Delaware | 56-1528994 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
4300 Six Forks Road | ||
Raleigh, North Carolina 27609 | ||
(Address of principal executive offices, ZIP code) | ||
(919) 716-7000 | ||
(Registrant's telephone number, including area code) |
Title of each class | Name of each exchange on which registered | |
Class A Common Stock, Par Value $1 | NASDAQ Global Select Market |
Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ | Emerging growth company ¨ |
Page | |||
CROSS REFERENCE INDEX | |||
PART I | Item 1 | ||
Item 1A | |||
Item 1B | Unresolved Staff Comments | None | |
Item 2 | |||
Item 3 | |||
Item 4 | Mine Safety Disclosures | N/A | |
PART II | Item 5 | ||
Item 6 | |||
Item 7 | |||
Item 7A | |||
Item 8 | Financial Statements and Supplementary Data | ||
Item 9 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | None | |
Item 9A | |||
Item 9B | Other Information | None | |
PART III | Item 10 | Directors, Executive Officers and Corporate Governance | * |
Item 11 | Executive Compensation | * | |
Item 12 | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | * | |
Item 13 | Certain Relationships and Related Transactions and Director Independence | * | |
Item 14 | Principal Accounting Fees and Services | * | |
PART IV | Item 15 | Exhibits, Financial Statement Schedules | |
(1) | Financial Statements (see Item 8 for reference) | ||
(2) | All Financial Statement Schedules normally required for Form 10-K are omitted since they are not applicable, except as referred to in Item 8. | ||
(3) |
• | Guaranty Bank (Guaranty) of Milwaukee, Wisconsin on May 5, 2017 |
• | Harvest Community Bank (HCB) of Pennsville, New Jersey on January 13, 2017 |
• | First CornerStone Bank (FCSB) of King of Prussia, Pennsylvania on May 6, 2016 |
• | North Milwaukee State Bank (NMSB) of Milwaukee, Wisconsin on March 11, 2016 |
• | Capital Planning and Stress Testing. The Dodd-Frank Act mandated that stress tests be developed and performed to ensure that financial institutions have sufficient capital to absorb losses and support operations during multiple economic and bank scenarios. Bank holding companies with total consolidated assets between $10 billion and $50 billion, including BancShares, perform annual stress tests using defined scenarios as provided by the Federal Reserve. The results of stress testing activities are considered by our Risk Committee in combination with other risk management and monitoring practices as part of our risk management program. |
• | The Volcker Rule. The Dodd-Frank Act prohibits banks and their affiliates from engaging in proprietary trading and investing in and sponsoring hedge funds and private equity funds. The Volcker Rule, which became effective in July 2015, does not significantly impact the operations of BancShares and its subsidiaries, as we do not have any significant engagement in the businesses prohibited by the Volcker Rule. |
• | Ability-to-Repay and Qualified Mortgage Rule. Creditors are required to comply with mortgage reform provisions prohibiting the origination of any residential mortgages that do not meet rigorous Qualified Mortgage standards or Ability- |
Basel III minimum requirement 2017 | Basel III well-capitalized 2017 | Basel III minimum requirement 2019 | Basel III well-capitalized 2019 | ||||
Leverage ratio | 4.00% | 5.00% | 4.00% | 5.00% | |||
Common equity Tier 1 | 4.50 | 6.50 | 4.50 | 6.50 | |||
Common equity Tier 1 plus conservation buffer | 5.75 | 7.75 | 7.00 | 9.00 | |||
Tier 1 capital ratio | 6.00 | 8.00 | 6.00 | 8.00 | |||
Tier 1 capital ratio plus conservation buffer | 7.25 | 9.25 | 8.50 | 10.50 | |||
Total capital ratio | 8.00 | 10.00 | 8.00 | 10.00 | |||
Total capital ratio plus conservation buffer | 9.25 | 11.25 | 10.50 | 12.50 |
• | allow our Board of Directors to issue and set the terms of preferred shares without further shareholder approval; |
• | limit who can call a special meeting of shareholders; and |
• | establish advance notice requirements for nominations for election to the Board of Directors and proposals of other business to be considered at annual meetings of shareholders. |
2017 | 2016 | ||||||||||||||||||||||||||||||
Fourth quarter | Third quarter | Second quarter | First quarter | Fourth quarter | Third quarter | Second quarter | First quarter | ||||||||||||||||||||||||
Cash dividends (Class A and Class B) | $ | 0.35 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | |||||||||||||||
Class A sales price | |||||||||||||||||||||||||||||||
High | 427.09 | 381.30 | 372.52 | 384.12 | 367.00 | 294.50 | 262.49 | 257.97 | |||||||||||||||||||||||
Low | 371.52 | 323.74 | 320.10 | 319.40 | 280.98 | 245.60 | 229.51 | 217.41 | |||||||||||||||||||||||
Class B bid price | |||||||||||||||||||||||||||||||
High | 376.00 | 338.00 | 328.00 | 321.00 | 318.00 | 258.51 | 237.00 | 233.25 | |||||||||||||||||||||||
Low | 320.00 | 294.00 | 291.51 | 290.00 | 252.00 | 219.00 | 214.00 | 197.36 |
(Dollars in thousands, except share data) | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||
SUMMARY OF OPERATIONS | |||||||||||||||||||
Interest income | $ | 1,103,690 | $ | 987,757 | $ | 969,209 | $ | 760,448 | $ | 796,804 | |||||||||
Interest expense | 43,794 | 43,082 | 44,304 | 50,351 | 56,618 | ||||||||||||||
Net interest income | 1,059,896 | 944,675 | 924,905 | 710,097 | 740,186 | ||||||||||||||
Provision (credit) for loan and lease losses | 25,692 | 32,941 | 20,664 | 640 | (32,255 | ) | |||||||||||||
Net interest income after provision for loan and lease losses | 1,034,204 | 911,734 | 904,241 | 709,457 | 772,441 | ||||||||||||||
Gain on acquisitions | 134,745 | 5,831 | 42,930 | — | — | ||||||||||||||
Noninterest income | 506,284 | 482,240 | 424,158 | 343,213 | 267,382 | ||||||||||||||
Noninterest expense | 1,131,535 | 1,048,738 | 1,038,915 | 849,076 | 771,380 | ||||||||||||||
Income before income taxes | 543,698 | 351,067 | 332,414 | 203,594 | 268,443 | ||||||||||||||
Income taxes | 219,946 | 125,585 | 122,028 | 65,032 | 101,574 | ||||||||||||||
Net income | $ | 323,752 | $ | 225,482 | $ | 210,386 | $ | 138,562 | $ | 166,869 | |||||||||
Net interest income, taxable equivalent (1) | $ | 1,064,415 | $ | 949,768 | $ | 931,231 | $ | 714,085 | $ | 742,846 | |||||||||
PER SHARE DATA | |||||||||||||||||||
Net income | $ | 26.96 | $ | 18.77 | $ | 17.52 | $ | 13.56 | $ | 17.35 | |||||||||
Cash dividends | 1.25 | 1.20 | 1.20 | 1.20 | 1.20 | ||||||||||||||
Market price at period end (Class A) | 403.00 | 355.00 | 258.17 | 252.79 | 222.63 | ||||||||||||||
Book value at period end | 277.60 | 250.82 | 239.14 | 223.77 | 215.35 | ||||||||||||||
SELECTED PERIOD AVERAGE BALANCES | |||||||||||||||||||
Total assets | $ | 34,302,867 | $ | 32,439,492 | $ | 31,072,235 | $ | 24,104,404 | $ | 21,295,587 | |||||||||
Investment securities | 7,036,564 | 6,616,355 | 7,011,767 | 5,994,080 | 5,206,000 | ||||||||||||||
Loans and leases (2) | 22,725,665 | 20,897,395 | 19,528,153 | 14,820,126 | 13,163,743 | ||||||||||||||
Interest-earning assets | 32,213,646 | 30,267,788 | 28,893,157 | 22,232,051 | 19,433,947 | ||||||||||||||
Deposits | 29,119,344 | 27,515,161 | 26,485,245 | 20,368,275 | 17,947,996 | ||||||||||||||
Interest-bearing liabilities | 19,576,353 | 19,158,317 | 18,986,755 | 15,273,619 | 13,910,299 | ||||||||||||||
Long-term obligations | 842,863 | 811,755 | 547,378 | 403,925 | 462,203 | ||||||||||||||
Shareholders' equity | $ | 3,206,250 | $ | 3,001,269 | $ | 2,797,300 | $ | 2,256,292 | $ | 1,936,895 | |||||||||
Shares outstanding | 12,010,405 | 12,010,405 | 12,010,405 | 10,221,721 | 9,618,952 | ||||||||||||||
SELECTED PERIOD-END BALANCES | |||||||||||||||||||
Total assets | $ | 34,527,512 | $ | 32,990,836 | $ | 31,475,934 | $ | 30,075,113 | $ | 21,193,878 | |||||||||
Investment securities | 7,180,256 | 7,006,678 | 6,861,548 | 7,172,435 | 5,388,610 | ||||||||||||||
Loans and leases: | |||||||||||||||||||
PCI | 762,998 | 809,169 | 950,516 | 1,186,498 | 1,029,426 | ||||||||||||||
Non-PCI | 22,833,827 | 20,928,709 | 19,289,474 | 17,582,967 | 12,104,298 | ||||||||||||||
Interest-earning assets | 32,216,187 | 30,691,551 | 29,224,436 | 27,730,515 | 19,428,929 | ||||||||||||||
Deposits | 29,266,275 | 28,161,343 | 26,930,755 | 25,678,577 | 17,874,066 | ||||||||||||||
Interest-bearing liabilities | 19,592,947 | 19,467,223 | 18,955,173 | 18,930,297 | 13,654,436 | ||||||||||||||
Long-term obligations | 870,240 | 832,942 | 704,155 | 351,320 | 510,769 | ||||||||||||||
Shareholders' equity | $ | 3,334,064 | $ | 3,012,427 | $ | 2,872,109 | $ | 2,687,594 | $ | 2,071,462 | |||||||||
Shares outstanding | 12,010,405 | 12,010,405 | 12,010,405 | 12,010,405 | 9,618,941 | ||||||||||||||
SELECTED RATIOS AND OTHER DATA | |||||||||||||||||||
Rate of return on average assets | 0.94 | % | 0.70 | % | 0.68 | % | 0.57 | % | 0.78 | % | |||||||||
Rate of return on average shareholders' equity | 10.10 | 7.51 | 7.52 | 6.14 | 8.62 | ||||||||||||||
Average equity to average assets ratio | 9.35 | 9.25 | 9.00 | 9.36 | 9.10 | ||||||||||||||
Net yield on interest-earning assets (taxable equivalent) | 3.30 | 3.14 | 3.22 | 3.21 | 3.82 | ||||||||||||||
Allowance for loan and lease losses to total loans and leases: | |||||||||||||||||||
Purchased Credit Impaired (PCI) | 1.31 | 1.70 | 1.72 | 1.82 | 5.20 | ||||||||||||||
Non-Purchased Credit Impaired (Non-PCI) | 0.93 | 0.98 | 0.98 | 1.04 | 1.49 | ||||||||||||||
Total | 0.94 | 1.01 | 1.02 | 1.09 | 1.78 | ||||||||||||||
Nonperforming assets to total loans and leases and other real estate at period end: | |||||||||||||||||||
Covered | 0.54 | 0.66 | 3.51 | 9.84 | 7.02 | ||||||||||||||
Noncovered | 0.61 | 0.67 | 0.79 | 0.66 | 0.74 | ||||||||||||||
Total | 0.61 | 0.67 | 0.83 | 0.91 | 1.25 | ||||||||||||||
Tier 1 risk-based capital ratio | 12.88 | 12.42 | 12.65 | 13.61 | 14.89 | ||||||||||||||
Common equity Tier 1 ratio | 12.88 | 12.42 | 12.51 | N/A | N/A | ||||||||||||||
Total risk-based capital ratio | 14.21 | 13.85 | 14.03 | 14.69 | 16.39 | ||||||||||||||
Leverage capital ratio | 9.47 | 9.05 | 8.96 | 8.91 | 9.80 | ||||||||||||||
Dividend payout ratio | 4.64 | 6.39 | 6.85 | 8.85 | 6.92 | ||||||||||||||
Average loans and leases to average deposits | 78.04 | 75.95 | 73.73 | 72.76 | 73.34 |
• | Loan growth was strong during 2017, as net balances increased by $1.86 billion to $23.60 billion, primarily driven by originated portfolio growth and net loans acquired from HCB and Guaranty. |
• | Deposit growth continued in 2017, up $1.10 billion to $29.27 billion, primarily due to organic growth in demand deposit account balances, interest-bearing savings and checking accounts, and the addition of deposit balances from the HCB and Guaranty acquisitions. |
• | The yield on the investment portfolio continued to improve, while deposit funding costs remained relatively unchanged. |
• | Earnings in 2017 included gains of $134.7 million recognized in connection with the HCB and Guaranty acquisitions. |
• | Core fee-based business contributed to higher noninterest income, led by growth of $20.1 million in merchant and cardholder income primarily reflecting increases in sales volume. |
• | The allowance for loan and lease losses as a percentage of total loans and leases declined to 0.94 percent at December 31, 2017, compared to 1.01 percent at December 31, 2016, primarily due to favorable experience in certain loan loss factors. |
• | Provision expense related to loan and lease losses decreased $7.2 million primarily due to lower loan loss estimates. |
• | Net charge-offs as a percentage of average loans and leases remained low at 0.10 percent in 2017, unchanged from 2016. |
• | Earnings in the fourth quarter of 2017 included additional income tax expense of $25.8 million related to the re-measurement of deferred taxes as a result of the Tax Act. Although earnings per share for the three and twelve months ended December 31, 2017 were up compared to the same periods in the prior year, the increase in income tax expense had a negative impact on earnings per share. |
• | BancShares remained well-capitalized at December 31, 2017 under Basel III capital requirements with a total risk-based capital ratio of 14.21 percent, Tier 1 risk-based capital ratio of 12.88 percent, common equity Tier 1 ratio of 12.88 percent and leverage capital ratio of 9.47 percent. |
• | For the fourth quarter of 2017, BancShares declared and paid dividends of $0.35 per share of outstanding common stock to shareholders, which is approximately a 17 percent increase from the $0.30 per share in previous periods. |
(Dollars in thousands) | As recorded by FCB | ||
Assets | |||
Cash and due from banks | $ | 48,824 | |
Overnight investments | 94,134 | ||
Investment securities | 12,140 | ||
Loans | 689,086 | ||
Premises and equipment | 8,603 | ||
Income earned not collected | 6,720 | ||
Intangible assets | 9,870 | ||
Other assets | 5,748 | ||
Total assets acquired | 875,125 | ||
Liabilities | |||
Deposits | 982,307 | ||
Other liabilities | 440 | ||
Total liabilities assumed | 982,747 | ||
Fair value of net liabilities assumed | (107,622 | ) | |
Cash received from FDIC | 230,350 | ||
Gain on acquisition of Guaranty | $ | 122,728 |
(Dollars in thousands) | As recorded by FCB | ||
Assets | |||
Cash and due from banks | $ | 3,350 | |
Overnight investments | 7,478 | ||
Investment securities | 14,455 | ||
Loans | 85,149 | ||
Income earned not collected | 31 | ||
Intangible assets | 850 | ||
Other assets | 237 | ||
Total assets acquired | 111,550 | ||
Liabilities | |||
Deposits | 121,755 | ||
Other liabilities | 74 | ||
Total liabilities assumed | 121,829 | ||
Fair value of net liabilities assumed | (10,279 | ) | |
Cash received from FDIC | 22,296 | ||
Gain on acquisition of HCB | $ | 12,017 |
Entity | Date of transaction | Fair value of loans at acquisition date | ||||
(Dollars in thousands) | ||||||
Guaranty Bank (Guaranty) | May 5, 2017 | $ | 689,086 | |||
Harvest Community Bank (HCB) | January 13, 2017 | 85,149 | ||||
First Cornerstone Bank (FCSB) | May 6, 2016 | 43,776 | ||||
North Milwaukee State Bank (NMSB) | March 11, 2016 | 36,914 | ||||
Capitol City Bank & Trust (CCBT) | February 13, 2015 | 154,496 | ||||
Colorado Capital Bank (CCB) | July 8, 2011 | 320,789 | ||||
Atlantic Bank & Trust (ABT) (1) | June 3, 2011 | 112,238 | ||||
United Western Bank (United Western) | January 21, 2011 | 759,351 | ||||
Williamsburg First National Bank (WFNB) (1) | July 23, 2010 | 55,054 | ||||
Sun American Bank (SAB) | March 5, 2010 | 290,891 | ||||
First Regional Bank (First Regional) | January 29, 2010 | 1,260,249 | ||||
Georgian Bank (GB) (1) | September 25, 2009 | 979,485 | ||||
Venture Bank (VB) | September 11, 2009 | 456,995 | ||||
Temecula Valley Bank (TVB) | July 17, 2009 | 855,583 | ||||
Total | $ | 6,100,056 | ||||
Carrying value of FDIC-assisted acquired loans as of December 31, 2017 | $ | 1,031,943 |
Fair value at acquisition date (1) | Losses/expenses incurred through 12/31/2017 (2) | Cumulative amount reimbursed by FDIC through 12/31/2017 (3) | Carrying value at December 31, 2017 | Current portion of receivable due from (to) FDIC for 12/31/2017 filings | Prospective amortization (accretion) (4) | |||||||||||||||||
