þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland | 6021 | 27-2176993 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) | ||
5851 Legacy Circle, Plano, Texas | 75024 | |||
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer x | Accelerated filer o | |
Non-accelerated filer o | Smaller reporting company o | |
(Do not check if a smaller reporting company) |
Class: Common Stock | Shares Outstanding as of July 25, 2016: | |
47,680,110 |
June 30, 2016 | December 31, 2015 | ||||||
ASSETS | (unaudited) | ||||||
Cash and due from financial institutions | $ | 59,217 | $ | 53,847 | |||
Short-term interest-bearing deposits in other financial institutions | 363,407 | 561,792 | |||||
Total cash and cash equivalents | 422,624 | 615,639 | |||||
Securities available for sale, at fair value | 325,042 | 311,708 | |||||
Securities held to maturity (fair value: June 30, 2016 — $233,944, December 31, 2015— $247,202) | 224,452 | 240,433 | |||||
Loans held for sale, at fair value | 20,752 | 22,535 | |||||
Loans held for investment: | |||||||
Loans held for investment (net of allowance for loan losses of $62,194 at June 30, 2016 and $47,093 at December 31, 2015) | 5,633,252 | 5,017,554 | |||||
Loans held for investment - Warehouse Purchase Program | 980,390 | 1,043,719 | |||||
Total loans held for investment | 6,613,642 | 6,061,273 | |||||
FHLB stock and other restricted securities, at cost | 62,247 | 63,075 | |||||
Bank-owned life insurance | 55,853 | 55,231 | |||||
Premises and equipment, net | 71,232 | 77,637 | |||||
Goodwill | 178,559 | 180,776 | |||||
Other assets | 82,602 | 63,633 | |||||
Total assets | $ | 8,057,005 | $ | 7,691,940 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Deposits | |||||||
Non-interest-bearing demand | $ | 1,235,731 | $ | 1,170,272 | |||
Interest-bearing demand | 811,015 | 819,350 | |||||
Savings and money market | 2,249,490 | 2,209,698 | |||||
Time | 1,326,446 | 1,027,391 | |||||
Total deposits | 5,622,682 | 5,226,711 | |||||
FHLB advances | 1,333,337 | 1,439,904 | |||||
Repurchase agreements | 68,049 | 83,269 | |||||
Subordinated debt | 85,231 | 84,992 | |||||
Other borrowings | 24,894 | — | |||||
Other liabilities | 79,508 | 52,988 | |||||
Total liabilities | 7,213,701 | 6,887,864 | |||||
Commitments and contingent liabilities | |||||||
Shareholders’ equity | |||||||
Preferred stock, $.01 par value; 10,000,000 shares authorized; 0 shares issued — June 30, 2016 and December 31, 2015 | — | — | |||||
Common stock, $.01 par value; 90,000,000 shares authorized; 47,670,440 shares issued — June 30, 2016 and 47,645,826 shares issued December 31, 2015 | 476 | 476 | |||||
Additional paid-in capital | 580,386 | 576,753 | |||||
Retained earnings | 272,454 | 240,496 | |||||
Accumulated other comprehensive income (loss), net | 2,918 | (133 | ) | ||||
Unearned Employee Stock Ownership Plan (ESOP) shares; 1,294,010 shares at June 30, 2016 and 1,365,457 shares at December 31, 2015 | (12,930 | ) | (13,516 | ) | |||
Total shareholders’ equity | 843,304 | 804,076 | |||||
Total liabilities and shareholders’ equity | $ | 8,057,005 | $ | 7,691,940 | |||
See accompanying notes to consolidated financial statements. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Interest and dividend income | |||||||||||||||
Loans, including fees | $ | 73,376 | $ | 61,551 | $ | 142,182 | $ | 119,586 | |||||||
Taxable securities | 2,359 | 2,252 | 4,671 | 4,751 | |||||||||||
Nontaxable securities | 759 | 724 | 1,533 | 1,442 | |||||||||||
Interest-bearing deposits in other financial institutions | 392 | 139 | 722 | 297 | |||||||||||
FHLB and Federal Reserve Bank stock and other | 450 | 301 | 836 | 509 | |||||||||||
77,336 | 64,967 | 149,944 | 126,585 | ||||||||||||
Interest expense | |||||||||||||||
Deposits | 4,422 | 3,049 | 8,544 | 6,176 | |||||||||||
FHLB advances | 2,103 | 1,774 | 3,776 | 3,480 | |||||||||||
Repurchase agreements and other borrowings | 1,457 | 323 | 2,919 | 782 | |||||||||||
7,982 | 5,146 | 15,239 | 10,438 | ||||||||||||
Net interest income | 69,354 | 59,821 | 134,705 | 116,147 | |||||||||||
Provision for loan losses | 6,800 | 3,750 | 15,600 | 6,750 | |||||||||||
Net interest income after provision for loan losses | 62,554 | 56,071 | 119,105 | 109,397 | |||||||||||
Non-interest income | |||||||||||||||
Service charges and other fees | 8,927 | 7,941 | 17,108 | 14,700 | |||||||||||
Net gain on sale of mortgage loans | 2,250 | 2,121 | 3,830 | 4,193 | |||||||||||
Bank-owned life insurance income | 441 | 424 | 867 | 843 | |||||||||||
Gain on sale of available-for-sale securities | 65 | — | 65 | 211 | |||||||||||
Gain on sale and disposition of assets | 1,186 | 429 | 5,258 | 457 | |||||||||||
Other | 853 | 1,049 | 1,249 | 967 | |||||||||||
13,722 | 11,964 | 28,377 | 21,371 | ||||||||||||
Non-interest expense | |||||||||||||||
Salaries and employee benefits | 22,867 | 22,549 | 45,204 | 45,520 | |||||||||||
Merger and acquisition costs | — | 8 | — | 1,553 | |||||||||||
Advertising | 1,035 | 1,048 | 2,071 | 1,988 | |||||||||||
Occupancy and equipment | 3,779 | 3,838 | 7,470 | 7,646 | |||||||||||
Outside professional services | 1,227 | 625 | 2,043 | 1,375 | |||||||||||
Regulatory assessments | 1,330 | 1,146 | 2,463 | 1,968 | |||||||||||
Data processing | 3,664 | 2,537 | 6,994 | 5,332 | |||||||||||
Office operations | 2,541 | 2,652 | 5,009 | 5,045 | |||||||||||
Other | 3,170 | 2,505 | 5,901 | 4,258 | |||||||||||
39,613 | 36,908 | 77,155 | 74,685 | ||||||||||||
Income before income tax expense | 36,663 | 31,127 | 70,327 | 56,083 | |||||||||||
Income tax expense | 13,446 | 10,876 | 25,028 | 19,508 | |||||||||||
Net income | $ | 23,217 | $ | 20,251 | $ | 45,299 | $ | 36,575 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.50 | $ | 0.44 | $ | 0.98 | $ | 0.79 | |||||||
Diluted | $ | 0.50 | $ | 0.44 | $ | 0.97 | $ | 0.79 | |||||||
Dividends declared per share | $ | 0.14 | $ | 0.13 | $ | 0.28 | $ | 0.26 | |||||||
See accompanying notes to consolidated financial statements. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 23,217 | $ | 20,251 | $ | 45,299 | $ | 36,575 | |||||||
Change in unrealized gains (losses) on securities available for sale | 1,725 | (1,925 | ) | 4,764 | (1,034 | ) | |||||||||
Reclassification of amount realized through sale of securities | (65 | ) | — | (65 | ) | (211 | ) | ||||||||
Tax effect | (583 | ) | 675 | (1,648 | ) | 437 | |||||||||
Other comprehensive income, net of tax | 1,077 | (1,250 | ) | 3,051 | (808 | ) | |||||||||
Comprehensive income | $ | 24,294 | $ | 19,001 | $ | 48,350 | $ | 35,767 | |||||||
See accompanying notes to consolidated financial statements. |
For the six months ended June 30, 2015 | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income, Net | Unearned ESOP Shares | Total Shareholders’ Equity | |||||||||||||||||
Balance at January 1, 2015 | $ | 400 | $ | 386,549 | $ | 195,327 | $ | 930 | $ | (14,983 | ) | $ | 568,223 | ||||||||||
Net income | — | — | 36,575 | — | — | 36,575 | |||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | (808 | ) | — | (808 | ) | |||||||||||||||
Dividends declared ($0.26 per share) | — | — | (12,409 | ) | — | — | (12,409 | ) | |||||||||||||||
ESOP shares earned, (92,097 shares) | — | 1,505 | — | — | 733 | 2,238 | |||||||||||||||||
Share-based compensation expense | — | 3,219 | — | — | — | 3,219 | |||||||||||||||||
Activity in employee stock plans, (112,522 shares) | 1 | 650 | — | — | — | 651 | |||||||||||||||||
Share repurchase, (357,950 shares) | (4 | ) | (7,985 | ) | — | — | — | (7,989 | ) | ||||||||||||||
Acquisition of LegacyTexas Group, Inc., (7,850,070 shares) | 79 | 187,145 | — | — | — | 187,224 | |||||||||||||||||
Balance at June 30, 2015 | $ | 476 | $ | 571,083 | $ | 219,493 | $ | 122 | $ | (14,250 | ) | $ | 776,924 | ||||||||||
For the six months ended June 30, 2016 | |||||||||||||||||||||||
Balance at January 1, 2016 | $ | 476 | $ | 576,753 | $ | 240,496 | $ | (133 | ) | $ | (13,516 | ) | $ | 804,076 | |||||||||
Net income | — | — | 45,299 | — | — | 45,299 | |||||||||||||||||
Other comprehensive income, net of tax | — | — | — | 3,051 | — | 3,051 | |||||||||||||||||
Dividends declared ($0.28 per share) | — | — | (13,341 | ) | — | — | (13,341 | ) | |||||||||||||||
ESOP shares earned, (71,447) shares | — | 982 | — | — | 586 | 1,568 | |||||||||||||||||
Share-based compensation expense | — | 2,223 | — | — | — | 2,223 | |||||||||||||||||
Activity in employee stock plans, (24,614 shares) | — | 428 | — | — | — | 428 | |||||||||||||||||
Balance at June 30, 2016 | $ | 476 | $ | 580,386 | $ | 272,454 | $ | 2,918 | $ | (12,930 | ) | $ | 843,304 |
Six Months Ended June 30, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities | |||||||
Net income | $ | 45,299 | $ | 36,575 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for loan losses | 15,600 | 6,750 | |||||
Depreciation and amortization | 3,506 | 3,636 | |||||
Deferred tax expense (benefit) | (5,063 | ) | 4,174 | ||||
Premium amortization and accretion of securities, net | 2,082 | 2,006 | |||||
Accretion related to acquired loans | (2,532 | ) | (6,548 | ) | |||
Gain on sale of available for sale securities | (65 | ) | (211 | ) | |||
ESOP compensation expense | 1,568 | 2,238 | |||||
Share-based compensation expense | 2,223 | 3,219 | |||||
Net gain on loans held for sale | (3,830 | ) | (4,193 | ) | |||
Loans originated or purchased for sale | (100,690 | ) | (114,637 | ) | |||
Proceeds from sale of loans held for sale | 106,303 | 116,566 | |||||
FHLB stock dividends | (238 | ) | (65 | ) | |||
Bank-owned life insurance income | (867 | ) | (843 | ) | |||
(Gain) on sale and disposition of repossessed assets, premises and equipment | (3,937 | ) | (176 | ) | |||
Disposition of insurance subsidiary goodwill upon sale of subsidiary operations | 2,217 | — | |||||
Net change in deferred loan fees/costs | (4,259 | ) | 470 | ||||
Net change in accrued interest receivable | (2,448 | ) | (1,922 | ) | |||
Net change in other assets | (4,974 | ) | 5,913 | ||||
Net change in other liabilities | 25,107 | 2,094 | |||||
Net cash provided by operating activities | 75,002 | 55,046 | |||||
Cash flows from investing activities | |||||||
Available-for-sale securities: | |||||||
Maturities, prepayments and calls | 228,710 | 31,352 | |||||
Purchases | (246,485 | ) | (44,730 | ) | |||
Proceeds from sale of AFS securities | 7,700 | 16,581 | |||||
Held-to-maturity securities: | |||||||
Maturities, prepayments and calls | 21,177 | 26,710 | |||||
Purchases | (5,774 | ) | (6,335 | ) | |||
Originations of Warehouse Purchase Program loans | (8,729,890 | ) | (7,987,452 | ) | |||
Proceeds from pay-offs of Warehouse Purchase Program loans | 8,793,219 | 7,688,871 | |||||
Net change in loans held for investment, excluding Warehouse Purchase Program loans | (635,097 | ) | (356,801 | ) | |||
Redemption (purchase) of FHLB and Federal Reserve Bank stock and other | 1,066 | (21,386 | ) | ||||
Cash received in excess of cash paid for acquisition of LegacyTexas Group, Inc. | — | 128,598 | |||||
Purchases of premises and equipment | (2,278 | ) | (3,476 | ) | |||
Proceeds from sale of assets | 13,470 | 8,225 | |||||
Net cash (used in) investing activities | (554,182 | ) | (519,843 | ) |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (Dollars in thousands) | |||||||
Six Months Ended June 30, | |||||||
2016 | 2015 | ||||||
Cash flows from financing activities | |||||||
Net change in deposits | 395,971 | 240,192 | |||||
Proceeds from FHLB advances | 650,000 | 1,075,000 | |||||
Repayments on FHLB advances | (756,567 | ) | (720,602 | ) | |||
Share repurchase | — | (7,989 | ) | ||||
Proceeds from borrowings | 24,894 | — | |||||
Repayments of borrowings | (15,220 | ) | (50,050 | ) | |||
Payment of dividends | (13,341 | ) | (12,409 | ) | |||
Activity in employee stock plans | 428 | 651 | |||||
Net cash provided by financing activities | 286,165 | 524,793 | |||||
Net change in cash and cash equivalents | (193,015 | ) | 59,996 | ||||
Beginning cash and cash equivalents | 615,639 | 132,021 | |||||
Ending cash and cash equivalents | $ | 422,624 | $ | 192,017 | |||
Supplemental noncash disclosures: | |||||||
Transfers from loans to other real estate owned | $ | 10,590 | $ | 589 | |||
Common stock issued in consideration of LegacyTexas Group, Inc. acquisition | — | 187,224 | |||||
See accompanying notes to consolidated financial statements. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Basic earnings per share: | |||||||||||||||
Numerator: | |||||||||||||||
Net income | $ | 23,217 | $ | 20,251 | $ | 45,299 | $ | 36,575 | |||||||
Distributed and undistributed earnings to participating securities | (103 | ) | (160 | ) | (232 | ) | (299 | ) | |||||||
Income available to common shareholders | $ | 23,114 | $ | 20,091 | $ | 45,067 | $ | 36,276 | |||||||
Denominator: | |||||||||||||||
Weighted average common shares outstanding | 47,658,896 | 47,611,263 | 47,652,361 | 47,680,597 | |||||||||||
Less: Average unallocated ESOP shares | (1,317,433 | ) | (1,487,747 | ) | (1,335,294 | ) | (1,510,641 | ) | |||||||
Average unvested restricted stock awards | (205,464 | ) | (363,284 | ) | (236,942 | ) | (377,612 | ) | |||||||
Average shares for basic earnings per share | 46,135,999 | 45,760,232 | 46,080,125 | 45,792,344 | |||||||||||
Basic earnings per common share | $ | 0.50 | $ | 0.44 | $ | 0.98 | $ | 0.79 | |||||||
Diluted earnings per share: | |||||||||||||||
Numerator: | |||||||||||||||
Income available to common shareholders | $ | 23,114 | $ | 20,091 | $ | 45,067 | $ | 36,276 | |||||||
Denominator: | |||||||||||||||
Average shares for basic earnings per share | 46,135,999 | 45,760,232 | 46,080,125 | 45,792,344 | |||||||||||
Dilutive effect of share-based compensation plan | 216,142 | 271,035 | 163,745 | 214,267 | |||||||||||
Average shares for diluted earnings per share | 46,352,141 | 46,031,267 | 46,243,870 | 46,006,611 | |||||||||||
Diluted earnings per common share | $ | 0.50 | $ | 0.44 | $ | 0.97 | $ | 0.79 | |||||||
Share awards excluded in the computation of diluted earnings per share because the exercise price was greater than the common stock average market price and were therefore antidilutive | 830,600 | 841,623 | 946,166 | 1,053,800 |
June 30, 2016 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Agency residential mortgage-backed securities 1 | $ | 221,289 | $ | 2,646 | $ | 96 | $ | 223,839 | |||||||
Agency commercial mortgage-backed securities 1 | 9,453 | 222 | — | 9,675 | |||||||||||
Agency residential collateralized mortgage obligations 1 | 36,195 | 472 | 48 | 36,619 | |||||||||||
US government and agency securities | 14,597 | 234 | — | 14,831 | |||||||||||
Municipal bonds | 39,014 | 1,128 | 64 | 40,078 | |||||||||||
Total securities | $ | 320,548 | $ | 4,702 | $ | 208 | $ | 325,042 | |||||||
December 31, 2015 | |||||||||||||||
Agency residential mortgage-backed securities 1 | $ | 224,582 | $ | 841 | $ | 1,575 | $ | 223,848 | |||||||
Agency commercial mortgage-backed securities 1 | 9,483 | — | 66 | 9,417 | |||||||||||
Agency residential collateralized mortgage obligations 1 | 22,430 | 26 | 142 | 22,314 | |||||||||||
US government and agency securities | 14,906 | 148 | — | 15,054 | |||||||||||
Municipal bonds | 40,512 | 637 | 74 | 41,075 | |||||||||||
Total securities | $ | 311,913 | $ | 1,652 | $ | 1,857 | $ | 311,708 |
June 30, 2016 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Agency residential mortgage-backed securities 1 | $ | 79,909 | $ | 2,529 | $ | 2 | $ | 82,436 | |||||||
Agency commercial mortgage-backed securities 1 | 28,306 | 1,916 | — | 30,222 | |||||||||||
Agency residential collateralized mortgage obligations 1 | 49,738 | 1,343 | 32 | 51,049 | |||||||||||
Municipal bonds | 66,499 | 3,750 | 12 | 70,237 | |||||||||||
Total securities | $ | 224,452 | $ | 9,538 | $ | 46 | $ | 233,944 | |||||||
December 31, 2015 | |||||||||||||||
Agency residential mortgage-backed securities 1 | $ | 87,935 | $ | 1,837 | $ | 284 | $ | 89,488 | |||||||
Agency commercial mortgage-backed securities 1 | 24,848 | 913 | 64 | 25,697 | |||||||||||
Agency residential collateralized mortgage obligations 1 | 59,174 | 1,087 | 55 | 60,206 | |||||||||||
Municipal bonds | 68,476 | 3,447 | 112 | 71,811 | |||||||||||
Total securities | $ | 240,433 | $ | 7,284 | $ | 515 | $ | 247,202 |
Held to maturity | Available for sale | ||||||||||
Carrying Amount | Fair Value | Fair Value | |||||||||
Due in one year or less | $ | 1,707 | $ | 1,729 | $ | 14,307 | |||||
Due after one to five years | 7,816 | 8,182 | 13,971 | ||||||||
Due after five to ten years | 47,063 | 50,151 | 16,860 | ||||||||
Due after ten years | 9,913 | 10,175 | 9,771 | ||||||||
Agency residential mortgage-backed securities | 79,909 | 82,436 | 223,839 | ||||||||
Agency commercial mortgage-backed securities | 28,306 | 30,222 | 9,675 | ||||||||
Agency residential collateralized mortgage obligations | 49,738 | 51,049 | 36,619 | ||||||||
Total | $ | 224,452 | $ | 233,944 | $ | 325,042 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Proceeds | $ | 7,700 | $ | — | $ | 7,700 | $ | 16,581 | |||||||
Gross gains | 72 | — | 72 | 211 | |||||||||||
Gross losses | 7 | — | 7 | — | |||||||||||
Tax benefit of securities gains/losses | 23 | — | 23 | 74 |
AFS | Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||
June 30, 2016 | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | |||||||||||||||||
Agency residential mortgage-backed securities 1 | $ | 9,616 | $ | 50 | $ | 1,957 | $ | 46 | $ | 11,573 | $ | 96 | |||||||||||
Agency residential collateralized mortgage obligations 1 | 925 | 7 | 4,062 | 41 | 4,987 | 48 | |||||||||||||||||
Municipal bonds | 1,920 | 16 | 2,975 | 48 | 4,895 | 64 | |||||||||||||||||
Total temporarily impaired | $ | 12,461 | $ | 73 | $ | 8,994 | $ | 135 | $ | 21,455 | $ | 208 | |||||||||||
December 31, 2015 | |||||||||||||||||||||||
Agency residential mortgage-backed securities 1 | $ | 158,172 | $ | 1,353 | $ | 10,474 | $ | 222 | $ | 168,646 | $ | 1,575 | |||||||||||
Agency commercial mortgage-backed securities 1 | 9,417 | 66 | — | — | 9,417 | 66 | |||||||||||||||||
Agency residential collateralized mortgage obligations 1 | 13,517 | 81 | 6,992 | 61 | 20,509 | 142 | |||||||||||||||||
Municipal bonds | 7,249 | 74 | — | — | 7,249 | 74 | |||||||||||||||||
Total temporarily impaired | $ | 188,355 | $ | 1,574 | $ | 17,466 | $ | 283 | $ | 205,821 | $ | 1,857 |
HTM | Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||
June 30, 2016 | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | |||||||||||||||||
Agency residential mortgage-backed securities 1 | $ | 2,057 | $ | 2 | $ | — | $ | — | $ | 2,057 | $ | 2 | |||||||||||
Agency residential collateralized mortgage obligations 1 | 3,022 | 3 | 2,218 | 29 | 5,240 | 32 | |||||||||||||||||
Municipal bonds | 279 | 1 | 1,086 | 11 | 1,365 | 12 | |||||||||||||||||
Total temporarily impaired | $ | 5,358 | $ | 6 | $ | 3,304 | $ | 40 | $ | 8,662 | $ | 46 | |||||||||||
December 31, 2015 | |||||||||||||||||||||||
Agency residential mortgage-backed securities 1 | $ | 41,935 | $ | 284 | $ | — | $ | — | $ | 41,935 | $ | 284 | |||||||||||
Agency commercial mortgage-backed securities 1 | 3,805 | 64 | — | — | 3,805 | 64 | |||||||||||||||||
Agency residential collateralized mortgage obligations 1 | 3,714 | 6 | 3,060 | 49 | 6,774 | 55 | |||||||||||||||||
Municipal bonds | 1,638 | 10 | 6,369 | 102 | 8,007 | 112 | |||||||||||||||||
Total temporarily impaired | $ | 51,092 | $ | 364 | $ | 9,429 | $ | 151 | $ | 60,521 | $ | 515 |
June 30, 2016 | December 31, 2015 | ||||||
Loans held for sale | $ | 20,752 | $ | 22,535 | |||
Loans held for investment: | |||||||
Commercial real estate | $ | 2,520,431 | $ | 2,177,543 | |||
Commercial and industrial | 1,782,463 | 1,612,669 | |||||
Construction and land | 281,936 | 269,708 | |||||
Consumer real estate | 1,046,794 | 936,757 | |||||
Other consumer | 61,423 | 69,830 | |||||
Gross loans held for investment, excluding Warehouse Purchase Program | 5,693,047 | 5,066,507 | |||||
Net of: | |||||||
Deferred costs (fees) and discounts, net | 2,399 | (1,860 | ) | ||||
Allowance for loan losses | (62,194 | ) | (47,093 | ) | |||
Net loans held for investment, excluding Warehouse Purchase Program | 5,633,252 | 5,017,554 | |||||
