UNITED COMMUNITY BANKS, INC. | ||
(Exact name of registrant as specified in its charter) |
Georgia | 58-1807304 | |
(State of Incorporation) | (I.R.S. Employer Identification No.) |
125 Highway 515 East | ||
Blairsville, Georgia | 30512 | |
Address of Principal Executive Offices | (Zip Code) |
(706) 781-2265 | ||
(Telephone Number) |
Large accelerated filer x | Accelerated filer o |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller Reporting Company o |
INDEX | ||||
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7 | ||||
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42 | ||||
66 | ||||
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68 |
2 |
UNITED COMMUNITY BANKS, INC. | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(in thousands, except per share data) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Interest revenue: | ||||||||||||||||
Loans, including fees | $ | 49,653 | $ | 50,162 | $ | 145,602 | $ | 151,827 | ||||||||
Investment securities, including tax exempt of $177, $202, $558 and $624 | 12,346 | 9,887 | 36,118 | 29,905 | ||||||||||||
Deposits in banks and short-term investments | 934 | 1,007 | 2,757 | 2,793 | ||||||||||||
Total interest revenue | 62,933 | 61,056 | 184,477 | 184,525 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits: | ||||||||||||||||
NOW | 365 | 413 | 1,216 | 1,286 | ||||||||||||
Money market | 872 | 545 | 2,192 | 1,641 | ||||||||||||
Savings | 20 | 37 | 61 | 109 | ||||||||||||
Time | 1,721 | 2,630 | 5,510 | 8,871 | ||||||||||||
Total deposit interest expense | 2,978 | 3,625 | 8,979 | 11,907 | ||||||||||||
Short-term borrowings | 316 | 525 | 2,064 | 1,563 | ||||||||||||
Federal Home Loan Bank advances | 435 | 16 | 573 | 65 | ||||||||||||
Long-term debt | 2,642 | 3,003 | 7,914 | 8,331 | ||||||||||||
Total interest expense | 6,371 | 7,169 | 19,530 | 21,866 | ||||||||||||
Net interest revenue | 56,562 | 53,887 | 164,947 | 162,659 | ||||||||||||
Provision for credit losses | 2,000 | 3,000 | 6,700 | 62,500 | ||||||||||||
Net interest revenue after provision for credit losses | 54,562 | 50,887 | 158,247 | 100,159 | ||||||||||||
Fee revenue: | ||||||||||||||||
Service charges and fees | 8,202 | 8,456 | 24,627 | 23,831 | ||||||||||||
Mortgage loan and other related fees | 2,178 | 2,554 | 5,409 | 8,212 | ||||||||||||
Brokerage fees | 1,209 | 1,274 | 3,631 | 3,104 | ||||||||||||
Securities gains, net | 11 | — | 4,663 | 116 | ||||||||||||
Loss from prepayment of debt | — | — | (4,446 | ) | — | |||||||||||
Other | 2,812 | 1,941 | 6,847 | 7,816 | ||||||||||||
Total fee revenue | 14,412 | 14,225 | 40,731 | 43,079 | ||||||||||||
Total revenue | 68,974 | 65,112 | 198,978 | 143,238 | ||||||||||||
Operating expenses: | ||||||||||||||||
Salaries and employee benefits | 25,666 | 23,090 | 74,349 | 71,416 | ||||||||||||
Communications and equipment | 3,094 | 3,305 | 9,370 | 9,819 | ||||||||||||
Occupancy | 3,425 | 3,379 | 10,065 | 10,195 | ||||||||||||
Advertising and public relations | 894 | 962 | 2,659 | 2,937 | ||||||||||||
Postage, printing and supplies | 876 | 644 | 2,456 | 2,401 | ||||||||||||
Professional fees | 2,274 | 2,650 | 5,873 | 7,515 | ||||||||||||
Foreclosed property | 285 | 194 | 503 | 7,678 | ||||||||||||
FDIC assessments and other regulatory charges | 1,131 | 2,405 | 3,909 | 7,415 | ||||||||||||
Amortization of intangibles | 313 | 427 | 1,061 | 1,623 | ||||||||||||
Other | 3,406 | 3,041 | 10,701 | 11,691 | ||||||||||||
Total operating expenses | 41,364 | 40,097 | 120,946 | 132,690 | ||||||||||||
Net income before income taxes | 27,610 | 25,015 | 78,032 | 10,548 | ||||||||||||
Income tax expense (benefit) | 9,994 | 9,515 | 28,659 | (246,681 | ) | |||||||||||
Net income | 17,616 | 15,500 | 49,373 | 257,229 | ||||||||||||
Preferred stock dividends and discount accretion | — | 3,059 | 439 | 9,166 | ||||||||||||
Net income available to common shareholders | $ | 17,616 | $ | 12,441 | $ | 48,934 | $ | 248,063 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | .29 | $ | .21 | $ | .81 | $ | 4.24 | ||||||||
Diluted | .29 | .21 | .81 | 4.24 | ||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 60,776 | 59,100 | 60,511 | 58,443 | ||||||||||||
Diluted | 60,779 | 59,202 | 60,513 | 58,444 |
3 |
UNITED COMMUNITY BANKS, INC. | ||||||||||||||||||||||||
(in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2014 | Before-tax Amount | Tax (Expense) Benefit | Net of Tax Amount | Before-tax Amount | Tax (Expense) Benefit | Net of Tax Amount | ||||||||||||||||||
Net income | $ | 27,610 | $ | (9,994 | ) | $ | 17,616 | $ | 78,032 | $ | (28,659 | ) | $ | 49,373 | ||||||||||
Other comprehensive income: | ||||||||||||||||||||||||
Unrealized gains (losses) on available-for-sale securities: | ||||||||||||||||||||||||
Unrealized holding gains (losses) arising during period | (4,357 | ) | 1,626 | (2,731 | ) | 10,696 | (4,031 | ) | 6,665 | |||||||||||||||
Reclassification adjustment for gains included in net income | (11 | ) | 4 | (7 | ) | (4,663 | ) | 1,821 | (2,842 | ) | ||||||||||||||
Net unrealized gains (losses) | (4,368 | ) | 1,630 | (2,738 | ) | 6,033 | (2,210 | ) | 3,823 | |||||||||||||||
Amortization of gains included in net income on available-for-sale securities transferred to held-to-maturity | 468 | (176 | ) | 292 | 1,207 | (453 | ) | 754 | ||||||||||||||||
Net unrealized gains | 468 | (176 | ) | 292 | 1,207 | (453 | ) | 754 | ||||||||||||||||
Amounts reclassified into net income on cash flow hedges | 711 | (277 | ) | 434 | 1,381 | (538 | ) | 843 | ||||||||||||||||
Unrealized gains (losses) on derivative financial instruments accounted for as cash flow hedges | 412 | (160 | ) | 252 | (5,967 | ) | 2,322 | (3,645 | ) | |||||||||||||||
Net unrealized gains (losses) | 1,123 | (437 | ) | 686 | (4,586 | ) | 1,784 | (2,802 | ) | |||||||||||||||
Net actuarial gain on defined benefit pension plan | — | — | — | 296 | (115 | ) | 181 | |||||||||||||||||
Amortization of prior service cost and actuarial losses included in net periodic pension cost for defined benefit pension plan | 91 | (36 | ) | 55 | 274 | (107 | ) | 167 | ||||||||||||||||
Net defined benefit pension plan activity | 91 | (36 | ) | 55 | 570 | (222 | ) | 348 | ||||||||||||||||
Total other comprehensive income (loss) | (2,686 | ) | 981 | (1,705 | ) | 3,224 | (1,101 | ) | 2,123 | |||||||||||||||
Comprehensive income | $ | 24,924 | $ | (9,013 | ) | $ | 15,911 | $ | 81,256 | $ | (29,760 | ) | $ | 51,496 | ||||||||||
2013 | ||||||||||||||||||||||||
Net income | $ | 25,015 | $ | (9,515 | ) | $ | 15,500 | $ | 10,548 | $ | 246,681 | $ | 257,229 | |||||||||||
Other comprehensive loss: | ||||||||||||||||||||||||
Unrealized losses on available-for-sale securities: | ||||||||||||||||||||||||
Unrealized holding losses arising during period | (13,215 | ) | 4,971 | (8,244 | ) | (26,932 | ) | 10,148 | (16,784 | ) | ||||||||||||||
Reclassification adjustment for gains included in net income | — | — | — | (116 | ) | 45 | (71 | ) | ||||||||||||||||
Adjustment of valuation allowance for the change in deferred taxes arising from unrealized gains and losses on available- for-sale securities and release of valuation allowance | — | — | — | — | (2,950 | ) | (2,950 | ) | ||||||||||||||||
Net unrealized losses | (13,215 | ) | 4,971 | (8,244 | ) | (27,048 | ) | 7,243 | (19,805 | ) | ||||||||||||||
Amortization of gains included in net income on available-for-sale securities transferred to held-to-maturity | (214 | ) | 82 | (132 | ) | (804 | ) | 309 | (495 | ) | ||||||||||||||
Adjustment of valuation allowance for the change in deferred taxes arising from the amortization of gains included in net income on available-for-sale securities transferred to held-to-maturity and release of valuation allowance | — | — | — | — | 1,293 | 1,293 | ||||||||||||||||||
Net unrealized losses | (214 | ) | 82 | (132 | ) | (804 | ) | 1,602 | 798 | |||||||||||||||
Amounts reclassified into net income on cash flow hedges | (58 | ) | 23 | (35 | ) | (902 | ) | 351 | (551 | ) | ||||||||||||||
Unrealized gains on derivative financial instruments accounted for as cash flow hedges | (3,369 | ) | 1,321 | (2,048 | ) | 8,733 | (3,386 | ) | 5,347 | |||||||||||||||
Adjustment of valuation allowance for the change in deferred taxes arising from unrealized gains and losses and amortization of gains included in net income on cash flow hedges and release of valuation allowance | — | — | — | — | 13,698 | 13,698 | ||||||||||||||||||
Net unrealized (losses) gains | (3,427 | ) | 1,344 | (2,083 | ) | 7,831 | 10,663 | 18,494 | ||||||||||||||||
Net actuarial loss on defined benefit pension plan | — | — | — | (415 | ) | 161 | (254 | ) | ||||||||||||||||
Amortization of prior service cost and actuarial losses included in net periodic pension cost for defined benefit pension plan | 133 | (52 | ) | 81 | 398 | (155 | ) | 243 | ||||||||||||||||
Net defined benefit pension plan activity | 133 | (52 | ) | 81 | (17 | ) | 6 | (11 | ) | |||||||||||||||
Total other comprehensive loss | (16,723 | ) | 6,345 | (10,378 | ) | (20,038 | ) | 19,514 | (524 | ) | ||||||||||||||
Comprehensive income | $ | 8,292 | $ | (3,170 | ) | $ | 5,122 | $ | (9,490 | ) | $ | 266,195 | $ | 256,705 |
4 |
UNITED COMMUNITY BANKS, INC. | ||||||||||||
September 30, | December 31, | September 30, | ||||||||||
(in thousands, except share and per share data) | 2014 | 2013 | 2013 | |||||||||
ASSETS | ||||||||||||
Cash and due from banks | $ | 75,268 | $ | 71,230 | $ | 70,986 | ||||||
Interest-bearing deposits in banks | 117,399 | 119,669 | 131,147 | |||||||||
Short-term investments | 23,397 | 37,999 | 62,000 | |||||||||
Cash and cash equivalents | 216,064 | 228,898 | 264,133 | |||||||||
Securities available for sale | 1,789,667 | 1,832,217 | 1,963,424 | |||||||||
Securities held to maturity (fair value $440,311, $485,585 and $214,651) | 432,418 | 479,742 | 205,613 | |||||||||
Mortgage loans held for sale | 20,004 | 10,319 | 11,987 | |||||||||
Loans, net of unearned income | 4,568,886 | 4,329,266 | 4,267,067 | |||||||||
Less allowance for loan losses | (71,928 | ) | (76,762 | ) | (80,372 | ) | ||||||
Loans, net | 4,496,958 | 4,252,504 | 4,186,695 | |||||||||
Assets covered by loss sharing agreements with the FDIC | 3,253 | 22,882 | 31,207 | |||||||||
Premises and equipment, net | 160,454 | 163,589 | 165,993 | |||||||||
Bank owned life insurance | 81,101 | 80,670 | 80,537 | |||||||||
Accrued interest receivable | 19,908 | 19,598 | 18,199 | |||||||||
Goodwill and core deposit intangibles | 3,910 | 3,480 | 3,888 | |||||||||
Foreclosed property | 3,146 | 4,221 | 4,467 | |||||||||
Net deferred tax asset | 224,734 | 258,518 | 269,784 | |||||||||
Derivative financial instruments | 22,221 | 23,833 | 8,092 | |||||||||
Other assets | 52,051 | 44,948 | 29,274 | |||||||||
Total assets | $ | 7,525,889 | $ | 7,425,419 | $ | 7,243,293 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
Liabilities: | ||||||||||||
Deposits: | ||||||||||||
Demand | $ | 1,561,020 | $ | 1,388,512 | $ | 1,418,782 | ||||||
NOW | 1,399,449 | 1,427,939 | 1,279,134 | |||||||||
Money market | 1,281,526 | 1,227,575 | 1,197,495 | |||||||||
Savings | 287,797 | 251,125 | 249,044 | |||||||||
Time: | ||||||||||||
Less than $100,000 | 774,201 | 892,961 | 925,089 | |||||||||
Greater than $100,000 | 531,428 | 588,689 | 624,019 | |||||||||
Brokered | 405,308 | 424,704 | 419,344 | |||||||||
Total deposits | 6,240,729 | 6,201,505 | 6,112,907 | |||||||||
Short-term borrowings | 6,001 | 53,241 | 53,769 | |||||||||
Federal Home Loan Bank advances | 330,125 | 120,125 | 125 | |||||||||
Long-term debt | 129,865 | 129,865 | 129,865 | |||||||||
Derivative financial instruments | 36,171 | 46,232 | 37,269 | |||||||||
Unsettled securities purchases | — | 29,562 | 11,610 | |||||||||
Accrued expenses and other liabilities | 46,573 | 49,174 | 45,531 | |||||||||
Total liabilities | 6,789,464 | 6,629,704 | 6,391,076 | |||||||||
Shareholders’ equity: | ||||||||||||
Preferred stock, $1 par value; 10,000,000 shares authorized; | ||||||||||||
Series A; $10 stated value; 0, 0 and 21,700 shares issued and outstanding | — | — | 217 | |||||||||
Series B; $1,000 stated value; 0, 105,000 and 180,000 shares issued and outstanding | — | 105,000 | 179,714 | |||||||||
Series D; $1,000 stated value; 0, 16,613 and 16,613 shares issued and outstanding | — | 16,613 | 16,613 | |||||||||
Common stock, $1 par value; 100,000,000 shares authorized; 50,167,191, 46,243,345 and 45,222,839 shares issued and outstanding | 50,167 | 46,243 | 45,223 | |||||||||
Common stock, non-voting, $1 par value; 26,000,000 shares authorized; 10,080,787, 13,188,206 and 14,189,006 shares issued and outstanding | 10,081 | 13,188 | 14,189 | |||||||||
Common stock issuable; 354,961, 241,832 and 242,262 shares | 5,116 | 3,930 | 3,979 | |||||||||
Capital surplus | 1,091,555 | 1,078,676 | 1,077,536 | |||||||||
Accumulated deficit | (402,773 | ) | (448,091 | ) | (461,090 | ) | ||||||
Accumulated other comprehensive loss | (17,721 | ) | (19,844 | ) | (24,164 | ) | ||||||
Total shareholders’ equity | 736,425 | 795,715 | 852,217 | |||||||||
Total liabilities and shareholders’ equity | $ | 7,525,889 | $ | 7,425,419 | $ | 7,243,293 |
5 |
Consolidated Statement of Changes in Shareholders’ Equity (Unaudited)
Accumulated | ||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Non-Voting | Common | Other | |||||||||||||||||||||||||||||||||||||
(in thousands, except share | Series | Series | Series | Common | Common | Stock | Capital | Accumulated | Comprehensive | |||||||||||||||||||||||||||||||
and per share data) | A | B | D | Stock | Stock | Issuable | Surplus | Deficit | Income (Loss) | Total | ||||||||||||||||||||||||||||||
Balance, December 31, 2012 | $ | 217 | $ | 178,557 | $ | 16,613 | $ | 42,424 | $ | 15,317 | $ | 3,119 | $ | 1,057,951 | $ | (709,153 | ) | $ | (23,640 | ) | $ | 581,405 | ||||||||||||||||||
Net income | 257,229 | 257,229 | ||||||||||||||||||||||||||||||||||||||
Other comprehensive income | (524 | ) | (524 | ) | ||||||||||||||||||||||||||||||||||||
Common stock issued to dividend reinvestment plan and employee benefit plans (49,830 shares) | 50 | 532 | 582 | |||||||||||||||||||||||||||||||||||||
Conversion of non-voting common stock to voting (1,127,788 shares) | 1,128 | (1,128 | ) | — | ||||||||||||||||||||||||||||||||||||
Warrant exercise (1,551,126 shares) | 1,551 | 17,838 | 19,389 | |||||||||||||||||||||||||||||||||||||
Amortization of stock options and restricted stock awards | 2,168 | 2,168 | ||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock (51,995 shares issued, 115,664 shares deferred) | 52 | 1,693 | (1,900 | ) | (155 | ) | ||||||||||||||||||||||||||||||||||
Deferred compensation plan, net, including dividend equivalents | 132 | 132 | ||||||||||||||||||||||||||||||||||||||
Shares issued from deferred compensation plan (18,230 shares) | 18 | (965 | ) | 947 | — | |||||||||||||||||||||||||||||||||||
Preferred stock dividends: | ||||||||||||||||||||||||||||||||||||||||
Series A | (9 | ) | (9 | ) | ||||||||||||||||||||||||||||||||||||
Series B | 1,157 | (7,907 | ) | (6,750 | ) | |||||||||||||||||||||||||||||||||||
Series D | (1,250 | ) | (1,250 | ) | ||||||||||||||||||||||||||||||||||||
Balance, September 30, 2013 | $ | 217 | $ | 179,714 | $ | 16,613 | $ | 45,223 | $ | 14,189 | $ | 3,979 | $ | 1,077,536 | $ | (461,090 | ) | $ | (24,164 | ) | $ | 852,217 | ||||||||||||||||||
Balance, December 31, 2013 | $ | — | $ | 105,000 | $ | 16,613 | $ | 46,243 | $ | 13,188 | $ | 3,930 | $ | 1,078,676 | $ | (448,091 | ) | $ | (19,844 | ) | $ | 795,715 | ||||||||||||||||||
Net income | 49,373 | 49,373 | ||||||||||||||||||||||||||||||||||||||
Other comprehensive income | 2,123 | 2,123 | ||||||||||||||||||||||||||||||||||||||
Redemption of Series B preferred stock (105,000 shares) | (105,000 | ) | (105,000 | ) | ||||||||||||||||||||||||||||||||||||
Redemption of Series D preferred stock (16,613 shares) | (16,613 | ) | (16,613 | ) | ||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock ($.06 per share) | (3,616 | ) | (3,616 | ) | ||||||||||||||||||||||||||||||||||||
Common stock issued at market (640,000 shares) | 640 | 11,566 | 12,206 | |||||||||||||||||||||||||||||||||||||
Common stock issued to dividend reinvestment plan and to employee benefit plans (25,284 shares) | 25 | 399 | 424 | |||||||||||||||||||||||||||||||||||||
Conversion of non-voting common stock to voting (3,107,419 shares) | 3,107 | (3,107 | ) | — | ||||||||||||||||||||||||||||||||||||
Amortization of stock options and restricted stock awards | 3,315 | 3,315 | ||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock, net of shares surrendered to cover payroll taxes (137,920 shares issued, 115,609 shares deferred) | 138 | 1,275 | (2,658 | ) | (1,245 | ) | ||||||||||||||||||||||||||||||||||
Deferred compensation plan, net, including dividend equivalents | 182 | 182 | ||||||||||||||||||||||||||||||||||||||
Shares issued from deferred compensation plan (13,223 shares) | 14 | (271 | ) | 257 | — | |||||||||||||||||||||||||||||||||||
Preferred stock dividends: | ||||||||||||||||||||||||||||||||||||||||
Series B | (159 | ) | (159 | ) | ||||||||||||||||||||||||||||||||||||
Series D | (280 | ) | (280 | ) | ||||||||||||||||||||||||||||||||||||
Balance, September 30, 2014 | $ | — | $ | — | $ | — | $ | 50,167 | $ | 10,081 | $ | 5,116 | $ | 1,091,555 | $ | (402,773 | ) | $ | (17,721 | ) | $ | 736,425 |
6 |
Nine Months Ended | ||||||||
September 30, | ||||||||
(in thousands) | 2014 | 2013 | ||||||
Operating activities: | ||||||||
Net income | $ | 49,373 | $ | 257,229 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation, amortization and accretion | 15,098 | 20,847 | ||||||
Provision for credit losses | 6,700 | 62,500 | ||||||
Stock based compensation | 3,315 | 2,168 | ||||||
Deferred income tax expense (benefit) | 28,112 | (250,054 | ) | |||||
Securities gains, net | (4,663 | ) | (116 | ) | ||||
Loss on prepayment of borrowings | 4,446 | — | ||||||
Net (gains) losses on sales of foreclosed property | (518 | ) | 5,141 | |||||
Changes in assets and liabilities: | ||||||||
Other assets and accrued interest receivable | (12,334 | ) | 16,225 | |||||
Accrued expenses and other liabilities | (16,813 | ) | 31,562 | |||||
Mortgage loans held for sale | (9,685 | ) | 16,834 | |||||
Net cash provided by operating activities | 63,031 | 162,336 | ||||||
Investing activities: | ||||||||
Investment securities held-to-maturity: | ||||||||
Proceeds from maturities and calls | 47,567 | 45,578 | ||||||
Purchases | (173 | ) | (8,481 | ) | ||||
Investment securities available-for-sale: | ||||||||
Proceeds from sales | 403,517 | 20,751 | ||||||
Proceeds from maturities and calls | 176,423 | 399,304 | ||||||
Purchases | (552,025 | ) | (574,020 | ) | ||||
Net increase in loans | (220,061 | ) | (288,514 | ) | ||||
Proceeds from note sales | 4,561 | 91,913 | ||||||
Cash paid for acquisition | (31,243 | ) | — | |||||
Funds collected from FDIC under loss sharing agreements | 2,890 | 5,121 | ||||||
Proceeds from sales of premises and equipment | 2,488 | 3,550 | ||||||
Purchases of premises and equipment | (3,260 | ) | (7,533 | ) | ||||
Proceeds from sale of other real estate | 7,920 | 24,049 | ||||||
Net cash used in investing activities | (161,396 | ) | (288,282 | ) | ||||
Financing activities: | ||||||||
Net change in deposits | 39,224 | 160,767 | ||||||
Net change in short-term borrowings | (51,686 | ) | 1,195 | |||||
Proceeds from Federal Home Loan Bank advances | 930,000 | 650,000 | ||||||
Repayment of Federal Home Loan Bank advances | (720,000 | ) | (690,000 | ) | ||||
Proceeds from issuance of senior debt | — | 40,000 | ||||||
Repayment of subordinated debentures | — | (35,000 | ) | |||||
Proceeds from issuance of common stock for dividend reinvestment and employee benefit plans | 424 | 582 | ||||||
Retirement of preferred stock | (121,613 | ) | — | |||||
Issuance of common stock | 12,206 | — | ||||||
Proceeds from warrant exercise | — | 19,389 | ||||||
Cash dividends on common stock | (1,810 | ) | — | |||||
Cash dividends on preferred stock | (1,214 | ) | (8,003 | ) | ||||
Net cash provided by financing activities | 85,531 | 138,930 | ||||||
Net change in cash and cash equivalents | (12,834 | ) | 12,984 | |||||
Cash and cash equivalents at beginning of period | 228,898 | 251,149 | ||||||
Cash and cash equivalents at end of period | $ | 216,064 | $ | 264,133 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 20,598 | $ | 26,517 | ||||
Income taxes | 2,497 | 2,361 | ||||||
Unsettled securities purchases | — | 11,610 | ||||||
Transfers of loans to foreclosed property | 8,216 | 18,460 |
7 |
8 |
In November 2014, the FASB issued ASU No. 2014-16,Derivatives and Hedging – Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. This ASU was issued to eliminate the use of different methods currently used in practice to account for hybrid financial instruments issued in the form of a share. The amendments in this ASU apply to all entities that are issuers of, or investors in, hybrid financial instruments that are issued in the form of a share. The amendments in this ASU are to be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant periods. The amendments in this ASU are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption, including adoption in an interim period, is permitted. United is not an issuer of or an investor in hybrid financial instruments issued in the form of a share and therefore this ASU is not currently applicable to United.
