DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 23, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | SOUTHSIDE BANCSHARES INC | ||
Entity Central Index Key | 705,432 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 960,145,277 | ||
Entity Common Stock Shares Outstanding (in shares) | 35,027,560 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
ASSETS | |||
Cash and due from banks | $ 79,171 | $ 59,363 | |
Interest earning deposits | 111,541 | 102,251 | |
Federal funds sold | 7,980 | 8,040 | |
Total cash and cash equivalents | 198,692 | 169,654 | |
Securities available for sale, at estimated fair value | 1,538,755 | 1,479,600 | |
Securities held to maturity, at carrying value (estimated fair value of $921,800 and $944,282, respectively) | 909,506 | 937,487 | |
FHLB stock, at cost | 55,729 | 61,084 | |
Other investments | 5,821 | 5,508 | |
Loans held for sale | 2,001 | 7,641 | |
Loans: | |||
Loans | [1] | 3,294,356 | 2,556,537 |
Less: Allowance for loan losses | [2] | (20,781) | (17,911) |
Net loans | 3,273,575 | 2,538,626 | |
Premises and equipment, net | 133,640 | 106,003 | |
Goodwill | 201,246 | 91,520 | |
Other intangible assets, net | 22,993 | 4,608 | |
Interest receivable | 28,491 | 25,183 | |
Deferred tax asset, net | 12,204 | 28,891 | |
Bank owned life insurance | 100,368 | 97,775 | |
Other assets | 15,076 | 10,187 | |
Total assets | 6,498,097 | 5,563,767 | |
Deposits: | |||
Noninterest bearing | 1,037,401 | 704,013 | |
Interest bearing | 3,478,046 | 2,829,063 | |
Total deposits | 4,515,447 | 3,533,076 | |
Federal funds purchased and repurchase agreements | 9,498 | 7,097 | |
FHLB borrowings | 1,017,361 | 1,309,646 | |
Subordinated notes, net of unamortized debt issuance costs | [3] | 98,248 | 98,100 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 60,241 | 60,236 | |
Other liabilities | 43,162 | 37,338 | |
Total liabilities | 5,743,957 | 5,045,493 | |
Off-balance-sheet arrangements, commitments and contingencies (Note 17) | |||
Shareholders’ equity: | |||
Common stock: ($1.25 par value, 40,000,000 shares authorized, 37,802,352 shares issued at December 31, 2017 and 31,455,951 shares issued at December 31, 2016) | 47,253 | 39,320 | |
Paid-in capital | 757,439 | 535,240 | |
Retained earnings | 32,851 | 30,098 | |
Treasury stock, at cost (2,802,019 at December 31, 2017 and 2,913,064 at December 31, 2016) | (47,105) | (47,891) | |
Accumulated other comprehensive loss | (36,298) | (38,493) | |
Total shareholders’ equity | 754,140 | 518,274 | |
Total liabilities and shareholders’ equity | $ 6,498,097 | $ 5,563,767 | |
[1] | Includes approximately $861.8 million and $372.4 million of acquired loans as of December 31, 2017 and 2016, respectively. | ||
[2] | Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. There was no allowance for loan loss recorded on purchase credit impaired (“PCI”) loans as of December 31, 2017. The allowance for loan loss recorded on PCI loans was $3,000 as of December 31, 2016 | ||
[3] | This debt consists of subordinated notes with a remaining maturity greater than one year that qualify under the risk-based capital guidelines as Tier 2 capital, subject to certain limitations. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Held to Maturity, fair value | $ 921,800 | $ 944,282 |
Common stock, par value (in dollars per share) | $ 1.25 | $ 1.25 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 37,802,352 | 31,455,951 |
Treasury stock, (in shares) | 2,802,019 | 2,913,064 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest income | |||
Loans | $ 117,633 | $ 106,564 | $ 96,417 |
Investment securities – taxable | 939 | 1,057 | 1,587 |
Investment securities – tax-exempt | 24,529 | 22,654 | 22,468 |
Mortgage-backed securities | 41,361 | 37,450 | 33,661 |
FHLB stock and other investments | 1,306 | 798 | 298 |
Other interest earning assets | 1,706 | 390 | 101 |
Total interest income | 187,474 | 168,913 | 154,532 |
Interest expense | |||
Deposits | 20,736 | 14,255 | 10,162 |
FHLB borrowings | 15,106 | 11,751 | 8,234 |
Subordinated notes | 5,633 | 1,628 | 0 |
Trust preferred subordinated debentures | 2,013 | 1,706 | 1,455 |
Other borrowings | 16 | 8 | 3 |
Total interest expense | 43,504 | 29,348 | 19,854 |
Net interest income | 143,970 | 139,565 | 134,678 |
Provision for loan losses | 4,675 | 9,780 | 8,343 |
Net interest income after provision for loan losses | 139,295 | 129,785 | 126,335 |
Noninterest income | |||
Deposit services | 21,785 | 20,702 | 20,112 |
Net gain on sale of securities available for sale | 625 | 2,836 | 3,660 |
Gain on sale of loans | 1,821 | 2,795 | 2,082 |
Trust income | 3,818 | 3,491 | 3,419 |
Bank owned life insurance income | 2,537 | 2,626 | 2,623 |
Brokerage services | 2,422 | 2,127 | 2,206 |
Other | 4,465 | 4,834 | 3,793 |
Total noninterest income | 37,473 | 39,411 | 37,895 |
Noninterest expense | |||
Salaries and employee benefits | 60,475 | 63,978 | 62,945 |
Occupancy expense | 12,068 | 13,722 | 12,883 |
Acquisition expense | 4,352 | 0 | 5,473 |
Advertising, travel & entertainment | 2,219 | 2,643 | 2,678 |
ATM and debit card expense | 3,889 | 3,136 | 3,054 |
Professional fees | 3,844 | 4,946 | 3,735 |
Software and data processing expense | 3,027 | 2,911 | 3,440 |
Telephone and communications | 1,905 | 1,931 | 1,978 |
FDIC insurance | 1,769 | 2,141 | 2,510 |
Amortization expense on intangibles | 1,955 | 1,940 | 2,296 |
Other | 10,832 | 12,174 | 11,962 |
Total noninterest expense | 106,335 | 109,522 | 112,954 |
Income before income tax expense | 70,433 | 59,674 | 51,276 |
Income tax expense | 16,121 | 10,325 | 7,279 |
Net income | $ 54,312 | $ 49,349 | $ 43,997 |
Earnings per common share - basic (in dollars per share) | $ 1.82 | $ 1.82 | $ 1.61 |
Earnings per common share - diluted (in dollars per share) | 1.81 | 1.81 | 1.61 |
Dividends paid on common stock (in dollars per share) | $ 1.11 | $ 1.01 | $ 1 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income | $ 54,312 | $ 49,349 | $ 43,997 |
Securities available for sale and transferred securities: | |||
Change in net unrealized holding gains (losses) on available for sale securities during the period | 15,217 | (23,459) | (8,564) |
Change in net unrealized (gain) loss on securities transferred to held to maturity | 0 | (10,240) | 1,329 |
Reclassification adjustment for amortization of unrealized losses on securities transferred to held to maturity | 1,255 | 429 | 930 |
Reclassification adjustment for net gain on sale of available for sale securities, included in net income | (625) | (2,836) | (3,660) |
Derivatives: | |||
Change in net unrealized gain on effective cash flow hedge interest rate swap derivatives | 3 | 5,255 | 0 |
Change in net unrealized gains on interest rate swap derivatives terminated during the period | 273 | 0 | 0 |
Reclassification adjustment for net loss on interest rate swap derivatives, included in net income | 828 | 1,815 | 0 |
Reclassification adjustment for amortization of unrealized gains on terminated interest rate swap derivatives | (74) | 0 | 0 |
Pension plans: | |||
Amortization of net actuarial loss, included in net periodic benefit cost | 1,613 | 1,828 | 2,448 |
Amortization of prior service credit, included in net periodic benefit cost | (8) | (8) | (16) |
Effect of settlement recognition | 8 | (8) | (62) |
Prior service cost adjustment due to plan amendments | 0 | (121) | 0 |
Change in net actuarial (loss) gain | (5,218) | (3,132) | 2,806 |
Other comprehensive income (loss), before tax | 13,272 | (30,477) | (4,789) |
Income tax (expense) benefit related to items of other comprehensive income (loss) | (5,374) | 10,667 | 1,676 |
Other comprehensive income (loss), net of tax | 7,898 | (19,810) | (3,113) |
Comprehensive income | $ 62,210 | $ 29,539 | $ 40,884 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock | Paid In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Beginning balance, net of tax at Dec. 31, 2014 | $ 425,243 | $ 33,223 | $ 389,886 | $ 55,396 | $ (37,692) | $ (15,570) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 43,997 | 43,997 | ||||
Other comprehensive income (loss) | (3,113) | (3,113) | ||||
Issuance of common stock for dividend reinvestment plan (43,650 shares in 2017, 44,575 shares in 2016, 49,908 shares in 2015) | 1,370 | 62 | 1,308 | |||
Stock compensation expense | 1,395 | 1,395 | ||||
Tax benefit related to stock awards | 75 | 75 | ||||
Net issuance of common stock under employee stock plan (159,356 shares in 2017, 108,255 shares in 2016, 28,486 shares in 2015) | 166 | 35 | 251 | (120) | ||
Cash dividends paid on common stock ($1.11 per share in 2017, $1.01 per share in 2016, $1.00 per share in 2015) | (25,071) | (25,071) | ||||
Stock dividend declared (719,515 shares in 2017, 1,252,353 shares in 2016, 1,209,277 shares in 2015) | 0 | 1,512 | 31,163 | (32,675) | ||
Ending balance, net of tax at Dec. 31, 2015 | 444,062 | 34,832 | 424,078 | 41,527 | (37,692) | (18,683) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 49,349 | 49,349 | ||||
Other comprehensive income (loss) | (19,810) | (19,810) | ||||
Issuance of common stock for dividend reinvestment plan (43,650 shares in 2017, 44,575 shares in 2016, 49,908 shares in 2015) | 1,411 | 56 | 1,355 | |||
Net issuance of common stock (2,185,000 shares) | 75,992 | 2,731 | 73,261 | |||
Purchase of common stock (443,426 shares) | (10,199) | (10,199) | ||||
Stock compensation expense | 1,541 | 1,541 | ||||
Tax benefit related to stock awards | 332 | 332 | ||||
Net issuance of common stock under employee stock plan (159,356 shares in 2017, 108,255 shares in 2016, 28,486 shares in 2015) | 1,559 | 136 | 1,473 | (50) | ||
Cash dividends paid on common stock ($1.11 per share in 2017, $1.01 per share in 2016, $1.00 per share in 2015) | (25,963) | (25,963) | ||||
Stock dividend declared (719,515 shares in 2017, 1,252,353 shares in 2016, 1,209,277 shares in 2015) | 0 | 1,565 | 33,200 | (34,765) | ||
Ending balance, net of tax at Dec. 31, 2016 | 518,274 | 39,320 | 535,240 | 30,098 | (47,891) | (38,493) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 54,312 | 54,312 | ||||
Other comprehensive income (loss) | 7,898 | 7,898 | ||||
Issuance of common stock for dividend reinvestment plan (43,650 shares in 2017, 44,575 shares in 2016, 49,908 shares in 2015) | 1,483 | 54 | 1,429 | |||
Net issuance of common stock in connection with the acquisition of Diboll State Bancshares, Inc. (5,534,925 shares) | 200,087 | 6,919 | 193,168 | |||
Stock compensation expense | 1,815 | 1,815 | ||||
Net issuance of common stock under employee stock plan (159,356 shares in 2017, 108,255 shares in 2016, 28,486 shares in 2015) | 2,470 | 61 | 1,726 | (103) | 786 | |
Cash dividends paid on common stock ($1.11 per share in 2017, $1.01 per share in 2016, $1.00 per share in 2015) | (32,199) | (32,199) | ||||
Stock dividend declared (719,515 shares in 2017, 1,252,353 shares in 2016, 1,209,277 shares in 2015) | 0 | 899 | 24,061 | (24,960) | ||
Reclassification of certain deferred tax effects | 0 | 5,703 | (5,703) | |||
Ending balance, net of tax at Dec. 31, 2017 | $ 754,140 | $ 47,253 | $ 757,439 | $ 32,851 | $ (47,105) | $ (36,298) |
CONSOLIDATED STATEMENTS OF CHA7
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Stockholders' Equity [Abstract] | |||
Issuance of common stock for dividend reinvestment plan (in shares) | 43,650 | 44,575 | 49,908 |
Net issuance of common stock (in shares) | 2,185,000 | ||
Dividends paid on common stock (in dollars per share) | $ 1.11 | $ 1.01 | $ 1 |
Purchase of common stock (in shares) | 0 | 443,426 | 0 |
Net issuance of common stock under employee stock plan (in shares) | 159,356 | 108,225 | 28,486 |
Common Stock Dividends (in shares) | 719,515 | 1,252,353 | 1,209,277 |
Net issuance of common stock in connection with the acquisition of Diboll State Bancshares, Inc. (in shares) | 5,534,925 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOW | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
OPERATING ACTIVITIES | |||
Net income | $ 54,312,000 | $ 49,349,000 | $ 43,997,000 |
Adjustments to reconcile net income to net cash provided by operations: | |||
Depreciation and net amortization | 10,208,000 | 9,084,000 | 8,624,000 |
Securities premium amortization (discount accretion), net | 17,639,000 | 19,126,000 | 21,978,000 |
Loan (discount accretion) premium amortization, net | (1,142,000) | (2,520,000) | (2,746,000) |
Provision for loan losses | 4,675,000 | 9,780,000 | 8,343,000 |
Stock compensation expense | 1,815,000 | 1,541,000 | 1,395,000 |
Deferred tax expense (benefit) | 3,514,000 | 1,768,000 | (3,392,000) |
Net tax benefit related to stock awards | 0 | (332,000) | (75,000) |
Net gain on sale of securities available for sale | (625,000) | (2,836,000) | (3,660,000) |
Net loss on premises and equipment | 152,000 | 376,000 | 584,000 |
Gross proceeds from sales of loans held for sale | 58,747,000 | 82,062,000 | 70,014,000 |
Gross originations of loans held for sale | (53,107,000) | (85,892,000) | (70,926,000) |
Net loss on other real estate owned | 7,000 | 219,000 | 430,000 |
Net gain on sale of customer receivables | 0 | (194,000) | 0 |
Net change in: | |||
Interest receivable | (63,000) | (2,483,000) | (264,000) |
Other assets | (3,909,000) | 1,823,000 | 325,000 |
Interest payable | 570,000 | 2,334,000 | 129,000 |
Other liabilities | (1,063,000) | 3,520,000 | (1,775,000) |
Net cash provided by operating activities | 91,730,000 | 86,725,000 | 72,981,000 |
Securities available for sale: | |||
Purchases | (619,398,000) | (1,001,742,000) | (984,725,000) |
Sales | 685,152,000 | 573,051,000 | 660,092,000 |
Maturities, calls and principal repayments | 113,183,000 | 207,500,000 | 278,995,000 |
Securities held to maturity: | |||
Purchases | (6,260,000) | (44,656,000) | (98,556,000) |
Maturities, calls and principal repayments | 28,974,000 | 31,251,000 | 23,322,000 |
Proceeds from redemption of FHLB stock and other investments | 6,945,000 | 3,644,000 | 8,603,000 |
Purchases of FHLB stock and other investments | (1,233,000) | (13,667,000) | (19,850,000) |
Net loan originations | (117,750,000) | (139,607,000) | (251,465,000) |
Proceeds from sales of customer receivables | 0 | 3,325,000 | 0 |
Net cash and cash equivalents acquired in acquisition | 115,598,000 | 0 | 0 |
Net cash paid in acquisition | (23,941,000) | 0 | 0 |
Purchases of premises and equipment | (9,633,000) | (6,549,000) | (3,765,000) |
Proceeds from sales of premises and equipment | 12,000 | 128,000 | 26,000 |
Proceeds from sales of other real estate owned | 659,000 | 2,024,000 | 640,000 |
Proceeds from sales of repossessed assets | 429,000 | 894,000 | 2,274,000 |
Net cash provided by (used in) investing activities | 172,737,000 | (384,404,000) | (384,409,000) |
FINANCING ACTIVITIES: | |||
Net change in deposits | 82,960,000 | 78,426,000 | 82,251,000 |
Net increase (decrease) in federal funds purchased and repurchase agreements | 2,401,000 | 4,668,000 | (1,808,000) |
Proceeds from FHLB borrowings | 2,786,476,000 | 8,158,985,000 | 23,022,132,000 |
Repayment of FHLB borrowings | (3,078,743,000) | (7,996,913,000) | (22,771,367,000) |
Net proceeds from issuance of subordinated long-term debt | 0 | 98,060,000 | 0 |
Tax benefit related to stock awards | 0 | 332,000 | 75,000 |
Proceeds from stock option exercises | 2,692,000 | 1,663,000 | 235,000 |
Cash paid to tax authority from stock option exercises | (222,000) | (104,000) | (69,000) |
Purchase of common stock | 0 | (10,199,000) | 0 |
Proceeds from the issuance of common stock for dividend reinvestment plan | 1,483,000 | 1,411,000 | 1,370,000 |
Proceeds from the issuance of common stock | 0 | 75,992,000 | 0 |
Cash dividends paid | (32,199,000) | (25,963,000) | (25,071,000) |
Payments for other financing activities | (277,000) | 0 | 0 |
Net cash (used in) provided by financing activities | (235,429,000) | 386,358,000 | 307,748,000 |
Net increase (decrease) in cash and cash equivalents | 29,038,000 | 88,679,000 | (3,680,000) |
Cash and cash equivalents at beginning of period | 169,654,000 | 80,975,000 | 84,655,000 |
Cash and cash equivalents at end of period | 198,692,000 | 169,654,000 | 80,975,000 |
SUPPLEMENTAL DISCLOSURES FOR CASH FLOW INFORMATION: | |||
Interest paid | 42,934,000 | 27,014,000 | 19,725,000 |
Income taxes paid | 11,300,000 | 5,700,000 | 8,500,000 |
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES: | |||
Loans transferred to other repossessed assets and real estate through foreclosure | 574,000 | 5,777,000 | 1,706,000 |
Transfer of available for sale securities to held to maturity securities | 0 | 157,083,000 | 57,724,000 |
Adjustment to pension liability | 3,605,000 | 1,441,000 | (5,176,000) |
Stock dividend (2.5%, 5% and 5%, respectively) | 24,960,000 | 34,765,000 | 32,675,000 |
Unsettled trades to purchase securities | 0 | (160,000) | (19,350,000) |
Unsettled trades to sell securities | 0 | 0 | 9,343,000 |
Common stock issued in acquisition | $ 200,364,000 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CAS9
CONSOLIDATED STATEMENTS OF CASH FLOW (Parenthetical) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Cash Flows [Abstract] | |||
Stock dividend, percentage of common stock | 2.50% | 5.00% | 5.00% |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES Organization . Southside Bancshares, Inc., incorporated in Texas in 1982, is a bank holding company for Southside Bank, a Texas state bank headquartered in Tyler, Texas that was formed in 1960. We operate through 60 branches, 16 of which are located in grocery stores. We consider our primary market areas to be East Texas, Southeast Texas, the greater Fort Worth, Texas area and the greater Austin, Texas area. We are a community-focused financial institution that offers a full range of financial services to individuals, businesses, municipal entities, and nonprofit organizations in the communities that we serve. These services include consumer and commercial loans, deposit accounts, trust services, safe deposit services and brokerage services. Basis of Presentation and Consolidation . The consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of Southside Bancshares, Inc. (the “Company”), and its wholly-owned subsidiaries, Southside Bank (“Southside Bank” or “the Bank”), SFG Finance, LLC (formerly Southside Financial Group, LLC) which was a wholly-owned subsidiary of the Bank and was dissolved in April 2015, and the nonbank subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. “Omni” refers to OmniAmerican Bancorp, Inc., a bank holding company acquired by Southside on December 17, 2014. On November 30, 2017, we acquired Diboll State Bancshares, Inc., a Texas corporation (“Diboll”) and the holding company for First Bank & Trust East Texas, a Texas banking association based in Diboll, Texas. See “Note 2 - Acquisition” in the accompanying notes to consolidated financial statements included elsewhere in this report. We determine if we have a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity (“VIE”) under GAAP. Voting interest entities are entities in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities. We consolidate voting interest entities in which we have all, or at least a majority of, the voting interest. As defined in applicable accounting standards, VIEs are entities that lack one or more of the characteristics of a voting interest entity. A controlling financial interest in a VIE is present when an enterprise has both the power to direct the activities of the VIE that most significantly impact the VIEs economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The enterprise with a controlling financial interest, known as the primary beneficiary, consolidates the VIE. Accounting Changes and Reclassifications . Certain prior period amounts have been reclassified to conform to current year presentation. We adopted ASU 2016-09 “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” on January 1, 2017 which requires all income tax effects related to settlements of share-based payment awards be reported in earnings as an increase (or decrease) to income tax expense. Previously, income tax benefits at settlement of an award were reported as an increase (or decrease) to additional paid-in capital to the extent that those benefits were greater than (or less than) the income tax benefits recognized in earnings during the vesting period or exercise of the award. The requirement to report those income tax effects in earnings has been applied to settlements occurring on or after January 1, 2017, and the impact of applying that guidance reduced reported income tax expense by $482,000 , or $0.02 on our diluted earnings per common share for the year ended December 31, 2017 . ASU 2016-09 also requires that all income tax-related cash flows resulting from share-based payments be reported as operating activities in the statement of cash flows. Previously, income tax benefits at settlement of an award were reported as a reduction to operating cash flows and an increase to financing cash flows to the extent that those benefits exceeded the income tax benefits reported in earnings during the vesting period or exercise of the award. We have elected to apply that change in cash flow on a prospective basis and therefore, prior periods have not been adjusted. ASU 2016-09 also requires the classification of employee taxes paid when an employer withholds shares for tax withholding purposes be classified as a financing activity in the statement of cash flow and be applied retrospectively. The requirement to report the employee taxes paid is reflected in prior period presentation in our consolidated statement of cash flows. In connection with the adoption of ASU 2016-09, we have also elected to recognize forfeitures as they occur. We early adopted ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” during the fourth quarter of 2017. ASU 2018-02, issued in February 2018, allows a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for the effect of remeasuring deferred tax balances related to items within AOCI resulting from the Tax Cuts and Jobs Act. As a result, we reclassified $5.7 million from AOCI to retained earnings. Stock Dividend . On May 4, 2017 , our board of directors declared a 2.5% stock dividend to common stock shareholders of record as of May 30, 2017 , which was paid on June 27, 2017 . On May 5, 2016 , our board of directors declared a 5% stock dividend to common stock shareholders of record as of May 31, 2016 , which was paid on June 28, 2016 . All share data for all periods presented has been adjusted to give retroactive recognition to these stock dividends unless otherwise indicated. Use of Estimates . In preparing consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. These estimates are subjective in nature and involve matters of judgment. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, assumptions used in the defined benefit plan and the fair values of financial instruments. The status of contingencies are particularly subject to change and significant assumptions used in periodic evaluation of securities for other-than-temporary impairment. Certain prior-period amounts have been reclassified to conform to the current period presentation. Segment Information . Operating segments are components of a business about which separate financial information is available and that are evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and assess performance. Our chief operating decision-maker uses consolidated results to make operating and strategic decisions. Therefore, we have determined that our business is conducted in one reportable segment. Business Combinations. Business combinations are accounted for using the acquisition method of accounting. Under this accounting method, the acquired company’s net assets are recorded at fair value on the date of acquisition, and the results of operations of the acquired company are combined with our results from that date forward. Costs related to the acquisition are expensed as incurred. The difference between the purchase price and the fair value of the net assets acquired (including intangible assets with finite lives) is recorded as goodwill. The accounting policy for goodwill and intangible assets is summarized in this note under the heading “Goodwill and Other Intangibles.” Acquired loans (non-impaired and impaired) are initially measured at fair value as of the acquisition date. The fair value estimates for acquired loans are based on the estimate of expected cash flows, both principal and interest and prepayments, discounted at prevailing market interest rates. Credit discounts representing the principal losses expected over the life of the loan are also a component of the initial fair value; therefore, an allowance for loan losses is not recorded at the acquisition date. We evaluate acquired loans for impairment in accordance with the provisions of ASC 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality” (“ASC 310-30”). Acquired loans are considered impaired if there is evidence of credit deterioration since origination and if it is probable at time of acquisition that all contractually required payments will not be collected. Expected cash flows at the acquisition date in excess of the fair value of the loans is referred to as the accretable yield and recorded as interest income over the life of the loans. Acquired impaired loans are not classified as nonaccrual or nonperforming as they are considered to be performing under the provisions of ASC 310-30. Subsequent to the acquisition date, increases in expected cash flows will generally result in a recovery of any previously recorded allowance for loan loss, to the extent applicable, and/or a reclassification from the nonaccretable difference to accretable yield, which will be recognized prospectively. The present value of any decreases in expected cash flows after the acquisition date will generally result in an impairment charge recorded as a provision for loan losses, resulting in an increase to the allowance for loan loss. For acquired non-impaired loans, the difference between the acquisition date fair value and the contractual amounts due at the acquisition date represents the fair value adjustment. Fair value adjustments may be discounts (or premiums) to a loan’s cost basis and are accreted (or amortized) to interest income over the loan’s remaining contractual life using the level yield method. Cash Equivalents . Cash equivalents, for purposes of reporting cash flow, include cash, amounts due from banks and federal funds sold that have an initial maturity of less than 90 days. We maintain deposits with other institutions in amounts that exceed federal deposit insurance coverage. Management regularly evaluates the credit risk associated with the counterparties to these transactions and believes that we are not exposed to any significant credit risks on cash and cash equivalents. Cash on hand or on deposit with the Federal Reserve Bank of $32.2 million and $20.3 million was required to meet regulatory reserves and clearing requirements at December 31, 2017 and 2016 , respectively. Basic and Diluted Earnings per Common Share . Basic earnings per common share is based on net income divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share include the dilutive effect of stock options granted using the treasury stock method. A reconciliation of the weighted-average shares used in calculating basic earnings per common share and the weighted average common shares used in calculating diluted earnings per common share for the reported periods is provided in “Note 3 – Earnings Per Share.” Comprehensive Income . Comprehensive income includes all changes in shareholders’ equity during a period, except those resulting from transactions with shareholders. Besides net income, other components of comprehensive income include the after tax effect of changes in the fair value of securities available for sale, changes in the net unrealized loss on securities transferred to held to maturity, changes in the accumulated gain or loss on effective cash flow hedging instruments, changes in the funded status of defined benefit retirement plans and the noncredit portion of other-than-temporary impairment. Comprehensive income is reported in the accompanying consolidated statements of comprehensive income and in “Note 4 - Accumulated Other Comprehensive Loss.” Loans . All loans are stated at principal outstanding net of unearned discount and other deferred expenses or fees. Interest income on loans is recognized using the level yield method or simple interest method. Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported at their outstanding principal adjusted for any charge-offs, the allowance for loan losses, and any unamortized deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans. A loan is considered impaired, based on current information and events, if it is probable that we will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Substantially all of our impaired loans are collateral-dependent, and as such, are measured for impairment based on the fair value of the collateral. Loans Held For Sale . Loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value, as determined by aggregate outstanding commitments from investors or current investor yield requirements. Net unrealized losses are recognized through a valuation allowance by charges to income. Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the carrying value of the related mortgage loans sold. Loan Fees . We treat loan fees, net of direct costs, as an adjustment to the yield of the related loan over its term. Allowance for Loan Losses . An allowance for loan losses is provided through charges to income in the form of a provision for loan losses. Loans which management believes are uncollectible are charged against this account with subsequent recoveries, if any, credited to the account. The amount of the allowance for loan losses is determined by management’s evaluation of the quality and inherent risks in the loan portfolio, economic conditions and other factors which warrant current recognition. Nonaccrual Loans . A loan is placed on nonaccrual when principal or interest is contractually past due 90 days or more unless, in the determination of management, the principal and interest on the loan are well collateralized and in the process of collection. In addition, a loan is placed on nonaccrual when, in the opinion of management, the future collectability of interest and principal is not expected. When classified as nonaccrual, accrued interest receivable on the loan is reversed and the future accrual of interest is suspended. Payments of contractual interest are recognized as income only to the extent that full recovery of the principal balance of the loan is reasonably certain. Other Real Estate Owned and Foreclosed Assets . Other Real Estate Owned (“OREO”) includes real estate acquired in full or partial settlement of loan obligations. OREO is initially carried at the fair value of the collateral net of estimated selling costs. Prior to foreclosure, the recorded amount of the loan is written down, if necessary, to the appraised fair value of the real estate to be acquired, less selling costs, by charging the allowance for loan losses. Any subsequent reduction in fair value net of estimated selling costs is charged to noninterest expense. Costs of maintaining and operating foreclosed properties are expensed as incurred and included in other expense in our income statement. Expenditures to complete or improve foreclosed properties are capitalized only if expected to be recovered; otherwise, they are expensed. Other foreclosed assets are held for sale and are initially recorded at fair value less estimated selling costs at the date of foreclosure, by charging the allowance for loan losses. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less costs to sell. Foreclosed assets are included in other assets in the accompanying consolidated balance sheets. Expenses from operations and changes in the valuation allowance are included in noninterest expense. Securities . Available for Sale (“AFS”). Debt and equity securities that will be held for indefinite periods of time, including securities that may be sold in response to changes in market interest or prepayment rates, needs for liquidity and changes in the availability of and the yield of alternative investments are classified as AFS. These assets are carried at fair value with changes recorded in other comprehensive income. Fair value is determined using quoted market prices as of the close of business on the balance sheet date. If quoted market prices are not available, fair values are based on quoted market prices for similar securities or estimates from independent pricing services. Held to Maturity (“HTM”). Debt securities that management has the positive intent and ability to hold until maturity are classified as HTM and are carried at their remaining unpaid principal balance, net of unamortized premiums or unaccreted discounts. Premiums are amortized and discounts are accreted to maturity, or in the case of mortgage-backed securities (“MBS”), over the estimated life of the security, using the level yield interest method. Unrealized gains and losses on AFS securities are excluded from earnings and reported net of tax in AOCI until realized. Declines in the fair value of AFS or HTM securities below their cost that are deemed to be other-than-temporary are reflected in earnings as a realized loss if there is no ability or intent to hold to recovery. If the Company does not intend to sell and will not be required to sell prior to recovery of its amortized cost basis, only the credit component of the impairment is reflected in earnings as a realized loss with the noncredit portion recognized in other comprehensive income. In estimating other-than-temporary impairment losses, we consider (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) our intent and ability to retain our investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. Gains and losses on the sale of securities are recorded in the month of the trade date and are determined using the specific identification method. Securities with Limited Marketability. Securities with limited marketability, such as stock in the FHLB, are carried at cost and assessed for other-than-temporary impairment. Premises and Equipment . Land is carried at cost. Bank premises and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed on a straight line basis over the estimated useful lives of the related assets. Useful lives are estimated to be 15 to 40 years for premises and 3 to 10 years for equipment. Leasehold improvements are generally depreciated over the lesser of the term of the respective leases or the estimated useful lives of the improvements. Maintenance and repairs are charged to expense as incurred while major improvements and replacements are capitalized. Bank-Owned Life Insurance . The Company has purchased life insurance policies on certain key executives. Bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Changes in the net cash surrender value of the policies, as well as insurance proceeds received are reflected in noninterest income on the consolidated statements of income and are not subject to income taxes. Goodwill and Other Intangibles . Other intangible assets consist primarily of core deposits and trust relationship intangibles. Intangible assets with definite useful lives are amortized on an accelerated basis over their estimated life. Goodwill and intangible assets that have indefinite useful lives are subject to at least an annual impairment test and more frequently if a triggering event occurs. If any such impairment is determined, a write-down is recorded. During the year ended December 31, 2015, we changed our annual goodwill impairment testing date from December 31 st to October 1 st of each year, commencing on October 1, 2015. The change in the testing date did not impact the financial statements. During the year ended December 31, 2017 and 2016 , the fair value of the reporting unit was greater than the carrying value of the reporting unit. As a result, we did no t record any goodwill impairment for the year ended December 31, 2017 and 2016 , and we had no cumulative goodwill impairment. For both of the years ended December 31, 2017 and 2016 , amortization expense related to our core deposit intangible and trust relationship intangible was $1.8 million . For the year ended December 31, 2015 , amortization expense related to our core deposit intangible was $2.2 million . Repurchase Agreements . We sell certain securities under agreements to repurchase. The agreements are treated as collateralized financing transactions and the obligations to repurchase securities sold are reflected as a liability in the accompanying consolidated balance sheets. The dollar amount of the securities underlying the agreements remains in the asset account. We determine the type of securities to pledge. Generally we pledge U.S. agency MBS. Derivative Financial Instruments and Hedging Activities . Derivative financial instruments are carried on the consolidated balance sheets as other assets or other liabilities, as applicable, at estimated fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative financial instrument is determined by whether it has been designated and qualifies as part of a hedging relationship and, further, by the type of hedging relationship. We present derivative financial instruments at fair value in the consolidated balance sheets on a net basis when a right of offset exists, based on transactions with a single counterparty and any cash collateral paid to and/or received from that counterparty for derivative contracts that are subject to legally enforceable master netting arrangements. For derivative instruments that are designated and qualify as cash flow hedges (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item (i.e., the ineffective portion), if any, is recognized in current earnings during the period of change. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings during the period of change. For derivatives designated as hedging instruments at inception, statistical regression analysis is used at inception and for each reporting period thereafter to assess whether the derivative used has been and is expected to be highly effective in offsetting changes in the fair value or cash flows of the hedged item. All components of each derivative instrument’s gain or loss are included in the assessment of hedge effectiveness. Net hedge ineffectiveness is recorded in “other noninterest income” on the consolidated statements of income. Terminated Derivative Financial Instruments . In accordance with ASC Topic 815, if a hedging item is terminated prior to maturity for a cash settlement, the existing gain or loss within AOCI will continue to be reclassified into earnings during the period or periods in which the hedged forecasted transaction affects earnings unless it is probable that the forecasted transaction will not occur by the end of the originally specified time period. If the forecasted transaction is deemed probable to not occur, the derivative gain or loss reported in AOCI shall be reclassified into earnings immediately. During the first quarter of 2017, we terminated two interest rate swap contracts designated as cash flow hedges of forecasted transactions. At the time of termination, we determined that the underlying hedged forecasted transactions were still probable of occurring. These transactions are reevaluated on a monthly basis thereafter, to determine if the hedged forecasted transactions are still probable of occurring. If at a subsequent evaluation, it is determined that the transactions will not occur, any related gains or losses recorded in AOCI are immediately recognized in earnings. The existing gain in AOCI related to the terminated interest rate swap contracts will be reclassified into earnings through straight-line accretion in the same periods the hedged forecasted transaction affects earnings. Further information on our derivative instruments and hedging activities is included in “Note 12 - Derivative Financial Instruments and Hedging Activities.” Revenue Recognition. The Company’s revenues include interest income, gains on sales of assets, and fee income. The following summarizes our revenue recognition policies as they relate to certain noninterest income line items in the consolidated statements of income. Service charges on deposit accounts include fees for banking services provided, overdrafts and non-sufficient funds. Revenue is generally recognized in accordance with published deposit account agreements for retail accounts or contractual agreements for commercial accounts. Trust income includes fees and commissions from investment management, administrative and advisory services primarily for individuals, and to a lesser extent, partnerships and corporations. Revenue is recognized on an accrual basis at the time the services are performed and are based on either the market value of the assets managed or the services provided. Advertising Costs . Advertising costs are expensed as incurred. Advertising expense was $609,000 , $869,000 and $1.0 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Income Taxes . We file a consolidated federal income tax return. Income tax expense represents the taxes expected to be paid or returned for current year taxes adjusted for the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in income in the period the change occurs. Uncertain tax positions arise when it is more likely than not that the tax position taken will be sustained upon examination by the appropriate tax authority. Any income tax benefit as well as penalties and interest related to income tax expense are recorded as a component of income tax expense. Unrecognized tax benefits were not material as of December 31, 2017 or 2016 . Fair Value of Financial Instruments . Fair values of financial instruments are estimated using relevant market information and other assumptions. Fair value estimates involve uncertainties and matters of significant judgment. In cases where quoted market prices are not available, fair values are based on estimates using present value or other estimation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Defined Benefit Pension Plan . Defined benefit pension plan costs are charged to retirement expense and included in “salaries and employee benefits” on the consolidated statements of income. Defined benefit pension obligations and the annual pension costs are determined by independent actuaries and through the use of a number of assumptions that are reviewed by management. These assumptions include a compensation rate increase, a discount rate used to determine the current benefit obligation and a long-term expected rate of return on plan assets. Net periodic defined benefit pension expense includes service cost, interest cost based on the assumed discount rate, an expected return on plan assets, amortization of prior service cost and amortization of net actuarial gains or losses. Prior service costs include the impact of plan amendments on the liabilities and are amortized over the future service periods of active employees expected to receive benefits under the plan. Actuarial gains and losses result from experience different from that assumed and from changes in assumptions. Amortization of actuarial gains and losses is included as a component of net periodic defined benefit pension cost. The plan obligations and related assets of our defined benefit pension plan are presented in “Note 11 – Employee Benefits.” Share-Based Awards . Share-based compensation transactions are recognized as compensation cost in the income statement based on their fair values on the date of the grant and recorded over the vesting period. Loss Contingencies . Loss contingencies, including claims and legal actions arising in the ordinary course of business are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Trust Assets . Assets of our trust department, other than cash on deposit at Southside Bank, are not included in the accompanying financial statements because they are not our assets. Accounting Pronouncements : In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” as modified by subsequently issued ASUs 2015-14, 2016-08, 2016-10, 2016-12 and 2016-20. This 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. This update affects entities that enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through cumulative adjustment. We adopted the new standard effective January 1, 2018, the effective date of the guidance, using the modified retrospective approach. Our revenue consists of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09, and noninterest income. We have evaluated the impact this guidance will have in relation to our noninterest income derived from contracts with our customers as it relates to deposit services, trust income, brokerage services, and merchant services (included in other noninterest income) which we have determined to be in the scope of ASU 2014-09. As the majority of the Company’s revenues are not subject to the new guidance, the adoption of ASU 2014-09 did not have a material impact on the Company’s consolidated financial position, results of operations, equity or cash flows. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (i |
ACQUISITION
ACQUISITION | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisition | ACQUISITION On November 30, 2017 , we acquired 100% of the outstanding stock of Diboll State Bancshares, Inc. and its wholly-owned subsidiary First Bank & Trust East Texas (collectively, “Diboll”) headquartered in Diboll, Texas. Diboll operated 17 banking offices in Diboll, Texas and surrounding areas. We acquired Diboll to further expand our presence in the East Texas market. The operations of Diboll were merged into the Company as of the date of the acquisition. The results of Diboll's operations for November 30 - December 31, 2017 are included in the consolidated financial statements and are not separately quantifiable subsequent to the business combination. Pursuant to the merger agreement, on November 30, 2017 , we issued 5.5 million shares of our common stock and paid $23.9 million in cash for all outstanding shares of Diboll State Bancshares Inc. common stock. In accordance with the merger agreement, each outstanding share of common stock of Diboll State Bancshares, Inc. was converted into (a) 6.5021 shares of common stock of the Company and (b) $28.12 in cash (the “Per Share Merger Consideration”). Pursuant to the Diboll State Bancshares, Inc. Incentive Stock Option 2014 Plan and predecessor plans, and the individual award agreements granted thereunder, all outstanding equity awards terminated as of the effective time of the merger, and became null and void. Holders of stock options granted under such plans were provided an opportunity to exercise such stock options or take advantage of the cashless exercise feature of such equity awards prior to the effective time of the merger. The cash consideration is net of the aggregate after-tax amount paid by Diboll to holders of options to purchase Diboll common stock who utilized the cashless exercise feature immediately prior to the merger as outlined in the merger agreement. Based on our closing stock price on November 30, 2017 of $36.20 , the total merger consideration for the Diboll merger was $224.3 million . The fair value of assets acquired, excluding goodwill, totaled $1.03 billion , including total loans of $621.3 million and total investment securities of $234.4 million . Total fair value of the liabilities assumed totaled $910.8 million , including deposits of $899.3 million . Goodwill represents consideration transferred in excess of the fair value of the net assets acquired. As of December 31, 2017 , the Company recognized $109.7 million in initial goodwill associated with the Diboll merger. The goodwill resulting from the acquisition represents the value expected from the expansion of our markets into the Southeast Texas region and the enhancement of our operations through customer synergies and efficiencies, thereby providing enhanced customer service. Goodwill is not expected to be deductible for tax purposes. The Diboll merger was accounted for using the acquisition method of accounting and accordingly, purchased assets, including identifiable intangible assets, and assumed liabilities were recorded at their respective acquisition date fair values. The purchase price allocation is preliminary and is subject to final determination and valuation of the fair value of assets acquired and liabilities assumed. The components of the consideration paid are shown in the following table (in thousands). Fair value of consideration transferred: Common stock issued $ 200,364 Cash 23,941 Total consideration transferred $ 224,305 The estimated fair values of the assets acquired and liabilities assumed as of the closing date of the transaction adjusted for the subsequent measurement period adjustments are shown in the following table (in thousands). Cash, cash equivalents, and amounts due from banks $ 115,598 Other investments 610 Securities available for sale 234,447 Loans 621,318 Property and equipment 26,256 Other assets 7,052 Core deposit intangible 14,700 Trust relationship intangible 5,400 Goodwill 109,726 Deposits (899,307 ) Deferred tax liability, net (7,802 ) Other liabilities (3,693 ) $ 224,305 The determination of estimated fair values of the acquired loans required the Company to make certain estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature. Based on such factors as past due status, nonaccrual status, bankruptcy status, and credit risk ratings, the acquired loans were divided into loans with evidence of credit quality deterioration, which are accounted for under ASC 310-30 (purchased credit impaired "PCI"), and loans that do not meet this criteria, which are accounted for under ASC 310-20 (purchased non-impaired). Expected cash flows, both principal and interest, were estimated based on key assumptions covering such factors as prepayments, default rates and severity of loss given default. These assumptions were developed using both Diboll’s historical experience and the portfolio characteristics as of the acquisition date as well as available market research. The fair value estimates for acquired loans were based on the amount and timing of expected principal, interest and other cash flows, including expected prepayments, discounted at prevailing market interest rates applicable to the types of acquired loans, which we considered to be level 3 fair value measurements. Deposit liabilities assumed in the acquisition of Diboll were segregated into two categories: time-deposits (i.e., deposit accounts with a stated maturity) and demand deposits, both using level 2 fair value measurements. In determining fair value of time deposits, the Company discounted the contractual cash flows of the deposit accounts using prevailing market interest rates for time deposit accounts of similar type and duration. For demand deposits, the acquisition date outstanding balance of the assumed demand deposit accounts approximates fair value. Acquisition date fair values for securities available for sale were determined using Level 1 or Level 2 inputs consistent with the methods discussed further in “Note 13 - Fair Value Measurement”. The remaining acquisition date fair values represent either Level 2 fair value measurements (other investments) or Level 3 fair value measurements (property and equipment, core deposit intangible and trust intangible). We recognized a core deposit intangible of $14.7 million and a trust relationship intangible of $5.4 million which will be amortized using an accelerated method over a 9 - and 13 -year weighted average amortization period, respectively, consistent with expected future cash flows. For the year ended December 31, 2017, the Company incurred a total of pre-tax merger related expenses associated with the Diboll merger of approximately $4.4 million which consisted primarily of $2.4 million of legal and consulting fees and $1.9 million of software expenses due to canceling of contracts. These expenses were recognized in the consolidated statements of income in acquisition expense. We incurred costs of $277,000 directly related to the issuance of the shares related to the merger which were offset against additional paid-in-capital in the consolidated statements of changes in equity. We also recorded non-solicitation agreements for $240,000 that will be amortized using the straight-line method over three years in connection with the merger. Loans acquired with Diboll were measured at fair value at the acquisition date with no carryover of any allowance for loan losses. Loans were segregated into those loans considered to be performing and those considered purchased credit impaired (“PCI”). PCI loans are loans acquired with evidence of deteriorated credit quality for which it was probable, at acquisition, that all contractually required cash flows would not be collected. The table below details the PCI loan portfolio at the Diboll acquisition date (in thousands): Purchased Credit Impaired Loans at Acquisition Date Contractually required principal and interest payments $ 59,286 Nonaccretable difference 4,560 Cash flows expected to be collected 54,726 Accretable difference 15,389 Fair value of loans acquired with a deterioration of credit quality $ 39,337 Acquired loans that were considered performing at the Diboll acquisition date and therefore not subject to ASC 310-30 are shown below (in thousands): Fair Value at Acquisition Date Contractual Amounts Receivable Cash Flows Not Expected to be Collected at Acquisition Date (1) Real Estate Loans: Construction $ 40,122 $ 56,905 $ 330 1-4 Family Residential 82,654 130,167 26,894 Commercial 319,623 484,529 97,431 Commercial Loans 82,083 87,688 1,226 Municipal Loans 7,848 9,998 28 Loans to Individuals 49,651 54,687 1,490 Total Loans $ 581,981 $ 823,974 $ 127,399 (1) Cash flows not expected to be collected relate to estimated credit losses and expected prepayments. Unaudited pro forma net income for the years ended December 31, 2017 and 2016 would have been $64.1 million and $58.0 million , respectively, and revenues would have been $270.9 million and $257.8 million for the same years, respectively, had the acquisition occurred as of January 1, 2016. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Earnings per share on a basic and diluted basis has been adjusted to give retroactive recognition to stock dividends and is calculated as follows (in thousands, except per share amounts): Years Ended December 31, 2017 2016 2015 Basic and Diluted Earnings: Net Income $ 54,312 $ 49,349 $ 43,997 Basic weighted-average shares outstanding 29,841 27,118 27,291 Add: Stock awards 206 129 91 Diluted weighted-average shares outstanding 30,047 27,247 27,382 Basic Earnings Per Share: Net Income $ 1.82 $ 1.82 $ 1.61 Diluted Earnings Per Share: Net Income $ 1.81 $ 1.81 $ 1.61 For the year ended December 31, 2017 , there were approximately 44,000 antidilutive options. For the years ended December 31, 2016 and 2015 there were approximately 18,000 and 36,000 antidilutive options, respectfully. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The changes in accumulated other comprehensive loss by component are as follows (in thousands): Year Ended December 31, 2017 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Net Gain (Loss) Total Beginning balance, net of tax $ (23,708 ) $ 4,595 $ (133 ) $ (19,247 ) $ (38,493 ) Other comprehensive (loss) income: Other comprehensive income (loss) before reclassifications 15,217 276 8 (5,218 ) 10,283 Reclassified from accumulated other comprehensive income 630 754 (8 ) 1,613 2,989 Income tax (expense) benefit (5,546 ) (360 ) — 532 (5,374 ) Net current-period other comprehensive income (loss), net of tax 10,301 670 — (3,073 ) 7,898 Reclassification of certain deferred tax effects (1) (2,888 ) 1,134 — (3,949 ) (5,703 ) Ending balance, net of tax $ (16,295 ) $ 6,399 $ (133 ) $ (26,269 ) $ (36,298 ) (1) Amounts reclassified to retained earnings due to early adoption of ASU 2018-02. See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. Year Ended December 31, 2016 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Net Gain (Loss) Total Beginning balance, net of tax $ (239 ) $ — $ (44 ) $ (18,400 ) $ (18,683 ) Other comprehensive (loss) income: Other comprehensive (loss) income before reclassifications (33,699 ) 5,255 (129 ) (3,132 ) (31,705 ) Reclassified from accumulated other comprehensive income (2,407 ) 1,815 (8 ) 1,828 1,228 Income tax benefit (expense) 12,637 (2,475 ) 48 457 10,667 Net current-period other comprehensive (loss) income, net of tax (23,469 ) 4,595 (89 ) (847 ) (19,810 ) Ending balance, net of tax $ (23,708 ) $ 4,595 $ (133 ) $ (19,247 ) $ (38,493 ) Year Ended December 31, 2015 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Net Gain (Loss) Total Beginning balance, net of tax $ 6,238 $ — $ 7 $ (21,815 ) $ (15,570 ) Other comprehensive (loss) income: Other comprehensive (loss) income before reclassifications (7,235 ) — (62 ) 2,806 (4,491 ) Reclassified from accumulated other comprehensive income (2,730 ) — (16 ) 2,448 (298 ) Income tax benefit (expense) 3,488 — 27 (1,839 ) 1,676 Net current-period other comprehensive (loss) income, net of tax (6,477 ) — (51 ) 3,415 (3,113 ) Ending balance, net of tax $ (239 ) $ — $ (44 ) $ (18,400 ) $ (18,683 ) The reclassifications out of accumulated other comprehensive (loss) income into net income are presented below (in thousands): Year ended December 31, 2017 2016 2015 Unrealized losses on securities transferred to held to maturity: Amortization of unrealized losses (1) $ (1,255 ) $ (429 ) $ (930 ) Tax benefit 439 150 326 Net of tax $ (816 ) $ (279 ) $ (604 ) Unrealized gains and losses on available for sale securities: Realized net gain on sale of securities (2) $ 625 $ 2,836 $ 3,660 Tax expense (219 ) (993 ) (1,281 ) Net of tax $ 406 $ 1,843 $ 2,379 Derivatives: Realized net loss on interest rate swap derivatives (3) $ (828 ) $ (1,815 ) $ — Tax benefit 290 635 — Net of tax $ (538 ) $ (1,180 ) $ — Amortization of unrealized gains on terminated interest rate swap derivatives (3) $ 74 $ — $ — Tax expense (26 ) — — Net of tax $ 48 $ — $ — Amortization of pension plan: Net actuarial loss (4) $ (1,613 ) $ (1,828 ) $ (2,448 ) Prior service credit (4) 8 8 16 Total before tax (1,605 ) (1,820 ) (2,432 ) Tax benefit 562 637 851 Net of tax $ (1,043 ) $ (1,183 ) $ (1,581 ) Total reclassifications for the period, net of tax $ (1,943 ) $ (799 ) $ 194 (1) Included in interest income on the consolidated statements of income. (2) Listed as net gain on sale of securities available for sale on the consolidated statements of income. (3) Included in interest expense for FHLB borrowings on the consolidated statements of income. (4) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (income) presented in “Note 11 - Employee Benefits.” |
