Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 22, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | INTERNATIONAL BANCSHARES CORP | ||
Entity Central Index Key | 315,709 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,720,588,000 | ||
Entity Common Stock, Shares Outstanding | 65,989,631 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Consolidated Statements of Cond
Consolidated Statements of Condition - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and cash equivalents | $ 269,198,000 | $ 273,053,000 |
Investment securities: | ||
Held to maturity (Market value of $2,400 on December 31, 2016 and $2,400 on December 31, 2015) | 2,400,000 | 2,400,000 |
Available for sale (Amortized cost of $4,218,841 on December 31, 2016 and $4,196,034 on December 31, 2015) | 4,177,349,000 | 4,199,372,000 |
Total investment securities | 4,179,749,000 | 4,201,772,000 |
Loans | 5,964,688,000 | 5,950,914,000 |
Less allowance for probable loan losses | (64,661,000) | (66,988,000) |
Net loans | 5,900,027,000 | 5,883,926,000 |
Bank premises and equipment, net | 527,583,000 | 516,716,000 |
Accrued interest receivable | 32,172,000 | 31,572,000 |
Other investments | 517,162,000 | 468,791,000 |
Identified intangible assets, net | 25,000 | 153,000 |
Goodwill | 282,532,000 | 282,532,000 |
Other assets | 95,593,000 | 114,354,000 |
Total assets | 11,804,041,000 | 11,772,869,000 |
Deposits: | ||
Demand - non-interest bearing | 3,158,051,000 | 3,149,618,000 |
Savings and interest bearing demand | 3,203,728,000 | 3,020,222,000 |
Time | 2,248,310,000 | 2,366,413,000 |
Total deposits | 8,610,089,000 | 8,536,253,000 |
Securities sold under repurchase agreements | 504,985,000 | 827,772,000 |
Other borrowed funds | 733,375,000 | 505,750,000 |
Junior subordinated deferrable interest debentures | 160,416,000 | 161,416,000 |
Other liabilities | 70,509,000 | 76,175,000 |
Total liabilities | 10,079,374,000 | 10,107,366,000 |
Shareholders' equity: | ||
Common shares of $1.00 par value. Authorized 275,000,000 shares; issued 95,910,143 shares on December 31, 2016 and 95,866,218 shares on December 31, 2015 | 95,910,000 | 95,866,000 |
Surplus | 169,567,000 | 167,980,000 |
Retained earnings | 1,777,963,000 | 1,683,600,000 |
Accumulated other comprehensive (loss) income (including $(3,287) on December 31, 2016 and $(4,026) on December 31, 2015 of comprehensive loss related to other-than-temporary impairment for non-credit related issues) | (26,697,000) | 2,167,000 |
Total shareholders' equity before treasury stock | 2,016,743,000 | 1,949,613,000 |
Less cost of shares in treasury, 29,934,516 shares on December 31, 2016 and 29,585,646 on December 31, 2015 | (292,076,000) | (284,110,000) |
Total shareholders' equity | 1,724,667,000 | 1,665,503,000 |
Total liabilities and shareholders' equity | $ 11,804,041,000 | $ 11,772,869,000 |
Consolidated Statements of Con3
Consolidated Statements of Condition (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Consolidated Statements of Condition | ||
Held to maturity, Market value (in dollars) | $ 2,400 | $ 2,400 |
Available for sale, Amortized cost (in dollars) | $ 4,218,841 | $ 4,196,034 |
Common shares, par value (in dollars per share) | $ 1 | $ 1 |
Common shares, Authorized shares | 275,000,000 | 275,000,000 |
Common shares, issued shares | 95,910,143 | 95,866,218 |
Comprehensive loss related to other-than-temporary impairment for non-credit related issues (in dollars) | $ (3,287) | $ (4,026) |
Treasury, shares | 29,934,675 | 29,585,646 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Interest income: | |||
Loans, including fees | $ 297,820 | $ 297,283 | $ 281,546 |
Investment securities: | |||
Taxable | 79,533 | 88,008 | 100,095 |
Tax-exempt | 10,356 | 11,319 | 11,767 |
Other interest income | 205 | 144 | 191 |
Total interest income | 387,914 | 396,754 | 393,599 |
Interest expense: | |||
Savings deposits | 4,562 | 3,593 | 3,597 |
Time deposits | 9,963 | 11,233 | 12,033 |
Securities sold under repurchase agreements | 20,876 | 23,777 | 24,616 |
Other borrowings | 3,128 | 1,615 | 2,033 |
Junior subordinated deferrable interest debentures | 4,600 | 4,099 | 4,264 |
Total interest expense | 43,129 | 44,317 | 46,543 |
Net interest income | 344,785 | 352,437 | 347,056 |
Provision for probable loan losses | 19,859 | 24,405 | 14,423 |
Net interest income after provision for probable loan losses | 324,926 | 328,032 | 332,633 |
Non-interest income: | |||
Service charges on deposit accounts | 73,581 | 78,825 | 88,586 |
Other service charges, commissions and fees | |||
Banking | 46,267 | 44,971 | 44,435 |
Non-banking | 7,006 | 7,223 | 7,463 |
Investment securities transactions, net | (2,626) | (3,682) | 1,283 |
Other investments, net | 23,827 | 16,969 | 22,023 |
Other income | 13,647 | 11,428 | 14,558 |
Total non-interest income | 161,702 | 155,734 | 178,348 |
Non-interest expense: | |||
Employee compensation and benefits | 128,661 | 125,135 | 121,511 |
Occupancy | 26,583 | 28,019 | 32,530 |
Depreciation of bank premises and equipment | 24,738 | 25,009 | 24,013 |
Professional fees | 13,672 | 12,278 | 10,925 |
Deposit insurance assessments | 5,777 | 5,938 | 6,082 |
Net expense, other real estate owned | 5,688 | 5,695 | 2,358 |
Amortization of identified intangible assets | 128 | 644 | 2,389 |
Advertising | 7,814 | 7,585 | 7,742 |
Early termination fee - securities sold under repurchase agreements | 7,042 | 3,510 | 11,000 |
Software and software maintenance | 15,087 | 11,225 | 9,824 |
Impairment charges (Total other-than-temporary impairment charges, $793 net of $1,147, $371, net of $1,325, and $(366), net of $(1,183), included in other comprehensive loss) | 354 | 954 | 817 |
Other | 54,081 | 50,932 | 51,852 |
Total non-interest expense | 289,625 | 276,924 | 281,043 |
Income before income taxes | 197,003 | 206,842 | 229,938 |
Provision for income taxes | 63,071 | 70,116 | 76,787 |
Net income | $ 133,932 | $ 136,726 | $ 153,151 |
Basic earnings per common share: | |||
Weighted average number of shares outstanding (in shares) | 65,967,989 | 66,411,193 | 66,872,500 |
Net income (in dollars per share) | $ 2.03 | $ 2.06 | $ 2.29 |
Fully diluted earnings per common share: | |||
Weighted average number of shares outstanding (in shares) | 66,313,490 | 66,636,353 | 67,056,456 |
Net income (in dollars per share) | $ 2.02 | $ 2.05 | $ 2.28 |
Consolidated Statements of Inc5
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements of Income | |||
Impairment charges, other-than-temporary impairment charges | $ 793 | $ 371 | $ (366) |
Impairment charges, other comprehensive income | $ 1,147 | $ 1,325 | $ (1,183) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 133,932 | $ 136,726 | $ 153,151 |
Other comprehensive income (loss), net of tax: | |||
Net unrealized holding (losses) gains on securities available for sale arising during period (net of tax effects of $(16,585), $(6,593), and $29,870) | (30,801) | (12,243) | 55,474 |
Reclassification adjustment for losses (gains) on securities available for sale included in net income (net of tax effects of $919, $1,289, and $(449)) | 1,707 | 2,393 | (834) |
Reclassification adjustment for impairment charges on available for sale securities included in net income (net of tax effects of $124, $334, and $286) | 230 | 620 | 531 |
Other comprehensive (loss) income, net of tax | (28,864) | (9,230) | 55,171 |
Comprehensive income | $ 105,068 | $ 127,496 | $ 208,322 |
Consolidated Statements of Com7
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements of Comprehensive Income | |||
Net unrealized holding (losses) gains on securities available for sale arising during period, tax effects | $ (16,585) | $ (6,593) | $ 29,870 |
Reclassification adjustment for (losses) gains on securities available for sale included in net income, tax effects | 919 | 1,289 | (449) |
Reclassification adjustment for impairment charges on available for sale securities included in net income, tax effects | $ 124 | $ 334 | $ 286 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] | Total |
Balance at Dec. 31, 2013 | $ 95,744 | $ 163,947 | $ 1,467,000 | $ (43,774) | $ (258,509) | $ 1,424,408 | |
Balance (in shares) at Dec. 31, 2013 | 95,744 | ||||||
Increase (decrease) in shareholders' equity | |||||||
Net Income | 153,151 | 153,151 | |||||
Dividends: | |||||||
Cash ($.60, $.58 and $.43 per share) for the year ended December 31, 2016, 2015 and 2014, respectively) | (34,762) | (34,762) | |||||
Purchase of treasury stock (349,029, 261,079 and 787,387 shares) for the years ended December 31, 2016, 2015 and 2014, respectively) | (18,923) | (18,923) | |||||
Exercise of stock options | 40 | 515 | 555 | ||||
Options exercised (in shares) | 40 | ||||||
Stock compensation expense recognized in earnings | 1,058 | 1,058 | |||||
Other comprehensive income (loss), net of tax: | |||||||
Net change in unrealized gains and losses on available for sale securities, net of reclassification adjustments | 55,171 | 55,171 | |||||
Balance at Dec. 31, 2014 | 95,784 | 165,520 | 1,585,389 | 11,397 | (277,432) | 1,580,658 | |
Balance (in shares) at Dec. 31, 2014 | 95,784 | ||||||
Increase (decrease) in shareholders' equity | |||||||
Net Income | 136,726 | 136,726 | |||||
Dividends: | |||||||
Cash ($.60, $.58 and $.43 per share) for the year ended December 31, 2016, 2015 and 2014, respectively) | (38,515) | (38,515) | |||||
Purchase of treasury stock (349,029, 261,079 and 787,387 shares) for the years ended December 31, 2016, 2015 and 2014, respectively) | (6,678) | (6,678) | |||||
Exercise of stock options | 82 | 1,288 | 1,370 | ||||
Options exercised (in shares) | 82 | ||||||
Stock compensation expense recognized in earnings | 1,172 | 1,172 | |||||
Other comprehensive income (loss), net of tax: | |||||||
Net change in unrealized gains and losses on available for sale securities, net of reclassification adjustments | (9,230) | (9,230) | |||||
Balance at Dec. 31, 2015 | 95,866 | 167,980 | 1,683,600 | 2,167 | (284,110) | 1,665,503 | |
Balance (in shares) at Dec. 31, 2015 | 95,866 | ||||||
Increase (decrease) in shareholders' equity | |||||||
Net Income | 133,932 | 133,932 | |||||
Dividends: | |||||||
Cash ($.60, $.58 and $.43 per share) for the year ended December 31, 2016, 2015 and 2014, respectively) | (39,569) | (39,569) | |||||
Purchase of treasury stock (349,029, 261,079 and 787,387 shares) for the years ended December 31, 2016, 2015 and 2014, respectively) | (7,966) | (7,966) | |||||
Exercise of stock options | 44 | 505 | 549 | ||||
Options exercised (in shares) | 44 | ||||||
Stock compensation expense recognized in earnings | 1,082 | 1,082 | |||||
Other comprehensive income (loss), net of tax: | |||||||
Net change in unrealized gains and losses on available for sale securities, net of reclassification adjustments | (28,864) | (28,864) | |||||
Balance at Dec. 31, 2016 | $ 95,910 | $ 169,567 | $ 1,777,963 | $ (26,697) | $ (292,076) | $ 1,724,667 | |
Balance (in shares) at Dec. 31, 2016 | 95,910 |
Consolidated Statements of Sha9
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements of Shareholders' Equity | |||
Cash Dividends (in dollars per share) | $ 0.60 | $ 0.58 | $ 0.43 |
Purchase of treasury stock (in shares) | 349,029 | 261,079 | 787,387 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities: | |||
Net income | $ 133,932,000 | $ 136,726,000 | $ 153,151,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for probable loan losses | 19,859,000 | 24,405,000 | 14,423,000 |
Specific reserve, other real estate owned | 2,351,000 | 1,023,000 | 779,000 |
Depreciation of bank premises and equipment | 24,738,000 | 25,009,000 | 24,013,000 |
(Gain) loss on sale of bank premises and equipment | (450,000) | 14,000 | (3,658,000) |
Loss (gain) on sale of other real estate owned | 86,000 | (57,000) | (933,000) |
Accretion of investment securities discounts | (539,000) | (1,704,000) | (2,608,000) |
Amortization of investment securities premiums | 26,873,000 | 28,000,000 | 26,729,000 |
Investment securities transactions, net | 2,626,000 | 3,682,000 | (1,283,000) |
Impairment charges on available for sale securities | 354,000 | 954,000 | 817,000 |
Amortization of identified intangible assets | 128,000 | 644,000 | 2,389,000 |
Stock based compensation expense | 1,082,000 | 1,172,000 | 1,058,000 |
Earnings from affiliates and other investments | (14,315,000) | (12,176,000) | (10,903,000) |
Deferred tax expense (benefit) | 7,306,000 | (332,000) | (1,027,000) |
Increase in accrued interest receivable | (600,000) | (111,000) | (807,000) |
Decrease (increase) in other assets | 7,494,000 | 2,967,000 | (1,621,000) |
Net increase in other liabilities | (7,705,000) | (6,567,000) | (7,482,000) |
Net cash provided by operating activities | 203,220,000 | 203,649,000 | 193,037,000 |
Investing activities: | |||
Proceeds from maturities of securities | 1,200,000 | 1,075,000 | |
Proceeds from sales and calls of available for sale securities | 352,743,000 | 164,163,000 | 621,588,000 |
Purchases of available for sale securities | (1,325,657,000) | (352,513,000) | (971,358,000) |
Principal collected on mortgage-backed securities | 919,594,000 | 854,736,000 | 787,361,000 |
Net increase in loans | (38,523,000) | (297,689,000) | (502,129,000) |
Purchases of other investments | (49,013,000) | (16,355,000) | (20,602,000) |
Distributions from other investments | 23,276,000 | 18,293,000 | 18,152,000 |
Purchases of bank premises and equipment | (38,856,000) | (19,831,000) | (50,360,000) |
Proceeds from sales of bank premises and equipment | 3,701,000 | 4,515,000 | 8,424,000 |
Proceeds from sales of other real estate owned | 13,772,000 | 16,831,000 | 18,525,000 |
Net cash (used in) provided by investing activities | (137,763,000) | 373,225,000 | (90,399,000) |
Financing activities: | |||
Net increase in non-interest bearing demand deposits | 8,433,000 | 219,365,000 | 263,743,000 |
Net increase (decrease) in savings and interest bearing demand deposits | 183,506,000 | (5,458,000) | 100,068,000 |
Net decrease in time deposits | (118,103,000) | (116,279,000) | (168,611,000) |
Net decrease in securities sold under repurchase agreements | (322,787,000) | (30,578,000) | (99,031,000) |
Net increase (decrease) in other borrowed funds | 227,625,000 | (568,194,000) | (150,006,000) |
Redemption of long-term debt | (1,000,000) | (14,000,000) | (15,310,000) |
Purchase of treasury stock | (7,966,000) | (6,678,000) | (18,923,000) |
Proceeds from stock transactions | 549,000 | 1,370,000 | 555,000 |
Payments of cash dividends - common | (39,569,000) | (38,515,000) | (34,762,000) |
Net cash used in financing activities | (69,312,000) | (558,967,000) | (122,277,000) |
(Decrease) increase in cash and cash equivalents | (3,855,000) | 17,907,000 | (19,639,000) |
Cash and cash equivalents at beginning of period | 273,053,000 | 255,146,000 | 274,785,000 |
Cash and cash equivalents at end of period | 269,198,000 | 273,053,000 | 255,146,000 |
Supplemental cash flow information: | |||
Interest paid | 44,069,000 | 44,560,000 | 47,273,000 |
Income taxes paid | 49,925,000 | 65,234,000 | 80,374,000 |
Non-cash investing and financing activities: | |||
Net transfer from loans to other real estate owned | $ 2,563,000 | $ 3,775,000 | $ 2,363,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (1) Summary of Significant Accounting Policies The accounting and reporting policies of International Bancshares Corporation (“Corporation”) and Subsidiaries (the Corporation and Subsidiaries collectively referred to herein as the “Company”) conform to accounting principles generally accepted in the United States of America and to general practices within the banking industry. The following is a description of the more significant of those policies. Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Corporation and its wholly-owned bank subsidiaries, International Bank of Commerce, Laredo (“IBC”), Commerce Bank, International Bank of Commerce, Zapata, International Bank of Commerce, Brownsville, and the Corporation's wholly-owned non-bank subsidiaries, IBC Subsidiary Corporation, IBC Life Insurance Company, IBC Trading Company, Premier Tierra Holdings, Inc., IBC Charitable and Community Development Corporation, and IBC Capital Corporation. All significant inter-company balances and transactions have been eliminated in consolidation. The Company, through its subsidiaries, is primarily engaged in the business of banking, including the acceptance of checking and savings deposits and the making of commercial, real estate, personal, home improvement, automobile and other installment and term loans. The primary markets of the Company are South, Central, and Southeast Texas and the state of Oklahoma. Each bank subsidiary is very active in facilitating international trade along the United States border with Mexico and elsewhere. Although the Company’s loan portfolio is diversified, the ability of the Company’s debtors to honor their contracts is primarily dependent upon the economic conditions in the Company’s trade area. In addition, the investment portfolio is directly impacted by fluctuations in market interest rates. The Company and its bank subsidiaries are subject to the regulations of certain Federal agencies as well as the Texas Department of Banking and undergo periodic examinations by those regulatory authorities. Such agencies may require certain standards or impose certain limitations based on their judgments or changes in law and regulations. The Company owns one insurance‑related subsidiary, IBC Insurance Agency, Inc., a wholly owned subsidiary of IBC, the bank subsidiary. The insurance‑related subsidiary does not conduct underwriting activities. The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the statement of condition and income and expenses for the periods. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant changes in the near‑term relate to the determination of the allowance for probable loan losses. Subsequent Events The Company has evaluated all events or transactions that occurred through the date the Company issued these financial statements. During this period, the Company did not have any material recognizable or non‑recognizable subsequent events. Investment Securities The Company classifies debt and equity securities into one of these categories: held‑to‑maturity, available‑for‑sale, or trading. Such classifications are reassessed for appropriate classification at each reporting date. Securities that are intended and expected to be held until maturity are classified as “held‑to‑maturity” and are carried at amortized cost for financial statement reporting. Securities that are not positively expected to be held until maturity, but are intended to be held for an indefinite period of time are classified as “available‑for‑sale” or “trading” and are carried at their fair value. Unrealized holding gains and losses are included in net income for those securities classified as “trading”, while unrealized holding gains and losses related to those securities classified as “available‑for‑sale” are excluded from net income and reported net of tax as other comprehensive income and in shareholders’ equity as accumulated other comprehensive income until realized. The Company did not maintain any trading securities during the three year period ended December 31, 2016. Mortgage‑backed securities held at December 31, 2016 and 2015 represent participating interests in pools of long‑term first mortgage loans originated and serviced by the issuers of the securities. Mortgage‑backed securities are either issued or guaranteed by the U.S. government or its agencies including the Federal Home Loan Mortgage Corporation (“Freddie Mac”), the Federal National Mortgage Association (“Fannie Mae”), the Government National Mortgage Association (“Ginnie Mae”) or other non‑government entities. Investments in residential mortgage‑backed securities issued by Ginnie Mae are fully guaranteed by the U. S. government. Investments in residential mortgage‑backed securities issued by Freddie Mac and Fannie Mae are not fully guaranteed by the U.S. government, however, the Company believes that the quality of the bonds is similar to other AAA rated bonds with limited credit risk, particularly given the placement of Fannie Mae and Freddie Mac into conservatorship by the federal government in 2008 and because securities issued by others that are collateralized by residential mortgage‑backed securities issued by Fannie Mae or Freddie Mac are rated consistently as AAA rated securities. Market interest rate fluctuations can affect the prepayment speed of principal and the yield on the security. Premiums and discounts are amortized using the level yield or “interest method” over the terms of the securities. Declines in the fair value of held‑to‑maturity and available‑for sale‑securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses. In determining whether other‑than‑temporary impairment exists, management considers many factors, including (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near‑term prospects of the issuer, and (3) the intent of the Company to hold and the determination of whether the Company will more likely than not be required to sell the security prior to a recovery in fair value. If the Company determines that (1) it intends to sell the security or (2) it is more likely than not that it will be required to sell the security before it’s anticipated recovery, the other‑than‑temporary impairment that is recognized in earnings is equal to the difference between the fair value of the security and the Company’s amortized cost in the security. If the Company determines that it (1) does not intend to sell the security and (2) it will not be more likely than not required to sell the security before it’s anticipated recovery, the other‑than‑temporary impairment is segregated into its two components (1) the amount of impairment related to credit loss and (2) the amount of impairment related to other factors. The difference between the present value of the cash flows expected to be collected and the amortized cost is the credit loss recognized through earnings and an adjustment to the cost basis of the security. The amount of impairment related to other factors is included in other comprehensive income (loss). Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Provision and Allowance for Probable Loan Losses The allowance for probable loan losses is maintained at a level considered adequate by management to provide for probable loan losses. The allowance is increased by provisions charged to operating expense and reduced by net charge‑offs. The provision for probable loan losses is the amount, which, in the judgment of management, is necessary to establish the allowance for probable loan losses at a level that is adequate to absorb known and inherent risks in the loan portfolio. Management believes that the allowance for probable loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s bank subsidiaries’ allowances for probable loan losses. Such agencies may require the Company’s bank subsidiaries to make additions or reductions to their U.S. generally accepted accounting principles (“GAAP”) allowances based on their judgments of information available to them at the time of their examination. The bank subsidiaries charge off that portion of any loan which management considers to represent a loss as well as that portion of any other loan which is classified as a “loss” by bank examiners. Commercial, financial and agricultural or real estate loans are generally considered by management to represent a loss, in whole or part, (i) when an exposure beyond any collateral coverage is apparent, (ii) when no further collection of the portion of the loan so exposed is anticipated based on actual results, (iii) when the credit enhancements, if any, are not adequate, and (iv) when the borrower’s financial condition would indicate so. Generally, unsecured consumer loans are charged off when 90 days past due. Loans Loans are reported at the principal balance outstanding, net of unearned discounts. Interest income on loans is reported on an accrual basis. Loan fees and costs associated with originating the loans are amortized over the life of the loan using the interest method. The Company originates mortgage loans that may subsequently be sold to an unaffiliated third party. The loans are not securitized and if sold, are sold without recourse. Loans held for sale are carried at cost and the principal amount outstanding is not significant to the consolidated financial statements. Impaired Loans Impaired loans are those loans where it is probable that all amounts due according to contractual terms of the loan agreement will not be collected. Impaired loans are measured based on (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price; or (3) the fair value of the collateral if the loan is collateral dependent. Substantially all of the Company’s impaired loans are measured at the fair value of the collateral. In limited cases the Company may use other methods to determine the level of impairment of a loan if such loan is not collateral dependent. Troubled Debt Restructured Loans Troubled debt restructured loans (“TDR”) are those loans where, for reasons related to a borrower’s difficulty to repay a loan, the company grants a concession to the borrower that the company would not normally consider in the normal course of business. The original terms of the loan are modified or restructured. The terms that may be modified include a reduction in the original stated interest rate, an extension of the original maturity of the loan, a renewal of the loan at an interest rate below current market rates, a reduction in the principal amount of debt outstanding, a reduction in accrued interest or deferral of interest payments. A loan classified as a TDR is classified as an impaired loan and included in the impaired loan totals. A TDR loan may be returned to accrual status when the loan is brought current, has performed in accordance with the restructured terms for a reasonable period of time, is at the current market rate, and the ultimate collectability of the outstanding principal and interest is no longer questionable, however, although those loans may be placed back on accrual status, they will continue to be classified as impaired. Consistent with regulatory guidance, a TDR loan that is subsequently modified, but has shown sustained performance and classification as a TDR, will be removed from TDR status provided that the modified terms were market-based at the time of modification. Non‑Accrual Loans The non‑accrual loan policy of the Company’s bank subsidiaries is to discontinue the accrual of interest on loans when management determines that it is probable that future interest accruals will be un‑collectible. As it relates to consumer loans, management charges off those loans when the loan is contractually 90 days past due. Under special circumstances, a consumer or non‑consumer loan may be more than 90 days delinquent as to interest or principal and not be placed on non‑accrual status. This situation generally results when a bank subsidiary has a borrower who is experiencing financial difficulties, but not to the extent that requires a restructuring of indebtedness. The majority of this category is composed of loans that are considered to be adequately secured and/or for which there are expected future payments. When a loan is placed on non‑accrual status, any interest accrued, not paid is reversed and charged to operations against interest income. As it relates to non‑consumer loans that are not 90 days past due, management will evaluate each of these loans to determine if placing the loan on non‑accrual status is warranted. Interest income on non‑accrual loans is recognized only to the extent payments are received or when, in management’s opinion, the debtor’s financial condition warrants reestablishment of interest accruals. Other Real Estate Owned Other real estate owned is comprised of real estate acquired by foreclosure and deeds in lieu of foreclosure. Other real estate is carried at the lower of the recorded investment in the property or its fair value less estimated costs to sell such property (as determined by independent appraisal). Prior to foreclosure, the value of the underlying loan is written down to the fair value of the real estate to be acquired by a charge to the allowance for probable loan losses, if necessary. Any subsequent write‑downs are charged against other non‑interest expense through a valuation allowance. Other real estate owned totaled approximately $42,204,000 and $55,850,000 at December 31, 2016 and 2015, respectively. Other real estate owned is included in other assets. Bank Premises and Equipment Bank premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed on straight‑line and accelerated methods over the estimated useful lives of the assets. Repairs and maintenance are charged to operations as incurred and expenditures for renewals and betterments are capitalized. Other Investments Other investments include equity investments in non‑financial companies, bank owned life insurance, as well as equity securities with no readily determinable fair market value. Equity investments are accounted for using the equity method of accounting. Equity securities with no readily determinable fair value are accounted for using the cost method. Income Taxes Deferred income tax assets and liabilities are determined using the asset and liability method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the differences between the book and tax basis of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. The Company files a consolidated federal income tax return with its subsidiaries. Recognition of deferred tax assets is based on management’s assessment that the benefit related to certain temporary differences, tax operating loss carry forwards, and tax credits are more likely than not to be realized. A valuation allowance is recorded for the amount of the deferred tax items for which it is more likely than not that the tax benefits will not be realized. The Company evaluates uncertain tax positions at the end of each reporting period. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefit recognized in the financial statements from any such a position is measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. As of December 31, 2016 and 2015, respectively, after evaluating all uncertain tax positions, the Company has recorded no liability for unrecognized tax benefits at the end of the reporting period. The Company would recognize any interest accrued on unrecognized tax benefits as other interest expense and penalties as other non‑interest expense. During the years ended December 31, 2016, 2015 and 2014, the Company recognized no interest expense or penalties related to uncertain tax positions. The Company files consolidated tax returns in the U.S. Federal jurisdiction and various state jurisdictions. The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2013. Stock Options Compensation expense for stock awards is based on the market price of the stock on the measurement date, which is generally the date of grant, and is recognized ratably over the service period of the award. The fair value of stock options granted was estimated, using the Black‑Sholes‑Merton option‑pricing model. This model was developed for use in estimating the fair value of publicly traded options that have no vesting restrictions and are fully transferable. Additionally, the model requires the input of highly subjective assumptions. Because the Company’s employee stock options have characteristics significantly different from those of publicly traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the Black‑Scholes‑Merton option‑pricing model does not necessarily provide a reliable single measure of the fair value of the Company’s stock options. Net Income Per Share Basic Earnings Per Share (“EPS”) is calculated by dividing net income by the weighted average number of common shares outstanding. The computation of diluted EPS assumes the issuance of common shares for all dilutive potential common shares outstanding during the reporting period. The dilutive effect of stock options is considered in earnings per share calculations, if dilutive, using the treasury stock method. Goodwill and Identified Intangible Assets Goodwill represents the excess of costs over fair value of assets of businesses acquired. Goodwill is tested for impairment at least annually or on an interim basis if an event triggering impairment may have occurred. As of October 1, 2016, after completing goodwill testing, the Company has determined that no goodwill impairment exists. Identified intangible assets are acquired assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or because the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset, or liability. The Company’s identified intangible assets relate to core deposits and contract rights. As of December 31, 2016, the Company has determined that no impairment of identified intangibles exists. Identified intangible assets with definite useful lives are amortized on an accelerated basis over their estimated life. See Note 6—Goodwill and Other Intangible Assets. Impairment of Long‑Lived Assets Long‑lived assets, such as property, plant and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying value of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying value of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying value of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the statement of condition and reported at the lower of the carrying value or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the statement of condition. Consolidated Statements of Cash Flows For purposes of the consolidated statements of cash flows, the Company considers all short‑term investments with a maturity at date of purchase of three months or less to be cash equivalents. Also, the Company reports transactions related to deposits and loans to customers on a net basis. Accounting for Transfers and Servicing of Financial Assets The Company accounts for transfers and servicing of financial assets and extinguishments of liabilities based on the application of a financial‑components approach that focuses on control. After a transfer of financial assets, the Company recognizes the financial and servicing assets it controls and liabilities it has incurred, derecognizes financial assets when control has been surrendered and derecognizes liabilities when extinguished. The Company has retained mortgage servicing rights in connection with the sale of mortgage loans. Because the Company may not initially identify loans as originated for resale, all loans are initially treated as held for investment. The value of the mortgage servicing rights are reviewed periodically for impairment and are amortized in proportion to, and over the period of estimated net servicing income or net servicing losses. The value of the mortgage servicing rights is not significant to the consolidated statements of condition. Segments of an Enterprise and Related Information The Company operates as one segment. The operating information used by the Company’s chief executive officer for purposes of assessing performance and making operating decisions about the Company is the consolidated financial statements presented in this report. The Company has four active operating subsidiaries, namely, the bank subsidiaries, otherwise known as International Bank of Commerce, Laredo, Commerce Bank, International Bank of Commerce, Zapata and International Bank of Commerce, Brownsville. The Company applies the provisions of ASC Topic 280, “Segment Reporting,” in determining its reportable segments and related disclosures. Comprehensive Income (Loss) Comprehensive income (loss) consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale. Advertising Advertising costs are expensed as incurred. Reclassifications Certain amounts in the prior year’s presentations have been reclassified to conform to the current presentation. These reclassifications had no effect on previously reported net income or shareholders’ equity. New Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09 to ASC 606, “Revenue from Contracts with Customers.” The update sets a common standard that defines revenue and the principles for recognizing revenue. The update outlines when an entity should recognize revenue, among other matters. At its core, the update states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The update also outlines the steps that entities should take to determine and record the correct revenue number. The update was originally effective for annual periods beginning after December 15, 2016 and the interim perriods wihin that reporting period. In August 2015, the FASB issued accounting Standards Update No 2015-14 which deferred the effective date of Accounting Standards Update No. 2014-019 by one year to annual and interim periods beginning after December 15, 2017. The Company’s revenue is primarily comprised of net interest income on financial assets and financial liabilities and non-interest income, which is explicitly excluded from the scope of the update. The Company will continue to evaluate the impact of the update on certain other revenue items, such as the sales of other real estate, however, the adtoption of the update is not expected to have a significant impact on the Company’s consolidated financial statements. In January 2015, the FASB issued Accounting Standards Update No. 2015-01 to ASC 225-20, “Income Statement- Extraordinary and Unusual Items.” The update amends existing standards and is being issued as part of the FASB’s initiative to reduce complexity in accounting standards. The update eliminates the concept of extraordinary items. The update is effective for interim and annual periods after December 15, 2015. The adoption of the update did not have a significant impact to the Company’s consolidated financial statements. In February 2015, the FASB issued Accounting Standards Update No. 2015-02 to ASC 810, “Consolidation.” The update amends existing standards regarding the evaluation of certain legal entities and their consolidation in the financial statements. The amendments modify the evaluation process to assess whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, eliminate the presumption that a general partner should consolidate a limited partnership, affect the consolidation analysis of entities that are involved in variable interest entities, particularly those that have fee arrangements and related party relationships and provides a scope exception for reporting entities with legal interests that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The update is effective for interim and annual periods after December 15, 2015. The adoption of the update to existing standards did not have a significant impact to the Company’s consolidated financial statements. In September 2015, the FASB issued Accounting Standards Update No. 2015-16 to ASC 805, “Business Combinations.” The update amends existing standards regarding the methodology used to recognize adjustments related to provisional amounts that are identified during the measurement period of a business combination. The update requires that adjustments to provisional amounts be recognized in the reporting period in which the adjustment amounts are determined. The update requires that the reporting entity disclose on the face of the income statement or in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The update is effective for interim and annual periods after December 15, 2015. The adoption of the update to existing standards did not have a significant impact to the Company’s consolidated financial statements. In January 2016, the FASB issued Accounting Standards Update No. 2016-01 to ASC 825-10, “Financial Instruments – Overall.” The update amends existing standards regarding certain aspects of recognition and measurement of financial assets and financial liabilities. The amendments in the update establish the following guidance: (i) requires equity investments, except those accounted for under the equity method of accounting or those that result in consolidation of the investee, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity securities without readily determinable fair values by requiring a qualitative assessment, (iii) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities, (iv) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (v) requires public business entities to use the exit price notion when measuring fair value for disclosure purposes, (vi) requires an entity to present separately, in other comprehensive income, the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option, (vii) requires separate presentation of financial assets and liabilities by measurement category and form of financial assets on the balance sheet or in the accompanying notes to the financial statements, and (viii) clarifies that an entity should evaluate the need to a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The update is effective for interim and annual periods beginning after December 15, 2017. The adoption of the update is not expected to have a significant impact to the Company’s consolidated financial statements. In February 2016, the FASB issued Accounting Standards Update No. 2016-02 to ASC 820, “Leases.” The update amends existing standards for accounting for leases by lessees, with accounting for leases by lessors remaining mainly unchanged from current guidance. The update requires that lessees recognize a lease liability and a right of use asset for all leases (with the exception of short-term leases) at the commencement date of the lease and disclose key information about leasing arrangements. The update is effective for interim and annual periods beginning after December 15, 2015 and is to be applied on a modified retrospective basis. The Company is evaluating the potential impact to the Company’s consolidated financial statements. In March 2016, the FB issued Accounting Standards Update No. 2016-09 to ASC 718, “Compensation – Stock Compensation.” The update amends existing standards for accounting for share-based payment transactions, including the income tax effects, the classification of awards on the balance sheet and the classification on the statement of cash flows. The update is effective for annual and interim periods after December 15, 2016. The adoption of the update is not expected to have a significant impact to the Company’s consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 to ASC 326, “Financial Insruments – Credit Losses.” The update amends existing standards for accounting for credit losses for financial assets. The update requires that the expected credit losses on the financial instruments held as of the end of the period being reported be measured based on historical experience, current conditions, and reasonable and supportable forecasts. The update also expands the required disclosures related to significant estimates and judgements used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s financial assets. The update also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioriation. The update is effective for interim and annual periods beginning after December 15, 2019. The Company is evaluating the potential impact of the update on the Company’s consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04 to ASC 350, “Intangibles – Goodwill and Other.” The update amends existing guidance in evaluating goodwill for impairment. The update requires that an entity perform its annual or interim goodwill test by comparing the fair value of a reporting unit with its carrying amount, with any impairment charges being recognized as the difference between the fair value and carrying value. The update is intended to standardize the impairment test for all business entities and also reduce the complexity and cost of evaluating goodwill for impairment. The update is effective for any ann |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2016 | |
Investment Securities | |
Investment Securities | (2) Investment Securities The amortized cost and estimated fair value by type of investment security at December 31, 2016 are as follows: Held to Maturity Gross Gross Amortized unrealized unrealized Estimated Carrying cost gains losses fair value value (Dollars in Thousands) Other securities $ $ — $ — $ $ Total investment securities $ $ — $ — $ $ Available for Sale Gross Gross Amortized unrealized unrealized Estimated Carrying cost gains losses fair value value (1) (Dollars in Thousands) Residential mortgage-backed securities $ $ $ $ $ Obligations of states and political subdivisions Equity securities Total investment securities $ $ $ $ $ (1) Included in the carrying value of residential mortgage‑ backed securities are $850,033 of mortgage‑backed securities issued by Ginnie Mae, $ 3,026,832 of mortgage‑backed securities issued by Fannie Mae and Freddie Mac and $17,605 issued by non‑government entities The amortized cost and estimated fair value of investment securities at December 31, 2016, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties. Held to Maturity Available for Sale Amortized Estimated Amortized Estimated Cost fair value Cost fair value (Dollars in Thousands) Due in one year or less $ $ $ — $ — Due after one year through five years — — Due after five years through ten years — — Due after ten years — — Residential mortgage-backed securities — — Equity securities — — Total investment securities $ $ $ $ The amortized cost and estimated fair value by type of investment security at December 31, 2015 are as follows: Held to Maturity Gross Gross Amortized unrealized unrealized Estimated Carrying cost gains losses fair value value (Dollars in Thousands) Other securities $ $ — $ — $ $ Total investment securities $ $ — $ — $ $ Available for Sale Gross Gross Estimated Amortized unrealized unrealized fair Carrying cost gains losses value value (1) (Dollars in Thousands) Residential mortgage-backed securities $ $ $ $ $ Obligations of states and political subdivisions Equity securities Total investment securities $ $ $ $ $ (1) Included in the carrying value of residential mortgage‑ backed securities are $1,147,143 of mortgage‑backed securities issued by Ginnie Mae, $2,724,839 of mortgage‑backed securities issued by Fannie Mae and Freddie Mac and $21,229 issued by non‑government entities Residential mortgage‑backed securities are securities issued by Freddie Mac, Fannie Mae, Ginnie Mae or non‑government entities. Investments in residential mortgage‑backed securities issued by Ginnie Mae are fully guaranteed by the U.S. government. Investments in mortgage‑backed securities issued by Freddie Mac and Fannie Mae are not fully guaranteed by the U.S. government, however, the Company believes that the quality of the bonds is similar to other AAA rated bonds with limited credit risk, particularly given the placement of Fannie Mae and Freddie Mac into conservatorship by the federal government in early September 2008 and because securities issued by others that are collateralized by residential mortgage‑backed securities issued by Fannie Mae and Freddie Mac are rated consistently as AAA rated securities. The amortized cost and fair value of available for sale investment securities pledged to qualify for fiduciary powers, to secure public monies as required by law, repurchase agreements and short‑term fixed borrowings was $1,780,513,000 and $1,754,763,000, respectively, at December 31, 2016. Proceeds from the sale and call of securities available‑for‑sale were $352,743,000 $164,163,000 and $621,588,000 during 2016, 2015 and 2014, respectively, which amounts included $338,138,000, $128,444,000 and $620,933 of mortgage‑backed securities. Gross gains of $586,000, $2,450,000 and $9,479,000 and gross losses of $3,212,000, $6,132,000 and $8,196,000 were realized on the sales in 2016, 2015 and 2014, respectively. Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2016 were as follows: Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses (Dollars in Thousands) Available for sale: Residential mortgage-backed securities $ $ $ $ $ $ Obligations of states and political subdivisions — — Equity securities $ $ $ $ $ $ Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous loss position, at December 31, 2015 were as follows: Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses (Dollars in Thousands) Available for sale: Residential mortgage-backed securities $ $ $ $ $ $ Obligations of states and political subdivisions Equity securities $ $ $ $ $ $ The unrealized losses on investments in residential mortgage‑backed securities are primarily caused by changes in market interest rates. Residential mortgage‑backed securities are primarily securities issued by Freddie Mac, Fannie Mae and Ginnie Mae. The contractual cash obligations of the securities issued by Ginnie Mae are fully guaranteed by the U.S. government. The contractual cash obligations of the securities issued by Freddie Mac and Fannie Mae are not fully guaranteed by the U.S. government; however, the Company believes that the quality of the bonds is similar to other AAA rated bonds with limited credit risk, particularly given the placement of Fannie Mae and Freddie Mac into conservatorship by the federal government in early September 2008 and because securities issued by others that are collateralized by residential mortgage‑backed securities issued by Fannie Mae and Freddie Mac are rated consistently as AAA rated securities. The decrease in fair value on residential mortgage‑backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae is due to market interest rates. The Company has no intent to sell and more likely than not be required to sell before a market price recovery or maturity of the securities; therefore, it is the conclusion of the Company that the investments in residential mortgage‑backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae are not considered other‑than‑temporarily impaired. In addition, the Company has a small investment in non‑agency residential mortgage‑backed securities that have strong credit backgrounds and include additional credit enhancements to protect the Company from losses arising from high foreclosure rates. These securities have additional market volatility beyond economically induced interest rate events. It is the conclusion of the Company that the investments in non‑agency residential mortgage‑backed securities are other‑than‑temporarily impaired due to both credit and other than credit issues. An impairment charge of $354,000 ($230,100 after tax), was recorded in 2016 on the non‑agency residential mortgage backed securities. Impairment charges of $954,000 ($620,100, after tax) and $817,000 ($531,050, after tax) were recorded in 2015 and 2014, respectively on the non‑agency residential mortgage backed securities. The impairment charges represent the credit related impairment on the securities. The unrealized losses on investments in other securities are caused by fluctuations in market interest rates. The underlying cash obligations of the securities are guaranteed by the entity underwriting the debt instrument. It is the belief of the Company that the entity issuing the debt will honor its interest payment schedule, as well as the full debt at maturity. The securities are purchased by the Company for their economic value. The decrease in fair value is primarily due to market interest rates and not other factors, and because the Company has no intent to sell and will more likely than not be required to sell before a market price recovery or maturity of the securities, it is the conclusion of the Company that the investments are not considered other‑than‑temporarily impaired. The following table presents a reconciliation of credit‑related impairment charges on available‑for‑sale investments recognized in earnings for the twelve months ended December 31, 2016 (in Thousands): Balance at December 31, 2015 $ Impairment charges recognized during period Balance at December 31, 2016 $ The following table presents a reconciliation of credit‑related impairment charges on available‑for‑sale investments recognized in earnings for the twelve months ended December 31, 2015 (in Thousands): Balance at December 31, 2014 $ Impairment charges recognized during period Balance at December 31, 2015 $ The following table presents a reconciliation of credit‑related impairment charges on available‑for‑sale investments recognized in earnings for the twelve months ended December 31, 2014 (in Thousands): Balance at December 31, 2013 $ Impairment charges recognized during period Balance at December 31, 2014 $ |
Loans
Loans | 12 Months Ended |
Dec. 31, 2016 | |
Loans | |
Loans | (3) Loans A summary of loans, by loan type at December 31, 2016 and 2015 is as follows: December 31, December 31, 2016 2015 (Dollars in Thousands) Commercial, financial and agricultural $ $ Real estate - mortgage Real estate - construction Consumer Foreign Total loans $ $ |
Allowance for Probable Loan Los
Allowance for Probable Loan Losses | 12 Months Ended |
Dec. 31, 2016 | |
Allowance for Probable Loan Losses | |
Allowance for Probable Loan Losses | (4) Allowance for Probable Loan Losses The allowance for probable loan losses primarily consists of the aggregate loan loss allowances of the bank subsidiaries. The allowances are established through charges to operations in the form of provisions for probable loan losses. Loan losses or recoveries are charged or credited directly to the allowances. The allowance for probable loan losses of each bank subsidiary is maintained at a level considered appropriate by management, based on estimated probable losses in the loan portfolio. The allowance for probable loan losses is derived from the following elements: (i) allowances established on specific impaired loans, which are based on a review of the individual characteristics of each loan, including the customer’s ability to repay the loan, the underlying collateral values, and the industry in which the customer operates, (ii) allowances based on actual historical loss experience for similar types of loans in the Company’s loan portfolio, and (iii) allowances based on general economic conditions, changes in the mix of loans, company resources, border risk and credit quality indicators, among other things. The Company’s management continually reviews the allowance for loan losses of the bank subsidiaries using the amounts determined from the allowances established on specific impaired loans, the allowance established on quantitative historical loss percentages, and the allowance based on qualitative data to establish an appropriate amount to maintain in the Company’s allowance for loan losses. Should any of the factors considered by management in evaluating the adequacy of the allowance for probable loan losses change, the Company’s estimate of probable loan losses could also change, which could affect the level of future provisions for probable loan losses. While the calculation of the allowance for probable loan losses utilizes management’s best judgment and all information available, the adequacy of the allowance is dependent on a variety of factors beyond the Company’s control, including, among other things, the performance of the entire loan portfolio, the economy, changes in interest rates and the view of regulatory authorities towards loan classifications. The loan loss provision is determined using the following methods. On a weekly basis, loan past due reports are reviewed by the credit quality committee to determine if a loan has any potential problems and if a loan should be placed on the Company’s internal classified report. Additionally, the Company’s credit department reviews the majority of the Company’s loans for proper internal classification purposes regardless of whether they are past due and segregates any loans with potential problems for further review. The credit department will discuss the potential problem loans with the servicing loan officers to determine any relevant issues that were not discovered in the evaluation. Also, an analysis of loans that is provided through examinations by regulatory authorities is considered in the review process. After the above analysis is completed, the Company will determine if a loan should be placed on an internal classified report because of issues related to the analysis of the credit, credit documents, collateral and/or payment history. The U.S. economy continues to face uncertainty, with particular attention being paid to continued depressed oil and gas prices, the unprecedented debt and trade deficit of the United States, possible interest rate movement, political changes, the continued impact of overseas markets on the U.S. and the negative impact on US exports and cross border trade between the U.S. and Mexico arising from the strength of the U.S. dollar. Although the Texas and Oklahoma economies continue to perform better than the U.S. economy as a whole, the same issues that are creating uncertainty in the U.S. economy may also negatively impact the economies of Texas and Oklahoma. Economic risk factors are minimized by the underwriting standards of the bank subsidiaries. The general underwriting standards encompass the following principles: (i) the financial strength of the borrower including strong earnings, a high net worth, significant liquidity and an acceptable debt to worth ratio, (ii) managerial and business competence, (iii) the ability to repay, (iv) for a new business, projected cash flows, (v) loan to value, (vi) in the case of a secondary guarantor, a guarantor financial statement, and (vii) financial and/or other character references. Although the underwriting standards reduce the risk of loss, unique risk factors exist in each type of loan in which the bank subsidiaries invest. Commercial and industrial loans are mostly secured by the collateral pledged by the borrower that is directly related to the business activities of the company such as accounts receivable and inventory. The ability of the borrower to collect accounts receivable, and to turn inventory into sales are risk factors in the repayment of the loan. Construction and land development loans can carry risk of repayment when projects incur cost overruns, have an increase in the price of building materials, encounter zoning and environmental issues, or encounter other factors that may affect the completion of a project on time and on budget. Additionally, repayment risk may be negatively impacted when the market experiences a deterioration in the value of real estate. Risks specifically related to 1‑4 family development loans also include the practice by the mortgage industry of more restrictive underwriting standards, which inhibits the buyer from obtaining long term financing and excessive housing and lot inventory in the market. Commercial real estate loans demonstrate a risk of repayment when market values deteriorate, the business experiences turnover in key management, the business has an inability to attract or keep occupancy levels stable, or when the market experiences an exit of a specific business industry that is significant to the local economy, such as a manufacturing plant. First and second lien residential 1-4 family mortgage and consumer loan repayments may be affected by unemployment or underemployment and deteriorating market values of real estate. A summary of the changes in the allowance for probable loan losses by loan class is as follows: December 31, 2016 Domestic Foreign Commercial real estate: other Commercial construction & real estate: Commercial land farmland & real estate: Residential: Residential: Commercial development commercial multifamily first lien junior lien Consumer Foreign Total (Dollars in Thousands) Balance at December 31, $ $ $ $ $ $ $ $ $ Losses charge to allowance Recoveries credited to allowance — Net losses charged to allowance Provision (credit) charged to operations Balance at December 31, $ $ $ $ $ $ $ $ $ December 31, 2015 Domestic Foreign Commercial real estate: other Commercial construction & real estate: Commercial land farmland & real estate: Residential: Residential: Commercial development commercial multifamily first lien junior lien Consumer Foreign Total (Dollars in Thousands) Balance at December 31, $ $ $ $ $ $ $ $ $ Losses charge to allowance — — Recoveries credited to allowance — Net losses charged to allowance — Provision (credit) charged to operations Balance at December 31, $ $ $ $ $ $ $ $ $ December 31, 2014 Domestic Foreign Commercial real estate: other Commercial construction & real estate: Commercial land farmland & real estate: Residential: Residential: Commercial development commercial multifamily first lien junior lien Consumer Foreign Total (Dollars in Thousands) Balance at December 31, $ $ $ $ $ $ $ $ $ Losses charge to allowance — Recoveries credited to allowance — Net losses charged to allowance — Provision (credit) charged to operations Balance at December 31, $ $ $ $ $ $ $ $ $ The allowance for probable loan losses is a reserve established through a provision for probable loan losses charged to expense, which represents management’s best estimate of probable loan losses when evaluating loans (i) individually or (ii) collectively. The increase in losses charged to the allowance for probable loan losses for the year ended December 31, 2016 can be attributed to further deterioration in a previously identified and charged down relationship primarily secured by multiple pieces of transportation equipment. In March 2016, litigation against the management of the borrower was filed in the State of Nevada, resulting in a going concern issue with the borrower’s operations and the future use of the transportation equipment pledged as collateral on the relationship. As a result, management, in accordance with its credit review procedures, re-evaluated the collateral values on the equipment in light of the new circumstances and reduced the collateral values accordingly, resulting in a further charge-down of the relationship of approximately $19.4 million, which is included in the losses charged to the allowance in the commercial category in the table detailing the year ended December 31, 2016 activity. The impact of the charge-down is also reflected in the various tables in this Note including impaired loans, non-accrual loans and the credit quality indicator summary. The relationship was classified as Watch-List Impaired at December 31, 2015. Two large recoveries on loans charged off in prior years are included in the recoveries credited to the allowance in the table detailing activity for the year ended December 31, 2016. The recoveries occurred in the first and third quarters of 2016 in the amounts of $4.4 million and $6 million, respectively and are included in the Commercial and Commercial Real Estate: Other Construction and Land Development categories. The increase in charge-offs for the years ended December 31, 2015 and 2014 in the Commercial category can be attributed to a charge down of the previously discussed relationship that is primarily secured by multiple pieces of transportation equipment. The relationship was charged down by $13.5 million and $8.5 million for the years ended December 31, 2015 and December 31, 2014, respectively. The table below provides additional information on the balance of loans individually or collectively evaluated for impairment and their related allowance, by loan class: December 31, 2016 Loans Individually Loans Collectively Evaluated For Evaluated For Impairment Impairment Recorded Recorded Investment Allowance Investment Allowance (Dollars in Thousands) Domestic Commercial $ $ — $ $ Commercial real estate: other construction & land development Commercial real estate: farmland & commercial Commercial real estate: multifamily — Residential: first lien Residential: junior lien — Consumer — Foreign — Total $ $ $ $ December 31, 2015 Loans Individually Loans Collectively Evaluated For Evaluated For Impairment Impairment Recorded Recorded Investment Allowance Investment Allowance (Dollars in Thousands) Domestic Commercial $ $ $ $ Commercial real estate: other construction & land development Commercial real estate: farmland & commercial Commercial real estate: multifamily Residential: first lien — Residential: junior lien — Consumer — Foreign — Total $ $ $ $ Loans accounted for on a non‑accrual basis at December 31, 2016, 2015 and 2014 amounted to $37,245,000, $47,685,000 and $63,559,000, respectively. The effect of such non‑accrual loans reduced interest income by approximately $2,461,800, $3,298,000 and $4,013,000 for the years ended December 31, 2016, 2015 and 2014, respectively. Amounts received on non‑accruals are applied, for financial accounting purposes, first to principal and then to interest after all principal has been collected. Accruing loans contractually past due 90 days or more as to principal or interest payments at December 31, 2016, 2015 and 2014 amounted to approximately $5,226,000, $11,616,000 and $9,988,000, respectively. The table below provides additional information on loans accounted for on a non‑accrual basis by loan class: December 31, 2016 December 31, 2015 (Dollars in Thousands) Domestic Commercial $ $ Commercial real estate: other construction & land development Commercial real estate: farmland & commercial Commercial real estate: multifamily Residential: first lien Residential: junior lien Consumer Foreign Total non-accrual loans $ $ Impaired loans are those loans where it is probable that all amounts due according to contractual terms of the loan agreement will not be collected. The Company has identified these loans through its normal loan review procedures. Impaired loans are measured based on (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price; or (3) the fair value of the collateral if the loan is collateral dependent. Substantially all of the Company’s impaired loans are measured at the fair value of the collateral. In limited cases the Company may use other methods to determine the level of impairment of a loan if such loan is not collateral dependent. The following tables detail key information regarding the Company’s impaired loans by loan class for the year ended December 31, 2016: December 31, 2016 Unpaid Average Recorded Principal Related Recorded Interest Investment Balance Allowance Investment Recognized (Dollars in Thousands) Loans with Related Allowance Domestic Commercial real estate: other construction & land development $ $ $ $ $ — Commercial real estate: farmland & commercial — Residential: first lien — Total impaired loans with related allowance $ $ $ $ $ — December 31, 2016 Unpaid Average Recorded Principal Recorded Interest Investment Balance Investment Recognized (Dollars in Thousands) Loans with No Related Allowance Domestic Commercial $ $ $ $ Commercial real estate: other construction & land development Commercial real estate: farmland & commercial Commercial real estate: multifamily — Residential: first lien Residential: junior lien Consumer Foreign Total impaired loans with no related allowance $ $ $ $ The following tables detail key information regarding the Company’s impaired loans by loan class for the year ended December 31, 2015: December 31, 2015 Unpaid Average Recorded Principal Related Recorded Interest Investment Balance Allowance Investment Recognized (Dollars in Thousands) Loans with Related Allowance Domestic Commercial $ $ $ $ $ — Commercial real estate: other construction & land development — Commercial real estate: farmland & commercial Commercial real estate: multifamily — Total impaired loans with related allowance $ $ $ $ $ December 31, 2015 Unpaid Average Recorded Principal Recorded Interest Investment Balance Investment Recognized (Dollars in Thousands) Loans with No Related Allowance Domestic Commercial $ $ $ $ Commercial real estate: other construction & land development Commercial real estate: farmland & commercial — Commercial real estate: multifamily — Residential: first lien Residential: junior lien Consumer Foreign Total impaired loans with no related allowance $ $ $ $ A portion of the impaired loans have adequate collateral and credit enhancements not requiring a related allowance for loan loss. Management is confident the Company’s loss exposure regarding these credits will be