Gross | ||||||||||||||||||||||||
Gross | Amounts | Gross Amounts not Offset | ||||||||||||||||||||||
Amounts of | Offset on the | in the Balance Sheet | ||||||||||||||||||||||
Recognized | Balance | Net Asset | Financial | Collateral | ||||||||||||||||||||
September 30, 2014 | Assets | Sheet | Balance | Instruments | Received | Net Amount | ||||||||||||||||||
Repurchase agreements / reverse repurchase agreements | $ | 392,000 | $ | (375,000 | ) | $ | 17,000 | $ | — | $ | (17,985 | ) | $ | — | ||||||||||
Derivatives | 22,221 | — | 22,221 | (2,093 | ) | (3,427 | ) | 16,701 | ||||||||||||||||
Total | $ | 414,221 | $ | (375,000 | ) | $ | 39,221 | $ | (2,093 | ) | $ | (21,412 | ) | $ | 16,701 | |||||||||
Weighted average interest rate of reverse repurchase agreements | 1.16 | % | ||||||||||||||||||||||
Gross | ||||||||||||||||||||||||
Gross | Amounts | Gross Amounts not Offset | ||||||||||||||||||||||
Amounts of | Offset on the | Net | in the Balance Sheet | |||||||||||||||||||||
Recognized | Balance | Liability | Financial | Collateral | ||||||||||||||||||||
Liabilities | Sheet | Balance | Instruments | Pledged | Net Amount | |||||||||||||||||||
Repurchase agreements / reverse repurchase agreements | $ | 375,000 | $ | (375,000 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Derivatives | 36,171 | — | 36,171 | (2,093 | ) | (38,195 | ) | — | ||||||||||||||||
Total | $ | 411,171 | $ | (375,000 | ) | $ | 36,171 | $ | (2,093 | ) | $ | (38,195 | ) | $ | — | |||||||||
Weighted average interest rate of repurchase agreements | .31 | % |
9 |
Gross | ||||||||||||||||||||||||
Gross | Amounts | Gross Amounts not Offset | ||||||||||||||||||||||
Amounts of | Offset on the | in the Balance Sheet | ||||||||||||||||||||||
Recognized | Balance | Net Asset | Financial | Collateral | ||||||||||||||||||||
December 31, 2013 | Assets | Sheet | Balance | Instruments | Received | Net Amount | ||||||||||||||||||
Repurchase agreements / reverse repurchase agreements | $ | 385,000 | $ | (350,000 | ) | $ | 35,000 | $ | — | $ | (38,982 | ) | $ | — | ||||||||||
Derivatives | 23,833 | — | 23,833 | (4,378 | ) | (2,912 | ) | 16,543 | ||||||||||||||||
Total | $ | 408,833 | $ | (350,000 | ) | $ | 58,833 | $ | (4,378 | ) | $ | (41,894 | ) | $ | 16,543 | |||||||||
Weighted average interest rate of reverse repurchase agreements | 1.09 | % | ||||||||||||||||||||||
Gross | ||||||||||||||||||||||||
Gross | Amounts | Gross Amounts not Offset | ||||||||||||||||||||||
Amounts of | Offset on the | Net | in the Balance Sheet | |||||||||||||||||||||
Recognized | Balance | Liability | Financial | Collateral | ||||||||||||||||||||
Liabilities | Sheet | Balance | Instruments | Pledged | Net Amount | |||||||||||||||||||
Repurchase agreements / reverse repurchase agreements | $ | 350,000 | $ | (350,000 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Derivatives | 46,232 | — | 46,232 | (4,378 | ) | (38,145 | ) | 3,709 | ||||||||||||||||
Total | $ | 396,232 | $ | (350,000 | ) | $ | 46,232 | $ | (4,378 | ) | $ | (38,145 | ) | $ | 3,709 | |||||||||
Weighted average interest rate of repurchase agreements | .27 | % | ||||||||||||||||||||||
Gross | ||||||||||||||||||||||||
Gross | Amounts | Gross Amounts not Offset | ||||||||||||||||||||||
Amounts of | Offset on the | in the Balance Sheet | ||||||||||||||||||||||
Recognized | Balance | Net Asset | Financial | Collateral | ||||||||||||||||||||
September 30, 2013 -Revised | Assets | Sheet | Balance | Instruments(1) | Received(2) | Net Amount | ||||||||||||||||||
Repurchase agreements / reverse repurchase agreements | $ | 405,000 | $ | (350,000 | ) | $ | 55,000 | $ | — | $ | (59,685 | ) | $ | — | ||||||||||
Derivatives | 8,092 | — | 8,092 | (3,765 | ) | (2,205 | ) | 2,122 | ||||||||||||||||
Total | $ | 413,092 | $ | (350,000 | ) | $ | 63,092 | $ | (3,765 | ) | $ | (61,890 | ) | $ | 2,122 | |||||||||
Weighted average interest rate of reverse repurchase agreements | 1.13 | % | ||||||||||||||||||||||
Gross | ||||||||||||||||||||||||
Gross | Amounts | Gross Amounts not Offset | ||||||||||||||||||||||
Amounts of | Offset on the | Net | in the Balance Sheet | |||||||||||||||||||||
Recognized | Balance | Liability | Financial | Collateral | ||||||||||||||||||||
Liabilities | Sheet | Balance | Instruments(1) | Pledged(2) | Net Amount | |||||||||||||||||||
Repurchase agreements / reverse repurchase agreements | $ | 350,000 | $ | (350,000 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Derivatives | 37,269 | — | 37,269 | (3,765 | ) | (29,011 | ) | 4,493 | ||||||||||||||||
Total | $ | 387,269 | $ | (350,000 | ) | $ | 37,269 | $ | (3,765 | ) | $ | (29,011 | ) | $ | 4,493 | |||||||||
Weighted average interest rate of repurchase agreements | .28 | % |
(1) United's original filings for the third, second and first quarters of 2013 contained an error and did not include amounts available for offset under master netting agreements for derivative financial instruments. Those amounts were $3.77 million, $4.30 million and $57,000, respectively, for the third, second and first quarters of 2013 and have been added to the balance sheet offsetting table for each respective period. United considers these revisions to be immaterial to the presentation of the financial statements for those quarters.
(2) United's original filings for the third, second and first quarters of 2013 contained an error and did not include amounts pledged by counterparties as collateral on reverse repurchase agreement positions. Those amounts were $59.7 million, $53.7 million and $87.5 million, respectively, for the third, second and first quarters of 2013 and have been added to the balance sheet offsetting table for each respective period in the current year presentation. In addition, in the original filings for the third and second quarters of 2013, the amounts reported by United as collateral pledged on derivative financial positions were reported net of collateral received on asset derivative positions. The amounts for those periods have been reported separately as collateral received and collateral pledged in the current year presentation. Additionally, upon further analysis, United updated collateral balances for the third quarter 2013 resulting in a net increase in the collateral pledged position of $1.23 million. United considers these revisions to be immaterial to the presentation of the financial statements for those quarters.
10 |
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
As of September 30, 2014 | Cost | Gains | Losses | Value | ||||||||||||
State and political subdivisions | $ | 50,248 | $ | 3,849 | $ | — | $ | 54,097 | ||||||||
Mortgage-backed securities (1) | 382,170 | 7,299 | 3,255 | 386,214 | ||||||||||||
Total | $ | 432,418 | $ | 11,148 | $ | 3,255 | $ | 440,311 | ||||||||
�� | ||||||||||||||||
As of December 31, 2013 | ||||||||||||||||
State and political subdivisions | $ | 51,733 | $ | 2,718 | $ | 42 | $ | 54,409 | ||||||||
Mortgage-backed securities (1) | 428,009 | 6,690 | 3,523 | 431,176 | ||||||||||||
Total | $ | 479,742 | $ | 9,408 | $ | 3,565 | $ | 485,585 | ||||||||
As of September 30, 2013 | ||||||||||||||||
State and political subdivisions | $ | 51,745 | $ | 2,723 | $ | 53 | $ | 54,415 | ||||||||
Mortgage-backed securities (1) | 153,868 | 6,767 | 399 | 160,236 | ||||||||||||
Total | $ | 205,613 | $ | 9,490 | $ | 452 | $ | 214,651 | ||||||||
(1) All are residential type mortgage-backed securities |
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||||||||
As of September 30, 2014 | Fair Value | Loss | Fair Value | Loss | Fair Value | Loss | ||||||||||||||||||
Mortgage-backed securities | $ | 189,223 | $ | 3,147 | $ | 2,798 | $ | 108 | $ | 192,021 | $ | 3,255 | ||||||||||||
Total unrealized loss position | $ | 189,223 | $ | 3,147 | $ | 2,798 | $ | 108 | $ | 192,021 | $ | 3,255 | ||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||||
State and political subdivisions | $ | 1,595 | $ | 42 | $ | — | $ | — | $ | 1,595 | $ | 42 | ||||||||||||
Mortgage-backed securities | 259,870 | 3,523 | — | — | 259,870 | 3,523 | ||||||||||||||||||
Total unrealized loss position | $ | 261,465 | $ | 3,565 | $ | — | $ | — | $ | 261,465 | $ | 3,565 | ||||||||||||
As of September 30, 2013 | ||||||||||||||||||||||||
State and political subdivisions | $ | 4,825 | $ | 53 | $ | — | $ | — | $ | 4,825 | $ | 53 | ||||||||||||
Mortgage-backed securities | 8,009 | 399 | — | — | 8,009 | 399 | ||||||||||||||||||
Total unrealized loss position | $ | 12,834 | $ | 452 | $ | — | $ | — | $ | 12,834 | $ | 452 |
11 |
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
As of September 30, 2014 | Cost | Gains | Losses | Value | ||||||||||||
U.S. Treasury securities | $ | 105,385 | $ | 245 | $ | 608 | $ | 105,022 | ||||||||
State and political subdivisions | 19,686 | 666 | 31 | 20,321 | ||||||||||||
Mortgage-backed securities (1) | 1,029,881 | 15,010 | 9,899 | 1,034,992 | ||||||||||||
Corporate bonds | 165,558 | 1,427 | 1,733 | 165,252 | ||||||||||||
Asset-backed securities | 458,569 | 3,629 | 154 | 462,044 | ||||||||||||
Other | 2,036 | — | — | 2,036 | ||||||||||||
Total | $ | 1,781,115 | $ | 20,977 | $ | 12,425 | $ | 1,789,667 | ||||||||
As of December 31, 2013 | ||||||||||||||||
State and political subdivisions | $ | 22,558 | $ | 823 | $ | 139 | $ | 23,242 | ||||||||
Mortgage-backed securities (1) | 1,145,800 | 13,296 | 13,749 | 1,145,347 | ||||||||||||
Corporate bonds | 255,316 | 1,304 | 6,324 | 250,296 | ||||||||||||
Asset-backed securities | 409,086 | 2,535 | 988 | 410,633 | ||||||||||||
Other | 2,699 | — | — | 2,699 | ||||||||||||
Total | $ | 1,835,459 | $ | 17,958 | $ | 21,200 | $ | 1,832,217 | ||||||||
As of September 30, 2013 | ||||||||||||||||
State and political subdivisions | $ | 22,781 | $ | 893 | $ | 150 | $ | 23,524 | ||||||||
Mortgage-backed securities (1) | 1,390,280 | 14,469 | 21,432 | 1,383,317 | ||||||||||||
Corporate bonds | 255,391 | 936 | 9,376 | 246,951 | ||||||||||||
Asset-backed securities | 306,961 | 1,836 | 1,559 | 307,238 | ||||||||||||
Other | 2,394 | — | — | 2,394 | ||||||||||||
Total | $ | 1,977,807 | $ | 18,134 | $ | 32,517 | $ | 1,963,424 | ||||||||
(1) All are residential type mortgage-backed securities |
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||||||||
As of September 30, 2014 | Fair Value | Loss | Fair Value | Loss | Fair Value | Loss | ||||||||||||||||||
U.S. Treasury securities | $ | 104,777 | $ | 608 | $ | — | $ | — | $ | 104,777 | $ | 608 | ||||||||||||
State and political subdivisions | — | — | 3,638 | 31 | 3,638 | 31 | ||||||||||||||||||
Mortgage-backed securities | 126,445 | 844 | 265,426 | 9,055 | 391,871 | 9,899 | ||||||||||||||||||
Corporate bonds | 49,547 | 414 | 34,657 | 1,319 | 84,204 | 1,733 | ||||||||||||||||||
Asset-backed securities | 57,716 | 137 | 9,952 | 17 | 67,668 | 154 | ||||||||||||||||||
Total unrealized loss position | $ | 338,485 | $ | 2,003 | $ | 313,673 | $ | 10,422 | $ | 652,158 | $ | 12,425 | ||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||||
State and political subdivisions | $ | 4,539 | $ | 139 | $ | — | $ | — | $ | 4,539 | $ | 139 | ||||||||||||
Mortgage-backed securities | 334,996 | 6,480 | 175,865 | 7,269 | 510,861 | 13,749 | ||||||||||||||||||
Corporate bonds | 137,318 | 4,494 | 54,130 | 1,830 | 191,448 | 6,324 | ||||||||||||||||||
Asset-backed securities | 164,933 | 722 | 22,370 | 266 | 187,303 | 988 | ||||||||||||||||||
Total unrealized loss position | $ | 641,786 | $ | 11,835 | $ | 252,365 | $ | 9,365 | $ | 894,151 | $ | 21,200 |
12 |
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||||||||
As of September 30, 2013 | Fair Value | Loss | Fair Value | Loss | Fair Value | Loss | ||||||||||||||||||
State and political subdivisions | $ | 4,533 | $ | 148 | $ | 10 | $ | 2 | $ | 4,543 | $ | 150 | ||||||||||||
Mortgage-backed securities | 533,681 | 17,958 | 100,534 | 3,474 | 634,215 | 21,432 | ||||||||||||||||||
Corporate bonds | 115,511 | 6,463 | 53,042 | 2,913 | 168,553 | 9,376 | ||||||||||||||||||
Asset-backed securities | 79,015 | 869 | 56,181 | 690 | 135,196 | 1,559 | ||||||||||||||||||
Total unrealized loss position | $ | 732,740 | $ | 25,438 | $ | 209,767 | $ | 7,079 | $ | 942,507 | $ | 32,517 |
Available-for-Sale | Held-to-Maturity | |||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||
U.S. Treasury Securities: | ||||||||||||||||
1 to 5 years | $ | 86,203 | $ | 85,841 | $ | — | $ | — | ||||||||
5 to 10 years | 19,182 | 19,181 | — | — | ||||||||||||
105,385 | 105,022 | — | — | |||||||||||||
State and political subdivisions: | ||||||||||||||||
Within 1 year | 6,330 | 6,427 | 1,000 | 1,023 | ||||||||||||
1 to 5 years | 10,414 | 10,863 | 18,595 | 19,949 | ||||||||||||
5 to 10 years | 2,094 | 2,130 | 20,161 | 21,726 | ||||||||||||
More than 10 years | 848 | 901 | 10,492 | 11,399 | ||||||||||||
19,686 | 20,321 | 50,248 | 54,097 | |||||||||||||
Corporate bonds: | ||||||||||||||||
1 to 5 years | 48,756 | 48,189 | — | — | ||||||||||||
5 to 10 years | 115,802 | 116,763 | — | — | ||||||||||||
More than 10 years | 1,000 | 300 | — | — | ||||||||||||
165,558 | 165,252 | — | — | |||||||||||||
Asset-backed securities: | ||||||||||||||||
Within 1 year | 9,993 | 10,007 | — | — | ||||||||||||
1 to 5 years | 86,608 | 87,916 | — | — | ||||||||||||
5 to 10 years | 242,393 | 244,069 | — | — | ||||||||||||
More than 10 years | 119,575 | 120,052 | — | — | ||||||||||||
458,569 | 462,044 | — | — | |||||||||||||
Other: | ||||||||||||||||
More than 10 years | 2,036 | 2,036 | — | — | ||||||||||||
2,036 | 2,036 | — | — | |||||||||||||
Total securities other than mortgage-backed securities: | ||||||||||||||||
Within 1 year | 16,323 | 16,434 | 1,000 | 1,023 | ||||||||||||
1 to 5 years | 231,981 | 232,809 | 18,595 | 19,949 | ||||||||||||
5 to 10 years | 379,471 | 382,143 | 20,161 | 21,726 | ||||||||||||
More than 10 years | 123,459 | 123,289 | 10,492 | 11,399 | ||||||||||||
Mortgage-backed securities | 1,029,881 | 1,034,992 | 382,170 | 386,214 | ||||||||||||
$ | 1,781,115 | $ | 1,789,667 | $ | 432,418 | $ | 440,311 |
13 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Proceeds from sales | $ | 13,290 | $ | 5,000 | $ | 403,517 | $ | 20,751 | ||||||||
Gross gains on sales | $ | 11 | $ | — | $ | 5,795 | $ | 116 | ||||||||
Gross losses on sales | — | — | (1,132 | ) | — | |||||||||||
Net gains on sales of securities | $ | 11 | $ | — | $ | 4,663 | $ | 116 | ||||||||
Income tax expense attributable to sales | $ | 4 | $ | — | $ | 1,821 | $ | 45 |
Securities with a carrying value of $1.38 billion, $1.53 billion and $1.34 billion were pledged to secure public deposits and other secured borrowings at September 30, 2014, December 31, 2013 and September 30, 2013, respectively.
