x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TEXAS
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75-1848732
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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|
|
|
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1201 S. Beckham, Tyler, Texas
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75701
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer o
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Accelerated filer x
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Non-accelerated filer o
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Smaller reporting company o
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(Do not check if a smaller reporting company)
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PART I. FINANCIAL INFORMATION
|
|
1 | |
34 | |
53 | |
54 | |
PART II. OTHER INFORMATION
|
|
55 | |
55 | |
55 | |
55 | |
55 | |
55 | |
56 | |
57 | |
58 | |
EXHIBIT 31.1 – CERTIFICATION PURSUANT TO SECTION 302
|
|
EXHIBIT 31.2 – CERTIFICATION PURSUANT TO SECTION 302
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EXHIBIT 32 – CERTIFICATION PURSUANT TO SECTION 906
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June 30,
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December 31,
|
|||||||
2012
|
2011
|
|||||||
ASSETS
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||||||||
Cash and due from banks
|
$ | 46,479 | $ | 40,989 | ||||
Interest earning deposits
|
59,757 | 2,249 | ||||||
Total cash and cash equivalents
|
106,236 | 43,238 | ||||||
Investment securities:
|
||||||||
Available for sale, at estimated fair value
|
418,215 | 282,956 | ||||||
Held to maturity, at amortized cost
|
1,010 | 1,496 | ||||||
Mortgage-backed and related securities:
|
||||||||
Available for sale, at estimated fair value
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1,204,759 | 716,126 | ||||||
Securities carried at fair value through income
|
– | 647,759 | ||||||
Held to maturity, at amortized cost
|
330,138 | 365,631 | ||||||
FHLB stock, at cost
|
34,334 | 33,869 | ||||||
Other investments, at cost
|
2,064 | 2,064 | ||||||
Loans held for sale
|
1,447 | 3,552 | ||||||
Loans:
|
||||||||
Loans
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1,183,200 | 1,087,230 | ||||||
Less: allowance for loan losses
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(20,194 | ) | (18,540 | ) | ||||
Net Loans
|
1,163,006 | 1,068,690 | ||||||
Premises and equipment, net
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50,250 | 50,595 | ||||||
Goodwill
|
22,034 | 22,034 | ||||||
Other intangible assets, net
|
416 | 522 | ||||||
Interest receivable
|
17,929 | 19,426 | ||||||
Deferred tax asset
|
3,478 | – | ||||||
Unsettled trades to sell securities
|
1,071 | – | ||||||
Other assets
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44,569 | 45,859 | ||||||
TOTAL ASSETS
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$ | 3,400,956 | $ | 3,303,817 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Deposits:
|
||||||||
Noninterest bearing
|
$ | 641,139 | $ | 505,594 | ||||
Interest bearing
|
1,754,733 | 1,816,077 | ||||||
Total deposits
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2,395,872 | 2,321,671 | ||||||
Short-term obligations:
|
||||||||
Federal funds purchased and repurchase agreements
|
1,948 | 2,945 | ||||||
FHLB advances
|
241,246 | 361,811 | ||||||
Other obligations
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219 | 219 | ||||||
Total short-term obligations
|
243,413 | 364,975 | ||||||
Long-term obligations:
|
||||||||
FHLB advances
|
366,989 | 260,724 | ||||||
Long-term debt
|
60,311 | 60,311 | ||||||
Total long-term obligations
|
427,300 | 321,035 | ||||||
Deferred tax liability
|
– | 3,458 | ||||||
Unsettled trades to purchase securities
|
42,300 | 1,196 | ||||||
Other liabilities
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28,715 | 32,555 | ||||||
TOTAL LIABILITIES
|
3,137,600 | 3,044,890 | ||||||
Off-Balance-Sheet Arrangements, Commitments and Contingencies (Note 10)
|
||||||||
Shareholders' equity:
|
||||||||
Common stock - $1.25 par, 40,000,000 shares authorized, 19,382,489 shares issued in 2012 and 18,517,101 shares issued in 2011
|
24,228 | 23,146 | ||||||
Paid-in capital
|
193,994 | 176,791 | ||||||
Retained earnings
|
66,565 | 72,646 | ||||||
Treasury stock (2,023,838 shares at cost)
|
(28,377 | ) | (28,377 | ) | ||||
Accumulated other comprehensive income
|
6,946 | 14,721 | ||||||
TOTAL SHAREHOLDERS' EQUITY
|
263,356 | 258,927 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$ | 3,400,956 | $ | 3,303,817 |
(UNAUDITED)
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Three Months
|
Six Months
|
||||||||||||||
(in thousands, except per share data)
|
Ended June 30,
|
Ended June 30,
|
||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Interest income
|
||||||||||||||||
Loans
|
$ | 17,526 | $ | 17,130 | $ | 34,296 | $ | 34,401 | ||||||||
Investment securities – taxable
|
20 | 20 | 51 | 38 | ||||||||||||
Investment securities – tax-exempt
|
2,961 | 3,209 | 5,628 | 6,438 | ||||||||||||
Mortgage-backed and related securities
|
8,872 | 13,310 | 21,035 | 24,607 | ||||||||||||
FHLB stock and other investments
|
54 | 52 | 133 | 132 | ||||||||||||
Other interest earning assets
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9 | 3 | 15 | 13 | ||||||||||||
Total interest income
|
29,442 | 33,724 | 61,158 | 65,629 | ||||||||||||
Interest expense
|
||||||||||||||||
Deposits
|
2,765 | 4,051 | 6,160 | 8,087 | ||||||||||||
Short-term obligations
|
1,734 | 1,705 | 3,326 | 3,434 | ||||||||||||
Long-term obligations
|
2,398 | 3,401 | 5,131 | 7,282 | ||||||||||||
Total interest expense
|
6,897 | 9,157 | 14,617 | 18,803 | ||||||||||||
Net interest income
|
22,545 | 24,567 | 46,541 | 46,826 | ||||||||||||
Provision for loan losses
|
2,174 | 1,860 | 5,226 | 3,998 | ||||||||||||
Net interest income after provision for loan losses
|
20,371 | 22,707 | 41,315 | 42,828 | ||||||||||||
Noninterest income
|
||||||||||||||||
Deposit services
|
3,838 | 4,028 | 7,586 | 7,907 | ||||||||||||
Gain on sale of securities available for sale
|
3,297 | 3,920 | 9,269 | 5,471 | ||||||||||||
(Loss) gain on sale of securities carried at fair value through income
|
(13 | ) | 84 | (498 | ) | 338 | ||||||||||
Total other-than-temporary impairment losses
|
(21 | ) | – | (21 | ) | – | ||||||||||
Portion of loss recognized in other comprehensive income (before taxes)
|
(19 | ) | – | (160 | ) | – | ||||||||||
Net impairment losses recognized in earnings
|
(40 | ) | – | (181 | ) | – | ||||||||||
Fair value gains – securities
|
– | 2,456 | – | 4,083 | ||||||||||||
FHLB advance option impairment charges
|
(1,364 | ) | – | (1,836 | ) | – | ||||||||||
Gain on sale of loans
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298 | 282 | 429 | 565 | ||||||||||||
Trust income
|
669 | 645 | 1,346 | 1,296 | ||||||||||||
Bank owned life insurance income
|
254 | 261 | 520 | 547 | ||||||||||||
Other
|
1,123 | 959 | 2,234 | 2,064 | ||||||||||||
Total noninterest income
|
8,062 | 12,635 | 18,869 | 22,271 | ||||||||||||
Noninterest expense
|
||||||||||||||||
Salaries and employee benefits
|
12,142 | 11,622 | 23,975 | 23,313 | ||||||||||||
Occupancy expense
|
1,851 | 1,778 | 3,609 | 3,499 | ||||||||||||
Equipment expense
|
554 | 525 | 1,064 | 1,018 | ||||||||||||
Advertising, travel & entertainment
|
603 | 550 | 1,207 | 1,103 | ||||||||||||
ATM and debit card expense
|
287 | 266 | 566 | 481 | ||||||||||||
Director fees
|
273 | 200 | 541 | 391 | ||||||||||||
Supplies
|
222 | 161 | 381 | 385 | ||||||||||||
Professional fees
|
390 | 457 | 941 | 1,012 | ||||||||||||
Postage
|
182 | 186 | 357 | 365 | ||||||||||||
Telephone and communications
|
445 | 345 | 851 | 682 | ||||||||||||
FDIC Insurance
|
414 | 735 | 884 | 1,498 | ||||||||||||
Other
|
1,733 | 1,291 | 3,242 | 3,101 | ||||||||||||
Total noninterest expense
|
19,096 | 18,116 | 37,618 | 36,848 | ||||||||||||
Income before income tax expense
|
9,337 | 17,226 | 22,566 | 28,251 | ||||||||||||
Provision for income tax expense
|
1,608 | 4,100 | 4,698 | 5,886 | ||||||||||||
Net income
|
7,729 | 13,126 | 17,868 | 22,365 | ||||||||||||
Less: Net income attributable to the noncontrolling interest
|
– | (493 | ) | – | (1,358 | ) | ||||||||||
Net income attributable to Southside Bancshares, Inc.
|
$ | 7,729 | $ | 12,633 | $ | 17,868 | $ | 21,007 | ||||||||
Earnings per common share – basic
|
$ | 0.45 | $ | 0.73 | $ | 1.03 | $ | 1.22 | ||||||||
Earnings per common share – diluted
|
$ | 0.45 | $ | 0.73 | $ | 1.03 | $ | 1.22 | ||||||||
Dividends paid per common share
|
$ | 0.20 | $ | 0.17 | $ | 0.38 | $ | 0.34 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
Three Months
|
Six Months
|
||||||||||||||
(UNAUDITED)
|
Ended June 30,
|
Ended June 30,
|
||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Net income
|
$ | 7,729 | $ | 13,126 | $ | 17,868 | $ | 22,365 | ||||||||
Other comprehensive (loss) income:
|
||||||||||||||||
Unrealized holding (losses) gains on available for sale securities during the period
|
863 | 20,126 | (4,023 | ) | 26,280 | |||||||||||
Noncredit portion of other-than-temporary impairment losses on the AFS securities
|
19 | – | 160 | – | ||||||||||||
Reclassification adjustment for gain on sale of available for sale securities included in net income
|
(3,297 | ) | (3,920 | ) | (9,269 | ) | (5,471 | ) | ||||||||
Reclassification of other-than-temporary impairment charges on available for sale securities included in net income
|
40 | – | 181 | – | ||||||||||||
Amortization of net actuarial loss, included in net periodic benefit cost
|
512 | 366 | 1,011 | 732 | ||||||||||||
Amortization of prior service credit included in net periodic benefit cost
|
(12 | ) | (10 | ) | (22 | ) | (21 | ) | ||||||||
Other comprehensive (loss) income
|
(1,875 | ) | 16,562 | (11,962 | ) | 21,520 | ||||||||||
Income tax benefit (expense) related to other items of comprehensive income
|
656 | (5,797 | ) | 4,187 | (7,532 | ) | ||||||||||
Other comprehensive income (loss), net of tax
|
(1,219 | ) | 10,765 | (7,775 | ) | 13,988 | ||||||||||
Comprehensive income
|
$ | 6,510 | $ | 23,891 | $ | 10,093 | $ | 36,353 |
(UNAUDITED)
|
Accu-
|
|||||||||||||||||||||||||||
(in thousands, except share amounts)
|
mulated-
|
|||||||||||||||||||||||||||
Common
Stock
|
Paid In
Capital
|
Retained
Earnings
|
Treasury
Stock
|
Other
Compre-
hensive
Income
(Loss)
|
Noncon-
trolling
Interest
|
Total
Equity
|
||||||||||||||||||||||
Balance at December 31, 2010
|
$ | 22,075 | $ | 162,877 | $ | 64,179 | $ | (28,377 | ) | $ | (6,293 | ) | $ | 1,113 | $ | 215,574 | ||||||||||||
Net Income
|
21,007 | 1,358 | 22,365 | |||||||||||||||||||||||||
Other comprehensive income
|
13,988 | 13,988 | ||||||||||||||||||||||||||
Issuance of common stock (28,869 shares)
|
36 | 531 | 567 | |||||||||||||||||||||||||
Stock compensation expense
|
26 | 26 | ||||||||||||||||||||||||||
Tax benefits related to stock compensation
|
2 | 2 | ||||||||||||||||||||||||||
Capital distribution to noncontrolling interest shareholders
|
(475 | ) | (475 | ) | ||||||||||||||||||||||||
Dividends paid on common stock ($0.34 per share)
|
(5,453 | ) | (5,453 | ) | ||||||||||||||||||||||||
Stock dividend declared
|
981 | 15,014 | (15,995 | ) | – | |||||||||||||||||||||||
Balance at June 30, 2011
|
$ | 23,092 | $ | 178,450 | $ | 63,738 | $ | (28,377 | ) | $ | 7,695 | $ | 1,996 | $ | 246,594 | |||||||||||||
Balance at December 31, 2011
|
$ | 23,146 | $ | 176,791 | $ | 72,646 | $ | (28,377 | ) | $ | 14,721 | $ | – | $ | 258,927 | |||||||||||||