(Dollars in thousands) | FDIC shared-loss receivable | FDIC shared-loss payable | ||||||||||||||||||||
Entity | ||||||||||||||||||||||
GB - combined losses | 279,310 | 898,334 | 462,807 | (1,132 | ) | — | (1,132 | ) | — | |||||||||||||
First Regional - combined losses | 378,695 | 206,930 | 132,573 | (1,860 | ) | 88,019 | (1,860 | ) | — | |||||||||||||
United Western | ||||||||||||||||||||||
Non-single family residential losses | 112,672 | 92,314 | 76,506 | 17 | 13,323 | 17 | — | |||||||||||||||
Single family residential losses | 24,781 | 5,918 | 4,580 | 5,198 | — | — | 5,215 | |||||||||||||||
Total | $ | 795,458 | $ | 1,203,496 | $ | 676,466 | $ | 2,223 | $ | 101,342 | $ | (2,975 | ) | $ | 5,215 | |||||||
(1) | Fair value at acquisition date represents the initial fair value of the receivable from FDIC, excluding the payable to FDIC. For GB the acquisition date is when Bancorporation initially acquired the banks. | |||||||||||||||||||||
(2) | For GB the losses/expenses incurred through December 31, 2017 include amounts prior to BancShares' acquisition through merger with Bancorporation. | |||||||||||||||||||||
(3) | For GB the cumulative amount reimbursed by FDIC through December 31, 2017 include amounts prior to BancShares' acquisition through merger with Bancorporation. | |||||||||||||||||||||
(4) | Prospective amortization (accretion) reflects balances that, due to post-acquisition credit quality improvement, will be amortized over the shorter of the covered asset's life or the term of the loss share period. | |||||||||||||||||||||
Except where noted, each FDIC-assisted transaction has a separate shared-loss agreement for Single-Family Residential loans (SFR) and Non-Single-Family Residential loans (NSFR). | ||||||||||||||||||||||
For GB, combined losses are covered at 0 percent up to $327.0 million, 80 percent for losses between $327.0 million and $853.0 million and 95 percent above $853.0 million. The shared-loss agreement expired on September 25, 2014 for all GB NSFR loans and will expire on September 25, 2019 for the SFR loans. | ||||||||||||||||||||||
For First Regional, NSFR losses were covered at 0 percent up to $41.8 million, 80 percent for losses between $41.8 million and $1.02 billion and 95 percent for losses above $1.02 billion. The shared-loss agreement expired on January 29, 2015 for all First Regional NSFR loans. First Regional had no SFR loans. | ||||||||||||||||||||||
For United Western NSFR loans, losses are covered at 80 percent up to $111.5 million, 30 percent between $111.5 million and $227.0 million and 80 percent for losses above $227.0 million. The shared-loss agreement expired on January 21, 2016. | ||||||||||||||||||||||
For United Western SFR loans, losses are covered at 80 percent up to $32.5 million, 0 percent between $32.5 million and $57.7 million and 80 percent for losses above $57.7 million. The shared-loss agreement expires on January 21, 2021. | ||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||
(Dollars in thousands, taxable equivalent) | Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | ||||||||||||||||
Assets | ||||||||||||||||||||||
Loans and leases | $ | 22,725,665 | $ | 959,785 | 4.22 | % | $ | 20,897,395 | $ | 881,266 | 4.22 | % | ||||||||||
Investment securities: | ||||||||||||||||||||||
U.S. Treasury | 1,628,088 | 18,015 | 1.11 | 1,548,895 | 12,078 | 0.78 | ||||||||||||||||
Government agency | 38,948 | 647 | 1.66 | 332,107 | 2,941 | 0.89 | ||||||||||||||||
Mortgage-backed securities | 5,206,897 | 98,341 | 1.89 | 4,631,927 | 79,336 | 1.71 | ||||||||||||||||
Corporate bonds | 60,950 | 3,877 | 6.36 | 30,347 | 1,783 | 5.88 | ||||||||||||||||
State, county and municipal | — | — | — | 49 | 1 | 2.69 | ||||||||||||||||
Other | 101,681 | 698 | 0.69 | 73,030 | 911 | 1.25 | ||||||||||||||||
Total investment securities | 7,036,564 | 121,578 | 1.73 | 6,616,355 | 97,050 | 1.47 | ||||||||||||||||
Overnight investments | 2,451,417 | 26,846 | 1.10 | 2,754,038 | 14,534 | 0.53 | ||||||||||||||||
Total interest-earning assets | 32,213,646 | $ | 1,108,209 | 3.44 | % | 30,267,788 | $ | 992,850 | 3.28 | |||||||||||||
Cash and due from banks | 417,229 | 467,315 | ||||||||||||||||||||
Premises and equipment | 1,133,255 | 1,128,870 | ||||||||||||||||||||
FDIC shared-loss receivable | 5,111 | 7,370 | ||||||||||||||||||||
Allowance for loan and lease losses | (226,465 | ) | (209,232 | ) | ||||||||||||||||||
Other real estate owned | 56,478 | 66,294 | ||||||||||||||||||||
Other assets | 703,613 | 711,087 | ||||||||||||||||||||
Total assets | $ | 34,302,867 | $ | 32,439,492 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||
Checking with interest | $ | 4,956,498 | $ | 1,021 | 0.02 | % | $ | 4,484,557 | $ | 910 | 0.02 | % | ||||||||||
Savings | 2,278,895 | 717 | 0.03 | 2,024,656 | 615 | 0.03 | ||||||||||||||||
Money market accounts | 8,136,731 | 6,969 | 0.09 | 8,148,123 | 6,472 | 0.08 | ||||||||||||||||
Time deposits | 2,634,434 | 7,489 | 0.28 | 2,959,757 | 10,172 | 0.34 | ||||||||||||||||
Total interest-bearing deposits | 18,006,558 | 16,196 | 0.09 | 17,617,093 | 18,169 | 0.10 | ||||||||||||||||
Repurchase obligations | 649,252 | 2,179 | 0.34 | 721,933 | 1,861 | 0.26 | ||||||||||||||||
Other short-term borrowings | 77,680 | 2,659 | 3.39 | 7,536 | 104 | 1.38 | ||||||||||||||||
Long-term obligations | 842,863 | 22,760 | 2.67 | 811,755 | 22,948 | 2.83 | ||||||||||||||||
Total interest-bearing liabilities | 19,576,353 | 43,794 | 0.22 | 19,158,317 | 43,082 | 0.22 | ||||||||||||||||
Demand deposits | 11,112,786 | 9,898,068 | ||||||||||||||||||||
Other liabilities | 407,478 | 381,838 | ||||||||||||||||||||
Shareholders' equity | 3,206,250 | 3,001,269 | ||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 34,302,867 | $ | 32,439,492 | ||||||||||||||||||
Interest rate spread | 3.22 | % | 3.06 | % | ||||||||||||||||||
Net interest income and net yield | ||||||||||||||||||||||
on interest-earning assets | $ | 1,064,415 | 3.30 | % | $ | 949,768 | 3.14 | % |
2015 | 2014 | 2013 | |||||||||||||||||||||||||||
Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | |||||||||||||||||||||
$ | 19,528,153 | $ | 880,381 | 4.51 | % | $ | 14,820,126 | $ | 703,716 | 4.75 | % | $ | 13,163,743 | $ | 759,261 | 5.77 | % | ||||||||||||
2,065,750 | 15,918 | 0.77 | 1,690,186 | 12,139 | 0.72 | 610,327 | 1,714 | 0.28 | |||||||||||||||||||||
801,408 | 7,095 | 0.89 | 1,509,868 | 7,717 | 0.51 | 2,829,328 | 12,783 | 0.45 | |||||||||||||||||||||
4,141,703 | 65,815 | 1.59 | 2,769,255 | 36,492 | 1.32 | 1,745,540 | 22,642 | 1.30 | |||||||||||||||||||||
1,042 | 178 | 17.08 | 4,779 | 254 | 5.31 | — | — | — | |||||||||||||||||||||
903 | 53 | 5.85 | 295 | 21 | 7.12 | 276 | 20 | 7.25 | |||||||||||||||||||||
961 | 28 | 2.93 | 19,697 | 385 | 1.95 | 20,529 | 321 | 1.56 | |||||||||||||||||||||
7,011,767 | 89,087 | 1.27 | 5,994,080 | 57,008 | 0.95 | 5,206,000 | 37,480 | 0.72 | |||||||||||||||||||||
2,353,237 | 6,067 | 0.26 | 1,417,845 | 3,712 | 0.26 | 1,064,204 | 2,723 | 0.26 | |||||||||||||||||||||
28,893,157 | $ | 975,535 | 3.38 | % | 22,232,051 | $ | 764,436 | 3.44 | % | 19,433,947 | $ | 799,464 | 4.12 | % | |||||||||||||||
469,270 | 493,947 | 483,186 | |||||||||||||||||||||||||||
1,125,159 | 943,270 | 874,862 | |||||||||||||||||||||||||||
18,637 | 61,605 | 168,281 | |||||||||||||||||||||||||||
(206,342 | ) | (210,937 | ) | (257,791 | ) | ||||||||||||||||||||||||
76,845 | 87,944 | 119,694 | |||||||||||||||||||||||||||
695,509 | 496,524 | 473,408 | |||||||||||||||||||||||||||
$ | 31,072,235 | $ | 24,104,404 | $ | 21,295,587 | ||||||||||||||||||||||||
$ | 4,170,598 | $ | 856 | 0.02 | % | $ | 2,988,287 | $ | 779 | 0.03 | % | $ | 2,346,192 | $ | 600 | 0.03 | % | ||||||||||||
1,838,531 | 479 | 0.03 | 1,196,096 | 624 | 0.05 | 968,251 | 482 | 0.05 | |||||||||||||||||||||
8,236,160 | 7,051 | 0.09 | 6,733,959 | 6,527 | 0.10 | 6,338,622 | 9,755 | 0.15 | |||||||||||||||||||||
3,359,794 | 12,844 | 0.38 | 3,159,510 | 16,856 | 0.53 | 3,198,606 | 23,658 | 0.74 | |||||||||||||||||||||
17,605,083 | 21,230 | 0.12 | 14,077,852 | 24,786 | 0.18 | 12,851,671 | 34,495 | 0.27 | |||||||||||||||||||||
606,357 | 1,481 | 0.24 | 159,696 | 350 | 0.22 | 108,612 | 316 | 0.29 | |||||||||||||||||||||
227,937 | 3,179 | 1.39 | 632,146 | 8,827 | 1.40 | 487,813 | 2,408 | 0.49 | |||||||||||||||||||||
547,378 | 18,414 | 3.36 | 403,925 | 16,388 | 4.06 | 462,203 | 19,399 | 4.20 | |||||||||||||||||||||
18,986,755 | 44,304 | 0.23 | 15,273,619 | 50,351 | 0.33 | 13,910,299 | 56,618 | 0.41 | |||||||||||||||||||||
8,880,162 | 6,290,423 | 5,096,325 | |||||||||||||||||||||||||||
408,018 | 284,070 | 352,068 | |||||||||||||||||||||||||||
2,797,300 | 2,256,292 | 1,936,895 | |||||||||||||||||||||||||||
$ | 31,072,235 | $ | 24,104,404 | $ | 21,295,587 | ||||||||||||||||||||||||
3.15 | % | 3.11 | % | 3.71 | % | ||||||||||||||||||||||||
$ | 931,231 | 3.22 | % | $ | 714,085 | 3.21 | % | $ | 742,846 | 3.82 | % |
2017 | 2016 | ||||||||||||||||||||||
Change from previous year due to: | Change from previous year due to: | ||||||||||||||||||||||
Yield/ | Total | Yield/ | Total | ||||||||||||||||||||
(Dollars in thousands) | Volume | Rate | Change | Volume | Rate | Change | |||||||||||||||||
Assets | |||||||||||||||||||||||
Loans and leases | $ | 77,836 | $ | 683 | $ | 78,519 | $ | 59,635 | $ | (58,750 | ) | $ | 885 | ||||||||||
Investment securities: | |||||||||||||||||||||||
U.S. Treasury | 722 | 5,215 | 5,937 | (4,013 | ) | 173 | (3,840 | ) | |||||||||||||||
Government agency | (3,730 | ) | 1,436 | (2,294 | ) | (4,165 | ) | 11 | (4,154 | ) | |||||||||||||
Mortgage-backed securities | 10,250 | 8,755 | 19,005 | 8,173 | 5,348 | 13,521 | |||||||||||||||||
Corporate bonds | 1,874 | 220 | 2,094 | 3,363 | (1,758 | ) | 1,605 | ||||||||||||||||
State, county and municipal | (1 | ) | — | (1 | ) | (37 | ) | (15 | ) | (52 | ) | ||||||||||||
Other | 277 | (490 | ) | (213 | ) | 1,505 | (622 | ) | 883 | ||||||||||||||
Total investment securities | 9,392 | 15,136 | 24,528 | 4,826 | 3,137 | 7,963 | |||||||||||||||||
Overnight investments | (2,495 | ) | 14,807 | 12,312 | 1,578 | 6,889 | 8,467 | ||||||||||||||||
Total interest-earning assets | $ | 84,733 | $ | 30,626 | $ | 115,359 | $ | 66,039 | $ | (48,724 | ) | $ | 17,315 | ||||||||||
Liabilities | |||||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||
Checking with interest | $ | 103 | $ | 8 | $ | 111 | $ | 58 | $ | (4 | ) | $ | 54 | ||||||||||
Savings | 89 | 13 | 102 | 96 | 40 | 136 | |||||||||||||||||
Money market accounts | (163 | ) | 660 | 497 | 83 | (662 | ) | (579 | ) | ||||||||||||||
Time deposits | (1,007 | ) | (1,676 | ) | (2,683 | ) | (1,424 | ) | (1,248 | ) | (2,672 | ) | |||||||||||
Total interest-bearing deposits | (978 | ) | (995 | ) | (1,973 | ) | (1,187 | ) | (1,874 | ) | (3,061 | ) | |||||||||||
Repurchase obligations | (224 | ) | 542 | 318 | 268 | 112 | 380 | ||||||||||||||||
Other short-term borrowings | 1,686 | 869 | 2,555 | (3,058 | ) | (17 | ) | (3,075 | ) | ||||||||||||||
Long-term obligations | 996 | (1,184 | ) | (188 | ) | 8,159 | (3,625 | ) | 4,534 | ||||||||||||||
Total interest-bearing liabilities | 1,480 | (768 | ) | 712 | 4,182 | (5,404 | ) | (1,222 | ) | ||||||||||||||
Change in net interest income | $ | 83,253 | $ | 31,394 | $ | 114,647 | $ | 61,857 | $ | (43,320 | ) | $ | 18,537 |
Year ended December 31 | |||||||||||
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
Gain on acquisitions | $ | 134,745 | $ | 5,831 | $ | 42,930 | |||||
Cardholder services | 95,365 | 83,417 | 77,342 | ||||||||
Merchant services | 103,962 | 95,774 | 84,207 | ||||||||
Service charges on deposit accounts | 101,201 | 89,359 | 90,546 | ||||||||
Wealth management services | 86,719 | 80,221 | 82,865 | ||||||||
Securities gains | 4,293 | 26,673 | 10,817 | ||||||||
Other service charges and fees | 28,321 | 27,011 | 23,987 | ||||||||
Mortgage income | 23,251 | 20,348 | 18,168 | ||||||||
Insurance commissions | 12,465 | 11,150 | 11,757 | ||||||||
ATM income | 9,143 | 7,283 | 7,119 | ||||||||
Adjustments to FDIC shared-loss receivable | (6,232 | ) | (9,725 | ) | (19,009 | ) | |||||
Net impact from FDIC loss share termination | (45 | ) | 16,559 | — | |||||||
Recoveries of PCI loans previously charged-off | 21,111 | 20,126 | 21,169 | ||||||||
Other | 26,730 | 14,044 | 15,190 | ||||||||
Total noninterest income | $ | 641,029 | $ | 488,071 | $ | 467,088 |
• | Merchant and cardholder services income increased by $20.1 million due to increases in sales volume and income from the Guaranty acquisition. |
• | Other income increased by $12.7 million, driven primarily by the early termination of two forward-starting FHLB advances which resulted in a realized gain of $12.5 million. |
• | Service charges on deposit accounts increased by $11.8 million, primarily attributable to the Guaranty acquisition, as well as increased fees charged on certain transactions. |
• | Wealth management services income increased by $6.5 million, driven primarily by an increase in sales volume on annuity products, increased brokerage income, and higher commissions earned on trust services. |
• | Lower FDIC shared-loss receivable adjustments of $3.5 million primarily due to a decrease in OREO and loan expenses related to shared-loss agreements. |
• | Mortgage income increased $2.9 million primarily attributable to interest rate movements and mortgage servicing rights retained related to the sale of certain residential mortgage loans. |
• | Gains on sales of securities decreased by $22.4 million due to lower investment portfolio sales in 2017 compared to 2016. |
• | Net impact from the FDIC shared-loss termination of $16.6 million recognized in 2016. |
• | Merchant and cardholder services income increased by $17.6 million, reflecting sales volume growth. |
• | Net impact from the FDIC shared-loss termination of $16.6 million. |
• | Gains on sales of securities increased by $15.9 million. |
• | Lower FDIC receivable adjustments of $9.3 million resulting from a reduction in claims and lower amortization expense due to the early termination of the shared-loss agreements. |
Year ended December 31 | |||||||||||
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
Salaries and wages | $ | 475,214 | $ | 428,351 | $ | 429,742 | |||||
Employee benefits | 113,231 | 104,518 | 113,309 | ||||||||
Occupancy expense | 104,690 | 102,609 | 98,191 | ||||||||
Equipment expense | 97,478 | 92,501 | 92,639 | ||||||||
Merchant processing | 78,537 | 71,150 | 62,473 | ||||||||
Cardholder processing | 30,573 | 29,207 | 25,296 | ||||||||
FDIC insurance expense | 22,191 | 20,967 | 18,340 | ||||||||
Collection and foreclosure-related expenses | 14,407 | 13,379 | 12,311 | ||||||||
Processing fees paid to third parties | 25,673 | 18,976 | 18,779 | ||||||||
Cardholder reward programs | 9,956 | 10,615 | 11,069 | ||||||||
Telecommunications | 12,172 | 14,496 | 14,406 | ||||||||
Consultant | 14,963 | 10,931 | 8,925 | ||||||||