September 30, | December 31, | September 30, | ||||||||||
2014 | 2013 | 2013 | ||||||||||
Owner occupied commercial real estate | $ | 1,153,933 | $ | 1,133,543 | $ | 1,129,152 | ||||||
Income producing ommercial real estate | 604,727 | 623,167 | 613,619 | |||||||||
Commercial & industrial | 649,853 | 471,961 | 457,414 | |||||||||
Commercial construction | 180,794 | 148,903 | 137,146 | |||||||||
Total commercial | 2,589,307 | 2,377,574 | 2,337,331 | |||||||||
Residential mortgage | 865,568 | 875,077 | 888,679 | |||||||||
Home equity lines of credit | 458,819 | 440,887 | 420,616 | |||||||||
Residential construction | 307,178 | 328,579 | 317,789 | |||||||||
Consumer installment | 105,345 | 111,045 | 116,535 | |||||||||
Indirect auto | 242,669 | 196,104 | 186,117 | |||||||||
Total loans | 4,568,886 | 4,329,266 | 4,267,067 | |||||||||
Less allowance for loan losses | (71,928 | ) | (76,762 | ) | (80,372 | ) | ||||||
Loans, net | $ | 4,496,958 | $ | 4,252,504 | $ | 4,186,695 |
14 |
2014 | ||||||||||||||||||||||||
Allocation | ||||||||||||||||||||||||
Beginning | Charge- | of | Ending | |||||||||||||||||||||
Three Months Ended September 30, | Balance | Offs | Recoveries | Unallocated | Provision | Balance | ||||||||||||||||||
Owner occupied commercial real estate | $ | 17,804 | $ | (832 | ) | $ | 86 | $ | — | (1,758 | ) | $ | 15,300 | |||||||||||
Income producing commercial real estate | 11,761 | (598 | ) | 494 | — | (866 | ) | 10,791 | ||||||||||||||||
Commercial & industrial | 3,885 | (30) | 372 | — | (1,009 | ) | 3,218 | |||||||||||||||||
Commercial construction | 4,067 | (104 | ) | 1 | — | 1,686 | 5,650 | |||||||||||||||||
Residential mortgage | 16,763 | (1,357) | 240 | — | 1,940 | 17,586 | ||||||||||||||||||
Home equity lines of credit | 6,338 | (405 | ) | 50 | — | (1,144 | ) | 4,839 | ||||||||||||||||
Residential construction | 11,208 | (753 | ) | 41 | — | 2,358 | 12,854 | |||||||||||||||||
Consumer installment | 599 | (449 | ) | 256 | — | 333 | 739 | |||||||||||||||||
Indirect auto | 823 | (178 | ) | 11 | — | 295 | 951 | |||||||||||||||||
Unallocated | — | — | — | — | — | — | ||||||||||||||||||
Total allowance for loan losses | 73,248 | (4,706 | ) | 1,551 | — | 1,835 | 71,928 | |||||||||||||||||
Allowance for unfunded commitments | 2,165 | — | — | — | 165 | 2,330 | ||||||||||||||||||
Total allowance for credit losses | $ | 75,413 | $ | (4,706 | ) | $ | 1,551 | $ | — | $ | 2,000 | $ | 74,258 |
Allocation | ||||||||||||||||||||||||
Beginning | Charge- | of | Ending | |||||||||||||||||||||
Nine Months Ended September 30, | Balance | Offs | Recoveries | Unallocated | Provision | Balance | ||||||||||||||||||
Owner occupied commercial real estate | $ | 17,164 | $ | (2,116 | ) | $ | 2,929 | $ | 1,278 | $ | (3,955 | ) | $ | 15,300 | ||||||||||
Income producing commercial real estate | 7,174 | (1,435 | ) | 691 | 688 | 3,673 | 10,791 | |||||||||||||||||
Commercial & industrial | 6,527 | (2,005 | ) | 1,263 | 318 | (2,885 | ) | 3,218 | ||||||||||||||||
Commercial construction | 3,669 | (236 | ) | 1 | 388 | 1,828 | 5,650 | |||||||||||||||||
Residential mortgage | 15,446 | (5,738 | ) | 597 | 1,452 | 5,829 | 17,586 | |||||||||||||||||
Home equity lines of credit | 5,528 | (2,032 | ) | 218 | 391 | 734 | 4,839 | |||||||||||||||||
Residential construction | 12,532 | (3,004 | ) | 410 | 1,728 | 1,188 | 12,854 | |||||||||||||||||
Consumer installment | 1,353 | (1,580 | ) | 974 | — | (8 | ) | 739 | ||||||||||||||||
Indirect auto | 1,126 | (344 | ) | 38 | — | 131 | 951 | |||||||||||||||||
Unallocated | 6,243 | — | — | (6,243 | ) | — | — | |||||||||||||||||
Total allowance for loan losses | 76,762 | (18,490 | ) | 7,121 | — | 6,535 | 71,928 | |||||||||||||||||
Allowance for unfunded commitments | 2,165 | — | — | — | 165 | 2,330 | ||||||||||||||||||
Total allowance for credit losses | $ | 78,927 | $ | (18,490 | ) | $ | 7,121 | $ | — | $ | 6,700 | $ | 74,258 |
15 |
2013 | ||||||||||||||||||||
Beginning | Charge- | Ending | ||||||||||||||||||
Three Months Ended September 30, | Balance | Offs | Recoveries | Provision | Balance | |||||||||||||||
Owner occupied commercial real estate | $ | 15,785 | $ | (1,712 | ) | $ | 71 | $ | (78 | ) | $ | 14,066 | ||||||||
Income producing commercial real estate | 7,023 | (216 | ) | — | 3,262 | 10,069 | ||||||||||||||
Commercial & industrial | 8,054 | (826 | ) | 690 | 14 | 7,932 | ||||||||||||||
Commercial construction | 4,275 | (134 | ) | 1 | (324 | ) | 3,818 | |||||||||||||
Residential mortgage | 14,498 | (918 | ) | 229 | 1,335 | 15,144 | ||||||||||||||
Home equity lines of credit | 5,529 | (388 | ) | 2 | 415 | 5,558 | ||||||||||||||
Residential construction | 17,322 | (1,096 | ) | 24 | (1,908 | ) | 14,342 | |||||||||||||
Consumer installment | 1,515 | (345 | ) | 210 | (31 | ) | 1,349 | |||||||||||||
Indirect auto | 875 | (74 | ) | 9 | 258 | 1,068 | ||||||||||||||
Unallocated | 6,969 | — | — | 57 | 7,026 | |||||||||||||||
Total allowance for loan losses | 81,845 | (5,709 | ) | 1,236 | 3,000 | 80,372 | ||||||||||||||
Allowance for unfunded commitments | — | — | — | — | — | |||||||||||||||
Total allowance for credit losses | $ | 81,845 | $ | (5,709 | ) | $ | 1,236 | $ | 3,000 | $ | 80,372 |
Beginning | Charge- | Ending | ||||||||||||||||||
Nine Months Ended September 30, | Balance | Offs | Recoveries | Provision | Balance | |||||||||||||||
Owner occupied commercial real estate | $ | 17,265 | $ | (23,444 | ) | $ | 1,296 | $ | 18,949 | $ | 14,066 | |||||||||
Income producing commercial real estate | 10,582 | (10,678 | ) | 260 | 9,905 | 10,069 | ||||||||||||||
Commercial & industrial | 5,537 | (18,581 | ) | 1,368 | 19,608 | 7,932 | ||||||||||||||
Commercial construction | 8,389 | (6,484 | ) | 60 | 1,853 | 3,818 | ||||||||||||||
Residential mortgage | 19,117 | (8,272 | ) | 479 | 3,820 | 15,144 | ||||||||||||||
Home equity lines of credit | 7,525 | (2,108 | ) | 170 | (29 | ) | 5,558 | |||||||||||||
Residential construction | 26,662 | (22,608 | ) | 57 | 10,231 | 14,342 | ||||||||||||||
Consumer installment | 2,527 | (1,521 | ) | 891 | (548 | ) | 1,349 | |||||||||||||
Indirect auto | 220 | (170 | ) | 20 | 998 | 1,068 | ||||||||||||||
Unallocated | 9,313 | — | — | (2,287 | ) | 7,026 | ||||||||||||||
Total allowance for loan losses | 107,137 | (93,866 | ) | 4,601 | 62,500 | 80,372 | ||||||||||||||
Allowance for unfunded commitments | — | — | — | — | — | |||||||||||||||
Total allowance for credit losses | $ | 107,137 | $ | (93,866 | ) | $ | 4,601 | $ | 62,500 | $ | 80,372 |
16 |
September 30, 2014 | December 31, 2013 | September 30, 2013 | ||||||||||||||||||||||||||||||||||
Individually | Collectively | Individually | Collectively | Individually | Collectively | |||||||||||||||||||||||||||||||
Evaluated for | Evaluated for | Ending | Evaluated for | Evaluated for | Ending | Evaluated for | Evaluated for | Ending | ||||||||||||||||||||||||||||
Allowance for Loan Losses | Impairment | Impairment | Balance | Impairment | Impairment | Balance | Impairment | Impairment | Balance | |||||||||||||||||||||||||||
Owner occupied commercial real estate | $ | 2,125 | $ | 13,175 | $ | 15,300 | $ | 1,023 | $ | 16,141 | $ | 17,164 | $ | 770 | $ | 13,296 | $ | 14,066 | ||||||||||||||||||
Income producing commercial real estate | 2,380 | 8,411 | 10,791 | 990 | 6,184 | 7,174 | 1,205 | 8,864 | 10,069 | |||||||||||||||||||||||||||
Commercial & industrial | 26 | 3,192 | 3,218 | 66 | 6,461 | 6,527 | 546 | 7,386 | 7,932 | |||||||||||||||||||||||||||
Commercial construction | 1,164 | 4,486 | 5,650 | 112 | 3,557 | 3,669 | 150 | 3,668 | 3,818 | |||||||||||||||||||||||||||
Residential mortgage | 3,501 | 14,085 | 17,586 | 2,914 | 12,532 | 15,446 | 2,008 | 13,136 | 15,144 | |||||||||||||||||||||||||||
Home equity lines of credit | 51 | 4,788 | 4,839 | 5 | 5,523 | 5,528 | — | 5,558 | 5,558 | |||||||||||||||||||||||||||
Residential construction | 1,037 | 11,817 | 12,854 | 688 | 11,844 | 12,532 | 662 | 13,680 | 14,342 | |||||||||||||||||||||||||||
Consumer installment | 23 | 716 | 739 | 224 | 1,129 | 1,353 | 11 | 1,338 | 1,349 | |||||||||||||||||||||||||||
Indirect auto | — | 951 | 951 | — | 1,126 | 1,126 | — | 1,068 | 1,068 | |||||||||||||||||||||||||||
Unallocated | — | — | — | — | 6,243 | 6,243 | — | 7,026 | 7,026 | |||||||||||||||||||||||||||
Total allowance for loan losses | 10,307 | 61,621 | 71,928 | 6,022 | 70,740 | 76,762 | 5,352 | 75,020 | 80,372 | |||||||||||||||||||||||||||
Allowance for unfunded commitments | — | 2,330 | 2,330 | — | 2,165 | 2,165 | — | — | — | |||||||||||||||||||||||||||
Total allowance for credit losses | $ | 10,307 | $ | 63,951 | $ | 74,258 | $ | 6,022 | $ | 72,905 | $ | 78,927 | $ | 5,352 | $ | 75,020 | $ | 80,372 | ||||||||||||||||||
Loans Outstanding | ||||||||||||||||||||||||||||||||||||
Owner occupied commercial real estate | $ | 33,635 | $ | 1,120,298 | $ | 1,153,933 | $ | 32,969 | $ | 1,100,574 | $ | 1,133,543 | $ | 31,138 | $ | 1,098,014 | $ | 1,129,152 | ||||||||||||||||||
Income producing commercial real estate | 26,120 | 578,607 | 604,727 | 27,239 | 595,928 | 623,167 | 23,325 | 590,294 | 613,619 | |||||||||||||||||||||||||||
Commercial & industrial | 4,540 | 645,313 | 649,853 | 4,217 | 467,744 | 471,961 | 4,105 | 453,309 | 457,414 | |||||||||||||||||||||||||||
Commercial construction | 12,127 | 168,667 | 180,794 | 13,715 | 135,188 | 148,903 | 13,478 | 123,668 | 137,146 | |||||||||||||||||||||||||||
Residential mortgage | 18,778 | 846,790 | 865,568 | 20,167 | 854,910 | 875,077 | 18,970 | 869,709 | 888,679 | |||||||||||||||||||||||||||
Home equity lines of credit | 531 | 458,288 | 458,819 | 505 | 440,382 | 440,887 | — | 420,616 | 420,616 | |||||||||||||||||||||||||||
Residential construction | 13,055 | 294,123 | 307,178 | 14,808 | 313,771 | 328,579 | 14,121 | 303,668 | 317,789 | |||||||||||||||||||||||||||
Consumer installment | 245 | 105,100 | 105,345 | 999 | 110,046 | 111,045 | 204 | 116,331 | 116,535 | |||||||||||||||||||||||||||
Indirect auto | — | 242,669 | 242,669 | — | 196,104 | 196,104 | — | 186,117 | 186,117 | |||||||||||||||||||||||||||
Total loans | $ | 109,031 | $ | 4,459,855 | $ | 4,568,886 | $ | 114,619 | $ | 4,214,647 | $ | 4,329,266 | $ | 105,341 | $ | 4,161,726 | $ | 4,267,067 |
17 |
18 |
September 30, 2014 | December 31, 2013 | September 30, 2013 | ||||||||||||||||||||||||||||||||||
Allowance | Allowance | Allowance | ||||||||||||||||||||||||||||||||||
Unpaid | for Loan | Unpaid | for Loan | Unpaid | for Loan | |||||||||||||||||||||||||||||||
Principal | Recorded | Losses | Principal | Recorded | Losses | Principal | Recorded | Losses | ||||||||||||||||||||||||||||
Balance | Investment | Allocated | Balance | Investment | Allocated | Balance | Investment | Allocated | ||||||||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||||||||||||||||
Owner occupied commercial real estate | $ | 11,370 | $ | 10,370 | $ | — | $ | 17,717 | $ | 14,458 | $ | — | $ | 18,423 | $ | 15,059 | $ | — | ||||||||||||||||||
Income producing commercial real estate | 9,872 | 9,872 | 12,644 | 9,747 | — | 6,643 | 5,325 | — | ||||||||||||||||||||||||||||
Commercial & industrial | 2,178 | 1,560 | — | 2,252 | 2,252 | — | 235 | 235 | — | |||||||||||||||||||||||||||
Commercial construction | — | — | — | 974 | 974 | — | 1,127 | 1,127 | — | |||||||||||||||||||||||||||
Total commercial | 23,420 | 21,802 | — | 33,587 | 27,431 | — | 26,428 | 21,746 | — | |||||||||||||||||||||||||||
Residential mortgage | 1,319 | 954 | — | 4,496 | 3,634 | — | 4,768 | 3,729 | — | |||||||||||||||||||||||||||
Home equity lines of credit | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Residential construction | 5,460 | 4,172 | — | 9,462 | 7,807 | — | 9,101 | 7,364 | — | |||||||||||||||||||||||||||
Consumer installment | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Indirect auto | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total with no related allowance recorded | 30,199 | 26,928 | — | 47,545 | 38,872 | — | 40,297 | 32,839 | — | |||||||||||||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||||||||||||||
Owner occupied commercial real estate | 24,828 | 23,265 | 2,125 | 18,595 | 18,513 | 1,023 | 16,163 | 16,079 | 770 | |||||||||||||||||||||||||||
Income producing commercial real estate | 16,797 | 16,248 | 2,380 | 17,490 | 17,490 | 990 | 20,020 | 18,000 | 1,205 | |||||||||||||||||||||||||||
Commercial & industrial | 2,980 | 2,980 | 26 | 2,248 | 1,965 | 66 | 4,002 | 3,870 | 546 | |||||||||||||||||||||||||||
Commercial construction | 12,281 | 12,127 | 1,164 | 12,821 | 12,741 | 112 | 12,430 | 12,351 | 150 | |||||||||||||||||||||||||||
Total commercial | 56,886 | 54,620 | 5,695 | 51,154 | 50,709 | 2,191 | 52,615 | 50,300 | 2,671 | |||||||||||||||||||||||||||
Residential mortgage | 18,657 | 17,824 | 3,501 | 17,119 | 16,533 | 2,914 | 15,598 | 15,241 | 2,008 | |||||||||||||||||||||||||||
Home equity lines of credit | 531 | 531 | 51 | 505 | 505 | 5 | — | — | — | |||||||||||||||||||||||||||
Residential construction | 9,427 | 8,883 | 1,037 | 8,469 | 7,001 | 688 | 7,257 | 6,757 | 662 | |||||||||||||||||||||||||||
Consumer installment | 245 | 245 | 23 | 999 | 999 | 224 | 214 | 204 | 11 | |||||||||||||||||||||||||||
Indirect auto | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total with an allowance recorded | 85,746 | 82,103 | 10,307 | 78,246 | 75,747 | 6,022 | 75,684 | 72,502 | 5,352 | |||||||||||||||||||||||||||
Total | $ | 115,945 | $ | 109,031 | $ | 10,307 | $ | 125,791 | $ | 114,619 | $ | 6,022 | $ | 115,981 | $ | 105,341 | $ | 5,352 |
19 |
2014 | 2013 | |||||||||||||||||||||||
Interest | Interest | |||||||||||||||||||||||
Revenue | Cash Basis | Revenue | Cash Basis | |||||||||||||||||||||
Recognized | Interest | Recognized | Interest | |||||||||||||||||||||
Average | During | Revenue | Average | During | Revenue | |||||||||||||||||||
Three Months Ended September 30, | Balance | Impairment | Received | Balance | Impairment | Received | ||||||||||||||||||
Owner occupied commercial real estate | $ | 33,715 | $ | 430 | $ | 448 | $ | 31,695 | $ | 737 | $ | 861 | ||||||||||||
Income producing commercial real estate | 26,622 | 325 | 341 | 23,608 | 599 | 600 | ||||||||||||||||||
Commercial & industrial | 4,698 | 43 | 85 | 4,189 | 114 | 104 | ||||||||||||||||||
Commercial construction | 12,203 | 119 | 96 | 13,501 | 244 | 246 | ||||||||||||||||||
Total commercial | 77,238 | 917 | 970 | 72,993 | 1,694 | 1,811 | ||||||||||||||||||
Residential mortgage | 19,235 | 215 | 215 | 18,548 | 425 | 435 | ||||||||||||||||||
Home equity lines of credit | 538 | 6 | 5 | 522 | 11 | 11 | ||||||||||||||||||
Residential construction | 13,146 | 130 | 130 | 14,136 | 346 | 307 | ||||||||||||||||||
Consumer installment | 251 | 4 | 5 | 214 | 7 | 7 | ||||||||||||||||||
Indirect auto | — | — | — | — | — | — | ||||||||||||||||||
Total | $ | 110,408 | $ | 1,272 | $ | 1,325 | $ | 106,413 | $ | 2,483 | $ | 2,571 | ||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||
Owner occupied commercial real estate | $ | 31,460 | $ | 1,191 | $ | 1,219 | $ | 37,732 | $ | 1,836 | $ | 2,049 | ||||||||||||
Income producing commercial real estate | 26,299 | 953 | 991 | 38,328 | 1,077 | 1,077 | ||||||||||||||||||
Commercial & industrial | 4,314 | 135 | 186 | 8,821 | 333 | 803 | ||||||||||||||||||
Commercial construction | 12,086 | 335 | 338 | 14,620 | 509 | 593 | ||||||||||||||||||
Total commercial | 74,159 | 2,614 | 2,734 | 99,501 | 3,755 | 4,522 | ||||||||||||||||||
Residential mortgage | 20,384 | 672 | 670 | 19,382 | 860 | 841 | ||||||||||||||||||
Home equity lines of credit | 531 | 16 | 17 | 524 | 22 | 21 | ||||||||||||||||||