Warehouse Purchase Program | 980,390 | 1,043,719 | |||||
Total loans held for investment | $ | 6,613,642 | $ | 6,061,273 |
For the three months ended June 30, 2016 | Commercial Real Estate | Commercial and Industrial | Construction and Land | Consumer Real Estate | Other Consumer | Total | |||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||
Beginning balance - April 1, 2016 | $ | 15,274 | $ | 31,431 | $ | 3,430 | $ | 4,252 | $ | 1,097 | $ | 55,484 | |||||||||||
Charge-offs | — | (82 | ) | — | (70 | ) | (193 | ) | (345 | ) | |||||||||||||
Recoveries | 3 | 178 | — | 9 | 65 | 255 | |||||||||||||||||
Provision expense | 889 | 4,852 | 520 | 398 | 141 | 6,800 | |||||||||||||||||
Ending balance - June 30, 2016 | $ | 16,166 | $ | 36,379 | $ | 3,950 | $ | 4,589 | $ | 1,110 | $ | 62,194 | |||||||||||
For the six months ended June 30, 2016 | |||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||
Beginning balance - January 1, 2016 | $ | 14,123 | $ | 24,975 | $ | 3,013 | $ | 3,992 | $ | 990 | $ | 47,093 | |||||||||||
Charge-offs | — | (465 | ) | — | (70 | ) | (391 | ) | (926 | ) | |||||||||||||
Recoveries | 9 | 214 | — | 52 | 152 | 427 | |||||||||||||||||
Provision expense | 2,034 | 11,655 | 937 | 615 | 359 | 15,600 | |||||||||||||||||
Ending balance - June 30, 2016 | $ | 16,166 | $ | 36,379 | $ | 3,950 | $ | 4,589 | $ | 1,110 | $ | 62,194 | |||||||||||
Allowance ending balance: | |||||||||||||||||||||||
Individually evaluated for impairment | $ | 355 | $ | 8,250 | $ | — | $ | 109 | $ | 55 | $ | 8,769 | |||||||||||
Collectively evaluated for impairment | 15,811 | 28,129 | 3,950 | 4,480 | 1,055 | 53,425 | |||||||||||||||||
Loans: | |||||||||||||||||||||||
Individually evaluated for impairment | 1,341 | 31,370 | 27 | 4,924 | 90 | 37,752 | |||||||||||||||||
Collectively evaluated for impairment | 2,512,377 | 1,750,814 | 281,909 | 1,041,004 | 61,060 | 5,647,164 | |||||||||||||||||
PCI loans | 6,713 | 279 | — | 866 | 273 | 8,131 | |||||||||||||||||
Ending balance | $ | 2,520,431 | $ | 1,782,463 | $ | 281,936 | $ | 1,046,794 | $ | 61,423 | $ | 5,693,047 |
For the three months ended June 30, 2015 | Commercial Real Estate | Commercial and Industrial | Construction and Land | Consumer Real Estate | Other Consumer | Total | |||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||
Beginning balance - April 1, 2015 | $ | 12,610 | $ | 10,741 | $ | 463 | $ | 3,983 | $ | 479 | $ | 28,276 | |||||||||||
Charge-offs | (78 | ) | (977 | ) | — | (27 | ) | (275 | ) | (1,357 | ) | ||||||||||||
Recoveries | — | 42 | — | 14 | 142 | 198 | |||||||||||||||||
Provision expense (benefit) | (1,247 | ) | 3,415 | 1,068 | 150 | 364 | 3,750 | ||||||||||||||||
Ending balance - June 30, 2015 | $ | 11,285 | $ | 13,221 | $ | 1,531 | $ | 4,120 | $ | 710 | $ | 30,867 | |||||||||||
For the six months ended June 30, 2015 | |||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||
Beginning balance - January 1, 2015 | $ | 11,830 | $ | 9,068 | $ | 174 | $ | 4,069 | $ | 408 | $ | 25,549 | |||||||||||
Charge-offs | (82 | ) | (1,041 | ) | — | (215 | ) | (523 | ) | (1,861 | ) | ||||||||||||
Recoveries | 21 | 101 | — | 60 | 247 | 429 | |||||||||||||||||
Provision expense (benefit) | (484 | ) | 5,093 | 1,357 | 206 | 578 | 6,750 | ||||||||||||||||
Ending balance - June 30, 2015 | $ | 11,285 | $ | 13,221 | $ | 1,531 | $ | 4,120 | $ | 710 | $ | 30,867 | |||||||||||
Allowance ending balance: | |||||||||||||||||||||||
Individually evaluated for impairment | $ | 897 | $ | 1,078 | $ | — | $ | 56 | $ | 10 | $ | 2,041 | |||||||||||
Collectively evaluated for impairment | 10,388 | 12,143 | 1,531 | 4,064 | 700 | 28,826 | |||||||||||||||||
Loans: | |||||||||||||||||||||||
Individually evaluated for impairment | 4,282 | 12,648 | 141 | 5,041 | 191 | 22,303 | |||||||||||||||||
Collectively evaluated for impairment | 1,914,846 | 1,293,671 | 230,000 | 840,099 | 79,258 | 4,357,874 | |||||||||||||||||
PCI loans | 11,128 | 1,849 | 441 | 842 | 349 | 14,609 | |||||||||||||||||
Ending balance | $ | 1,930,256 | $ | 1,308,168 | $ | 230,582 | $ | 845,982 | $ | 79,798 | $ | 4,394,786 |
June 30, 2016 | Unpaid Contractual Principal Balance | Recorded Investment With No Allowance | Recorded Investment With Allowance | Total Recorded Investment | Related Allowance | |||||||||||||||
Commercial real estate | $ | 1,459 | $ | 248 | $ | 1,093 | $ | 1,341 | $ | 332 | ||||||||||
Commercial and industrial | 33,305 | 2,648 | 28,722 | 31,370 | 8,249 | |||||||||||||||
Construction and land | 34 | 27 | — | 27 | — | |||||||||||||||
Consumer real estate | 5,612 | 4,913 | 11 | 4,924 | 11 | |||||||||||||||
Other consumer | 123 | 39 | 51 | 90 | 29 | |||||||||||||||
Total | $ | 40,533 | $ | 7,875 | $ | 29,877 | $ | 37,752 | $ | 8,621 | ||||||||||
December 31, 2015 | ||||||||||||||||||||
Commercial real estate | $ | 11,682 | $ | 10,618 | $ | 962 | $ | 11,580 | $ | 303 | ||||||||||
Commercial and industrial | 18,649 | 13,894 | 3,012 | 16,906 | 1,467 | |||||||||||||||
Construction and land | 38 | 33 | — | 33 | — | |||||||||||||||
Consumer real estate | 5,327 | 4,754 | 13 | 4,767 | 13 | |||||||||||||||
Other consumer | 199 | 49 | 71 | 120 | 45 | |||||||||||||||
Total | $ | 35,895 | $ | 29,348 | $ | 4,058 | $ | 33,406 | $ | 1,828 |
June 30, 2016 | Current Quarter Average Recorded Investment | Year-to-Date Average Recorded Investment | Current Quarter Interest Income Recognized | Year-to-Date Interest Income Recognized | ||||||||||||
Commercial real estate | $ | 1,376 | $ | 5,836 | $ | 2 | $ | 4 | ||||||||
Commercial and industrial | 30,351 | 25,076 | — | 1 | ||||||||||||
Construction and land | 29 | 31 | — | — | ||||||||||||
Consumer real estate | 6,040 | 5,834 | 4 | 8 | ||||||||||||
Other consumer | 98 | 105 | 1 | 2 | ||||||||||||
Total | $ | 37,894 | $ | 36,882 | $ | 7 | $ | 15 | ||||||||
June 30, 2015 | ||||||||||||||||
Commercial real estate | $ | 5,886 | $ | 6,537 | $ | 9 | $ | 19 | ||||||||
Commercial and industrial | 9,881 | 8,187 | 2 | 5 | ||||||||||||
Construction and land | 141 | 125 | — | — | ||||||||||||
Consumer real estate | 5,103 | 5,319 | 3 | 5 | ||||||||||||
Other consumer | 216 | 245 | 1 | 2 | ||||||||||||
Total | $ | 21,227 | $ | 20,413 | $ | 15 | $ | 31 |
June 30, 2016 | December 31, 2015 | ||||||
Commercial real estate | $ | 1,183 | $ | 11,418 | |||
Commercial and industrial | 31,362 | 16,877 | |||||
Construction and land | 27 | 33 | |||||
Consumer real estate | 10,005 | 9,781 | |||||
Other consumer | 274 | 107 | |||||
Total | $ | 42,851 | $ | 38,216 |
June 30, 2016 | December 31, 2015 | ||||||
Nonaccrual TDRs(1) | $ | 13,200 | $ | 6,207 | |||
Performing TDRs (2) | 565 | 605 | |||||
Total | $ | 13,765 | $ | 6,812 | |||
Specific reserves on TDRs | $ | 549 | $ | 487 | |||
Outstanding commitments to lend additional funds to borrowers with TDR loans | — | — |
Three Months Ended June 30, 2016 | Six Months Ended June 30, 2016 | ||||||||||||||||||||||||||||||
Principal Deferrals (1) | Combination of Rate Reduction and Principal Deferral | Other | Total | Principal Deferrals (1) | Combination of Rate Reduction and Principal Deferral | Other | Total | ||||||||||||||||||||||||
Commercial and industrial | $ | — | $ | — | $ | — | $ | — | $ | 6 | $ | — | $ | 7,138 | (2) | $ | 7,144 | ||||||||||||||
Consumer real estate | — | — | — | — | 67 | 81 | — | 148 | |||||||||||||||||||||||
Total | $ | — | $ | — | $ | — | $ | — | $ | 73 | $ | 81 | $ | 7,138 | $ | 7,292 | |||||||||||||||
Three Months Ended June 30, 2015 | Six Months Ended June 30, 2015 | ||||||||||||||||||||||||||||||
Commercial and industrial | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 80 | $ | 80 | |||||||||||||||
Consumer real estate | 87 | — | — | 87 | 87 | 62 | — | 149 | |||||||||||||||||||||||
Total | $ | 87 | $ | — | $ | — | $ | 87 | $ | 87 | $ | 62 | $ | 80 | $ | 229 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Construction and land | $ | — | $ | 101 | $ | — | $ | 101 | |||||||
Consumer real estate | — | 65 | $ | 35 | $ | 65 | |||||||||
Total | $ | — | $ | 166 | $ | 35 | $ | 166 |
June 30, 2016 | December 31, 2015 | ||||||
Carrying amount 1 | $ | 7,983 | $ | 11,804 | |||
Outstanding balance | 8,883 | 13,053 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Beginning balance | $ | 3,056 | $ | 3,736 | $ | 3,356 | $ | 2,100 | |||||||
Additions | — | — | — | 1,907 | |||||||||||
Reclassifications (to) from nonaccretable | (493 | ) | 299 | (256 | ) | 406 | |||||||||
Disposals | (14 | ) | (350 | ) | (282 | ) | (354 | ) | |||||||
Accretion | (273 | ) | (375 | ) | (542 | ) | (749 | ) | |||||||
Balance at end of period | $ | 2,276 | $ | 3,310 | $ | 2,276 | $ | 3,310 |
June 30, 2016 | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days and Greater Past Due | Total Loans Past Due | Current Loans 1 | Total Loans | |||||||||||||||||
Commercial real estate | $ | 32 | $ | 1,448 | $ | 160 | $ | 1,640 | $ | 2,518,791 | $ | 2,520,431 | |||||||||||
Commercial and industrial | 6,786 | 619 | 12,592 | 19,997 | 1,762,466 | 1,782,463 | |||||||||||||||||
Construction and land | 118 | — | — | 118 | 281,818 | 281,936 | |||||||||||||||||
Consumer real estate | 203 | 4,109 | 2,059 | 6,371 | 1,040,423 | 1,046,794 | |||||||||||||||||
Other consumer | 663 | 63 | 114 | 840 | 60,583 | 61,423 | |||||||||||||||||
Total | $ | 7,802 | $ | 6,239 | $ | 14,925 | $ | 28,966 | $ | 5,664,081 | $ | 5,693,047 | |||||||||||
December 31, 2015 | |||||||||||||||||||||||
Commercial real estate | $ | 16 | $ | 176 | $ | 10,269 | $ | 10,461 | $ | 2,167,082 | $ | 2,177,543 | |||||||||||
Commercial and industrial | 884 | 670 | 12,255 | 13,809 | 1,598,860 | 1,612,669 | |||||||||||||||||
Construction and land | 623 | — | — | 623 | 269,085 | 269,708 | |||||||||||||||||
Consumer real estate | 10,880 | 2,463 | 3,458 | 16,801 | 919,956 | 936,757 | |||||||||||||||||
Other consumer | 463 | 37 | — | 500 | 69,330 | 69,830 | |||||||||||||||||
Total | $ | 12,866 | $ | 3,346 | $ | 25,982 | $ | 42,194 | $ | 5,024,313 | $ | 5,066,507 |
June 30, 2016 | Commercial Real Estate | Commercial and Industrial | Construction and Land | Consumer Real Estate | ||||||||||||
Grade: 1 | ||||||||||||||||
Pass | $ | 2,496,101 | $ | 1,530,291 | $ | 281,819 | $ | 1,030,771 | ||||||||
Special Mention | 8,925 | 131,071 | — | 2,801 | ||||||||||||
Substandard | 14,470 | 121,044 | 90 | 9,855 | ||||||||||||
Doubtful | 935 | 57 | 27 | 3,367 | ||||||||||||
Total | $ | 2,520,431 | $ | 1,782,463 | $ | 281,936 | $ | 1,046,794 | ||||||||
December 31, 2015 | ||||||||||||||||
Grade: 1 | ||||||||||||||||
Pass | $ | 2,135,539 | $ | 1,460,725 | $ | 269,582 | $ | 920,519 | ||||||||
Special Mention | 13,633 | 92,048 | — | 3,327 | ||||||||||||
Substandard | 27,572 | 59,835 | 93 | 9,606 | ||||||||||||
Doubtful | 799 | 61 | 33 | 3,305 | ||||||||||||
Total | $ | 2,177,543 | $ | 1,612,669 | $ | 269,708 | $ | 936,757 |
June 30, 2016 | December 31, 2015 | ||||||
Performing | $ | 61,149 | $ | 69,723 | |||
Non-performing | 274 | 107 | |||||
Total | $ | 61,423 | $ | 69,830 |
Fair Value Measurements Using Significant Other Observable Inputs (Level 2) | ||||||||
June 30, 2016 | December 31, 2015 | |||||||
Assets: | ||||||||
Agency residential mortgage-backed securities | $ | 223,839 | $ | 223,848 | ||||
Agency commercial mortgage-backed securities | 9,675 | 9,417 | ||||||
Agency residential collateralized mortgage obligations | 36,619 | 22,314 | ||||||
US government and agency securities | 14,831 | 15,054 | ||||||
Municipal bonds | 40,078 | 41,075 | ||||||
Total securities available for sale | $ | 325,042 | $ | 311,708 | ||||
Loans held for sale | $ | 20,752 | $ | 22,535 | ||||
Derivative financial instruments: | ||||||||
Interest rate lock commitments | 717 | 421 | ||||||
Forward mortgage-backed securities trades | — | 15 | ||||||
Loan customer counterparty | 1,704 | 260 | ||||||
Liabilities: | ||||||||
Derivative financial instruments: | ||||||||
Interest rate lock commitments | — | — | ||||||
Forward mortgage-backed securities trades | 173 | 29 | ||||||
Financial institution counterparty | 1,704 | 260 |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||
June 30, 2016 | December 31, 2015 | |||||||
Assets: | ||||||||
Impaired loans | $ | 21,256 | $ | 2,230 | ||||
Foreclosed assets: | ||||||||
Commercial real estate | 11,888 | 4,784 | ||||||
Construction and land | 1,447 | 1,802 | ||||||
Residential real estate | 33 | 106 |
Fair Value | ||||||||||||||||
June 30, 2016 | Carrying Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Financial assets | ||||||||||||||||
Cash and cash equivalents | $ | 422,624 | $ | 422,624 | $ | — | $ | — | ||||||||
Securities held to maturity | 224,452 | — | 233,944 | — | ||||||||||||
Loans held for investment, net | 5,633,252 | — | — | 5,772,856 | ||||||||||||
Loans held for investment - Warehouse Purchase Program | 980,390 | — | — | 980,524 | ||||||||||||
FHLB and other restricted securities, at cost | 62,247 | — | 62,247 | — | ||||||||||||
Accrued interest receivable | 19,557 | 19,557 | — | — | ||||||||||||
Financial liabilities | ||||||||||||||||
Deposits | $ | 5,622,682 | $ | — | $ | — | $ | 5,410,523 | ||||||||
FHLB advances | 1,333,337 | — | — | 1,330,620 | ||||||||||||
Repurchase agreements | 68,049 | — | — | 68,048 | ||||||||||||
Subordinated debt | 85,231 | — | — | 82,309 | ||||||||||||
Other borrowings | 24,894 | — | — | 25,000 | ||||||||||||
Accrued interest payable | 1,955 | 1,955 | — | — | ||||||||||||
December 31, 2015 | ||||||||||||||||
Financial assets | ||||||||||||||||
Cash and cash equivalents | $ | 615,639 | $ | 615,639 | $ | — | $ | — | ||||||||
Securities held to maturity | 240,433 | — | 247,202 | — | ||||||||||||
Loans held for investment, net | 5,017,554 | — | — | 5,083,093 | ||||||||||||
Loans held for investment - Warehouse Purchase Program | 1,043,719 | — | — | 1,042,434 | ||||||||||||
FHLB and other restricted securities, at cost | 63,075 | — | 63,075 | — | ||||||||||||
Accrued interest receivable | 17,109 | 17,109 | — | — | ||||||||||||
Financial liabilities | ||||||||||||||||
Deposits | $ | 5,226,711 | $ | — | $ | — | $ | 4,920,648 | ||||||||
FHLB advances | 1,439,904 | — | — | 1,433,125 | ||||||||||||
Repurchase agreement | 83,269 | — | — | 81,956 | ||||||||||||
Subordinated debt | 84,992 | — | — | 85,771 | ||||||||||||
Accrued interest payable | 1,653 | 1,653 | — | — |
June 30, 2016 | December 31, 2015 | |||||||||||||||||||
Derivative Positions related to Mortgage Loans Held for Sale: | Expiration Dates | Outstanding Notional Balance | Fair Value | Expiration Dates | Outstanding Notional Balance | Fair Value | ||||||||||||||
Assets: | ||||||||||||||||||||
IRLCs | 2016 | $ | 17,150 | $ | 717 | 2016 | $ | 12,518 | $ | 421 | ||||||||||
Forward mortgage-backed securities trades | 2016 | — | — | 2016 | 11,874 | 15 | ||||||||||||||
Liabilities: | ||||||||||||||||||||
Forward mortgage-backed securities trades | 2016 | $ | 26,035 | $ | 173 | 2016 | $ | 8,500 | $ | 29 |
Derivative Positions related to Commercial Loan Interest Rate Swaps and Caps: | Outstanding Notional Amount | Estimated Fair Value | Weighted-Average Interest Rate | |||||||||||
Received | Paid | |||||||||||||
June 30, 2016 | ||||||||||||||
Loan customer counterparty | $ | 99,572 | $ | 1,704 | 5.24 | % | 3.76 | % | ||||||
Financial institution counterparty | (99,572 | ) | (1,704 | ) | 3.76 | 5.24 | ||||||||
December 31, 2015 | ||||||||||||||
Loan customer counterparty | $ | 24,796 | $ | 260 | 5.01 | % | 3.37 | % | ||||||
Financial institution counterparty | (24,796 | ) | (260 | ) | 3.37 | 5.01 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Restricted stock | $ | 733 | $ | 1,070 | $ | 1,181 | $ | 2,262 | |||||||
Stock options | 493 | 430 | 1,042 | 957 | |||||||||||
Income tax benefit | 429 | 525 | 778 | 1,127 |
Six Months Ended June 30, 2016 | |||||||||||||
Time-Vested Shares | Performance-Based Shares | ||||||||||||
Shares | Weighted-Average Grant Date Fair Value per Share 1 | Shares | Weighted-Average Grant Date Fair Value per Share 2 | ||||||||||
Non-vested at December 31, 2015 | 246,461 | $ | 20.98 | 61,800 | $ | 25.02 | |||||||
Granted | — | — | — | — | |||||||||
Vested | (96,665 | ) | 20.86 | (20,600 | ) | 25.02 | |||||||
Non-vested at June 30, 2016 | 149,796 | $ | 20.81 | 41,200 | $ | 26.33 |
Shares | Weighted- Average Exercise Price per Share | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||
Outstanding at December 31, 2015 | 1,865,750 | $ | 22.21 | 7.9 | $ | 6,401 | |||||||
Granted | 19,000 | 21.73 | 10.0 | — | |||||||||
Exercised | (24,614 | ) | 19.97 | — | 127 | ||||||||
Forfeited | (59,666 | ) | 24.91 | — | — | ||||||||
Outstanding at June 30, 2016 | 1,800,470 | 22.14 | 7.3 | 8,641 | |||||||||
Fully vested and expected to vest | 1,795,218 | 22.14 | 7.3 | 8,625 | |||||||||
Exercisable at June 30, 2016 | 805,534 | $ | 19.79 | 6.4 | $ | 5,742 |
June 30, 2016 | December 31, 2015 | ||||||
Net deferred tax assets | $ | 24,455 | $ | 21,040 | |||
Estimated annual effective tax rate | 35 | % |
June 30, 2016 | December 31, 2015 | ||||||
Unused commitments to extend credit | $ | 1,356,035 | $ | 1,211,964 | |||
Unused capacity on Warehouse Purchase Program loans | 744,610 | 476,281 | |||||
Standby letters of credit | 27,046 | 18,644 | |||||
Total unused commitments/capacity | $ | 2,127,691 | $ | 1,706,889 |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
• | Net income of $23.2 million for the second quarter of 2016 was a record high for the Company, up $3.0 million, or 14.6%, from the second quarter of 2015, which includes a $9.5 million increase in net interest income and a $1.8 million increase in non-interest income, which was partially offset by a $3.1 million increase in the provision for loan losses and a $2.7 million increase in non-interest expense. |
• | Gross loans held for investment at June 30, 2016, excluding Warehouse Purchase Program loans, grew $626.5 million, or 12.4%, from December 31, 2015, with $512.7 million of growth in commercial real estate and commercial and industrial loans and $110.0 million of growth in consumer real estate loans. |
• | Deposits at June 30, 2016 increased by $396.0 million, or 7.6%, from December 31, 2015, which includes $299.1 million of growth in time deposits and $65.5 million of growth in non-interest-bearing demand deposits. |
• | The allowance for loan losses allocated to energy loans at June 30, 2016 totaled $21.9 million, or 4.0% of total energy loans (including both reserve-based and midstream), up $9.9 million from $12.0 million at December 31, 2015. |
June 30, 2016 | December 31, 2015 | Dollar Change | Percent Change | |||||||||||
(Dollars in thousands) | ||||||||||||||
Commercial real estate | $ | 2,520,431 | $ | 2,177,543 | $ | 342,888 | 15.7 | % | ||||||
Commercial and industrial | 1,782,463 | 1,612,669 | 169,794 | 10.5 | ||||||||||
Construction and land | 281,936 | 269,708 | 12,228 | 4.5 | ||||||||||
Consumer real estate | 1,046,794 | 936,757 | 110,037 | 11.7 | ||||||||||
Other consumer | 61,423 | 69,830 | (8,407 | ) | (12.0 | ) | ||||||||
Gross loans held for investment, excluding Warehouse Purchase Program loans | 5,693,047 | 5,066,507 | 626,540 | 12.4 | ||||||||||
Warehouse Purchase Program loans | 980,390 | 1,043,719 | (63,329 | ) | (6.1 | ) | ||||||||
Gross loans held for investment | 6,673,437 | 6,110,226 | 563,211 | 9.2 | ||||||||||
Loans held for sale | 20,752 | 22,535 | (1,783 | ) | (7.9 | ) | ||||||||
Gross loans | $ | 6,694,189 | $ | 6,132,761 | $ | 561,428 | 9.2 | % |
June 30, 2016 | March 31, 2016 | Linked-Quarter Change | June 30, 2015 | Year-over-Year Change | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Special Mention (all performing) | $ | 106,060 | $ | 115,199 | $ | (9,139 | ) | $ | 22,161 | $ | 83,899 | ||||||||
Substandard (performing) | 81,482 | 48,088 | 33,394 | 58,591 | 22,891 | ||||||||||||||
Substandard (non-performing) | 26,576 | 25,171 | 1,405 | 5,233 | 21,343 | ||||||||||||||
$ | 214,118 | $ | 188,458 | $ | 25,660 | $ | 85,985 | $ | 128,133 |
June 30, 2016 | December 31, 2015 | ||||||
(Dollars in thousands) | |||||||
Doubtful | $ | 4,386 | $ | 4,201 | |||
Substandard | 146,032 | 97,523 | |||||
Total classified loans | 150,418 | 101,724 | |||||