Advertising | 11,227 | 10,239 | 12,431 | ||||||||
Core deposit intangible amortization | 17,194 | 16,851 | 18,892 | ||||||||
Merger-related expenses | 9,015 | 5,341 | 14,174 | ||||||||
Other | 95,014 | 98,607 | 87,938 | ||||||||
Total noninterest expense | $ | 1,131,535 | $ | 1,048,738 | $ | 1,038,915 |
• | Personnel expense, which includes salaries, wages and employee benefits, increased by $55.6 million primarily driven by acquired bank personnel, merit increases, staff additions, and payroll incentive plans. |
• | Merchant processing expense increased by $7.4 million aligned with higher sales volumes during 2017. |
• | Processing fees paid to third parties increased by $6.7 million primarily due to core processing expenses related to the acquisitions of Guaranty and HCB. |
• | Equipment expense increased by $5.0 million attributable to investments in new technology as well as upgrades to existing equipment. |
• | Consultant expenses increased by $4.0 million primarily due to regulatory, accounting and compliance-related services. |
• | Merger-related expense increased by $3.7 million primarily driven by costs associated with the Guaranty and HCB acquisitions in 2017. |
• | Processing expenses for merchant and cardholder services increased by $12.6 million aligned with higher sales volume. |
• | Other expense increased by $10.7 million primarily as a result of higher operational losses, including losses on debit and credit cards of $4.5 million and costs related to branch closures of $3.2 million. |
• | Occupancy expense increased by $4.4 million as a result of repairs to bank buildings related to Hurricane Matthew and an increase in depreciation expense for technological investments put into production during 2016. |
• | FDIC insurance expense increased $2.6 million due to a higher surcharge imposed during 2016. |
• | Employee benefits expense decreased by $8.8 million driven primarily by lower pension costs as a result of an increase to the discount rate used to estimate pension expense in 2016. |
• | Merger-related expense decreased by $8.8 million due primarily to increased costs related to the Bancorporation merger in 2015. |
December 31 | |||||||||||||||||||||||
2017 | 2016 | 2015 | |||||||||||||||||||||
(Dollars in thousands) | Cost | Fair value | Cost | Fair value | Cost | Fair value | |||||||||||||||||
Investment securities available for sale | |||||||||||||||||||||||
U.S. Treasury | 1,658,410 | 1,657,864 | 1,650,675 | 1,650,319 | 1,675,996 | 1,674,882 | |||||||||||||||||
Government agency | — | — | 40,291 | 40,398 | 498,804 | 498,660 | |||||||||||||||||
Mortgage-backed securities | 5,428,074 | 5,349,426 | 5,259,466 | 5,175,425 | 4,692,447 | 4,668,198 | |||||||||||||||||
Equity securities | 75,471 | 105,208 | 71,873 | 83,507 | 7,935 | 8,893 | |||||||||||||||||
Corporate bonds | 59,414 | 59,963 | 49,367 | 49,562 | 8,500 | 8,500 | |||||||||||||||||
Other | 7,645 | 7,719 | 7,615 | 7,369 | 2,115 | 2,160 | |||||||||||||||||
Total investment securities available for sale | $ | 7,229,014 | $ | 7,180,180 | 7,079,287 | 7,006,580 | 6,885,797 | 6,861,293 | |||||||||||||||
Investment securities held to maturity | |||||||||||||||||||||||
Mortgage-backed securities | 76 | 81 | 98 | 104 | 255 | 265 | |||||||||||||||||
Total investment securities | $ | 7,229,090 | $ | 7,180,261 | $ | 7,079,385 | $ | 7,006,684 | $ | 6,886,052 | $ | 6,861,558 |
December 31, 2017 | ||||||||||||
Average maturity (Yrs./mos.) | Taxable equivalent yield | |||||||||||
(Dollars in thousands) | Cost | Fair value | ||||||||||
Investment securities available for sale: | ||||||||||||
U.S. Treasury | ||||||||||||
Within one year | $ | 808,768 | $ | 808,301 | 0/7 | 1.35 | % | |||||
One to five years | 849,642 | 849,563 | 1/4 | 1.85 | ||||||||
Total | 1,658,410 | 1,657,864 | 1/0 | 1.61 | ||||||||
Mortgage-backed securities(1) | ||||||||||||
One to five years | 890 | 886 | 2/2 | 1.73 | ||||||||
Five to ten years | 1,086,285 | 1,072,184 | 9/7 | 1.91 | ||||||||
Over ten years | 4,340,899 | 4,276,356 | 14/11 | 1.98 | ||||||||
Total | 5,428,074 | 5,349,426 | 13/10 | 1.97 | ||||||||
Corporate bonds | ||||||||||||
Five to ten years | 59,414 | 59,963 | 8/4 | 6.08 | ||||||||
Total | 59,414 | 59,963 | 8/4 | 6.08 | ||||||||
Other | ||||||||||||
Over ten years | 7,645 | 7,719 | 23/9 | 6.57 | ||||||||
Total | 7,645 | 7,719 | 23/9 | 6.57 | ||||||||
Equity securities | 75,471 | 105,208 | — | — | ||||||||
Total investment securities available for sale | 7,229,014 | 7,180,180 | ||||||||||
Investment securities held to maturity: | ||||||||||||
Mortgage-backed securities | ||||||||||||
One to five years | 3 | 3 | 4/8 | 2.93 | ||||||||
Five to ten years | 3 | 3 | 7/5 | 2.74 | ||||||||
Over ten years | 70 | 75 | 11/7 | 7.41 | ||||||||
Total investment securities held to maturity | 76 | 81 | 11/2 | 7.07 | ||||||||
Total investment securities | $ | 7,229,090 | $ | 7,180,261 |
December 31, 2017 | |||||||
(Dollars in thousands) | Cost | Fair Value | |||||
Federal Home Loan Mortgage Corporation | $ | 1,770,572 | $ | 1,744,040 | |||
Federal National Mortgage Association | 3,547,885 | 3,496,787 |
December 31 | |||||||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||
Non-PCI loans and leases(1): | |||||||||||||||||||
Commercial: | |||||||||||||||||||
Construction and land development | $ | 669,215 | $ | 649,157 | $ | 620,352 | $ | 493,133 | $ | 319,847 | |||||||||
Commercial mortgage | 9,729,022 | 9,026,220 | 8,274,548 | 7,552,948 | 6,362,490 | ||||||||||||||
Other commercial real estate | 473,433 | 351,291 | 321,021 | 244,875 | 178,754 | ||||||||||||||
Commercial and industrial | 2,730,407 | 2,567,501 | 2,368,958 | 1,988,934 | 1,081,158 | ||||||||||||||
Lease financing | 894,801 | 826,270 | 730,778 | 571,916 | 381,763 | ||||||||||||||
Other | 302,176 | 340,264 | 314,832 | 353,833 | 175,336 | ||||||||||||||
Total commercial loans | 14,799,054 | 13,760,703 | 12,630,489 | 11,205,639 | 8,499,348 | ||||||||||||||
Noncommercial: | |||||||||||||||||||
Residential mortgage | 3,523,786 | 2,889,124 | 2,695,985 | 2,493,058 | 982,421 | ||||||||||||||
Revolving mortgage | 2,701,525 | 2,601,344 | 2,523,106 | 2,561,800 | 2,113,285 | ||||||||||||||
Construction and land development | 248,289 | 231,400 | 220,073 | 205,016 | 122,792 | ||||||||||||||
Consumer | 1,561,173 | 1,446,138 | 1,219,821 | 1,117,454 | 386,452 | ||||||||||||||
Total noncommercial loans | 8,034,773 | 7,168,006 | 6,658,985 | 6,377,328 | 3,604,950 | ||||||||||||||
Total non-PCI loans and leases | $ | 22,833,827 | $ | 20,928,709 | $ | 19,289,474 | $ | 17,582,967 | $ | 12,104,298 | |||||||||
PCI loans: | |||||||||||||||||||
Commercial: | |||||||||||||||||||
Construction and land development | $ | 13,654 | $ | 20,766 | $ | 33,880 | $ | 78,079 | $ | 78,915 | |||||||||
Commercial mortgage | 358,103 | 453,013 | 525,468 | 577,518 | 642,891 | ||||||||||||||
Other commercial real estate | 17,124 | 12,645 | 17,076 | 40,193 | 41,381 | ||||||||||||||
Commercial and industrial | 6,374 | 11,844 | 15,182 | 27,254 | 17,254 | ||||||||||||||
Other | 1,683 | 1,702 | 2,008 | 3,079 | 866 | ||||||||||||||
Total commercial loans | 396,938 | 499,970 | 593,614 | 726,123 | 781,307 | ||||||||||||||
Noncommercial: | |||||||||||||||||||
Residential mortgage | 299,318 | 268,777 | 302,158 | 382,340 | 213,851 | ||||||||||||||
Revolving mortgage | 63,908 | 38,650 | 52,471 | 74,109 | 30,834 | ||||||||||||||
Construction and land development | 644 | — | — | 912 | 2,583 | ||||||||||||||
Consumer | 2,190 | 1,772 | 2,273 | 3,014 | 851 | ||||||||||||||
Total noncommercial loans | 366,060 | 309,199 | 356,902 | 460,375 | 248,119 | ||||||||||||||
Total PCI loans | 762,998 | 809,169 | 950,516 | 1,186,498 | 1,029,426 | ||||||||||||||
Total loans and leases | 23,596,825 | 21,737,878 | 20,239,990 | 18,769,465 | 13,133,724 | ||||||||||||||
Less allowance for loan and lease losses | (221,893 | ) | (218,795 | ) | (206,216 | ) | (204,466 | ) | (233,394 | ) | |||||||||
Net loans and leases | $ | 23,374,932 | $ | 21,519,083 | $ | 20,033,774 | $ | 18,564,999 | $ | 12,900,330 |
(Dollars in thousands) | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||
Allowance for loan and lease losses at beginning of period | $ | 218,795 | $ | 206,216 | $ | 204,466 | $ | 233,394 | $ | 319,018 | |||||||||
Reclassification (1) | — | — | — | — | 7,368 | ||||||||||||||
Non-PCI provision for loan and lease losses | 29,139 | 34,870 | 22,937 | 15,260 | 19,289 | ||||||||||||||
PCI provision for loan losses | (3,447 | ) | (1,929 | ) | (2,273 | ) | (14,620 | ) | (51,544 | ) | |||||||||
Non-PCI Charge-offs: | |||||||||||||||||||
Commercial: | |||||||||||||||||||
Construction and land development | (599 | ) | (680 | ) | (1,012 | ) | (316 | ) | (4,685 | ) | |||||||||
Commercial mortgage | (421 | ) | (987 | ) | (1,498 | ) | (1,147 | ) | (3,904 | ) | |||||||||
Other commercial real estate | (5 | ) | — | (178 | ) | — | (312 | ) | |||||||||||
Commercial and industrial | (10,926 | ) | (9,013 | ) | (5,952 | ) | (3,014 | ) | (4,785 | ) | |||||||||
Lease financing | (995 | ) | (442 | ) | (402 | ) | (100 | ) | (272 | ) | |||||||||
Other | (912 | ) | (144 | ) | — | (13 | ) | (6 | ) | ||||||||||
Total commercial loans | (13,858 | ) | (11,266 | ) | (9,042 | ) | (4,590 | ) | (13,964 | ) | |||||||||
Noncommercial: | |||||||||||||||||||
Residential mortgage | (1,376 | ) | (926 | ) | (1,619 | ) | (1,260 | ) | (2,387 | ) | |||||||||
Revolving mortgage | (2,368 | ) | (3,287 | ) | (2,925 | ) | (4,744 | ) | (6,064 | ) | |||||||||
Construction and land development | — | — | (22 | ) | (118 | ) | (392 | ) | |||||||||||
Consumer | (18,784 | ) | (14,108 | ) | (11,696 | ) | (9,787 | ) | (10,311 | ) | |||||||||
Total noncommercial loans | (22,528 | ) | (18,321 | ) | (16,262 | ) | (15,909 | ) | (19,154 | ) | |||||||||
Total non-PCI charge-offs | (36,386 | ) | (29,587 | ) | (25,304 | ) | (20,499 | ) | (33,118 | ) | |||||||||
Non-PCI Recoveries: | |||||||||||||||||||
Commercial: | |||||||||||||||||||
Construction and land development | 521 | 398 | 566 | 207 | 1,039 | ||||||||||||||
Commercial mortgage | 2,842 | 1,281 | 2,027 | 2,825 | 996 | ||||||||||||||
Other commercial real estate | 27 | 176 | 45 | 124 | 109 | ||||||||||||||
Commercial and industrial | 3,740 | 1,539 | 909 | 938 | 1,213 | ||||||||||||||
Lease financing | 249 | 190 | 38 | 110 | 107 | ||||||||||||||
Other | 285 | 539 | 91 | — | 1 | ||||||||||||||
Total commercial loans | 7,664 | 4,123 | 3,676 | 4,204 | 3,465 | ||||||||||||||
Noncommercial: | |||||||||||||||||||
Residential mortgage | 539 | 467 | 861 | 191 | 559 | ||||||||||||||
Revolving mortgage | 1,282 | 916 | 1,173 | 854 | 660 | ||||||||||||||
Construction and land development | — | 66 | 74 | 84 | 209 | ||||||||||||||
Consumer | 4,603 | 4,267 | 3,650 | 2,869 | 2,396 | ||||||||||||||
Total noncommercial loans | 6,424 | 5,716 | 5,758 | 3,998 | 3,824 | ||||||||||||||
Total non-PCI recoveries | 14,088 | 9,839 | 9,434 | 8,202 | 7,289 | ||||||||||||||
Non-PCI loans and leases charged-off, net | (22,298 | ) | (19,748 | ) | (15,870 | ) | (12,297 | ) | (25,829 | ) | |||||||||
PCI loans charged-off, net | (296 | ) | (614 | ) | (3,044 | ) | (17,271 | ) | (34,908 | ) | |||||||||
Allowance for loan and lease losses at end of period | $ | 221,893 | $ | 218,795 | $ | 206,216 | $ | 204,466 | $ | 233,394 | |||||||||
Reserve for unfunded commitments (1) | $ | 1,032 | $ | 1,133 | $ | 379 | $ | 333 | $ | 357 |
(Dollars in thousands) | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||
Average loans and leases: | |||||||||||||||||||
PCI | $ | 845,030 | $ | 898,706 | $ | 1,112,286 | $ | 1,195,238 | $ | 1,403,341 | |||||||||
Non-PCI | 21,880,635 | 19,998,689 | 18,415,867 | 13,624,888 | 11,760,402 | ||||||||||||||
Loans and leases at period end: | |||||||||||||||||||
PCI | 762,998 | 809,169 | 950,516 | 1,186,498 | 1,029,426 | ||||||||||||||
Non-PCI | 22,833,827 | 20,928,709 | 19,289,474 | 17,582,967 | 12,104,298 | ||||||||||||||
Allowance for loan and lease losses allocated to loans and leases: | |||||||||||||||||||
PCI | $ | 10,026 | $ | 13,769 | $ | 16,312 | $ | 21,629 | $ | 53,520 | |||||||||
Non-PCI | 211,867 | 205,026 | 189,904 | 182,837 | 179,874 | ||||||||||||||
Total | $ | 221,893 | $ | 218,795 | $ | 206,216 | $ | 204,466 | $ | 233,394 | |||||||||
Net charge-offs to average loans and leases: | |||||||||||||||||||
PCI | 0.04 | % | 0.07 | % | 0.27 | % | 1.44 | % | 2.49 | % | |||||||||
Non-PCI | 0.10 | 0.10 | 0.09 | 0.09 | 0.22 | ||||||||||||||
Total | 0.10 | 0.10 | 0.10 | 0.20 | 0.46 | ||||||||||||||
Allowance for loan and lease losses to total loans and leases: | |||||||||||||||||||
PCI | 1.31 | 1.70 | 1.72 | 1.82 | 5.20 | ||||||||||||||
Non-PCI | 0.93 | 0.98 | 0.98 | 1.04 | 1.49 | ||||||||||||||
Total | 0.94 | 1.01 | 1.02 | 1.09 | 1.78 |
December 31 | ||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||
(dollars in thousands) | Allowance for loan and lease losses | Percent of loans to total loans | Allowance for loan and lease losses | Percent of loans to total loans | Allowance for loan and lease losses | Percent of loans to total loans | Allowance for loan and lease losses | Percent of loans to total loans | Allowance for loan and lease losses | Percent of loans to total loans | ||||||||||||||||||||
Allowance for loan and lease losses allocated to: | ||||||||||||||||||||||||||||||
Non-PCI loans and leases | ||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||
Construction and land development - commercial | $ | 24,470 | 2.8 | % | $ | 28,877 | 3.0 | % | $ | 16,288 | 3.1 | % | $ | 11,961 | 2.9 | % | $ | 10,335 | 2.4 | % | ||||||||||
Commercial mortgage | 45,005 | 41.2 | 48,278 | 41.4 | 69,896 | 40.8 | 85,189 | 40.3 | 100,257 | 48.5 | ||||||||||||||||||||
Other commercial real estate | 4,571 | 2.0 | 3,269 | 1.6 | 2,168 | 1.6 | 732 | 1.3 | 1,009 | 1.4 | ||||||||||||||||||||
Commercial and industrial | 53,697 | 11.6 | 50,225 | 11.8 | 43,116 | 11.7 | 30,727 | 10.6 | 22,362 | 8.2 | ||||||||||||||||||||
Lease financing | 6,127 | 3.8 | 5,907 | 3.8 | 5,524 | 3.6 | 4,286 | 3.0 | 4,749 | 2.9 | ||||||||||||||||||||
Other | 4,689 | 1.3 | 3,127 | 1.6 | 1,855 | 1.6 | 3,184 | 1.9 | 190 | 1.3 | ||||||||||||||||||||
Total commercial | 138,559 | 62.7 | 139,683 | 63.2 | 138,847 | 62.4 | 136,079 | 60.0 | 138,902 | 64.7 | ||||||||||||||||||||
Noncommercial: | ||||||||||||||||||||||||||||||
Residential mortgage | 15,706 | 15.0 | 12,366 | 13.3 | 14,105 | 13.3 | 10,661 | 13.4 | 10,511 | 7.5 | ||||||||||||||||||||
Revolving mortgage | 22,436 | 11.4 | 23,094 | 12.0 | 15,971 | 12.5 | 18,650 | 13.7 | 16,239 | 16.1 | ||||||||||||||||||||
Construction and land development - noncommercial | 3,962 | 1.1 | 1,596 | 1.1 | 1,485 | 1.1 | 892 | 0.6 | 681 | 1.0 | ||||||||||||||||||||
Consumer | 31,204 | 6.6 | 28,287 | 6.7 | 19,496 | 6.0 | 16,555 | 6.0 | 13,541 | 2.9 | ||||||||||||||||||||
Total noncommercial | 73,308 | 34.1 | 65,343 | 33.1 | 51,057 | 32.9 | 46,758 | 33.7 | 40,972 | 27.5 | ||||||||||||||||||||