Net Income
|
17,868 | 17,868 | ||||||||||||||||||||||||||
Other comprehensive loss
|
(7,775 | ) | (7,775 | ) | ||||||||||||||||||||||||
Issuance of common stock (30,436 shares)
|
38 | 595 | 633 | |||||||||||||||||||||||||
Stock compensation expense
|
133 | 133 | ||||||||||||||||||||||||||
Tax benefits related to stock compensation
|
11 | 11 | ||||||||||||||||||||||||||
Net issuance of common stock under employee stock plans
|
10 | 39 | (54 | ) | (5 | ) | ||||||||||||||||||||||
Dividends paid on common stock ($0.38 per share)
|
(6,436 | ) | (6,436 | ) | ||||||||||||||||||||||||
Stock dividend declared
|
1,034 | 16,425 | (17,459 | ) | – | |||||||||||||||||||||||
Balance at June 30, 2012
|
$ | 24,228 | $ | 193,994 | $ | 66,565 | $ | (28,377 | ) | $ | 6,946 | $ | – | $ | 263,356 |
Six Months Ended
June 30,
|
||||||||
2012
|
2011
|
|||||||
OPERATING ACTIVITIES:
|
||||||||
Net income
|
$ | 17,868 | $ | 22,365 | ||||
Adjustments to reconcile net income to net cash provided by operations:
|
||||||||
Depreciation
|
1,778 | 1,646 | ||||||
Amortization of premium
|
22,864 | 16,782 | ||||||
Accretion of discount and loan fees
|
(2,399 | ) | (2,327 | ) | ||||
Provision for loan losses
|
5,226 | 3,998 | ||||||
Stock compensation expense
|
133 | 26 | ||||||
Deferred tax (benefit) expense
|
(2,743 | ) | 1,467 | |||||
Excess tax benefits from stock-based compensation
|
(11 | ) | – | |||||
Loss (gain) on sale of securities carried at fair value through income
|
498 | (338 | ) | |||||
Gain on sale of securities available for sale
|
(9,269 | ) | (5,471 | ) | ||||
Net other-than-temporary impairment losses
|
181 | – | ||||||
Fair value gain – securities
|
– | (4,083 | ) | |||||
FHLB advance option impairment charges
|
1,836 | – | ||||||
Loss on sale of assets
|
– | 3 | ||||||
Loss on retirement of assets
|
– | 90 | ||||||
Impairment on other real estate owned
|
– | 145 | ||||||
Gain on sale of other real estate owned
|
(3 | ) | (221 | ) | ||||
Net change in:
|
||||||||
Interest receivable
|
1,497 | (1,370 | ) | |||||
Other assets
|
27 | (2,593 | ) | |||||
Interest payable
|
(458 | ) | (575 | ) | ||||
Other liabilities
|
(2,393 | ) | 2,364 | |||||
Loans held for sale
|
2,105 | 3,845 | ||||||
Net cash provided by operating activities
|
36,737 | 35,753 | ||||||
INVESTING ACTIVITIES:
|
||||||||
Securities held to maturity:
|
||||||||
Purchases
|
– | (6,394 | ) | |||||
Maturities, calls and principal repayments
|
32,331 | 23,373 | ||||||
Securities available for sale:
|
||||||||
Purchases
|
(1,213,923 | ) | (350,206 | ) | ||||
Sales
|
448,725 | 326,701 | ||||||
Maturities, calls and principal repayments
|
163,809 | 138,176 | ||||||
Securities carried at fair value through income:
|
||||||||
Purchases
|
(57,606 | ) | (344,728 | ) | ||||
Sales
|
675,255 | 16,248 | ||||||
Maturities, calls and principal repayments
|
25,279 | 13,919 | ||||||
Proceeds from redemption of FHLB stock
|
10,292 | 14,811 | ||||||
Purchases of FHLB stock and other investments
|
(10,757 | ) | (5,623 | ) | ||||
Net (increase) decrease in loans
|
(100,529 | ) | 32,740 | |||||
Purchases of premises and equipment
|
(1,433 | ) | (2,169 | ) | ||||
Proceeds from sales of premises and equipment
|
– | 6 | ||||||
Proceeds from sales of other real estate owned
|
112 | 306 | ||||||
Proceeds from sales of repossessed assets
|
2,070 | 2,767 | ||||||
Net cash used in investing activities
|
(26,375 | ) | (140,073 | ) |
Six Months Ended
June 30,
|
||||||||
2012
|
2011
|
|||||||
FINANCING ACTIVITIES:
|
||||||||
Net increase in demand and savings accounts
|
198,420 | 87,107 | ||||||
Net (decrease) increase in certificates of deposit
|
(124,695 | ) | 22,511 | |||||
Net decrease in federal funds purchased and repurchase agreements
|
(997 | ) | (767 | ) | ||||
Proceeds from FHLB advances
|
9,133,164 | 3,349,032 | ||||||
Repayment of FHLB advances
|
(9,147,464 | ) | (3,378,823 | ) | ||||
Net capital distributions to noncontrolling interest in consolidated entities
|
– | (475 | ) | |||||
Excess tax benefits from stock-based compensation
|
11 | 2 | ||||||
Proceeds from the issuance of common stock
|
633 | 567 | ||||||
Dividends paid
|
(6,436 | ) | (5,453 | ) | ||||
Net cash provided by financing activities
|
52,636 | 73,701 | ||||||
Net increase (decrease) in cash and cash equivalents
|
62,998 | (30,619 | ) | |||||
Cash and cash equivalents at beginning of period
|
43,238 | 79,073 | ||||||
Cash and cash equivalents at end of period
|
$ | 106,236 | $ | 48,454 | ||||
SUPPLEMENTAL DISCLOSURES FOR CASH FLOW INFORMATION:
|
||||||||
Interest paid
|
$ | 15,075 | $ | 19,378 | ||||
Income taxes paid
|
$ | 9,200 | $ | 3,500 | ||||
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||
Acquisition of other repossessed assets and real estate through foreclosure
|
$ | 2,621 | $ | 2,779 | ||||
Adjustment to pension liability
|
$ | (989 | ) | $ | (711 | ) | ||
5% stock dividend
|
$ | 17,459 | $ | 15,995 | ||||
Unsettled trades to purchase securities
|
$ | (42,300 | ) | $ | (9,145 | ) | ||
Unsettled trades to sell securities
|
$ | 1,071 | $ | 31,919 |
1.
|
Basis of Presentation
|
2.
|
Earnings Per Share
|
Three Months
|
Six Months
|
|||||||||||||||
Ended June 30,
|
Ended June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Basic and Diluted Earnings:
|
||||||||||||||||
Net income – Southside Bancshares, Inc.
|
$ | 7,729 | $ | 12,633 | $ | 17,868 | $ | 21,007 | ||||||||
Basic weighted-average shares outstanding
|
17,341 | 17,263 | 17,334 | 17,255 | ||||||||||||
Add: Stock options
|
12 | 6 | 10 | 5 | ||||||||||||
Diluted weighted-average shares outstanding
|
17,353 | 17,269 | 17,344 | 17,260 | ||||||||||||
Basic Earnings Per Share:
|
||||||||||||||||
Net Income - Southside Bancshares, Inc.
|
$ | 0.45 | $ | 0.73 | $ | 1.03 | $ | 1.22 | ||||||||
Diluted Earnings Per Share:
|
||||||||||||||||
Net Income - Southside Bancshares, Inc.
|
$ | 0.45 | $ | 0.73 | $ | 1.03 | $ | 1.22 |
3.
|
Comprehensive (Loss) Income
|
Six Months Ended June 30, 2012
|
||||||||||||
Before-Tax
|
Tax (Expense)
|
Net-of-Tax
|
||||||||||
Amount
|
Benefit
|
Amount
|
||||||||||
Unrealized losses on securities:
|
||||||||||||
Unrealized holding losses arising during period
|
$ | (4,023 | ) | $ | 1,408 | $ | (2,615 | ) | ||||
Noncredit portion of other-than-temporary impairment losses on the AFS securities
|
160 | (56 | ) | 104 | ||||||||
Less: reclassification adjustment for gain on sale of AFS securities included in net income
|
9,269 | (3,244 | ) | 6,025 | ||||||||
Less: reclassification of other-than-temporary impairment charges of AFS securities included in net income
|
(181 | ) | 63 | (118 | ) | |||||||
Net unrealized losses on securities
|
(12,951 | ) | 4,533 | (8,418 | ) | |||||||
Change in pension plans
|
989 | (346 | ) | 643 | ||||||||
Other comprehensive loss
|
$ | (11,962 | ) | $ | 4,187 | $ | (7,775 | ) |
Three Months Ended June 30, 2012
|
||||||||||||
Before-Tax
|
Tax (Expense)
|
Net-of-Tax
|
||||||||||
Amount
|
Benefit
|
Amount
|
||||||||||
Unrealized losses on securities:
|
||||||||||||
Unrealized holding gains arising during period
|
$ | 863 | $ | (302 | ) | $ | 561 | |||||
Noncredit portion of other-than-temporary impairment losses on the AFS securities
|
19 | (7 | ) | 12 | ||||||||
Less: reclassification adjustment for gain on sale of AFS securities included in net income
|
3,297 | (1,154 | ) | 2,143 | ||||||||
Less: reclassification of other-than-temporary impairment charges of AFS securities included in net income
|
(40 | ) | 14 | (26 | ) | |||||||
Net unrealized losses on securities
|
(2,375 | ) | 831 | (1,544 | ) | |||||||
Change in pension plans
|
500 | (175 | ) | 325 | ||||||||
Other comprehensive loss
|
$ | (1,875 | ) | $ | 656 | $ | (1,219 | ) |
Six Months Ended June 30, 2011
|
||||||||||||
Before-Tax
|
Tax
|
Net-of-Tax
|
||||||||||
Amount
|
Expense
|
Amount
|
||||||||||
Unrealized gains on securities:
|
||||||||||||
Unrealized holding gains arising during period
|
$ | 26,280 | $ | (9,198 | ) | $ | 17,082 | |||||
Less: reclassification adjustment for gain on sale of AFS securities included in net income
|
5,471 | (1,915 | ) | 3,556 | ||||||||
Net unrealized gains on securities
|
20,809 | (7,283 | ) | 13,526 | ||||||||
Change in pension plans
|
711 | (249 | ) | 462 | ||||||||
Other comprehensive income
|
$ | 21,520 | $ | (7,532 | ) | $ | 13,988 |
Three Months Ended June 30, 2011
|
||||||||||||
Before-Tax
|
Tax
|
Net-of-Tax
|
||||||||||
Amount
|
Expense
|
Amount
|
||||||||||
Unrealized gains on securities:
|
||||||||||||
Unrealized holding gains arising during period
|
$ | 20,126 | $ | (7,044 | ) | $ | 13,082 | |||||
Less: reclassification adjustment for gain on sale of AFS securities included in net income
|
3,920 | (1,372 | ) | 2,548 | ||||||||
Net unrealized gains on securities
|
16,206 | (5,672 | ) | 10,534 | ||||||||
Change in pension plans
|
356 | (125 | ) | 231 | ||||||||
Other comprehensive income
|
$ | 16,562 | $ | (5,797 | ) | $ | 10,765 |
4.
|
Securities
|
June 30, 2012
|
||||||||||||||||||||
Gross | ||||||||||||||||||||
Amortized
|
Unrealized
|
Gross Unrealized Losses
|
Estimated
|
|||||||||||||||||
AVAILABLE FOR SALE:
|
Cost | Gains | OTTI | Other | Fair Value | |||||||||||||||
Investment Securities:
|
||||||||||||||||||||
State and Political Subdivisions
|
$ | 390,601 | $ | 24,699 | $ | – | $ | 403 | $ | 414,897 | ||||||||||
Other Stocks and Bonds
|
5,404 | 35 | 2,121 | – | 3,318 | |||||||||||||||
Mortgage-backed Securities:
|
||||||||||||||||||||
U.S. Government Agencies
|
114,274 | 3,556 | – | 85 | 117,745 | |||||||||||||||
Government-Sponsored Enterprises
|
1,070,507 | 18,033 | – | 1,526 | 1,087,014 | |||||||||||||||
Total
|
$ | 1,580,786 | $ | 46,323 | $ | 2,121 | $ | 2,014 | $ | 1,622,974 |
June 30, 2012
|
||||||||||||||||||||
Gross | ||||||||||||||||||||
|
Amortized
|
Unrealized
|
Gross Unrealized Losses
|
Estimated
|
||||||||||||||||
HELD TO MATURITY:
|
Cost | Gains | OTTI | Other | Fair Value | |||||||||||||||
Investment Securities:
|
||||||||||||||||||||
State and Political Subdivisions
|
$ | 1,010 | $ | 122 | $ | – | $ | – | $ | 1,132 | ||||||||||
Mortgage-backed Securities:
|
||||||||||||||||||||
U.S. Government Agencies
|
21,763 | 1,301 | – | 11 | 23,053 | |||||||||||||||
Government-Sponsored Enterprises
|
308,375 | 10,738 | – | 4 | 319,109 | |||||||||||||||
Total
|
$ | 331,148 | $ | 12,161 | $ | – | $ | 15 | $ | 343,294 |
December 31, 2011
|
||||||||||||||||||||
Gross | ||||||||||||||||||||
Amortized
|
Unrealized
|
Gross Unrealized Losses
|
Estimated
|
|||||||||||||||||
AVAILABLE FOR SALE:
|
Cost | Gains | OTTI | Other | Fair Value | |||||||||||||||
Investment Securities:
|
||||||||||||||||||||
State and Political Subdivisions
|
$ | 251,281 | $ | 31,221 | $ | – | $ | 45 | $ | 282,457 | ||||||||||
Other Stocks and Bonds
|
2,925 | – | 2,426 | – | 499 | |||||||||||||||
Mortgage-backed Securities:
|
||||||||||||||||||||
U.S. Government Agencies
|
99,974 | 7,158 | – | 80 | 107,052 | |||||||||||||||
Government-Sponsored Enterprises
|
589,687 | 20,127 | – | 740 | 609,074 | |||||||||||||||
Total
|
$ | 943,867 | $ | 58,506 | $ | 2,426 | $ | 865 | $ | 999,082 |
December 31, 2011
|
||||||||||||||||||||
Gross | ||||||||||||||||||||
Amortized
|
Unrealized
|
Gross Unrealized Losses
|
Estimated
|
|||||||||||||||||
HELD TO MATURITY:
|
Cost | Gains | OTTI | Other | Fair Value | |||||||||||||||
Investment Securities:
|
||||||||||||||||||||
State and Political Subdivisions
|
$ | 1,010 | $ | 196 | $ | – | $ | – | $ | 1,206 | ||||||||||
Other Stocks and Bonds
|
486 | 15 | – | – | 501 | |||||||||||||||
