Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 22, 2018 | |
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 Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 35,159,939 |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | |
ASSETS | |||
Cash and due from banks | $ 85,103,000 | $ 79,171,000 | |
Interest earning deposits | 70,685,000 | 111,541,000 | |
Federal funds sold | 18,284,000 | 7,980,000 | |
Total cash and cash equivalents | 174,072,000 | 198,692,000 | |
Securities available for sale, at estimated fair value | 1,939,277,000 | ||
Securities available for sale, at estimated fair value | 1,538,755,000 | ||
Securities held to maturity, at carrying value (estimated fair value of $156,472 and $921,800, respectively) | 163,365,000 | 909,506,000 | |
FHLB stock, at cost | 32,291,000 | 55,729,000 | |
Equity investments | 12,029,000 | ||
Equity investments | 5,821,000 | ||
Loans held for sale | 954,000 | 2,001,000 | |
Loans: | |||
Loans | 3,274,524,000 | 3,294,356,000 | |
Less: Allowance for loan losses | [1] | (26,092,000) | (20,781,000) |
Net Loans | 3,248,432,000 | 3,273,575,000 | |
Premises and equipment, net | 133,939,000 | 133,640,000 | |
Goodwill | 201,116,000 | 201,246,000 | |
Other intangible assets, net | 19,009,000 | 22,993,000 | |
Interest receivable | 22,456,000 | 28,491,000 | |
Deferred tax asset, net | 16,433,000 | 12,204,000 | |
Unsettled trades to sell securities | 14,602,000 | 0 | |
Unsettled issuances of brokered certificates of deposit | 10,000,000 | 0 | |
Bank owned life insurance | 97,611,000 | 100,368,000 | |
Other assets | 19,768,000 | 15,076,000 | |
Total assets | 6,105,354,000 | 6,498,097,000 | |
Deposits: | |||
Noninterest bearing | 1,033,572,000 | 1,037,401,000 | |
Interest bearing | 3,519,940,000 | 3,478,046,000 | |
Total deposits | 4,553,512,000 | 4,515,447,000 | |
Federal funds purchased and repurchase agreements | 8,975,000 | 9,498,000 | |
FHLB borrowings | 561,267,000 | 1,017,361,000 | |
Subordinated notes, net of unamortized debt issuance costs | 98,366,000 | 98,248,000 | |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 60,244,000 | 60,241,000 | |
Unsettled trades to purchase securities | 28,662,000 | 0 | |
Other liabilities | 41,822,000 | 43,162,000 | |
Total liabilities | 5,352,848,000 | 5,743,957,000 | |
Off-balance-sheet arrangements, commitments and contingencies (Note 13) | |||
Shareholders’ equity: | |||
Common stock: ($1.25 par value, 80,000,000 shares authorized and 37,832,989 shares issued at September 30, 2018 and 40,000,000 shares authorized and 37,802,352 shares issued at December 31, 2017) | 47,291,000 | 47,253,000 | |
Paid-in capital | 761,594,000 | 757,439,000 | |
Retained earnings | 58,578,000 | 32,851,000 | |
Treasury stock, shares at cost (2,673,050 at September 30, 2018 and 2,802,019 at December 31, 2017) | (45,966,000) | (47,105,000) | |
Accumulated other comprehensive loss | (68,991,000) | (36,298,000) | |
Total shareholders’ equity | 752,506,000 | 754,140,000 | |
Total liabilities and shareholders’ equity | $ 6,105,354,000 | $ 6,498,097,000 | |
[1] | Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. The allowance for loan loss recorded on purchase credit impaired (“PCI”) loans totaled $824,000 as of September 30, 2018. There was no allowance for loan loss recorded on PCI loans as of December 31, 2017. |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Held-to-maturity Securities, Other Disclosure Items [Abstract] | ||
Securities held to maturity, fair value | $ 156,472 | $ 921,800 |
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 1.25 | $ 1.25 |
Common stock, shares authorized (in shares) | 80,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 37,832,989 | 37,802,352 |
Treasury stock (in shares) | 2,673,050 | 2,802,019 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Interest income | ||||
Loans | $ 39,831 | $ 29,322 | $ 117,962 | $ 84,666 |
Investment securities – taxable | 36 | 58 | 314 | 702 |
Investment securities – tax-exempt | 6,331 | 5,670 | 19,065 | 18,381 |
Mortgage-backed securities | 10,086 | 10,567 | 31,190 | 31,430 |
FHLB stock and equity investments | 377 | 329 | 1,202 | 926 |
Other interest earning assets | 491 | 527 | 1,410 | 1,265 |
Total interest income | 57,152 | 46,473 | 171,143 | 137,370 |
Interest expense | ||||
Deposits | 9,497 | 5,420 | 25,529 | 14,839 |
FHLB borrowings | 3,108 | 4,156 | 9,747 | 11,171 |
Subordinated notes | 1,423 | 1,413 | 4,228 | 4,204 |
Trust preferred subordinated debentures | 684 | 520 | 1,911 | 1,481 |
Other borrowings | 30 | 4 | 74 | 11 |
Total interest expense | 14,742 | 11,513 | 41,489 | 31,706 |
Net interest income | 42,410 | 34,960 | 129,654 | 105,664 |
Provision for loan losses | 975 | 960 | 5,991 | 3,404 |
Net interest income after provision for loan losses | 41,435 | 34,000 | 123,663 | 102,260 |
Noninterest income | ||||
Deposit services | 6,317 | 5,476 | 18,757 | 15,845 |
Net (loss) gain on sale of securities available for sale | (741) | 627 | (1,900) | 874 |
Gain on sale of loans | 303 | 347 | 591 | 1,553 |
Trust income | 1,568 | 873 | 5,259 | 2,662 |
Bank owned life insurance income | 552 | 636 | 2,369 | 1,905 |
Brokerage services | 532 | 561 | 1,488 | 1,790 |
Other | 1,491 | 888 | 4,075 | 3,745 |
Total noninterest income | 10,022 | 9,408 | 30,639 | 28,374 |
Noninterest expense | ||||
Salaries and employee benefits | 17,628 | 14,472 | 52,820 | 45,463 |
Occupancy expense | 3,396 | 2,981 | 10,339 | 8,741 |
Acquisition expense | 437 | 405 | 2,295 | 878 |
Advertising, travel & entertainment | 648 | 487 | 2,108 | 1,618 |
ATM and debit card expense | 251 | 1,024 | 840 | 2,840 |
Professional fees | 824 | 996 | 2,846 | 2,985 |
Software and data processing expense | 977 | 732 | 2,939 | 2,145 |
Telephone and communications | 354 | 459 | 1,370 | 1,461 |
FDIC insurance | 435 | 441 | 1,416 | 1,327 |
Amortization expense on intangibles | 1,279 | 388 | 3,985 | 1,229 |
Other | 2,733 | 2,622 | 8,945 | 7,715 |
Total noninterest expense | 28,962 | 25,007 | 89,903 | 76,402 |
Income before income tax expense | 22,495 | 18,401 | 64,399 | 54,232 |
Income tax expense | 2,192 | 3,890 | 7,642 | 10,251 |
Net income | $ 20,303 | $ 14,511 | $ 56,757 | $ 43,981 |
Earnings per common share - basic (in dollars per share) | $ 0.58 | $ 0.49 | $ 1.62 | $ 1.50 |
Earnings per common share - diluted (in dollars per share) | 0.58 | 0.49 | 1.61 | 1.49 |
Dividends paid per common share (in dollars per share) | $ 0.30 | $ 0.28 | $ 0.88 | $ 0.81 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 20,303 | $ 14,511 | $ 56,757 | $ 43,981 |
Securities available for sale and transferred securities: | ||||
Change in net unrealized holding (losses) gains on available for sale securities during the period | (16,885) | 344 | (65,039) | 18,450 |
Unrealized net gain on securities transferred from held to maturity to available for sale under the transition guidance enumerated in ASU 2017-12 | 0 | 0 | 11,881 | 0 |
Change in net unrealized losses on securities transferred from held to maturity to available for sale | 0 | 0 | 401 | 0 |
Reclassification adjustment for net loss on equity investments, reclassified to retained earnings with adoption of ASU 2016-01 | 0 | 0 | 107 | 0 |
Reclassification adjustment for amortization related to available for sale and held to maturity debt securities | (661) | 490 | 729 | 1,191 |
Reclassification adjustment for net loss (gain) on sale of available for sale securities, included in net income | 741 | (627) | 1,900 | (874) |
Derivatives: | ||||
Change in net unrealized gain (loss) on effective cash flow hedge interest rate swap derivatives | 1,894 | (236) | 7,864 | (2,084) |
Change in net unrealized gains on interest rate swap derivatives terminated during the period | 0 | 0 | 0 | 273 |
Reclassification adjustment from other comprehensive income (loss) related to derivatives designated as cash flow hedge | (406) | 101 | (864) | 694 |
Pension plans: | ||||
Amortization of net actuarial loss and prior service credit, included in net periodic benefit cost | 546 | 402 | 1,637 | 1,205 |
Other comprehensive (loss) income, before tax | (14,771) | 474 | (41,384) | 18,855 |
Income tax benefit (expense) related to items of other comprehensive income (loss) | 3,102 | (166) | 8,691 | (6,599) |
Other comprehensive (loss) income, net of tax | (11,669) | 308 | (32,693) | 12,256 |
Comprehensive income | $ 8,634 | $ 14,819 | $ 24,064 | $ 56,237 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - 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, 2016 | $ 518,274 | $ 39,320 | $ 535,240 | $ 30,098 | $ (47,891) | $ (38,493) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 43,981 | 43,981 | ||||
Other comprehensive income (loss) | 12,256 | 12,256 | ||||
Issuance of common stock for dividend reinvestment plan (30,637 shares in 2018 and 33,000 shares in 2017) | 1,098 | 41 | 1,057 | |||
Stock compensation expense | 1,393 | 1,393 | ||||
Net issuance of common stock under employee stock plans (128,969 shares in 2018 and 138,035 shares in 2017) | 2,390 | 61 | 1,802 | (73) | 600 | |
Cash dividends paid on common stock ($0.88 per share in 2018 and $0.81 per share in 2017) | (23,369) | (23,369) | ||||
Stock dividend declared (719,515 shares in 2017) | 0 | 899 | 24,061 | (24,960) | ||
Ending balance, net of tax at Sep. 30, 2017 | 556,023 | 40,321 | 563,553 | 25,677 | (47,291) | (26,237) |
Beginning balance, net of tax at Jun. 30, 2017 | (26,545) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 14,511 | |||||
Other comprehensive income (loss) | 308 | |||||
Ending balance, net of tax at Sep. 30, 2017 | 556,023 | 40,321 | 563,553 | 25,677 | (47,291) | (26,237) |
Beginning balance, net of tax at Dec. 31, 2017 | 754,140 | 47,253 | 757,439 | 32,851 | (47,105) | (36,298) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 56,757 | 56,757 | ||||
Other comprehensive income (loss) | (32,693) | (32,693) | ||||
Issuance of common stock for dividend reinvestment plan (30,637 shares in 2018 and 33,000 shares in 2017) | 1,089 | 38 | 1,051 | |||
Stock compensation expense | 1,626 | 1,626 | ||||
Net issuance of common stock under employee stock plans (128,969 shares in 2018 and 138,035 shares in 2017) | 2,530 | 0 | 1,478 | (87) | 1,139 | |
Cash dividends paid on common stock ($0.88 per share in 2018 and $0.81 per share in 2017) | (30,858) | (30,858) | ||||
Ending balance, net of tax at Sep. 30, 2018 | 752,506 | 47,291 | 761,594 | 58,578 | (45,966) | (68,991) |
Beginning balance, net of tax at Jun. 30, 2018 | (57,322) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 20,303 | |||||
Other comprehensive income (loss) | (11,669) | |||||
Ending balance, net of tax at Sep. 30, 2018 | 752,506 | $ 47,291 | $ 761,594 | 58,578 | $ (45,966) | $ (68,991) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of ASU 2016-01 | $ (85) | $ (85) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Stockholders' Equity [Abstract] | ||
Issuance of common stock - DRIP (in shares) | 30,637 | 33,000 |
Dividends paid on common stock (in dollars per share) | $ 0.88 | $ 0.81 |
Net issuance of common stock under employee stock plans (in shares) | 128,969 | 138,035 |
Common Stock Dividends, Shares | 719,515 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
OPERATING ACTIVITIES: | ||
Net income | $ 56,757,000 | $ 43,981,000 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation and net amortization | 10,571,000 | 7,251,000 |
Securities premium amortization (discount accretion), net | 10,875,000 | 13,502,000 |
Loan (discount accretion) premium amortization, net | (2,021,000) | (818,000) |
Provision for loan losses | 5,991,000 | 3,404,000 |
Stock compensation expense | 1,626,000 | 1,393,000 |
Deferred tax expense | 4,535,000 | 453,000 |
Net loss (gain) on sale of securities available for sale | 1,900,000 | (874,000) |
Net loss on premises and equipment | 379,000 | 77,000 |
Gross proceeds from sales of loans held for sale | 19,612,000 | 50,689,000 |
Gross originations of loans held for sale | (18,565,000) | (45,225,000) |
Net loss (gain) on other real estate owned | 411,000 | (1,000) |
Net gain on sale of customer receivables | 124,000 | 0 |
Net change in: | ||
Interest receivable | 6,035,000 | 6,391,000 |
Other assets | (1,672,000) | 2,696,000 |
Interest payable | (839,000) | (923,000) |
Other liabilities | 7,639,000 | (4,639,000) |
Net cash provided by operating activities | 103,110,000 | 77,357,000 |
Securities available for sale: | ||
Purchases | (228,281,000) | (371,555,000) |
Sales | 394,232,000 | 486,460,000 |
Maturities, calls and principal repayments | 122,135,000 | 87,096,000 |
Securities held to maturity: | ||
Purchases | 0 | (1,521,000) |
Maturities, calls and principal repayments | 2,656,000 | 25,455,000 |
Proceeds from redemption of FHLB stock and other investments | 24,360,000 | 114,000 |
Purchases of FHLB stock and other investments | (1,174,000) | (761,000) |
Net loan paydowns (originations) | 15,892,000 | (127,240,000) |
Proceeds from sales of customer receivables | 4,300,000 | 0 |
Purchases of premises and equipment | (8,863,000) | (7,090,000) |
Proceeds from sales of premises and equipment | 1,905,000 | 8,000 |
Proceeds from sales of other real estate owned | 771,000 | 134,000 |
Proceeds from sales of repossessed assets | 378,000 | 341,000 |
Net cash provided by investing activities | 328,311,000 | 91,441,000 |
FINANCING ACTIVITIES: | ||
Net change in deposits | 27,809,000 | 31,031,000 |
Net (decrease) increase in federal funds purchased and repurchase agreements | (523,000) | 1,986,000 |
Proceeds from FHLB borrowings | 2,569,000,000 | 2,366,476,000 |
Repayment of FHLB borrowings | (3,025,088,000) | (2,533,551,000) |
Proceeds from stock option exercises | 2,655,000 | 2,527,000 |
Cash paid to tax authority related to tax withholding on share-based awards | (125,000) | (137,000) |
Proceeds from the issuance of common stock for dividend reinvestment plan | 1,089,000 | 1,098,000 |
Cash dividends paid | (30,858,000) | (23,369,000) |
Net cash used in financing activities | (456,041,000) | (153,939,000) |
Net (decrease) increase in cash and cash equivalents | (24,620,000) | 14,859,000 |
Cash and cash equivalents at beginning of period | 198,692,000 | 169,654,000 |
Cash and cash equivalents at end of period | 174,072,000 | 184,513,000 |
SUPPLEMENTAL DISCLOSURES FOR CASH FLOW INFORMATION: | ||
Interest paid | 42,209,000 | 32,629,000 |
Income taxes paid | 2,000,000 | 8,300,000 |
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Loans transferred to other repossessed assets and real estate through foreclosure | 1,220,000 | 407,000 |
Loans transferred from portfolio to held for sale | 3,984,000 | 0 |
Transfer of held to maturity securities to available for sale securities | 743,421,000 | 0 |
Adjustment to pension liability | 1,637,000 | (1,205,000) |
Stock dividend (2.5% for 2017) | 0 | 24,960,000 |
Unsettled trades to purchase securities | (28,662,000) | (16,673,000) |
Unsettled trades to sell securities | 14,602,000 | 11,843,000 |
Unsettled issuances of brokered certificates of deposit | $ 10,000,000 | $ 0 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOW Consolidated Statements Cash Flow (Parenthetical) | 9 Months Ended |
Sep. 30, 2017Rate | |
Statement of Cash Flows [Abstract] | |
Stock dividend declared (as a percent) | 2.50% |
Summary of Significant Accounti
Summary of Significant Accounting and Reporting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting and Reporting Policies | Summary of Significant Accounting and Reporting Policies Basis of Presentation In this report, the words “the Company,” “we,” “us,” and “our” refer to the combined entities of Southside Bancshares, Inc. and its subsidiaries. The words “Southside” and “Southside Bancshares” refer to Southside Bancshares, Inc. The words “Southside Bank” and “the Bank” refer to Southside Bank. “Omni” refers to OmniAmerican Bancorp, Inc., a bank holding company, and its wholly-owned subsidiary, OmniAmerican Bank, acquired by Southside on December 17, 2014. “Diboll” refers to Diboll State Bancshares, Inc., a bank holding company and its wholly-owned subsidiary, First Bank & Trust East Texas, acquired by Southside on November 30, 2017. The accompanying unaudited consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, not all information required by GAAP for complete financial statements is included in these interim statements. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments consisted only of normal recurring items. The preparation of these consolidated financial statements in accordance with GAAP requires the use of management’s estimates. These estimates are subjective in nature and involve matters of judgment. Actual amounts could differ from these estimates. Interim results are not necessarily indicative of results for a full year. These financial statements should be read in conjunction with the financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2017 . Accounting Changes and Reclassifications Certain prior period amounts have been reclassified to conform to current year presentation. We adopted Accounting Standards Update (“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, on January 1, 2018, the effective date of the guidance, using the modified retrospective approach. 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. As a result of the guidance, we adjusted the presentation of revenue received from our brokerage services, merchant services, as well as our interchange income associated with debit card services, which were all deemed to be services offered in an agent capacity. These lines of revenue will now be presented on a net basis with the fee income disclosed net of the related costs in the noninterest income section of the consolidated statements of income. In connection with the adoption, for the three and nine months ended September 30, 2018 , we netted $1.0 million and $2.8 million of debit card expense against deposit services income and $172,000 and $474,000 of brokerage services expense against brokerage services income, respectively. Due to the implementation of the guidance under the modified retrospective method, prior periods have not been adjusted and are not comparative. Refer to our revenue recognition discussion below and “Note 1 - Summary of Significant Accounting and Reporting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2017 for more information related to our revenue recognition policies. We adopted ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities,” on January 1, 2018, the effective date of the guidance. 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 (“AFS”) securities in combination with the entity’s other deferred tax assets. 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. Adoption of this guidance resulted in a cumulative adjustment to retained earnings of $85,000 , net of tax, on January 1, 2018 and an equity security with a carrying value of $5.9 million that was previously recognized in securities AFS, at estimated fair value on our consolidated balance sheet to instead be recognized in equity investments, with subsequent changes in fair value being recognized in income. Also in conjunction with the adoption, our fair value measurement of financial instruments will be based upon an exit price notion as required in ASC 820. The guidance was applied on a prospective approach resulting in prior periods no longer being comparable. We adopted ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” on January 1, 2018. 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. 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. The guidance requires companies to apply the requirements retrospectively to all prior periods presented. We elected to use the practical expedient that permits us to use the amounts in our pension plan disclosures in our employee benefit footnote for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements, which resulted in an increase of $77,000 and $234,000 in salaries and employee benefits expense and a decrease of $77,000 and $234,000 in other noninterest expense for the three and nine months ended September 30, 2017 , respectively. We early adopted ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” on January 1, 2018. 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 held to maturity (“HTM”) securities to AFS securities if a portion of those securities would qualify to be hedged under the new “last-of-layer” approach. 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. The guidance did not have an impact on our derivatives that qualified as hedges on the date of adoption and thus no adjustment was made to retained earnings. In conjunction with the adoption of ASU 2017-12, we made the transition election to reclassify approximately $743.4 million in book value of securities from HTM to AFS that qualified for the last-of-layer method described in ASU 2017-12. During the second quarter of 2018, we entered into partial term fair value hedges, as allowed under the recently adopted ASU 2017-12, for certain of our fixed rate callable AFS municipal securities. These hedges are expected to be effective in offsetting changes in the fair value of the hedged securities. Gains and losses on derivative instruments designated as fair value hedges, as well as the change in fair value on the hedged item, are recorded in interest income in the consolidated statements of income. Revenue Recognition Our revenue consists of net interest income on financial assets and financial liabilities and noninterest income. The classifications of our revenue are presented in the consolidated statements of income. On January 1, 2018, we adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” using the modified retrospective method. The revenue recognition principle in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of 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. ASU 2014-09 permits an entity to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset would have been one year or less. We generally expense sales commissions when incurred because the amortization period is within one year or less. These costs are recorded within salaries and employee benefits on the consolidated statements of income. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of goods or services. Under ASU 2014-09’s practical expedient to recognize revenue equal to the amounts for which we have a right to invoice, revenue is measured as the amount of consideration we expect to receive in exchange for the transfer of those goods or services. The following summarizes our revenue recognition policies as they relate to revenue from contracts with customers under ASU 2014-09: • Deposit services . 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. Our deposit services also include our ATM and debit card interchange revenue that is presented net of the associated costs. Interchange revenue is generated by our deposit customers’ usage and volume of activity. Interchange rates are not controlled by the Company, which effectively acts as processor that collects and remits payments associated with customer debit card transactions. • Trust income. 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 when we have a right to invoice and are based on either the market value of the assets managed or the services provided. • Brokerage services. Brokerage services income includes fees and commissions charged when we arrange for another party to transfer brokerage services to a customer. The fees and commissions under this agent relationship are based upon stated fee schedules based upon the type of transaction, volume and value of the services provided. • Other noninterest income . Other noninterest income includes among other things, merchant services income. Merchant services revenue is derived from third party vendors that process credit card transactions on behalf of our merchant customers. Merchant services revenue is primarily comprised of residual fee income based on the referred merchant’s processing volumes and/or margin. Securities Available for Sale (“AFS”). Debt 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 on 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. Securities that are hedged with qualifying derivatives are carried at fair value with the change in fair value on both the hedged instrument and the securities recorded in interest income in the consolidated statements of income. 