significantly reduced due to the Company’s long‑standing practices that emphasize secured lending with strong collateral positions and guarantor support. Management is likewise confident the reserve for probable loan losses is adequate. Management of the Company recognizes the risks associated with these impaired loans. However, management's decision to place loans in this category does not necessarily mean that losses will occur. In the current environment, troubled loan management can be protracted because of the legal and process problems that delay the collection of an otherwise collectable loan. Additionally, management believes that the collateral related to these impaired loans and/or the secondary support from guarantors mitigates the potential for losses from impaired loans. The following table details loans accounted for as “troubled debt restructuring,” segregated by loan class. Loans accounted for as troubled debt restructuring are included in impaired loans. December 31, 2016 December 31, 2015 (Dollars in Thousands) Domestic Commercial $ $ Commercial real estate: other construction & land development — Commercial real estate: farmland & commercial Residential: first lien Residential: junior lien Consumer Foreign Total troubled debt restructuring $ $ The increase in loans accounted for as troubled debt restructurings for December 31, 2016 is due to the renewal of an impaired loan that was previously charged down. The loan is primarily secured by multiple pieces of transportation equipment, as previously discussed with respect to the detail in the changes in the allowance for probable loan losses in this Note. The loan remains on non-accrual status and is included in total impaired loans in the various tables in this Note. The bank subsidiaries charge off that portion of any loan which management considers to represent a loss, as well as that portion of any other loan which is classified as a “loss” by bank examiners. Commercial and industrial or real estate loans are generally considered by management to represent a loss, in whole or part, when an exposure beyond any collateral coverage is apparent and when no further collection of the loss portion is anticipated based on the borrower’s financial condition and general economic conditions in the borrower’s industry. Generally, unsecured consumer loans are charged‑off when 90 days past due. While management of the Company considers that it is generally able to identify borrowers with financial problems reasonably early and to monitor credit extended to such borrowers carefully, there is no precise method of predicting loan losses. The determination that a loan is likely to be uncollectible and that it should be wholly or partially charged‑off as a loss is an exercise of judgment. Similarly, the determination of the adequacy of the allowance for probable loan losses can be made only on a subjective basis. It is the judgment of the Company’s management that the allowance for probable loan losses at December 31, 2016 and December 31, 2015, was adequate to absorb probable losses from loans in the portfolio at that date. The following table presents information regarding the aging of past due loans by loan class: December 31, 2016 90 Days or Total 30 - 59 60 - 89 90 Days or greater & Past Total Days Days Greater still accruing Due Current Portfolio (Dollars in Thousands) Domestic Commercial $ $ $ $ $ $ $ Commercial real estate: other construction & land development Commercial real estate: farmland & commercial Commercial real estate: multifamily — — Residential: first lien Residential: junior lien Consumer Foreign Total past due loans $ $ $ $ $ $ $ December 31, 2015 90 Days or Total 30 - 59 60 - 89 90 Days or greater & Past Total Days Days Greater still accruing Due Current Portfolio (Dollars in Thousands) Domestic Commercial $ $ $ $ $ $ $ Commercial real estate: other construction & land development — Commercial real estate: farmland & commercial Commercial real estate: multifamily Residential: first lien Residential: junior lien Consumer Foreign Total past due loans $ $ $ $ $ $ $ The Company’s internal classified report is segregated into the following categories: (i) “Special Review Credits,” (ii) “Watch List—Pass Credits,” or (iii) “Watch List—Substandard Credits.” The loans placed in the “Special Review Credits” category reflect the Company’s opinion that the loans reflect potential weakness which require monitoring on a more frequent basis. The “Special Review Credits” are reviewed and discussed on a regular basis with the credit department and the lending staff to determine if a change in category is warranted. The loans placed in the “Watch List—Pass Credits” category reflect the Company’s opinion that the credit contains weaknesses which represent a greater degree of risk, which warrant “extra attention.” The “Watch List—Pass Credits” are reviewed and discussed on a regular basis with the credit department and the lending staff to determine if a change in category is warranted. The loans placed in the “Watch List—Substandard Credits” classification are considered to be potentially inadequately protected by the current sound worth and debt service capacity of the borrower or of any pledged collateral. These credit obligations, even if apparently protected by collateral value, have shown defined weaknesses related to adverse financial, managerial, economic, market or political conditions which may jeopardize repayment of principal and interest. Furthermore, there is the possibility that some future loss could be sustained by the Company if such weaknesses are not corrected. For loans that are classified as impaired, management evaluates these credits in accordance with the provision of. ASC 310‑10, “Receivables,” and, if deemed necessary, a specific reserve is allocated to the credit. The specific reserve allocated under ASC 310‑10, is based on (i) the present value of expected future cash flows discounted at the loan’s effective interest rate; (ii) the loan’s observable market price; or (iii) the fair value of the collateral if the loan is collateral dependent. Substantially all of the Company’s loans evaluated as impaired under ASC 310‑10 are measured using the fair value of collateral method. In limited cases, the Company may use other methods to determine the specific reserve of a loan under ASC 310‑10 if such loan is not collateral dependent. The allowance based on historical loss experience on the Company’s remaining loan portfolio, which includes the “Special Review Credits,” “Watch List—Pass Credits,” and “Watch List—Substandard Credits” is determined by segregating the remaining loan portfolio into certain categories such as commercial loans, installment loans, international loans, loan concentrations and overdrafts. Installment loans are then further segregated by number of days past due. A historical loss percentage, adjusted for (i) management’s evaluation of changes in lending policies and procedures, (ii) current economic conditions in the market area served by the Company, (iii) other risk factors, (iv) the effectiveness of the internal loan review function, (v) changes in loan portfolios, and (vi) the composition and concentration of credit volume is applied to each category. Each category is then added together to determine the allowance allocated under ASC 450‑20. A summary of the loan portfolio by credit quality indicator by loan class is as follows: December 31, 2016 Special Watch Watch List— Watch List— Pass Review List—Pass Substandard Impaired (Dollars in Thousands) Domestic Commercial $ $ $ $ $ Commercial real estate: other construction & land development — Commercial real estate: farmland & commercial Commercial real estate: multifamily — — — Residential: first lien — Residential: junior lien — — Consumer — — — Foreign — — — Total $ $ $ $ $ December 31, 2015 Special Watch Watch List— Watch List— Pass Review List—Pass Substandard Impaired (Dollars in Thousands) Domestic Commercial $ $ $ $ $ Commercial real estate: other construction & land development Commercial real estate: farmland & commercial Commercial real estate: multifamily — — Residential: first lien — — Residential: junior lien — — Consumer — — Foreign — — — Total $ $ $ $ $ The increase in Special Review credits for December 31, 2016 compared to December 31, 2015 can be attributed to the re-classification of a commercial loan relationship secured mainly by transportation equipment used in the shipping industry to the Pass category. The decrease in Watch-List Pass credits can be attributed to the re-classification of a commercial loan relationship secured mainly by assets, including contract rights of the borrower to the Pass category. Additionally impacting the Watch-List Pass credits in the real estate farmland and commercial category is a reclassification of a relationship secured mainly by warehouses from the Pass category. Also impacting the Watch-List Pass and Watch-List Substandard category at December 31, 2016 is the reclassification of a relationship secured by all assets, equipment, and accounts receivable from Watch-List Substandard to the Pass category. The decrease in Watch-List Impaired loans can be attributed to the charge-down of the loan relationship that is mainly secured by multiple pieces of transportation equipment previously discussed. |
Bank Premises and Equipment
Bank Premises and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Bank Premises and Equipment | |
Bank Premises and Equipment | (5) Bank Premises and Equipment A summary of bank premises and equipment, by asset classification, at December 31, 2016 and 2015 were as follows: Estimated useful lives 2016 2015 (Dollars in Thousands) Bank buildings and improvements 5 - 40 years $ $ Furniture, equipment and vehicles 1 - 20 years Land Real estate held for future expansion: Land, building, furniture, fixture and equipment 7 - 27 years — — Less: accumulated depreciation Bank premises and equipment, net $ $ |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | (6) Goodwill and Other Intangible Assets The majority of the Company’s identified intangibles are in the form of amortizable core deposit premium. A small portion of the fully amortized identified intangibles represent identified intangibles in the acquisition of the rights to the insurance agency contracts of InsCorp, Inc., acquired in 2008. Information on the Company’s identified intangible assets follows: Carrying Accumulated Amount Amortization Net (Dollars in Thousands) December 31, 2016: Core deposit premium $ $ $ Identified intangible (contract rights) — Total identified intangibles $ $ $ December 31, 2015: Core deposit premium $ $ $ Identified intangible (contract rights) — Total identified intangibles $ $ $ Amortization expense of intangible assets for the years ended December 31, 2016, 2015 and 2014, was $128,000, $644,000 and $2,389,000, respectively. Estimated amortization expense for each of the five succeeding fiscal years, and thereafter, is as follows: Fiscal year ending December 31: Total (in thousands) 2017 2018 — 2019 — 2020 — 2021 — Thereafter Total $ There were no changes in the carrying amount of goodwill for the years ended December 31, 2016 and 2015. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2016 | |
Deposits. | |
Deposits | (7) Deposits Deposits as of December 31, 2016 and 2015 and related interest expense for the years ended December 31, 2016, 2015 and 2014 were as follows: 2016 2015 (Dollars in Thousands) Deposits: Demand - non-interest bearing Domestic $ $ Foreign Total demand non-interest bearing Savings and interest bearing demand Domestic Foreign Total savings and interest bearing demand Time, certificates of deposit $100,000 or more Domestic Foreign Less than $100,000 Domestic Foreign Total time, certificates of deposit Total deposits $ $ 2016 2015 2014 (Dollars in Thousands) Interest expense: Savings and interest bearing demand Domestic $ $ $ Foreign Total savings and interest bearing demand Time, certificates of deposit $100,000 or more Domestic Foreign Less than $100,000 Domestic Foreign Total time, certificates of deposit Total interest expense on deposits $ $ $ Scheduled maturities of time deposits as of December 31, 2016 were as follows: Total (in thousands) 2017 $ 2018 2019 2020 2021 Thereafter Total $ Scheduled maturities of time deposits in amounts of $100,000 or more at December 31, 2016, were as follows: Total (in thousands) Due within 3 months or less $ Due after 3 months and within 6 months Due after 6 months and within 12 months Due after 12 months $ Time deposits that meet or exceed the FDIC insurance limit of $250,000 at December 31, 2016 and December 31, 2015 were $1,005,000 and $1,021,000, respectively. |
Securities Sold Under Repurchas
Securities Sold Under Repurchase Agreements | 12 Months Ended |
Dec. 31, 2016 | |
Securities Sold Under Repurchase Agreements | |
Securities Sold Under Repurchase Agreements | (8) Securities Sold Under Repurchase Agreements The Company’s bank subsidiaries have entered into repurchase agreements with an investment banking firm and individual customers of the bank subsidiaries. The purchasers have agreed to resell to the bank subsidiaries identical securities upon the maturities of the agreements. Securities sold under repurchase agreements were mortgage‑backed book entry securities and averaged $759,458,000 and $872,611,000 during 2016 and 2015, respectively, and the maximum amount outstanding at any month end during 2016 and 2015 was $819,155,000 and $907,211,000 respectively. Further information related to repurchase agreements at December 31, 2016 and 2015 is set forth in the following table: Collateral Securities Repurchase Borrowing Book Value of Fair Value of Balance of Weighted Average Securities Sold Securities Sold Liability Interest Rate (Dollars in Thousands) December 31, 2016 term: Overnight agreements $ $ $ % 1 to 29 days 30 to 90 days Over 90 days Total $ $ $ % December 31, 2015 term: Overnight agreements $ $ $ % 1 to 29 days 30 to 90 days Over 90 days Total $ $ $ % The book value and fair value of securities sold includes the entire book value and fair value of securities partially or fully pledged under repurchase agreements. |
Other Borrowed Funds
Other Borrowed Funds | 12 Months Ended |
Dec. 31, 2016 | |
Other Borrowed Funds | |
Other Borrowed Funds | (9) Other Borrowed Funds Other borrowed funds include Federal Home Loan Bank borrowings, which are short and long‑term fixed borrowings issued by the Federal Home Loan Bank of Dallas at the market price offered at the time of funding. These borrowings are secured by mortgage‑backed investment securities and a portion of the Company’s loan portfolio. The increase in other borrowed funds is a result of purchases of available‑for‑sale securities. Further information regarding the Company’s other borrowed funds at December 31, 2016 and 2015 is set forth in the following table: December 31, 2016 2015 (Dollars in Thousands) Federal Home Loan Bank advances—short-term Balance at year end $ $ Rate on balance outstanding at year end % % Average daily balance $ $ Average rate % % Maximum amount outstanding at any month end $ $ Federal Home Loan Bank advances—long-term (1) Balance at year end $ $ Rate on balance outstanding at year end % % Average daily balance $ $ Average rate % % Maximum amount outstanding at any month end $ $ (1) Long-term advances matured in January 2017. |
Junior Subordinated Interest De
Junior Subordinated Interest Deferrable Debentures | 12 Months Ended |
Dec. 31, 2016 | |
Junior Subordinated Interest Deferrable Debentures | |
Junior Subordinated Interest Deferrable Debentures | (10) Junior Subordinated Deferrable Interest Debentures The Company has formed six statutory business trusts under the laws of the State of Delaware, for the purpose of issuing trust preferred securities. The statutory business trusts formed by the Company (the “Trusts”) have each issued Capital and Common Securities and invested the proceeds thereof in an equivalent amount of junior subordinated debentures (the “Debentures”) issued by the Company. As of December 31, 2016 and December 31, 2015, the principal amount of debentures outstanding totaled $160,416,000 and $161,416,000, respectively. On July 29, 2015, the Company bought back a portion of the Capital Securities of IB Capital Trusts X and XI from the holder of the securities for a price that reflected an approximate 24.5% discount from the redemption prices of the securities. The Company thereby retired $13,000,000 of the total $34,021,000 of related Junior Subordinated Deferrable Interest Debentures related to IB Capital Trust X and $1,000,000 of the total $27,990,000 of related Junior Subordinated Deferrable Interest Debentures related to IB Capital Trust XI. On November 1, 2016, the Company bought back a portion of the Capital Securities of IB Capital Trust XI from the holder of the securities for a price that reflected an approximate 24% discount from the redemption price of the securities. The Company thereby retired $1,000,000 of the total $26,990,000 of related Junior Subordinated Deferrable Interest Debentures related to IB Capital Trust XI. The discounts recorded in connection with the repurchases of the outstanding Capital Securities are included in other income on the consolidated financial statements. The Debentures are subordinated and junior in right of payment to all present and future senior indebtedness (as defined in the respective indentures) of the Company, and are pari passu with one another. The interest rate payable on, and the payment terms of the Debentures are the same as the distribution rate and payment terms of the respective issues of Capital and Common Securities issued by the Trusts. The Company has fully and unconditionally guaranteed the obligations of each of the Trusts with respect to the Capital and Common Securities. The Company has the right, unless an Event of Default (as defined in the Indentures) has occurred and is continuing, to defer payment of interest on the Debentures for up to twenty consecutive quarterly periods on Trusts VI, VIII, IX, X, XI and XII. If interest payments on any of the Debentures are deferred, distributions on both the Capital and Common Securities related to that Debenture would also be deferred. The redemption prior to maturity of any of the Debentures may require the prior approval of the Federal Reserve and/or other regulatory bodies. For financial reporting purposes, the Trusts are treated as investments of the Company and not consolidated in the consolidated financial statements. Although the Capital Securities issued by each of the Trusts are not included as a component of shareholders’ equity on the consolidated statement of condition, the Capital Securities are treated as capital for regulatory purposes. Specifically, under applicable regulatory guidelines, the Capital Securities issued by the Trusts qualify as Tier 1 capital up to a maximum of 25% of Tier 1 capital on an aggregate basis. Any amount that exceeds the 25% threshold would qualify as Tier 2 capital. At December 31, 2016 and December 31, 2015, the total $160,416,000 and $161,416,000, respectively, of the Capital Securities outstanding qualified as Tier 1 capital. The following table illustrates key information about each of the Debentures and their interest rates at December 31, 2016: Junior Subordinated Deferrable Optional Interest Repricing Interest Interest Redemption Debentures Frequency Rate Rate Index(1) Maturity Date Date(1) (Dollars in Thousands) Trust VI $ Quarterly % LIBOR + November 2032 February 2008 Trust VIII Quarterly % LIBOR + October 2033 October 2008 Trust IX Quarterly % LIBOR + October 2036 October 2011 Trust X Quarterly % LIBOR + February 2037 February 2012 Trust XI Quarterly % LIBOR + July 2037 July 2012 Trust XII Quarterly % LIBOR + September 2037 September 2012 $ (1) The Capital Securities may be redeemed in whole or in part on any interest payment date after the Optional Redemption Date. |
Earnings per Share ("EPS")
Earnings per Share ("EPS") | 12 Months Ended |
Dec. 31, 2016 | |
Earnings per Share ("EPS") | |
Earnings per Share ("EPS") | (11) Earnings per Share (“EPS”) Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding. The computation of diluted EPS assumes the issuance of common shares for all dilutive potential common shares outstanding during the reporting period. The calculation of the basic EPS and the diluted EPS for the years ended December 31, 2016, 2015, and 2014 is set forth in the following table: Net Income Shares Per Share (Numerator) (Denominator) Amount (Dollars in Thousands, Except Per Share Amounts) December 31, 2016: Basic EPS Net income available to common shareholders $ $ Potential dilutive common shares and warrants — Diluted EPS $ $ December 31, 2015: Basic EPS Net income available to common shareholders $ $ Potential dilutive common shares and warrants — Diluted EPS $ $ December 31, 2014: Basic EPS Net income available to common shareholders $ $ Potential dilutive common shares — Diluted EPS $ $ |
Employees' Profit Sharing Plan
Employees' Profit Sharing Plan | 12 Months Ended |
Dec. 31, 2016 | |
Employees' Profit Sharing Plan | |
Employees' Profit Sharing Plan | (12) Employees’ Profit Sharing Plan The Company has a deferred profit sharing plan for full‑time employees with a minimum of one year of continuous employment. The Company’s annual contribution to the plan is based on a percentage, as determined by the Board of Directors, of income before income taxes, as defined, for the year. Allocation of the contribution among officers and employees’ accounts is based on length of service and amount of salary earned. Profit sharing costs of $3,650,000 $3,525,000 and $3,510,000 were charged to income for the years ended December 31, 2016, 2015, and 2014, respectively. |
International Operations
International Operations | 12 Months Ended |
Dec. 31, 2016 | |
International Operations | |
International Operations | (13) International Operations The Company provides international banking services for its customers through its bank subsidiaries. Neither the Company nor its bank subsidiaries have facilities located outside the United States. International operations are distinguished from domestic operations based upon the domicile of the customer. Because the resources employed by the Company are common to both international and domestic operations, it is not practical to determine net income generated exclusively from international activities. A summary of assets attributable to international operations at December 31, 2016 and 2015 are as follows: 2016 2015 (Dollars in Thousands) Loans: Commercial $ $ Others Less allowance for probable loan losses Net loans $ $ Accrued interest receivable $ $ At December 31, 2016, the Company had $93,154,000 in outstanding standby and commercial letters of credit to facilitate trade activities. Revenues directly attributable to international operations were approximately $5,495,000, $6,113,000 and $6,034,000 for the years ended December 31, 2016, 2015 and 2014, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | (14) Income Taxes The Company files a consolidated U.S. Federal and State income tax return. The current and deferred portions of net income tax expense included in the consolidated statements of income are presented below for the years ended December 31: 2016 2015 2014 (Dollars in Thousands) Current U.S. $ $ $ State Foreign — Total current taxes Deferred U.S. State Total deferred taxes Total income taxes $ $ $ Total income tax expense differs from the amount computed by applying the U.S. Federal income tax rate of 35% for 2016, 2015 and 2014 to income before income taxes. The reasons for the differences for the years ended December 31 are as follows: 2016 2015 2014 (Dollars in Thousands) Computed expected tax expense $ $ $ Change in taxes resulting from: Tax-exempt interest income State tax, net of federal income taxes and tax credit Other investment income Other Actual tax expense $ $ $ The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2016 and 2015 are reflected below: 2016 2015 (Dollars in Thousands) Deferred tax assets: Loans receivable, principally due to the allowance for probable loan losses $ $ Other real estate owned Impairment charges on available-for-sale securities Accrued expenses Net unrealized losses on available for sale investment securities — Other Total deferred tax assets Deferred tax liabilities: Bank premises and equipment, principally due to differences on depreciation Net unrealized gains on available for sale investment securities — Identified intangible assets and goodwill Other Total deferred tax liabilities Net deferred tax liability $ $ The net deferred tax liability of $1,625,000 at December 31, 2016 and $10,285,000 at December 31, 2015 is included in other liabilities in the consolidated statements of condition. |
Stock Options
Stock Options | 12 Months Ended |
Dec. 31, 2016 | |
Stock Options | |
Stock Options | (15) Stock Options On April 5, 2012, the Board of Directors adopted the 2012 International Bancshares Corporation Stock Option Plan (the “2012 Plan”). There are 800,000 shares available for stock option grants under the 2012 Plan. Under the 2012 Plan, both qualified incentive stock options (“ISOs”) and non‑qualified stock options (“NQSOs”) may be granted. Options granted may be exercisable for a period of up to 10 years from the date of grant, excluding ISOs granted to 10% shareholders, which may be exercisable for a period of up to only five years. As of December 31, 2016, 198,675 shares were available for future grants under the 2012 Plan. The fair value of each option award granted under the plan is estimated on the date of grant using a Black‑Scholes‑Merton option valuation model that uses the assumptions noted in the following table. Expected volatility is based on the historical volatility of the price of the Company’s stock. The Company uses historical data to estimate the expected dividend yield and employee termination rates within the valuation model. The expected term of options is derived from historical exercise behavior. The risk‑free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. 2016 2015 Expected Life (Years) Dividend yield % % Interest rate % % Volatility % % A summary of option activity under the stock option plans for the twelve months ended December 31, 2016 is as follows: Weighted Weighted average average remaining Aggregate Number of exercise contractual intrinsic options price term (years) value ($) (in Thousands) Options outstanding at December 31, 2015 $ Plus: Options granted Less: Options exercised Options expired Options forfeited Options outstanding at December 31, 2016 $ Options fully vested and exercisable at December 31, 2016 $ $ Stock‑based compensation expense included in the consolidated statements of income for the years ended December 31, 2016, 2015 and 2014 was approximately $1,082,000, $1,172,000 and $1,058,000, respectively. As of December 31, 2016, there was approximately $2,322,000 of total unrecognized stock‑based compensation cost related to non‑vested options granted under the Company plans that will be recognized over a weighted average period of 1.7 years. Other information pertaining to option activity during the twelve month period ending December 31, 2016, 2015 and 2014 is as follows: Twelve Months Ended December 31, 2016 2015 2014 Weighted average grant date fair value of stock options granted $ $ $ Total fair value of stock options vested $ $ $ Total intrinsic value of stock options exercised $ $ $ |
Long Term Restricted Stock Unit
Long Term Restricted Stock Units | 12 Months Ended |
Dec. 31, 2016 | |
Long Term Restricted Stock Units | |
Long Term Restricted Stock Units | (16) Long Term Restricted Stock Units As a participant in the Troubled Asset Relief Program Capital Purchase Program (the “CPP”) until November 28, 2012, the Company was subject to certain compensation restrictions, which included a prohibition on the payment or accrual of any bonuses (including equity‑based incentive compensation) to certain officers and employees except for awards of CPP‑compliant long‑ term restricted stock and stock units. On December 18, 2009, the Company’s board of directors (the “Board”) adopted the 2009 International Bancshares Corporation Long‑Term Restricted Stock Unit Plan (the “Plan”) to give the Company additional flexibility in the compensation of its officers, employees, consultants and advisors in compliance with all applicable laws and restrictions. The Plan authorizes the Company to issue Restricted Stock Units (“RSUs”) to officers, employees, consultants and advisors of the Company and its subsidiaries. The Plan provides that RSUs shall be issued by a committee of the Board appointed by the Board from time to time consisting of at least two (2) members of the Board, each of whom is both a non‑employee director and an outside director. On December 18, 2009, the Board adopted resolutions creating the Long‑Term Restricted Stock Unit Plan Committee to administer the Plan. RSUs issued under the Plan are not equity and are payable only in cash. The Plan provides for both the issuance of CPP‑compliant long‑term RSUs as well as RSUs that are not CPP‑compliant. Dennis E. Nixon, the Company’s President, Chairman of the Board and a director of the Company, was awarded CPP‑compliant RSUs granted as of December 19, 2012 of $425,000 for his performance in 2012. In order to meet the requirements of a CPP‑compliant RSU, Mr. Nixon’s 2012 RSUs vested and were paid in December 2014 in the cash amount of $572,746. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities and Other Tax Matters | 12 Months Ended |
Dec. 31, 2016 | |
Commitments, Contingent Liabilities and Other Matters | |
Commitments, Contingent Liabilities and Other Matters | (17) Commitments, Contingent Liabilities and Other Matters The Company leases portions of its banking premises and equipment under operating leases. Total rental expense for the years ended December 31, 2016, 2015 and 2014 were approximately $5,870,000, $6,200,000 and $7,200,000, respectively. Future minimum lease payments due under non‑cancellable operating leases at December 31, 2016 were as follows: Fiscal year ending: Total (in thousands) 2017 $ 2018 2019 2020 2021 Thereafter Total $ It is expected that certain leases will be renewed, as these leases expire. Aggregate future minimum rentals to be received under non‑cancellable sub‑leases greater than one year at December 31, 2016 were $101,562,000. Cash of approximately $111,353,000 and $104,684,000 at December 31, 2016 and 2015, respectively, was maintained to satisfy regulatory reserve requirements. The Company is involved in various legal proceedings that are in various stages of litigation. The Company has determined, based on discussions with its counsel that any material loss in such actions, individually or in the aggregate, is remote or the damages sought, even if fully recovered, would not be considered material to the consolidated statements of condition and related statements of income, comprehensive income, shareholders’ equity and cash flows of the Company. However, many of these matters are in various stages of proceedings and further developments could cause management to revise its assessment of these matters. |
Transactions with Related Parti
Transactions with Related Parties | 12 Months Ended |
Dec. 31, 2016 | |
Transactions with Related Parties | |
Transactions with Related Parties | (18) Transactions with Related Parties In the ordinary course of business, the subsidiaries of the Company make loans to directors and executive officers of the Corporation, including their affiliates, families and companies in which they are principal owners. In the opinion of management, these loans are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and do not involve more than normal risk of collectability or present other unfavorable features. The aggregate amounts receivable from such related parties amounted to approximately $26,662,000 and $31,975,000 at December 31, 2016 and 2015, respectively. |
Financial Instruments with Off-
Financial Instruments with Off-Statement of Condition Risk and Concentrations of Credit Risk | 12 Months Ended |
Dec. 31, 2016 | |
Financial Instruments with Off-Statement of Condition Risk and Concentrations of Credit Risk | |
Financial Instruments with Off-Statement of Condition Risk and Concentrations of Credit Risk | (19) Financial Instruments with Off‑Statement of Condition Risk and Concentrations of Credit Risk In the normal course of business, the bank subsidiaries are party to financial instruments with off‑statement of condition risk to meet the financing needs of their customers. These financial instruments include commitments to their customers. These financial instruments involve, to varying degrees, elements of credit risk in excess of the amounts recognized in the consolidated statement of condition. The contract amounts of these instruments reflect the extent of involvement the bank subsidiaries have in particular classes of financial instruments. At December 31, 2016, the following financial amounts of instruments, whose contract amounts represent credit risks, were outstanding: Commitments to extend credit $ Credit card lines Standby letters of credit Commercial letters of credit The Company enters into a standby letter of credit to guarantee performance of a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved is represented by the contractual amounts of those instruments. Under the standby letters of credit, the Company is required to make payments to the beneficiary of the letters of credit upon request by the beneficiary so long as all performance criteria have been met. At December 31, 2016, the maximum potential amount of future payments is approximately $88,504,000. At December 31, 2016, the fair value of these guarantees is not significant. Unsecured letters of credit totaled approximately $40,738,000 and $37,454,000 at December 31, 2016 and 2015, respectively. The Company enters into commercial letters of credit on behalf of its customers which authorize a third party to draw drafts on the Company up to a stipulated amount and with specific terms and conditions. A commercial letter of credit is a conditional commitment on the part of the Company to provide payment on drafts drawn in accordance with the terms of the commercial letter of credit. The bank subsidiaries’ exposure to credit loss in the event of nonperformance by the other party to the above financial instruments is represented by the contractual amounts of the instruments. The bank subsidiaries use the same credit policies in making commitments and conditional obligations as they do for on‑statement of condition instruments. The bank subsidiaries control the credit risk of these transactions through credit approvals, limits and monitoring procedures. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates normally less than one year or other termination clauses and may require the payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The bank subsidiaries evaluate each customer’s credit‑worthiness on a case‑by‑case basis. The amount of collateral obtained, if deemed necessary by the subsidiary banks upon extension of credit, is based on management’s credit evaluation of the customer. Collateral held varies, but may include residential and commercial real estate, bank certificates of deposit, accounts receivable and inventory. The bank subsidiaries make commercial, real estate and consumer loans to customers principally located in South, Central and Southeast Texas and the State of Oklahoma. Although the loan portfolio is diversified, a substantial portion of its debtors’ ability to honor their contracts is dependent upon the economic conditions in these areas, especially in the real estate and commercial business sectors. |