Mortgage-backed Securities:
|
||||||||||||||||||||
U.S. Government Agencies
|
22,999 | 1,159 | – | 43 | 24,115 | |||||||||||||||
Government-Sponsored Enterprises
|
342,632 | 14,848 | – | 11 | 357,469 | |||||||||||||||
Total
|
$ | 367,127 | $ | 16,218 | $ | – | $ | 54 | $ | 383,291 |
At June 30,
|
At December 31,
|
|||||||
2012
|
2011
|
|||||||
Mortgage-backed Securities:
|
||||||||
U.S. Government Agencies
|
$ | – | $ | 30,413 | ||||
Government-Sponsored Enterprises
|
– | 617,346 | ||||||
Total
|
$ | – | $ | 647,759 |
Six Months Ended June 30, | ||||||||
2012 | 2011 | |||||||
Net (loss) gain on sales transactions
|
$ | (498 | ) | $ | 338 | |||
Net mark-to-market gains
|
– | 4,083 | ||||||
Net (loss) gain on securities carried at fair value through income
|
$ | (498 | ) | $ | 4,421 |
Three Months Ended June 30, | ||||||||
2012 | 2011 | |||||||
Net (loss) gain on sales transactions
|
$ | (13 | ) | $ | 84 | |||
Net mark-to-market gains
|
– | 2,456 | ||||||
Net (loss) gain on securities carried at fair value through income
|
$ | (13 | ) | $ | 2,540 |
Less Than 12 Months
|
More Than 12 Months
|
Total
|
||||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||
Fair Value
|
Loss
|
Fair Value
|
Loss
|
Fair Value
|
Loss
|
|||||||||||||||||||
As of June 30, 2012:
|
||||||||||||||||||||||||
Available for Sale
|
||||||||||||||||||||||||
State and Political Subdivisions
|
$ | 66,858 | $ | 403 | $ | – | $ | – | $ | 66,858 | $ | 403 | ||||||||||||
Other Stocks and Bonds
|
– | – | 623 | 2,121 | 623 | 2,121 | ||||||||||||||||||
Mortgage-Backed Securities
|
420,684 | 1,587 | 2,409 | 24 | 423,093 | 1,611 | ||||||||||||||||||
Total
|
$ | 487,542 | $ | 1,990 | $ | 3,032 | $ | 2,145 | $ | 490,574 | $ | 4,135 | ||||||||||||
Held to Maturity
|
||||||||||||||||||||||||
Mortgage-Backed Securities
|
$ | 3,455 | $ | 12 | $ | 375 | $ | 3 | $ | 3,830 | $ | 15 | ||||||||||||
Total
|
$ | 3,455 | $ | 12 | $ | 375 | $ | 3 | $ | 3,830 | $ | 15 | ||||||||||||
As of December 31, 2011:
|
||||||||||||||||||||||||
Available for Sale
|
||||||||||||||||||||||||
State and Political Subdivisions
|
$ | 1,668 | $ | 42 | $ | 307 | $ | 3 | $ | 1,975 | $ | 45 | ||||||||||||
Other Stocks and Bonds
|
– | – | 499 | 2,426 | 499 | 2,426 | ||||||||||||||||||
Mortgage-Backed Securities
|
148,171 | 754 | 5,322 | 66 | 153,493 | 820 | ||||||||||||||||||
Total
|
$ | 149,839 | $ | 796 | $ | 6,128 | $ | 2,495 | $ | 155,967 | $ | 3,291 | ||||||||||||
Held to Maturity
|
||||||||||||||||||||||||
Mortgage-Backed Securities
|
$ | 8,918 | $ | 54 | $ | – | $ | – | $ | 8,918 | $ | 54 | ||||||||||||
Total
|
$ | 8,918 | $ | 54 | $ | – | $ | – | $ | 8,918 | $ | 54 |
TRUP
|
Par
|
Credit
Loss
|
Amortized
Cost
|
Fair
Value
|
Tranche
|
Credit
Rating
|
|||||||||||||||||
1 | $ | 2,000 | $ | 1,256 | $ | 744 | $ | 117 | C1 |
Ca
|
|||||||||||||
2 | 2,000 | 550 | 1,450 | 234 | B1 | C | |||||||||||||||||
3 | 2,000 | 1,450 | 550 | 272 | B2 | C | |||||||||||||||||
$ | 6,000 | $ | 3,256 | $ | 2,744 | $ | 623 |
Six Months Ended
|
||||||||
June 30, 2012
|
June 30, 2011
|
|||||||
Balance, beginning of period
|
$ | 3,075 | $ | 3,075 | ||||
Additions for credit losses recognized on debt securities that had no previous impairment losses
|
– | – | ||||||
Additions for credit losses recognized on debt securities that had previously incurred impairment losses
|
181 | – | ||||||
Balance, end of period
|
$ | 3,256 | $ | 3,075 |
Three Months Ended
|
||||||||
June 30, 2012
|
June 30, 2011
|
|||||||
Balance, beginning of period
|
$ | 3,216 | $ | 3,075 | ||||
Additions for credit losses recognized on debt securities that had no previous impairment losses
|
– | – | ||||||
Additions for credit losses recognized on debt securities that had previously incurred impairment losses
|
40 | – | ||||||
Balance, end of period
|
$ | 3,256 | $ | 3,075 |
Six Months Ended
|
||||||||
June 30, 2012
|
June 30, 2011
|
|||||||
U.S. Treasury
|
$ | – | $ | 6 | ||||
State and Political Subdivisions
|
5,642 | 6,452 | ||||||
Other Stocks and Bonds
|
37 | 18 | ||||||
Mortgage-backed Securities
|
21,035 | 24,607 | ||||||
Total interest income on securities
|
$ | 26,714 | $ | 31,083 |
Three Months Ended
|
||||||||
June 30, 2012
|
June 30, 2011
|
|||||||
U.S. Treasury
|
$ | – | $ | 5 | ||||
State and Political Subdivisions
|
2,968 | 3,215 | ||||||
Other Stocks and Bonds
|
13 | 9 | ||||||
Mortgage-backed Securities
|
8,872 | 13,310 | ||||||
Total interest income on securities
|
$ | 11,853 | $ | 16,539 |
June 30, 2012
|
||||||||
Amortized Cost
|
Fair Value
|
|||||||
Available for sale securities:
|
(in thousands)
|
|||||||
Investment Securities
|
||||||||
Due in one year or less
|
$ | 5,106 | $ | 5,166 | ||||
Due after one year through five years
|
11,273 | 11,589 | ||||||
Due after five years through ten years
|
58,021 | 60,334 | ||||||
Due after ten years
|
321,605 | 341,126 | ||||||
396,005 | 418,215 | |||||||
Mortgage-backed securities
|
1,184,781 | 1,204,759 | ||||||
Total
|
$ | 1,580,786 | $ | 1,622,974 |
June 30, 2012
|
||||||||
Amortized Cost
|
Fair Value
|
|||||||
Held to maturity securities:
|
(in thousands)
|
|||||||
Investment Securities
|
||||||||
Due in one year or less
|
$ | – | $ | – | ||||
Due after one year through five years
|
– | – | ||||||
Due after five years through ten years
|
– | – | ||||||
Due after ten years
|
1,010 | 1,132 | ||||||
1,010 | 1,132 | |||||||
Mortgage-backed securities
|
330,138 | 342,162 | ||||||
Total
|
$ | 331,148 | $ | 343,294 |
5.
|
Loans and Allowance for Probable Loan Losses
|
At
|
At
|
|||||||
June 30,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Real Estate Loans:
|
||||||||
Construction
|
$ | 105,675 | $ | 111,361 | ||||
1-4 Family residential
|
325,720 | 247,479 | ||||||
Other
|
214,885 | 206,519 | ||||||
Commercial loans
|
146,499 | 143,552 | ||||||
Municipal loans
|
215,256 | 207,261 | ||||||
Loans to individuals
|
175,165 | 171,058 | ||||||
Total loans
|
1,183,200 | 1,087,230 | ||||||
Less: Allowance for loan losses
|
20,194 | 18,540 | ||||||
Net loans
|
$ | 1,163,006 | $ | 1,068,690 |
|
·
|
Satisfactory (Rating 1 – 4) – This rating is assigned to all satisfactory loans. This category, by definition, should consist of completely acceptable credit. Credit and collateral exceptions should not be present, although their presence would not necessarily prohibit a loan from being rated Satisfactory, if deficiencies are in process of correction. These loans will not be included in the Watch List.
|
|
·
|
Satisfactory (Rating 5) – Special Treatment Required – (Pass Watch) – These loans require some degree of special treatment, but not due to credit quality. This category does not include loans specially mentioned or adversely classified by the Loan Review Officer or regulatory authorities; however, particular attention must be accorded such credits due to characteristics such as:
|
|
·
|
A lack of, or abnormally extended payment program;
|
|
·
|
A heavy degree of concentration of collateral without sufficient margin;
|
|
·
|
A vulnerability to competition through lesser or extensive financial leverage; and
|
|
·
|
A dependence on a single, or few customers, or sources of supply and materials without suitable substitutes or alternatives.
|
|
·
|
Special Mention (Rating 6) – A Special Mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.
|
|
·
|
Substandard (Rating 7) – Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
|
|
·
|
Doubtful (Rating 8) – Loans classified as Doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation, in full, on the basis of currently known facts, conditions and values, highly questionable and improbable.
|
|
·
|
Loss (Rating 9) – Loans classified as Loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future.
|
|
·
|
Changes in lending policies or procedures, including underwriting, collection, charge-off, and recovery procedures;
|
|
·
|
Changes in local, regional and national economic and business conditions including entry into new markets;
|
|
·
|
Changes in the volume or type of credit extended;
|
|
·
|
Changes in the experience, ability, and depth of lending management;
|
|
·
|
Changes in the volume and severity of past due, nonaccrual, restructured, or classified loans;
|
|
·
|
Changes in loan review or Board oversight; and
|
|
·
|
Changes in the level of concentrations of credit.
|
Six Months Ended June 30, 2012
|
||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||
Construction
|
1-4 Family
Residential
|
Other
|
Commercial
Loans
|
Municipal
Loans
|
Loans to
Individuals
|
Unallocated
|
Total
|
|||||||||||||||||||||||||
Balance at beginning of period
|
$ | 2,620 | $ | 1,957 | $ | 3,051 | $ | 2,877 | $ | 619 | $ | 6,244 | $ | 1,172 | $ | 18,540 | ||||||||||||||||
Provision (reversal) for loan losses
|
(178 | ) | 396 | 177 | 433 | 12 | 4,419 | (33 | ) | 5,226 | ||||||||||||||||||||||
Loans charged off
|
(15 | ) | (53 | ) | (93 | ) | (375 | ) | – | (4,466 | ) | – | (5,002 | ) | ||||||||||||||||||
Recoveries of loans charged off
|
47 | 160 | 3 | 253 | – | 967 | – | 1,430 | ||||||||||||||||||||||||
Balance at end of period
|
$ | 2,474 | $ | 2,460 | $ | 3,138 | $ | 3,188 | $ | 631 | $ | 7,164 | $ | 1,139 | $ | 20,194 |
Three Months Ended June 30, 2012
|
||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||
Construction
|
1-4 Family
Residential
|
Other
|
Commercial
Loans
|
Municipal
Loans
|
Loans to
Individuals
|
Unallocated
|
Total
|
|||||||||||||||||||||||||
Balance at beginning of period
|
$ | 2,682 | $ | 2,290 | $ | 3,065 | $ | 3,342 | $ | 608 | $ | 6,918 | $ | 1,169 | $ | 20,074 | ||||||||||||||||
Provision (reversal) for loan losses
|
(227 | ) | 57 | 165 | 78 | 23 | 2,108 | (30 | ) | 2,174 | ||||||||||||||||||||||
Loans charged off
|
(7 | ) | (42 | ) | (93 | ) | (287 | ) | – | (2,343 | ) | – | (2,772 | ) | ||||||||||||||||||
Recoveries of loans charged off
|
26 | 155 | 1 | 55 | – | 481 | – | 718 | ||||||||||||||||||||||||
Balance at end of period
|
$ | 2,474 | $ | 2,460 | $ | 3,138 | $ | 3,188 | $ | 631 | $ | 7,164 | $ | 1,139 | $ | 20,194 |
Six Months Ended June 30, 2011
|
||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||
Construction
|
1-4 Family
Residential
|
Other
|
Commercial
Loans
|
Municipal
Loans
|
Loans to
Individuals
|
Unallocated
|
Total
|
|||||||||||||||||||||||||
Balance at beginning of period
|
$ | 2,585 | $ | 1,988 | $ | 3,354 | $ | 3,746 | $ | 607 | $ | 7,978 | $ | 453 | $ | 20,711 | ||||||||||||||||
Provision (reversal) for loan losses
|
210 | 181 | (524 | ) | (231 | ) | 3 | 3,288 | 1,071 | 3,998 | ||||||||||||||||||||||
Loans charged off
|
(9 | ) | (383 | ) | (80 | ) | (927 | ) | – | (5,672 | ) | – | (7,071 | ) | ||||||||||||||||||
Recoveries of loans charged off
|
14 | 93 | 273 | 328 | – | 1,063 | – | 1,771 | ||||||||||||||||||||||||
Balance at end of period
|
$ | 2,800 | $ | 1,879 | $ | 3,023 | $ | 2,916 | $ | 610 | $ | 6,657 | $ | 1,524 | $ | 19,409 |
Three Months Ended June 30, 2011
|
||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||
Construction
|
1-4 Family
Residential
|
Other
|
Commercial
Loans
|
Municipal
Loans
|
Loans to
Individuals
|
Unallocated
|
Total
|
|||||||||||||||||||||||||
Balance at beginning of period
|
$ | 2,832 | $ | 1,808 | $ | 3,321 | $ | 3,497 | $ | 605 | $ | 7,121 | $ | 596 | $ | 19,780 | ||||||||||||||||
Provision (reversal) for loan losses
|
(37 | ) | 107 | (376 | ) | (421 | ) | 5 | 1,654 | 928 | 1,860 | |||||||||||||||||||||
Loans charged off
|
(9 | ) | (64 | ) | – | (377 | ) | – | (2,573 | ) | – | (3,023 | ) | |||||||||||||||||||
Recoveries of loans charged off
|
14 | 28 | 78 | 217 | – | 455 | – | 792 | ||||||||||||||||||||||||