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. Equity Investments. Beginning January 1, 2018, upon adoption of ASU 2016-01, equity investments with readily determinable fair values are stated at fair value with unrealized gains and losses reported in income. For periods prior to January 1, 2018, certain equity investments were classified as AFS and stated at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income (“AOCI”), net of tax. Equity investments without readily determinable fair values are recorded at cost less impairment, if any. Accounting Pronouncements 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 originally required companies to apply the requirements in the year of adoption using a modified retrospective approach; however, in July 2018, the FASB issued ASU 2018-11 “Leases (Topic 842): Targeted Improvements,” which provides lessees the option to apply the new leasing standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We plan to select this transition option. We are currently evaluating the impact this guidance will have on our consolidated financial statements, and we anticipate our assessment to be completed during the fiscal year 2018. 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 AFS 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 plan to adopt on January 1, 2020, the effective date. We have developed a project plan and have assigned a project team to complete the analysis needed to implement the guidance. The team is currently completing the data collection and anticipates running parallel models in early 2019. 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 2017-08, “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. We have elected to adopt on January 1, 2019. 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 have evaluated an estimate of the potential impact of the pending adoption of ASU 2017-08 on our consolidated financial statements. Based on our existing municipal securities portfolio, the preliminary estimate of amortizing premiums to the earliest call date will increase amortization expense recorded through interest income for the year ended December 31, 2019 by approximately $2.9 million . Our preliminary estimate of the cumulative adjustment to retained earnings, at the date of adoption, is estimated to reduce retained earnings by $14.4 million , before tax. |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combination Disclosure | 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 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 Diboll acquisition was accounted for using the acquisition method of accounting and accordingly, purchased assets, including identifiable intangible assets and assumed liabilities were recorded at their respective acquisition date fair values. The purchase price allocation is preliminary and is subject to final determination and valuation of the fair value of assets acquired and liabilities assumed. Subsequent to filing our Annual Report on Form 10-K for the year ended December 31, 2017, we continue to evaluate the assets and liabilities assumed. This evaluation has resulted in an immaterial adjustment to goodwill at September 30, 2018 , based on the filing of the short-period Federal Income Tax return for Diboll and its subsidiaries. The impact of the adjustments to goodwill, net of deferred tax, is reflected below. For more information concerning the fair value of the assets acquired and liabilities assumed in relation to the acquisition of Diboll, see “Note 2 - Acquisition” in our Annual Report on Form 10-K for the year ended December 31, 2017. The following table reflects the changes in the carrying amount of goodwill for the three months ended September 30, 2018 (in thousands): Goodwill Balance as of December 31, 2017 $ 201,246 Less: measurement period adjustments (130 ) Balance as of September 30, 2018 $ 201,116 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Earnings per share on a basic and diluted basis are calculated as follows (in thousands, except per share amounts). Three Months Ended Nine Months Ended 2018 2017 2018 2017 Basic and Diluted Earnings: Net income $ 20,303 $ 14,511 $ 56,757 $ 43,981 Basic weighted-average shares outstanding 35,114 29,370 35,066 29,326 Add: Stock awards 174 200 175 205 Diluted weighted-average shares outstanding 35,288 29,570 35,241 29,531 Basic Earnings Per Share: Net Income $ 0.58 $ 0.49 $ 1.62 $ 1.50 Diluted Earnings Per Share: Net Income $ 0.58 $ 0.49 $ 1.61 $ 1.49 For the three- and nine- month periods ended September 30, 2018 , there were approximately 84,000 and 61,000 anti-dilutive shares, respectively. For the three- and nine- month periods ended September 30, 2017 , there were approximately 45,000 and 49,000 anti-dilutive shares, respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) by component are as follows (in thousands): Three Months Ended September 30, 2018 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Service (Cost) Credit Net Gain (Loss) Total Beginning balance, net of tax $ (42,536 ) $ 10,753 $ (135 ) $ (25,404 ) $ (57,322 ) Other comprehensive income (loss): Other comprehensive (loss) income before reclassifications (16,885 ) 1,894 — — (14,991 ) Reclassified from accumulated other comprehensive income 80 (406 ) (1 ) 547 220 Income tax benefit (expense) 3,529 (312 ) — (115 ) 3,102 Net current-period other comprehensive (loss) income, net of tax (13,276 ) 1,176 (1 ) 432 (11,669 ) Ending balance, net of tax $ (55,812 ) $ 11,929 $ (136 ) $ (24,972 ) $ (68,991 ) Nine Months Ended September 30, 2018 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Net Gain (Loss) Total Beginning balance, net of tax $ (16,295 ) $ 6,399 $ (133 ) $ (26,269 ) $ (36,298 ) Other comprehensive income (loss): Other comprehensive (loss) income before reclassifications (52,757 ) 7,864 — — (44,893 ) Reclassified from accumulated other comprehensive income (1) 2,736 (864 ) (5 ) 1,642 3,509 Income tax benefit (expense) 10,504 (1,470 ) 2 (345 ) 8,691 Net current-period other comprehensive (loss) income, net of tax (39,517 ) 5,530 (3 ) 1,297 (32,693 ) Ending balance, net of tax $ (55,812 ) $ 11,929 $ (136 ) $ (24,972 ) $ (68,991 ) (1) As discussed in “Note 1 – Summary of Significant Accounting and Reporting Policies,” the Company adopted ASU 2016-01 on January 1, 2018. This amount includes a reclassification for the cumulative adjustment to retained earnings of $107,000 ( $85,000 , net of tax). Three Months Ended September 30, 2017 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Service (Cost) Credit Net Gain (Loss) Total Beginning balance, net of tax $ (11,644 ) $ 3,957 $ (136 ) $ (18,722 ) $ (26,545 ) Other comprehensive income (loss): Other comprehensive income (loss) before reclassifications 344 (236 ) — — 108 Reclassified from accumulated other comprehensive income (137 ) 101 (1 ) 403 366 Income tax (expense) benefit (72 ) 47 — (141 ) (166 ) Net current-period other comprehensive income (loss), net of tax 135 (88 ) (1 ) 262 308 Ending balance, net of tax $ (11,509 ) $ 3,869 $ (137 ) $ (18,460 ) $ (26,237 ) Nine Months Ended September 30, 2017 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Service (Cost) Credit Net Gain (Loss) Total Beginning balance, net of tax $ (23,708 ) $ 4,595 $ (133 ) $ (19,247 ) $ (38,493 ) Other comprehensive income (loss): Other comprehensive income (loss) before reclassifications 18,450 (1,811 ) — — 16,639 Reclassified from accumulated other comprehensive income 317 694 (5 ) 1,210 2,216 Income tax (expense) benefit (6,568 ) 391 1 (423 ) (6,599 ) Net current-period other comprehensive income (loss), net of tax 12,199 (726 ) (4 ) 787 12,256 Ending balance, net of tax $ (11,509 ) $ 3,869 $ (137 ) $ (18,460 ) $ (26,237 ) The reclassifications out of accumulated other comprehensive income (loss) into net income are presented below (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Unrealized losses on securities transferred: Amortization of unrealized losses (1) $ 661 $ (490 ) $ (729 ) $ (1,191 ) Tax (expense) benefit (139 ) 172 153 417 Net of tax $ 522 $ (318 ) $ (576 ) $ (774 ) Unrealized gains and losses on available for sale securities: Realized net (loss) gain on sale of securities (2) $ (741 ) $ 627 $ (1,900 ) $ 874 Tax benefit (expense) 156 (220 ) 399 (306 ) Net of tax $ (585 ) $ 407 $ (1,501 ) $ 568 Derivatives: Realized net gain (loss) on interest rate swap derivatives (3) $ 384 $ (122 ) $ 799 $ (746 ) Tax (expense) benefit (81 ) 43 (168 ) 261 Net of tax $ 303 $ (79 ) $ 631 $ (485 ) Amortization of unrealized gains on terminated interest rate swap derivatives (3) $ 22 $ 21 $ 65 $ 52 Tax expense (5 ) (7 ) (14 ) (18 ) Net of tax $ 17 $ 14 $ 51 $ 34 Amortization of pension plan: Net actuarial loss (4) $ (547 ) $ (403 ) $ (1,642 ) $ (1,210 ) Prior service credit (4) 1 1 5 5 Total before tax (546 ) (402 ) (1,637 ) (1,205 ) Tax benefit 115 141 343 422 Net of tax (431 ) (261 ) (1,294 ) (783 ) Total reclassifications for the period, net of tax $ (174 ) $ (237 ) $ (2,689 ) $ (1,440 ) (1) Included in interest income on the consolidated statements of income. (2) Listed as net (loss) 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 8 - Employee Benefit Plans.” |
Securities
Securities | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Securities | Securities Debt securities The amortized cost, gross unrealized gains and losses and estimated fair value of investment and mortgage-backed securities available for sale and held to maturity as of September 30, 2018 and December 31, 2017 are reflected in the tables below (in thousands): September 30, 2018 Amortized Gross Unrealized Gross Unrealized Estimated AVAILABLE FOR SALE Cost Gains Losses Fair Value Investment Securities: U.S. Treasury $ 19,706 $ 42 $ — $ 19,748 State and Political Subdivisions 718,237 4,666 23,834 699,069 Other Stocks and Bonds 3,000 27 — 3,027 Mortgage-backed Securities: (1) Residential 708,137 1,997 22,536 687,598 Commercial 544,993 244 15,402 529,835 Total $ 1,994,073 $ 6,976 $ 61,772 $ 1,939,277 HELD TO MATURITY Investment Securities: State and Political Subdivisions $ 3,087 $ — $ 57 $ 3,030 Mortgage-backed Securities: (1) Residential 59,679 143 3,015 56,807 Commercial 100,599 65 4,029 96,635 Total $ 163,365 $ 208 $ 7,101 $ 156,472 December 31, 2017 Amortized Gross Unrealized Gross Unrealized Estimated AVAILABLE FOR SALE Cost Gains Losses Fair Value Investment Securities: U.S. Government Agency Debentures $ 108,869 $ — $ — $ 108,869 State and Political Subdivisions 392,760 3,895 3,991 392,664 Other Stocks and Bonds 5,024 31 — 5,055 Other Equity Securities (2) 6,027 — 107 5,920 Mortgage-backed Securities: (1) Residential 720,930 4,476 7,377 718,029 Commercial 308,357 761 900 308,218 Total $ 1,541,967 $ 9,163 $ 12,375 $ 1,538,755 HELD TO MATURITY Investment Securities: State and Political Subdivisions $ 413,632 $ 10,879 $ 2,583 $ 421,928 Mortgage-backed Securities: (1) Residential 129,044 1,631 239 130,436 Commercial 366,830 3,812 1,206 369,436 Total $ 909,506 $ 16,322 $ 4,028 $ 921,800 (1) All mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. (2) See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. From time to time, we have transferred securities from AFS to HTM due to overall balance sheet strategies. The remaining net unamortized, unrealized loss on the transferred securities included in AOCI in the accompanying balance sheets totaled $15.8 million ( $12.5 million , net of tax) at September 30, 2018 and $17.4 million ( $13.8 million , net of tax) at December 31, 2017 . Any net unrealized gain or loss on the transferred securities included in AOCI 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. Securities transferred with losses included in AOCI 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 the nine months ended September 30, 2018 or the year ended December 31, 2017 . On January 1, 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. The unrealized gain of $11.9 million ( $9.4 million , net of tax) on the transferred securities was recognized in other comprehensive income on the date of transfer. The following tables represent the estimated fair value and unrealized loss on investment and mortgage-backed securities AFS and HTM as of September 30, 2018 and December 31, 2017 (in thousands): As of September 30, 2018 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss AVAILABLE FOR SALE Investment Securities: State and Political Subdivisions $ 287,571 $ 7,728 $ 244,510 $ 16,106 $ 532,081 $ 23,834 Mortgage-backed Securities: Residential 332,230 8,003 285,356 14,533 617,586 22,536 Commercial 415,196 12,991 45,485 2,411 460,681 15,402 Total $ 1,034,997 $ 28,722 $ 575,351 $ 33,050 $ 1,610,348 $ 61,772 HELD TO MATURITY Investment Securities: State and Political Subdivisions $ 1,761 $ 23 $ 1,269 $ 34 $ 3,030 $ 57 Mortgage-backed Securities: Residential 48,022 2,473 6,781 542 54,803 3,015 Commercial 50,276 1,578 37,995 2,451 88,271 4,029 Total $ 100,059 $ 4,074 $ 46,045 $ 3,027 $ 146,104 $ 7,101 As of December 31, 2017 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized AVAILABLE FOR SALE Investment Securities: State and Political Subdivisions $ 32,341 $ 121 $ 172,006 $ 3,870 $ 204,347 $ 3,991 Other Equity Securities (1) 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 (1) See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. 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 AFS and HTM 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 September 30, 2018 . 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 September 30, 2018 . The following tables reflect interest income recognized on securities for the periods presented (in thousands): Three Months Ended 2018 2017 U.S. Treasury $ 10 $ — U.S. Government Agency Debentures — — State and Political Subdivisions 6,331 5,670 Other Stocks and Bonds 26 27 Other Equity Securities — 31 Mortgage-backed Securities 10,086 10,567 Total interest income on securities $ 16,453 $ 16,295 Nine Months Ended 2018 2017 U.S. Treasury $ 141 $ 519 U.S. Government Agency Debentures 89 — State and Political Subdivisions 19,065 18,381 Other Stocks and Bonds 84 96 Other Equity Securities (1) — 87 Mortgage-backed Securities 31,190 31,430 Total interest income on securities $ 50,569 $ 50,513 (1) See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. Of the $1.9 million in net securities loss from the AFS portfolio for the nine months ended September 30, 2018 , there were $1.9 million in realized gains and $3.8 million in realized losses. Of the $874,000 in net securities gains from the AFS portfolio for the nine months ended September 30, 2017 , there were $4.7 million in realized gains and $3.8 million in realized losses. There were no sales from the HTM portfolio during the nine months ended September 30, 2018 or 2017 . We calculate realized gains and losses on sales of securities under the specific identification method. The amortized cost and estimated fair value of AFS and HTM securities at September 30, 2018 , 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. September 30, 2018 Amortized Cost Fair Value AVAILABLE FOR SALE Investment Securities: Due in one year or less $ 3,557 $ 3,616 Due after one year through five years 49,413 50,431 Due after five years through ten years 183,420 181,041 Due after ten years 504,553 486,756 740,943 721,844 Mortgage-backed Securities 1,253,130 1,217,433 Total $ 1,994,073 $ 1,939,277 September 30, 2018 Amortized Cost Fair Value HELD TO MATURITY Investment Securities: Due in one year or less $ 115 $ 115 Due after one year through five years 1,700 1,670 Due after five years through ten years 1,272 1,245 Due after ten years — — 3,087 3,030 Mortgage-backed Securities: 160,278 153,442 Total $ 163,365 $ 156,472 Investment securities and MBS with carrying values of $1.15 billion and $1.24 billion were pledged as of September 30, 2018 and December 31, 2017 , respectively. Pledged securities may be used to collateralize one or more of the following: Federal Home Loan Bank of Dallas (“FHLB”) borrowings, repurchase agreements and public funds or for other purposes as required by law. Equity Investments Equity investments on our consolidated balance sheet include Community Reinvestment Act funds with a readily determinable fair value as well as equity investments without readily determinable fair values. At September 30, 2018 , we had equity investments recorded in our consolidated balance sheet of $12.0 million . At December 31, 2017 , we had $5.8 million in equity investments without readily determinable fair values recorded at cost. Beginning January 1, 2018, upon adoption of ASU 2016-01, equity investments with readily determinable fair values are stated at fair value with realized and unrealized gains and losses reported in income. For periods prior to January 1, 2018, these equity investments were classified as AFS and stated at fair value with unrealized gains and losses reported as a separate component of AOCI, net of tax. Equity investments without readily determinable fair values are recorded at cost less any impairment, if any. At December 31, 2017, we had $5.9 million in equity investments included in AFS securities and recorded at fair value, with net unrealized losses of $85,000 , net of tax, recognized in AOCI. On January 1, 2018, these unrealized losses were reclassified out of AOCI and into retained earnings with subsequent changes in fair value being recognized in net income. The following is a summary of unrealized and realized gains and losses recognized in net income on equity investments during the three and nine months ended September 30, 2018 (in thousands): Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 Net (losses) recognized during the period on equity investments $ (42 ) $ (176 ) Less: Net gains and (losses) recognized during the period on equity investments sold during the period — — Unrealized (losses) recognized during the reporting period on equity investments still held at the reporting date $ (42 ) $ (176 ) Equity investments are assessed quarterly for other-than-temporary impairment. Based upon that evaluation, management does no t consider any of our equity investments to be other-than-temporarily impaired at September 30, 2018 . Federal Home Loan Bank Stock Our FHLB stock, which has limited marketability, is carried at cost. |
Loans and Allowance for Probabl
Loans and Allowance for Probable Loan Losses | 9 Months Ended |
Sep. 30, 2018 | |
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): September 30, 2018 December 31, 2017 Real Estate Loans: Construction $ 484,254 $ 475,867 1-4 Family Residential 791,274 805,341 Commercial 1,218,714 1,265,159 Commercial Loans 322,873 266,422 Municipal Loans 344,792 345,798 Loans to Individuals 112,617 135,769 Total Loans 3,274,524 3,294,356 Less: Allowance for Loan Losses (1) 26,092 20,781 Net Loans $ 3,248,432 $ 3,273,575 (1) Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. The allowance for loan loss recorded on purchase credit impaired (“PCI”) loans totaled $824,000 as of September 30, 2018 . There was no allowance for loan loss recorded on PCI loans as of December 31, 2017 . 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 September 30, 2018 consisted of $1.11 billion of owner and non-owner occupied real estate, $87.8 million of loans secured by multi-family properties and $19.4 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 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): Three Months Ended September 30, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period $ 3,841 $ 2,730 $ 14,036 $ 2,560 $ 859 $ 1,046 $ 25,072 Provision (reversal) for loan losses (2) (717 ) 585 290 533 5 279 975 Loans charged off — (8 ) — (13 ) — (641 ) (662 ) Recoveries of loans charged off — 331 5 105 — 266 707 Balance at end of period $ 3,124 $ 3,638 $ 14,331 $ 3,185 $ 864 $ 950 $ 26,092 Nine Months Ended September 30, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period (1) $ 3,676 $ 2,445 $ 10,821 $ 2,094 $ 860 $ 885 $ 20,781 Provision (reversal) for loan losses (2) (538 ) 906 3,499 1,194 4 926 5,991 Loans charged off (14 ) (65 ) — (270 ) — (1,997 ) (2,346 ) Recoveries of loans charged off — 352 11 167 — 1,136 1,666 Balance at end of period $ 3,124 $ 3,638 $ 14,331 $ 3,185 $ 864 $ 950 $ 26,092 Three Months Ended September 30, 2017 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period $ 3,573 $ 2,392 $ 9,970 $ 1,624 $ 765 $ 917 $ 19,241 Provision (reversal) for loan losses (2) (20 ) 34 383 189 41 333 960 Loans charged off — (11 ) — (73 ) — (593 ) (677 ) Recoveries of loans charged off — 10 2 89 — 246 347 Balance at end of period $ 3,553 $ 2,425 $ 10,355 $ 1,829 $ 806 $ 903 $ 19,871 Nine Months Ended September 30, 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 (2) (560 ) 46 3,140 (84 ) 56 806 3,404 Loans charged off (35 ) (299 ) — (650 ) — (1,835 ) (2,819 ) Recoveries of loans charged off 1 13 11 300 — 1,050 1,375 Balance at end of period $ 3,553 $ 2,425 $ 10,355 $ 1,829 $ 806 $ 903 $ 19,871 (1) Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. (2) Of the $975,000 and $6.0 million recorded in provision for loan losses for the three and nine months ended September 30, 2018 , $466,000 and $824,000 related to provision expense on PCI loans, respectively. Of the $960,000 and $3.4 million recorded in provision for loan losses for the three and nine months ended September 30, 2017 , $50,000 related to provision expense on PCI loans. The following tables present the balance in the allowance for loan losses by portfolio segment based on impairment method (in thousands): As of September 30, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Ending balance – individually evaluated for impairment (1) $ 18 $ 37 $ 5,563 $ 340 $ 9 $ 72 $ 6,039 Ending balance – collectively evaluated for impairment 3,106 3,601 8,768 2,845 855 878 20,053 Balance at end of period $ 3,124 $ 3,638 $ 14,331 $ 3,185 $ 864 $ 950 $ 26,092 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 (1) The allowance for loan loss on PCI loans totaled $824,000 as of September 30, 2018 . There was no allowance for loan losses associated with PCI loans as of December 31, 2017 . The following tables present the recorded investment in loans by portfolio segment based on impairment method (in thousands): September 30, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Loans individually evaluated for impairment $ 54 $ 1,245 $ 29,938 $ 1,594 $ 429 $ 168 $ 33,428 Loans collectively evaluated for impairment 483,996 778,830 1,167,687 318,726 344,363 111,823 3,205,425 Purchased credit impaired loans 204 11,199 21,089 2,553 — 626 35,671 Total ending loan balance $ 484,254 $ 791,274 $ 1,218,714 $ 322,873 $ 344,792 $ 112,617 $ 3,274,524 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 The following tables set forth credit quality indicators by class of loans for the periods presented (in thousands): September 30, 2018 Pass Pass Watch (1) Special Mention (1) Substandard (1) Doubtful (1) Total Real Estate Loans: Construction $ 483,704 $ 382 $ 5 $ 122 $ 41 $ 484,254 1-4 Family Residential 782,330 458 553 6,635 1,298 791,274 Commercial 1,086,806 24,346 35,944 69,614 2,004 1,218,714 Commercial Loans 314,422 1,104 4,043 3,030 274 322,873 Municipal Loans 343,504 — 859 429 — 344,792 Loans to Individuals 111,665 15 18 610 309 112,617 Total $ 3,122,431 $ 26,305 $ 41,422 $ 80,440 $ 3,926 $ 3,274,524 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 (1) Includes PCI loans comprised of $25,000 pass watch, $2.1 million special mention, $6.1 million substandard and $2.4 doubtful as of September 30, 2018 . 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 . 