Residential construction | 13,315 | 452 | 455 | 14,219 | 850 | 882 | ||||||||||||||||||
Consumer installment | 345 | 16 | 19 | 228 | 17 | 17 | ||||||||||||||||||
Indirect auto | — | — | — | — | — | — | ||||||||||||||||||
Total | $ | 108,734 | $ | 3,770 | $ | 3,895 | $ | 133,854 | $ | 5,504 | $ | 6,283 |
20 |
Loans Past Due | Loans Not | |||||||||||||||||||||||
As of September 30, 2014 | 30 - 59 Days | 60 - 89 Days | > 90 Days | Total | Past Due | Total | ||||||||||||||||||
Owner occupied commercial real estate | $ | 2,769 | $ | 257 | $ | 947 | $ | 3,973 | $ | 1,149,960 | $ | 1,153,933 | ||||||||||||
Income producing commercial real estate | 417 | 991 | $ | 226 | 1,634 | 603,093 | 604,727 | |||||||||||||||||
Commercial & industrial | 900 | 103 | 861 | 1,864 | 647,989 | 649,853 | ||||||||||||||||||
Commercial construction | 123 | 182 | — | 305 | 180,489 | 180,794 | ||||||||||||||||||
Total commercial | 4,209 | 1,533 | 2,034 | 7,776 | 2,581,531 | 2,589,307 | ||||||||||||||||||
Residential mortgage | 6,985 | 3,136 | 2,563 | 12,684 | 852,884 | 865,568 | ||||||||||||||||||
Home equity lines of credit | 1,566 | 373 | 375 | 2,314 | 456,505 | 458,819 | ||||||||||||||||||
Residential construction | 1,262 | 329 | 2,803 | 4,394 | 302,784 | 307,178 | ||||||||||||||||||
Consumer installment | 995 | 322 | 191 | 1,508 | 103,837 | 105,345 | ||||||||||||||||||
Indirect auto | 278 | 83 | 200 | 561 | 242,108 | 242,669 | ||||||||||||||||||
Total loans | $ | 15,295 | $ | 5,776 | $ | 8,166 | $ | 29,237 | $ | 4,539,649 | $ | 4,568,886 | ||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||||
Owner occupied commercial real estate | $ | 1,845 | $ | 705 | $ | 2,017 | $ | 4,567 | $ | 1,128,976 | $ | 1,133,543 | ||||||||||||
Income producing commercial real estate | 3,879 | 2,092 | 530 | 6,501 | 616,666 | 623,167 | ||||||||||||||||||
Commercial & industrial | 2,349 | 223 | 88 | 2,660 | 469,301 | 471,961 | ||||||||||||||||||
Commercial construction | 94 | 190 | 235 | 519 | 148,384 | 148,903 | ||||||||||||||||||
Total commercial | 8,167 | 3,210 | 2,870 | 14,247 | 2,363,327 | 2,377,574 | ||||||||||||||||||
Residential mortgage | 9,011 | 2,832 | 4,140 | 15,983 | 859,094 | 875,077 | ||||||||||||||||||
Home equity lines of credit | 2,056 | 430 | 941 | 3,427 | 437,460 | 440,887 | ||||||||||||||||||
Residential construction | 1,335 | 588 | 1,375 | 3,298 | 325,281 | 328,579 | ||||||||||||||||||
Consumer installment | 1,058 | 358 | 24 | 1,440 | 109,605 | 111,045 | ||||||||||||||||||
Indirect auto | 185 | 65 | 42 | 292 | 195,812 | 196,104 | ||||||||||||||||||
Total loans | $ | 21,812 | $ | 7,483 | $ | 9,392 | $ | 38,687 | $ | 4,290,579 | $ | 4,329,266 | ||||||||||||
As of September 30, 2013 | ||||||||||||||||||||||||
Owner occupied commercial real estate | $ | 1,332 | $ | 910 | $ | 1,896 | $ | 4,138 | $ | 1,125,014 | $ | 1,129,152 | ||||||||||||
Income producing commercial real estate | 694 | 373 | 533 | 1,600 | 612,019 | 613,619 | ||||||||||||||||||
Commercial & industrial | 763 | 191 | 93 | 1,047 | 456,367 | 457,414 | ||||||||||||||||||
Commercial construction | 16 | — | 235 | 251 | 136,895 | 137,146 | ||||||||||||||||||
Total commercial | 2,805 | 1,474 | 2,757 | 7,036 | 2,330,295 | 2,337,331 | ||||||||||||||||||
Residential mortgage | 7,672 | 2,467 | 4,279 | 14,418 | 874,261 | 888,679 | ||||||||||||||||||
Home equity lines of credit | 1,177 | 610 | 373 | 2,160 | 418,456 | 420,616 | ||||||||||||||||||
Residential construction | 3,705 | 418 | 924 | 5,047 | 312,742 | 317,789 | ||||||||||||||||||
Consumer installment | 633 | 19 | 94 | 746 | 115,789 | 116,535 | ||||||||||||||||||
Indirect auto | 220 | 84 | 55 | 359 | 185,758 | 186,117 | ||||||||||||||||||
Total loans | $ | 16,212 | $ | 5,072 | $ | 8,482 | $ | 29,766 | $ | 4,237,301 | $ | 4,267,067 |
21 |
September 30, 2014 | December 31, 2013 | September 30, 2013 | ||||||||||||||||||||||||||||||||||
Pre- | Post- | Pre- | Post- | Pre- | Post- | |||||||||||||||||||||||||||||||
Modification | Modification | Modification | Modification | Modification | Modification | |||||||||||||||||||||||||||||||
Number | Outstanding | Outstanding | Number | Outstanding | Outstanding | Number | Outstanding | Outstanding | ||||||||||||||||||||||||||||
of | Recorded | Recorded | of | Recorded | Recorded | of | Recorded | Recorded | ||||||||||||||||||||||||||||
Contracts | Investment | Investment | Contracts | Investment | Investment | Contracts | Investment | Investment | ||||||||||||||||||||||||||||
Owner occupied commercial real estate | 52 | $ | 27,811 | $ | 26,248 | 45 | $ | 24,064 | $ | 22,399 | 45 | $ | 25,829 | $ | 24,368 | |||||||||||||||||||||
Income producing commercial real estate | 32 | 19,652 | 19,104 | 32 | 20,900 | 18,268 | 32 | 22,134 | 18,795 | |||||||||||||||||||||||||||
Commercial & industrial | 33 | 2,941 | 2,941 | 36 | 3,527 | 3,245 | 34 | 3,051 | 2,919 | |||||||||||||||||||||||||||
Commercial construction | 14 | 11,238 | 11,084 | 13 | 13,122 | 13,042 | 12 | 12,904 | 12,825 | |||||||||||||||||||||||||||
Total commercial | 131 | 61,642 | 59,377 | 126 | 61,613 | 56,954 | 123 | 63,918 | 58,907 | |||||||||||||||||||||||||||
Residential mortgage | 160 | 19,555 | 18,356 | 133 | 20,117 | 18,852 | 115 | 18,511 | 17,408 | |||||||||||||||||||||||||||
Home equity lines of credit | 4 | 531 | 531 | 3 | 505 | 505 | 5 | 521 | 521 | |||||||||||||||||||||||||||
Residential construction | 50 | 10,916 | 10,084 | 57 | 12,459 | 10,452 | 55 | 12,360 | 10,290 | |||||||||||||||||||||||||||
Consumer installment | 20 | 245 | 245 | 26 | 203 | 203 | 36 | 214 | 204 | |||||||||||||||||||||||||||
Indirect auto | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total loans | 365 | 92,889 | 88,593 | 345 | 94,897 | $ | 86,966 | 334 | 95,524 | 87,330 |
New Troubled Debt Restructurings | New Troubled Debt Restructurings | |||||||||||||||||||||||||||||||||||||||
for the Three Months Ended September 30, | for the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||
Modified Within the | Modified Within the | |||||||||||||||||||||||||||||||||||||||
Previous Twelve Months | Previous Twelve Months | |||||||||||||||||||||||||||||||||||||||
that Have Subsequently | that Have Subsequently | |||||||||||||||||||||||||||||||||||||||
Pre- | Post- | Defaulted During the | Pre- | Post- | Defaulted During the Nine | |||||||||||||||||||||||||||||||||||
Modification | Modification | Three Months Ended | Modification | Modification | Months Ended | |||||||||||||||||||||||||||||||||||
Outstanding | Outstanding | September 30, 2014 | Outstanding | Outstanding | September 30, 2014 | |||||||||||||||||||||||||||||||||||
Number of | Recorded | Recorded | Number of | Recorded | Number of | Recorded | Recorded | Number of | Recorded | |||||||||||||||||||||||||||||||
2014 | Contracts | Investment | Investment | Contracts | Investment | Contracts | Investment | Investment | Contracts | Investment | ||||||||||||||||||||||||||||||
Owner occupied commercial real estate | 2 | $ | 747 | $ | 747 | — | $ | — | 9 | $ | 4,139 | $ | 4,139 | $ | 1 | $ | 104 | |||||||||||||||||||||||
Income producing commercial real estate | — | — | — | — | — | 5 | 1,992 | 1,992 | — | — | ||||||||||||||||||||||||||||||
Commercial & industrial | 6 | 452 | 452 | — | — | 10 | 782 | 782 | 2 | 54 | ||||||||||||||||||||||||||||||
Commercial construction | — | — | — | — | — | 2 | 471 | 471 | — | — | ||||||||||||||||||||||||||||||
Total commercial | 8 | 1,199 | 1,199 | — | — | 26 | 7,384 | 7,384 | 3 | 158 | ||||||||||||||||||||||||||||||
Residential mortgage | 10 | 778 | 673 | 2 | 139 | 33 | 2,924 | 2,778 | 8 | 871 | ||||||||||||||||||||||||||||||
Home equity lines of credit | — | — | — | — | — | 1 | 36 | 36 | — | — | ||||||||||||||||||||||||||||||
Residential construction | — | — | — | — | — | 3 | 1,124 | 1,124 | — | — | ||||||||||||||||||||||||||||||
Consumer installment | — | — | — | — | — | 5 | 226 | 226 | — | — | ||||||||||||||||||||||||||||||
Indirect auto | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Total loans | 18 | $ | 1,977 | $ | 1,872 | 2 | $ | 139 | 68 | $ | 11,694 | $ | 11,548 | 11 | $ | 1,029 |
Modified Within the | Modified Within the | |||||||||||||||||||||||||||||||||||||||
Previous Twelve Months | Previous Twelve Months | |||||||||||||||||||||||||||||||||||||||
that Have Subsequently | that Have Subsequently | |||||||||||||||||||||||||||||||||||||||
Pre- | Post- | Defaulted During the | Pre- | Post- | Defaulted During the Nine | |||||||||||||||||||||||||||||||||||
Modification | Modification | Three Months Ended | Modification | Modification | Months Ended | |||||||||||||||||||||||||||||||||||
Outstanding | Outstanding | September 30, 2013 | Outstanding | Outstanding | September 30, 2013 | |||||||||||||||||||||||||||||||||||
Number of | Recorded | Recorded | Number of | Recorded | Number of | Recorded | Recorded | Number of | Recorded | |||||||||||||||||||||||||||||||
2013 | Contracts | Investment | Investment | Contracts | Investment | Contracts | Investment | Investment | Contracts | Investment | ||||||||||||||||||||||||||||||
Owner occupied commercial real estate | 1 | $ | 1,841 | $ | 741 | — | $ | — | 11 | $ | 5,923 | $ | 4,823 | $ | 1 | $ | 432 | |||||||||||||||||||||||
Income producing commercial real estate | — | — | — | — | — | 7 | 6,009 | 6,009 | — | — | ||||||||||||||||||||||||||||||
Commercial & industrial | 1 | 68 | 68 | — | — | 10 | 883 | 777 | 1 | 35 | ||||||||||||||||||||||||||||||
Commercial construction | — | — | — | — | — | — | — | — | 2 | 1,454 | ||||||||||||||||||||||||||||||
Total commercial | 2 | 1,909 | 809 | — | — | 28 | 12,815 | 11,609 | 4 | 1,921 | ||||||||||||||||||||||||||||||
Residential mortgage | 16 | 2,365 | 2,207 | 1 | 533 | 29 | 5,129 | 4,827 | 3 | 641 | ||||||||||||||||||||||||||||||
Home equity lines of credit | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Residential construction | 3 | 727 | 727 | 1 | 414 | 10 | 1,850 | 1,721 | 3 | 531 | ||||||||||||||||||||||||||||||
Consumer installment | 1 | 7 | 7 | 2 | 9 | 5 | 28 | 28 | 5 | 29 | ||||||||||||||||||||||||||||||
Indirect auto | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Total loans | 22 | $ | 5,008 | $ | 3,750 | 4 | $ | 956 | 72 | $ | 19,822 | $ | 18,185 | 15 | $ | 3,122 |
22 |
Substandard | Doubtful / | |||||||||||||||||||||||
As of September 30, 2014 | Pass | Watch | Performing | Nonaccrual | Loss | Total | ||||||||||||||||||
Owner occupied commercial real estate | $ | 1,076,822 | $ | 25,098 | $ | 49,857 | $ | 2,156 | $ | — | $ | 1,153,933 | ||||||||||||
Income producing commercial real estate | 563,451 | 17,319 | 22,215 | 1,742 | — | 604,727 | ||||||||||||||||||
Commercial & industrial | 637,160 | 3,602 | 7,498 | 1,593 | — | 649,853 | ||||||||||||||||||
Commercial construction | 174,443 | 2,356 | 3,847 | 148 | — | 180,794 | ||||||||||||||||||
Total commercial | 2,451,876 | 48,375 | 83,417 | 5,639 | — | 2,589,307 | ||||||||||||||||||
Residential mortgage | 803,937 | 10,300 | 42,981 | 8,350 | — | 865,568 | ||||||||||||||||||
Home equity lines of credit | 450,026 | — | 8,073 | 720 | — | 458,819 | ||||||||||||||||||
Residential construction | 284,491 | 7,389 | 11,755 | 3,543 | — | 307,178 | ||||||||||||||||||
Consumer installment | 102,460 | — | 2,746 | 139 | — | 105,345 | ||||||||||||||||||
Indirect auto | 242,315 | — | — | 354 | — | 242,669 | ||||||||||||||||||
Total loans | $ | 4,335,105 | $ | 66,064 | $ | 148,972 | $ | 18,745 | $ | — | $ | 4,568,886 | ||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||||
Owner occupied commercial real estate | $ | 1,054,924 | $ | 29,714 | $ | 43,083 | $ | 5,822 | $ | — | $ | 1,133,543 | ||||||||||||
Income producing commercial real estate | 575,597 | 10,410 | 34,642 | 2,518 | 623,167 | |||||||||||||||||||
Commercial & industrial | 456,563 | 5,382 | 9,589 | 427 | — | 471,961 | ||||||||||||||||||
Commercial construction | 120,852 | 10,932 | 16,758 | 361 | — | 148,903 | ||||||||||||||||||
Total commercial | 2,207,936 | 56,438 | 104,072 | 9,128 | — | 2,377,574 | ||||||||||||||||||
Residential mortgage | 793,381 | 25,944 | 44,022 | 11,730 | — | 875,077 | ||||||||||||||||||
Home equity lines of credit | 426,052 | 5,420 | 7,967 | 1,448 | 440,887 | |||||||||||||||||||
Residential construction | 298,685 | 11,526 | 14,104 | 4,264 | — | 328,579 | ||||||||||||||||||
Consumer installment | 107,029 | 1,229 | 2,538 | 249 | — | 111,045 | ||||||||||||||||||
Indirect auto | 196,104 | — | — | — | — | 196,104 | ||||||||||||||||||
Total loans | $ | 4,029,187 | $ | 100,557 | $ | 172,703 | $ | 26,819 | $ | — | $ | 4,329,266 | ||||||||||||
As of September 30, 2013 | ||||||||||||||||||||||||
Owner occupied commercial real estate | $ | 1,046,900 | $ | 35,948 | $ | 39,946 | $ | 6,358 | $ | — | $ | 1,129,152 | ||||||||||||
Income producing commercial real estate | 556,963 | 19,403 | 35,596 | 1,657 | — | 613,619 | ||||||||||||||||||
Commercial & industrial | 436,401 | 10,062 | 10,342 | 609 | — | 457,414 | ||||||||||||||||||
Commercial construction | 109,332 | 10,560 | 16,911 | 343 | — | 137,146 | ||||||||||||||||||
Total commercial | 2,149,596 | 75,973 | 102,795 | 8,967 | — | 2,337,331 | ||||||||||||||||||
Residential mortgage | 808,574 | 23,277 | 45,493 | 11,335 | — | 888,679 | ||||||||||||||||||
Home equity lines of credit | 406,575 | 5,193 | 7,679 | 1,169 | — | 420,616 | ||||||||||||||||||
Residential construction | 283,197 | 14,943 | 15,552 | 4,097 | — | 317,789 | ||||||||||||||||||
Consumer installment | 112,706 | 1,162 | 2,147 | 520 | — | 116,535 | ||||||||||||||||||
Indirect auto | 186,117 | — | — | — | — | 186,117 | ||||||||||||||||||
Total loans | $ | 3,946,765 | $ | 120,548 | $ | 173,666 | $ | 26,088 | $ | — | $ | 4,267,067 |
23 |
Nonaccrual Loans | ||||||||||||
September 30, | December 31, | September 30, | ||||||||||
2014 | 2013 | 2013 | ||||||||||
Owner occupied commercial real estate | $ | 2,156 | $ | 5,822 | $ | 6,358 | ||||||
Income producing commercial real estate | 1,742 | 2,518 | 1,657 | |||||||||
Commercial & industrial | 1,593 | 427 | 609 | |||||||||
Commercial construction | 148 | 361 | 343 | |||||||||
Total commercial | 5,639 | 9,128 | 8,967 | |||||||||
Residential mortgage | 8,350 | 11,730 | 11,335 | |||||||||
Home equity lines of credit | 720 | 1,448 | 1,169 | |||||||||
Residential construction | 3,543 | 4,264 | 4,097 | |||||||||
Consumer installment | 139 | 249 | 520 | |||||||||
Indirect auto | 354 | — | — | |||||||||
Total | $ | 18,745 | $ | 26,819 | $ | 26,088 | ||||||
Balance as a percentage of unpaid principal | 68.6 | % | 65.3 | % | 61.6 | % |
September 30, | December 31, | September 30, | ||||||||||
2014 | 2013 | 2013 | ||||||||||
Commercial real estate | $ | 1,350 | $ | 1,287 | $ | 1,130 | ||||||
Commercial construction | — | — | 376 | |||||||||
Total commercial | 1,350 | 1,287 | 1,506 | |||||||||
Residential mortgage | 1,954 | 3,380 | 2,420 | |||||||||
Residential construction | 588 | 736 | 1,981 | |||||||||
Total foreclosed property | 3,892 | 5,403 | 5,907 | |||||||||
Less valuation allowance | (746 | ) | (1,182 | ) | (1,440 | ) | ||||||
Foreclosed property, net | $ | 3,146 | $ | 4,221 | $ | 4,467 | ||||||
Balance as a percentage of original loan unpaid principal | 54.5 | % | 44.5 | % | 41.5 | % |
24 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Balance at beginning of period | $ | 741 | $ | 3,602 | $ | 1,182 | $ | 6,954 | ||||||||
Additions charged to expense | 108 | 329 | 690 | 2,739 | ||||||||||||
Disposals | (103 | ) | (2,491 | ) | (1,126 | ) | (8,253 | ) | ||||||||
Balance at end of period | $ | 746 | $ | 1,440 | $ | 746 | $ | 1,440 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net (gain)/loss on sales | $ | (264 | ) | $ | 513 | $ | (1,208 | ) | $ | 3,563 | ||||||