Foreclosed assets | 13,368 | 6,692 | |||||
Total classified assets | $ | 163,786 | $ | 108,416 |
June 30, 2016 | December 31, 2015 | Dollar Change | Percent Change | |||||||||||
(Dollars in thousands) | ||||||||||||||
Non-interest-bearing demand | $ | 1,235,731 | $ | 1,170,272 | $ | 65,459 | 5.6 | % | ||||||
Interest-bearing demand | 811,015 | 819,350 | (8,335 | ) | (1.0 | ) | ||||||||
Savings and money market | 2,249,490 | 2,209,698 | 39,792 | 1.8 | ||||||||||
Time | 1,326,446 | 1,027,391 | 299,055 | 29.1 | ||||||||||
Total deposits | $ | 5,622,682 | $ | 5,226,711 | $ | 395,971 | 7.6 | % |
Balance | Weighted Average Rate | |||||
(Dollars in thousands) | ||||||
Less than 90 days | $ | 453,446 | 0.50 | % | ||
90 days to less than one year | 53,400 | 2.55 | ||||
One to three years | 821,928 | 0.44 | ||||
After three to five years | 3,046 | 5.49 | ||||
After five years | 1,719 | 5.49 | ||||
1,333,539 | 0.56 | % | ||||
Restructuring prepayment penalty | (202 | ) | ||||
Total | $ | 1,333,337 |
June 30, 2016 | December 31, 2015 | Dollar Change | Percent Change | |||||||||||
(Dollars in thousands) | ||||||||||||||
Common stock | $ | 476 | $ | 476 | $ | — | — | % | ||||||
Additional paid-in capital | 580,386 | 576,753 | 3,633 | 0.6 | ||||||||||
Retained earnings | 272,454 | 240,496 | 31,958 | 13.3 | ||||||||||
Accumulated other comprehensive income (loss), net | 2,918 | (133 | ) | 3,051 | N/M1 | |||||||||
Unearned ESOP shares | (12,930 | ) | (13,516 | ) | 586 | (4.3 | ) | |||||||
Total shareholders’ equity | $ | 843,304 | $ | 804,076 | $ | 39,228 | 4.9 | % |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2016 | 2015 | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Interest and dividend income | ||||||||||||||
Loans, including fees | $ | 73,376 | $ | 61,551 | $ | 11,825 | 19.2 | % | ||||||
Securities | 3,118 | 2,976 | 142 | 4.8 | ||||||||||
Interest-bearing deposits in other financial institutions | 392 | 139 | 253 | 182.0 | ||||||||||
FHLB and Federal Reserve Bank stock and other | 450 | 301 | 149 | 49.5 | ||||||||||
$ | 77,336 | $ | 64,967 | $ | 12,369 | 19.0 | % |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2016 | 2015 | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Interest expense | ||||||||||||||
Deposits | $ | 4,422 | $ | 3,049 | $ | 1,373 | 45.0 | % | ||||||
FHLB advances | 2,103 | 1,774 | 329 | 18.5 | ||||||||||
Repurchase agreements and other borrowings | 1,457 | 323 | 1,134 | 351.1 | ||||||||||
$ | 7,982 | $ | 5,146 | $ | 2,836 | 55.1 | % |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2016 | 2015 | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Non-interest income | ||||||||||||||
Service charges and other fees | $ | 8,927 | $ | 7,941 | $ | 986 | 12.4 | % | ||||||
Net gain on sale of mortgage loans | 2,250 | 2,121 | 129 | 6.1 | ||||||||||
Bank-owned life insurance income | 441 | 424 | 17 | 4.0 | ||||||||||
Gain on sale of available for sale securities | 65 | — | 65 | 100.0 | ||||||||||
Gain on sale and disposition of assets | 1,186 | 429 | 757 | 176.5 | ||||||||||
Other | 853 | 1,049 | (196 | ) | (18.7 | ) | ||||||||
$ | 13,722 | $ | 11,964 | $ | 1,758 | 14.7 | % |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2016 | 2015 | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Non-interest expense | ||||||||||||||
Salaries and employee benefits | $ | 22,867 | $ | 22,549 | $ | 318 | 1.4 | % | ||||||
Merger and acquisition costs | — | 8 | (8 | ) | (100.0 | ) | ||||||||
Advertising | 1,035 | 1,048 | (13 | ) | (1.2 | ) | ||||||||
Occupancy and equipment | 3,779 | 3,838 | (59 | ) | (1.5 | ) | ||||||||
Outside professional services | 1,227 | 625 | 602 | 96.3 | ||||||||||
Regulatory assessments | 1,330 | 1,146 | 184 | 16.1 | ||||||||||
Data processing | 3,664 | 2,537 | 1,127 | 44.4 | ||||||||||
Office operations | 2,541 | 2,652 | (111 | ) | (4.2 | ) | ||||||||
Other | 3,170 | 2,505 | 665 | 26.5 | ||||||||||
$ | 39,613 | $ | 36,908 | $ | 2,705 | 7.3 | % |
Six Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2016 | 2015 | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Interest and dividend income | ||||||||||||||
Loans, including fees | $ | 142,182 | $ | 119,586 | $ | 22,596 | 18.9 | % | ||||||
Securities | 6,204 | 6,193 | 11 | 0.2 | ||||||||||
Interest-bearing deposits in other financial institutions | 722 | 297 | 425 | 143.1 | ||||||||||
FHLB and Federal Reserve Bank stock and other | 836 | 509 | 327 | 64.2 | ||||||||||
$ | 149,944 | $ | 126,585 | $ | 23,359 | 18.5 | % |
Six Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2016 | 2015 | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Interest expense | ||||||||||||||
Deposits | $ | 8,544 | $ | 6,176 | $ | 2,368 | 38.3 | % | ||||||
FHLB advances | 3,776 | 3,480 | 296 | 8.5 | ||||||||||
Repurchase agreements and other borrowings | 2,919 | 782 | 2,137 | 273.3 | ||||||||||
$ | 15,239 | $ | 10,438 | $ | 4,801 | 46.0 | % |
Six Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2016 | 2015 | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Non-interest income | ||||||||||||||
Service charges and other fees | $ | 17,108 | $ | 14,700 | $ | 2,408 | 16.4 | % | ||||||
Net gain on sale of mortgage loans | 3,830 | 4,193 | (363 | ) | (8.7 | ) | ||||||||
Bank-owned life insurance income | 867 | 843 | 24 | 2.8 | ||||||||||
Gain on sale of available for sale securities | 65 | 211 | (146 | ) | (69.2 | ) | ||||||||
Gain on sale and disposition of assets | 5,258 | 457 | 4,801 | 1,050.5 | ||||||||||
Other | 1,249 | 967 | 282 | 29.2 | ||||||||||
$ | 28,377 | $ | 21,371 | $ | 7,006 | 32.8 | % |
Six Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2016 | 2015 | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Non-interest expense | ||||||||||||||
Salaries and employee benefits | $ | 45,204 | $ | 45,520 | $ | (316 | ) | (0.7 | )% | |||||
Merger and acquisition costs | — | 1,553 | (1,553 | ) | (100.0 | ) | ||||||||
Advertising | 2,071 | 1,988 | 83 | 4.2 | ||||||||||
Occupancy and equipment | 7,470 | 7,646 | (176 | ) | (2.3 | ) | ||||||||
Outside professional services | 2,043 | 1,375 | 668 | 48.6 | ||||||||||
Regulatory assessments | 2,463 | 1,968 | 495 | 25.2 | ||||||||||
Data processing | 6,994 | 5,332 | 1,662 | 31.2 | ||||||||||
Office operations | 5,009 | 5,045 | (36 | ) | (0.7 | ) | ||||||||
Other | 5,901 | 4,258 | 1,643 | 38.6 | ||||||||||
$ | 77,155 | $ | 74,685 | $ | 2,470 | 3.3 | % |
Three Months Ended June 30, | ||||||||||||||||||||||
2016 | 2015 | |||||||||||||||||||||
Average Outstanding Balance | Interest Earned/Paid | Yield/ Rate | Average Outstanding Balance | Interest Earned/Paid | Yield/ Rate | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Commercial real estate | $ | 2,416,288 | $ | 30,458 | 5.04 | % | $ | 1,850,134 | $ | 24,061 | 5.20 | % | ||||||||||
Warehouse Purchase Program | 987,225 | 8,042 | 3.26 | 920,034 | 7,720 | 3.36 | ||||||||||||||||
Commercial and industrial | 1,695,037 | 18,477 | 4.36 | 1,248,447 | 14,811 | 4.75 | ||||||||||||||||
Construction and land | 266,968 | 3,566 | 5.34 | 214,038 | 3,347 | 6.25 | ||||||||||||||||
Consumer real estate | 1,002,848 | 11,765 | 4.69 | 805,573 | 10,292 | 5.11 | ||||||||||||||||
Other consumer | 63,525 | 893 | 5.62 | 83,296 | 1,143 | 5.49 | ||||||||||||||||
Loans held for sale | 19,726 | 175 | 3.55 | 19,414 | 177 | 3.65 | ||||||||||||||||
Less: deferred fees and allowance for loan loss | (55,940 | ) | — | — | (31,991 | ) | — | — | ||||||||||||||
Loans receivable 1 | 6,395,677 | 73,376 | 4.59 | 5,108,945 | 61,551 | 4.82 | ||||||||||||||||
Agency mortgage-backed securities | 352,330 | 1,837 | 2.09 | 318,986 | 1,630 | 2.04 | ||||||||||||||||
Agency collateralized mortgage obligations | 81,651 | 476 | 2.33 | 118,649 | 574 | 1.94 | ||||||||||||||||
Investment securities | 123,510 | 805 | 2.61 | 116,597 | 772 | 2.65 | ||||||||||||||||
FHLB and FRB stock and other restricted securities | 65,657 | 450 | 2.74 | 65,839 | 301 | 1.83 | ||||||||||||||||
Interest-earning deposit accounts | 291,754 | 392 | 0.54 | 164,499 | 139 | 0.34 | ||||||||||||||||
Total interest-earning assets | 7,310,579 | 77,336 | 4.23 | 5,893,515 | 64,967 | 4.41 | ||||||||||||||||
Non-interest-earning assets | 428,436 | 422,195 | ||||||||||||||||||||
Total assets | $ | 7,739,015 | $ | 6,315,710 | ||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing demand | $ | 784,741 | 966 | 0.49 | $ | 701,592 | 838 | 0.48 | ||||||||||||||
Savings and money market | 2,166,002 | 1,318 | 0.24 | 1,806,857 | 748 | 0.17 | ||||||||||||||||
Time | 1,169,960 | 2,138 | 0.73 | 839,604 | 1,463 | 0.70 | ||||||||||||||||
Borrowings | 1,508,787 | 3,560 | 0.94 | 1,112,198 | 2,097 | 0.75 | ||||||||||||||||
Total interest-bearing liabilities | 5,629,490 | 7,982 | 0.57 | 4,460,251 | 5,146 | 0.46 | ||||||||||||||||
Non-interest-bearing demand | 1,194,118 | 1,024,108 | ||||||||||||||||||||
Non-interest-bearing liabilities | 79,655 | 68,854 | ||||||||||||||||||||
Total liabilities | 6,903,263 | 5,553,213 | ||||||||||||||||||||
Total shareholders’ equity | 835,752 | 762,497 | ||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 7,739,015 | $ | 6,315,710 | ||||||||||||||||||
Net interest income and margin | $ | 69,354 | 3.79 | % | $ | 59,821 | 4.06 | % | ||||||||||||||
Net interest income and margin (tax-equivalent basis) 2 | $ | 69,620 | 3.81 | % | $ | 60,075 | 4.08 | % | ||||||||||||||
Net interest rate spread | 3.66 | % | 3.95 | % | ||||||||||||||||||
Net earning assets | $ | 1,681,089 | $ | 1,433,264 | ||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 129.86 | % | 132.13 | % | ||||||||||||||||||
1 | Calculated net of deferred fees, loan discounts, loans in process and allowance for loan losses. | |||||||||||||||||||||
2 | In order to make pretax income and resultant yields on tax-exempt investments and loans comparable to those on taxable investments and loans, a tax-equivalent adjustment has been computed using a federal income tax rate of 35% for 2016 and 2015. Tax-exempt investments and loans had an average balance of $106.4 million and $101.1 million for the three months ended June 30, 2016 and 2015, respectively. |
Six Months Ended June 30, | ||||||||||||||||||||||
2016 | 2015 | |||||||||||||||||||||
Average Outstanding Balance | Interest Earned/Paid | Yield/ Rate | Average Outstanding Balance | Interest Earned/Paid | Yield/ Rate | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Commercial real estate | $ | 2,322,485 | $ | 58,604 | 5.05 | % | $ | 1,842,557 | $ | 48,360 | 5.25 | % | ||||||||||
Warehouse Purchase Program | 892,028 | 14,716 | 3.30 | 804,407 | 13,496 | 3.36 | ||||||||||||||||
Commercial and industrial | 1,653,581 | 36,406 | 4.40 | 1,192,074 | 28,720 | 4.82 | ||||||||||||||||
Construction and land | 268,329 | 7,170 | 5.34 | 218,899 | 6,661 | 6.09 | ||||||||||||||||
Consumer real estate | 976,208 | 23,090 | 4.73 | 796,428 | 19,671 | 4.94 | ||||||||||||||||
Other consumer | 65,290 | 1,841 | 5.64 | 86,193 | 2,323 | 5.39 | ||||||||||||||||
Loans held for sale | 19,657 | 355 | 3.61 | 19,542 | 355 | 3.63 | ||||||||||||||||
Less: deferred fees and allowance for loan loss | (52,559 | ) | — | — | (30,552 | ) | — | — | ||||||||||||||
Loans receivable 1 | 6,145,019 | 142,182 | 4.63 | 4,929,548 | 119,586 | 4.85 | ||||||||||||||||
Agency mortgage-backed securities | 348,546 | 3,640 | 2.09 | 321,780 | 3,372 | 2.10 | ||||||||||||||||
Agency collateralized mortgage obligations | 80,475 | 939 | 2.33 | 125,182 | 1,261 | 2.01 | ||||||||||||||||
Investment securities | 123,395 | 1,625 | 2.63 | 116,553 | 1,560 | 2.68 | ||||||||||||||||
FHLB and FRB stock and other restricted securities | 58,998 | 836 | 2.83 | 56,764 | 509 | 1.79 | ||||||||||||||||
Interest-earning deposit accounts | 265,165 | 722 | 0.54 | 193,170 | 297 | 0.31 | ||||||||||||||||
Total interest-earning assets | 7,021,598 | 149,944 | 4.27 | 5,742,997 | 126,585 | 4.41 | ||||||||||||||||
Non-interest-earning assets | 426,539 | 426,567 | ||||||||||||||||||||
Total assets | $ | 7,448,137 | $ | 6,169,564 | ||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing demand | $ | 779,770 | 1,899 | 0.49 | $ | 701,961 | 1,556 | 0.44 | ||||||||||||||
Savings and money market | 2,187,839 | 2,659 | 0.24 | 1,808,017 | 1,759 | 0.19 | ||||||||||||||||
Time | 1,109,885 | 3,986 | 0.72 | 829,881 | 2,861 | 0.69 | ||||||||||||||||
Borrowings | 1,307,682 | 6,695 | 1.02 | 997,964 | 4,262 | 0.85 | ||||||||||||||||
Total interest-bearing liabilities | 5,385,176 | 15,239 | 0.57 | 4,337,823 | 10,438 | 0.48 | ||||||||||||||||
Non-interest-bearing demand | 1,164,094 | 999,723 | ||||||||||||||||||||
Non-interest-bearing liabilities | 71,722 | 70,698 | ||||||||||||||||||||
Total liabilities | 6,620,992 | 5,408,244 | ||||||||||||||||||||
Total shareholders’ equity | 827,145 | 761,320 | ||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 7,448,137 | $ | 6,169,564 | ||||||||||||||||||
Net interest income and margin | $ | 134,705 | 3.84 | % | $ | 116,147 | 4.04 | % | ||||||||||||||
Net interest income and margin (tax-equivalent basis) 2 | $ | 135,243 | 3.85 | % | $ | 116,652 | 4.06 | % | ||||||||||||||
Net interest rate spread | 3.70 | % | 3.93 | % | ||||||||||||||||||
Net earning assets | $ | 1,636,422 | $ | 1,405,174 | ||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 130.39 | % | 132.39 | % | ||||||||||||||||||
1 | Calculated net of deferred fees, loan discounts, loans in process and allowance for loan losses. | |||||||||||||||||||||
2 | In order to make pretax income and resultant yields on tax-exempt investments and loans comparable to those on taxable investments and loans, a tax-equivalent adjustment has been computed using a federal income tax rate of 35% for 2016 and 2015. Tax-exempt investments and loans had an average balance of $107.3 million and $101.0 million for the six months ended June 30, 2016 and 2015, respectively. |
Three Months Ended June 30, | |||||||||||
2016 versus 2015 | |||||||||||
Increase (Decrease) Due to | Total Increase | ||||||||||
Volume | Rate | (Decrease) | |||||||||
(Dollars in thousands) | |||||||||||
Interest-earning assets: | |||||||||||
Commercial real estate | $ | 7,157 | $ | (760 | ) | $ | 6,397 | ||||
Warehouse Purchase Program | 552 | (230 | ) | 322 | |||||||
Commercial and industrial | 4,948 | (1,282 | ) | 3,666 | |||||||
Construction and land | 752 | (533 | ) | 219 | |||||||
Consumer real estate | 2,366 | (893 | ) | 1,473 | |||||||
Other consumer | (277 | ) | 27 | (250 | ) | ||||||
Loans held for sale | 3 | (5 | ) | (2 | ) | ||||||
Loans receivable | 15,501 | (3,676 | ) | 11,825 | |||||||
Agency mortgage-backed securities | 173 | 34 | 207 | ||||||||
Agency collateralized mortgage obligations | (201 | ) | 103 | (98 | ) | ||||||
Investment securities | 45 | (12 | ) | 33 | |||||||
FHLB and FRB stock and other restricted securities | (1 | ) | 150 | 149 | |||||||
Interest-earning deposit accounts | 144 | 109 | 253 | ||||||||
Total interest-earning assets | 15,661 | (3,292 | ) | 12,369 | |||||||
Interest-bearing liabilities: | |||||||||||
Interest-bearing demand | 102 | 26 | 128 | ||||||||
Savings and money market | 169 | 401 | 570 | ||||||||
Time | 601 | 74 | 675 | ||||||||
Borrowings | 858 | 605 | 1,463 | ||||||||
Total interest-bearing liabilities | 1,730 | 1,106 | 2,836 | ||||||||
Net interest income | $ | 13,931 | $ | (4,398 | ) | $ | 9,533 | ||||
Six Months Ended June 30, | |||||||||||
2016 versus 2015 | |||||||||||
Increase (Decrease) Due to | Total Increase | ||||||||||
Volume | Rate | (Decrease) | |||||||||
(Dollars in thousands) | |||||||||||
Interest-earning assets: | |||||||||||
Commercial real estate | $ | 12,173 | $ | (1,929 | ) | $ | 10,244 | ||||
Warehouse Purchase Program | 1,449 | (229 | ) | 1,220 | |||||||
Commercial and industrial | 10,335 | (2,649 | ) | 7,686 | |||||||
Construction and land | 1,385 | (876 | ) | 509 | |||||||
Consumer real estate | 4,282 | (863 | ) | 3,419 | |||||||
Other consumer | (585 | ) | 103 | (482 | ) | ||||||
Loans held for sale | 2 | (2 | ) | — | |||||||
Loans receivable | 29,041 | (6,445 | ) | 22,596 | |||||||
Agency mortgage-backed securities | 280 | (12 | ) | 268 | |||||||
Agency collateralized mortgage obligations | (500 | ) | 178 | (322 | ) | ||||||
Investment securities | 90 | (25 | ) | 65 | |||||||
FHLB and FRB stock and other restricted securities | 21 | 306 | 327 | ||||||||
Interest-earning deposit accounts | 139 | 286 | 425 | ||||||||
Total interest-earning assets | 29,071 | (5,712 | ) | 23,359 | |||||||
Interest-bearing liabilities: | |||||||||||
Interest-bearing demand | 181 | 162 | 343 | ||||||||
Savings and money market | 412 | 488 | 900 | ||||||||
Time | 1,001 | 124 | 1,125 | ||||||||
Borrowings | 1,483 | 950 | 2,433 | ||||||||
Total interest-bearing liabilities | 3,077 | 1,724 | 4,801 | ||||||||
Net interest income | $ | 25,994 | $ | (7,436 | ) | $ | 18,558 |
June 30, 2016 | |||||||||||||||||||
Less than One Year | One through Three Years | Four through Five Years | After Five Years | Total | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Contractual obligations: | |||||||||||||||||||
Deposits without a stated maturity | $ | 4,296,236 | $ | — | $ | — | $ | — | $ | 4,296,236 | |||||||||
Certificates of deposit | 977,631 | 301,752 | 42,629 | 4,434 | 1,326,446 | ||||||||||||||
FHLB advances 1 | 506,846 | 821,928 | 3,046 | 1,719 | 1,333,539 | ||||||||||||||
Repurchase agreements | 43,049 | 25,000 | — | — | 68,049 | ||||||||||||||
Subordinated debt 1 | — | — | — | 90,464 | 90,464 | ||||||||||||||
Other borrowings 1 | 25,000 | — | — | — | 25,000 | ||||||||||||||
Private equity fund for Community Reinvestment Act purposes | 2,480 | — | — | — | 2,480 | ||||||||||||||
Operating leases (premises) | 6,795 | 10,867 | 8,598 | 22,357 | 48,617 | ||||||||||||||
Total contractual obligations | $ | 5,858,037 | $ | 1,159,547 | $ | 54,273 | $ | 118,974 | 7,190,831 | ||||||||||
Off-balance sheet loan commitments: 2 | |||||||||||||||||||
Unused commitments to extend credit | $ | 680,522 | $ | 319,799 | $ | 298,552 | $ | 57,162 | 1,356,035 | ||||||||||
Unused capacity on Warehouse Purchase Program loans 3 | 744,610 | — | — | — | 744,610 | ||||||||||||||
Standby letters of credit | 11,607 | 6,769 | 8,670 | — | 27,046 | ||||||||||||||
Total loan commitments | $ | 1,436,739 | $ | 326,568 | $ | 307,222 | $ | 57,162 | 2,127,691 | ||||||||||
Total contractual obligations and loan commitments | $ | 9,318,522 |
Actual | Required for Capital Adequacy Purposes | To Be Well-Capitalized Under Prompt Corrective Action Regulations | ||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||
June 30, 2016 | (Dollars in thousands) | |||||||||||||||||||
Total risk-based capital | ||||||||||||||||||||
Company | $ | 809,410 | 11.35 | % | $ | 570,630 | 8.00 | % | $ | 713,287 | 10.00 | % | ||||||||
Bank | 783,245 | 10.98 | 570,615 | 8.00 | 713,269 | 10.00 | ||||||||||||||
Tier 1 risk-based capital | ||||||||||||||||||||
Company | 673,633 | 9.44 | 427,972 | 6.00 | 570,630 | 8.00 | ||||||||||||||
Bank | 721,051 | 10.11 | 427,962 | 6.00 | 570,615 | 8.00 | ||||||||||||||
Common equity tier 1 risk-based capital | ||||||||||||||||||||
Company | 661,985 | 9.28 | 320,979 | 4.50 | 463,637 | 6.50 | ||||||||||||||
Bank | 721,051 | 10.11 | 320,971 | 4.50 | 463,625 | 6.50 | ||||||||||||||
Tier 1 leverage | ||||||||||||||||||||
Company | 673,633 | 8.91 | 302,472 | 4.00 | 378,090 | 5.00 | ||||||||||||||
Bank | 721,051 | 9.53 | 302,524 | 4.00 | 378,155 | 5.00 | ||||||||||||||
December 31, 2015 | ||||||||||||||||||||
Total risk-based capital | ||||||||||||||||||||
Company | $ | 755,689 | 11.58 | % | $ | 522,107 | 8.00 | % | $ | 652,634 | 10.00 | % | ||||||||
Bank | 691,554 | 10.60 | 522,116 | 8.00 | 652,645 | 10.00 | ||||||||||||||
Tier 1 risk-based capital | ||||||||||||||||||||
Company | 635,162 | 9.73 | 391,580 | 6.00 | 522,107 | 8.00 | ||||||||||||||
Bank | 644,461 | 9.87 | 391,587 | 6.00 | 522,116 | 8.00 | ||||||||||||||
Common equity tier 1 risk-based capital | ||||||||||||||||||||
Company | 623,604 | 9.56 | 293,685 | 4.50 | 424,212 | 6.50 | ||||||||||||||
Bank | 644,461 | 9.87 | 293,690 | 4.50 | 424,219 | 6.50 | ||||||||||||||
Tier 1 leverage | ||||||||||||||||||||