Balance at end of period
|
$ | 2,800 | $ | 1,879 | $ | 3,023 | $ | 2,916 | $ | 610 | $ | 6,657 | $ | 1,524 | $ | 19,409 |
As of June 30, 2012
|
||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||
Construction
|
1-4 Family
Residential
|
Other
|
Commercial
Loans
|
Municipal
Loans
|
Loans to
Individuals
|
Unallocated
|
Total
|
|||||||||||||||||||||||||
Ending balance – individually evaluated for impairment
|
$ | 695 | $ | 901 | $ | 512 | $ | 1,383 | $ | 102 | $ | 340 | $ | – | $ | 3,933 | ||||||||||||||||
Ending balance – collectively evaluated for impairment
|
1,779 | 1,559 | 2,626 | 1,805 | 529 | 6,824 | 1,139 | 16,261 | ||||||||||||||||||||||||
Balance at end of period
|
$ | 2,474 | $ | 2,460 | $ | 3,138 | $ | 3,188 | $ | 631 | $ | 7,164 | $ | 1,139 | $ | 20,194 |
As of December 31, 2011
|
||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||
Construction
|
1-4 Family
Residential
|
Other
|
Commercial
Loans
|
Municipal
Loans
|
Loans to
Individuals
|
Unallocated
|
Total
|
|||||||||||||||||||||||||
Ending balance – individually evaluated for impairment
|
$ | 888 | $ | 788 | $ | 511 | $ | 1,108 | $ | 110 | $ | 347 | $ | – | $ | 3,752 | ||||||||||||||||
Ending balance – collectively evaluated for impairment
|
1,732 | 1,169 | 2,540 | 1,769 | 509 | 5,897 | 1,172 | 14,788 | ||||||||||||||||||||||||
Balance at end of period
|
$ | 2,620 | $ | 1,957 | $ | 3,051 | $ | 2,877 | $ | 619 | $ | 6,244 | $ | 1,172 | $ | 18,540 |
Six Months Ended
June 30,
|
||||||||
2012
|
2011
|
|||||||
Reserve For Unfunded Loan Commitments:
|
||||||||
Balance at beginning of period
|
$
|
26
|
$
|
30
|
||||
Provision (reversal) for losses on unfunded loan commitments
|
(23
|
)
|
(8
|
)
|
||||
Balance at end of period
|
$
|
3
|
$
|
22
|
Three Months Ended
June 30,
|
||||||||
2012
|
2011
|
|||||||
Reserve For Unfunded Loan Commitments:
|
||||||||
Balance at beginning of period
|
$
|
26
|
$
|
30
|
||||
Provision (reversal) for losses on unfunded loan commitments
|
(23
|
)
|
(8
|
)
|
||||
Balance at end of period
|
$
|
3
|
$
|
22
|
Real Estate
|
||||||||||||||||||||||||||||
June 30, 2012
|
Construction
|
1-4 Family
Residential
|
Other
|
Commercial
Loans
|
Municipal
Loans
|
Loans to
Individuals
|
Total
|
|||||||||||||||||||||
Loans individually evaluated for impairment
|
$ | 4,883 | $ | 12,120 | $ | 10,986 | $ | 5,821 | $ | 620 | $ | 1,261 | $ | 35,691 | ||||||||||||||
Loans collectively evaluated for impairment
|
100,792 | 313,600 | 203,899 | 140,678 | 214,636 | 173,904 | 1,147,509 | |||||||||||||||||||||
Total ending loan balance
|
$ | 105,675 | $ | 325,720 | $ | 214,885 | $ | 146,499 | $ | 215,256 | $ | 175,165 | $ | 1,183,200 |
Real Estate
|
||||||||||||||||||||||||||||
December 31, 2011
|
Construction
|
1-4 Family
Residential
|
Other
|
Commercial
Loans
|
Municipal
Loans
|
Loans to
Individuals
|
Total
|
|||||||||||||||||||||
Loans individually evaluated for impairment
|
$ | 6,274 | $ | 12,453 | $ | 9,394 | $ | 5,986 | $ | 651 | $ | 1,320 | $ | 36,078 | ||||||||||||||
Loans collectively evaluated for impairment
|
105,087 | 235,026 | 197,125 | 137,566 | 206,610 | 169,738 | 1,051,152 | |||||||||||||||||||||
Total ending loan balance
|
$ | 111,361 | $ | 247,479 | $ | 206,519 | $ | 143,552 | $ | 207,261 | 171,058 | $ | 1,087,230 |
June 30, 2012
|
Pass
|
Pass
Watch
|
Special
Mention
|
Substandard
|
Doubtful
|
Loss
|
Total
|
|||||||||||||||||||||
Real Estate Loans:
|
||||||||||||||||||||||||||||
Construction
|
$ | 100,792 | $ | – | $ | 20 | $ | 4,736 | $ | 127 | $ | – | $ | 105,675 | ||||||||||||||
1-4 Family residential
|
313,600 | 1,736 | 3,942 | 5,374 | 1,068 | – | 325,720 | |||||||||||||||||||||
Other
|
203,899 | 3,387 | 4,173 | 3,280 | 146 | – | 214,885 | |||||||||||||||||||||
Commercial loans
|
140,678 | 957 | – | 4,187 | 674 | 3 | 146,499 | |||||||||||||||||||||
Municipal loans
|
214,636 | 232 | – | 388 | – | – | 215,256 | |||||||||||||||||||||
Loans to individuals
|
173,904 | 39 | – | 930 | 266 | 26 | 175,165 | |||||||||||||||||||||
Total
|
$ | 1,147,509 | $ | 6,351 | $ | 8,135 | $ | 18,895 | $ | 2,281 | $ | 29 | $ | 1,183,200 |
December 31, 2011
|
Pass
|
Pass
Watch
|
Special
Mention
|
Substandard
|
Doubtful
|
Loss
|
Total
|
|||||||||||||||||||||
Real Estate Loans:
|
||||||||||||||||||||||||||||
Construction
|
$ | 105,087 | $ | 785 | $ | 20 | $ | 5,285 | $ | 184 | $ | – | $ | 111,361 | ||||||||||||||
1-4 Family residential
|
235,026 | 1,763 | 5,299 | 4,345 | 1,046 | – | 247,479 | |||||||||||||||||||||
Other
|
197,126 | 2,911 | 2,877 | 3,475 | 130 | – | 206,519 | |||||||||||||||||||||
Commercial loans
|
137,565 | 908 | 242 | 4,772 | 55 | 10 | 143,552 | |||||||||||||||||||||
Municipal loans
|
206,610 | 231 | – | 420 | – | – | 207,261 | |||||||||||||||||||||
Loans to individuals
|
169,738 | 81 | – | 976 | 236 | 27 | 171,058 | |||||||||||||||||||||
Total
|
$ | 1,051,152 | $ | 6,679 | $ | 8,438 | $ | 19,273 | $ | 1,651 | $ | 37 | $ | 1,087,230 |
At
June 30,
2012
|
At
December 31,
2011
|
|||||||
Nonaccrual loans
|
$ | 10,077 | $ | 10,299 | ||||
Accruing loans past due more than 90 days
|
1 | 5 | ||||||
Restructured loans
|
2,352 | 2,109 | ||||||
Other real estate owned
|
960 | 453 | ||||||
Repossessed assets
|
388 | 322 | ||||||
Total Nonperforming Assets
|
$ | 13,778 | $ | 13,188 |
June 30, 2012
|
December 31, 2011
|
|||||||||||||||
Nonaccrual
|
Accruing Loans
Past Due More
Than 90 Days
|
Nonaccrual
|
Accruing Loans
Past Due More
Than 90 Days
|
|||||||||||||
Real Estate Loans:
|
||||||||||||||||
Construction
|
$ | 3,149 | $ | – | $ | 3,894 | $ | – | ||||||||
1-4 Family residential
|
2,320 | – | 2,362 | – | ||||||||||||
Other
|
865 | – | 781 | – | ||||||||||||
Commercial loans
|
1,858 | – | 1,353 | – | ||||||||||||
Loans to individuals
|
1,885 | 1 | 1,909 | 5 | ||||||||||||
Total
|
$ | 10,077 | $ | 1 | $ | 10,299 | $ | 5 |
June 30, 2012
|
||||||||||||||||||||||||
30-59 Days
Past Due
|
60-89 Days
Past Due
|
Greater than
90 Days
Past Due
|
Total Past
Due
|
Loans Not
Past Due
|
Total
|
|||||||||||||||||||
Real Estate Loans:
|
||||||||||||||||||||||||
Construction
|
$ | 271 | $ | 61 | $ | 3,149 | $ | 3,481 | $ | 102,194 | $ | 105,675 | ||||||||||||
1-4 Family residential
|
143 | 466 | 2,320 | 2,929 | 322,791 | 325,720 | ||||||||||||||||||
Other
|
180 | 236 | 865 | 1,281 | 213,604 | 214,885 | ||||||||||||||||||
Commercial loans
|
353 | 393 | 1,858 | 2,604 | 143,895 | 146,499 | ||||||||||||||||||
Municipal loans
|
– | – | – | – | 215,256 | 215,256 | ||||||||||||||||||
Loans to individuals
|
3,019 | 718 | 1,886 | 5,623 | 169,542 | 175,165 | ||||||||||||||||||
Total
|
$ | 3,966 | $ | 1,874 | $ | 10,078 | $ | 15,918 | $ | 1,167,282 | $ | 1,183,200 |
December 31, 2011
|
||||||||||||||||||||||||
30-59 Days
Past Due
|
60-89 Days
Past Due
|
Greater than
90 Days
Past Due
|
Total Past
Due
|
Loans Not
Past Due
|
Total
|
|||||||||||||||||||
Real Estate Loans:
|
||||||||||||||||||||||||
Construction
|
$ | 185 | $ | 146 | $ | 3,894 | $ | 4,225 | $ | 107,136 | $ | 111,361 | ||||||||||||
1-4 Family residential
|
4,289 | 1,051 | 2,362 | 7,702 | 239,777 | 247,479 | ||||||||||||||||||
Other
|
1,129 | 296 | 781 | 2,206 | 204,313 | 206,519 | ||||||||||||||||||
Commercial loans
|
1,353 | 129 | 1,353 | 2,835 | 140,717 | 143,552 | ||||||||||||||||||
Municipal loans
|
– | – | – | – | 207,261 | 207,261 | ||||||||||||||||||
Loans to individuals
|
4,614 | 960 | 1,914 | 7,488 | 163,570 | 171,058 | ||||||||||||||||||
Total
|
$ | 11,570 | $ | 2,582 | $ | 10,304 | $ | 24,456 | $ | 1,062,774 | $ | 1,087,230 |
June 30,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Loans with no allocated allowance for loan losses
|
$ | 1 | $ | 4 | ||||
Loans with allocated allowance for loan losses
|
12,395 | 12,366 | ||||||
Total
|
$ | 12,396 | $ | 12,370 | ||||
Amount of the allowance for loan losses allocated
|
$ | 2,645 | $ | 2,639 |
June 30, 2012
|
June 30, 2011
|
|||||||||||||||
Interest
Income
Recognized
|
Accruing
Interest at
Original
Contracted
Rate
|
Interest
Income
Recognized
|
Accruing
Interest at
Original
Contracted
Rate
|
|||||||||||||
Real Estate Loans:
|
||||||||||||||||
Construction
|
$ | – | $ | 128 | $ | 6 | $ | 143 | ||||||||
1-4 Family residential
|
9 | 80 | 47 | 85 | ||||||||||||
Other
|
20 | 65 | 29 | 87 | ||||||||||||
Commercial loans
|
12 | 55 | 5 | 43 | ||||||||||||
Loans to individuals
|
150 | 272 | 253 | 447 | ||||||||||||
Total
|
$ | 191 | $ | 600 | $ | 340 | $ | 805 |
June 30, 2012
|
Unpaid
Contractual
Principal
Balance
|
Recorded
Investment
With No
Allowance
|
Recorded
Investment
With
Allowance
|
Total
Recorded
Investment
|
Loan Losses
Allocated
|
Average
Recorded
Investment
|
||||||||||||||||||
Real Estate Loans:
|
||||||||||||||||||||||||
Construction
|
$ | 4,289 | $ | – | $ | 3,149 | $ | 3,149 | $ | 346 | $ | 3,591 | ||||||||||||
1-4 Family residential
|
2,880 | – | 2,810 | 2,810 | 461 | 2,908 | ||||||||||||||||||
Other
|
1,996 | – | 1,558 | 1,558 | 176 | 1,558 | ||||||||||||||||||
Commercial loans
|
2,212 | – | 2,092 | 2,092 | 797 | 2,010 | ||||||||||||||||||
Loans to individuals
|
3,069 | 1 | 2,786 | 2,787 | 865 | 2,950 | ||||||||||||||||||
Total
|
$ | 14,446 | $ | 1 | $ | 12,395 | $ | 12,396 | $ | 2,645 | $ | 13,017 |
December 31, 2011
|
Unpaid
Contractual
Principal
Balance
|
Recorded
Investment
With No
Allowance
|
Recorded
Investment
With
Allowance
|
Total
Recorded
Investment
|
Loan Losses
Allocated
|
Average
Recorded
Investment
|
||||||||||||||||||
Real Estate Loans:
|
||||||||||||||||||||||||
Construction
|
$ | 4,909 | $ | – | $ | 3,895 | $ | 3,895 | $ | 597 | $ | 4,054 | ||||||||||||
1-4 Family residential
|
2,449 | – | 2,362 | 2,362 | 320 | 2,362 | ||||||||||||||||||
Other
|
1,930 | – | 1,508 | 1,508 | 380 | 1,744 | ||||||||||||||||||
Commercial loans
|
1,570 | – | 1,493 | 1,493 | 485 | 1,748 | ||||||||||||||||||
Loans to individuals
|
3,389 | 4 | 3,108 | 3,112 | 857 | 4,508 | ||||||||||||||||||
Total
|
$ | 14,247 | $ | 4 | $ | 12,366 | $ | 12,370 | $ | 2,639 | $ | 14,416 |
As of June 30, 2012 | ||||||||||||
Number of
Contracts
|
Pre-Modification
Outstanding
Recorded
Investment
|
Post-
Modification
Outstanding
Recorded
Investment
|
||||||||||
Real Estate Loans:
|
||||||||||||
Construction
|
2 | $ | 93 | $ | 83 | |||||||
1-4 Family residential
|
10 | 970 | 917 | |||||||||
Other
|
2 | 824 | 782 | |||||||||
Commercial loans
|
8 | 879 | 866 | |||||||||
Loans to individuals
|
22 | 126 | 63 | |||||||||
Total
|
$ | 2,892 | $ | 2,711 |
As of December 31, 2011
|
||||||||||||
Number of
Contracts
|
Pre-Modification
Outstanding
Recorded
Investment
|
Post-
Modification
Outstanding
Recorded
Investment
|
||||||||||
Real Estate Loans:
|
||||||||||||
Construction
|
2 | $ | 93 | $ | 87 | |||||||
1-4 Family residential
|
4 | 325 | 320 | |||||||||
Other
|
1 | 732 | 728 | |||||||||
Commercial loans
|
2 | 141 | 141 | |||||||||
Loans to individuals
|
12 | 111 | 89 | |||||||||
Total
|
$ | 1,402 | $ | 1,365 |
6.
|
Long-term Obligations
|
June 30,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
FHLB Advances (1)
|
$ | 366,989 | $ | 260,724 | ||||
Long-term Debt (2)
|
||||||||
Southside Statutory Trust III Due 2033 (3)
|
20,619 | 20,619 | ||||||
Southside Statutory Trust IV Due 2037 (4)
|
23,196 | 23,196 | ||||||
Southside Statutory Trust V Due 2037 (5)
|
12,887 | 12,887 | ||||||
Magnolia Trust Company I Due 2035 (6)
|
3,609 | 3,609 | ||||||
Total Long-term Debt
|
60,311 | 60,311 | ||||||
Total Long-term Obligations
|
$ | 427,300 | $ | 321,035 |
|
(1)
|
At June 30, 2012, the weighted average cost of these advances was 2.00%. Long-term FHLB Advances have maturities ranging from July 2013 through July 2028.