Provision for unrealized losses | 108 | 329 | 690 | 2,739 | ||||||||||||
Operating expenses | 441 | (648 | ) | 1,021 | 1,376 | |||||||||||
Total foreclosed property expense | $ | 285 | $ | 194 | $ | 503 | $ | 7,678 |
25 |
Amounts Reclassified from Accumulated Other | |||||||||||||||||
Comprehensive Income | |||||||||||||||||
For the three months ended | For the nine months ended | ||||||||||||||||
Details about Accumulated Other | September 30, | September 30, | Affected Line Item in the Statement | ||||||||||||||
Comprehensive Income Components | 2014 | 2013 | 2014 | 2013 | Where Net Income is Presented | ||||||||||||
Realized gains on sales of available-for-sale securities: | |||||||||||||||||
$ | 11 | $ | — | $ | 4,663 | $ | 116 | Securities gains, net | |||||||||
(4 | ) | — | (1,821 | ) | (45 | ) | Tax expense | ||||||||||
$ | 7 | $ | — | $ | 2,842 | $ | 71 | Net of tax | |||||||||
Amortization of (losses) gains included in net income on available-for-sale securities transferred to held to maturity: | |||||||||||||||||
$ | (468 | ) | $ | 214 | $ | (1,207 | ) | $ | 803 | Investment securities interest revenue | |||||||
176 | (83 | ) | 453 | (310 | ) | Tax benefit (expense) | |||||||||||
$ | (292 | ) | $ | 131 | $ | (754 | ) | $ | 493 | Net of tax | |||||||
Amounts included in net income on derivative financial instruments accounted for as cash flow hedges: | |||||||||||||||||
Effective portion of interest rate contracts | $ | — | $ | 10 | $ | — | $ | 850 | Loan interest revenue | ||||||||
Ineffective portion of interest rate contracts | — | 48 | — | 52 | Loan interest revenue | ||||||||||||
Effective portion of interest rate contracts | (317 | ) | — | (764 | ) | — | Brokered deposit interest expense | ||||||||||
Amortization of losses on de-designated positions | (81 | ) | — | (105 | ) | — | Money market deposit interest expense | ||||||||||
Amortization of losses on de-designated positions | (313 | ) | — | (512 | ) | — | Brokered deposit interest expense | ||||||||||
(711 | ) | 58 | (1,381 | ) | 902 | Total before tax | |||||||||||
277 | (23 | ) | 538 | (351 | ) | Tax or benefit (expense) | |||||||||||
$ | (434 | ) | $ | 35 | $ | (843 | ) | $ | 551 | Net of tax | |||||||
Amortization of prior service cost and actuarial losses included in net periodic pension cost for defined benefit pension plan | |||||||||||||||||
Prior service cost | $ | (91 | ) | $ | (91 | ) | $ | (274 | ) | $ | (273 | ) | Salaries and employee benefits expense | ||||
Actuarial losses | — | (42 | ) | — | (126 | ) | Salaries and employee benefits expense | ||||||||||
(91 | ) | (133 | ) | (274 | ) | (399 | ) | Total before tax | |||||||||
36 | 52 | 107 | 155 | Tax benefit | |||||||||||||
$ | (55 | ) | $ | (81 | ) | $ | (167 | ) | $ | (244 | ) | Net of tax | |||||
Total reclassifications for the period | $ | (774 | ) | $ | 85 | $ | 1,078 | $ | 871 | Net of tax | |||||||
Amounts shown above in parentheses reduce earnings |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Series A - 6% fixed | $ | — | $ | 3 | $ | — | $ | 9 | ||||||||
Series B - 5% fixed until December 6, 2013, 9% thereafter | — | 2,641 | 159 | 7,907 | ||||||||||||
Series D - LIBOR plus 9.6875%, resets quarterly | — | 415 | 280 | 1,250 | ||||||||||||
Total preferred stock dividends | $ | — | $ | 3,059 | $ | 439 | $ | 9,166 |
26 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income available to common shareholders | $ | 17,616 | $ | 12,441 | $ | 48,934 | $ | 248,063 | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 60,776 | 59,100 | 60,511 | 58,443 | ||||||||||||
Effect of dilutive securities | ||||||||||||||||
Stock options | 3 | 1 | 2 | 1 | ||||||||||||
Warrants | — | 101 | — | — | ||||||||||||
Diluted | 60,779 | 59,202 | 60,513 | 58,444 | ||||||||||||
Income per common share: | ||||||||||||||||
Basic | $ | .29 | $ | .21 | $ | .81 | $ | 4.24 | ||||||||
Diluted | $ | .29 | $ | .21 | $ | .81 | $ | 4.24 |
27 |
Derivatives designated as hedging instruments under ASC 815 | ||||||||||||||
Fair Value | ||||||||||||||
Balance Sheet | September 30, | December 31, | September 30, | |||||||||||
Interest Rate Products | Location | 2014 | 2013 | 2013 | ||||||||||
Cash flow hedge of money market deposits | Other assets | $ | 1,349 | $ | 4,782 | $ | 3,580 | |||||||
Fair value hedge of corporate bonds | Other assets | — | 3,939 | 2,709 | ||||||||||
$ | 1,349 | $ | 8,721 | $ | 6,289 | |||||||||
Cash flow hedge of short-term debt | Other liabilities | $ | — | $ | 3,368 | $ | 3,247 | |||||||
Cash flow hedge of money market deposits | Other liabilities | — | — | 431 | ||||||||||
Fair value hedge of brokered CD’s | Other liabilities | 10,201 | 19,970 | 28,748 | ||||||||||
Fair value hedge of corporate bonds | Other liabilities | — | 2,308 | 3,025 | ||||||||||
$ | 10,201 | $ | 25,646 | $ | 35,451 |
Derivatives not designated as hedging instruments under ASC 815 | ||||||||||||||
Fair Value | ||||||||||||||
Balance Sheet | September 30, | December 31, | September 30, | |||||||||||
Interest Rate Products | Location | 2014 | 2013 | 2013 | ||||||||||
Customer swap positions | Other assets | $ | 2,067 | $ | 898 | $ | 1,096 | |||||||
Dealer offsets to customer swap positions | Other assets | 475 | 1,347 | 707 | ||||||||||
Bifurcated embedded derivatives | Other assets | 14,780 | 12,867 | — | ||||||||||
Offsetting positions for de-designated cash flow hedges | Other assets | 3,550 | — | — | ||||||||||
$ | 20,872 | $ | 15,112 | $ | 1,803 | |||||||||
Customer swap positions | Other liabilities | $ | 475 | $ | 1,347 | $ | 707 | |||||||
Dealer offsets to customer swap positions | Other liabilities | 2,087 | 915 | 1,111 | ||||||||||
Dealer offsets to bifurcated embedded derivatives | Other liabilities | 19,858 | 18,324 | — | ||||||||||
De-designated cash flow hedge of brokered CDs | Other liabilities | 2,645 | — | — | ||||||||||
De-designated cash flow hedge of money market deposits | Other liabilities | 905 | — | — | ||||||||||
$ | 25,970 | $ | 20,586 | $ | 1,818 |
28 |
29 |
Location of Gain | Amount of Gain (Loss) | Amount of Gain (Loss) | ||||||||||||||||
(Loss) Recognized | Recognized in Income | Recognized in Income | ||||||||||||||||
in Income on | on Derivative | on Hedged Item | ||||||||||||||||
Derivative | 2014 | 2013 | 2014 | 2013 | ||||||||||||||
Three Months Ended September 30, | ||||||||||||||||||
Fair value hedges of brokered CD’s | Interest expense | $ | (37 | ) | $ | (2,849 | ) | $ | (275 | ) | $ | 2,872 | ||||||
Fair value hedges of corporate bonds | Interest revenue | — | 109 | — | (94 | ) | ||||||||||||
$ | (37 | ) | $ | (2,740 | ) | $ | (275 | ) | $ | 2,778 | ||||||||
Nine Months Ended September 30, | ||||||||||||||||||
Fair value hedges of brokered CD’s | Interest expense | $ | 10,078 | $ | (20,134 | ) | $ | (10,691 | ) | $ | 19,988 | |||||||
Fair value hedges of corporate bonds | Interest revenue | (2,487 | ) | 4,338 | 2,163 | (3,951 | ) | |||||||||||
$ | 7,591 | $ | (15,796 | ) | $ | (8,528 | ) | $ | 16,037 |
30 |
Amount of Gain (Loss) | ||||||||||||||||||||||||||
Recognized in Other | Gain (Loss) Reclassified from | |||||||||||||||||||||||||
Comprehensive | Accumulated Other Comprehensive | Gain (Loss) Recognized in Income on | ||||||||||||||||||||||||
Income on Derivative | Income into Income | Derivative | ||||||||||||||||||||||||
(Effective Portion) | (Effective Portion) | (Ineffective Portion) | ||||||||||||||||||||||||
2014 | 2013 | Location | 2014 | 2013 | Location | 2014 | 2013 | |||||||||||||||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||
Interest revenue | $ | — | $ | 58 | ||||||||||||||||||||||
Interest expense | (711 | ) | — | |||||||||||||||||||||||
Interest rate swaps | $ | 412 | $ | (3,507 | ) | Total | $ | (711 | ) | $ | 58 | Interest expense | $ | 12 | $ | (33 | ) | |||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||
Interest revenue | $ | — | $ | 902 | ||||||||||||||||||||||
Interest expense | (1,381 | ) | — | |||||||||||||||||||||||
Interest rate swaps | $ | (5,967 | ) | $ | 8,595 | Total | $ | (1,381 | ) | $ | 902 | Interest expense | $ | (73 | ) | $ | 46 |
31 |
Weighted- | ||||||||||||||||
Average | Aggregate | |||||||||||||||
Weighted- | Remaining | Intrinisic | ||||||||||||||
Average Exercise | Contractual | Value | ||||||||||||||
Options | Shares | Price | Term (Years) | ($000) | ||||||||||||
Outstanding at December 31, 2013 | 350,772 | $ | 97.87 | |||||||||||||
Expired | (45,481 | ) | 110.57 | |||||||||||||
Outstanding at September 30, 2014 | 305,291 | 95.98 | 2.9 | $ | 59 | |||||||||||
Exercisable at September 30, 2014 | 299,041 | 97.70 | 2.8 | 41 |
Nine Months Ended | |||
September 30, | |||
2014 | 2013 | ||
Expected volatility | NA | 30.00% | |
Expected dividend yield | NA | 0.00% | |
Expected life (in years) | NA | 6.25 | |
Risk-free rate | NA | 2.01% |
32 |
Weighted- | ||||||||
Average Grant- | ||||||||
Restricted Stock | Shares | Date Fair Value | ||||||
Outstanding at December 31, 2013 | 1,073,676 | $ | 13.73 | |||||
Granted | 55,066 | 17.73 | ||||||
Excercised | (324,108 | ) | 12.24 | |||||
Cancelled | (3,300 | ) | 13.18 | |||||
Outstanding at September 30, 2014 | 801,334 | 14.61 | ||||||
Vested at September 30, 2014 | 7,580 | 9.90 |
33 |
34 |
35 |
36 |
September 30, 2014 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | ||||||||||||||||
Securities available for sale: | ||||||||||||||||
U.S. Treasury securities | $ | — | $ | 105,022 | $ | — | $ | 105,022 | ||||||||
State and political subdivisions | — | 20,321 | — | 20,321 | ||||||||||||
Mortgage-backed securities | — | 1,034,992 | — | 1,034,992 | ||||||||||||
Corporate bonds | — | 164,952 | 300 | 165,252 | ||||||||||||
Asset-backed securities | — | 462,044 | — | 462,044 | ||||||||||||
Other | — | 2,036 | — | 2,036 | ||||||||||||
Deferred compensation plan assets | 3,734 | — | — | 3,734 | ||||||||||||
Derivative financial instruments | — | 22,221 | — | 22,221 | ||||||||||||
Total assets | $ | 3,734 | $ | 1,811,588 | $ | 300 | $ | 1,815,622 | ||||||||
Liabilities: | ||||||||||||||||
Deferred compensation plan liability | $ | 3,734 | $ | — | $ | — | $ | 3,734 | ||||||||
Brokered certificates of deposit | — | 175,053 | — | 175,053 | ||||||||||||
Derivative financial instruments | — | 36,171 | — | 36,171 | ||||||||||||
Total liabilities | $ | 3,734 | $ | 211,224 | $ | — | $ | 214,958 | ||||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | ||||||||||||||||
Securities available for sale | ||||||||||||||||
State and political subdivisions | $ | — | $ | 23,242 | $ | — | $ | 23,242 | ||||||||
Mortgage-backed securities | — | 1,145,347 | — | 1,145,347 | ||||||||||||
Corporate bonds | — | 249,946 | 350 | 250,296 | ||||||||||||
Asset-backed securities | — | 410,633 | — | 410,633 | ||||||||||||
Other | — | 2,699 | — | 2,699 | ||||||||||||
Deferred compensation plan assets | 3,496 | — | — | 3,496 | ||||||||||||
Derivative financial instruments | — | 23,833 | — | 23,833 | ||||||||||||
Total assets | $ | 3,496 | $ | 1,855,700 | $ | 350 | $ | 1,859,546 | ||||||||
Liabilities: | ||||||||||||||||
Deferred compensation plan liability | $ | 3,496 | $ | — | $ | — | $ | 3,496 | ||||||||
Brokered certificates of deposit | — | 173,657 | — | 173,657 | ||||||||||||
Derivative financial instruments | — | 46,232 | — | 46,232 | ||||||||||||
Total liabilities | $ | 3,496 | $ | 219,889 | $ | — | $ | 223,385 |
37 |
Notes to Consolidated Financial Statements
September 30, 2013 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | ||||||||||||||||
Securities available for sale: | ||||||||||||||||
State and political subdivisions | $ | — | $ | 23,524 | $ | — | $ | 23,524 | ||||||||
Mortgage-backed securities | — | 1,383,317 | — | 1,383,317 | ||||||||||||
Corporate bonds | — | 246,601 | 350 | 246,951 | ||||||||||||
Asset-backed securities | — | 307,238 | — | 307,238 | ||||||||||||
Other | — | 2,394 | — | 2,394 | ||||||||||||
Deferred compensation plan assets | 3,203 | — | — | 3,203 | ||||||||||||
Derivative financial instruments | — | 8,092 | — | 8,092 | ||||||||||||
Total assets | $ | 3,203 | $ | 1,971,166 | $ | 350 | $ | 1,974,719 | ||||||||
Liabilities: | ||||||||||||||||
Deferred compensation plan liability | $ | 3,203 | $ | — | $ | — | $ | 3,203 | ||||||||
Brokered certificates of deposit | — | 273,282 | — | 273,282 | ||||||||||||
Derivative financial instruments | — | 37,269 | — | 37,269 | ||||||||||||
Total liabilities | $ | 3,203 | $ | 310,551 | $ | — | $ | 313,754 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
Securities Available for Sale | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Balance at beginning of period | $ | 300 | $ | 350 | $ | 350 | $ | 350 | ||||||||
Amounts included in earnings | — | — | — | — | ||||||||||||
Paydowns / sales | — | — | (50 | ) | — | |||||||||||
Balance at end of period | $ | 300 | $ | 350 | $ | 300 | $ | 350 |
38 |
September 30, 2014 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets | ||||||||||||||||
Loans | $ | — | $ | — | $ | 85,827 | $ | 85,827 | ||||||||
Foreclosed properties | — | — | 2,204 | 2,204 | ||||||||||||
Total | $ | — | $ | — | $ | 88,031 | $ | 88,031 | ||||||||
December 31, 2013 | ||||||||||||||||
Assets | ||||||||||||||||
Loans | $ | — | $ | — | $ | 82,798 | $ | 82,798 | ||||||||
Foreclosed properties | — | — | 3,747 | 3,747 | ||||||||||||
Total | $ | — | $ | — | $ | 86,545 | $ | 86,545 | ||||||||
September 30, 2013 | ||||||||||||||||
Assets | ||||||||||||||||
Loans | $ | — | $ | — | $ | 76,393 | $ | 76,393 | ||||||||
Foreclosed properties | — | — | 3,898 | 3,898 | ||||||||||||
Total | $ | — | $ | — | $ | 80,291 | $ | 80,291 |
39 |
Carrying | Fair Value Level | |||||||||||||||||||
September 30, 2014 | Amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
Assets: | ||||||||||||||||||||
Securities held to maturity | $ | 432,418 | $ | — | $ | 440,311 | $ | — | $ | 440,311 | ||||||||||
Loans, net | 4,496,958 | — | — | 4,437,039 | 4,437,039 | |||||||||||||||
Mortgage loans held for sale | 20,004 | — | 20,253 | — | 20,253 | |||||||||||||||
Liabilities: | ||||||||||||||||||||
Deposits | 6,240,729 | — | 6,228,804 | — | 6,228,804 | |||||||||||||||
Federal Home Loan Bank advances | 330,125 | — | 330,134 | — | 330,134 | |||||||||||||||
Long-term debt | 129,865 | — | — | 132,636 | 132,636 | |||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Securities held to maturity | 479,742 | — | 485,585 | — | 485,585 | |||||||||||||||
Loans, net | 4,252,504 | — | — | 4,165,591 | 4,165,591 | |||||||||||||||
Mortgage loans held for sale | 10,319 | — | 10,529 | — | 10,529 | |||||||||||||||
Liabilities: | ||||||||||||||||||||
Deposits | 6,201,505 | — | 6,204,815 | — | 6,204,815 | |||||||||||||||
Federal Home Loan Bank advances | 120,125 | — | 120,125 | — | 120,125 | |||||||||||||||
Long-term debt | 129,865 | — | — | 130,262 | 130,262 | |||||||||||||||
September 30, 2013 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Securities held to maturity | 205,613 | — | 214,651 | — | 214,651 | |||||||||||||||
Loans, net | 4,186,695 | — | — | 4,095,666 | 4,095,666 | |||||||||||||||
Mortgage loans held for sale | 11,987 | — | 11,979 | — | 11,979 | |||||||||||||||
Liabilities: | ||||||||||||||||||||
Deposits | 6,112,907 | — | 6,117,769 | — | 6,117,769 | |||||||||||||||
Federal Home Loan Bank advances | 125 | — | 125 | — | 125 | |||||||||||||||
Long-term debt | 129,865 | — | — | 129,197 | 129,197 |
40 |
September 30, 2014 | December 31, 2013 | September 30, 2013 | ||||||||||
Financial instruments whose contract amounts represent credit risk: | ||||||||||||