Company | 635,162 | 9.46 | 268,430 | 4.00 | 335,537 | 5.00 | ||||||||||||||
Bank | 644,461 | 9.61 | 268,273 | 4.00 | 335,341 | 5.00 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
June 30, 2016 | |||||||||||||||||||||
Change in Interest Rates in Basis Points | Economic Value of Equity | Earnings at Risk (12 months) | |||||||||||||||||||
Estimated EVE | Estimated Increase / (Decrease) in EVE | EVE Ratio % | Estimated Net Interest Income | Increase / (Decrease) in Estimated Net Interest Income | |||||||||||||||||
$ Amount | $ Change | % Change | $ Amount | $ Change | % Change | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
400 | 964,957 | (122,952 | ) | (11.30 | ) | 12.87 | 283,177 | (4,003 | ) | (1.39 | ) | ||||||||||
300 | 1,006,069 | (81,840 | ) | (7.52 | ) | 13.18 | 283,710 | (3,470 | ) | (1.21 | ) | ||||||||||
200 | 1,043,214 | (44,695 | ) | (4.11 | ) | 13.43 | 283,991 | (3,189 | ) | (1.11 | ) | ||||||||||
100 | 1,070,586 | (17,323 | ) | (1.59 | ) | 13.55 | 283,931 | (3,249 | ) | (1.13 | ) | ||||||||||
— | 1,087,909 | — | — | 13.55 | 287,180 | — | — | ||||||||||||||
(100 | ) | 1,064,939 | (22,970 | ) | (2.11 | ) | 13.04 | 279,310 | (7,870 | ) | (2.74 | ) |
December 31, 2015 | |||||||||||||||||||||
Change in Interest Rates in Basis Points | Economic Value of Equity | Earnings at Risk (12 months) | |||||||||||||||||||
Estimated EVE | Estimated Increase / (Decrease) in EVE | EVE Ratio % | Estimated Net Interest Income | Increase / (Decrease) in Estimated Net Interest Income | |||||||||||||||||
$ Amount | $ Change | % Change | $ Amount | $ Change | % Change | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
400 | 911,142 | (118,867 | ) | (11.54 | ) | 12.86 | 252,686 | (6,758 | ) | (2.60 | ) | ||||||||||
300 | 947,909 | (82,100 | ) | (7.97 | ) | 13.15 | 254,417 | (5,027 | ) | (1.94 | ) | ||||||||||
200 | 981,508 | (48,501 | ) | (4.71 | ) | 13.38 | 256,044 | (3,400 | ) | (1.31 | ) | ||||||||||
100 | 1,011,522 | (18,487 | ) | (1.79 | ) | 13.56 | 257,491 | (1,953 | ) | (0.75 | ) | ||||||||||
— | 1,030,009 | — | — | 13.58 | 259,444 | — | — | ||||||||||||||
(100 | ) | 999,211 | (30,798 | ) | (2.99 | ) | 12.96 | 248,731 | (10,713 | ) | (4.13 | ) |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
• | Kevin Hanigan, President and Chief Executive Officer - 27,100 restricted shares |
• | Mays Davenport, Executive Vice President, Chief Financial Officer - 9,900 restricted shares |
• | Scott Almy, Executive Vice President, Chief Operating Officer, Chief Risk Officer and General Counsel - 9,600 restricted shares |
• | Thomas Swiley, Executive Vice President, Chief Lending Officer - 9,300 restricted shares |
• | Charles Eikenberg, Executive Vice President, Community Banking- 9,300 restricted shares |
Performance-based Shares Earned (% of Target)* | ||||||||||
Measure | Weight (% of Target No. of Shares) | Below Threshold (Below 35th percentile) | Threshold (35th percentile) | Target (50th percentile) | Maximum (75th percentile and above) | |||||
Relative 3-year ROA | 50% | 0% | 25% | 50% | 75% | |||||
Relative 3-year ROE | 50% | 0% | 25% | 50% | 75% | |||||
Total | 100% | 0% | 50% | 100% | 150% |
Item 6. | Exhibits |
Exhibit | |||
Number | Description | ||
2.1 | Agreement and Plan of Merger, dated as of November 25, 2013, by and between the Registrant and LegacyTexas Group, Inc. (incorporated herein by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on November 25, 2013 (File No. 001-34737)) | ||
2.2 | Amendment No. One to the Agreement and Plan of Merger, dated as of February 19, 2014, by and between the Registrant and LegacyTexas Group, Inc. (incorporated herein by reference to Exhibit 2.3 of the Registrant’s Annual Report on Form 10-K filed with the SEC on February 26, 2014 (File No. 001-34737)) | ||
2.3 | Amendment No. Two to the Agreement and Plan of Merger, dated as of August 29, 2014, by and between the Registrant and LegacyTexas Group, Inc. (incorporated herein by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on August 29, 2014 (File No. 001-34737)) | ||
3.1 | Charter of the Registrant (incorporated herein by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on January 6, 2015 (File No. 001-34737)) | ||
3.2 | Bylaws of the Registrant (incorporated herein by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K filed with the SEC on January 6, 2015 (File No. 001-34737)) | ||
4.1 | Certificate of Registrant’s Common Stock (incorporated herein by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on January 6, 2015 (File No. 001-34737)) | ||
4.2 | The Registrant hereby agrees to furnish to the Commission, upon request, the instruments defining the rights of the holders of each issue of long-term debt of the Registrant and its consolidated subsidiaries. | ||
10.1 | ViewPoint Bank Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.7 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 0-24566-01)) | ||
10.2 | Amended and Restated ViewPoint Bank Supplemental Executive Retirement Plan (incorporated herein by reference to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 0-24566-01)) | ||
10.3 | 2016 Executive Annual Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 3, 2016 (File No. 001-34737)) | ||
10.4 | Change in Control and Severance Benefits Agreement entered into between the Registrant and Mays Davenport (incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the SEC on November 25, 2013 (File No. 001-34737)). | ||
10.5 | Form of Change In Control and Severance Benefits Agreement entered into between the Registrant and the following executive officers: Scott A. Almy, Charles D. Eikenberg, Thomas S. Swiley, and Mark L. Williamson (incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the SEC on December 2, 2013 (File No. 001-34737)). | ||
10.6 | Amended and Restated Executive Employment Agreement entered into by the Registrant on December 2, 2013 with Kevin J. Hanigan (incorporated herein by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the SEC on December 2, 2013 (File No. 001-34737)). | ||
10.7 | Registrant's 2007 Equity Incentive Plan (incorporated herein by reference to Appendix A to the proxy statement filed with the SEC on March 30, 2007 (File No. 001-32992)) | ||
10.8 | Registrant's 2012 Equity Incentive Plan (incorporated herein by reference to Appendix A to the Registrant's proxy statement filed with the SEC on April 4, 2012 (File No. 001-34737)) | ||
10.9 | Forms of Incentive Stock Option, Non-Qualified Stock Option, and Restricted Stock (time and performance-based) Agreements under the 2012 Equity Incentive Plan (incorporated herein by reference to the Exhibits to the Registrant's Registration Statement on Form S-8 filed with the SEC on June 14, 2012 (File No. 333-182122)) | ||
10.10 | Form of 2012 Equity Incentive Plan Restricted Stock Award and Non-Solicitation Agreement | ||
10.11 | Form of 2012 Equity Incentive Plan Non-Employee Restricted Stock Award Agreement | ||
11 | Statement regarding computation of per share earnings (See Note 3 of the Condensed Notes to Unaudited Consolidated Interim Financial Statements included in this Form 10-Q). | ||
31.1 | Rule 13a — 14(a)/15d — 14(a) Certification (Chief Executive Officer) | ||
31.2 | Rule 13a — 14(a)/15d — 14(a) Certification (Chief Financial Officer) | ||
32 | Section 1350 Certifications | ||
101 | Financial statements from Quarterly Report on Form 10-Q of the Registrant for the quarter ended June 30, 2016, formatted in eXtensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Condensed Notes to Unaudited Consolidated Interim Financial Statements. | ||
Date: | July 26, 2016 | By: | /s/ Kevin J. Hanigan | |
Kevin J. Hanigan, | ||||
President and Chief Executive Officer | ||||
(Duly Authorized Officer) | ||||
Date: | July 26, 2016 | By: | /s/ J. Mays Davenport | |
J. Mays Davenport | ||||
Executive Vice President and Chief Financial Officer | ||||
(Principal Financial and Accounting Officer) |
10.10 | Form of 2012 Equity Incentive Plan Restricted Stock Award and Non-Solicitation Agreement |
10.11 | Form of 2012 Equity Incentive Plan Non-Employee Restricted Stock Award Agreement |
31.1 | Certification of the Chief Executive Officer |
31.2 | Certification of the Chief Financial Officer |
32.0 | Section 1350 Certifications |
101 | Financial statements from Quarterly Report on Form 10-Q of the Registrant for the quarter ended June 30, 2016, formatted in eXtensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Shareholders' Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Condensed Notes to Unaudited Consolidated Interim Financial Statements. |
1. | Grant of Time-Based Restricted Stock Award. The Corporation hereby makes to the Grantee a Restricted Stock Award consisting of _______ Shares (the “Tranche 1 Shares”), which shall be a time-based award. Except as otherwise provided in Sections 4 and 5 of this Agreement, the Tranche 1 Shares shall vest [vesting provisions to be determined at the time of grant.]. Upon the vesting of the Tranche 1 Shares, the Corporation shall deliver the Shares underlying the Tranche 1 Shares in accordance with Section 9 of this Agreement and the Plan. Until the Tranche 1 Shares vest, they are subject to forfeiture and to limits on transferability as provided in Sections 3 and 4 of this Agreement and in Article VII of the Plan. |
2. | Grant of Performance-Based Restricted Stock Award. The Corporation hereby makes to the Grantee a Restricted Stock Award consisting of an award of a target number of ________ Shares (the “Tranche 2 Shares”) which shall be a performance-based award. Except as otherwise provided in Sections 4 and 5 of this Agreement, the Tranche 2 Shares shall vest subject to a performance-based vesting schedule. The performance period for the Tranche 2 Shares begins on January 1, [first performance year] and ends on December 31, [final performance year] (the “Performance Period”). The number of earned Tranche 2 Shares shall be determined according to the level of achievement with respect to the performance goals set forth on Exhibit A hereto for the Performance Period. Until the Tranche 2 Shares vest, they are subject to forfeiture and to limits on transferability as provided in Sections 3 and 4 of this Agreement and in Article VII of the Plan. |
3. | Transferability. The Grantee may not sell, assign, transfer, pledge or otherwise encumber any Shares that have not vested, except in the event of the Grantee’s death, by will or by the laws of descent and distribution or pursuant to a Domestic Relations Order. The Committee, in its sole and absolute discretion, may allow the Grantee to transfer all or any portion of this Restricted Stock Award to the Grantee’s Family Members, as provided in the Plan. |
4. | Termination of Service. If the Grantee terminates Service for any reason other than in connection with a Change in Control or the death or Disability of the Grantee, any Shares that have not vested as of the date of that termination shall be forfeited to the Corporation. If the Grantee’s Service terminates on account of the Grantee’s death or Disability, the vesting date for all Shares that have not vested or been forfeited shall be accelerated to the date of that termination of Service, with the Tranche 2 Shares vesting at the “Target” performance level described in Exhibit A hereto. |
5. | Effect of Change in Control. Notwithstanding the less restrictive provisions of Section 7.2 of the Plan, upon a Change in Control: |
(i) | Be accelerated to the date of termination of the Grantee’s Service if, during the 12-month period following the Change in Control, the Grantee’s Service is terminated by the Corporation or its Affiliates or their successors without cause or if the Grantee voluntarily terminates Service with Good Reason; |
(ii) | Be accelerated to the date of the Change in Control if, during the 6-month period prior to the Change in Control, the Grantee’s Service was terminated by the Corporation or its Affiliates without cause or if the Grantee voluntarily terminated Service with Good Reason; |
(iii) | Be accelerated as of the date of the Change in Control if this Restricted Stock Award is not assumed or replaced by the acquiror/continuing entity on terms deemed by the Committee or by the Board of Directors to be appropriate; and |
(iv) | Except as otherwise provided in Section 4 of this Agreement, occur on the [vesting provisions to be determined at the time of grant] if vesting has not otherwise been accelerated as provided above. |
(b) | The Tranche 2 Shares will automatically convert to time-based restricted stock without proration for the percentage of the Performance Period that has elapsed since the Grant Date, as follows: |
(i) | If the Change in Control occurs prior to the __-month anniversary of the Grant Date, then the Tranche 2 Shares shall convert to time-based restricted stock equal to the target number of Tranche 2 Shares set forth in Section 2 above, with no further right by the Grantee to earn any additional Shares; |
(ii) | If the Change in Control occurs on or after the __-month anniversary of the Grant Date, the conversion of the Tranche 2 Shares to time-based restricted stock will be based on the Corporation’s performance determined under Exhibit A from the Grant Date through the earliest of (A) the date of the Change in Control or (B) the date of the Corporation’s entry into the material definitive agreement pursuant to which the Change in Control occurs; and |
(iii) | The vesting of the time-based restricted stock as so converted pursuant to this Section 5(b) shall occur as described in Section 5(a) above. |
(c) | For purposes of this Section 5, “Good Reason” shall mean (i) a material diminution of or interference with the Grantee’s duties, responsibilities or titles, or (ii) any of the following actions unless consented to in writing by the Grantee: (A) a requirement that the Grantee’s principal place of employment be based at any place other than Plano, Texas, or within a radius of 35 miles from the location of the Corporation’s administrative offices; (B) a material demotion of the Grantee; (C) a material reduction in the number or seniority of personnel reporting to the Grantee other than as part of a Corporation-wide reduction in staff; or (D) a material reduction in the Grantee’s salary, other than as part of an overall program applied uniformly and with equitable effect to all members of the senior management of the Corporation. |
6. | Stock Power. The Grantee agrees to execute a stock power with respect to each stock certificate reflecting the Shares, or other evidence of book-entry stock ownership, in favor of the Corporation. The Shares shall not be issued by the Corporation until the required stock power(s) is delivered to the Corporation. |
7. | Delivery of Shares. The Corporation shall issue stock certificates or evidence of the issuance of such Shares in book-entry form, in the name of the Grantee reflecting the number of Shares granted as set forth in Section 1. The Corporation shall retain these certificates or evidence of the issuance of Shares in book-entry form until the Shares represented thereby become vested. Prior to vesting, the Shares shall be subject to the following restriction, communicated in writing to the Corporation’s stock transfer agent: |
8. | Dividends; Grantee’s Rights. As the record holder of all Tranche 1 Shares, the Grantee shall be paid cash dividends by the Corporation with respect to those Shares at the same time as they are paid to other holders of the Corporation’s common stock. The Grantee shall have no right to receive cash dividends by the Corporation with respect to un-vested Tranche 2 Shares; however, the Corporation shall accrue cash dividend equivalents with respect to all un-vested Tranche 2 Shares, without interest, and maintain the same for the benefit of Grantee subject to the level of achievement with respect to the performance goals set forth on Exhibit A hereto for the Performance Period. The Grantee may exercise all voting rights appurtenant to the Tranche 1 Shares. The Grantee shall have no rights of a shareholder of the Corporation |
9. | Delivery of Shares to Grantee. Upon the vesting of any Shares, the restrictions in Section 3 shall terminate, and the Corporation shall deliver only to the Grantee (or, if applicable, the Grantee’s Beneficiary, estate or Family Member) a certificate (without the legend referenced in Section 7) or evidence of the issuance of Shares in book-entry form, and the related stock power in respect of the vesting Shares shall be of no further force or effect. The Corporation’s obligation to deliver a stock certificate for vested Shares, or evidence of the issuance of Shares in book-entry form, can be conditioned upon the receipt of a representation of investment intent from the Grantee (or the Grantee’s Beneficiary, estate or Family Member) in such form as the Committee requires. The Corporation shall not be required to deliver stock certificates for vested Shares, or evidence of the issuance of Shares in book-entry form, prior to: (a) the listing of those Shares on a National Exchange; or (b) the completion of any registration or qualification of those Shares required under applicable law. |
10. | Adjustments in Shares. In the event of any recapitalization, forward or reverse stock split, reorganization, merger, consolidation, spin-off, combination, exchange of Shares or other securities, stock dividend, special or recurring dividend or distribution, liquidation, dissolution or other similar corporate transaction or event, the Committee, in its sole discretion, shall adjust the number of Shares or class of securities of the Corporation covered by this Agreement. Any additional Shares or other securities received by the Grantee as a result of any such adjustment shall be subject to all restrictions and requirements applicable to Shares that have not vested. The Grantee agrees to execute any documents required by the Committee in connection with an adjustment under this Section 10. |
11. | Tax Election. The Grantee understands that an election may be made under Section 83(b) of the Code to accelerate the Grantee’s tax obligation with respect to receipt of the number of Shares set forth in Section 1 above from the vesting dates to the Grant Date by submitting an election to the Internal Revenue Service substantially in the form attached hereto. There are significant risks associated with the decision to make an 83(b) Election. THEREFORE, THE GRANTEE SHOULD SEEK INDEPENDENT ADVICE REGARDING THE APPLICABLE PROVISIONS OF THE FEDERAL TAX LAW AND THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY TO WHICH THE GRANTEE IS SUBJECT. |
12. | Tax Withholding. Upon Shares becoming vested (or at such earlier time, if any, that an election is made by the Grantee under Section 83(b) of the Code, or any successor provision thereto), the Corporation may either (a) withhold from any payment or distribution made hereunder sufficient Shares to cover any applicable withholding and employment taxes, provided that this clause (a) shall not be applicable in the event of a Section 83(b) election, (b) or require the Grantee to remit to the Corporation an amount sufficient to satisfy such taxes. The Corporation shall have the right to deduct from all dividends paid with respect to Shares the amount of any taxes which the Corporation is required to withhold with respect to such dividend payments, or require the Grantee to remit to the Corporation an amount sufficient to satisfy such taxes. |
13. | Non-solicitation. |