Total allowance for non-PCI loan and lease losses | 211,867 | 96.8 | 205,026 | 96.3 | 189,904 | 95.3 | 182,837 | 93.7 | 179,874 | 92.2 | ||||||||||||||||||||
PCI loans | 10,026 | 3.2 | 13,769 | 3.7 | 16,312 | 4.7 | 21,629 | 6.3 | 53,520 | 7.8 | ||||||||||||||||||||
Total allowance for loan and lease losses | $ | 221,893 | 100.0 | % | $ | 218,795 | 100.0 | % | $ | 206,216 | 100.0 | % | $ | 204,466 | 100.0 | % | $ | 233,394 | 100.0 | % |
December 31 | |||||||||||||||||||
(Dollars in thousands, except ratios) | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||
Nonaccrual loans and leases: | |||||||||||||||||||
Non-PCI | $ | 92,534 | $ | 82,307 | $ | 95,854 | $ | 44,005 | $ | 53,170 | |||||||||
PCI | 624 | 3,451 | 7,579 | 33,422 | 28,493 | ||||||||||||||
Other real estate | 51,097 | 61,231 | 65,559 | 93,436 | 83,979 | ||||||||||||||
Total nonperforming assets | $ | 144,255 | $ | 146,989 | $ | 168,992 | $ | 170,863 | $ | 165,642 | |||||||||
Nonaccrual loans and leases: | |||||||||||||||||||
Covered under shared-loss agreements | $ | 95 | $ | 93 | $ | 2,992 | $ | 27,020 | $ | 28,493 | |||||||||
Not covered under shared-loss agreements | 93,063 | 85,665 | 100,441 | 50,407 | 53,170 | ||||||||||||||
Other real estate owned: | |||||||||||||||||||
Covered | 271 | 472 | 6,817 | 22,982 | 47,081 | ||||||||||||||
Noncovered | 50,826 | 60,759 | 58,742 | 70,454 | 36,898 | ||||||||||||||
Total nonperforming assets | $ | 144,255 | $ | 146,989 | $ | 168,992 | $ | 170,863 | $ | 165,642 | |||||||||
Loans and leases at December 31: | |||||||||||||||||||
Covered | $ | 67,757 | $ | 84,821 | $ | 272,554 | $ | 485,308 | $ | 1,029,426 | |||||||||
Noncovered | 23,529,068 | 21,653,057 | 19,967,436 | 18,284,157 | 12,104,298 | ||||||||||||||
Accruing loans and leases 90 days or more past due | |||||||||||||||||||
Non-PCI | 2,978 | 2,718 | 3,315 | 11,250 | 8,784 | ||||||||||||||
PCI | 58,740 | 65,523 | 73,751 | 104,430 | 193,892 | ||||||||||||||
Interest income recognized on nonperforming loans and leases | 1,527 | 1,873 | 3,204 | 1,364 | 2,062 | ||||||||||||||
Interest income that would have been earned on nonperforming loans and leases had they been performing | 6,237 | 7,304 | 9,628 | 6,600 | 18,430 | ||||||||||||||
Ratio of nonperforming assets to total loans, leases, and other real estate owned: | |||||||||||||||||||
Covered | 0.54 | % | 0.66 | % | 3.51 | % | 9.84 | % | 7.02 | % | |||||||||
Noncovered | 0.61 | 0.67 | 0.79 | 0.66 | 0.74 | ||||||||||||||
Total | 0.61 | 0.67 | 0.83 | 0.91 | 1.25 |
December 31 | |||||||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||
Accruing TDRs: | |||||||||||||||||||
PCI | $ | 18,163 | $ | 26,068 | $ | 29,231 | $ | 44,647 | $ | 90,829 | |||||||||
Non-PCI | 112,228 | 101,462 | 84,065 | 91,316 | 85,126 | ||||||||||||||
Total accruing TDRs | $ | 130,391 | $ | 127,530 | $ | 113,296 | $ | 135,963 | $ | 175,955 | |||||||||
Nonaccruing TDRs: | |||||||||||||||||||
PCI | $ | 272 | $ | 301 | $ | 1,420 | $ | 2,225 | $ | 11,479 | |||||||||
Non-PCI | 33,898 | 23,085 | 30,127 | 13,291 | 19,322 | ||||||||||||||
Total nonaccruing TDRs | $ | 34,170 | $ | 23,386 | $ | 31,547 | $ | 15,516 | $ | 30,801 | |||||||||
All TDRs: | |||||||||||||||||||
PCI | $ | 18,435 | $ | 26,369 | $ | 30,651 | $ | 46,872 | $ | 102,308 | |||||||||
Non-PCI | 146,126 | 124,547 | 114,192 | 104,607 | 104,448 | ||||||||||||||
Total TDRs | $ | 164,561 | $ | 150,916 | $ | 144,843 | $ | 151,479 | $ | 206,756 |
December 31 | |||||||||||
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
Demand | $ | 11,237,375 | $ | 10,130,549 | $ | 9,274,470 | |||||
Checking with interest | 5,230,060 | 4,919,727 | 4,445,353 | ||||||||
Money market | 8,059,271 | 8,193,392 | 8,205,705 | ||||||||
Savings | 2,340,449 | 2,099,579 | 1,909,021 | ||||||||
Time | 2,399,120 | 2,818,096 | 3,096,206 | ||||||||
Total deposits | $ | 29,266,275 | $ | 28,161,343 | $ | 26,930,755 |
(Dollars in thousands) | December 31, 2017 | ||
Time deposits maturing in: | |||
Three months or less | $ | 340,461 | |
Over three months through six months | 117,236 | ||
Over six months through 12 months | 174,155 | ||
More than 12 months | 289,965 | ||
Total | $ | 921,817 |
2017 | 2016 | 2015 | ||||||||||||||||||
(dollars in thousands) | Amount | Rate | Amount | Rate | Amount | Rate | ||||||||||||||
Master notes | ||||||||||||||||||||
At December 31 | $ | — | — | % | $ | — | — | % | $ | — | — | % | ||||||||
Average during year | — | — | — | — | 133,001 | 0.35 | ||||||||||||||
Maximum month-end balance during year | — | — | 417,924 | |||||||||||||||||
Repurchase agreements | ||||||||||||||||||||
At December 31 | 586,171 | 0.30 | 590,772 | 0.31 | 592,182 | 0.28 | ||||||||||||||
Average during year | 649,252 | 0.34 | 721,933 | 0.26 | 606,357 | 0.24 | ||||||||||||||
Maximum month-end balance during year | 725,711 | 779,613 | 747,206 | |||||||||||||||||
Federal funds purchased | ||||||||||||||||||||
At December 31 | 2,551 | 0.12 | 2,551 | 0.12 | 2,551 | 0.12 | ||||||||||||||
Average during year | 2,551 | 0.12 | 2,556 | 0.12 | 2,551 | 0.12 | ||||||||||||||
Maximum month-end balance during year | 2,551 | 2,551 | 2,551 | |||||||||||||||||
Notes payable to Federal Home Loan Banks | ||||||||||||||||||||
At December 31 | 90,000 | 2.95 - 3.57 | 10,000 | 4.74 | — | — | ||||||||||||||
Average during year | 70,115 | 3.17 | 4,898 | 2.14 | 22,192 | 2.61 | ||||||||||||||
Maximum month-end balance during year | 90,000 | 10,000 | 80,000 | |||||||||||||||||
Subordinated notes payable | ||||||||||||||||||||
At December 31 | 15,000 | 8.00 | — | — | — | — | ||||||||||||||
Average during year | 5,014 | 8.00 | — | — | 70,193 | 2.34 | ||||||||||||||
Maximum month-end balance during year | 15,000 | — | 200,000 | |||||||||||||||||
Unamortized purchase accounting adjustments | ||||||||||||||||||||
At December 31 | 85 | — | 164 | — | — | — | ||||||||||||||
Average during year | 41 | — | 82 | — | — | — | ||||||||||||||
Maximum month-end balance during year | 140 | 257 | — |
(Dollars in thousands) | December 31, 2017 | December 31, 2016 | December 31, 2015 | Regulatory minimum (1) | Well-capitalized requirement (1) | ||||||||||||
Tier 1 risk-based capital | $ | 3,287,364 | $ | 2,995,557 | $ | 2,831,242 | |||||||||||
Tier 2 risk-based capital | 339,425 | 344,429 | 308,970 | ||||||||||||||
Total risk-based capital | $ | 3,626,789 | $ | 3,339,986 | $ | 3,140,212 | |||||||||||
Common equity Tier 1 capital | $ | 3,287,364 | $ | 2,995,557 | $ | 2,799,163 | |||||||||||
Risk-adjusted assets | 25,528,286 | 24,113,117 | 22,376,034 | ||||||||||||||
Risk-based capital ratios | |||||||||||||||||
Tier 1 risk-based capital | 12.88 | % | 12.42 | % | 12.65 | % | 6.00 | % | 8.00 | % | |||||||
Common equity Tier 1 | 12.88 | 12.42 | 12.51 | 4.50 | 6.50 | ||||||||||||
Total risk-based capital | 14.21 | 13.85 | 14.03 | 8.00 | 10.00 | ||||||||||||
Tier 1 leverage ratio | 9.47 | 9.05 | 8.96 | 4.00 | 5.00 | ||||||||||||
Capital conservation buffer (2) | 6.21 | 5.85 | N/A | 1.25 | N/A |
December 31, 2017 | |
Collateral location | Percent of real estate secured loans with collateral located in the state |
North Carolina | 39.9% |
South Carolina | 16.1 |
California | 9.5 |
Virginia | 7.6 |
Georgia | 5.9 |
Florida | 3.7 |
Washington | 2.9 |
Texas | 2.6 |
Tennessee | 1.7 |
All other locations | 10.1 |
Estimated increase (decrease) in net interest income | |||||
Change in interest rate (basis point) | December 31, 2017 | December 31, 2016 | |||
-100 | (12.25 | )% | (11.21 | )% | |
+100 | 3.66 | 4.12 | |||
+200 | 4.61 | 5.06 | |||
+300 | 2.43 | 2.08 |
Estimated increase (decrease) in EVE | |||||
Change in interest rate (basis point) | December 31, 2017 | December 31, 2016 | |||
-100 | (15.44 | )% | (15.72 | )% | |
+100 | 3.38 | 3.10 | |||
+200 | 1.06 | 0.85 | |||
+300 | (5.52 | ) | (5.44 | ) |
At December 31, 2017, maturing | |||||||||||||||
(Dollars in thousands) | Within One Year | One to Five Years | After Five Years | Total | |||||||||||
Loans and leases: | |||||||||||||||
Secured by real estate | $ | 1,239,684 | $ | 5,668,584 | $ | 11,189,753 | $ | 18,098,021 | |||||||
Commercial and industrial | 801,116 | 1,048,933 | 886,732 | 2,736,781 | |||||||||||
Other | 516,070 | 1,413,293 | 832,660 | 2,762,023 | |||||||||||
Total loans and leases | $ | 2,556,870 | $ | 8,130,810 | $ | 12,909,145 | $ | 23,596,825 | |||||||
Loans maturing after one year with: | |||||||||||||||
Fixed interest rates | $ | 6,731,497 | $ | 8,252,103 | $ | 14,983,600 | |||||||||
Floating or adjustable rates | 1,399,313 | 4,657,042 | 6,056,355 | ||||||||||||
Total | $ | 8,130,810 | $ | 12,909,145 | $ | 21,039,955 |
• | Tactical liquidity measures the risk of a negative cash flow position whereby cash outflows exceed cash inflows over a short-term horizon out to nine weeks; |
• | Structural liquidity measures the amount by which illiquid assets are supported by long-term funding; and |
• | Contingent liquidity utilizes cash flow stress testing across three crisis scenarios to determine the adequacy of our liquidity. |
Type of obligation | Payments due by period | ||||||||||||||||||
(Dollars in thousands) | Less than 1 year | 1-3 years | 3-5 years | Thereafter | Total | ||||||||||||||
Contractual obligations: | |||||||||||||||||||
Time deposits | $ | 1,684,017 | $ | 580,368 | $ | 134,732 | $ | 3 | $ | 2,399,120 | |||||||||
Short-term borrowings | 693,807 | — | — | — | 693,807 | ||||||||||||||
Long-term obligations | 1,298 | 2,724 | 147,672 | 718,546 | 870,240 | ||||||||||||||
Operating leases | 25,797 | 31,529 | 19,961 | 45,138 | 122,425 | ||||||||||||||
Estimated payment to FDIC due to claw-back provisions under shared-loss agreements | — | 88,019 | 13,323 | — | 101,342 | ||||||||||||||
Total contractual obligations | $ | 2,404,919 | $ | 702,640 | $ | 315,688 | $ | 763,687 | $ | 4,186,934 | |||||||||
Commitments: | |||||||||||||||||||
Loan commitments | $ | 5,268,707 | $ | 877,249 | $ | 649,854 | $ | 2,833,555 | $ | 9,629,365 | |||||||||
Standby letters of credit | 68,150 | 12,809 | 571 | — | 81,530 | ||||||||||||||
Affordable housing partnerships | 34,297 | 22,928 | 3,797 | 797 | 61,819 | ||||||||||||||
Total commitments | $ | 5,371,154 | $ | 912,986 | $ | 654,222 | $ | 2,834,352 | $ | 9,772,714 |
2017 | 2016 | ||||||||||||||||||||||||||||||
(Dollars in thousands, except share data and ratios) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||||||||||||
SUMMARY OF OPERATIONS | |||||||||||||||||||||||||||||||
Interest income | $ | 285,958 | $ | 284,333 | $ | 272,542 | $ | 260,857 | $ | 254,782 | $ | 246,494 | $ | 243,369 | $ | 243,112 | |||||||||||||||
Interest expense | 11,189 | 11,158 | 10,933 | 10,514 | 10,865 | 10,645 | 11,180 | 10,392 | |||||||||||||||||||||||
Net interest income | 274,769 | 273,175 | 261,609 | 250,343 | 243,917 | 235,849 | 232,189 | 232,720 | |||||||||||||||||||||||
Provision (credit) for loan and lease losses | (2,809 | ) | 7,946 | 12,324 | 8,231 | 16,029 | 7,507 | 4,562 | 4,843 | ||||||||||||||||||||||
Net interest income after provision for loan and lease losses | 277,578 | 265,229 | 249,285 | 242,112 | 227,888 | 228,342 | 227,627 | 227,877 | |||||||||||||||||||||||
Gain on acquisitions | — | — | 122,728 | 12,017 | — | 837 | 3,290 | 1,704 | |||||||||||||||||||||||
Noninterest income | 140,150 | 125,387 | 125,472 | 115,275 | 124,698 | 117,004 | 136,960 | 103,578 | |||||||||||||||||||||||
Noninterest expense | 294,617 | 286,967 | 285,606 | 264,345 | 271,531 | 267,233 | 258,303 | 251,671 | |||||||||||||||||||||||
Income before income taxes | 123,111 | 103,649 | 211,879 | 105,059 | 81,055 | 78,950 | 109,574 | 81,488 | |||||||||||||||||||||||
Income taxes | 68,704 | 36,585 | 77,219 | 37,438 | 28,365 | 27,546 | 40,258 | 29,416 | |||||||||||||||||||||||
Net income | $ | 54,407 | $ | 67,064 | $ | 134,660 | $ | 67,621 | $ | 52,690 | $ | 51,404 | $ | 69,316 | $ | 52,072 | |||||||||||||||
Net interest income, taxable equivalent | $ | 276,002 | $ | 274,272 | $ | 262,549 | $ | 251,593 | $ | 245,330 | $ | 237,146 | $ | 233,496 | $ | 234,187 | |||||||||||||||
PER SHARE DATA | |||||||||||||||||||||||||||||||
Net income | $ | 4.53 | $ | 5.58 | $ | 11.21 | $ | 5.63 | $ | 4.39 | $ | 4.28 | $ | 5.77 | $ | 4.34 | |||||||||||||||
Cash dividends | 0.35 | 0.30 | 0.30 | 0.30 | 0.30 | 0.30 | 0.30 | 0.30 | |||||||||||||||||||||||
Market price at period end (Class A) | 403.00 | 373.89 | 372.70 | 335.37 | 355.00 | 293.89 | 258.91 | 251.07 | |||||||||||||||||||||||
Book value at period end | 277.60 | 275.91 | 269.75 | 258.17 | 250.82 | 256.76 | 252.76 | 246.55 | |||||||||||||||||||||||
SELECTED QUARTERLY AVERAGE BALANCES | |||||||||||||||||||||||||||||||
Total assets | $ | 34,864,720 | $ | 34,590,503 | $ | 34,243,527 | $ | 33,494,500 | $ | 33,223,995 | $ | 32,655,417 | $ | 32,161,905 | $ | 31,705,658 | |||||||||||||||
Investment securities | 7,044,534 | 6,906,345 | 7,112,267 | 7,084,986 | 6,716,873 | 6,452,532 | 6,786,463 | 6,510,248 | |||||||||||||||||||||||
Loans and leases (1) | 23,360,235 | 22,997,195 | 22,575,323 | 21,951,444 | 21,548,313 | 21,026,510 | 20,657,094 | 20,349,091 | |||||||||||||||||||||||
Interest-earning assets | 32,874,233 | 32,555,597 | 32,104,717 | 31,298,970 | 31,078,428 | 30,446,592 | 29,976,629 | 29,558,629 | |||||||||||||||||||||||
Deposits | 29,525,843 | 29,319,384 | 29,087,852 | 28,531,166 | 28,231,477 | 27,609,418 | 27,212,814 | 26,998,026 | |||||||||||||||||||||||
Long-term obligations | 866,198 | 887,948 | 799,319 | 816,953 | 835,509 | 842,715 | 817,750 | 750,446 | |||||||||||||||||||||||
Interest-bearing liabilities | 19,425,404 | 19,484,663 | 19,729,956 | 19,669,075 | 19,357,282 | 19,114,740 | 19,092,287 | 19,067,251 | |||||||||||||||||||||||
Shareholders’ equity | $ | 3,329,562 | $ | 3,284,044 | $ | 3,159,004 | $ | 3,061,099 | $ | 3,056,426 | $ | 3,058,155 | $ | 2,989,097 | $ | 2,920,611 | |||||||||||||||
Shares outstanding | 12,010,405 | 12,010,405 | 12,010,405 | 12,010,405 | 12,010,405 | 12,010,405 | 12,010,405 | 12,010,405 | |||||||||||||||||||||||
SELECTED QUARTER-END BALANCES | |||||||||||||||||||||||||||||||
Total assets | $ | 34,527,512 | $ | 34,584,154 | $ | 34,769,850 | $ | 34,018,405 | $ | 32,990,836 | $ | 32,971,910 | $ | 32,230,403 | $ | 32,195,657 | |||||||||||||||
Investment securities | 7,180,256 | 6,992,955 | 6,596,530 | 7,119,944 | 7,006,678 | 6,384,940 | 6,557,736 | 6,687,483 | |||||||||||||||||||||||
Loans and leases: | |||||||||||||||||||||||||||||||
PCI | 762,998 | 834,167 | 894,863 | 848,816 | 809,169 | 868,200 | 921,467 | 945,887 | |||||||||||||||||||||||
Non-PCI | 22,833,827 | 22,314,906 | 21,976,602 | 21,057,633 | 20,928,709 | 20,428,780 | 19,821,104 | 19,471,802 | |||||||||||||||||||||||
Deposits | 29,266,275 | 29,333,949 | 29,456,338 | 29,002,768 | 28,161,343 | 27,925,253 | 27,257,774 | 27,365,245 | |||||||||||||||||||||||
Long-term obligations | 870,240 | 866,123 | 879,957 | 727,500 | 832,942 | 840,266 | 850,504 | 779,087 | |||||||||||||||||||||||
Shareholders’ equity | $ | 3,334,064 | $ | 3,313,831 | $ | 3,239,851 | $ | 3,100,696 | $ | 3,012,427 | $ | 3,083,748 | $ | 3,035,704 | $ | 2,961,194 | |||||||||||||||