Commitments to extend credit | $ | 852,635 | $ | 747,170 | $ | 677,891 | ||||||
Letters of credit | 20,534 | 19,846 | 9,818 |
41 |
● | the condition of the general business and economic environment; |
● | the results of our internal credit stress tests may not accurately predict the impact on our financial condition if the economy were to deteriorate; |
● | our ability to maintain profitability; |
● | our ability to fully realize the balance of our net deferred tax asset, including net operating loss carryforwards; |
● | the risk that we may be required to increase the valuation allowance on our net deferred tax asset in future periods; |
● | the condition of the banking system and financial markets; |
● | our ability to raise capital as may be necessary; |
● | our ability to maintain liquidity or access other sources of funding; |
● | changes in the cost and availability of funding; |
● | the success of the local economies in which we operate; |
● | our lack of geographic diversification; |
● | our concentrations of residential and commercial construction and development loans and commercial real estate loans are subject to unique risks that could adversely affect our earnings; |
● | changes in prevailing interest rates may negatively affect our net income and the value of our assets and other interest rate risks; |
● | our accounting and reporting policies; |
● | if our allowance for loan losses is not sufficient to cover actual loan losses; |
● | losses due to fraudulent and negligent conduct of our loan customers, third party service providers or employees; |
● | risks related to our communications and information systems, including risks with respect to cybersecurity breaches; |
● | our reliance on third parties to provide key components of our business infrastructure and services required to operate our business; |
● | competition from financial institutions and other financial service providers; |
● | risks with respect to our ability to successfully expand and complete acquisitions and integrate businesses and operations that are acquired; |
● | if the conditions in the stock market, the public debt market and other capital markets deteriorate; |
● | the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and related regulations; |
● | changes in laws and regulations or failures to comply with such laws and regulations; |
● | changes in regulatory capital and other requirements; |
● | the costs and effects of litigation, examinations, investigations, or similar matters, or adverse facts and developments related thereto, including possible dilution; |
● | regulatory or judicial proceedings, board resolutions, informal memorandums of understanding or formal enforcement actions imposed by regulators that may occur; |
● | changes in tax laws, regulations and interpretations or challenges to our income tax provision; and |
● | our ability to maintain effective internal controls over financial reporting and disclosure controls and procedures. |
42 |
43 |
44 |
Table 1 - Financial Highlights | ||||||||||||||||||||||||||||||||||||
Selected Financial Information | ||||||||||||||||||||||||||||||||||||
Third | For the Nine | |||||||||||||||||||||||||||||||||||
2014 | 2013 | Quarter | Months Ended | YTD | ||||||||||||||||||||||||||||||||
(in thousands, except per share | Third | Second | First | Fourth | Third | 2014-2013 | September 30, | 2014-2013 | ||||||||||||||||||||||||||||
data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | 2014 | 2013 | Change | |||||||||||||||||||||||||||
INCOME SUMMARY | ||||||||||||||||||||||||||||||||||||
Interest revenue | $ | 63,338 | $ | 61,783 | $ | 60,495 | $ | 61,695 | $ | 61,426 | $ | 185,616 | $ | 185,628 | ||||||||||||||||||||||
Interest expense | 6,371 | 6,833 | 6,326 | 5,816 | 7,169 | 19,530 | 21,866 | |||||||||||||||||||||||||||||
Net interest revenue | 56,967 | 54,950 | 54,169 | 55,879 | 54,257 | 5 | % | 166,086 | 163,762 | 1 | % | |||||||||||||||||||||||||
Provision for credit losses | 2,000 | 2,200 | 2,500 | 3,000 | 3,000 | 6,700 | 62,500 | |||||||||||||||||||||||||||||
Fee revenue | 14,412 | 14,143 | 12,176 | 13,519 | 14,225 | 1 | 40,731 | 43,079 | (5 | ) | ||||||||||||||||||||||||||
Total revenue | 69,379 | 66,893 | 63,845 | 66,398 | 65,482 | 200,117 | 144,341 | |||||||||||||||||||||||||||||
Operating expenses | 41,364 | 40,532 | 39,050 | 41,614 | 40,097 | 3 | 120,946 | 132,690 | (9 | ) | ||||||||||||||||||||||||||
Income before income taxes | 28,015 | 26,361 | 24,795 | 24,784 | 25,385 | 10 | 79,171 | 11,651 | ||||||||||||||||||||||||||||
Income tax expense (benefit) | 10,399 | 10,004 | 9,395 | 8,873 | 9,885 | 29,798 | (245,578 | ) | ||||||||||||||||||||||||||||
Net income | 17,616 | 16,357 | 15,400 | 15,911 | 15,500 | 14 | 49,373 | 257,229 | ||||||||||||||||||||||||||||
Preferred dividends and discount accretion | — | — | 439 | 2,912 | 3,059 | 439 | 9,166 | |||||||||||||||||||||||||||||
Net income available to common shareholders | $ | 17,616 | $ | 16,357 | $ | 14,961 | $ | 12,999 | $ | 12,441 | 42 | $ | 48,934 | $ | 248,063 | |||||||||||||||||||||
PERFORMANCE MEASURES | ||||||||||||||||||||||||||||||||||||
Per common share: | ||||||||||||||||||||||||||||||||||||
Diluted income | $ | .29 | $ | .27 | $ | .25 | $ | .22 | $ | .21 | 38 | $ | .81 | $ | 4.24 | |||||||||||||||||||||
Book value | 12.15 | 11.94 | 11.66 | 11.30 | 10.99 | 11 | 12.15 | 10.99 | 11 | |||||||||||||||||||||||||||
Tangible book value (2) | 12.10 | 11.91 | 11.63 | 11.26 | 10.95 | 11 | 12.10 | 10.95 | 11 | |||||||||||||||||||||||||||
Key performance ratios: | ||||||||||||||||||||||||||||||||||||
Return on common equity (1)(3) | 9.41 | % | 8.99 | % | 8.64 | % | 7.52 | % | 7.38 | % | 9.02 | % | 64.29 | % | ||||||||||||||||||||||
Return on assets (3) | .95 | .88 | .85 | .86 | .86 | .89 | 4.93 | |||||||||||||||||||||||||||||
Net interest margin (3) | 3.32 | 3.21 | 3.21 | 3.26 | 3.26 | 3.25 | 3.32 | |||||||||||||||||||||||||||||
Efficiency ratio | 57.96 | 58.65 | 59.05 | 60.02 | 58.55 | 58.54 | 64.19 | |||||||||||||||||||||||||||||
Equity to assets | 9.85 | 9.61 | 9.52 | 11.62 | 11.80 | 9.66 | 9.91 | |||||||||||||||||||||||||||||
Tangible equity to assets (2) | 9.83 | 9.58 | 9.50 | 11.59 | 11.76 | 9.64 | 9.85 | |||||||||||||||||||||||||||||
Tangible common equity to assets (2) | 9.83 | 9.58 | 9.22 | 8.99 | 9.02 | 9.55 | 7.04 | |||||||||||||||||||||||||||||
Tangible common equity to risk- weighted assets (2) | 14.10 | 13.92 | 13.63 | 13.18 | 13.34 | 14.10 | 13.34 | |||||||||||||||||||||||||||||
ASSET QUALITY * | ||||||||||||||||||||||||||||||||||||
Non-performing loans | $ | 18,745 | $ | 20,724 | $ | 25,250 | $ | 26,819 | $ | 26,088 | $ | 18,745 | $ | 26,088 | ||||||||||||||||||||||
Foreclosed properties | 3,146 | 2,969 | 5,594 | 4,221 | 4,467 | 3,146 | 4,467 | |||||||||||||||||||||||||||||
Total non-performing assets (NPAs) | 21,891 | 23,693 | 30,844 | 31,040 | 30,555 | 21,891 | 30,555 | |||||||||||||||||||||||||||||
Allowance for loan losses | 71,928 | 73,248 | 75,223 | 76,762 | 80,372 | 71,928 | 80,372 | |||||||||||||||||||||||||||||
Net charge-offs | 3,155 | 4,175 | 4,039 | 4,445 | 4,473 | 11,369 | 89,265 | |||||||||||||||||||||||||||||
Allowance for loan losses to loans | 1.57 | % | 1.66 | % | 1.73 | % | 1.77 | % | 1.88 | % | 1.57 | % | 1.88 | % | ||||||||||||||||||||||
Net charge-offs to average loans (3) | .28 | .38 | .38 | .41 | .42 | .35 | 2.84 | |||||||||||||||||||||||||||||
NPAs to loans and foreclosed properties | .48 | .54 | .71 | .72 | .72 | .48 | .72 | |||||||||||||||||||||||||||||
NPAs to total assets | .29 | .32 | .42 | .42 | .42 | .29 | .42 | |||||||||||||||||||||||||||||
AVERAGE BALANCES ($ in millions) | ||||||||||||||||||||||||||||||||||||
Loans | $ | 4,446 | $ | 4,376 | $ | 4,356 | $ | 4,315 | $ | 4,250 | 5 | $ | 4,393 | $ | 4,234 | 4 | ||||||||||||||||||||
Investment securities | 2,231 | 2,326 | 2,320 | 2,280 | 2,178 | 2 | 2,292 | 2,160 | 6 | |||||||||||||||||||||||||||
Earning assets | 6,820 | 6,861 | 6,827 | 6,823 | 6,615 | 3 | 6,836 | 6,590 | 4 | |||||||||||||||||||||||||||
Total assets | 7,374 | 7,418 | 7,384 | 7,370 | 7,170 | 3 | 7,392 | 6,974 | 6 | |||||||||||||||||||||||||||
Deposits | 6,143 | 6,187 | 6,197 | 6,190 | 5,987 | 3 | 6,176 | 5,972 | 3 | |||||||||||||||||||||||||||
Shareholders’ equity | 726 | 713 | 703 | 856 | 846 | (14 | ) | 714 | 691 | 3 | ||||||||||||||||||||||||||
Common shares - basic (thousands) | 60,776 | 60,712 | 60,059 | 59,923 | 59,100 | 60,511 | 58,443 | |||||||||||||||||||||||||||||
Common shares - diluted (thousands) | 60,779 | 60,714 | 60,061 | 59,925 | 59,202 | 60,513 | 58,444 | |||||||||||||||||||||||||||||
AT PERIOD END ($ in millions) | ||||||||||||||||||||||||||||||||||||
Loans * | $ | 4,569 | $ | 4,410 | $ | 4,356 | $ | 4,329 | $ | 4,267 | 7 | $ | 4,569 | $ | 4,267 | 7 | ||||||||||||||||||||
Investment securities | 2,222 | 2,190 | 2,302 | 2,312 | 2,169 | 2 | 2,222 | 2,169 | 2 | |||||||||||||||||||||||||||
Total assets | 7,526 | 7,352 | 7,398 | 7,425 | 7,243 | 4 | 7,526 | 7,243 | 4 | |||||||||||||||||||||||||||
Deposits | 6,241 | 6,164 | 6,248 | 6,202 | 6,113 | 2 | 6,241 | 6,113 | 2 | |||||||||||||||||||||||||||
Shareholders’ equity | 736 | 722 | 704 | 796 | 852 | (14 | ) | 736 | 852 | (14 | ) | |||||||||||||||||||||||||
Common shares outstanding (thousands) | 60,248 | 60,139 | 60,092 | 59,432 | 59,412 | 60,248 | 59,412 |
45 |
Table 1 Continued - Non-GAAP Performance Measures Reconciliation | ||||||||||||||||||||||||||||
Selected Financial Information | ||||||||||||||||||||||||||||
2014 | 2013 | For the Nine Months | ||||||||||||||||||||||||||
(in thousands, except per share | Third | Second | First | Fourth | Third | Ended September 30, | ||||||||||||||||||||||
data; taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | 2014 | 2013 | |||||||||||||||||||||
Interest revenue reconciliation | ||||||||||||||||||||||||||||
Interest revenue - taxable equivalent | $ | 63,338 | $ | 61,783 | $ | 60,495 | $ | 61,695 | $ | 61,426 | $ | 185,616 | $ | 185,628 | ||||||||||||||
Taxable equivalent adjustment | (405 | ) | (377 | ) | (357 | ) | (380 | ) | (370 | ) | (1,139 | ) | (1,103 | ) | ||||||||||||||
Interest revenue (GAAP) | $ | 62,933 | $ | 61,406 | $ | 60,138 | $ | 61,315 | $ | 61,056 | $ | 184,477 | $ | 184,525 | ||||||||||||||
Net interest revenue reconciliation | ||||||||||||||||||||||||||||
Net interest revenue - taxable equivalent | $ | 56,967 | $ | 54,950 | $ | 54,169 | $ | 55,879 | $ | 54,257 | $ | 166,086 | $ | 163,762 | ||||||||||||||
Taxable equivalent adjustment | (405 | ) | (377 | ) | (357 | ) | (380 | ) | (370 | ) | (1,139 | ) | (1,103 | ) | ||||||||||||||
Net interest revenue (GAAP) | $ | 56,562 | $ | 54,573 | $ | 53,812 | $ | 55,499 | $ | 53,887 | $ | 164,947 | $ | 162,659 | ||||||||||||||
Total revenue reconciliation | ||||||||||||||||||||||||||||
Total operating revenue | $ | 69,379 | $ | 66,893 | $ | 63,845 | $ | 66,398 | $ | 65,482 | $ | 200,117 | $ | 144,341 | ||||||||||||||
Taxable equivalent adjustment | (405 | ) | (377 | ) | (357 | ) | (380 | ) | (370 | ) | (1,139 | ) | (1,103 | ) | ||||||||||||||
Total revenue (GAAP) | $ | 68,974 | $ | 66,516 | $ | 63,488 | $ | 66,018 | $ | 65,112 | $ | 198,978 | $ | 143,238 | ||||||||||||||
Income before taxes reconciliation | ||||||||||||||||||||||||||||
Income before taxes | $ | 28,015 | $ | 26,361 | $ | 24,795 | $ | 24,784 | $ | 25,385 | $ | 79,171 | $ | 11,651 | ||||||||||||||
Taxable equivalent adjustment | (405 | ) | (377 | ) | (357 | ) | (380 | ) | (370 | ) | (1,139 | ) | (1,103 | ) | ||||||||||||||
Income before taxes (GAAP) | $ | 27,610 | $ | 25,984 | $ | 24,438 | $ | 24,404 | $ | 25,015 | $ | 78,032 | $ | 10,548 | ||||||||||||||
Income tax expense (benefit) reconciliation | ||||||||||||||||||||||||||||
Income tax expense (benefit) | $ | 10,399 | $ | 10,004 | $ | 9,395 | $ | 8,873 | $ | 9,885 | $ | 29,798 | $ | (245,578 | ) | |||||||||||||
Taxable equivalent adjustment | (405 | ) | (377 | ) | (357 | ) | (380 | ) | (370 | ) | (1,139 | ) | (1,103 | ) | ||||||||||||||
Income tax expense (benefit) (GAAP) | $ | 9,994 | $ | 9,627 | $ | 9,038 | $ | 8,493 | $ | 9,515 | $ | 28,659 | $ | (246,681 | ) | |||||||||||||
Book value per common share reconciliation | ||||||||||||||||||||||||||||
Tangible book value per common share | $ | 12.10 | $ | 11.91 | $ | 11.63 | $ | 11.26 | $ | 10.95 | $ | 12.10 | $ | 10.95 | ||||||||||||||
Effect of goodwill and other intangibles | .05 | .03 | .03 | .04 | .04 | .05 | .04 | |||||||||||||||||||||
Book value per common share (GAAP) | $ | 12.15 | $ | 11.94 | $ | 11.66 | $ | 11.30 | $ | 10.99 | $ | 12.15 | $ | 10.99 | ||||||||||||||
Average equity to assets reconciliation | ||||||||||||||||||||||||||||
Tangible common equity to assets | 9.83 | % | 9.58 | % | 9.22 | % | 8.99 | % | 9.02 | % | 9.55 | % | 7.04 | % | ||||||||||||||
Effect of preferred equity | — | — | .28 | 2.60 | 2.74 | .09 | 2.81 | |||||||||||||||||||||
Tangible equity to assets | 9.83 | 9.58 | 9.50 | 11.59 | 11.76 | 9.64 | 9.85 | |||||||||||||||||||||
Effect of goodwill and other intangibles | .02 | .03 | .02 | .03 | .04 | .02 | .06 | |||||||||||||||||||||
Equity to assets (GAAP) | 9.85 | % | 9.61 | % | 9.52 | % | 11.62 | % | 11.80 | % | 9.66 | % | 9.91 | % | ||||||||||||||
Tangible common equity to risk-weighted assets reconciliation | ||||||||||||||||||||||||||||
Tangible common equity to risk-weighted assets | 14.10 | % | 13.92 | % | 13.63 | % | 13.18 | % | 13.34 | % | 14.10 | % | 13.34 | % | ||||||||||||||
Effect of other comprehensive income | .34 | .53 | .36 | .39 | .49 | .34 | .49 | |||||||||||||||||||||
Effect of deferred tax limitation | (3.39 | ) | (3.74 | ) | (3.92 | ) | (4.26 | ) | (4.72 | ) | (3.39 | ) | (4.72 | ) | ||||||||||||||
Effect of trust preferred | 1.02 | 1.04 | 1.03 | 1.04 | 1.09 | 1.02 | 1.09 | |||||||||||||||||||||
Effect of preferred equity | — | — | — | 2.39 | 4.01 | — | 4.01 | |||||||||||||||||||||
Tier I capital ratio (Regulatory) | 12.07 | % | 11.75 | % | 11.10 | % | 12.74 | % | 14.21 | % | 12.07 | % | 14.21 | % |
46 |
47 |
Table 2 - Average Consolidated Balance Sheets and Net Interest Analysis | ||||||||||||||||||||||||
For the Three Months Ended September 30, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Average | Avg. | Average | Avg. | |||||||||||||||||||||
(dollars in thousands, taxable equivalent) | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Loans, net of unearned income (1)(2) | $ | 4,445,947 | $ | 49,853 | 4.45 | % | $ | 4,249,892 | $ | 50,265 | 4.69 | % | ||||||||||||
Taxable securities (3) | 2,212,116 | 12,169 | 2.20 | 2,157,448 | 9,685 | 1.80 | ||||||||||||||||||
Tax-exempt securities (1)(3) | 18,794 | 290 | 6.17 | 20,913 | 331 | 6.32 | ||||||||||||||||||
Federal funds sold and other interest-earning assets | 143,169 | 1,026 | 2.87 | 186,544 | 1,145 | 2.46 | ||||||||||||||||||
Total interest-earning assets | 6,820,026 | 63,338 | 3.69 | 6,614,797 | 61,426 | 3.69 | ||||||||||||||||||
Non-interest-earning assets: | ||||||||||||||||||||||||
Allowance for loan losses | (74,146 | ) | (83,408 | ) | ||||||||||||||||||||
Cash and due from banks | 71,224 | 63,890 | ||||||||||||||||||||||
Premises and equipment | 161,315 | 166,906 | ||||||||||||||||||||||
Other assets (3) | 395,184 | 407,912 | ||||||||||||||||||||||
Total assets | $ | 7,373,603 | $ | 7,170,097 | ||||||||||||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
NOW | $ | 1,331,806 | 365 | .11 | $ | 1,222,334 | 413 | .13 | ||||||||||||||||
Money market | 1,387,042 | 872 | .25 | 1,328,661 | 545 | .16 | ||||||||||||||||||
Savings | 282,746 | 20 | .03 | 248,937 | 37 | .06 | ||||||||||||||||||