Capital Ratios
Capital Ratios | 12 Months Ended |
Dec. 31, 2016 | |
Capital Requirements | |
Capital Ratios | (20) Capital Requirements On December 23, 2008, as part of the Troubled Asset Relief Program Capital Purchase Program (the “TARP Capital Purchase Program”) of the United States Department of the Treasury (“Treasury”), the Company issued to the Treasury a warrant to purchase 1,326,238 shares of the Company’s common stock at a price per share of $24.43 and with a term of ten years (the “Warrant”). On June 12, 2013, the U.S. Treasury sold the Warrant to a third party. As of February 20, 2016, the Warrant is still outstanding. Adjustments to the $24.43 per share Exercise Price of the Warrant will be made if the Company pays cash dividends in excess of 33 cents per semi-annual period or makes certain other shareholder distributions before the Warrants expires on December 23, 2018. Bank regulatory agencies limit the amount of dividends, which the bank subsidiaries can pay the Corporation, through IBC Subsidiary Corporation, without obtaining prior approval from such agencies. At December 31, 2016, the subsidiary banks could pay dividends of up to $819,500,000 to the Corporation without prior regulatory approval and without adversely affecting their “well‑capitalized” status under regulatory capital rules in effect at December 31, 2016. In addition to legal requirements, regulatory authorities also consider the adequacy of the bank subsidiaries’ total capital in relation to their deposits and other factors. These capital adequacy considerations also limit amounts available for payment of dividends. The Company historically has not allowed any subsidiary bank to pay dividends in such a manner as to impair its capital adequacy. The Company and the bank subsidiaries are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off‑statement of condition items as calculated under regulatory accounting practices. The Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Current quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table on the following page) of Total and Tier 1 capital to risk‑weighted assets and of Tier 1 capital to average assets. Management believes, as of December 31, 2016, that the Company and each of the bank subsidiaries met all capital adequacy requirements to which they are subject. In July 2013, the Federal Deposit Insurance Corporation (“FDIC”) and other regulatory bodies established a new, comprehensive capital framework for U.S. banking organizations, consisting of minimum requirements that increase both the quantity and quality of capital held by banking organizations. The final rules are a result of the implementation of the BASEL III capital reforms and various Dodd-Frank Act related capital provisions. Consistent with the Basel international framework, the rules include a new minimum ratio of Common Equity Tier 1 (“CET1”) to risk-weighted assets of 4.5% and a CET1 capital conservation buffer of 2.5% of risk-weighted assets. The capital conservation buffer began phasing-in on January 1, 2016 at .625% and will increase each year until January 1, 2019, when the Company will be required to have a 2.5% capital conservation buffer, effectively resulting in a minimum ratio of CET1 capital to risk-weighted assets of at least 7% upon full implementation. The rules also raised the minimum ratio of Tier 1 capital to risk-weighted assets from 4% to 6% and include a minimum leverage ratio of 4% for all banking organizations. Regarding the quality of capital, the new rules emphasize CET1 capital and implements strict eligibility criteria for regulatory capital instruments. The new rules also improve the methodology for calculating risk-weighted assets to enhance risk sensitivity. The new rules are subject to a four year phase in period for mandatory compliance and the Company was required to begin to phase in the new rules beginning on January 1, 2015. Management believes, as of December 31, 2016, that the Company and each of the bank subsidiaries will meet all capital adequacy requirements once the capital conservation is fully phased-in. The CET1 (beginning in 2015), Tier 1 and Total capital ratios are calculated by dividing the respective capital amounts by risk-weighted assets. Risk-weighted assets are calculated based on regulatory requirements and include total assets, excluding goodwill and other intangible assets, allocated by risk weight category, and certain off-balance-sheet items, among other things. The leverage ratio is calculated by dividing Tier 1 capital by adjusted quarterly average total assets, which exclude goodwill and other intangible assets, among other things. The aforementioned capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of CET1 capital to risk-weighted assets above the minimum but below the conservation buffer will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. As of December 31, 2016, capital levels at the Company exceed all capital adequacy requirements under the Basel III Capital Rules as currently applicable to the Company. Based on the ratios presented below, capital levels as of December 31, 2016 at the Company exceed the minimum levels necessary to be considered “well capitalized.” As of December 31, 2016, the most recent notification from the Federal Deposit Insurance Corporation categorized all the bank subsidiaries as well‑capitalized under the regulatory framework for prompt corrective action. To be categorized as “well‑capitalized,” the Company and the bank subsidiaries must maintain minimum Total risk‑based, Tier 1 risk based, and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the categorization of the Company or any of the bank subsidiaries as well‑capitalized. The Company’s and the bank subsidiaries’ actual capital amounts and ratios for 2016 under current guidelines are presented in the following table: For Capital Adequacy To Be Well-Capitalized Purposes Under Prompt Corrective Actual Phase In Schedule Action Provisions Amount Ratio Amount Ratio Amount Ratio (greater than (greater than (greater than (greater than or equal to) or equal to) or equal to) or equal to) (Dollars in Thousands) As of December 31, 2016: Common Equity Tier 1 (to Risk Weighted Assets): Consolidated $ % $ % N/A N/A International Bank of Commerce, Laredo $ % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank Total Capital (to Risk Weighted Assets): Consolidated $ % $ % N/A N/A International Bank of Commerce, Laredo $ % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank Tier 1 Capital (to Risk Weighted Assets): Consolidated $ % $ % N/A N/A International Bank of Commerce, Laredo $ % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank Tier 1 Capital (to Average Assets): Consolidated $ % $ % $ N/A N/A International Bank of Commerce, Laredo % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank The Company’s and the bank subsidiaries’ actual capital amounts and ratios for 2015 are also presented in the following table: To Be Well-Capitalized For Capital Adequacy Under Prompt Corrective Actual Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio (greater than (greater than (greater than (greater than or equal to) or equal to) or equal to) or equal to) (Dollars in Thousands) As of December 31, 2015: Common Equity Tier 1 (to Risk Weighted Assets): Consolidated $ % $ % N/A N/A International Bank of Commerce, Laredo $ % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank Total Capital (to Risk Weighted Assets): Consolidated $ % $ % N/A N/A International Bank of Commerce, Laredo $ % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank Tier 1 Capital (to Risk Weighted Assets): Consolidated $ % $ % N/A N/A International Bank of Commerce, Laredo $ % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank Tier 1 Capital (to Average Assets): Consolidated $ % $ % $ N/A N/A International Bank of Commerce, Laredo % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | (21) Fair Value ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 applies to all financial instruments that are being measured and reported on a fair value basis. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; it also establishes a fair value hierarchy that prioritizes the inputs used in valuation methodologies into the following three levels: · Level 1 Inputs—Unadjusted quoted prices in active markets for identical assets or liabilities. · Level 2 Inputs—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3 Inputs—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or other valuation techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy is set forth below. The following table represents financial instruments reported on the consolidated statements of condition at their fair value as of December 31, 2016 by level within the fair value measurement hierarchy. Fair Value Measurements at Reporting Date Using (in Thousands) Quoted Prices in Active Significant Assets/Liabilities Markets for Other Significant Measured at Identical Observable Unobservable Fair Value Assets Inputs Inputs December 31, 2016 (Level 1) (Level 2) (Level 3) Measured on a recurring basis: Assets: Available for sale securities Residential mortgage-backed securities $ $ — $ $ States and political subdivisions — — Equity securities — — $ $ $ $ The following table represents financial instruments reported on the consolidated balance sheets at their fair value as of December 31, 2015 by level within the fair value measurement hierarchy. Fair Value Measurements at Reporting Date Using (in Thousands) Quoted Prices in Active Significant Assets/Liabilities Markets for Other Significant Measured at Identical Observable Unobservable Fair Value Assets Inputs Inputs December 31, 2015 (Level 1) (Level 2) (Level 3) Measured on a recurring basis: Assets: Available for sale securities Residential mortgage - backed securities $ $ — $ $ States and political subdivisions — — Equity securities — — $ $ $ $ Investment securities available‑for‑sale are classified within level 2 and level 3 of the valuation hierarchy, with the exception of certain equity investments that are classified within level 1. For investments classified as level 2 in the fair value hierarchy, the Company obtains fair value measurements for investment securities from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. Investment securities classified as level 3 are non‑agency mortgage‑backed securities. The non‑agency mortgage‑backed securities held by the Company are traded in inactive markets and markets that have experienced significant decreases in volume and level of activity, as evidenced by few recent transactions, a significant decline or absence of new issuances, price quotations that are not based on comparable securities transactions and wide bid‑ask spreads among other factors. As a result of the inability to use quoted market prices to determine fair value for these securities, the Company determined that fair value, as determined by level 3 inputs in the fair value hierarchy, is more appropriate for financial reporting and more consistent with the expected performance of the investments. For the investments classified within level 3 of the fair value hierarchy, the Company used a discounted cash flow model to determine fair value. Inputs in the model included both historical performance and expected future performance based on information currently available. Assumptions used in the discounted cash flow model as of December 31, 2016 and December 31, 2015 were applied separately to those portions of the bond where the underlying residential mortgage loans had been performing under original contract terms for at least the prior 24 months and those where the underlying residential mortgages had not been meeting the original contractual obligation for the same period. Unobservable inputs included in the model are estimates on future principal prepayment rates, and default and loss severity rates. For that portion of the bond where the underlying residential mortgage had been meeting the original contract terms for at least 24 months, the Company used the following estimates in the model: (i) a voluntary prepayment rate of 7%, (ii) a 1% default rate, (iii) a loss severity rate of 25%, and (iv) a discount rate of 13%. The assumptions used in the model for the rest of the bond included the following estimates: (i) a voluntary prepayment rate of 2%, (ii) a default rate of 4.5%, (iii) a loss severity rate that started at 60% for the first year (2012) then declines by 5% for the following five years (2013, 2014, 2015, 2016 and 2017) and remains at 25% thereafter (2018 and beyond), and (iv) a discount rate of 13%. The estimates used in the model to determine fair value are based on observable historical data of the underlying collateral. The model anticipates that the housing market will gradually improve and that the underlying collateral will eventually all perform in accordance with the original contract terms on the bond. Should the number of loans in the underlying collateral that default and go into foreclosure or the severity of the losses in the underlying collateral significantly change, the results of the model would be impacted. The Company will continue to evaluate the actual historical performance of the underlying collateral and will modify the assumptions used in the model as necessary. The following table presents a reconciliation of activity for such mortgage‑backed securities on a net basis (Dollars in Thousands): Balance at December 31, 2015 $ Principal paydowns Total unrealized gains (losses) included in: Other comprehensive loss Impairment realized in earnings Balance at December 31, 2016 $ Certain financial instruments are measured at fair value on a nonrecurring basis. They are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following table represents financial instruments measured at fair value on a non‑recurring basis as of and for the period ended December 31, 2016 by level within the fair value measurement hierarchy: Fair Value Measurements at Reporting Date Using (in thousands) Quoted Assets/Liabilities Prices in Measured at Active Significant Fair Value Markets for Other Significant Net Provision Year ended Identical Observable Unobservable (Credit) December 31, Assets Inputs Inputs During 2016 (Level 1) (Level 2) (Level 3) Period Measured on a non-recurring basis: Assets: Impaired loans $ $ — $ — $ $ Other real estate owned — — The following table represents financial instruments measured at fair value on a non‑recurring basis as of and for the year ended December 31, 2015 by level within the fair value measurement hierarchy: Fair Value Measurements at Reporting Date Using (in thousands) Quoted Assets/Liabilities Prices in Measured at Active Significant Fair Value Markets Other Significant Net (Credit) Year ended for Identical Observable Unobservable Provision December 31, Assets Inputs Inputs During 2015 (Level 1) (Level 2) (Level 3) Period Measured on a non-recurring basis: Assets: Impaired loans $ $ — $ — $ $ Other real estate owned — — The Company’s assets measured at fair value on a non-recurring basis are limited to impaired loans and other real estate owned. Impaired loans are classified within level 3 of the valuation hierarchy. The fair value of impaired loans is derived in accordance with FASB ASC 310, “Receivables”. Impaired loans are primarily comprised of collateral-dependent commercial loans. Understanding that as the primary sources of loan repayments decline, the secondary repayment source comes into play and correctly evaluating the fair value of that secondary source, the collateral, becomes even more important. Re-measurement of the impaired loan to fair value is done through a specific valuation allowance included in the allowance for probable loan losses. The fair value of impaired loans is based on the fair value of the collateral, as determined through either an appraisal or evaluation process. The basis for the Company’s appraisal and appraisal review process is based on regulatory guidelines and strives to comply with all regulatory appraisal laws, regulations and the Uniform Standards of Professional Appraisal Practice. All appraisals and evaluations are “as is” (the property’s highest and best use) valuations based on the current conditions of the property/project at that point in time. The determination of the fair value of the collateral is based on the net realizable value, which is the appraised value less any closing costs, when applicable. As of December 31, 2016, the Company had approximately $38,108,000 of impaired commercial collateral dependent loans, of which approximately $26,162,000 had an appraisal performed within the immediately preceding twelve months and of which approximately $6,836,000 had an evaluation performed within the immediately preceding twelve months. As of December 31, 2015, the Company had approximately $51,021,000 of impaired commercial collateral dependent loans, of which approximately $39,520,000 had an appraisal performed within the immediately preceding twelve months and of which approximately $2,958,000 had an evaluation performed within the immediately preceding twelve months. The determination to either seek an appraisal or to perform an evaluation begins in weekly credit quality meetings, where the committee analyzes the existing collateral values of the impaired loans and where obsolete appraisals are identified. In order to determine whether the Company would obtain a new appraisal or perform an internal evaluation to determine the fair value of the collateral, the credit committee reviews the existing appraisal to determine if the collateral value is reasonable in view of the current use of the collateral and the economic environment related to the collateral. If the analysis of the existing appraisal does not find that the collateral value is reasonable under the current circumstances, the Company would obtain a new appraisal on the collateral or perform an internal evaluation of the collateral. The ultimate decision to get a new appraisal rests with the independent credit administration group. A new appraisal is not required if an internal evaluation, as performed by in-house experts, is able to appropriately update the original appraisal assumptions to reflect current market conditions and provide an estimate of the collateral’s market value for impairment analysis. The internal evaluations must be in writing and contain sufficient information detailing the analysis, assumptions and conclusions and they must support performing an evaluation in lieu of ordering a new appraisal. Other real estate owned is comprised of real estate acquired by foreclosure and deeds in lieu of foreclosure. Other real estate owned is carried at the lower of the recorded investment in the property or its fair value less estimated costs to sell such property (as determined by independent appraisal) within level 3 of the fair value hierarchy. Prior to foreclosure, the value of the underlying loan is written down to the fair value of the real estate to be acquired by a charge to the allowance for probable loan losses, if necessary. The fair value is reviewed periodically and subsequent write downs are made accordingly through a charge to operations. Other real estate owned is included in other assets on the consolidated financial statements. For the twelve months ended December 31, 2016, December 31, 2015 and December 31, 2014, respectively the Company recorded approximately $381,000, $696,000 and $367,000 in charges to the allowance for probable loan losses in connection with loans transferred to other real estate owned. For the twelve months ended December 31, 2016, December 31, 2015 and December 31, 2014, respectively, the Company recorded approximately $2,351,000, $1,023,000 and $597,000 in adjustments to fair value in connection with other real estate owned. The fair value estimates, methods, and assumptions for the Company’s financial instruments at December 31, 2016 and December 31, 2015 are outlined below. Cash and Cash Equivalents For these short‑term instruments, the carrying amount is a reasonable estimate of fair value. Investment securities held‑to‑maturity The carrying amounts of investments held‑to‑maturity approximate fair value. Investment Securities For investment securities, which include U.S. Treasury securities, obligations of other U.S. government agencies, obligations of states and political subdivisions and mortgage pass through and related securities, fair values are from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. See disclosures of fair value of investment securities in Note 2. Loans Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as commercial, real estate and consumer loans as outlined by regulatory reporting guidelines. Each category is segmented into fixed and variable interest rate terms and by performing and non‑performing categories. For variable rate performing loans, the carrying amount approximates the fair value. For fixed rate performing loans, except residential mortgage loans, the fair value is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the loan. For performing residential mortgage loans, fair value is estimated by discounting contractual cash flows adjusted for prepayment estimates using discount rates based on secondary market sources or the primary origination market. Fixed rate performing loans are within Level 3 of the fair value hierarchy. At December 31, 2016, and December 31, 2015, the carrying amount of fixed rate performing loans was $1,411,272,000 and $1,383,836,000, respectively, and the estimated fair value was $1,375,807,000 and $1,362,248,000, respectively. Accrued Interest The carrying amounts of accrued interest approximate fair value. Deposits The fair value of deposits with no stated maturity, such as non‑interest bearing demand deposit accounts, savings accounts and interest bearing demand deposit accounts, was equal to the amount payable on demand as of December 31, 2016 and December 31, 2015. The fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is based on currently offered rates. Time deposits are within Level 3 of the fair value hierarchy. At December 31, 2016 and December 31, 2015, the carrying amount of time deposits was $2,248,310,000 and $2,366,413,000, respectively, and the estimated fair value was $2,247,648,000 and $2,365,390,000, respectively. Securities Sold Under Repurchase Agreements Securities sold under repurchase agreements include both short and long‑term maturities. Due to the contractual terms of the short‑term instruments, the carrying amounts approximated fair value at December 31, 2016 and December 31, 2015. The fair value of the long‑term instruments is based on established market spread using option adjusted spreads methodology. Long‑term repurchase agreements are within level 3 of the fair value hierarchy. At December 31, 2016 and December 31, 2015, respectively, the carrying amount of long‑term repurchase agreements was $300,000,000 and $560,000,000 and the estimated fair value was $289,324,000 and $527,198,600, respectively. Junior Subordinated Deferrable Interest Debentures The company currently has floating rate junior subordinated deferrable interest debentures outstanding. Due to the contractual terms of the floating rate junior subordinated deferrable interest debentures, the carrying amounts approximated fair value at December 31, 2016 and December 31, 2015. Other Borrowed Funds The company currently has short and long‑term borrowings issued from the Federal Home Loan Bank (“FHLB”). Due to the contractual terms of the short‑term borrowings, the carrying amounts approximated fair value at December 31, 2016 and December 31, 2015. The long-term borrowings outstanding at December 31, 2016 are variable rate borrowings and re-price on a monthly basis. Commitments to Extend Credit and Letters of Credit Commitments to extend credit and fund letters of credit are principally at current interest rates and therefore the carrying amount approximates fair value. Limitations Fair value estimates are made at a point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates are based on existing on‑and off‑statement of condition financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Other significant assets and liabilities that are not considered financial assets or liabilities include the bank premises and equipment and core deposit value. In addition, the tax ramifications related to the effect of fair value estimates have not been considered in the above estimates. |
International Bancshares Corpor
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Condition | 12 Months Ended |
Dec. 31, 2016 | |
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Condition | |
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Condition | (22) International Bancshares Corporation (Parent Company Only) Financial Information Statements of Condition (Parent Company Only) December 31, 2016 and 2015 (Dollars in Thousands) 2016 2015 ASSETS Cash $ $ Other investments Notes receivable — Investment in subsidiaries Other assets Total assets $ $ LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Junior subordinated deferrable interest debentures $ $ Due to IBC Trading Other liabilities Total liabilities Shareholders’ equity: Common shares Surplus Retained earnings Accumulated other comprehensive (loss) income Less cost of shares in treasury Total shareholders’ equity Total liabilities and shareholders’ equity $ $ |
International Bancshares Corp33
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Income | 12 Months Ended |
Dec. 31, 2016 | |
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Income | |
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Income | (23) International Bancshares Corporation (Parent Company Only) Financial Information Statements of Income (Parent Company Only) Years ended December 31, 2016, 2015 and 2014 (Dollars in Thousands) 2016 2015 2014 Income: Dividends from subsidiaries $ $ $ Interest income on notes receivable Interest income on other investments Other Total income Expenses: Interest expense (Debentures) Other Total expenses Income before federal income taxes and equity in undistributed net income of subsidiaries Income tax expense Income before equity in undistributed net income of subsidiaries Equity in undistributed net income of subsidiaries Net income $ $ $ |
International Bancshares Corp34
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Cash Flows | 12 Months Ended |
Dec. 31, 2016 | |
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Cash Flows | |
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Cash Flows | (24) International Bancshares Corporation (Parent Company Only) Financial Information Statements of Cash Flows (Parent Company Only) Years ended December 31, 2016, 2015 and 2014 (Dollars in Thousands) 2016 2015 2014 Operating activities: Net income $ $ $ Adjustments to reconcile net income to net cash provided by operating activities: Impairment charges on available for sale securities Stock compensation expense Increase (decrease) in other liabilities Equity in undistributed net income of subsidiaries Net cash provided by operating activities Investing activities: Principal collected on mortgage-backed securities Net decrease in notes receivable Increase in other assets and other investments Net cash used in investing activities Financing activities: Redemption of long-term debt Proceeds from stock transactions Payments of cash dividends - common Purchase of treasury stock Net cash used in financing activities Increase (decrease) in cash Cash at beginning of year Cash at end of year $ $ $ |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Consolidation and Basis of Presentation | Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Corporation and its wholly-owned bank subsidiaries, International Bank of Commerce, Laredo (“IBC”), Commerce Bank, International Bank of Commerce, Zapata, International Bank of Commerce, Brownsville, and the Corporation's wholly-owned non-bank subsidiaries, IBC Subsidiary Corporation, IBC Life Insurance Company, IBC Trading Company, Premier Tierra Holdings, Inc., IBC Charitable and Community Development Corporation, and IBC Capital Corporation. All significant inter-company balances and transactions have been eliminated in consolidation. The Company, through its subsidiaries, is primarily engaged in the business of banking, including the acceptance of checking and savings deposits and the making of commercial, real estate, personal, home improvement, automobile and other installment and term loans. The primary markets of the Company are South, Central, and Southeast Texas and the state of Oklahoma. Each bank subsidiary is very active in facilitating international trade along the United States border with Mexico and elsewhere. Although the Company’s loan portfolio is diversified, the ability of the Company’s debtors to honor their contracts is primarily dependent upon the economic conditions in the Company’s trade area. In addition, the investment portfolio is directly impacted by fluctuations in market interest rates. The Company and its bank subsidiaries are subject to the regulations of certain Federal agencies as well as the Texas Department of Banking and undergo periodic examinations by those regulatory authorities. Such agencies may require certain standards or impose certain limitations based on their judgments or changes in law and regulations. The Company owns one insurance‑related subsidiary, IBC Insurance Agency, Inc., a wholly owned subsidiary of IBC, the bank subsidiary. The insurance‑related subsidiary does not conduct underwriting activities. The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the statement of condition and income and expenses for the periods. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant changes in the near‑term relate to the determination of the allowance for probable loan losses. |
Subsequent Events | Subsequent Events The Company has evaluated all events or transactions that occurred through the date the Company issued these financial statements. During this period, the Company did not have any material recognizable or non‑recognizable subsequent events. |
Investment Securities | Investment Securities The Company classifies debt and equity securities into one of these categories: held‑to‑maturity, available‑for‑sale, or trading. Such classifications are reassessed for appropriate classification at each reporting date. Securities that are intended and expected to be held until maturity are classified as “held‑to‑maturity” and are carried at amortized cost for financial statement reporting. Securities that are not positively expected to be held until maturity, but are intended to be held for an indefinite period of time are classified as “available‑for‑sale” or “trading” and are carried at their fair value. Unrealized holding gains and losses are included in net income for those securities classified as “trading”, while unrealized holding gains and losses related to those securities classified as “available‑for‑sale” are excluded from net income and reported net of tax as other comprehensive income and in shareholders’ equity as accumulated other comprehensive income until realized. The Company did not maintain any trading securities during the three year period ended December 31, 2016. Mortgage‑backed securities held at December 31, 2016 and 2015 represent participating interests in pools of long‑term first mortgage loans originated and serviced by the issuers of the securities. Mortgage‑backed securities are either issued or guaranteed by the U.S. government or its agencies including the Federal Home Loan Mortgage Corporation (“Freddie Mac”), the Federal National Mortgage Association (“Fannie Mae”), the Government National Mortgage Association (“Ginnie Mae”) or other non‑government entities. Investments in residential mortgage‑backed securities issued by Ginnie Mae are fully guaranteed by the U. S. government. Investments in residential mortgage‑backed securities issued by Freddie Mac and Fannie Mae are not fully guaranteed by the U.S. government, however, the Company believes that the quality of the bonds is similar to other AAA rated bonds with limited credit risk, particularly given the placement of Fannie Mae and Freddie Mac into conservatorship by the federal government in 2008 and because securities issued by others that are collateralized by residential mortgage‑backed securities issued by Fannie Mae or Freddie Mac are rated consistently as AAA rated securities. Market interest rate fluctuations can affect the prepayment speed of principal and the yield on the security. Premiums and discounts are amortized using the level yield or “interest method” over the terms of the securities. Declines in the fair value of held‑to‑maturity and available‑for sale‑securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses. In determining whether other‑than‑temporary impairment exists, management considers many factors, including (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near‑term prospects of the issuer, and (3) the intent of the Company to hold and the determination of whether the Company will more likely than not be required to sell the security prior to a recovery in fair value. If the Company determines that (1) it intends to sell the security or (2) it is more likely than not that it will be required to sell the security before it’s anticipated recovery, the other‑than‑temporary impairment that is recognized in earnings is equal to the difference between the fair value of the security and the Company’s amortized cost in the security. If the Company determines that it (1) does not intend to sell the security and (2) it will not be more likely than not required to sell the security before it’s anticipated recovery, the other‑than‑temporary impairment is segregated into its two components (1) the amount of impairment related to credit loss and (2) the amount of impairment related to other factors. The difference between the present value of the cash flows expected to be collected and the amortized cost is the credit loss recognized through earnings and an adjustment to the cost basis of the security. The amount of impairment related to other factors is included in other comprehensive income (loss). Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. |