(a) | In exchange for the Corporation providing the Grantee the consideration set forth herein and other confidential information, during the Grantee’s employment with the Corporation and for a period of one year after the separation of such employment for any reason, the Grantee hereby agrees not to, either directly or indirectly: (i) solicit the employment of, recruit, employ, hire, cause to be employed or hired, entice away, or establish a business with any person whom the Grantee had contact with or job-related information about in the course of such person’s employment or other relationship with the Corporation, or suggest to or discuss with any such person the discontinuation of that person’s status or employment with the Corporation; or (ii) on behalf of any person or entity engaged in the same or similar business as the Corporation, call on, service, solicit, or accept competing business from the Corporation’s customers or prospective customers whom or which the Grantee, within the previous two (2) years, had or made contact with regarding the Corporation’s business or had access to the Corporation’s information or files about such customer or prospective customer. |
(b) | To the extent that any provision of this Section 13 shall be determined to be invalid or unenforceable in any respect or to any extent, the provision shall not be void or rendered invalid, but instead shall be automatically amended for such lesser term, to such lesser extent, or in such other lesser degree, as will grant the Corporation the maximum protection and restrictions on the Grantee’s activities permitted by applicable law in such circumstances. If the Grantee violates a non-solicitation provision described above and the Corporation brings legal action for injunctive relief, the Corporation shall not, as a result of such breach or the time involved in obtaining the relief, be deprived of the benefit of the full period of the provision(s) violated. Accordingly, the |
(c) | The Corporation’s right to enforce the terms of this Section 13 shall not be affected by the existence or non-existence of any other similar agreement for anyone else, or by the Corporation’s failure to fully enforce, or enforce at all, the terms of any other such agreement. The provisions of this Section 13 are in addition to and not in lieu of, and do not supersede, cancel or replace, (i) any agreement regarding non-solicitation or non-recruitment of customers, consultants or employees previously or subsequently signed by the Grantee, or (ii) any provisions of an existing agreement regarding any such subjects. Likewise, this Agreement does not alter or amend the terms of any existing agreement between the Corporation and the Grantee concerning employment, and such agreement shall not operate to preclude the enforcement or cancel the terms of this Agreement. In case of any conflict between the terms of this Agreement and the terms of any such agreement concerning employment, the terms of that agreement shall not operate to cancel, supersede or preclude the enforcement of the terms of this Agreement. The terms of any other such agreement shall be construed and enforced without reference to this Agreement unless such agreement references this Agreement, specifically or generally. |
14. | Plan and Committee Decisions are Controlling. This Agreement and the award of Shares to the Grantee are subject in all respects to the provisions of the Plan, which are controlling. All decisions, determinations and interpretations by the Committee respecting the Plan, this Agreement or the award of Shares shall be binding and conclusive upon the Grantee, any Beneficiary of the Grantee or the legal representative thereof. |
15. | Clawback. All Tranche 2 Shares granted pursuant to this Agreement shall be subject to any clawback, recoupment or forfeiture provisions (i) required by law or regulation and applicable to the Corporation as in effect from time to time or (ii) set forth in any policies adopted or maintained by the Corporation as in effect from time to time. |
16. | Grantee’s Employment. Nothing in this Agreement shall limit the right of the Corporation or any of its Affiliates to terminate the Grantee’s service or employment as a director, advisory director, director emeritus, officer or employee, or otherwise impose upon the Corporation or any of its Affiliates any obligation to employ or accept the services or employment of the Grantee. |
17. | Amendment. The Committee may waive any conditions of or rights of the Corporation or modify or amend the terms of this Agreement; provided, however, that the Committee may not amend, alter, suspend, discontinue or terminate any provision of this Agreement if such action may adversely affect the Grantee without the Grantee’s written consent. To the extent permitted by applicable laws and regulations, the Committee shall have the authority, in its sole discretion but with the permission of the Grantee, to accelerate the vesting of the Shares or remove any other restrictions imposed on the Grantee with respect to the Shares, whenever the Committee may determine that such action is appropriate. |
18. | No Impact on Other Benefits. The Shares awarded to Grantee pursuant to this Agreement are not part of Grantee’s normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit. |
19. | Grantee Acceptance. The Grantee shall signify acceptance of the terms and conditions of this Agreement (including Exhibit A) and acknowledge receipt of a copy of the Plan by signing in the space provided below and returning the signed copy to the Corporation. |
20. | Electronic Signature. All references to signatures and delivery of documents in this Agreement may be satisfied by procedures the Corporation has established or may establish from time to time for an electronic system for execution and delivery of any such documents, including this Agreement. The Grantee’s electronic signature, including, without limitation, “click-through” acceptance of this Agreement through a website maintained by or on behalf of the Corporation, is the same as, and shall have the same force and effect as, the Grantee’s manual signature. Any such procedures and delivery may be effected by a third party engaged by the Corporation to provide administrative services relating to this Agreement. |
(Signature) | |
(Name) | |
(Street Address) | |
(City, State & Zip Code) |
1. | Performance Goals. The number of Tranche 2 Shares that may be earned shall be determined based on the Corporation ROA and Corporation ROE percentile ranking over the Performance Period as compared to the Comparative Peer Group ROA and Comparative Peer Group ROE for the same period. The table below sets forth the number of Tranche 2 Shares (as a percentage of the target number of Tranche 2 Shares set forth in Section 1 above) that may become earned Tranche 2 Shares based on the Corporation’s performance for the Performance Period: |
Tranche 2 Shares Earned (% of Target)* | ||||||||||
Measure | Weight (% of Target No. of Shares) | Below Threshold (Below 35th percentile) | Threshold (35th percentile) | Target (50th percentile) | Maximum (75th percentile and above) | |||||
Relative __-year ROA [performance period to be inserted] | 50% | 0% | 25% | 50% | 75% | |||||
Relative __-year ROE [performance period to be inserted] | 50% | 0% | 25% | 50% | 75% | |||||
Total | 100% | 0% | 50% | 100% | 150% |
2. | Vesting; Certification. The earned Tranche 2 Shares shall vest as of the date the Committee certifies (the “Certification Date”) the Corporation’s performance, provided that the Grantee’s Service with the Corporation and its Affiliates continues uninterrupted through the Certification Date. Attainment of the performance goals shall be determined and certified by the Committee in writing following the last day of the Performance Period, and by no later than April 15th in order to allow for companies in the Comparative Peer Group to complete and report their own financials for the Performance Period. In such event, the Corporation shall deliver the number of earned Tranche 2 Shares in accordance with Section 9 of this Agreement and the Plan. |
3. | Definitions. |
a. | Corporation ROA means the average of the Corporation’s core return on average assets over the Performance Period as measured by core (non-GAAP) net income, which is net income adjusted for the impact of merger and acquisition costs, one-time gains and losses on assets and security sales, and certain other items (“Core Net Income”), divided by average total assets. |
b. | Corporation ROE means the average of the Corporation’s core return on average shareholders’ equity over the Performance Period as measured by Core Net Income, divided by average total shareholders’ equity. |
c. | Comparative Peer Group means the companies contained in the KBW Nasdaq Regional Banking Index as of the end of the Performance Period. |
d. | Comparative Peer Group ROA means the average of the weighted average return on average assets for the Comparative Peer Group over the Performance Period as measured by net income, divided by average total assets. |
e. | Comparative Peer Group ROE means the average of the weighted average return on average shareholders’ equity for the Comparative Peer Group over the Performance Period as measured by net income, divided by average total shareholders’ equity. |
4. | Negative Discretion. Notwithstanding anything to the contrary in this Agreement, the actual number of Tranche 2 Shares that become earned based on achieving the performance goal set forth in Section 1 above may be reduced by the Committee in its sole and absolute discretion based on such factors as the Committee determines to be appropriate and/or advisable. However, it is the intention of the Committee that it will exercise such negative discretion only in extreme and unusual circumstances. |
1. | Grant of Time-Based Restricted Stock Award. The Corporation hereby makes to the Director a Restricted Stock Award consisting of _______ Shares (the “Restricted Shares”), which shall be a time-based award. Except as otherwise provided in Sections 3 and 4 of this Agreement, the Restricted Shares shall vest [vesting provisions to be determined at time of grant]. Upon the vesting of the Restricted Shares, the Corporation shall deliver the Shares underlying the Restricted Shares in accordance with Section 8 of this Agreement and the Plan. Until the Restricted Shares vest, they are subject to forfeiture and to limits on transferability as provided in Sections 2 and 3 of this Agreement and in Article VII of the Plan. |
2. | Transferability. The Director may not sell, assign, transfer, pledge or otherwise encumber any Restricted Shares that have not vested, except in the event of the Director’s death, by will or by the laws of descent and distribution or pursuant to a Domestic Relations Order. The Committee, in its sole and absolute discretion, may allow the Director to transfer all or any portion of this Restricted Stock Award to the Director’s Family Members, as provided in the Plan. |
3. | Termination of Service. If the Director terminates Service for any reason other than on account of the Director’s death or Disability, any Restricted Shares that have not vested as of the date of that termination shall be forfeited to the Corporation. If the Director’s Service terminates on account of the Director’s death or Disability, the vesting date for all Restricted Shares that have not vested or been forfeited shall be accelerated to the date of that termination of Service. |
4. | Effect of Change in Control. Notwithstanding the less restrictive provisions of Section 7.2 of the Plan, the vesting date for all Restricted Shares that have not vested or been forfeited shall be accelerated to the date of a Change in Control. |
5. | Stock Power. The Director agrees to execute a stock power with respect to each stock certificate reflecting the Restricted Shares, or other evidence of book-entry stock ownership, in favor of the Corporation. The Restricted Shares shall not be issued by the Corporation until the required stock power(s) is delivered to the Corporation. |
6. | Delivery of Shares. The Corporation shall issue stock certificates or evidence of the issuance of such Restricted Shares in book-entry form, in the name of the Director reflecting the number of Restricted Shares granted as set forth in Section 1. The Corporation shall retain these certificates or evidence of the issuance of the Restricted Shares in book-entry form until the Shares represented thereby become vested. Prior to vesting, the Restricted Shares shall be subject to the following restriction, communicated in writing to the Corporation’s stock transfer agent: |
7. | Dividends; Director’s Rights. As the record holder of all Restricted Shares, the Director shall be paid cash dividends by the Corporation with respect to those Shares at the same time as they are paid to other holders of the Corporation’s common stock. The Director may exercise all voting rights appurtenant to the Restricted Shares. |
8. | Delivery of Shares to Director. Upon the vesting of any Restricted Shares, the restrictions in Section 2 shall terminate, and the Corporation shall deliver only to the Director (or, if applicable, the Director’s Beneficiary, estate or Family Member) a certificate (without the legend referenced in Section 6) or evidence of the issuance of Shares in book-entry form, and the related stock power in respect of the vested Restricted Shares shall be of no further force or effect. The Corporation’s obligation to deliver a stock certificate for vested Restricted Shares, or evidence of the issuance of Shares in book-entry form, can be conditioned upon the receipt of a representation of investment intent from the Director (or the Director’s Beneficiary, estate or Family Member) in such form as the Committee requires. The Corporation shall not be required to deliver stock certificates for vested Restricted Shares, or evidence of the issuance of Shares in book-entry form, prior to: (a) the listing of those Shares on a National Exchange; or (b) the completion of any registration or qualification of those Shares required under applicable law. |
9. | Adjustments in Shares. In the event of any recapitalization, forward or reverse stock split, reorganization, merger, consolidation, spin-off, combination, exchange of Shares or other securities, stock dividend, special or recurring dividend or distribution, liquidation, dissolution or other similar corporate transaction or event, the Committee, in its sole discretion, shall adjust the number of Shares or class of securities of the Corporation covered by this Agreement. Any additional Shares or other securities received by the Director as a result of any such adjustment shall be subject to all restrictions and requirements applicable to Restricted Shares that have not vested. The Director agrees to execute any documents required by the Committee in connection with an adjustment under this Section 9. |
10. | Tax Election. The Director understands that an election may be made under Section 83(b) of the Code to accelerate the Director’s tax obligation with respect to receipt of the number of Shares set forth in Section 1 above from the vesting dates to the Grant Date by submitting an election to the Internal Revenue Service substantially in the form attached hereto. There are significant risks associated with the decision to make an 83(b) Election. THEREFORE, THE DIRECTOR SHOULD SEEK INDEPENDENT ADVICE REGARDING THE APPLICABLE PROVISIONS OF THE FEDERAL TAX LAW AND THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY TO WHICH THE DIRECTOR IS SUBJECT. |
11. | Tax Withholding. As a condition to the issuance of any Restricted Shares, the Corporation may withhold, or require the Director to pay or reimburse the Corporation for, any taxes which the Corporation determines are required to be withheld under federal, state or local law in connection with the grant or vesting of the Restricted Shares. |
12. | Plan and Committee Decisions are Controlling. This Agreement and the award of Shares to the Director are subject in all respects to the provisions of the Plan, which are controlling. All decisions, determinations and interpretations by the Committee respecting the Plan, this Agreement or the award of Restricted Shares shall be binding and conclusive upon the Director, any Beneficiary of the Director or the legal representative thereof. |
13. | No Right to Continued Service on the Board. Neither the Plan nor this Agreement shall confer upon the Director any right to be retained as a Director of the Company or in any other capacity. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the Director’s service at any time. |
14. | Amendment. The Committee may waive any conditions of or rights of the Corporation or modify or amend the terms of this Agreement; provided, however, that the Committee may not amend, alter, suspend, discontinue or terminate any provision of this Agreement if such action may adversely affect the Director without the Director’s written consent. To the extent permitted by applicable laws and regulations, the Committee shall have the authority, in its sole discretion but with the permission of the Director, to accelerate the vesting of the Restricted Shares or remove any other restrictions imposed on the Director with respect to the Restricted Shares, whenever the Committee may determine that such action is appropriate. |
15. | Director Acceptance. The Director shall signify acceptance of the terms and conditions of this Agreement and acknowledge receipt of a copy of the Plan by signing in the space provided below and returning the signed copy to the Corporation. |
16. | Electronic Signature. All references to signatures and delivery of documents in this Agreement may be satisfied by procedures the Corporation has established or may establish from time to time for an electronic system for execution and delivery of any such documents, including this Agreement. The Director’s electronic signature, including, without limitation, “click-through” acceptance of this Agreement through a website maintained by or on behalf of the Corporation, is the same as, and shall have the same force and effect as, the Director’s manual signature. Any such procedures and |
(Signature) | |
(Name) | |
(Street Address) | |
(City, State & Zip Code) |
1. | I have reviewed this Quarterly Report on Form 10-Q of LegacyTexas Financial Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | July 26, 2016 | By: | /s/ Kevin J. Hanigan | |
Kevin J. Hanigan, | ||||
President and Chief Executive Officer | ||||
1. | I have reviewed this Quarterly Report on Form 10-Q of LegacyTexas Financial Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | July 26, 2016 | By: | /s/ J. Mays Davenport | |
J. Mays Davenport, | ||||
Executive Vice President and Chief Financial Officer |
1) | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and | |
2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company as of the dates and for the periods presented in the financial statements included in such Report. |
Date: | July 26, 2016 | By: | /s/ Kevin J. Hanigan | |
Kevin J. Hanigan, | ||||
President and Chief Executive Officer | ||||
Date: | July 26, 2016 | By: | /s/ J. Mays Davenport | |
J. Mays Davenport, | ||||
Executive Vice President and Chief Financial Officer |
DOCUMENT AND ENTITY INFORMATION - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jul. 25, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | LegacyTexas Financial Group, Inc. | |
Entity Central Index Key | 0001487052 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 47,680,110 |
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Fair value of securities held to maturity | $ 233,944 | $ 247,202 |
Allowance for loan losses on loans held for investment | $ 62,194 | $ 47,093 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 90,000,000 | 90,000,000 |
Common Stock, shares issued (in shares) | 47,670,440 | 47,645,826 |
Unearned Employee Stock Ownership Plan, shares (in shares) | 1,294,010 | 1,365,457 |
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Interest and dividend income | ||||
Loans, including fees | $ 73,376 | $ 61,551 | $ 142,182 | $ 119,586 |
Taxable securities | 2,359 | 2,252 | 4,671 | 4,751 |
Nontaxable securities | 759 | 724 | 1,533 | 1,442 |
Interest-bearing deposits in other financial institutions | 392 | 139 | 722 | 297 |
FHLB and Federal Reserve Bank stock and other | 450 | 301 | 836 | 509 |
Total interest and dividend income | 77,336 | 64,967 | 149,944 | 126,585 |
Interest expense | ||||