SECURITIES
SECURITIES | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
SECURITIES | SECURITIES The amortized cost, gross unrealized gains and losses, carrying value, and estimated fair value of investment and mortgage-backed securities are reflected in the tables below (in thousands): December 31, 2017 Recognized in OCI Not recognized in OCI Amortized Gross Unrealized Gross Unrealized Carrying Gross Gross Unrealized Estimated AVAILABLE FOR SALE Cost Gains Losses Value Gains Losses Fair Value Investment Securities: U.S. Government Agency Debentures $ 108,869 $ — $ — $ 108,869 $ — $ — $ 108,869 State and Political Subdivisions 392,760 3,895 3,991 392,664 — — 392,664 Other Stocks and Bonds 5,024 31 — 5,055 — — 5,055 Other Equity Securities 6,027 — 107 5,920 — — 5,920 Mortgage-backed Securities: (1) Residential 720,930 4,476 7,377 718,029 — — 718,029 Commercial 308,357 761 900 308,218 — — 308,218 Total $ 1,541,967 $ 9,163 $ 12,375 $ 1,538,755 $ — $ — $ 1,538,755 HELD TO MATURITY Investment Securities: State and Political Subdivisions $ 423,376 $ 2,448 $ 12,192 $ 413,632 $ 10,879 $ 2,583 $ 421,928 Mortgage-backed Securities: (1) Residential 134,018 — 4,974 129,044 1,631 239 130,436 Commercial 369,526 899 3,595 366,830 3,812 1,206 369,436 Total $ 926,920 $ 3,347 $ 20,761 $ 909,506 $ 16,322 $ 4,028 $ 921,800 December 31, 2016 Recognized in OCI Not recognized in OCI Amortized Gross Unrealized Gross Unrealized Carrying Gross Gross Unrealized Estimated AVAILABLE FOR SALE Cost Gains Losses Value Gains Losses Fair Value Investment Securities: U.S. Treasury $ 74,016 $ — $ 3,947 $ 70,069 $ — $ — $ 70,069 State and Political Subdivisions 394,050 3,217 12,070 385,197 — — 385,197 Other Stocks and Bonds 6,587 64 — 6,651 — — 6,651 Other Equity Securities 6,039 — 119 5,920 — — 5,920 Mortgage-backed Securities: (1) Residential 630,603 6,434 9,529 627,508 — — 627,508 Commercial 386,109 1,201 3,055 384,255 — — 384,255 Total $ 1,497,404 $ 10,916 $ 28,720 $ 1,479,600 $ — $ — $ 1,479,600 HELD TO MATURITY Investment Securities: State and Political Subdivisions $ 435,080 $ 3,987 $ 13,257 $ 425,810 $ 7,595 $ 3,493 $ 429,912 Mortgage-backed Securities: (1) Residential 142,060 — 5,748 136,312 1,534 950 136,896 Commercial 379,016 1,067 4,718 375,365 4,372 2,263 377,474 Total $ 956,156 $ 5,054 $ 23,723 $ 937,487 $ 13,501 $ 6,706 $ 944,282 (1) All mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. During the year ended December 31, 2016, the Company transferred securities with a fair value of $157.1 million from AFS to HTM. The unrealized loss on the securities transferred from AFS to HTM was $10.2 million ( $6.7 million , net of tax) at the date of transfer based on the fair value of the securities on the transfer date. We transferred these securities due to overall balance sheet strategies and our management has the current intent and ability to hold these securities until maturity. Any net unrealized gain or loss on the transferred securities included in accumulated other comprehensive income at the time of transfer will be amortized over the remaining life of the underlying security as an adjustment to the yield on those securities. AFS securities transferred with losses included in accumulated other comprehensive income continue to be included in management’s assessment for other-than-temporary impairment for each individual security. There were no securities transferred from AFS to HTM during 2017. The following tables represent the estimated fair value and unrealized loss on securities (in thousands): Less Than 12 Months More Than 12 Months Total Estimated Fair Value Unrealized Loss Estimated Unrealized Loss Estimated Unrealized Loss As of December 31, 2017: AVAILABLE FOR SALE Investment Securities: State and Political Subdivisions $ 32,341 $ 121 $ 172,006 $ 3,870 $ 204,347 $ 3,991 Other Equity Securities 5,920 107 — — 5,920 107 Mortgage-backed Securities: Residential 429,742 3,232 102,973 4,145 532,715 7,377 Commercial 146,796 419 13,134 481 159,930 900 Total $ 614,799 $ 3,879 $ 288,113 $ 8,496 $ 902,912 $ 12,375 HELD TO MATURITY Investment Securities: State and Political Subdivisions $ 85,608 $ 807 $ 56,736 $ 1,776 $ 142,344 $ 2,583 Mortgage-backed Securities: Residential 24,707 157 2,736 82 27,443 239 Commercial 136,491 782 13,552 424 150,043 1,206 Total $ 246,806 $ 1,746 $ 73,024 $ 2,282 $ 319,830 $ 4,028 As of December 31, 2016: AVAILABLE FOR SALE Investment Securities: U.S. Treasury $ 70,069 $ 3,947 $ — $ — $ 70,069 $ 3,947 State and Political Subdivisions 264,485 12,069 887 1 265,372 12,070 Other Equity Securities 5,920 119 — — 5,920 119 Mortgage-backed Securities: Residential 369,903 9,491 6,199 38 376,102 9,529 Commercial 245,422 3,055 — — 245,422 3,055 Total $ 955,799 $ 28,681 $ 7,086 $ 39 $ 962,885 $ 28,720 HELD TO MATURITY Investment Securities: State and Political Subdivisions $ 179,939 $ 2,190 $ 29,427 $ 1,303 $ 209,366 $ 3,493 Mortgage-backed Securities: Residential 107,024 950 — — 107,024 950 Commercial 186,854 2,263 — — 186,854 2,263 Total $ 473,817 $ 5,403 $ 29,427 $ 1,303 $ 503,244 $ 6,706 We review those securities in an unrealized loss position for significant differences between fair value and the cost basis to evaluate if a classification of other-than-temporary impairment is warranted. In estimating other-than-temporary impairment losses, management considers, among other things, the length of time and the extent to which the fair value has been less than cost and the financial condition and near-term prospects of the issuer. We consider an other-than-temporary impairment to have occurred when there is an adverse change in expected cash flows. When it is determined that a decline in fair value of HTM or AFS securities is other-than-temporary, the carrying value of the security is reduced to its estimated fair value, with a corresponding charge to earnings for the credit portion and a charge to other comprehensive income for the noncredit portion. Based upon the length of time and the extent to which fair value is less than cost, we believe that none of the securities with an unrealized loss have other-than-temporary impairment at December 31, 2017 . The majority of the securities in an unrealized loss position are highly rated Texas municipal securities and U.S. Agency mortgage-backed securities (“MBS”) where the unrealized loss is a direct result of the change in interest rates and spreads. For those securities in an unrealized loss position, we do not currently intend to sell the securities, and it is not more likely than not that we will be required to sell the securities before the anticipated recovery of their amortized cost basis. To the best of management’s knowledge and based on our consideration of the qualitative factors associated with each security, there were no securities in our investment and MBS portfolio with an other-than-temporary impairment at December 31, 2017 . Our equity securities consist of investments that are deemed to be qualified under the Community Reinvestment Act (CRA) of 1977. We primarily invest in securities issued by Fannie Mae, Freddie Mac and Ginnie Mae. We evaluate the near-term prospects of our other equity securities in relation to the severity and duration of the current unrealized loss position. Based upon that evaluation, management does not consider the other equity securities to be other-than-temporarily impaired at December 31, 2017 . Interest income recognized on securities for the years presented (in thousands): Years Ended December 31, 2017 2016 2015 U.S. Treasury $ 519 $ 739 $ 1,132 U.S. Government Agency Debentures 178 — 118 State and Political Subdivisions 24,530 22,654 22,474 Other Stocks and Bonds 125 195 213 Other Equity Securities 116 123 118 Mortgage-backed Securities 41,361 37,450 33,661 Total interest income on securities $ 66,829 $ 61,161 $ 57,716 Of the $625,000 in net securities gain from the AFS portfolio for the year ended December 31, 2017 , there were $5.0 million in realized gains and $4.4 million in realized losses. Of the $2.8 million in net securities gains from the AFS portfolio for the year ended December 31, 2016 , there were $6.3 million in realized gain position and $3.4 million in realized loss position. Of the $3.7 million in net securities gains from the AFS portfolio for the year ended December 31, 2015 , there were $4.9 million in realized gains and $1.2 million in realized losses. There were no sales from the HTM portfolio during the years ended December 31, 2017 , 2016 or 2015 . We calculate realized gains and losses on sales of securities under the specific identification method. On January 2, 2018, we early-adopted ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” and in conjunction with the adoption took the one-time transition election to reclassify approximately $743.4 million book value of securities from HTM to AFS that qualified for hedging under the last-of-layer approach from HTM to AFS. The amortized cost and estimated fair value of AFS securities and the carrying value and estimated fair values of HTM securities at December 31, 2017 , are presented below by contractual maturity (in thousands). Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. MBS are presented in total by category due to the fact that MBS typically are issued with stated principal amounts, and the securities are backed by pools of mortgages that have loans with varying maturities. The characteristics of the underlying pool of mortgages, such as fixed-rate or adjustable-rate, as well as prepayment risk, are passed on to the security holder. The term of a mortgage-backed pass-through security thus approximates the term of the underlying mortgages and can vary significantly due to prepayments. December 31, 2017 Amortized Cost Estimated Available for sale securities: Investment Securities Due in one year or less $ 32,727 $ 32,777 Due after one year through five years 110,393 110,618 Due after five years through ten years 35,856 36,312 Due after ten years 327,677 326,881 506,653 506,588 Mortgage-backed Securities and Other Equity Securities 1,035,314 1,032,167 Total $ 1,541,967 $ 1,538,755 December 31, 2017 Carrying Value Estimated Held to maturity securities: Investment Securities Due in one year or less $ 30,817 $ 30,500 Due after one year through five years 70,419 71,108 Due after five years through ten years 112,784 114,341 Due after ten years 199,612 205,979 413,632 421,928 Mortgage-backed Securities 495,874 499,872 Total $ 909,506 $ 921,800 Investment securities and MBS with carrying values of $1.24 billion and $1.50 billion were pledged as of December 31, 2017 and 2016 , respectively, to collateralize Federal Home Loan Bank of Dallas borrowings, repurchase agreements and public funds or for other purposes as required by law. Securities with limited marketability, such as FHLB stock and other investments, are carried at cost, which approximates fair value and are assessed quarterly for other-than-temporary impairment. These securities have no maturity date. |
LOANS AND ALLOWANCE FOR PROBABL
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES | LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES Loans in the accompanying consolidated balance sheets are classified as follows (in thousands): December 31, 2017 December 31, 2016 Real Estate Loans: Construction $ 475,867 $ 380,175 1-4 Family Residential 805,341 637,239 Commercial 1,265,159 945,978 Commercial Loans 266,422 177,265 Municipal Loans 345,798 298,583 Loans to Individuals 135,769 117,297 Total Loans (1) 3,294,356 2,556,537 Less: Allowance for Loan Losses (2) 20,781 17,911 Net Loans $ 3,273,575 $ 2,538,626 (1) Includes approximately $861.8 million and $372.4 million of acquired loans as of December 31, 2017 and 2016 , respectively. (2) Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. There was no allowance for loan loss recorded on purchase credit impaired (“PCI”) loans as of December 31, 2017 . The allowance for loan loss recorded on PCI loans was $3,000 as of December 31, 2016 . Loans to Affiliated Parties In the normal course of business, we make loans to certain of our own executive officers and directors and their related interests. As of December 31, 2017 , 2016 and 2015 , these loans totaled $5.5 million , $6.3 million and $8.1 million , respectively. These loans represented 0.7% , 1.2% , and 1.8% of shareholders’ equity as of December 31, 2017 , 2016 and 2015 , respectively. Real Estate Construction Loans Our construction loans are collateralized by property located primarily in or near the market areas we serve. A number of our construction loans will be owner occupied upon completion. Construction loans for non-owner occupied projects are financed, but these typically have cash flows from leases with tenants, secondary sources of repayment, and in some cases, additional collateral. Our construction loans have both adjustable and fixed interest rates during the construction period. Construction loans to individuals are typically priced and made with the intention of granting the permanent loan on the property. Speculative and commercial construction loans are subject to underwriting standards similar to that of the commercial portfolio. Owner occupied 1-4 family residential construction loans are subject to the underwriting standards of the permanent loan. Real Estate 1-4 Family Residential Loans Residential loan originations are generated by our loan officers, in-house origination staff, marketing efforts, present customers, walk-in customers and referrals from real estate agents and builders. We focus our lending efforts primarily on the origination of loans secured by first mortgages on owner occupied 1-4 family residences. Substantially all of our 1-4 family residential originations are secured by properties located in or near our market areas. Our 1-4 family residential loans generally have maturities ranging from five to 30 years. These loans are typically fully amortizing with monthly payments sufficient to repay the total amount of the loan. Our 1-4 family residential loans are made at both fixed and adjustable interest rates. Underwriting for 1-4 family residential loans includes debt-to-income analysis, credit history analysis, appraised value and down payment considerations. Changes in the market value of real estate can affect the potential losses in the portfolio. Commercial Real Estate Loans Commercial real estate loans as of December 31, 2017 consisted of $1.17 billion of owner and non-owner occupied real estate, $83.8 million of loans secured by multi-family properties and $13.6 million of loans secured by farmland. Commercial real estate loans primarily include loans collateralized by retail, commercial office buildings, multi-family residential buildings, medical facilities and offices, senior living, assisted living and skilled nursing facilities, warehouse facilities, hotels and churches. Management does not consider there to be a risk in any one industry type. In determining whether to originate commercial real estate loans, we generally consider such factors as the financial condition of the borrower and the debt service coverage of the property. Commercial real estate loans are made at both fixed and adjustable interest rates for terms generally up to 20 years. Commercial Loans Our commercial loans are diversified loan types including short-term working capital loans for inventory and accounts receivable and short- and medium-term loans for equipment or other business capital expansion. Management does not consider there to be a concentration of risk in any one industry type. In our commercial loan underwriting, we assess the creditworthiness, ability to repay, and the value and liquidity of the collateral being offered. Terms of commercial loans are generally commensurate with the useful life of the collateral offered. Municipal Loans We have a specific lending department that makes loans to municipalities and school districts primarily throughout the state of Texas. Municipal loans outside the state of Texas have been limited to adjoining states. The majority of the loans to municipalities and school districts have tax or revenue pledges and in some cases are additionally supported by collateral. Municipal loans made without a direct pledge of taxes or revenues are usually made based on some type of collateral that represents an essential service. Loans to Individuals Substantially all originations of our loans to individuals are made to consumers in our market areas. The majority of loans to individuals are collateralized by titled equipment, which are primarily automobiles. Loan terms vary according to the type and value of collateral, length of contract and creditworthiness of the borrower. The underwriting standards we employ for consumer loans include an application, a determination of the applicant’s payment history on other debts, with the greatest weight being given to payment history with us, and an assessment of the borrower’s ability to meet existing obligations and payments on the proposed loan. Although creditworthiness of the applicant is a primary consideration, the underwriting process also includes a comparison of the value of the collateral, if any, in relation to the proposed loan amount. Most of our loans to individuals are collateralized, which management believes assists in limiting our exposure. Allowance for Loan Losses The allowance for loan losses is based on the most current review of the loan portfolio and is a result of multiple processes. First, we utilize historical net charge-off data to establish general reserve amounts for each class of loans. The historical charge-off figure is further adjusted through qualitative factors that include general trends in past dues, nonaccruals and classified loans to more effectively and promptly react to both positive and negative movements not reflected in the historical data. Second, our lenders have the primary responsibility for identifying problem loans based on customer financial stress and underlying collateral. These recommendations are reviewed by senior loan administration, the special assets department, and the loan review department on a monthly basis. Third, the loan review department independently reviews the portfolio on an annual basis. The loan review department follows a board-approved annual loan review scope. The loan review scope encompasses a number of considerations including the size of the loan, the type of credit extended, the seasoning of the loan and the performance of the loan. The loan review scope, as it relates to size, focuses more on larger dollar loan relationships, typically aggregate debt of $500,000 or greater. The loan review officer also reviews specific reserves compared to general reserves to determine trends in comparative reserves as well as losses not reserved for prior to charge-off to determine the effectiveness of the specific reserve process. At each review, a subjective analysis methodology is used to grade the respective loan. Categories of grading vary in severity from loans that do not appear to have a significant probability of loss at the time of review to loans that indicate a probability that the entire balance of the loan will be uncollectible. If at the time of review we determine it is probable that we will not collect the principal and interest cash flows contractually due on the loan, estimates of future expected cash flows or appraisals of the collateral securing the debt are used to determine the necessary allowances. The internal loan review department maintains a list (“Watch List”) of all loans or loan relationships that are graded as having more than the normal degree of risk associated with them. In addition, a list of specifically reserved loans or loan relationships of $150,000 or more is updated on a quarterly basis in order to properly determine necessary allowances and keep management informed on the status of attempts to correct the deficiencies noted with respect to the loan. We calculate historical loss ratios for pools of loans with similar characteristics based on the proportion of actual charge-offs experienced, consistent with the characteristics of remaining loans, to the total population of loans in the pool. The historical gross loss ratios are updated quarterly based on actual charge-off experience and adjusted for qualitative factors. All loans are subject to individual analysis if determined to be impaired with the exception of consumer loans and loans secured by 1-4 family residential loans. Industry and our own experience indicates that a portion of our loans will become delinquent and a portion of our loans will require partial or full charge-off. Regardless of the underwriting criteria utilized, losses may occur as a result of various factors beyond our control, including, among other things, changes in market conditions affecting the value of properties used as collateral for loans and problems affecting the credit worthiness of the borrower and the ability of the borrower to make payments on the loan. Our determination of the appropriateness of the allowance for loan losses is based on various considerations, including an analysis of the risk characteristics of various classifications of loans, previous loan loss experience, specific loans which have loan loss potential, delinquency trends, estimated fair value of the underlying collateral, current economic conditions, and geographic and industry loan concentration. Credit Quality Indicators We categorize loans into risk categories on an ongoing basis based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. We use the following definitions for risk ratings: • Pass (Rating 1 – 4) – This rating is assigned to all satisfactory loans. This category, by definition, consists of acceptable credit. Credit and collateral exceptions should not be present, although their presence would not necessarily prohibit a loan from being rated Pass, if deficiencies are in the process of correction. These loans are not included in the Watch List. • Pass Watch (Rating 5) – These loans require some degree of special treatment, but not due to credit quality. This category does not include loans specially mentioned or adversely classified; however, particular attention is warranted to characteristics such as: ◦ A lack of, or abnormally extended payment program; ◦ A heavy degree of concentration of collateral without sufficient margin; ◦ A vulnerability to competition through lesser or extensive financial leverage; and ◦ A dependence on a single or few customers or sources of supply and materials without suitable substitutes or alternatives. • Special Mention (Rating 6) – A Special Mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in our credit position at some future date. Special Mention loans are not adversely classified and do not expose us to sufficient risk to warrant adverse classification. • Substandard (Rating 7) – Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. • Doubtful (Rating 8) – Loans classified as Doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation, in full, on the basis of currently known facts, conditions and values, highly questionable and improbable. All accruing loans are reserved for as a group of similar type credits and included in the general portion of the allowance for loan losses. Loans to individuals and 1-4 family residential loans, including loans not accruing, are collectively evaluated and included in the general portion of the allowance for loan losses. All loans considered troubled debt restructurings (“TDR”) are evaluated individually for impairment. The general portion of the loan loss allowance is reflective of historical charge-off levels for similar loans adjusted for changes in current conditions and other relevant factors. These factors are likely to cause estimated losses to differ from historical loss experience and include: • Changes in lending policies or procedures, including underwriting, collection, charge-off, and recovery procedures; • Changes in local, regional and national economic and business conditions, including entry into new markets; • Changes in the volume or type of credit extended; • Changes in the experience, ability, and depth of lending management; • Changes in the volume and severity of past due, nonaccrual, restructured, or classified loans; • Changes in charge-off trends; • Changes in loan review or Board oversight; • Changes in the level of concentrations of credit; and • Changes in external factors, such as competition and legal and regulatory requirements. These factors are also considered for the non-PCI purchased loan portfolio specifically in regards to changes in credit quality, past due, nonaccrual and charge-off trends. The following tables detail activity in the allowance for loan losses by portfolio segment for the periods presented (in thousands): Year Ended December 31, 2017 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period $ 4,147 $ 2,665 $ 7,204 $ 2,263 $ 750 $ 882 $ 17,911 Provision (reversal) for loan losses (1) (437 ) 65 3,604 242 110 1,091 4,675 Loans charged off (35 ) (304 ) — (723 ) — (2,391 ) (3,453 ) Recoveries of loans charged off 1 19 13 312 — 1,303 1,648 Balance at end of period (2) $ 3,676 $ 2,445 $ 10,821 $ 2,094 $ 860 $ 885 $ 20,781 Year Ended December 31, 2016 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans (3) Municipal Loans Loans to Individuals Total Balance at beginning of period $ 4,350 $ 2,595 $ 4,577 $ 6,596 $ 725 $ 893 $ 19,736 Provision (reversal) for loan losses (1) (472 ) (28 ) 2,604 6,397 (224 ) 1,503 9,780 Loans charged off (3) — (43 ) — (11,396 ) — (2,948 ) (14,387 ) Recoveries of loans charged off 269 141 23 666 249 1,434 2,782 Balance at end of period $ 4,147 $ 2,665 $ 7,204 $ 2,263 $ 750 $ 882 $ 17,911 Year Ended December 31, 2015 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period (4) $ 2,456 $ 2,822 $ 3,025 $ 3,279 $ 716 $ 994 $ 13,292 Provision (reversal) for loan losses (1) 1,711 (284 ) 1,467 3,500 258 1,691 8,343 Loans charged off (24 ) (58 ) — (336 ) (249 ) (3,688 ) (4,355 ) Recoveries of loans charged off 207 115 85 153 — 1,896 2,456 Balance at end of period $ 4,350 $ 2,595 $ 4,577 $ 6,596 $ 725 $ 893 $ 19,736 (1) Of the $4.7 million and $9.8 million recorded in provision for loan losses for the years ended December 31, 2017 and 2016 , none related to provision expense on PCI loans. Of the $8.3 million recorded in provision for loan losses for the year ended December 31, 2015 , $629,000 related to provision expense on PCI loans. (2) Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. (3) Of the $11.4 million in commercial charge-offs recorded for the year ended December 31, 2016 , $10.9 million relates to the charge-off of two large commercial borrowing relationships. (4) Loans acquired with the Omni acquisition were measured at fair value on December 17, 2014 with no carryover of allowance for loan loss. The following tables present the balance in the allowance for loan losses by portfolio segment based on impairment method(in thousands): As of December 31, 2017 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Ending balance – individually evaluated for impairment (1) $ 12 $ 14 $ 14 $ 252 $ 10 $ 51 $ 353 Ending balance – collectively evaluated for impairment 3,664 2,431 10,807 1,842 850 834 20,428 Balance at end of period $ 3,676 $ 2,445 $ 10,821 $ 2,094 $ 860 $ 885 $ 20,781 As of December 31, 2016 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Ending balance – individually evaluated for impairment (1) $ 13 $ 16 $ 17 $ 923 $ 11 $ 106 $ 1,086 Ending balance – collectively evaluated for impairment 4,134 2,649 7,187 1,340 739 776 16,825 Balance at end of period $ 4,147 $ 2,665 $ 7,204 $ 2,263 $ 750 $ 882 $ 17,911 (1) There was no allowance for loan losses associated with PCI loans as of December 31, 2017 . There was approximately $3,000 of allowance for loan losses associated with PCI loans as of December 31, 2016 . The following tables present the recorded investment in loans by portfolio segment based on impairment method (in thousands): December 31, 2017 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Loans individually evaluated for impairment $ 86 $ 1,581 $ 895 $ 1,429 $ 502 $ 205 $ 4,698 Loans collectively evaluated for impairment 475,505 797,111 1,232,327 259,745 345,296 134,441 3,244,425 Purchased credit impaired loans 276 6,649 31,937 5,248 — 1,123 45,233 Total ending loan balance $ 475,867 $ 805,341 $ 1,265,159 $ 266,422 $ 345,798 $ 135,769 $ 3,294,356 December 31, 2016 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Loans individually evaluated for impairment $ 480 $ 1,693 $ 1,184 $ 5,840 $ 571 $ 241 $ 10,009 Loans collectively evaluated for impairment 379,526 629,893 942,818 170,159 298,012 116,923 2,537,331 Purchased credit impaired loans 169 5,653 1,976 1,266 — 133 9,197 Total ending loan balance $ 380,175 $ 637,239 $ 945,978 $ 177,265 $ 298,583 $ 117,297 $ 2,556,537 The following tables set forth credit quality indicators by class of loans for the periods presented (in thousands): December 31, 2017 Pass Pass Watch (1) Special Mention (1) Substandard (1) Doubtful (1) Total Real Estate Loans: Construction $ 471,446 $ 3,329 $ 77 $ 982 $ 33 $ 475,867 1-4 Family Residential 796,639 559 857 6,610 676 805,341 Commercial 1,136,576 26,275 25,301 76,625 382 1,265,159 Commercial Loans 247,430 9,625 3,956 5,203 208 266,422 Municipal Loans 344,366 — 930 502 — 345,798 Loans to Individuals 134,694 20 102 707 246 135,769 Total $ 3,131,151 $ 39,808 $ 31,223 $ 90,629 $ 1,545 $ 3,294,356 December 31, 2016 Pass Pass Watch (1) Special Mention (1) Substandard (1) Doubtful (1) Total Real Estate Loans: Construction $ 374,443 $ 34 $ 571 $ 5,108 $ 19 $ 380,175 1-4 Family Residential 632,937 68 — 3,380 854 637,239 Commercial 885,049 17,739 10,587 32,603 — 945,978 Commercial Loans 158,943 1,187 8,086 9,012 37 177,265 Municipal Loans 297,014 — 998 571 — 298,583 Loans to Individuals 115,952 — 9 629 707 117,297 Total $ 2,464,338 $ 19,028 $ 20,251 $ 51,303 $ 1,617 $ 2,556,537 (1) Includes PCI loans comprised of $362,000 pass watch, $6.0 million special mention, $10.5 million substandard and $925,000 doubtful as of December 31, 2017 . Includes PCI loans comprised of $5,000 pass watch, $511,000 special mention, $1.5 million substandard and $28,000 doubtful as of December 31, 2016 . Nonperforming Assets and Past Due Loans Nonaccrual loans are loans 90 days or more delinquent and collection in full of both the principal and interest is not expected. Additionally, some loans that are not delinquent or that are delinquent less than 90 days may be placed on nonaccrual status if it is probable that we will not receive contractual principal and interest payments in accordance with the terms of the respective loan agreement. When a loan is categorized as nonaccrual, the accrual of interest is discontinued and any accrued balance is reversed for financial statement purposes. Payments received on nonaccrual loans are applied to the outstanding principal balance. Payments of contractual interest are recognized as income only to the extent that full recovery of the principal balance of the loan is reasonably certain. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Other factors, such as the value of collateral securing the loan and the financial condition of the borrower, are considered in judgments as to potential loan loss. Nonaccrual loans and accruing loans past due more than 90 days include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. PCI loans are recorded at fair value at acquisition date. Although the PCI loans may be contractually delinquent, we do not classify these loans as past due or nonperforming as the loans were written down to fair value at the acquisition date, and the accretable yield is recognized in interest income over the remaining life of the loan. However, subsequent to acquisition, we re-assess PCI loans for additional impairment and record additional impairment in the event we conclude it is probable that we will be unable to collect all cash flows originally expected to be collected at acquisition plus any additional cash flows expected to be collected due to changes in estimates after acquisition. All such PCI loans for which we recognize subsequent impairment are reported as impaired loans in the financial statements. The following table sets forth nonperforming assets for the periods presented (in thousands): At At Nonaccrual loans (1) $ 2,937 $ 8,280 Accruing loans past due more than 90 days (1) 1 6 Restructured loans (2) 5,767 6,431 Other real estate owned 1,613 339 Repossessed assets 154 49 Total Nonperforming Assets $ 10,472 $ 15,105 (1) Excludes PCI loans measured at fair value at acquisition. (2) Includes $2.9 million and $3.1 million in PCI loans restructured as of December 31, 2017 and 2016 , respectively. Foreclosed assets include other real estate owned and repossessed assets. For 1-4 family residential real estate properties, a loan is recognized as a foreclosed property once legal title to the real estate property has been received upon completion of foreclosure or the borrower has conveyed all interest in the residential property through a deed in lieu of foreclosure. As of December 31, 2017 , there were $154,000 in loans secured by 1-4 family residential properties for which formal foreclosure proceedings were in process. There was a total of $28,000 in loans secured by 1-4 family residential properties for which formal foreclosure proceedings were in process as of December 31, 2016 . The following table sets forth the recorded investment in nonaccrual loans by class of loans for the period presented (in thousands). The table excludes PCI loans measured at fair value at acquisition: Nonaccrual Loans December 31, 2017 December 31, 2016 Real Estate Loans: Construction $ 86 $ 105 1-4 Family Residential 1,098 1,067 Commercial 595 808 Commercial Loans 903 5,477 Loans to Individuals 255 823 Total $ 2,937 $ 8,280 Loans are considered impaired if, based on current information and events, it is probable we will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual loan basis for larger loans. The measurement of loss on impaired loans is generally based on the fair value of the collateral less selling costs if repayment is expected solely from the collateral or the present value of the expected future cash flows discounted at the historical effective interest rate stipulated in the loan agreement. In measuring the fair value of the collateral, in addition to relying on third party appraisals, we use assumptions, such as discount rates, and methodologies, such as comparison to the recent selling price of similar assets, consistent with those that would be utilized by unrelated third parties performing a valuation. Loans that are evaluated and determined not to meet the definition of an impaired loan are reserved for at the general reserve rate for its appropriate class. At the time a loss is probable in the collection of contractual amounts, specific reserves are allocated. Loans are charged off to the liquidation value of the collateral net of liquidation costs, if any, when deemed uncollectible or as soon as collection by liquidation is evident. Subsequent to year-end, we categorized a commercial real estate loan with a balance of $12.5 million as of December 31, 2017 as nonaccrual upon a primary tenant’s notification to the borrower in January 2018 that it would not be renewing its lease. This loan was categorized as substandard and accruing interest as of December 31, 2017. The following tables set forth impaired loans by class of loans for the periods presented (in thousands). Impaired loans include restructured and nonaccrual loans for which the allowance was measured in accordance with section 310-10 of ASC Topic 310, “Receivables.” There were no impaired loans recorded without an allowance for the years ended December 31, 2017 or 2016 . December 31, 2017 Unpaid Contractual Principal Balance Recorded Investment Related Allowance for Loan Losses Real Estate Loans: Construction $ 91 $ 86 $ 12 1-4 Family Residential 4,141 3,952 14 Commercial 1,353 1,199 14 Commercial Loans 1,665 1,605 252 Municipal Loans 502 502 10 Loans to Individuals 237 205 51 Total (1) $ 7,989 $ 7,549 $ 353 December 31, 2016 Unpaid Contractual Principal Balance Recorded Related Allowance for Loan Losses Real Estate Loans: Construction $ 486 $ 480 $ 13 1-4 Family Residential 4,487 4,264 16 Commercial 1,631 1,574 17 Commercial Loans 6,108 5,941 923 Municipal Loans 571 571 11 Loans to Individuals 277 241 106 Total (1) $ 13,560 $ 13,071 $ 1,086 (1) Includes $2.9 million and $3.1 million of PCI loans that experienced deterioration in credit quality subsequent to the acquisition date as of December 31, 2017 and December 31, 2016 , respectively. The following tables present the aging of the recorded investment in past due loans by class of loans (in thousands): December 31, 2017 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Past Due Total Past Due Current (1) Total Real Estate Loans: Construction $ 1,302 $ 1,530 $ 68 $ 2,900 $ 472,967 $ 475,867 1-4 Family Residential 8,508 1,574 862 10,944 794,397 805,341 Commercial 1,357 24 5 1,386 1,263,773 1,265,159 Commercial Loans 662 400 333 1,395 265,027 266,422 Municipal Loans 422 — — 422 345,376 345,798 Loans to Individuals 1,526 373 93 1,992 133,777 135,769 Total $ 13,777 $ 3,901 $ 1,361 $ 19,039 $ 3,275,317 $ 3,294,356 December 31, 2016 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Past Due Total Past Due Current (1) Total Real Estate Loans: Construction $ 917 $ 64 $ 86 $ 1,067 $ 379,108 $ 380,175 1-4 Family Residential 6,225 755 600 7,580 629,659 637,239 Commercial 70 154 154 378 945,600 945,978 Commercial Loans 783 300 3,459 4,542 172,723 177,265 Municipal Loans 113 — — 113 298,470 298,583 Loans to Individuals 1,550 320 185 2,055 115,242 117,297 Total $ 9,658 $ 1,593 $ 4,484 $ 15,735 $ 2,540,802 $ 2,556,537 (1) Includes PCI loans measured at fair value at acquisition. The following table sets forth average recorded investment and interest income recognized on impaired loans by class of loans for the periods presented (in thousands). The table excludes PCI loans measured at fair value at acquisition that have not experienced further deterioration in credit quality subsequent to the acquisition date: December 31, 2017 December 31, 2016 December 31, 2015 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Real Estate Loans: Construction $ 251 $ — $ 510 $ 22 $ 1,518 $ — 1-4 Family Residential 4,264 197 3,247 169 3,410 61 Commercial 1,338 30 4,490 63 3,323 64 Commercial Loans 2,862 59 13,481 48 13,807 256 Municipal Loans 545 30 612 33 824 37 Loans to Individuals 244 9 257 9 725 4 Total $ 9,504 $ 325 $ 22,597 $ 344 $ 23,607 $ 422 Troubled Debt Restructurings The restructuring of a loan is considered a TDR if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession. Concessions may include interest rate reductions or below market interest rates, restructuring amortization schedules and other actions intended to minimize potential losses. We may provide a combination of concessions which may include an extension of the amortization period, interest rate reduction, and/or converting the loan to interest-only for a limited period of time. The following tables set forth the recorded balance of loans considered to be TDRs that were restructured and the type of concession during the periods presented (dollars in thousands): Year Ended December 31, 2017 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Contracts Commercial Loans $ 778 $ — $ 241 $ 1,019 4 Loans to Individuals 23 — 52 75 6 Total $ 801 $ — $ 293 $ 1,094 10 Year Ended December 31, 2016 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Contracts Real Estate Loans: Construction $ 375 $ — $ 23 $ 398 2 1-4 Family Residential — 71 2,602 2,673 4 Commercial 500 — — 500 1 Commercial Loans 2,230 — 59 2,289 8 Loans to Individuals 29 — 77 106 8 Total $ 3,134 $ 71 $ 2,761 $ 5,966 23 The majority of loans restructured as TDRs during the year ended December 31, 2017 were modified with maturity extensions. Interest continues to be charged on principal balances outstanding during the extended term. Therefore, the financial effects of the recorded investment of loans restructured as TDRs during the year ended December 31, 2017 and 2016 were not significant. Generally, the loans identified as TDRs were previously reported as impaired loans prior to restructuring and therefore the modification did not impact our determination of the allowance for loan losses. On an ongoing basis, the performance of the TDRs is monitored for subsequent payment default. Payment default for TDRs is recognized when the borrower is 90 days or more past due. There were $138,000 and $768,000 of TDRs in default as of December 31, 2017 and 2016 , respectively. Payment defaults for TDRs did not significantly impact the determination of the allowance for loan loss in either period presented. At December 31, 2017 and 2016 , there were no commitments to lend additional funds to borrowers whose terms had been modified in TDRs. Purchased Credit Impaired Loans The following table presents the outstanding principal balance and carrying value for PCI loans for the periods presented (in thousands): December 31, 2017 December 31, 2016 Outstanding principal balance $ 52,426 $ 10,612 Carrying amount $ 45,233 $ 9,197 The following table presents the changes in the accretable yield during the periods for PCI loans (in thousands): December 31, 2017 December 31, 2016 Balance at beginning of period $ 2,480 $ 2,493 Additions due to acquisition 15,389 — Reclassifications (to) from nonaccretable disc |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
PREMISES AND EQUIPMENT | PREMISES AND EQUIPMENT December 31, 2017 December 31, 2016 (in thousands) Premises $ 158,817 $ 127,970 Furniture and equipment 40,565 36,603 199,382 164,573 Less: accumulated depreciation 65,742 58,570 Total $ 133,640 $ 106,003 Assets with accumulated depreciation of $915,000 and $1.2 million were written off for the years ended December 31, 2017 and 2016 , respectively. Depreciation expense was $8.1 million , $8.0 million , and $8.1 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2017 | |
Deposits [Abstract] | |
DEPOSITS | DEPOSITS December 31, 2017 December 31, 2016 (in thousands) Noninterest bearing demand deposits: Private accounts $ 995,685 $ 678,279 Public accounts 41,716 25,734 Total noninterest bearing demand deposits 1,037,401 704,013 Interest bearing deposits: Private accounts: Savings deposits 356,857 249,490 Money market demand deposits 443,015 329,426 Platinum money market deposits 308,105 353,381 Interest bearing checking 686,816 212,296 NOW demand deposits 20,142 234,217 Certificates and other time deposits of $250,000 or more 87,195 58,312 Certificates and other time deposits under $250,000 534,220 422,134 Total private accounts 2,436,350 1,859,256 Public accounts: Savings deposits 304 19 Money market demand deposits 19,560 15,126 Platinum money market deposits 360,006 382,017 Interest bearing checking 55,902 12,856 NOW demand deposits 114,401 128,086 Certificates and other time deposits of $250,000 or more 462,941 409,671 Certificates and other time deposits under $250,000 28,582 22,032 Total public accounts 1,041,696 969,807 Total interest bearing deposits 3,478,046 2,829,063 Total deposits $ 4,515,447 $ 3,533,076 For the years ended December 31, 2017 , 2016 and 2015 , interest expense on time deposits of $250,000 or more was $5.0 million , $3.2 million and $1.4 million , respectively. At December 31, 2017 , the scheduled maturities of certificates and other time deposits, including public accounts, were as follows (in thousands): 2018 $ 758,624 2019 229,032 2020 64,215 2021 35,493 2022 20,445 2023 and thereafter 5,129 $ 1,112,938 At December 31, 2017 , we had $60.2 million in brokered certificates of deposit (“CDs”) that represented 1.3% of our deposits. Approximately $54.5 million of our brokered CDs were non-callable with a weighted average cost of 114 basis points and remaining maturities of two to eleven months. The remaining $5.7 million were long term CDs that mature within two years and have short-term calls that we control. These brokered CDs are reflected in the CDs under $250,000 category. At December 31, 2016 , we had $35.5 million in brokered CDs. We utilized long-term brokered CDs because the brokered CDs better matched overall ALCO objectives at the time of issuance by protecting us with fixed rates should interest rates increase, while providing us options to call the funding should interest rates decrease. Our current policy allows for a maximum of $180 million in brokered CDs. At December 31, 2017 and 2016 , we had approximately $31.7 million and $10.3 million , respectively, in deposits from related parties, including directors and named executive officers. The aggregate amount of demand deposit overdrafts that have been reclassified as loans were $1.3 million and $993,000 at December 31, 2017 and 2016 , respectively. |
BORROWING ARRANGEMENTS
BORROWING ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