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 when the timing and amount of expected cash flows can be reasonably estimated, 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) $ 32,526 $ 2,937 Accruing loans past due more than 90 days (1) — 1 Restructured loans (2) 5,699 5,767 Other real estate owned 1,413 1,613 Repossessed assets — 154 Total Nonperforming Assets $ 39,638 $ 10,472 (1) Excludes PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated. The increase in nonaccrual loans was primarily the result of the addition of two large commercial real estate relationships consisting of three loans in the first quarter of 2018. (2) Includes $3.2 million and $2.9 million in PCI loans restructured as of September 30, 2018 and December 31, 2017 , 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. There were $232,000 and $154,000 in loans secured by 1-4 family residential properties for which formal foreclosure proceedings were in process as of September 30, 2018 and December 31, 2017 , respectively. The following table sets forth the recorded investment in nonaccrual loans by class of loans for the periods presented (in thousands). The table excludes PCI loans measured at fair value at acquisition: Nonaccrual Loans September 30, 2018 December 31, 2017 Real Estate Loans: Construction $ 55 $ 86 1-4 Family Residential 1,399 1,098 Commercial 29,512 595 Commercial Loans 1,153 903 Loans to Individuals 407 255 Total $ 32,526 $ 2,937 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. The following tables set forth impaired loans by class of loans, including the unpaid contractual principal balance, the recorded investment and the allowance for loan losses 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 as of September 30, 2018 or December 31, 2017 . September 30, 2018 Unpaid Contractual Principal Balance Recorded Investment Related Allowance for Loan Losses Real Estate Loans: Construction $ 185 $ 157 $ 18 1-4 Family Residential 4,891 4,559 37 Commercial 33,560 32,267 5,563 Commercial Loans 2,605 2,269 340 Municipal Loans 429 429 9 Loans to Individuals 232 191 72 Total (1) $ 41,902 $ 39,872 $ 6,039 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 (1) Includes $6.4 million and $2.9 million of PCI loans that experienced deterioration in credit quality subsequent to the acquisition date as of September 30, 2018 and December 31, 2017 , respectively. The following tables present the aging of the recorded investment in past due loans by class of loans (in thousands): September 30, 2018 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 $ 35 $ 2,808 $ 41 $ 2,884 $ 481,370 $ 484,254 1-4 Family Residential 2,296 2,326 520 5,142 786,132 791,274 Commercial 252 115 123 490 1,218,224 1,218,714 Commercial Loans 1,957 722 420 3,099 319,774 322,873 Municipal Loans — — — — 344,792 344,792 Loans to Individuals 1,013 229 190 1,432 111,185 112,617 Total $ 5,553 $ 6,200 $ 1,294 $ 13,047 $ 3,261,477 $ 3,274,524 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 (1) Includes PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated. 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: Three Months Ended September 30, 2018 September 30, 2017 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Real Estate Loans: Construction $ 252 $ 3 $ 62 $ — 1-4 Family residential 3,976 49 4,170 26 Commercial 32,580 16 1,459 2 Commercial loans 2,543 21 1,148 28 Municipal loans 466 6 537 7 Loans to Individuals 244 1 250 1 Total $ 40,061 $ 96 $ 7,626 $ 64 Nine Months Ended September 30, 2018 September 30, 2017 Average Recorded Investment Interest Income Recognized Average Recorded Interest Income Recognized Real Estate Loans: Construction $ 150 $ 4 $ 301 $ — 1-4 Family Residential 3,951 138 4,322 134 Commercial 24,149 36 1,368 27 Commercial Loans 2,073 51 3,320 118 Municipal Loans 488 20 558 23 Loans to Individuals 223 3 248 4 Total $ 31,034 $ 252 $ 10,117 $ 306 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): Three Months Ended September 30, 2018 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Real Estate Loans: Commercial $ — $ — $ 283 $ 283 2 Commercial Loans 142 — 56 198 4 Loans to Individuals — 35 — 35 1 Total $ 142 $ 35 $ 339 $ 516 7 Nine Months Ended September 30, 2018 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Real Estate Loans: 1-4 Family Residential $ — $ 80 $ — $ 80 1 Commercial — — 283 283 2 Commercial Loans 244 — 135 379 9 Loans to Individuals 8 35 13 56 4 Total $ 252 $ 115 $ 431 $ 798 16 Three Months Ended September 30, 2017 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Loans to Individuals $ — $ — $ 8 $ 8 1 Total $ — $ — $ 8 $ 8 1 Nine Months Ended September 30, 2017 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Commercial Loans $ 810 $ — $ — $ 810 3 Loans to Individuals 27 — 56 83 6 Total $ 837 $ — $ 56 $ 893 9 The majority of loans restructured as TDRs during the nine months ended September 30, 2018 and 2017 were modified with maturity extensions or a combination of maturity extensions and interest rate reductions. 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 nine months ended September 30, 2018 and 2017 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. For the three and nine months ended September 30, 2018 and 2017 , the amount of TDRs in default was not significant. Payment defaults for TDRs did not significantly impact the determination of the allowance for loan loss in either period presented. At September 30, 2018 and 2017 , there |
Borrowing Arrangements
Borrowing Arrangements | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Borrowing Arrangements | Borrowing Arrangements Information related to borrowings is provided in the table below (dollars in thousands): September 30, 2018 December 31, 2017 Federal funds purchased and repurchase agreements: Balance at end of period $ 8,975 $ 9,498 Average amount outstanding during the period (1) (5) 9,018 8,120 Maximum amount outstanding during the period (2) 8,975 9,498 Weighted average interest rate during the period (3) (5) 1.1 % 0.2 % Interest rate at end of period (4) 0.8 % 0.2 % FHLB borrowings: Balance at end of period $ 561,267 $ 1,017,361 Average amount outstanding during the period (1) (5) 757,399 1,222,033 Maximum amount outstanding during the period (2) 957,231 1,414,453 Weighted average interest rate during the period (3) (5) 1.7 % 1.2 % Interest rate at end of period (4) 2.1 % 1.4 % Subordinated notes, net of unamortized debt issuance costs: Balance at end of period $ 98,366 $ 98,248 Average amount outstanding during the period (1) (5) 98,307 98,172 Maximum amount outstanding during the period (2) 98,366 98,248 Weighted average interest rate during the period (3) (5) 5.8 % 5.7 % 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 $ 60,244 $ 60,241 Average amount outstanding during the period (1) (5) 60,242 60,238 Maximum amount outstanding during the period (2) 60,244 60,241 Weighted average interest rate during the period (3) (5) 4.2 % 3.3 % Interest rate at end of period (4) 4.4 % 3.6 % (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 (annualized for interim periods) by the average amount outstanding during the period. The weighted average interest rate on the FHLB borrowings includes the effect of interest rate swaps. (4) Stated rate. (5) Interim period averages are annualized. Maturities of fixed rate obligations based on scheduled repayments at September 30, 2018 are as follows (in thousands): Payments Due by Period Less than 1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Thereafter Total Federal funds purchased and repurchase agreements $ 8,588 $ 387 $ — $ — $ — $ — $ 8,975 FHLB borrowings 158,505 385,165 11,537 — — 6,060 561,267 Subordinated notes, net of unamortized debt issuance costs — — — — — 98,366 98,366 Trust preferred subordinated debentures, net of unamortized debt issuance costs — — — — — 60,244 60,244 Total obligations $ 167,093 $ 385,552 $ 11,537 $ — $ — $ 164,670 $ 728,852 FHLB borrowings represent borrowings with fixed and floating interest rates ranging from 1.37% to 4.799% and with remaining maturities of one day to 9.8 years . FHLB borrowings may be collateralized by FHLB stock, nonspecified loans and/or securities. From time to time, the Company may enter into various variable rate advance agreements with the FHLB. These advance agreements totaled $310.0 million at September 30, 2018 and $280.0 million December 31, 2017 . Two of the variable rate advance agreements have interest rates of three-month LIBOR plus 0.021% , and one has an interest rate of three-month LIBOR minus 0.003% . The remaining variable rate advance agreements have interest rates ranging from one-month LIBOR plus 0.072% to one-month LIBOR plus 0.164% . In connection with obtaining these variable rate advance agreements, the Company also 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 2.8325% and original terms ranging from four 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 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 10 - 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 $40.0 million , $15.0 million and $7.5 million , respectively. There were no federal funds purchased at September 30, 2018 or December 31, 2017 . Southside Bank has a $5.0 million line of credit with Frost Bank to be used to issue letters of credit, and at September 30, 2018 , we had one outstanding letter of credit for $195,000 . At September 30, 2018 , the amount of additional funding Southside Bank could obtain from FHLB, collateralized by FHLB stock, nonspecified loans and securities, was approximately $1.25 billion , net of FHLB stock purchases required. Southside Bank currently has no outstanding letters of credit from FHLB held as collateral for its public fund deposits. Southside Bank enters into sales of securities under agreements to repurchase (“repurchase agreements”). These repurchase agreements totaled $9.0 million and $9.5 million at September 30, 2018 and December 31, 2017 , respectively, and had maturities of less than two years. These repurchase agreements are secured by investment securities and are stated at the amount of cash received in connection with the transaction. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2018 | |
Defined Contribution Plan [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The components of net periodic benefit cost (income) related to our employee benefit plans are as follows (in thousands): Three Months Ended September 30, Defined Benefit Defined Benefit Pension Plan Acquired Restoration 2018 2017 2018 2017 2018 2017 Service cost $ 387 $ 349 $ — $ — $ 73 $ 61 Interest cost 848 901 41 44 149 142 Expected return on assets (1,621 ) (1,513 ) (73 ) (53 ) — — Net loss amortization 378 328 — — 169 75 Prior service (credit) cost amortization (3 ) (3 ) — — 2 2 Net periodic benefit cost (income) $ (11 ) $ 62 $ (32 ) $ (9 ) $ 393 $ 280 Nine Months Ended September 30, Defined Benefit Defined Benefit Pension Plan Acquired Restoration 2018 2017 2018 2017 2018 2017 Service cost $ 1,161 $ 1,048 $ — $ — $ 220 $ 185 Interest cost 2,544 2,701 123 133 447 425 Expected return on assets (4,863 ) (4,538 ) (218 ) (160 ) — — Net loss amortization 1,134 984 — — 508 226 Prior service (credit) cost amortization (10 ) (10 ) — — 5 5 Net periodic benefit cost (income) $ (34 ) $ 185 $ (95 ) $ (27 ) $ 1,180 $ 841 The service cost component is recorded on our consolidated income statement as salaries and employee benefits in noninterest expense while all other components other than service cost are recorded in other noninterest expense. In the third quarter of 2018, we made contributions of $2.0 million and $500,000 to the defined benefit pension plan and the defined benefit pension plan acquired, respectively. |
Share-based Incentive Plans
Share-based Incentive Plans | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Incentive Plans | 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 September 30, 2018 , there were 1,687,830 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. There have been 356,849 nonqualified stock options (“NQSOs”) granted during the nine months ended September 30, 2018 with an exercise price equal to the fair value of the shares at the date of grant with a weighted average exercise price of $34.52 . During the nine months ended September 30, 2017 , there were no stock option awards granted. The NQSOs have contractual terms of 10 years from the date of grant and vest in equal annual installments over either a three - or four -year period. During the nine months ended September 30, 2018 , we granted 52,148 restricted stock units (“RSUs”) with a total value of $1.8 million . During the nine months ended September 30, 2017 , there were 3,707 RSUs granted with a total value of $125,000 . The RSUs vest in equal annual installments over either a one -, three - or four -year period. 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): Three Months Ended Nine Months Ended 2018 2017 2018 2017 New shares issued from available authorized shares — — — 48,311 New shares issued from available treasury shares 65,918 77,957 128,969 89,724 Total 65,918 77,957 128,969 138,035 Proceeds from stock option exercises $ 1,571 $ 1,505 $ 2,655 $ 2,527 For the three and nine months ended September 30, 2018 , we had share-based compensation expense of $661,000 and $1.6 million , respectively. Share-based compensation expense for the three and nine months ended September 30, 2017 was $480,000 and $1.4 million , respectively. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | 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, cash flow hedges of forecasted transactions or fair value hedges of a recognized asset or liability. Gains and losses on derivative instruments designated as cash flow hedges are recorded in AOCI 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. Gains and losses on derivative instruments designated as fair value hedges, as well as the change in fair value on the hedged item, are recorded in interest income in the consolidated statements of income. Gains and losses due to changes in fair value of the interest rate swap agreements completely offset changes in the fair value of the hedged portion of the hedged item. Therefore, no gain or loss has been recognized due to hedge ineffectiveness. From time to time, we have entered 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 $270.0 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. During the three months ended June 30, 2018, we entered into partial term fair value hedges, as allowed under the recently adopted ASU 2017-12, for certain of our fixed rate callable available for sale municipal securities. These partial term hedges of selected cash flows covering the time periods to the call dates of the hedged securities are expected to be effective in offsetting changes in the fair value of the hedged securities. As of September 30, 2018 , hedged securities with a carrying amount of $23.3 million are included in our AFS securities portfolio in our consolidated balance sheets. Interest rate swaps designated as partial-term fair value hedges are utilized to mitigate the effect of changing interest rates on the hedged securities. The hedging strategy converts a portion of the fixed interest rates on the securities to LIBOR-based variable interest rates. 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. At the time of termination, we determined that the underlying hedged forecasted transactions were still probable of occurring. The existing gain in AOCI will be reclassified into earnings in the same periods the hedged forecasted transaction affects earnings. 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. At September 30, 2018 , net derivative assets included $18.0 million of cash collateral received from counterparties under master netting agreements. 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): September 30, 2018 December 31, 2017 Estimated Fair Value Estimated Fair Value Notional (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 $ 270,000 $ 14,965 $ — $ 240,000 $ 7,922 $ 22 Swaps-Fair Value Hedge-Financial institution counterparties 21,100 102 — — — — Derivatives designated as non-hedging instruments Interest rate contracts: Swaps-Financial institution counterparties 94,679 3,257 307 67,220 92 612 Swaps-Customer counterparties 94,679 307 3,257 67,220 612 92 Gross derivatives 18,631 3,564 8,626 726 Offsetting derivative assets/liabilities (307 ) (307 ) (114 ) (114 ) Cash collateral received/posted (18,017 ) — (7,900 ) (520 ) Net derivatives included in the consolidated balance sheets (2) $ 307 $ 3,257 $ 612 $ 92 (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 no credit exposure related to interest rate swaps with financial institutions and $307,000 related to interest rate swaps with customers at September 30, 2018 . 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 are generally secured by the non-cash collateral securing the underlying transaction being hedged. 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 September 30, 2018 and December 31, 2017 : September 30, 2018 December 31, 2017 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 $ 270,000 5.1 2.18 % 1.58 % $ 240,000 5.3 1.44 % 1.43 % Swaps-Fair Value Hedge Financial institution counterparties 21,100 7.8 2.34 3.00 — — — — Swaps-Non-Hedging Financial institution counterparties 94,679 12.1 2.12 2.58 67,220 12.7 1.39 2.37 Customer counterparties 94,679 12.1 2.58 2.12 67,220 12.7 2.37 1.39 |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability (exit price) 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 September 30, 2018 and December 31, 2017 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 nine months ended September 30, 2018 or the year ended December 31, 2017 . Securities Available for Sale and Equity Investments with readily determinable fair values – U.S. Treasury securities and equity investments 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 those securities, 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 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. 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 September 30, 2018 and December 31, 2017 . 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 September 30, 2018 and December 31, 2017 , the impact of loans with specific reserves based on the fair value of the collateral was reflected in our allowance for loan losses. 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 September 30, 2018 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 $ 19,748 $ 19,748 $ — $ — State and Political Subdivisions 699,069 — 699,069 — Other Stocks and Bonds 3,027 — 3,027 — Mortgage-backed Securities: (1) Residential 687,598 — 687,598 — Commercial 529,835 — 529,835 — Equity Investments: Equity Investments (2) 5,735 5,735 — — Derivative assets: Interest rate swaps 18,631 — 18,631 — Total asset recurring fair value measurements $ 1,963,643 $ 25,483 $ 1,938,160 $ — Derivative liabilities: Interest rate swaps $ 3,564 $ — $ 3,564 $ — Total liability recurring fair value measurements $ 3,564 $ — $ 3,564 $ — Nonrecurring fair value measurements Foreclosed assets $ 1,413 $ — $ — $ 1,413 Impaired loans (3) 33,280 — — 33,280 Total asset nonrecurring fair value measurements $ 34,693 $ — $ — $ 34,693 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 — Equity Investments (2) 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 (3) 6,536 — — 6,536 Total asset nonrecurring fair value measurements $ 8,303 $ — $ — $ 8,303 (1) All mortgage-backed securities are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. (2) With the adoption of ASU 2016-01 on January 1, 2018, these investments are included in equity investments on our consolidated balance sheets. The guidance was applied on a prospective approach resulting in prior-periods no longer being comparable. See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. (3) 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 - The carrying amount of FHLB stock is a reasonable estimate of the fair value of those assets. Equity investments - Equity investments with readily determinable fair values are presented at fair value based upon the currently available bid-and-ask quotations publicly available on a market or exchange. The carrying value of other equity investments without readily determinable fair values are measured at cost less impairment, if any, adjusted for observable price changes for an identical or similar investment of the same issuer. This carrying value is a reasonable estimate of the fair value of those assets. Loans receivable - With the adoption of ASU 2016-01 on January 1, 2018, we refined our methodology to estimate the fair value of our loan portfolio to an exit price notion with adjustments for liquidity, credit and prepayment factors. The guidance was applied on a prospective approach resulting in prior-periods no longer being comparable. See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. For December 31, 2017, a djustable rate loans that repriced frequently and with no significant change in credit risk, the carrying amounts were a reasonable estimate of those assets’ fair value and the fair value of fixed rate loans were 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 continue to be 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 and financial liabilities measured on a nonrecurring basis at both their respective carrying amounts and estimated fair value (in thousands): Estimated Fair Value September 30, 2018 Carrying Total Level 1 Level 2 Level 3 Financial Assets: Cash and cash equivalents $ 174,072 $ 174,072 $ 174,072 $ — $ — Investment Securities: Held to maturity, at carrying value 3,087 3,030 — 3,030 — Mortgage-backed Securities: Held to maturity, at carrying value 160,278 153,442 — 153,442 — FHLB stock, at cost 32,291 32,291 — 32,291 — Equity investments 6,294 6,294 — 6,294 — Loans, net of allowance for loan losses 3,248,432 3,179,049 — — 3,179,049 Loans held for sale 954 954 — 954 — Financial Liabilities: Deposits $ 4,553,512 $ 4,543,794 $ — $ 4,543,794 $ — Federal funds purchased and repurchase agreements 8,975 8,975 — 8,975 — FHLB borrowings 561,267 542,846 — 542,846 — Subordinated notes, net of unamortized debt issuance costs 98,366 97,979 — 97,979 — Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,244 51,014 — 51,014 — 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 55,729 55,729 — 55,729 — Equity investments 5,821 5,821 — 5,821 — 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 — 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 tables do not necessarily represent their underlying value. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
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): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Current income tax expense $ 95 $ 3,454 $ 3,107 $ 9,798 Deferred income tax expense 2,097 436 4,535 453 Income tax expense $ 2,192 $ 3,890 $ 7,642 $ 10,251 The Tax Cuts and Jobs Act (“Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%. We remeasured certain deferred tax assets and liabilities as of December 22, 2017 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 Tax Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. During the three and nine months ended September 30, 2018 , we recognized a benefit of approximately $800,000 made to the provisional amounts recorded with the remeasurement of the net deferred tax asset. The Tax Act repealed the existing Alternative Minimum Tax (“AMT”). As of September 30, 2018 , we have a remaining AMT tax credit of $2.2 million . This remaining 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. Net deferred tax assets totaled $16.4 million at September 30, 2018 and $12.2 million at December 31, 2017 . No valuation allowance for the net deferred tax asset was recorded at September 30, 2018 or December 31, 2017 , as management believes it is more likely than not that all of the net deferred tax asset will be realized in future years. Unrecognized tax benefits were not material at September 30, 2018 or December 31, 2017 . We recognized income tax expense of $2.2 million and $7.6 million , for an effective tax rate (“ETR”) of 9.7% and 11.9% for the three and nine months ended September 30, 2018 , respectively, compared to income tax expense of $3.9 million and $10.3 million , for an ETR of 21.1% and 18.9% , for the three and nine months ended September 30, 2017 , respectively. The lower ETR for the three and nine months ended September 30, 2018 was mainly due to the reduced corporate tax rate under the Tax Act from 35% to 21%. Additionally, the benefit recorded with the remeasurement lowered the ETR by 3.6% and 1.2% for the three and nine months ended September 30, 2018 , respectively. The ETR differs from the stated rate of 21% and 35% for the three and nine months ended September 30, 2018 and 2017, respectively, primarily due to the effect of tax-exempt income from municipal loans and securities, as well as bank owned life insurance. We file federal income tax returns in the U.S. federal jurisdictions and in certain states. We are no longer subject to U.S. federal income tax examinations by tax authorities for years before 2015 or Texas state tax examinations by tax authorities for years before 2014 . |
Off-Balance-Sheet Arrangements,
Off-Balance-Sheet Arrangements, Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