|
|
(2)
|
This long-term debt consists of trust preferred securities that qualify under the risk-based capital guidelines as Tier 1 capital, subject to certain limitations.
|
|
(3)
|
This debt carries an adjustable rate of 3.4006% through September 29, 2012 and adjusts quarterly at a rate equal to three-month LIBOR plus 294 basis points.
|
|
(4)
|
This debt carries a fixed rate of 6.518% through October 30, 2012 and thereafter, adjusts quarterly at a rate equal to three-month LIBOR plus 130 basis points.
|
|
(5)
|
This debt carries a fixed rate of 7.48% through December 15, 2012 and thereafter, adjusts quarterly at a rate equal to three-month LIBOR plus 225 basis points.
|
|
(6)
|
This debt carries an adjustable rate of 2.26685% through August 22, 2012 and thereafter, adjusts quarterly at a rate equal to three-month LIBOR plus 180 basis points.
|
Advance
Commitment
|
Option
Expiration
Date
|
Advance
Commitment
Term at
Exercise Date
|
Advance
Commitment
Rate
|
Option
Fee Paid
|
Impairment
|
Fair
Value
Option
Fee
|
|||||||||||
$
|
25,000
|
09/20/12
|
36 months
|
1.325%
|
$
|
1,105
|
$
|
1,093
|
$
|
12
|
|||||||
25,000
|
09/20/12
|
48 months
|
1.674%
|
1,410
|
1,403
|
7
|
|||||||||||
20,000
|
10/09/12
|
36 months
|
1.153%
|
789
|
742
|
47
|
|||||||||||
20,000
|
10/09/12
|
48 months
|
1.466%
|
1,042
|
1,008
|
34
|
|||||||||||
20,000
|
10/09/12
|
60 months
|
1.807%
|
1,216
|
1,188
|
28
|
|||||||||||
20,000
|
03/18/13
|
60 months
|
2.510%
|
1,528
|
1,498
|
30
|
|||||||||||
15,000
|
03/18/13
|
36 months
|
1.622%
|
828
|
811
|
17
|
|||||||||||
15,000
|
03/18/13
|
48 months
|
2.086%
|
1,017
|
997
|
20
|
|||||||||||
$
|
160,000
|
$
|
8,935
|
$
|
8,740
|
$
|
195
|
7.
|
Employee Benefit Plans
|
Six Months Ended June 30,
|
||||||||||||||||
Defined Benefit
|
||||||||||||||||
Pension Plan
|
Restoration Plan
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Service cost
|
$
|
868
|
$
|
768
|
$
|
80
|
$
|
87
|
||||||||
Interest cost
|
1,533
|
1,490
|
195
|
198
|
||||||||||||
Expected return on assets
|
(2,058
|
)
|
(1,941
|
)
|
–
|
–
|
||||||||||
Net loss recognition
|
852
|
581
|
159
|
151
|
||||||||||||
Prior service credit amortization
|
(21
|
)
|
(21
|
)
|
(1
|
)
|
(1
|
)
|
||||||||
Net periodic benefit cost
|
$
|
1,174
|
$
|
877
|
$
|
433
|
$
|
435
|
Three Months Ended June 30,
|
||||||||||||||||
Defined Benefit
|
||||||||||||||||
Pension Plan
|
Restoration Plan
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Service cost
|
$
|
403
|
$
|
374
|
$
|
30
|
$
|
44
|
||||||||
Interest cost
|
770
|
749
|
96
|
98
|
||||||||||||
Expected return on assets
|
(1,029
|
)
|
(969
|
)
|
–
|
–
|
||||||||||
Net loss recognition
|
437
|
296
|
75
|
70
|
||||||||||||
Prior service credit amortization
|
(11
|
)
|
(11
|
)
|
(1
|
)
|
–
|
|||||||||
Net periodic benefit cost
|
$
|
570
|
$
|
439
|
$
|
200
|
$
|
212
|
8.
|
Share-based Incentive Plans
|
Restricted Stock Units
Outstanding
|
Stock Options
Outstanding
|
|||||||||||||||||||||||
Shares
Available
for Grant
|
Number
of Shares
|
Weighted-
Average
Grant-Date
Fair Value
|
Number
of Shares
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Grant-Date
Fair Value
|
|||||||||||||||||||
Balance, December 31, 2011
|
1,001,069 | 35,070 | $ | 18.28 | 189,857 | $ | 17.82 | $ | 5.59 | |||||||||||||||
Granted
|
– | – | – | – | – | – | ||||||||||||||||||
Stock options exercised
|
– | – | – | (1,634 | ) | 9.89 | – | |||||||||||||||||
Stock awards vested
|
– | (7,759 | ) | 18.28 | – | – | – | |||||||||||||||||
Forfeited
|
35,077 | (8,218 | ) | 18.28 | (26,859 | ) | 18.28 | 5.59 | ||||||||||||||||
Canceled/expired
|
– | – | – | – | – | – | ||||||||||||||||||
Balance, June 30, 2012
|
1,036,146 | 19,093 | $ | 18.28 | 161,364 | $ | 17.82 | $ | 5.59 |
Options Outstanding
|
Options Exercisable
|
|||||||||||||||
Range of Exercise Prices
|
Number
of Shares
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Remaining
Contractual
Life in Years
|
Number
of Shares
|
Weighted-
Average
Exercise
Price
|
|||||||||||
$ |
9.89
|
–
|
9.89
|
8,855
|
$
|
9.89
|
0.75
|
8,855
|
$
|
9.89
|
||||||
18.28
|
–
|
18.28
|
152,509
|
18.28
|
8.94
|
41,499
|
18.28
|
|||||||||
Total
|
161,364
|
$
|
17.82
|
8.49
|
50,354
|
$
|
16.80
|
9.
|
Fair Value Measurement
|
Fair Value Measurements at the End of the Reporting Period Using
|
||||||||||||||||||||
Carrying
Amount
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total Gains
(Losses)
|
||||||||||||||||
June 30, 2012
|
||||||||||||||||||||
Recurring fair value measurements
|
||||||||||||||||||||
Investment Securities:
|
||||||||||||||||||||
State and Political Subdivisions
|
$ | 414,897 | $ | – | $ | 414,897 | $ | – | $ | – | ||||||||||
Other Stocks and Bonds
|
3,318 | – | 2,695 | 623 | (181 | ) | ||||||||||||||
Mortgage-backed Securities:
|
||||||||||||||||||||
U.S. Government Agencies
|
117,745 | – | 117,745 | – | – | |||||||||||||||
Government-Sponsored Enterprise
|
1,087,014 | – | 1,087,014 | – | – | |||||||||||||||
Total recurring fair value measurements
|
$ | 1,622,974 | $ | – | $ | 1,622,351 | $ | 623 | $ | (181 | ) | |||||||||
Nonrecurring fair value measurements
|
||||||||||||||||||||
Foreclosed assets (1)
|
$ | 1,348 | $ | – | $ | – | $ | 1,348 | $ | (481 | ) | |||||||||
Impaired loans (2)
|
9,751 | – | – | 9,751 | (11 | ) | ||||||||||||||
Total nonrecurring fair value measurements
|
$ | 11,099 | $ | – | $ | – | $ | 11,099 | $ | (492 | ) |
Fair Value Measurements at the End of the Reporting Period Using
|
||||||||||||||||
Carrying
Amount
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||||||
December 31, 2011
|
||||||||||||||||
Recurring fair value measurements
|
||||||||||||||||
Securities Available for Sale
|
||||||||||||||||
Investment Securities:
|
||||||||||||||||
State and Political Subdivisions
|
$ | 282,457 | $ | – | $ | 282,457 | $ | – | ||||||||
Other Stocks and Bonds
|
499 | – | – | 499 | ||||||||||||
Mortgage-backed Securities:
|
||||||||||||||||
U.S. Government Agencies
|
107,052 | – | 107,052 | – | ||||||||||||
Government-Sponsored Enterprise
|
609,074 | – | 609,074 | – | ||||||||||||
Total available for sale securities
|
$ | 999,082 | $ | – | $ | 998,583 | $ | 499 | ||||||||
Securities carried at fair value through income
|
||||||||||||||||
Mortgage-backed Securities:
|
||||||||||||||||
U.S. Government Agencies
|
$ | 30,413 | $ | – | $ | 30,413 | $ | – | ||||||||
Government-Sponsored Enterprise
|
617,346 | – | 617,346 | – | ||||||||||||
Total securities carried at fair value through income
|
$ | 647,759 | $ | – | $ | 647,759 | $ | – | ||||||||
Total recurring fair value measurements
|
$ | 1,646,841 | $ | – | $ | 1,646,342 | $ | 499 | ||||||||
Nonrecurring fair value measurements
|
||||||||||||||||
Foreclosed assets (1)
|
$ | 775 | $ | – | $ | – | $ | 775 | ||||||||
Impaired loans (2)
|
9,731 | – | – | 9,731 | ||||||||||||
Total nonrecurring fair value measurements
|
$ | 10,506 | $ | – | $ | – | $ | 10,506 |
|
(1)
|
Losses represent related losses on foreclosed properties that were written down subsequent to their initial classification as foreclosed properties.
|
|
(2)
|
Loans represent collateral dependent impaired loans with a specific valuation allowance. Losses on these loans represent charge-offs which are netted against the allowance for loan losses.
|
Six Months Ended
June 30,
|
||||||||
2012
|
2011
|
|||||||
Other Stocks and Bonds
|
||||||||
Balance at Beginning of Period
|
$ | 499 | $ | 189 | ||||
Total gains or losses (realized/unrealized):
|
||||||||
Included in earnings
|
(181 | ) | – | |||||
Included in other comprehensive income (loss)
|
305 | 768 | ||||||
Purchases
|
– | – | ||||||
Issuances
|
– | – | ||||||
Settlements
|
– | – | ||||||
Transfers in and/or out of Level 3
|
– | – | ||||||
Balance at End of Period
|
$ | 623 | $ | 957 | ||||
The amount of total gains or losses for the periods included in earnings attributable to the change in unrealized gains or losses relating to assets still held at reporting date
|
$ | (181 | ) | $ | – |
Three Months Ended
June 30,
|
||||||||
2012
|
2011
|
|||||||
Other Stocks and Bonds
|
||||||||
Balance at Beginning of Period
|
$ | 658 | $ | 1,005 | ||||
Total gains or losses (realized/unrealized):
|
||||||||
Included in earnings
|
(40 | ) | – | |||||
Included in other comprehensive income (loss)
|
5 | (48 | ) | |||||
Purchases
|
– | – | ||||||
Issuances
|
– | – | ||||||
Settlements
|
– | – | ||||||
Transfers in and/or out of Level 3
|
– | – | ||||||
Balance at End of Period
|
$ | 623 | $ | 957 | ||||
The amount of total gains or losses for the periods included in earnings attributable to the change in unrealized gains or losses relating to assets still held at reporting date
|
$ | (40 | ) | $ | – |
Six Months Ended June 30, 2012 | ||||||||||||||||||||||||
Net Securities Gains
(Losses)
|
Other Noninterest Income
(Loss)
|
Total | ||||||||||||||||||||||
Securities Available for Sale | Realized | Unrealized | Realized | Unrealized | Realized | Unrealized | ||||||||||||||||||
Investment securities:
|
||||||||||||||||||||||||
Other stocks and bonds
|
$ | – | $ | – | $ | (181 | ) | $ | – | $ | (181 | ) | $ | – |
Three Months Ended June 30, 2012 | ||||||||||||||||||||||||
Net Securities Gains
(Losses)
|
Other Noninterest Income
(Loss)
|
Total | ||||||||||||||||||||||
Securities Available for Sale | Realized | Unrealized | Realized | Unrealized | Realized | Unrealized | ||||||||||||||||||
Investment securities:
|
||||||||||||||||||||||||
Other stocks and bonds
|
$ | – | $ | – | $ | (40 | ) | $ | – | $ | (40 | ) | $ | – |
As of June 30, 2012 | |||||||||||
Securities Available for Sale | Fair Value |
Valuation
Techniques
|
Unobservable
Input
|
Range of Inputs | |||||||
Discounted Cash
Flows
|
Constant
prepayment rate
|
1% - 2 | % | ||||||||
Investment securities: | Discount Rate |
Libor + 14% - 15
|
% | ||||||||
Other stocks and bonds
|
$ | 623 |
Loss Severity
|
25% - 100 | % |
Six Months Ended June 30,
|
||||||||
2012
|
2011
|
|||||||
Changes in fair value included in net income:
|
||||||||
Mortgage-backed Securities:
|
||||||||
U.S. Government Agencies
|
$ | – | $ | 50 | ||||
Government-Sponsored Enterprises
|
– | 4,033 | ||||||
Total
|
$ | – | $ | 4,083 |
Three Months Ended June 30,
|
||||||||
2012
|
2011
|
|||||||
Changes in fair value included in net income:
|
||||||||
Mortgage-backed Securities:
|
||||||||
U.S. Government Agencies
|
$ | – | $ | 61 | ||||
Government-Sponsored Enterprises
|
– | 2,395 | ||||||
Total
|
$ | – | $ | 2,456 |
|
Cash and cash equivalents - The carrying amounts for cash and cash equivalents is a reasonable estimate of those assets' fair value.
|
|
Investment and mortgage-backed and related securities - Fair values for these securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices for similar securities or estimates from independent pricing services.
|
|
FHLB stock and other investments - The carrying amount of FHLB stock is a reasonable estimate of those assets’ fair value.
|
|
Loans receivable - For adjustable rate loans that reprice frequently and with no significant change in credit risk, the carrying amounts are a reasonable estimate of those assets' fair value. The fair value of fixed rate loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Nonperforming loans are estimated using discounted cash flow analyses or the underlying value of the collateral where applicable.
|
|
Deposit liabilities - The fair value of demand deposits, savings accounts, and certain money market deposits is the amount on demand at the reporting date, that is, the carrying value. Fair values for fixed rate CDs are estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities.
|
|
Federal funds purchased and repurchase agreements - Federal funds purchased and repurchase agreements generally have an original term to maturity of one day and thus are considered short-term borrowings. Consequently, their carrying value is a reasonable estimate of fair value.
|
|
FHLB advances - The fair value of these advances is estimated by discounting the future cash flows using rates at which advances would be made to borrowers with similar credit ratings and for the same remaining maturities.