Deposits | 4,422 | 3,049 | 8,544 | 6,176 |
FHLB advances | 2,103 | 1,774 | 3,776 | 3,480 |
Repurchase agreements and other borrowings | 1,457 | 323 | 2,919 | 782 |
Total interest expense | 7,982 | 5,146 | 15,239 | 10,438 |
Net interest income | 69,354 | 59,821 | 134,705 | 116,147 |
Provision for loan losses | 6,800 | 3,750 | 15,600 | 6,750 |
Net interest income after provision for loan losses | 62,554 | 56,071 | 119,105 | 109,397 |
Non-interest income | ||||
Service charges and other fees | 8,927 | 7,941 | 17,108 | 14,700 |
Net gain on sale of mortgage loans | 2,250 | 2,121 | 3,830 | 4,193 |
Bank-owned life insurance income | 441 | 424 | 867 | 843 |
Gain on sale of available-for-sale securities | 65 | 0 | 65 | 211 |
Gain on sale and disposition of assets | 1,186 | 429 | 5,258 | 457 |
Other | 853 | 1,049 | 1,249 | 967 |
Total non-interest income | 13,722 | 11,964 | 28,377 | 21,371 |
Non-interest expense | ||||
Salaries and employee benefits | 22,867 | 22,549 | 45,204 | 45,520 |
Merger and acquisition costs | 0 | 8 | 0 | 1,553 |
Advertising | 1,035 | 1,048 | 2,071 | 1,988 |
Occupancy and equipment | 3,779 | 3,838 | 7,470 | 7,646 |
Outside professional services | 1,227 | 625 | 2,043 | 1,375 |
Regulatory assessments | 1,330 | 1,146 | 2,463 | 1,968 |
Data processing | 3,664 | 2,537 | 6,994 | 5,332 |
Office operations | 2,541 | 2,652 | 5,009 | 5,045 |
Other | 3,170 | 2,505 | 5,901 | 4,258 |
Total non-interest expense | 39,613 | 36,908 | 77,155 | 74,685 |
Income before income tax expense | 36,663 | 31,127 | 70,327 | 56,083 |
Income tax expense | 13,446 | 10,876 | 25,028 | 19,508 |
Net income | $ 23,217 | $ 20,251 | $ 45,299 | $ 36,575 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.50 | $ 0.44 | $ 0.98 | $ 0.79 |
Diluted (in dollars per share) | 0.50 | 0.44 | 0.97 | 0.79 |
Dividends declared (in dollars per share) | $ 0.14 | $ 0.13 | $ 0.28 | $ 0.26 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 23,217 | $ 20,251 | $ 45,299 | $ 36,575 |
Change in unrealized gains (losses) on securities available for sale | 1,725 | (1,925) | 4,764 | (1,034) |
Reclassification of amount realized through sale of securities | (65) | 0 | (65) | (211) |
Tax effect | (583) | 675 | (1,648) | 437 |
Other comprehensive income, net of tax | 1,077 | (1,250) | 3,051 | (808) |
Comprehensive income | $ 24,294 | $ 19,001 | $ 48,350 | $ 35,767 |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands |
Total |
Common Stock [Member] |
Additional Paid-In Capital [Member] |
Retained Earnings [Member] |
Accumulated Other Comprehensive Income, Net [Member] |
Unearned ESOP Shares [Member] |
---|---|---|---|---|---|---|
Beginning Balance at Dec. 31, 2014 | $ 568,223 | $ 400 | $ 386,549 | $ 195,327 | $ 930 | $ (14,983) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 36,575 | 36,575 | ||||
Other comprehensive income (loss), net of tax | (808) | (808) | ||||
Dividends declared | (12,409) | (12,409) | ||||
ESOP shares earned | 2,238 | 1,505 | 733 | |||
Share-based compensation expense | 3,219 | 3,219 | ||||
Activity in employee stock plans | 651 | 1 | 650 | |||
Share repurchase | (7,989) | (4) | (7,985) | |||
Acquisition of LegacyTexas Group, Inc. | 187,224 | 79 | 187,145 | |||
Ending Balance at Jun. 30, 2015 | 776,924 | 476 | 571,083 | 219,493 | 122 | (14,250) |
Beginning Balance at Dec. 31, 2015 | 804,076 | 476 | 576,753 | 240,496 | (133) | (13,516) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 45,299 | 45,299 | ||||
Other comprehensive income (loss), net of tax | 3,051 | 3,051 | ||||
Dividends declared | (13,341) | (13,341) | ||||
ESOP shares earned | 1,568 | 982 | 586 | |||
Share-based compensation expense | 2,223 | 2,223 | ||||
Activity in employee stock plans | 428 | 0 | 428 | |||
Ending Balance at Jun. 30, 2016 | $ 843,304 | $ 476 | $ 580,386 | $ 272,454 | $ 2,918 | $ (12,930) |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (PARENTHETICAL) - $ / shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared (in dollars per share) | $ 0.28 | $ 0.26 |
ESOP shares earned (in shares) | 71,447 | 92,097 |
Net issuance of common stock under employee stock plans (in shares) | 24,614 | 112,522 |
Share repurchase (in shares) | 0 | 357,950 |
Acquisition of LegacyTexas Group, Inc. (in shares) | 7,850,070 |
BASIS OF FINANCIAL STATEMENT PRESENTATION |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
BASIS OF FINANCIAL STATEMENT PRESENTATION | BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying consolidated financial statements of LegacyTexas Financial Group, Inc. (the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles ("US GAAP") and with the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, all normal and recurring adjustments which are considered necessary to fairly present the results for the interim periods presented have been included. Certain items in prior periods were reclassified to conform to the current presentation. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 (“2015 Form 10-K”). Interim results are not necessarily indicative of results for a full year. In preparing the financial statements, management is required to make estimates and assumptions that affect the recorded amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the period. Actual results could differ from those estimates. For further information with respect to significant accounting policies followed by the Company in preparation of its consolidated financial statements, refer to the 2015 Form 10-K. The accompanying Unaudited Consolidated Interim Financial Statements include the accounts of the Company, whose business primarily consists of the operations of its wholly owned subsidiary, LegacyTexas Bank (the “Bank”). All significant intercompany transactions and balances are eliminated in consolidation. |
SHARE TRANSACTIONS |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
SHARE TRANSACTIONS | SHARE TRANSACTIONS On March 1, 2016, the Company announced the resumption of its existing stock repurchase program. The open-ended stock repurchase program, which commenced in August 2012, allows for the repurchase of up to 1,978,871 shares in the open market and in negotiated transactions, depending on market conditions. At June 30, 2016, 441,750 shares have been repurchased under this stock repurchase program, leaving 1,537,121 shares available for future repurchases under the program. Subsequently, the Company entered into a new trading plan with Sandler O’Neill & Partners, LP in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, to facilitate repurchases of its common stock pursuant to the above mentioned stock repurchase program. No shares of Company stock were repurchased under this program during the three or six months ended June 30, 2016. |
EARNINGS PER COMMON SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE Basic earnings per common share is computed by dividing net income (which has been adjusted for distributed and undistributed earnings to participating securities) by the weighted-average number of common shares outstanding for the period, reduced for average unallocated ESOP shares and average unvested restricted stock awards. Unvested share-based awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method described in ASC 260-10-45-60B. Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock (such as stock awards and options) were exercised or converted to common stock, or resulted in the issuance of common stock that then shared in the Company’s earnings. Diluted earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding for the period increased for the dilutive effect of unexercised stock options and unvested restricted stock awards. The dilutive effect of the unexercised stock options and unvested restricted stock awards is calculated under the treasury stock method utilizing the average market value of the Company’s stock for the period. A reconciliation of the numerator and denominator of the basic and diluted earnings per common share computation for the three and six months ended June 30, 2016 and 2015 is as follows:
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SECURITIES |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SECURITIES | SECURITIES The amortized cost, related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss), and the fair value of securities available for sale were as follows:
1 Mortgage-backed securities and collateralized mortgage obligations are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. The carrying amount, unrealized gains and losses, and fair value of securities held to maturity were as follows:
1 Mortgage-backed securities and collateralized mortgage obligations are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. The carrying amount and fair value of held to maturity debt securities and the fair value of available for sale debt securities at June 30, 2016 by contractual maturity are set forth in the table below. Securities with contractual payments not due at a single maturity date, including mortgage-backed securities and collateralized mortgage obligations, are shown separately.
Securities with a carrying value of $228,783 and $280,629 at June 30, 2016 and December 31, 2015, respectively, were pledged to secure public deposits, repurchase agreements and for other purposes required or permitted by law. Sales activity of securities for the six months ended June 30, 2016 and 2015 was as follows. All securities sold were classified as available for sale.
Gains and losses on the sale of securities classified as available for sale are recorded on the trade date using the specific-identification method. Securities with unrealized losses at June 30, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:
1 Mortgage-backed securities and collateralized mortgage obligations are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. Other-than-Temporary Impairment In determining other-than-temporary impairment for debt securities, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than amortized cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent and ability to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. As of June 30, 2016, 32 securities had unrealized losses, 19 of which had been in an unrealized loss position for over 12 months at June 30, 2016. The Company does not believe these unrealized losses are other-than-temporary and, at June 30, 2016, had the intent and ability to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. All principal and interest payments are being received on time and in full. |
LOANS |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS | LOANS Loans consist of the following:
Activity in the allowance for loan losses for the three and six months ended June 30, 2016 and 2015, segregated by portfolio segment and evaluation for impairment, is set forth below. All Warehouse Purchase Program loans are collectively evaluated for impairment and are purchased under several contractual requirements, providing safeguards to the Company. These safeguards include the requirement that our mortgage company customers have a takeout commitment for each loan and multiple investors for purchases. To date, the Company has not experienced a loss on these loans and no allowance for loan losses has been allocated to them. At June 30, 2016 and 2015, the allowance for loan impairment related to purchased credit impaired ("PCI") loans totaled $148 and $127, respectively.
The allowance for loan losses and related provision expense are susceptible to change if the credit quality of our loan portfolio changes, which is evidenced by many factors, including but not limited to charge-offs and non-performing loan trends. Generally, consumer real estate lending has a lower credit risk profile compared to other consumer lending (such as automobile loans). Commercial real estate and commercial and industrial lending, however, can have higher risk profiles than consumer loans due to these loans being larger in amount and non-homogeneous in structure and term. Changes in economic conditions, the mix and size of the loan portfolio, and individual borrower conditions can dramatically impact our level of allowance for loan losses in relatively short periods of time. The allowance for loan losses is maintained to cover losses that are estimated in accordance with US GAAP. It is our estimate of credit losses inherent in our loan portfolio at each balance sheet date. Our methodology for analyzing the allowance for loan losses consists of general and specific components. For the general component, we stratify the loan portfolio into homogeneous groups of loans that possess similar loss potential characteristics and apply a loss ratio to these groups of loans to estimate the credit losses in the loan portfolio. We use both historical loss ratios and qualitative loss factors assigned to major loan collateral types to establish general component loss allocations. Qualitative loss factors are based on management's judgment of company, market, industry or business specific data and external economic indicators, which may not yet be reflected in the historical loss ratios, and that could impact the Company's specific loan portfolios. The Allowance for Loan Loss Committee sets and adjusts qualitative loss factors by regularly reviewing changes in underlying loan composition and the seasonality of specific portfolios. The Allowance for Loan Loss Committee also considers credit quality and trends relating to delinquency, non-performing and classified loans within the Company's loan portfolio when evaluating qualitative loss factors. Additionally, the Allowance for Loan Loss Committee adjusts qualitative factors to account for the potential impact of external economic factors, including the unemployment rate, vacancy and capitalization rates and other pertinent economic data specific to our primary market area and lending portfolios. For the specific component, the allowance for loan losses includes loans where management has concerns about the borrower's ability to repay and on individually analyzed loans found to be impaired. Management evaluates current information and events regarding a borrower's ability to repay its obligations and considers a loan to be impaired when the ultimate collectability of amounts due, according to the contractual terms of the loan agreement, is in doubt. If an impaired loan is collateral-dependent, the fair value of the collateral, less the estimated cost to sell, is used to determine the amount of impairment. If an impaired loan is not collateral-dependent, the impairment amount is determined using the negative difference, if any, between the estimated discounted cash flows and the loan amount due. For impaired loans, the amount of the impairment can be adjusted, based on current data, until such time as the actual basis is established by acquisition of the collateral or until the basis is collected. Impairment losses are reflected in the allowance for loan losses through a charge to the provision for loan losses. Subsequent recoveries are credited to the allowance for loan losses. Cash receipts for accruing loans are applied to principal and interest under the contractual terms of the loan agreement. Cash receipts on impaired loans for which the accrual of interest has been discontinued are applied first to principal. Large groups of smaller-balance homogeneous loans are collectively evaluated for impairment. As a result, the Company does not separately identify consumer real estate loans less than $417 or individual consumer non-real estate secured loans for impairment disclosures. The Company considers these loans to be homogeneous in nature due to the smaller dollar amount and the similar underwriting criteria. Impaired loans at June 30, 2016 and December 31, 2015, were as follows 1:
1 No Warehouse Purchase Program loans were impaired at June 30, 2016 or December 31, 2015. Loans reported do not include PCI loans. Income on impaired loans at June 30, 2016 and 2015, was as follows1:
1 Loans reported do not include PCI loans. Past due status is based on the contractual terms of the loan. Loans that are past due 30 days are considered delinquent. Interest income on loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Non-mortgage consumer loans are typically charged off no later than 120 days past due. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and larger individually classified impaired loans. All interest accrued but not received for loans placed on nonaccrual status is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Loans past due over 90 days that were still accruing interest totaled $124 at June 30, 2016 and $111 at December 31, 2015, which consisted entirely of PCI loans. At June 30, 2016, no PCI loans were considered non-performing loans. No Warehouse Purchase Program loans were non-performing at June 30, 2016 or December 31, 2015. Non-performing (nonaccrual) loans were as follows:
A modified loan is considered a troubled debt restructuring (“TDR”) when two conditions are met: 1) the borrower is experiencing financial difficulty and 2) concessions are made for the borrower's benefit that would not otherwise be considered for a borrower or transaction with similar credit risk characteristics. Modifications to loan terms may include a modification of the contractual interest rate to a below-market rate (even if the modified rate is higher than the original rate), forgiveness of accrued interest, forgiveness of a portion of principal, an extended repayment period or a deed in lieu of foreclosure or other transfer of assets other than cash to fully or partially satisfy a debt. The Company's policy is to place all TDRs on nonaccrual for a minimum period of six months. Loans qualify for return to accrual status once they have demonstrated performance with the restructured terms of the loan agreement for a minimum of six months and the collection of principal and interest under the revised terms is deemed probable. All TDRs are considered to be impaired loans. The outstanding balances of TDRs are shown below:
1 Nonaccrual TDR loans are included in the nonaccrual loan totals. 2 Performing TDR loans are loans that have been performing under the restructured terms for at least six months and the Company is accruing interest on these loans. The following tables provide the recorded balances of loans modified as a TDR during the three and six months ended June 30, 2016 and 2015.
1 Principal deferrals include Chapter 7 bankruptcy loans for which the court has discharged the borrower's obligation and the borrower has not reaffirmed the debt. Such loans are placed on non-accrual status. 2 Includes a $6.2 million reserve-based energy relationship; the primary modification to this relationship was suspension of required borrowing base payments. Loans modified as a TDR during the three and six months ended June 30, 2016 or 2015 which experienced a subsequent payment default during the periods are shown below. A payment default is defined as a loan that was 90 days or more past due.
Loans acquired with evidence of credit quality deterioration at acquisition, for which it was probable that the Company would not be able to collect all contractual amounts due, were accounted for as PCI loans. The carrying amount of PCI loans included in the consolidated balance sheets and the related outstanding balances at June 30, 2016 and December 31, 2015 are set forth in the table below. The outstanding balance represents the total amount owed, including accrued but unpaid interest, and any amounts previously charged off.
1 The carrying amounts are reported net of allowance for loan losses of $148 and $150 as of June 30, 2016 and December 31, 2015. Changes in the accretable yield for PCI loans for the three and six months ended June 30, 2016, and 2015 are as follows:
Below is an analysis of the age of recorded investment in loans that were past due at June 30, 2016 and December 31, 2015. No Warehouse Purchase Program loans were delinquent at June 30, 2016 or December 31, 2015 and therefore are not included in the following table.