Provision and Allowance for Probable Loan Losses | Provision and Allowance for Probable Loan Losses The allowance for probable loan losses is maintained at a level considered adequate by management to provide for probable loan losses. The allowance is increased by provisions charged to operating expense and reduced by net charge‑offs. The provision for probable loan losses is the amount, which, in the judgment of management, is necessary to establish the allowance for probable loan losses at a level that is adequate to absorb known and inherent risks in the loan portfolio. Management believes that the allowance for probable loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s bank subsidiaries’ allowances for probable loan losses. Such agencies may require the Company’s bank subsidiaries to make additions or reductions to their U.S. generally accepted accounting principles (“GAAP”) allowances based on their judgments of information available to them at the time of their examination. The bank subsidiaries charge off that portion of any loan which management considers to represent a loss as well as that portion of any other loan which is classified as a “loss” by bank examiners. Commercial, financial and agricultural or real estate loans are generally considered by management to represent a loss, in whole or part, (i) when an exposure beyond any collateral coverage is apparent, (ii) when no further collection of the portion of the loan so exposed is anticipated based on actual results, (iii) when the credit enhancements, if any, are not adequate, and (iv) when the borrower’s financial condition would indicate so. Generally, unsecured consumer loans are charged off when 90 days past due. |
Loans | Loans Loans are reported at the principal balance outstanding, net of unearned discounts. Interest income on loans is reported on an accrual basis. Loan fees and costs associated with originating the loans are amortized over the life of the loan using the interest method. The Company originates mortgage loans that may subsequently be sold to an unaffiliated third party. The loans are not securitized and if sold, are sold without recourse. Loans held for sale are carried at cost and the principal amount outstanding is not significant to the consolidated financial statements. |
Impaired Loans | Impaired Loans Impaired loans are those loans where it is probable that all amounts due according to contractual terms of the loan agreement will not be collected. Impaired loans are measured based on (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price; or (3) the fair value of the collateral if the loan is collateral dependent. Substantially all of the Company’s impaired loans are measured at the fair value of the collateral. In limited cases the Company may use other methods to determine the level of impairment of a loan if such loan is not collateral dependent. |
Troubled Debt Restructured Loans | Troubled Debt Restructured Loans Troubled debt restructured loans (“TDR”) are those loans where, for reasons related to a borrower’s difficulty to repay a loan, the company grants a concession to the borrower that the company would not normally consider in the normal course of business. The original terms of the loan are modified or restructured. The terms that may be modified include a reduction in the original stated interest rate, an extension of the original maturity of the loan, a renewal of the loan at an interest rate below current market rates, a reduction in the principal amount of debt outstanding, a reduction in accrued interest or deferral of interest payments. A loan classified as a TDR is classified as an impaired loan and included in the impaired loan totals. A TDR loan may be returned to accrual status when the loan is brought current, has performed in accordance with the restructured terms for a reasonable period of time, is at the current market rate, and the ultimate collectability of the outstanding principal and interest is no longer questionable, however, although those loans may be placed back on accrual status, they will continue to be classified as impaired. Consistent with regulatory guidance, a TDR loan that is subsequently modified, but has shown sustained performance and classification as a TDR, will be removed from TDR status provided that the modified terms were market-based at the time of modification. |
Non-Accrual Loans | Non‑Accrual Loans The non‑accrual loan policy of the Company’s bank subsidiaries is to discontinue the accrual of interest on loans when management determines that it is probable that future interest accruals will be un‑collectible. As it relates to consumer loans, management charges off those loans when the loan is contractually 90 days past due. Under special circumstances, a consumer or non‑consumer loan may be more than 90 days delinquent as to interest or principal and not be placed on non‑accrual status. This situation generally results when a bank subsidiary has a borrower who is experiencing financial difficulties, but not to the extent that requires a restructuring of indebtedness. The majority of this category is composed of loans that are considered to be adequately secured and/or for which there are expected future payments. When a loan is placed on non‑accrual status, any interest accrued, not paid is reversed and charged to operations against interest income. As it relates to non‑consumer loans that are not 90 days past due, management will evaluate each of these loans to determine if placing the loan on non‑accrual status is warranted. Interest income on non‑accrual loans is recognized only to the extent payments are received or when, in management’s opinion, the debtor’s financial condition warrants reestablishment of interest accruals. |
Other Real Estate Owned | Other Real Estate Owned Other real estate owned is comprised of real estate acquired by foreclosure and deeds in lieu of foreclosure. Other real estate is carried at the lower of the recorded investment in the property or its fair value less estimated costs to sell such property (as determined by independent appraisal). Prior to foreclosure, the value of the underlying loan is written down to the fair value of the real estate to be acquired by a charge to the allowance for probable loan losses, if necessary. Any subsequent write‑downs are charged against other non‑interest expense through a valuation allowance. Other real estate owned totaled approximately $42,204,000 and $55,850,000 at December 31, 2016 and 2015, respectively. Other real estate owned is included in other assets. |
Bank Premises and Equipment | Bank Premises and Equipment Bank premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed on straight‑line and accelerated methods over the estimated useful lives of the assets. Repairs and maintenance are charged to operations as incurred and expenditures for renewals and betterments are capitalized. |
Other Investments | Other Investments Other investments include equity investments in non‑financial companies, bank owned life insurance, as well as equity securities with no readily determinable fair market value. Equity investments are accounted for using the equity method of accounting. Equity securities with no readily determinable fair value are accounted for using the cost method. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined using the asset and liability method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the differences between the book and tax basis of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. The Company files a consolidated federal income tax return with its subsidiaries. Recognition of deferred tax assets is based on management’s assessment that the benefit related to certain temporary differences, tax operating loss carry forwards, and tax credits are more likely than not to be realized. A valuation allowance is recorded for the amount of the deferred tax items for which it is more likely than not that the tax benefits will not be realized. The Company evaluates uncertain tax positions at the end of each reporting period. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefit recognized in the financial statements from any such a position is measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. As of December 31, 2016 and 2015, respectively, after evaluating all uncertain tax positions, the Company has recorded no liability for unrecognized tax benefits at the end of the reporting period. The Company would recognize any interest accrued on unrecognized tax benefits as other interest expense and penalties as other non‑interest expense. During the years ended December 31, 2016, 2015 and 2014, the Company recognized no interest expense or penalties related to uncertain tax positions. The Company files consolidated tax returns in the U.S. Federal jurisdiction and various state jurisdictions. The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2013. |
Stock Options | Stock Options Compensation expense for stock awards is based on the market price of the stock on the measurement date, which is generally the date of grant, and is recognized ratably over the service period of the award. The fair value of stock options granted was estimated, using the Black‑Sholes‑Merton option‑pricing model. This model was developed for use in estimating the fair value of publicly traded options that have no vesting restrictions and are fully transferable. Additionally, the model requires the input of highly subjective assumptions. Because the Company’s employee stock options have characteristics significantly different from those of publicly traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the Black‑Scholes‑Merton option‑pricing model does not necessarily provide a reliable single measure of the fair value of the Company’s stock options. |
Net Income Per Share | Net Income Per Share Basic Earnings Per Share (“EPS”) is calculated by dividing net income by the weighted average number of common shares outstanding. The computation of diluted EPS assumes the issuance of common shares for all dilutive potential common shares outstanding during the reporting period. The dilutive effect of stock options is considered in earnings per share calculations, if dilutive, using the treasury stock method. |
Goodwill and Identified Intangible Assets | Goodwill and Identified Intangible Assets Goodwill represents the excess of costs over fair value of assets of businesses acquired. Goodwill is tested for impairment at least annually or on an interim basis if an event triggering impairment may have occurred. As of October 1, 2016, after completing goodwill testing, the Company has determined that no goodwill impairment exists. Identified intangible assets are acquired assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or because the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset, or liability. The Company’s identified intangible assets relate to core deposits and contract rights. As of December 31, 2016, the Company has determined that no impairment of identified intangibles exists. Identified intangible assets with definite useful lives are amortized on an accelerated basis over their estimated life. See Note 6—Goodwill and Other Intangible Assets. |
Impairment of Long-Lived Assets | Impairment of Long‑Lived Assets Long‑lived assets, such as property, plant and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying value of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying value of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying value of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the statement of condition and reported at the lower of the carrying value or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the statement of condition. |
Consolidated Statements of Cash Flows | Consolidated Statements of Cash Flows For purposes of the consolidated statements of cash flows, the Company considers all short‑term investments with a maturity at date of purchase of three months or less to be cash equivalents. Also, the Company reports transactions related to deposits and loans to customers on a net basis. |
Accounting for Transfers and Servicing of Financial Assets | Accounting for Transfers and Servicing of Financial Assets The Company accounts for transfers and servicing of financial assets and extinguishments of liabilities based on the application of a financial‑components approach that focuses on control. After a transfer of financial assets, the Company recognizes the financial and servicing assets it controls and liabilities it has incurred, derecognizes financial assets when control has been surrendered and derecognizes liabilities when extinguished. The Company has retained mortgage servicing rights in connection with the sale of mortgage loans. Because the Company may not initially identify loans as originated for resale, all loans are initially treated as held for investment. The value of the mortgage servicing rights are reviewed periodically for impairment and are amortized in proportion to, and over the period of estimated net servicing income or net servicing losses. The value of the mortgage servicing rights is not significant to the consolidated statements of condition. |
Segments of an Enterprise and Related Information | Segments of an Enterprise and Related Information The Company operates as one segment. The operating information used by the Company’s chief executive officer for purposes of assessing performance and making operating decisions about the Company is the consolidated financial statements presented in this report. The Company has four active operating subsidiaries, namely, the bank subsidiaries, otherwise known as International Bank of Commerce, Laredo, Commerce Bank, International Bank of Commerce, Zapata and International Bank of Commerce, Brownsville. The Company applies the provisions of ASC Topic 280, “Segment Reporting,” in determining its reportable segments and related disclosures. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale. |
Advertising | Advertising Advertising costs are expensed as incurred. |
Reclassifications | Reclassifications Certain amounts in the prior year’s presentations have been reclassified to conform to the current presentation. These reclassifications had no effect on previously reported net income or shareholders’ equity. |
New Accounting Standards | New Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09 to ASC 606, “Revenue from Contracts with Customers.” The update sets a common standard that defines revenue and the principles for recognizing revenue. The update outlines when an entity should recognize revenue, among other matters. At its core, the update states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The update also outlines the steps that entities should take to determine and record the correct revenue number. The update was originally effective for annual periods beginning after December 15, 2016 and the interim perriods wihin that reporting period. In August 2015, the FASB issued accounting Standards Update No 2015-14 which deferred the effective date of Accounting Standards Update No. 2014-019 by one year to annual and interim periods beginning after December 15, 2017. The Company’s revenue is primarily comprised of net interest income on financial assets and financial liabilities and non-interest income, which is explicitly excluded from the scope of the update. The Company will continue to evaluate the impact of the update on certain other revenue items, such as the sales of other real estate, however, the adtoption of the update is not expected to have a significant impact on the Company’s consolidated financial statements. In January 2015, the FASB issued Accounting Standards Update No. 2015-01 to ASC 225-20, “Income Statement- Extraordinary and Unusual Items.” The update amends existing standards and is being issued as part of the FASB’s initiative to reduce complexity in accounting standards. The update eliminates the concept of extraordinary items. The update is effective for interim and annual periods after December 15, 2015. The adoption of the update did not have a significant impact to the Company’s consolidated financial statements. In February 2015, the FASB issued Accounting Standards Update No. 2015-02 to ASC 810, “Consolidation.” The update amends existing standards regarding the evaluation of certain legal entities and their consolidation in the financial statements. The amendments modify the evaluation process to assess whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, eliminate the presumption that a general partner should consolidate a limited partnership, affect the consolidation analysis of entities that are involved in variable interest entities, particularly those that have fee arrangements and related party relationships and provides a scope exception for reporting entities with legal interests that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The update is effective for interim and annual periods after December 15, 2015. The adoption of the update to existing standards did not have a significant impact to the Company’s consolidated financial statements. In September 2015, the FASB issued Accounting Standards Update No. 2015-16 to ASC 805, “Business Combinations.” The update amends existing standards regarding the methodology used to recognize adjustments related to provisional amounts that are identified during the measurement period of a business combination. The update requires that adjustments to provisional amounts be recognized in the reporting period in which the adjustment amounts are determined. The update requires that the reporting entity disclose on the face of the income statement or in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The update is effective for interim and annual periods after December 15, 2015. The adoption of the update to existing standards did not have a significant impact to the Company’s consolidated financial statements. In January 2016, the FASB issued Accounting Standards Update No. 2016-01 to ASC 825-10, “Financial Instruments – Overall.” The update amends existing standards regarding certain aspects of recognition and measurement of financial assets and financial liabilities. The amendments in the update establish the following guidance: (i) requires equity investments, except those accounted for under the equity method of accounting or those that result in consolidation of the investee, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity securities without readily determinable fair values by requiring a qualitative assessment, (iii) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities, (iv) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (v) requires public business entities to use the exit price notion when measuring fair value for disclosure purposes, (vi) requires an entity to present separately, in other comprehensive income, the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option, (vii) requires separate presentation of financial assets and liabilities by measurement category and form of financial assets on the balance sheet or in the accompanying notes to the financial statements, and (viii) clarifies that an entity should evaluate the need to a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The update is effective for interim and annual periods beginning after December 15, 2017. The adoption of the update is not expected to have a significant impact to the Company’s consolidated financial statements. In February 2016, the FASB issued Accounting Standards Update No. 2016-02 to ASC 820, “Leases.” The update amends existing standards for accounting for leases by lessees, with accounting for leases by lessors remaining mainly unchanged from current guidance. The update requires that lessees recognize a lease liability and a right of use asset for all leases (with the exception of short-term leases) at the commencement date of the lease and disclose key information about leasing arrangements. The update is effective for interim and annual periods beginning after December 15, 2015 and is to be applied on a modified retrospective basis. The Company is evaluating the potential impact to the Company’s consolidated financial statements. In March 2016, the FB issued Accounting Standards Update No. 2016-09 to ASC 718, “Compensation – Stock Compensation.” The update amends existing standards for accounting for share-based payment transactions, including the income tax effects, the classification of awards on the balance sheet and the classification on the statement of cash flows. The update is effective for annual and interim periods after December 15, 2016. The adoption of the update is not expected to have a significant impact to the Company’s consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 to ASC 326, “Financial Insruments – Credit Losses.” The update amends existing standards for accounting for credit losses for financial assets. The update requires that the expected credit losses on the financial instruments held as of the end of the period being reported be measured based on historical experience, current conditions, and reasonable and supportable forecasts. The update also expands the required disclosures related to significant estimates and judgements used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s financial assets. The update also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioriation. The update is effective for interim and annual periods beginning after December 15, 2019. The Company is evaluating the potential impact of the update on the Company’s consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04 to ASC 350, “Intangibles – Goodwill and Other.” The update amends existing guidance in evaluating goodwill for impairment. The update requires that an entity perform its annual or interim goodwill test by comparing the fair value of a reporting unit with its carrying amount, with any impairment charges being recognized as the difference between the fair value and carrying value. The update is intended to standardize the impairment test for all business entities and also reduce the complexity and cost of evaluating goodwill for impairment. The update is effective for any annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The adoption of the update is not expected to have a significant impact to the Company’s consolidated financial statements. |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investment Securities | |
Amortized cost and estimated fair value by type of investment security | The amortized cost and estimated fair value by type of investment security at December 31, 2016 are as follows: Held to Maturity Gross Gross Amortized unrealized unrealized Estimated Carrying cost gains losses fair value value (Dollars in Thousands) Other securities $ $ — $ — $ $ Total investment securities $ $ — $ — $ $ Available for Sale Gross Gross Amortized unrealized unrealized Estimated Carrying cost gains losses fair value value (1) (Dollars in Thousands) Residential mortgage-backed securities $ $ $ $ $ Obligations of states and political subdivisions Equity securities Total investment securities $ $ $ $ $ (1) Included in the carrying value of residential mortgage‑ backed securities are $850,033 of mortgage‑backed securities issued by Ginnie Mae, $ 3,026,832 of mortgage‑backed securities issued by Fannie Mae and Freddie Mac and $17,605 issued by non‑government entities The amortized cost and estimated fair value by type of investment security at December 31, 2015 are as follows: Held to Maturity Gross Gross Amortized unrealized unrealized Estimated Carrying cost gains losses fair value value (Dollars in Thousands) Other securities $ $ — $ — $ $ Total investment securities $ $ — $ — $ $ Available for Sale Gross Gross Estimated Amortized unrealized unrealized fair Carrying cost gains losses value value (1) (Dollars in Thousands) Residential mortgage-backed securities $ $ $ $ $ Obligations of states and political subdivisions Equity securities Total investment securities $ $ $ $ $ (1) Included in the carrying value of residential mortgage‑ backed securities are $1,147,143 of mortgage‑backed securities issued by Ginnie Mae, $2,724,839 of mortgage‑backed securities issued by Fannie Mae and Freddie Mac and $21,229 issued by non‑government entities |
Amortized cost and fair value of investment securities, by contractual maturity | Held to Maturity Available for Sale Amortized Estimated Amortized Estimated Cost fair value Cost fair value (Dollars in Thousands) Due in one year or less $ $ $ — $ — Due after one year through five years — — Due after five years through ten years — — Due after ten years — — Residential mortgage-backed securities — — Equity securities — — Total investment securities $ $ $ $ |
Gross unrealized losses on investment securities and the related fair value | Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2016 were as follows: Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses (Dollars in Thousands) Available for sale: Residential mortgage-backed securities $ $ $ $ $ $ Obligations of states and political subdivisions — — Equity securities $ $ $ $ $ $ Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous loss position, at December 31, 2015 were as follows: Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses (Dollars in Thousands) Available for sale: Residential mortgage-backed securities $ $ $ $ $ $ Obligations of states and political subdivisions Equity securities $ $ $ $ $ $ |
Reconciliation of credit-related impairment charges on available-for-sale investment | The following table presents a reconciliation of credit‑related impairment charges on available‑for‑sale investments recognized in earnings for the twelve months ended December 31, 2016 (in Thousands): Balance at December 31, 2015 $ Impairment charges recognized during period Balance at December 31, 2016 $ The following table presents a reconciliation of credit‑related impairment charges on available‑for‑sale investments recognized in earnings for the twelve months ended December 31, 2015 (in Thousands): Balance at December 31, 2014 $ Impairment charges recognized during period Balance at December 31, 2015 $ The following table presents a reconciliation of credit‑related impairment charges on available‑for‑sale investments recognized in earnings for the twelve months ended December 31, 2014 (in Thousands): Balance at December 31, 2013 $ Impairment charges recognized during period Balance at December 31, 2014 $ |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Loans | |
Summary of loans, by loan type | December 31, December 31, 2016 2015 (Dollars in Thousands) Commercial, financial and agricultural $ $ Real estate - mortgage Real estate - construction Consumer Foreign Total loans $ $ |
Allowance for Probable Loan L38
Allowance for Probable Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Allowance for Probable Loan Losses | |
Summary of the transactions in the allowance for probable loan losses by loan class | December 31, 2016 Domestic Foreign Commercial real estate: other Commercial construction & real estate: Commercial land farmland & real estate: Residential: Residential: Commercial development commercial multifamily first lien junior lien Consumer Foreign Total (Dollars in Thousands) Balance at December 31, $ $ $ $ $ $ $ $ $ Losses charge to allowance Recoveries credited to allowance — Net losses charged to allowance Provision (credit) charged to operations Balance at December 31, $ $ $ $ $ $ $ $ $ December 31, 2015 Domestic Foreign Commercial real estate: other Commercial construction & real estate: Commercial land farmland & real estate: Residential: Residential: Commercial development commercial multifamily first lien junior lien Consumer Foreign Total (Dollars in Thousands) Balance at December 31, $ $ $ $ $ $ $ $ $ Losses charge to allowance — — Recoveries credited to allowance — Net losses charged to allowance — Provision (credit) charged to operations Balance at December 31, $ $ $ $ $ $ $ $ $ December 31, 2014 Domestic Foreign Commercial real estate: other Commercial construction & real estate: Commercial land farmland & real estate: Residential: Residential: Commercial development commercial multifamily first lien junior lien Consumer Foreign Total (Dollars in Thousands) Balance at December 31, $ $ $ $ $ $ $ $ $ Losses charge to allowance — Recoveries credited to allowance — Net losses charged to allowance — Provision (credit) charged to operations Balance at December 31, $ $ $ $ $ $ $ $ $ |
Loans individually or collectively evaluated for their impairment and related allowance, by loan class | December 31, 2016 Loans Individually Loans Collectively Evaluated For Evaluated For Impairment Impairment Recorded Recorded Investment Allowance Investment Allowance (Dollars in Thousands) Domestic Commercial $ $ — $ $ Commercial real estate: other construction & land development Commercial real estate: farmland & commercial Commercial real estate: multifamily — Residential: first lien Residential: junior lien — Consumer — Foreign — Total $ $ $ $ December 31, 2015 Loans Individually Loans Collectively Evaluated For Evaluated For Impairment Impairment Recorded Recorded Investment Allowance Investment Allowance (Dollars in Thousands) Domestic Commercial $ $ $ $ Commercial real estate: other construction & land development Commercial real estate: farmland & commercial Commercial real estate: multifamily Residential: first lien — Residential: junior lien — Consumer — Foreign — Total $ $ $ $ |
Loans accounted on non-accrual basis, by loan class | December 31, 2016 December 31, 2015 (Dollars in Thousands) Domestic Commercial $ $ Commercial real estate: other construction & land development Commercial real estate: farmland & commercial Commercial real estate: multifamily Residential: first lien Residential: junior lien Consumer Foreign Total non-accrual loans $ $ |
Impaired loans, by loan class | December 31, 2016 Unpaid Average Recorded Principal Related Recorded Interest Investment Balance Allowance Investment Recognized (Dollars in Thousands) Loans with Related Allowance Domestic Commercial real estate: other construction & land development $ $ $ $ $ — Commercial real estate: farmland & commercial — Residential: first lien — Total impaired loans with related allowance $ $ $ $ $ — December 31, 2016 Unpaid Average Recorded Principal Recorded Interest Investment Balance Investment Recognized (Dollars in Thousands) Loans with No Related Allowance Domestic Commercial $ $ $ $ Commercial real estate: other construction & land development Commercial real estate: farmland & commercial Commercial real estate: multifamily — Residential: first lien Residential: junior lien Consumer Foreign Total impaired loans with no related allowance $ $ $ $ The following tables detail key information regarding the Company’s impaired loans by loan class for the year ended December 31, 2015: December 31, 2015 Unpaid Average Recorded Principal Related Recorded Interest Investment Balance Allowance Investment Recognized (Dollars in Thousands) Loans with Related Allowance Domestic Commercial $ $ $ $ $ — Commercial real estate: other construction & land development — Commercial real estate: farmland & commercial Commercial real estate: multifamily — Total impaired loans with related allowance $ $ $ $ $ December 31, 2015 Unpaid Average Recorded Principal Recorded Interest Investment Balance Investment Recognized (Dollars in Thousands) Loans with No Related Allowance Domestic Commercial $ $ $ $ Commercial real estate: other construction & land development Commercial real estate: farmland & commercial — Commercial real estate: multifamily — Residential: first lien Residential: junior lien Consumer Foreign Total impaired loans with no related allowance $ $ $ $ |
Loans accounted for as trouble debt restructuring, by loan class | December 31, 2016 December 31, 2015 (Dollars in Thousands) Domestic Commercial $ $ Commercial real estate: other construction & land development — Commercial real estate: farmland & commercial Residential: first lien Residential: junior lien Consumer Foreign Total troubled debt restructuring $ $ |