Time less than $100,000 | 791,289 | 876 | .44 | 952,320 | 1,369 | .57 | ||||||||||||||||||
Time greater than $100,000 | 542,216 | 827 | .61 | 644,264 | 1,229 | .76 | ||||||||||||||||||
Brokered time deposits | 278,330 | 18 | .03 | 233,842 | 32 | .05 | ||||||||||||||||||
Total interest-bearing deposits | 4,613,429 | 2,978 | .26 | 4,630,358 | 3,625 | .31 | ||||||||||||||||||
Federal funds purchased and other borrowings | 53,713 | 316 | 2.33 | 67,292 | 525 | 3.10 | ||||||||||||||||||
Federal Home Loan Bank advances | 227,190 | 435 | .76 | 32,082 | 16 | .20 | ||||||||||||||||||
Long-term debt | 129,865 | 2,642 | 8.07 | 144,601 | 3,003 | 8.24 | ||||||||||||||||||
Total borrowed funds | 410,768 | 3,393 | 3.28 | 243,975 | 3,544 | 5.76 | ||||||||||||||||||
Total interest-bearing liabilities | 5,024,197 | 6,371 | .50 | 4,874,333 | 7,169 | .58 | ||||||||||||||||||
Non-interest-bearing liabilities: | ||||||||||||||||||||||||
Non-interest-bearing deposits | 1,530,011 | 1,356,792 | ||||||||||||||||||||||
Other liabilities | 92,986 | 93,247 | ||||||||||||||||||||||
Total liabilities | 6,647,194 | 6,324,372 | ||||||||||||||||||||||
Shareholders’ equity | 726,409 | 845,725 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 7,373,603 | $ | 7,170,097 | ||||||||||||||||||||
Net interest revenue | $ | 56,967 | $ | 54,257 | ||||||||||||||||||||
Net interest-rate spread | 3.19 | % | 3.11 | % | ||||||||||||||||||||
Net interest margin (4) | 3.32 | % | 3.26 | % |
48 |
Table 3 - Average Consolidated Balance Sheets and Net Interest Analysis | ||||||||||||||||||||||||
For the Nine Months Ended September 30, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Average | Avg. | Average | Avg. | |||||||||||||||||||||
(dollars in thousands, taxable equivalent) | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Loans, net of unearned income (1)(2) | $ | 4,392,895 | $ | 146,156 | 4.45 | % | $ | 4,233,531 | $ | 152,073 | 4.80 | % | ||||||||||||
Taxable securities (3) | 2,272,639 | 35,560 | 2.09 | 2,138,725 | 29,281 | 1.83 | ||||||||||||||||||
Tax-exempt securities (1)(3) | 19,515 | 914 | 6.24 | 21,411 | 1,022 | 6.36 | ||||||||||||||||||
Federal funds sold and other interest-earning assets | 150,782 | 2,986 | 2.64 | 196,445 | 3,252 | 2.21 | ||||||||||||||||||
Total interest-earning assets | 6,835,831 | 185,616 | 3.63 | 6,590,112 | 185,628 | 3.76 | ||||||||||||||||||
Non-interest-earning assets: | ||||||||||||||||||||||||
Allowance for loan losses | (76,148 | ) | (100,154 | ) | ||||||||||||||||||||
Cash and due from banks | 65,744 | 63,879 | ||||||||||||||||||||||
Premises and equipment | 161,843 | 168,144 | ||||||||||||||||||||||
Other assets (3) | 404,654 | 252,275 | ||||||||||||||||||||||
Total assets | $ | 7,391,924 | $ | 6,974,256 | ||||||||||||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
NOW | $ | 1,367,713 | 1,216 | .12 | $ | 1,256,684 | 1,286 | .14 | ||||||||||||||||
Money market | 1,375,064 | 2,192 | .21 | 1,297,792 | 1,641 | .17 | ||||||||||||||||||
Savings | 272,696 | 61 | .03 | 242,807 | 109 | .06 | ||||||||||||||||||
Time less than $100,000 | 828,694 | 2,822 | .46 | 997,193 | 4,686 | .63 | ||||||||||||||||||
Time greater than $100,000 | 561,167 | 2,610 | .62 | 670,821 | 4,086 | .81 | ||||||||||||||||||
Brokered time deposits | 300,374 | 78 | .03 | 201,599 | 99 | .07 | ||||||||||||||||||
Total interest-bearing deposits | 4,705,708 | 8,979 | .26 | 4,666,896 | 11,907 | .34 | ||||||||||||||||||
Federal funds purchased and other borrowings | 91,320 | 2,064 | 3.02 | 70,512 | 1,563 | 2.96 | ||||||||||||||||||
Federal Home Loan Bank advances | 169,392 | 573 | .45 | 41,352 | 65 | .21 | ||||||||||||||||||
Long-term debt | 129,865 | 7,914 | 8.15 | 131,491 | 8,331 | 8.47 | ||||||||||||||||||
Total borrowed funds | 390,577 | 10,551 | 3.61 | 243,355 | 9,959 | 5.47 | ||||||||||||||||||
Total interest-bearing liabilities | 5,096,285 | 19,530 | .51 | 4,910,251 | 21,866 | .60 | ||||||||||||||||||
Non-interest-bearing liabilities: | ||||||||||||||||||||||||
Non-interest-bearing deposits | 1,469,967 | 1,305,133 | ||||||||||||||||||||||
Other liabilities | 111,522 | 68,312 | ||||||||||||||||||||||
Total liabilities | 6,677,774 | 6,283,696 | ||||||||||||||||||||||
Shareholders’ equity | 714,150 | 690,560 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 7,391,924 | $ | 6,974,256 | ||||||||||||||||||||
Net interest revenue | $ | 166,086 | $ | 163,762 | ||||||||||||||||||||
Net interest-rate spread | 3.12 | % | 3.16 | % | ||||||||||||||||||||
Net interest margin (4) | 3.25 | % | 3.32 | % |
49 |
Table 4 - Change in Interest Revenue and Expense on a Taxable Equivalent Basis | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, 2014 | September 30, 2014 | |||||||||||||||||||||||
Compared to 2013 | Compared to 2013 | |||||||||||||||||||||||
Increase (decrease) | Increase (decrease) | |||||||||||||||||||||||
Due to Changes in | Due to Changes in | |||||||||||||||||||||||
Volume | Rate | Total | Volume | Rate | Total | |||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Loans | $ | 2,262 | $ | (2,674 | ) | $ | (412 | ) | $ | 5,582 | $ | (11,499 | ) | $ | (5,917 | ) | ||||||||
Taxable securities | 251 | 2,233 | 2,484 | 1,913 | 4,366 | 6,279 | ||||||||||||||||||
Tax-exempt securities | (33 | ) | (8 | ) | (41 | ) | (89 | ) | (19 | ) | (108 | ) | ||||||||||||
Federal funds sold and other interest-earning assets | (292 | ) | 173 | (119 | ) | (836 | ) | 570 | (266 | ) | ||||||||||||||
Total interest-earning assets | 2,188 | (276 | ) | 1,912 | 6,570 | (6,582 | ) | (12 | ) | |||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
NOW accounts | 35 | (83 | ) | (48 | ) | 108 | (178 | ) | (70 | ) | ||||||||||||||
Money market accounts | 25 | 302 | 327 | 102 | 449 | 551 | ||||||||||||||||||
Savings deposits | 4 | (21 | ) | (17 | ) | 12 | (60 | ) | (48 | ) | ||||||||||||||
Time deposits less than $100,000 | (209 | ) | (284 | ) | (493 | ) | (709 | ) | (1,155 | ) | (1,864 | ) | ||||||||||||
Time deposits greater than $100,000 | (177 | ) | (225 | ) | (402 | ) | (603 | ) | (873 | ) | (1,476 | ) | ||||||||||||
Brokered deposits | 5 | (19 | ) | (14 | ) | 37 | (58 | ) | (21 | ) | ||||||||||||||
Total interest-bearing deposits | (317 | ) | (330 | ) | (647 | ) | (1,053 | ) | (1,875 | ) | (2,928 | ) | ||||||||||||
Federal funds purchased & other borrowings | (94 | ) | (115 | ) | (209 | ) | 470 | 31 | 501 | |||||||||||||||
Federal Home Loan Bank advances | 286 | 133 | 419 | 370 | 138 | 508 | ||||||||||||||||||
Long-term debt | (301 | ) | (60 | ) | (361 | ) | (102 | ) | (315 | ) | (417 | ) | ||||||||||||
Total borrowed funds | (109 | ) | (42 | ) | (151 | ) | 738 | (146 | ) | 592 | ||||||||||||||
Total interest-bearing liabilities | (426 | ) | (372 | ) | (798 | ) | (315 | ) | (2,021 | ) | (2,336 | ) | ||||||||||||
Increase in net interest revenue | $ | 2,614 | $ | 96 | $ | 2,710 | $ | 6,885 | $ | (4,561 | ) | $ | 2,324 |
50 |
Table 5 - Fee Revenue | ||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
September 30, | Change | September 30, | Change | |||||||||||||||||||||||||||||
2014 | 2013 | Amount | Percent | 2014 | 2013 | Amount | Percent | |||||||||||||||||||||||||
Overdraft fees | $ | 3,071 | $ | 3,203 | $ | (132 | ) | (4 | ) | $ | 8,935 | $ | 9,226 | $ | (291 | ) | (3 | ) | ||||||||||||||
Debit card and interchange fees | 3,811 | 3,952 | (141 | ) | (4 | ) | 11,318 | 10,818 | 500 | 5 | ||||||||||||||||||||||
Other service charges and fees | 1,320 | 1,301 | 19 | 1 | 4,374 | 3,787 | 587 | 16 | ||||||||||||||||||||||||
Service charges and fees | 8,202 | 8,456 | (254 | ) | (3 | ) | 24,627 | 23,831 | 796 | 3 | ||||||||||||||||||||||
Mortgage loan and related fees | 2,178 | 2,554 | (376 | ) | (15 | ) | 5,409 | 8,212 | (2,803 | ) | (34 | ) | ||||||||||||||||||||
Brokerage fees | 1,209 | 1,274 | (65 | ) | (5 | ) | 3,631 | 3,104 | 527 | 17 | ||||||||||||||||||||||
Gains on sales of SBA loans | 945 | — | 945 | 1,689 | — | 1,689 | ||||||||||||||||||||||||||
Customer derivatives | 179 | 442 | (263 | ) | (60 | ) | 650 | 1,182 | (532 | ) | (45 | ) | ||||||||||||||||||||
Securities gains, net | 11 | — | 11 | 4,663 | 116 | 4,547 | ||||||||||||||||||||||||||
Loss on prepayment of borrowings | — | — | — | (4,446 | ) | — | (4,446 | ) | ||||||||||||||||||||||||
Other | 1,688 | 1,499 | 189 | 13 | 4,508 | 6,634 | (2,126 | ) | (32 | ) | ||||||||||||||||||||||
Total fee revenue | $ | 14,412 | $ | 14,225 | $ | 187 | 1 | $ | 40,731 | $ | 43,079 | $ | (2,348 | ) | (5 | ) |
51 |
Table 6 - Operating Expenses | ||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
September 30, | Change | September 30, | Change | |||||||||||||||||||||||||||||
2014 | 2013 | Amount | Percent | 2014 | 2013 | Amount | Percent | |||||||||||||||||||||||||
Salaries and employee benefits | $ | 25,666 | $ | 23,090 | $ | 2,576 | 11 | $ | 74,349 | $ | 71,416 | $ | 2,933 | 4 | ||||||||||||||||||
Communications and equipment | 3,094 | 3,305 | (211 | ) | (6 | ) | 9,370 | 9,819 | (449 | ) | (5 | ) | ||||||||||||||||||||
Occupancy | 3,425 | 3,379 | 46 | 1 | 10,065 | 10,195 | (130 | ) | (1 | ) | ||||||||||||||||||||||
Advertising and public relations | 894 | 962 | (68 | ) | (7 | ) | 2,659 | 2,937 | (278 | ) | (9 | ) | ||||||||||||||||||||
Postage, printing and supplies | 876 | 644 | 232 | 36 | 2,456 | 2,401 | 55 | 2 | ||||||||||||||||||||||||
Professional fees | 2,274 | 2,650 | (376 | ) | (14 | ) | 5,873 | 7,515 | (1,642 | ) | (22 | ) | ||||||||||||||||||||
FDIC assessments and other regulatory charges | 1,131 | 2,405 | (1,274 | ) | (53 | ) | 3,909 | 7,415 | (3,506 | ) | (47 | ) | ||||||||||||||||||||
Amortization of intangibles | 313 | 427 | (114 | ) | (27 | ) | 1,061 | 1,623 | (562 | ) | (35 | ) | ||||||||||||||||||||
Other | 3,406 | 3,041 | 365 | 12 | 10,701 | 11,691 | (990 | ) | (8 | ) | ||||||||||||||||||||||
Total excluding foreclosed property expenses | 41,079 | 39,903 | 1,176 | 3 | 120,443 | 125,012 | (4,569 | ) | (4 | ) | ||||||||||||||||||||||
Net losses on sales of foreclosed properties | (264 | ) | (648 | ) | 384 | (1,208 | ) | 2,402 | (3,610 | ) | ||||||||||||||||||||||
Foreclosed property write downs | 108 | 329 | (221 | ) | 690 | 2,739 | (2,049 | ) | ||||||||||||||||||||||||
Foreclosed property maintenance expenses | 441 | 513 | (72 | ) | (14 | ) | 1,021 | 2,537 | (1,516 | ) | (60 | ) | ||||||||||||||||||||
Total operating expenses | $ | 41,364 | $ | 40,097 | $ | 1,267 | 3 | $ | 120,946 | $ | 132,690 | $ | (11,744 | ) | (9 | ) |
52 |
53 |
54 |
September 30, | December 31, | September 30, | ||||||||||
2014 | 2013 | 2013 | ||||||||||
By Loan Type | ||||||||||||
Owner occupied commercial real estate | $ | 1,153,933 | $ | 1,133,543 | $ | 1,129,152 | ||||||
Income producing commercial real estate | 604,727 | 623,167 | 613,619 | |||||||||
Commercial & industrial | 649,853 | 471,961 | 457,414 | |||||||||
Commercial construction | 180,794 | 148,903 | 137,146 | |||||||||
Total commercial | 2,589,307 | 2,377,574 | 2,337,331 | |||||||||
Residential mortgage | 865,568 | 875,077 | 888,679 | |||||||||
Home equity lines of credit | 458,819 | 440,887 | 420,616 | |||||||||
Residential construction | 307,178 | 328,579 | 317,789 | |||||||||
Consumer installment | 105,345 | 111,045 | 116,535 | |||||||||
Indirect auto | 242,669 | 196,104 | 186,117 | |||||||||
Total loans | $ | 4,568,886 | $ | 4,329,266 | $ | 4,267,067 | ||||||
As a percentage of total loans: | ||||||||||||
Owner occupied commercial real estate | 25 | % | 26 | % | 27 | % | ||||||
Income producing commercial real estate | 13 | 14 | 14 | |||||||||
Commercial & industrial | 14 | 11 | 11 | |||||||||
Commercial construction | 4 | 3 | 3 | |||||||||
Total commercial | 56 | 54 | 55 | |||||||||
Residential mortgage | 19 | 20 | 21 | |||||||||
Home equity lines of credit | 10 | 10 | 10 | |||||||||
Residential construction | 7 | 8 | 7 | |||||||||
Consumer installment | 3 | 3 | 3 | |||||||||
Indirect auto | 5 | 5 | 4 | |||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
By Geographic Location | ||||||||||||
North Georgia | $ | 1,168,307 | $ | 1,240,234 | $ | 1,261,751 | ||||||
Atlanta MSA | 1,289,267 | 1,275,139 | 1,246,433 | |||||||||
North Carolina | 553,028 | 571,971 | 574,667 | |||||||||
Coastal Georgia | 443,803 | 423,045 | 421,488 | |||||||||
Gainesville MSA | 253,878 | 254,655 | 253,004 | |||||||||
East Tennessee | 280,534 | 279,587 | 277,059 | |||||||||
South Carolina / Corporate | 337,400 | 88,531 | 46,548 | |||||||||
Indirect auto | 242,669 | 196,104 | 186,117 | |||||||||
Total loans | $ | 4,568,886 | $ | 4,329,266 | $ | 4,267,067 |
55 |
Table 8 - Performing Substandard Loans | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
2014 | 2014 | 2014 | 2013 | 2013 | ||||||||||||||||
By Category | ||||||||||||||||||||
Owner occupied commercial real estate | $ | 49,857 | $ | 48,222 | $ | 47,526 | $ | 43,083 | $ | 39,946 | ||||||||||
Income producing commercial real estate | 22,215 | 24,633 | 36,799 | 34,642 | 35,596 | |||||||||||||||
Commercial & industrial | 7,498 | 5,647 | 8,141 | 9,589 | 10,342 | |||||||||||||||
Commercial construction | 3,847 | 4,406 | 5,281 | 16,758 | 16,911 | |||||||||||||||
Total commercial | 83,417 | 82,908 | 97,747 | 104,072 | 102,795 | |||||||||||||||
Residential mortgage | 42,981 | 41,856 | 43,572 | 44,022 | 45,493 | |||||||||||||||
Home equity | 8,073 | 7,562 | 7,662 | 7,967 | 7,679 | |||||||||||||||
Residential construction | 11,755 | 12,872 | 12,977 | 14,104 | 15,552 | |||||||||||||||
Consumer installment | 2,062 | 1,776 | 2,310 | 2,538 | 2,147 | |||||||||||||||
Indirect auto | 684 | 562 | 597 | — | — | |||||||||||||||
Total | $ | 148,972 | $ | 147,536 | $ | 164,865 | $ | 172,703 | $ | 173,666 | ||||||||||
By Market | ||||||||||||||||||||
North Georgia | $ | 66,780 | $ | 66,709 | $ | 69,584 | $ | 69,510 | $ | 74,456 | ||||||||||
Atlanta MSA | 34,699 | 32,975 | 32,008 | 43,171 | 44,650 | |||||||||||||||
North Carolina | 18,465 | 19,619 | 21,735 | 18,954 | 20,768 | |||||||||||||||
Coastal Georgia | 17,368 | 17,427 | 18,354 | 18,561 | 10,729 | |||||||||||||||
Gainesville MSA | 2,016 | 2,832 | 14,911 | 14,916 | 14,820 | |||||||||||||||
East Tennessee | 7,643 | 7,412 | 7,676 | 7,591 | 8,243 | |||||||||||||||
South Carolina / Corporate | 1,317 | — | — | — | — | |||||||||||||||
Indirect auto | 684 | 562 | 597 | — | — | |||||||||||||||
Total loans | $ | 148,972 | $ | 147,536 | $ | 164,865 | $ | 172,703 | $ | 173,666 |
56 |
Table 9 - Allowance for Loan Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Allowance for loan losses at beginning of period | $ | 73,248 | $ | 81,845 | $ | 76,762 | $ | 107,137 | ||||||||
Charge-offs: | ||||||||||||||||
Owner occupied commercial real estate | 832 | 1,712 | 2,116 | 23,444 | ||||||||||||
Income producing commercial real estate | 598 | 216 | 1,435 | 10,678 | ||||||||||||
Commercial & industrial | 30 | 826 | 2,005 | 18,581 | ||||||||||||
Commercial construction | 104 | 134 | 236 | 6,484 | ||||||||||||
Residential mortgage | 1,357 | 918 | 5,738 | 8,272 | ||||||||||||
Home equity lines of credit | 405 | 388 | 2,032 | 2,108 | ||||||||||||
Residential construction | 753 | 1,096 | 3,004 | 22,608 | ||||||||||||
Consumer installment | 449 | 345 | 1,580 | 1,521 | ||||||||||||
Indirect auto | 178 | 74 | 344 | 170 | ||||||||||||
Total loans charged-off | 4,706 | 5,709 | 18,490 | 93,866 | ||||||||||||
Recoveries: | ||||||||||||||||
Owner occupied commercial real estate | 86 | 71 | 2,929 | 1,296 | ||||||||||||
Income producing commercial real estate | 494 | — | 691 | 260 | ||||||||||||
Commercial & industrial | 372 | 690 | 1,263 | 1,368 | ||||||||||||