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 $ 819,256 $ 804,715 Standby letters of credit 28,197 14,890 Total $ 847,453 $ 819,605 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. Securities . In the normal course of business we buy and sell securities. At September 30, 2018 , there were $28.7 million of unsettled trades to purchase securities and $14.6 million unsettled trades to sell securities. There were no unsettled trades to purchase securities and no unsettled trades to sell securities at December 31, 2017 . Deposits . At September 30, 2018 , there were $10.0 million of unsettled issuances of brokered certificates of deposit (“CDs”). There were no unsettled issuances of brokered CDs at December 31, 2017 . 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting and Reporting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation In this report, the words “the Company,” “we,” “us,” and “our” refer to the combined entities of Southside Bancshares, Inc. and its subsidiaries. The words “Southside” and “Southside Bancshares” refer to Southside Bancshares, Inc. The words “Southside Bank” and “the Bank” refer to Southside Bank. “Omni” refers to OmniAmerican Bancorp, Inc., a bank holding company, and its wholly-owned subsidiary, OmniAmerican Bank, acquired by Southside on December 17, 2014. “Diboll” refers to Diboll State Bancshares, Inc., a bank holding company and its wholly-owned subsidiary, First Bank & Trust East Texas, acquired by Southside on November 30, 2017. The accompanying unaudited consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, not all information required by GAAP for complete financial statements is included in these interim statements. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments consisted only of normal recurring items. The preparation of these consolidated financial statements in accordance with GAAP requires the use of management’s estimates. These estimates are subjective in nature and involve matters of judgment. Actual amounts could differ from these estimates. Interim results are not necessarily indicative of results for a full year. These financial statements should be read in conjunction with the financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2017 . Accounting Changes and Reclassifications Certain prior period amounts have been reclassified to conform to current year presentation. We adopted Accounting Standards Update (“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, on January 1, 2018, the effective date of the guidance, using the modified retrospective approach. 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. As a result of the guidance, we adjusted the presentation of revenue received from our brokerage services, merchant services, as well as our interchange income associated with debit card services, which were all deemed to be services offered in an agent capacity. These lines of revenue will now be presented on a net basis with the fee income disclosed net of the related costs in the noninterest income section of the consolidated statements of income. In connection with the adoption, for the three and nine months ended September 30, 2018 , we netted $1.0 million and $2.8 million of debit card expense against deposit services income and $172,000 and $474,000 of brokerage services expense against brokerage services income, respectively. Due to the implementation of the guidance under the modified retrospective method, prior periods have not been adjusted and are not comparative. Refer to our revenue recognition discussion below and “Note 1 - Summary of Significant Accounting and Reporting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2017 for more information related to our revenue recognition policies. We adopted ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities,” on January 1, 2018, the effective date of the guidance. 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 (“AFS”) securities in combination with the entity’s other deferred tax assets. 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. Adoption of this guidance resulted in a cumulative adjustment to retained earnings of $85,000 , net of tax, on January 1, 2018 and an equity security with a carrying value of $5.9 million that was previously recognized in securities AFS, at estimated fair value on our consolidated balance sheet to instead be recognized in equity investments, with subsequent changes in fair value being recognized in income. Also in conjunction with the adoption, our fair value measurement of financial instruments will be based upon an exit price notion as required in ASC 820. The guidance was applied on a prospective approach resulting in prior periods no longer being comparable. We adopted ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” on January 1, 2018. 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. 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. The guidance requires companies to apply the requirements retrospectively to all prior periods presented. We elected to use the practical expedient that permits us to use the amounts in our pension plan disclosures in our employee benefit footnote for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements, which resulted in an increase of $77,000 and $234,000 in salaries and employee benefits expense and a decrease of $77,000 and $234,000 in other noninterest expense for the three and nine months ended September 30, 2017 , respectively. We early adopted ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” on January 1, 2018. 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 held to maturity (“HTM”) securities to AFS securities if a portion of those securities would qualify to be hedged under the new “last-of-layer” approach. 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. The guidance did not have an impact on our derivatives that qualified as hedges on the date of adoption and thus no adjustment was made to retained earnings. In conjunction with the adoption of ASU 2017-12, we made the transition election to reclassify approximately $743.4 million in book value of securities from HTM to AFS that qualified for the last-of-layer method described in ASU 2017-12. During the second quarter of 2018, we entered into partial term fair value hedges, as allowed under the recently adopted ASU 2017-12, for certain of our fixed rate callable AFS municipal securities. These hedges are expected to be effective in offsetting changes in the fair value of the hedged securities. Gains and losses on derivative instruments designated as fair value hedges, as well as the change in fair value on the hedged item, are recorded in interest income in the consolidated statements of income. |
Revenue Recognition | Revenue Recognition Our revenue consists of net interest income on financial assets and financial liabilities and noninterest income. The classifications of our revenue are presented in the consolidated statements of income. On January 1, 2018, we adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” using the modified retrospective method. The revenue recognition principle in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of 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. ASU 2014-09 permits an entity to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset would have been one year or less. We generally expense sales commissions when incurred because the amortization period is within one year or less. These costs are recorded within salaries and employee benefits on the consolidated statements of income. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of goods or services. Under ASU 2014-09’s practical expedient to recognize revenue equal to the amounts for which we have a right to invoice, revenue is measured as the amount of consideration we expect to receive in exchange for the transfer of those goods or services. The following summarizes our revenue recognition policies as they relate to revenue from contracts with customers under ASU 2014-09: • Deposit services . 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. Our deposit services also include our ATM and debit card interchange revenue that is presented net of the associated costs. Interchange revenue is generated by our deposit customers’ usage and volume of activity. Interchange rates are not controlled by the Company, which effectively acts as processor that collects and remits payments associated with customer debit card transactions. • Trust income. 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 when we have a right to invoice and are based on either the market value of the assets managed or the services provided. • Brokerage services. Brokerage services income includes fees and commissions charged when we arrange for another party to transfer brokerage services to a customer. The fees and commissions under this agent relationship are based upon stated fee schedules based upon the type of transaction, volume and value of the services provided. • Other noninterest income . Other noninterest income includes among other things, merchant services income. Merchant services revenue is derived from third party vendors that process credit card transactions on behalf of our merchant customers. Merchant services revenue is primarily comprised of residual fee income based on the referred merchant’s processing volumes and/or margin. |
Securities | Securities Available for Sale (“AFS”). Debt 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 on 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. Securities that are hedged with qualifying derivatives are carried at fair value with the change in fair value on both the hedged instrument and the securities recorded in interest income in the consolidated statements of income. 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. Equity Investments. Beginning January 1, 2018, upon adoption of ASU 2016-01, equity investments with readily determinable fair values are stated at fair value with unrealized gains and losses reported in income. For periods prior to January 1, 2018, certain equity investments were classified as AFS and stated at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income (“AOCI”), net of tax. Equity investments without readily determinable fair values are recorded at cost less impairment, if any. |
Accounting Pronouncements | Accounting Pronouncements 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 originally required companies to apply the requirements in the year of adoption using a modified retrospective approach; however, in July 2018, the FASB issued ASU 2018-11 “Leases (Topic 842): Targeted Improvements,” which provides lessees the option to apply the new leasing standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We plan to select this transition option. We are currently evaluating the impact this guidance will have on our consolidated financial statements, and we anticipate our assessment to be completed during the fiscal year 2018. 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 AFS 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 plan to adopt on January 1, 2020, the effective date. We have developed a project plan and have assigned a project team to complete the analysis needed to implement the guidance. The team is currently completing the data collection and anticipates running parallel models in early 2019. 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 2017-08, “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. We have elected to adopt on January 1, 2019. 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 have evaluated an estimate of the potential impact of the pending adoption of ASU 2017-08 on our consolidated financial statements. Based on our existing municipal securities portfolio, the preliminary estimate of amortizing premiums to the earliest call date will increase amortization expense recorded through interest income for the year ended December 31, 2019 by approximately $2.9 million . Our preliminary estimate of the cumulative adjustment to retained earnings, at the date of adoption, is estimated to reduce retained earnings by $14.4 million , before tax. |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table reflects the changes in the carrying amount of goodwill for the three months ended September 30, 2018 (in thousands): Goodwill Balance as of December 31, 2017 $ 201,246 Less: measurement period adjustments (130 ) Balance as of September 30, 2018 $ 201,116 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per share on a basic and diluted basis | Earnings per share on a basic and diluted basis are calculated as follows (in thousands, except per share amounts). Three Months Ended Nine Months Ended 2018 2017 2018 2017 Basic and Diluted Earnings: Net income $ 20,303 $ 14,511 $ 56,757 $ 43,981 Basic weighted-average shares outstanding 35,114 29,370 35,066 29,326 Add: Stock awards 174 200 175 205 Diluted weighted-average shares outstanding 35,288 29,570 35,241 29,531 Basic Earnings Per Share: Net Income $ 0.58 $ 0.49 $ 1.62 $ 1.50 Diluted Earnings Per Share: Net Income $ 0.58 $ 0.49 $ 1.61 $ 1.49 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income (loss) by component | The changes in accumulated other comprehensive income (loss) by component are as follows (in thousands): Three Months Ended September 30, 2018 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Service (Cost) Credit Net Gain (Loss) Total Beginning balance, net of tax $ (42,536 ) $ 10,753 $ (135 ) $ (25,404 ) $ (57,322 ) Other comprehensive income (loss): Other comprehensive (loss) income before reclassifications (16,885 ) 1,894 — — (14,991 ) Reclassified from accumulated other comprehensive income 80 (406 ) (1 ) 547 220 Income tax benefit (expense) 3,529 (312 ) — (115 ) 3,102 Net current-period other comprehensive (loss) income, net of tax (13,276 ) 1,176 (1 ) 432 (11,669 ) Ending balance, net of tax $ (55,812 ) $ 11,929 $ (136 ) $ (24,972 ) $ (68,991 ) Nine Months Ended September 30, 2018 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Net Gain (Loss) Total Beginning balance, net of tax $ (16,295 ) $ 6,399 $ (133 ) $ (26,269 ) $ (36,298 ) Other comprehensive income (loss): Other comprehensive (loss) income before reclassifications (52,757 ) 7,864 — — (44,893 ) Reclassified from accumulated other comprehensive income (1) 2,736 (864 ) (5 ) 1,642 3,509 Income tax benefit (expense) 10,504 (1,470 ) 2 (345 ) 8,691 Net current-period other comprehensive (loss) income, net of tax (39,517 ) 5,530 (3 ) 1,297 (32,693 ) Ending balance, net of tax $ (55,812 ) $ 11,929 $ (136 ) $ (24,972 ) $ (68,991 ) (1) As discussed in “Note 1 – Summary of Significant Accounting and Reporting Policies,” the Company adopted ASU 2016-01 on January 1, 2018. This amount includes a reclassification for the cumulative adjustment to retained earnings of $107,000 ( $85,000 , net of tax). Three Months Ended September 30, 2017 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Service (Cost) Credit Net Gain (Loss) Total Beginning balance, net of tax $ (11,644 ) $ 3,957 $ (136 ) $ (18,722 ) $ (26,545 ) Other comprehensive income (loss): Other comprehensive income (loss) before reclassifications 344 (236 ) — — 108 Reclassified from accumulated other comprehensive income (137 ) 101 (1 ) 403 366 Income tax (expense) benefit (72 ) 47 — (141 ) (166 ) Net current-period other comprehensive income (loss), net of tax 135 (88 ) (1 ) 262 308 Ending balance, net of tax $ (11,509 ) $ 3,869 $ (137 ) $ (18,460 ) $ (26,237 ) Nine Months Ended September 30, 2017 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Service (Cost) Credit Net Gain (Loss) Total Beginning balance, net of tax $ (23,708 ) $ 4,595 $ (133 ) $ (19,247 ) $ (38,493 ) Other comprehensive income (loss): Other comprehensive income (loss) before reclassifications 18,450 (1,811 ) — — 16,639 Reclassified from accumulated other comprehensive income 317 694 (5 ) 1,210 2,216 Income tax (expense) benefit (6,568 ) 391 1 (423 ) (6,599 ) Net current-period other comprehensive income (loss), net of tax 12,199 (726 ) (4 ) 787 12,256 Ending balance, net of tax $ (11,509 ) $ 3,869 $ (137 ) $ (18,460 ) $ (26,237 ) |
Reclassifications out of accumulated other comprehensive income | The reclassifications out of accumulated other comprehensive income (loss) into net income are presented below (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Unrealized losses on securities transferred: Amortization of unrealized losses (1) $ 661 $ (490 ) $ (729 ) $ (1,191 ) Tax (expense) benefit (139 ) 172 153 417 Net of tax $ 522 $ (318 ) $ (576 ) $ (774 ) Unrealized gains and losses on available for sale securities: Realized net (loss) gain on sale of securities (2) $ (741 ) $ 627 $ (1,900 ) $ 874 Tax benefit (expense) 156 (220 ) 399 (306 ) Net of tax $ (585 ) $ 407 $ (1,501 ) $ 568 Derivatives: Realized net gain (loss) on interest rate swap derivatives (3) $ 384 $ (122 ) $ 799 $ (746 ) Tax (expense) benefit (81 ) 43 (168 ) 261 Net of tax $ 303 $ (79 ) $ 631 $ (485 ) Amortization of unrealized gains on terminated interest rate swap derivatives (3) $ 22 $ 21 $ 65 $ 52 Tax expense (5 ) (7 ) (14 ) (18 ) Net of tax $ 17 $ 14 $ 51 $ 34 Amortization of pension plan: Net actuarial loss (4) $ (547 ) $ (403 ) $ (1,642 ) $ (1,210 ) Prior service credit (4) 1 1 5 5 Total before tax (546 ) (402 ) (1,637 ) (1,205 ) Tax benefit 115 141 343 422 Net of tax (431 ) (261 ) (1,294 ) (783 ) Total reclassifications for the period, net of tax $ (174 ) $ (237 ) $ (2,689 ) $ (1,440 ) (1) Included in interest income on the consolidated statements of income. (2) Listed as net (loss) 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 8 - Employee Benefit Plans.” |
Securities (Tables)
Securities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 and estimated fair value of investment and mortgage-backed securities available for sale and held to maturity as of September 30, 2018 and December 31, 2017 are reflected in the tables below (in thousands): September 30, 2018 Amortized Gross Unrealized Gross Unrealized Estimated AVAILABLE FOR SALE Cost Gains Losses Fair Value Investment Securities: U.S. Treasury $ 19,706 $ 42 $ — $ 19,748 State and Political Subdivisions 718,237 4,666 23,834 699,069 Other Stocks and Bonds 3,000 27 — 3,027 Mortgage-backed Securities: (1) Residential 708,137 1,997 22,536 687,598 Commercial 544,993 244 15,402 529,835 Total $ 1,994,073 $ 6,976 $ 61,772 $ 1,939,277 HELD TO MATURITY Investment Securities: State and Political Subdivisions $ 3,087 $ — $ 57 $ 3,030 Mortgage-backed Securities: (1) Residential 59,679 143 3,015 56,807 Commercial 100,599 65 4,029 96,635 Total $ 163,365 $ 208 $ 7,101 $ 156,472 December 31, 2017 Amortized Gross Unrealized Gross Unrealized Estimated AVAILABLE FOR SALE Cost Gains Losses Fair Value Investment Securities: U.S. Government Agency Debentures $ 108,869 $ — $ — $ 108,869 State and Political Subdivisions 392,760 3,895 3,991 392,664 Other Stocks and Bonds 5,024 31 — 5,055 Other Equity Securities (2) 6,027 — 107 5,920 Mortgage-backed Securities: (1) Residential 720,930 4,476 7,377 718,029 Commercial 308,357 761 900 308,218 Total $ 1,541,967 $ 9,163 $ 12,375 $ 1,538,755 HELD TO MATURITY Investment Securities: State and Political Subdivisions $ 413,632 $ 10,879 $ 2,583 $ 421,928 Mortgage-backed Securities: (1) Residential 129,044 1,631 239 130,436 Commercial 366,830 3,812 1,206 369,436 Total $ 909,506 $ 16,322 $ 4,028 $ 921,800 (1) All mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. (2) See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. |
Unrealized loss on securities | The following tables represent the estimated fair value and unrealized loss on investment and mortgage-backed securities AFS and HTM as of September 30, 2018 and December 31, 2017 (in thousands): As of September 30, 2018 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss AVAILABLE FOR SALE Investment Securities: State and Political Subdivisions $ 287,571 $ 7,728 $ 244,510 $ 16,106 $ 532,081 $ 23,834 Mortgage-backed Securities: Residential 332,230 8,003 285,356 14,533 617,586 22,536 Commercial 415,196 12,991 45,485 2,411 460,681 15,402 Total $ 1,034,997 $ 28,722 $ 575,351 $ 33,050 $ 1,610,348 $ 61,772 HELD TO MATURITY Investment Securities: State and Political Subdivisions $ 1,761 $ 23 $ 1,269 $ 34 $ 3,030 $ 57 Mortgage-backed Securities: Residential 48,022 2,473 6,781 542 54,803 3,015 Commercial 50,276 1,578 37,995 2,451 88,271 4,029 Total $ 100,059 $ 4,074 $ 46,045 $ 3,027 $ 146,104 $ 7,101 As of December 31, 2017 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized AVAILABLE FOR SALE Investment Securities: State and Political Subdivisions $ 32,341 $ 121 $ 172,006 $ 3,870 $ 204,347 $ 3,991 Other Equity Securities (1) 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 (1) See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. |
Interest income recognized on securities | The following tables reflect interest income recognized on securities for the periods presented (in thousands): Three Months Ended 2018 2017 U.S. Treasury $ 10 $ — U.S. Government Agency Debentures — — State and Political Subdivisions 6,331 5,670 Other Stocks and Bonds 26 27 Other Equity Securities — 31 Mortgage-backed Securities 10,086 10,567 Total interest income on securities $ 16,453 $ 16,295 Nine Months Ended 2018 2017 U.S. Treasury $ 141 $ 519 U.S. Government Agency Debentures 89 — State and Political Subdivisions 19,065 18,381 Other Stocks and Bonds 84 96 Other Equity Securities (1) — 87 Mortgage-backed Securities 31,190 31,430 Total interest income on securities $ 50,569 $ 50,513 (1) See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. |
Amortized cost, carrying value and fair value of securities presented by contractual maturity | The amortized cost and estimated fair value of AFS and HTM securities at September 30, 2018 , 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. September 30, 2018 Amortized Cost Fair Value AVAILABLE FOR SALE Investment Securities: Due in one year or less $ 3,557 $ 3,616 Due after one year through five years 49,413 50,431 Due after five years through ten years 183,420 181,041 Due after ten years 504,553 486,756 740,943 721,844 Mortgage-backed Securities 1,253,130 1,217,433 Total $ 1,994,073 $ 1,939,277 September 30, 2018 Amortized Cost Fair Value HELD TO MATURITY Investment Securities: Due in one year or less $ 115 $ 115 Due after one year through five years 1,700 1,670 Due after five years through ten years 1,272 1,245 Due after ten years — — 3,087 3,030 Mortgage-backed Securities: 160,278 153,442 Total $ 163,365 $ 156,472 |
Unrealized and realized gains (losses) recognized in net income on equity investments | The following is a summary of unrealized and realized gains and losses recognized in net income on equity investments during the three and nine months ended September 30, 2018 (in thousands): Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 Net (losses) recognized during the period on equity investments $ (42 ) $ (176 ) Less: Net gains and (losses) recognized during the period on equity investments sold during the period — — Unrealized (losses) recognized during the reporting period on equity investments still held at the reporting date $ (42 ) $ (176 ) |
Loans and Allowance for Proba_2
Loans and Allowance for Probable Loan Losses (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Classification of loans in the consolidated balance sheets | Loans in the accompanying consolidated balance sheets are classified as follows (in thousands): September 30, 2018 December 31, 2017 Real Estate Loans: Construction $ 484,254 $ 475,867 1-4 Family Residential 791,274 805,341 Commercial 1,218,714 1,265,159 Commercial Loans 322,873 266,422 Municipal Loans 344,792 345,798 Loans to Individuals 112,617 135,769 Total Loans 3,274,524 3,294,356 Less: Allowance for Loan Losses (1) 26,092 20,781 Net Loans $ 3,248,432 $ 3,273,575 (1) Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. The allowance for loan loss recorded on purchase credit impaired (“PCI”) loans totaled $824,000 as of September 30, 2018 . There was no allowance for loan loss recorded on PCI loans as of December 31, 2017 . |
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): Three Months Ended September 30, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period $ 3,841 $ 2,730 $ 14,036 $ 2,560 $ 859 $ 1,046 $ 25,072 Provision (reversal) for loan losses (2) (717 ) 585 290 533 5 279 975 Loans charged off — (8 ) — (13 ) — (641 ) (662 ) Recoveries of loans charged off — 331 5 105 — 266 707 Balance at end of period $ 3,124 $ 3,638 $ 14,331 $ 3,185 $ 864 $ 950 $ 26,092 Nine Months Ended September 30, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period (1) $ 3,676 $ 2,445 $ 10,821 $ 2,094 $ 860 $ 885 $ 20,781 Provision (reversal) for loan losses (2) (538 ) 906 3,499 1,194 4 926 5,991 Loans charged off (14 ) (65 ) — (270 ) — (1,997 ) (2,346 ) Recoveries of loans charged off — 352 11 167 — 1,136 1,666 Balance at end of period $ 3,124 $ 3,638 $ 14,331 $ 3,185 $ 864 $ 950 $ 26,092 Three Months Ended September 30, 2017 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period $ 3,573 $ 2,392 $ 9,970 $ 1,624 $ 765 $ 917 $ 19,241 Provision (reversal) for loan losses (2) (20 ) 34 383 189 41 333 960 Loans charged off — (11 ) — (73 ) — (593 ) (677 ) Recoveries of loans charged off — 10 2 89 — 246 347 Balance at end of period $ 3,553 $ 2,425 $ 10,355 $ 1,829 $ 806 $ 903 $ 19,871 Nine Months Ended September 30, 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 (2) (560 ) 46 3,140 (84 ) 56 806 3,404 Loans charged off (35 ) (299 ) — (650 ) — (1,835 ) (2,819 ) Recoveries of loans charged off 1 13 11 300 — 1,050 1,375 Balance at end of period $ 3,553 $ 2,425 $ 10,355 $ 1,829 $ 806 $ 903 $ 19,871 (1) Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. (2) Of the $975,000 and $6.0 million recorded in provision for loan losses for the three and nine months ended September 30, 2018 , $466,000 and $824,000 related to provision expense on PCI loans, respectively. Of the $960,000 and $3.4 million recorded in provision for loan losses for the three and nine months ended September 30, 2017 , $50,000 related to provision expense on PCI loans. |