Information regarding the aging of past due loans, by loan class | December 31, 2016 90 Days or Total 30 - 59 60 - 89 90 Days or greater & Past Total Days Days Greater still accruing Due Current Portfolio (Dollars in Thousands) Domestic Commercial $ $ $ $ $ $ $ Commercial real estate: other construction & land development Commercial real estate: farmland & commercial Commercial real estate: multifamily — — Residential: first lien Residential: junior lien Consumer Foreign Total past due loans $ $ $ $ $ $ $ December 31, 2015 90 Days or Total 30 - 59 60 - 89 90 Days or greater & Past Total Days Days Greater still accruing Due Current Portfolio (Dollars in Thousands) Domestic Commercial $ $ $ $ $ $ $ Commercial real estate: other construction & land development — Commercial real estate: farmland & commercial Commercial real estate: multifamily Residential: first lien Residential: junior lien Consumer Foreign Total past due loans $ $ $ $ $ $ $ |
Summary of the loan portfolio by credit quality indicator, by loan class | December 31, 2016 Special Watch Watch List— Watch List— Pass Review List—Pass Substandard Impaired (Dollars in Thousands) Domestic Commercial $ $ $ $ $ Commercial real estate: other construction & land development — Commercial real estate: farmland & commercial Commercial real estate: multifamily — — — Residential: first lien — Residential: junior lien — — Consumer — — — Foreign — — — Total $ $ $ $ $ December 31, 2015 Special Watch Watch List— Watch List— Pass Review List—Pass Substandard Impaired (Dollars in Thousands) Domestic Commercial $ $ $ $ $ Commercial real estate: other construction & land development Commercial real estate: farmland & commercial Commercial real estate: multifamily — — Residential: first lien — — Residential: junior lien — — Consumer — — Foreign — — — Total $ $ $ $ $ |
Bank Premises and Equipment (Ta
Bank Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Bank Premises and Equipment | |
Summary of bank premises and equipment, by asset classification | Estimated useful lives 2016 2015 (Dollars in Thousands) Bank buildings and improvements 5 - 40 years $ $ Furniture, equipment and vehicles 1 - 20 years Land Real estate held for future expansion: Land, building, furniture, fixture and equipment 7 - 27 years — — Less: accumulated depreciation Bank premises and equipment, net $ $ |
Goodwill and Other Intangible40
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Other Intangible Assets | |
Schedule of the entity's identified intangible assets | Carrying Accumulated Amount Amortization Net (Dollars in Thousands) December 31, 2016: Core deposit premium $ $ $ Identified intangible (contract rights) — Total identified intangibles $ $ $ December 31, 2015: Core deposit premium $ $ $ Identified intangible (contract rights) — Total identified intangibles $ $ $ |
Schedule of estimated amortization expense for each of the five succeeding fiscal years and thereafter | Total (in thousands) 2017 2018 — 2019 — 2020 — 2021 — Thereafter Total $ |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Deposits. | |
Schedule of deposits and related interest expense | 2016 2015 (Dollars in Thousands) Deposits: Demand - non-interest bearing Domestic $ $ Foreign Total demand non-interest bearing Savings and interest bearing demand Domestic Foreign Total savings and interest bearing demand Time, certificates of deposit $100,000 or more Domestic Foreign Less than $100,000 Domestic Foreign Total time, certificates of deposit Total deposits $ $ 2016 2015 2014 (Dollars in Thousands) Interest expense: Savings and interest bearing demand Domestic $ $ $ Foreign Total savings and interest bearing demand Time, certificates of deposit $100,000 or more Domestic Foreign Less than $100,000 Domestic Foreign Total time, certificates of deposit Total interest expense on deposits $ $ $ |
Scheduled maturities of time deposits | Total (in thousands) 2017 $ 2018 2019 2020 2021 Thereafter Total $ |
Scheduled maturities of time deposits in amounts of $100,000 or more | Total (in thousands) Due within 3 months or less $ Due after 3 months and within 6 months Due after 6 months and within 12 months Due after 12 months $ |
Securities Sold Under Repurch42
Securities Sold Under Repurchase Agreements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Securities Sold Under Repurchase Agreements | |
Schedule of repurchase agreements | Collateral Securities Repurchase Borrowing Book Value of Fair Value of Balance of Weighted Average Securities Sold Securities Sold Liability Interest Rate (Dollars in Thousands) December 31, 2016 term: Overnight agreements $ $ $ % 1 to 29 days 30 to 90 days Over 90 days Total $ $ $ % December 31, 2015 term: Overnight agreements $ $ $ % 1 to 29 days 30 to 90 days Over 90 days Total $ $ $ % |
Other Borrowed Funds (Tables)
Other Borrowed Funds (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Borrowed Funds | |
Schedule of other borrowed funds | December 31, 2016 2015 (Dollars in Thousands) Federal Home Loan Bank advances—short-term Balance at year end $ $ Rate on balance outstanding at year end % % Average daily balance $ $ Average rate % % Maximum amount outstanding at any month end $ $ Federal Home Loan Bank advances—long-term (1) Balance at year end $ $ Rate on balance outstanding at year end % % Average daily balance $ $ Average rate % % Maximum amount outstanding at any month end $ $ Long-term advances matured in January 2017. |
Junior Subordinated Interest 44
Junior Subordinated Interest Deferrable Debentures (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Junior Subordinated Interest Deferrable Debentures | |
Junior subordinated deferrable interest debentures, major types of business trusts | The following table illustrates key information about each of the Debentures and their interest rates at December 31, 2016: Junior Subordinated Deferrable Optional Interest Repricing Interest Interest Redemption Debentures Frequency Rate Rate Index(1) Maturity Date Date(1) (Dollars in Thousands) Trust VI $ Quarterly % LIBOR + November 2032 February 2008 Trust VIII Quarterly % LIBOR + October 2033 October 2008 Trust IX Quarterly % LIBOR + October 2036 October 2011 Trust X Quarterly % LIBOR + February 2037 February 2012 Trust XI Quarterly % LIBOR + July 2037 July 2012 Trust XII Quarterly % LIBOR + September 2037 September 2012 $ The Capital Securities may be redeemed in whole or in part on any interest payment date after the Optional Redemption Date. |
Earnings per Share ("EPS") (Tab
Earnings per Share ("EPS") (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings per Share ("EPS") | |
Schedule of calculation of the basic EPS and the diluted EPS | Net Income Shares Per Share (Numerator) (Denominator) Amount (Dollars in Thousands, Except Per Share Amounts) December 31, 2016: Basic EPS Net income available to common shareholders $ $ Potential dilutive common shares and warrants — Diluted EPS $ $ December 31, 2015: Basic EPS Net income available to common shareholders $ $ Potential dilutive common shares and warrants — Diluted EPS $ $ December 31, 2014: Basic EPS Net income available to common shareholders $ $ Potential dilutive common shares — Diluted EPS $ $ |
International Operations (Table
International Operations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
International Operations | |
Summary of assets attributable to international operations | 2016 2015 (Dollars in Thousands) Loans: Commercial $ $ Others Less allowance for probable loan losses Net loans $ $ Accrued interest receivable $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Schedule of current and deferred portions of net income tax expense | 2016 2015 2014 (Dollars in Thousands) Current U.S. $ $ $ State Foreign — Total current taxes Deferred U.S. State Total deferred taxes Total income taxes $ $ $ |
Schedule of income tax expense differences from the amount computed by applying the U.S. Federal income tax rate to income before income taxes | 2016 2015 2014 (Dollars in Thousands) Computed expected tax expense $ $ $ Change in taxes resulting from: Tax-exempt interest income State tax, net of federal income taxes and tax credit Other investment income Other Actual tax expense $ $ $ |
Schedule of tax effects of temporary difference that give rise to significant portions of the deferred tax assets and deferred tax liabilities | 2016 2015 (Dollars in Thousands) Deferred tax assets: Loans receivable, principally due to the allowance for probable loan losses $ $ Other real estate owned Impairment charges on available-for-sale securities Accrued expenses Net unrealized losses on available for sale investment securities — Other Total deferred tax assets Deferred tax liabilities: Bank premises and equipment, principally due to differences on depreciation Net unrealized gains on available for sale investment securities — Identified intangible assets and goodwill Other Total deferred tax liabilities Net deferred tax liability $ $ |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock Options | |
Schedule of Black-Scholes-Merton option valuation model assumptions | 2016 2015 Expected Life (Years) Dividend yield % % Interest rate % % Volatility % % |
Summary of option activity under stock option plans | Weighted Weighted average average remaining Aggregate Number of exercise contractual intrinsic options price term (years) value ($) (in Thousands) Options outstanding at December 31, 2015 $ Plus: Options granted Less: Options exercised Options expired Options forfeited Options outstanding at December 31, 2016 $ Options fully vested and exercisable at December 31, 2016 $ $ |
Schedule of other information pertaining to option activity | Twelve Months Ended December 31, 2016 2015 2014 Weighted average grant date fair value of stock options granted $ $ $ Total fair value of stock options vested $ $ $ Total intrinsic value of stock options exercised $ $ $ |
Commitments, Contingent Liabili
Commitments, Contingent Liabilities and Other Matters (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments, Contingent Liabilities and Other Matters | |
Schedule of future minimum lease payments due under non-cancellable operating leases | Total (in thousands) 2017 $ 2018 2019 2020 2021 Thereafter Total $ |
Financial Instruments with Of50
Financial Instruments with Off-Statement of Condition Risk and Concentrations of Credit Risk (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Financial Instruments with Off-Statement of Condition Risk and Concentrations of Credit Risk | |
Schedule of financial amounts of instruments, whose contract amounts represent credit risks | Commitments to extend credit $ Credit card lines Standby letters of credit Commercial letters of credit |
Capital Requirements (Tables)
Capital Requirements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Capital Requirements | |
Schedule of the Company's and the bank subsidiaries' actual capital amounts and ratios | The Company’s and the bank subsidiaries’ actual capital amounts and ratios for 2016 under current guidelines are presented in the following table: For Capital Adequacy To Be Well-Capitalized Purposes Under Prompt Corrective Actual Phase In Schedule Action Provisions Amount Ratio Amount Ratio Amount Ratio (greater than (greater than (greater than (greater than or equal to) or equal to) or equal to) or equal to) (Dollars in Thousands) As of December 31, 2016: Common Equity Tier 1 (to Risk Weighted Assets): Consolidated $ % $ % N/A N/A International Bank of Commerce, Laredo $ % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank Total Capital (to Risk Weighted Assets): Consolidated $ % $ % N/A N/A International Bank of Commerce, Laredo $ % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank Tier 1 Capital (to Risk Weighted Assets): Consolidated $ % $ % N/A N/A International Bank of Commerce, Laredo $ % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank Tier 1 Capital (to Average Assets): Consolidated $ % $ % $ N/A N/A International Bank of Commerce, Laredo % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank The Company’s and the bank subsidiaries’ actual capital amounts and ratios for 2015 are also presented in the following table: To Be Well-Capitalized For Capital Adequacy Under Prompt Corrective Actual Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio (greater than (greater than (greater than (greater than or equal to) or equal to) or equal to) or equal to) (Dollars in Thousands) As of December 31, 2015: Common Equity Tier 1 (to Risk Weighted Assets): Consolidated $ % $ % N/A N/A International Bank of Commerce, Laredo $ % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank Total Capital (to Risk Weighted Assets): Consolidated $ % $ % N/A N/A International Bank of Commerce, Laredo $ % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank Tier 1 Capital (to Risk Weighted Assets): Consolidated $ % $ % N/A N/A International Bank of Commerce, Laredo $ % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank Tier 1 Capital (to Average Assets): Consolidated $ % $ % $ N/A N/A International Bank of Commerce, Laredo % International Bank of Commerce, Brownsville International Bank of Commerce, Zapata Commerce Bank |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements | |
Assets and liabilities measured at fair value on a recurring basis | The following table represents financial instruments reported on the consolidated statements of condition at their fair value as of December 31, 2016 by level within the fair value measurement hierarchy. Fair Value Measurements at Reporting Date Using (in Thousands) Quoted Prices in Active Significant Assets/Liabilities Markets for Other Significant Measured at Identical Observable Unobservable Fair Value Assets Inputs Inputs December 31, 2016 (Level 1) (Level 2) (Level 3) Measured on a recurring basis: Assets: Available for sale securities Residential mortgage-backed securities $ $ — $ $ States and political subdivisions — — Equity securities — — $ $ $ $ The following table represents financial instruments reported on the consolidated balance sheets at their fair value as of December 31, 2015 by level within the fair value measurement hierarchy. Fair Value Measurements at Reporting Date Using (in Thousands) Quoted Prices in Active Significant Assets/Liabilities Markets for Other Significant Measured at Identical Observable Unobservable Fair Value Assets Inputs Inputs December 31, 2015 (Level 1) (Level 2) (Level 3) Measured on a recurring basis: Assets: Available for sale securities Residential mortgage - backed securities $ $ — $ $ States and political subdivisions — — Equity securities — — $ $ $ $ |
Reconciliation of activity for mortgage-backed securities on a net basis | Balance at December 31, 2015 $ Principal paydowns Total unrealized gains (losses) included in: Other comprehensive loss Impairment realized in earnings Balance at December 31, 2016 $ |
Assets measured at fair value on a non-recurring basis | The following table represents financial instruments measured at fair value on a non‑recurring basis as of and for the period ended December 31, 2016 by level within the fair value measurement hierarchy: Fair Value Measurements at Reporting Date Using (in thousands) Quoted Assets/Liabilities Prices in Measured at Active Significant Fair Value Markets for Other Significant Net Provision Year ended Identical Observable Unobservable (Credit) December 31, Assets Inputs Inputs During 2016 (Level 1) (Level 2) (Level 3) Period Measured on a non-recurring basis: Assets: Impaired loans $ $ — $ — $ $ Other real estate owned — — The following table represents financial instruments measured at fair value on a non‑recurring basis as of and for the year ended December 31, 2015 by level within the fair value measurement hierarchy: Fair Value Measurements at Reporting Date Using (in thousands) Quoted Assets/Liabilities Prices in Measured at Active Significant Fair Value Markets Other Significant Net (Credit) Year ended for Identical Observable Unobservable Provision December 31, Assets Inputs Inputs During 2015 (Level 1) (Level 2) (Level 3) Period Measured on a non-recurring basis: Assets: Impaired loans $ $ — $ — $ $ Other real estate owned — — |
International Bancshares Corp53
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Condition (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Condition | |
Schedule of condensed statements of condition of Parent Company | (Dollars in Thousands) 2016 2015 ASSETS Cash $ $ Other investments Notes receivable — Investment in subsidiaries Other assets Total assets $ $ LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Junior subordinated deferrable interest debentures $ $ Due to IBC Trading Other liabilities Total liabilities Shareholders’ equity: Common shares Surplus Retained earnings Accumulated other comprehensive (loss) income Less cost of shares in treasury Total shareholders’ equity Total liabilities and shareholders’ equity $ $ |
International Bancshares Corp54
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Income (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Income | |
Schedule of condensed statements of income of Parent Company | (Dollars in Thousands) 2016 2015 2014 Income: Dividends from subsidiaries $ $ $ Interest income on notes receivable Interest income on other investments Other Total income Expenses: Interest expense (Debentures) Other Total expenses Income before federal income taxes and equity in undistributed net income of subsidiaries Income tax expense Income before equity in undistributed net income of subsidiaries Equity in undistributed net income of subsidiaries Net income $ $ $ |
International Bancshares Corp55
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Cash Flows (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Cash Flows | |
Schedule of condensed statements of cash flows of Parent Company | (Dollars in Thousands) 2016 2015 2014 Operating activities: Net income $ $ $ Adjustments to reconcile net income to net cash provided by operating activities: Impairment charges on available for sale securities Stock compensation expense Increase (decrease) in other liabilities Equity in undistributed net income of subsidiaries Net cash provided by operating activities Investing activities: Principal collected on mortgage-backed securities Net decrease in notes receivable Increase in other assets and other investments Net cash used in investing activities Financing activities: Redemption of long-term debt Proceeds from stock transactions Payments of cash dividends - common Purchase of treasury stock Net cash used in financing activities Increase (decrease) in cash Cash at beginning of year Cash at end of year $ $ $ |
Summary of Significant Accoun56
Summary of Significant Accounting Policies (Details) | Oct. 01, 2016USD ($) | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Summary of Significant Accounting Policies | ||||
Number of insurance-related subsidiaries | item | 1 | |||
Investment Securities | ||||
Number of components in which other-than-temporary impairment is segregated | item | 2 | |||
Non-Accrual Loans | ||||
Period of charge off for past due unsecured consumer loans | 90 days | |||
Minimum period that past due unsecured loans outstanding may not be placed on nonaccrual status under special circumstances | 90 days | |||
Maximum period of non-consumer loans outstanding that is used to evaluate whether loans should be placed on non-accrual status | 90 days | |||
Other Real Estate Owned | ||||
Other real estate owned | $ 42,204,000 | $ 55,850,000 | ||
Income Taxes | ||||
Percentage of likelihood of realization of recognized tax benefit | 50.00% | |||
Liability for unrecognized tax benefits | $ 0 | 0 | ||
Interest expense related to uncertain tax positions | 0 | 0 | $ 0 | |
Penalties related to uncertain tax positions | 0 | $ 0 | $ 0 | |
Goodwill and Identified Intangible Assets | ||||
Goodwill impairment loss | $ 0 | |||
Impairment of identified intangible assets | $ 0 | |||
Segments of an Enterprise and Related Information | ||||
Number of operating segments | item | 1 | |||
Number of active operating bank subsidiaries | item | 4 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Held-to-maturity securities | ||
Amortized cost | $ 2,400 | $ 2,400 |
Estimated fair value | 2,400 | 2,400 |
Carrying Value | 2,400 | 2,400 |
Available-for-sale securities | ||
Amortized Cost | 4,218,841 | 4,196,034 |
Gross Unrealized Gains | 29,343 | 50,165 |
Gross Unrealized Losses | (70,835) | (46,827) |
Total Investment Securities | 4,177,349 | 4,199,372 |
Assets/liabilities measured at fair value | ||
Available-for-sale securities | ||
Total Investment Securities | 4,177,349 | 4,199,372 |
Carrying Value | ||
Available-for-sale securities | ||
Total Investment Securities | 4,177,349 | 4,199,372 |
Residential mortgage-backed securities | ||
Available-for-sale securities | ||
Amortized Cost | 3,946,144 | 3,908,809 |
Gross Unrealized Gains | 18,246 | 30,959 |
Gross Unrealized Losses | (69,920) | (46,557) |
Residential mortgage-backed securities | Assets/liabilities measured at fair value | ||
Available-for-sale securities | ||
Total Investment Securities | 3,894,470 | 3,893,211 |
Residential mortgage-backed securities | Carrying Value | ||
Available-for-sale securities | ||
Total Investment Securities | 3,894,470 | 3,893,211 |
Mortgage-backed securities by Ginnie Mae | ||
Available-for-sale securities | ||
Total Investment Securities | 850,033 | 1,147,143 |
Mortgage-backed securities by Fannie Mae and Freddie Mac | ||
Available-for-sale securities | ||
Total Investment Securities | 3,026,832 | 2,724,839 |
Mortgage-backed securities by non-government entities | ||
Available-for-sale securities | ||
Total Investment Securities | 17,605 | 21,229 |
Obligations of states and political subdivisions | ||
Available-for-sale securities | ||
Amortized Cost | 244,622 | 259,150 |
Gross Unrealized Gains | 10,783 | 18,579 |
Gross Unrealized Losses | (433) | (25) |
Obligations of states and political subdivisions | Assets/liabilities measured at fair value | ||
Available-for-sale securities | ||
Total Investment Securities | 254,972 | 277,704 |
Obligations of states and political subdivisions | Carrying Value | ||
Available-for-sale securities | ||
Total Investment Securities | 254,972 | 277,704 |
Other securities | ||
Held-to-maturity securities | ||
Amortized cost | 2,400 | 2,400 |
Estimated fair value | 2,400 | 2,400 |
Carrying Value | 2,400 | 2,400 |
Equity securities | ||
Available-for-sale securities | ||
Amortized Cost | 28,075 | 28,075 |
Gross Unrealized Gains | 314 | 627 |
Gross Unrealized Losses | (482) | (245) |
Equity securities | Assets/liabilities measured at fair value | ||
Available-for-sale securities | ||
Total Investment Securities | 27,907 | 28,457 |
Equity securities | Carrying Value | ||
Available-for-sale securities | ||
Total Investment Securities | $ 27,907 | $ 28,457 |
Investment Securities (Contract
Investment Securities (Contractual Maturities and Estimated Fair Values) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Held-to-maturity debt securities amortized cost disclosures | |||
Due in one year or less, held-to-maturity debt securities amortized cost | $ 125,000 | ||
Due after one year through five years, held-to-maturity debt securities amortized cost | 2,275,000 | ||
Amortized cost, held-to-maturity debt securities | 2,400,000 | $ 2,400,000 | |
Held-to-maturity debt securities, Estimated fair value disclosures | |||
Due in one year or less, held-to-maturity debt securities, Estimated fair value | 125,000 | ||
Due after one year through five years, held-to-maturity debt securities, Estimated fair value | 2,275,000 | ||
Estimated fair value | 2,400,000 | 2,400,000 | |
Available-for-sale debt securities amortized cost disclosures | |||
Due after five years through ten years, available-for-sale debt securities amortized cost | 1,218,000 | ||
Due after ten years, available-for-sale debt securities amortized cost | 243,404,000 | ||
Residential mortgage-backed securities, amortized cost | 3,946,144,000 | ||
Equity securities, amortized cost | 28,075,000 | ||
Amortized cost, Available for sale securities | 4,218,841,000 | 4,196,034,000 | |
Available for sale debt securities, Estimated Fair Value Disclosures | |||
Due after five years through ten years, available-for-sale debt securities, Estimated Fair Value | 1,288,000 | ||
Due after ten years, available-for-sale debt securities, Estimated Fair Value | 253,684,000 | ||
Residential mortgage-backed securities, Estimated Fair Value | 3,894,470,000 | ||
Equity securities, Estimated Fair Value | 27,907,000 | ||
Estimated fair value, Available for sale securities | 4,177,349,000 | 4,199,372,000 | |
Amortized cost of available for sale investment securities pledged | 1,780,513,000 | ||
Fair value of available for sale investment securities pledged | 1,754,763,000 | ||
Proceeds from sales and calls of available for sale securities | 352,743,000 | 164,163,000 | $ 621,588,000 |
Proceeds from sales of mortgage-backed securities | 338,138,000 | 128,444,000 | 620,933 |
Gross gains realized on sales | 586,000 | 2,450,000 | 9,479,000 |
Gross losses realized on sales | 3,212,000 | 6,132,000 | 8,196,000 |
Impairment charges on available-for-sale investment securities, after tax | $ 230,100 | $ 620,100 | $ 531,050 |
Investment Securities (Fair Val
Investment Securities (Fair Value and Gross Unrealized Loss) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Available for sale: | ||
Fair value, less than 12 months | $ 2,559,042 | $ 1,094,992 |
Unrealized losses, less than 12 Months | (52,862) | (9,387) |
Fair value, 12 months or more | 402,147 | 1,460,634 |
Unrealized losses, 12 Months or More | (17,973) | (37,440) |
Fair value, total | 2,961,189 | 2,555,626 |
Unrealized losses, total | (70,835) | (46,827) |
Residential mortgage-backed securities | ||
Available for sale: | ||
Fair value, less than 12 months | 2,513,872 | 1,083,137 |
Unrealized losses, less than 12 Months | (52,245) | (9,333) |
Fair value, 12 months or more | 396,695 | 1,454,550 |
Unrealized losses, 12 Months or More | (17,675) | (37,224) |
Fair value, total | 2,910,567 | 2,537,687 |
Unrealized losses, total | (69,920) | (46,557) |
Obligations of states and political subdivisions | ||
Available for sale: | ||
Fair value, less than 12 months | 31,104 | 6,814 |
Unrealized losses, less than 12 Months | (433) | (19) |
Fair value, 12 months or more | 544 | |
Unrealized losses, 12 Months or More | (6) | |
Fair value, total | 31,104 | 7,358 |
Unrealized losses, total | (433) | (25) |
Equity securities | ||
Available for sale: | ||
Fair value, less than 12 months | 14,066 | 5,041 |
Unrealized losses, less than 12 Months | (184) | (35) |
Fair value, 12 months or more | 5,452 | 5,540 |
Unrealized losses, 12 Months or More | (298) | (210) |
Fair value, total | 19,518 | 10,581 |
Unrealized losses, total | $ (482) | $ (245) |
Investment Securities (Reconcil
Investment Securities (Reconciliation of Credit Related Impairment Charges ) (Details) - Available-for-sale investments - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of credit-related impairment charges on investments recognized in earnings | |||
Balance at the beginning | $ 13,577 | $ 12,623 | $ 11,806 |
Impairment charges recognized during period | 354 | 954 | 817 |
Balance at the end | $ 13,931 | $ 13,577 | $ 12,623 |
Loans (Details)
Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of loans, by loan type | ||
Total loans | $ 5,964,688 | $ 5,950,914 |
Commercial, financial and agricultural | ||
Summary of loans, by loan type | ||
Total loans | 2,993,203 | 3,101,748 |
Real estate - mortgage | ||
Summary of loans, by loan type | ||
Total loans | 1,032,222 | 962,582 |
Commercial Real Estate: Other Construction and Land Development | ||
Summary of loans, by loan type | ||
Total loans | 1,716,875 | 1,649,827 |
Consumer | ||
Summary of loans, by loan type | ||
Total loans | 55,168 | 57,744 |
Foreign | ||
Summary of loans, by loan type | ||
Total loans | $ 167,220 | $ 179,013 |
Allowance for Probable Loan L62
Allowance for Probable Loan Losses (By Loan Class) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Allowance for probable loan losses | |||||
Balance at the beginning of the period | $ 66,988 | $ 66,988 | $ 64,828 | $ 70,161 | |
Losses charged to allowance | (35,901) | (27,125) | (23,465) | ||
Recoveries credited to allowance | 13,715 | 4,880 | 3,709 | ||
Net (losses) recoveries charged to allowance | (22,186) | (22,245) | (19,756) | ||
Provision charged to operations | 19,859 | 24,405 | 14,423 | ||
Balance at the end of the period | $ 64,661 | 66,988 | 64,828 | ||
Number of large recoveries | item | 2 | ||||
Watch - List Impaired | |||||
Allowance for probable loan losses | |||||
Losses charged to allowance | $ (19,400) | ||||
Commercial | |||||
Allowance for probable loan losses | |||||
Balance at the beginning of the period | 21,431 | 21,431 | 22,352 | 22,433 | |
Losses charged to allowance | (32,959) | (24,802) | (19,110) | ||
Recoveries credited to allowance | 4,400 | 7,110 | 3,135 | 2,979 | |
Net (losses) recoveries charged to allowance | (25,849) | (21,667) | (16,131) | ||
Provision charged to operations | 30,067 | 20,746 | 16,050 | ||
Balance at the end of the period | 25,649 | 21,431 | 22,352 | ||
Commercial | Transportation Equipment | |||||
Allowance for probable loan losses | |||||
Losses charged to allowance | (13,500) | (8,500) | |||
Commercial Real Estate: Other Construction and Land Development | |||||
Allowance for probable loan losses | |||||
Balance at the beginning of the period | 13,920 | 13,920 | 12,955 | 12,541 | |
Losses charged to allowance | (16) | (695) | (680) | ||
Recoveries credited to allowance | $ 6,000 | 6,099 | 141 | 72 | |
Net (losses) recoveries charged to allowance | 6,083 | (554) | (608) | ||
Provision charged to operations | (6,114) | 1,519 | 1,022 | ||
Balance at the end of the period | 13,889 | 13,920 | 12,955 | ||
Commercial Real Estate: Farmland & Commercial | |||||
Allowance for probable loan losses | |||||
Balance at the beginning of the period | 19,769 | 19,769 | 18,683 | 24,467 | |
Losses charged to allowance | (1,890) | (492) | (1,893) | ||
Recoveries credited to allowance | 119 | 963 | 107 | ||
Net (losses) recoveries charged to allowance | (1,771) | 471 | (1,786) | ||
Provision charged to operations | (1,267) | 615 | (3,998) | ||
Balance at the end of the period | 16,731 | 19,769 | 18,683 | ||
Commercial Real Estate: Multifamily | |||||
Allowance for probable loan losses | |||||
Balance at the beginning of the period | 1,248 | 1,248 | 846 | 776 | |
Losses charged to allowance | (180) | ||||
Net (losses) recoveries charged to allowance | (180) | ||||
Provision charged to operations | (262) | 402 | 70 | ||
Balance at the end of the period | 806 | 1,248 | 846 | ||
Residential First Lien | |||||
Allowance for probable loan losses | |||||
Balance at the beginning of the period | 3,509 | 3,509 | 3,589 | 3,812 | |
Losses charged to allowance | (70) | (157) | (351) | ||
Recoveries credited to allowance | 21 | 30 | 49 | ||
Net (losses) recoveries charged to allowance | (49) | (127) | (302) | ||
Provision charged to operations | (1,005) | 47 | 79 | ||
Balance at the end of the period | 2,455 | 3,509 | 3,589 | ||
Residential Junior Lien | |||||
Allowance for probable loan losses | |||||
Balance at the beginning of the period | 5,321 | 5,321 | 4,683 | 4,249 | |
Losses charged to allowance | (331) | (275) | (661) | ||
Recoveries credited to allowance | 278 | 431 | 242 | ||
Net (losses) recoveries charged to allowance | (53) | 156 | (419) | ||
Provision charged to operations | (1,552) | 482 | 853 | ||
Balance at the end of the period | 3,716 | 5,321 | 4,683 | ||
Consumer | |||||
Allowance for probable loan losses | |||||
Balance at the beginning of the period | 638 | 638 | 660 | 750 | |
Losses charged to allowance | (414) | (704) | (719) | ||
Recoveries credited to allowance | 69 | 170 | 210 | ||
Net (losses) recoveries charged to allowance | (345) | (534) | (509) | ||
Provision charged to operations | 238 | 512 | 419 | ||
Balance at the end of the period | 531 | 638 | 660 | ||
Foreign | |||||
Allowance for probable loan losses | |||||
Balance at the beginning of the period | $ 1,152 | 1,152 | 1,060 | 1,133 | |
Losses charged to allowance | (41) | (51) | |||
Recoveries credited to allowance | 19 | 10 | 50 | ||
Net (losses) recoveries charged to allowance | (22) | 10 | (1) | ||
Provision charged to operations | (246) | 82 | (72) | ||
Balance at the end of the period | $ 884 | $ 1,152 | $ 1,060 |
Allowance for Probable Loan L63
Allowance for Probable Loan Losses (Impairment By Loan Class) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Loan loss allowances, impaired financing receivable, evaluated individually or collectively | ||
Loans Individually Evaluated for Impairment, Recorded Investment | $ 48,405 | $ 60,448 |
Loans Individually Evaluated for Impairment, Allowance | 961 | 2,206 |
Loans Collectively Evaluated for Impairment, Recorded Investment | 5,916,283 | 5,890,466 |
Loans Collectively Evaluated for Impairment, Allowance | 63,700 | 64,782 |
Commercial | ||
Loan loss allowances, impaired financing receivable, evaluated individually or collectively | ||
Loans Individually Evaluated for Impairment, Recorded Investment | 22,412 | 30,946 |
Loans Individually Evaluated for Impairment, Allowance | 1,704 | |
Loans Collectively Evaluated for Impairment, Recorded Investment | 887,255 | 935,905 |
Loans Collectively Evaluated for Impairment, Allowance | 25,649 | 19,727 |
Commercial Real Estate: Other Construction and Land Development | ||
Loan loss allowances, impaired financing receivable, evaluated individually or collectively | ||
Loans Individually Evaluated for Impairment, Recorded Investment | 4,776 | 6,221 |
Loans Individually Evaluated for Impairment, Allowance | 371 | 100 |
Loans Collectively Evaluated for Impairment, Recorded Investment | 1,712,099 | 1,643,606 |
Loans Collectively Evaluated for Impairment, Allowance | 13,518 | 13,820 |
Commercial Real Estate: Farmland & Commercial | ||
Loan loss allowances, impaired financing receivable, evaluated individually or collectively | ||
Loans Individually Evaluated for Impairment, Recorded Investment | 10,810 | 13,806 |
Loans Individually Evaluated for Impairment, Allowance | 546 | 202 |
Loans Collectively Evaluated for Impairment, Recorded Investment | 1,932,260 | 1,981,643 |