|
|
Long-term debt - The carrying amount for the long-term debt is estimated by discounting future cash flows using estimated rates at which long-term debt would be made to borrowers with similar credit ratings and for the remaining maturities. This type of debt is issued much less frequently since the economic crisis beginning in 2007. Therefore, the discount rate is a best estimate.
|
Estimated Fair Value
|
||||||||||||||||||||
June 30, 2012
|
Carrying
Amount
|
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||||
Financial Assets
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 106,236 | $ | 106,236 | $ | 106,236 | $ | – | $ | – | ||||||||||
Investment securities:
|
||||||||||||||||||||
Held to maturity, at amortized cost
|
1,010 | 1,132 | – | 1,132 | – | |||||||||||||||
Mortgage-backed and related securities:
|
||||||||||||||||||||
Held to maturity, at amortized cost
|
330,138 | 342,162 | – | 342,162 | – | |||||||||||||||
FHLB stock and other investments, at cost
|
36,398 | 36,398 | – | 36,398 | – | |||||||||||||||
Loans, net of allowance for loan losses
|
1,163,006 | 1,160,201 | – | – | 1,160,201 | |||||||||||||||
Loans held for sale
|
1,447 | 1,447 | – | 1,447 | – | |||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Retail deposits
|
$ | 2,395,872 | $ | 2,399,755 | $ | – | $ | 2,399,755 | $ | – | ||||||||||
Federal funds purchased and repurchase agreements
|
1,948 | 1,948 | – | 1,948 | – | |||||||||||||||
FHLB advances
|
608,235 | 613,600 | – | 613,600 | – | |||||||||||||||
Long-term debt
|
60,311 | 45,856 | – | 45,856 | – |
Estimated Fair Value
|
||||||||||||||||||||
December 31, 2011
|
Carrying
Amount
|
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||||
Financial Assets
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 43,238 | $ | 43,238 | $ | 43,238 | $ | – | $ | – | ||||||||||
Investment securities:
|
||||||||||||||||||||
Held to maturity, at amortized cost
|
1,496 | 1,707 | – | 1,707 | – | |||||||||||||||
Mortgage-backed and related securities:
|
||||||||||||||||||||
Held to maturity, at amortized cost
|
365,631 | 381,584 | – | 381,584 | – | |||||||||||||||
FHLB stock and other investments, at cost
|
35,933 | 35,933 | – | 35,933 | – | |||||||||||||||
Loans, net of allowance for loan losses
|
1,068,690 | 1,073,298 | – | – | 1,073,298 | |||||||||||||||
Loans held for sale
|
3,552 | 3,552 | – | 3,552 | – | |||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Retail deposits
|
$ | 2,321,671 | $ | 2,329,243 | $ | – | $ | 2,329,243 | $ | – | ||||||||||
Federal funds purchased and repurchase agreements
|
2,945 | 2,945 | – | 2,945 | – | |||||||||||||||
FHLB advances
|
622,535 | 636,129 | – | 636,129 | – | |||||||||||||||
Long-term debt
|
60,311 | 45,132 | – | 45,132 | – |
10.
|
Off-Balance-Sheet Arrangements, Commitments and Contingencies
|
June 30, 2012
|
December 31, 2011
|
|||||||
Unused commitments: | ||||||||
Due in one year or less
|
$ | 88,589 | $ | 85,737 | ||||
Due after one year
|
50,351 | 30,291 | ||||||
Total
|
$ | 138,940 | $ | 116,028 |
|
·
|
general economic conditions, either globally, nationally, in the State of Texas, or in the specific markets in which we operate, including, without limitation, the deterioration of the commercial real estate, residential real estate, construction and development, credit and liquidity markets, which could cause an adverse change in our net interest margin, or a decline in the value of our assets, which could result in realized losses;
|
|
·
|
legislation, regulatory changes or changes in monetary or fiscal policy that adversely affect the businesses in which we are engaged, including the impact of the Dodd-Frank Act, the Federal Reserve’s actions with respect to interest rates and other regulatory responses to current economic conditions;
|
|
·
|
adverse changes in the status or financial condition of the Government-Sponsored Enterprises (the “GSEs”) impacting the GSEs’ guarantees or ability to pay or issue debt;
|
|
·
|
adverse changes in the credit portfolio of other U.S. financial institutions relative to the performance of certain of our investment securities;
|
|
·
|
economic or other disruptions caused by acts of terrorism in the United States, Europe or other areas;
|
|
·
|
changes in the interest rate yield curve such as flat, inverted or steep yield curves, or changes in the interest rate environment that impact interest margins and may impact prepayments on the mortgage-backed securities portfolio;
|
|
·
|
increases in our nonperforming assets;
|
|
·
|
our ability to maintain adequate liquidity to fund operations and growth;
|
|
·
|
the failure of our assumptions underlying allowance for loan losses and other estimates;
|
|
·
|
unexpected outcomes of, and the costs associated with, existing or new litigation involving us;
|
|
·
|
changes impacting our balance sheet and leverage strategy;
|
|
·
|
risks related to actual U.S. agency mortgage-backed securities prepayments exceeding projected prepayment levels;
|
|
·
|
risks related to U.S. agency mortgage-backed securities prepayments increasing due to U.S. Government programs designed to assist homeowners to refinance their mortgage that might not otherwise have qualified;
|
|
·
|
our ability to monitor interest rate risk;
|
|
·
|
significant increases in competition in the banking and financial services industry;
|
|
·
|
changes in consumer spending, borrowing and saving habits;
|
|
·
|
technological changes;
|
|
·
|
our ability to increase market share and control expenses;
|
|
·
|
the effect of changes in federal or state tax laws;
|
|
·
|
the effect of compliance with legislation or regulatory changes;
|
|
·
|
the effect of changes in accounting policies and practices;
|
|
·
|
risks of mergers and acquisitions including the related time and cost of implementing transactions and the potential failure to achieve expected gains, revenue growth or expense savings;
|
|
·
|
credit risks of borrowers, including any increase in those risks due to changing economic conditions; and
|
|
·
|
risks related to loans secured by real estate, including the risk that the value and marketability of collateral could decline.
|
|
·
|
A permanent increase in deposit insurance coverage to $250,000 per account, unlimited deposit insurance on noninterest bearing transaction accounts beginning December 31, 2010 through December 31, 2012, and an increase in the minimum Deposit Insurance Fund reserve requirement from 1.15% to 1.35%, with assessments to be based on assets as opposed to deposits;
|
|
·
|
New disclosure and other requirements relating to executive compensation and corporate governance;
|
|
·
|
New prohibitions and restrictions on the ability of a banking entity and nonbank financial company to engage in proprietary trading and have certain interests in, or relationships with, a hedge fund or private equity fund;
|
|
·
|
Amendments to the Truth in Lending Act aimed at improving consumer protections with respect to mortgage originations, including originator compensation, minimum repayment standards, and prepayment considerations;
|
|
·
|
The establishment of the Financial Stability Oversight Council, which will be responsible for identifying and monitoring systemic risks posed by financial firms, activities, and practices;
|
|
·
|
The development of regulations to limit debit card interchange fees;
|
|
·
|
The future elimination of newly issued trust preferred securities as a permitted element of Tier 1 capital;
|
|
·
|
The creation of a special regime to allow for the orderly liquidation of systemically important financial companies, including the establishment of an orderly liquidation fund;
|
|
·
|
The development of regulations to address derivatives markets, including clearing and exchange trading requirements and a framework for regulating derivatives-market participants;
|
|
·
|
Enhanced supervision of credit rating agencies through the Office of Credit Ratings within the SEC;
|
|
·
|
Increased regulation of asset-backed securities, including a requirement that issuers of asset-backed securities retain at least 5% of the risk of the asset-backed securities; and
|
|
·
|
The establishment of a Bureau of Consumer Financial Protection with centralized authority, including examination and enforcement authority, for consumer protection in the banking industry.
|
AVERAGE BALANCES AND YIELDS
|
||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
(unaudited)
|
||||||||||||||||||||||||
Six Months Ended
|
||||||||||||||||||||||||
June 30, 2012
|
June 30, 2011
|
|||||||||||||||||||||||
AVG
BALANCE
|
INTEREST
|
AVG
YIELD
|
AVG
BALANCE
|
INTEREST
|
AVG
YIELD
|
|||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
INTEREST EARNING ASSETS:
|
||||||||||||||||||||||||
Loans (1) (2)
|
$ | 1,137,397 | $ | 36,132 | 6.39 | % | $ | 1,059,313 | $ | 36,281 | 6.91 | % | ||||||||||||
Loans Held For Sale
|
1,637 | 31 | 3.81 | % | 3,106 | 68 | 4.41 | % | ||||||||||||||||
Securities:
|
||||||||||||||||||||||||
Investment Securities (Taxable)(4)
|
5,167 | 51 | 1.98 | % | 7,058 | 38 | 1.09 | % | ||||||||||||||||
Investment Securities (Tax-Exempt)(3)(4)
|
278,435 | 8,473 | 6.12 | % | 302,421 | 9,564 | 6.38 | % | ||||||||||||||||
Mortgage-backed and Related Securities (4)
|
1,592,499 | 21,035 | 2.66 | % | 1,433,080 | 24,607 | 3.46 | % | ||||||||||||||||
Total Securities
|
1,876,101 | 29,559 | 3.17 | % | 1,742,559 | 34,209 | 3.96 | % | ||||||||||||||||
FHLB stock and other investments, at cost
|
34,553 | 133 | 0.77 | % | 30,390 | 132 | 0.88 | % | ||||||||||||||||
Interest Earning Deposits
|
14,750 | 15 | 0.20 | % | 11,054 | 13 | 0.24 | % | ||||||||||||||||
Total Interest Earning Assets
|
3,064,438 | 65,870 | 4.32 | % | 2,846,422 | 70,703 | 5.01 | % | ||||||||||||||||
NONINTEREST EARNING ASSETS:
|
||||||||||||||||||||||||
Cash and Due From Banks
|
42,004 | 44,511 | ||||||||||||||||||||||
Bank Premises and Equipment
|
50,551 | 50,514 | ||||||||||||||||||||||
Other Assets
|
167,295 | 121,472 | ||||||||||||||||||||||
Less: Allowance for Loan Loss
|
(19,501 | ) | (19,657 | ) | ||||||||||||||||||||
Total Assets
|
$ | 3,304,787 | $ | 3,043,262 | ||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||||||||||||||||||
INTEREST BEARING LIABILITIES:
|
||||||||||||||||||||||||
Savings Deposits
|
$ | 94,647 | 73 | 0.16 | % | $ | 83,343 | 118 | 0.29 | % | ||||||||||||||
Time Deposits
|
821,752 | 4,371 | 1.07 | % | 856,860 | 5,744 | 1.35 | % | ||||||||||||||||
Interest Bearing Demand Deposits
|
859,343 | 1,716 | 0.40 | % | 784,228 | 2,225 | 0.57 | % | ||||||||||||||||
Total Interest Bearing Deposits
|
1,775,742 | 6,160 | 0.70 | % | 1,724,431 | 8,087 | 0.95 | % | ||||||||||||||||
Short-term Interest Bearing Liabilities
|
311,948 | 3,326 | 2.14 | % | 239,179 | 3,434 | 2.90 | % | ||||||||||||||||
Long-term Interest Bearing Liabilities – FHLB Dallas
|
289,743 | 3,476 | 2.41 | % | 317,985 | 5,663 | 3.59 | % | ||||||||||||||||
Long-term Debt (5)
|
60,311 | 1,655 | 5.52 | % | 60,311 | 1,619 | 5.41 | % | ||||||||||||||||
Total Interest Bearing Liabilities
|
2,437,744 | 14,617 | 1.21 | % | 2,341,906 | 18,803 | 1.62 | % | ||||||||||||||||
NONINTEREST BEARING LIABILITIES:
|
||||||||||||||||||||||||
Demand Deposits
|
547,150 | 448,073 | ||||||||||||||||||||||
Other Liabilities
|
53,926 | 26,384 | ||||||||||||||||||||||
Total Liabilities
|
3,038,820 | 2,816,363 | ||||||||||||||||||||||
SHAREHOLDERS’ EQUITY (6)
|
265,967 | 226,899 | ||||||||||||||||||||||
Total Liabilities and Shareholders’ Equity
|
$ | 3,304,787 | $ | 3,043,262 | ||||||||||||||||||||
NET INTEREST INCOME
|
$ | 51,253 | $ | 51,900 | ||||||||||||||||||||
NET INTEREST MARGIN ON AVERAGE EARNING ASSETS
|
3.36 | % | 3.68 | % | ||||||||||||||||||||
NET INTEREST SPREAD
|
3.11 | % | 3.39 | % |
(1)
|
Interest on loans includes fees on loans that are not material in amount.
|
(2)
|
Interest income includes taxable-equivalent adjustments of $1,867 and $1,948 for the six months ended June 30, 2012 and 2011, respectively.
|
(3)
|
Interest income includes taxable-equivalent adjustments of $2,845 and $3,126 for the six months ended June 30, 2012 and 2011, respectively.
|
(4)
|
For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.
|
(5)
|
Represents junior subordinated debentures issued by us to Southside Statutory Trust III, IV, and V in connection with the issuance by Southside Statutory Trust III of $20 million of trust preferred securities, Southside Statutory Trust IV of $22.5 million of trust preferred securities, Southside Statutory Trust V of $12.5 million of trust preferred securities and junior subordinated debentures issued by FWBS to Magnolia Trust Company I in connection with the issuance by Magnolia Trust Company I of $3.5 million of trust preferred securities.
|
(6)
|
Includes average equity of noncontrolling interest of $1,788 for the six months ended June 30, 2011.