BORROWING ARRANGEMENTS | BORROWINGS ARRANGEMENTS Information related to borrowings is provided in the table below (dollars in thousands): December 31, 2017 December 31, 2016 Federal funds purchased and repurchase agreements: Balance at end of period $ 9,498 $ 7,097 Average amount outstanding during the period (1) 8,120 6,798 Maximum amount outstanding during the period (2) 9,498 11,516 Weighted average interest rate during the period (3) 0.2 % 0.1 % Interest rate at end of period (4) 0.2 % 0.2 % FHLB borrowings: Balance at end of period $ 1,017,361 $ 1,309,646 Average amount outstanding during the period (1) 1,222,033 1,060,631 Maximum amount outstanding during the period (2) 1,414,453 1,309,646 Weighted average interest rate during the period (3) 1.2 % 1.1 % Interest rate at end of period (4) 1.4 % 0.9 % Subordinated notes, net of unamortized debt issuance costs: Balance at end of period $ 98,248 $ 98,100 Average amount outstanding during the period (1) 98,172 27,860 Maximum amount outstanding during the period (2) 98,248 98,100 Weighted average interest rate during the period (3) 5.7 % 5.8 % Interest rate at end of period (4) 5.5 % 5.5 % Trust preferred subordinated debentures, net of unamortized debt issuance costs: Balance at end of period $ 60,241 $ 60,236 Average amount outstanding during the period (1) 60,238 60,233 Maximum amount outstanding during the period (2) 60,241 60,236 Weighted average interest rate during the period (3) 3.3 % 2.8 % Interest rate at end of period (4) 3.6 % 3.0 % (1) The average amount outstanding during the period was computed by dividing the total daily outstanding principal balances by the number of days in the period. (2) The maximum amount outstanding at any month-end during the period. (3) The weighted average interest rate during the period was computed by dividing the actual interest expense by the average balance outstanding during the period. The weighted average interest rate on the FHLB borrowings include the effect of interest rate swaps. (4) Stated rate. Maturities of fixed rate obligations based on scheduled repayments at December 31, 2017 are as follows (in thousands): Years Ended December 31, 2018 2019 2020 2021 2022 Thereafter Total Federal funds purchased and repurchase agreements $ 9,498 $ — $ — $ — $ — $ — $ 9,498 FHLB borrowings 863,288 62,330 76,015 11,690 — 4,038 1,017,361 Subordinated notes, net of unamortized debt issuance costs — — — — — 98,248 98,248 Trust preferred subordinated debentures, net of unamortized debt issuance costs — — — — — 60,241 60,241 Total obligations $ 872,786 $ 62,330 $ 76,015 $ 11,690 $ — $ 162,527 $ 1,185,348 FHLB borrowings represent borrowings with fixed interest rates ranging from 0.85% to 4.799% and with maturities of one month to 10.6 years . FHLB borrowings are collateralized by FHLB stock, nonspecified loans and securities. From time to time, the Company may enter into various variable rate advance agreements with the FHLB. These advance agreements totaled $240.0 million at December 31, 2017 and $250.0 million at December 31, 2016 . Two of the variable rate advance agreements have interest rates of three-month LIBOR minus 0.25% . The remaining advance agreements have interest rates ranging from one-month LIBOR plus 0.17% to one-month LIBOR plus 0.278% . In connection with obtaining these advance agreements, the Company entered into various interest rate swap contracts that are treated as cash flow hedges under ASC Topic 815, “Derivatives and Hedging” that effectively converted the variable rate advance agreements to fixed interest rates ranging from 0.932% to 2.345% and original terms ranging from five years to ten years. The cash flows from the swaps are expected to be effective in hedging the variability in future cash flows attributable to fluctuations in the one-month and three-month LIBOR interest rates. During the first quarter of 2017 , we terminated two interest rate swap contracts designated as cash flow hedges having a total notional value of $40.0 million . At the time of termination, we determined that the underlying hedged forecasted transactions were still probable of occurring. These transactions are reevaluated on a monthly basis thereafter, to determine if the hedged forecasted transactions are still probable of occurring. If at a subsequent evaluation, it is determined that the transactions will not occur, any related gains or losses recorded in AOCI are immediately recognized in earnings. Refer to “Note 12 - Derivative Financial Instruments and Hedging Activities” in our consolidated financial statements included in this report for a detailed description of our hedging policy and methodology related to derivative instruments. Southside Bank has three unsecured lines of credit for the purchase of overnight federal funds at prevailing rates with Frost Bank, TIB – The Independent Bankers Bank and Comerica Bank for $30.0 million , $15.0 million and $7.5 million , respectively. There were no federal funds purchased at December 31, 2017 or 2016 . Southside Bank has a $5.0 million line of credit with Frost Bank to be used to issue letters of credit and at December 31, 2017 , we had one outstanding letter of credit for $195,000 . At December 31, 2017 , the amount of additional funding Southside Bank could obtain from FHLB, collateralized by FHLB stock, nonspecified loans and securities, was approximately $729.7 million , net of FHLB stock purchases required. Southside Bank currently has no letters of credit from FHLB as collateral for a portion of its public fund deposits. Southside Bank enters into sales of securities under agreements to repurchase (“repurchase agreements”). These repurchase agreements totaled $9.5 million and $7.1 million at December 31, 2017 and 2016 , respectively, and had maturities of less than one year. These repurchase agreements are secured by investment securities and are stated at the amount of cash received in connection with the transaction. |
LONG-TERM OBLIGATIONS
LONG-TERM OBLIGATIONS | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
LONG-TERM OBLIGATIONS | LONG-TERM DEBT December 31, 2017 December 31, (in thousands) Subordinated notes: (1) 5.50% Subordinated Notes, net of unamortized debt issuance costs (2) $ 98,248 $ 98,100 Total Subordinated notes 98,248 98,100 Trust preferred subordinated debentures: (3) Southside Statutory Trust III, net of unamortized debt issuance costs (4) 20,549 20,544 Southside Statutory Trust IV 23,196 23,196 Southside Statutory Trust V 12,887 12,887 Magnolia Trust Company I 3,609 3,609 Total Trust preferred subordinated debentures 60,241 60,236 Total Long-term debt $ 158,489 $ 158,336 (1) This debt consists of subordinated notes with a remaining maturity greater than one year that qualify under the risk-based capital guidelines as Tier 2 capital, subject to certain limitations. (2) The unamortized discount and debt issuance costs reflected in the carrying amount of the subordinated notes totaled approximately $1.8 million at December 31, 2017 and $1.9 million at December 31, 2016 . (3) This debt consists of trust preferred securities that qualify under the risk-based capital guidelines as Tier 1 capital, subject to certain limitations. (4) The unamortized debt issuance costs reflected in the carrying amount of the Southside Statutory Trust III junior subordinated debentures totaled $70,000 at December 31, 2017 and $75,000 at December 31, 2016 . As of December 31, 2017 , the details of the subordinated notes and the trust preferred subordinated debentures are summarized below (dollars in thousands): Date issued Amount issued Fixed or floating rate Interest rate Maturity date 5.50% Subordinated Notes September 19, 2016 $ 100,000 Fixed-to-Floating 5.50% September 30, 2026 Southside Statutory Trust III September 4, 2003 $ 20,619 Floating 3 month LIBOR + 2.94% September 4, 2033 Southside Statutory Trust IV August 8, 2007 $ 23,196 Floating 3 month LIBOR + 1.30% October 30, 2037 Southside Statutory Trust V August 10, 2007 $ 12,887 Floating 3 month LIBOR + 2.25% September 15, 2037 Magnolia Trust Company I (1) October 10, 2007 $ 3,609 Floating 3 month LIBOR + 1.80% November 23, 2035 (1) On October 10, 2007, as part of an acquisition we assumed $3.6 million of floating rate junior subordinated debentures issued in 2005 to Magnolia Trust Company I. On September 19, 2016 , the Company issued $100.0 million aggregate principal amount of fixed-to-floating rate subordinated notes that mature on September 30, 2026 . This debt initially bears interest at a fixed rate of 5.50% through September 29, 2021 and thereafter, adjusts quarterly at a floating rate equal to three-month LIBOR plus 429.7 basis points. The proceeds from the sale of the subordinated notes were used for general corporate purposes, which included advances to the Bank to finance its activities. |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefits Including Defined Benefit Plans and Share-based Compensation Plans [Abstract] | |
EMPLOYEE BENEFITS | EMPLOYEE BENEFITS Deferred Compensation Agreements Southside Bank has deferred compensation agreements with 17 of its executive officers, which generally provide for payment of an aggregate amount of $5.1 million over a maximum period of 15 years after retirement or death. Of the 17 executives included in the agreements, payments have commenced to nine former executives and/or their beneficiaries. In addition, one executive retired on December 31, 2016 with payments commencing in 2017. Three executive officers became eligible to receive payments in 2016 as a result of the acceptance of an early retirement package offered in late December of 2015. Deferred compensation expense was $353,000 , $357,000 and $553,000 for the years ended December 31, 2017 , 2016 and 2015 , respectively. At December 31, 2017 and 2016 , the deferred compensation plan liability totaled $3.5 million and $3.6 million , respectively. Health Insurance We provide accident and health insurance for substantially all employees through a self-funded insurance program. The cost of health care benefits was $5.6 million , $4.9 million and $6.0 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Our healthcare plan was amended to provide health insurance coverage for any retiree having 50 years of service with the Company. In addition, the eligible retiree must have Medicare coverage, including part A, part B and part D. There were two retirees participating in the health insurance plan as of December 31, 2017 , 2016 and 2015 . Employee Stock Ownership Plan We have an Employee Stock Ownership Plan (the “ESOP”) which covers substantially all employees. Contributions to the ESOP are at the sole discretion of the board of directors. We contributed $350,000 to the ESOP for the years ended December 31, 2017 , 2016 and 2015 . At December 31, 2017 and 2016 , the ESOP owned 280,542 and 324,831 shares of common stock, respectively. The number of shares has been adjusted as a result of stock dividends. These shares are treated as externally held shares for dividend and earnings per share calculations. Long-term Disability We have an officer’s long-term disability income policy which provides coverage in the event they become disabled as defined under its terms. Individuals are automatically covered under the policy if they (a) have been elected as an officer, (b) have been an employee of Southside Bank for three years and (c) receive earnings of $50,000 or more on an annual basis. The policy provides, among other things, that should a covered individual become totally disabled he would receive two-thirds of his current salary, not to exceed $15,000 per month. The benefits paid out of the policy are limited by the benefits paid to the individual under the terms of our other Company-sponsored benefit plans. Split Dollar Agreements We entered into split dollar agreements with eight of our executive officers. The agreements provide we will be the beneficiary of bank owned life insurance (“BOLI”) insuring the executives’ lives. The agreements provide the executives the right to designate the beneficiaries of the death benefits guaranteed in each agreement. The agreements originally provided for death benefits of an initial aggregate amount of $4.5 million . The individual amounts are increased annually on the anniversary date of the agreement by inflation adjustment factors ranging from 3% to 5% . As of December 31, 2017 , the expected death benefits total $5.8 million . The agreements also state that after the executive’s retirement, we shall also pay an annual gross-up bonus to the executive in an amount sufficient to enable the executive to pay federal income tax on both the economic benefit and on the gross-up bonus. The expense required to record the post retirement liability associated with the split dollar post retirement bonuses was $172,000 and $28,000 for the years ended December 31, 2016 and 2015 , respectively, and a credit to expense of $3,000 for the year ended December 31, 2017 . For the years ended December 31, 2017 and 2016 , the split dollar liability totaled $1.9 million and $1.8 million , respectively. 401(k) Plan We have a 401(k) defined contribution plan (the “401(k) Plan”) covering substantially all employees that permits each participant to make before- or after-tax contributions subject to certain limits imposed by the Internal Revenue Code. Beginning January 1, 2017, eligible employees may participate in the 401(k) Plan after they have worked at least 30 days with the Company. For the years ended December 31, 2017 , 2016 and 2015 , expense attributable to the 401(k) Plan amounted to $613,000 , $562,000 and $447,000 , respectively. Pension Plans We have a defined benefit pension plan (“the Plan”) pursuant to which participants are entitled to benefits based on final average monthly compensation and years of credited service determined in accordance with plan provisions. Entrance into the Plan by new employees was frozen effective December 31, 2005. Employees hired after December 31, 2005 are not eligible to participate in the plan. All participants in the Plan are fully vested. Benefits are payable monthly commencing on the later of age 65 or the participant’s date of retirement. Eligible participants may retire at reduced benefit levels after reaching age 55 . We contribute amounts to the pension fund sufficient to satisfy funding requirements of the Employee Retirement Income Security Act. Plan assets included 240,666 shares of our stock at December 31, 2017 and 2016 . Our stock included in the Plan assets was purchased at fair value. The number of shares has been adjusted as a result of stock dividends. During 2017 , our funded status slightly declined and at December 31, 2017 , we had an unfunded status of $3.0 million compared to an unfunded status of $2.8 million at December 31, 2016 . The deterioration was a result of a decline in discount rate at December 31, 2017 compared to December 31, 2016 to better reflect the current market conditions, partially offset by greater than expected return on the fair value of plan assets and contributions to the plan since December 31, 2016 and the updated mortality assumption at December 31, 2017 compared to December 31, 2016 . In late December 2015, we offered an early retirement package to 24 of our employees, of which 16 accepted the early retirement offer by the acceptance deadline of January 29, 2016. During 2016 , the Plan provided special and contractual termination benefits of $1.5 million to 15 employees that accepted an early retirement package during the year ended December 31, 2016 . The Plan provided special and contractual termination benefits of $176,000 to an employee that accepted an early retirement package during the year ended December 31, 2015 . In connection with the acquisition of Omni, we acquired the OmniAmerican Bank Defined Benefit Plan ( “the Acquired Plan”) which was remeasured at fair value. The Acquired Plan originally called for benefits to be paid to eligible employees at retirement based primarily upon years of service and the compensation levels at retirement. As of December 31, 2006, the benefits under the Acquired Plan were frozen. No further benefits will be earned by employees after that date. In addition, no new participants may be added to the Acquired Plan after December 31, 2006. During 2017 , our funded status improved, and at December 31, 2017 , we had an unfunded status of $361,000 compared to an unfunded status of $1.2 million at December 31, 2016 . The improvement was a result of greater than expected return on the fair value of plan assets and contributions to the plan since December 31, 2016 , a settlement event which improved the funded status during the year ended December 31, 2017 and an updated mortality assumption at December 31, 2017 compared to December 31, 2016 , partially offset by a decline in the discount rate at December 31, 2017 compared to December 31, 2016 . We have a nonfunded supplemental retirement plan (the “Restoration Plan”) for our employees whose benefits under the principal retirement plan are reduced because of compensation deferral elections or limitations under federal tax laws. Both the Plan and the Restoration Plan were amended effective January 1, 2013 to change the formula for determining death benefits for participants who die while in service of the employer and who are early retirement eligible on their date of death. We use a measurement date of December 31 for our plans. Year ended December 31, 2017 2016 2015 Defined Benefit Pension Plan Defined Restoration Plan Defined Benefit Pension Plan Defined Restoration Plan Defined Benefit Pension Plan Defined Restoration Plan (in thousands) Change in Projected Benefit Obligation: Benefit obligation at end of prior year $ 88,071 $ 4,238 $ 12,723 $ 80,040 $ 4,685 $ 12,024 $ 84,050 $ 5,977 $ 13,259 Service cost 1,398 — 247 1,375 — 207 1,838 — 334 Interest cost 3,601 177 567 3,731 212 535 3,410 238 668 Actuarial loss (gain) 5,404 418 1,751 4,978 275 237 (6,777 ) (753 ) (1,968 ) Benefits paid (4,128 ) (43 ) (646 ) (3,632 ) (31 ) (280 ) (2,590 ) (28 ) (269 ) Expenses paid (70 ) (47 ) — (91 ) (39 ) — (67 ) (30 ) — Plan amendments — — — 121 — — — — — Settlements — (351 ) — — (864 ) — — (719 ) — Special and contractual termination benefits — — — 1,549 — — 176 — — Benefit obligation at end of year 94,276 4,392 14,642 88,071 4,238 12,723 80,040 4,685 12,024 Change in Plan Assets: Fair value of plan assets at end of prior year 85,293 2,993 — 76,355 3,740 — 79,730 4,512 — Actual return 8,138 479 — 7,661 187 — (718 ) 5 — Employer contributions 2,000 1,000 646 5,000 — 280 — — 269 Benefits paid (4,128 ) (43 ) (646 ) (3,632 ) (31 ) (280 ) (2,590 ) (28 ) (269 ) Expenses paid (70 ) (47 ) — (91 ) (39 ) — (67 ) (30 ) — Settlements — (351 ) — — (864 ) — — (719 ) — Fair value of plan assets at end of year 91,233 4,031 — 85,293 2,993 — 76,355 3,740 — (Un)Funded status at end of year (3,043 ) (361 ) (14,642 ) (2,778 ) (1,245 ) (12,723 ) (3,685 ) (945 ) (12,024 ) Accrued benefit (liability) asset recognized $ (3,043 ) $ (361 ) $ (14,642 ) $ (2,778 ) $ (1,245 ) $ (12,723 ) $ (3,685 ) $ (945 ) $ (12,024 ) Accumulated benefit obligation at end of year $ 83,802 $ 4,392 $ 13,246 $ 77,639 $ 4,238 $ 11,133 $ 69,737 $ 4,685 $ 10,290 Amounts related to our defined benefit pension plans and restoration plan recognized as a component of other comprehensive (loss) income were as follows (in thousands): Year ended December 31, 2017 2016 2015 Defined Defined Restoration Defined Defined Restoration Defined Defined Restoration Recognition of net loss $ 1,312 $ — $ 301 $ 1,642 $ — $ 186 $ 1,505 $ — $ 943 Recognition of prior service (credit) cost (14 ) — 6 (14 ) — 6 (23 ) — 7 Recognition of loss (gain) due to settlement — 8 — — (8 ) — — (62 ) — Net (loss) gain occurring during the year (3,317 ) (150 ) (1,751 ) (2,541 ) (354 ) (237 ) 375 463 1,968 Net prior service cost occurring during the year — — — (121 ) — — — — — (2,019 ) (142 ) (1,444 ) (1,034 ) (362 ) (45 ) 1,857 401 2,918 Deferred tax benefit (expense) 241 30 259 362 127 16 (650 ) (141 ) (1,021 ) Other comprehensive (loss) income, net of tax $ (1,778 ) $ (112 ) $ (1,185 ) $ (672 ) $ (235 ) $ (29 ) $ 1,207 $ 260 $ 1,897 Net amounts recognized in net periodic benefit cost and other comprehensive loss were as follows (in thousands): December 31, 2017 December 31, 2016 Defined Benefit Pension Plan Defined Restoration Plan Defined Defined Restoration Plan Net loss $ 1,312 $ — $ 301 $ 1,642 $ — $ 186 Prior service (credit) cost (14 ) — 6 (14 ) — 6 Loss (gain) recognized due to settlement — 8 — — (8 ) — 1,298 8 307 1,628 (8 ) 192 Deferred tax (expense) benefit (454 ) (2 ) (107 ) (569 ) 3 (67 ) Accumulated other comprehensive income (loss), net of tax $ 844 $ 6 $ 200 $ 1,059 $ (5 ) $ 125 Amounts recognized as a component of accumulated other comprehensive loss were as follows (in thousands): December 31, 2017 December 31, 2016 Defined Defined Restoration Defined Defined Restoration Net (loss) gain $ (28,859 ) $ (102 ) $ (4,317 ) $ (26,855 ) $ 40 $ (2,868 ) Prior service cost (109 ) — (31 ) (96 ) — (38 ) (28,968 ) (102 ) (4,348 ) (26,951 ) 40 (2,906 ) Deferred tax benefit (expense) 9,674 15 1,276 9,433 (14 ) 1,017 Reclassification of certain deferred tax effects (1) (3,591 ) 6 (364 ) — — — Accumulated other comprehensive (loss) income, net of tax $ (22,885 ) $ (81 ) $ (3,436 ) $ (17,518 ) $ 26 $ (1,889 ) (1) Amounts reclassified to retained earnings due to early adoption of ASU 2018-02. See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. . Net periodic pension cost and postretirement benefit cost included the following components (in thousands): Year ended December 31, 2017 2016 2015 Defined Benefit Pension Plan: Service cost $ 1,398 $ 1,375 $ 1,838 Interest cost 3,601 3,731 3,410 Expected return on assets (6,050 ) (5,224 ) (5,684 ) Net loss amortization 1,312 1,642 1,505 Prior service credit amortization (14 ) (14 ) (23 ) Special and contractual termination benefits — 1,549 176 Net periodic benefit cost $ 247 $ 3,059 $ 1,222 Defined Benefit Pension Plan Acquired: Service cost $ — $ — $ — Interest cost 177 212 238 Expected return on assets (212 ) (265 ) (294 ) Net loss amortization — — — Prior service credit amortization — — — Loss (gain) recognized due to settlement 8 (8 ) (62 ) Net periodic benefit cost $ (27 ) $ (61 ) $ (118 ) Restoration Plan: Service cost $ 247 $ 207 $ 334 Interest cost 567 535 668 Net loss amortization 301 186 943 Prior service cost amortization 6 6 7 Net periodic benefit cost $ 1,121 $ 934 $ 1,952 The amounts in accumulated other comprehensive income (loss) that are expected to be recognized as components of net periodic benefit cost during 2018 are as follows (in thousands): Defined Benefit Pension Plan Defined Restoration Net loss $ 1,536 $ — $ 364 Prior service (credit) cost (14 ) — 6 1,522 — 370 Deferred tax benefit (320 ) — (78 ) Accumulated other comprehensive loss, net of tax $ 1,202 $ — $ 292 The Plan and Acquired Plan assets, which consist primarily of marketable equity and debt instruments, are valued using market quotations in active markets for identical assets, market quotations for similar assets in active or non-active markets or the net asset value (NAV) provided by the plan administrator. The Plans’ obligations and the annual pension expense are determined by independent actuaries and through the use of a number of assumptions. Key assumptions in measuring the Plans’ obligations include the discount rate, the rate of salary increases and the estimated future return on plan assets. In determining the discount rate, we utilized a cash flow matching analysis to determine a range of appropriate discount rates for the defined benefit pension plan and restoration plan. In developing the cash flow matching analysis, we had our actuaries construct a portfolio of high quality noncallable bonds to match as closely as possible the timing of future benefit payments of the plans at December 31, 2017 . We utilized a bond selection-settlement approach that selects a portfolio of bonds from a universe of high quality corporate bonds rated Aa by at least half of the rating agencies available. Based on the results of this cash flow matching analysis, we were able to determine an appropriate discount rate. Salary increase assumptions are based upon historical experience and anticipated future management actions. The expected long-term rate of return assumption reflects the average return expected based on the investment strategies and asset allocation of the assets invested to provide for the Plans’ liabilities. We considered broad equity and bond indices, long-term return projections, and actual long-term historical Plan performance when evaluating the expected long-term rate of return assumption. The assumptions used to determine the benefit obligation were as follows: December 31, 2017 December 31, 2016 Defined Benefit Defined Restoration Defined Defined Restoration Discount rate 3.71 % 3.71 % 3.71 % 4.23 % 4.23 % 4.23 % Compensation increase rate 3.50 % — 3.50 % 3.50 % — 3.50 % The assumptions used to determine net periodic pension cost and postretirement benefit cost were as follows: Year ended December 31, 2017 2016 2015 Defined Benefit Pension Plan: Discount rate 4.23 % 4.56 % 4.14 % Expected long-term rate of return on plan assets 7.25 % 7.25 % 7.25 % Compensation increase rate 3.50 % 3.50 % 3.50 % Defined Benefit Pension Plan Acquired Discount rate 4.23 % 4.56 % 4.14 % Expected long-term rate of return on plan assets 7.25 % 7.25 % 7.25 % Compensation increase rate — — — Restoration Plan: Discount rate 4.23 % 4.56 % 4.14 % Compensation increase rate 3.50 % 3.50 % 3.50 % Material changes in pension benefit costs may occur in the future due to changes in these assumptions. Future annual amounts could be impacted by changes in the number of SSB Plan participants, changes in the level of benefits provided, changes in the discount rates, changes in the expected long-term rate of return, changes in the level of contributions to the Plan and other factors. The major categories of assets in our Plan and the Acquired Plan are presented in the following table (in thousands). Assets are segregated by the level of the valuation inputs within the fair value hierarchy established by ASC Topic 820 “Fair Value Measurements and Disclosures,” utilized to measure fair value (see “Note 13 – Fair Value Measurement”). Our Restoration Plan is unfunded. December 31, 2017 December 31, 2016 Defined Defined Defined Defined Level 1: Cash $ 423 $ — $ 484 $ — Equity Securities: U.S. large cap (1) 6,198 — 27,383 — U.S. mid cap (2) 21,379 — 8,533 — U.S. small cap (3) 10,706 — 9,851 — Fixed Income Securities: International developed (4) 8,601 — 2,663 — International emerging (2) 4,308 — 1,246 — Level 2: Cash Equivalents 13,256 — 13,152 — Equity Securities: U.S. large cap (1) — 1,440 — 1,082 U.S. mid cap (2) — 167 — 125 U.S. small cap (3) — 84 — 66 International (5) — 712 — 427 Fixed Income Securities: Corporate bonds (6) 1,118 378 1,130 304 U.S. government agencies (6) 19,303 — 13,248 — Municipal bonds (6) 5,595 — 7,211 — U.S. agency mortgage-backed securities (7) 346 — 392 — Asset-backed securities (8) — 717 — 590 Real estate (9) — 241 — 180 Balanced Asset Allocation (10) — 81 — 60 Other (11) — 211 — 159 Total fair value of plan assets $ 91,233 $ 4,031 $ 85,293 $ 2,993 (1) For the defined benefit pension plan, this category is comprised of individual securities that are actively managed and a broadly diversified “passive” mutual fund. The Acquired Plan assets in this category consist of pooled separate accounts invested in mutual funds and domestic stocks. (2) For the defined benefit pension plan, this category is comprised of broadly diversified “passive” mutual funds. The Acquired Plan assets in this category consist of pooled separate accounts invested in mutual funds and domestic stocks. (3) For the defined benefit pension plan, this category is comprised of broadly diversified “passive” mutual funds and shares of Southside Bancshares stock that is owned in the Plan. The Acquired Plan assets in this category consist of pooled separate accounts invested in mutual funds and domestic stocks. (4) This category is comprised of individual securities that are actively managed and a broadly diversified “passive” mutual fund. (5) This category is comprised of pooled separate accounts invested in mutual funds and international stocks. (6) For the defined benefit pension plan, this category is comprised of individual investment grade securities that are generally held to maturity in the Plan. The Acquired Plan assets in this category consist of pooled separate accounts invested in investment grade and below investment grade bonds. (7) This category is comprised of individual securities that are generally not held to maturity. (8) This category is mainly comprised of a pooled separate account invested in asset backed securities, residential mortgage backed securities, commercial mortgage backed securities and corporate bonds. (9) This category is comprised of a pooled separate account invested in commercial real estate and includes mortgage loans which are backed by the associated properties. (10) This category is comprised of a pooled separate account invested in a single mutual fund invested in a combination of fixed income and equity investment options. (11) This category is comprised a pooled separate account invested in a broad range of instruments including, but not limited to, equities, bonds, currencies, convertible securities and derivatives such as futures, options, swaps and forwards. We did not have any plan assets with Level 3 input fair value measurements at December 31, 2017 or 2016 . Due to asset allocation model changes, there were transfers between Level 1 and Level 2 during the year ended December 31, 2016 . There were no transfer during the year ended December 31, 2017 . Our overall investment strategy is to realize long-term growth of the Plan within acceptable risk parameters, while funding benefit payments from dividend and interest income, to the extent possible. The target allocations for plan assets are 55.0% equities, 44.5% fixed income and 0.5% cash equivalents. Equity securities are diversified among U.S. and international (both developed and emerging), large, mid and small caps, value and growth securities and real estate investment trusts (“REITs”). The investment objective of equity funds is long-term capital appreciation with current income. Fixed income securities include government agencies, CDs, corporate bonds, municipal bonds, and MBS. The investment objective of fixed income funds is to maximize investment return while preserving investment principal. Mutual funds are primarily used because of the superior diversification they provide. As of December 31, 2017 , expected future benefit payments related to our defined benefit pension plan, defined benefit pension plan acquired and restoration plan were as follows (in thousands): Defined Benefit Pension Plan Defined Benefit Restoration 2018 $ 3,758 $ 60 $ 693 2019 3,964 60 746 2020 4,079 235 805 2021 4,204 125 927 2022 4,393 91 983 2023 through 2027 24,456 528 4,880 $ 44,854 $ 1,099 $ 9,034 We do no t expect to make additional contributions to the Plan, the Acquired Plan, or the restoration plan in 2018 . Share-based Incentive Plans 2017 Incentive Plan On May 10, 2017, our shareholders approved the Southside Bancshares, Inc. 2017 Incentive Plan (the “2017 Incentive Plan”), which is a stock-based incentive compensation plan. A total of 2,460,000 shares of our common stock were reserved and available for issuance pursuant to awards granted under the 2017 Incentive Plan. This amount includes a number of additional shares (not to exceed 410,000 ) underlying awards outstanding as of May 10, 2017 under the Company’s 2009 Incentive Plan that thereafter terminate or expire unexercised, or are cancelled, forfeited or lapse for any reason. Under the 2017 Incentive Plan, we are authorized to grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, and qualified performance-based awards or any combination thereof to selected employees, officers, directors and consultants of the Company and its affiliates. As of December 31, 2017 , there were 2,074,724 shares remaining available for grant for future awards. All share data for all periods presented has been adjusted to give retroactive recognition to stock dividends unless otherwise indicated. Reference to incentive plans refers to the 2017 Incentive Plan and predecessor incentive plans. As of December 31, 2017 , 2016 and 2015 , there were 366,292 , 599,498 and 560,464 unvested awards outstanding, respectively. For the years ended December 31, 2017 , 2016 and 2015 , there was $1.8 million , $1.5 million and $1.4 million of share-based compensation expense related to the incentive plans, respectively, and $635,000 , $539,000 and $488,000 of income tax benefit related to the stock compensation expense, respectively. As of December 31, 2017 , 2016 and 2015 , there was $3.8 million , $5.6 million and $4.0 million of unrecognized compensation cost related to the incentive plans, respectively. The remaining cost at December 31, 2017 is expected to be recognized over a weighted-average period of 2.54 years . The nonqualified stock options (“NQSOs”) have contractual terms of 10 years and vest in equal annual installments over either a three - or four -year period. The fair value of each restricted stock units (“RSUs”) is the ending stock price on the date of grant. The RSUs vest in equal annual installments over a one - to four -year period. Each award is evidenced by an award agreement that specifies the option price, if applicable, the duration of the award, the number of shares to which the award pertains, and such other provisions as the Board determines. Historically, shares issued in connection with stock compensation awards have been issued from available authorized shares. Beginning in the second quarter of 2017, shares were issued from available treasury shares. Shares issued in connection with stock compensation awards along with other related information are presented in the following table without the retroactive recognition of stock dividends (in thousands, except share amounts): Years Ended 2017 2016 2015 New shares issued from available authorized shares 48,311 108,225 28,486 New shares issued from available treasury shares 111,045 — — Total 159,356 108,225 28,486 Proceeds from stock option exercises $ 2,692 $ 1,663 $ 235 The estimated weighted-average grant-date fair value per option and the underlying Black-Scholes option-pricing model assumptions are summarized in the following table for years in which we granted NQSOs pursuant to the incentive plans: Years Ended December 31, 2017 2016 2015 Weighted-average grant date fair value per option — $7.18 $6.29 Weighted-average assumptions: Risk-free interest rates — 1.79% 2.01% Expected dividend yield — 2.69% 3.24% Expected volatility factors of the market price of Southside Bancshares common stock — 27.02% 30.91% Expected option life (in years) — 6.2 6.3 A combined summary of activity in our share-based plans as of December 31, 2017 is presented below: Restricted Stock Units Outstanding Stock Options Outstanding Number of Shares Weighted- Average Grant-Date Fair Value Number of Shares Weighted- Average Exercise Price Weighted- Average Grant-Date Fair Value Balance, January 1, 2017 100,923 $ 30.70 878,587 $ 25.28 $ 6.08 Granted 20,536 34.15 — — — Stock options exercised — — (134,231 ) 20.06 5.40 Stock awards vested (29,853 ) 29.38 — — — Forfeited (13,353 ) 31.13 (50,245 ) 28.94 6.32 Canceled/expired — — (3,799 ) 25.71 6.08 Balance, December 31, 2017 78,253 $ 32.04 690,312 $ 26.02 $ 6.19 Other information regarding options outstanding and exercisable as of December 31, 2017 is as follows: Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted- Weighted- Number Weighted- $ 14.67 - 20.00 135,946 $ 15.86 4.08 135,946 $ 15.86 20.01 - 25.00 148,184 22.93 6.41 106,826 23.00 25.01 - 30.00 259,242 26.73 7.41 119,322 26.63 30.01 - 35.00 — — — — — 35.01 - 37.28 146,940 37.28 8.84 40,179 37.28 Total 690,312 $ 26.02 6.84 402,273 $ 23.09 The total intrinsic value of outstanding in-the-money stock options and outstanding in-the-money exercisable stock options was $5.8 million and $4.4 million at December 31, 2017 , respectively. The weighted-average remaining contractual life of options exercisable at December 31, 2017 was 5.94 years . The total intrinsic value of stock options exercised during the years ended December 31, 2017 , 2016 and 2015 was $1.8 million , $1.3 million and $119,000 , respectively. Due to adoption of ASU 2016-09 “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” during 2017 , there was no tax benefit realized for the deductions related to stock awards for the year ended December 31, 2017 . However, prior to adoption of the ASU, the tax benefit realized for the deductions related to stock awards was $332,000 and $75,000 for the years ended December 31, 2016 and 2015 , respectively. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES INSTRUMENTS AND HEDGING ACTIVITIES DISCLOSURE | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES Our hedging policy allows the use of interest rate derivative instruments to manage our exposure to interest rate risk or hedge specified assets and liabilities. These instruments may include interest rate swaps and interest rate caps and floors. All derivative instruments are carried on the balance sheet at their estimated fair value and are recorded in other assets or other liabilities, as appropriate. Derivative instruments may be designated as cash flow hedges of variable rate assets or liabilities, or as cash flow hedges of forecasted transactions. Gains and losses on derivative instruments designated as cash flow hedges are recorded in accumulated other comprehensive income to the extent that they are effective. The amount recorded in other comprehensive income is reclassified to earnings in the same periods that the hedged cash flows impact earnings. The ineffective portion of changes in fair value is reported in current earnings. From time to time, we enter into certain interest rate swap contracts on specific variable-rate advance agreements with the FHLB. These interest rate swap contracts were designated as hedging instruments in cash flow hedges under ASC Topic 815. The objective of the interest rate swap contracts is to manage the expected future cash flows on $240.0 million of variable-rate advance agreements with the FHLB. The cash flows from the swap are expected to be effective in hedging the variability in future cash flows attributable to fluctuations in the underlying LIBOR interest rate. In accordance with ASC Topic 815, if a hedging item is terminated prior to maturity for a cash settlement, the existing gain or loss within accumulated other comprehensive income will continue to be reclassified into earnings during the period or periods in which the hedged forecasted transaction affects earnings unless it is probable that the forecasted transaction will not occur by the end of the originally specified time period. If the forecasted transaction is deemed probable to not occur, the derivative gain or loss reported in accumulated other comprehensive income shall be reclassified into earnings immediately. During the first quarter of 2017, we terminated two interest rate swap contracts designated as cash flow hedges. At the time of termination, we determined that the underlying hedged forecasted transactions were still probable of occurring. The existing gain in accumulated other comprehensive income will be reclassified into earnings in the same periods the hedged forecasted transaction affects earnings. At December 31, 2017 , net derivative assets included $7.9 million of cash collateral received from counterparties under master netting agreements and net derivative liabilities included $520,000 of cash collateral held by a counterparty subject to a master netting agreement. At December 31, 2017 , we had $30,000 of cash collateral receivable that was not offset against derivative liabilities. From time to time, we may enter into certain interest rate swaps, cap, and floor contracts that are not designated as hedging instruments. These interest rate derivative contracts relate to transactions in which we enter into an interest rate swap, cap, or floor with a customer while concurrently entering into an offsetting interest rate swap, cap, or floor with a third-party financial institution. We agree to pay interest to the customer on a notional amount at a variable rate and receive interest from the customer on a similar notional amount at a fixed interest rate. At the same time, we agree to pay a third-party financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. These interest rate derivative contracts allow our customers to effectively convert a variable rate loan to a fixed rate loan. The changes in the fair value of the underlying derivative contracts primarily offset each other and do not significantly impact our results of operations. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings during the period of change. We recognized swap fee income associated with these derivative contracts immediately based upon the difference in the bid/ask spread of the underlying transactions with the customer and the third-party financial institution. The swap fee income is included in other noninterest income in our consolidated statements of income. The notional amounts of the derivative instruments represent the contractual cash flows pertaining to the underlying agreements. These amounts are not exchanged and are not reflected in the consolidated balance sheets. The fair value of the interest rate swaps are presented at net in other assets and other liabilities when a right of offset exists, based on transactions with a single counterparty that are subject to a legally enforceable master netting agreement. The following tables present the notional and estimated fair value amount of derivative positions outstanding (in thousands): December 31, 2017 December 31, 2016 Estimated Fair Value Estimated Fair Value Notional Amount (1) Asset Derivative Liability Derivative Notional (1) Asset Derivative Liability Derivative Derivatives designated as hedging instruments Interest rate contracts: Swaps-Cash Flow Hedge-Financial institution counterparties $ 240,000 $ 7,922 $ 22 $ 250,000 $ 7,069 $ — Derivatives designated as non-hedging instruments Interest rate contracts: Swaps-Financial institution counterparties 67,220 92 612 2,182 85 — Swaps-Customer counterparties 67,220 612 92 2,182 — 85 Gross derivatives 8,626 726 7,154 85 Offsetting derivative assets/liabilities (114 ) (114 ) — — Cash collateral received/posted (7,900 ) (520 ) (7,154 ) — Net derivatives included in the consolidated balance sheets (2) $ 612 $ 92 $ — $ 85 (1) Notional amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk, and are not reflected in the consolidated balance sheets. (2) Net derivative assets are included in “other assets” and net derivative liabilities are included in “other liabilities” on the consolidated balance sheets. Included in the fair value of net derivative assets and net derivative liabilities are credit valuation adjustments reflecting counterparty credit risk and our credit risk. We had net credit exposure of $30,000 related to interest rate swaps with financial institutions and $612,000 related to interest rate swaps with customers at December 31, 2017 . The credit risk associated with customer transactions is partially mitigated as these transactions are generally secured by the non-cash collateral securing the underlying transaction being hedged. We had no credit exposure related to interest rate swaps with financial or customer counterparties at December 31, 2016 . The summarized expected weighted average remaining maturity of the notional amount of interest rate swaps and the weighted average interest rates associated with the amounts expected to be received or paid on interest rate swap agreements are presented below (dollars in thousands). Variable rates received on pay fixed swaps are based on one-month or three-month LIBOR rates in effect at December 31, 2017 and December 31, 2016 : December 31, 2017 December 31, 2016 Weighted Average Weighted Average Notional Amount Remaining Maturity (in years) Receive Rate Pay Rate Notional Amount Remaining Maturity Receive Rate Pay Swaps-Cash Flow Hedge Financial institution counterparties $ 240,000 5.3 1.44 % 1.43 % $ 250,000 5.4 0.68 % 1.31 % Swaps-Non-Hedging Financial institution counterparties 67,220 12.7 1.39 2.37 2,182 9.7 0.62 1.57 Customer counterparties 67,220 12.7 2.37 1.39 2,182 9.7 1.57 0.62 |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact. Valuation techniques including the market approach, the income approach and/or the cost approach are utilized to determine fair value. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Valuation policies and procedures are determined by our investment department and reported to our Asset/Liability Committee (“ALCO”) for review. An entity must consider all aspects of nonperforming risk, including the entity’s own credit standing, when measuring fair value of a liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. A fair value hierarchy for valuation inputs gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. Level 3 assets recorded at fair value on a nonrecurring basis at December 31, 2017 and 2016 , included loans for which a specific allowance was established based on the fair value of collateral and commercial real estate for which fair value of the properties was less than the cost basis. For both asset classes, the unobservable inputs were the additional adjustments applied by management to the appraised values to reflect such factors as non-current appraisals and revisions to estimated time to sell. These adjustments are determined based on qualitative judgments made by management on a case-by-case basis and are not quantifiable inputs, although they are used in the determination of fair value. A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. Certain financial assets are measured at fair value in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of fair value accounting or write-downs of individual assets. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with our monthly and/or quarterly valuation process. There were no transfers between Level 1 and Level 2 during the year ended December 31, 2017 . Securities Available for Sale – U.S. Treasury securities and other equity securities are reported at fair value utilizing Level 1 inputs. Other securities classified as available for sale are reported at fair value utilizing Level 2 inputs. For these securities, we obtain fair value measurements from independent pricing services and obtain an understanding of the pricing methodologies used by these independent pricing services. 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, as stated in the pricing methodologies of the independent pricing services. We review and validate the prices supplied by the independent pricing services for reasonableness by comparison to prices obtained from, in most cases, two additional third party sources. For securities where prices are outside a reasonable range, we further review those securities, based on internal ALCO approved procedures, to determine what a reasonable fair value measurement is for that security, given available data. Derivatives – Derivatives are reported at fair value utilizing Level 2 inputs. We obtain fair value measurements from three sources including an independent pricing service and the counterparty to the derivatives designated as hedges. The fair value measurements consider observable data that may include dealer quotes, market spreads, the U.S. Treasury yield curve, live trading levels, trade execution data, credit information and the derivatives’ terms and conditions, among other things. We review the prices supplied by the sources for reasonableness. In addition, we obtain a basic understanding of their underlying pricing methodology. We validate prices supplied by the sources by comparison to one another. Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis, which means that the instruments 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). Financial assets and financial liabilities measured at fair value on a nonrecurring basis included foreclosed assets and impaired loans at December 31, 2017 and 2016 . Foreclosed Assets – Foreclosed assets are initially recorded at fair value less costs to sell. The fair value measurements of foreclosed assets can include Level 2 measurement inputs such as real estate appraisals and comparable real estate sales information, in conjunction with Level 3 measurement inputs such as cash flow projections, qualitative adjustments, and sales cost estimates. As a result, the categorization of foreclosed assets is Level 3 of the fair value hierarchy. In connection with the measurement and initial recognition of certain foreclosed assets, we may recognize charge-offs through the allowance for loan losses. Impaired Loans – Certain impaired loans may be reported at the fair value of the underlying collateral if repayment is expected solely from the collateral. Collateral values are estimated using Level 3 inputs based on customized discounting criteria or appraisals. At December 31, 2017 and 2016 , the impact of loans with specific reserves based on the fair value of the collateral was reflected in our allowance for loan losses. Certain nonfinancial assets and nonfinancial liabilities measured at fair value on a recurring basis include reporting units measured at fair value and tested for goodwill impairment. The following tables summarize assets measured at fair value on a recurring and nonrecurring basis segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands): As of December 31, 2017: Fair Value Measurements at the End of the Reporting Period Using Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring fair value measurements Investment Securities: U.S. Government Agency Debentures $ 108,869 $ — $ 108,869 $ — State and Political Subdivisions 392,664 — 392,664 — Other Stocks and Bonds 5,055 — 5,055 — Other Equity Securities 5,920 5,920 — — Mortgage-backed Securities: (1) Residential 718,029 — 718,029 — Commercial 308,218 — 308,218 — Derivative assets: Interest rate swaps 8,626 — 8,626 — Total asset recurring fair value measurements $ 1,547,381 $ 5,920 $ 1,541,461 $ — Derivative liabilities: Interest rate swaps $ 726 $ — $ 726 $ — Total liability recurring fair value measurements $ 726 $ — $ 726 $ — Nonrecurring fair value measurements Foreclosed assets $ 1,767 $ — $ — $ 1,767 Impaired loans (2) 6,536 — — 6,536 Total asset nonrecurring fair value measurements $ 8,303 $ — $ — $ 8,303 As of December 31, 2016: Fair Value Measurements at the End of the Reporting Period Using Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring fair value measurements Investment Securities: U.S. Treasury $ 70,069 $ 70,069 $ — $ — State and Political Subdivisions 385,197 — 385,197 — Other Stocks and Bonds 6,651 — 6,651 — Other Equity Securities 5,920 5,920 — — Mortgage-backed Securities: (1) Residential 627,508 — 627,508 — Commercial 384,255 — 384,255 — Derivative assets: Interest rate swaps 7,154 — 7,154 — Total asset recurring fair value measurements $ 1,486,754 $ 75,989 $ 1,410,765 $ — Derivative liabilities: Interest rate swaps $ 85 $ — $ 85 $ — Total liability recurring fair value measurements $ 85 $ — $ 85 $ — Nonrecurring fair value measurements Foreclosed assets $ 388 $ — $ — $ 388 Impaired loans (2) 9,693 — — 9,693 Total asset nonrecurring fair value measurements $ 10,081 $ — $ — $ 10,081 (1) All mortgage-backed securities are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. (2) Impaired loans represent collateral-dependent loans with a specific valuation allowance. Losses on these loans represent charge-offs which are netted against the allowance for loan losses. Disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, is required when it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other estimation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Such techniques and assumptions, as they apply to individual categories of our financial instruments, are as follows: Cash and cash equivalents - The carrying amount for cash and cash equivalents is a reasonable estimate of those assets’ fair value. Investment and mortgage - backed securities held to maturity - Fair values for these securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices for similar securities or estimates from independent pricing services. FHLB stock and other investments - The carrying amount of FHLB stock and other investments is a reasonable estimate of the fair value of those assets. Loans receivable - For adjustable rate loans that reprice frequently and with no significant change in credit risk, the carrying amounts are a reasonable estimate of those assets’ fair value. The fair value of fixed rate loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Nonperforming loans are estimated using discounted cash flow analyses or the underlying value of the collateral where applicable. Loans held for sale – The fair value of loans held for sale is determined based on expected proceeds, which are based on sales contracts and commitments. Deposit liabilities - The fair value of demand deposits, savings accounts, and certain money market deposits is the amount on demand at the reporting date, which is the carrying value. Fair values for fixed rate CDs are estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities. Federal funds purchased and repurchase agreements - Federal funds purchased generally have original terms to maturity of one day and repurchase agreements generally have terms of less than one year, and therefore both are considered short-term borrowings. Consequently, their carrying value is a reasonable estimate of fair value. FHLB borrowings - The fair value of these borrowings is estimated by discounting the future cash flows using rates at which borrowings would be made to borrowers with similar credit ratings and for the same remaining maturities. Subordinated notes - The fair value of the subordinated notes is estimated by discounting future cash flows using estimated rates at which long-term debt would be made to borrowers with similar credit ratings and for the remaining maturities. Long-term debt - The fair value of the long-term debt is estimated by discounting future cash flows using estimated rates at which long-term debt would be made to borrowers with similar credit ratings and for the remaining maturities. The following tables present our financial assets, financial liabilities, and unrecognized financial instruments measured on a nonrecurring basis at both their respective carrying amounts and estimated fair value (in thousands): Estimated Fair Value December 31, 2017 Carrying Total Level 1 Level 2 Level 3 Financial Assets: Cash and cash equivalents $ 198,692 $ 198,692 $ 198,692 $ — $ — Investment Securities: Held to maturity, at carrying value 413,632 421,928 — 421,928 — Mortgage-backed Securities: Held to maturity, at carrying value 495,874 499,872 — 499,872 — FHLB stock, at cost, and other investments 61,550 61,550 — 61,550 — Loans, net of allowance for loan losses 3,273,575 3,269,316 — — 3,269,316 Loans held for sale 2,001 2,001 — 2,001 — Financial Liabilities: Deposits $ 4,515,447 $ 4,506,133 $ — $ 4,506,133 $ — Federal funds purchased and repurchase agreements 9,498 9,498 — 9,498 — FHLB borrowings 1,017,361 1,008,292 — 1,008,292 — Subordinated notes, net of unamortized debt issuance costs 98,248 99,665 — 99,665 — Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,241 47,622 — 47,622 — Estimated Fair Value December 31, 2016 Carrying Total Level 1 Level 2 Level 3 Financial Assets: Cash and cash equivalents $ 169,654 $ 169,654 $ 169,654 $ — $ — Investment Securities: Held to maturity, at carrying value 425,810 429,912 — 429,912 — Mortgage-backed Securities: Held to maturity, at carrying value 511,677 514,370 — 514,370 — FHLB stock, at cost, and other investments 66,592 66,592 — 66,592 — Loans, net of allowance for loan losses 2,538,626 2,630,009 — — 2,630,009 Loans held for sale 7,641 7,641 — 7,641 — Financial Liabilities: Deposits $ 3,533,076 $ 3,293,352 $ — $ 3,293,352 $ — Federal funds purchased and repurchase agreements 7,097 7,097 — 7,097 — FHLB borrowings 1,309,646 1,331,517 — 1,331,517 — Subordinated notes, net of unamortized debt issuance costs 98,100 101,627 — 101,627 — Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,236 45,147 — 45,147 — The fair value estimate of financial instruments for which quoted market prices are unavailable is dependent upon the assumptions used. Consequently, those estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Accordingly, the aggregate fair value amounts presented in the above fair value table do not necessarily represent their underlying value. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2017 | |