Loans Collectively Evaluated for Impairment, Allowance | 16,185 | 19,567 |
Commercial Real Estate: Multifamily | ||
Loan loss allowances, impaired financing receivable, evaluated individually or collectively | ||
Loans Individually Evaluated for Impairment, Recorded Investment | 552 | 777 |
Loans Individually Evaluated for Impairment, Allowance | 200 | |
Loans Collectively Evaluated for Impairment, Recorded Investment | 139,914 | 138,671 |
Loans Collectively Evaluated for Impairment, Allowance | 806 | 1,048 |
Residential First Lien | ||
Loan loss allowances, impaired financing receivable, evaluated individually or collectively | ||
Loans Individually Evaluated for Impairment, Recorded Investment | 6,836 | 5,699 |
Loans Individually Evaluated for Impairment, Allowance | 44 | |
Loans Collectively Evaluated for Impairment, Recorded Investment | 415,068 | 404,545 |
Loans Collectively Evaluated for Impairment, Allowance | 2,411 | 3,509 |
Residential Junior Lien | ||
Loan loss allowances, impaired financing receivable, evaluated individually or collectively | ||
Loans Individually Evaluated for Impairment, Recorded Investment | 978 | 950 |
Loans Collectively Evaluated for Impairment, Recorded Investment | 609,340 | 551,388 |
Loans Collectively Evaluated for Impairment, Allowance | 3,716 | 5,321 |
Consumer | ||
Loan loss allowances, impaired financing receivable, evaluated individually or collectively | ||
Loans Individually Evaluated for Impairment, Recorded Investment | 1,295 | 1,297 |
Loans Collectively Evaluated for Impairment, Recorded Investment | 53,873 | 56,447 |
Loans Collectively Evaluated for Impairment, Allowance | 531 | 638 |
Foreign | ||
Loan loss allowances, impaired financing receivable, evaluated individually or collectively | ||
Loans Individually Evaluated for Impairment, Recorded Investment | 746 | 752 |
Loans Collectively Evaluated for Impairment, Recorded Investment | 166,474 | 178,261 |
Loans Collectively Evaluated for Impairment, Allowance | $ 884 | $ 1,152 |
Allowance for Probable Loan L64
Allowance for Probable Loan Losses (Non-accrual Basis By Loan Class) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Loan loss allowances, financing receivable past due | |||
Non-accrual loans, total | $ 37,245,000 | $ 47,685,000 | $ 63,559,000 |
Reduced interest income on non-accrual loans | 2,461,800 | 3,298,000 | $ 4,013,000 |
Commercial | |||
Loan loss allowances, financing receivable past due | |||
Non-accrual loans, total | 22,369,000 | 30,894,000 | |
Commercial Real Estate: Other Construction and Land Development | |||
Loan loss allowances, financing receivable past due | |||
Non-accrual loans, total | 4,776,000 | 3,668,000 | |
Commercial Real Estate: Farmland & Commercial | |||
Loan loss allowances, financing receivable past due | |||
Non-accrual loans, total | 8,314,000 | 11,543,000 | |
Commercial Real Estate: Multifamily | |||
Loan loss allowances, financing receivable past due | |||
Non-accrual loans, total | 552,000 | 777,000 | |
Residential First Lien | |||
Loan loss allowances, financing receivable past due | |||
Non-accrual loans, total | 655,000 | 383,000 | |
Residential Junior Lien | |||
Loan loss allowances, financing receivable past due | |||
Non-accrual loans, total | 166,000 | 21,000 | |
Consumer | |||
Loan loss allowances, financing receivable past due | |||
Non-accrual loans, total | 26,000 | 34,000 | |
Foreign | |||
Loan loss allowances, financing receivable past due | |||
Non-accrual loans, total | $ 387,000 | $ 365,000 |
Allowance for Probable Loan L65
Allowance for Probable Loan Losses (Impaired Loans) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Interest Recognized | ||
Total trouble debt restructuring | $ 22,418 | $ 15,719 |
Period of charge off for past due unsecured commercial loans | 90 days | |
Class of Financing Receivable | ||
Recorded investment: | ||
Total impaired loans with related allowance | $ 4,828 | 8,785 |
Total impaired loans with no related allowance | 42,577 | 51,663 |
Unpaid principal balance: | ||
Total impaired loans with an allowance recorded | 5,981 | 9,233 |
Total impaired loans with no related allowance recorded | 74,677 | 64,788 |
Related Allowance | 961 | 2,206 |
Average recorded investment: | ||
Total impaired loans with an allowance recorded | 5,821 | 5,694 |
Total impaired loans with no related allowance recorded | 40,450 | 53,575 |
Interest Recognized | ||
Total impaired loans with an allowance recorded | 92 | |
Total impaired loans with no related allowance recorded | 547 | 441 |
Commercial | ||
Interest Recognized | ||
Total trouble debt restructuring | 10,710 | 2,419 |
Commercial | Class of Financing Receivable | ||
Recorded investment: | ||
Total impaired loans with related allowance | 4,016 | |
Total impaired loans with no related allowance | 21,412 | 26,930 |
Unpaid principal balance: | ||
Total impaired loans with an allowance recorded | 4,156 | |
Total impaired loans with no related allowance recorded | 50,737 | 38,845 |
Related Allowance | 1,704 | |
Average recorded investment: | ||
Total impaired loans with an allowance recorded | 3,758 | |
Total impaired loans with no related allowance recorded | 19,354 | 30,847 |
Interest Recognized | ||
Total impaired loans with no related allowance recorded | 3 | 4 |
Commercial Real Estate: Other Construction and Land Development | ||
Interest Recognized | ||
Total trouble debt restructuring | 2,553 | |
Commercial Real Estate: Other Construction and Land Development | Class of Financing Receivable | ||
Recorded investment: | ||
Total impaired loans with related allowance | 1,958 | 167 |
Total impaired loans with no related allowance | 2,818 | 6,054 |
Unpaid principal balance: | ||
Total impaired loans with an allowance recorded | 1,971 | 169 |
Total impaired loans with no related allowance recorded | 4,419 | 6,204 |
Related Allowance | 371 | 100 |
Average recorded investment: | ||
Total impaired loans with an allowance recorded | 2,512 | 893 |
Total impaired loans with no related allowance recorded | 2,336 | 6,455 |
Interest Recognized | ||
Total impaired loans with no related allowance recorded | 67 | 85 |
Commercial Real Estate: Farmland & Commercial | ||
Interest Recognized | ||
Total trouble debt restructuring | 3,086 | 2,853 |
Commercial Real Estate: Farmland & Commercial | Class of Financing Receivable | ||
Recorded investment: | ||
Total impaired loans with related allowance | 2,808 | 4,003 |
Total impaired loans with no related allowance | 8,002 | 9,803 |
Unpaid principal balance: | ||
Total impaired loans with an allowance recorded | 3,948 | 4,309 |
Total impaired loans with no related allowance recorded | 9,054 | 10,717 |
Related Allowance | 546 | 202 |
Average recorded investment: | ||
Total impaired loans with an allowance recorded | 3,247 | 444 |
Total impaired loans with no related allowance recorded | 8,523 | 7,258 |
Interest Recognized | ||
Total impaired loans with an allowance recorded | 92 | |
Total impaired loans with no related allowance recorded | 110 | |
Commercial Real Estate: Multifamily | Class of Financing Receivable | ||
Recorded investment: | ||
Total impaired loans with related allowance | 599 | |
Total impaired loans with no related allowance | 552 | 178 |
Unpaid principal balance: | ||
Total impaired loans with an allowance recorded | 599 | |
Total impaired loans with no related allowance recorded | 562 | 178 |
Related Allowance | 200 | |
Average recorded investment: | ||
Total impaired loans with an allowance recorded | 599 | |
Total impaired loans with no related allowance recorded | 401 | 205 |
Residential First Lien | ||
Interest Recognized | ||
Total trouble debt restructuring | 6,181 | 5,316 |
Residential First Lien | Class of Financing Receivable | ||
Recorded investment: | ||
Total impaired loans with related allowance | 62 | |
Total impaired loans with no related allowance | 6,774 | 5,699 |
Unpaid principal balance: | ||
Total impaired loans with an allowance recorded | 62 | |
Total impaired loans with no related allowance recorded | 6,847 | 5,822 |
Related Allowance | 44 | |
Average recorded investment: | ||
Total impaired loans with an allowance recorded | 62 | |
Total impaired loans with no related allowance recorded | 6,860 | 5,853 |
Interest Recognized | ||
Total impaired loans with no related allowance recorded | 298 | 264 |
Residential Junior Lien | ||
Interest Recognized | ||
Total trouble debt restructuring | 812 | 929 |
Residential Junior Lien | Class of Financing Receivable | ||
Recorded investment: | ||
Total impaired loans with no related allowance | 978 | 950 |
Unpaid principal balance: | ||
Total impaired loans with no related allowance recorded | 1,017 | 972 |
Average recorded investment: | ||
Total impaired loans with no related allowance recorded | 1,011 | 1,182 |
Interest Recognized | ||
Total impaired loans with no related allowance recorded | 52 | 68 |
Consumer | ||
Interest Recognized | ||
Total trouble debt restructuring | 1,269 | 1,263 |
Consumer | Class of Financing Receivable | ||
Recorded investment: | ||
Total impaired loans with no related allowance | 1,295 | 1,297 |
Unpaid principal balance: | ||
Total impaired loans with no related allowance recorded | 1,295 | 1,298 |
Average recorded investment: | ||
Total impaired loans with no related allowance recorded | 1,214 | 1,227 |
Interest Recognized | ||
Total impaired loans with no related allowance recorded | 1 | 3 |
Foreign | ||
Interest Recognized | ||
Total trouble debt restructuring | 360 | 386 |
Foreign | Class of Financing Receivable | ||
Recorded investment: | ||
Total impaired loans with no related allowance | 746 | 752 |
Unpaid principal balance: | ||
Total impaired loans with no related allowance recorded | 746 | 752 |
Average recorded investment: | ||
Total impaired loans with no related allowance recorded | 751 | 548 |
Interest Recognized | ||
Total impaired loans with no related allowance recorded | $ 16 | $ 17 |
Allowance for Probable Loan L66
Allowance for Probable Loan Losses (Aging By Loan Class) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Financing receivable recorded investment | |||
Past due | $ 61,400,000 | $ 68,273,000 | |
Past due 90 days or Greater and Still Accruing | 5,226,000 | 11,616,000 | $ 9,988,000 |
Loans, current | 5,903,288,000 | 5,882,641,000 | |
Total loans | 5,964,688,000 | 5,950,914,000 | |
30 to 59 Days | |||
Financing receivable recorded investment | |||
Past due | 17,299,000 | 15,584,000 | |
60 to 89 Days | |||
Financing receivable recorded investment | |||
Past due | 6,327,000 | 5,219,000 | |
90 Days or Greater | |||
Financing receivable recorded investment | |||
Past due | 37,774,000 | 47,470,000 | |
Commercial | |||
Financing receivable recorded investment | |||
Past due | 26,033,000 | 32,916,000 | |
Past due 90 days or Greater and Still Accruing | 392,000 | 2,566,000 | |
Loans, current | 883,634,000 | 933,936,000 | |
Total loans | 909,667,000 | 966,852,000 | |
Commercial | 30 to 59 Days | |||
Financing receivable recorded investment | |||
Past due | 4,081,000 | 3,361,000 | |
Commercial | 60 to 89 Days | |||
Financing receivable recorded investment | |||
Past due | 829,000 | 940,000 | |
Commercial | 90 Days or Greater | |||
Financing receivable recorded investment | |||
Past due | 21,123,000 | 28,615,000 | |
Commercial Real Estate: Other Construction and Land Development | |||
Financing receivable recorded investment | |||
Past due | 6,354,000 | 3,988,000 | |
Past due 90 days or Greater and Still Accruing | 9,000 | ||
Loans, current | 1,710,521,000 | 1,645,839,000 | |
Total loans | 1,716,875,000 | 1,649,827,000 | |
Commercial Real Estate: Other Construction and Land Development | 30 to 59 Days | |||
Financing receivable recorded investment | |||
Past due | 1,502,000 | 193,000 | |
Commercial Real Estate: Other Construction and Land Development | 60 to 89 Days | |||
Financing receivable recorded investment | |||
Past due | 396,000 | 293,000 | |
Commercial Real Estate: Other Construction and Land Development | 90 Days or Greater | |||
Financing receivable recorded investment | |||
Past due | 4,456,000 | 3,502,000 | |
Commercial Real Estate: Farmland & Commercial | |||
Financing receivable recorded investment | |||
Past due | 12,658,000 | 12,304,000 | |
Past due 90 days or Greater and Still Accruing | 289,000 | 3,373,000 | |
Loans, current | 1,930,412,000 | 1,983,144,000 | |
Total loans | 1,943,070,000 | 1,995,448,000 | |
Commercial Real Estate: Farmland & Commercial | 30 to 59 Days | |||
Financing receivable recorded investment | |||
Past due | 3,454,000 | 2,684,000 | |
Commercial Real Estate: Farmland & Commercial | 60 to 89 Days | |||
Financing receivable recorded investment | |||
Past due | 3,054,000 | 1,328,000 | |
Commercial Real Estate: Farmland & Commercial | 90 Days or Greater | |||
Financing receivable recorded investment | |||
Past due | 6,150,000 | 8,292,000 | |
Commercial Real Estate: Multifamily | |||
Financing receivable recorded investment | |||
Past due | 596,000 | 1,317,000 | |
Past due 90 days or Greater and Still Accruing | 49,000 | ||
Loans, current | 139,870,000 | 138,131,000 | |
Total loans | 140,466,000 | 139,448,000 | |
Commercial Real Estate: Multifamily | 30 to 59 Days | |||
Financing receivable recorded investment | |||
Past due | 44,000 | 49,000 | |
Commercial Real Estate: Multifamily | 60 to 89 Days | |||
Financing receivable recorded investment | |||
Past due | 442,000 | ||
Commercial Real Estate: Multifamily | 90 Days or Greater | |||
Financing receivable recorded investment | |||
Past due | 552,000 | 826,000 | |
Residential First Lien | |||
Financing receivable recorded investment | |||
Past due | 11,108,000 | 11,139,000 | |
Past due 90 days or Greater and Still Accruing | 3,756,000 | 4,093,000 | |
Loans, current | 410,796,000 | 399,105,000 | |
Total loans | 421,904,000 | 410,244,000 | |
Residential First Lien | 30 to 59 Days | |||
Financing receivable recorded investment | |||
Past due | 5,615,000 | 5,299,000 | |
Residential First Lien | 60 to 89 Days | |||
Financing receivable recorded investment | |||
Past due | 1,350,000 | 1,545,000 | |
Residential First Lien | 90 Days or Greater | |||
Financing receivable recorded investment | |||
Past due | 4,143,000 | 4,295,000 | |
Residential Junior Lien | |||
Financing receivable recorded investment | |||
Past due | 1,480,000 | 1,772,000 | |
Past due 90 days or Greater and Still Accruing | 382,000 | 640,000 | |
Loans, current | 608,838,000 | 550,566,000 | |
Total loans | 610,318,000 | 552,338,000 | |
Residential Junior Lien | 30 to 59 Days | |||
Financing receivable recorded investment | |||
Past due | 762,000 | 713,000 | |
Residential Junior Lien | 60 to 89 Days | |||
Financing receivable recorded investment | |||
Past due | 178,000 | 413,000 | |
Residential Junior Lien | 90 Days or Greater | |||
Financing receivable recorded investment | |||
Past due | 540,000 | 646,000 | |
Consumer | |||
Financing receivable recorded investment | |||
Past due | 1,418,000 | 1,308,000 | |
Past due 90 days or Greater and Still Accruing | 387,000 | 453,000 | |
Loans, current | 53,750,000 | 56,436,000 | |
Total loans | 55,168,000 | 57,744,000 | |
Consumer | 30 to 59 Days | |||
Financing receivable recorded investment | |||
Past due | 910,000 | 646,000 | |
Consumer | 60 to 89 Days | |||
Financing receivable recorded investment | |||
Past due | 95,000 | 175,000 | |
Consumer | 90 Days or Greater | |||
Financing receivable recorded investment | |||
Past due | 413,000 | 487,000 | |
Foreign | |||
Financing receivable recorded investment | |||
Past due | 1,753,000 | 3,529,000 | |
Past due 90 days or Greater and Still Accruing | 11,000 | 442,000 | |
Loans, current | 165,467,000 | 175,484,000 | |
Total loans | 167,220,000 | 179,013,000 | |
Foreign | 30 to 59 Days | |||
Financing receivable recorded investment | |||
Past due | 931,000 | 2,639,000 | |
Foreign | 60 to 89 Days | |||
Financing receivable recorded investment | |||
Past due | 425,000 | 83,000 | |
Foreign | 90 Days or Greater | |||
Financing receivable recorded investment | |||
Past due | $ 397,000 | $ 807,000 |
Allowance for Probable Loan L67
Allowance for Probable Loan Losses (Portfolio Credit Quality By Loan Class) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Loan portfolio by credit quality indicator | ||
Portfolio, total | $ 5,964,688 | $ 5,950,914 |
Pass | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 5,544,614 | 5,529,707 |
Special Review | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 101,679 | 45,599 |
Watch List - Pass | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 60,993 | 83,069 |
Watch List - Substandard | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 208,997 | 232,091 |
Watch - List Impaired | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 48,405 | 60,448 |
Commercial | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 909,667 | 966,852 |
Commercial | Pass | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 720,350 | 771,999 |
Commercial | Special Review | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 90,746 | 42,152 |
Commercial | Watch List - Pass | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 1,121 | 31,539 |
Commercial | Watch List - Substandard | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 75,038 | 90,215 |
Commercial | Watch - List Impaired | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 22,412 | 30,946 |
Commercial Real Estate: Other Construction and Land Development | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 1,716,875 | 1,649,827 |
Commercial Real Estate: Other Construction and Land Development | Pass | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 1,648,633 | 1,582,683 |
Commercial Real Estate: Other Construction and Land Development | Special Review | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 1,986 | 1,164 |
Commercial Real Estate: Other Construction and Land Development | Watch List - Pass | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 13,765 | |
Commercial Real Estate: Other Construction and Land Development | Watch List - Substandard | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 61,480 | 45,994 |
Commercial Real Estate: Other Construction and Land Development | Watch - List Impaired | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 4,776 | 6,221 |
Commercial Real Estate: Farmland & Commercial | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 1,943,070 | 1,995,448 |
Commercial Real Estate: Farmland & Commercial | Pass | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 1,792,542 | 1,849,587 |
Commercial Real Estate: Farmland & Commercial | Special Review | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 7,983 | 2,283 |
Commercial Real Estate: Farmland & Commercial | Watch List - Pass | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 59,872 | 37,765 |
Commercial Real Estate: Farmland & Commercial | Watch List - Substandard | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 71,863 | 92,008 |
Commercial Real Estate: Farmland & Commercial | Watch - List Impaired | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 10,810 | 13,806 |
Commercial Real Estate: Multifamily | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 140,466 | 139,448 |
Commercial Real Estate: Multifamily | Pass | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 139,914 | 138,546 |
Commercial Real Estate: Multifamily | Watch List - Substandard | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 125 | |
Commercial Real Estate: Multifamily | Watch - List Impaired | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 552 | 777 |
Residential First Lien | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 421,904 | 410,244 |
Residential First Lien | Pass | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 413,638 | 401,053 |
Residential First Lien | Special Review | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 814 | |
Residential First Lien | Watch List - Substandard | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 616 | 3,492 |
Residential First Lien | Watch - List Impaired | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 6,836 | 5,699 |
Residential Junior Lien | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 610,318 | 552,338 |
Residential Junior Lien | Pass | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 609,190 | 551,138 |
Residential Junior Lien | Special Review | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 150 | |
Residential Junior Lien | Watch List - Substandard | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 250 | |
Residential Junior Lien | Watch - List Impaired | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 978 | 950 |
Consumer | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 55,168 | 57,744 |
Consumer | Pass | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 53,873 | 56,440 |
Consumer | Watch List - Substandard | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 7 | |
Consumer | Watch - List Impaired | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 1,295 | 1,297 |
Foreign | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 167,220 | 179,013 |
Foreign | Pass | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | 166,474 | 178,261 |
Foreign | Watch - List Impaired | ||
Loan portfolio by credit quality indicator | ||
Portfolio, total | $ 746 | $ 752 |
Bank Premises and Equipment (De
Bank Premises and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Bank premises and equipment | ||
Less: accumulated depreciation | $ (420,279) | $ (403,165) |
Bank premises and equipment, net | 527,583 | 516,716 |
Bank Building and Improvements | ||
Bank premises and equipment | ||
Bank premises and equipment, gross | $ 542,063 | 523,022 |
Bank Building and Improvements | Minimum | ||
Bank premises and equipment | ||
Estimated useful lives | 5 years | |
Bank Building and Improvements | Maximum | ||
Bank premises and equipment | ||
Estimated useful lives | 40 years | |
Furniture, Equipment and Vehicles | ||
Bank premises and equipment | ||
Bank premises and equipment, gross | $ 280,586 | 274,923 |
Furniture, Equipment and Vehicles | Minimum | ||
Bank premises and equipment | ||
Estimated useful lives | 1 year | |
Furniture, Equipment and Vehicles | Maximum | ||
Bank premises and equipment | ||
Estimated useful lives | 20 years | |
Land | ||
Bank premises and equipment | ||
Bank premises and equipment, gross | $ 125,213 | $ 121,936 |
Land, Building, Furniture, Fixture and Equipment | Minimum | ||
Bank premises and equipment | ||
Estimated useful lives | 7 years | |
Land, Building, Furniture, Fixture and Equipment | Maximum | ||
Bank premises and equipment | ||
Estimated useful lives | 27 years |
Goodwill and Other Intangible69
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Identified intangible assets | |||
Carrying Amount | $ 60,697 | $ 60,697 | |
Accumulated Amortization | 60,672 | 60,544 | |
Total identified intangibles, Net | 25 | 153 | |
Amortization expense | 128 | 644 | $ 2,389 |
Estimated amortization expense for each of the five succeeding fiscal years and thereafter | |||
2,017 | 25 | ||
Total | 25 | ||
Changes in carrying amount of goodwill | 0 | 0 | |
Core deposit premium | |||
Identified intangible assets | |||
Carrying Amount | 58,675 | 58,675 | |
Accumulated Amortization | 58,650 | 58,522 | |
Total identified intangibles, Net | 25 | 153 | |
Identified intangible (contract rights) | |||
Identified intangible assets | |||
Carrying Amount | 2,022 | 2,022 | |
Accumulated Amortization | $ 2,022 | $ 2,022 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Demand non-interest bearing | |||
Domestic | $ 2,509,544 | $ 2,536,192 | |
Foreign | 648,507 | 613,426 | |
Total demand non-interest bearing | 3,158,051 | 3,149,618 | |
Savings and interest bearing demand | |||
Domestic | 2,589,675 | 2,450,102 | |
Foreign | 614,053 | 570,120 | |
Total savings and interest bearing demand | 3,203,728 | 3,020,222 | |
$100,000 or more | |||
Time, certificate of deposit | 1,586,265 | ||
Less than $100,000 | |||
Domestic | 389,682 | 430,102 | |
Foreign | 272,363 | 287,563 | |
Total time, certificates of deposit | 2,248,310 | 2,366,413 | |
Total deposits | 8,610,089 | 8,536,253 | |
Savings and interest bearing demand | |||
Domestic | 3,922 | 3,026 | $ 2,998 |
Foreign | 640 | 567 | 599 |
Total savings and interest bearing demand | 4,562 | 3,593 | 3,597 |
$100,000 or more | |||
Domestic | 3,881 | 4,693 | 4,615 |
Foreign | 3,929 | 4,116 | 4,529 |
Less than $100,000 | |||
Domestic | 1,447 | 1,680 | 2,074 |
Foreign | 706 | 744 | 815 |
Total time, certificates of deposit | 9,963 | 11,233 | 12,033 |
Total interest expense on deposits | 14,525 | 14,826 | $ 15,630 |
Domestic | |||
$100,000 or more | |||
Time, certificate of deposit | 748,104 | 800,393 | |
Foreign | |||
$100,000 or more | |||
Time, certificate of deposit | $ 838,161 | $ 848,355 |
Deposits (Scheduled Maturities)
Deposits (Scheduled Maturities) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Scheduled maturities of time deposits | ||
2,017 | $ 2,021,655,000 | |
2,018 | 156,078,000 | |
2,019 | 52,777,000 | |
2,020 | 17,064,000 | |
2,021 | 638,000 | |
Thereafter | 98,000 | |
Total time, certificates of deposit | 2,248,310,000 | $ 2,366,413,000 |
Time Deposits 250,000 or exceed | 1,005,000 | $ 1,021,000 |
Scheduled maturities of time deposits in amounts of $100,000 or more | ||
Due within 3 months or less | 605,093,000 | |
Due after 3 months and within 6 months | 390,668,000 | |
Due after 6 months and within 12 months | 430,447,000 | |
Due after 12 months | 160,057,000 | |
Total | $ 1,586,265,000 |
Securities Sold Under Repurch72
Securities Sold Under Repurchase Agreements (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Collateral Securities and Repurchase Borrowing agreements | ||
Collateralized Securities, Book Value of Securities Sold | $ 690,151,000 | $ 977,714,000 |
Collateralized securities, Fair Value of Securities Sold | 679,811,000 | 976,400,000 |
Repurchase Borrowing, Balance of Liability | $ 504,985,000 | $ 827,772,000 |
Repurchase Borrowing, Weighted Average Interest Rate (as a percent) | 2.46% | 2.66% |
Average outstanding amount | $ 759,458,000 | $ 872,611,000 |
Maximum amount outstanding at any month end | 819,155,000 | 907,211,000 |
Overnight agreements | ||
Collateral Securities and Repurchase Borrowing agreements | ||
Collateralized Securities, Book Value of Securities Sold | 295,282,000 | 316,041,000 |
Collateralized securities, Fair Value of Securities Sold | 292,286,000 | 317,799,000 |
Repurchase Borrowing, Balance of Liability | $ 190,915,000 | $ 250,702,000 |
Repurchase Borrowing, Weighted Average Interest Rate (as a percent) | 0.15% | 0.15% |
1 to 29 days | ||
Collateral Securities and Repurchase Borrowing agreements | ||
Collateralized Securities, Book Value of Securities Sold | $ 10,250,000 | $ 10,199,000 |
Collateralized securities, Fair Value of Securities Sold | 10,148,000 | 10,114,000 |
Repurchase Borrowing, Balance of Liability | $ 9,863,000 | $ 9,798,000 |
Repurchase Borrowing, Weighted Average Interest Rate (as a percent) | 0.50% | 0.50% |
30 to 90 days | ||
Collateral Securities and Repurchase Borrowing agreements | ||
Collateralized Securities, Book Value of Securities Sold | $ 2,315,000 | $ 4,388,000 |
Collateralized securities, Fair Value of Securities Sold | 2,317,000 | 4,356,000 |
Repurchase Borrowing, Balance of Liability | $ 2,300,000 | $ 4,320,000 |
Repurchase Borrowing, Weighted Average Interest Rate (as a percent) | 0.33% | 0.31% |
Over 90 days | ||
Collateral Securities and Repurchase Borrowing agreements | ||
Collateralized Securities, Book Value of Securities Sold | $ 382,304,000 | $ 647,086,000 |
Collateralized securities, Fair Value of Securities Sold | 375,060,000 | 644,131,000 |
Repurchase Borrowing, Balance of Liability | $ 301,907,000 | $ 562,952,000 |
Repurchase Borrowing, Weighted Average Interest Rate (as a percent) | 4.01% | 3.84% |
Other Borrowed Funds (Details)
Other Borrowed Funds (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Federal Home Loan Bank advances | ||
Other borrowed funds | $ 733,375 | $ 505,750 |
Federal Home Loan Bank advances - short-term | ||
Federal Home Loan Bank advances | ||
Other borrowed funds | $ 583,375 | $ 355,750 |
Rate on balance outstanding at year end (as a percent) | 0.66% | 0.37% |
Average daily balance | $ 483,379 | $ 859,220 |
Average rate (as a percent) | 0.47% | 0.19% |
Maximum amount outstanding at any month end | $ 600,875 | $ 1,239,200 |
Federal Home Loan Bank advances - long-term | ||
Federal Home Loan Bank advances | ||
Other borrowed funds | $ 150,000 | $ 150,000 |
Rate on balance outstanding at year end (as a percent) | 0.58% | 0.31% |
Average daily balance | $ 150,000 | $ 5,314 |
Average rate (as a percent) | 0.58% | 0.31% |
Maximum amount outstanding at any month end | $ 150,000 | $ 150,000 |
Junior Subordinated Deferrable
Junior Subordinated Deferrable Interest Debentures (Details) | Nov. 01, 2016USD ($) | Jul. 29, 2015USD ($) | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) |
Junior subordinated deferrable interest debentures, major types of business trusts | ||||
Number of statutory business trusts issuing trust preferred securities | item | 6 | |||
Junior subordinated deferrable interest debentures | $ 160,416,000 | $ 161,416,000 | ||
Maximum number of consecutive quarterly period available for deferral of interest payment on Trusts VI, VII, VIII, IX, X, XI and XII | item | 20 | |||
Percentage of capital securities issued by trust qualifying as Tier I capital, maximum | 25.00% | |||
Percentage of capital securities issued by trust qualifying as Tier II capital, minimum | 25.00% | |||
Capital securities issued by the trust, qualifying as Tier I capital | $ 160,416,000 | 161,416,000 | ||
Trust XI | ||||
Junior subordinated deferrable interest debentures, major types of business trusts | ||||
Redemption price discount (as a percent) | 24.00% | |||
Retirement of capital securities | $ 1,000,000 | $ 1,000,000 | ||
Junior subordinated deferrable interest debentures | $ 26,990,000 | $ 27,990,000 | 25,990,000 | |
Trust X and XI | ||||
Junior subordinated deferrable interest debentures, major types of business trusts | ||||
Redemption price discount (as a percent) | 24.50% | |||
Trust X | ||||
Junior subordinated deferrable interest debentures, major types of business trusts | ||||
Retirement of capital securities | $ 13,000,000 | |||
Junior subordinated deferrable interest debentures | $ 34,021,000 | 21,021,000 | ||
Parent Company | ||||
Junior subordinated deferrable interest debentures, major types of business trusts | ||||
Junior subordinated deferrable interest debentures | $ 160,416,000 | $ 161,416,000 |
Junior Subordinated Deferrabl75
Junior Subordinated Deferrable Interest Debentures (Key Information) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Nov. 01, 2016 | Dec. 31, 2015 | Jul. 29, 2015 | |
Junior subordinated deferrable interest debentures, major types of business trusts | ||||
Junior subordinated deferrable interest debentures | $ 160,416,000 | $ 161,416,000 | ||
Trust VI | ||||
Junior subordinated deferrable interest debentures, major types of business trusts | ||||
Junior subordinated deferrable interest debentures | $ 25,774,000 | |||
Interest rate (as a percent) | 4.36% | |||
Interest rate index | 3.45 | |||
Trust VIII | ||||
Junior subordinated deferrable interest debentures, major types of business trusts | ||||
Junior subordinated deferrable interest debentures | $ 25,774,000 | |||
Interest rate (as a percent) | 3.93% | |||
Interest rate index | 3.05 | |||
Trust IX | ||||
Junior subordinated deferrable interest debentures, major types of business trusts | ||||
Junior subordinated deferrable interest debentures | $ 41,238,000 | |||
Interest rate (as a percent) | 2.47% | |||
Interest rate index | 1.62 | |||
Trust X | ||||
Junior subordinated deferrable interest debentures, major types of business trusts | ||||
Junior subordinated deferrable interest debentures | $ 21,021,000 | $ 34,021,000 | ||
Interest rate (as a percent) | 2.54% | |||
Interest rate index | 1.65 | |||
Trust XI | ||||
Junior subordinated deferrable interest debentures, major types of business trusts | ||||
Junior subordinated deferrable interest debentures | $ 25,990,000 | $ 26,990,000 | $ 27,990,000 | |
Interest rate (as a percent) | 2.47% | |||
Interest rate index | 1.62 | |||
Trust XII | ||||
Junior subordinated deferrable interest debentures, major types of business trusts | ||||
Junior subordinated deferrable interest debentures | $ 20,619,000 | |||
Interest rate (as a percent) | 2.38% | |||
Interest rate index | 1.45 | |||
Parent Company | ||||
Junior subordinated deferrable interest debentures, major types of business trusts | ||||
Junior subordinated deferrable interest debentures | $ 160,416,000 | $ 161,416,000 |
Earnings per Share ("EPS") (Det
Earnings per Share ("EPS") (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Basic EPS | |||
Net Income (Numerator) | $ 133,932 | $ 136,726 | $ 153,151 |
Shares (Denominator) | 65,967,989 | 66,411,193 | 66,872,500 |
Per Share Amount | $ 2.03 | $ 2.06 | $ 2.29 |
Diluted EPS | |||
Net Income (Numerator) | $ 133,932 | $ 136,726 | $ 153,151 |
Potential dilutive common shares and warrants | 345,501 | 225,160 | 183,956 |
Shares (Denominator) | 66,313,490 | 66,636,353 | 67,056,456 |
Per Share Amount (in dollars per share) | $ 2.02 | $ 2.05 | $ 2.28 |
Employees' Profit Sharing Plan
Employees' Profit Sharing Plan (Details) - Deferred profit sharing - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employees' profit sharing plan | |||
Minimum period of continuous employment to be fully vested | 1 year | ||
Profit sharing costs | $ 3,650,000 | $ 3,525,000 | $ 3,510,000 |
International Operations (Detai
International Operations (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Loans: | ||||
Total loans | $ 5,964,688,000 | $ 5,950,914,000 | ||
Less allowance for probable loan losses | (64,661,000) | (66,988,000) | $ (64,828,000) | $ (70,161,000) |
Net loans | 5,900,027,000 | 5,883,926,000 | ||
Accrued interest receivable | 32,172,000 | 31,572,000 | ||
International Banking Services | ||||
Loans: | ||||
Accrued interest receivable | 603,000 | 697,000 | ||
Outstanding standby and commercial letters of credit | 93,154,000 | |||