|
AVERAGE BALANCES AND YIELDS
|
||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
(unaudited)
|
||||||||||||||||||||||||
Three Months Ended
|
||||||||||||||||||||||||
June 30, 2012
|
June 30, 2011
|
|||||||||||||||||||||||
AVG
BALANCE
|
INTEREST
|
AVG
YIELD
|
AVG
BALANCE
|
INTEREST
|
AVG
YIELD
|
|||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
INTEREST EARNING ASSETS:
|
||||||||||||||||||||||||
Loans (1) (2)
|
$ | 1,165,141 | $ | 18,442 | 6.37 | % | $ | 1,049,692 | $ | 18,076 | 6.91 | % | ||||||||||||
Loans Held For Sale
|
1,568 | 14 | 3.59 | % | 2,491 | 31 | 4.99 | % | ||||||||||||||||
Securities:
|
||||||||||||||||||||||||
Investment Securities (Taxable)(4)
|
5,660 | 20 | 1.42 | % | 5,082 | 20 | 1.58 | % | ||||||||||||||||
Investment Securities (Tax-Exempt)(3)(4)
|
307,465 | 4,483 | 5.86 | % | 299,807 | 4,778 | 6.39 | % | ||||||||||||||||
Mortgage-backed and Related Securities (4)
|
1,606,106 | 8,872 | 2.22 | % | 1,469,138 | 13,310 | 3.63 | % | ||||||||||||||||
Total Securities
|
1,919,231 | 13,375 | 2.80 | % | 1,774,027 | 18,108 | 4.09 | % | ||||||||||||||||
FHLB stock and other investments, at cost
|
35,202 | 54 | 0.62 | % | 28,317 | 52 | 0.74 | % | ||||||||||||||||
Interest Earning Deposits
|
8,226 | 9 | 0.44 | % | 6,101 | 3 | 0.20 | % | ||||||||||||||||
Total Interest Earning Assets
|
3,129,368 | 31,894 | 4.10 | % | 2,860,628 | 36,270 | 5.09 | % | ||||||||||||||||
NONINTEREST EARNING ASSETS:
|
||||||||||||||||||||||||
Cash and Due From Banks
|
41,112 | 43,330 | ||||||||||||||||||||||
Bank Premises and Equipment
|
50,509 | 50,655 | ||||||||||||||||||||||
Other Assets
|
167,246 | 131,926 | ||||||||||||||||||||||
Less: Allowance for Loan Loss
|
(19,945 | ) | (19,266 | ) | ||||||||||||||||||||
Total Assets
|
$ | 3,368,290 | $ | 3,067,273 | ||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||||||||||||||||||
INTEREST BEARING LIABILITIES:
|
||||||||||||||||||||||||
Savings Deposits
|
$ | 96,527 | 36 | 0.15 | % | $ | 85,778 | 58 | 0.27 | % | ||||||||||||||
Time Deposits
|
782,371 | 1,894 | 0.97 | % | 867,694 | 2,943 | 1.36 | % | ||||||||||||||||
Interest Bearing Demand Deposits
|
863,308 | 835 | 0.39 | % | 778,084 | 1,050 | 0.54 | % | ||||||||||||||||
Total Interest Bearing Deposits
|
1,742,206 | 2,765 | 0.64 | % | 1,731,556 | 4,051 | 0.94 | % | ||||||||||||||||
Short-term Interest Bearing Liabilities
|
367,195 | 1,734 | 1.90 | % | 259,025 | 1,705 | 2.64 | % | ||||||||||||||||
Long-term Interest Bearing Liabilities – FHLB Dallas
|
311,550 | 1,573 | 2.03 | % | 287,903 | 2,587 | 3.60 | % | ||||||||||||||||
Long-term Debt (5)
|
60,311 | 825 | 5.50 | % | 60,311 | 814 | 5.41 | % | ||||||||||||||||
Total Interest Bearing Liabilities
|
2,481,262 | 6,897 | 1.12 | % | 2,338,795 | 9,157 | 1.57 | % | ||||||||||||||||
NONINTEREST BEARING LIABILITIES:
|
||||||||||||||||||||||||
Demand Deposits
|
565,344 | 465,578 | ||||||||||||||||||||||
Other Liabilities
|
55,593 | 27,679 | ||||||||||||||||||||||
Total Liabilities
|
3,102,199 | 2,832,052 | ||||||||||||||||||||||
SHAREHOLDERS’ EQUITY (6)
|
266,091 | 235,221 | ||||||||||||||||||||||
Total Liabilities and Shareholders’ Equity
|
$ | 3,368,290 | $ | 3,067,273 | ||||||||||||||||||||
NET INTEREST INCOME
|
$ | 24,997 | $ | 27,113 | ||||||||||||||||||||
NET INTEREST MARGIN ON AVERAGE EARNING ASSETS
|
3.21 | % | 3.80 | % | ||||||||||||||||||||
NET INTEREST SPREAD
|
2.98 | % | 3.52 | % |
(1)
|
Interest on loans includes fees on loans that are not material in amount.
|
(2)
|
Interest income includes taxable-equivalent adjustments of $930 and $977 for the three months ended June 30, 2012 and 2011, respectively.
|
(3)
|
Interest income includes taxable-equivalent adjustments of $1,522 and $1,569 for the three months ended June 30, 2012 and 2011, respectively.
|
(4)
|
For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.
|
(5)
|
Represents junior subordinated debentures issued by us to Southside Statutory Trust III, IV, and V in connection with the issuance by Southside Statutory Trust III of $20 million of trust preferred securities, Southside Statutory Trust IV of $22.5 million of trust preferred securities, Southside Statutory Trust V of $12.5 million of trust preferred securities and junior subordinated debentures issued by FWBS to Magnolia Trust Company I in connection with the issuance by Magnolia Trust Company I of $3.5 million of trust preferred securities.
|
(6)
|
Includes average equity of noncontrolling interest of $2,068 for the three months ended June 30, 2011.
|
|
Actual
|
For Capital
Adequacy Purposes
|
To Be Well Capitalized
Under Prompt
Corrective Actions
Provisions
|
|||||||||||||||||||||
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
As of June 30, 2012:
|
(dollars in thousands)
|
|||||||||||||||||||||||
Total Capital (to Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 309,635 | 22.52 | % | $ | 109,992 | 8.00 | % | N/A | N/A | ||||||||||||||
Bank Only
|
$ | 306,149 | 22.27 | % | $ | 109,957 | 8.00 | % | $ | 137,446 | 10.00 | % | ||||||||||||
Tier 1 Capital (to Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 292,363 | 21.26 | % | $ | 54,996 | 4.00 | % | N/A | N/A | ||||||||||||||
Bank Only
|
$ | 288,877 | 21.02 | % | $ | 54,978 | 4.00 | % | $ | 82,468 | 6.00 | % | ||||||||||||
Tier 1 Capital (to Average Assets) (1)
|
||||||||||||||||||||||||
Consolidated
|
$ | 292,363 | 8.85 | % | $ | 132,148 | 4.00 | % | N/A | N/A | ||||||||||||||
Bank Only
|
$ | 288,877 | 8.75 | % | $ | 132,052 | 4.00 | % | $ | 165,065 | 5.00 | % | ||||||||||||
As of December 31, 2011:
|
||||||||||||||||||||||||
Total Capital (to Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 296,715 | 22.36 | % | $ | 106,152 | 8.00 | % | N/A | N/A | ||||||||||||||
Bank Only
|
$ | 285,539 | 21.52 | % | $ | 106,159 | 8.00 | % | $ | 132,699 | 10.00 | % | ||||||||||||
Tier 1 Capital (to Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 280,050 | 21.11 | % | $ | 53,076 | 4.00 | % | N/A | N/A | ||||||||||||||
Bank Only
|
$ | 268,874 | 20.26 | % | $ | 53,080 | 4.00 | % | $ | 79,619 | 6.00 | % | ||||||||||||
Tier 1 Capital (to Average Assets) (1)
|
||||||||||||||||||||||||
Consolidated
|
$ | 280,050 | 8.63 | % | $ | 129,795 | 4.00 | % | N/A | N/A | ||||||||||||||
Bank Only
|
$ | 268,874 | 8.29 | % | $ | 129,698 | 4.00 | % | $ | 162,122 | 5.00 | % |
(1)
|
Refers to quarterly average assets as calculated by bank regulatory agencies.
|
Six Months Ended June 30, | ||||||||
2012
|
2011
|
|||||||
Return on Average Assets
|
1.09 | % | 1.39 | % | ||||
Return on Average Shareholders' Equity
|
13.51 | 18.82 | ||||||
Dividend Payout Ratio – Basic
|
36.89 | 27.87 | ||||||
Dividend Payout Ratio – Diluted
|
36.89 | 27.87 | ||||||
Average Shareholders' Equity to Average Total Assets
|
8.05 | 7.40 | ||||||
Three Months Ended June 30, | ||||||||
2012 | 2011 | |||||||
Return on Average Assets
|
0.92 | % | 1.65 | % | ||||
Return on Average Shareholders' Equity
|
11.68 | 21.73 | ||||||
Dividend Payout Ratio – Basic
|
44.44 | 23.29 | ||||||
Dividend Payout Ratio – Diluted
|
44.44 | 23.29 | ||||||
Average Shareholders' Equity to Average Total Assets
|
7.90 | 7.60 |
At
|
At
|
At
|
||||||||||
June 30,
|
December 31,
|
June 30,
|
||||||||||
2012
|
2011
|
2011
|
||||||||||
(in thousands)
|
||||||||||||
Real Estate Loans: | ||||||||||||
Construction
|
$ | 105,675 | $ | 111,361 | $ | 108,851 | ||||||
1-4 Family Residential
|
325,720 | 247,479 | 221,283 | |||||||||
Other
|
214,885 | 206,519 | 193,341 | |||||||||
Commercial Loans
|
146,499 | 143,552 | 134,197 | |||||||||
Municipal Loans
|
215,256 | 207,261 | 200,537 | |||||||||
Loans to Individuals
|
175,165 | 171,058 | 180,599 | |||||||||
Total Loans
|
$ | 1,183,200 | $ | 1,087,230 | $ | 1,038,808 |
At
June 30,
2012
|
At
December 31,
2011
|
At
June 30,
2011
|
||||||||||
Nonaccrual loans
|
$ | 10,077 | $ | 10,299 | $ | 13,208 | ||||||
Accruing loans past due more than 90 days
|
1 | 5 | 8 | |||||||||
Restructured loans
|
2,352 | 2,109 | 1,757 | |||||||||
Other real estate owned
|
960 | 453 | 412 | |||||||||
Repossessed assets
|
388 | 322 | 318 | |||||||||
Total Nonperforming Assets
|
$ | 13,778 | $ | 13,188 | $ | 15,703 |
At
June 30,
2012
|
At
December 31,
2011
|
At
June 30,
2011
|
||||||||||
(unaudited)
|
||||||||||||
Asset Quality Ratios:
|
||||||||||||
|
|
|
|
|
||||||||
Nonaccruing loans to total loans
|
0.85
|
%
|
|
0.95
|
%
|
1.27
|
%
|
|||||
Allowance for loan losses to nonaccruing loans
|
200.40
|
|
180.02
|
146.95
|
||||||||
Allowance for loan losses to nonperforming assets
|
146.57
|
|
140.58
|
123.60
|
||||||||
Allowance for loan losses to total loans
|
1.71
|
|
1.71
|
1.87
|
||||||||
Nonperforming assets to total assets
|
0.41
|
0.40
|
0.50
|
|||||||||
Net charge-offs to average loans
|
0.63
|
0.92
|
1.01
|
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
|
ITEM 6.
|
Exhibit No.
|
||
3 (a)
|
–
|
Amended and Restated Articles of Incorporation of Southside Bancshares, Inc. effective April 17, 2009 (filed as Exhibit 3(a) to the Registrant's Form 8-K, filed April 20, 2009, and incorporated herein by reference).
|
3 (b)(i)
|
–
|
Amended and Restated Bylaws of Southside Bancshares, Inc. effective February 28, 2008 (filed as Exhibit 3(b) to the Registrant’s Form 8-K, filed March 5, 2008, and incorporated herein by reference).
|
3(b)(ii)
|
–
|
Amendment No. 1 to the Amended and Restated Bylaws of Southside Bancshares, Inc. effective August 27, 2009 (filed as Exhibit 3.1 to the Registrant’s Form 8-K/A, filed September 10, 2009, and incorporated herein by reference).
|
3(b)(iii)
|
–
|
Amendment No. 2 to the Amended and Restated Bylaws of Southside Bancshares, Inc. effective September 2, 2010 (filed as Exhibit 3.1 to the Registrant’s Form 8-K, filed September 2, 2010, and incorporated herein by reference).
|
*31.1
|
–
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
*31.2
|
–
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
*32
|
–
|
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
**101.INS
|
–
|
XBRL Instance Document.
|
**101.SCH
|
–
|
XBRL Taxonomy Extension Schema Document.
|
**101.CAL
|
–
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
**101.LAB
|
–
|
XBRL Taxonomy Extension Label Linkbase Document.
|
**101.PRE
|
–
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
**101.DEF
|
–
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
*Filed herewith.
|
||
**Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
|
SOUTHSIDE BANCSHARES, INC.
|
|
|
|
|
|
BY:
|
/s/ SAM DAWSON
|
|
|
Sam Dawson, President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
DATE: August 6, 2012
|
|
|
BY:
|
/s/ LEE R. GIBSON
|
|
|
Lee R. Gibson, CPA, Senior Executive Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
DATE: August 6, 2012
|
|
Exhibit Number
|
Description
|
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
**101.INS
|
XBRL Instance Document.
|
|
**101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
**101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
**101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
**101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
**101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Southside Bancshares, 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(s) 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 assurance 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; and
|
|
5.
|
The registrant’s other certifying officer(s) 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 the 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: August 6, 2012
|
By:
|
/s/ SAM DAWSON
|
|
|
Sam Dawson
|
|
|
President and Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Southside Bancshares, 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(s) 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 assurance 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; and
|
|
5.
|
The registrant’s other certifying officer(s) 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 the 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: August 6, 2012
|
By:
|
/s/ LEE R. GIBSON
|
|
|
Lee R. Gibson, CPA
|
|
|
Senior Executive Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Registrant.