1 Includes acquired PCI loans with a total carrying value of $7,936 and $11,328 at June 30, 2016 and December 31, 2015, respectively. For loans collateralized by real property and commercial and industrial loans, credit exposure is monitored by internally assigned grades used for classification of loans. A loan is considered “special mention” when management has determined that there is a potential weakness that deserves management's close attention. Loans rated as "special mention" are not adversely classified according to regulatory classifications and do not expose the Company to sufficient risk to warrant adverse classification. A loan is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. “Substandard” loans include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected, and the loan may or may not meet the criteria for impairment. Loans classified as “doubtful” have all of the weaknesses of those classified as “substandard”, with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions and values, “highly questionable and improbable.” All other loans that do not fall into the above mentioned categories are considered “pass” loans. Updates to internally assigned grades are made monthly and/or upon significant developments. For consumer loans, credit exposure is monitored by payment history of the loans. Non-performing consumer loans are on nonaccrual status and are generally greater than 90 days past due. The recorded investment in loans by credit quality indicators at June 30, 2016 and December 31, 2015, was as follows. Real Estate and Commercial and Industrial Credit Exposure Credit Risk Profile by Internally Assigned Grade
1 PCI loans are included in the substandard or doubtful categories. These categories are consistent with the "substandard" and "doubtful" categories as defined by regulatory authorities. Warehouse Purchase Program Credit Exposure All Warehouse Purchase Program loans were graded pass as of June 30, 2016 and December 31, 2015. Consumer Other Credit Exposure Credit Risk Profile Based on Payment Activity
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FAIR VALUE |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE | FAIR VALUE ASC 820, “Fair Value Measurements and Disclosures”, establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Prices or valuation techniques that require inputs that are both significant and unobservable in the market. These instruments are valued using the best information available, some of which is internally developed, and reflects a reporting entity’s own assumptions about the risk premiums that market participants would generally require and the assumptions they would use. The fair values of securities available for sale are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). The Company elects the fair value option for residential mortgage loans held for sale in accordance with ASC 825, "Financial Instruments". This election allows for a more effective offset of the changes in fair values of the loans and the derivative instruments used to economically hedge them without the burden of complying with the requirements for hedge accounting under ASC 815, “Derivatives and Hedging.” Mortgage loans held for sale, which are sold on a servicing released basis, are valued on a recurring basis using a market approach by utilizing either: (i) the fair value of securities backed by similar mortgage loans, adjusted for certain factors to approximate the fair value of a whole mortgage loan, including the value attributable to mortgage servicing and credit risk, (ii) current commitments to purchase loans or (iii) recent observable market trades for similar loans, adjusted to credit risk and other individual loan characteristics. As these prices are derived from market observable inputs, the Company classifies these valuations as Level 2 in the fair value disclosures. At June 30, 2016, loans held for sale had an aggregate fair value of $20,752 and an aggregate outstanding principal balance of $19,938 and were recorded in mortgage loans held for sale in the consolidated balance sheet. There were no mortgage loans held for sale that were 90 days or greater past due or on non-accrual at June 30, 2016. Interest income on mortgage loans held for sale is recognized based on the contractual rates and reflected in interest income on loans held for sale in the consolidated income statement. Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (i) the assets have been isolated from the Company, (ii) the transferee has the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (iii) the Company does not maintain effective control over the transferred assets through either (a) an agreement that entitles and obligates the Company to repurchase or redeem them before their maturity or (b) the ability to unilaterally cause the holder to return specific assets. The Company has no continuing involvement in any residential mortgage loans sold. The Company enters into a variety of derivative instruments as part of its hedging strategy and measures these instruments at fair value on a recurring basis in the balance sheet. The majority of these derivatives are forward mortgage-backed securities and are exchange-traded or traded within highly active dealer markets. In order to determine the fair value of these instruments, the Company utilized the exchange price or dealer market price for the particular derivative contract; therefore these contracts are classified as Level 2. In addition, the Company enters into interest rate lock commitments ("IRLCs") with prospective borrowers. These commitments are carried at fair value based on the fair value of the underlying mortgage loans which are based on observable market data. The Company adjusts the outstanding IRLCs with prospective borrowers based on an expectation that it will be exercised and the loan will be funded. IRLCs are recorded in other assets or other liabilities in the consolidated balance sheet. These commitments are classified as Level 2 in the fair value disclosures, as the valuations are based on market observable inputs. Net gains of $86 and $296 resulting from changes in the fair value of these IRLCs and net losses of $301 and $646 on forward mortgage-backed securities trades were recorded in net gain on sale of mortgage loans during the three and six months ended June 30, 2016. These gains and losses were not attributable to instrument-specific credit risk. Please see Note 7 - Derivative Financial Instruments for more information. The Company also enters into certain interest rate derivative positions that are not designated as hedging instruments. The estimated fair value of these commercial loan interest rate swaps are obtained from a pricing service that provides the swaps' unwind value (Level 2 inputs). The fair value of these derivative positions outstanding are included in other assets and other liabilities in the accompanying consolidated balance sheets. Please see Note 7 - Derivative Financial Instruments for more information. Assets and Liabilities Measured on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis are summarized below.
Assets and Liabilities Measured on a Non-Recurring Basis Assets measured at fair value on a non-recurring basis are summarized below. There were no liabilities measured at fair value on a non-recurring basis at June 30, 2016 or December 31, 2015.
Impaired loans that are collateral dependent are measured for impairment using the fair value of the collateral adjusted by additional Level 3 inputs, such as discounts of market value, estimated marketing costs and estimated legal expenses. Impaired loans secured by real estate, receivables or inventory had discounts determined by management on an individual loan basis. Impaired loans that are not collateral dependent are measured for impairment by a discounted cash flow analysis using a net present value calculation that utilizes data from the loan file before and after the modification. Foreclosed assets are measured at the lower of book or fair value less costs to sell using third party appraisals, listing agreements or sale contracts, which may be adjusted by additional Level 3 inputs, such as discounts of market value, estimated marketing costs and estimated legal expenses. Management may also consider additional adjustments on specific properties due to the age of the appraisal, expected holding period, lack of comparable sales, or if the other real estate owned is a special use property. At June 30, 2016, the Company had $368 in residential mortgage loans in the process of foreclosure. The Credit Risk Management department evaluates the valuations on impaired loans and foreclosed assets at least quarterly. The valuations on impaired loans are reviewed at least quarterly by the Allowance for Loan Loss Committee and are considered in the calculation of the allowance for loan losses. Unobservable inputs, such as discounts to collateral, are monitored and adjusted if market conditions change. The carrying amount and fair value information of financial instruments not recorded at fair value in their entirety on a recurring basis on the Company's consolidated balance sheets at June 30, 2016 and at December 31, 2015, were as follows:
Estimated fair value is the carrying amount for cash and cash equivalents and accrued interest receivable and payable. The fair values of securities held to maturity are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). For loans held for investment (including Warehouse Purchase Program loans), fair value is based on discounted cash flows using current market offering rates, estimated life, and applicable credit risk. For deposits, FHLB advances and overnight repurchase agreements with depositors, fair value is calculated using the FHLB advance curve to discount cash flows for the estimated life for deposits and according to the contractual repayment schedule for FHLB advances. The fair value of the structured repurchase agreement is based on discounting the estimated cash flows using the current rate at which similar borrowings would be made with similar terms and remaining maturities. The fair value of other borrowings, which consists of an unsecured term loan borrowed by the Company in the second quarter of 2016, is the loan's par value, since the loan was recorded on the Company's balance sheet near the June 30, 2016 reporting date. The fair value of subordinated debt and trust preferred securities is based on current market rates on similar debt in the market. The fair value of FHLB stock and other restricted securities is based on the securities' cost basis due to restrictions on its transferability. The fair value of off-balance sheet items is based on the current fees or costs that would be charged to enter into or terminate such arrangements and are not considered significant to this presentation. |
DERIVATIVE FINANCIAL INSTRUMENTS |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS The Company enters into IRLCs with prospective residential mortgage borrowers whereby the interest rate on the loan is determined prior to funding and the borrowers have locked into that interest rate. These commitments are carried at fair value in accordance with ASC 815, Derivatives and Hedging. The estimated fair values of IRLCs are based on observable market data and are recorded in other assets or other liabilities in the consolidated balance sheets. The Company adjusts the outstanding IRLCs with prospective borrowers based on the expectation that it will be exercised and the loan will be funded. The initial and subsequent changes in the fair value of IRLCs are a component of net gain on sale of mortgage loans. The Company actively manages the risk profiles of its IRLCs and mortgage loans held for sale on a daily basis. To manage the price risk associated with IRLCs, the Company enters into forward sales of mortgage-backed securities in an amount similar to the portion of the IRLC expected to close, assuming no change in mortgage interest rates. In addition, to manage the interest rate risk associated with mortgage loans held for sale, the Company enters into forward sales of mortgage-backed securities to deliver mortgage loan inventory to investors. The estimated fair values of forward sales of mortgage-backed securities and forward sale commitments are based on quoted market values and are recorded in other assets or other liabilities in the consolidated balance sheets. The initial and subsequent changes in value on forward sales of mortgage-backed securities are a component of net gain on sale of mortgage loans. The following table provides the outstanding notional balances and fair values of outstanding positions at June 30, 2016 and December 31, 2015.
The Company enters into certain interest rate derivative positions that are not designated as hedging instruments. These derivative positions related to transactions in which we entered into an interest rate swap or cap with a customer, while at the same time entering into an offsetting interest rate swap or cap with another financial institution. In connection with each swap transaction, we agree to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate. At the same time, we agree to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows our customer to effectively convert a variable rate loan to a fixed rate. In connection with each interest rate cap, we sell a cap to the customer and agree to pay interest if the underlying index exceeds the strike price defined in the cap agreement. Simultaneously we purchase a cap with matching terms from another financial institution which agrees to pay us if the underlying index exceeds the strike price. Because we act as an intermediary for our customer, changes in the fair value of the underlying derivative contracts substantially offset each other and do not have a material impact on our results of operations. The Company presents derivative instruments at fair value in other assets and other liabilities in the accompanying consolidated balance sheets. The notional amounts and estimated fair values of interest rate swap derivative positions outstanding and weighted-average receive and pay interest rates at June 30, 2016 and December 31, 2015 are presented in the following table.
Our credit exposure on interest rate swaps is limited to the net favorable value of all swaps by each counterparty. In some cases, collateral may be required from the counterparties involved if the net value of the swaps exceeds a nominal amount considered to be immaterial. Collateral levels are monitored and adjusted on a regular basis for changes in interest rate swap values. Our cash collateral pledged for interest rate swaps and included in our interest-bearing deposits, which totaled $1,700 at June 30, 2016 and $300 at December 31, 2015, is in excess of our credit exposure. The Company does not offset fair value amounts recognized for derivative instruments and the amounts collected and/or deposited on derivative instruments in its consolidated balance sheets. |
SHARE-BASED COMPENSATION |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Compensation cost charged to income for share-based compensation is presented below:
A summary of activity in the restricted stock portion of the Company's stock plans is presented below:
1For restricted stock awards with time-based vesting conditions, the grant date fair value is based upon the closing stock price as quoted on the NASDAQ Stock Market on the grant date. 2 For restricted stock awards with performance-based vesting conditions, the value of the award is based upon the closing stock price as quoted on the NASDAQ Stock Market on the date of vesting. Until the final value is determined on the vesting date, the Company estimates the fair value quarterly based upon the closing stock price as quoted on the NASDAQ Stock Market near the last business day of each calendar quarter end. As of June 30, 2016, there was $3,322 of total unrecognized compensation expense related to non-vested restricted shares awarded under the Company's stock plans. That expense is expected to be recognized over a weighted-average period of 1.37 years. A summary of activity in the stock option portion of the Company's stock plans as of June 30, 2016 is presented below:
As of June 30, 2016, there was $5,769 of total unrecognized compensation expense related to non-vested stock options. That expense is expected to be recognized over a weighted-average period of 2.94 years. |
INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES A summary of the net deferred tax assets as of June 30, 2016 and December 31, 2015, is presented below:
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COMMITMENTS AND CONTINGENT LIABILITIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENT LIABILITIES | COMMITMENTS AND CONTINGENT LIABILITIES In the normal course of business, the Company enters into various transactions which, in accordance with US GAAP, are not included in its consolidated balance sheets. The Company enters into these transactions to meet the financing needs of its customers. These transactions include commitments to extend credit and standby letters of credit which involve, to varying degrees, elements of credit and interest rate risk. Credit losses up to the face amount of these instruments could occur, although material losses are not anticipated. The Company's credit policies applied to loan originations are also applied to these commitment requests, including obtaining collateral at the exercise of the commitment. The Company enters into contractual commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes. Since many commitments expire without being drawn upon, the total contractual amount of commitments does not necessarily represent future cash requirements of the Company. Substantially all of the Company's commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of future loan funding. Standby letters of credit are written conditional commitments issued by the Company to guarantee the performance of a customer to a third party. In the event the customer does not perform in accordance with the terms of the agreement with the third party, the Company would be required to fund the commitment. The maximum potential amount of future payments the Company could be required to make is represented by the contractual amount of the commitment. If the commitment were funded, the Company would seek payment from the customer under pre-arranged terms. The Company's policies generally require that standby letter of credit arrangements contain security and debt covenants similar to those contained in loan agreements. The contractual amounts of financial instruments with off‑balance sheet risk at June 30, 2016 and December 31, 2015, are summarized below. Please see Part I-Item 2-"Off-Balance Sheet Arrangements, Contractual Obligations and Commitments" of this Form 10-Q for information related to commitment maturities.
In addition to the commitments above, the Company guarantees the credit card debt of certain customers to the merchant bank that issues the credit cards. These guarantees are in place for as long as the guaranteed credit card is open. At June 30, 2016 and December 31, 2015, these credit card guarantees totaled $2,275 and $1,028, respectively. This amount represents the maximum potential amount of future payments under the guarantee, which the Company is responsible for in the event of customer non-payment. In addition to the commitments above, the Company had overdraft protection available in the amounts of $86,020 and $87,077 at June 30, 2016 and December 31, 2015, respectively. In regards to unused capacity on Warehouse Purchase Program loans, the Company has established maximum purchase facility amounts, but reserves the right, at any time, to refuse to buy any mortgage loans offered for sale by each customer, for any reason in the Company's sole and absolute discretion. The Company, at June 30, 2016, had FHLB letters of credit of $833,111 pledged to secure public deposits, repurchase agreements, and for other purposes required or permitted by law. At June 30, 2016, the Company had $2,480 of unfunded commitments recorded in other liabilities in its consolidated balance sheet related to investments in community development-oriented private equity funds used for Community Reinvestment Act purposes. |
RECENT ACCOUNTING DEVELOPMENTS |
6 Months Ended |
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Jun. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING DEVELOPMENTS | RECENT ACCOUNTING DEVELOPMENTS In June 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2016-13, "Measurement of Credit Losses on Financial Instruments." This ASU removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. Under current U.S. GAAP, companies generally recognize credit losses when it is probable that the loss has been incurred. This revised guidance will remove all recognition thresholds and will require companies to recognize an allowance for lifetime expected credit losses. Credit losses will be immediately recognized through net income; the amount recognized will be based on the current estimate of contractual cash flows not expected to be collected over the financial asset’s contractual term. ASU 2016-13 also amends the credit loss measurement guidance for available-for-sale debt securities. For public business entities, this ASU is effective for financial statements issued for fiscal years and for interim periods within those fiscal years beginning after December 15, 2019. The Company is evaluating the impact of this ASU on its financial statements and disclosures. |
SUBSEQUENT EVENTS |
6 Months Ended |
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Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluated events from the date of the consolidated financial statements on June 30, 2016 through the issuance of those consolidated financial statements included in this Quarterly Report on Form 10-Q dated July 26, 2016. No additional events were identified requiring recognition in and/or disclosures in the consolidated financial statements. |
BASIS OF FINANCIAL STATEMENT PRESENTATION (Policies) |
6 Months Ended |
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Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Use of Estimates | In preparing the financial statements, management is required to make estimates and assumptions that affect the recorded amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the period. Actual results could differ from those estimates. For further information with respect to significant accounting policies followed by the Company in preparation of its consolidated financial statements, refer to the 2015 Form 10-K. |
Consolidation | The accompanying Unaudited Consolidated Interim Financial Statements include the accounts of the Company, whose business primarily consists of the operations of its wholly owned subsidiary, LegacyTexas Bank (the “Bank”). All significant intercompany transactions and balances are eliminated in consolidation. |
Securities | Gains and losses on the sale of securities classified as available for sale are recorded on the trade date using the specific-identification method. |
Other-than-Temporary Impairment | Other-than-Temporary Impairment In determining other-than-temporary impairment for debt securities, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than amortized cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent and ability to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. |
Allowance for Loan Losses | A modified loan is considered a troubled debt restructuring (“TDR”) when two conditions are met: 1) the borrower is experiencing financial difficulty and 2) concessions are made for the borrower's benefit that would not otherwise be considered for a borrower or transaction with similar credit risk characteristics. Modifications to loan terms may include a modification of the contractual interest rate to a below-market rate (even if the modified rate is higher than the original rate), forgiveness of accrued interest, forgiveness of a portion of principal, an extended repayment period or a deed in lieu of foreclosure or other transfer of assets other than cash to fully or partially satisfy a debt. The Company's policy is to place all TDRs on nonaccrual for a minimum period of six months. Loans qualify for return to accrual status once they have demonstrated performance with the restructured terms of the loan agreement for a minimum of six months and the collection of principal and interest under the revised terms is deemed probable. All TDRs are considered to be impaired loans. The allowance for loan losses and related provision expense are susceptible to change if the credit quality of our loan portfolio changes, which is evidenced by many factors, including but not limited to charge-offs and non-performing loan trends. Generally, consumer real estate lending has a lower credit risk profile compared to other consumer lending (such as automobile loans). Commercial real estate and commercial and industrial lending, however, can have higher risk profiles than consumer loans due to these loans being larger in amount and non-homogeneous in structure and term. Changes in economic conditions, the mix and size of the loan portfolio, and individual borrower conditions can dramatically impact our level of allowance for loan losses in relatively short periods of time. The allowance for loan losses is maintained to cover losses that are estimated in accordance with US GAAP. It is our estimate of credit losses inherent in our loan portfolio at each balance sheet date. Our methodology for analyzing the allowance for loan losses consists of general and specific components. For the general component, we stratify the loan portfolio into homogeneous groups of loans that possess similar loss potential characteristics and apply a loss ratio to these groups of loans to estimate the credit losses in the loan portfolio. We use both historical loss ratios and qualitative loss factors assigned to major loan collateral types to establish general component loss allocations. Qualitative loss factors are based on management's judgment of company, market, industry or business specific data and external economic indicators, which may not yet be reflected in the historical loss ratios, and that could impact the Company's specific loan portfolios. The Allowance for Loan Loss Committee sets and adjusts qualitative loss factors by regularly reviewing changes in underlying loan composition and the seasonality of specific portfolios. The Allowance for Loan Loss Committee also considers credit quality and trends relating to delinquency, non-performing and classified loans within the Company's loan portfolio when evaluating qualitative loss factors. Additionally, the Allowance for Loan Loss Committee adjusts qualitative factors to account for the potential impact of external economic factors, including the unemployment rate, vacancy and capitalization rates and other pertinent economic data specific to our primary market area and lending portfolios. For the specific component, the allowance for loan losses includes loans where management has concerns about the borrower's ability to repay and on individually analyzed loans found to be impaired. Management evaluates current information and events regarding a borrower's ability to repay its obligations and considers a loan to be impaired when the ultimate collectability of amounts due, according to the contractual terms of the loan agreement, is in doubt. If an impaired loan is collateral-dependent, the fair value of the collateral, less the estimated cost to sell, is used to determine the amount of impairment. If an impaired loan is not collateral-dependent, the impairment amount is determined using the negative difference, if any, between the estimated discounted cash flows and the loan amount due. For impaired loans, the amount of the impairment can be adjusted, based on current data, until such time as the actual basis is established by acquisition of the collateral or until the basis is collected. Impairment losses are reflected in the allowance for loan losses through a charge to the provision for loan losses. Subsequent recoveries are credited to the allowance for loan losses. Cash receipts for accruing loans are applied to principal and interest under the contractual terms of the loan agreement. Cash receipts on impaired loans for which the accrual of interest has been discontinued are applied first to principal. Large groups of smaller-balance homogeneous loans are collectively evaluated for impairment. As a result, the Company does not separately identify consumer real estate loans less than $417 or individual consumer non-real estate secured loans for impairment disclosures. The Company considers these loans to be homogeneous in nature due to the smaller dollar amount and the similar underwriting criteria. |