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 September 30, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Ending balance – individually evaluated for impairment (1) $ 18 $ 37 $ 5,563 $ 340 $ 9 $ 72 $ 6,039 Ending balance – collectively evaluated for impairment 3,106 3,601 8,768 2,845 855 878 20,053 Balance at end of period $ 3,124 $ 3,638 $ 14,331 $ 3,185 $ 864 $ 950 $ 26,092 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 (1) The allowance for loan loss on PCI loans totaled $824,000 as of September 30, 2018 . There was no allowance for loan losses associated with PCI loans as of December 31, 2017 . |
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): September 30, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Loans individually evaluated for impairment $ 54 $ 1,245 $ 29,938 $ 1,594 $ 429 $ 168 $ 33,428 Loans collectively evaluated for impairment 483,996 778,830 1,167,687 318,726 344,363 111,823 3,205,425 Purchased credit impaired loans 204 11,199 21,089 2,553 — 626 35,671 Total ending loan balance $ 484,254 $ 791,274 $ 1,218,714 $ 322,873 $ 344,792 $ 112,617 $ 3,274,524 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 |
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): September 30, 2018 Pass Pass Watch (1) Special Mention (1) Substandard (1) Doubtful (1) Total Real Estate Loans: Construction $ 483,704 $ 382 $ 5 $ 122 $ 41 $ 484,254 1-4 Family Residential 782,330 458 553 6,635 1,298 791,274 Commercial 1,086,806 24,346 35,944 69,614 2,004 1,218,714 Commercial Loans 314,422 1,104 4,043 3,030 274 322,873 Municipal Loans 343,504 — 859 429 — 344,792 Loans to Individuals 111,665 15 18 610 309 112,617 Total $ 3,122,431 $ 26,305 $ 41,422 $ 80,440 $ 3,926 $ 3,274,524 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 (1) Includes PCI loans comprised of $25,000 pass watch, $2.1 million special mention, $6.1 million substandard and $2.4 doubtful as of September 30, 2018 . 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 . |
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) $ 32,526 $ 2,937 Accruing loans past due more than 90 days (1) — 1 Restructured loans (2) 5,699 5,767 Other real estate owned 1,413 1,613 Repossessed assets — 154 Total Nonperforming Assets $ 39,638 $ 10,472 (1) Excludes PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated. The increase in nonaccrual loans was primarily the result of the addition of two large commercial real estate relationships consisting of three loans in the first quarter of 2018. (2) Includes $3.2 million and $2.9 million in PCI loans restructured as of September 30, 2018 and December 31, 2017 , 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 periods presented (in thousands). The table excludes PCI loans measured at fair value at acquisition: Nonaccrual Loans September 30, 2018 December 31, 2017 Real Estate Loans: Construction $ 55 $ 86 1-4 Family Residential 1,399 1,098 Commercial 29,512 595 Commercial Loans 1,153 903 Loans to Individuals 407 255 Total $ 32,526 $ 2,937 |
Summary of impaired loans by class of loans for the period | The following tables set forth impaired loans by class of loans, including the unpaid contractual principal balance, the recorded investment and the allowance for loan losses 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 as of September 30, 2018 or December 31, 2017 . September 30, 2018 Unpaid Contractual Principal Balance Recorded Investment Related Allowance for Loan Losses Real Estate Loans: Construction $ 185 $ 157 $ 18 1-4 Family Residential 4,891 4,559 37 Commercial 33,560 32,267 5,563 Commercial Loans 2,605 2,269 340 Municipal Loans 429 429 9 Loans to Individuals 232 191 72 Total (1) $ 41,902 $ 39,872 $ 6,039 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 (1) Includes $6.4 million and $2.9 million of PCI loans that experienced deterioration in credit quality subsequent to the acquisition date as of September 30, 2018 and December 31, 2017 , 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): September 30, 2018 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 $ 35 $ 2,808 $ 41 $ 2,884 $ 481,370 $ 484,254 1-4 Family Residential 2,296 2,326 520 5,142 786,132 791,274 Commercial 252 115 123 490 1,218,224 1,218,714 Commercial Loans 1,957 722 420 3,099 319,774 322,873 Municipal Loans — — — — 344,792 344,792 Loans to Individuals 1,013 229 190 1,432 111,185 112,617 Total $ 5,553 $ 6,200 $ 1,294 $ 13,047 $ 3,261,477 $ 3,274,524 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 (1) Includes PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated. |
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: Three Months Ended September 30, 2018 September 30, 2017 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Real Estate Loans: Construction $ 252 $ 3 $ 62 $ — 1-4 Family residential 3,976 49 4,170 26 Commercial 32,580 16 1,459 2 Commercial loans 2,543 21 1,148 28 Municipal loans 466 6 537 7 Loans to Individuals 244 1 250 1 Total $ 40,061 $ 96 $ 7,626 $ 64 Nine Months Ended September 30, 2018 September 30, 2017 Average Recorded Investment Interest Income Recognized Average Recorded Interest Income Recognized Real Estate Loans: Construction $ 150 $ 4 $ 301 $ — 1-4 Family Residential 3,951 138 4,322 134 Commercial 24,149 36 1,368 27 Commercial Loans 2,073 51 3,320 118 Municipal Loans 488 20 558 23 Loans to Individuals 223 3 248 4 Total $ 31,034 $ 252 $ 10,117 $ 306 |
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): Three Months Ended September 30, 2018 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Real Estate Loans: Commercial $ — $ — $ 283 $ 283 2 Commercial Loans 142 — 56 198 4 Loans to Individuals — 35 — 35 1 Total $ 142 $ 35 $ 339 $ 516 7 Nine Months Ended September 30, 2018 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Real Estate Loans: 1-4 Family Residential $ — $ 80 $ — $ 80 1 Commercial — — 283 283 2 Commercial Loans 244 — 135 379 9 Loans to Individuals 8 35 13 56 4 Total $ 252 $ 115 $ 431 $ 798 16 Three Months Ended September 30, 2017 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Loans to Individuals $ — $ — $ 8 $ 8 1 Total $ — $ — $ 8 $ 8 1 Nine Months Ended September 30, 2017 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Commercial Loans $ 810 $ — $ — $ 810 3 Loans to Individuals 27 — 56 83 6 Total $ 837 $ — $ 56 $ 893 9 |
Schedule of PCI Loans | The following table presents the outstanding principal balance and carrying value for PCI loans for the periods presented (in thousands): September 30, 2018 December 31, 2017 Outstanding principal balance $ 41,094 $ 52,426 Carrying amount $ 35,671 $ 45,233 |
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): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Balance at beginning of period $ 16,105 $ 3,758 $ 18,721 $ 2,480 Changes in expected cash flows not affecting non-accretable differences — — (1,445 ) — Reclassifications (to) from nonaccretable discount 620 (79 ) 1,389 1,735 Accretion (733 ) (156 ) (2,673 ) (692 ) Balance at end of period $ 15,992 $ 3,523 $ 15,992 $ 3,523 |
Borrowing Arrangements (Tables)
Borrowing Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Information related to borrowings is provided in the table below (dollars in thousands): September 30, 2018 December 31, 2017 Federal funds purchased and repurchase agreements: Balance at end of period $ 8,975 $ 9,498 Average amount outstanding during the period (1) (5) 9,018 8,120 Maximum amount outstanding during the period (2) 8,975 9,498 Weighted average interest rate during the period (3) (5) 1.1 % 0.2 % Interest rate at end of period (4) 0.8 % 0.2 % FHLB borrowings: Balance at end of period $ 561,267 $ 1,017,361 Average amount outstanding during the period (1) (5) 757,399 1,222,033 Maximum amount outstanding during the period (2) 957,231 1,414,453 Weighted average interest rate during the period (3) (5) 1.7 % 1.2 % Interest rate at end of period (4) 2.1 % 1.4 % Subordinated notes, net of unamortized debt issuance costs: Balance at end of period $ 98,366 $ 98,248 Average amount outstanding during the period (1) (5) 98,307 98,172 Maximum amount outstanding during the period (2) 98,366 98,248 Weighted average interest rate during the period (3) (5) 5.8 % 5.7 % 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 $ 60,244 $ 60,241 Average amount outstanding during the period (1) (5) 60,242 60,238 Maximum amount outstanding during the period (2) 60,244 60,241 Weighted average interest rate during the period (3) (5) 4.2 % 3.3 % Interest rate at end of period (4) 4.4 % 3.6 % (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 (annualized for interim periods) by the average amount outstanding during the period. The weighted average interest rate on the FHLB borrowings includes the effect of interest rate swaps. (4) Stated rate. (5) Interim period averages are annualized. |
Schedule of Maturities of Borrowings | Maturities of fixed rate obligations based on scheduled repayments at September 30, 2018 are as follows (in thousands): Payments Due by Period Less than 1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Thereafter Total Federal funds purchased and repurchase agreements $ 8,588 $ 387 $ — $ — $ — $ — $ 8,975 FHLB borrowings 158,505 385,165 11,537 — — 6,060 561,267 Subordinated notes, net of unamortized debt issuance costs — — — — — 98,366 98,366 Trust preferred subordinated debentures, net of unamortized debt issuance costs — — — — — 60,244 60,244 Total obligations $ 167,093 $ 385,552 $ 11,537 $ — $ — $ 164,670 $ 728,852 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Defined Contribution Plan [Abstract] | |
The components of net periodic benefit cost | The components of net periodic benefit cost (income) related to our employee benefit plans are as follows (in thousands): Three Months Ended September 30, Defined Benefit Defined Benefit Pension Plan Acquired Restoration 2018 2017 2018 2017 2018 2017 Service cost $ 387 $ 349 $ — $ — $ 73 $ 61 Interest cost 848 901 41 44 149 142 Expected return on assets (1,621 ) (1,513 ) (73 ) (53 ) — — Net loss amortization 378 328 — — 169 75 Prior service (credit) cost amortization (3 ) (3 ) — — 2 2 Net periodic benefit cost (income) $ (11 ) $ 62 $ (32 ) $ (9 ) $ 393 $ 280 Nine Months Ended September 30, Defined Benefit Defined Benefit Pension Plan Acquired Restoration 2018 2017 2018 2017 2018 2017 Service cost $ 1,161 $ 1,048 $ — $ — $ 220 $ 185 Interest cost 2,544 2,701 123 133 447 425 Expected return on assets (4,863 ) (4,538 ) (218 ) (160 ) — — Net loss amortization 1,134 984 — — 508 226 Prior service (credit) cost amortization (10 ) (10 ) — — 5 5 Net periodic benefit cost (income) $ (34 ) $ 185 $ (95 ) $ (27 ) $ 1,180 $ 841 |
Share-based Incentive Plans (Ta
Share-based Incentive Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
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): Three Months Ended Nine Months Ended 2018 2017 2018 2017 New shares issued from available authorized shares — — — 48,311 New shares issued from available treasury shares 65,918 77,957 128,969 89,724 Total 65,918 77,957 128,969 138,035 Proceeds from stock option exercises $ 1,571 $ 1,505 $ 2,655 $ 2,527 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following tables present the notional and estimated fair value amount of derivative positions outstanding (in thousands): September 30, 2018 December 31, 2017 Estimated Fair Value Estimated Fair Value Notional (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 $ 270,000 $ 14,965 $ — $ 240,000 $ 7,922 $ 22 Swaps-Fair Value Hedge-Financial institution counterparties 21,100 102 — — — — Derivatives designated as non-hedging instruments Interest rate contracts: Swaps-Financial institution counterparties 94,679 3,257 307 67,220 92 612 Swaps-Customer counterparties 94,679 307 3,257 67,220 612 92 Gross derivatives 18,631 3,564 8,626 726 Offsetting derivative assets/liabilities (307 ) (307 ) (114 ) (114 ) Cash collateral received/posted (18,017 ) — (7,900 ) (520 ) Net derivatives included in the consolidated balance sheets (2) $ 307 $ 3,257 $ 612 $ 92 (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 no credit exposure related to interest rate swaps with financial institutions and $307,000 related to interest rate swaps with customers at September 30, 2018 . 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 are generally secured by the non-cash collateral securing the underlying transaction being hedged. |
Weighted Average Maturity And Interest Rates On Risk Management Interest Rate Swaps [Table Text Block] | 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 September 30, 2018 and December 31, 2017 : September 30, 2018 December 31, 2017 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 $ 270,000 5.1 2.18 % 1.58 % $ 240,000 5.3 1.44 % 1.43 % Swaps-Fair Value Hedge Financial institution counterparties 21,100 7.8 2.34 3.00 — — — — Swaps-Non-Hedging Financial institution counterparties 94,679 12.1 2.12 2.58 67,220 12.7 1.39 2.37 Customer counterparties 94,679 12.1 2.58 2.12 67,220 12.7 2.37 1.39 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 | 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 September 30, 2018 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 $ 19,748 $ 19,748 $ — $ — State and Political Subdivisions 699,069 — 699,069 — Other Stocks and Bonds 3,027 — 3,027 — Mortgage-backed Securities: (1) Residential 687,598 — 687,598 — Commercial 529,835 — 529,835 — Equity Investments: Equity Investments (2) 5,735 5,735 — — Derivative assets: Interest rate swaps 18,631 — 18,631 — Total asset recurring fair value measurements $ 1,963,643 $ 25,483 $ 1,938,160 $ — Derivative liabilities: Interest rate swaps $ 3,564 $ — $ 3,564 $ — Total liability recurring fair value measurements $ 3,564 $ — $ 3,564 $ — Nonrecurring fair value measurements Foreclosed assets $ 1,413 $ — $ — $ 1,413 Impaired loans (3) 33,280 — — 33,280 Total asset nonrecurring fair value measurements $ 34,693 $ — $ — $ 34,693 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 — Equity Investments (2) 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 (3) 6,536 — — 6,536 Total asset nonrecurring fair value measurements $ 8,303 $ — $ — $ 8,303 (1) All mortgage-backed securities are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. (2) With the adoption of ASU 2016-01 on January 1, 2018, these investments are included in equity investments on our consolidated balance sheets. The guidance was applied on a prospective approach resulting in prior-periods no longer being comparable. See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. (3) 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 and financial liabilities measured on a nonrecurring basis at both their respective carrying amounts and estimated fair value (in thousands): Estimated Fair Value September 30, 2018 Carrying Total Level 1 Level 2 Level 3 Financial Assets: Cash and cash equivalents $ 174,072 $ 174,072 $ 174,072 $ — $ — Investment Securities: Held to maturity, at carrying value 3,087 3,030 — 3,030 — Mortgage-backed Securities: Held to maturity, at carrying value 160,278 153,442 — 153,442 — FHLB stock, at cost 32,291 32,291 — 32,291 — Equity investments 6,294 6,294 — 6,294 — Loans, net of allowance for loan losses 3,248,432 3,179,049 — — 3,179,049 Loans held for sale 954 954 — 954 — Financial Liabilities: Deposits $ 4,553,512 $ 4,543,794 $ — $ 4,543,794 $ — Federal funds purchased and repurchase agreements 8,975 8,975 — 8,975 — FHLB borrowings 561,267 542,846 — 542,846 — Subordinated notes, net of unamortized debt issuance costs 98,366 97,979 — 97,979 — Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,244 51,014 — 51,014 — 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 55,729 55,729 — 55,729 — Equity investments 5,821 5,821 — 5,821 — 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 — |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The income tax expense included in the accompanying statements of income consists of the following (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Current income tax expense $ 95 $ 3,454 $ 3,107 $ 9,798 Deferred income tax expense 2,097 436 4,535 453 Income tax expense $ 2,192 $ 3,890 $ 7,642 $ 10,251 |
Off-Balance-Sheet Arrangement_2
Off-Balance-Sheet Arrangements, Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of unused commitments | Financial instruments with off-balance-sheet risk were as follows (in thousands): At At Unused commitments: Commitments to extend credit $ 819,256 $ 804,715 Standby letters of credit 28,197 14,890 Total $ 847,453 $ 819,605 |
Summary of Significant Accoun_3
Summary of Significant Accounting and Reporting Policies - Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Decrease in debit card expense | $ (251) | $ (1,024) | $ (840) | $ (2,840) | ||
Decrease in brokerage services income | (532) | (561) | (1,488) | (1,790) | ||
Cumulative effect of new accounting principle | (85) | (85) | ||||
Increase in salaries and employee benefits expense | 17,628 | 14,472 | 52,820 | 45,463 | ||
Decrease in other Noninterest Expense | 2,733 | $ 2,622 | 8,945 | $ 7,715 | ||
Securities available for sale, at estimated fair value | $ 1,538,755 | |||||
Securities available for sale | 1,994,073 | 1,994,073 | ||||
Held-to-maturity securities | 163,365 | 163,365 | $ 909,506 | |||
Accounting Standards Update 2014-09 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Decrease in debit card expense | 1,000 | 2,800 | ||||
Decrease in brokerage expense | 172 | 474 | ||||
Decrease in brokerage services income | 172 | 474 | ||||
Accounting Standards Update 2016-01 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Equity investments | $ 5,900 | |||||
Securities available for sale, at estimated fair value | (5,900) | |||||
Accounting Standards Update 2017-07 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Increase in salaries and employee benefits expense | 77 | 234 | ||||
Decrease in other Noninterest Expense | (77) | (234) | ||||
New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2017-12 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Securities available for sale | 743,400 | |||||
Held-to-maturity securities | (743,400) | |||||
Retained Earnings | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative effect of new accounting principle | (85) | (85) | ||||
Retained Earnings | Accounting Standards Update 2016-01 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative effect of new accounting principle | $ (85) | |||||
Deposit services | Accounting Standards Update 2014-09 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Decrease in deposit services income | $ 1,000 | $ 2,800 |
Summary of Significant Accoun_4
Summary of Significant Accounting and Reporting Policies Accounting Pronouncements (Details) - Scenario, Forecast - Accounting Standards Update 2017-08 $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Amortization expense | $ (2,900) |
Cumulative Effect on Retained Earnings, before Tax | $ (14,400) |
Acquisition (Details)
Acquisition (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018USD ($) | Nov. 30, 2017banking_offices | |
Goodwill [Roll Forward] | ||
Balance as of December 31, 2017 | $ 201,246 | |
Less: measurement period adjustments | (130) | |
Balance as of September 30, 2018 | $ 201,116 | |
Diboll State Bancshares, Inc. | ||
Business Acquisition [Line Items] | ||
Voting interests acquired | 100.00% | |
Number of banking centers | banking_offices | 17 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Basic and Diluted Earnings: | ||||
Net income | $ 20,303 | $ 14,511 | $ 56,757 | $ 43,981 |
Basic weighted-average shares outstanding (in shares) | 35,114,000 | 29,370,000 | 35,066,000 | 29,326,000 |
Add: Stock awards (in shares) | 174,000 | 200,000 | 175,000 | 205,000 |
Diluted weighted-average shares outstanding (in shares) | 35,288,000 | 29,570,000 | 35,241,000 | 29,531,000 |
Basic Earnings Per Share: | ||||
Earnings per common share - basic (in dollars per share) | $ 0.58 | $ 0.49 | $ 1.62 | $ 1.50 |
Diluted Earnings Per Share: | ||||
Earnings per common share - diluted (in dollars per share) | $ 0.58 | $ 0.49 | $ 1.61 | $ 1.49 |
Antidilutive securities excluded from calculating earnings | ||||
Number of antidilutive options (in shares) | 84,000 | 45,000 | 61,000 | 49,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income, Changes In (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | |||
AOCI Attributable to Parent, Net of Tax | |||||||
Beginning balance, net of tax | $ 754,140 | $ 518,274 | |||||
Income tax benefit (expense) | $ 3,102 | $ (166) | 8,691 | (6,599) | |||
Ending balance, net of tax | 752,506 | 556,023 | 752,506 | 556,023 | |||
Cumulative effect of new accounting principle | (85) | (85) | |||||
Retained Earnings | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Beginning balance, net of tax | 32,851 | 30,098 | |||||
Ending balance, net of tax | 58,578 | 25,677 | 58,578 | 25,677 | |||
Cumulative effect of new accounting principle | (85) | (85) | |||||
Unrealized Gains (Losses) on Securities | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Beginning balance, net of tax | (42,536) | (11,644) | (16,295) | (23,708) | |||
Other comprehensive (loss) income before reclassifications | (16,885) | 344 | (52,757) | 18,450 | |||
Reclassified from accumulated other comprehensive income | 80 | (137) | 2,736 | [1] | 317 | ||
Income tax benefit (expense) | 3,529 | (72) | 10,504 | (6,568) | |||
Net current-period other comprehensive (loss) income, net of tax | (13,276) | 135 | (39,517) | 12,199 | |||
Ending balance, net of tax | (55,812) | (11,509) | (55,812) | (11,509) | |||
Unrealized Gains (Losses) on Derivatives | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Beginning balance, net of tax | 10,753 | 3,957 | 6,399 | 4,595 | |||
Other comprehensive (loss) income before reclassifications | 1,894 | (236) | 7,864 | (1,811) | |||
Reclassified from accumulated other comprehensive income | (406) | 101 | (864) | 694 | |||
Income tax benefit (expense) | (312) | 47 | (1,470) | 391 | |||
Net current-period other comprehensive (loss) income, net of tax | 1,176 | (88) | 5,530 | (726) | |||
Ending balance, net of tax | 11,929 | 3,869 | 11,929 | 3,869 | |||
Net Prior Service (Cost) Credit | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Beginning balance, net of tax | (135) | (136) | (133) | (133) | |||
Other comprehensive (loss) income before reclassifications | 0 | 0 | 0 | 0 | |||
Reclassified from accumulated other comprehensive income | [2] | (1) | (1) | (5) | (5) | ||
Income tax benefit (expense) | 0 | 0 | 2 | 1 | |||
Net current-period other comprehensive (loss) income, net of tax | (1) | (1) | (3) | (4) | |||
Ending balance, net of tax | (136) | (137) | (136) | (137) | |||
Net Gain (Loss) | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Beginning balance, net of tax | (25,404) | (18,722) | (26,269) | (19,247) | |||
Other comprehensive (loss) income before reclassifications | 0 | 0 | 0 | 0 | |||
Reclassified from accumulated other comprehensive income | [2] | 547 | 403 | 1,642 | 1,210 | ||
Income tax benefit (expense) | (115) | (141) | (345) | (423) | |||
Net current-period other comprehensive (loss) income, net of tax | 432 | 262 | 1,297 | 787 | |||
Ending balance, net of tax | (24,972) | (18,460) | (24,972) | (18,460) | |||
Total | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Beginning balance, net of tax | (57,322) | (26,545) | (36,298) | (38,493) | |||
Other comprehensive (loss) income before reclassifications | (14,991) | 108 | (44,893) | 16,639 | |||
Reclassified from accumulated other comprehensive income | 220 | 366 | 3,509 | [1] | 2,216 | ||
Income tax benefit (expense) | 3,102 | (166) | 8,691 | (6,599) | |||
Net current-period other comprehensive (loss) income, net of tax | (11,669) | 308 | (32,693) | 12,256 | |||
Ending balance, net of tax | (68,991) | $ (26,237) | (68,991) | $ (26,237) | |||
Accounting Standards Update 2016-01 | Retained Earnings | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Cumulative effect of new accounting principle before tax | $ (107) | $ (107) | |||||