Regulatory Capital Requirements [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY Cash dividends declared and paid were $1.11 , $1.01 and $1.00 per share for the years ended December 31, 2017 , 2016 and 2015 , respectively. Future dividends will depend on our earnings, financial condition and other factors which the board of directors considers to be relevant. Our dividend policy requires that any cash dividend payments made may not exceed consolidated earnings for that year. On December 6, 2016, we entered into an underwriting agreement, pursuant to which we sold 2,185,000 shares of our common stock at a price of $36.50 per share. We received $76.0 million in net proceeds, after deducting underwriting discounts and costs. These net proceeds were used primarily for general corporate purposes. We 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 our financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Our capital amounts and classification are also subject to qualitative judgments by the regulators regarding components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require us to maintain minimum amounts and ratios (set forth in the table below) of Common Equity Tier 1, Tier 1 and Total Capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 Capital (as defined) to average assets (as defined). At December 31, 2017 , we exceeded all regulatory minimum capital requirements. As of December 31, 2017 , the most recent notification from the FDIC categorized us as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized we must maintain minimum Common Equity Tier 1 risk-based, Tier 1 risk-based, Total risk-based and Tier 1 leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed our category. Actual For Capital Adequacy Purposes To Be Well Capitalized Under Prompt Corrective Actions Provisions Amount Ratio Amount Ratio Amount Ratio As of December 31, 2017: (dollars in thousands) Common Equity Tier 1 (to Risk Weighted Assets) Consolidated $ 570,610 14.65 % $ 175,216 4.50 % N/A N/A Bank Only $ 711,157 18.27 % $ 175,145 4.50 % $ 252,987 6.50 % Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 627,532 16.12 % $ 233,621 6.00 % N/A N/A Bank Only $ 711,157 18.27 % $ 233,527 6.00 % $ 311,369 8.00 % Total Capital (to Risk Weighted Assets) Consolidated $ 748,532 19.22 % $ 311,495 8.00 % N/A N/A Bank Only $ 733,909 18.86 % $ 311,369 8.00 % $ 389,211 10.00 % Tier 1 Capital (to Average Assets) (1) Consolidated $ 627,532 11.16 % $ 224,844 4.00 % N/A N/A Bank Only $ 711,157 12.66 % $ 224,741 4.00 % $ 280,926 5.00 % As of December 31, 2016: Common Equity Tier 1 (to Risk Weighted Assets) Consolidated $ 461,158 14.64 % $ 141,759 4.50 % N/A N/A Bank Only $ 566,423 17.98 % $ 141,734 4.50 % $ 204,726 6.50 % Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 515,831 16.37 % $ 189,013 6.00 % N/A N/A Bank Only $ 566,423 17.98 % $ 188,978 6.00 % $ 251,971 8.00 % Total Capital (to Risk Weighted Assets) Consolidated $ 633,289 20.10 % $ 252,017 8.00 % N/A N/A Bank Only $ 585,781 18.60 % $ 251,971 8.00 % $ 314,964 10.00 % Tier 1 Capital (to Average Assets) (1) Consolidated $ 515,831 9.46 % $ 218,029 4.00 % N/A N/A Bank Only $ 566,423 10.40 % $ 217,892 4.00 % $ 272,365 5.00 % (1) Refers to quarterly average assets as calculated in accordance with policies established by bank regulatory agencies. Our payment of dividends is limited under regulation. The amount that can be paid in any calendar year without prior approval of our regulatory agencies cannot exceed the lesser of net profits (as defined) for that year plus the net profits for the preceding two calendar years, or retained earnings. |
DIVIDEND REINVESTMENT AND COMMO
DIVIDEND REINVESTMENT AND COMMON STOCK REPURCHASE PLAN | 12 Months Ended |
Dec. 31, 2017 | |
Dividend Reinvestment and Common Stock Repurchase Plan [Abstract] | |
DIVIDEND REINVESTMENT AND COMMON STOCK REPURCHASE PLAN | DIVIDEND REINVESTMENT AND COMMON STOCK REPURCHASE PLAN We have a Dividend Reinvestment Plan funded by stock authorized but not yet issued. Proceeds from the sale of the common stock will be used for general corporate purposes and could be directed to our subsidiaries. For the year ended December 31, 2017 , 43,650 shares were sold under this plan at an average price of $33.99 per share, reflective of other trades at the time of each sale. For the year ended December 31, 2016 , 44,575 shares were sold under this plan at an average price of $31.65 per share, reflective of other trades at the time of each sale. Our board continually evaluates the Company’s capital needs and those of Southside Bank and may, at their discretion, initiate, modify or discontinue an authorized stock repurchase plan. During 2016, 443,426 shares of common stock were purchased under an authorized stock repurchase plan at a cost of $10.2 million . There were no purchases of shares of common stock under a stock repurchase plan during 2017 or 2015. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The income tax expense included in the accompanying statements of income consists of the following (in thousands): Years Ended December 31, 2017 2016 2015 Current income tax expense $ 12,607 $ 8,557 $ 10,671 Deferred income tax expense (benefit) 3,514 1,768 (3,392 ) Income tax expense $ 16,121 $ 10,325 $ 7,279 The components of the net deferred tax asset (liability) as of December 31, 2017 and 2016 are summarized below (in thousands): Assets Liabilities Allowance for loan losses $ 4,364 $ Retirement and other benefit plans (2,102 ) Premises and equipment (5,716 ) Core deposit intangible (3,660 ) Unrealized losses on securities available for sale 4,285 Effective hedging derivatives (1,701 ) Fair value adjustment on loans 2,607 Fair value adjustment on time deposits (54 ) Alternative minimum tax credit 6,943 Unfunded status of defined benefit plan 7,018 State business tax credit 544 Stock-based compensation 642 Other (966 ) Gross deferred tax assets (liabilities) 26,403 (14,199 ) Net deferred tax asset at December 31, 2017 $ 12,204 Allowance for loan losses $ 6,269 $ Retirement and other benefit plans (2,707 ) Premises and equipment (5,273 ) Core deposit intangible (1,576 ) Unrealized losses on securities available for sale 12,286 Effective hedging derivatives (2,474 ) Fair value adjustment on loans 1,404 Alternative minimum tax credit 8,776 Unfunded status of defined benefit plan 10,436 State business tax credit 604 Stock-based compensation 995 Other 151 Gross deferred tax assets (liabilities) 40,921 (12,030 ) Net deferred tax asset at December 31, 2016 $ 28,891 A reconciliation of tax at statutory rates and total tax expense is as follows (dollars in thousands): Years Ended December 31, 2017 2016 2015 Amount Percent of Pre-Tax Income Amount Percent of Pre-Tax Income Amount Percent of Pre-Tax Income Statutory tax expense $ 24,652 35.0 % $ 20,886 35.0 % $ 17,946 35.0 % Increase (decrease) in taxes from: Tax rate changes 2,416 3.4 % — — — — Tax exempt interest (10,195 ) (14.5 )% (9,879 ) (16.6 )% (9,975 ) (19.5 )% Bank owned life insurance (885 ) (1.2 )% (915 ) (1.5 )% (914 ) (1.8 )% Share-based compensation (482 ) (0.7 )% — — (75 ) (0.1 )% Acquisition costs 467 0.7 % — — — — State business tax 68 0.1 % 71 0.1 % — — Other, net 80 0.1 % 162 0.3 % 297 0.6 % Income tax expense $ 16,121 22.9 % $ 10,325 17.3 % $ 7,279 14.2 % The Tax Cuts and Jobs Act was enacted on December 22, 2017. The Act reduces the U.S. federal corporate tax rate from 35% to 21%. We remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, we are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of our net deferred tax asset balance was $2.4 million , an increase to the effective tax rate (“ETR”) of 3.4% . The Tax Cuts and Jobs Act repealed the existing Alternative Minimum Tax (“AMT”). As of December 31, 2017 , we had a remaining AMT tax credit of $6.9 million . This existing tax credit carryforward can be used to offset regular future tax liability. Additionally, this AMT credit is refundable in any taxable year after 2017 and before 2022 in an amount equal to 50% of the excess of the minimum tax credit for the taxable year over the amount of the credit allowable for the year against regular tax liability. We expect to realize the remaining AMT tax credit in 2018 to offset tax liability. During the first quarter of 2017, we adopted a new accounting standard that impacted how the income tax effects associated with stock-based compensation are recognized. See “Note 1 - Summary of Significant Accounting and Reporting Policies” for additional information. The adoption of the standard reduced income tax expense by $482,000 and the ETR by 0.7% for the year ended December 31, 2017 . We file income tax returns in the U.S. federal jurisdiction and in certain states. We are no longer subject to U.S. federal income tax examinations by tax authorities for years before 2014 or Texas state tax examinations by tax authorities for years before 2013. No valuation allowance for deferred tax assets was recorded at December 31, 2017 or 2016 as management believes it is more likely than not that all of the deferred tax assets will be realized in future years. Unrecognized tax benefits were not material at December 31, 2017 or 2016 . |
OFF-BALANCE-SHEET ARRANGEMENTS,
OFF-BALANCE-SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
OFF-BALANCE-SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES | OFF-BALANCE-SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES Financial Instruments with Off-Balance-Sheet Risk . In the normal course of business, we are a party to certain financial instruments with off-balance-sheet risk to meet the financing needs of our customers. These off-balance-sheet instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount reflected in the financial statements. The contract or notional amounts of these instruments reflect the extent of involvement and exposure to credit loss that we have in these particular classes of financial instruments. Commitments to extend credit are agreements to lend to a customer provided that the terms established in the contract are met. Commitments generally have fixed expiration dates and may require the payment of fees. Since some commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan commitments to customers and similarly do not necessarily represent future cash obligations. Financial instruments with off-balance-sheet risk were as follows (in thousands): At At Unused commitments: Commitments to extend credit $ 804,715 $ 665,663 Standby letters of credit 14,890 9,075 Total $ 819,605 $ 674,738 We apply the same credit policies in making commitments and standby letters of credit as we do for on-balance-sheet instruments. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary, upon extension of credit is based on management’s credit evaluation of the borrower. Collateral held varies but may include cash or cash equivalents, negotiable instruments, real estate, accounts receivable, inventory, oil, gas and mineral interests, property, plant, and equipment. Lease Commitments . We lease certain branch facilities and office equipment under operating leases. It is expected that certain leases will be renewed, or equipment replaced with new leased equipment, as these leases expire. Future minimum rental commitments due under non-cancelable operating leases at December 31, 2017 were as follows (in thousands): 2018 $ 1,496 2019 1,106 2020 796 2021 480 2022 294 2023 and thereafter 72 $ 4,244 Rent expense for branch facilities was $1.7 million , $3.9 million , and $2.5 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Rent expense for leased equipment was $178,000 , $261,000 , and $297,000 for the years ended December 31, 2017 , 2016 , and 2015 , respectively. We acquired a 202,000 square-foot office building in Fort Worth, Texas upon completion of the Omni acquisition that is used for a branch location and certain bank operations. We occupy approximately 41,000 square feet of the building and lease the remaining space to various tenants. Gross rental income from these leases of $3.1 million , $3.1 million , and $2.8 million was recognized for the years ended December 31, 2017 , 2016 , and 2015 , respectively. At December 31, 2017 , non-cancelable operating leases for the building with future minimum lease payments are as follows (in thousands): 2018 $ 2,929 2019 2,501 2020 2,392 2021 1,474 2022 1,480 2023 and thereafter 5,264 $ 16,040 It is expected that certain leases will be renewed, or equipment replaced with new leased equipment, as these leases expire. Securities . In the normal course of business we buy and sell securities. There were no unsettled trades to purchase securities at December 31, 2017 . As of December 31, 2016 , there were $160,000 of unsettled trades to purchase securities. There were no unsettled trades to sell securities as of December 31, 2017 or 2016 , respectively. Deposits. There were no unsettled issuances of brokered CDs at December 31, 2017 or December 31, 2016 . Litigation . We are involved with various litigation in the normal course of business. Management, after consulting with our legal counsel, believes that any liability resulting from litigation will not have a material effect on our financial position, results of operations or liquidity. |
SIGNIFICANT GROUP CONCENTRATION
SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK | SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK Although we have a diversified loan portfolio, a significant portion of our loans are collateralized by real estate. Repayment of these loans is in part dependent upon the economic conditions in the market area. See “Item 1. Business – Market Area.” Part of the risk associated with real estate loans has been mitigated since 31.6% of this group represents loans collateralized by residential dwellings that are primarily owner occupied . Losses on this type of loan have historically been less than those on speculative properties. Many of the remaining real estate loans are collateralized primarily with non owner-occupied commercial real estate. The MBS we hold consist exclusively of U.S. agency pass-through securities which are either directly or indirectly backed by the full faith and credit of the United States Government or guaranteed by GSEs. The GNMA mortgage-backed securities are backed by the full faith and credit of the United States Government. The Fannie Mae and Freddie Mac U.S. agency GSE guaranteed MBS are not backed by the full faith and credit of the United States government. |
PARENT COMPANY FINANCIAL INFORM
PARENT COMPANY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
PARENT COMPANY FINANCIAL INFORMATION | PARENT COMPANY FINANCIAL INFORMATION Condensed financial information for Southside Bancshares, Inc. (parent company only) was as follows (in thousands, except share amounts): CONDENSED BALANCE SHEETS December 31, 2017 2016 ASSETS Cash and due from banks $ 8,483 $ 42,968 Investment in bank subsidiaries at equity in underlying net assets 894,010 625,046 Investment in nonbank subsidiaries at equity in underlying net assets 1,826 2,554 Other assets 10,350 8,237 Total assets $ 914,669 $ 678,805 LIABILITIES Subordinated notes, net of unamortized debt issuance costs $ 98,248 $ 98,100 Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,241 60,236 Other liabilities 2,040 2,195 Total liabilities 160,529 160,531 SHAREHOLDERS’ EQUITY Common stock ($1.25 par, 40,000,000 shares authorized, 37,802,352 shares issued at December 31, 2017 and 31,455,951 shares issued at December 31, 2016) 47,253 39,320 Paid-in capital 757,439 535,240 Retained earnings 32,851 30,098 Treasury stock, at cost (2,802,019 at December 31, 2017 and 2,913,064 at December 31, 2016) (47,105 ) (47,891 ) Accumulated other comprehensive loss (36,298 ) (38,493 ) Total shareholders’ equity 754,140 518,274 Total liabilities and shareholders’ equity $ 914,669 $ 678,805 CONDENSED STATEMENTS OF INCOME Years Ended December 31, 2017 2016 2015 Income Dividends from subsidiary $ 27,000 $ 30,000 $ 17,600 Interest income 60 51 44 Total income 27,060 30,051 17,644 Expense Interest expense 7,646 3,334 1,455 Other 5,869 3,227 3,193 Total expense 13,515 6,561 4,648 Income before income tax expense 13,545 23,490 12,996 Income tax benefit 4,242 2,278 1,612 Income before equity in undistributed earnings of subsidiaries 17,787 25,768 14,608 Equity in undistributed earnings of subsidiaries 36,525 23,581 29,389 Net income $ 54,312 $ 49,349 $ 43,997 CONDENSED STATEMENTS OF CASH FLOW Years Ended December 31, 2017 2016 2015 OPERATING ACTIVITIES: Net Income $ 54,312 $ 49,349 $ 43,997 Adjustments to reconcile net income to net cash provided by operations: Amortization 153 45 — Equity in undistributed earnings of subsidiaries (36,525 ) (23,581 ) (29,389 ) (Increase) decrease in other assets (2,113 ) (1,035 ) 2,716 (Decrease) increase in other liabilities (155 ) 1,564 (3,709 ) Net cash provided by operating activities 15,672 26,342 13,615 INVESTING ACTIVITIES: Investment in subsidiaries 890 (126,000 ) (10 ) Net cash paid for acquisition (22,801 ) — — Net cash used in investing activities (21,911 ) (126,000 ) (10 ) FINANCING ACTIVITIES: Net proceeds from issuance of subordinated long-term debt — 98,060 — Purchase of common stock — (10,199 ) — Proceeds from issuance of common stock 3,953 78,962 1,536 Dividends paid (32,199 ) (25,963 ) (25,071 ) Net cash (used in) provided by financing activities (28,246 ) 140,860 (23,535 ) Net (decrease) increase in cash and cash equivalents (34,485 ) 41,202 (9,930 ) Cash and cash equivalents at beginning of period 42,968 1,766 11,696 Cash and cash equivalents at end of period $ 8,483 $ 42,968 $ 1,766 |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION OF REGISTRANT | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL INFORMATION OF REGISTRANT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | QUARTERLY FINANCIAL INFORMATION OF REGISTRANT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share amounts) 2017 Fourth Third Second First Interest income $ 50,104 $ 46,473 $ 46,009 $ 44,888 Interest expense 11,798 11,513 10,585 9,608 Net interest income 38,306 34,960 35,424 35,280 Provision for loan losses 1,271 960 1,346 1,098 Net (loss) gain on sale of securities available for sale (249 ) 627 (75 ) 322 Noninterest income excluding net securities gains 9,348 8,781 9,368 9,351 Noninterest expense 29,933 25,007 25,537 25,858 Income before income tax expense 16,201 18,401 17,834 17,997 Income tax expense 5,870 3,890 3,353 3,008 Net income 10,331 14,511 14,481 14,989 Earnings per common share Basic $ 0.33 $ 0.49 $ 0.49 $ 0.51 Diluted $ 0.33 $ 0.49 $ 0.49 $ 0.51 2016 Fourth Third Second First Interest income $ 43,680 $ 41,132 $ 41,089 $ 43,012 Interest expense 9,039 7,202 6,711 6,396 Net interest income 34,641 33,930 34,378 36,616 Provision for loan losses 2,065 1,631 3,768 2,316 Net (loss) gain on sale of securities available for sale (2,676 ) 2,343 728 2,441 Noninterest income excluding net securities gains 9,389 9,389 8,642 9,155 Noninterest expense 25,877 28,425 25,813 29,407 Income before income tax expense 13,412 15,606 14,167 16,489 Income tax expense 1,839 2,741 2,772 2,973 Net income 11,573 12,865 11,395 13,516 Earnings per common share Basic $ 0.42 $ 0.48 $ 0.42 $ 0.50 Diluted $ 0.42 $ 0.48 $ 0.42 $ 0.50 |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation . The consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of Southside Bancshares, Inc. (the “Company”), and its wholly-owned subsidiaries, Southside Bank (“Southside Bank” or “the Bank”), SFG Finance, LLC (formerly Southside Financial Group, LLC) which was a wholly-owned subsidiary of the Bank and was dissolved in April 2015, and the nonbank subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. “Omni” refers to OmniAmerican Bancorp, Inc., a bank holding company acquired by Southside on December 17, 2014. On November 30, 2017, we acquired Diboll State Bancshares, Inc., a Texas corporation (“Diboll”) and the holding company for First Bank & Trust East Texas, a Texas banking association based in Diboll, Texas. See “Note 2 - Acquisition” in the accompanying notes to consolidated financial statements included elsewhere in this report. We determine if we have a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity (“VIE”) under GAAP. Voting interest entities are entities in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities. We consolidate voting interest entities in which we have all, or at least a majority of, the voting interest. As defined in applicable accounting standards, VIEs are entities that lack one or more of the characteristics of a voting interest entity. A controlling financial interest in a VIE is present when an enterprise has both the power to direct the activities of the VIE that most significantly impact the VIEs economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The enterprise with a controlling financial interest, known as the primary beneficiary, consolidates the VIE. |
Use of Estimates | Use of Estimates . In preparing consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. These estimates are subjective in nature and involve matters of judgment. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, assumptions used in the defined benefit plan and the fair values of financial instruments. The status of contingencies are particularly subject to change and significant assumptions used in periodic evaluation of securities for other-than-temporary impairment. Certain prior-period amounts have been reclassified to conform to the current period presentation. |
Segment Information | Segment Information . Operating segments are components of a business about which separate financial information is available and that are evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and assess performance. Our chief operating decision-maker uses consolidated results to make operating and strategic decisions. Therefore, we have determined that our business is conducted in one reportable segment. |
Business Combinations | Business Combinations. Business combinations are accounted for using the acquisition method of accounting. Under this accounting method, the acquired company’s net assets are recorded at fair value on the date of acquisition, and the results of operations of the acquired company are combined with our results from that date forward. Costs related to the acquisition are expensed as incurred. The difference between the purchase price and the fair value of the net assets acquired (including intangible assets with finite lives) is recorded as goodwill. The accounting policy for goodwill and intangible assets is summarized in this note under the heading “Goodwill and Other Intangibles.” Acquired loans (non-impaired and impaired) are initially measured at fair value as of the acquisition date. The fair value estimates for acquired loans are based on the estimate of expected cash flows, both principal and interest and prepayments, discounted at prevailing market interest rates. Credit discounts representing the principal losses expected over the life of the loan are also a component of the initial fair value; therefore, an allowance for loan losses is not recorded at the acquisition date. We evaluate acquired loans for impairment in accordance with the provisions of ASC 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality” (“ASC 310-30”). Acquired loans are considered impaired if there is evidence of credit deterioration since origination and if it is probable at time of acquisition that all contractually required payments will not be collected. Expected cash flows at the acquisition date in excess of the fair value of the loans is referred to as the accretable yield and recorded as interest income over the life of the loans. Acquired impaired loans are not classified as nonaccrual or nonperforming as they are considered to be performing under the provisions of ASC 310-30. Subsequent to the acquisition date, increases in expected cash flows will generally result in a recovery of any previously recorded allowance for loan loss, to the extent applicable, and/or a reclassification from the nonaccretable difference to accretable yield, which will be recognized prospectively. The present value of any decreases in expected cash flows after the acquisition date will generally result in an impairment charge recorded as a provision for loan losses, resulting in an increase to the allowance for loan loss. For acquired non-impaired loans, the difference between the acquisition date fair value and the contractual amounts due at the acquisition date represents the fair value adjustment. Fair value adjustments may be discounts (or premiums) to a loan’s cost basis and are accreted (or amortized) to interest income over the loan’s remaining contractual life using the level yield method. |
Cash Equivalents | Cash Equivalents . Cash equivalents, for purposes of reporting cash flow, include cash, amounts due from banks and federal funds sold that have an initial maturity of less than 90 days. We maintain deposits with other institutions in amounts that exceed federal deposit insurance coverage. Management regularly evaluates the credit risk associated with the counterparties to these transactions and believes that we are not exposed to any significant credit risks on cash and cash equivalents. |
Basic and Diluted Earnings per Common Share | Basic and Diluted Earnings per Common Share . Basic earnings per common share is based on net income divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share include the dilutive effect of stock options granted using the treasury stock method. |
Comprehensive Income | Comprehensive Income . Comprehensive income includes all changes in shareholders’ equity during a period, except those resulting from transactions with shareholders. Besides net income, other components of comprehensive income include the after tax effect of changes in the fair value of securities available for sale, changes in the net unrealized loss on securities transferred to held to maturity, changes in the accumulated gain or loss on effective cash flow hedging instruments, changes in the funded status of defined benefit retirement plans and the noncredit portion of other-than-temporary impairment. |
Loans | Loans . All loans are stated at principal outstanding net of unearned discount and other deferred expenses or fees. Interest income on loans is recognized using the level yield method or simple interest method. Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported at their outstanding principal adjusted for any charge-offs, the allowance for loan losses, and any unamortized deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans. A loan is considered impaired, based on current information and events, if it is probable that we will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Substantially all of our impaired loans are collateral-dependent, and as such, are measured for impairment based on the fair value of the collateral. |
Loans Held For Sale | Loans Held For Sale . Loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value, as determined by aggregate outstanding commitments from investors or current investor yield requirements. Net unrealized losses are recognized through a valuation allowance by charges to income. Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the carrying value of the related mortgage loans sold. |
Loan Fees | Loan Fees . We treat loan fees, net of direct costs, as an adjustment to the yield of the related loan over its term. |
Allowance for Loan Losses | Allowance for Loan Losses . An allowance for loan losses is provided through charges to income in the form of a provision for loan losses. Loans which management believes are uncollectible are charged against this account with subsequent recoveries, if any, credited to the account. The amount of the allowance for loan losses is determined by management’s evaluation of the quality and inherent risks in the loan portfolio, economic conditions and other factors which warrant current recognition. |
Nonaccrual Loans | Nonaccrual Loans . A loan is placed on nonaccrual when principal or interest is contractually past due 90 days or more unless, in the determination of management, the principal and interest on the loan are well collateralized and in the process of collection. In addition, a loan is placed on nonaccrual when, in the opinion of management, the future collectability of interest and principal is not expected. When classified as nonaccrual, accrued interest receivable on the loan is reversed and the future accrual of interest is suspended. Payments of contractual interest are recognized as income only to the extent that full recovery of the principal balance of the loan is reasonably certain. |
Other Real Estate Owned | Other Real Estate Owned and Foreclosed Assets . Other Real Estate Owned (“OREO”) includes real estate acquired in full or partial settlement of loan obligations. OREO is initially carried at the fair value of the collateral net of estimated selling costs. Prior to foreclosure, the recorded amount of the loan is written down, if necessary, to the appraised fair value of the real estate to be acquired, less selling costs, by charging the allowance for loan losses. Any subsequent reduction in fair value net of estimated selling costs is charged to noninterest expense. Costs of maintaining and operating foreclosed properties are expensed as incurred and included in other expense in our income statement. Expenditures to complete or improve foreclosed properties are capitalized only if expected to be recovered; otherwise, they are expensed. |
Foreclosed Assets | Other foreclosed assets are held for sale and are initially recorded at fair value less estimated selling costs at the date of foreclosure, by charging the allowance for loan losses. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less costs to sell. Foreclosed assets are included in other assets in the accompanying consolidated balance sheets. Expenses from operations and changes in the valuation allowance are included in noninterest expense. |
Securities | Securities . Available for Sale (“AFS”). Debt and equity securities that will be held for indefinite periods of time, including securities that may be sold in response to changes in market interest or prepayment rates, needs for liquidity and changes in the availability of and the yield of alternative investments are classified as AFS. These assets are carried at fair value with changes recorded in other comprehensive income. Fair value is determined using quoted market prices as of the close of business on the balance sheet date. If quoted market prices are not available, fair values are based on quoted market prices for similar securities or estimates from independent pricing services. Held to Maturity (“HTM”). Debt securities that management has the positive intent and ability to hold until maturity are classified as HTM and are carried at their remaining unpaid principal balance, net of unamortized premiums or unaccreted discounts. Premiums are amortized and discounts are accreted to maturity, or in the case of mortgage-backed securities (“MBS”), over the estimated life of the security, using the level yield interest method. Unrealized gains and losses on AFS securities are excluded from earnings and reported net of tax in AOCI until realized. Declines in the fair value of AFS or HTM securities below their cost that are deemed to be other-than-temporary are reflected in earnings as a realized loss if there is no ability or intent to hold to recovery. If the Company does not intend to sell and will not be required to sell prior to recovery of its amortized cost basis, only the credit component of the impairment is reflected in earnings as a realized loss with the noncredit portion recognized in other comprehensive income. In estimating other-than-temporary impairment losses, we consider (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) our intent and ability to retain our investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. Gains and losses on the sale of securities are recorded in the month of the trade date and are determined using the specific identification method. |
Securities with Limited Marketability | Securities with Limited Marketability. Securities with limited marketability, such as stock in the FHLB, are carried at cost and assessed for other-than-temporary impairment. |
Premises and Equipment | Premises and Equipment . Land is carried at cost. Bank premises and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed on a straight line basis over the estimated useful lives of the related assets. Useful lives are estimated to be 15 to 40 years for premises and 3 to 10 years for equipment. Leasehold improvements are generally depreciated over the lesser of the term of the respective leases or the estimated useful lives of the improvements. Maintenance and repairs are charged to expense as incurred while major improvements and replacements are capitalized. |
Bank Owned Life Insurance | Bank-Owned Life Insurance . The Company has purchased life insurance policies on certain key executives. Bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Changes in the net cash surrender value of the policies, as well as insurance proceeds received are reflected in noninterest income on the consolidated statements of income and are not subject to income taxes. |
Goodwill and Other Intangibles | Goodwill and Other Intangibles . Other intangible assets consist primarily of core deposits and trust relationship intangibles. Intangible assets with definite useful lives are amortized on an accelerated basis over their estimated life. Goodwill and intangible assets that have indefinite useful lives are subject to at least an annual impairment test and more frequently if a triggering event occurs. If any such impairment is determined, a write-down is recorded. |
Repurchase Agreements | Repurchase Agreements . We sell certain securities under agreements to repurchase. The agreements are treated as collateralized financing transactions and the obligations to repurchase securities sold are reflected as a liability in the accompanying consolidated balance sheets. The dollar amount of the securities underlying the agreements remains in the asset account. We determine the type of securities to pledge. Generally we pledge U.S. agency MBS. |
Derivative Financial Instruments and Hedging Activities | Derivative Financial Instruments and Hedging Activities . Derivative financial instruments are carried on the consolidated balance sheets as other assets or other liabilities, as applicable, at estimated fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative financial instrument is determined by whether it has been designated and qualifies as part of a hedging relationship and, further, by the type of hedging relationship. We present derivative financial instruments at fair value in the consolidated balance sheets on a net basis when a right of offset exists, based on transactions with a single counterparty and any cash collateral paid to and/or received from that counterparty for derivative contracts that are subject to legally enforceable master netting arrangements. For derivative instruments that are designated and qualify as cash flow hedges (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item (i.e., the ineffective portion), if any, is recognized in current earnings during the period of change. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings during the period of change. For derivatives designated as hedging instruments at inception, statistical regression analysis is used at inception and for each reporting period thereafter to assess whether the derivative used has been and is expected to be highly effective in offsetting changes in the fair value or cash flows of the hedged item. All components of each derivative instrument’s gain or loss are included in the assessment of hedge effectiveness. Net hedge ineffectiveness is recorded in “other noninterest income” on the consolidated statements of income. |
Terminated Derivative Financial Instruments | Terminated Derivative Financial Instruments . In accordance with ASC Topic 815, if a hedging item is terminated prior to maturity for a cash settlement, the existing gain or loss within AOCI will continue to be reclassified into earnings during the period or periods in which the hedged forecasted transaction affects earnings unless it is probable that the forecasted transaction will not occur by the end of the originally specified time period. If the forecasted transaction is deemed probable to not occur, the derivative gain or loss reported in AOCI shall be reclassified into earnings immediately. During the first quarter of 2017, we terminated two interest rate swap contracts designated as cash flow hedges of forecasted transactions. At the time of termination, we determined that the underlying hedged forecasted transactions were still probable of occurring. These transactions are reevaluated on a monthly basis thereafter, to determine if the hedged forecasted transactions are still probable of occurring. If at a subsequent evaluation, it is determined that the transactions will not occur, any related gains or losses recorded in AOCI are immediately recognized in earnings. The existing gain in AOCI related to the terminated interest rate swap contracts will be reclassified into earnings through straight-line accretion in the same periods the hedged forecasted transaction affects earnings. |
Revenue Recognition | Revenue Recognition. The Company’s revenues include interest income, gains on sales of assets, and fee income. The following summarizes our revenue recognition policies as they relate to certain noninterest income line items in the consolidated statements of income. Service charges on deposit accounts include fees for banking services provided, overdrafts and non-sufficient funds. Revenue is generally recognized in accordance with published deposit account agreements for retail accounts or contractual agreements for commercial accounts. Trust income includes fees and commissions from investment management, administrative and advisory services primarily for individuals, and to a lesser extent, partnerships and corporations. Revenue is recognized on an accrual basis at the time the services are performed and are based on either the market value of the assets managed or the services provided. |
Advertising Costs | Advertising Costs . Advertising costs are expensed as incurred |
Income Taxes | Income Taxes . We file a consolidated federal income tax return. Income tax expense represents the taxes expected to be paid or returned for current year taxes adjusted for the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in income in the period the change occurs. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments . Fair values of financial instruments are estimated using relevant market information and other assumptions. Fair value estimates involve uncertainties and matters of significant judgment. In cases where quoted market prices are not available, fair values are based on estimates using present value or other estimation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. |
Defined Benefit Pension Plan | Defined Benefit Pension Plan . Defined benefit pension plan costs are charged to retirement expense and included in “salaries and employee benefits” on the consolidated statements of income. Defined benefit pension obligations and the annual pension costs are determined by independent actuaries and through the use of a number of assumptions that are reviewed by management. These assumptions include a compensation rate increase, a discount rate used to determine the current benefit obligation and a long-term expected rate of return on plan assets. Net periodic defined benefit pension expense includes service cost, interest cost based on the assumed discount rate, an expected return on plan assets, amortization of prior service cost and amortization of net actuarial gains or losses. Prior service costs include the impact of plan amendments on the liabilities and are amortized over the future service periods of active employees expected to receive benefits under the plan. Actuarial gains and losses result from experience different from that assumed and from changes in assumptions. Amortization of actuarial gains and losses is included as a component of net periodic defined benefit pension cost. |
Share-Based Awards | Share-Based Awards . Share-based compensation transactions are recognized as compensation cost in the income statement based on their fair values on the date of the grant and recorded over the vesting period. |
Loss Contingencies | Loss Contingencies . Loss contingencies, including claims and legal actions arising in the ordinary course of business are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. |
Trust Assets | Trust Assets . Assets of our trust department, other than cash on deposit at Southside Bank, are not included in the accompanying financial statements because they are not our assets. |
Accounting Pronouncements | Accounting Pronouncements : In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” as modified by subsequently issued ASUs 2015-14, 2016-08, 2016-10, 2016-12 and 2016-20. This 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. This update affects entities that enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through cumulative adjustment. We adopted the new standard effective January 1, 2018, the effective date of the guidance, using the modified retrospective approach. Our revenue consists of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09, and noninterest income. We have evaluated the impact this guidance will have in relation to our noninterest income derived from contracts with our customers as it relates to deposit services, trust income, brokerage services, and merchant services (included in other noninterest income) which we have determined to be in the scope of ASU 2014-09. As the majority of the Company’s revenues are not subject to the new guidance, the adoption of ASU 2014-09 did not have a material impact on the Company’s consolidated financial position, results of operations, equity or cash flows. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (v) 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 for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (vii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The guidance requires companies to apply the requirements in the year of adoption, through cumulative adjustment while the guidance related to equity securities without readily determinable fair values, should be applied prospectively. We adopted the new standard effective January 1, 2018, the effective date of the guidance. The adoption of this guidance did not have a significant impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires a lessee to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP which requires only capital leases to be recognized on the balance sheet, the new ASU 2016-02 will require both finance (formerly known as “capital”) and operating leases to be recognized on the balance sheet. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The guidance requires companies to apply the requirements in the year of adoption using a modified retrospective approach. We are currently evaluating the impact this guidance will have on our consolidated financial statements, and we anticipate our assessment to be completed during fiscal year 2018. We are currently evaluating all of our lease agreements, implementation options and potential systems to facilitate the implementation. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. ASU 2016-13 also modifies the impairment model for available for sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The guidance requires companies to apply the requirements in the year of adoption through cumulative adjustment with some aspects of the update requiring a prospective transition approach. We are currently evaluating the potential impact of the pending adoption of ASU 2016-13 on our consolidated financial statements. We have developed a project plan and have assigned a project team to complete the analysis needed to implement. The team is currently reviewing both the internal and external system requirements. The Company’s ability to early adopt is contingent upon system requirements and the completion of the analysis. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force).” ASU 2016-15 is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU 2016-15 addresses eight classification issues related to the statement of cash flows: (i) debt prepayment or debt extinguishment, (ii) settlement of zero-coupon bonds, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (vi) distributions received from equity method investees, (vii) beneficial interest in securitizations transactions, and (viii) separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The guidance requires companies to apply the requirements retrospectively to all prior periods presented. If it is impracticable for a company to apply ASU 2016-15 retrospectively, requirements may be applied prospectively as of the earliest date practicable. We adopted the new standard effective January 1, 2018, the effective date of the guidance. The adoption of this guidance did not have a significant impact on our consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” Under current GAAP, the tax effects of intra-entity asset transfers (intercompany sales) are deferred until the transferred asset is sold to a third party or otherwise recovered through use. This is an exception to the principle in ASC Topic 740, Income Taxes, that generally requires comprehensive recognition of current and deferred income taxes. ASU 2016-16 eliminates the exception for all intra-entity sales of assets other than inventory. As a result, a company would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. ASU 2016-16 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The guidance requires companies to apply the requirements on a modified retrospective basis through a cumulative adjustment directly to retained earnings as of the beginning of the period of adoption. We adopted the new standard effective January 1, 2018, the effective date of the guidance. The adoption of this guidance did not have a significant impact on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” ASU 2016-18 is intended to reduce diversity in practice in how restricted cash and restricted cash equivalents are presented in the statement of cash flows. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The guidance requires companies to apply the requirements retrospectively to all prior periods presented. We adopted the new standard effective January 1, 2018, the effective date of the guidance. The adoption of this guidance did not have a significant impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” ASU 2017-01 is intended to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The guidance requires companies to apply the requirements prospectively. We adopted the new standard effective January 1, 2018, the effective date of the guidance. The adoption of this guidance did not have a significant impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 is intended to simplify goodwill impairment testing by eliminating the second step of the analysis which requires the calculation of the implied fair value of goodwill to measure a goodwill impairment charge. The update requires entities to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for any amount by which the carrying amount exceeds the reporting unit’s fair value, to the extent that the loss recognized does not exceed the amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for annual and interim goodwill impairment tests performed in periods beginning after December 15, 2019. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The guidance requires companies to apply the requirements prospectively in the year of adoption. ASU 2017-04 is not expected to have a significant impact on our consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” ASU 2017-07 requires employers to present the service cost component of net periodic postretirement benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in assets. Employers are required to present the other components of the net periodic benefit cost separately from the line item that includes the service cost and outside of any subtotal of operating income, if one is presented. ASU 2017-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The guidance requires companies to apply the requirements retrospectively to all prior periods presented. We adopted the new standard effective January 1, 2018, the effective date of the guidance. The adoption of this guidance did not have a significant impact on our consolidated financial statements. In March 2017, the FASB issued ASU 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” Under current GAAP, premiums on callable debt securities are generally amortized over the contractual life of the security. ASU 2017-08 requires the premium on callable debt securities to be amortized to the earliest call date. If the debt security is not called at the earliest call date, the holder of the debt security would be required to reset the effective yield on the debt security based on the payment terms required by the debt security. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The guidance requires companies to apply the requirements on a modified retrospective basis through a cumulative adjustment directly to retained earnings as of the beginning of the period of adoption. We are currently evaluating the potential impact of the pending adoption of ASU 2017-08 on our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Subtopic 718): Scope of Modification Accounting.” ASU 2017-09 clarifies when changes to terms or conditions of a share-based payment award must be accounted for as a modification. Under the new guidance, an entity will not apply modification accounting to a share-based payment award if all of the following are the same immediately before and after the change: (i) the fair value of the award, (ii) the vesting conditions of the award, and (iii) the classification of the award as either an equity or liability instrument. ASU 2017-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The guidance requires companies to apply the requirements prospectively to awards modified on or after the adoption date. We adopted the new standard effective January 1, 2018, the effective date of the guidance. The adoption of this guidance did not have a significant impact on our consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 (i) expands hedge accounting for nonfinancial and financial risk components and amends measurement methodologies to more closely align hedge accounting with a company’s risk management activities, (ii) decreases the complexity of preparing and understanding hedge results by eliminating the separate measurement and reporting of hedge ineffectiveness, (iii) enhances transparency, comparability, and understanding of hedge results through enhanced disclosures and changing the presentation of hedge results to align the effects of the hedging instrument and the hedged item, and (iv) reduces the cost and complexity of applying hedge accounting by simplifying the manner in which assessments of hedge effectiveness may be performed. The guidance also permits a transition election to reclassify HTM securities to AFS securities if a portion of those securities would qualify to be hedged under the new “last-of-layer” approach. ASU 2017-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The guidance requires companies to apply the requirements to existing hedging relationships on the date of adoption, and the effect of the adoption should be reflected as of the beginning of the fiscal year of adoption. We early-adopted ASU 2017-02 on January 2, 2018, and in conjunction with the adoption, made the transition election to reclassify approximately $743.4 million in book value of securities from HTM to AFS. Transferring these callable assets from HTM to AFS will allow us more flexibility in the future. |