Loans | Past due status is based on the contractual terms of the loan. Loans that are past due 30 days are considered delinquent. Interest income on loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Non-mortgage consumer loans are typically charged off no later than 120 days past due. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and larger individually classified impaired loans. All interest accrued but not received for loans placed on nonaccrual status is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. For consumer loans, credit exposure is monitored by payment history of the loans. Non-performing consumer loans are on nonaccrual status and are generally greater than 90 days past due. |
Fair Value | ASC 820, “Fair Value Measurements and Disclosures”, establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Prices or valuation techniques that require inputs that are both significant and unobservable in the market. These instruments are valued using the best information available, some of which is internally developed, and reflects a reporting entity’s own assumptions about the risk premiums that market participants would generally require and the assumptions they would use. The fair values of securities available for sale are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). The Company elects the fair value option for residential mortgage loans held for sale in accordance with ASC 825, "Financial Instruments". This election allows for a more effective offset of the changes in fair values of the loans and the derivative instruments used to economically hedge them without the burden of complying with the requirements for hedge accounting under ASC 815, “Derivatives and Hedging.” Mortgage loans held for sale, which are sold on a servicing released basis, are valued on a recurring basis using a market approach by utilizing either: (i) the fair value of securities backed by similar mortgage loans, adjusted for certain factors to approximate the fair value of a whole mortgage loan, including the value attributable to mortgage servicing and credit risk, (ii) current commitments to purchase loans or (iii) recent observable market trades for similar loans, adjusted to credit risk and other individual loan characteristics. As these prices are derived from market observable inputs, the Company classifies these valuations as Level 2 in the fair value disclosures. At June 30, 2016, loans held for sale had an aggregate fair value of $20,752 and an aggregate outstanding principal balance of $19,938 and were recorded in mortgage loans held for sale in the consolidated balance sheet. There were no mortgage loans held for sale that were 90 days or greater past due or on non-accrual at June 30, 2016. Interest income on mortgage loans held for sale is recognized based on the contractual rates and reflected in interest income on loans held for sale in the consolidated income statement. Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (i) the assets have been isolated from the Company, (ii) the transferee has the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (iii) the Company does not maintain effective control over the transferred assets through either (a) an agreement that entitles and obligates the Company to repurchase or redeem them before their maturity or (b) the ability to unilaterally cause the holder to return specific assets. The Company has no continuing involvement in any residential mortgage loans sold. The Company enters into a variety of derivative instruments as part of its hedging strategy and measures these instruments at fair value on a recurring basis in the balance sheet. The majority of these derivatives are forward mortgage-backed securities and are exchange-traded or traded within highly active dealer markets. In order to determine the fair value of these instruments, the Company utilized the exchange price or dealer market price for the particular derivative contract; therefore these contracts are classified as Level 2. In addition, the Company enters into interest rate lock commitments ("IRLCs") with prospective borrowers. These commitments are carried at fair value based on the fair value of the underlying mortgage loans which are based on observable market data. The Company adjusts the outstanding IRLCs with prospective borrowers based on an expectation that it will be exercised and the loan will be funded. IRLCs are recorded in other assets or other liabilities in the consolidated balance sheet. These commitments are classified as Level 2 in the fair value disclosures, as the valuations are based on market observable inputs. Impaired loans that are collateral dependent are measured for impairment using the fair value of the collateral adjusted by additional Level 3 inputs, such as discounts of market value, estimated marketing costs and estimated legal expenses. Impaired loans secured by real estate, receivables or inventory had discounts determined by management on an individual loan basis. Impaired loans that are not collateral dependent are measured for impairment by a discounted cash flow analysis using a net present value calculation that utilizes data from the loan file before and after the modification. Foreclosed assets are measured at the lower of book or fair value less costs to sell using third party appraisals, listing agreements or sale contracts, which may be adjusted by additional Level 3 inputs, such as discounts of market value, estimated marketing costs and estimated legal expenses. Management may also consider additional adjustments on specific properties due to the age of the appraisal, expected holding period, lack of comparable sales, or if the other real estate owned is a special use property. At June 30, 2016, the Company had $368 in residential mortgage loans in the process of foreclosure. The Credit Risk Management department evaluates the valuations on impaired loans and foreclosed assets at least quarterly. The valuations on impaired loans are reviewed at least quarterly by the Allowance for Loan Loss Committee and are considered in the calculation of the allowance for loan losses. Unobservable inputs, such as discounts to collateral, are monitored and adjusted if market conditions change. |
Derivatives | The Company enters into IRLCs with prospective residential mortgage borrowers whereby the interest rate on the loan is determined prior to funding and the borrowers have locked into that interest rate. These commitments are carried at fair value in accordance with ASC 815, Derivatives and Hedging. The estimated fair values of IRLCs are based on observable market data and are recorded in other assets or other liabilities in the consolidated balance sheets. The Company adjusts the outstanding IRLCs with prospective borrowers based on the expectation that it will be exercised and the loan will be funded. The initial and subsequent changes in the fair value of IRLCs are a component of net gain on sale of mortgage loans. The Company actively manages the risk profiles of its IRLCs and mortgage loans held for sale on a daily basis. To manage the price risk associated with IRLCs, the Company enters into forward sales of mortgage-backed securities in an amount similar to the portion of the IRLC expected to close, assuming no change in mortgage interest rates. In addition, to manage the interest rate risk associated with mortgage loans held for sale, the Company enters into forward sales of mortgage-backed securities to deliver mortgage loan inventory to investors. The estimated fair values of forward sales of mortgage-backed securities and forward sale commitments are based on quoted market values and are recorded in other assets or other liabilities in the consolidated balance sheets. The initial and subsequent changes in value on forward sales of mortgage-backed securities are a component of net gain on sale of mortgage loans. The Company enters into certain interest rate derivative positions that are not designated as hedging instruments. These derivative positions related to transactions in which we entered into an interest rate swap or cap with a customer, while at the same time entering into an offsetting interest rate swap or cap with another financial institution. In connection with each swap transaction, we agree to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate. At the same time, we agree to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows our customer to effectively convert a variable rate loan to a fixed rate. In connection with each interest rate cap, we sell a cap to the customer and agree to pay interest if the underlying index exceeds the strike price defined in the cap agreement. Simultaneously we purchase a cap with matching terms from another financial institution which agrees to pay us if the underlying index exceeds the strike price. Because we act as an intermediary for our customer, changes in the fair value of the underlying derivative contracts substantially offset each other and do not have a material impact on our results of operations. The Company presents derivative instruments at fair value in other assets and other liabilities in the accompanying consolidated balance sheets. |
EARNINGS PER COMMON SHARE (Tables) |
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Reconciliation of Numerator and Denominator of Basic and Diluted Earnings per Common Share | A reconciliation of the numerator and denominator of the basic and diluted earnings per common share computation for the three and six months ended June 30, 2016 and 2015 is as follows:
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SECURITIES (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Available-for-Sale Securities and Related Gross Unrealized Gains and Losses | The amortized cost, related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss), and the fair value of securities available for sale were as follows:
1 Mortgage-backed securities and collateralized mortgage obligations are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. |
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Carrying Amount, Unrecognized Gains and Losses, and Fair Value of Securities Held to Maturity | The carrying amount, unrealized gains and losses, and fair value of securities held to maturity were as follows:
1 Mortgage-backed securities and collateralized mortgage obligations are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. |
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Carrying Amount and Fair Value of Held to Maturity Debt Securities and Fair Value of Available-for-Sale Debt Securities | The carrying amount and fair value of held to maturity debt securities and the fair value of available for sale debt securities at June 30, 2016 by contractual maturity are set forth in the table below. Securities with contractual payments not due at a single maturity date, including mortgage-backed securities and collateralized mortgage obligations, are shown separately.
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Summarized Sales Activity | Sales activity of securities for the six months ended June 30, 2016 and 2015 was as follows. All securities sold were classified as available for sale.
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Securities with Unrealized Losses Aggregated by Investment and Length of Time that Individual Securities have been in Continuous Unrealized Loss Position Category | Securities with unrealized losses at June 30, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:
1 Mortgage-backed securities and collateralized mortgage obligations are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. |
LOANS - (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Loans consist of the following:
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Allowance for Loan Losses | Activity in the allowance for loan losses for the three and six months ended June 30, 2016 and 2015, segregated by portfolio segment and evaluation for impairment, is set forth below. All Warehouse Purchase Program loans are collectively evaluated for impairment and are purchased under several contractual requirements, providing safeguards to the Company. These safeguards include the requirement that our mortgage company customers have a takeout commitment for each loan and multiple investors for purchases. To date, the Company has not experienced a loss on these loans and no allowance for loan losses has been allocated to them. At June 30, 2016 and 2015, the allowance for loan impairment related to purchased credit impaired ("PCI") loans totaled $148 and $127, respectively.
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Impaired Loans | Impaired loans at June 30, 2016 and December 31, 2015, were as follows 1:
1 No Warehouse Purchase Program loans were impaired at June 30, 2016 or December 31, 2015. Loans reported do not include PCI loans. Income on impaired loans at June 30, 2016 and 2015, was as follows1:
1 Loans reported do not include PCI loans. The carrying amount of PCI loans included in the consolidated balance sheets and the related outstanding balances at June 30, 2016 and December 31, 2015 are set forth in the table below. The outstanding balance represents the total amount owed, including accrued but unpaid interest, and any amounts previously charged off.
1 The carrying amounts are reported net of allowance for loan losses of $148 and $150 as of June 30, 2016 and December 31, 2015. Changes in the accretable yield for PCI loans for the three and six months ended June 30, 2016, and 2015 are as follows:
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Non-Performing (Nonaccrual) Loans | Non-performing (nonaccrual) loans were as follows:
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Summary of Outstanding Balances of Troubled Debt Restructuring | The outstanding balances of TDRs are shown below:
1 Nonaccrual TDR loans are included in the nonaccrual loan totals. 2 Performing TDR loans are loans that have been performing under the restructured terms for at least six months and the Company is accruing interest on these loans. The following tables provide the recorded balances of loans modified as a TDR during the three and six months ended June 30, 2016 and 2015.
1 Principal deferrals include Chapter 7 bankruptcy loans for which the court has discharged the borrower's obligation and the borrower has not reaffirmed the debt. Such loans are placed on non-accrual status. 2 Includes a $6.2 million reserve-based energy relationship; the primary modification to this relationship was suspension of required borrowing base payments. Loans modified as a TDR during the three and six months ended June 30, 2016 or 2015 which experienced a subsequent payment default during the periods are shown below. A payment default is defined as a loan that was 90 days or more past due.
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Analysis of Age of Recorded Investment in Loans | Below is an analysis of the age of recorded investment in loans that were past due at June 30, 2016 and December 31, 2015. No Warehouse Purchase Program loans were delinquent at June 30, 2016 or December 31, 2015 and therefore are not included in the following table.
1 Includes acquired PCI loans with a total carrying value of $7,936 and $11,328 at June 30, 2016 and December 31, 2015, respectively. |
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Real Estate and Commercial and Industrial Credit Exposure Credit Risk Profile by Internally Assigned Grade | The recorded investment in loans by credit quality indicators at June 30, 2016 and December 31, 2015, was as follows. Real Estate and Commercial and Industrial Credit Exposure Credit Risk Profile by Internally Assigned Grade
1 PCI loans are included in the substandard or doubtful categories. These categories are consistent with the "substandard" and "doubtful" categories as defined by regulatory authorities. |
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Consumer Credit Exposure Credit Risk Profile Based on Payment Activity | Consumer Other Credit Exposure Credit Risk Profile Based on Payment Activity
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FAIR VALUE - (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value Measured on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below.
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Summary of Fair Value Measured on Nonrecurring Basis | Assets measured at fair value on a non-recurring basis are summarized below. There were no liabilities measured at fair value on a non-recurring basis at June 30, 2016 or December 31, 2015.
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Fair Value, by Balance Sheet Grouping | The carrying amount and fair value information of financial instruments not recorded at fair value in their entirety on a recurring basis on the Company's consolidated balance sheets at June 30, 2016 and at December 31, 2015, were as follows:
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DERIVATIVE FINANCIAL INSTRUMENTS (Tables) |
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Notional Balances and Fair Values of Outstanding Positions | The following table provides the outstanding notional balances and fair values of outstanding positions at June 30, 2016 and December 31, 2015.
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Schedule of Derivative Instruments | The notional amounts and estimated fair values of interest rate swap derivative positions outstanding and weighted-average receive and pay interest rates at June 30, 2016 and December 31, 2015 are presented in the following table.
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SHARE-BASED COMPENSATION - (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | Compensation cost charged to income for share-based compensation is presented below:
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Nonvested Shares for the Company's Stock Plans | A summary of activity in the restricted stock portion of the Company's stock plans is presented below:
1For restricted stock awards with time-based vesting conditions, the grant date fair value is based upon the closing stock price as quoted on the NASDAQ Stock Market on the grant date. 2 For restricted stock awards with performance-based vesting conditions, the value of the award is based upon the closing stock price as quoted on the NASDAQ Stock Market on the date of vesting. Until the final value is determined on the vesting date, the Company estimates the fair value quarterly based upon the closing stock price as quoted on the NASDAQ Stock Market near the last business day of each calendar quarter end. |
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Schedule of Stock Option Activity | A summary of activity in the stock option portion of the Company's stock plans as of June 30, 2016 is presented below:
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INCOME TAXES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Summary of Net Deferred Tax Assets | A summary of the net deferred tax assets as of June 30, 2016 and December 31, 2015, is presented below:
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COMMITMENTS AND CONTINGENT LIABILITIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments Contractual Amounts with off Balance Sheet Risk | The contractual amounts of financial instruments with off‑balance sheet risk at June 30, 2016 and December 31, 2015, are summarized below. Please see Part I-Item 2-"Off-Balance Sheet Arrangements, Contractual Obligations and Commitments" of this Form 10-Q for information related to commitment maturities.
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SHARE TRANSACTIONS (Details) - shares |
3 Months Ended | 6 Months Ended | 47 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Aug. 01, 2012 |
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Stockholders' Equity Note [Abstract] | |||||
Remaining authorization (in shares) | 1,978,871 | ||||
Number of shares repurchased (in shares) | 0 | 0 | 357,950 | 441,750 | |
Authorized for repurchase (in shares) | 1,537,121 | 1,537,121 | 1,537,121 |
SECURITIES - Summarized Sales Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
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Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds | $ 7,700 | $ 0 | $ 7,700 | $ 16,581 |
Gross gains | 72 | 0 | 72 | 211 |
Gross losses | 7 | 0 | 7 | 0 |
Tax benefit of securities gains/losses | $ 23 | $ 0 | $ 23 | $ 74 |
SECURITIES - (Narrative) (Details) $ in Thousands |
Jun. 30, 2016
USD ($)
security
|
Dec. 31, 2015
USD ($)
|
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Pledged as collateral | $ | $ 228,783 | $ 280,629 |
Number of securities in unrealized losses | 32 | |
Number of securities in unrealized losses for greater than one year | 19 |
LOANS - Narrative (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
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Receivables [Abstract] | |||
Portion of allowance for loan losses allocated to PCI loans | $ 148 | $ 150 | $ 127 |
Threshold at which large consumer real estate loans are individually evaluated for impairment | $ 417 | ||
Loans That Are Past Due Or Greater Are Considered Delinquent | 30 days | ||
Delinquent Period of Loan to Discontinued Interest Income for Consumer Loan | 90 days | ||
Consumer Loans Are Typically Charged Off | 120 days | ||
Loans past due over 90 days and still accruing | $ 124 | $ 111 | |
Troubled debt restructuring, non-accrual period | 6 months | ||
Number Of Days To Define Payment Default | 90 days | ||
Period of time for Consumer Loans to be Past Due to be Classified as Non-Performing | 90 days |
LOANS - Non-Performing (nonaccrual) loans (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-performing | $ 42,851 | $ 38,216 |
Commercial Real Estate [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-performing | 1,183 | 11,418 |
Commercial and Industrial [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-performing | 31,362 | 16,877 |
Construction and land [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-performing | 27 | 33 |
Consumer Real Estate [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-performing | 10,005 | 9,781 |
Other Consumer [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-performing | $ 274 | $ 107 |
LOANS - Summary of Outstanding Balances of Troubled Debt Restructuring (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Troubled Debt Restructuring, Debtor, Current Period [Line Items] | ||
Recorded investment | $ 13,765 | $ 6,812 |
Specific reserves on TDRs | 549 | 487 |
Outstanding commitments to lend additional funds to borrowers with TDR loans | $ 0 | 0 |
Troubled debt restructuring, non-accrual period | 6 months | |
Nonperforming Financing Receivable [Member] | ||
Troubled Debt Restructuring, Debtor, Current Period [Line Items] | ||
Recorded investment | $ 13,200 | 6,207 |
Performing Financing Receivable [Member] | ||
Troubled Debt Restructuring, Debtor, Current Period [Line Items] | ||
Recorded investment | $ 565 | $ 605 |
LOANS - Carrying Amount of Acquired PCI Loans Included in the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|---|
Receivables [Abstract] | |||
Carrying amount | $ 7,983 | $ 11,804 | |
Outstanding balance | 8,883 | 13,053 | |
Portion of allowance for loan losses allocated to PCI loans | $ 148 | $ 150 | $ 127 |
LOANS - Changes in the Accretable Yield for Acquired PCI Loans (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||||
Beginning balance | $ 3,056 | $ 3,736 | $ 3,356 | $ 2,100 |
Additions | 0 | 0 | 0 | 1,907 |
Reclassifications (to) from nonaccretable | (493) | 299 | (256) | 406 |
Disposals | (14) | (350) | (282) | (354) |
Accretion | (273) | (375) | (542) | (749) |
Balance at end of period | $ 2,276 | $ 3,310 | $ 2,276 | $ 3,310 |
LOANS - Consumer Credit Exposure Credit Risk Profile Based on Payment Activity (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|---|
Financing Receivable, Recorded Investment [Line Items] | |||
Non-performing | $ 42,851 | $ 38,216 | |
Other consumer | 61,423 | 69,830 | $ 79,798 |
Other Consumer [Member] | Performing Financing Receivable [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Performing | 61,149 | 69,723 | |
Other Consumer [Member] | Nonperforming Financing Receivable [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Non-performing | $ 274 | $ 107 |
FAIR VALUE - Narrative (Details) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2016
USD ($)
|
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | $ 20,752 | $ 20,752 |
Loans held for sale, fair value, outstanding principal balance | 19,938 | 19,938 |
Mortgage loans on real estate, pending foreclosures | 368 | 368 |
Interest Rate Lock Commitments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gains (losses) resulting from changes in fair value | 86 | 296 |
Forward Mortgage Backed Securities Trades [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gains (losses) resulting from changes in fair value | $ (301) | $ (646) |
FAIR VALUE - Summary of Fair Value Measured on Nonrecurring Basis (Details) - Significant Unobservable Inputs (Level 3) [Member] - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | $ 21,256 | $ 2,230 |
Commercial Real Estate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreclosed assets | 11,888 | 4,784 |
Construction and Land [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreclosed assets | 1,447 | 1,802 |
Residential Mortgage [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreclosed assets | $ 33 | $ 106 |
DERIVATIVE FINANCIAL INSTRUMENTS - Schedule of Outstanding Notional Balances and Fair Values of Outstanding Positions (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Interest Rate Lock Commitments [Member] | ||
Derivative [Line Items] | ||
Asset, Outstanding Notional Balance | $ 17,150 | $ 12,518 |
Asset, Fair Value | 717 | 421 |
Forward Mortgage Backed Securities Trades [Member] | ||
Derivative [Line Items] | ||
Asset, Outstanding Notional Balance | 0 | 11,874 |
Asset, Fair Value | 0 | 15 |
Liability, Outstanding Notional Amount | 26,035 | 8,500 |
Liability, Fair Value | $ 173 | $ 29 |
DERIVATIVE FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative, collateral pledged | $ 1,700 | $ 300 |
SHARE-BASED COMPENSATION - Compensation Cost Charged to Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Compensation cost charged to income for: | ||||
Income tax benefit | $ 429 | $ 525 | $ 778 | $ 1,127 |
Restricted stock [Member] | ||||
Compensation cost charged to income for: | ||||
Compensation cost | 733 | 1,070 | 1,181 | 2,262 |
Stock options [Member] | ||||
Compensation cost charged to income for: | ||||
Compensation cost | $ 493 | $ 430 | $ 1,042 | $ 957 |
SHARE-BASED COMPENSATION - Narrative (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2016
USD ($)
| |
Restricted stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized compensation expense related to non-vested shares | $ 3,322 |
Weighted-average period | 1 year 4 months 15 days |
Stock options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized compensation expense related to non-vested shares | $ 5,769 |
Weighted-average period | 2 years 11 months 8 days |
INCOME TAXES - (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | ||
Net deferred tax assets | $ 24,455 | $ 21,040 |
Estimated annual effective tax rate | 35.00% |
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