Cumulative effect of new accounting principle | $ (85) | ||||||
[1] | As discussed in “Note 1 – Summary of Significant Accounting and Reporting Policies,” the Company adopted ASU 2016-01 on January 1, 2018. This amount includes a reclassification for the cumulative adjustment to retained earnings of $107,000 ($85,000, net of tax). | ||||||
[2] | These accumulated other comprehensive income components are included in the computation of net periodic pension cost (income) presented in “Note 8 - Employee Benefit Plans.” |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Reclassifications out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Amortization of unrealized losses | $ (661) | $ 490 | $ 729 | $ 1,191 | ||
Tax benefit (expense) | (2,192) | (3,890) | (7,642) | (10,251) | ||
Total reclassifications for the period, net of tax | (174) | (237) | (2,689) | (1,440) | ||
Unrealized gains (losses) | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Reclassified from accumulated other comprehensive income | (80) | 137 | (2,736) | [1] | (317) | |
Realized net loss on interest rate swap derivatives | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Reclassified from accumulated other comprehensive income | 406 | (101) | 864 | (694) | ||
Net actuarial loss | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Reclassified from accumulated other comprehensive income | [2] | (547) | (403) | (1,642) | (1,210) | |
Prior service credit | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Reclassified from accumulated other comprehensive income | [2] | 1 | 1 | 5 | 5 | |
Amortization of pension plan | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Reclassified from accumulated other comprehensive income | (546) | (402) | (1,637) | (1,205) | ||
Tax benefit | 115 | 141 | 343 | 422 | ||
Total reclassifications for the period, net of tax | (431) | (261) | (1,294) | (783) | ||
Unrealized losses on securities transferred from held to maturity to available for sale: | Reclassification out of accumulated other comprehensive income | Unrealized gains (losses) | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Amortization of unrealized losses | [3] | 661 | (490) | (729) | (1,191) | |
Tax benefit (expense) | (139) | 172 | 153 | 417 | ||
Net of tax | 522 | (318) | (576) | (774) | ||
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) | 156 | (220) | 399 | (306) | ||
Net of tax | (585) | 407 | (1,501) | 568 | ||
Realized net (loss) gain on sale of securities | [4] | (741) | 627 | (1,900) | 874 | |
Interest rate swap derivatives | Reclassification out of accumulated other comprehensive income | Realized net loss on interest rate swap derivatives | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Tax benefit (expense) | (81) | 43 | (168) | 261 | ||
Net of tax | 303 | (79) | 631 | (485) | ||
Realized net gain (loss) on interest rate swap derivatives | [5] | 384 | (122) | 799 | (746) | |
Interest rate swap derivatives | Reclassification out of accumulated other comprehensive income | Amortization of unrealized gains on terminated interest rate swap derivatives | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Tax benefit (expense) | (5) | (7) | (14) | (18) | ||
Net of tax | 17 | 14 | 51 | 34 | ||
Realized net gain (loss) on interest rate swap derivatives | [5] | $ 22 | $ 21 | $ 65 | $ 52 | |
[1] | As discussed in “Note 1 – Summary of Significant Accounting and Reporting Policies,” the Company adopted ASU 2016-01 on January 1, 2018. This amount includes a reclassification for the cumulative adjustment to retained earnings of $107,000 ($85,000, net of tax). | |||||
[2] | These accumulated other comprehensive income components are included in the computation of net periodic pension cost (income) presented in “Note 8 - Employee Benefit Plans.” | |||||
[3] | Included in interest income on the consolidated statements of income. | |||||
[4] | Listed as net (loss) gain on sale of securities available for sale on the consolidated statements of income. | |||||
[5] | Included in interest expense for FHLB borrowings on the consolidated statements of income. |
Securities - Schedule of Debt
Securities - Schedule of Debt and Equity Securities Components (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
AVAILABLE FOR SALE | |||
Amortized Cost | $ 1,994,073 | ||
Gross unrealized gains | 6,976 | ||
Gross unrealized losses | 61,772 | ||
Estimated fair value | 1,939,277 | ||
Amortized Cost | $ 1,541,967 | ||
Gross unrealized gains | 9,163 | ||
Gross unrealized losses | 12,375 | ||
Estimated fair value | 1,538,755 | ||
HELD TO MATURITY | |||
Amortized cost | 163,365 | 909,506 | |
Gross unrealized gains | 208 | 16,322 | |
Gross unrealized losses | 7,101 | 4,028 | |
Estimated Fair Value | 156,472 | 921,800 | |
US Treasury Securities [Member] | |||
AVAILABLE FOR SALE | |||
Amortized Cost | 19,706 | ||
Gross unrealized gains | 42 | ||
Gross unrealized losses | 0 | ||
Estimated fair value | 19,748 | ||
US Government Agency Debentures | |||
AVAILABLE FOR SALE | |||
Amortized Cost | 108,869 | ||
Gross unrealized gains | 0 | ||
Gross unrealized losses | 0 | ||
Estimated fair value | 108,869 | ||
State and Political Subdivisions | |||
AVAILABLE FOR SALE | |||
Amortized Cost | 718,237 | ||
Gross unrealized gains | 4,666 | ||
Gross unrealized losses | 23,834 | ||
Estimated fair value | 699,069 | ||
Amortized Cost | 392,760 | ||
Gross unrealized gains | 3,895 | ||
Gross unrealized losses | 3,991 | ||
Estimated fair value | 392,664 | ||
HELD TO MATURITY | |||
Amortized cost | 3,087 | 413,632 | |
Gross unrealized gains | 0 | 10,879 | |
Gross unrealized losses | 57 | 2,583 | |
Estimated Fair Value | 3,030 | 421,928 | |
Other Stocks and Bonds | |||
AVAILABLE FOR SALE | |||
Amortized Cost | 3,000 | ||
Gross unrealized gains | 27 | ||
Gross unrealized losses | 0 | ||
Estimated fair value | 3,027 | ||
Amortized Cost | 5,024 | ||
Gross unrealized gains | 31 | ||
Gross unrealized losses | 0 | ||
Estimated fair value | 5,055 | ||
Other Equity Securities | |||
AVAILABLE FOR SALE | |||
Amortized Cost | [1] | 6,027 | |
Gross unrealized gains | [1] | 0 | |
Gross unrealized losses | [1] | 107 | |
Estimated fair value | [1] | 5,920 | |
Residential | |||
AVAILABLE FOR SALE | |||
Amortized Cost | [2] | 708,137 | |
Gross unrealized gains | [2] | 1,997 | |
Gross unrealized losses | [2] | 22,536 | |
Estimated fair value | [2] | 687,598 | |
Amortized Cost | [2] | 720,930 | |
Gross unrealized gains | [2] | 4,476 | |
Gross unrealized losses | [2] | 7,377 | |
Estimated fair value | [2] | 718,029 | |
HELD TO MATURITY | |||
Amortized cost | [2] | 59,679 | 129,044 |
Gross unrealized gains | [2] | 143 | 1,631 |
Gross unrealized losses | [2] | 3,015 | 239 |
Estimated Fair Value | [2] | 56,807 | 130,436 |
Commercial | |||
AVAILABLE FOR SALE | |||
Amortized Cost | [2] | 544,993 | |
Gross unrealized gains | [2] | 244 | |
Gross unrealized losses | [2] | 15,402 | |
Estimated fair value | [2] | 529,835 | |
Amortized Cost | [2] | 308,357 | |
Gross unrealized gains | [2] | 761 | |
Gross unrealized losses | [2] | 900 | |
Estimated fair value | [2] | 308,218 | |
HELD TO MATURITY | |||
Amortized cost | [2] | 100,599 | 366,830 |
Gross unrealized gains | [2] | 65 | 3,812 |
Gross unrealized losses | [2] | 4,029 | 1,206 |
Estimated Fair Value | [2] | $ 96,635 | $ 369,436 |
[1] | See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. | ||
[2] | 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 | Sep. 30, 2018 | Dec. 31, 2017 | |
Available-for-sale, Unrealized Loss Position [Abstract] | |||
Less than 12 Months, fair value | $ 1,034,997 | ||
Less than 12 months, fair value | $ 614,799 | ||
More than 12 Months, fair value | 575,351 | ||
More than 12 months, fair value | 288,113 | ||
Total fair value | 1,610,348 | ||
Total fair value | 902,912 | ||
Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | |||
Less than 12 Months, unrealized loss | 28,722 | ||
Less than 12 Months, unrealized loss | 3,879 | ||
More than 12 Months, unrealized Loss | 33,050 | ||
More than 12 months, unrealized loss | 8,496 | ||
Total unrealized loss | 61,772 | ||
Total unrealized loss | 12,375 | ||
Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||
Less than 12 months, fair value | 100,059 | 246,806 | |
More than 12 Months, fair value | 46,045 | 73,024 | |
Total fair value | 146,104 | 319,830 | |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Losses [Abstract] | |||
Less than 12 months, unrealized loss | 4,074 | 1,746 | |
More than 12 months, unrealized loss | 3,027 | 2,282 | |
Total unrealized loss | 7,101 | 4,028 | |
State and Political Subdivisions | |||
Available-for-sale, Unrealized Loss Position [Abstract] | |||
Less than 12 Months, fair value | 287,571 | ||
Less than 12 months, fair value | 32,341 | ||
More than 12 Months, fair value | 244,510 | ||
More than 12 months, fair value | 172,006 | ||
Total fair value | 532,081 | ||
Total fair value | 204,347 | ||
Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | |||
Less than 12 Months, unrealized loss | 7,728 | ||
Less than 12 Months, unrealized loss | 121 | ||
More than 12 Months, unrealized Loss | 16,106 | ||
More than 12 months, unrealized loss | 3,870 | ||
Total unrealized loss | 23,834 | ||
Total unrealized loss | 3,991 | ||
Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||
Less than 12 months, fair value | 1,761 | 85,608 | |
More than 12 Months, fair value | 1,269 | 56,736 | |
Total fair value | 3,030 | 142,344 | |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Losses [Abstract] | |||
Less than 12 months, unrealized loss | 23 | 807 | |
More than 12 months, unrealized loss | 34 | 1,776 | |
Total unrealized loss | 57 | 2,583 | |
Other Equity Securities | |||
Available-for-sale, Unrealized Loss Position [Abstract] | |||
Less than 12 months, fair value | [1] | 5,920 | |
More than 12 months, fair value | [1] | 0 | |
Total fair value | [1] | 5,920 | |
Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | |||
Less than 12 Months, unrealized loss | [1] | 107 | |
More than 12 months, unrealized loss | [1] | 0 | |
Total unrealized loss | [1] | 107 | |
Residential | |||
Available-for-sale, Unrealized Loss Position [Abstract] | |||
Less than 12 Months, fair value | 332,230 | ||
Less than 12 months, fair value | 429,742 | ||
More than 12 Months, fair value | 285,356 | ||
More than 12 months, fair value | 102,973 | ||
Total fair value | 617,586 | ||
Total fair value | 532,715 | ||
Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | |||
Less than 12 Months, unrealized loss | 8,003 | ||
Less than 12 Months, unrealized loss | 3,232 | ||
More than 12 Months, unrealized Loss | 14,533 | ||
More than 12 months, unrealized loss | 4,145 | ||
Total unrealized loss | 22,536 | ||
Total unrealized loss | 7,377 | ||
Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||
Less than 12 months, fair value | 48,022 | 24,707 | |
More than 12 Months, fair value | 6,781 | 2,736 | |
Total fair value | 54,803 | 27,443 | |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Losses [Abstract] | |||
Less than 12 months, unrealized loss | 2,473 | 157 | |
More than 12 months, unrealized loss | 542 | 82 | |
Total unrealized loss | 3,015 | 239 | |
Commercial | |||
Available-for-sale, Unrealized Loss Position [Abstract] | |||
Less than 12 Months, fair value | 415,196 | ||
Less than 12 months, fair value | 146,796 | ||
More than 12 Months, fair value | 45,485 | ||
More than 12 months, fair value | 13,134 | ||
Total fair value | 460,681 | ||
Total fair value | 159,930 | ||
Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | |||
Less than 12 Months, unrealized loss | 12,991 | ||
Less than 12 Months, unrealized loss | 419 | ||
More than 12 Months, unrealized Loss | 2,411 | ||
More than 12 months, unrealized loss | 481 | ||
Total unrealized loss | 15,402 | ||
Total unrealized loss | 900 | ||
Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||
Less than 12 months, fair value | 50,276 | 136,491 | |
More than 12 Months, fair value | 37,995 | 13,552 | |
Total fair value | 88,271 | 150,043 | |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Losses [Abstract] | |||
Less than 12 months, unrealized loss | 1,578 | 782 | |
More than 12 months, unrealized loss | 2,451 | 424 | |
Total unrealized loss | $ 4,029 | $ 1,206 | |
[1] | See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. |
Securities - Interest Income o
Securities - Interest Income on Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Investments, Debt and Equity Securities [Abstract] | |||||
U.S. Treasury | $ 10 | $ 0 | $ 141 | $ 519 | |
U.S. Government Agency Debentures | 0 | 0 | 89 | 0 | |
State and Political Subdivisions | 6,331 | 5,670 | 19,065 | 18,381 | |
Other Stocks and Bonds | 26 | 27 | 84 | 96 | |
Other Equity Securities | [1] | 0 | 31 | 0 | 87 |
Mortgage-backed Securities | 10,086 | 10,567 | 31,190 | 31,430 | |
Total interest income on securities | $ 16,453 | $ 16,295 | $ 50,569 | $ 50,513 | |
[1] | See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. |
Securities - Amortized Cost an
Securities - Amortized Cost and Estimated Fair Value of Investments in Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Available for sale, Amortized Cost | ||
Due in one year or less | $ 3,557 | |
Due after one year through five years | 49,413 | |
Due after five years through ten years | 183,420 | |
Due after ten years | 504,553 | |
Total available-for-sale investment securities | 740,943 | |
Mortgage-backed Securities | 1,253,130 | |
Amortized Cost | 1,994,073 | |
Available for sale, Fair Value | ||
Due in one year or less | 3,616 | |
Due after one year through five years | 50,431 | |
Due after five years through ten years | 181,041 | |
Due after ten years | 486,756 | |
Total available-for-sale investment securities | 721,844 | |
Mortgage-backed Securities | 1,217,433 | |
Total | 1,939,277 | |
Held to maturity, Amortized Cost | ||
Due in one year or less | 115 | |
Due after one year through five years | 1,700 | |
Due after five years through ten years | 1,272 | |
Due after ten years | 0 | |
Total held-to-maturity investment securities | 3,087 | |
Mortgage-backed securities | 160,278 | |
Amortized cost | 163,365 | $ 909,506 |
Held to maturity, Fair Value | ||
Due in one year or less | 115 | |
Due after one year through five years | 1,670 | |
Due after five years through ten years | 1,245 | |
Due after ten years | 0 | |
Total held-to-maturity investment securities | 3,030 | |
Mortgage-backed securities | 153,442 | |
Fair Value | $ 156,472 | $ 921,800 |
Securities - Unrealized and R
Securities - Unrealized and Realized Gain (Loss) Recognized in Net Income on Equity Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Gain (Loss) on Securities [Line Items] | ||
Net (losses) recognized during the period on equity investments | $ (42) | $ (176) |
Less: Net gains and (losses) recognized during the period on equity investments sold during the period | 0 | 0 |
Unrealized (losses) recognized during the reporting period on equity investments still held at the reporting date | $ (42) | $ (176) |
Securities - Narrative (Detail
Securities - Narrative (Details) | Jan. 01, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Investment [Line Items] | |||||||
Transferred Securities, Unrealized Loss, Before Tax | $ 15,800,000 | $ 15,800,000 | $ 17,400,000 | ||||
Securities transferred, Unrealized Loss, Net of Tax | 12,500,000 | 12,500,000 | 13,800,000 | ||||
Fair value of securities transferred from AFS to HTM | 0 | 0 | |||||
Securities available for sale, at estimated fair value | 1,939,277,000 | 1,939,277,000 | |||||
Securities available for sale, at estimated fair value | 1,538,755,000 | ||||||
Unrealized net gain on securities transferred from held to maturity to available for sale, before tax | $ 11,881,000 | $ 0 | $ 0 | $ 11,881,000 | $ 0 | ||
Unrealized net gain on securities transferred from held to maturity to available for sale, net of tax | 9,400,000 | ||||||
AFS securities and HTM securities with other-than-temporary impairment | 0 | 0 | |||||
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract] | |||||||
Net realized (loss) gain on AFS securities | $ (1,900,000) | 874,000 | |||||
Gross realized gains on AFS securities | 1,900,000 | 4,700,000 | |||||
Gross realized loss on AFS securities | 3,800,000 | 3,800,000 | |||||
Carrying value of investment securities pledged as collateral | $ 1,150,000,000 | 1,150,000,000 | 1,240,000,000 | ||||
Equity investments | $ 12,029,000 | $ 12,029,000 | |||||
Equity investments without readily determinable fair value | 5,821,000 | ||||||
Equity investments with other-than-temporary impairment | 0 | 0 | |||||
Debt Securities, Held-to-maturity, Sale or Transfer of Investment [Abstract] | |||||||
Sale of HTM portfolio | $ 0 | $ 0 | |||||
Accounting Standards Update 2016-01 | |||||||
Investment [Line Items] | |||||||
Securities available for sale, at estimated fair value | (5,900,000) | ||||||
New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2017-12 | |||||||
Investment [Line Items] | |||||||
Securities available for sale, at estimated fair value | $ 743,400,000 | ||||||
Other Equity Securities | |||||||
Investment [Line Items] | |||||||
Securities available for sale, at estimated fair value | [1] | 5,920,000 | |||||
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract] | |||||||
Unrealized losses on equity investment included in AFS securities | [1] | $ 85,000 | |||||
[1] | See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. |
Loans and Allowance for Proba_3
Loans and Allowance for Probable Loan Losses - Loans by Portfolio Segment (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loan balance | $ 3,274,524 | $ 3,294,356 | |
Less: Allowance for loan losses | [1] | 26,092 | 20,781 |
Net Loans | 3,248,432 | 3,273,575 | |
Construction Real Estate Loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loan balance | 484,254 | 475,867 | |
1-4 Family Residential Real Estate Loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loan balance | 791,274 | 805,341 | |
Commercial Real Estate Loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loan balance | 1,218,714 | 1,265,159 | |
Commercial Loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loan balance | 322,873 | 266,422 | |
Municipal Loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loan balance | 344,792 | 345,798 | |
Loans to Individuals | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loan balance | 112,617 | 135,769 | |
Purchase Credit Impaired (PCI) Loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Less: Allowance for loan losses | [1] | $ 824 | $ 0 |
[1] | Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. The allowance for loan loss recorded on purchase credit impaired (“PCI”) loans totaled $824,000 as of September 30, 2018. There was no allowance for loan loss recorded on PCI loans as of December 31, 2017. |
Loans and Allowance for Proba_4
Loans and Allowance for Probable Loan Losses - Allowance for Loan Losses Activity by Portfolio Segment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||
Loans and Leases Receivable, Allowance | [1] | $ 26,092,000 | $ 26,092,000 | $ 20,781,000 | |||
Allowances for Loan Losses [Roll Forward] | |||||||
Balance at beginning of period | 25,072,000 | $ 19,241,000 | 20,781,000 | [2] | $ 17,911,000 | ||
Provision (reversal) for loan losses | [3] | 975,000 | 960,000 | 5,991,000 | 3,404,000 | ||
Loans charged off | (662,000) | (677,000) | (2,346,000) | (2,819,000) | |||
Recoveries of loans charged off | 707,000 | 347,000 | 1,666,000 | 1,375,000 | |||
Balance at end of period | 26,092,000 | 19,871,000 | 26,092,000 | 19,871,000 | |||
Provision for loan losses | 975,000 | 960,000 | 5,991,000 | 3,404,000 | |||
Provision for PCI Loans | 466,000 | 50,000 | 824,000 | 50,000 | |||
Construction Real Estate Loans | |||||||
Allowances for Loan Losses [Roll Forward] | |||||||
Balance at beginning of period | 3,841,000 | 3,573,000 | 3,676,000 | [2] | 4,147,000 | ||
Provision (reversal) for loan losses | (717,000) | (20,000) | (538,000) | (560,000) | |||
Loans charged off | 0 | 0 | (14,000) | (35,000) | |||
Recoveries of loans charged off | 0 | 0 | 0 | 1,000 | |||
Balance at end of period | 3,124,000 | 3,553,000 | 3,124,000 | 3,553,000 | |||
1-4 Family Residential Real Estate Loans | |||||||
Allowances for Loan Losses [Roll Forward] | |||||||
Balance at beginning of period | 2,730,000 | 2,392,000 | 2,445,000 | [2] | 2,665,000 | ||
Provision (reversal) for loan losses | 585,000 | 34,000 | 906,000 | 46,000 | |||
Loans charged off | (8,000) | (11,000) | (65,000) | (299,000) | |||
Recoveries of loans charged off | 331,000 | 10,000 | 352,000 | 13,000 | |||
Balance at end of period | 3,638,000 | 2,425,000 | 3,638,000 | 2,425,000 | |||
Commercial Real Estate Loans | |||||||
Allowances for Loan Losses [Roll Forward] | |||||||
Balance at beginning of period | 14,036,000 | 9,970,000 | 10,821,000 | [2] | 7,204,000 | ||
Provision (reversal) for loan losses | 290,000 | 383,000 | 3,499,000 | 3,140,000 | |||
Loans charged off | 0 | 0 | 0 | 0 | |||
Recoveries of loans charged off | 5,000 | 2,000 | 11,000 | 11,000 | |||
Balance at end of period | 14,331,000 | 10,355,000 | 14,331,000 | 10,355,000 | |||
Commercial Loans | |||||||
Allowances for Loan Losses [Roll Forward] | |||||||
Balance at beginning of period | 2,560,000 | 1,624,000 | 2,094,000 | [2] | 2,263,000 | ||
Provision (reversal) for loan losses | 533,000 | 189,000 | 1,194,000 | (84,000) | |||
Loans charged off | (13,000) | (73,000) | (270,000) | (650,000) | |||
Recoveries of loans charged off | 105,000 | 89,000 | 167,000 | 300,000 | |||
Balance at end of period | 3,185,000 | 1,829,000 | 3,185,000 | 1,829,000 | |||
Municipal Loans | |||||||
Allowances for Loan Losses [Roll Forward] | |||||||
Balance at beginning of period | 859,000 | 765,000 | 860,000 | [2] | 750,000 | ||
Provision (reversal) for loan losses | 5,000 | 41,000 | 4,000 | 56,000 | |||
Loans charged off | 0 | 0 | 0 | 0 | |||
Recoveries of loans charged off | 0 | 0 | 0 | 0 | |||
Balance at end of period | 864,000 | 806,000 | 864,000 | 806,000 | |||
Loans to Individuals | |||||||
Allowances for Loan Losses [Roll Forward] | |||||||
Balance at beginning of period | 1,046,000 | 917,000 | 885,000 | [2] | 882,000 | ||
Provision (reversal) for loan losses | 279,000 | 333,000 | 926,000 | 806,000 | |||
Loans charged off | (641,000) | (593,000) | (1,997,000) | (1,835,000) | |||
Recoveries of loans charged off | 266,000 | 246,000 | 1,136,000 | 1,050,000 | |||
Balance at end of period | 950,000 | $ 903,000 | 950,000 | $ 903,000 | |||
Financial Asset Acquired with Credit Deterioration [Member] | |||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||
Loans and Leases Receivable, Allowance | [1] | $ 824,000 | $ 824,000 | $ 0 | |||
[1] | Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. The allowance for loan loss recorded on purchase credit impaired (“PCI”) loans totaled $824,000 as of September 30, 2018. There was no allowance for loan loss recorded on PCI loans as of December 31, 2017. | ||||||
[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 $975,000 and $6.0 million recorded in provision for loan losses for the three and nine months ended September 30, 2018, $466,000 and $824,000 related to provision expense on PCI loans, respectively. Of the $960,000 and $3.4 million recorded in provision for loan losses for the three and nine months ended September 30, 2017, $50,000 related to provision expense on PCI loans. |
Loans and Allowance for Proba_5
Loans and Allowance for Probable Loan Losses - Allowance Balance, by Impairment Method (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | ||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | ||||||||
Loans and Leases Receivable, Allowance | [1] | $ 26,092 | $ 20,781 | |||||
Ending balance - individually evaluated for impairment | [2] | 6,039 | 353 | |||||
Ending balance - collectively evaluated for impairment | 20,053 | 20,428 | ||||||
Balance at end of period | 26,092 | $ 25,072 | 20,781 | [3] | $ 19,871 | $ 19,241 | $ 17,911 | |
Construction Real Estate Loans | ||||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | ||||||||
Ending balance - individually evaluated for impairment | [2] | 18 | 12 | |||||
Ending balance - collectively evaluated for impairment | 3,106 | 3,664 | ||||||
Balance at end of period | 3,124 | 3,841 | 3,676 | [3] | 3,553 | 3,573 | 4,147 | |
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 | [2] | 37 | 14 | |||||
Ending balance - collectively evaluated for impairment | 3,601 | 2,431 | ||||||
Balance at end of period | 3,638 | 2,730 | 2,445 | [3] | 2,425 | 2,392 | 2,665 | |
Commercial Real Estate Loans | ||||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | ||||||||