|
Date: August 6, 2012
|
By:
|
/s/ SAM DAWSON
|
|
|
Sam Dawson
|
|
|
President and Chief Executive Officer
|
Date: August 6, 2012
|
By:
|
/s/ LEE R. GIBSON
|
|
|
Lee R. Gibson, CPA
|
|
|
Senior Executive Vice President and Chief Financial Officer
|
Loans and Allowance for Probable Loan Losses (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Loans and Financing Receivable [Line Items] | ||
Total loans | $ 1,183,200 | $ 1,087,230 |
Less: Allowance for loan losses | 20,194 | 18,540 |
Net loans | 1,163,006 | 1,068,690 |
Construction [Member]
|
||
Loans and Financing Receivable [Line Items] | ||
Total loans | 105,675 | 111,361 |
Family Residential 1 4 [Member]
|
||
Loans and Financing Receivable [Line Items] | ||
Total loans | 325,720 | 247,479 |
Other Financing Receivable [Member]
|
||
Loans and Financing Receivable [Line Items] | ||
Total loans | 214,885 | 206,519 |
Commercial Loans [Member]
|
||
Loans and Financing Receivable [Line Items] | ||
Total loans | 146,499 | 143,552 |
Municipal Loans [Member]
|
||
Loans and Financing Receivable [Line Items] | ||
Total loans | 215,256 | 207,261 |
Loans to Individuals [Member]
|
||
Loans and Financing Receivable [Line Items] | ||
Total loans | $ 175,165 | $ 171,058 |
Share-based Incentive Plans (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Incentive Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of activity in share-based plans | A combined summary of activity in our share-based plans as of June 30, 2012 is presented below:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other information regarding options outstanding and exercisable | Other information regarding options outstanding and exercisable as of June 30, 2012 is as follows:
|
Fair Value Measurement (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
U.S Government Agencies [Member]
|
Jun. 30, 2011
U.S Government Agencies [Member]
|
Jun. 30, 2012
U.S Government Agencies [Member]
|
Jun. 30, 2011
U.S Government Agencies [Member]
|
Jun. 30, 2012
US Government-sponsored Enterprises [Member]
|
Jun. 30, 2011
US Government-sponsored Enterprises [Member]
|
Jun. 30, 2012
US Government-sponsored Enterprises [Member]
|
Jun. 30, 2011
US Government-sponsored Enterprises [Member]
|
Jun. 30, 2012
Carrying Amount [Member]
|
Dec. 31, 2011
Carrying Amount [Member]
|
Jun. 30, 2012
Fair Value, Measurements, Recurring [Member]
Quoted Prices in Active Markets for Identical Assets ( Level 1) [Member]
|
Dec. 31, 2011
Fair Value, Measurements, Recurring [Member]
Quoted Prices in Active Markets for Identical Assets ( Level 1) [Member]
|
Jun. 30, 2012
Fair Value, Measurements, Recurring [Member]
Significant Other Observable Inputs (Level 2) [Member]
|
Dec. 31, 2011
Fair Value, Measurements, Recurring [Member]
Significant Other Observable Inputs (Level 2) [Member]
|
Jun. 30, 2012
Fair Value, Measurements, Recurring [Member]
Significant Unobservable Inputs (Level 3) [Member]
|
Dec. 31, 2011
Fair Value, Measurements, Recurring [Member]
Significant Unobservable Inputs (Level 3) [Member]
|
Jun. 30, 2012
Fair Value, Measurements, Recurring [Member]
Total Gains (Losses) [Member]
|
Jun. 30, 2012
Fair Value, Measurements, Nonrecurring [Member]
Quoted Prices in Active Markets for Identical Assets ( Level 1) [Member]
|
Dec. 31, 2011
Fair Value, Measurements, Nonrecurring [Member]
Quoted Prices in Active Markets for Identical Assets ( Level 1) [Member]
|
Jun. 30, 2012
Fair Value, Measurements, Nonrecurring [Member]
Significant Other Observable Inputs (Level 2) [Member]
|
Dec. 31, 2011
Fair Value, Measurements, Nonrecurring [Member]
Significant Other Observable Inputs (Level 2) [Member]
|
Jun. 30, 2012
Fair Value, Measurements, Nonrecurring [Member]
Significant Unobservable Inputs (Level 3) [Member]
|
Dec. 31, 2011
Fair Value, Measurements, Nonrecurring [Member]
Significant Unobservable Inputs (Level 3) [Member]
|
Jun. 30, 2012
Fair Value, Measurements, Nonrecurring [Member]
Total Gains (Losses) [Member]
|
||||||||||||||
Investment securities: | |||||||||||||||||||||||||||||||||||||||||
State and Political Subdivisions | $ 414,897 | $ 282,457 | $ 0 | $ 0 | $ 414,897 | $ 282,457 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||||||||||||
Other Stocks and Bonds | 3,318 | 499 | 0 | 0 | 2,695 | 0 | 623 | 499 | (181) | ||||||||||||||||||||||||||||||||
Mortgage-backed Securities | |||||||||||||||||||||||||||||||||||||||||
U.S. Government Agencies | 117,745 | 107,052 | 0 | 0 | 117,745 | 107,052 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Government-Sponsored Enterprise | 1,087,014 | 609,074 | 0 | 0 | 1,087,014 | 609,074 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Total Available For Sale Securities | 999,082 | 0 | 998,583 | 499 | |||||||||||||||||||||||||||||||||||||
Securities Carried at fair value through income mortgage backed securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||
U S Government Agencies | 30,413 | 0 | 30,413 | 0 | |||||||||||||||||||||||||||||||||||||
Government Sponsored Enterprises | 617,346 | 0 | 617,346 | 0 | |||||||||||||||||||||||||||||||||||||
Total Securities carried at fair value through income | 647,759 | 0 | 647,759 | 0 | |||||||||||||||||||||||||||||||||||||
Assets Recurring Measurement Fair Value Disclosure | 1,622,974 | 1,646,841 | 0 | 0 | 1,622,351 | 1,646,342 | 623 | 499 | (181) | ||||||||||||||||||||||||||||||||
Nonrecurring fair value measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Foreclosed assets | 1,348 | [1] | 775 | [1] | 0 | [1] | 0 | [1] | 0 | [1] | 0 | [1] | 1,348 | [1] | 775 | [1] | (481) | [1] | |||||||||||||||||||||||
Impaired loans | 9,751 | [2] | 9,731 | [2] | 0 | [2] | 0 | [2] | 0 | [2] | 0 | [2] | 9,751 | [2] | 9,731 | [2] | (11) | [2] | |||||||||||||||||||||||
Total nonrecurring fair value measurements | 11,099 | 10,506 | 0 | 0 | 0 | 0 | 11,099 | 10,506 | (492) | ||||||||||||||||||||||||||||||||
Mortgage-backed Securities: | |||||||||||||||||||||||||||||||||||||||||
Changes in fair value included in net income | $ 0 | $ 2,456 | $ 0 | $ 4,083 | $ 0 | $ 61 | $ 0 | $ 50 | $ 0 | $ 2,395 | $ 0 | $ 4,033 | |||||||||||||||||||||||||||||
|
Loans and Allowance for Probable Loan Losses, Part V (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Dec. 31, 2011
|
|
Financing Receivable, Impaired [Line Items] | |||
Interest income recognized | $ 191 | $ 340 | |
Accruing interest at original contracted rate | 600 | 805 | |
Unpaid contractual principal balance | 14,446 | 14,247 | |
Recorded investment with no allowance | 1 | 4 | |
Recorded investment with allowance | 12,395 | 12,366 | |
Total recorded investment | 12,396 | 12,370 | |
Loan losses allocated | 2,645 | 2,639 | |
Average recorded investment (year-to-date) | 13,017 | 14,416 | |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |||
Loans with no allocated allowance for loan losses | 1 | 4 | |
Loans with allocated allowance for loan losses | 12,395 | 12,366 | |
Total | 12,396 | 12,370 | |
Amount of the allowance for loan losses allocated | 2,645 | 2,639 | |
Construction [Member]
|
|||
Financing Receivable, Impaired [Line Items] | |||
Interest income recognized | 0 | 6 | |
Accruing interest at original contracted rate | 128 | 143 | |
Unpaid contractual principal balance | 4,289 | 4,909 | |
Recorded investment with no allowance | 0 | 0 | |
Recorded investment with allowance | 3,149 | 3,895 | |
Total recorded investment | 3,149 | 3,895 | |
Loan losses allocated | 346 | 597 | |
Average recorded investment (year-to-date) | 3,591 | 4,054 | |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |||
Loans with no allocated allowance for loan losses | 0 | 0 | |
Loans with allocated allowance for loan losses | 3,149 | 3,895 | |
Total | 3,149 | 3,895 | |
Family Residential 1 4 [Member]
|
|||
Financing Receivable, Impaired [Line Items] | |||
Interest income recognized | 9 | 47 | |
Accruing interest at original contracted rate | 80 | 85 | |
Unpaid contractual principal balance | 2,880 | 2,449 | |
Recorded investment with no allowance | 0 | 0 | |
Recorded investment with allowance | 2,810 | 2,362 | |
Total recorded investment | 2,810 | 2,362 | |
Loan losses allocated | 461 | 320 | |
Average recorded investment (year-to-date) | 2,908 | 2,362 | |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |||
Loans with no allocated allowance for loan losses | 0 | 0 | |
Loans with allocated allowance for loan losses | 2,810 | 2,362 | |
Total | 2,810 | 2,362 | |
Other Financing Receivable [Member]
|
|||
Financing Receivable, Impaired [Line Items] | |||
Interest income recognized | 20 | 29 | |
Accruing interest at original contracted rate | 65 | 87 | |
Unpaid contractual principal balance | 1,996 | 1,930 | |
Recorded investment with no allowance | 0 | 0 | |
Recorded investment with allowance | 1,558 | 1,508 | |
Total recorded investment | 1,558 | 1,508 | |
Loan losses allocated | 176 | 380 | |
Average recorded investment (year-to-date) | 1,558 | 1,744 | |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |||
Loans with no allocated allowance for loan losses | 0 | 0 | |
Loans with allocated allowance for loan losses | 1,558 | 1,508 | |
Total | 1,558 | 1,508 | |
Commercial Loans [Member]
|
|||
Financing Receivable, Impaired [Line Items] | |||
Interest income recognized | 12 | 5 | |
Accruing interest at original contracted rate | 55 | 43 | |
Unpaid contractual principal balance | 2,212 | 1,570 | |
Recorded investment with no allowance | 0 | 0 | |
Recorded investment with allowance | 2,092 | 1,493 | |
Total recorded investment | 2,092 | 1,493 | |
Loan losses allocated | 797 | 485 | |
Average recorded investment (year-to-date) | 2,010 | 1,748 | |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |||
Loans with no allocated allowance for loan losses | 0 | 0 | |
Loans with allocated allowance for loan losses | 2,092 | 1,493 | |
Total | 2,092 | 1,493 | |
Loans to Individuals [Member]
|
|||
Financing Receivable, Impaired [Line Items] | |||
Interest income recognized | 150 | 253 | |
Accruing interest at original contracted rate | 272 | 447 | |
Unpaid contractual principal balance | 3,069 | 3,389 | |
Recorded investment with no allowance | 1 | 4 | |
Recorded investment with allowance | 2,786 | 3,108 | |
Total recorded investment | 2,787 | 3,112 | |
Loan losses allocated | 865 | 857 | |
Average recorded investment (year-to-date) | 2,950 | 4,508 | |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |||
Loans with no allocated allowance for loan losses | 1 | 4 | |
Loans with allocated allowance for loan losses | 2,786 | 3,108 | |
Total | $ 2,787 | $ 3,112 |
Basis of Presentation
|
6 Months Ended |
---|---|
Jun. 30, 2012
|
|
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation In this report, the words "the Company," "we," "us," and "our" refer to the combined entities of Southside Bancshares, Inc. and its subsidiaries. The words "Southside" and "Southside Bancshares" refer to Southside Bancshares, Inc. The words "Southside Bank" and "the Bank" refer to Southside Bank (which, subsequent to the internal merger of Fort Worth National Bank ("FWNB") with and into Southside Bank, includes FWNB). "FWBS" refers to Fort Worth Bancshares, Inc., a bank holding company acquired by Southside of which FWNB was a wholly-owned subsidiary. "SFG" refers to SFG Finance, LLC (formerly Southside Financial Group, LLC) which is a wholly-owned subsidiary of the Bank as of July 15, 2011. "SSI" refers to Southside Securities, Inc., which is a wholly-owned subsidiary of Southside Bancshares, Inc. The consolidated balance sheet as of June 30, 2012, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows and notes to the financial statements for the three and six month periods ended June 30, 2012 and 2011 are unaudited; in the opinion of management, all adjustments necessary for a fair statement of such financial statements have been included. Such adjustments consisted only of normal recurring items. All significant intercompany accounts and transactions are eliminated in consolidation. The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires the use of management's estimates. These estimates are subjective in nature and involve matters of judgment. Actual amounts could differ from these estimates. Interim results are not necessarily indicative of results for a full year. These financial statements should be read in conjunction with the financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2011. All share data has been adjusted to give retroactive recognition to stock splits and stock dividends. For a description of our significant accounting and reporting policies, refer to Note 1 of the Notes to Financial Statements in our Annual Report on Form 10K for the year ended December 31, 2011. Accounting Standards ASU No. 2011-03, "Transfers and Servicing (Topic 860) - Reconsideration of Effective Control for Repurchase Agreements." ASU 2011-03 is intended to improve financial reporting of repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. ASU 2011-03 removes from the assessment of effective control (i) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (ii) the collateral maintenance guidance related to that criterion. ASU 2011-03 became effective for us on January 1, 2012 and did not have a significant impact on our consolidated financial statements. ASU 2011-04, "Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs." ASU 2011-04 amends Topic 820, "Fair Value Measurements and Disclosures," to converge the fair value measurement guidance in U.S. generally accepted accounting principles and International Financial Reporting Standards. ASU 2011-04 clarifies the application of existing fair value measurement requirements, changes certain principles in Topic 820 and requires additional fair value disclosures. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011, and did not have a significant impact on our consolidated financial statements. See "Note 9 - Fair Value Measurement." ASU 2011-05, "Comprehensive Income (Topic 220) - Presentation of Comprehensive Income." ASU 2011-05 amends Topic 220, "Comprehensive Income," to require that all nonowner changes in stockholders' equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, ASU 2011-05 requires entities to present, on the face of the financial statements, reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement or statements where the components of net income and the components of other comprehensive income are presented. The option to present components of other comprehensive income as part of the statement of changes in stockholders' equity was eliminated. ASU 2011-05 is effective for annual and interim periods beginning after December 15, 2011; however, certain provisions related to the presentation of reclassification adjustments have been deferred by ASU 2011-12 "Comprehensive Income (Topic 220) - Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05." ASU 2011-05 did not have a significant impact on our consolidated financial statements. See "Consolidated Statements of Comprehensive Income" directly following our Consolidated Statements of Income in our consolidated financial statements. ASU 2011-08, "Intangibles - Goodwill and Other (Topic 350) - Testing Goodwill for Impairment." ASU 2011-08 amends Topic 350, "Intangibles - Goodwill and Other," to give entities the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. ASU 2011-08 is effective for annual and interim impairment tests beginning after December 15, 2011, and did not have a significant impact on our consolidated financial statements. ASU 2011-11, "Balance Sheet (Topic 210) - Disclosures about Offsetting Assets and Liabilities." ASU 2011-11 amends Topic 210, "Balance Sheet," to require an entity to disclose both gross and net information about financial instruments, such as sales and repurchase agreements and reverse sale and repurchase agreements and securities borrowing/lending arrangements, and derivative instruments that are eligible for offset in the statement of financial position and/or subject to a master netting arrangement or similar agreement. ASU 2011-11 is effective for annual and interim periods beginning on January 1, 2013, and is not expected to have a significant impact on our consolidated financial statements. |