Shares outstanding | 12,010,405 | 12,010,405 | 12,010,405 | 12,010,405 | 12,010,405 | 12,010,405 | 12,010,405 | 12,010,405 | |||||||||||||||||||||||
SELECTED RATIOS AND OTHER DATA | |||||||||||||||||||||||||||||||
Rate of return on average assets (annualized) | 0.62 | % | 0.77 | % | 1.58 | % | 0.82 | % | 0.63 | % | 0.63 | % | 0.87 | % | 0.66 | % | |||||||||||||||
Rate of return on average shareholders’ equity (annualized) | 6.48 | 8.10 | 17.10 | 8.96 | 6.86 | 6.69 | 9.33 | 7.17 | |||||||||||||||||||||||
Net yield on interest-earning assets (taxable equivalent) | 3.34 | 3.35 | 3.28 | 3.25 | 3.14 | 3.10 | 3.13 | 3.18 | |||||||||||||||||||||||
Allowance for loan and lease losses to loans and leases: | |||||||||||||||||||||||||||||||
PCI | 1.31 | 1.55 | 1.51 | 1.29 | 1.70 | 1.34 | 1.25 | 1.45 | |||||||||||||||||||||||
Non-PCI | 0.93 | 0.98 | 0.98 | 1.00 | 0.98 | 0.98 | 0.99 | 0.99 | |||||||||||||||||||||||
Total | 0.94 | 1.00 | 1.00 | 1.01 | 1.01 | 1.01 | 1.00 | 1.01 | |||||||||||||||||||||||
Nonperforming assets to total loans and leases and other real estate at period end: | |||||||||||||||||||||||||||||||
Covered | 0.54 | 0.35 | 0.35 | 0.59 | 0.66 | 0.75 | 1.17 | 4.74 | |||||||||||||||||||||||
Noncovered | 0.61 | 0.63 | 0.66 | 0.66 | 0.67 | 0.75 | 0.77 | 0.74 | |||||||||||||||||||||||
Total | 0.61 | 0.63 | 0.65 | 0.66 | 0.67 | 0.75 | 0.77 | 0.80 | |||||||||||||||||||||||
Tier 1 risk-based capital ratio | 12.88 | 12.95 | 12.69 | 12.57 | 12.42 | 12.50 | 12.63 | 12.58 | |||||||||||||||||||||||
Common equity Tier 1 ratio | 12.88 | 12.95 | 12.69 | 12.57 | 12.42 | 12.50 | 12.63 | 12.58 | |||||||||||||||||||||||
Total risk-based capital ratio | 14.21 | 14.34 | 14.07 | 13.99 | 13.85 | 13.96 | 14.10 | 14.09 | |||||||||||||||||||||||
Leverage capital ratio | 9.47 | 9.43 | 9.33 | 9.15 | 9.05 | 9.07 | 9.09 | 9.00 | |||||||||||||||||||||||
Dividend payout ratio | 7.73 | 5.38 | 2.68 | 5.33 | 6.83 | 7.01 | 5.20 | 6.91 | |||||||||||||||||||||||
Average loans and leases to average deposits | 79.12 | 78.44 | 77.61 | 76.94 | 76.33 | 76.16 | 75.91 | 75.37 |
2017 | 2016 | Increase (decrease) due to: | |||||||||||||||||||||||||||||||
Interest | Interest | ||||||||||||||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | Yield/ | Total | ||||||||||||||||||||||||||
(Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | Volume | Rate | Change | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Loans and leases | $ | 23,360,235 | $ | 248,151 | 4.22 | % | $ | 21,548,313 | $ | 226,651 | 4.19 | % | $ | 19,503 | $ | 1,997 | $ | 21,500 | |||||||||||||||
Investment securities: | |||||||||||||||||||||||||||||||||
U. S. Treasury | 1,627,968 | 4,784 | 1.17 | 1,593,610 | 3,328 | 0.83 | 81 | 1,375 | 1,456 | ||||||||||||||||||||||||
Government agency | 9,659 | 69 | 2.85 | 172,037 | 396 | 0.92 | (765 | ) | 438 | (327 | ) | ||||||||||||||||||||||
Mortgage-backed securities | 5,233,293 | 25,351 | 1.94 | 4,802,198 | 20,937 | 1.74 | 1,944 | 2,470 | 4,414 | ||||||||||||||||||||||||
Corporate bonds | 63,911 | 991 | 6.20 | 54,255 | 772 | 5.69 | 144 | 75 | 219 | ||||||||||||||||||||||||
Other | 109,703 | 246 | 0.89 | 94,773 | 253 | 1.06 | 37 | (44 | ) | (7 | ) | ||||||||||||||||||||||
Total investment securities | 7,044,534 | 31,441 | 1.78 | 6,716,873 | 25,686 | 1.53 | 1,441 | 4,314 | 5,755 | ||||||||||||||||||||||||
Overnight investments | 2,469,464 | 7,599 | 1.22 | 2,813,242 | 3,858 | 0.55 | (743 | ) | 4,484 | 3,741 | |||||||||||||||||||||||
Total interest-earning assets | 32,874,233 | $ | 287,191 | 3.47 | % | 31,078,428 | $ | 256,195 | 3.28 | % | $ | 20,201 | $ | 10,795 | $ | 30,996 | |||||||||||||||||
Cash and due from banks | 316,851 | 478,779 | |||||||||||||||||||||||||||||||
Premises and equipment | 1,137,075 | 1,134,228 | |||||||||||||||||||||||||||||||
FDIC shared-loss receivable | 5,104 | 5,584 | |||||||||||||||||||||||||||||||
Allowance for loan and lease losses | (232,653 | ) | (214,463 | ) | |||||||||||||||||||||||||||||
Other real estate owned | 52,103 | 65,670 | |||||||||||||||||||||||||||||||
Other assets | 712,007 | 675,769 | |||||||||||||||||||||||||||||||
Total assets | $ | 34,864,720 | $ | 33,223,995 | |||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||||||||||||
Checking with interest | $ | 5,028,978 | $ | 262 | 0.02 | % | $ | 4,696,279 | $ | 261 | 0.02 | % | $ | 9 | $ | (8 | ) | $ | 1 | ||||||||||||||
Savings | 2,337,993 | 172 | 0.03 | 2,080,598 | 161 | 0.03 | 15 | (4 | ) | 11 | |||||||||||||||||||||||
Money market accounts | 8,047,691 | 1,732 | 0.09 | 8,113,686 | 1,619 | 0.08 | (52 | ) | 165 | 113 | |||||||||||||||||||||||
Time deposits | 2,421,749 | 1,623 | 0.27 | 2,892,143 | 2,411 | 0.33 | (371 | ) | (417 | ) | (788 | ) | |||||||||||||||||||||
Total interest-bearing deposits | 17,836,411 | 3,789 | 0.08 | 17,782,706 | 4,452 | 0.10 | (399 | ) | (264 | ) | (663 | ) | |||||||||||||||||||||
Repurchase agreements | 615,244 | 622 | 0.40 | 726,318 | 485 | 0.27 | (88 | ) | 225 | 137 | |||||||||||||||||||||||
Other short-term borrowings | 107,551 | 1,031 | 3.77 | 12,749 | 52 | 1.63 | 650 | 329 | 979 | ||||||||||||||||||||||||
Long-term obligations | 866,198 | 5,747 | 2.61 | 835,509 | 5,876 | 2.81 | 252 | (381 | ) | (129 | ) | ||||||||||||||||||||||
Total interest-bearing liabilities | 19,425,404 | $ | 11,189 | 0.23 | % | 19,357,282 | $ | 10,865 | 0.22 | % | $ | 415 | $ | (91 | ) | $ | 324 | ||||||||||||||||
Demand deposits | 11,689,432 | 10,448,771 | |||||||||||||||||||||||||||||||
Other liabilities | 420,322 | 361,516 | |||||||||||||||||||||||||||||||
Shareholders' equity | 3,329,562 | 3,056,426 | |||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 34,864,720 | $ | 33,223,995 | |||||||||||||||||||||||||||||
Interest rate spread | 3.24 | % | 3.06 | % | |||||||||||||||||||||||||||||
Net interest income and net yield | |||||||||||||||||||||||||||||||||
on interest-earning assets | $ | 276,002 | 3.34 | % | $ | 245,330 | 3.14 | % | $ | 19,786 | $ | 10,886 | $ | 30,672 |
(Dollars in thousands, except share data) | December 31, 2017 | December 31, 2016 | |||||
Assets | |||||||
Cash and due from banks | $ | 336,150 | $ | 539,741 | |||
Overnight investments | 1,387,927 | 1,872,594 | |||||
Investment securities available for sale (cost of $7,229,014 at December 31, 2017 and $7,079,287 at December 31, 2016) | 7,180,180 | 7,006,580 | |||||
Investment securities held to maturity (fair value of $81 at December 31, 2017 and $104 at December 31, 2016) | 76 | 98 | |||||
Loans held for sale | 51,179 | 74,401 | |||||
Loans and leases | 23,596,825 | 21,737,878 | |||||
Allowance for loan and lease losses | (221,893 | ) | (218,795 | ) | |||
Net loans and leases | 23,374,932 | 21,519,083 | |||||
Premises and equipment | 1,138,431 | 1,133,044 | |||||
Other real estate owned | 51,097 | 61,231 | |||||
Income earned not collected | 95,249 | 79,839 | |||||
FDIC shared-loss receivable | 2,223 | 4,172 | |||||
Goodwill | 150,601 | 150,601 | |||||
Other intangible assets | 73,096 | 78,040 | |||||
Other assets | 686,371 | 471,412 | |||||
Total assets | $ | 34,527,512 | $ | 32,990,836 | |||
Liabilities | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | 11,237,375 | $ | 10,130,549 | |||
Interest-bearing | 18,028,900 | 18,030,794 | |||||
Total deposits | 29,266,275 | 28,161,343 | |||||
Short-term borrowings | 693,807 | 603,487 | |||||
Long-term obligations | 870,240 | 832,942 | |||||
FDIC shared-loss payable | 101,342 | 97,008 | |||||
Other liabilities | 261,784 | 283,629 | |||||
Total liabilities | 31,193,448 | 29,978,409 | |||||
Shareholders’ equity | |||||||
Common stock: | |||||||
Class A - $1 par value (16,000,000 shares authorized; 11,005,220 shares issued and outstanding at December 31, 2017 and December 31, 2016) | 11,005 | 11,005 | |||||
Class B - $1 par value (2,000,000 shares authorized; 1,005,185 shares issued and outstanding at December 31, 2017 and December 31, 2016) | 1,005 | 1,005 | |||||
Preferred stock - $0.01 par value (10,000,000 shares authorized; no shares issued and outstanding at December 31, 2017 and December 31, 2016) | — | — | |||||
Surplus | 658,918 | 658,918 | |||||
Retained earnings | 2,785,430 | 2,476,691 | |||||
Accumulated other comprehensive loss | (122,294 | ) | (135,192 | ) | |||
Total shareholders’ equity | 3,334,064 | 3,012,427 | |||||
Total liabilities and shareholders’ equity | $ | 34,527,512 | $ | 32,990,836 |
Year ended December 31 | |||||||||||
(Dollars in thousands, except share and per share data) | 2017 | 2016 | 2015 | ||||||||
Interest income | |||||||||||
Loans and leases | $ | 955,637 | $ | 876,472 | $ | 874,892 | |||||
Investment securities: | |||||||||||
U. S. Treasury | 17,657 | 11,837 | 15,353 | ||||||||
Government agency | 634 | 2,883 | 6,843 | ||||||||
Mortgage-backed securities | 98,341 | 79,336 | 65,815 | ||||||||
Corporate bonds | 3,877 | 1,783 | — | ||||||||
Other | 698 | 912 | 239 | ||||||||
Total investment securities interest and dividend income | 121,207 | 96,751 | 88,250 | ||||||||
Overnight investments | 26,846 | 14,534 | 6,067 | ||||||||
Total interest income | 1,103,690 | 987,757 | 969,209 | ||||||||
Interest expense | |||||||||||
Deposits | 16,196 | 18,169 | 21,230 | ||||||||
Short-term borrowings | 4,838 | 1,965 | 4,660 | ||||||||
Long-term obligations | 22,760 | 22,948 | 18,414 | ||||||||
Total interest expense | 43,794 | 43,082 | 44,304 | ||||||||
Net interest income | 1,059,896 | 944,675 | 924,905 | ||||||||
Provision for loan and lease losses | 25,692 | 32,941 | 20,664 | ||||||||
Net interest income after provision for loan and lease losses | 1,034,204 | 911,734 | 904,241 | ||||||||
Noninterest income | |||||||||||
Gain on acquisitions | 134,745 | 5,831 | 42,930 | ||||||||
Cardholder services | 95,365 | 83,417 | 77,342 | ||||||||
Merchant services | 103,962 | 95,774 | 84,207 | ||||||||
Service charges on deposit accounts | 101,201 | 89,359 | 90,546 | ||||||||
Wealth management services | 86,719 | 80,221 | 82,865 | ||||||||
Securities gains, net | 4,293 | 26,673 | 10,817 | ||||||||
Other service charges and fees | 28,321 | 27,011 | 23,987 | ||||||||
Mortgage income | 23,251 | 20,348 | 18,168 | ||||||||
Insurance commissions | 12,465 | 11,150 | 11,757 | ||||||||
ATM income | 9,143 | 7,283 | 7,119 | ||||||||
Adjustments to FDIC shared-loss receivable | (6,232 | ) | (9,725 | ) | (19,009 | ) | |||||
Net impact from FDIC shared-loss agreement terminations | (45 | ) | 16,559 | — | |||||||
Other | 47,841 | 34,170 | 36,359 | ||||||||
Total noninterest income | 641,029 | 488,071 | 467,088 | ||||||||
Noninterest expense | |||||||||||
Salaries and wages | 475,214 | 428,351 | 429,742 | ||||||||
Employee benefits | 113,231 | 104,518 | 113,309 | ||||||||
Occupancy expense | 104,690 | 102,609 | 98,191 | ||||||||
Equipment expense | 97,478 | 92,501 | 92,639 | ||||||||
Merchant processing | 78,537 | 71,150 | 62,473 | ||||||||
Cardholder processing | 30,573 | 29,207 | 25,296 | ||||||||
FDIC insurance expense | 22,191 | 20,967 | 18,340 | ||||||||
Collection and foreclosure-related expenses | 14,407 | 13,379 | 12,311 | ||||||||
Merger-related expenses | 9,015 | 5,341 | 14,174 | ||||||||
Other | 186,199 | 180,715 | 172,440 | ||||||||
Total noninterest expense | 1,131,535 | 1,048,738 | 1,038,915 | ||||||||
Income before income taxes | 543,698 | 351,067 | 332,414 | ||||||||
Income taxes | 219,946 | 125,585 | 122,028 | ||||||||
Net income | $ | 323,752 | $ | 225,482 | $ | 210,386 | |||||
Net income per share | $ | 26.96 | $ | 18.77 | $ | 17.52 | |||||
Dividends declared per share | $ | 1.25 | $ | 1.20 | $ | 1.20 | |||||
Average shares outstanding | 12,010,405 | 12,010,405 | 12,010,405 |
Year ended December 31 | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Dollars in thousands) | |||||||||||
Net income | $ | 323,752 | $ | 225,482 | $ | 210,386 | |||||
Other comprehensive income (loss) | |||||||||||
Unrealized gains (losses) on securities: | |||||||||||
Change in unrealized securities gains (losses) arising during period | 28,166 | (21,530 | ) | (22,030 | ) | ||||||
Tax effect | (10,531 | ) | 7,584 | 8,486 | |||||||
Reclassification adjustment for net gains realized and included in income before income taxes | (4,293 | ) | (26,673 | ) | (10,817 | ) | |||||
Tax effect | 1,588 | 9,869 | 4,138 | ||||||||
Total change in unrealized gains (losses) on securities, net of tax | 14,930 | (30,750 | ) | (20,223 | ) | ||||||
Change in fair value of cash flow hedges: | |||||||||||
Change in unrecognized loss on cash flow hedges | — | 1,429 | 2,908 | ||||||||
Tax effect | — | (537 | ) | (1,136 | ) | ||||||
Total change in unrecognized loss on cash flow hedges, net of tax | — | 892 | 1,772 | ||||||||
Change in pension obligation: | |||||||||||
Change in pension obligation | (12,945 | ) | (70,424 | ) | 691 | ||||||
Tax effect | 4,789 | 25,077 | (297 | ) | |||||||
Amortization of actuarial losses and prior service cost | 9,720 | 7,069 | 11,586 | ||||||||
Tax effect | (3,596 | ) | (2,616 | ) | (4,988 | ) | |||||
Total change in pension obligation, net of tax | (2,032 | ) | (40,894 | ) | 6,992 | ||||||
Other comprehensive income (loss) | 12,898 | (70,752 | ) | (11,459 | ) | ||||||
Total comprehensive income | $ | 336,650 | $ | 154,730 | $ | 198,927 |
Class A Common Stock | Class B Common Stock | Surplus | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders’ Equity | ||||||||||||||||||
(Dollars in thousands, except share data) | |||||||||||||||||||||||
Balance at December 31, 2014 | $ | 11,005 | $ | 1,005 | $ | 658,918 | $ | 2,069,647 | $ | (52,981 | ) | $ | 2,687,594 | ||||||||||
Net income | — | — | — | 210,386 | — | 210,386 | |||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (11,459 | ) | (11,459 | ) | |||||||||||||||
Cash dividends ($1.20 per share) | — | — | — | (14,412 | ) | — | (14,412 | ) | |||||||||||||||
Balance at December 31, 2015 | 11,005 | 1,005 | 658,918 | 2,265,621 | (64,440 | ) | 2,872,109 | ||||||||||||||||
Net income | — | — | — | 225,482 | — | 225,482 | |||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (70,752 | ) | (70,752 | ) | |||||||||||||||
Cash dividends ($1.20 per share) | — | — | — | (14,412 | ) | — | (14,412 | ) | |||||||||||||||
Balance at December 31, 2016 | 11,005 | 1,005 | 658,918 | 2,476,691 | (135,192 | ) | 3,012,427 | ||||||||||||||||
Net income | — | — | — | 323,752 | — | 323,752 | |||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 12,898 | 12,898 | |||||||||||||||||
Cash dividends ($1.25 per share) | — | — | — | (15,013 | ) | — | (15,013 | ) | |||||||||||||||
Balance at December 31, 2017 | $ | 11,005 | $ | 1,005 | $ | 658,918 | $ | 2,785,430 | $ | (122,294 | ) | $ | 3,334,064 |
Year ended December 31 | |||||||||||
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net income | $ | 323,752 | $ | 225,482 | $ | 210,386 | |||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
Provision for loan and lease losses | 25,692 | 32,941 | 20,664 | ||||||||
Deferred tax expense | 125,838 | 33,146 | 550 | ||||||||
Net change in current taxes | (10,616 | ) | (24,380 | ) | (19,477 | ) | |||||
Depreciation | 90,804 | 88,777 | 87,717 | ||||||||