ACQUISITION (Tables)
ACQUISITION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of consideration paid | The components of the consideration paid are shown in the following table (in thousands). Fair value of consideration transferred: Common stock issued $ 200,364 Cash 23,941 Total consideration transferred $ 224,305 |
Schedule of assets acquired and liabilities assumed | he estimated fair values of the assets acquired and liabilities assumed as of the closing date of the transaction adjusted for the subsequent measurement period adjustments are shown in the following table (in thousands). Cash, cash equivalents, and amounts due from banks $ 115,598 Other investments 610 Securities available for sale 234,447 Loans 621,318 Property and equipment 26,256 Other assets 7,052 Core deposit intangible 14,700 Trust relationship intangible 5,400 Goodwill 109,726 Deposits (899,307 ) Deferred tax liability, net (7,802 ) Other liabilities (3,693 ) $ 224,305 |
Schedule of acquired PCI loans | The table below details the PCI loan portfolio at the Diboll acquisition date (in thousands): Purchased Credit Impaired Loans at Acquisition Date Contractually required principal and interest payments $ 59,286 Nonaccretable difference 4,560 Cash flows expected to be collected 54,726 Accretable difference 15,389 Fair value of loans acquired with a deterioration of credit quality $ 39,337 The following table presents the outstanding principal balance and carrying value for PCI loans for the periods presented (in thousands): December 31, 2017 December 31, 2016 Outstanding principal balance $ 52,426 $ 10,612 Carrying amount $ 45,233 $ 9,197 |
Schedule of acquired loans that were considered performing | Acquired loans that were considered performing at the Diboll acquisition date and therefore not subject to ASC 310-30 are shown below (in thousands): Fair Value at Acquisition Date Contractual Amounts Receivable Cash Flows Not Expected to be Collected at Acquisition Date (1) Real Estate Loans: Construction $ 40,122 $ 56,905 $ 330 1-4 Family Residential 82,654 130,167 26,894 Commercial 319,623 484,529 97,431 Commercial Loans 82,083 87,688 1,226 Municipal Loans 7,848 9,998 28 Loans to Individuals 49,651 54,687 1,490 Total Loans $ 581,981 $ 823,974 $ 127,399 (1) Cash flows not expected to be collected relate to estimated credit losses and expected prepayments. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per share on a basic and diluted basis | Earnings per share on a basic and diluted basis has been adjusted to give retroactive recognition to stock dividends and is calculated as follows (in thousands, except per share amounts): Years Ended December 31, 2017 2016 2015 Basic and Diluted Earnings: Net Income $ 54,312 $ 49,349 $ 43,997 Basic weighted-average shares outstanding 29,841 27,118 27,291 Add: Stock awards 206 129 91 Diluted weighted-average shares outstanding 30,047 27,247 27,382 Basic Earnings Per Share: Net Income $ 1.82 $ 1.82 $ 1.61 Diluted Earnings Per Share: Net Income $ 1.81 $ 1.81 $ 1.61 |
ACCUMULATED OTHER COMPREHENSI33
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income (loss) by component | The changes in accumulated other comprehensive loss by component are as follows (in thousands): Year Ended December 31, 2017 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Net Gain (Loss) Total Beginning balance, net of tax $ (23,708 ) $ 4,595 $ (133 ) $ (19,247 ) $ (38,493 ) Other comprehensive (loss) income: Other comprehensive income (loss) before reclassifications 15,217 276 8 (5,218 ) 10,283 Reclassified from accumulated other comprehensive income 630 754 (8 ) 1,613 2,989 Income tax (expense) benefit (5,546 ) (360 ) — 532 (5,374 ) Net current-period other comprehensive income (loss), net of tax 10,301 670 — (3,073 ) 7,898 Reclassification of certain deferred tax effects (1) (2,888 ) 1,134 — (3,949 ) (5,703 ) Ending balance, net of tax $ (16,295 ) $ 6,399 $ (133 ) $ (26,269 ) $ (36,298 ) (1) Amounts reclassified to retained earnings due to early adoption of ASU 2018-02. See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. Year Ended December 31, 2016 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Net Gain (Loss) Total Beginning balance, net of tax $ (239 ) $ — $ (44 ) $ (18,400 ) $ (18,683 ) Other comprehensive (loss) income: Other comprehensive (loss) income before reclassifications (33,699 ) 5,255 (129 ) (3,132 ) (31,705 ) Reclassified from accumulated other comprehensive income (2,407 ) 1,815 (8 ) 1,828 1,228 Income tax benefit (expense) 12,637 (2,475 ) 48 457 10,667 Net current-period other comprehensive (loss) income, net of tax (23,469 ) 4,595 (89 ) (847 ) (19,810 ) Ending balance, net of tax $ (23,708 ) $ 4,595 $ (133 ) $ (19,247 ) $ (38,493 ) Year Ended December 31, 2015 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Net Gain (Loss) Total Beginning balance, net of tax $ 6,238 $ — $ 7 $ (21,815 ) $ (15,570 ) Other comprehensive (loss) income: Other comprehensive (loss) income before reclassifications (7,235 ) — (62 ) 2,806 (4,491 ) Reclassified from accumulated other comprehensive income (2,730 ) — (16 ) 2,448 (298 ) Income tax benefit (expense) 3,488 — 27 (1,839 ) 1,676 Net current-period other comprehensive (loss) income, net of tax (6,477 ) — (51 ) 3,415 (3,113 ) Ending balance, net of tax $ (239 ) $ — $ (44 ) $ (18,400 ) $ (18,683 ) |
Reclassification out of Accumulated Other Comprehensive Income | The reclassifications out of accumulated other comprehensive (loss) income into net income are presented below (in thousands): Year ended December 31, 2017 2016 2015 Unrealized losses on securities transferred to held to maturity: Amortization of unrealized losses (1) $ (1,255 ) $ (429 ) $ (930 ) Tax benefit 439 150 326 Net of tax $ (816 ) $ (279 ) $ (604 ) Unrealized gains and losses on available for sale securities: Realized net gain on sale of securities (2) $ 625 $ 2,836 $ 3,660 Tax expense (219 ) (993 ) (1,281 ) Net of tax $ 406 $ 1,843 $ 2,379 Derivatives: Realized net loss on interest rate swap derivatives (3) $ (828 ) $ (1,815 ) $ — Tax benefit 290 635 — Net of tax $ (538 ) $ (1,180 ) $ — Amortization of unrealized gains on terminated interest rate swap derivatives (3) $ 74 $ — $ — Tax expense (26 ) — — Net of tax $ 48 $ — $ — Amortization of pension plan: Net actuarial loss (4) $ (1,613 ) $ (1,828 ) $ (2,448 ) Prior service credit (4) 8 8 16 Total before tax (1,605 ) (1,820 ) (2,432 ) Tax benefit 562 637 851 Net of tax $ (1,043 ) $ (1,183 ) $ (1,581 ) Total reclassifications for the period, net of tax $ (1,943 ) $ (799 ) $ 194 (1) Included in interest income on the consolidated statements of income. (2) Listed as net gain on sale of securities available for sale on the consolidated statements of income. (3) Included in interest expense for FHLB borrowings on the consolidated statements of income. (4) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (income) presented in “Note 11 - Employee Benefits.” |
SECURITIES (Tables)
SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Amortized cost and estimated fair value of investment and mortgage-backed securities | The amortized cost, gross unrealized gains and losses, carrying value, and estimated fair value of investment and mortgage-backed securities are reflected in the tables below (in thousands): December 31, 2017 Recognized in OCI Not recognized in OCI Amortized Gross Unrealized Gross Unrealized Carrying Gross Gross Unrealized Estimated AVAILABLE FOR SALE Cost Gains Losses Value Gains Losses Fair Value Investment Securities: U.S. Government Agency Debentures $ 108,869 $ — $ — $ 108,869 $ — $ — $ 108,869 State and Political Subdivisions 392,760 3,895 3,991 392,664 — — 392,664 Other Stocks and Bonds 5,024 31 — 5,055 — — 5,055 Other Equity Securities 6,027 — 107 5,920 — — 5,920 Mortgage-backed Securities: (1) Residential 720,930 4,476 7,377 718,029 — — 718,029 Commercial 308,357 761 900 308,218 — — 308,218 Total $ 1,541,967 $ 9,163 $ 12,375 $ 1,538,755 $ — $ — $ 1,538,755 HELD TO MATURITY Investment Securities: State and Political Subdivisions $ 423,376 $ 2,448 $ 12,192 $ 413,632 $ 10,879 $ 2,583 $ 421,928 Mortgage-backed Securities: (1) Residential 134,018 — 4,974 129,044 1,631 239 130,436 Commercial 369,526 899 3,595 366,830 3,812 1,206 369,436 Total $ 926,920 $ 3,347 $ 20,761 $ 909,506 $ 16,322 $ 4,028 $ 921,800 December 31, 2016 Recognized in OCI Not recognized in OCI Amortized Gross Unrealized Gross Unrealized Carrying Gross Gross Unrealized Estimated AVAILABLE FOR SALE Cost Gains Losses Value Gains Losses Fair Value Investment Securities: U.S. Treasury $ 74,016 $ — $ 3,947 $ 70,069 $ — $ — $ 70,069 State and Political Subdivisions 394,050 3,217 12,070 385,197 — — 385,197 Other Stocks and Bonds 6,587 64 — 6,651 — — 6,651 Other Equity Securities 6,039 — 119 5,920 — — 5,920 Mortgage-backed Securities: (1) Residential 630,603 6,434 9,529 627,508 — — 627,508 Commercial 386,109 1,201 3,055 384,255 — — 384,255 Total $ 1,497,404 $ 10,916 $ 28,720 $ 1,479,600 $ — $ — $ 1,479,600 HELD TO MATURITY Investment Securities: State and Political Subdivisions $ 435,080 $ 3,987 $ 13,257 $ 425,810 $ 7,595 $ 3,493 $ 429,912 Mortgage-backed Securities: (1) Residential 142,060 — 5,748 136,312 1,534 950 136,896 Commercial 379,016 1,067 4,718 375,365 4,372 2,263 377,474 Total $ 956,156 $ 5,054 $ 23,723 $ 937,487 $ 13,501 $ 6,706 $ 944,282 (1) All mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. |
Unrealized loss on securities | The following tables represent the estimated fair value and unrealized loss on securities (in thousands): Less Than 12 Months More Than 12 Months Total Estimated Fair Value Unrealized Loss Estimated Unrealized Loss Estimated Unrealized Loss As of December 31, 2017: AVAILABLE FOR SALE Investment Securities: State and Political Subdivisions $ 32,341 $ 121 $ 172,006 $ 3,870 $ 204,347 $ 3,991 Other Equity Securities 5,920 107 — — 5,920 107 Mortgage-backed Securities: Residential 429,742 3,232 102,973 4,145 532,715 7,377 Commercial 146,796 419 13,134 481 159,930 900 Total $ 614,799 $ 3,879 $ 288,113 $ 8,496 $ 902,912 $ 12,375 HELD TO MATURITY Investment Securities: State and Political Subdivisions $ 85,608 $ 807 $ 56,736 $ 1,776 $ 142,344 $ 2,583 Mortgage-backed Securities: Residential 24,707 157 2,736 82 27,443 239 Commercial 136,491 782 13,552 424 150,043 1,206 Total $ 246,806 $ 1,746 $ 73,024 $ 2,282 $ 319,830 $ 4,028 As of December 31, 2016: AVAILABLE FOR SALE Investment Securities: U.S. Treasury $ 70,069 $ 3,947 $ — $ — $ 70,069 $ 3,947 State and Political Subdivisions 264,485 12,069 887 1 265,372 12,070 Other Equity Securities 5,920 119 — — 5,920 119 Mortgage-backed Securities: Residential 369,903 9,491 6,199 38 376,102 9,529 Commercial 245,422 3,055 — — 245,422 3,055 Total $ 955,799 $ 28,681 $ 7,086 $ 39 $ 962,885 $ 28,720 HELD TO MATURITY Investment Securities: State and Political Subdivisions $ 179,939 $ 2,190 $ 29,427 $ 1,303 $ 209,366 $ 3,493 Mortgage-backed Securities: Residential 107,024 950 — — 107,024 950 Commercial 186,854 2,263 — — 186,854 2,263 Total $ 473,817 $ 5,403 $ 29,427 $ 1,303 $ 503,244 $ 6,706 |
Interest income recognized on securities | Interest income recognized on securities for the years presented (in thousands): Years Ended December 31, 2017 2016 2015 U.S. Treasury $ 519 $ 739 $ 1,132 U.S. Government Agency Debentures 178 — 118 State and Political Subdivisions 24,530 22,654 22,474 Other Stocks and Bonds 125 195 213 Other Equity Securities 116 123 118 Mortgage-backed Securities 41,361 37,450 33,661 Total interest income on securities $ 66,829 $ 61,161 $ 57,716 |
Amortized cost and fair value of securities presented by contractual maturity | The amortized cost and estimated fair value of AFS securities and the carrying value and estimated fair values of HTM securities at December 31, 2017 , are presented below by contractual maturity (in thousands). Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. MBS are presented in total by category due to the fact that MBS typically are issued with stated principal amounts, and the securities are backed by pools of mortgages that have loans with varying maturities. The characteristics of the underlying pool of mortgages, such as fixed-rate or adjustable-rate, as well as prepayment risk, are passed on to the security holder. The term of a mortgage-backed pass-through security thus approximates the term of the underlying mortgages and can vary significantly due to prepayments. December 31, 2017 Amortized Cost Estimated Available for sale securities: Investment Securities Due in one year or less $ 32,727 $ 32,777 Due after one year through five years 110,393 110,618 Due after five years through ten years 35,856 36,312 Due after ten years 327,677 326,881 506,653 506,588 Mortgage-backed Securities and Other Equity Securities 1,035,314 1,032,167 Total $ 1,541,967 $ 1,538,755 December 31, 2017 Carrying Value Estimated Held to maturity securities: Investment Securities Due in one year or less $ 30,817 $ 30,500 Due after one year through five years 70,419 71,108 Due after five years through ten years 112,784 114,341 Due after ten years 199,612 205,979 413,632 421,928 Mortgage-backed Securities 495,874 499,872 Total $ 909,506 $ 921,800 |
LOANS AND ALLOWANCE FOR PROBA35
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Classification of loans in the consolidated balance sheets | Loans in the accompanying consolidated balance sheets are classified as follows (in thousands): December 31, 2017 December 31, 2016 Real Estate Loans: Construction $ 475,867 $ 380,175 1-4 Family Residential 805,341 637,239 Commercial 1,265,159 945,978 Commercial Loans 266,422 177,265 Municipal Loans 345,798 298,583 Loans to Individuals 135,769 117,297 Total Loans (1) 3,294,356 2,556,537 Less: Allowance for Loan Losses (2) 20,781 17,911 Net Loans $ 3,273,575 $ 2,538,626 (1) Includes approximately $861.8 million and $372.4 million of acquired loans as of December 31, 2017 and 2016 , respectively. (2) Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. There was no allowance for loan loss recorded on purchase credit impaired (“PCI”) loans as of December 31, 2017 . The allowance for loan loss recorded on PCI loans was $3,000 as of December 31, 2016 . |
Activity in the allowance for loan losses by portfolio segment | The following tables detail activity in the allowance for loan losses by portfolio segment for the periods presented (in thousands): Year Ended December 31, 2017 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period $ 4,147 $ 2,665 $ 7,204 $ 2,263 $ 750 $ 882 $ 17,911 Provision (reversal) for loan losses (1) (437 ) 65 3,604 242 110 1,091 4,675 Loans charged off (35 ) (304 ) — (723 ) — (2,391 ) (3,453 ) Recoveries of loans charged off 1 19 13 312 — 1,303 1,648 Balance at end of period (2) $ 3,676 $ 2,445 $ 10,821 $ 2,094 $ 860 $ 885 $ 20,781 Year Ended December 31, 2016 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans (3) Municipal Loans Loans to Individuals Total Balance at beginning of period $ 4,350 $ 2,595 $ 4,577 $ 6,596 $ 725 $ 893 $ 19,736 Provision (reversal) for loan losses (1) (472 ) (28 ) 2,604 6,397 (224 ) 1,503 9,780 Loans charged off (3) — (43 ) — (11,396 ) — (2,948 ) (14,387 ) Recoveries of loans charged off 269 141 23 666 249 1,434 2,782 Balance at end of period $ 4,147 $ 2,665 $ 7,204 $ 2,263 $ 750 $ 882 $ 17,911 Year Ended December 31, 2015 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period (4) $ 2,456 $ 2,822 $ 3,025 $ 3,279 $ 716 $ 994 $ 13,292 Provision (reversal) for loan losses (1) 1,711 (284 ) 1,467 3,500 258 1,691 8,343 Loans charged off (24 ) (58 ) — (336 ) (249 ) (3,688 ) (4,355 ) Recoveries of loans charged off 207 115 85 153 — 1,896 2,456 Balance at end of period $ 4,350 $ 2,595 $ 4,577 $ 6,596 $ 725 $ 893 $ 19,736 (1) Of the $4.7 million and $9.8 million recorded in provision for loan losses for the years ended December 31, 2017 and 2016 , none related to provision expense on PCI loans. Of the $8.3 million recorded in provision for loan losses for the year ended December 31, 2015 , $629,000 related to provision expense on PCI loans. (2) Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. (3) Of the $11.4 million in commercial charge-offs recorded for the year ended December 31, 2016 , $10.9 million relates to the charge-off of two large commercial borrowing relationships. (4) Loans acquired with the Omni acquisition were measured at fair value on December 17, 2014 with no carryover of allowance for loan loss. |
Balance in the allowance for loan losses by portfolio segment based on impairment method | The following tables present the balance in the allowance for loan losses by portfolio segment based on impairment method(in thousands): As of December 31, 2017 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Ending balance – individually evaluated for impairment (1) $ 12 $ 14 $ 14 $ 252 $ 10 $ 51 $ 353 Ending balance – collectively evaluated for impairment 3,664 2,431 10,807 1,842 850 834 20,428 Balance at end of period $ 3,676 $ 2,445 $ 10,821 $ 2,094 $ 860 $ 885 $ 20,781 As of December 31, 2016 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Ending balance – individually evaluated for impairment (1) $ 13 $ 16 $ 17 $ 923 $ 11 $ 106 $ 1,086 Ending balance – collectively evaluated for impairment 4,134 2,649 7,187 1,340 739 776 16,825 Balance at end of period $ 4,147 $ 2,665 $ 7,204 $ 2,263 $ 750 $ 882 $ 17,911 (1) There was no allowance for loan losses associated with PCI loans as of December 31, 2017 . There was approximately $3,000 of allowance for loan losses associated with PCI loans as of December 31, 2016 |
Balance in recorded investments in loans by portfolio segment based on impairment method | The following tables present the recorded investment in loans by portfolio segment based on impairment method (in thousands): December 31, 2017 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Loans individually evaluated for impairment $ 86 $ 1,581 $ 895 $ 1,429 $ 502 $ 205 $ 4,698 Loans collectively evaluated for impairment 475,505 797,111 1,232,327 259,745 345,296 134,441 3,244,425 Purchased credit impaired loans 276 6,649 31,937 5,248 — 1,123 45,233 Total ending loan balance $ 475,867 $ 805,341 $ 1,265,159 $ 266,422 $ 345,798 $ 135,769 $ 3,294,356 December 31, 2016 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Loans individually evaluated for impairment $ 480 $ 1,693 $ 1,184 $ 5,840 $ 571 $ 241 $ 10,009 Loans collectively evaluated for impairment 379,526 629,893 942,818 170,159 298,012 116,923 2,537,331 Purchased credit impaired loans 169 5,653 1,976 1,266 — 133 9,197 Total ending loan balance $ 380,175 $ 637,239 $ 945,978 $ 177,265 $ 298,583 $ 117,297 $ 2,556,537 |
Summary of loans by credit quality indicators | The following tables set forth credit quality indicators by class of loans for the periods presented (in thousands): December 31, 2017 Pass Pass Watch (1) Special Mention (1) Substandard (1) Doubtful (1) Total Real Estate Loans: Construction $ 471,446 $ 3,329 $ 77 $ 982 $ 33 $ 475,867 1-4 Family Residential 796,639 559 857 6,610 676 805,341 Commercial 1,136,576 26,275 25,301 76,625 382 1,265,159 Commercial Loans 247,430 9,625 3,956 5,203 208 266,422 Municipal Loans 344,366 — 930 502 — 345,798 Loans to Individuals 134,694 20 102 707 246 135,769 Total $ 3,131,151 $ 39,808 $ 31,223 $ 90,629 $ 1,545 $ 3,294,356 December 31, 2016 Pass Pass Watch (1) Special Mention (1) Substandard (1) Doubtful (1) Total Real Estate Loans: Construction $ 374,443 $ 34 $ 571 $ 5,108 $ 19 $ 380,175 1-4 Family Residential 632,937 68 — 3,380 854 637,239 Commercial 885,049 17,739 10,587 32,603 — 945,978 Commercial Loans 158,943 1,187 8,086 9,012 37 177,265 Municipal Loans 297,014 — 998 571 — 298,583 Loans to Individuals 115,952 — 9 629 707 117,297 Total $ 2,464,338 $ 19,028 $ 20,251 $ 51,303 $ 1,617 $ 2,556,537 (1) Includes PCI loans comprised of $362,000 pass watch, $6.0 million special mention, $10.5 million substandard and $925,000 doubtful as of December 31, 2017 . Includes PCI loans comprised of $5,000 pass watch, $511,000 special mention, $1.5 million substandard and $28,000 doubtful as of December 31, 2016 . |
Summary of nonperforming assets for the period | The following table sets forth nonperforming assets for the periods presented (in thousands): At At Nonaccrual loans (1) $ 2,937 $ 8,280 Accruing loans past due more than 90 days (1) 1 6 Restructured loans (2) 5,767 6,431 Other real estate owned 1,613 339 Repossessed assets 154 49 Total Nonperforming Assets $ 10,472 $ 15,105 (1) Excludes PCI loans measured at fair value at acquisition. (2) Includes $2.9 million and $3.1 million in PCI loans restructured as of December 31, 2017 and 2016 , respectively. |
Recorded investment in nonaccrual by class of loans | The following table sets forth the recorded investment in nonaccrual loans by class of loans for the period presented (in thousands). The table excludes PCI loans measured at fair value at acquisition: Nonaccrual Loans December 31, 2017 December 31, 2016 Real Estate Loans: Construction $ 86 $ 105 1-4 Family Residential 1,098 1,067 Commercial 595 808 Commercial Loans 903 5,477 Loans to Individuals 255 823 Total $ 2,937 $ 8,280 |
Summary of impaired loans by class of loans for the period | The following tables set forth impaired loans by class of loans for the periods presented (in thousands). Impaired loans include restructured and nonaccrual loans for which the allowance was measured in accordance with section 310-10 of ASC Topic 310, “Receivables.” There were no impaired loans recorded without an allowance for the years ended December 31, 2017 or 2016 . December 31, 2017 Unpaid Contractual Principal Balance Recorded Investment Related Allowance for Loan Losses Real Estate Loans: Construction $ 91 $ 86 $ 12 1-4 Family Residential 4,141 3,952 14 Commercial 1,353 1,199 14 Commercial Loans 1,665 1,605 252 Municipal Loans 502 502 10 Loans to Individuals 237 205 51 Total (1) $ 7,989 $ 7,549 $ 353 December 31, 2016 Unpaid Contractual Principal Balance Recorded Related Allowance for Loan Losses Real Estate Loans: Construction $ 486 $ 480 $ 13 1-4 Family Residential 4,487 4,264 16 Commercial 1,631 1,574 17 Commercial Loans 6,108 5,941 923 Municipal Loans 571 571 11 Loans to Individuals 277 241 106 Total (1) $ 13,560 $ 13,071 $ 1,086 (1) Includes $2.9 million and $3.1 million of PCI loans that experienced deterioration in credit quality subsequent to the acquisition date as of December 31, 2017 and December 31, 2016 , respectively. |
Aging of recorded investment in past due loans by class of loans | The following tables present the aging of the recorded investment in past due loans by class of loans (in thousands): December 31, 2017 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Past Due Total Past Due Current (1) Total Real Estate Loans: Construction $ 1,302 $ 1,530 $ 68 $ 2,900 $ 472,967 $ 475,867 1-4 Family Residential 8,508 1,574 862 10,944 794,397 805,341 Commercial 1,357 24 5 1,386 1,263,773 1,265,159 Commercial Loans 662 400 333 1,395 265,027 266,422 Municipal Loans 422 — — 422 345,376 345,798 Loans to Individuals 1,526 373 93 1,992 133,777 135,769 Total $ 13,777 $ 3,901 $ 1,361 $ 19,039 $ 3,275,317 $ 3,294,356 December 31, 2016 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Past Due Total Past Due Current (1) Total Real Estate Loans: Construction $ 917 $ 64 $ 86 $ 1,067 $ 379,108 $ 380,175 1-4 Family Residential 6,225 755 600 7,580 629,659 637,239 Commercial 70 154 154 378 945,600 945,978 Commercial Loans 783 300 3,459 4,542 172,723 177,265 Municipal Loans 113 — — 113 298,470 298,583 Loans to Individuals 1,550 320 185 2,055 115,242 117,297 Total $ 9,658 $ 1,593 $ 4,484 $ 15,735 $ 2,540,802 $ 2,556,537 (1) Includes PCI loans measured at fair value at acquisition. |
Average recorded investment and interest income on impaired loans | The following table sets forth average recorded investment and interest income recognized on impaired loans by class of loans for the periods presented (in thousands). The table excludes PCI loans measured at fair value at acquisition that have not experienced further deterioration in credit quality subsequent to the acquisition date: December 31, 2017 December 31, 2016 December 31, 2015 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Real Estate Loans: Construction $ 251 $ — $ 510 $ 22 $ 1,518 $ — 1-4 Family Residential 4,264 197 3,247 169 3,410 61 Commercial 1,338 30 4,490 63 3,323 64 Commercial Loans 2,862 59 13,481 48 13,807 256 Municipal Loans 545 30 612 33 824 37 Loans to Individuals 244 9 257 9 725 4 Total $ 9,504 $ 325 $ 22,597 $ 344 $ 23,607 $ 422 |
Schedule of recorded investment in loans modified | The following tables set forth the recorded balance of loans considered to be TDRs that were restructured and the type of concession during the periods presented (dollars in thousands): Year Ended December 31, 2017 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Contracts Commercial Loans $ 778 $ — $ 241 $ 1,019 4 Loans to Individuals 23 — 52 75 6 Total $ 801 $ — $ 293 $ 1,094 10 Year Ended December 31, 2016 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Contracts Real Estate Loans: Construction $ 375 $ — $ 23 $ 398 2 1-4 Family Residential — 71 2,602 2,673 4 Commercial 500 — — 500 1 Commercial Loans 2,230 — 59 2,289 8 Loans to Individuals 29 — 77 106 8 Total $ 3,134 $ 71 $ 2,761 $ 5,966 23 |
Schedule of acquired PCI loans | The table below details the PCI loan portfolio at the Diboll acquisition date (in thousands): Purchased Credit Impaired Loans at Acquisition Date Contractually required principal and interest payments $ 59,286 Nonaccretable difference 4,560 Cash flows expected to be collected 54,726 Accretable difference 15,389 Fair value of loans acquired with a deterioration of credit quality $ 39,337 The following table presents the outstanding principal balance and carrying value for PCI loans for the periods presented (in thousands): December 31, 2017 December 31, 2016 Outstanding principal balance $ 52,426 $ 10,612 Carrying amount $ 45,233 $ 9,197 |
Schedule of changes in accretable yield for PCI loans | The following table presents the changes in the accretable yield during the periods for PCI loans (in thousands): December 31, 2017 December 31, 2016 Balance at beginning of period $ 2,480 $ 2,493 Additions due to acquisition 15,389 — Reclassifications (to) from nonaccretable discount 1,720 1,796 Accretion (868 ) (1,809 ) Balance at end of period $ 18,721 $ 2,480 |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of premises and equipment | December 31, 2017 December 31, 2016 (in thousands) Premises $ 158,817 $ 127,970 Furniture and equipment 40,565 36,603 199,382 164,573 Less: accumulated depreciation 65,742 58,570 Total $ 133,640 $ 106,003 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deposits [Abstract] | |
Schedule of deposits at year-end | December 31, 2017 December 31, 2016 (in thousands) Noninterest bearing demand deposits: Private accounts $ 995,685 $ 678,279 Public accounts 41,716 25,734 Total noninterest bearing demand deposits 1,037,401 704,013 Interest bearing deposits: Private accounts: Savings deposits 356,857 249,490 Money market demand deposits 443,015 329,426 Platinum money market deposits 308,105 353,381 Interest bearing checking 686,816 212,296 NOW demand deposits 20,142 234,217 Certificates and other time deposits of $250,000 or more 87,195 58,312 Certificates and other time deposits under $250,000 534,220 422,134 Total private accounts 2,436,350 1,859,256 Public accounts: Savings deposits 304 19 Money market demand deposits 19,560 15,126 Platinum money market deposits 360,006 382,017 Interest bearing checking 55,902 12,856 NOW demand deposits 114,401 128,086 Certificates and other time deposits of $250,000 or more 462,941 409,671 Certificates and other time deposits under $250,000 28,582 22,032 Total public accounts 1,041,696 969,807 Total interest bearing deposits 3,478,046 2,829,063 Total deposits $ 4,515,447 $ 3,533,076 |
Schedule of maturities of time deposits | At December 31, 2017 , the scheduled maturities of certificates and other time deposits, including public accounts, were as follows (in thousands): 2018 $ 758,624 2019 229,032 2020 64,215 2021 35,493 2022 20,445 2023 and thereafter 5,129 $ 1,112,938 |
BORROWING ARRANGEMENTS (Tables)
BORROWING ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Information related to borrowings is provided in the table below (dollars in thousands): December 31, 2017 December 31, 2016 Federal funds purchased and repurchase agreements: Balance at end of period $ 9,498 $ 7,097 Average amount outstanding during the period (1) 8,120 6,798 Maximum amount outstanding during the period (2) 9,498 11,516 Weighted average interest rate during the period (3) 0.2 % 0.1 % Interest rate at end of period (4) 0.2 % 0.2 % FHLB borrowings: Balance at end of period $ 1,017,361 $ 1,309,646 Average amount outstanding during the period (1) 1,222,033 1,060,631 Maximum amount outstanding during the period (2) 1,414,453 1,309,646 Weighted average interest rate during the period (3) 1.2 % 1.1 % Interest rate at end of period (4) 1.4 % 0.9 % Subordinated notes, net of unamortized debt issuance costs: Balance at end of period $ 98,248 $ 98,100 Average amount outstanding during the period (1) 98,172 27,860 Maximum amount outstanding during the period (2) 98,248 98,100 Weighted average interest rate during the period (3) 5.7 % 5.8 % Interest rate at end of period (4) 5.5 % 5.5 % Trust preferred subordinated debentures, net of unamortized debt issuance costs: Balance at end of period $ 60,241 $ 60,236 Average amount outstanding during the period (1) 60,238 60,233 Maximum amount outstanding during the period (2) 60,241 60,236 Weighted average interest rate during the period (3) 3.3 % 2.8 % Interest rate at end of period (4) 3.6 % 3.0 % (1) The average amount outstanding during the period was computed by dividing the total daily outstanding principal balances by the number of days in the period. (2) The maximum amount outstanding at any month-end during the period. (3) The weighted average interest rate during the period was computed by dividing the actual interest expense by the average balance outstanding during the period. The weighted average interest rate on the FHLB borrowings include the effect of interest rate swaps. (4) Stated rate. |
Schedule of maturities of borrowings | Maturities of fixed rate obligations based on scheduled repayments at December 31, 2017 are as follows (in thousands): Years Ended December 31, 2018 2019 2020 2021 2022 Thereafter Total Federal funds purchased and repurchase agreements $ 9,498 $ — $ — $ — $ — $ — $ 9,498 FHLB borrowings 863,288 62,330 76,015 11,690 — 4,038 1,017,361 Subordinated notes, net of unamortized debt issuance costs — — — — — 98,248 98,248 Trust preferred subordinated debentures, net of unamortized debt issuance costs — — — — — 60,241 60,241 Total obligations $ 872,786 $ 62,330 $ 76,015 $ 11,690 $ — $ 162,527 $ 1,185,348 |
LONG-TERM OBLIGATIONS (Tables)
LONG-TERM OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt by entity | December 31, 2017 December 31, (in thousands) Subordinated notes: (1) 5.50% Subordinated Notes, net of unamortized debt issuance costs (2) $ 98,248 $ 98,100 Total Subordinated notes 98,248 98,100 Trust preferred subordinated debentures: (3) Southside Statutory Trust III, net of unamortized debt issuance costs (4) 20,549 20,544 Southside Statutory Trust IV 23,196 23,196 Southside Statutory Trust V 12,887 12,887 Magnolia Trust Company I 3,609 3,609 Total Trust preferred subordinated debentures 60,241 60,236 Total Long-term debt $ 158,489 $ 158,336 (1) This debt consists of subordinated notes with a remaining maturity greater than one year that qualify under the risk-based capital guidelines as Tier 2 capital, subject to certain limitations. (2) The unamortized discount and debt issuance costs reflected in the carrying amount of the subordinated notes totaled approximately $1.8 million at December 31, 2017 and $1.9 million at December 31, 2016 . (3) This debt consists of trust preferred securities that qualify under the risk-based capital guidelines as Tier 1 capital, subject to certain limitations. (4) The unamortized debt issuance costs reflected in the carrying amount of the Southside Statutory Trust III junior subordinated debentures totaled $70,000 at December 31, 2017 and $75,000 at December 31, 2016 . |
Schedule of subordinated borrowing | As of December 31, 2017 , the details of the subordinated notes and the trust preferred subordinated debentures are summarized below (dollars in thousands): Date issued Amount issued Fixed or floating rate Interest rate Maturity date 5.50% Subordinated Notes September 19, 2016 $ 100,000 Fixed-to-Floating 5.50% September 30, 2026 Southside Statutory Trust III September 4, 2003 $ 20,619 Floating 3 month LIBOR + 2.94% September 4, 2033 Southside Statutory Trust IV August 8, 2007 $ 23,196 Floating 3 month LIBOR + 1.30% October 30, 2037 Southside Statutory Trust V August 10, 2007 $ 12,887 Floating 3 month LIBOR + 2.25% September 15, 2037 Magnolia Trust Company I (1) October 10, 2007 $ 3,609 Floating 3 month LIBOR + 1.80% November 23, 2035 (1) On October 10, 2007, as part of an acquisition we assumed $3.6 million of floating rate junior subordinated debentures issued in 2005 to Magnolia Trust Company I. |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefits Including Defined Benefit Plans and Share-based Compensation Plans [Abstract] | |
Schedule of changes in projected benefit obligation and fair value of plan assets | Year ended December 31, 2017 2016 2015 Defined Benefit Pension Plan Defined Restoration Plan Defined Benefit Pension Plan Defined Restoration Plan Defined Benefit Pension Plan Defined Restoration Plan (in thousands) Change in Projected Benefit Obligation: Benefit obligation at end of prior year $ 88,071 $ 4,238 $ 12,723 $ 80,040 $ 4,685 $ 12,024 $ 84,050 $ 5,977 $ 13,259 Service cost 1,398 — 247 1,375 — 207 1,838 — 334 Interest cost 3,601 177 567 3,731 212 535 3,410 238 668 Actuarial loss (gain) 5,404 418 1,751 4,978 275 237 (6,777 ) (753 ) (1,968 ) Benefits paid (4,128 ) (43 ) (646 ) (3,632 ) (31 ) (280 ) (2,590 ) (28 ) (269 ) Expenses paid (70 ) (47 ) — (91 ) (39 ) — (67 ) (30 ) — Plan amendments — — — 121 — — — — — Settlements — (351 ) — — (864 ) — — (719 ) — Special and contractual termination benefits — — — 1,549 — — 176 — — Benefit obligation at end of year 94,276 4,392 14,642 88,071 4,238 12,723 80,040 4,685 12,024 Change in Plan Assets: Fair value of plan assets at end of prior year 85,293 2,993 — 76,355 3,740 — 79,730 4,512 — Actual return 8,138 479 — 7,661 187 — (718 ) 5 — Employer contributions 2,000 1,000 646 5,000 — 280 — — 269 Benefits paid (4,128 ) (43 ) (646 ) (3,632 ) (31 ) (280 ) (2,590 ) (28 ) (269 ) Expenses paid (70 ) (47 ) — (91 ) (39 ) — (67 ) (30 ) — Settlements — (351 ) — — (864 ) — — (719 ) — Fair value of plan assets at end of year 91,233 4,031 — 85,293 2,993 — 76,355 3,740 — (Un)Funded status at end of year (3,043 ) (361 ) (14,642 ) (2,778 ) (1,245 ) (12,723 ) (3,685 ) (945 ) (12,024 ) Accrued benefit (liability) asset recognized $ (3,043 ) $ (361 ) $ (14,642 ) $ (2,778 ) $ (1,245 ) $ (12,723 ) $ (3,685 ) $ (945 ) $ (12,024 ) Accumulated benefit obligation at end of year $ 83,802 $ 4,392 $ 13,246 $ 77,639 $ 4,238 $ 11,133 $ 69,737 $ 4,685 $ 10,290 |
Schedule of amounts recognized in other comprehensive income (loss) | Amounts related to our defined benefit pension plans and restoration plan recognized as a component of other comprehensive (loss) income were as follows (in thousands): Year ended December 31, 2017 2016 2015 Defined Defined Restoration Defined Defined Restoration Defined Defined Restoration Recognition of net loss $ 1,312 $ — $ 301 $ 1,642 $ — $ 186 $ 1,505 $ — $ 943 Recognition of prior service (credit) cost (14 ) — 6 (14 ) — 6 (23 ) — 7 Recognition of loss (gain) due to settlement — 8 — — (8 ) — — (62 ) — Net (loss) gain occurring during the year (3,317 ) (150 ) (1,751 ) (2,541 ) (354 ) (237 ) 375 463 1,968 Net prior service cost occurring during the year — — — (121 ) — — — — — (2,019 ) (142 ) (1,444 ) (1,034 ) (362 ) (45 ) 1,857 401 2,918 Deferred tax benefit (expense) 241 30 259 362 127 16 (650 ) (141 ) (1,021 ) Other comprehensive (loss) income, net of tax $ (1,778 ) $ (112 ) $ (1,185 ) $ (672 ) $ (235 ) $ (29 ) $ 1,207 $ 260 $ 1,897 |
Schedule of amounts in accumulated other comprehensive income (loss) recognized in net periodic benefit cost during period | Net amounts recognized in net periodic benefit cost and other comprehensive loss were as follows (in thousands): December 31, 2017 December 31, 2016 Defined Benefit Pension Plan Defined Restoration Plan Defined Defined Restoration Plan Net loss $ 1,312 $ — $ 301 $ 1,642 $ — $ 186 Prior service (credit) cost (14 ) — 6 (14 ) — 6 Loss (gain) recognized due to settlement — 8 — — (8 ) — 1,298 8 307 1,628 (8 ) 192 Deferred tax (expense) benefit (454 ) (2 ) (107 ) (569 ) 3 (67 ) Accumulated other comprehensive income (loss), net of tax $ 844 $ 6 $ 200 $ 1,059 $ (5 ) $ 125 |
Schedule of amounts recognized as a component of accumulated other comprehensive loss | Amounts recognized as a component of accumulated other comprehensive loss were as follows (in thousands): December 31, 2017 December 31, 2016 Defined Defined Restoration Defined Defined Restoration Net (loss) gain $ (28,859 ) $ (102 ) $ (4,317 ) $ (26,855 ) $ 40 $ (2,868 ) Prior service cost (109 ) — (31 ) (96 ) — (38 ) (28,968 ) (102 ) (4,348 ) (26,951 ) 40 (2,906 ) Deferred tax benefit (expense) 9,674 15 1,276 9,433 (14 ) 1,017 Reclassification of certain deferred tax effects (1) (3,591 ) 6 (364 ) — — — Accumulated other comprehensive (loss) income, net of tax $ (22,885 ) $ (81 ) $ (3,436 ) $ (17,518 ) $ 26 $ (1,889 ) (1) Amounts reclassified to retained earnings due to early adoption of ASU 2018-02. See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. |
Schedule of components of net periodic pension cost and postretirement benefit cost | Net periodic pension cost and postretirement benefit cost included the following components (in thousands): Year ended December 31, 2017 2016 2015 Defined Benefit Pension Plan: Service cost $ 1,398 $ 1,375 $ 1,838 Interest cost 3,601 3,731 3,410 Expected return on assets (6,050 ) (5,224 ) (5,684 ) Net loss amortization 1,312 1,642 1,505 Prior service credit amortization (14 ) (14 ) (23 ) Special and contractual termination benefits — 1,549 176 Net periodic benefit cost $ 247 $ 3,059 $ 1,222 Defined Benefit Pension Plan Acquired: Service cost $ — $ — $ — Interest cost 177 212 238 Expected return on assets (212 ) (265 ) (294 ) Net loss amortization — — — Prior service credit amortization — — — Loss (gain) recognized due to settlement 8 (8 ) (62 ) Net periodic benefit cost $ (27 ) $ (61 ) $ (118 ) Restoration Plan: Service cost $ 247 $ 207 $ 334 Interest cost 567 535 668 Net loss amortization 301 186 943 Prior service cost amortization 6 6 7 Net periodic benefit cost $ 1,121 $ 934 $ 1,952 |
Schedule of amounts in accumulated other comprehensive income (loss) that is expected to be recognized as a component of net periodic benefit cost during the next fiscal year | The amounts in accumulated other comprehensive income (loss) that are expected to be recognized as components of net periodic benefit cost during 2018 are as follows (in thousands): Defined Benefit Pension Plan Defined Restoration Net loss $ 1,536 $ — $ 364 Prior service (credit) cost (14 ) — 6 1,522 — 370 Deferred tax benefit (320 ) — (78 ) Accumulated other comprehensive loss, net of tax $ 1,202 $ — $ 292 |
Schedule of assumptions used to determine benefit obligation and net periodic benefit cost | The assumptions used to determine the benefit obligation were as follows: December 31, 2017 December 31, 2016 Defined Benefit Defined Restoration Defined Defined Restoration Discount rate 3.71 % 3.71 % 3.71 % 4.23 % 4.23 % 4.23 % Compensation increase rate 3.50 % — 3.50 % 3.50 % — 3.50 % The assumptions used to determine net periodic pension cost and postretirement benefit cost were as follows: Year ended December 31, 2017 2016 2015 Defined Benefit Pension Plan: Discount rate 4.23 % 4.56 % 4.14 % Expected long-term rate of return on plan assets 7.25 % 7.25 % 7.25 % Compensation increase rate 3.50 % 3.50 % 3.50 % Defined Benefit Pension Plan Acquired Discount rate 4.23 % 4.56 % 4.14 % Expected long-term rate of return on plan assets 7.25 % 7.25 % 7.25 % Compensation increase rate — — — Restoration Plan: Discount rate 4.23 % 4.56 % 4.14 % Compensation increase rate 3.50 % 3.50 % 3.50 % |
Schedule of allocation of plan assets | The major categories of assets in our Plan and the Acquired Plan are presented in the following table (in thousands). Assets are segregated by the level of the valuation inputs within the fair value hierarchy established by ASC Topic 820 “Fair Value Measurements and Disclosures,” utilized to measure fair value (see “Note 13 – Fair Value Measurement”). Our Restoration Plan is unfunded. December 31, 2017 December 31, 2016 Defined Defined Defined Defined Level 1: Cash $ 423 $ — $ 484 $ — Equity Securities: U.S. large cap (1) 6,198 — 27,383 — U.S. mid cap (2) 21,379 — 8,533 — U.S. small cap (3) 10,706 — 9,851 — Fixed Income Securities: International developed (4) 8,601 — 2,663 — International emerging (2) 4,308 — 1,246 — Level 2: Cash Equivalents 13,256 — 13,152 — Equity Securities: U.S. large cap (1) — 1,440 — 1,082 U.S. mid cap (2) — 167 — 125 U.S. small cap (3) — 84 — 66 International (5) — 712 — 427 Fixed Income Securities: Corporate bonds (6) 1,118 378 1,130 304 U.S. government agencies (6) 19,303 — 13,248 — Municipal bonds (6) 5,595 — 7,211 — U.S. agency mortgage-backed securities (7) 346 — 392 — Asset-backed securities (8) — 717 — 590 Real estate (9) — 241 — 180 Balanced Asset Allocation (10) — 81 — 60 Other (11) — 211 — 159 Total fair value of plan assets $ 91,233 $ 4,031 $ 85,293 $ 2,993 (1) For the defined benefit pension plan, this category is comprised of individual securities that are actively managed and a broadly diversified “passive” mutual fund. The Acquired Plan assets in this category consist of pooled separate accounts invested in mutual funds and domestic stocks. (2) For the defined benefit pension plan, this category is comprised of broadly diversified “passive” mutual funds. The Acquired Plan assets in this category consist of pooled separate accounts invested in mutual funds and domestic stocks. (3) For the defined benefit pension plan, this category is comprised of broadly diversified “passive” mutual funds and shares of Southside Bancshares stock that is owned in the Plan. The Acquired Plan assets in this category consist of pooled separate accounts invested in mutual funds and domestic stocks. (4) This category is comprised of individual securities that are actively managed and a broadly diversified “passive” mutual fund. (5) This category is comprised of pooled separate accounts invested in mutual funds and international stocks. (6) For the defined benefit pension plan, this category is comprised of individual investment grade securities that are generally held to maturity in the Plan. The Acquired Plan assets in this category consist of pooled separate accounts invested in investment grade and below investment grade bonds. (7) This category is comprised of individual securities that are generally not held to maturity. (8) This category is mainly comprised of a pooled separate account invested in asset backed securities, residential mortgage backed securities, commercial mortgage backed securities and corporate bonds. (9) This category is comprised of a pooled separate account invested in commercial real estate and includes mortgage loans which are backed by the associated properties. (10) This category is comprised of a pooled separate account invested in a single mutual fund invested in a combination of fixed income and equity investment options. (11) This category is comprised a pooled separate account invested in a broad range of instruments including, but not limited to, equities, bonds, currencies, convertible securities and derivatives such as futures, options, swaps and forwards. |
Schedule of expected future benefit payments related to pension and postretirement plans | As of December 31, 2017 , expected future benefit payments related to our defined benefit pension plan, defined benefit pension plan acquired and restoration plan were as follows (in thousands): Defined Benefit Pension Plan Defined Benefit Restoration 2018 $ 3,758 $ 60 $ 693 2019 3,964 60 746 2020 4,079 235 805 2021 4,204 125 927 2022 4,393 91 983 2023 through 2027 24,456 528 4,880 $ 44,854 $ 1,099 $ 9,034 |
Schedule of shares issued in connection with stock compensation awards | Shares issued in connection with stock compensation awards along with other related information are presented in the following table without the retroactive recognition of stock dividends (in thousands, except share amounts): Years Ended 2017 2016 2015 New shares issued from available authorized shares 48,311 108,225 28,486 New shares issued from available treasury shares 111,045 — — Total 159,356 108,225 28,486 Proceeds from stock option exercises $ 2,692 $ 1,663 $ 235 |
Schedule of stock option valuation assumptions | The estimated weighted-average grant-date fair value per option and the underlying Black-Scholes option-pricing model assumptions are summarized in the following table for years in which we granted NQSOs pursuant to the incentive plans: Years Ended December 31, 2017 2016 2015 Weighted-average grant date fair value per option — $7.18 $6.29 Weighted-average assumptions: Risk-free interest rates — 1.79% 2.01% Expected dividend yield — 2.69% 3.24% Expected volatility factors of the market price of Southside Bancshares common stock — 27.02% 30.91% Expected option life (in years) — 6.2 6.3 |
Schedule of stock options and restricted stock units award activity | A combined summary of activity in our share-based plans as of December 31, 2017 is presented below: Restricted Stock Units Outstanding Stock Options Outstanding Number of Shares Weighted- Average Grant-Date Fair Value Number of Shares Weighted- Average Exercise Price Weighted- Average Grant-Date Fair Value Balance, January 1, 2017 100,923 $ 30.70 878,587 $ 25.28 $ 6.08 Granted 20,536 34.15 — — — Stock options exercised — — (134,231 ) 20.06 5.40 Stock awards vested (29,853 ) 29.38 — — — Forfeited (13,353 ) 31.13 (50,245 ) 28.94 6.32 Canceled/expired — — (3,799 ) 25.71 6.08 Balance, December 31, 2017 78,253 $ 32.04 690,312 $ 26.02 $ 6.19 |
Schedule of shares stock option exercise price range | Other information regarding options outstanding and exercisable as of December 31, 2017 is as follows: Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted- Weighted- Number Weighted- $ 14.67 - 20.00 135,946 $ 15.86 4.08 135,946 $ 15.86 20.01 - 25.00 148,184 22.93 6.41 106,826 23.00 25.01 - 30.00 259,242 26.73 7.41 119,322 26.63 30.01 - 35.00 — — — — — 35.01 - 37.28 146,940 37.28 8.84 40,179 37.28 Total 690,312 $ 26.02 6.84 402,273 $ 23.09 |
DERIVATIVES INSTRUMENTS AND HED
DERIVATIVES INSTRUMENTS AND HEDGING ACTIVITIES DISCLOSURE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative instruments in statement of financial position, fair value | The following tables present the notional and estimated fair value amount of derivative positions outstanding (in thousands): December 31, 2017 December 31, 2016 Estimated Fair Value Estimated Fair Value Notional Amount (1) Asset Derivative Liability Derivative Notional (1) Asset Derivative Liability Derivative Derivatives designated as hedging instruments Interest rate contracts: Swaps-Cash Flow Hedge-Financial institution counterparties $ 240,000 $ 7,922 $ 22 $ 250,000 $ 7,069 $ — Derivatives designated as non-hedging instruments Interest rate contracts: Swaps-Financial institution counterparties 67,220 92 612 2,182 85 — Swaps-Customer counterparties 67,220 612 92 2,182 — 85 Gross derivatives 8,626 726 7,154 85 Offsetting derivative assets/liabilities (114 ) (114 ) — — Cash collateral received/posted (7,900 ) (520 ) (7,154 ) — Net derivatives included in the consolidated balance sheets (2) $ 612 $ 92 $ — $ 85 (1) Notional amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk, and are not reflected in the consolidated balance sheets. (2) Net derivative assets are included in “other assets” and net derivative liabilities are included in “other liabilities” on the consolidated balance sheets. Included in the fair value of net derivative assets and net derivative liabilities are credit valuation adjustments reflecting counterparty credit risk and our credit risk. We had net credit exposure of $30,000 related to interest rate swaps with financial institutions and $612,000 related to interest rate swaps with customers at December 31, 2017 . The credit risk associated with customer transactions is partially mitigated as these transactions are generally secured by the non-cash collateral securing the underlying transaction being hedged. We had no credit exposure related to interest rate swaps with financial or customer counterparties at December 31, 2016 . |
Weighted average maturity and interest rates on risk management interest rate swaps | Variable rates received on pay fixed swaps are based on one-month or three-month LIBOR rates in effect at December 31, 2017 and December 31, 2016 : December 31, 2017 December 31, 2016 Weighted Average Weighted Average Notional Amount Remaining Maturity (in years) Receive Rate Pay Rate Notional Amount Remaining Maturity Receive Rate Pay Swaps-Cash Flow Hedge Financial institution counterparties $ 240,000 5.3 1.44 % 1.43 % $ 250,000 5.4 0.68 % 1.31 % Swaps-Non-Hedging Financial institution counterparties 67,220 12.7 1.39 2.37 2,182 9.7 0.62 1.57 Customer counterparties 67,220 12.7 2.37 1.39 2,182 9.7 1.57 0.62 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of fair value measurement on recurring and nonrecurring basis segregated by level of valuation inputs within fair value hierarchy utilized to measure fair value | As of December 31, 2017: Fair Value Measurements at the End of the Reporting Period Using Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring fair value measurements Investment Securities: U.S. Government Agency Debentures $ 108,869 $ — $ 108,869 $ — State and Political Subdivisions 392,664 — 392,664 — Other Stocks and Bonds 5,055 — 5,055 — Other Equity Securities 5,920 5,920 — — Mortgage-backed Securities: (1) Residential 718,029 — 718,029 — Commercial 308,218 — 308,218 — Derivative assets: Interest rate swaps 8,626 — 8,626 — Total asset recurring fair value measurements $ 1,547,381 $ 5,920 $ 1,541,461 $ — Derivative liabilities: Interest rate swaps $ 726 $ — $ 726 $ — Total liability recurring fair value measurements $ 726 $ — $ 726 $ — Nonrecurring fair value measurements Foreclosed assets $ 1,767 $ — $ — $ 1,767 Impaired loans (2) 6,536 — — 6,536 Total asset nonrecurring fair value measurements $ 8,303 $ — $ — $ 8,303 As of December 31, 2016: Fair Value Measurements at the End of the Reporting Period Using Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring fair value measurements Investment Securities: U.S. Treasury $ 70,069 $ 70,069 $ — $ — State and Political Subdivisions 385,197 — 385,197 — Other Stocks and Bonds 6,651 — 6,651 — Other Equity Securities 5,920 5,920 — — Mortgage-backed Securities: (1) Residential 627,508 — 627,508 — Commercial 384,255 — 384,255 — Derivative assets: Interest rate swaps 7,154 — 7,154 — Total asset recurring fair value measurements $ 1,486,754 $ 75,989 $ 1,410,765 $ — Derivative liabilities: Interest rate swaps $ 85 $ — $ 85 $ — Total liability recurring fair value measurements $ 85 $ — $ 85 $ — Nonrecurring fair value measurements Foreclosed assets $ 388 $ — $ — $ 388 Impaired loans (2) 9,693 — — 9,693 Total asset nonrecurring fair value measurements $ 10,081 $ — $ — $ 10,081 (1) All mortgage-backed securities are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. (2) Impaired loans represent collateral-dependent loans with a specific valuation allowance. Losses on these loans represent charge-offs which are netted against the allowance for loan losses. |