Commercial construction | 1 | 1 | 1 | 60 | ||||||||||||
Residential mortgage | 240 | 229 | 597 | 479 | ||||||||||||
Home equity lines of credit | 50 | 2 | 218 | 170 | ||||||||||||
Residential construction | 41 | 24 | 410 | 57 | ||||||||||||
Consumer installment | 256 | 210 | 974 | 891 | ||||||||||||
Indirect auto | 11 | 9 | 38 | 20 | ||||||||||||
Total recoveries | 1,551 | 1,236 | 7,121 | 4,601 | ||||||||||||
Net charge-offs | 3,155 | 4,473 | 11,369 | 89,265 | ||||||||||||
Provision for loan losses | 1,835 | 3,000 | 6,535 | 62,500 | ||||||||||||
Allowance for loan losses at end of period | $ | 71,928 | $ | 80,372 | $ | 71,928 | $ | 80,372 | ||||||||
Allowance for unfunded commitments at beginning of period | $ | 2,165 | $ | — | $ | 2,165 | $ | — | ||||||||
Provision for losses on unfunded commitments | 165 | — | 165 | — | ||||||||||||
Allowance for unfunded commitments at end of period | 2,330 | — | 2,330 | — | ||||||||||||
Allowance for credit losses | $ | 74,258 | $ | 80,372 | $ | 74,258 | $ | 80,372 | ||||||||
Total loans: * | ||||||||||||||||
At period-end | $ | 4,568,886 | $ | 4,267,067 | $ | 4,568,886 | $ | 4,267,067 | ||||||||
Average | 4,445,947 | 4,225,014 | 4,380,327 | 4,206,279 | ||||||||||||
Allowance for loan losses as a percentage of period-end loans | 1.57 | % | 1.88 | % | 1.57 | % | 1.88 | % | ||||||||
As a percentage of average loans (annualized): | ||||||||||||||||
Net charge-offs | .28 | .42 | .35 | 2.84 | ||||||||||||
Provision for loan losses | .16 | .28 | .20 | 1.99 | ||||||||||||
Allowance for loan losses as a percentage of non-performing loans | 384 | 308 | 384 | 308 | ||||||||||||
* Excludes loans covered by loss sharing agreements with the FDIC |
57 |
Table 10 - Nonperforming Assets | ||||||||||||
(in thousands) | ||||||||||||
September 30, | December 31, | September 30, | ||||||||||
2014 | 2013 | 2013 | ||||||||||
Nonperforming loans | $ | 18,745 | $ | 26,819 | $ | 26,088 | ||||||
Foreclosed properties (OREO) | 3,146 | 4,221 | 4,467 | |||||||||
Total nonperforming assets | $ | 21,891 | $ | 31,040 | $ | 30,555 | ||||||
Nonperforming loans as a percentage of total loans | .41 | % | .62 | % | .61 | % | ||||||
Nonperforming assets as a percentage of total loans and OREO | .48 | .72 | .72 | |||||||||
Nonperforming assets as a percentage of total assets | .29 | .42 | .42 |
58 |
Table 11 - Nonperforming Assets by Quarter | ||||||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | September 30, 2013 | ||||||||||||||||||||||||||||||||||
Nonaccrual | Foreclosed | Total | Nonaccrual | Foreclosed | Total | Nonaccrual | Foreclosed | Total | ||||||||||||||||||||||||||||
Loans | Properties | NPAs | Loans | Properties | NPAs | Loans | Properties | NPAs | ||||||||||||||||||||||||||||
BY CATEGORY | ||||||||||||||||||||||||||||||||||||
Owner occupied commercial real estate | $ | 2,156 | $ | 1,024 | $ | 3,180 | $ | 5,822 | $ | 832 | $ | 6,654 | $ | 6,358 | $ | 591 | $ | 6,949 | ||||||||||||||||||
Income producing commercial real estate | 1,742 | 42 | 1,784 | 2,518 | — | 2,518 | 1,657 | 139 | 1,796 | |||||||||||||||||||||||||||
Commercial & industrial | 1,593 | — | 1,593 | 427 | — | 427 | 609 | — | 609 | |||||||||||||||||||||||||||
Commercial construction | 148 | — | 148 | 361 | — | 361 | 343 | 376 | 719 | |||||||||||||||||||||||||||
Total commercial | 5,639 | 1,066 | 6,705 | 9,128 | 832 | 9,960 | 8,967 | 1,106 | 10,073 | |||||||||||||||||||||||||||
Residential mortgage | 8,350 | 1,769 | 10,119 | 11,730 | 2,684 | 14,414 | 11,335 | 1,679 | 13,014 | |||||||||||||||||||||||||||
Home equity | 720 | 90 | 810 | 1,448 | 389 | 1,837 | 1,169 | 475 | 1,644 | |||||||||||||||||||||||||||
Residential construction | 3,543 | 221 | 3,764 | 4,264 | 316 | 4,580 | 4,097 | 1,207 | 5,304 | |||||||||||||||||||||||||||
Consumer installment | 139 | — | 139 | 249 | — | 249 | 520 | — | 520 | |||||||||||||||||||||||||||
Indirect auto | 354 | — | 354 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total NPAs | $ | 18,745 | $ | 3,146 | $ | 21,891 | $ | 26,819 | $ | 4,221 | $ | 31,040 | $ | 26,088 | $ | 4,467 | $ | 30,555 | ||||||||||||||||||
Balance as a % of | ||||||||||||||||||||||||||||||||||||
Unpaid Principal | 68.6 | % | 54.5 | % | 66.1 | % | 65.3 | % | 44.5 | % | 61.4 | % | 61.6 | % | 41.5 | % | 57.6 | % | ||||||||||||||||||
BY MARKET | ||||||||||||||||||||||||||||||||||||
North Georgia | $ | 7,392 | $ | 1,717 | $ | 9,109 | $ | 12,352 | $ | 2,494 | $ | 14,846 | $ | 13,652 | $ | 1,726 | $ | 15,378 | ||||||||||||||||||
Atlanta MSA | 1,724 | 364 | 2,088 | 2,830 | 684 | 3,514 | 3,096 | 1,026 | 4,122 | |||||||||||||||||||||||||||
North Carolina | 4,919 | 398 | 5,317 | 6,567 | 683 | 7,250 | �� | 5,680 | 762 | 6,442 | ||||||||||||||||||||||||||
Coastal Georgia | 781 | 160 | 941 | 2,342 | 173 | 2,515 | 995 | 928 | 1,923 | |||||||||||||||||||||||||||
Gainesville MSA | 1,403 | 85 | 1,488 | 928 | - | 928 | 1,036 | — | 1,036 | |||||||||||||||||||||||||||
East Tennessee | 1,227 | 245 | 1,472 | 1,800 | 187 | 1,987 | 1,629 | 25 | 1,654 | |||||||||||||||||||||||||||
South Carolina | 945 | 177 | 1,122 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Indirect auto | 354 | — | 354 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total NPAs | $ | 18,745 | $ | 3,146 | $ | 21,891 | $ | 26,819 | $ | 4,221 | $ | 31,040 | $ | 26,088 | $ | 4,467 | $ | 30,555 |
59 |
Table 12 - Activity in Nonperforming Assets | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Third Quarter 2014 | Third Quarter 2013 | |||||||||||||||||||||||
Nonaccrual | Foreclosed | Total | Nonaccrual | Foreclosed | Total | |||||||||||||||||||
Loans | Properties | NPAs | Loans | Properties | NPAs | |||||||||||||||||||
Beginning Balance | $ | 20,724 | $ | 2,969 | $ | 23,693 | $ | 27,864 | $ | 3,936 | $ | 31,800 | ||||||||||||
Loans placed on non-accrual | 7,665 | — | 7,665 | 9,959 | — | 9,959 | ||||||||||||||||||
Payments received | (3,129 | ) | — | (3,129 | ) | (3,601 | ) | — | (3,601 | ) | ||||||||||||||
Loan charge-offs | (4,353 | ) | — | (4,353 | ) | (5,395 | ) | — | (5,395 | ) | ||||||||||||||
Foreclosures | (2,162 | ) | 2,162 | — | (2,739 | ) | 2,739 | — | ||||||||||||||||
Capitalized costs | — | 209 | 209 | — | 7 | 7 | ||||||||||||||||||
Property sales | — | (2,350 | ) | (2,350 | ) | — | (2,534 | ) | (2,534 | ) | ||||||||||||||
Write downs | — | (108 | ) | (108 | ) | — | (329 | ) | (329 | ) | ||||||||||||||
Net gains on sales | — | 264 | 264 | — | 648 | 648 | ||||||||||||||||||
Ending Balance | $ | 18,745 | $ | 3,146 | $ | 21,891 | $ | 26,088 | $ | 4,467 | $ | 30,555 | ||||||||||||
First Nine Months 2014 | First Nine Months 2013 | |||||||||||||||||||||||
Nonaccrual | Foreclosed | Total | Nonaccrual | Foreclosed | Total | |||||||||||||||||||
Loans | Properties | NPAs | Loans | Properties | NPAs | |||||||||||||||||||
Beginning Balance | $ | 26,819 | $ | 4,221 | $ | 31,040 | $ | 109,894 | $ | 18,264 | $ | 128,158 | ||||||||||||
Loans placed on non-accrual | 26,497 | — | 26,497 | 32,824 | — | 32,824 | ||||||||||||||||||
Payments received | (8,822 | ) | — | (8,822 | ) | (58,347 | ) | — | (58,347 | ) | ||||||||||||||
Loan charge-offs | (17,533 | ) | — | (17,533 | ) | (39,823 | ) | — | (39,823 | ) | ||||||||||||||
Foreclosures | (8,216 | ) | 8,216 | — | (18,460 | ) | 18,460 | — | ||||||||||||||||
Capitalized costs | — | 209 | 209 | — | 116 | 116 | ||||||||||||||||||
Note / property sales | — | (10,018 | ) | (10,018 | ) | — | (27,232 | ) | (27,232 | ) | ||||||||||||||
Write downs | — | (690 | ) | (690 | ) | — | (2,739 | ) | (2,739 | ) | ||||||||||||||
Net gains (losses) on sales | — | 1,208 | 1,208 | — | (2,402 | ) | (2,402 | ) | ||||||||||||||||
Ending Balance | $ | 18,745 | $ | 3,146 | $ | 21,891 | $ | 26,088 | $ | 4,467 | $ | 30,555 |
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Table 13 - Interest Sensitivity | ||||||||||||||||
Increase (Decrease) in Net Interest Revenue from Base Scenario at | ||||||||||||||||
September 30, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Change in Rates | Shock | Ramp | Shock | Ramp | ||||||||||||
200 basis point increase | 2.0 | % | 2.1 | % | 5.9 | % | 6.1 | % | ||||||||
25 basis point decrease | (2.1 | ) | (2.1 | ) | (3.4 | ) | (3.4 | ) |
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Table 14 - Derivative Financial Instruments | ||||||||||||||||
(in thousands) | ||||||||||||||||
Number of | Fair Value (6) | |||||||||||||||
Type of Instrument | Contracts | Notional | Purpose | Asset | Liability | |||||||||||
Fair value hedges of fixed rate brokered deposit (accounting hedge) | ||||||||||||||||
Receive fixed cancellable swaps (1) | 16 | $ | 199,000 | Low cost funding | $ | — | $ | 10,201 | ||||||||
De-designated former cash flow hedges | ||||||||||||||||
Pay fixed swaps (2) | 4 | 300,000 | De-designated cash flow hedge | — | 3,550 | |||||||||||
Offsetting positions to de-designated former cash flow hedges | ||||||||||||||||
Receive fixed swaps (2) | 4 | 300,000 | Offset to de-designated cash flow hedge | 3,550 | — | |||||||||||
Cash flow hedges of LIBOR indexed money market deposits (accounting hedge) | ||||||||||||||||
Pay fixed swaps (3) | 2 | 275,000 | Protection from rising interest rates | 1,349 | ||||||||||||
Customer swap positions | ||||||||||||||||
Receive fixed swaps (4) | 68 | 177,890 | Provide customer with fixed rate loan | 2,067 | 475 | |||||||||||
Dealer offset to customer swap positions | ||||||||||||||||
Pay fixed swaps (4) | 68 | 177,890 | Protection from rising interest rates | 475 | 2,087 | |||||||||||
Bifurcated derivatives embedded in hybrid host instruments | ||||||||||||||||
Pay steepener rate cancellable swap (5) | 3 | 96,425 | Low cost funding | 14,780 | — | |||||||||||
Interest rate swaps not designated as accounting hedges | ||||||||||||||||
Receive steepener rate cancellable swap (5) | 3 | 96,425 | Low cost funding | — | 19,858 | |||||||||||
$ | 1,622,630 | $ | 22,221 | $ | 36,171 |
(1) United uses these swaps as part of a program to provide a low cost non-collateralized source of funds. The swaps hedge fixed rate brokered deposits with step up rates that increase over time that are mirrored in the receive rate of the swaps. The variable pay rates on these swaps are based on three-month LIBOR at spreads of minus 20 to minus 65 basis points. The counterparties have the right to call the instruments at any time generally after six months to one year following inception. United has a similar option in the hedged brokered deposit. |
(2) These swaps are forward starting and became effective in the first and second quarters of 2014. They were originally entered into to convert three month LIBOR-based floating rate borrowings and one month LIBOR-based money market deposits to fixed rates for a three-year term in order to provide protection from rising short-term interest rates. In the second quarter of 2014, United determined that the interest rate protection was no longer needed and de-designated these swaps as hedges and entered into mirror image offsetting positions to effectively terminate the hedging relationship. |
(3) These swaps are forward starting and become effective in the third quarter of 2014 and the second quarter of 2015. They convert one month LIBOR-based money market deposits to fixed rates for terms of three to eight years. They are used for protection against rising interest rates. |
(4) United offers interest rate swaps to customers seeking fixed rate loans under a back to back swap program. United enters into offsetting swap positions with qualified dealers simultaneously with the customer swap. Customer swaps and the offsetting dealer swap positions are marked to market through other fee revenue. |
(5) United offers market linked certificates of deposit through broker dealers. The rate paid on these hybrid instruments is based on a formula derived from the spread betweeen the long and short ends of the constant maturity swap ("CMS") rate curve. This type of instrument is referred to as a steepener since it derives its value from the slope of the CMS curve. United has determined that these hybrid instruments contain an embedded swap contract which has been bifurcated from the host contract. United enters into a swap with a swap dealer simultaneously where the receive rate on the swap mirrors the pay rate on the brokered deposit. The bifurcated derivative and the stand alone swap are both marked to market through other fee revenue. Although these instruments are not treated as an accounting hedge, the swap acts as an effective economic hedge of the steepener index in the brokered deposit. |
(6) Market values presented here do not include accrued interest. |
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64 |
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Table 15 - Capital Ratios | ||||||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Regulatory | United Community Banks, Inc. | |||||||||||||||||||||||||||||||
Guidelines | (Consolidated) | United Community Bank | ||||||||||||||||||||||||||||||
Well | September 30, | December 31, | September 30, | September 30, | December 31, | September 30, | ||||||||||||||||||||||||||
Minimum | Capitalized | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | |||||||||||||||||||||||||
Risk-based ratios: | ||||||||||||||||||||||||||||||||
Tier I capital | 4.0 | % | 6.0 | % | 12.07 | % | 12.74 | % | 14.29 | % | 12.58 | % | 13.55 | % | 14.48 | % | ||||||||||||||||
Total capital | 8.0 | 10.0 | 13.32 | 13.99 | 15.54 | 13.83 | 14.81 | 15.74 | ||||||||||||||||||||||||
Leverage ratio | 3.0 | 5.0 | 8.72 | 9.08 | 10.03 | 9.08 | 9.61 | 10.17 | ||||||||||||||||||||||||
Tier I capital | $ | 627,523 | $ | 649,162 | $ | 695,802 | $ | 652,748 | $ | 686,687 | $ | 704,591 | ||||||||||||||||||||
Total capital | 692,641 | 713,063 | 756,925 | 717,730 | 750,216 | 765,646 | ||||||||||||||||||||||||||
Risk-weighted assets | 5,200,260 | 5,097,091 | 4,870,582 | 5,189,322 | 5,066,948 | 4,865,066 | ||||||||||||||||||||||||||
Average total assets | 7,193,763 | 7,150,360 | 6,936,300 | 7,185,923 | 7,142,050 | 6,925,099 |
Table 16 - Stock Price Information | ||||||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||
Avg Daily | Avg Daily | |||||||||||||||||||||||||||||||
High | Low | Close | Volume | High | Low | Close | Volume | |||||||||||||||||||||||||
First quarter | $ | 20.28 | $ | 15.74 | $ | 19.41 | 494,205 | $ | 11.57 | $ | 9.59 | $ | 11.34 | 195,803 | ||||||||||||||||||
Second quarter | 19.87 | 14.86 | 16.37 | 308,486 | 12.94 | 10.15 | 12.42 | 184,922 | ||||||||||||||||||||||||
Third quarter | 18.42 | 15.42 | 16.46 | 331,109 | 16.04 | 12.15 | 14.99 | 341,270 | ||||||||||||||||||||||||
Fourth quarter | 18.56 | 14.82 | 17.75 | 421,948 |
66 |
67 |
Exhibit No. | Description |
31.1 | Certification by Jimmy C. Tallent, President and Chief Executive Officer of United Community Banks, Inc., as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Certification by Rex S. Schuette, Executive Vice President and Chief Financial Officer of United Community Banks, Inc., as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
68 |
UNITED COMMUNITY BANKS, INC. | |
/s/ Jimmy C. Tallent | |
Jimmy C. Tallent | |
President and Chief Executive Officer | |
(Principal Executive Officer) | |
/s/ Rex S. Schuette | |
Rex S. Schuette | |
Executive Vice President and | |
Chief Financial Officer | |
(Principal Financial Officer) | |
/s/ Alan H. Kumler | |
Alan H. Kumler | |
Senior Vice President and Chief Accounting Officer | |
(Principal Accounting Officer) | |
Date: November 10, 2014 |
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