Net change in accrued interest payable | 155 | (1,916 | ) | (2,481 | ) | ||||||
Net change in income earned not collected | (8,899 | ) | (7,805 | ) | (12,782 | ) | |||||
Gain on acquisitions | (134,745 | ) | (5,831 | ) | (42,930 | ) | |||||
Gain on branch sale | — | — | (216 | ) | |||||||
Net securities gains | (4,293 | ) | (26,673 | ) | (10,817 | ) | |||||
Loss on termination of FDIC shared-loss agreements | 45 | 3,377 | — | ||||||||
Origination of loans held for sale | (622,503 | ) | (795,963 | ) | (685,631 | ) | |||||
Proceeds from sale of loans held for sale | 660,808 | 797,123 | 701,412 | ||||||||
Gain on sale of loans held for sale | (14,843 | ) | (15,795 | ) | (11,851 | ) | |||||
Gain on sale of portfolio loans | (1,007 | ) | (3,758 | ) | — | ||||||
Net write-downs/losses on other real estate | 4,460 | 6,201 | 2,168 | ||||||||
Gain on sale of premises and equipment | (524 | ) | — | — | |||||||
Gain on extinguishment of long-term obligations | (919 | ) | (1,717 | ) | — | ||||||
Net amortization of premiums and discounts | (40,028 | ) | (44,618 | ) | (85,066 | ) | |||||
Amortization of intangible assets | 22,842 | 21,808 | 22,894 | ||||||||
Reduction in FDIC receivable for shared-loss agreements | 7,764 | 14,745 | 47,044 | ||||||||
Net change in FDIC payable for shared-loss agreements | 4,334 | (11,245 | ) | 9,918 | |||||||
Net change in other assets | (46,920 | ) | (27,873 | ) | (12,904 | ) | |||||
Net change in other liabilities | (29,542 | ) | (25,520 | ) | 14,458 | ||||||
Net cash provided by operating activities | 351,655 | 230,506 | 233,056 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
Net change in loans outstanding | (1,213,686 | ) | (1,214,433 | ) | (1,311,447 | ) | |||||
Purchases of investment securities available for sale | (3,648,312 | ) | (4,086,855 | ) | (2,467,993 | ) | |||||
Proceeds from maturities/calls of investment securities held to maturity | 22 | 157 | 263 | ||||||||
Proceeds from maturities/calls of investment securities available for sale | 1,842,563 | 2,149,130 | 1,478,608 | ||||||||
Proceeds from sales of investment securities available for sale | 1,345,746 | 1,829,305 | 1,286,120 | ||||||||
Net change in overnight investments | 586,279 | 233,433 | (338,213 | ) | |||||||
Cash paid to the FDIC for shared-loss agreements | (7,440 | ) | (21,059 | ) | (33,296 | ) | |||||
Net cash paid to the FDIC for termination of shared-loss agreements | (285 | ) | (20,115 | ) | — | ||||||
Proceeds from sales of other real estate | 40,709 | 34,944 | 80,932 | ||||||||
Proceeds from sale of premises and equipment | 3,061 | — | — | ||||||||
Proceeds from sales of portfolio loans | 162,649 | 77,665 | 45,862 | ||||||||
Additions to premises and equipment | (84,798 | ) | (81,841 | ) | (89,734 | ) | |||||
Net cash used in branch sale | — | — | (22,242 | ) | |||||||
Net cash acquired in business acquisitions | 304,820 | (727 | ) | 123,137 | |||||||
Net cash used by investing activities | (668,672 | ) | (1,100,396 | ) | (1,248,003 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
Net decrease in time deposits | (538,250 | ) | (505,548 | ) | (590,773 | ) | |||||
Net increase in demand and other interest-bearing deposits | 539,120 | 1,287,856 | 1,607,487 | ||||||||
Net decrease in short-term borrowings | (44,680 | ) | (33,072 | ) | (397,952 | ) | |||||
Repayment of long-term obligations | (6,955 | ) | (9,279 | ) | (5,896 | ) | |||||
Origination of long-term obligations | 175,000 | 150,000 | 350,000 | ||||||||
Cash dividends paid | (10,809 | ) | (14,412 | ) | (18,015 | ) | |||||
Net cash provided by financing activities | 113,426 | 875,545 | 944,851 | ||||||||
Change in cash and due from banks | (203,591 | ) | 5,655 | (70,096 | ) | ||||||
Cash and due from banks at beginning of period | 539,741 | 534,086 | 604,182 | ||||||||
Cash and due from banks at end of period | $ | 336,150 | $ | 539,741 | $ | 534,086 | |||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | 43,639 | $ | 44,998 | $ | 46,785 | |||||
Income taxes | 88,565 | 108,741 | 136,900 | ||||||||
Noncash investing and financing activities: | |||||||||||
Transfers of loans to other real estate | 34,980 | 35,272 | 55,032 | ||||||||
Dividends declared but not paid | 4,204 | — | — | ||||||||
Unsettled sales of investment securities | 309,623 | — | — | ||||||||
Reclassification of portfolio loans to loans held for sale | 161,719 | 73,907 | — |
• | Allowance for loan and lease losses; |
• | Fair value of financial instruments, including acquired assets and assumed liabilities; |
• | Pension plan assumptions; |
• | Cash flow estimates on purchased credit-impaired (PCI) loans; |
• | Goodwill and other intangible assets; |
• | FDIC shared-loss receivable and payable; and |
• | Income tax assets, liabilities and expense |
(Dollars in thousands) | As recorded by FCB | ||
Assets | |||
Cash and due from banks | $ | 48,824 | |
Overnight investments | 94,134 | ||
Investment securities | 12,140 | ||
Loans | 689,086 | ||
Premises and equipment | 8,603 | ||
Income earned not collected | 6,720 | ||
Intangible assets | 9,870 | ||
Other assets | 5,748 | ||
Total assets acquired | 875,125 | ||
Liabilities | |||
Deposits | 982,307 | ||
Other liabilities | 440 | ||
Total liabilities assumed | 982,747 | ||
Fair value of net liabilities assumed | (107,622 | ) | |
Cash received from FDIC | 230,350 | ||
Gain on acquisition of Guaranty | $ | 122,728 |
(Dollars in thousands) | As recorded by FCB | ||
Assets | |||
Cash and due from banks | $ | 3,350 | |
Overnight investments | 7,478 | ||
Investment securities | 14,455 | ||
Loans | 85,149 | ||
Income earned not collected | 31 | ||
Intangible assets | 850 | ||
Other assets | 237 | ||
Total assets acquired | 111,550 | ||
Liabilities | |||
Deposits | 121,755 | ||
Other liabilities | 74 | ||
Total liabilities assumed | 121,829 | ||
Fair value of net liabilities assumed | (10,279 | ) | |
Cash received from FDIC | 22,296 | ||
Gain on acquisition of HCB | $ | 12,017 |
December 31, 2017 | |||||||||||||||
(Dollars in thousands) | Cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||
Investment securities available for sale | |||||||||||||||
U.S. Treasury | $ | 1,658,410 | $ | — | $ | 546 | $ | 1,657,864 | |||||||
Mortgage-backed securities | 5,428,074 | 1,544 | 80,192 | 5,349,426 | |||||||||||
Equity securities | 75,471 | 29,737 | — | 105,208 | |||||||||||
Corporate bonds | 59,414 | 557 | 8 | 59,963 | |||||||||||
Other | 7,645 | 256 | 182 | 7,719 | |||||||||||
Total investment securities available for sale | $ | 7,229,014 | $ | 32,094 | $ | 80,928 | $ | 7,180,180 | |||||||
December 31, 2016 | |||||||||||||||
Cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||
U.S. Treasury | $ | 1,650,675 | $ | 579 | $ | 935 | $ | 1,650,319 | |||||||
Government agency | 40,291 | 107 | — | 40,398 | |||||||||||
Mortgage-backed securities | 5,259,466 | 2,809 | 86,850 | 5,175,425 | |||||||||||
Equity securities | 71,873 | 11,634 | — | 83,507 | |||||||||||
Corporate bonds | 49,367 | 195 | — | 49,562 | |||||||||||
Other | 7,615 | — | 246 | 7,369 | |||||||||||
Total investment securities available for sale | $ | 7,079,287 | $ | 15,324 | $ | 88,031 | $ | 7,006,580 | |||||||
December 31, 2017 | |||||||||||||||
Cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||
Investment securities held to maturity | |||||||||||||||
Mortgage-backed securities | $ | 76 | $ | 5 | $ | — | $ | 81 | |||||||
December 31, 2016 | |||||||||||||||
Cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||
Mortgage-backed securities | $ | 98 | $ | 6 | $ | — | $ | 104 |
December 31, 2017 | December 31, 2016 | ||||||||||||||
(Dollars in thousands) | Cost | Fair value | Cost | Fair value | |||||||||||
Investment securities available for sale | |||||||||||||||
Non-amortizing securities maturing in: | |||||||||||||||
One year or less | $ | 808,768 | $ | 808,301 | $ | 842,798 | $ | 842,947 | |||||||
One through five years | 849,642 | 849,563 | 848,168 | 847,770 | |||||||||||
Five through 10 years | 59,414 | 59,963 | 49,367 | 49,562 | |||||||||||
Over 10 years | 7,645 | 7,719 | 7,615 | 7,369 | |||||||||||
Mortgage-backed securities | 5,428,074 | 5,349,426 | 5,259,466 | 5,175,425 | |||||||||||
Equity securities | 75,471 | 105,208 | 71,873 | 83,507 | |||||||||||
Total investment securities available for sale | $ | 7,229,014 | $ | 7,180,180 | $ | 7,079,287 | $ | 7,006,580 | |||||||
Investment securities held to maturity | |||||||||||||||
Mortgage-backed securities held to maturity | $ | 76 | $ | 81 | $ | 98 | $ | 104 |
Year ended December 31 | |||||||||||
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
Gross gains on retirement/sales of investment securities available for sale | $ | 11,635 | $ | 27,104 | $ | 10,834 | |||||
Gross losses on sales of investment securities available for sale | (7,342 | ) | (431 | ) | (17 | ) | |||||
Net securities gains | $ | 4,293 | $ | 26,673 | $ | 10,817 |
December 31, 2017 | |||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||
(Dollars in thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||||||
U.S. Treasury | $ | 1,408,166 | $ | 345 | $ | 249,698 | $ | 201 | $ | 1,657,864 | $ | 546 | |||||||||||
Mortgage-backed securities | 2,334,102 | 20,923 | 2,725,933 | 59,269 | 5,060,035 | 80,192 | |||||||||||||||||
Corporate bonds | 5,025 | 8 | — | — | 5,025 | 8 | |||||||||||||||||
Other | 5,349 | 182 | — | — | 5,349 | 182 | |||||||||||||||||
Total | $ | 3,752,642 | $ | 21,458 | $ | 2,975,631 | $ | 59,470 | $ | 6,728,273 | $ | 80,928 | |||||||||||
December 31, 2016 | |||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||||||
U.S. Treasury | $ | 807,822 | $ | 935 | $ | — | $ | — | $ | 807,822 | $ | 935 | |||||||||||
Mortgage-backed securities | 4,442,700 | 82,161 | 362,351 | 4,689 | 4,805,051 | 86,850 | |||||||||||||||||
Other | 7,369 | 246 | — | — | 7,369 | 246 | |||||||||||||||||
Total | $ | 5,257,891 | $ | 83,342 | $ | 362,351 | $ | 4,689 | $ | 5,620,242 | $ | 88,031 |
(Dollars in thousands) | December 31, 2017 | December 31, 2016 | |||||
Non-PCI loans and leases: | |||||||
Commercial: | |||||||
Construction and land development | $ | 669,215 | $ | 649,157 | |||
Commercial mortgage | 9,729,022 | 9,026,220 | |||||
Other commercial real estate | 473,433 | 351,291 | |||||
Commercial and industrial | 2,730,407 | 2,567,501 | |||||
Lease financing | 894,801 | 826,270 | |||||
Other | 302,176 | 340,264 | |||||
Total commercial loans | 14,799,054 | 13,760,703 | |||||
Noncommercial: | |||||||
Residential mortgage | 3,523,786 | 2,889,124 | |||||
Revolving mortgage | 2,701,525 | 2,601,344 | |||||
Construction and land development | 248,289 | 231,400 | |||||
Consumer | 1,561,173 | 1,446,138 | |||||
Total noncommercial loans | 8,034,773 | 7,168,006 | |||||
Total non-PCI loans and leases | 22,833,827 | 20,928,709 | |||||
PCI loans: | |||||||
Commercial: | |||||||
Construction and land development | 13,654 | 20,766 | |||||
Commercial mortgage | 358,103 | 453,013 | |||||
Other commercial real estate | 17,124 | 12,645 | |||||
Commercial and industrial | 6,374 | 11,844 | |||||
Other | 1,683 | 1,702 | |||||
Total commercial loans | 396,938 | 499,970 | |||||
Noncommercial: | |||||||
Residential mortgage | 299,318 | 268,777 | |||||
Revolving mortgage | 63,908 | 38,650 | |||||
Construction and land development | 644 | — | |||||
Consumer | 2,190 | 1,772 | |||||
Total noncommercial loans | 366,060 | 309,199 | |||||
Total PCI loans | 762,998 | 809,169 | |||||
Total loans and leases | $ | 23,596,825 | $ | 21,737,878 |
December 31, 2017 | |||||||||||||||||||||||||||
(Dollars in thousands) | Non-PCI commercial loans and leases | ||||||||||||||||||||||||||
Grade: | Construction and land development | Commercial mortgage | Other commercial real estate | Commercial and industrial | Lease financing | Other | Total non-PCI commercial loans and leases | ||||||||||||||||||||
Pass | $ | 665,197 | $ | 9,521,019 | $ | 468,942 | $ | 2,511,307 | $ | 883,779 | $ | 298,064 | $ | 14,348,308 | |||||||||||||
Special mention | 691 | 78,643 | 1,260 | 44,130 | 4,340 | 2,919 | 131,983 | ||||||||||||||||||||
Substandard | 3,327 | 128,848 | 3,224 | 18,617 | 6,585 | 1,193 | 161,794 | ||||||||||||||||||||
Doubtful | — | 262 | — | 385 | — | — | 647 | ||||||||||||||||||||
Ungraded | — | 250 | 7 | 155,968 | 97 | — | 156,322 | ||||||||||||||||||||
Total | $ | 669,215 | $ | 9,729,022 | $ | 473,433 | $ | 2,730,407 | $ | 894,801 | $ | 302,176 | $ | 14,799,054 | |||||||||||||
December 31, 2016 | |||||||||||||||||||||||||||
Non-PCI commercial loans and leases | |||||||||||||||||||||||||||
Construction and land development | Commercial mortgage | Other commercial real estate | Commercial and industrial | Lease financing | Other | Total non-PCI commercial loans and leases | |||||||||||||||||||||
Pass | $ | 645,232 | $ | 8,821,439 | $ | 347,509 | $ | 2,402,659 | $ | 818,008 | $ | 335,831 | $ | 13,370,678 | |||||||||||||
Special mention | 2,236 | 76,084 | 1,433 | 22,804 | 2,675 | 1,020 | 106,252 | ||||||||||||||||||||
Substandard | 1,683 | 126,863 | 2,349 | 17,870 | 5,415 | 3,413 | 157,593 | ||||||||||||||||||||
Doubtful | 6 | 334 | — | 8 | — | — | 348 | ||||||||||||||||||||
Ungraded | — | 1,500 | — | 124,160 | 172 | — | 125,832 | ||||||||||||||||||||
Total | $ | 649,157 | $ | 9,026,220 | $ | 351,291 | $ | 2,567,501 | $ | 826,270 | $ | 340,264 | $ | 13,760,703 |
December 31, 2017 | |||||||||||||||||||
Non-PCI noncommercial loans and leases | |||||||||||||||||||
(Dollars in thousands) | Residential mortgage | Revolving mortgage | Construction and land development | Consumer | Total non-PCI noncommercial loans and leases | ||||||||||||||
Current | $ | 3,465,935 | $ | 2,674,390 | $ | 239,648 | $ | 1,546,473 | $ | 7,926,446 | |||||||||
30-59 days past due | 27,886 | 13,428 | 7,154 | 8,812 | 57,280 | ||||||||||||||
60-89 days past due | 8,064 | 3,485 | 108 | 2,893 | 14,550 | ||||||||||||||
90 days or greater past due | 21,901 | 10,222 | 1,379 | 2,995 | 36,497 | ||||||||||||||
Total | $ | 3,523,786 | $ | 2,701,525 | $ | 248,289 | $ | 1,561,173 | $ | 8,034,773 | |||||||||
December 31, 2016 | |||||||||||||||||||
Non-PCI noncommercial loans and leases | |||||||||||||||||||
Residential mortgage | Revolving mortgage | Construction and land development | Consumer | Total non-PCI noncommercial loans and leases | |||||||||||||||
Current | $ | 2,839,045 | $ | 2,576,942 | $ | 229,106 | $ | 1,434,658 | $ | 7,079,751 | |||||||||
30-59 days past due | 27,760 | 14,290 | 1,139 | 6,775 | 49,964 | ||||||||||||||
60-89 days past due | 7,039 | 2,698 | 598 | 2,779 | 13,114 | ||||||||||||||
90 days or greater past due | 15,280 | 7,414 | 557 | 1,926 | 25,177 | ||||||||||||||
Total | $ | 2,889,124 | $ | 2,601,344 | $ | 231,400 | $ | 1,446,138 | $ | 7,168,006 |
December 31, 2017 | |||||||||||||||||||||||
(Dollars in thousands) | PCI commercial loans | ||||||||||||||||||||||
Grade: | Construction and land development | Commercial mortgage | Other commercial real estate | Commercial and industrial | Other | Total PCI commercial loans | |||||||||||||||||