Financial assets, financial liabilities, and unrecognized financial instruments at carrying amount and fair value | The following tables present our financial assets, financial liabilities, and unrecognized financial instruments measured on a nonrecurring basis at both their respective carrying amounts and estimated fair value (in thousands): Estimated Fair Value December 31, 2017 Carrying Total Level 1 Level 2 Level 3 Financial Assets: Cash and cash equivalents $ 198,692 $ 198,692 $ 198,692 $ — $ — Investment Securities: Held to maturity, at carrying value 413,632 421,928 — 421,928 — Mortgage-backed Securities: Held to maturity, at carrying value 495,874 499,872 — 499,872 — FHLB stock, at cost, and other investments 61,550 61,550 — 61,550 — Loans, net of allowance for loan losses 3,273,575 3,269,316 — — 3,269,316 Loans held for sale 2,001 2,001 — 2,001 — Financial Liabilities: Deposits $ 4,515,447 $ 4,506,133 $ — $ 4,506,133 $ — Federal funds purchased and repurchase agreements 9,498 9,498 — 9,498 — FHLB borrowings 1,017,361 1,008,292 — 1,008,292 — Subordinated notes, net of unamortized debt issuance costs 98,248 99,665 — 99,665 — Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,241 47,622 — 47,622 — Estimated Fair Value December 31, 2016 Carrying Total Level 1 Level 2 Level 3 Financial Assets: Cash and cash equivalents $ 169,654 $ 169,654 $ 169,654 $ — $ — Investment Securities: Held to maturity, at carrying value 425,810 429,912 — 429,912 — Mortgage-backed Securities: Held to maturity, at carrying value 511,677 514,370 — 514,370 — FHLB stock, at cost, and other investments 66,592 66,592 — 66,592 — Loans, net of allowance for loan losses 2,538,626 2,630,009 — — 2,630,009 Loans held for sale 7,641 7,641 — 7,641 — Financial Liabilities: Deposits $ 3,533,076 $ 3,293,352 $ — $ 3,293,352 $ — Federal funds purchased and repurchase agreements 7,097 7,097 — 7,097 — FHLB borrowings 1,309,646 1,331,517 — 1,331,517 — Subordinated notes, net of unamortized debt issuance costs 98,100 101,627 — 101,627 — Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,236 45,147 — 45,147 — |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Regulatory Capital Requirements [Abstract] | |
Schedule of compliance with regulatory capital requirements under ranking regulations | As of December 31, 2017 , the most recent notification from the FDIC categorized us as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized we must maintain minimum Common Equity Tier 1 risk-based, Tier 1 risk-based, Total risk-based and Tier 1 leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed our category. Actual For Capital Adequacy Purposes To Be Well Capitalized Under Prompt Corrective Actions Provisions Amount Ratio Amount Ratio Amount Ratio As of December 31, 2017: (dollars in thousands) Common Equity Tier 1 (to Risk Weighted Assets) Consolidated $ 570,610 14.65 % $ 175,216 4.50 % N/A N/A Bank Only $ 711,157 18.27 % $ 175,145 4.50 % $ 252,987 6.50 % Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 627,532 16.12 % $ 233,621 6.00 % N/A N/A Bank Only $ 711,157 18.27 % $ 233,527 6.00 % $ 311,369 8.00 % Total Capital (to Risk Weighted Assets) Consolidated $ 748,532 19.22 % $ 311,495 8.00 % N/A N/A Bank Only $ 733,909 18.86 % $ 311,369 8.00 % $ 389,211 10.00 % Tier 1 Capital (to Average Assets) (1) Consolidated $ 627,532 11.16 % $ 224,844 4.00 % N/A N/A Bank Only $ 711,157 12.66 % $ 224,741 4.00 % $ 280,926 5.00 % As of December 31, 2016: Common Equity Tier 1 (to Risk Weighted Assets) Consolidated $ 461,158 14.64 % $ 141,759 4.50 % N/A N/A Bank Only $ 566,423 17.98 % $ 141,734 4.50 % $ 204,726 6.50 % Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 515,831 16.37 % $ 189,013 6.00 % N/A N/A Bank Only $ 566,423 17.98 % $ 188,978 6.00 % $ 251,971 8.00 % Total Capital (to Risk Weighted Assets) Consolidated $ 633,289 20.10 % $ 252,017 8.00 % N/A N/A Bank Only $ 585,781 18.60 % $ 251,971 8.00 % $ 314,964 10.00 % Tier 1 Capital (to Average Assets) (1) Consolidated $ 515,831 9.46 % $ 218,029 4.00 % N/A N/A Bank Only $ 566,423 10.40 % $ 217,892 4.00 % $ 272,365 5.00 % (1) Refers to quarterly average assets as calculated in accordance with policies established by bank regulatory agencies. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax provision | The income tax expense included in the accompanying statements of income consists of the following (in thousands): Years Ended December 31, 2017 2016 2015 Current income tax expense $ 12,607 $ 8,557 $ 10,671 Deferred income tax expense (benefit) 3,514 1,768 (3,392 ) Income tax expense $ 16,121 $ 10,325 $ 7,279 |
Schedule of net deferred tax assets and liabilities | The components of the net deferred tax asset (liability) as of December 31, 2017 and 2016 are summarized below (in thousands): Assets Liabilities Allowance for loan losses $ 4,364 $ Retirement and other benefit plans (2,102 ) Premises and equipment (5,716 ) Core deposit intangible (3,660 ) Unrealized losses on securities available for sale 4,285 Effective hedging derivatives (1,701 ) Fair value adjustment on loans 2,607 Fair value adjustment on time deposits (54 ) Alternative minimum tax credit 6,943 Unfunded status of defined benefit plan 7,018 State business tax credit 544 Stock-based compensation 642 Other (966 ) Gross deferred tax assets (liabilities) 26,403 (14,199 ) Net deferred tax asset at December 31, 2017 $ 12,204 Allowance for loan losses $ 6,269 $ Retirement and other benefit plans (2,707 ) Premises and equipment (5,273 ) Core deposit intangible (1,576 ) Unrealized losses on securities available for sale 12,286 Effective hedging derivatives (2,474 ) Fair value adjustment on loans 1,404 Alternative minimum tax credit 8,776 Unfunded status of defined benefit plan 10,436 State business tax credit 604 Stock-based compensation 995 Other 151 Gross deferred tax assets (liabilities) 40,921 (12,030 ) Net deferred tax asset at December 31, 2016 $ 28,891 |
Schedule of income tax reconciliation | A reconciliation of tax at statutory rates and total tax expense is as follows (dollars in thousands): Years Ended December 31, 2017 2016 2015 Amount Percent of Pre-Tax Income Amount Percent of Pre-Tax Income Amount Percent of Pre-Tax Income Statutory tax expense $ 24,652 35.0 % $ 20,886 35.0 % $ 17,946 35.0 % Increase (decrease) in taxes from: Tax rate changes 2,416 3.4 % — — — — Tax exempt interest (10,195 ) (14.5 )% (9,879 ) (16.6 )% (9,975 ) (19.5 )% Bank owned life insurance (885 ) (1.2 )% (915 ) (1.5 )% (914 ) (1.8 )% Share-based compensation (482 ) (0.7 )% — — (75 ) (0.1 )% Acquisition costs 467 0.7 % — — — — State business tax 68 0.1 % 71 0.1 % — — Other, net 80 0.1 % 162 0.3 % 297 0.6 % Income tax expense $ 16,121 22.9 % $ 10,325 17.3 % $ 7,279 14.2 % |
OFF-BALANCE-SHEET ARRANGEMENT45
OFF-BALANCE-SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Scheduled maturities of unused commitments | Financial instruments with off-balance-sheet risk were as follows (in thousands): At At Unused commitments: Commitments to extend credit $ 804,715 $ 665,663 Standby letters of credit 14,890 9,075 Total $ 819,605 $ 674,738 |
Future minimum commitments of non-cancelable operating leases | Future minimum rental commitments due under non-cancelable operating leases at December 31, 2017 were as follows (in thousands): 2018 $ 1,496 2019 1,106 2020 796 2021 480 2022 294 2023 and thereafter 72 $ 4,244 |
Schedule of future minimum rental payments receivable under non-cancelable operating leases | At December 31, 2017 , non-cancelable operating leases for the building with future minimum lease payments are as follows (in thousands): 2018 $ 2,929 2019 2,501 2020 2,392 2021 1,474 2022 1,480 2023 and thereafter 5,264 $ 16,040 |
PARENT COMPANY FINANCIAL INFO46
PARENT COMPANY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed balance sheets | Condensed financial information for Southside Bancshares, Inc. (parent company only) was as follows (in thousands, except share amounts): CONDENSED BALANCE SHEETS December 31, 2017 2016 ASSETS Cash and due from banks $ 8,483 $ 42,968 Investment in bank subsidiaries at equity in underlying net assets 894,010 625,046 Investment in nonbank subsidiaries at equity in underlying net assets 1,826 2,554 Other assets 10,350 8,237 Total assets $ 914,669 $ 678,805 LIABILITIES Subordinated notes, net of unamortized debt issuance costs $ 98,248 $ 98,100 Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,241 60,236 Other liabilities 2,040 2,195 Total liabilities 160,529 160,531 SHAREHOLDERS’ EQUITY Common stock ($1.25 par, 40,000,000 shares authorized, 37,802,352 shares issued at December 31, 2017 and 31,455,951 shares issued at December 31, 2016) 47,253 39,320 Paid-in capital 757,439 535,240 Retained earnings 32,851 30,098 Treasury stock, at cost (2,802,019 at December 31, 2017 and 2,913,064 at December 31, 2016) (47,105 ) (47,891 ) Accumulated other comprehensive loss (36,298 ) (38,493 ) Total shareholders’ equity 754,140 518,274 Total liabilities and shareholders’ equity $ 914,669 $ 678,805 |
Condensed statements of income | CONDENSED STATEMENTS OF INCOME Years Ended December 31, 2017 2016 2015 Income Dividends from subsidiary $ 27,000 $ 30,000 $ 17,600 Interest income 60 51 44 Total income 27,060 30,051 17,644 Expense Interest expense 7,646 3,334 1,455 Other 5,869 3,227 3,193 Total expense 13,515 6,561 4,648 Income before income tax expense 13,545 23,490 12,996 Income tax benefit 4,242 2,278 1,612 Income before equity in undistributed earnings of subsidiaries 17,787 25,768 14,608 Equity in undistributed earnings of subsidiaries 36,525 23,581 29,389 Net income $ 54,312 $ 49,349 $ 43,997 |
Condensed statements of cash flow | CONDENSED STATEMENTS OF CASH FLOW Years Ended December 31, 2017 2016 2015 OPERATING ACTIVITIES: Net Income $ 54,312 $ 49,349 $ 43,997 Adjustments to reconcile net income to net cash provided by operations: Amortization 153 45 — Equity in undistributed earnings of subsidiaries (36,525 ) (23,581 ) (29,389 ) (Increase) decrease in other assets (2,113 ) (1,035 ) 2,716 (Decrease) increase in other liabilities (155 ) 1,564 (3,709 ) Net cash provided by operating activities 15,672 26,342 13,615 INVESTING ACTIVITIES: Investment in subsidiaries 890 (126,000 ) (10 ) Net cash paid for acquisition (22,801 ) — — Net cash used in investing activities (21,911 ) (126,000 ) (10 ) FINANCING ACTIVITIES: Net proceeds from issuance of subordinated long-term debt — 98,060 — Purchase of common stock — (10,199 ) — Proceeds from issuance of common stock 3,953 78,962 1,536 Dividends paid (32,199 ) (25,963 ) (25,071 ) Net cash (used in) provided by financing activities (28,246 ) 140,860 (23,535 ) Net (decrease) increase in cash and cash equivalents (34,485 ) 41,202 (9,930 ) Cash and cash equivalents at beginning of period 42,968 1,766 11,696 Cash and cash equivalents at end of period $ 8,483 $ 42,968 $ 1,766 |
QUARTERLY FINANCIAL INFORMATI47
QUARTERLY FINANCIAL INFORMATION OF REGISTRANT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | 2017 Fourth Third Second First Interest income $ 50,104 $ 46,473 $ 46,009 $ 44,888 Interest expense 11,798 11,513 10,585 9,608 Net interest income 38,306 34,960 35,424 35,280 Provision for loan losses 1,271 960 1,346 1,098 Net (loss) gain on sale of securities available for sale (249 ) 627 (75 ) 322 Noninterest income excluding net securities gains 9,348 8,781 9,368 9,351 Noninterest expense 29,933 25,007 25,537 25,858 Income before income tax expense 16,201 18,401 17,834 17,997 Income tax expense 5,870 3,890 3,353 3,008 Net income 10,331 14,511 14,481 14,989 Earnings per common share Basic $ 0.33 $ 0.49 $ 0.49 $ 0.51 Diluted $ 0.33 $ 0.49 $ 0.49 $ 0.51 2016 Fourth Third Second First Interest income $ 43,680 $ 41,132 $ 41,089 $ 43,012 Interest expense 9,039 7,202 6,711 6,396 Net interest income 34,641 33,930 34,378 36,616 Provision for loan losses 2,065 1,631 3,768 2,316 Net (loss) gain on sale of securities available for sale (2,676 ) 2,343 728 2,441 Noninterest income excluding net securities gains 9,389 9,389 8,642 9,155 Noninterest expense 25,877 28,425 25,813 29,407 Income before income tax expense 13,412 15,606 14,167 16,489 Income tax expense 1,839 2,741 2,772 2,973 Net income 11,573 12,865 11,395 13,516 Earnings per common share Basic $ 0.42 $ 0.48 $ 0.42 $ 0.50 Diluted $ 0.42 $ 0.48 $ 0.42 $ 0.50 |
SUMMARY OF SIGNIFICANT ACCOUN48
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)banking_officessegment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Organization and Basis of Presentation [Abstract] | |||
Number of branches | banking_offices | 60 | ||
Number of branches in grocery stores | banking_offices | 16 | ||
Segment Information [Abstract] | |||
Number of reportable segments | segment | 1 | ||
Cash and Cash Equivalents [Abstract] | |||
Cash on deposit with the Federal Reserve required to meet regulatory reserve and clearing requirements | $ 32,200,000 | $ 20,300,000 | |
Goodwill and Other Intangible Assets [Abstract] | |||
Goodwill impairment loss | 0 | 0 | |
Amortization expense of intangible assets | 1,955,000 | 1,940,000 | $ 2,296,000 |
Marketing and Advertising Expense [Abstract] | |||
Advertising costs | 609,000 | 869,000 | 1,000,000 |
Core deposits | |||
Goodwill and Other Intangible Assets [Abstract] | |||
Amortization expense of intangible assets | $ 1,800,000 | $ 1,800,000 | $ 2,200,000 |
Premises | Minimum | |||
Premises and Equipment [Abstract] | |||
Estimated useful life | 15 years | ||
Premises | Maximum | |||
Premises and Equipment [Abstract] | |||
Estimated useful life | 40 years | ||
Equipment | Minimum | |||
Premises and Equipment [Abstract] | |||
Estimated useful life | 3 years | ||
Equipment | Maximum | |||
Premises and Equipment [Abstract] | |||
Estimated useful life | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN49
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES - Reclassifications (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / shares | |
Accounting Standards Update 2016-09 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Income tax effects related to settlements of share-based payment awards reported in earnings as reduction of income tax expense | $ 482 |
Impact on diluted earnings per common share (in dollars per share) | $ / shares | $ 0.02 |
Accumulated Other Comprehensive Income (Loss) | New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2018-02 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect of new accounting principle in period of adoption | $ (5,700) |
Retained Earnings | New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2018-02 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect of new accounting principle in period of adoption | $ 5,700 |
SUMMARY OF SIGNIFICANT ACCOUN50
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES - Stock Dividend (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Dividends, Common Stock [Abstract] | |||
Stock dividend, percentage of common stock | 2.50% | 5.00% | 5.00% |
SUMMARY OF SIGNIFICANT ACCOUN51
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES - Accounting Pronouncements (Details) $ in Millions | Jan. 02, 2018USD ($) |
New Accounting Pronouncement, Early Adoption, Effect | Subsequent Event | Accounting Standards Update 2017-12 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Book value of HTM securities reclassified to AFS | $ 743.4 |
ACQUISITION (Details)
ACQUISITION (Details) $ / shares in Units, $ in Thousands | Nov. 30, 2017USD ($)banking_offices$ / sharesshares | Dec. 31, 2017USD ($)banking_offices | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Business Acquisition [Line Items] | ||||
Number of branches | banking_offices | 60 | |||
Cash | $ 23,941 | $ 0 | $ 0 | |
Acquisition, goodwill | 201,246 | 91,520 | ||
Acquisition expense | 4,352 | 0 | 5,473 | |
Acquisition, legal and consulting fees | 3,844 | 4,946 | 3,735 | |
Acquisition, software and data processing expense | 3,027 | 2,911 | $ 3,440 | |
Diboll State Bancshares, Inc. | ||||
Business Acquisition [Line Items] | ||||
Percentage of company acquired | 100.00% | |||
Number of branches | banking_offices | 17 | |||
Acquisition, number of shares issued | shares | 5,500,000 | |||
Cash | $ 23,941 | |||
Company stock consideration, stock issued per each share of acquiree stock (in shares) | shares | 6.5021 | |||
Cash consideration, per share of acquiree stock (in dollars per share) | $ / shares | $ 28.12 | |||
Acquisition, closing stock price per share (in dollars per share) | $ / shares | $ 36.20 | |||
Acquisition, total merger consideration | $ 224,305 | |||
Acquisition, assets | 1,030,000 | |||
Acquisition, loans | 621,318 | |||
Acquisition, investment securities | 234,447 | |||
Acquisition, liabilities assumed | 910,800 | |||
Acquisition, deposits | 899,300 | |||
Acquisition, goodwill | 109,726 | 109,700 | ||
Acquisition expense | 4,400 | |||
Acquisition, legal and consulting fees | 2,400 | |||
Acquisition, software and data processing expense | 1,900 | |||
Cost related to issuance of shares related to the merger | 277 | |||
Pro forma net income (loss) | 64,100 | 58,000 | ||
Pro forma revenue | $ 270,900 | $ 257,800 | ||
Core deposits | Diboll State Bancshares, Inc. | ||||
Business Acquisition [Line Items] | ||||
Acquisition, finite-lived intangible assets | $ 14,700 | |||
Amortization period | 9 years | |||
Trust Relationship Intangible | Diboll State Bancshares, Inc. | ||||
Business Acquisition [Line Items] | ||||
Acquisition, finite-lived intangible assets | $ 5,400 | |||
Amortization period | 13 years | |||
Noncompete Agreements | Diboll State Bancshares, Inc. | ||||
Business Acquisition [Line Items] | ||||
Acquisition, finite-lived intangible assets | $ 240 | |||
Amortization period | 3 years |
ACQUISITION - Schedule of Comp
ACQUISITION - Schedule of Components of Consideration Paid (Details) - USD ($) $ in Thousands | Nov. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Common stock issued | $ 200,364 | $ 0 | $ 0 | |
Cash | $ 23,941 | $ 0 | $ 0 | |
Diboll State Bancshares, Inc. | ||||
Business Acquisition [Line Items] | ||||
Common stock issued | $ 200,364 | |||
Cash | 23,941 | |||
Total consideration transferred | $ 224,305 |
ACQUISITION - Assets Acquired
ACQUISITION - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Nov. 30, 2017 | Dec. 31, 2016 |
Assets of acquired bank: | |||
Goodwill | $ 201,246 | $ 91,520 | |
Diboll State Bancshares, Inc. | |||
Assets of acquired bank: | |||
Cash, cash equivalents, and amounts due from banks | $ 115,598 | ||
Other investments | 610 | ||
Securities available for sale | 234,447 | ||
Loans | 621,318 | ||
Property and equipment | 26,256 | ||
Other assets | 7,052 | ||
Core deposit intangible | 14,700 | ||
Trust relationship intangible | 5,400 | ||
Goodwill | $ 109,700 | 109,726 | |
Liabilities of acquired bank: | |||
Deposits | (899,307) | ||
Deferred tax liability, net | (7,802) | ||
Other liabilities | (3,693) | ||
Fair value of assets acquired net of liabilities assumed | $ 224,305 |
ACQUISITION - PCI Loans (Detai
ACQUISITION - PCI Loans (Details) - Diboll State Bancshares, Inc. $ in Thousands | Nov. 30, 2017USD ($) |
Business Acquisition [Line Items] | |
Contractually required principal and interest payments | $ 59,286 |
Nonaccretable difference | 4,560 |
Cash flows expected to be collected | 54,726 |
Accretable difference | 15,389 |
Fair value of loans acquired with a deterioration of credit quality | $ 39,337 |
ACQUISITION - Acquired Perform
ACQUISITION - Acquired Performing Loans (Details) - Diboll State Bancshares, Inc. - Performing loans $ in Thousands | Nov. 30, 2017USD ($) | |
Business Acquisition [Line Items] | ||
Fair Value at Acquisition Date | $ 581,981 | |
Contractual Amounts Receivable | 823,974 | |
Cash Flows Not Expected to be Collected at Acquisition Date | 127,399 | [1] |
Construction Real Estate Loans | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition Date | 40,122 | |
Contractual Amounts Receivable | 56,905 | |
Cash Flows Not Expected to be Collected at Acquisition Date | 330 | [1] |
1-4 Family Residential Real Estate Loans | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition Date | 82,654 | |
Contractual Amounts Receivable | 130,167 | |
Cash Flows Not Expected to be Collected at Acquisition Date | 26,894 | [1] |
Commercial Real Estate Loans | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition Date | 319,623 | |
Contractual Amounts Receivable | 484,529 | |
Cash Flows Not Expected to be Collected at Acquisition Date | 97,431 | [1] |
Commercial Loans | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition Date | 82,083 | |
Contractual Amounts Receivable | 87,688 | |
Cash Flows Not Expected to be Collected at Acquisition Date | 1,226 | [1] |
Loans to Individuals | ||
Business Acquisition [Line Items] | ||
Fair Value at Acquisition Date | 49,651 | |
Contractual Amounts Receivable | 54,687 | |
Cash Flows Not Expected to be Collected at Acquisition Date | $ 1,490 | [1] |
[1] | Cash flows not expected to be collected relate to estimated credit losses and expected prepayments. |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Basic and Diluted Earnings: | |||||||||||
Net Income | $ 10,331 | $ 14,511 | $ 14,481 | $ 14,989 | $ 11,573 | $ 12,865 | $ 11,395 | $ 13,516 | $ 54,312 | $ 49,349 | $ 43,997 |
Basic weighted-average shares outstanding (in shares) | 29,841 | 27,118 | 27,291 | ||||||||
Add: Stock options (in shares) | 206 | 129 | 91 | ||||||||
Diluted weighted-average shares outstanding (in shares) | 30,047 | 27,247 | 27,382 | ||||||||
Basic Earnings Per Share: | |||||||||||
Earnings per common share - basic (in dollars per share) | $ 0.33 | $ 0.49 | $ 0.49 | $ 0.51 | $ 0.42 | $ 0.48 | $ 0.42 | $ 0.50 | $ 1.82 | $ 1.82 | $ 1.61 |
Diluted Earnings Per Share: | |||||||||||
Earnings per common share - diluted (in dollars per share) | $ 0.33 | $ 0.49 | $ 0.49 | $ 0.51 | $ 0.42 | $ 0.48 | $ 0.42 | $ 0.50 | $ 1.81 | $ 1.81 | $ 1.61 |
Antidilutive securities from non-qualified stock options excluded from calculating earnings | |||||||||||
Number of antidilutive options (in shares) | 44 | 18 | 36 |
ACCUMULATED OTHER COMPREHENSI58
ACCUMULATED OTHER COMPREHENSIVE LOSS - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
AOCI Attributable to Parent, Net of Tax | ||||
Beginning balance, net of tax | $ 518,274 | $ 444,062 | $ 425,243 | |
Income tax (expense) benefit | (5,374) | 10,667 | 1,676 | |
Ending balance, net of tax | 754,140 | 518,274 | 444,062 | |
Unrealized Gains (Losses) on Securities | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Beginning balance, net of tax | (23,708) | (239) | 6,238 | |
Other comprehensive income (loss) before reclassifications | 15,217 | (33,699) | (7,235) | |
Reclassified from accumulated other comprehensive income | 630 | (2,407) | (2,730) | |
Income tax (expense) benefit | (5,546) | 12,637 | 3,488 | |
Net current-period other comprehensive (loss) income, net of tax | 10,301 | (23,469) | (6,477) | |
Reclassification of certain deferred tax effects | [1] | (2,888) | ||
Ending balance, net of tax | (16,295) | (23,708) | (239) | |
Unrealized Gains (Losses) on Derivatives | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Beginning balance, net of tax | 4,595 | 0 | 0 | |
Other comprehensive income (loss) before reclassifications | 276 | 5,255 | 0 | |
Reclassified from accumulated other comprehensive income | 754 | 1,815 | 0 | |
Income tax (expense) benefit | (360) | (2,475) | 0 | |
Net current-period other comprehensive (loss) income, net of tax | 670 | 4,595 | 0 | |
Reclassification of certain deferred tax effects | [1] | 1,134 | ||
Ending balance, net of tax | 6,399 | 4,595 | 0 | |
Net Prior Service (Cost) Credit | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Beginning balance, net of tax | (133) | (44) | 7 | |
Other comprehensive income (loss) before reclassifications | 8 | (129) | (62) | |
Reclassified from accumulated other comprehensive income | [2] | (8) | (8) | (16) |
Income tax (expense) benefit | 0 | 48 | 27 | |
Net current-period other comprehensive (loss) income, net of tax | 0 | (89) | (51) | |
Reclassification of certain deferred tax effects | [1] | 0 | ||
Ending balance, net of tax | (133) | (133) | (44) | |
Net Gain (Loss) | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Beginning balance, net of tax | (19,247) | (18,400) | (21,815) | |
Other comprehensive income (loss) before reclassifications | (5,218) | (3,132) | 2,806 | |
Reclassified from accumulated other comprehensive income | [2] | 1,613 | 1,828 | 2,448 |
Income tax (expense) benefit | 532 | 457 | (1,839) | |
Net current-period other comprehensive (loss) income, net of tax | (3,073) | (847) | 3,415 | |
Reclassification of certain deferred tax effects | [1] | (3,949) | ||
Ending balance, net of tax | (26,269) | (19,247) | (18,400) | |
Total | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Beginning balance, net of tax | (38,493) | (18,683) | (15,570) | |
Other comprehensive income (loss) before reclassifications | 10,283 | (31,705) | (4,491) | |
Reclassified from accumulated other comprehensive income | 2,989 | 1,228 | (298) | |
Income tax (expense) benefit | (5,374) | 10,667 | 1,676 | |
Net current-period other comprehensive (loss) income, net of tax | 7,898 | (19,810) | (3,113) | |
Reclassification of certain deferred tax effects | [1] | (5,703) | ||
Ending balance, net of tax | $ (36,298) | $ (38,493) | $ (18,683) | |
[1] | Amounts reclassified to retained earnings due to early adoption of ASU 2018-02. See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. | |||
[2] | These accumulated other comprehensive income components are included in the computation of net periodic pension cost (income) presented in “Note 11 - Employee Benefits.” |
ACCUMULATED OTHER COMPREHENSI59
ACCUMULATED OTHER COMPREHENSIVE LOSS - Reclassifications out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Amortization of unrealized losses | $ 1,255 | $ 429 | $ 930 | |||||||||
Tax benefit (expense) | $ (5,870) | $ (3,890) | $ (3,353) | $ (3,008) | $ (1,839) | $ (2,741) | $ (2,772) | $ (2,973) | (16,121) | (10,325) | (7,279) | |
Amortization of unrealized gains on interest rate swaps | $ 16,201 | $ 18,401 | $ 17,834 | $ 17,997 | $ 13,412 | $ 15,606 | $ 14,167 | $ 16,489 | 70,433 | 59,674 | 51,276 | |
Total reclassifications for the period, net of tax | (1,943) | (799) | 194 | |||||||||
Unrealized gains (losses) | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Total before tax | (630) | 2,407 | 2,730 | |||||||||
Realized net loss on interest rate swaps | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Total before tax | (754) | (1,815) | 0 | |||||||||
Net actuarial loss | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Total before tax | [1] | (1,613) | (1,828) | (2,448) | ||||||||
Prior service credit | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Total before tax | [1] | 8 | 8 | 16 | ||||||||
Amortization of pension plan | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Total before tax | (1,605) | (1,820) | (2,432) | |||||||||
Tax benefit | 562 | 637 | 851 | |||||||||
Total reclassifications for the period, net of tax | (1,043) | (1,183) | (1,581) | |||||||||
Unrealized losses on securities transferred to held to maturity | Reclassification out of accumulated other comprehensive income | Unrealized gains (losses) | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Amortization of unrealized losses | [2] | (1,255) | (429) | (930) | ||||||||
Tax benefit (expense) | 439 | 150 | 326 | |||||||||
Net of tax | (816) | (279) | (604) | |||||||||
Unrealized gains and losses on available for sale securities | Reclassification out of accumulated other comprehensive income | Unrealized gains (losses) | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Tax benefit (expense) | (219) | (993) | (1,281) | |||||||||
Net of tax | 406 | 1,843 | 2,379 | |||||||||
Realized net gain on sale of securities | [3] | 625 | 2,836 | 3,660 | ||||||||
Interest Rate Swaps | Reclassification out of accumulated other comprehensive income | Realized net loss on interest rate swaps | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Tax benefit (expense) | 290 | 635 | 0 | |||||||||
Net of tax | (538) | (1,180) | 0 | |||||||||
Realized net loss on interest rate swaps | [4] | (828) | (1,815) | 0 | ||||||||
Interest Rate Swaps | Reclassification out of accumulated other comprehensive income | Amortization of unrealized gains on terminated interest rate swaps | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Tax benefit (expense) | (26) | 0 | 0 | |||||||||
Net of tax | 48 | 0 | 0 | |||||||||
Amortization of unrealized gains on interest rate swaps | [4] | $ 74 | $ 0 | $ 0 | ||||||||
[1] | These accumulated other comprehensive income components are included in the computation of net periodic pension cost (income) presented in “Note 11 - Employee Benefits.” | |||||||||||
[2] | Included in interest income on the consolidated statements of income. | |||||||||||
[3] | Listed as net gain on sale of securities available for sale on the consolidated statements of income. | |||||||||||
[4] | Included in interest expense for FHLB borrowings on the consolidated statements of income. |
SECURITIES - Schedule of Debt
SECURITIES - Schedule of Debt and Equity Securities Components (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
AVAILABLE FOR SALE: | |||
Amortized Cost | $ 1,541,967 | $ 1,497,404 | |
Gross unrealized gains, in OCI | 9,163 | 10,916 | |
Gross unrealized losses, in OCI | 12,375 | 28,720 | |
Securities available for sale, at estimated fair value | 1,538,755 | 1,479,600 | |
HELD TO MATURITY: | |||
Amortized cost | 926,920 | 956,156 | |
Gross unrealized gains, in OCI | 3,347 | 5,054 | |
Gross unrealized losses, in OCI | 20,761 | 23,723 | |
Carrying value | 909,506 | 937,487 | |
Gross unrealized gains, not in OCI | 16,322 | 13,501 | |
Gross unrealized losses, not in OCI | 4,028 | 6,706 | |
Estimated fair value | 921,800 | 944,282 | |
US Treasury | |||
AVAILABLE FOR SALE: | |||
Amortized Cost | 74,016 | ||
Gross unrealized gains, in OCI | 0 | ||
Gross unrealized losses, in OCI | 3,947 | ||
Securities available for sale, at estimated fair value | 70,069 | ||
U.S. Government Agency Debentures | |||
AVAILABLE FOR SALE: | |||
Amortized Cost | 108,869 | ||
Gross unrealized gains, in OCI | 0 | ||
Gross unrealized losses, in OCI | 0 | ||
Securities available for sale, at estimated fair value | 108,869 | ||
State and Political Subdivisions | |||
AVAILABLE FOR SALE: | |||
Amortized Cost | 392,760 | 394,050 | |
Gross unrealized gains, in OCI | 3,895 | 3,217 | |
Gross unrealized losses, in OCI | 3,991 | 12,070 | |
Securities available for sale, at estimated fair value | 392,664 | 385,197 | |
HELD TO MATURITY: | |||
Amortized cost | 423,376 | 435,080 | |
Gross unrealized gains, in OCI | 2,448 | 3,987 | |
Gross unrealized losses, in OCI | 12,192 | 13,257 | |
Carrying value | 413,632 | 425,810 | |
Gross unrealized gains, not in OCI | 10,879 | 7,595 | |
Gross unrealized losses, not in OCI | 2,583 | 3,493 | |
Estimated fair value | 421,928 | 429,912 | |
Other Stocks and Bonds | |||
AVAILABLE FOR SALE: | |||
Amortized Cost | 5,024 | 6,587 | |
Gross unrealized gains, in OCI | 31 | 64 | |
Gross unrealized losses, in OCI | 0 | 0 | |
Securities available for sale, at estimated fair value | 5,055 | 6,651 | |
Other Equity Securities | |||
AVAILABLE FOR SALE: | |||
Amortized Cost | 6,027 | 6,039 | |
Gross unrealized gains, in OCI | 0 | 0 | |
Gross unrealized losses, in OCI | 107 | 119 | |
Securities available for sale, at estimated fair value | 5,920 | 5,920 | |
Residential | |||
AVAILABLE FOR SALE: | |||
Amortized Cost | [1] | 720,930 | 630,603 |
Gross unrealized gains, in OCI | [1] | 4,476 | 6,434 |
Gross unrealized losses, in OCI | [1] | 7,377 | 9,529 |
Securities available for sale, at estimated fair value | [1] | 718,029 | 627,508 |
HELD TO MATURITY: | |||
Amortized cost | [1] | 134,018 | 142,060 |
Gross unrealized gains, in OCI | [1] | 0 | 0 |
Gross unrealized losses, in OCI | [1] | 4,974 | 5,748 |
Carrying value | [1] | 129,044 | 136,312 |
Gross unrealized gains, not in OCI | [1] | 1,631 | 1,534 |
Gross unrealized losses, not in OCI | [1] | 239 | 950 |
Estimated fair value | [1] | 130,436 | 136,896 |
Commercial | |||
AVAILABLE FOR SALE: | |||
Amortized Cost | [1] | 308,357 | 386,109 |
Gross unrealized gains, in OCI | [1] | 761 | 1,201 |
Gross unrealized losses, in OCI | [1] | 900 | 3,055 |
Securities available for sale, at estimated fair value | [1] | 308,218 | 384,255 |
HELD TO MATURITY: | |||
Amortized cost | [1] | 369,526 | 379,016 |
Gross unrealized gains, in OCI | [1] | 899 | 1,067 |
Gross unrealized losses, in OCI | [1] | 3,595 | 4,718 |
Carrying value | [1] | 366,830 | 375,365 |
Gross unrealized gains, not in OCI | [1] | 3,812 | 4,372 |
Gross unrealized losses, not in OCI | [1] | 1,206 | 2,263 |
Estimated fair value | [1] | $ 369,436 | $ 377,474 |
[1] | All mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. |
SECURITIES - Unrealized Loss o
SECURITIES - Unrealized Loss on Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months, fair value | $ 614,799 | $ 955,799 |
More than 12 months, fair value | 288,113 | 7,086 |
Total fair value | 902,912 | 962,885 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract] | ||
Less than 12 months, unrealized loss position | 3,879 | 28,681 |
More than 12 months, unrealized loss position | 8,496 | 39 |
Unrealized loss position | 12,375 | 28,720 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months, fair value | 246,806 | 473,817 |
More than 12 months, fair value | 73,024 | 29,427 |
Total fair value | 319,830 | 503,244 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Losses [Abstract] | ||
Less than 12 Months, unrealized loss position | 1,746 | 5,403 |
More than 12 Months, unrealized loss position | 2,282 | 1,303 |
Unrealized loss position | 4,028 | 6,706 |
US Treasury | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months, fair value | 70,069 | |
More than 12 months, fair value | 0 | |
Total fair value | 70,069 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract] | ||
Less than 12 months, unrealized loss position | 3,947 | |
More than 12 months, unrealized loss position | 0 | |
Unrealized loss position | 3,947 | |
State and Political Subdivisions | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months, fair value | 32,341 | 264,485 |
More than 12 months, fair value | 172,006 | 887 |
Total fair value | 204,347 | 265,372 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract] | ||
Less than 12 months, unrealized loss position | 121 | 12,069 |
More than 12 months, unrealized loss position | 3,870 | 1 |
Unrealized loss position | 3,991 | 12,070 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months, fair value | 85,608 | 179,939 |
More than 12 months, fair value | 56,736 | 29,427 |
Total fair value | 142,344 | 209,366 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Losses [Abstract] | ||
Less than 12 Months, unrealized loss position | 807 | 2,190 |
More than 12 Months, unrealized loss position | 1,776 | 1,303 |
Unrealized loss position | 2,583 | 3,493 |
Other Equity Securities | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months, fair value | 5,920 | 5,920 |
More than 12 months, fair value | 0 | 0 |
Total fair value | 5,920 | 5,920 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract] | ||
Less than 12 months, unrealized loss position | 107 | 119 |
More than 12 months, unrealized loss position | 0 | 0 |
Unrealized loss position | 107 | 119 |
Residential | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months, fair value | 429,742 | 369,903 |
More than 12 months, fair value | 102,973 | 6,199 |
Total fair value | 532,715 | 376,102 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract] | ||
Less than 12 months, unrealized loss position | 3,232 | 9,491 |
More than 12 months, unrealized loss position | 4,145 | 38 |
Unrealized loss position | 7,377 | 9,529 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months, fair value | 24,707 | 107,024 |
More than 12 months, fair value | 2,736 | 0 |
Total fair value | 27,443 | 107,024 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Losses [Abstract] | ||
Less than 12 Months, unrealized loss position | 157 | 950 |
More than 12 Months, unrealized loss position | 82 | 0 |
Unrealized loss position | 239 | 950 |
Commercial | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months, fair value | 146,796 | 245,422 |
More than 12 months, fair value | 13,134 | 0 |
Total fair value | 159,930 | 245,422 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract] | ||
Less than 12 months, unrealized loss position | 419 | 3,055 |
More than 12 months, unrealized loss position | 481 | 0 |
Unrealized loss position | 900 | 3,055 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months, fair value | 136,491 | 186,854 |
More than 12 months, fair value | 13,552 | 0 |
Total fair value | 150,043 | 186,854 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Losses [Abstract] | ||
Less than 12 Months, unrealized loss position | 782 | 2,263 |
More than 12 Months, unrealized loss position | 424 | 0 |
Unrealized loss position | $ 1,206 | $ 2,263 |
SECURITIES - Interest Income o
SECURITIES - Interest Income on Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest Income Recognized on Securities [Abstract] | |||
U.S. Treasury | $ 519 | $ 739 | $ 1,132 |
U.S. Government Agency Debentures | 178 | 0 | 118 |
State and Political Subdivisions | 24,530 | 22,654 | 22,474 |
Other Stocks and Bonds | 125 | 195 | 213 |
Other Equity Securities | 116 | 123 | 118 |
Mortgage-backed Securities | 41,361 | 37,450 | 33,661 |
Total interest income on securities | $ 66,829 | $ 61,161 | $ 57,716 |
SECURITIES - Amortized Cost an
SECURITIES - Amortized Cost and Estimated Fair Value of Investments in Debt Securities By Contractual Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Available-for-sale Securities, Amortized Cost Basis [Abstract] | ||
Due in one year or less | $ 32,727 | |
Due after one year through five years | 110,393 | |
Due after five years through ten years | 35,856 | |
Due after ten years | 327,677 | |
Subtotal | 506,653 | |
Mortgage-backed Securities and Other Equity Securities | 1,035,314 | |
Total | 1,541,967 | |
Available-for-sale Securities, Fair Value [Abstract] | ||
Due in one year or less | 32,777 | |
Due after one year through five years | 110,618 | |
Due after five years through ten years | 36,312 | |
Due after ten years | 326,881 | |
Subtotal | 506,588 | |
Mortgage-backed Securities and Other Equity Securities | 1,032,167 | |
Total | 1,538,755 | $ 1,479,600 |
Held to Maturity Securities, Carrying Value [Abstract] | ||
Due in one year or less | 30,817 | |
Due after one year through five years | 70,419 | |
Due after five years through ten years | 112,784 | |
Due after ten years | 199,612 | |
Subtotal | 413,632 | |
Mortgage-backed Securities | 495,874 | |
Carrying value | 909,506 | $ 937,487 |
Held to Maturity Securities, Fair Value [Abstract] | ||
Due in one year or less | 30,500 | |
Due after one year through five years | 71,108 | |
Due after five years through ten years | 114,341 | |
Due after ten years | 205,979 | |
Subtotal | 421,928 | |
Mortgage-backed Securities | 499,872 | |
Total | $ 921,800 |
SECURITIES - Narrative (Detail
SECURITIES - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |||
Transfer of available for sale securities to held to maturity securities | $ 0 | $ 157,083,000 | $ 57,724,000 |
Available for sale securities, transferred to held to maturity, unrealized loss | 10,200,000 | ||
Available for sale securities, transferred to held to maturity, unrealized loss, net of tax | 6,700,000 | ||
Proceeds from sale of held-to-maturity securities | 0 | 0 | 0 |
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract] | |||
Realized losses | 4,400,000 | 3,400,000 | 1,200,000 |
Realized gains | 5,000,000 | 6,300,000 | 4,900,000 |
Net securities gains from AFS portfolio | 625,000 | 2,800,000 | $ 3,700,000 |
Securities pledged as collateral, carrying value | $ 1,240,000,000 | $ 1,500,000,000 |
SECURITIES - Subsequent Event
SECURITIES - Subsequent Event (Details) $ in Millions | Jan. 02, 2018USD ($) |
New Accounting Pronouncement, Early Adoption, Effect | Subsequent Event | Accounting Standards Update 2017-12 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Book value of HTM securities reclassified to AFS | $ 743.4 |
LOANS AND ALLOWANCE FOR PROBA66
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES - Narrative (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Jan. 31, 2018 | Dec. 31, 2015 | ||
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||||
Loans to related parties | $ 5,500,000 | $ 6,300,000 | $ 8,100,000 | ||
Related party loans as a percent of stockholders' equity | 0.70% | 1.20% | 1.80% | ||
Owner and non-owner occupied commercial real estate loans | $ 1,170,000,000 | ||||
Loans secured by multi-family properties | 83,800,000 | ||||
Loans secured by farmland | 13,600,000 | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Nonaccrual loans | [1] | 2,937,000 | $ 8,280,000 | ||
Loans for which formal foreclosure proceedings were in process | 154,000 | 28,000 | |||
TDRs in Default | 138,000 | 768,000 | |||
Commitments to lend additional funds | 0 | 0 | |||
Minimum | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Loan review larger dollar loan relationship scope, aggregate debt | 500,000 | ||||
Specifically reserved loans or loan relationships threshold | 150,000 | ||||
Commercial Real Estate Loans | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Nonaccrual loans | $ 595,000 | $ 808,000 | |||
Commercial Real Estate Loans | Subsequent Event | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Nonaccrual loans | $ 12,500,000 | ||||
[1] | Excludes PCI loans measured at fair value at acquisition. |
LOANS AND ALLOWANCE FOR PROBA67
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES - Loans by Portfolio Segment (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | |
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loans balance | [1] | $ 3,294,356,000 | $ 2,556,537,000 |
Less: Allowance for loan losses | [2] | 20,781,000 | 17,911,000 |
Net loans | 3,273,575,000 | 2,538,626,000 | |
Loans acquired | 861,800,000 | 372,400,000 | |
Allowance for loan loss recorded on PCI loans | 0 | 3,000 | |
Construction Real Estate Loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loans balance | 475,867,000 | 380,175,000 | |
1-4 Family Residential Real Estate Loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loans balance | 805,341,000 | 637,239,000 | |
Commercial Real Estate Loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loans balance | 1,265,159,000 | 945,978,000 | |
Commercial Loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loans balance | 266,422,000 | 177,265,000 | |
Municipal Loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loans balance | 345,798,000 | 298,583,000 | |
Loans to Individuals | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loans balance | $ 135,769,000 | $ 117,297,000 | |
[1] | Includes approximately $861.8 million and $372.4 million of acquired loans as of December 31, 2017 and 2016, respectively. | ||
[2] | Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. There was no allowance for loan loss recorded on purchase credit impaired (“PCI”) loans as of December 31, 2017. The allowance for loan loss recorded on PCI loans was $3,000 as of December 31, 2016 |
LOANS AND ALLOWANCE FOR PROBA68
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES - Allowance for Loan Losses Activity by Portfolio Segment (Details) | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)Loan | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | ||||||
Change in Allowances for Loan Losses [Abstract] | ||||||||||||||||
Balance at beginning of period | $ 17,911,000 | $ 19,736,000 | $ 17,911,000 | $ 19,736,000 | $ 13,292,000 | [1] | ||||||||||
Provision (reversal) for loan losses | [2] | 4,675,000 | 9,780,000 | 8,343,000 | ||||||||||||
Loans charged off | (3,453,000) | (14,387,000) | (4,355,000) | |||||||||||||
Recoveries of loans charged off | 1,648,000 | 2,782,000 | 2,456,000 | |||||||||||||
Balance at end of period | $ 20,781,000 | [3] | $ 17,911,000 | 20,781,000 | [3] | 17,911,000 | 19,736,000 | |||||||||
Provision for loan losses | 1,271,000 | $ 960,000 | $ 1,346,000 | 1,098,000 | 2,065,000 | $ 1,631,000 | $ 3,768,000 | 2,316,000 | 4,675,000 | 9,780,000 | 8,343,000 | |||||
Provision expense on PCI Loans | 0 | 0 | 629,000 | |||||||||||||
Construction Real Estate Loans | ||||||||||||||||
Change in Allowances for Loan Losses [Abstract] | ||||||||||||||||
Balance at beginning of period | 4,147,000 | 4,350,000 | 4,147,000 | 4,350,000 | 2,456,000 | [1] | ||||||||||
Provision (reversal) for loan losses | [2] | (437,000) | (472,000) | 1,711,000 | ||||||||||||
Loans charged off | (35,000) | 0 | (24,000) | |||||||||||||
Recoveries of loans charged off | 1,000 | 269,000 | 207,000 | |||||||||||||
Balance at end of period | 3,676,000 | [3] | 4,147,000 | 3,676,000 | [3] | 4,147,000 | 4,350,000 | |||||||||
1-4 Family Residential Real Estate Loans | ||||||||||||||||
Change in Allowances for Loan Losses [Abstract] | ||||||||||||||||
Balance at beginning of period | 2,665,000 | 2,595,000 | 2,665,000 | 2,595,000 | 2,822,000 | [1] | ||||||||||
Provision (reversal) for loan losses | [2] | 65,000 | (28,000) | (284,000) | ||||||||||||
Loans charged off | (304,000) | (43,000) | (58,000) | |||||||||||||
Recoveries of loans charged off | 19,000 | 141,000 | 115,000 | |||||||||||||
Balance at end of period | 2,445,000 | [3] | 2,665,000 | 2,445,000 | [3] | 2,665,000 | 2,595,000 | |||||||||
Commercial Real Estate Loans | ||||||||||||||||
Change in Allowances for Loan Losses [Abstract] | ||||||||||||||||
Balance at beginning of period | 7,204,000 | 4,577,000 | 7,204,000 | 4,577,000 | 3,025,000 | [1] | ||||||||||
Provision (reversal) for loan losses | [2] | 3,604,000 | 2,604,000 | 1,467,000 | ||||||||||||
Loans charged off | 0 | 0 | 0 | |||||||||||||
Recoveries of loans charged off | 13,000 | 23,000 | 85,000 | |||||||||||||
Balance at end of period | 10,821,000 | [3] | 7,204,000 | 10,821,000 | [3] | 7,204,000 | 4,577,000 | |||||||||
Commercial Loans | ||||||||||||||||
Change in Allowances for Loan Losses [Abstract] | ||||||||||||||||
Balance at beginning of period | 2,263,000 | 6,596,000 | 2,263,000 | 6,596,000 | 3,279,000 | [1] | ||||||||||
Provision (reversal) for loan losses | [2] | 242,000 | 6,397,000 | 3,500,000 | ||||||||||||
Loans charged off | (723,000) | (11,396,000) | [4] | (336,000) | ||||||||||||
Recoveries of loans charged off | 312,000 | 666,000 | 153,000 | |||||||||||||
Balance at end of period | 2,094,000 | [3] | 2,263,000 | 2,094,000 | [3] | 2,263,000 | 6,596,000 | |||||||||
Charge-off of large commercial borrowing relationships | [4] | $ 10,900,000 | ||||||||||||||
Number of loans partially charged-off | Loan | [4] | 2 | ||||||||||||||
Municipal Loans | ||||||||||||||||
Change in Allowances for Loan Losses [Abstract] | ||||||||||||||||
Balance at beginning of period | 750,000 | 725,000 | $ 750,000 | 725,000 | 716,000 | [1] | ||||||||||
Provision (reversal) for loan losses | [2] | 110,000 | (224,000) | 258,000 | ||||||||||||
Loans charged off | 0 | 0 | (249,000) | |||||||||||||
Recoveries of loans charged off | 0 | 249,000 | 0 | |||||||||||||
Balance at end of period | 860,000 | [3] | 750,000 | 860,000 | [3] | 750,000 | 725,000 | |||||||||
Loans to Individuals | ||||||||||||||||
Change in Allowances for Loan Losses [Abstract] | ||||||||||||||||
Balance at beginning of period | $ 882,000 | $ 893,000 | 882,000 | 893,000 | 994,000 | [1] | ||||||||||
Provision (reversal) for loan losses | [2] | 1,091,000 | 1,503,000 | 1,691,000 | ||||||||||||
Loans charged off | (2,391,000) | (2,948,000) | (3,688,000) | |||||||||||||
Recoveries of loans charged off | 1,303,000 | 1,434,000 | 1,896,000 | |||||||||||||
Balance at end of period | $ 885,000 | [3] | $ 882,000 | $ 885,000 | [3] | $ 882,000 | $ 893,000 | |||||||||
[1] | Loans acquired with the Omni acquisition were measured at fair value on December 17, 2014 with no carryover of allowance for loan loss. | |||||||||||||||
[2] | Of the $4.7 million and $9.8 million recorded in provision for loan losses for the years ended December 31, 2017 and 2016, none related to provision expense on PCI loans. Of the $8.3 million recorded in provision for loan losses for the year ended December 31, 2015, $629,000 related to provision expense on PCI loans. | |||||||||||||||
[3] | Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. | |||||||||||||||
[4] | Of the $11.4 million in commercial charge-offs recorded for the year ended December 31, 2016, $10.9 million relates to the charge-off of two large commercial borrowing relationships. |
LOANS AND ALLOWANCE FOR PROBA69
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES - Allowance Balance, by Impairment Method, Reserve (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | [3] | ||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | |||||||
Ending balance - individually evaluated for impairment | [1] | $ 353,000 | $ 1,086,000 | ||||
Ending balance - collectively evaluated for impairment | 20,428,000 | 16,825,000 | |||||
Balance at end of period | 20,781,000 | [2] | 17,911,000 | $ 19,736,000 | $ 13,292,000 | ||
Allowance for loan losses associated with PCI loans | 0 | 3,000 | |||||
Construction Real Estate Loans | |||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | |||||||
Ending balance - individually evaluated for impairment | [1] | 12,000 | 13,000 | ||||
Ending balance - collectively evaluated for impairment | 3,664,000 | 4,134,000 | |||||
Balance at end of period | 3,676,000 | [2] | 4,147,000 | 4,350,000 | 2,456,000 | ||
1-4 Family Residential Real Estate Loans | |||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | |||||||
Ending balance - individually evaluated for impairment | [1] | 14,000 | 16,000 | ||||
Ending balance - collectively evaluated for impairment | 2,431,000 | 2,649,000 | |||||
Balance at end of period | 2,445,000 | [2] | 2,665,000 | 2,595,000 | 2,822,000 | ||
Commercial Real Estate Loans | |||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | |||||||
Ending balance - individually evaluated for impairment | [1] | 14,000 | 17,000 | ||||
Ending balance - collectively evaluated for impairment | 10,807,000 | 7,187,000 | |||||
Balance at end of period | 10,821,000 | [2] | 7,204,000 | 4,577,000 | 3,025,000 | ||
Commercial Loans | |||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | |||||||
Ending balance - individually evaluated for impairment | [1] | 252,000 | 923,000 | ||||
Ending balance - collectively evaluated for impairment | 1,842,000 | 1,340,000 | |||||
Balance at end of period | 2,094,000 | [2] | 2,263,000 | 6,596,000 | 3,279,000 | ||
Municipal Loans | |||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | |||||||
Ending balance - individually evaluated for impairment | [1] | 10,000 | 11,000 | ||||
Ending balance - collectively evaluated for impairment | 850,000 | 739,000 | |||||
Balance at end of period | 860,000 | [2] | 750,000 | 725,000 | 716,000 | ||
Loans to Individuals | |||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | |||||||
Ending balance - individually evaluated for impairment | [1] | 51,000 | 106,000 | ||||
Ending balance - collectively evaluated for impairment | 834,000 | 776,000 | |||||
Balance at end of period | $ 885,000 | [2] | $ 882,000 | $ 893,000 | $ 994,000 | ||
[1] | There was no allowance for loan losses associated with PCI loans as of December 31, 2017. There was approximately $3,000 of allowance for loan losses associated with PCI loans as of December 31, 2016. | ||||||
[2] | Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. | ||||||
[3] | Loans acquired with the Omni acquisition were measured at fair value on December 17, 2014 with no carryover of allowance for loan loss. |
LOANS AND ALLOWANCE FOR PROBA70
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES - Allowance for Loan Losses, Loan Portfolio, by Impairment Method (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | |||
Loans individually evaluated for impairment | $ 4,698 | $ 10,009 | |