Revenues | 5,495,000 | 6,113,000 | $ 6,034,000 | |
International Banking Services | Foreign | ||||
Loans: | ||||
Total loans | 167,220,000 | 179,013,000 | ||
Less allowance for probable loan losses | (884,000) | (1,152,000) | ||
Net loans | 166,336,000 | 177,861,000 | ||
International Banking Services | Foreign | Commercial | ||||
Loans: | ||||
Total loans | 124,079,000 | 138,125,000 | ||
International Banking Services | Foreign | Others | ||||
Loans: | ||||
Total loans | $ 43,141,000 | $ 40,888,000 |
Income Taxes (Current and Defer
Income Taxes (Current and Deferred Portions of Net Income Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current | |||
U.S. | $ 52,403 | $ 65,196 | $ 72,561 |
State | 3,362 | 5,258 | 5,252 |
Foreign | (6) | 1 | |
Total current taxes | 55,765 | 70,448 | 77,814 |
Deferred | |||
U.S. | 7,279 | (261) | (969) |
State | 27 | (71) | (58) |
Total deferred taxes | 7,306 | (332) | (1,027) |
Total income taxes | $ 63,071 | $ 70,116 | $ 76,787 |
Income Taxes (Income Tax Expens
Income Taxes (Income Tax Expense Differences from the Amount Computed by Applying the U.S. Federal Income Tax Rate) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes | |||
Income tax expense differences from the amount computed by applying the U.S. Federal income tax rate to income before income taxes (as a percent) | 35.00% | 35.00% | 35.00% |
Reasons for the difference of income tax expense | |||
Computed expected tax expense | $ 69,253 | $ 72,389 | $ 80,560 |
Change in taxes resulting from: | |||
Tax-exempt interest income | (3,940) | (3,910) | (4,554) |
State tax, net of federal income taxes and tax credit | 3,287 | 3,371 | 3,377 |
Other investment income | (3,694) | (3,540) | (3,615) |
Other | (1,835) | 1,806 | 1,019 |
Total income taxes | $ 63,071 | $ 70,116 | $ 76,787 |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Deferred Tax Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Loans receivable, principally due to the allowance for probable loan losses | $ 24,315 | $ 25,689 |
Other real estate owned | 3,652 | 3,224 |
Impairment charges on available-for-sale securities | 6,086 | 5,959 |
Accrued expenses | 137 | 137 |
Net unrealized gains on available for sale investment securities | 14,791 | |
Other | 6,917 | 7,411 |
Total deferred tax assets | 55,898 | 42,420 |
Deferred tax liabilities: | ||
Bank premises and equipment, principally due to differences on depreciation | (19,837) | (18,266) |
Net unrealized gains on available for sale investment securities | (1,171) | |
Identified intangible assets and goodwill | (21,386) | (20,169) |
Other | (16,300) | (13,099) |
Total deferred tax liabilities | 57,523 | 52,705 |
Total deferred tax liability | $ (1,625) | $ (10,285) |
Stock Options (Details)
Stock Options (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 05, 2012 | |
Stock options under 2012 Plan | ||||
Stock option details | ||||
Shares available for future grants | 198,675 | 800,000 | ||
Maximum exercisable period for options granted | 10 years | |||
Black-Scholes-Merton option valuation model assumptions | ||||
Expected Life | 7 years 7 months 10 days | 7 years 7 months 10 days | ||
Dividend yield (as a percent) | 2.50% | 2.36% | ||
Interest rate (as a percent) | 1.50% | 1.91% | ||
Volatility (as a percent) | 41.32% | 46.52% | ||
Stock option activity | ||||
Options outstanding at the beginning of the period (in shares) | 871,727 | |||
Plus: Options granted (in shares) | 9,000 | |||
Less: | ||||
Options exercised (in shares) | 43,925 | |||
Options expired (in shares) | 2,000 | |||
Options forfeited (in shares) | 34,300 | |||
Options outstanding at the end of the period (in shares) | 800,502 | 871,727 | ||
Options fully vested and exercisable at the end of the period (in shares) | 266,392 | |||
Stock Options, Weighted Average Exercise Price | ||||
Options outstanding at the beginning, weighted average exercise price (in dollars per share) | $ 19.08 | |||
Plus: Options granted, weighted average exercise price (in dollars per share) | 26.14 | |||
Less: | ||||
Options exercised, weighted average exercise price (in dollars per share) | 12.51 | |||
Options expired, weighted average exercise price (in dollars per share) | 20.83 | |||
Options forfeited, weighted average exercise price (in dollars per share) | 21.17 | |||
Options outstanding at the end, weighted average exercise price (in dollars per share) | 19.43 | $ 19.08 | ||
Options fully vested and exercisable at the end, weighted average exercise price (in dollars per share) | $ 15.91 | |||
Stock Options, Weighted Average Remaining Contractual Term | ||||
Options outstanding at the end, weighted average remaining contractual term | 5 years 10 months 28 days | |||
Options fully vested and exercisable at the end, weighted average remaining contractual term | 3 years 8 months 16 days | |||
Stock Options, Aggregate Intrinsic Value | ||||
Options outstanding at the end, aggregate intrinsic value | $ 17,108,000 | |||
Options fully vested and exercisable at the end, aggregate intrinsic value | 6,630,000 | |||
Stock-based compensation expense | 1,082,000 | $ 1,172,000 | $ 1,058,000 | |
Stock-based compensation cost, unrecognized, related to non-vested options | $ 2,322,000 | |||
Stock-based compensation cost, unrecognized, related to non-vested options, weighted-average period of recognition | 1 year 8 months 12 days | |||
Other information pertaining to option activity | ||||
Weighted average grant date fair value of stock options granted (in dollars per share) | $ 8.74 | $ 9.42 | $ 9.07 | |
Total fair value of stock options vested | $ 1,015,000 | $ 872,000 | $ 376,000 | |
Total intrinsic value of stock options exercised | $ 792,000 | $ 781,000 | $ 468,000 | |
Incentive stock options granted to 10% shareholders | ||||
Stock option details | ||||
Maximum exercisable period for options granted | 5 years |
Long Term Restricted Stock Un83
Long Term Restricted Stock Units (Details) - Plan | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2009item | Dec. 31, 2014USD ($) | Dec. 31, 2012USD ($) | |
CPP Compliant Long Term RSU Granted for Performance in 2012 | |||
Long-Term Restricted Stock Units | |||
Compensation cost | $ 425,000 | ||
CPP Compliant Long Term RSU Granted for Performance in 2011 | |||
Long-Term Restricted Stock Units | |||
Cash amounts paid on vesting of awards | $ 572,746 | ||
RSUs | |||
Long-Term Restricted Stock Units | |||
Minimum number of non-employee members of the Board needed to authorize restricted stock units | item | 2 |
Commitments, Contingent Liabi84
Commitments, Contingent Liabilities and Other Matters (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments, Contingent Liabilities and Other Matters | |||
Total rental expense | $ 5,870,000 | $ 6,200,000 | $ 7,200,000 |
Minimum period for non-cancellable sub-leases | 1 year | ||
Aggregate future minimum rentals to be received under non-cancellable sub-leases | $ 101,562,000 | ||
Approximate cash maintained to satisfy regulatory reserve requirements | 111,353,000 | $ 104,684,000 | |
Future minimum lease payments due under non-cancellable operating leases | |||
2,017 | 3,078,000 | ||
2,018 | 2,772,000 | ||
2,019 | 2,726,000 | ||
2,020 | 2,551,000 | ||
2,021 | 1,633,000 | ||
Thereafter | 88,000 | ||
Total | $ 12,848,000 |
Transactions with Related Par85
Transactions with Related Parties (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Transactions with Related Parties | ||
Aggregate amount receivable from related parties | $ 26,662,000 | $ 31,975,000 |
Financial Instruments with Of86
Financial Instruments with Off-Statement of Condition Risk and Concentrations of Credit Risk (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Maximum | ||
Financial amounts of instruments, whose contract amounts represent credit risks | ||
Credit risk commitment, maximum expiration date | 1 year | |
Commitments to Extend Credit | ||
Financial amounts of instruments, whose contract amounts represent credit risks | ||
Outstanding amount of financial instruments whose, contract amounts represent credit risks | $ 2,262,717,000 | |
Credit Card Lines | ||
Financial amounts of instruments, whose contract amounts represent credit risks | ||
Outstanding amount of financial instruments whose, contract amounts represent credit risks | 18,531,000 | |
Standby Letters of Credit | ||
Financial amounts of instruments, whose contract amounts represent credit risks | ||
Outstanding amount of financial instruments whose, contract amounts represent credit risks | 88,504,000 | |
Commercial Letters of Credit | ||
Financial amounts of instruments, whose contract amounts represent credit risks | ||
Outstanding amount of financial instruments whose, contract amounts represent credit risks | 4,650,000 | |
Unsecured Letters of Credit | ||
Financial amounts of instruments, whose contract amounts represent credit risks | ||
Guarantee obligations, maximum exposure | 88,504,000 | |
Unsecured letters of credit | $ 40,738,000 | $ 37,454,000 |
Capital Requirements (Details)
Capital Requirements (Details) - USD ($) | Dec. 23, 2008 | Dec. 31, 2016 |
Capital Requirements | ||
Warrants to purchase entity's common stock (in shares) | 1,326,238 | |
Warrants, exercise price (in dollars per share) | $ 24.43 | $ 24.43 |
Maximum cash dividend paid in semi-annual period (in dollars per share) | $ 0.33 | |
Warrants, term | 10 years | |
Dividend payable by subsidiaries, maximum | $ 819,500,000 |
Capital Requirements (Changes)
Capital Requirements (Changes) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Jan. 01, 2016 | Jul. 31, 2013 | |
Tier 1 capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 6.00% | |||
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 2.50% | 0.625% | ||
Term of mandatory compliance | 4 years | |||
Percentage of capital securities issued by trust qualifying as Tier I capital, maximum | 25.00% | |||
Percentage of capital securities issued by trust qualifying as Tier II capital, minimum | 25.00% | |||
Capital securities issued by the trust, qualifying as Tier I capital | $ 160,416,000 | $ 161,416,000 | ||
Minimum | ||||
CET 1 ratio | 7.00% | |||
Tier 1 capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 4.00% | |||
Total Capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 4.50% | |||
Parent Company | ||||
Tier 1 capital (to Average Assets), Actual Ratio (as a percent) | 13.91% | 13.15% | ||
Tier 1 capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 18.68% | 18.69% | ||
Total Capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 19.47% | 19.54% | ||
Parent Company | Minimum | ||||
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 8.625% | 8.00% |
Capital Requirements (Capital A
Capital Requirements (Capital Amounts and Ratios) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Jan. 01, 2016 | Jul. 31, 2013 | |
Capital Requirements | ||||
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 2.50% | 0.625% | ||
Tier 1 capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 6.00% | |||
Term of mandatory compliance | 4 years | |||
Minimum | ||||
Capital Requirements | ||||
Total Capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 4.50% | |||
Tier 1 capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 4.00% | |||
Parent Company | ||||
Capital Requirements | ||||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Amount | $ 1,468,662 | $ 1,380,801 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 16.95% | 16.81% | ||
Total Capital (to Risk Weighted Assets), Actual Amount | $ 1,687,501 | $ 1,605,419 | ||
Tier 1 Capital (to Risk Weighted Assets), Actual Amount | 1,618,935 | 1,535,443 | ||
Tier 1 Capital (to Average Assets), Actual Amount | $ 1,618,935 | $ 1,535,443 | ||
Total Capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 19.47% | 19.54% | ||
Tier 1 capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 18.68% | 18.69% | ||
Tier 1 capital (to Average Assets), Actual Ratio (as a percent) | 13.91% | 13.15% | ||
Parent Company | Minimum | ||||
Capital Requirements | ||||
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount | $ 390,021 | $ 369,726 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 5.125% | 4.50% | ||
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount | $ 693,370 | $ 657,291 | ||
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount | 520,028 | 492,968 | ||
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Amount | $ 471,135 | $ 466,897 | ||
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 8.625% | 8.00% | ||
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 6.625% | 6.00% | ||
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Ratio (as a percent) | 4.00% | 4.00% | ||
International Bank of Commerce, Laredo | ||||
Capital Requirements | ||||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Amount | $ 1,201,527 | $ 1,151,812 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 16.63% | 16.42% | ||
Total Capital (to Risk Weighted Assets), Actual Amount | $ 1,260,886 | $ 1,213,377 | ||
Tier 1 Capital (to Risk Weighted Assets), Actual Amount | 1,201,527 | 1,151,812 | ||
Tier 1 Capital (to Average Assets), Actual Amount | $ 1,201,527 | $ 1,151,812 | ||
Total Capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 17.45% | 17.30% | ||
Tier 1 capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 16.63% | 16.42% | ||
Tier 1 capital (to Average Assets), Actual Ratio (as a percent) | 12.50% | 12.09% | ||
International Bank of Commerce, Laredo | Minimum | ||||
Capital Requirements | ||||
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount | $ 325,178 | $ 315,707 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 469,701 | $ 456,022 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 5.125% | 4.50% | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 6.50% | 6.50% | ||
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount | $ 578,094 | $ 561,258 | ||
Total Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | 722,618 | 701,572 | ||
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount | 433,571 | 420,943 | ||
Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | 578,094 | 561,258 | ||
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Amount | 384,342 | 381,105 | ||
Tier 1 Capital (to Average Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 480,427 | $ 476,381 | ||
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 8.625% | 8.00% | ||
Total Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 10.00% | 10.00% | ||
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 6.625% | 6.00% | ||
Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 8.00% | 8.00% | ||
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Ratio (as a percent) | 4.00% | 4.00% | ||
Tier 1 Capital (to Average Assets), To Be well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 5.00% | 5.00% | ||
International Bank of Commerce, Brownsville | ||||
Capital Requirements | ||||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Amount | $ 158,533 | $ 154,141 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 25.61% | 26.26% | ||
Total Capital (to Risk Weighted Assets), Actual Amount | $ 163,937 | $ 159,913 | ||
Tier 1 Capital (to Risk Weighted Assets), Actual Amount | 158,533 | 154,141 | ||
Tier 1 Capital (to Average Assets), Actual Amount | $ 158,533 | $ 154,141 | ||
Total Capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 26.49% | 27.24% | ||
Tier 1 capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 25.61% | 26.26% | ||
Tier 1 capital (to Average Assets), Actual Ratio (as a percent) | 16.91% | 15.03% | ||
International Bank of Commerce, Brownsville | Minimum | ||||
Capital Requirements | ||||
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount | $ 27,852 | $ 26,418 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 40,230 | $ 38,159 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 5.125% | 4.50% | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 6.50% | 6.50% | ||
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount | $ 49,514 | $ 46,965 | ||
Total Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | 61,892 | 58,706 | ||
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount | 37,135 | 35,224 | ||
Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | 49,514 | 46,965 | ||
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Amount | 37,509 | 41,034 | ||
Tier 1 Capital (to Average Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 46,886 | $ 51,293 | ||
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 8.625% | 8.00% | ||
Total Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 10.00% | 10.00% | ||
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 6.625% | 6.00% | ||
Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 8.00% | 8.00% | ||
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Ratio (as a percent) | 4.00% | 4.00% | ||
Tier 1 Capital (to Average Assets), To Be well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 5.00% | 5.00% | ||
International Bank of Commerce, Zapata | ||||
Capital Requirements | ||||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Amount | $ 65,989 | $ 66,153 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 34.09% | 35.71% | ||
Total Capital (to Risk Weighted Assets), Actual Amount | $ 67,464 | $ 67,470 | ||
Tier 1 Capital (to Risk Weighted Assets), Actual Amount | 65,989 | 66,153 | ||
Tier 1 Capital (to Average Assets), Actual Amount | $ 65,989 | $ 66,153 | ||
Total Capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 34.85% | 36.42% | ||
Tier 1 capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 34.09% | 35.71% | ||
Tier 1 capital (to Average Assets), Actual Ratio (as a percent) | 13.87% | 13.15% | ||
International Bank of Commerce, Zapata | Minimum | ||||
Capital Requirements | ||||
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount | $ 8,712 | $ 8,336 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 12,584 | $ 12,042 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 5.125% | 4.50% | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 6.50% | 6.50% | ||
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount | $ 15,488 | $ 14,820 | ||
Total Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | 19,360 | 18,525 | ||
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount | 11,616 | 11,115 | ||
Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | 15,488 | 14,820 | ||
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Amount | 19,029 | 20,129 | ||
Tier 1 Capital (to Average Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 23,786 | $ 25,161 | ||
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 8.625% | 8.00% | ||
Total Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 10.00% | 10.00% | ||
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 6.625% | 6.00% | ||
Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 8.00% | 8.00% | ||
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Ratio (as a percent) | 4.00% | 4.00% | ||
Tier 1 Capital (to Average Assets), To Be well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 5.00% | 5.00% | ||
Commerce Bank | ||||
Capital Requirements | ||||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Amount | $ 73,765 | $ 72,882 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 31.84% | 36.17% | ||
Total Capital (to Risk Weighted Assets), Actual Amount | $ 76,093 | $ 74,204 | ||
Tier 1 Capital (to Risk Weighted Assets), Actual Amount | 73,765 | 72,882 | ||
Tier 1 Capital (to Average Assets), Actual Amount | $ 73,765 | $ 72,882 | ||
Total Capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 32.85% | 36.83% | ||
Tier 1 capital (to Risk Weighted Assets), Actual Ratio (as a percent) | 31.84% | 36.17% | ||
Tier 1 capital (to Average Assets), Actual Ratio (as a percent) | 13.05% | 12.94% | ||
Commerce Bank | Minimum | ||||
Capital Requirements | ||||
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount | $ 10,425 | $ 9,067 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 15,058 | $ 13,097 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 5.125% | 4.50% | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 6.50% | 6.50% | ||
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount | $ 18,532 | $ 16,119 | ||
Total Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | 23,166 | 20,149 | ||
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount | 13,899 | 12,089 | ||
Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | 18,532 | 16,119 | ||
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Amount | 22,607 | 22,521 | ||
Tier 1 Capital (to Average Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 28,259 | $ 28,151 | ||
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 8.625% | 8.00% | ||
Total Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 10.00% | 10.00% | ||
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent) | 6.625% | 6.00% | ||
Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 8.00% | 8.00% | ||
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Ratio (as a percent) | 4.00% | 4.00% | ||
Tier 1 Capital (to Average Assets), To Be well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 5.00% | 5.00% |
Fair Value (Fair Value By Level
Fair Value (Fair Value By Level) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets: | ||
Available for sale securities | $ 4,177,349 | $ 4,199,372 |
Assets/liabilities measured at fair value | ||
Assets: | ||
Available for sale securities | 4,177,349 | 4,199,372 |
Assets/liabilities measured at fair value | Residential mortgage-backed securities | ||
Assets: | ||
Available for sale securities | 3,894,470 | 3,893,211 |
Assets/liabilities measured at fair value | Obligations of states and political subdivisions | ||
Assets: | ||
Available for sale securities | 254,972 | 277,704 |
Assets/liabilities measured at fair value | Equity securities | ||
Assets: | ||
Available for sale securities | 27,907 | 28,457 |
Measured on a recurring basis: | ||
Assets: | ||
Available for sale securities | 4,177,349 | 4,199,372 |
Measured on a recurring basis: | Residential mortgage-backed securities | ||
Assets: | ||
Available for sale securities | 3,894,470 | 3,893,210 |
Measured on a recurring basis: | Obligations of states and political subdivisions | ||
Assets: | ||
Available for sale securities | 254,972 | 277,705 |
Measured on a recurring basis: | Equity securities | ||
Assets: | ||
Available for sale securities | 27,907 | 28,457 |
Measured on a recurring basis: | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Available for sale securities | 27,907 | 28,457 |
Measured on a recurring basis: | Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity securities | ||
Assets: | ||
Available for sale securities | 27,907 | 28,457 |
Measured on a recurring basis: | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Available for sale securities | 4,131,837 | 4,149,686 |
Measured on a recurring basis: | Significant Other Observable Inputs (Level 2) | Residential mortgage-backed securities | ||
Assets: | ||
Available for sale securities | 3,876,865 | 3,871,981 |
Measured on a recurring basis: | Significant Other Observable Inputs (Level 2) | Obligations of states and political subdivisions | ||
Assets: | ||
Available for sale securities | 254,972 | 277,705 |
Measured on a recurring basis: | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Available for sale securities | 17,605 | 21,229 |
Measured on a recurring basis: | Significant Unobservable Inputs (Level 3) | Residential mortgage-backed securities | ||
Assets: | ||
Available for sale securities | $ 17,605 | $ 21,229 |
Fair Value Measurements -(Recon
Fair Value Measurements -(Reconciliation) (Details) - Residential mortgage-backed securities $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Reconciliation of activity for mortgage-backed securities on a net basis | |
Balance at the beginning of the period | $ 21,229 |
Principal paydowns | (4,417) |
Total unrealized losses included in: | |
Other comprehensive loss | 1,147 |
Impairment realized in earnings | (354) |
Balance at the end of the period | $ 17,605 |
Fair Value (Fair Value Measurem
Fair Value (Fair Value Measurement and Assumptions) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Assets: | |||
Impaired Loans | $ 38,108,000 | $ 51,021,000 | |
Non-financial assets: | |||
Other real estate owned | 42,204,000 | 55,850,000 | |
Assumptions used in discounted cash flow model to determine fair value of investments classified within level 3 | |||
Charges to allowance for probable loan losses in connection with other real estate owned | 381,000 | 696,000 | $ 367,000 |
Adjustment to fair value in connection with other real estate owned | 2,351,000 | 1,023,000 | $ 597,000 |
Impaired commercial collateral dependent loans | 38,108,000 | 51,021,000 | |
Impaired commercial collateral dependent receivables appraisals to determine fair value within immediately preceding twelve months | 26,162,000 | 39,520,000 | |
Impaired collateral dependent commercial loans with internal evaluation completed within last twelve months | $ 6,836,000 | $ 2,958,000 | |
Significant Unobservable Inputs (Level 3) | Bond meeting original contract terms | |||
Assumptions used in discounted cash flow model to determine fair value of investments classified within level 3 | |||
Minimum period of residential mortgage loan performance under original contract terms | 24 months | 24 months | |
Estimated future principal prepayment rate assumption, low end of range (as a percent) | 7.00% | 7.00% | |
Default rate assumptions (as a percent) | 1.00% | 1.00% | |
Loss severity rate assumptions, first year (as a percent) | 25.00% | 25.00% | |
Estimated future principal prepayment rate assumption, discount rate (as a percent) | 13.00% | 13.00% | |
Significant Unobservable Inputs (Level 3) | Bond not meeting the original contract terms | |||
Assumptions used in discounted cash flow model to determine fair value of investments classified within level 3 | |||
Estimated future principal prepayment rate assumption, low end of range (as a percent) | 2.00% | 2.00% | |
Default rate assumptions (as a percent) | 4.50% | 4.50% | |
Loss severity rate assumptions, first year (as a percent) | 60.00% | ||
Decrease in loss severity rates, following five years (as a percent) | 5.00% | ||
Loss severity rate, thereafter (as a percent) | 25.00% | ||
Estimated future principal prepayment rate assumption, discount rate (as a percent) | 13.00% | ||
Measured on a non-recurring basis | |||
Assets: | |||
Impaired Loans | $ 38,794,000 | $ 18,033,000 | |
Non-financial assets: | |||
Other real estate owned | 9,445,000 | 12,705,000 | |
Assumptions used in discounted cash flow model to determine fair value of investments classified within level 3 | |||
Change in net provision, impaired loans | 19,699,000 | (8,589,000) | |
Change in net provision, other real estate owned | 2,351,000 | 1,023,000 | |
Impaired commercial collateral dependent loans | 38,794,000 | 18,033,000 | |
Measured on a non-recurring basis | Significant Unobservable Inputs (Level 3) | |||
Assets: | |||
Impaired Loans | 38,794,000 | 18,033,000 | |
Non-financial assets: | |||
Other real estate owned | 9,445,000 | 12,705,000 | |
Assumptions used in discounted cash flow model to determine fair value of investments classified within level 3 | |||
Impaired commercial collateral dependent loans | $ 38,794,000 | $ 18,033,000 |
Fair Value Measurements (Other
Fair Value Measurements (Other Assumptions) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deposits | ||
Carrying amount of time deposits | $ 2,248,310,000 | $ 2,366,413,000 |
Significant Unobservable Inputs (Level 3) | ||
Loans | ||
Carrying amount of fixed rate performing loans | 1,411,272,000 | 1,383,836,000 |
Estimated fair value of fixed rate performing loans | 1,375,807,000 | 1,362,248,000 |
Deposits | ||
Carrying amount of time deposits | 2,248,310,000 | 2,366,413,000 |
Estimated fair value of time deposits | 2,247,648,000 | 2,365,390,000 |
Securities Sold Under Repurchase Agreements | ||
Carrying amount of long-term repurchase agreements | 300,000,000 | 560,000,000 |
Estimated fair value of long-term repurchase agreements | $ 289,324,000 | $ 527,198,600 |
International Bancshares Corp94
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Condition (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
ASSETS | ||||
Other investments | $ 517,162,000 | $ 468,791,000 | ||
Other assets | 95,593,000 | 114,354,000 | ||
Total assets | 11,804,041,000 | 11,772,869,000 | ||
Liabilities: | ||||
Junior subordinated deferrable interest debentures | 160,416,000 | 161,416,000 | ||
Other liabilities | 70,509,000 | 76,175,000 | ||
Total liabilities | 10,079,374,000 | 10,107,366,000 | ||
Shareholders' equity: | ||||
Common shares | 95,910,000 | 95,866,000 | ||
Surplus | 169,567,000 | 167,980,000 | ||
Retained earnings | 1,777,963,000 | 1,683,600,000 | ||
Accumulated other comprehensive (loss) income | (26,697,000) | 2,167,000 | ||
Total shareholders' equity before treasury stock | 2,016,743,000 | 1,949,613,000 | ||
Less cost of shares in treasury | (292,076,000) | (284,110,000) | ||
Total shareholders' equity | 1,724,667,000 | 1,665,503,000 | $ 1,580,658,000 | $ 1,424,408,000 |
Total liabilities and shareholders' equity | 11,804,041,000 | 11,772,869,000 | ||
Parent Company | ||||
ASSETS | ||||
Cash | 18,555,000 | 2,977,000 | ||
Other investments | 94,908,000 | 69,160,000 | ||
Notes receivable | 99,000 | |||
Investment in subsidiaries | 1,787,120,000 | 1,766,592,000 | ||
Other assets | 1,098,000 | 45,000 | ||
Total assets | 1,901,681,000 | 1,838,873,000 | ||
Liabilities: | ||||
Junior subordinated deferrable interest debentures | 160,416,000 | 161,416,000 | ||
Due to IBC Trading | 21,000 | 21,000 | ||
Other liabilities | 16,577,000 | 11,933,000 | ||
Total liabilities | 177,014,000 | 173,370,000 | ||
Shareholders' equity: | ||||
Common shares | 95,910,000 | 95,866,000 | ||
Surplus | 169,567,000 | 167,980,000 | ||
Retained earnings | 1,777,963,000 | 1,683,600,000 | ||
Accumulated other comprehensive (loss) income | (26,697,000) | 2,167,000 | ||
Total shareholders' equity before treasury stock | 2,016,743,000 | 1,949,613,000 | ||
Less cost of shares in treasury | (292,076,000) | (284,110,000) | ||
Total shareholders' equity | 1,724,667,000 | 1,665,503,000 | ||
Total liabilities and shareholders' equity | $ 1,901,681,000 | $ 1,838,873,000 |
International Bancshares Corp95
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Expenses: | |||
Interest expense (Debentures) | $ 4,600 | $ 4,099 | $ 4,264 |
Income before federal income taxes and equity in undistributed net income of subsidiaries | 197,003 | 206,842 | 229,938 |
Income tax expense | 63,071 | 70,116 | 76,787 |
Net income | 133,932 | 136,726 | 153,151 |
Parent Company | |||
Income: | |||
Dividends from subsidiaries | 84,432 | 51,575 | 71,389 |
Interest income on notes receivable | 2 | 7 | 15 |
Interest income on other investments | 8,958 | 5,738 | 6,862 |
Other | 255 | 3,442 | 1,923 |
Total income | 93,647 | 60,762 | 80,189 |
Expenses: | |||
Interest expense (Debentures) | 4,600 | 4,099 | 4,264 |
Other | 3,637 | 3,037 | 1,099 |
Total expenses | 8,237 | 7,136 | 5,363 |
Income before federal income taxes and equity in undistributed net income of subsidiaries | 85,410 | 53,626 | 74,826 |
Income tax expense | 311 | 386 | 1,370 |
Income before equity in undistributed net income of subsidiaries | 85,099 | 53,240 | 73,456 |
Equity in undistributed net income of subsidiaries | 48,833 | 83,486 | 79,695 |
Net income | $ 133,932 | $ 136,726 | $ 153,151 |
International Bancshares Corp96
International Bancshares Corporation (Parent Company Only) Financial Information Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities: | |||
Net income | $ 133,932 | $ 136,726 | $ 153,151 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Impairment charges on available for sale securities | 354 | 954 | 817 |
Stock compensation expense | 1,082 | 1,172 | 1,058 |
Increase (decrease) in other liabilities | (7,705) | (6,567) | (7,482) |
Net cash provided by operating activities | 203,220 | 203,649 | 193,037 |
Investing activities: | |||
Principal collected on mortgage-backed securities | 919,594 | 854,736 | 787,361 |
Net cash (used in) provided by investing activities | (137,763) | 373,225 | (90,399) |
Financing activities: | |||
Repayments of Long-term Debt | 1,000 | 14,000 | 15,310 |
Proceeds from stock transactions | 549 | 1,370 | 555 |
Payments of cash dividends - common | (39,569) | (38,515) | (34,762) |
Purchase of treasury stock | (7,966) | (6,678) | (18,923) |
Net cash used in financing activities | (69,312) | (558,967) | (122,277) |
(Decrease) increase in cash and cash equivalents | (3,855) | 17,907 | (19,639) |
Cash and cash equivalents at beginning of period | 273,053 | 255,146 | 274,785 |
Cash and cash equivalents at end of period | 269,198 | 273,053 | 255,146 |
Parent Company | |||
Operating activities: | |||
Net income | 133,932 | 136,726 | 153,151 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Impairment charges on available for sale securities | 112 | 385 | 254 |
Stock compensation expense | 1,082 | 1,172 | 1,058 |
Increase (decrease) in other liabilities | 3,901 | (1,998) | 416 |
Equity in undistributed net income of subsidiaries | (48,833) | (83,486) | (79,695) |
Net cash provided by operating activities | 90,194 | 52,799 | 75,184 |
Investing activities: | |||
Principal collected on mortgage-backed securities | 1,105 | 474 | 1,301 |
Net decrease in notes receivable | 99 | 105 | 109 |
Increase in other assets and other investments | (27,834) | (1,830) | (7,008) |
Net cash (used in) provided by investing activities | (26,630) | (1,251) | (5,598) |
Financing activities: | |||
Repayments of Long-term Debt | 1,000 | 14,000 | 15,310 |
Proceeds from stock transactions | 549 | 1,370 | 555 |
Payments of cash dividends - common | (39,569) | (38,515) | (34,762) |
Purchase of treasury stock | (7,966) | (6,678) | (18,923) |
Net cash used in financing activities | (47,986) | (57,823) | (68,440) |
(Decrease) increase in cash and cash equivalents | 15,578 | (6,275) | 1,146 |
Cash and cash equivalents at beginning of period | 2,977 | 9,252 | 8,106 |
Cash and cash equivalents at end of period | $ 18,555 | $ 2,977 | $ 9,252 |