Pass | $ | 5,336 | $ | 181,353 | $ | 13,830 | $ | 4,057 | $ | 275 | $ | 204,851 | |||||||||||
Special mention | 320 | 61,295 | 323 | 374 | 945 | 63,257 | |||||||||||||||||
Substandard | 5,792 | 106,807 | 2,163 | 1,843 | 463 | 117,068 | |||||||||||||||||
Doubtful | 2,206 | 8,648 | 808 | 73 | — | 11,735 | |||||||||||||||||
Ungraded | — | — | — | 27 | — | 27 | |||||||||||||||||
Total | $ | 13,654 | $ | 358,103 | $ | 17,124 | $ | 6,374 | $ | 1,683 | $ | 396,938 | |||||||||||
December 31, 2016 | |||||||||||||||||||||||
PCI commercial loans | |||||||||||||||||||||||
Construction and land development | Commercial mortgage | Other commercial real estate | Commercial and industrial | Other | Total PCI commercial loans | ||||||||||||||||||
Pass | $ | 8,103 | $ | 234,023 | $ | 8,744 | $ | 7,253 | $ | 696 | $ | 258,819 | |||||||||||
Special mention | 950 | 67,848 | 102 | 620 | — | 69,520 | |||||||||||||||||
Substandard | 7,850 | 138,312 | 3,462 | 3,648 | 1,006 | 154,278 | |||||||||||||||||
Doubtful | 3,863 | 12,830 | 337 | 303 | — | 17,333 | |||||||||||||||||
Ungraded | — | — | — | 20 | — | 20 | |||||||||||||||||
Total | $ | 20,766 | $ | 453,013 | $ | 12,645 | $ | 11,844 | $ | 1,702 | $ | 499,970 |
December 31, 2017 | |||||||||||||||||||
PCI noncommercial loans | |||||||||||||||||||
(Dollars in thousands) | Residential mortgage | Revolving mortgage | Construction and land development | Consumer | Total PCI noncommercial loans | ||||||||||||||
Current | $ | 257,166 | $ | 55,871 | $ | 2 | $ | 2,074 | $ | 315,113 | |||||||||
30-59 days past due | 10,525 | 2,767 | — | 51 | 13,343 | ||||||||||||||
60-89 days past due | 4,846 | 701 | 642 | 23 | 6,212 | ||||||||||||||
90 days or greater past due | 26,781 | 4,569 | — | 42 | 31,392 | ||||||||||||||
Total | $ | 299,318 | $ | 63,908 | $ | 644 | $ | 2,190 | $ | 366,060 | |||||||||
December 31, 2016 | |||||||||||||||||||
PCI noncommercial loans | |||||||||||||||||||
Residential mortgage | Revolving mortgage | Construction and land development | Consumer | Total PCI noncommercial loans | |||||||||||||||
Current | $ | 230,065 | $ | 33,827 | $ | — | $ | 1,637 | $ | 265,529 | |||||||||
30-59 days past due | 9,595 | 618 | — | 68 | 10,281 | ||||||||||||||
60-89 days past due | 6,528 | 268 | — | 4 | 6,800 | ||||||||||||||
90 days or greater past due | 22,589 | 3,937 | — | 63 | 26,589 | ||||||||||||||
Total | $ | 268,777 | $ | 38,650 | $ | — | $ | 1,772 | $ | 309,199 |
December 31, 2017 | |||||||||||||||||||||||
(Dollars in thousands) | 30-59 days past due | 60-89 days past due | 90 days or greater | Total past due | Current | Total loans and leases | |||||||||||||||||
Non-PCI loans and leases: | |||||||||||||||||||||||
Construction and land development - commercial | $ | 491 | $ | 442 | $ | 357 | $ | 1,290 | $ | 667,925 | $ | 669,215 | |||||||||||
Commercial mortgage | 12,288 | 2,375 | 6,490 | 21,153 | 9,707,869 | 9,729,022 | |||||||||||||||||
Other commercial real estate | 107 | — | 75 | 182 | 473,251 | 473,433 | |||||||||||||||||
Commercial and industrial | 6,694 | 1,510 | 1,266 | 9,470 | 2,720,937 | 2,730,407 | |||||||||||||||||
Lease financing | 2,983 | 167 | 973 | 4,123 | 890,678 | 894,801 | |||||||||||||||||
Residential mortgage | 27,886 | 8,064 | 21,901 | 57,851 | 3,465,935 | 3,523,786 | |||||||||||||||||
Revolving mortgage | 13,428 | 3,485 | 10,222 | 27,135 | 2,674,390 | 2,701,525 | |||||||||||||||||
Construction and land development - noncommercial | 7,154 | 108 | 1,379 | 8,641 | 239,648 | 248,289 | |||||||||||||||||
Consumer | 8,812 | 2,893 | 2,995 | 14,700 | 1,546,473 | 1,561,173 | |||||||||||||||||
Other | 188 | 6 | 133 | 327 | 301,849 | 302,176 | |||||||||||||||||
Total non-PCI loans and leases | $ | 80,031 | $ | 19,050 | $ | 45,791 | $ | 144,872 | $ | 22,688,955 | $ | 22,833,827 | |||||||||||
December 31, 2016 | |||||||||||||||||||||||
30-59 days past due | 60-89 days past due | 90 days or greater | Total past due | Current | Total loans and leases | ||||||||||||||||||
Non-PCI loans and leases: | |||||||||||||||||||||||
Construction and land development - commercial | $ | 1,845 | $ | 39 | $ | 286 | $ | 2,170 | $ | 646,987 | $ | 649,157 | |||||||||||
Commercial mortgage | 11,592 | 2,773 | 10,329 | 24,694 | 9,001,526 | 9,026,220 | |||||||||||||||||
Other commercial real estate | 310 | — | — | 310 | 350,981 | 351,291 | |||||||||||||||||
Commercial and industrial | 7,918 | 2,102 | 1,051 | 11,071 | 2,556,430 | 2,567,501 | |||||||||||||||||
Lease financing | 1,175 | 444 | 863 | 2,482 | 823,788 | 826,270 | |||||||||||||||||
Residential mortgage | 27,760 | 7,039 | 15,280 | 50,079 | 2,839,045 | 2,889,124 | |||||||||||||||||
Revolving mortgage | 14,290 | 2,698 | 7,414 | 24,402 | 2,576,942 | 2,601,344 | |||||||||||||||||
Construction and land development - noncommercial | 1,139 | 598 | 557 | 2,294 | 229,106 | 231,400 | |||||||||||||||||
Consumer | 6,775 | 2,779 | 1,926 | 11,480 | 1,434,658 | 1,446,138 | |||||||||||||||||
Other | 72 | — | 198 | 270 | 339,994 | 340,264 | |||||||||||||||||
Total non-PCI loans and leases | $ | 72,876 | $ | 18,472 | $ | 37,904 | $ | 129,252 | $ | 20,799,457 | $ | 20,928,709 |
December 31, 2017 | December 31, 2016 | ||||||||||||||
(Dollars in thousands) | Nonaccrual loans and leases | Loans and leases > 90 days and accruing | Nonaccrual loans and leases | Loans and leases > 90 days and accruing | |||||||||||
Non-PCI loans and leases: | |||||||||||||||
Construction and land development - commercial | $ | 1,040 | $ | — | $ | 606 | $ | — | |||||||
Commercial mortgage | 22,625 | 397 | 26,527 | 482 | |||||||||||
Other commercial real estate | 916 | — | 86 | — | |||||||||||
Commercial and industrial | 2,884 | 428 | 4,275 | 440 | |||||||||||
Lease financing | 1,992 | — | 359 | 683 | |||||||||||
Residential mortgage | 38,942 | — | 32,470 | 37 | |||||||||||
Revolving mortgage | 19,990 | — | 14,308 | — | |||||||||||
Construction and land development - noncommercial | 1,989 | — | 1,121 | — | |||||||||||
Consumer | 1,992 | 2,153 | 2,236 | 1,076 | |||||||||||
Other | 164 | — | 319 | — | |||||||||||
Total non-PCI loans and leases | $ | 92,534 | $ | 2,978 | $ | 82,307 | $ | 2,718 |
(Dollars in thousands) | Guaranty | Cordia | |||||
Contractually required payments | $ | 703,916 | $ | 296,529 | |||
Contractual cash flows not expected to be collected | $ | 16,073 | $ | 2,678 | |||
Fair value at acquisition date | $ | 574,553 | $ | 241,392 |
(Dollars in thousands) | Guaranty | Cordia | |||||
Commercial: | |||||||
Construction and land development | $ | — | $ | 3,066 | |||
Commercial mortgage | 850 | 77,455 | |||||
Other commercial real estate | — | 22,174 | |||||
Commercial and industrial | 583 | 31,773 | |||||
Other | 183,816 | — | |||||
Total commercial loans and leases | 185,249 | 134,468 | |||||
Noncommercial: | |||||||
Residential mortgage | 309,612 | 16,839 | |||||
Revolving mortgage | 54,780 | 9,867 | |||||
Consumer | 24,912 | 80,218 | |||||
Total noncommercial loans and leases | 389,304 | 106,924 | |||||
Total non-PCI loans | $ | 574,553 | $ | 241,392 |
(Dollars in thousands) | Guaranty | HCB | FCSB | NMSB | |||||||||||
Contractually required payments | $ | 158,456 | $ | 111,250 | $ | 58,036 | $ | 50,613 | |||||||
Cash flows expected to be collected | $ | 142,000 | $ | 101,802 | $ | 50,665 | $ | 42,513 | |||||||
Fair value of loans at acquisition | $ | 114,533 | $ | 85,149 | $ | 43,776 | $ | 36,914 |
(Dollars in thousands) | Guaranty | HCB | FCSB | NMSB | |||||||||||
Commercial: | |||||||||||||||
Construction and land development | $ | 55 | $ | 7,061 | $ | 559 | $ | 125 | |||||||
Commercial mortgage | 644 | 21,836 | 24,156 | 26,216 | |||||||||||
Other commercial real estate | — | 6,404 | 1,158 | 1,471 | |||||||||||
Commercial and industrial | 2 | 19,675 | 1,783 | 1,847 | |||||||||||
Other | — | — | 1,619 | — | |||||||||||
Total commercial loans | 701 | 54,976 | 29,275 | 29,659 | |||||||||||
Noncommercial: | |||||||||||||||
Residential mortgage | 80,475 | 25,857 | 12,518 | 6,416 | |||||||||||
Revolving mortgage | 33,319 | 3,434 | 1,117 | 121 | |||||||||||
Construction and land development | 26 | — | 340 | — | |||||||||||
Consumer | 12 | 882 | 526 | 718 | |||||||||||
Total noncommercial loans | 113,832 | 30,173 | 14,501 | 7,255 | |||||||||||
Total PCI loans | $ | 114,533 | $ | 85,149 | $ | 43,776 | $ | 36,914 |
(Dollars in thousands) | 2017 | 2016 | |||||
Balance at January 1 | $ | 809,169 | $ | 950,516 | |||
Fair value of PCI loans acquired during the year | 199,682 | 80,690 | |||||
Accretion | 76,594 | 76,565 | |||||
Payments received and other changes, net | (322,447 | ) | (298,602 | ) | |||
Balance at December 31 | $ | 762,998 | $ | 809,169 | |||
Unpaid principal balance at December 31 | $ | 1,175,441 | $ | 1,266,395 |
(Dollars in thousands) | 2017 | 2016 | |||||
Balance at January 1 | $ | 335,074 | $ | 343,856 | |||
Additions from acquisitions | 44,120 | 12,488 | |||||
Accretion | (76,594 | ) | (76,565 | ) | |||
Reclassifications from nonaccretable difference | 18,901 | 29,931 | |||||
Changes in expected cash flows that do not affect nonaccretable difference | (4,822 | ) | 25,364 | ||||
Balance at December 31 | $ | 316,679 | $ | 335,074 |
Non-PCI | PCI | Total | |||||||||
(Dollars in thousands) | |||||||||||
Balance at January 1, 2015 | $ | 182,837 | $ | 21,629 | $ | 204,466 | |||||
Provision (credit) for loan and lease losses | 22,937 | (2,273 | ) | 20,664 | |||||||
Loans and leases charged-off | (25,304 | ) | (3,044 | ) | (28,348 | ) | |||||
Loans and leases recovered | 9,434 | — | 9,434 | ||||||||
Net charge-offs | (15,870 | ) | (3,044 | ) | (18,914 | ) | |||||
Balance at December 31, 2015 | 189,904 | 16,312 | 206,216 | ||||||||
Provision (credit) for loan and lease losses | 34,870 | (1,929 | ) | 32,941 | |||||||
Loans and leases charged-off | (29,587 | ) | (614 | ) | (30,201 | ) | |||||
Loans and leases recovered | 9,839 | — | 9,839 | ||||||||
Net charge-offs | (19,748 | ) | (614 | ) | (20,362 | ) | |||||
Balance at December 31, 2016 | 205,026 | 13,769 | 218,795 | ||||||||
Provision (credit) for loan and lease losses | 29,139 | (3,447 | ) | 25,692 | |||||||
Loans and leases charged-off | (36,386 | ) | (296 | ) | (36,682 | ) | |||||
Loans and leases recovered | 14,088 | — | 14,088 | ||||||||
Net charge-offs | (22,298 | ) | (296 | ) | (22,594 | ) | |||||
Balance at December 31, 2017 | $ | 211,867 | $ | 10,026 | $ | 221,893 |
Years ended December 31, 2017, 2016 and 2015 | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Construction and land development - commercial | Commercial mortgage | Other commercial real estate | Commercial and industrial | Lease financing | Other | Residential mortgage | Revolving mortgage | Construction and land development - non- commercial | Consumer | Total | ||||||||||||||||||||||||||||||||
Non-PCI Loans | |||||||||||||||||||||||||||||||||||||||||||
Allowance for loan and lease losses: | |||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2015 | $ | 11,961 | $ | 85,189 | $ | 732 | $ | 30,727 | $ | 4,286 | $ | 3,184 | $ | 10,661 | $ | 18,650 | $ | 892 | $ | 16,555 | $ | 182,837 | |||||||||||||||||||||
Provision (credits) | 4,773 | (15,822 | ) | 1,569 | 17,432 | 1,602 | (1,420 | ) | 4,202 | (927 | ) | 541 | 10,987 | 22,937 | |||||||||||||||||||||||||||||
Charge-offs | (1,012 | ) | (1,498 | ) | (178 | ) | (5,952 | ) | (402 | ) | — | (1,619 | ) | (2,925 | ) | (22 | ) | (11,696 | ) | (25,304 | ) | ||||||||||||||||||||||
Recoveries | 566 | 2,027 | 45 | 909 | 38 | 91 | 861 | 1,173 | 74 | 3,650 | 9,434 | ||||||||||||||||||||||||||||||||
Balance at December 31, 2015 | 16,288 | 69,896 | 2,168 | 43,116 | 5,524 | 1,855 | 14,105 | 15,971 | 1,485 | 19,496 | 189,904 | ||||||||||||||||||||||||||||||||
Provision (credits) | 12,871 | (21,912 | ) | 925 | 14,583 | 635 | 877 | 801 | 7,413 | 45 | 18,632 | 34,870 | |||||||||||||||||||||||||||||||
Charge-offs | (680 | ) | (987 | ) | — | (9,013 | ) | (442 | ) | (144 | ) | (926 | ) | (3,287 | ) | — | (14,108 | ) | (29,587 | ) | |||||||||||||||||||||||
Recoveries | 398 | 1,281 | 176 | 1,539 | 190 | 539 | 467 | 916 | 66 | 4,267 | 9,839 | ||||||||||||||||||||||||||||||||
Balance at December 31, 2016 | 28,877 | 48,278 | 3,269 | 50,225 | 5,907 | 3,127 | 14,447 | 21,013 | 1,596 | 28,287 | 205,026 | ||||||||||||||||||||||||||||||||
Provision (credits) | (4,329 | ) | (5,694 | ) | 1,280 | 10,658 | 966 | 2,189 | 2,096 | 2,509 | 2,366 | 17,098 | 29,139 | ||||||||||||||||||||||||||||||
Charge-offs | (599 | ) | (421 | ) | (5 | ) | (10,926 | ) | (995 | ) | (912 | ) | (1,376 | ) | (2,368 | ) | — | (18,784 | ) | (36,386 | ) | ||||||||||||||||||||||
Recoveries | 521 | 2,842 | 27 | 3,740 | 249 | 285 | 539 | 1,282 | — | 4,603 | 14,088 | ||||||||||||||||||||||||||||||||
Balance at December 31, 2017 | $ | 24,470 | $ | 45,005 | $ | 4,571 | $ | 53,697 | $ | 6,127 | $ | 4,689 | $ | 15,706 | $ | 22,436 | $ | 3,962 | $ | 31,204 | $ | 211,867 |
December 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Construction and land development - commercial | Commercial mortgage | Other commercial real estate | Commercial and industrial | Lease financing | Other | Residential mortgage | Revolving mortgage | Construction and land development - non-commercial | Consumer | Total | ||||||||||||||||||||||||||||||||
Non-PCI Loans | |||||||||||||||||||||||||||||||||||||||||||
Allowance for loan and lease losses: | |||||||||||||||||||||||||||||||||||||||||||
ALLL for loans and leases individually evaluated for impairment | $ | 185 | $ | 3,648 | $ | 209 | $ | 665 | $ | 397 | $ | — | $ | 2,733 | $ | 1,085 | $ | 68 | $ | 738 | $ | 9,728 | |||||||||||||||||||||
ALLL for loans and leases collectively evaluated for impairment | 24,285 | 41,357 | 4,362 | 53,032 | 5,730 | 4,689 | 12,973 | 21,351 | 3,894 | 30,466 | 202,139 | ||||||||||||||||||||||||||||||||
Total allowance for loan and lease losses | $ | 24,470 | $ | 45,005 | $ | 4,571 | $ | 53,697 | $ | 6,127 | $ | 4,689 | $ | 15,706 | $ | 22,436 | $ | 3,962 | $ | 31,204 | $ | 211,867 | |||||||||||||||||||||
Loans and leases: | |||||||||||||||||||||||||||||||||||||||||||
Loans and leases individually evaluated for impairment | $ | 788 | $ | 73,655 | $ | 1,857 | $ | 7,974 | $ | 1,914 | $ | 521 | $ | 37,842 | $ | 23,770 | $ | 4,551 | $ | 2,774 | $ | 155,646 | |||||||||||||||||||||
Loans and leases collectively evaluated for impairment | 668,427 | 9,655,367 | 471,576 | 2,722,433 | 892,887 | 301,655 | 3,485,944 | 2,677,755 | 243,738 | 1,558,399 | 22,678,181 | ||||||||||||||||||||||||||||||||
Total loan and leases | $ | 669,215 | $ | 9,729,022 | $ | 473,433 | $ | 2,730,407 | $ | 894,801 | $ | 302,176 | $ | 3,523,786 | $ | 2,701,525 | $ | 248,289 | $ | 1,561,173 | $ | 22,833,827 |
December 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Construction and land development - commercial | Commercial mortgage | Other commercial real estate | Commercial and industrial | Lease financing | Other | Residential mortgage | Revolving mortgage | Construction and land development - non-commercial | Consumer | Total | ||||||||||||||||||||||||||||||||