Loans collectively evaluated for impairment | 3,244,425 | 2,537,331 | |
Purchased credit impaired loans | 45,233 | 9,197 | |
Total ending loan balance | [1] | 3,294,356 | 2,556,537 |
Construction Real Estate Loans | |||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | |||
Loans individually evaluated for impairment | 86 | 480 | |
Loans collectively evaluated for impairment | 475,505 | 379,526 | |
Purchased credit impaired loans | 276 | 169 | |
Total ending loan balance | 475,867 | 380,175 | |
1-4 Family Residential Real Estate Loans | |||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | |||
Loans individually evaluated for impairment | 1,581 | 1,693 | |
Loans collectively evaluated for impairment | 797,111 | 629,893 | |
Purchased credit impaired loans | 6,649 | 5,653 | |
Total ending loan balance | 805,341 | 637,239 | |
Commercial Real Estate Loans | |||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | |||
Loans individually evaluated for impairment | 895 | 1,184 | |
Loans collectively evaluated for impairment | 1,232,327 | 942,818 | |
Purchased credit impaired loans | 31,937 | 1,976 | |
Total ending loan balance | 1,265,159 | 945,978 | |
Commercial Loans | |||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | |||
Loans individually evaluated for impairment | 1,429 | 5,840 | |
Loans collectively evaluated for impairment | 259,745 | 170,159 | |
Purchased credit impaired loans | 5,248 | 1,266 | |
Total ending loan balance | 266,422 | 177,265 | |
Municipal Loans | |||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | |||
Loans individually evaluated for impairment | 502 | 571 | |
Loans collectively evaluated for impairment | 345,296 | 298,012 | |
Purchased credit impaired loans | 0 | 0 | |
Total ending loan balance | 345,798 | 298,583 | |
Loans to Individuals | |||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | |||
Loans individually evaluated for impairment | 205 | 241 | |
Loans collectively evaluated for impairment | 134,441 | 116,923 | |
Purchased credit impaired loans | 1,123 | 133 | |
Total ending loan balance | $ 135,769 | $ 117,297 | |
[1] | Includes approximately $861.8 million and $372.4 million of acquired loans as of December 31, 2017 and 2016, respectively. |
LOANS AND ALLOWANCE FOR PROBA71
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES - Loans by Credit Quality Indicator (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [1] | $ 3,294,356 | $ 2,556,537 |
PCI loans | 45,233 | 9,197 | |
Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | 3,131,151 | 2,464,338 | |
Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 39,808 | 19,028 |
PCI loans | 362 | 5 | |
Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 31,223 | 20,251 |
PCI loans | 6,000 | 511 | |
Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 90,629 | 51,303 |
PCI loans | 10,500 | 1,500 | |
Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 1,545 | 1,617 |
PCI loans | 925 | 28 | |
Construction Real Estate Loans | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | 475,867 | 380,175 | |
PCI loans | 276 | 169 | |
Construction Real Estate Loans | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | 471,446 | 374,443 | |
Construction Real Estate Loans | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 3,329 | 34 |
Construction Real Estate Loans | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 77 | 571 |
Construction Real Estate Loans | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 982 | 5,108 |
Construction Real Estate Loans | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 33 | 19 |
1-4 Family Residential Real Estate Loans | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | 805,341 | 637,239 | |
PCI loans | 6,649 | 5,653 | |
1-4 Family Residential Real Estate Loans | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | 796,639 | 632,937 | |
1-4 Family Residential Real Estate Loans | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 559 | 68 |
1-4 Family Residential Real Estate Loans | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 857 | 0 |
1-4 Family Residential Real Estate Loans | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 6,610 | 3,380 |
1-4 Family Residential Real Estate Loans | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 676 | 854 |
Commercial Real Estate Loans | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | 1,265,159 | 945,978 | |
PCI loans | 31,937 | 1,976 | |
Commercial Real Estate Loans | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | 1,136,576 | 885,049 | |
Commercial Real Estate Loans | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 26,275 | 17,739 |
Commercial Real Estate Loans | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 25,301 | 10,587 |
Commercial Real Estate Loans | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 76,625 | 32,603 |
Commercial Real Estate Loans | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 382 | 0 |
Commercial Loans | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | 266,422 | 177,265 | |
PCI loans | 5,248 | 1,266 | |
Commercial Loans | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | 247,430 | 158,943 | |
Commercial Loans | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 9,625 | 1,187 |
Commercial Loans | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 3,956 | 8,086 |
Commercial Loans | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 5,203 | 9,012 |
Commercial Loans | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 208 | 37 |
Municipal Loans | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | 345,798 | 298,583 | |
PCI loans | 0 | 0 | |
Municipal Loans | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | 344,366 | 297,014 | |
Municipal Loans | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 0 | 0 |
Municipal Loans | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 930 | 998 |
Municipal Loans | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 502 | 571 |
Municipal Loans | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 0 | 0 |
Loans to Individuals | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | 135,769 | 117,297 | |
PCI loans | 1,123 | 133 | |
Loans to Individuals | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | 134,694 | 115,952 | |
Loans to Individuals | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 20 | 0 |
Loans to Individuals | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 102 | 9 |
Loans to Individuals | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | 707 | 629 |
Loans to Individuals | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Total ending loan balance | [2] | $ 246 | $ 707 |
[1] | Includes approximately $861.8 million and $372.4 million of acquired loans as of December 31, 2017 and 2016, respectively. | ||
[2] | Includes PCI loans comprised of $362,000 pass watch, $6.0 million special mention, $10.5 million substandard and $925,000 doubtful as of December 31, 2017. Includes PCI loans comprised of $5,000 pass watch, $511,000 special mention, $1.5 million substandard and $28,000 doubtful as of December 31, 2016. |
LOANS AND ALLOWANCE FOR PROBA72
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES - Nonperforming Assets by Asset Class (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Nonperforming Assets by Asset Class [Abstract] | |||
Nonaccrual loans | [1] | $ 2,937 | $ 8,280 |
Accruing loans past due more than 90 days | [1] | 1 | 6 |
Restructured loans | [2] | 5,767 | 6,431 |
Other real estate owned | 1,613 | 339 | |
Repossessed assets | 154 | 49 | |
Total Nonperforming Assets | 10,472 | 15,105 | |
PCI loans restructured | $ 2,900 | $ 3,100 | |
[1] | Excludes PCI loans measured at fair value at acquisition. | ||
[2] | Includes $2.9 million and $3.1 million in PCI loans restructured as of December 31, 2017 and 2016, respectively. |
LOANS AND ALLOWANCE FOR PROBA73
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES - Nonaccrual Loans by Class (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Nonaccrual loans | [1] | $ 2,937 | $ 8,280 |
Construction Real Estate Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Nonaccrual loans | 86 | 105 | |
1-4 Family Residential Real Estate Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Nonaccrual loans | 1,098 | 1,067 | |
Commercial Real Estate Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Nonaccrual loans | 595 | 808 | |
Commercial Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Nonaccrual loans | 903 | 5,477 | |
Loans to Individuals | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Nonaccrual loans | $ 255 | $ 823 | |
[1] | Excludes PCI loans measured at fair value at acquisition. |
LOANS AND ALLOWANCE FOR PROBA74
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES - Impaired Loans by Class of Loan (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Impaired Financing Receivable, Recorded Investment [Abstract] | |||
Unpaid Contractual Principal Balance | [1] | $ 7,989 | $ 13,560 |
Recorded Investment | [1] | 7,549 | 13,071 |
Related Allowance for Loan Losses | [1] | 353 | 1,086 |
PCI loans that experienced deterioration in credit quality subsequent to acquisition | 2,900 | 3,100 | |
Construction Real Estate Loans | |||
Impaired Financing Receivable, Recorded Investment [Abstract] | |||
Unpaid Contractual Principal Balance | 91 | 486 | |
Recorded Investment | 86 | 480 | |
Related Allowance for Loan Losses | 12 | 13 | |
1-4 Family Residential Real Estate Loans | |||
Impaired Financing Receivable, Recorded Investment [Abstract] | |||
Unpaid Contractual Principal Balance | 4,141 | 4,487 | |
Recorded Investment | 3,952 | 4,264 | |
Related Allowance for Loan Losses | 14 | 16 | |
Commercial Real Estate Loans | |||
Impaired Financing Receivable, Recorded Investment [Abstract] | |||
Unpaid Contractual Principal Balance | 1,353 | 1,631 | |
Recorded Investment | 1,199 | 1,574 | |
Related Allowance for Loan Losses | 14 | 17 | |
Commercial Loans | |||
Impaired Financing Receivable, Recorded Investment [Abstract] | |||
Unpaid Contractual Principal Balance | 1,665 | 6,108 | |
Recorded Investment | 1,605 | 5,941 | |
Related Allowance for Loan Losses | 252 | 923 | |
Municipal Loans | |||
Impaired Financing Receivable, Recorded Investment [Abstract] | |||
Unpaid Contractual Principal Balance | 502 | 571 | |
Recorded Investment | 502 | 571 | |
Related Allowance for Loan Losses | 10 | 11 | |
Loans to Individuals | |||
Impaired Financing Receivable, Recorded Investment [Abstract] | |||
Unpaid Contractual Principal Balance | 237 | 277 | |
Recorded Investment | 205 | 241 | |
Related Allowance for Loan Losses | $ 51 | $ 106 | |
[1] | Includes $2.9 million and $3.1 million of PCI loans that experienced deterioration in credit quality subsequent to the acquisition date as of December 31, 2017 and December 31, 2016, respectively. |
LOANS AND ALLOWANCE FOR PROBA75
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES - Aging of Past Due Loans By Class of Loan (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | $ 19,039 | $ 15,735 | |
Current | [1] | 3,275,317 | 2,540,802 |
Total ending loans balance | [2] | 3,294,356 | 2,556,537 |
30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 13,777 | 9,658 | |
60-89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 3,901 | 1,593 | |
Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 1,361 | 4,484 | |
Construction Real Estate Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 2,900 | 1,067 | |
Current | [1] | 472,967 | 379,108 |
Total ending loans balance | 475,867 | 380,175 | |
Construction Real Estate Loans | 30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 1,302 | 917 | |
Construction Real Estate Loans | 60-89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 1,530 | 64 | |
Construction Real Estate Loans | Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 68 | 86 | |
1-4 Family Residential Real Estate Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 10,944 | 7,580 | |
Current | [1] | 794,397 | 629,659 |
Total ending loans balance | 805,341 | 637,239 | |
1-4 Family Residential Real Estate Loans | 30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 8,508 | 6,225 | |
1-4 Family Residential Real Estate Loans | 60-89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 1,574 | 755 | |
1-4 Family Residential Real Estate Loans | Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 862 | 600 | |
Commercial Real Estate Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 1,386 | 378 | |
Current | [1] | 1,263,773 | 945,600 |
Total ending loans balance | 1,265,159 | 945,978 | |
Commercial Real Estate Loans | 30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 1,357 | 70 | |
Commercial Real Estate Loans | 60-89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 24 | 154 | |
Commercial Real Estate Loans | Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 5 | 154 | |
Commercial Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 1,395 | 4,542 | |
Current | [1] | 265,027 | 172,723 |
Total ending loans balance | 266,422 | 177,265 | |
Commercial Loans | 30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 662 | 783 | |
Commercial Loans | 60-89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 400 | 300 | |
Commercial Loans | Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 333 | 3,459 | |
Municipal Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 422 | 113 | |
Current | [1] | 345,376 | 298,470 |
Total ending loans balance | 345,798 | 298,583 | |
Municipal Loans | 30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 422 | 113 | |
Municipal Loans | 60-89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 0 | 0 | |
Municipal Loans | Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 0 | 0 | |
Loans to Individuals | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 1,992 | 2,055 | |
Current | [1] | 133,777 | 115,242 |
Total ending loans balance | 135,769 | 117,297 | |
Loans to Individuals | 30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 1,526 | 1,550 | |
Loans to Individuals | 60-89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 373 | 320 | |
Loans to Individuals | Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | $ 93 | $ 185 | |
[1] | Includes PCI loans measured at fair value at acquisition. | ||
[2] | Includes approximately $861.8 million and $372.4 million of acquired loans as of December 31, 2017 and 2016, respectively. |
LOANS AND ALLOWANCE FOR PROBA76
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES - Interest Income on Impaired Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Impaired Financing Receivable, Average Recorded Investment and Interest [Abstract] | |||
Average Recorded Investment | $ 9,504 | $ 22,597 | $ 23,607 |
Interest Income Recognized | 325 | 344 | 422 |
Construction Real Estate Loans | |||
Impaired Financing Receivable, Average Recorded Investment and Interest [Abstract] | |||
Average Recorded Investment | 251 | 510 | 1,518 |
Interest Income Recognized | 0 | 22 | 0 |
1-4 Family Residential Real Estate Loans | |||
Impaired Financing Receivable, Average Recorded Investment and Interest [Abstract] | |||
Average Recorded Investment | 4,264 | 3,247 | 3,410 |
Interest Income Recognized | 197 | 169 | 61 |
Commercial Real Estate Loans | |||
Impaired Financing Receivable, Average Recorded Investment and Interest [Abstract] | |||
Average Recorded Investment | 1,338 | 4,490 | 3,323 |
Interest Income Recognized | 30 | 63 | 64 |
Commercial Loans | |||
Impaired Financing Receivable, Average Recorded Investment and Interest [Abstract] | |||
Average Recorded Investment | 2,862 | 13,481 | 13,807 |
Interest Income Recognized | 59 | 48 | 256 |
Municipal Loans | |||
Impaired Financing Receivable, Average Recorded Investment and Interest [Abstract] | |||
Average Recorded Investment | 545 | 612 | 824 |
Interest Income Recognized | 30 | 33 | 37 |
Loans to Individuals | |||
Impaired Financing Receivable, Average Recorded Investment and Interest [Abstract] | |||
Average Recorded Investment | 244 | 257 | 725 |
Interest Income Recognized | $ 9 | $ 9 | $ 4 |
LOANS AND ALLOWANCE FOR PROBA77
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES - Troubled Debt Restructurings (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)contract | Dec. 31, 2016USD ($)contract | |
Troubled Debt Restructuring [Abstract] | ||
Extend Amortization Period | $ 801 | $ 3,134 |
Interest Rate Reductions | 0 | 71 |
Combination | 293 | 2,761 |
Total Modifications | $ 1,094 | $ 5,966 |
Number of Contracts | contract | 10 | 23 |
Construction Real Estate Loans | ||
Troubled Debt Restructuring [Abstract] | ||
Extend Amortization Period | $ 375 | |
Interest Rate Reductions | 0 | |
Combination | 23 | |
Total Modifications | $ 398 | |
Number of Contracts | contract | 2 | |
1-4 Family Residential Real Estate Loans | ||
Troubled Debt Restructuring [Abstract] | ||
Extend Amortization Period | $ 0 | |
Interest Rate Reductions | 71 | |
Combination | 2,602 | |
Total Modifications | $ 2,673 | |
Number of Contracts | contract | 4 | |
Commercial Real Estate Loans | ||
Troubled Debt Restructuring [Abstract] | ||
Extend Amortization Period | $ 500 | |
Interest Rate Reductions | 0 | |
Combination | 0 | |
Total Modifications | $ 500 | |
Number of Contracts | contract | 1 | |
Commercial Loans | ||
Troubled Debt Restructuring [Abstract] | ||
Extend Amortization Period | $ 778 | $ 2,230 |
Interest Rate Reductions | 0 | 0 |
Combination | 241 | 59 |
Total Modifications | $ 1,019 | $ 2,289 |
Number of Contracts | contract | 4 | 8 |
Loans to Individuals | ||
Troubled Debt Restructuring [Abstract] | ||
Extend Amortization Period | $ 23 | $ 29 |
Interest Rate Reductions | 0 | 0 |
Combination | 52 | 77 |
Total Modifications | $ 75 | $ 106 |
Number of Contracts | contract | 6 | 8 |
LOANS AND ALLOWANCE FOR PROBA78
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES - Purchased Credit Impaired (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Purchased Credit Impaired [Abstract] | ||
Outstanding principal balance | $ 52,426 | $ 10,612 |
Carrying amount | 45,233 | 9,197 |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||
Balance at beginning of period | 2,480 | 2,493 |
Additions due to acquisition | 15,389 | 0 |
Reclassifications (to) from nonaccretable discount | 1,720 | 1,796 |
Accretion | (868) | (1,809) |
Balance at end of period | $ 18,721 | $ 2,480 |
PREMISES AND EQUIPMENT (Details
PREMISES AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Premises | $ 158,817 | $ 127,970 | |
Furniture and equipment | 40,565 | 36,603 | |
Premises and equipment, gross | 199,382 | 164,573 | |
Less: accumulated depreciation | 65,742 | 58,570 | |
Premises and equipment, net | 133,640 | 106,003 | |
Depreciation [Abstract] | |||
Accumulated depreciation of assets written off | 915 | 1,200 | |
Depreciation expense | $ 8,100 | $ 8,000 | $ 8,100 |
DEPOSITS - Types and Component
DEPOSITS - Types and Components of Deposit Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Noninterest bearing demand deposits: | ||
Noninterest bearing demand deposits | $ 1,037,401 | $ 704,013 |
Interest bearing deposits: | ||
Total interest bearing deposits | 3,478,046 | 2,829,063 |
Total deposits | 4,515,447 | 3,533,076 |
Private accounts | ||
Noninterest bearing demand deposits: | ||
Noninterest bearing demand deposits | 995,685 | 678,279 |
Interest bearing deposits: | ||
Savings deposits | 356,857 | 249,490 |
Money market demand deposits | 443,015 | 329,426 |
Platinum money market deposits | 308,105 | 353,381 |
Interest bearing checking | 686,816 | 212,296 |
NOW demand deposits | 20,142 | 234,217 |
Certificates and other time deposits, $250,000 or more | 87,195 | 58,312 |
Certificates and other time deposits under $250,000 | 534,220 | 422,134 |
Total interest bearing deposits | 2,436,350 | 1,859,256 |
Public accounts | ||
Noninterest bearing demand deposits: | ||
Noninterest bearing demand deposits | 41,716 | 25,734 |
Interest bearing deposits: | ||
Savings deposits | 304 | 19 |
Money market demand deposits | 19,560 | 15,126 |
Platinum money market deposits | 360,006 | 382,017 |
Interest bearing checking | 55,902 | 12,856 |
NOW demand deposits | 114,401 | 128,086 |
Certificates and other time deposits, $250,000 or more | 462,941 | 409,671 |
Certificates and other time deposits under $250,000 | 28,582 | 22,032 |
Total interest bearing deposits | $ 1,041,696 | $ 969,807 |
DEPOSITS - Scheduled Maturitie
DEPOSITS - Scheduled Maturities of Time Deposits (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Time Deposits, Fiscal Year Maturity [Abstract] | |
2,018 | $ 758,624 |
2,019 | 229,032 |
2,020 | 64,215 |
2,021 | 35,493 |
2,022 | 20,445 |
2023 and thereafter | 5,129 |
Total | $ 1,112,938 |
DEPOSITS - Narrative (Details)
DEPOSITS - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deposit Liabilities Disclosures [Line Items] | |||
Time deposits threshold | $ 250,000 | ||
Interest expense on time deposits of $250,000 or more | 5,000,000 | $ 3,200,000 | $ 1,400,000 |
Related party deposit liabilities | 31,700,000 | 10,300,000 | |
Demand deposit overdrafts reclassified as loans | 1,300,000 | 993,000 | |
Certificates of deposit - CDs | |||
Deposit Liabilities Disclosures [Line Items] | |||
Brokered certificates of deposit | $ 60,200,000 | $ 35,500,000 | |
Brokered certificates of deposit, as a percent of total deposits | 1.30% | ||
Category under which brokered certificates of deposit are reported | $ 250,000 | ||
Maximum brokered certificates of deposit balance allowed per company policy | 180,000,000 | ||
Non-Callable | Certificates of deposit - CDs | |||
Deposit Liabilities Disclosures [Line Items] | |||
Interest-bearing domestic deposit, brokered, non-callable | $ 54,500,000 | ||
Weighted average cost, domestic deposit, brokered | 1.14% | ||
Non-Callable | Minimum | |||
Deposit Liabilities Disclosures [Line Items] | |||
Brokered certificates of deposit, maturity period | 2 months | ||
Non-Callable | Maximum | |||
Deposit Liabilities Disclosures [Line Items] | |||
Brokered certificates of deposit, maturity period | 11 months | ||
Callable | Certificates of deposit - CDs | |||
Deposit Liabilities Disclosures [Line Items] | |||
Brokered certificates of deposit, maturity period | 2 years | ||
Interest-bearing domestic deposit, brokered, long-term with company controlled short-term calls | $ 5,700,000 |
BORROWING ARRANGEMENTS (Details
BORROWING ARRANGEMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Debt Instrument [Line Items] | |||
Federal funds purchased and repurchase agreements | $ 9,498 | $ 7,097 | |
FHLB borrowings | 1,017,361 | 1,309,646 | |
Subordinated notes, net of unamortized debt issuance costs | [1] | 98,248 | 98,100 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 60,241 | 60,236 | |
Federal funds purchased and repurchase agreements: | |||
Debt Instrument [Line Items] | |||
Average amount outstanding during the period | [2] | 8,120 | 6,798 |
Maximum amount outstanding during the period | [3] | $ 9,498 | $ 11,516 |
Weighted average interest rate during the period | [4] | 0.20% | 0.10% |
Interest rate at end of period | [5] | 0.20% | 0.20% |
FHLB borrowings: | |||
Debt Instrument [Line Items] | |||
Average amount outstanding during the period | [2] | $ 1,222,033 | $ 1,060,631 |
Maximum amount outstanding during the period | [3] | $ 1,414,453 | $ 1,309,646 |
Weighted average interest rate during the period | [4] | 1.20% | 1.10% |
Interest rate at end of period | [5] | 1.40% | 0.90% |
Subordinated notes, net of unamortized debt issuance costs: | |||
Debt Instrument [Line Items] | |||
Average amount outstanding during the period | [2] | $ 98,172 | $ 27,860 |
Maximum amount outstanding during the period | [3] | $ 98,248 | $ 98,100 |
Weighted average interest rate during the period | [4] | 5.70% | 5.80% |
Interest rate at end of period | [5] | 5.50% | 5.50% |
Trust preferred subordinated debentures, net of unamortized debt issuance costs: | |||
Debt Instrument [Line Items] | |||
Average amount outstanding during the period | [2] | $ 60,238 | $ 60,233 |
Maximum amount outstanding during the period | [3] | $ 60,241 | $ 60,236 |
Weighted average interest rate during the period | [4] | 3.30% | 2.80% |
Interest rate at end of period | [5] | 3.60% | 3.00% |
[1] | This debt consists of subordinated notes with a remaining maturity greater than one year that qualify under the risk-based capital guidelines as Tier 2 capital, subject to certain limitations. | ||
[2] | The average amount outstanding during the period was computed by dividing the total daily outstanding principal balances by the number of days in the period. | ||
[3] | The maximum amount outstanding at any month-end during the period. | ||
[4] | The weighted average interest rate during the period was computed by dividing the actual interest expense by the average balance outstanding during the period. The weighted average interest rate on the FHLB borrowings include the effect of interest rate swaps. | ||
[5] | Stated rate. |
BORROWING ARRANGEMENTS - Matur
BORROWING ARRANGEMENTS - Maturities Table (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |
2,018 | $ 872,786 |
2,019 | 62,330 |
2,020 | 76,015 |
2,021 | 11,690 |
2,022 | 0 |
Thereafter | 162,527 |
Total | 1,185,348 |
Federal funds purchased and repurchase agreements: | |
Debt Instrument [Line Items] | |
2,018 | 9,498 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 0 |
Total | 9,498 |
FHLB borrowings: | |
Debt Instrument [Line Items] | |
2,018 | 863,288 |
2,019 | 62,330 |
2,020 | 76,015 |
2,021 | 11,690 |
2,022 | 0 |
Thereafter | 4,038 |
Total | 1,017,361 |
Subordinated notes, net of unamortized debt issuance costs: | |
Debt Instrument [Line Items] | |
2,018 | 0 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 98,248 |
Total | 98,248 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs: | |
Debt Instrument [Line Items] | |
2,018 | 0 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 60,241 |
Total | $ 60,241 |
BORROWING ARRANGEMENTS - Addit
BORROWING ARRANGEMENTS - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017contract | Dec. 31, 2017USD ($)credit_lineagreementOustanding_Letters_of_CreditRate | Dec. 31, 2016USD ($) | |
Line of Credit Facility [Line Items] | |||
Number of credit lines maintained by the Company | credit_line | 3 | ||
Federal funds purchased | $ 0 | $ 0 | |
Number of outstanding letters of credit | Oustanding_Letters_of_Credit | 1 | ||
Letters of credit outstanding | $ 195,000 | ||
FHLB Advances, unused funds | 729,700,000 | ||
Letters of credit, FHLB, as collateral | 0 | ||
Securities sold under agreements to repurchase | $ 9,500,000 | 7,100,000 | |
Maturity of repurchase agreements | 1 year | ||
Frost Bank | |||
Line of Credit Facility [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 30,000,000 | ||
Line of credit facility, capacity available for issuance of letters of credit | 5,000,000 | ||
TIB - The Independent Bankers Bank | |||
Line of Credit Facility [Line Items] | |||
Line of credit, maximum borrowing capacity | 15,000,000 | ||
Comerica Bank | |||
Line of Credit Facility [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 7,500,000 | ||
Minimum | |||
Line of Credit Facility [Line Items] | |||
Federal home loan bank, advances, general debt obligations, disclosures, interest rate at period end | 0.85% | ||
Maturity range of FHLB advances | 1 month | ||
Maximum | |||
Line of Credit Facility [Line Items] | |||
Federal home loan bank, advances, general debt obligations, disclosures, interest rate at period end | 4.799% | ||
Maturity range of FHLB advances | 10 years 7 months | ||
Variable Rate Advance Agreements | |||
Line of Credit Facility [Line Items] | |||
Debt face amount | $ 240,000,000 | $ 250,000,000 | |
Three-Month London Interbank Offered Rate (LIBOR) | Variable Rate Advance Agreements | |||
Line of Credit Facility [Line Items] | |||
Number of variable rate advance agreements | agreement | 2 | ||
Description of variable rate basis | three-month LIBOR | ||
Basis spread on variable rate | Rate | (0.25%) | ||
One-Month London Interbank Offered Rate (LIBOR) | Variable Rate Advance Agreements | |||
Line of Credit Facility [Line Items] | |||
Description of variable rate basis | one-month LIBOR | ||
One-Month London Interbank Offered Rate (LIBOR) | Variable Rate Advance Agreements | Minimum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | Rate | 0.17% | ||
One-Month London Interbank Offered Rate (LIBOR) | Variable Rate Advance Agreements | Maximum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | Rate | 0.278% | ||
Interest Rate Swaps | |||
Line of Credit Facility [Line Items] | |||
Derivative, instruments terminated | contract | 2 | ||
Derivative, terminated, notional amount | $ 40,000,000 | ||
Interest Rate Swaps | Minimum | |||
Line of Credit Facility [Line Items] | |||
Derivative, fixed interest rate | 0.932% | ||
Derivative, term of contract | 5 years | ||
Interest Rate Swaps | Maximum | |||
Line of Credit Facility [Line Items] | |||
Derivative, fixed interest rate | 2.345% | ||
Derivative, term of contract | 10 years |
LONG-TERM OBLIGATIONS - Other
LONG-TERM OBLIGATIONS - Other Long-term Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2017 | Dec. 31, 2016 | Oct. 10, 2007 | [5] | ||||
Debt Instruments [Abstract] | |||||||
Subordinated notes, net of unamortized debt issuance costs | [1] | $ 98,248 | $ 98,100 | ||||
Trust preferred subordinated debentures | [2] | 60,241 | 60,236 | ||||
Total long-term obligations | 158,489 | 158,336 | |||||
5.50% Subordinated Notes | |||||||
Debt Instruments [Abstract] | |||||||
Subordinated notes, net of unamortized debt issuance costs | [1],[3] | 98,248 | 98,100 | ||||
Unamortized debt issuance expense | 1,800 | 1,900 | |||||
Southside Statutory Trust III, net of unamortized debt issuance costs | |||||||
Debt Instruments [Abstract] | |||||||
Trust preferred subordinated debentures | [2],[4] | 20,549 | 20,544 | ||||
Unamortized debt issuance expense | 70 | 75 | |||||
Southside Statutory Trust IV | |||||||
Debt Instruments [Abstract] | |||||||
Trust preferred subordinated debentures | 23,196 | 23,196 | [2] | ||||
Southside Statutory Trust V | |||||||
Debt Instruments [Abstract] | |||||||
Trust preferred subordinated debentures | 12,887 | 12,887 | [2] | ||||
Magnolia Trust Company I | |||||||
Debt Instruments [Abstract] | |||||||
Trust preferred subordinated debentures | $ 3,609 | [5] | $ 3,609 | [2] | $ 3,600 | ||
Minimum | 5.50% Subordinated Notes | |||||||
Debt Instruments [Abstract] | |||||||
Long-term debt, remaining maturity | 1 year | ||||||
[1] | This debt consists of subordinated notes with a remaining maturity greater than one year that qualify under the risk-based capital guidelines as Tier 2 capital, subject to certain limitations. | ||||||
[2] | This debt consists of trust preferred securities that qualify under the risk-based capital guidelines as Tier 1 capital, subject to certain limitations. | ||||||
[3] | The unamortized discount and debt issuance costs reflected in the carrying amount of the subordinated notes totaled approximately $1.8 million at December 31, 2017 and $1.9 million at December 31, 2016. | ||||||
[4] | The unamortized debt issuance costs reflected in the carrying amount of the Southside Statutory Trust III junior subordinated debentures totaled $70,000 at December 31, 2017 and $75,000 at December 31, 2016. | ||||||
[5] | On October 10, 2007, as part of an acquisition we assumed $3.6 million of floating rate junior subordinated debentures issued in 2005 to Magnolia Trust Company I. |
LONG-TERM OBLIGATIONS - LT Deb
LONG-TERM OBLIGATIONS - LT Debt Interest Rates (Details) - USD ($) $ in Thousands | Sep. 19, 2016 | Oct. 10, 2007 | Aug. 10, 2007 | Aug. 08, 2007 | Sep. 04, 2003 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Debt Instrument [Line Items] | |||||||||||
Other long-term debt | [1] | $ 60,241 | $ 60,236 | ||||||||
5.50% Subordinated Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amount issued | $ 100,000 | ||||||||||
Stated interest rate | 5.50% | ||||||||||
5.50% Subordinated Notes | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate, effective September 30, 2021 | 4.297% | ||||||||||
Southside Statutory Trust III | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amount issued | $ 20,619 | ||||||||||
Other long-term debt | [1],[2] | 20,549 | 20,544 | ||||||||
Southside Statutory Trust III | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.94% | ||||||||||
Southside Statutory Trust IV | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Other long-term debt | 23,196 | 23,196 | [1] | ||||||||
Southside Statutory Trust IV | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.30% | ||||||||||
Southside Statutory Trust V | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Other long-term debt | 12,887 | 12,887 | [1] | ||||||||
Southside Statutory Trust V | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.25% | ||||||||||
Magnolia Trust Company I | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Other long-term debt | $ 3,600 | [3] | $ 3,609 | [3] | $ 3,609 | [1] | |||||
Magnolia Trust Company I | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | [3] | 1.80% | |||||||||
[1] | This debt consists of trust preferred securities that qualify under the risk-based capital guidelines as Tier 1 capital, subject to certain limitations. | ||||||||||
[2] | The unamortized debt issuance costs reflected in the carrying amount of the Southside Statutory Trust III junior subordinated debentures totaled $70,000 at December 31, 2017 and $75,000 at December 31, 2016. | ||||||||||
[3] | On October 10, 2007, as part of an acquisition we assumed $3.6 million of floating rate junior subordinated debentures issued in 2005 to Magnolia Trust Company I. |
EMPLOYEE BENEFITS - Narrative
EMPLOYEE BENEFITS - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)executive_officershares | Dec. 31, 2016USD ($)executive_officershares | Dec. 31, 2015USD ($)shares | |
Health Insurance Coverage [Abstract] | |||
Cost of health care benefits | $ 5,600,000 | $ 4,900,000 | $ 6,000,000 |
Health coverage eligibility for retiring employees, minimum years of service | 50 years | ||
Retirees participating in health insurance | 2 | 2 | 2 |
Employee Stock Ownership Plan (ESOP) [Abstract] | |||
Contributions to the employee stock ownership plan (ESOP) | $ 350,000 | $ 350,000 | $ 350,000 |
Shares owned by the ESOP (in shares) | shares | 280,542 | 324,831 | |
Supplemental Unemployment Benefits [Abstract] | |||
Long-term disability coverage, minimum years of service rendered for officers to automatically qualify | 3 years | ||
Long-term disability coverage, minimum annual salary level for officers to automatically qualify | $ 50,000 | ||
Long-term disability coverage, maximum benefit provided, per month | $ 15,000 | ||
Long-term disability coverage, maximum benefit provided, as a ratio of final salary | 0.667% | ||
401(k) [Abstract] | |||
Requisite service period | 30 days | ||
401(k) Plan expense | $ 613,000 | $ 562,000 | 447,000 |
Share-based Compensation [Abstract] | |||
Tax benefit (expense) realized for deductions related to stock option exercises | $ 332,000 | 75,000 | |
Defined Benefit Pension Plan | |||
Defined Benefit Plan [Abstract] | |||
Defined benefit pension plan, minimum eligibility age | 65 years | ||
Early retirement election at reduced benefit levels, minimum eligibility age | 55 years | ||
Number of shares of Company stock included in plan assets (in shares) | shares | 240,666 | 240,666 | |
Funded (under funded) status | $ (3,043,000) | $ (2,778,000) | $ (3,685,000) |
Number of employees offered early retirement | 24 | ||
Total number of employees that accepted early retirement offer | 16 | ||
Special and contractual termination benefits | 0 | $ 1,549,000 | $ 176,000 |
Number of employees that accepted early retirement offer | 15 | 1 | |
Accrued benefit (liability) asset recognized | (3,043,000) | $ (2,778,000) | $ (3,685,000) |
Expected future employer contributions, next fiscal year | 0 | ||
Defined Benefit Pension Plan Acquired | |||
Defined Benefit Plan [Abstract] | |||
Funded (under funded) status | (361,000) | (1,245,000) | (945,000) |
Special and contractual termination benefits | 0 | 0 | 0 |
Accrued benefit (liability) asset recognized | (361,000) | (1,245,000) | (945,000) |
Expected future employer contributions, next fiscal year | 0 | ||
Restoration Plan | |||
Defined Benefit Plan [Abstract] | |||
Funded (under funded) status | (14,642,000) | (12,723,000) | (12,024,000) |
Special and contractual termination benefits | 0 | 0 | 0 |
Accrued benefit (liability) asset recognized | (14,642,000) | $ (12,723,000) | $ (12,024,000) |
Expected future employer contributions, next fiscal year | $ 0 | ||
Other Equity Securities | Defined Benefit Pension Plan | |||
Defined Benefit Plan [Abstract] | |||
Target allocation | 55.00% | ||
Fixed Income Securities | Defined Benefit Pension Plan | |||
Defined Benefit Plan [Abstract] | |||
Target allocation | 44.50% | ||
Cash equivalents | Defined Benefit Pension Plan | |||
Defined Benefit Plan [Abstract] | |||
Target allocation | 0.50% | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation [Abstract] | |||
Nonvested awards outstanding (in shares) | shares | 78,253 | 100,923 | |
Incentive Plan 2009 | |||
Share-based Compensation [Abstract] | |||
Number of additional shares (in shares) | shares | 410,000 | ||
Incentive Plan 2017 | |||
Share-based Compensation [Abstract] | |||
Common stock shares reserved and available for issuance (in shares) | shares | 2,460,000 | ||
Shares remaining available for grant for future awards (in shares) | shares | 2,074,724 | ||
Incentive Plan | |||
Share-based Compensation [Abstract] | |||
Nonvested awards outstanding (in shares) | shares | 366,292 | 599,498 | 560,464 |
Share-based compensation expense | $ 1,800,000 | $ 1,500,000 | $ 1,400,000 |
Tax benefit from share-based compensation expense | 635,000 | 539,000 | 488,000 |
Unrecognized compensation expense | $ 3,800,000 | 5,600,000 | 4,000,000 |
Unrecognized compensation, weighted-average period for recognition | 2 years 6 months 14 days | ||
Incentive Plan | Nonqualified Stock Options (NQSOs) | |||
Share-based Compensation [Abstract] | |||
Awards contractual term | 10 years | ||
Total intrinsic value of outstanding stock options | $ 5,800,000 | ||
Total intrinsic value of exercisable stock options | $ 4,400,000 | ||
Weighted-average remaining contractual life of options exercisable | 5 years 11 months 8 days | ||
Total intrinsic value of stock options exercised during period | $ 1,800,000 | 1,300,000 | 119,000 |
Tax benefit (expense) realized for deductions related to stock option exercises | $ 0 | $ 332,000 | 75,000 |
Incentive Plan | Nonqualified Stock Options (NQSOs) | Minimum | |||
Share-based Compensation [Abstract] | |||
Awards vesting period | 3 years | ||
Incentive Plan | Nonqualified Stock Options (NQSOs) | Maximum | |||
Share-based Compensation [Abstract] | |||
Awards vesting period | 4 years | ||
Incentive Plan | Restricted Stock Units (RSUs) | Minimum | |||
Share-based Compensation [Abstract] | |||
Awards vesting period | 1 year | ||
Incentive Plan | Restricted Stock Units (RSUs) | Maximum | |||
Share-based Compensation [Abstract] | |||
Awards vesting period | 4 years | ||
Executive officers | |||
Deferred Compensation Arrangements [Abstract] | |||
Number of employees included in the deferred compensation agreement with the Company | executive_officer | 17 | ||
Aggregate payment amount provided in the deferred compensation agreements | $ 5,100,000 | ||
Maximum benefit period after retirement or death | 15 years | ||
Number of individuals receiving payments | executive_officer | 9 | ||
Number of individuals that retired at year-end | executive_officer | 1 | ||
Number of individuals that accepted the retirement package | executive_officer | 3 | ||
Deferred compensation expense | $ 353,000 | $ 357,000 | 553,000 |
Total deferred compensation plan liability | $ 3,500,000 | 3,600,000 | |
Split Dollar Life Insurance Agreements [Abstract] | |||
Number of employees covered by the split dollar agreements | executive_officer | 8 | ||
Aggregate death benefit amount provided in agreement, before inflation adjustment | $ 4,500,000 | ||
Aggregate death benefits, inflation adjusted | 5,800,000 | ||
Expense of split dollar retirement bonus | (3,000) | 172,000 | $ 28,000 |
Total split dollar liability | $ 1,900,000 | $ 1,800,000 | |
Executive officers | Minimum | |||
Split Dollar Life Insurance Agreements [Abstract] | |||
Inflation adjustment factor applied to benefits, annual | 3.00% | ||
Executive officers | Maximum | |||
Split Dollar Life Insurance Agreements [Abstract] | |||
Inflation adjustment factor applied to benefits, annual | 5.00% |
EMPLOYEE BENEFITS - Change in
EMPLOYEE BENEFITS - Change in Projected Benefit Obligation and Plan Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Pension Plan | |||
Change in Projected Benefit Obligation: | |||
Benefit obligation at end of prior year | $ 88,071,000 | $ 80,040,000 | $ 84,050,000 |
Service cost | 1,398,000 | 1,375,000 | 1,838,000 |
Interest cost | 3,601,000 | 3,731,000 | 3,410,000 |
Actuarial loss (gain) | 5,404,000 | 4,978,000 | (6,777,000) |
Benefits Paid | (4,128,000) | (3,632,000) | (2,590,000) |
Expenses paid | (70,000) | (91,000) | (67,000) |
Plan Amendments | 0 | 121,000 | 0 |
Settlements | 0 | 0 | 0 |
Special and contractual termination benefits | 0 | 1,549,000 | 176,000 |
Benefit obligation at end of year | 94,276,000 | 88,071,000 | 80,040,000 |
Change in Plan Assets: | |||
Fair value of plan assets at end of prior year | 85,293,000 | 76,355,000 | 79,730,000 |
Actual return | 8,138,000 | 7,661,000 | (718,000) |
Employer contributions | 2,000,000 | 5,000,000 | 0 |
Benefits paid | (4,128,000) | (3,632,000) | (2,590,000) |
Expenses paid | (70,000) | (91,000) | (67,000) |
Settlements | 0 | 0 | 0 |
Fair value of plan assets at end of year | 91,233,000 | 85,293,000 | 76,355,000 |
(Un)Funded status at end of year | (3,043,000) | (2,778,000) | (3,685,000) |
Accrued benefit (liability) asset recognized | (3,043,000) | (2,778,000) | (3,685,000) |
Accumulated benefit obligation at end of year | 83,802,000 | 77,639,000 | 69,737,000 |
Defined Benefit Pension Plan Acquired | |||
Change in Projected Benefit Obligation: | |||
Benefit obligation at end of prior year | 4,238,000 | 4,685,000 | 5,977,000 |
Service cost | 0 | 0 | 0 |
Interest cost | 177,000 | 212,000 | 238,000 |
Actuarial loss (gain) | 418,000 | 275,000 | (753,000) |
Benefits Paid | (43,000) | (31,000) | (28,000) |
Expenses paid | (47,000) | (39,000) | (30,000) |
Plan Amendments | 0 | 0 | 0 |
Settlements | (351,000) | (864,000) | (719,000) |
Special and contractual termination benefits | 0 | 0 | 0 |
Benefit obligation at end of year | 4,392,000 | 4,238,000 | 4,685,000 |
Change in Plan Assets: | |||
Fair value of plan assets at end of prior year | 2,993,000 | 3,740,000 | 4,512,000 |
Actual return | 479,000 | 187,000 | 5,000 |
Employer contributions | 1,000,000 | 0 | 0 |
Benefits paid | (43,000) | (31,000) | (28,000) |
Expenses paid | (47,000) | (39,000) | (30,000) |
Settlements | (351,000) | (864,000) | (719,000) |
Fair value of plan assets at end of year | 4,031,000 | 2,993,000 | 3,740,000 |
(Un)Funded status at end of year | (361,000) | (1,245,000) | (945,000) |
Accrued benefit (liability) asset recognized | (361,000) | (1,245,000) | (945,000) |
Accumulated benefit obligation at end of year | 4,392,000 | 4,238,000 | 4,685,000 |
Restoration Plan | |||
Change in Projected Benefit Obligation: | |||
Benefit obligation at end of prior year | 12,723,000 | 12,024,000 | 13,259,000 |
Service cost | 247,000 | 207,000 | 334,000 |
Interest cost | 567,000 | 535,000 | 668,000 |
Actuarial loss (gain) | 1,751,000 | 237,000 | (1,968,000) |
Benefits Paid | (646,000) | (280,000) | (269,000) |
Expenses paid | 0 | 0 | 0 |
Plan Amendments | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Special and contractual termination benefits | 0 | 0 | 0 |
Benefit obligation at end of year | 14,642,000 | 12,723,000 | 12,024,000 |
Change in Plan Assets: | |||
Fair value of plan assets at end of prior year | 0 | 0 | 0 |
Actual return | 0 | 0 | 0 |
Employer contributions | 646,000 | 280,000 | 269,000 |
Benefits paid | (646,000) | (280,000) | (269,000) |
Expenses paid | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Fair value of plan assets at end of year | 0 | 0 | 0 |
(Un)Funded status at end of year | (14,642,000) | (12,723,000) | (12,024,000) |
Accrued benefit (liability) asset recognized | (14,642,000) | (12,723,000) | (12,024,000) |
Accumulated benefit obligation at end of year | $ 13,246,000 | $ 11,133,000 | $ 10,290,000 |
EMPLOYEE BENEFITS - Amounts Re
EMPLOYEE BENEFITS - Amounts Recognized as a Component of Other Comprehensive Income (loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss) [Abstract] | |||
Recognition of net loss | $ (1,613) | $ (1,828) | $ (2,448) |
Recognition of prior service (credit) cost | 8 | 8 | 16 |
Net (loss) gain occurring during the year | 5,218 | 3,132 | (2,806) |
Net prior service (cost) credit occurring during the year | 0 | 121 | 0 |
Defined Benefit Pension Plan | |||
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss) [Abstract] | |||
Recognition of net loss | 1,312 | 1,642 | 1,505 |
Recognition of prior service (credit) cost | (14) | (14) | (23) |
Recognition of loss (gain) due to settlements | 0 | 0 | 0 |
Net (loss) gain occurring during the year | (3,317) | (2,541) | 375 |
Net prior service (cost) credit occurring during the year | 0 | (121) | 0 |
Total adjustment during the year | (2,019) | (1,034) | 1,857 |
Deferred tax benefit (expense) | 241 | 362 | (650) |
Other comprehensive (loss) income, net of tax | (1,778) | (672) | 1,207 |
Defined Benefit Pension Plan Acquired | |||
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss) [Abstract] | |||
Recognition of net loss | 0 | 0 | 0 |
Recognition of prior service (credit) cost | 0 | 0 | 0 |
Recognition of loss (gain) due to settlements | 8 | (8) | (62) |
Net (loss) gain occurring during the year | (150) | (354) | 463 |
Net prior service (cost) credit occurring during the year | 0 | 0 | 0 |
Total adjustment during the year | (142) | (362) | 401 |
Deferred tax benefit (expense) | 30 | 127 | (141) |
Other comprehensive (loss) income, net of tax | (112) | (235) | 260 |
Restoration Plan | |||
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss) [Abstract] | |||
Recognition of net loss | 301 | 186 | 943 |
Recognition of prior service (credit) cost | 6 | 6 | 7 |
Recognition of loss (gain) due to settlements | 0 | 0 | 0 |
Net (loss) gain occurring during the year | (1,751) | (237) | 1,968 |
Net prior service (cost) credit occurring during the year | 0 | 0 | 0 |
Total adjustment during the year | (1,444) | (45) | 2,918 |
Deferred tax benefit (expense) | 259 | 16 | (1,021) |
Other comprehensive (loss) income, net of tax | $ (1,185) | $ (29) | $ 1,897 |
EMPLOYEE BENEFITS - Amounts in
EMPLOYEE BENEFITS - Amounts in Accumulated Other Comprehensive Income (Loss) Recognized in Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
Net loss | $ (1,613) | $ (1,828) | $ (2,448) |
Prior service (credit) cost | 8 | 8 | 16 |
Defined Benefit Pension Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
Net loss | 1,312 | 1,642 | 1,505 |
Prior service (credit) cost | (14) | (14) | (23) |
Loss (gain) recognized due to settlement | 0 | 0 | 0 |
Total amount in other comprehensive income recognized in net periodic benefit cost, before tax | 1,298 | 1,628 | |
Deferred tax (expense) benefit | (454) | (569) | |
Accumulated other comprehensive income (loss), net of tax | 844 | 1,059 | |
Defined Benefit Pension Plan Acquired | |||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
Net loss | 0 | 0 | 0 |
Prior service (credit) cost | 0 | 0 | 0 |
Loss (gain) recognized due to settlement | 8 | (8) | (62) |
Total amount in other comprehensive income recognized in net periodic benefit cost, before tax | 8 | (8) | |
Deferred tax (expense) benefit | (2) | 3 | |
Accumulated other comprehensive income (loss), net of tax | 6 | (5) | |
Restoration Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
Net loss | 301 | 186 | 943 |
Prior service (credit) cost | 6 | 6 | 7 |
Loss (gain) recognized due to settlement | 0 | 0 | $ 0 |
Total amount in other comprehensive income recognized in net periodic benefit cost, before tax | 307 | 192 | |
Deferred tax (expense) benefit | (107) | (67) | |
Accumulated other comprehensive income (loss), net of tax | $ 200 | $ 125 |
EMPLOYEE BENEFITS - Amounts 92
EMPLOYEE BENEFITS - Amounts Recognized as a Component of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Pension Plan | |||
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract] | |||
Net (loss) gain | $ (28,859) | $ (26,855) | |
Prior service cost | (109) | (96) | |
Accumulated other comprehensive (loss) income, before tax | (28,968) | (26,951) | |
Deferred tax benefit (expense) | 9,674 | 9,433 | |
Reclassification of Certain Tax Effects | [1] | (3,591) | 0 |
Accumulated other comprehensive (loss) income, net of tax | (22,885) | (17,518) | |
Defined Benefit Pension Plan Acquired | |||
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract] | |||
Net (loss) gain | (102) | 40 | |
Prior service cost | 0 | 0 | |
Accumulated other comprehensive (loss) income, before tax | (102) | 40 | |
Deferred tax benefit (expense) | 15 | (14) | |
Reclassification of Certain Tax Effects | [1] | 6 | 0 |
Accumulated other comprehensive (loss) income, net of tax | (81) | 26 | |
Restoration Plan | |||
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract] | |||
Net (loss) gain | (4,317) | (2,868) | |
Prior service cost | (31) | (38) | |
Accumulated other comprehensive (loss) income, before tax | (4,348) | (2,906) | |
Deferred tax benefit (expense) | 1,276 | 1,017 | |
Reclassification of Certain Tax Effects | [1] | (364) | 0 |
Accumulated other comprehensive (loss) income, net of tax | $ (3,436) | $ (1,889) | |
[1] | Amounts reclassified to retained earnings due to early adoption of ASU 2018-02. See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. |
EMPLOYEE BENEFITS - Net Period
EMPLOYEE BENEFITS - Net Periodic Benefit Cost and Postretirement Benefit Cost (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Pension Plan | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Service cost | $ 1,398,000 | $ 1,375,000 | $ 1,838,000 |
Interest cost | 3,601,000 | 3,731,000 | 3,410,000 |
Expected return on assets | (6,050,000) | (5,224,000) | (5,684,000) |
Net loss amortization | 1,312,000 | 1,642,000 | 1,505,000 |
Prior service cost (credit) amortization | (14,000) | (14,000) | (23,000) |
Special and contractual termination benefits | 0 | 1,549,000 | 176,000 |
Loss (gain) recognized due to settlement | 0 | 0 | 0 |
Net periodic benefit cost | 247,000 | 3,059,000 | 1,222,000 |
Defined Benefit Pension Plan Acquired | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Service cost | 0 | 0 | 0 |
Interest cost | 177,000 | 212,000 | 238,000 |
Expected return on assets | (212,000) | (265,000) | (294,000) |
Net loss amortization | 0 | 0 | 0 |
Prior service cost (credit) amortization | 0 | 0 | 0 |
Special and contractual termination benefits | 0 | 0 | 0 |
Loss (gain) recognized due to settlement | 8,000 | (8,000) | (62,000) |
Net periodic benefit cost | (27,000) | (61,000) | (118,000) |
Restoration Plan | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Service cost | 247,000 | 207,000 | 334,000 |
Interest cost | 567,000 | 535,000 | 668,000 |
Net loss amortization | 301,000 | 186,000 | 943,000 |
Prior service cost (credit) amortization | 6,000 | 6,000 | 7,000 |
Special and contractual termination benefits | 0 | 0 | 0 |
Loss (gain) recognized due to settlement | 0 | 0 | 0 |
Net periodic benefit cost | $ 1,121,000 | $ 934,000 | $ 1,952,000 |
EMPLOYEE BENEFITS - Amounts th
EMPLOYEE BENEFITS - Amounts that Will be Amortized from Accumulated Other Comprehensive Income (Loss) in next fiscal year (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Defined Benefit Pension Plan | |
Amounts that Will be Amortized from Accumulated Other Comprehensive Income (Loss) in Next Fiscal Year [Abstract] | |
Net loss | $ 1,536 |
Prior service (credit) cost | (14) |
Total amount that will be amortized from accumulated other comprehensive income | 1,522 |
Deferred tax benefit | (320) |
Accumulated other comprehensive loss, net of tax | 1,202 |
Defined Benefit Pension Plan Acquired | |
Amounts that Will be Amortized from Accumulated Other Comprehensive Income (Loss) in Next Fiscal Year [Abstract] | |
Net loss | 0 |
Prior service (credit) cost | 0 |
Total amount that will be amortized from accumulated other comprehensive income | 0 |
Deferred tax benefit | 0 |
Accumulated other comprehensive loss, net of tax | 0 |
Restoration Plan | |
Amounts that Will be Amortized from Accumulated Other Comprehensive Income (Loss) in Next Fiscal Year [Abstract] | |
Net loss | 364 |
Prior service (credit) cost | 6 |
Total amount that will be amortized from accumulated other comprehensive income | 370 |
Deferred tax benefit | (78) |
Accumulated other comprehensive loss, net of tax | $ 292 |