Ending balance - individually evaluated for impairment | [2] | 5,563 | 14 | |||||
Ending balance - collectively evaluated for impairment | 8,768 | 10,807 | ||||||
Balance at end of period | 14,331 | 14,036 | 10,821 | [3] | 10,355 | 9,970 | 7,204 | |
Commercial Loans | ||||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | ||||||||
Ending balance - individually evaluated for impairment | [2] | 340 | 252 | |||||
Ending balance - collectively evaluated for impairment | 2,845 | 1,842 | ||||||
Balance at end of period | 3,185 | 2,560 | 2,094 | [3] | 1,829 | 1,624 | 2,263 | |
Municipal Loans | ||||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | ||||||||
Ending balance - individually evaluated for impairment | [2] | 9 | 10 | |||||
Ending balance - collectively evaluated for impairment | 855 | 850 | ||||||
Balance at end of period | 864 | 859 | 860 | [3] | 806 | 765 | 750 | |
Loans to Individuals | ||||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | ||||||||
Ending balance - individually evaluated for impairment | [2] | 72 | 51 | |||||
Ending balance - collectively evaluated for impairment | 878 | 834 | ||||||
Balance at end of period | 950 | $ 1,046 | 885 | [3] | $ 903 | $ 917 | $ 882 | |
Financial Asset Acquired with Credit Deterioration [Member] | ||||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | ||||||||
Loans and Leases Receivable, Allowance | [1] | $ 824 | $ 0 | |||||
[1] | Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. The allowance for loan loss recorded on purchase credit impaired (“PCI”) loans totaled $824,000 as of September 30, 2018. There was no allowance for loan loss recorded on PCI loans as of December 31, 2017. | |||||||
[2] | The allowance for loan loss on PCI loans totaled $824,000 as of September 30, 2018. There was no allowance for loan losses associated with PCI loans as of December 31, 2017. | |||||||
[3] | Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan loss. |
Loans and Allowance for Proba_6
Loans and Allowance for Probable Loan Losses - Allowance for Loan Losses, Loan Portfolio, by Impairment Method (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | ||
Loans individually evaluated for impairment | $ 33,428 | $ 4,698 |
Loans collectively evaluated for impairment | 3,205,425 | 3,244,425 |
Purchased credit impaired loans | 35,671 | 45,233 |
Total ending loan balance | 3,274,524 | 3,294,356 |
Construction Real Estate Loans | ||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | ||
Loans individually evaluated for impairment | 54 | 86 |
Loans collectively evaluated for impairment | 483,996 | 475,505 |
Purchased credit impaired loans | 204 | 276 |
Total ending loan balance | 484,254 | 475,867 |
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 | 1,245 | 1,581 |
Loans collectively evaluated for impairment | 778,830 | 797,111 |
Purchased credit impaired loans | 11,199 | 6,649 |
Total ending loan balance | 791,274 | 805,341 |
Commercial Real Estate Loans | ||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | ||
Loans individually evaluated for impairment | 29,938 | 895 |
Loans collectively evaluated for impairment | 1,167,687 | 1,232,327 |
Purchased credit impaired loans | 21,089 | 31,937 |
Total ending loan balance | 1,218,714 | 1,265,159 |
Commercial Loans | ||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | ||
Loans individually evaluated for impairment | 1,594 | 1,429 |
Loans collectively evaluated for impairment | 318,726 | 259,745 |
Purchased credit impaired loans | 2,553 | 5,248 |
Total ending loan balance | 322,873 | 266,422 |
Municipal Loans | ||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | ||
Loans individually evaluated for impairment | 429 | 502 |
Loans collectively evaluated for impairment | 344,363 | 345,296 |
Purchased credit impaired loans | 0 | 0 |
Total ending loan balance | 344,792 | 345,798 |
Loans to Individuals | ||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | ||
Loans individually evaluated for impairment | 168 | 205 |
Loans collectively evaluated for impairment | 111,823 | 134,441 |
Purchased credit impaired loans | 626 | 1,123 |
Total ending loan balance | $ 112,617 | $ 135,769 |
Loans and Allowance for Proba_7
Loans and Allowance for Probable Loan Losses - Loans by Credit Quality Indicator (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | $ 3,274,524 | $ 3,294,356 | |
Purchased credit impaired loans | 35,671 | 45,233 | |
Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 3,122,431 | 3,131,151 | |
Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 26,305 | 39,808 |
Purchased credit impaired loans | 25 | 362 | |
Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 41,422 | 31,223 |
Purchased credit impaired loans | 2,100 | 6,000 | |
Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 80,440 | 90,629 |
Purchased credit impaired loans | 6,100 | 10,500 | |
Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 3,926 | 1,545 |
Purchased credit impaired loans | 2,400 | 925 | |
Construction Real Estate Loans | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 484,254 | 475,867 | |
Purchased credit impaired loans | 204 | 276 | |
Construction Real Estate Loans | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 483,704 | 471,446 | |
Construction Real Estate Loans | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 382 | 3,329 |
Construction Real Estate Loans | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 5 | 77 |
Construction Real Estate Loans | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 122 | 982 |
Construction Real Estate Loans | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 41 | 33 |
1-4 Family Residential Real Estate Loans | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 791,274 | 805,341 | |
Purchased credit impaired loans | 11,199 | 6,649 | |
1-4 Family Residential Real Estate Loans | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 782,330 | 796,639 | |
1-4 Family Residential Real Estate Loans | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 458 | 559 |
1-4 Family Residential Real Estate Loans | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 553 | 857 |
1-4 Family Residential Real Estate Loans | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 6,635 | 6,610 |
1-4 Family Residential Real Estate Loans | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 1,298 | 676 |
Commercial Real Estate Loans | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 1,218,714 | 1,265,159 | |
Purchased credit impaired loans | 21,089 | 31,937 | |
Commercial Real Estate Loans | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 1,086,806 | 1,136,576 | |
Commercial Real Estate Loans | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 24,346 | 26,275 |
Commercial Real Estate Loans | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 35,944 | 25,301 |
Commercial Real Estate Loans | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 69,614 | 76,625 |
Commercial Real Estate Loans | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 2,004 | 382 |
Commercial Loans | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 322,873 | 266,422 | |
Purchased credit impaired loans | 2,553 | 5,248 | |
Commercial Loans | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 314,422 | 247,430 | |
Commercial Loans | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 1,104 | 9,625 |
Commercial Loans | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 4,043 | 3,956 |
Commercial Loans | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 3,030 | 5,203 |
Commercial Loans | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 274 | 208 |
Municipal Loans | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 344,792 | 345,798 | |
Purchased credit impaired loans | 0 | 0 | |
Municipal Loans | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 343,504 | 344,366 | |
Municipal Loans | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 0 | 0 |
Municipal Loans | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 859 | 930 |
Municipal Loans | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 429 | 502 |
Municipal Loans | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 0 | 0 |
Loans to Individuals | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 112,617 | 135,769 | |
Purchased credit impaired loans | 626 | 1,123 | |
Loans to Individuals | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 111,665 | 134,694 | |
Loans to Individuals | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 15 | 20 |
Loans to Individuals | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 18 | 102 |
Loans to Individuals | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 610 | 707 |
Loans to Individuals | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | $ 309 | $ 246 |
[1] | Includes PCI loans comprised of $25,000 pass watch, $2.1 million special mention, $6.1 million substandard and $2.4 doubtful as of September 30, 2018. 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. |
Loans and Allowance for Proba_8
Loans and Allowance for Probable Loan Losses - Nonperforming Assets by Asset Class (Details) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018USD ($)Customer_relationshipsLoan | Dec. 31, 2017USD ($) | ||
Nonperforming Assets by Asset Class [Abstract] | |||
Nonaccrual loans | [1] | $ 32,526 | $ 2,937 |
Accruing loans past due more than 90 days | [1] | 0 | 1 |
Restructured loans | [2] | 5,699 | 5,767 |
Other real estate owned | 1,413 | 1,613 | |
Repossessed assets | 0 | 154 | |
Total Nonperforming Assets | $ 39,638 | 10,472 | |
Number of commercial real estate relationships added to nonaccrual | Customer_relationships | 2 | ||
Number of commercial real estate loans added to nonaccrual | Loan | 3 | ||
PCI loans restructured | $ 3,200 | $ 2,900 | |
[1] | Excludes PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated. | ||
[2] | Includes $3.2 million and $2.9 million in PCI loans restructured as of September 30, 2018 and December 31, 2017, respectively. |
Loans and Allowance for Proba_9
Loans and Allowance for Probable Loan Losses - Nonaccrual by Class of Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Nonaccrual loans | [1] | $ 32,526 | $ 2,937 |
Construction Real Estate Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Nonaccrual loans | 55 | 86 | |
1-4 Family Residential Real Estate Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Nonaccrual loans | 1,399 | 1,098 | |
Commercial Real Estate Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Nonaccrual loans | 29,512 | 595 | |
Commercial Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Nonaccrual loans | 1,153 | 903 | |
Loans to Individuals | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Nonaccrual loans | $ 407 | $ 255 | |
[1] | Excludes PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated. |
Loans and Allowance for Prob_10
Loans and Allowance for Probable Loan Losses - Impaired Loans by Class of Loan (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | [1] | $ 41,902 | $ 7,989 |
Recorded Investment | [1] | 39,872 | 7,549 |
Related Allowance for Loan Losses | [1] | 6,039 | 353 |
PCI loans that experienced deterioration in credit quality subsequent to acquisition | 6,400 | 2,900 | |
Construction Real Estate Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 185 | 91 | |
Recorded Investment | 157 | 86 | |
Related Allowance for Loan Losses | 18 | 12 | |
1-4 Family Residential Real Estate Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 4,891 | 4,141 | |
Recorded Investment | 4,559 | 3,952 | |
Related Allowance for Loan Losses | 37 | 14 | |
Commercial Real Estate Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 33,560 | 1,353 | |
Recorded Investment | 32,267 | 1,199 | |
Related Allowance for Loan Losses | 5,563 | 14 | |
Commercial Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 2,605 | 1,665 | |
Recorded Investment | 2,269 | 1,605 | |
Related Allowance for Loan Losses | 340 | 252 | |
Municipal Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 429 | 502 | |
Recorded Investment | 429 | 502 | |
Related Allowance for Loan Losses | 9 | 10 | |
Loans to Individuals | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 232 | 237 | |
Recorded Investment | 191 | 205 | |
Related Allowance for Loan Losses | $ 72 | $ 51 | |
[1] | Includes $6.4 million and $2.9 million of PCI loans that experienced deterioration in credit quality subsequent to the acquisition date as of September 30, 2018 and December 31, 2017, respectively. |
Loans and Allowance for Prob_11
Loans and Allowance for Probable Loan Losses - Aging of Past Due Loans by Class of Loan (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | $ 13,047 | $ 19,039 | |
Current | [1] | 3,261,477 | 3,275,317 |
Total ending loan balance | 3,274,524 | 3,294,356 | |
30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 5,553 | 13,777 | |
60-89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 6,200 | 3,901 | |
Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 1,294 | 1,361 | |
Construction Real Estate Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 2,884 | 2,900 | |
Current | [1] | 481,370 | 472,967 |
Total ending loan balance | 484,254 | 475,867 | |
Construction Real Estate Loans | 30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 35 | 1,302 | |
Construction Real Estate Loans | 60-89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 2,808 | 1,530 | |
Construction Real Estate Loans | Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 41 | 68 | |
1-4 Family Residential Real Estate Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 5,142 | 10,944 | |
Current | [1] | 786,132 | 794,397 |
Total ending loan balance | 791,274 | 805,341 | |
1-4 Family Residential Real Estate Loans | 30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 2,296 | 8,508 | |
1-4 Family Residential Real Estate Loans | 60-89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 2,326 | 1,574 | |
1-4 Family Residential Real Estate Loans | Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 520 | 862 | |
Commercial Real Estate Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 490 | 1,386 | |
Current | [1] | 1,218,224 | 1,263,773 |
Total ending loan balance | 1,218,714 | 1,265,159 | |
Commercial Real Estate Loans | 30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 252 | 1,357 | |
Commercial Real Estate Loans | 60-89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 115 | 24 | |
Commercial Real Estate Loans | Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 123 | 5 | |
Commercial Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 3,099 | 1,395 | |
Current | [1] | 319,774 | 265,027 |
Total ending loan balance | 322,873 | 266,422 | |
Commercial Loans | 30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 1,957 | 662 | |
Commercial Loans | 60-89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 722 | 400 | |
Commercial Loans | Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 420 | 333 | |
Municipal Loans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 0 | 422 | |
Current | [1] | 344,792 | 345,376 |
Total ending loan balance | 344,792 | 345,798 | |
Municipal Loans | 30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 0 | 422 | |
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 | 1,432 | 1,992 | |
Current | [1] | 111,185 | 133,777 |
Total ending loan balance | 112,617 | 135,769 | |
Loans to Individuals | 30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 1,013 | 1,526 | |
Loans to Individuals | 60-89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | 229 | 373 | |
Loans to Individuals | Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total Past Due | $ 190 | $ 93 | |
[1] | cludes PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated. |
Loans and Allowance for Prob_12
Loans and Allowance for Probable Loan Losses - Interest Income on Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Financing Receivable, Impaired [Line Items] | ||||
Average recorded investment | $ 40,061 | $ 7,626 | $ 31,034 | $ 10,117 |
Interest income recognized | 96 | 64 | 252 | 306 |
Construction Real Estate Loans | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average recorded investment | 252 | 62 | 150 | 301 |
Interest income recognized | 3 | 0 | 4 | 0 |
1-4 Family Residential Real Estate Loans | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average recorded investment | 3,976 | 4,170 | 3,951 | 4,322 |
Interest income recognized | 49 | 26 | 138 | 134 |
Commercial Real Estate Loans | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average recorded investment | 32,580 | 1,459 | 24,149 | 1,368 |
Interest income recognized | 16 | 2 | 36 | 27 |
Commercial Loans | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average recorded investment | 2,543 | 1,148 | 2,073 | 3,320 |
Interest income recognized | 21 | 28 | 51 | 118 |
Municipal Loans | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average recorded investment | 466 | 537 | 488 | 558 |
Interest income recognized | 6 | 7 | 20 | 23 |
Loans to Individuals | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average recorded investment | 244 | 250 | 223 | 248 |
Interest income recognized | $ 1 | $ 1 | $ 3 | $ 4 |
Loans and Allowance for Prob_13
Loans and Allowance for Probable Loan Losses - Troubled Debt Restructurings (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($)contract | Sep. 30, 2017USD ($)contract | Sep. 30, 2018USD ($)contract | Sep. 30, 2017USD ($)contract | |
Financing Receivable, Modifications [Line Items] | ||||
Extend Amortization Period | $ 142 | $ 0 | $ 252 | $ 837 |
Interest Rate Reductions | 35 | 0 | 115 | 0 |
Combination | 339 | 8 | 431 | 56 |
Total Modifications | $ 516 | $ 8 | $ 798 | $ 893 |
Number of Loans | contract | 7 | 1 | 16 | 9 |
1-4 Family Residential Real Estate Loans | ||||
Financing Receivable, Modifications [Line Items] | ||||
Extend Amortization Period | $ 0 | |||
Interest Rate Reductions | 80 | |||
Combination | 0 | |||
Total Modifications | $ 80 | |||
Number of Loans | contract | 1 | |||
Commercial Real Estate Loans | ||||
Financing Receivable, Modifications [Line Items] | ||||
Extend Amortization Period | $ 0 | $ 0 | ||
Interest Rate Reductions | 0 | 0 | ||
Combination | 283 | 283 | ||
Total Modifications | $ 283 | $ 283 | ||
Number of Loans | contract | 2 | 2 | ||
Commercial Loans | ||||
Financing Receivable, Modifications [Line Items] | ||||
Extend Amortization Period | $ 142 | $ 244 | $ 810 | |
Interest Rate Reductions | 0 | 0 | 0 | |
Combination | 56 | 135 | 0 | |
Total Modifications | $ 198 | $ 379 | $ 810 | |
Number of Loans | contract | 4 | 9 | 3 | |
Loans to Individuals | ||||
Financing Receivable, Modifications [Line Items] | ||||
Extend Amortization Period | $ 0 | $ 0 | $ 8 | $ 27 |
Interest Rate Reductions | 35 | 0 | 35 | 0 |
Combination | 0 | 8 | 13 | 56 |
Total Modifications | $ 35 | $ 8 | $ 56 | $ 83 |
Number of Loans | contract | 1 | 1 | 4 | 6 |
Loans and Allowance for Prob_14
Loans and Allowance for Probable Loan Losses - Purchased Credit Impaired (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Purchased Credit Impaired [Abstract] | |||||
Outstanding principal balance | $ 41,094 | $ 41,094 | $ 52,426 | ||
Carrying amount | 35,671 | 35,671 | $ 45,233 | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | |||||
Balance at beginning of period | 16,105 | $ 3,758 | 18,721 | $ 2,480 | |
Changes in expected cash flows not affecting non-accretable differences | 0 | 0 | (1,445) | 0 | |
Reclassifications (to) from nonaccretable discount | 620 | (79) | 1,389 | 1,735 | |
Accretion | (733) | (156) | (2,673) | (692) | |
Balance at end of period | $ 15,992 | $ 3,523 | $ 15,992 | $ 3,523 |
Loans and Allowance for Prob_15
Loans and Allowance for Probable Loan Losses - Narrative (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||
Owner and nonowner-occupied real estate | $ 1,110,000,000 | ||
Loans secured by multi-family properties | 87,800,000 | ||
Loans secured by farmland | 19,400,000 | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Loans in process of foreclosure | 232,000 | $ 154,000 | |
Loans and leases receivable, impaired, commitment to lend | 0 | $ 0 | |
Impaired loans without an allowance | 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 |
Borrowing Arrangements (Details
Borrowing Arrangements (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | ||
Debt Instrument [Line Items] | |||
Federal funds purchased and repurchase agreements | $ 8,975 | $ 9,498 | |
FHLB borrowings | 561,267 | 1,017,361 | |
Subordinated notes, net of unamortized debt issuance costs: | 98,366 | 98,248 | |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 60,244 | 60,241 | |
Federal funds purchased and repurchase agreements: | |||
Debt Instrument [Line Items] | |||
Average amount outstanding during the period | [1],[2] | 9,018 | 8,120 |
Maximum amount outstanding during the period | [3] | $ 8,975 | $ 9,498 |
Weighted average interest rate during the period | [1],[4] | 1.10% | 0.20% |
Interest rate at end of the period | [5] | 0.80% | 0.20% |
FHLB borrowings: | |||
Debt Instrument [Line Items] | |||
Average amount outstanding during the period | [1],[2] | $ 757,399 | $ 1,222,033 |
Maximum amount outstanding during the period | [3] | $ 957,231 | $ 1,414,453 |
Weighted average interest rate during the period | [1],[4] | 1.70% | 1.20% |
Interest rate at end of the period | [5] | 2.10% | 1.40% |
Subordinated notes, net of unamortized debt issuance costs: | |||
Debt Instrument [Line Items] | |||
Average amount outstanding during the period | [1],[2] | $ 98,307 | $ 98,172 |
Maximum amount outstanding during the period | [3] | $ 98,366 | $ 98,248 |
Weighted average interest rate during the period | [1],[4] | 5.80% | 5.70% |
Interest rate at end of the 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 | [1],[2] | $ 60,242 | $ 60,238 |
Maximum amount outstanding during the period | [3] | $ 60,244 | $ 60,241 |
Weighted average interest rate during the period | [1],[4] | 4.20% | 3.30% |
Interest rate at end of the period | [5] | 4.40% | 3.60% |
[1] | Interim period averages are annualized. | ||
[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 (annualized for interim periods) by the average amount outstanding during the period. The weighted average interest rate on the FHLB borrowings includes the effect of interest rate swaps. | ||
[5] | Stated rate. |
Borrowings Maturities Table (De
Borrowings Maturities Table (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Debt Instrument [Line Items] | |
Less than 1 Year | $ 167,093 |
1-2 Years | 385,552 |
2-3 Years | 11,537 |
3-4 Years | 0 |
4-5 Years | 0 |
Thereafter | 164,670 |
Total | 728,852 |
Federal funds purchased and repurchase agreements: | |
Debt Instrument [Line Items] | |
Less than 1 Year | 8,588 |
1-2 Years | 387 |
2-3 Years | 0 |
3-4 Years | 0 |
4-5 Years | 0 |
Thereafter | 0 |
Total | 8,975 |
FHLB borrowings: | |
Debt Instrument [Line Items] | |
Less than 1 Year | 158,505 |
1-2 Years | 385,165 |
2-3 Years | 11,537 |
3-4 Years | 0 |
4-5 Years | 0 |
Thereafter | 6,060 |
Total | 561,267 |
Subordinated notes, net of unamortized debt issuance costs: | |
Debt Instrument [Line Items] | |
Less than 1 Year | 0 |
1-2 Years | 0 |
2-3 Years | 0 |
3-4 Years | 0 |
4-5 Years | 0 |
Thereafter | 98,366 |
Total | 98,366 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs: | |
Debt Instrument [Line Items] | |
Less than 1 Year | 0 |
1-2 Years | 0 |
2-3 Years | 0 |
3-4 Years | 0 |
4-5 Years | 0 |
Thereafter | 60,244 |
Total | $ 60,244 |
Borrowing Arrangements Narrativ
Borrowing Arrangements Narrative (Details) | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2017USD ($)contract | Sep. 30, 2018USD ($)credit_lineagreementOustanding_Letters_of_CreditRate | Dec. 31, 2017USD ($) | |
Line of Credit Facility [Line Items] | |||
FHLB borrowings with variable interest rate, face amount | $ 270,000,000 | ||
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, amount | $ 195,000 | ||
FHLB borrowings, additional funding available | 1,250,000,000 | ||
Letters of Credit, FHLB, as collateral | 0 | ||
Securities sold under agreements to repurchase | $ 9,000,000 | 9,500,000 | |
Maturity of repurchase agreements | 2 years | ||
Frost Bank | |||
Line of Credit Facility [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 40,000,000 | ||
Line of credit, 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] | |||
FHLB borrowings interest rates | 1.37% | ||
FHLB borrowings maturities | 1 day | ||
Maximum | |||
Line of Credit Facility [Line Items] | |||
FHLB borrowings interest rates | 4.799% | ||
FHLB borrowings maturities | 9 years 10 months | ||
Variable Rate Advance Agreements | |||
Line of Credit Facility [Line Items] | |||
FHLB borrowings with variable interest rate, face amount | $ 310,000,000 | $ 280,000,000 | |
Three-Month London Interbank Offered Rate (LIBOR) | Variable Rate Advance Agreements | |||
Line of Credit Facility [Line Items] | |||
FHLB borrowings, description of variable rate basis | three-month LIBOR | ||
Three-Month London Interbank Offered Rate (LIBOR) | Variable Rate Advance Agreements | Minimum | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Number Of Variable Rate Advance Agreements | agreement | 1 | ||
FHLB borrowings, basis spread on variable rate | Rate | (0.003%) | ||
Three-Month London Interbank Offered Rate (LIBOR) | Variable Rate Advance Agreements | Maximum | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Number Of Variable Rate Advance Agreements | agreement | 2 | ||
FHLB borrowings, basis spread on variable rate | Rate | 0.021% | ||
One-Month London Interbank Offered Rate (LIBOR) | Variable Rate Advance Agreements | |||
Line of Credit Facility [Line Items] | |||
FHLB borrowings, 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] | |||
FHLB borrowings, basis spread on variable rate | Rate | 0.072% | ||
One-Month London Interbank Offered Rate (LIBOR) | Variable Rate Advance Agreements | Maximum | |||
Line of Credit Facility [Line Items] | |||
FHLB borrowings, basis spread on variable rate | Rate | 0.164% | ||
Interest rate swap derivatives | |||
Line of Credit Facility [Line Items] | |||
Derivative, instruments terminated | contract | 2 | ||
Derivative, terminated, notional amount | $ 40,000,000 | ||
Interest rate swap derivatives | Minimum | |||
Line of Credit Facility [Line Items] | |||
Derivative, fixed interest rate | 0.932% | ||
Derivative, term of contract | 4 years | ||
Interest rate swap derivatives | Maximum | |||
Line of Credit Facility [Line Items] | |||
Derivative, fixed interest rate | 2.8325% | ||
Derivative, term of contract | 10 years |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Benefit Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 387 | $ 349 | $ 1,161 | $ 1,048 |
Interest cost | 848 | 901 | 2,544 | 2,701 |
Expected return on assets | (1,621) | (1,513) | (4,863) | (4,538) |
Net loss amortization | 378 | 328 | 1,134 | 984 |
Prior service (credit) cost amortization | (3) | (3) | (10) | (10) |
Net periodic benefit cost (income) | (11) | 62 | (34) | 185 |
Defined Benefit Pension Plan Acquired | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 41 | 44 | 123 | 133 |
Expected return on assets | (73) | (53) | (218) | (160) |
Net loss amortization | 0 | 0 | 0 | 0 |
Prior service (credit) cost amortization | 0 | 0 | 0 | 0 |
Net periodic benefit cost (income) | (32) | (9) | (95) | (27) |
Restoration Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 73 | 61 | 220 | 185 |
Interest cost | 149 | 142 | 447 | 425 |
Expected return on assets | 0 | 0 | 0 | 0 |
Net loss amortization | 169 | 75 | 508 | 226 |
Prior service (credit) cost amortization | 2 | 2 | 5 | 5 |
Net periodic benefit cost (income) | $ 393 | $ 280 | $ 1,180 | $ 841 |
Employee Benefit Plans Narrativ
Employee Benefit Plans Narrative (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Defined Benefit Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions by Employer | $ 2,000 |
Defined Benefit Pension Plan Acquired | |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions by Employer | $ 500 |
Share-based Incentive Plans - N
Share-based Incentive Plans - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Incentive Plan 2017 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock shares reserved and available for issuance (in shares) | 2,460,000 | 2,460,000 | ||
Shares remaining available for grant for future awards (in shares) | 1,687,830 | 1,687,830 | ||
Incentive Plan 2009 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of additional shares (in shares) | 410,000 | 410,000 | ||
Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 661 | $ 480 | $ 1,626 | $ 1,393 |
Incentive Plan | Nonqualified Stock Options (NQSO) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (shares) | 356,849 | 0 | ||
Weighted average exercise price (in dollars per share) | $ 34.52 | |||
Awards contractual term | 10 years | |||
Incentive Plan | Nonqualified Stock Options (NQSO) | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards vesting period | 3 years | |||
Incentive Plan | Nonqualified Stock Options (NQSO) | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards vesting period | 4 years | |||
Incentive Plan | Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (shares) | 52,148 | 3,707 | ||
Fair value of shares granted | $ 1,800 | $ 125 | ||
Share-based Compensation Award, Tranche One | Incentive Plan | Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards vesting period | 1 year | |||
Share-based Compensation Award, Tranche Two | Incentive Plan | Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards vesting period | 3 years | |||
Share-based Compensation Award, Tranche Three | Incentive Plan | Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards vesting period | 4 years |
Share-based Incentive Plans - S
Share-based Incentive Plans - Schedule of Shares Issued in Connection With Stock Compensation Awards (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
New shares issued (in shares) | 65,918 | 77,957 | 128,969 | 138,035 |
Proceeds from stock option exercises | $ 1,571 | $ 1,505 | $ 2,655 | $ 2,527 |
New shares issued from available authorized shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
New shares issued (in shares) | 0 | 0 | 0 | 48,311 |
New shares issued from available treasury shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
New shares issued (in shares) | 65,918 | 77,957 | 128,969 | 89,724 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities - Narrative (Details) | 3 Months Ended | ||
Mar. 31, 2017contract | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | |
Derivative [Line Items] | |||
Debt instrument, face amount | $ 270,000,000 | ||
Cash collateral received from counterparties under master netting agreements | 18,017,000 | $ 7,900,000 | |
Interest Rate Swap | |||
Derivative [Line Items] | |||
Derivative, instruments terminated | contract | 2 | ||
Available-for-sale Securities [Member] | Fixed rate callable securities | |||
Derivative [Line Items] | |||
Hedged asset, fair value hedge | $ 23,300,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Hedging Activities - Schedule Of Derivative Instruments (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | |
Asset Derivative | |||
Gross derivatives | $ 18,631,000 | $ 8,626,000 | |
Offsetting derivative assets | (307,000) | (114,000) | |
Cash collateral received/posted | (18,017,000) | (7,900,000) | |
Net derivatives included in the consolidated balance sheets | [1] | 307,000 | 612,000 |
Liability Derivative | |||
Gross derivatives | 3,564,000 | 726,000 | |
Offsetting derivative liabilities | (307,000) | (114,000) | |
Cash collateral received/posted | 0 | (520,000) | |
Net derivatives included in the consolidated balance sheets | [1] | 3,257,000 | 92,000 |
Financial Institution Counterparties | |||
Liability Derivative | |||
Net credit exposure | 0 | 30,000 | |
Financial Institution Counterparties | Designated as Hedging Instrument | Cash Flow Hedging | Interest Rate Swap | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [2] | 270,000,000 | 240,000,000 |
Asset Derivative | |||
Gross derivatives | 14,965,000 | 7,922,000 | |
Liability Derivative | |||
Gross derivatives | 0 | 22,000 | |
Financial Institution Counterparties | Designated as Hedging Instrument | Fair Value Hedging [Member] | Interest Rate Swap | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [2] | 21,100,000 | 0 |
Asset Derivative | |||
Gross derivatives | 102,000 | 0 | |
Liability Derivative | |||
Gross derivatives | 0 | 0 | |
Financial Institution Counterparties | Not Designated as Hedging Instrument | Interest Rate Swap | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [2] | 94,679,000 | 67,220,000 |
Asset Derivative | |||
Gross derivatives | 3,257,000 | 92,000 | |
Liability Derivative | |||
Gross derivatives | 307,000 | 612,000 | |
Customer Counterparties | |||
Liability Derivative | |||
Net credit exposure | 307,000 | 612,000 | |
Customer Counterparties | Not Designated as Hedging Instrument | Interest Rate Swap | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [2] | 94,679,000 | 67,220,000 |
Asset Derivative | |||
Gross derivatives | 307,000 | 612,000 | |
Liability Derivative | |||
Gross derivatives | $ 3,257,000 | $ 92,000 | |
[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 no credit exposure related to interest rate swaps with financial institutions and $307,000 related to interest rate swaps with customers at September 30, 2018. We had net credit exposure of $30,000 related to interest rate swaps with financial institutions and $612,000 related to interest rate swaps with customers at December 31, 2017. The credit risk associated with customer transactions is partially mitigated as these are generally secured by the non-cash collateral securing the underlying transaction being hedged. | ||
[2] | Notional amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the consolidated balance sheets. |
Derivative Financial Instrume_5
Derivative Financial Instruments and Hedging Activities - Weighted Average Remaining Maturity, Lives, and Rates of Interest Rate Swaps (Details) - Interest Rate Swap - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | ||
Financial Institution Counterparties | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional Amount | [1] | $ 94,679 | $ 67,220 |
Remaining Maturity (in years) | 12 years 1 month 21 days | 12 years 8 months 24 days | |
Weighted Average Receive Rate | 2.12% | 1.39% | |
Weighted Average Pay Rate | 2.58% | 2.37% | |
Financial Institution Counterparties | Cash Flow Hedging | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional Amount | [1] | $ 270,000 | $ 240,000 |
Remaining Maturity (in years) | 5 years 28 days | 5 years 3 months | |
Weighted Average Receive Rate | 2.18% | 1.44% | |
Weighted Average Pay Rate | 1.58% | 1.43% | |
Financial Institution Counterparties | Fair Value Hedging [Member] | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional Amount | [1] | $ 21,100 | $ 0 |
Remaining Maturity (in years) | 7 years 9 months 2 days | 0 years | |
Weighted Average Receive Rate | 2.34% | 0.00% | |
Weighted Average Pay Rate | 3.00% | 0.00% | |
Customer Counterparties | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional Amount | [1] | $ 94,679 | $ 67,220 |
Remaining Maturity (in years) | 12 years 1 month 21 days | 12 years 8 months 24 days | |
Weighted Average Receive Rate | 2.58% | 2.37% | |
Weighted Average Pay Rate | 2.12% | 1.39% | |
[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 - Recur
Fair Value Measurement - Recurring and Nonrecurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | $ 1,939,277 | ||
Securities available for sale, at estimated fair value | $ 1,538,755 | ||
Derivative assets | [1] | 307 | 612 |
Derivative liabilities | [1] | 3,257 | 92 |
U.S. Treasury | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 19,748 | ||
US Government Agency Debentures | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 108,869 | ||
State and Political Subdivisions | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 699,069 | ||
Securities available for sale, at estimated fair value | 392,664 | ||
Other Stocks and Bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 3,027 | ||
Securities available for sale, at estimated fair value | 5,055 | ||
Residential MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [2] | 687,598 | |
Securities available for sale, at estimated fair value | [2] | 718,029 | |
Commercial MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [2] | 529,835 | |
Securities available for sale, at estimated fair value | [2] | 308,218 | |
Equity Investments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [3] | 5,920 | |
Fair Value, Measurements, Recurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity investments | [4] | 5,735 | |
Total asset fair value measurements | 1,963,643 | 1,547,381 | |
Total liability fair value measurements | 3,564 | 726 | |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 19,748 | ||
Fair Value, Measurements, Recurring [Member] | US Government Agency Debentures | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 108,869 | ||
Fair Value, Measurements, Recurring [Member] | State and Political Subdivisions | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 699,069 | ||
Securities available for sale, at estimated fair value | 392,664 | ||
Fair Value, Measurements, Recurring [Member] | Other Stocks and Bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 3,027 | ||
Securities available for sale, at estimated fair value | 5,055 | ||
Fair Value, Measurements, Recurring [Member] | Residential MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [5] | 687,598 | |
Securities available for sale, at estimated fair value | [5] | 718,029 | |
Fair Value, Measurements, Recurring [Member] | Commercial MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [5] | 529,835 | |
Securities available for sale, at estimated fair value | [5] | 308,218 | |
Fair Value, Measurements, Recurring [Member] | Equity Investments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [4] | 5,920 | |
Fair Value, Measurements, Recurring [Member] | Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 18,631 | 8,626 | |
Derivative liabilities | 3,564 | 726 | |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity investments | [4] | 5,735 | |
Total asset fair value measurements | 25,483 | 5,920 | |
Total liability fair value measurements | 0 | 0 | |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 19,748 | ||
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | US Government Agency Debentures | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 0 | ||
Fair Value, Measurements, Recurring [Member] | 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] | |||
Securities available for sale, at estimated fair value | 0 | ||
Securities available for sale, at estimated fair value | 0 | ||
Fair Value, Measurements, Recurring [Member] | 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] | |||
Securities available for sale, at estimated fair value | 0 | ||
Securities available for sale, at estimated fair value | 0 | ||
Fair Value, Measurements, Recurring [Member] | 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] | |||
Securities available for sale, at estimated fair value | [5] | 0 | |
Securities available for sale, at estimated fair value | [5] | 0 | |
Fair Value, Measurements, Recurring [Member] | 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] | |||
Securities available for sale, at estimated fair value | [5] | 0 | |
Securities available for sale, at estimated fair value | [5] | 0 | |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity Investments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [4] | 5,920 | |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 0 | 0 | |
Derivative liabilities | 0 | 0 | |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity investments | [4] | 0 | |
Total asset fair value measurements | 1,938,160 | 1,541,461 | |
Total liability fair value measurements | 3,564 | 726 | |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | U.S. Treasury | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 0 | ||
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | US Government Agency Debentures | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 108,869 | ||
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | State and Political Subdivisions | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 699,069 | ||
Securities available for sale, at estimated fair value | 392,664 | ||
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Other Stocks and Bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 3,027 | ||
Securities available for sale, at estimated fair value | 5,055 | ||
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Residential MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [5] | 687,598 | |
Securities available for sale, at estimated fair value | [5] | 718,029 | |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Commercial MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [5] | 529,835 | |
Securities available for sale, at estimated fair value | [5] | 308,218 | |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Equity Investments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [4] | 0 | |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 18,631 | 8,626 | |
Derivative liabilities | 3,564 | 726 | |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity investments | [4] | 0 | |
Total asset fair value measurements | 0 | 0 | |
Total liability fair value measurements | 0 | 0 | |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | U.S. Treasury | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 0 | ||
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | US Government Agency Debentures | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 0 | ||
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | State and Political Subdivisions | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 0 | ||
Securities available for sale, at estimated fair value | 0 | ||
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Other Stocks and Bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 0 | ||
Securities available for sale, at estimated fair value | 0 | ||
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Residential MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [5] | 0 | |
Securities available for sale, at estimated fair value | [5] | 0 | |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Commercial MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [5] | 0 | |
Securities available for sale, at estimated fair value | [5] | 0 | |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Equity Investments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [4] | 0 | |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 0 | 0 | |
Derivative liabilities | 0 | 0 | |
Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreclosed assets | 1,413 | 1,767 | |
Impaired loans | [6] | 33,280 | 6,536 |
Total asset fair value measurements | 34,693 | 8,303 | |
Fair Value, Measurements, Nonrecurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreclosed assets | 0 | 0 | |
Impaired loans | [6] | 0 | 0 |
Total asset fair value measurements | 0 | 0 | |
Fair Value, Measurements, Nonrecurring [Member] | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreclosed assets | 0 | 0 | |
Impaired loans | [6] | 0 | 0 |
Total asset fair value measurements | 0 | 0 | |
Fair Value, Measurements, Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreclosed assets | 1,413 | 1,767 | |
Impaired loans | [6] | 33,280 | 6,536 |
Total asset fair value measurements | $ 34,693 | $ 8,303 | |
[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 no credit exposure related to interest rate swaps with financial institutions and $307,000 related to interest rate swaps with customers at September 30, 2018. We had net credit exposure of $30,000 related to interest rate swaps with financial institutions and $612,000 related to interest rate swaps with customers at December 31, 2017. The credit risk associated with customer transactions is partially mitigated as these are generally secured by the non-cash collateral securing the underlying transaction being hedged. | ||
[2] | All mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. | ||
[3] | See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. | ||
[4] | With the adoption of ASU 2016-01 on January 1, 2018, these investments are included in equity investments on our consolidated balance sheets. The guidance was applied on a prospective approach resulting in prior-periods no longer being comparable. See “Note 1 – Summary of Significant Accounting and Reporting Policies” for further information. | ||
[5] | All mortgage-backed securities are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. | ||
[6] | Impaired loans represent collateral-dependent loans with a specific valuation allowance. Losses on these loans represent charge-offs which are netted against the allowance for loan losses. |
Fair Value Measurement - Balan
Fair Value Measurement - Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Carrying Amount | ||
Financial Assets: | ||
Cash and cash equivalents | $ 174,072 | $ 198,692 |
Investment Securities: | ||
Held to maturity, at carrying value | 3,087 | 413,632 |
Mortgage-backed Securities: | ||
Held to maturity, at carrying value | 160,278 | 495,874 |
FHLB stock, at cost | 32,291 | 55,729 |
Equity investments | 6,294 | 5,821 |
Loans, net of allowance for loan losses | 3,248,432 | 3,273,575 |
Loans held for sale | 954 | 2,001 |
Financial Liabilities: | ||
Deposits | 4,553,512 | 4,515,447 |
Federal funds purchased and repurchase agreements | 8,975 | 9,498 |
FHLB borrowings | 561,267 | 1,017,361 |
Subordinated notes, net of unamortized debt issuance costs | 98,366 | 98,248 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 60,244 | 60,241 |
Estimated Fair Value | ||
Financial Assets: | ||
Cash and cash equivalents | 174,072 | 198,692 |
Investment Securities: | ||
Held to maturity, at carrying value | 3,030 | 421,928 |
Mortgage-backed Securities: | ||
Held to maturity, at carrying value | 153,442 | 499,872 |
FHLB stock, at cost | 32,291 | 55,729 |
Equity investments | 6,294 | 5,821 |
Loans, net of allowance for loan losses | 3,179,049 | 3,269,316 |
Loans held for sale | 954 | 2,001 |
Financial Liabilities: | ||
Deposits | 4,543,794 | 4,506,133 |
Federal funds purchased and repurchase agreements | 8,975 | 9,498 |
FHLB borrowings | 542,846 | 1,008,292 |
Subordinated notes, net of unamortized debt issuance costs | 97,979 | 99,665 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 51,014 | 47,622 |
Estimated Fair Value | Level 1 | ||
Financial Assets: | ||
Cash and cash equivalents | 174,072 | 198,692 |
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 | 0 | 0 |
Equity 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 | 3,030 | 421,928 |
Mortgage-backed Securities: | ||
Held to maturity, at carrying value | 153,442 | 499,872 |
FHLB stock, at cost | 32,291 | 55,729 |
Equity investments | 6,294 | 5,821 |
Loans, net of allowance for loan losses | 0 | 0 |
Loans held for sale | 954 | 2,001 |
Financial Liabilities: | ||
Deposits | 4,543,794 | 4,506,133 |
Federal funds purchased and repurchase agreements | 8,975 | 9,498 |
FHLB borrowings | 542,846 | 1,008,292 |
Subordinated notes, net of unamortized debt issuance costs | 97,979 | 99,665 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 51,014 | 47,622 |
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 | 0 | 0 |
Equity investments | 0 | 0 |
Loans, net of allowance for loan losses | 3,179,049 | 3,269,316 |
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 |
Income Taxes - Provision for I
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Current income tax expense | $ 95 | $ 3,454 | $ 3,107 | $ 9,798 |
Deferred income tax expense | 2,097 | 436 | 4,535 | 453 |
Income tax expense | $ 2,192 | $ 3,890 | $ 7,642 | $ 10,251 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Change in Tax Rate, Provisional Income Tax Benefit, Adjustment | $ 800,000 | $ 800,000 | |||
Deferred Tax Assets, Tax Credit Carryforwards, Alternative Minimum Tax | 2,200,000 | 2,200,000 | |||
Net deferred tax assets | 16,400,000 | 16,400,000 | $ 12,200,000 | ||
Deferred tax assets, valuation allowance | 0 | 0 | $ 0 | ||
Income tax expense | $ 2,192,000 | $ 3,890,000 | $ 7,642,000 | $ 10,251,000 | |
Effective income tax rate, percent | 9.70% | 21.10% | 11.90% | 18.90% | |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 3.60% | 1.20% |
Off-Balance-Sheet Arrangement_3
Off-Balance-Sheet Arrangements, Commitments and Contingencies (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments with off-balance-sheet risk, at fair value | $ 847,453 | $ 819,605 |
Commitments to extend credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments with off-balance-sheet risk, at fair value | 819,256 | 804,715 |
Standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments with off-balance-sheet risk, at fair value | $ 28,197 | $ 14,890 |
Off-Balance-Sheet Arrangement_4
Off-Balance-Sheet Arrangements, Commitments and Contingencies Narrative (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Securities: | |||
Unsettled trades to purchase securities | $ 28,662,000 | $ 0 | $ 16,673,000 |
Unsettled trades to sell securities | 14,602,000 | 0 | 11,843,000 |
Deposits: | |||
Unsettled Issuances of Brokered CDs | $ 10,000,000 | $ 0 | $ 0 |