EMPLOYEE BENEFITS - Assumption
EMPLOYEE BENEFITS - Assumptions Used to Calculate Benefit Obligation, Net Periodic Benefit Cost and Postretirement Benefit (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Pension Plan | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 3.71% | 4.23% | |
Compensation increase rate | 3.50% | 3.50% | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 4.23% | 4.56% | 4.14% |
Expected long-term rate of return on plan assets | 7.25% | 7.25% | 7.25% |
Compensation increase rate | 3.50% | 3.50% | 3.50% |
Defined Benefit Pension Plan Acquired | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 3.71% | 4.23% | |
Compensation increase rate | 0.00% | 0.00% | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 4.23% | 4.56% | 4.14% |
Expected long-term rate of return on plan assets | 7.25% | 7.25% | 7.25% |
Compensation increase rate | 0.00% | 0.00% | 0.00% |
Restoration Plan | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 3.71% | 4.23% | |
Compensation increase rate | 3.50% | 3.50% | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 4.23% | 4.56% | 4.14% |
Compensation increase rate | 3.50% | 3.50% | 3.50% |
EMPLOYEE BENEFITS - Pension Pl
EMPLOYEE BENEFITS - Pension Plan Asset Categories (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Pension Plan | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | $ 91,233 | $ 85,293 | $ 76,355 | $ 79,730 | |
Defined Benefit Pension Plan Acquired | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | 4,031 | 2,993 | $ 3,740 | $ 4,512 | |
Level 1 | Defined Benefit Pension Plan | Cash | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | 423 | 484 | |||
Level 1 | Defined Benefit Pension Plan | U.S. large cap equities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [1] | 6,198 | 27,383 | ||
Level 1 | Defined Benefit Pension Plan | U.S. mid cap equities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [2] | 21,379 | 8,533 | ||
Level 1 | Defined Benefit Pension Plan | U.S. small cap equities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [3] | 10,706 | 9,851 | ||
Level 1 | Defined Benefit Pension Plan | International developed | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [4] | 8,601 | 2,663 | ||
Level 1 | Defined Benefit Pension Plan | International emerging | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [2] | 4,308 | 1,246 | ||
Level 1 | Defined Benefit Pension Plan Acquired | Cash | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | 0 | 0 | |||
Level 1 | Defined Benefit Pension Plan Acquired | U.S. large cap equities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [1] | 0 | 0 | ||
Level 1 | Defined Benefit Pension Plan Acquired | U.S. mid cap equities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [2] | 0 | 0 | ||
Level 1 | Defined Benefit Pension Plan Acquired | U.S. small cap equities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [3] | 0 | 0 | ||
Level 1 | Defined Benefit Pension Plan Acquired | International developed | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [4] | 0 | 0 | ||
Level 1 | Defined Benefit Pension Plan Acquired | International emerging | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [2] | 0 | 0 | ||
Level 2 | Defined Benefit Pension Plan | Cash equivalents | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | 13,256 | 13,152 | |||
Level 2 | Defined Benefit Pension Plan | U.S. large cap equities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [1] | 0 | 0 | ||
Level 2 | Defined Benefit Pension Plan | U.S. mid cap equities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [2] | 0 | 0 | ||
Level 2 | Defined Benefit Pension Plan | U.S. small cap equities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [3] | 0 | 0 | ||
Level 2 | Defined Benefit Pension Plan | International | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [5] | 0 | 0 | ||
Level 2 | Defined Benefit Pension Plan | Corporate bonds | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [6] | 1,118 | 1,130 | ||
Level 2 | Defined Benefit Pension Plan | U.S. government agencies | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [6] | 19,303 | 13,248 | ||
Level 2 | Defined Benefit Pension Plan | Municipal bonds | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [6] | 5,595 | 7,211 | ||
Level 2 | Defined Benefit Pension Plan | U.S. agency mortgage-backed securities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [7] | 346 | 392 | ||
Level 2 | Defined Benefit Pension Plan | Asset-backed Securities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [8] | 0 | 0 | ||
Level 2 | Defined Benefit Pension Plan | Real Estate | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [9] | 0 | 0 | ||
Level 2 | Defined Benefit Pension Plan | Balanced Asset Allocation | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [10] | 0 | 0 | ||
Level 2 | Defined Benefit Pension Plan | Other | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [11] | 0 | 0 | ||
Level 2 | Defined Benefit Pension Plan Acquired | Cash equivalents | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | 0 | 0 | |||
Level 2 | Defined Benefit Pension Plan Acquired | U.S. large cap equities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [1] | 1,440 | 1,082 | ||
Level 2 | Defined Benefit Pension Plan Acquired | U.S. mid cap equities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [2] | 167 | 125 | ||
Level 2 | Defined Benefit Pension Plan Acquired | U.S. small cap equities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [3] | 84 | 66 | ||
Level 2 | Defined Benefit Pension Plan Acquired | International | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [5] | 712 | 427 | ||
Level 2 | Defined Benefit Pension Plan Acquired | Corporate bonds | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [6] | 378 | 304 | ||
Level 2 | Defined Benefit Pension Plan Acquired | U.S. government agencies | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [6] | 0 | 0 | ||
Level 2 | Defined Benefit Pension Plan Acquired | Municipal bonds | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [6] | 0 | 0 | ||
Level 2 | Defined Benefit Pension Plan Acquired | U.S. agency mortgage-backed securities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [7] | 0 | 0 | ||
Level 2 | Defined Benefit Pension Plan Acquired | Asset-backed Securities | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [8] | 717 | 590 | ||
Level 2 | Defined Benefit Pension Plan Acquired | Real Estate | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [9] | 241 | 180 | ||
Level 2 | Defined Benefit Pension Plan Acquired | Balanced Asset Allocation | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [10] | 81 | 60 | ||
Level 2 | Defined Benefit Pension Plan Acquired | Other | |||||
Defined Benefit Plan, Categories of Plan Assets [Abstract] | |||||
Total fair value of plan assets | [11] | $ 211 | $ 159 | ||
[1] | For the defined benefit pension plan, this category is comprised of individual securities that are actively managed and a broadly diversified “passive” mutual fund. The Acquired Plan assets in this category consist of pooled separate accounts invested in mutual funds and domestic stocks. | ||||
[2] | For the defined benefit pension plan, this category is comprised of broadly diversified “passive” mutual funds. The Acquired Plan assets in this category consist of pooled separate accounts invested in mutual funds and domestic stocks. | ||||
[3] | For the defined benefit pension plan, this category is comprised of broadly diversified “passive” mutual funds and shares of Southside Bancshares stock that is owned in the Plan. The Acquired Plan assets in this category consist of pooled separate accounts invested in mutual funds and domestic stocks. | ||||
[4] | This category is comprised of individual securities that are actively managed and a broadly diversified “passive” mutual fund. | ||||
[5] | This category is comprised of pooled separate accounts invested in mutual funds and international stocks. | ||||
[6] | For the defined benefit pension plan, this category is comprised of individual investment grade securities that are generally held to maturity in the Plan. The Acquired Plan assets in this category consist of pooled separate accounts invested in investment grade and below investment grade bonds. | ||||
[7] | This category is comprised of individual securities that are generally not held to maturity. | ||||
[8] | This category is mainly comprised of a pooled separate account invested in asset backed securities, residential mortgage backed securities, commercial mortgage backed securities and corporate bonds. | ||||
[9] | This category is comprised of a pooled separate account invested in commercial real estate and includes mortgage loans which are backed by the associated properties. | ||||
[10] | This category is comprised of a pooled separate account invested in a single mutual fund invested in a combination of fixed income and equity investment options. | ||||
[11] | This category is comprised a pooled separate account invested in a broad range of instruments including, but not limited to, equities, bonds, currencies, convertible securities and derivatives such as futures, options, swaps and forwards. |
EMPLOYEE BENEFITS - Expected F
EMPLOYEE BENEFITS - Expected Future Benefit Payments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Defined Benefit Pension Plan | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2,018 | $ 3,758 |
2,019 | 3,964 |
2,020 | 4,079 |
2,021 | 4,204 |
2,022 | 4,393 |
2023 through 2027 | 24,456 |
Total expected future payments | 44,854 |
Defined Benefit Pension Plan Acquired | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2,018 | 60 |
2,019 | 60 |
2,020 | 235 |
2,021 | 125 |
2,022 | 91 |
2023 through 2027 | 528 |
Total expected future payments | 1,099 |
Restoration Plan | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2,018 | 693 |
2,019 | 746 |
2,020 | 805 |
2,021 | 927 |
2,022 | 983 |
2023 through 2027 | 4,880 |
Total expected future payments | $ 9,034 |
EMPLOYEE BENEFITS - Schedule o
EMPLOYEE BENEFITS - Schedule of Shares Issued in Connection with Stock Compensation Awards (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
New shares issued (in shares) | 159,356 | 108,225 | 28,486 |
Proceeds from stock options exercised | $ 2,692 | $ 1,663 | $ 235 |
New shares issued from authorized shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
New shares issued (in shares) | 48,311 | 108,225 | 28,486 |
New shares issued from available treasury shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
New shares issued (in shares) | 111,045 | 0 | 0 |
EMPLOYEE BENEFITS - Stock Opti
EMPLOYEE BENEFITS - Stock Option Valuation Assumptions (Details) - Stock options - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant date fair value per option (in dollars per share) | $ 0 | $ 7.18 | $ 6.29 |
Weighted-average assumptions: | |||
Risk-free interest rates | 1.79% | 2.01% | |
Expected dividend yield | 2.69% | 3.24% | |
Expected volatility factors of the market price of Southside Bancshares common stock | 0.00% | 27.02% | 30.91% |
Expected option life (in years) | 6 years 2 months 16 days | 6 years 4 months |
EMPLOYEE BENEFITS - Summary of
EMPLOYEE BENEFITS - Summary of Activity of Share-based Plans (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Restricted Stock Units Outstanding | |
Number of Shares | |
Balance, January 1, 2017 (shares) | shares | 100,923 |
Granted (shares) | shares | 20,536 |
Stock awards vested (shares) | shares | (29,853) |
Forfeited (shares) | shares | (13,353) |
Canceled/expired (shares) | shares | 0 |
Balance, December 31, 2017 (shares) | shares | 78,253 |
Weighted- Average Grant-Date Fair Value | |
Balance, January 1, 2017 (in dollars per share) | $ 30.70 |
Granted (in dollars per share) | 34.15 |
Stock awards vested (in dollars per share) | 29.38 |
Forfeited (in dollars per share) | 31.13 |
Canceled/expired (in dollars per share) | 0 |
Balance, December 31, 2017 (in dollars per share) | $ 32.04 |
Stock Options Outstanding | |
Number of Shares | |
Balance, January 1, 2017 (shares) | shares | 878,587 |
Granted (shares) | shares | 0 |
Stock options exercised (shares) | shares | (134,231) |
Stock awards vested (shares) | shares | 0 |
Forfeited (shares) | shares | (50,245) |
Canceled/expired (shares) | shares | (3,799) |
Balance, December 31, 2017 (shares) | shares | 690,312 |
Weighted- Average Exercise Price | |
Balance, January 1, 2017 (in dollars per share) | $ 25.28 |
Granted (in dollars per share) | 0 |
Stock options exercised (in dollars per share) | 20.06 |
Forfeited (in dollars per share) | 28.94 |
Canceled/expired (in dollars per share) | 25.71 |
Balance, December 31, 2017 (in dollars per share) | 26.02 |
Weighted- Average Grant-Date Fair Value | |
Balance, January 1, 2017 (in dollars per share) | 6.08 |
Granted (in dollars per share) | 0 |
Stock options exercised (in dollars per share) | 5.40 |
Stock awards vested (in dollars per share) | 0 |
Forfeited (in dollars per share) | 6.32 |
Canceled/expired (in dollars per share) | 6.08 |
Balance, December 31, 2017 (in dollars per share) | $ 6.19 |
EMPLOYEE BENEFITS - Stock O101
EMPLOYEE BENEFITS - Stock Options Exercise Price Range (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Options Outstanding | |
Number of Shares (in shares) | shares | 690,312 |
Weighted- Average Exercise Price (in dollars per share) | $ 26.02 |
Weighted- Average Remaining Contractual Life in Years | 6 years 10 months 2 days |
Options Exercisable | |
Number of Shares (in shares) | shares | 402,273 |
Weighted- Average Exercise Price (in dollars per share) | $ 23.09 |
$14.67 - $20.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices - Lower Range Limit (in dollars per share) | 14.67 |
Range of Exercise Prices - Upper Range Limit (in dollars per share) | $ 20 |
Options Outstanding | |
Number of Shares (in shares) | shares | 135,946 |
Weighted- Average Exercise Price (in dollars per share) | $ 15.86 |
Weighted- Average Remaining Contractual Life in Years | 4 years 30 days |
Options Exercisable | |
Number of Shares (in shares) | shares | 135,946 |
Weighted- Average Exercise Price (in dollars per share) | $ 15.86 |
$20.01 - $25.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices - Lower Range Limit (in dollars per share) | 20.01 |
Range of Exercise Prices - Upper Range Limit (in dollars per share) | $ 25 |
Options Outstanding | |
Number of Shares (in shares) | shares | 148,184 |
Weighted- Average Exercise Price (in dollars per share) | $ 22.93 |
Weighted- Average Remaining Contractual Life in Years | 6 years 4 months 28 days |
Options Exercisable | |
Number of Shares (in shares) | shares | 106,826 |
Weighted- Average Exercise Price (in dollars per share) | $ 23 |
$25.01 - $30.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices - Lower Range Limit (in dollars per share) | 25.01 |
Range of Exercise Prices - Upper Range Limit (in dollars per share) | $ 30 |
Options Outstanding | |
Number of Shares (in shares) | shares | 259,242 |
Weighted- Average Exercise Price (in dollars per share) | $ 26.73 |
Weighted- Average Remaining Contractual Life in Years | 7 years 4 months 28 days |
Options Exercisable | |
Number of Shares (in shares) | shares | 119,322 |
Weighted- Average Exercise Price (in dollars per share) | $ 26.63 |
$30.01 - $35.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices - Lower Range Limit (in dollars per share) | 30.01 |
Range of Exercise Prices - Upper Range Limit (in dollars per share) | $ 35 |
Options Outstanding | |
Number of Shares (in shares) | shares | 0 |
Weighted- Average Exercise Price (in dollars per share) | $ 0 |
Options Exercisable | |
Number of Shares (in shares) | shares | 0 |
Weighted- Average Exercise Price (in dollars per share) | $ 0 |
$35.01 - $37.28 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices - Lower Range Limit (in dollars per share) | 35.01 |
Range of Exercise Prices - Upper Range Limit (in dollars per share) | $ 37.28 |
Options Outstanding | |
Number of Shares (in shares) | shares | 146,940 |
Weighted- Average Exercise Price (in dollars per share) | $ 37.28 |
Weighted- Average Remaining Contractual Life in Years | 8 years 10 months 2 days |
Options Exercisable | |
Number of Shares (in shares) | shares | 40,179 |
Weighted- Average Exercise Price (in dollars per share) | $ 37.28 |
DERIVATIVE FINANCIAL INSTRUM102
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017contract | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Derivative [Line Items] | |||
Notional Amount | $ 240,000 | ||
Cash collateral received | 7,900 | $ 7,154 | |
Collateral Already Posted, Aggregate Fair Value | 520 | ||
Cash collateral receivable that was not offset against derivative liabilities | $ 30 | ||
Interest Rate Swaps | |||
Derivative [Line Items] | |||
Derivative, instruments terminated | contract | 2 |
DERIVATIVE FINANCIAL INSTRUM103
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Derivative Instruments (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | ||
Derivatives, Fair Value [Line Items] | ||||
Notional Amount | $ 240,000,000 | |||
Derivative Asset [Abstract] | ||||
Gross derivatives | 8,626,000 | $ 7,154,000 | ||
Offsetting derivative assets/liabilities | (114,000) | 0 | ||
Cash collateral received/posted | (7,900,000) | (7,154,000) | ||
Net derivatives included in the consolidated balance sheets | [1] | 612,000 | 0 | |
Derivative Liability [Abstract] | ||||
Gross derivatives | 726,000 | 85,000 | ||
Offsetting derivative assets/liabilities | (114,000) | 0 | ||
Cash collateral received/posted | (520,000) | 0 | ||
Net derivatives included in the consolidated balance sheets | [1] | 92,000 | 85,000 | |
Net credit exposure | 0 | |||
Financial institution counterparties | ||||
Derivative Liability [Abstract] | ||||
Net credit exposure | 30,000 | |||
Financial institution counterparties | Derivatives designated as hedging instruments | Cash Flow Hedging | Interest Rate Swaps | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional Amount | 240,000,000 | 250,000,000 | [2] | |
Derivative Asset [Abstract] | ||||
Gross derivatives | 7,922,000 | 7,069,000 | ||
Derivative Liability [Abstract] | ||||
Gross derivatives | 22,000 | 0 | ||
Financial institution counterparties | Derivatives designated as non-hedging instruments | Interest Rate Swaps | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional Amount | 67,220,000 | 2,182,000 | [2] | |
Derivative Asset [Abstract] | ||||
Gross derivatives | 92,000 | 85,000 | ||
Derivative Liability [Abstract] | ||||
Gross derivatives | 612,000 | 0 | ||
Customer counterparties | ||||
Derivative Liability [Abstract] | ||||
Net credit exposure | 612,000 | |||
Customer counterparties | Derivatives designated as non-hedging instruments | Interest Rate Swaps | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional Amount | 67,220,000 | 2,182,000 | [2] | |
Derivative Asset [Abstract] | ||||
Gross derivatives | 612,000 | 0 | ||
Derivative Liability [Abstract] | ||||
Gross derivatives | $ 92,000 | $ 85,000 | ||
[1] | Net derivative assets are included in “other assets” and net derivative liabilities are included in “other liabilities” on the consolidated balance sheets. Included in the fair value of net derivative assets and net derivative liabilities are credit valuation adjustments reflecting counterparty credit risk and our credit risk. We had net credit exposure of $30,000 related to interest rate swaps with financial institutions and $612,000 related to interest rate swaps with customers at December 31, 2017. The credit risk associated with customer transactions is partially mitigated as these transactions are generally secured by the non-cash collateral securing the underlying transaction being hedged. We had no credit exposure related to interest rate swaps with financial or customer counterparties at December 31, 2016. | |||
[2] | Notional amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk, and are not reflected in the consolidated balance sheets. |
DERIVATIVE FINANCIAL INSTRUM104
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Weighted Average Remaining Maturity, Lives, and Rates of Interest Rate Swaps (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Derivative [Line Items] | |||
Notional Amount | $ 240,000 | ||
Financial institution counterparties | Interest Rate Swaps | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional Amount | $ 67,220 | $ 2,182 | [1] |
Remaining Maturity | 12 years 8 months 24 days | 9 years 8 months | |
Receive Rate | 1.39% | 0.62% | |
Pay Rate | 2.37% | 1.57% | |
Financial institution counterparties | Interest Rate Swaps | Cash Flow Hedging | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional Amount | $ 240,000 | $ 250,000 | [1] |
Remaining Maturity | 5 years 3 months | 5 years 5 months 6 days | |
Receive Rate | 1.44% | 0.68% | |
Pay Rate | 1.43% | 1.31% | |
Customer counterparties | Interest Rate Swaps | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional Amount | $ 67,220 | $ 2,182 | [1] |
Remaining Maturity | 12 years 8 months 24 days | 9 years 8 months | |
Receive Rate | 2.37% | 1.57% | |
Pay Rate | 1.39% | 0.62% | |
[1] | Notional amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk, and are not reflected in the consolidated balance sheets. |
FAIR VALUE MEASUREMENT - Fair
FAIR VALUE MEASUREMENT - Fair Value Measurements, Recurring and Nonrecurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Carrying Amount | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | $ 1,547,381 | $ 1,486,754 | |
Total liability recurring fair value measurements | 726 | 85 | |
Total asset nonrecurring fair value measurements | 8,303 | 10,081 | |
Carrying Amount | Foreclosed assets | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset nonrecurring fair value measurements | 1,767 | 388 | |
Carrying Amount | Impaired loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset nonrecurring fair value measurements | 6,536 | 9,693 | [1] |
Carrying Amount | Interest Rate Swaps | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 8,626 | 7,154 | |
Total liability recurring fair value measurements | 726 | 85 | |
Carrying Amount | US Treasury | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 70,069 | ||
Carrying Amount | U.S. Government Agency Debentures | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 108,869 | ||
Carrying Amount | State and Political Subdivisions | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 392,664 | 385,197 | |
Carrying Amount | Other Stocks and Bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 5,055 | 6,651 | |
Carrying Amount | Other Equity Securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 5,920 | 5,920 | |
Carrying Amount | Residential MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 718,029 | 627,508 | [2] |
Carrying Amount | Commercial MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 308,218 | 384,255 | [2] |
Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 5,920 | 75,989 | |
Total liability recurring fair value measurements | 0 | 0 | |
Total asset nonrecurring fair value measurements | 0 | 0 | |
Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreclosed assets | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset nonrecurring fair value measurements | 0 | 0 | |
Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Impaired loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset nonrecurring fair value measurements | 0 | 0 | [1] |
Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest Rate Swaps | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | 0 | |
Total liability recurring fair value measurements | 0 | 0 | |
Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | US Treasury | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 70,069 | ||
Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Government Agency Debentures | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | ||
Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | State and Political Subdivisions | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | 0 | |
Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Stocks and Bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | 0 | |
Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Equity Securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 5,920 | 5,920 | |
Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Residential MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | 0 | [2] |
Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | 0 | [2] |
Estimated Fair Value | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 1,541,461 | 1,410,765 | |
Total liability recurring fair value measurements | 726 | 85 | |
Total asset nonrecurring fair value measurements | 0 | 0 | |
Estimated Fair Value | Significant Other Observable Inputs (Level 2) | Foreclosed assets | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset nonrecurring fair value measurements | 0 | 0 | |
Estimated Fair Value | Significant Other Observable Inputs (Level 2) | Impaired loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset nonrecurring fair value measurements | 0 | 0 | [1] |
Estimated Fair Value | Significant Other Observable Inputs (Level 2) | Interest Rate Swaps | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 8,626 | 7,154 | |
Total liability recurring fair value measurements | 726 | 85 | |
Estimated Fair Value | Significant Other Observable Inputs (Level 2) | US Treasury | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | ||
Estimated Fair Value | Significant Other Observable Inputs (Level 2) | U.S. Government Agency Debentures | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 108,869 | ||
Estimated Fair Value | Significant Other Observable Inputs (Level 2) | State and Political Subdivisions | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 392,664 | 385,197 | |
Estimated Fair Value | Significant Other Observable Inputs (Level 2) | Other Stocks and Bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 5,055 | 6,651 | |
Estimated Fair Value | Significant Other Observable Inputs (Level 2) | Other Equity Securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | 0 | |
Estimated Fair Value | Significant Other Observable Inputs (Level 2) | Residential MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 718,029 | 627,508 | [2] |
Estimated Fair Value | Significant Other Observable Inputs (Level 2) | Commercial MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 308,218 | 384,255 | [2] |
Estimated Fair Value | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | 0 | |
Total liability recurring fair value measurements | 0 | 0 | |
Total asset nonrecurring fair value measurements | 8,303 | 10,081 | |
Estimated Fair Value | Significant Unobservable Inputs (Level 3) | Foreclosed assets | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset nonrecurring fair value measurements | 1,767 | 388 | |
Estimated Fair Value | Significant Unobservable Inputs (Level 3) | Impaired loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset nonrecurring fair value measurements | 6,536 | 9,693 | [1] |
Estimated Fair Value | Significant Unobservable Inputs (Level 3) | Interest Rate Swaps | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | 0 | |
Total liability recurring fair value measurements | 0 | 0 | |
Estimated Fair Value | Significant Unobservable Inputs (Level 3) | US Treasury | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | ||
Estimated Fair Value | Significant Unobservable Inputs (Level 3) | U.S. Government Agency Debentures | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | ||
Estimated Fair Value | Significant Unobservable Inputs (Level 3) | State and Political Subdivisions | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | 0 | |
Estimated Fair Value | Significant Unobservable Inputs (Level 3) | Other Stocks and Bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | 0 | |
Estimated Fair Value | Significant Unobservable Inputs (Level 3) | Other Equity Securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | 0 | |
Estimated Fair Value | Significant Unobservable Inputs (Level 3) | Residential MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | 0 | 0 | [2] |
Estimated Fair Value | Significant Unobservable Inputs (Level 3) | Commercial MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total asset recurring fair value measurements | $ 0 | $ 0 | [2] |
[1] | Impaired loans represent collateral-dependent loans with a specific valuation allowance. Losses on these loans represent charge-offs which are netted against the allowance for loan losses. | ||
[2] | All mortgage-backed securities are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. |
FAIR VALUE MEASUREMENT - Fa106
FAIR VALUE MEASUREMENT - Fair Value, Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Carrying Amount | ||
Financial Assets | ||
Cash and cash equivalents | $ 198,692 | $ 169,654 |
Investment Securities: | ||
Held to maturity, at carrying value | 413,632 | 425,810 |
Mortgage-backed securities: | ||
Held to maturity, at carrying value | 495,874 | 511,677 |
FHLB stock, at cost, and other investments | 61,550 | 66,592 |
Loans, net of allowance for loan losses | 3,273,575 | 2,538,626 |
Loans held for sale | 2,001 | 7,641 |
Financial Liabilities: | ||
Deposits | 4,515,447 | 3,533,076 |
Federal funds purchased and repurchase agreements | 9,498 | 7,097 |
FHLB borrowings | 1,017,361 | 1,309,646 |
Subordinated notes, net of unamortized debt issuance costs | 98,248 | 98,100 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 60,241 | 60,236 |
Estimated Fair Value | ||
Financial Assets | ||
Cash and cash equivalents | 198,692 | 169,654 |
Investment Securities: | ||
Held to maturity, at carrying value | 421,928 | 429,912 |
Mortgage-backed securities: | ||
Held to maturity, at carrying value | 499,872 | 514,370 |
FHLB stock, at cost, and other investments | 61,550 | 66,592 |
Loans, net of allowance for loan losses | 3,269,316 | 2,630,009 |
Loans held for sale | 2,001 | 7,641 |
Financial Liabilities: | ||
Deposits | 4,506,133 | 3,293,352 |
Federal funds purchased and repurchase agreements | 9,498 | 7,097 |
FHLB borrowings | 1,008,292 | 1,331,517 |
Subordinated notes, net of unamortized debt issuance costs | 99,665 | 101,627 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 47,622 | 45,147 |
Estimated Fair Value | Level 1 | ||
Financial Assets | ||
Cash and cash equivalents | 198,692 | 169,654 |
Investment Securities: | ||
Held to maturity, at carrying value | 0 | 0 |
Mortgage-backed securities: | ||
Held to maturity, at carrying value | 0 | 0 |
FHLB stock, at cost, and other investments | 0 | 0 |
Loans, net of allowance for loan losses | 0 | 0 |
Loans held for sale | 0 | 0 |
Financial Liabilities: | ||
Deposits | 0 | 0 |
Federal funds purchased and repurchase agreements | 0 | 0 |
FHLB borrowings | 0 | 0 |
Subordinated notes, net of unamortized debt issuance costs | 0 | 0 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 0 | 0 |
Estimated Fair Value | Level 2 | ||
Financial Assets | ||
Cash and cash equivalents | 0 | 0 |
Investment Securities: | ||
Held to maturity, at carrying value | 421,928 | 429,912 |
Mortgage-backed securities: | ||
Held to maturity, at carrying value | 499,872 | 514,370 |
FHLB stock, at cost, and other investments | 61,550 | 66,592 |
Loans, net of allowance for loan losses | 0 | 0 |
Loans held for sale | 2,001 | 7,641 |
Financial Liabilities: | ||
Deposits | 4,506,133 | 3,293,352 |
Federal funds purchased and repurchase agreements | 9,498 | 7,097 |
FHLB borrowings | 1,008,292 | 1,331,517 |
Subordinated notes, net of unamortized debt issuance costs | 99,665 | 101,627 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 47,622 | 45,147 |
Estimated Fair Value | Level 3 | ||
Financial Assets | ||
Cash and cash equivalents | 0 | 0 |
Investment Securities: | ||
Held to maturity, at carrying value | 0 | 0 |
Mortgage-backed securities: | ||
Held to maturity, at carrying value | 0 | 0 |
FHLB stock, at cost, and other investments | 0 | 0 |
Loans, net of allowance for loan losses | 3,269,316 | 2,630,009 |
Loans held for sale | 0 | 0 |
Financial Liabilities: | ||
Deposits | 0 | 0 |
Federal funds purchased and repurchase agreements | 0 | 0 |
FHLB borrowings | 0 | 0 |
Subordinated notes, net of unamortized debt issuance costs | 0 | 0 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | $ 0 | $ 0 |
FAIR VALUE MEASUREMENT - Fa107
FAIR VALUE MEASUREMENT - Fair Value Measurements, Narrative (Details) | 12 Months Ended |
Dec. 31, 2017source | |
Available-for-sale Securities [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Number of third party sources used to validate prices | 2 |
Derivative [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Number of third party sources used to validate prices | 3 |
SHAREHOLDERS' EQUITY - Regulat
SHAREHOLDERS' EQUITY - Regulatory Capital Requirements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Consolidated | |||
Common Equity Tier 1 (to Risk Weighted Assets) | |||
Common Equity Tier 1 Capital | $ 570,610 | $ 461,158 | |
Common Equity Tier 1 Capital for Capital Adequacy Purposes | $ 175,216 | $ 141,759 | |
Common Equity Tier 1 (to Risk Weighted Assets) Ratios [Abstract] | |||
Common Equity Tier 1 Capital to Risk Weighted Assets | 14.65% | 14.64% | |
Common Equity Tier 1 Capital for Capital Adequacy Purposes to Risk Weighted Assets | 4.50% | 4.50% | |
Tier 1 Capital (to Risk Weighted Assets) | |||
Tier 1 Capital | $ 627,532 | $ 515,831 | |
Tier 1 Capital Required for Capital Adequacy Purposes | $ 233,621 | $ 189,013 | |
Tier 1 Capital (to Risk Weighted Assets) Ratios | |||
Tier 1 Capital to Risk Weighted Assets | 16.12% | 16.37% | |
Tier 1 Capital Required for Capital Adequacy Purposes to Risk Weighted Assets | 6.00% | 6.00% | |
Total Capital (to Risk Weighted Assets) | |||
Total Capital | $ 748,532 | $ 633,289 | |
Total Capital Required for Capital Adequacy Purposes | $ 311,495 | $ 252,017 | |
Total Capital (to Risk Weighted Assets) Ratios | |||
Total Capital to Risk Weighted Assets | 19.22% | 20.10% | |
Total Capital Required for Capital Adequacy Purposes to Risk Weighted Assets | 8.00% | 8.00% | |
Tier 1 Capital (to Average Assets) | |||
Tier 1 Capital | [1] | $ 627,532 | $ 515,831 |
Tier 1 Capital Required for Capital Adequacy Purposes | [1] | $ 224,844 | $ 218,029 |
Tier 1 Capital (to Average Assets) Ratios | |||
Tier 1 Capital to Average Assets | [1] | 11.16% | 9.46% |
Tier 1 Capital Required for Capital Adequacy Purposes to Average Assets | [1] | 4.00% | 4.00% |
Bank Only | |||
Common Equity Tier 1 (to Risk Weighted Assets) | |||
Common Equity Tier 1 Capital | $ 711,157 | $ 566,423 | |
Common Equity Tier 1 Capital for Capital Adequacy Purposes | 175,145 | 141,734 | |
Common Equity Tier 1 Capital to be Well Capitalized | $ 252,987 | $ 204,726 | |
Common Equity Tier 1 (to Risk Weighted Assets) Ratios [Abstract] | |||
Common Equity Tier 1 Capital to Risk Weighted Assets | 18.27% | 17.98% | |
Common Equity Tier 1 Capital for Capital Adequacy Purposes to Risk Weighted Assets | 4.50% | 4.50% | |
Common Equity Tier 1 Capital to be Well Capitalized to Risk Weighted Assets | 6.50% | 6.50% | |
Tier 1 Capital (to Risk Weighted Assets) | |||
Tier 1 Capital | $ 711,157 | $ 566,423 | |
Tier 1 Capital Required for Capital Adequacy Purposes | 233,527 | 188,978 | |
Tier 1 Capital Required to be Well Capitalized | $ 311,369 | $ 251,971 | |
Tier 1 Capital (to Risk Weighted Assets) Ratios | |||
Tier 1 Capital to Risk Weighted Assets | 18.27% | 17.98% | |
Tier 1 Capital Required for Capital Adequacy Purposes to Risk Weighted Assets | 6.00% | 6.00% | |
Tier 1 Capital Required to be Well Capitalized to Risk Weighted Assets | 8.00% | 8.00% | |
Total Capital (to Risk Weighted Assets) | |||
Total Capital | $ 733,909 | $ 585,781 | |
Total Capital Required for Capital Adequacy Purposes | 311,369 | 251,971 | |
Total Capital Required to be Well Capitalized | $ 389,211 | $ 314,964 | |
Total Capital (to Risk Weighted Assets) Ratios | |||
Total Capital to Risk Weighted Assets | 18.86% | 18.60% | |
Total Capital Required for Capital Adequacy Purposes to Risk Weighted Assets | 8.00% | 8.00% | |
Total Capital Required to be Well Capitalized to Risk Weighted Assets | 10.00% | 10.00% | |
Tier 1 Capital (to Average Assets) | |||
Tier 1 Capital | [1] | $ 711,157 | $ 566,423 |
Tier 1 Capital Required for Capital Adequacy Purposes | [1] | 224,741 | 217,892 |
Tier 1 Capital Required to be Well Capitalized | [1] | $ 280,926 | $ 272,365 |
Tier 1 Capital (to Average Assets) Ratios | |||
Tier 1 Capital to Average Assets | [1] | 12.66% | 10.40% |
Tier 1 Capital Required for Capital Adequacy Purposes to Average Assets | [1] | 4.00% | 4.00% |
Tier 1 Capital Required to be Well Capitalized to Average Assets | [1] | 5.00% | 5.00% |
[1] | Refers to quarterly average assets as calculated in accordance with policies established by bank regulatory agencies. |
SHAREHOLDERS' EQUITY - Narrati
SHAREHOLDERS' EQUITY - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 06, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Payments of Ordinary Dividends [Abstract] | ||||
Dividends paid on common stock (in dollars per share) | $ 1.11 | $ 1.01 | $ 1 | |
Net issuance of common stock (in shares) | 2,185,000 | 2,185,000 | ||
Price of shares issued (in dollars per share) | $ 36.50 | |||
Value of stock issued during the period | $ 76,000 | $ 75,992 |
DIVIDEND REINVESTMENT AND CO110
DIVIDEND REINVESTMENT AND COMMON STOCK REPURCHASE PLAN (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Dividend Reinvestment and Common Stock Repurchase Plan [Abstract] | |||
Stock issued during period under dividend reinvestment plan (in shares) | 43,650 | 44,575 | 49,908 |
Stock issued during period under dividend reinvestment plan, average price per share (in dollars per share) | $ 33.99 | $ 31.65 | |
Purchase of common stock, cost | $ 10,199 | ||
Purchase of common stock (in shares) | 0 | 443,426 | 0 |
INCOME TAXES - Provision for I
INCOME TAXES - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||||||||
Current income tax expense | $ 12,607 | $ 8,557 | $ 10,671 | ||||||||
Deferred income tax expense (benefit) | 3,514 | 1,768 | (3,392) | ||||||||
Income tax expense | $ 5,870 | $ 3,890 | $ 3,353 | $ 3,008 | $ 1,839 | $ 2,741 | $ 2,772 | $ 2,973 | $ 16,121 | $ 10,325 | $ 7,279 |
INCOME TAXES - Summary of Net
INCOME TAXES - Summary of Net Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Allowance for loan losses | $ 4,364 | $ 6,269 |
Unrealized losses on securities available for sale | 4,285 | 12,286 |
Fair value adjustment on loans | 2,607 | 1,404 |
Alternative minimum tax credit | 6,943 | 8,776 |
Unfunded status of defined benefit plan | 7,018 | 10,436 |
State business tax credit | 544 | 604 |
Stock-based compensation | 642 | 995 |
Other | 151 | |
Gross deferred tax assets | 26,403 | 40,921 |
Liabilities | ||
Retirement and other benefit plans | (2,102) | (2,707) |
Premises and equipment | (5,716) | (5,273) |
Core deposit intangible | (3,660) | (1,576) |
Effective hedging derivatives | (1,701) | (2,474) |
Fair value adjustment on time deposits | (54) | |
Other | (966) | |
Gross deferred tax liabilities | (14,199) | (12,030) |
Net deferred tax asset at year-end | $ 12,204 | $ 28,891 |
INCOME TAXES - Income Tax Expe
INCOME TAXES - Income Tax Expense Reconciliation (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Amount | |||||||||||
Statutory tax expense | $ 24,652,000 | $ 20,886,000 | $ 17,946,000 | ||||||||
Increase (decrease) in taxes from: | |||||||||||
Tax rate changes | 2,416,000 | 0 | 0 | ||||||||
Tax exempt interest | (10,195,000) | (9,879,000) | (9,975,000) | ||||||||
Bank Owned Life Insurance | (885,000) | (915,000) | (914,000) | ||||||||
Share-based compensation | (482,000) | 0 | (75,000) | ||||||||
Acquisition costs | 467,000 | 0 | 0 | ||||||||
State Business Tax | 68,000 | 71,000 | 0 | ||||||||
Other, net | 80,000 | 162,000 | 297,000 | ||||||||
Income tax expense | $ 5,870,000 | $ 3,890,000 | $ 3,353,000 | $ 3,008,000 | $ 1,839,000 | $ 2,741,000 | $ 2,772,000 | $ 2,973,000 | $ 16,121,000 | $ 10,325,000 | $ 7,279,000 |
Percent of Pre-Tax Income | |||||||||||
Statutory tax expense | 35.00064% | 35.00017% | 34.99883% | ||||||||
Increase (Decrease) in Taxes From: | |||||||||||
Percent of Pre-tax income, tax rate changes | 3.40% | 0.00% | 0.00% | ||||||||
Percent of Pre-tax income, Tax exempt interest | (14.50%) | (16.60%) | (19.50%) | ||||||||
Percent of Pre-tax income, Bank Owned Life Insurance | (1.20%) | (1.50%) | (1.80%) | ||||||||
Percent of Pre-tax income, Share based compensation | (0.70%) | 0.00% | (0.10%) | ||||||||
Percent of Pre-tax income, Acquisition Costs | 0.70% | 0.00% | 0.00% | ||||||||
Percent of Pre-tax income, State Business Tax | 0.10% | 0.10% | 0.00% | ||||||||
Percent of Pre-tax income, Other Net | 0.10% | 0.30% | 0.60% | ||||||||
Percent of Pre-tax income, Income tax expense | 22.90% | 17.30% | 14.20% | ||||||||
Deferred tax asset valuation allowance | $ 0 | $ 0 | $ 0 | $ 0 |
OFF-BALANCE-SHEET ARRANGEMEN114
OFF-BALANCE-SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES - Off-Balance Sheet Arrangements, Commitments and Contingencies (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments with off-balance sheet risk, at fair value | $ 819,605 | $ 674,738 |
Commitments to extend credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments with off-balance sheet risk, at fair value | 804,715 | 665,663 |
Standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments with off-balance sheet risk, at fair value | $ 14,890 | $ 9,075 |
OFF-BALANCE-SHEET ARRANGEMEN115
OFF-BALANCE-SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES - Operating Lease Commitments and Rent Expense (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,018 | $ 1,496 |
2,019 | 1,106 |
2,020 | 796 |
2,021 | 480 |
2,022 | 294 |
2023 and thereafter | 72 |
Total future minimum payments due | $ 4,244 |
OFF-BALANCE-SHEET ARRANGEMEN116
OFF-BALANCE-SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES - Operating Lease - Lessor (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 2,929 |
2,019 | 2,501 |
2,020 | 2,392 |
2,021 | 1,474 |
2,022 | 1,480 |
2023 and thereafter | 5,264 |
Future minimum payments receivable | $ 16,040 |
OFF-BALANCE-SHEET ARRANGEMEN117
OFF-BALANCE-SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES - Narrative (Details) ft² in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)ft² | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Long-term Purchase Commitment [Line Items] | |||
Number of square feet in building acquired | ft² | 202 | ||
Number of square feet occupied | ft² | 41 | ||
Lease revenue | $ 3,100,000 | $ 3,100,000 | $ 2,800,000 |
Securities | |||
Unsettled trades to purchase securities | 0 | 160,000 | 19,350,000 |
Unsettled trades to sell securities | 0 | 0 | 9,343,000 |
Deposits [Abstract] | |||
Unsettled issuances of brokered cds | 0 | ||
Land, Buildings and Improvements | |||
Long-term Purchase Commitment [Line Items] | |||
Rent expense | 1,700,000 | 3,900,000 | 2,500,000 |
Office Equipment | |||
Long-term Purchase Commitment [Line Items] | |||
Rent expense | $ 178,000 | $ 261,000 | $ 297,000 |
SIGNIFICANT GROUP CONCENTRAT118
SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK (Details) - Credit Concentration Risk | 12 Months Ended |
Dec. 31, 2017Rate | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 31.60% |
Concentration risk, additional characteristic | loans collateralized by residential dwellings that are primarily owner occupied |
PARENT COMPANY FINANCIAL INF119
PARENT COMPANY FINANCIAL INFORMATION - BALANCE SHEETS (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
ASSETS | |||||
Cash and due from banks | $ 79,171 | $ 59,363 | |||
Other assets | 15,076 | 10,187 | |||
Total assets | 6,498,097 | 5,563,767 | |||
Liabilities [Abstract] | |||||
Subordinated notes, net of unamortized debt issuance costs | [1] | 98,248 | 98,100 | ||
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 60,241 | 60,236 | |||
Other liabilities | 43,162 | 37,338 | |||
Total liabilities | 5,743,957 | 5,045,493 | |||
Stockholders' Equity Attributable to Parent [Abstract] | |||||
Common stock: ($1.25 par value, 40,000,000 shares authorized, 37,802,352 shares issued at December 31, 2017 and 31,455,951 shares issued at December 31, 2016) | 47,253 | 39,320 | |||
Paid-in capital | 757,439 | 535,240 | |||
Retained earnings | 32,851 | 30,098 | |||
Treasury stock, at cost (2,802,019 at December 31, 2017 and 2,913,064 at December 31, 2016) | (47,105) | (47,891) | |||
Accumulated other comprehensive loss | (36,298) | (38,493) | |||
Total shareholders’ equity | 754,140 | 518,274 | $ 444,062 | $ 425,243 | |
Total liabilities and shareholders’ equity | 6,498,097 | 5,563,767 | |||
Parent | |||||
ASSETS | |||||
Cash and due from banks | 8,483 | 42,968 | |||
Other assets | 10,350 | 8,237 | |||
Total assets | 914,669 | 678,805 | |||
Liabilities [Abstract] | |||||
Subordinated notes, net of unamortized debt issuance costs | 98,248 | 98,100 | |||
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 60,241 | 60,236 | |||
Other liabilities | 2,040 | 2,195 | |||
Total liabilities | 160,529 | 160,531 | |||
Stockholders' Equity Attributable to Parent [Abstract] | |||||
Common stock: ($1.25 par value, 40,000,000 shares authorized, 37,802,352 shares issued at December 31, 2017 and 31,455,951 shares issued at December 31, 2016) | 47,253 | 39,320 | |||
Paid-in capital | 757,439 | 535,240 | |||
Retained earnings | 32,851 | 30,098 | |||
Treasury stock, at cost (2,802,019 at December 31, 2017 and 2,913,064 at December 31, 2016) | (47,105) | (47,891) | |||
Accumulated other comprehensive loss | (36,298) | (38,493) | |||
Total shareholders’ equity | 754,140 | 518,274 | |||
Total liabilities and shareholders’ equity | 914,669 | 678,805 | |||
Parent | Bank subsidiaries | |||||
ASSETS | |||||
Investment in subsidiaries at equity in underlying net assets | 894,010 | 625,046 | |||
Parent | Nonbank subsidiaries | |||||
ASSETS | |||||
Investment in subsidiaries at equity in underlying net assets | $ 1,826 | $ 2,554 | |||
[1] | This debt consists of subordinated notes with a remaining maturity greater than one year that qualify under the risk-based capital guidelines as Tier 2 capital, subject to certain limitations. |
PARENT COMPANY FINANCIAL INF120
PARENT COMPANY FINANCIAL INFORMATION - BALANCE SHEETS SHARE INFORMATION (Details) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Common stock, par value (in dollars per share) | $ 1.25 | $ 1.25 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 37,802,352 | 31,455,951 |
Treasury stock, (in shares) | 2,802,019 | 2,913,064 |
Parent | ||
Common stock, par value (in dollars per share) | $ 1.25 | $ 1.25 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 37,802,352 | 31,455,951 |
Treasury stock, (in shares) | 2,802,019 | 2,913,064 |
PARENT COMPANY FINANCIAL INF121
PARENT COMPANY FINANCIAL INFORMATION - INCOME STATEMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income | |||||||||||
Total interest income | $ 50,104 | $ 46,473 | $ 46,009 | $ 44,888 | $ 43,680 | $ 41,132 | $ 41,089 | $ 43,012 | $ 187,474 | $ 168,913 | $ 154,532 |
Expense | |||||||||||
Interest expense | 11,798 | 11,513 | 10,585 | 9,608 | 9,039 | 7,202 | 6,711 | 6,396 | 43,504 | 29,348 | 19,854 |
Income tax benefit | (5,870) | (3,890) | (3,353) | (3,008) | (1,839) | (2,741) | (2,772) | (2,973) | (16,121) | (10,325) | (7,279) |
Net income | $ 10,331 | $ 14,511 | $ 14,481 | $ 14,989 | $ 11,573 | $ 12,865 | $ 11,395 | $ 13,516 | 54,312 | 49,349 | 43,997 |
Parent | |||||||||||
Income | |||||||||||
Dividends from subsidiary | 27,000 | 30,000 | 17,600 | ||||||||
Interest income | 60 | 51 | 44 | ||||||||
Total interest income | 27,060 | 30,051 | 17,644 | ||||||||
Expense | |||||||||||
Interest expense | 7,646 | 3,334 | 1,455 | ||||||||
Other | 5,869 | 3,227 | 3,193 | ||||||||
Total expense | 13,515 | 6,561 | 4,648 | ||||||||
Income before income tax expense | 13,545 | 23,490 | 12,996 | ||||||||
Income tax benefit | 4,242 | 2,278 | 1,612 | ||||||||
Income before equity in undistributed earnings of subsidiaries | 17,787 | 25,768 | 14,608 | ||||||||
Equity in undistributed earnings of subsidiaries | 36,525 | 23,581 | 29,389 | ||||||||
Net income | $ 54,312 | $ 49,349 | $ 43,997 |
PARENT COMPANY FINANCIAL INF122
PARENT COMPANY FINANCIAL INFORMATION - CASH FLOW (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
OPERATING ACTIVITIES: | |||||||||||
Net Income | $ 10,331 | $ 14,511 | $ 14,481 | $ 14,989 | $ 11,573 | $ 12,865 | $ 11,395 | $ 13,516 | $ 54,312 | $ 49,349 | $ 43,997 |
Adjustments to reconcile net income to net cash provided by operations: | |||||||||||
(Increase) decrease in other assets | (3,909) | 1,823 | 325 | ||||||||
(Decrease) increase in other liabilities | (1,063) | 3,520 | (1,775) | ||||||||
Net cash provided by operating activities | 91,730 | 86,725 | 72,981 | ||||||||
INVESTING ACTIVITIES: | |||||||||||
Net cash provided by (used in) investing activities | 172,737 | (384,404) | (384,409) | ||||||||
FINANCING ACTIVITIES: | |||||||||||
Net proceeds from issuance of subordinated long-term debt | 0 | 98,060 | 0 | ||||||||
Purchase of common stock | 0 | (10,199) | 0 | ||||||||
Proceeds from issuance of common stock | 0 | 75,992 | 0 | ||||||||
Dividends paid | (32,199) | (25,963) | (25,071) | ||||||||
Net cash (used in) provided by financing activities | (235,429) | 386,358 | 307,748 | ||||||||
Net (decrease) increase in cash and cash equivalents | 29,038 | 88,679 | (3,680) | ||||||||
Cash and cash equivalents at beginning of period | 169,654 | 80,975 | 169,654 | 80,975 | 84,655 | ||||||
Cash and cash equivalents at end of period | 198,692 | 169,654 | 198,692 | 169,654 | 80,975 | ||||||
Parent | |||||||||||
OPERATING ACTIVITIES: | |||||||||||
Net Income | 54,312 | 49,349 | 43,997 | ||||||||
Adjustments to reconcile net income to net cash provided by operations: | |||||||||||
Amortization | 153 | 45 | 0 | ||||||||
Equity in undistributed earnings of subsidiaries | (36,525) | (23,581) | (29,389) | ||||||||
(Increase) decrease in other assets | (2,113) | (1,035) | 2,716 | ||||||||
(Decrease) increase in other liabilities | (155) | 1,564 | (3,709) | ||||||||
Net cash provided by operating activities | 15,672 | 26,342 | 13,615 | ||||||||
INVESTING ACTIVITIES: | |||||||||||
Investment in subsidiaries | 890 | (126,000) | (10) | ||||||||
Net cash paid for acquisition | (22,801) | 0 | 0 | ||||||||
Net cash provided by (used in) investing activities | (21,911) | (126,000) | (10) | ||||||||
FINANCING ACTIVITIES: | |||||||||||
Net proceeds from issuance of subordinated long-term debt | 0 | 98,060 | 0 | ||||||||
Purchase of common stock | 0 | (10,199) | 0 | ||||||||
Proceeds from issuance of common stock | 3,953 | 78,962 | 1,536 | ||||||||
Dividends paid | (32,199) | (25,963) | (25,071) | ||||||||
Net cash (used in) provided by financing activities | (28,246) | 140,860 | (23,535) | ||||||||
Net (decrease) increase in cash and cash equivalents | (34,485) | 41,202 | (9,930) | ||||||||
Cash and cash equivalents at beginning of period | $ 42,968 | $ 1,766 | 42,968 | 1,766 | 11,696 | ||||||
Cash and cash equivalents at end of period | $ 8,483 | $ 42,968 | $ 8,483 | $ 42,968 | $ 1,766 |
QUARTERLY FINANCIAL INFORMAT123
QUARTERLY FINANCIAL INFORMATION OF REGISTRANT (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Interest income | $ 50,104 | $ 46,473 | $ 46,009 | $ 44,888 | $ 43,680 | $ 41,132 | $ 41,089 | $ 43,012 | $ 187,474 | $ 168,913 | $ 154,532 |
Interest expense | 11,798 | 11,513 | 10,585 | 9,608 | 9,039 | 7,202 | 6,711 | 6,396 | 43,504 | 29,348 | 19,854 |
Net interest income | 38,306 | 34,960 | 35,424 | 35,280 | 34,641 | 33,930 | 34,378 | 36,616 | 143,970 | 139,565 | 134,678 |
Provision for loan losses | 1,271 | 960 | 1,346 | 1,098 | 2,065 | 1,631 | 3,768 | 2,316 | 4,675 | 9,780 | 8,343 |
Net (loss) gain on sale of securities available for sale | (249) | 627 | (75) | 322 | (2,676) | 2,343 | 728 | 2,441 | 625 | 2,836 | 3,660 |
Noninterest income excluding net securities gains | 9,348 | 8,781 | 9,368 | 9,351 | 9,389 | 9,389 | 8,642 | 9,155 | 37,473 | 39,411 | 37,895 |
Noninterest expense | 29,933 | 25,007 | 25,537 | 25,858 | 25,877 | 28,425 | 25,813 | 29,407 | 106,335 | 109,522 | 112,954 |
Income before income tax expense | 16,201 | 18,401 | 17,834 | 17,997 | 13,412 | 15,606 | 14,167 | 16,489 | 70,433 | 59,674 | 51,276 |
Income tax expense | 5,870 | 3,890 | 3,353 | 3,008 | 1,839 | 2,741 | 2,772 | 2,973 | 16,121 | 10,325 | 7,279 |
Net income | $ 10,331 | $ 14,511 | $ 14,481 | $ 14,989 | $ 11,573 | $ 12,865 | $ 11,395 | $ 13,516 | $ 54,312 | $ 49,349 | $ 43,997 |
Earnings (loss) per common share | |||||||||||
Earnings (loss) per common share - basic (in dollars per share) | $ 0.33 | $ 0.49 | $ 0.49 | $ 0.51 | $ 0.42 | $ 0.48 | $ 0.42 | $ 0.50 | $ 1.82 | $ 1.82 | $ 1.61 |
Earnings (loss) per common share - diluted (in dollars per share) | $ 0.33 | $ 0.49 | $ 0.49 | $ 0.51 | $ 0.42 | $ 0.48 | $ 0.42 | $ 0.50 | $ 1.81 | $ 1.81 | $ 1.61 |