Non-PCI Loans | |||||||||||||||||||||||||||||||||||||||||||
Allowance for loan and lease losses: | |||||||||||||||||||||||||||||||||||||||||||
ALLL for loans and leases individually evaluated for impairment | $ | 151 | $ | 3,488 | $ | 152 | $ | 1,732 | $ | 75 | $ | 23 | $ | 2,447 | $ | 366 | $ | 109 | $ | 667 | $ | 9,210 | |||||||||||||||||||||
ALLL for loans and leases collectively evaluated for impairment | 28,726 | 44,790 | 3,117 | 48,493 | 5,832 | 3,104 | 12,000 | 20,647 | 1,487 | 27,620 | 195,816 | ||||||||||||||||||||||||||||||||
Total allowance for loan and lease losses | $ | 28,877 | $ | 48,278 | $ | 3,269 | $ | 50,225 | $ | 5,907 | $ | 3,127 | $ | 14,447 | $ | 21,013 | $ | 1,596 | $ | 28,287 | $ | 205,026 | |||||||||||||||||||||
Loans and leases: | |||||||||||||||||||||||||||||||||||||||||||
Loans and leases individually evaluated for impairment | $ | 1,045 | $ | 76,361 | $ | 1,563 | $ | 12,600 | $ | 1,074 | $ | 142 | $ | 31,476 | $ | 7,613 | $ | 2,613 | $ | 1,912 | $ | 136,399 | |||||||||||||||||||||
Loans and leases collectively evaluated for impairment | 648,112 | 8,949,859 | 349,728 | 2,554,901 | 825,196 | 340,122 | 2,857,648 | 2,593,731 | 228,787 | 1,444,226 | 20,792,310 | ||||||||||||||||||||||||||||||||
Total loan and leases | $ | 649,157 | $ | 9,026,220 | $ | 351,291 | $ | 2,567,501 | $ | 826,270 | $ | 340,264 | $ | 2,889,124 | $ | 2,601,344 | $ | 231,400 | $ | 1,446,138 | $ | 20,928,709 |
Years ended December 31, 2017, 2016 and 2015 | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Construction and land development - commercial | Commercial mortgage | Other commercial real estate | Commercial and industrial | Residential mortgage | Revolving mortgage | Construction and land development - noncommercial | Consumer and other | Total | ||||||||||||||||||||||||||
PCI Loans | |||||||||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||||||
Balance at January 1, 2015 | $ | 150 | $ | 10,135 | $ | 75 | $ | 1,240 | $ | 5,820 | $ | 3,999 | $ | 183 | $ | 27 | $ | 21,629 | |||||||||||||||||
Provision (credits) | 1,029 | (1,426 | ) | 698 | (470 | ) | 72 | (2,720 | ) | (183 | ) | 727 | (2,273 | ) | |||||||||||||||||||||
Charge-offs | (97 | ) | (871 | ) | — | (325 | ) | (494 | ) | (756 | ) | — | (501 | ) | (3,044 | ) | |||||||||||||||||||
Recoveries | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Balance at December 31, 2015 | 1,082 | 7,838 | 773 | 445 | 5,398 | 523 | — | 253 | 16,312 | ||||||||||||||||||||||||||
Provision (credits) | (599 | ) | (1,249 | ) | (266 | ) | 59 | (209 | ) | 433 | — | (98 | ) | (1,929 | ) | ||||||||||||||||||||
Charge-offs | — | (166 | ) | (5 | ) | — | (371 | ) | — | — | (72 | ) | (614 | ) | |||||||||||||||||||||
Recoveries | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Balance at December 31, 2016 | 483 | 6,423 | 502 | 504 | 4,818 | 956 | — | 83 | 13,769 | ||||||||||||||||||||||||||
Provision (credits) | (148 | ) | 437 | (281 | ) | (198 | ) | (2,701 | ) | (697 | ) | — | 141 | (3,447 | ) | ||||||||||||||||||||
Charge-offs | — | (296 | ) | — | — | — | — | — | — | (296 | ) | ||||||||||||||||||||||||
Recoveries | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Balance at December 31, 2017 | $ | 335 | $ | 6,564 | $ | 221 | $ | 306 | $ | 2,117 | $ | 259 | $ | — | $ | 224 | $ | 10,026 | |||||||||||||||||
December 31, 2017 | |||||||||||||||||||||||||||||||||||
ALLL for loans acquired with deteriorated credit quality | $ | 335 | $ | 6,564 | $ | 221 | $ | 306 | $ | 2,117 | $ | 259 | $ | — | $ | 224 | $ | 10,026 | |||||||||||||||||
Loans acquired with deteriorated credit quality | 13,654 | 358,103 | 17,124 | 6,374 | 299,318 | 63,908 | 644 | 3,873 | 762,998 | ||||||||||||||||||||||||||
December 31, 2016 | |||||||||||||||||||||||||||||||||||
ALLL for loans acquired with deteriorated credit quality | 483 | 6,423 | 502 | 504 | 4,818 | 956 | — | 83 | 13,769 | ||||||||||||||||||||||||||
Loans acquired with deteriorated credit quality | 20,766 | 453,013 | 12,645 | 11,844 | 268,777 | 38,650 | — | 3,474 | 809,169 |
December 31, 2017 | |||||||||||||||||||
(Dollars in thousands) | With a recorded allowance | With no recorded allowance | Total | Unpaid principal balance | Related allowance recorded | ||||||||||||||
Non-PCI impaired loans and leases | |||||||||||||||||||
Construction and land development - commercial | $ | 788 | $ | — | $ | 788 | $ | 1,110 | $ | 185 | |||||||||
Commercial mortgage | 39,135 | 34,520 | 73,655 | 78,936 | 3,648 | ||||||||||||||
Other commercial real estate | 1,351 | 506 | 1,857 | 2,267 | 209 | ||||||||||||||
Commercial and industrial | 6,326 | 1,648 | 7,974 | 10,475 | 665 | ||||||||||||||
Lease financing | 1,890 | 24 | 1,914 | 2,571 | 397 | ||||||||||||||
Other | — | 521 | 521 | 521 | — | ||||||||||||||
Residential mortgage | 19,135 | 18,707 | 37,842 | 39,946 | 2,733 | ||||||||||||||
Revolving mortgage | 5,875 | 17,895 | 23,770 | 25,941 | 1,085 | ||||||||||||||
Construction and land development - noncommercial | 592 | 3,959 | 4,551 | 5,224 | 68 | ||||||||||||||
Consumer | 2,107 | 667 | 2,774 | 3,043 | 738 | ||||||||||||||
Total non-PCI impaired loans and leases | $ | 77,199 | $ | 78,447 | $ | 155,646 | $ | 170,034 | $ | 9,728 | |||||||||
December 31, 2016 | |||||||||||||||||||
(Dollars in thousands) | With a recorded allowance | With no recorded allowance | Total | Unpaid principal balance | Related allowance recorded | ||||||||||||||
Non-PCI impaired loans and leases | |||||||||||||||||||
Construction and land development - commercial | $ | 1,002 | $ | 43 | $ | 1,045 | $ | 1,172 | $ | 151 | |||||||||
Commercial mortgage | 42,875 | 33,486 | 76,361 | 82,658 | 3,488 | ||||||||||||||
Other commercial real estate | 1,279 | 284 | 1,563 | 1,880 | 152 | ||||||||||||||
Commercial and industrial | 8,920 | 3,680 | 12,600 | 16,637 | 1,732 | ||||||||||||||
Lease financing | 1,002 | 72 | 1,074 | 1,074 | 75 | ||||||||||||||
Other | 142 | — | 142 | 233 | 23 | ||||||||||||||
Residential mortgage | 20,269 | 11,207 | 31,476 | 32,588 | 2,447 | ||||||||||||||
Revolving mortgage | 1,825 | 5,788 | 7,613 | 8,831 | 366 | ||||||||||||||
Construction and land development - noncommercial | 645 | 1,968 | 2,613 | 3,030 | 109 | ||||||||||||||
Consumer | 1,532 | 380 | 1,912 | 2,086 | 667 | ||||||||||||||
Total non-PCI impaired loans and leases | $ | 79,491 | $ | 56,908 | $ | 136,399 | $ | 150,189 | $ | 9,210 |
Year ended December 31, 2017 | |||||||
(Dollars in thousands) | YTD Average Balance | YTD Interest Income Recognized | |||||
Non-PCI impaired loans and leases: | |||||||
Construction and land development - commercial | $ | 858 | $ | 37 | |||
Commercial mortgage | 73,815 | 2,596 | |||||
Other commercial real estate | 1,642 | 34 | |||||
Commercial and industrial | 9,847 | 376 | |||||
Lease financing | 1,753 | 51 | |||||
Other | 426 | 22 | |||||
Residential mortgage | 33,818 | 990 | |||||
Revolving mortgage | 14,022 | 436 | |||||
Construction and land development - noncommercial | 3,383 | 145 | |||||
Consumer | 2,169 | 103 | |||||
Total non-PCI impaired loans and leases | $ | 141,733 | $ | 4,790 | |||
Year ended December 31, 2016 | |||||||
Non-PCI impaired loans and leases: | |||||||
Construction and land development - commercial | $ | 2,700 | $ | 138 | |||
Commercial mortgage | 82,146 | 2,671 | |||||
Other commercial real estate | 1,112 | 38 | |||||
Commercial and industrial | 11,878 | 417 | |||||
Lease financing | 1,307 | 63 | |||||
Other | 687 | 33 | |||||
Residential mortgage | 26,774 | 805 | |||||
Revolving mortgage | 6,915 | 171 | |||||
Construction and land development - noncommercial | 983 | 50 | |||||
Consumer | 1,480 | 80 | |||||
Total non-PCI impaired loans and leases | $ | 135,982 | $ | 4,466 | |||
Year ended December 31, 2015 | |||||||
Non-PCI impaired loans and leases: | |||||||
Construction and land development - commercial | $ | 3,164 | $ | 146 | |||
Commercial mortgage | 89,934 | 3,129 | |||||
Other commercial real estate | 481 | 12 | |||||
Commercial and industrial | 14,587 | 510 | |||||
Lease financing | 1,718 | 74 | |||||
Other | 1,673 | 37 | |||||
Residential mortgage | 18,524 | 557 | |||||
Revolving mortgage | 4,368 | 97 | |||||
Construction and land development - noncommercial | 829 | 38 | |||||
Consumer | 1,126 | 75 | |||||
Total non-PCI impaired loans and leases | $ | 136,404 | $ | 4,675 | |||
December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||
(Dollars in thousands) | Accruing | Nonaccruing | Total | Accruing | Nonaccruing | Total | |||||||||||||||||
Commercial loans | |||||||||||||||||||||||
Construction and land development - commercial | $ | 4,089 | $ | 483 | $ | 4,572 | $ | 3,292 | $ | 308 | $ | 3,600 | |||||||||||
Commercial mortgage | 62,358 | 15,863 | 78,221 | 70,263 | 14,435 | 84,698 | |||||||||||||||||
Other commercial real estate | 1,012 | 788 | 1,800 | 1,635 | 80 | 1,715 | |||||||||||||||||
Commercial and industrial | 7,598 | 910 | 8,508 | 9,193 | 1,436 | 10,629 | |||||||||||||||||
Lease financing | 722 | 1,048 | 1,770 | 882 | 192 | 1,074 | |||||||||||||||||
Other | 521 | — | 521 | 64 | 78 | 142 | |||||||||||||||||
Total commercial loans | 76,300 | 19,092 | 95,392 | 85,329 | 16,529 | 101,858 | |||||||||||||||||
Noncommercial | |||||||||||||||||||||||
Residential mortgage | 34,067 | 9,475 | 43,542 | 34,012 | 5,117 | 39,129 | |||||||||||||||||
Revolving mortgage | 17,673 | 5,180 | 22,853 | 6,346 | 1,431 | 7,777 | |||||||||||||||||
Construction and land development - noncommercial | — | — | — | 240 | — | 240 | |||||||||||||||||
Consumer and other | 2,351 | 423 | 2,774 | 1,603 | 309 | 1,912 | |||||||||||||||||
Total noncommercial loans | 54,091 | 15,078 | 69,169 | 42,201 | 6,857 | 49,058 | |||||||||||||||||
Total loans | $ | 130,391 | $ | 34,170 | $ | 164,561 | $ | 127,530 | $ | 23,386 | $ | 150,916 |
Year ended December 31, 2017 | Year ended December 31, 2016 | ||||||||||||||||||
All restructurings | Restructurings with payment default | All restructurings | Restructurings with payment default | ||||||||||||||||
Number of Loans | Recorded investment at period end | Number of Loans | Recorded investment at period end | Number of Loans | Recorded investment at period end | Number of Loans | Recorded investment at period end | ||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Non-PCI loans and leases | |||||||||||||||||||
Interest only period provided | |||||||||||||||||||
Commercial mortgage | 4 | $ | 490 | — | $ | — | 2 | $ | 569 | 1 | $ | 326 | |||||||
Residential mortgage | — | — | — | — | 1 | 122 | 1 | 122 | |||||||||||
Revolving mortgage | 1 | 82 | — | — | — | — | — | — | |||||||||||
Total interest only | 5 | 572 | — | — | 3 | 691 | 2 | 448 | |||||||||||
Loan term extension | |||||||||||||||||||
Construction and land development - commercial | — | — | — | — | 1 | 40 | 1 | 40 | |||||||||||
Commercial mortgage | 3 | 2,240 | — | — | 7 | 2,428 | — | — | |||||||||||
Other commercial real estate | — | — | — | — | 1 | 747 | — | — | |||||||||||
Commercial and industrial | 9 | 246 | — | — | 8 | 1,070 | — | — | |||||||||||
Residential mortgage | 10 | 1,915 | 1 | 243 | 15 | 2,183 | — | — | |||||||||||
Revolving mortgage | 14 | 1,233 | 1 | 30 | — | — | — | — | |||||||||||
Construction and land development - noncommercial | 1 | 35 | — | — | 2 | 421 | — | — | |||||||||||
Consumer | 9 | 327 | — | — | 3 | 30 | — | ||||||||||||
Other | 1 | 521 | — | — | — | — | — | — | |||||||||||
Total loan term extension | 47 | 6,517 | 2 | 273 | 37 | 6,919 | 1 | 40 | |||||||||||
Below market interest rate | |||||||||||||||||||
Construction and land development - commercial | 3 | 170 | 2 | 170 | 6 | 231 | 1 | — | |||||||||||
Commercial mortgage | 49 | 11,716 | 16 | 2,001 | 45 | 12,030 | 16 | 1,986 | |||||||||||
Commercial and industrial | 27 | 1,227 | 9 | 452 | 34 | 3,056 | 11 | 1,144 | |||||||||||
Other commercial real estate | 5 | 340 | 3 | 181 | 3 | 619 | — | — | |||||||||||
Lease financing | 3 | 633 | 2 | 588 | 4 | 152 | 4 | 152 | |||||||||||
Residential mortgage | 104 | 6,858 | 33 | 2,867 | 185 | 11,087 | 48 | 2,583 | |||||||||||
Revolving mortgage | 129 | 6,457 | 36 | 1,550 | 5 | 106 | — | — | |||||||||||
Construction and land development - noncommercial | 16 | 1,877 | 3 | 43 | 15 | 676 | 4 | 96 | |||||||||||
Consumer | 18 | 95 | 5 | 30 | 10 | 222 | 2 | 15 | |||||||||||
Other | 1 | — | — | — | 2 | 120 | 1 | 78 | |||||||||||
Total below market interest rate | 355 | 29,373 | 109 | 7,882 | 309 | 28,299 | 87 | 6,054 | |||||||||||
Discharged from bankruptcy | |||||||||||||||||||
Construction and land development - commercial | 1 | 15 | 1 | 15 | 1 | 22 | 1 | 22 | |||||||||||
Commercial mortgage | 8 | 2,052 | 1 | — | 4 | 347 | 2 | 73 | |||||||||||
Commercial and industrial | 10 | 56 | 7 | — | 6 | 83 | — | — | |||||||||||
Lease financing | 17 | 431 | 16 | 431 | 1 | 84 | — | — | |||||||||||
Residential mortgage | 41 | 3,723 | 17 | 1,161 | 22 | 773 | 14 | 326 | |||||||||||
Revolving mortgage | 46 | 2,597 | 15 | 724 | 51 | 3,043 | 13 | 345 | |||||||||||
Construction and land development - noncommercial | 2 | 35 | 2 | 35 | — | — | — | — | |||||||||||
Consumer | 85 | 1,003 | 30 | 315 | 69 | 770 | 23 | 250 | |||||||||||
Total discharged from bankruptcy | 210 | 9,912 | 89 | 2,681 | 154 | 5,122 | 53 | 1,016 | |||||||||||
Total non-PCI restructurings | 617 | $ | 46,374 | 200 | $ | 10,836 | 503 | $ | 41,031 | 143 | $ | 7,558 |
Year ended December 31, 2017 | Year ended December 31, 2016 | ||||||||||||||||||
All restructurings | Restructurings with payment default | All restructurings | Restructurings with payment default | ||||||||||||||||
Number of Loans | Recorded investment at period end | Number of Loans | Recorded investment at period end | Number of Loans | Recorded investment at period end | Number of Loans | Recorded investment at period end | ||||||||||||
(Dollars in thousands) | |||||||||||||||||||
PCI loans | |||||||||||||||||||
Interest only period provided | |||||||||||||||||||
Commercial and industrial | 1 | $ | 634 | 1 | $ | 634 | — | $ | — | — | $ | — | |||||||
Total interest only | 1 | 634 | 1 | 634 | — | — | — | — | |||||||||||
Below market interest rate | |||||||||||||||||||
Construction and land development - commercial | — | — | — | — | 1 | 52 | — | — | |||||||||||
Commercial mortgage | 4 | 725 | — | — | 4 | 3,255 | — | — | |||||||||||
Residential mortgage | 4 | 314 | 1 | 101 | 3 | 172 | — | — | |||||||||||
Total below market interest rate | 8 | 1,039 | 1 | 101 | 8 | 3,479 | — | — | |||||||||||
Discharged from bankruptcy | |||||||||||||||||||
Commercial mortgage | 3 | 458 | 1 | 262 | 2 | 2,965 | 1 | 3 | |||||||||||
Residential mortgage | 3 | 495 | 1 | 157 | — | — | — | — | |||||||||||
Total discharged from bankruptcy | 6 | 953 | 2 | 419 | 2 | 2,965 | 1 | 3 | |||||||||||
Total PCI restructurings | 15 | $ | 2,626 | 4 | $ | 1,154 | 10 | $ | 6,444 | 1 | $ | 3 |
(Dollars in thousands) | 2017 | 2016 | |||||
Land | $ | 290,990 | $ | 285,612 | |||
Premises and leasehold improvements | 1,158,699 | 1,130,650 | |||||
Furniture and equipment | 489,067 | 443,560 | |||||
Total | 1,938,756 | 1,859,822 | |||||
Less accumulated depreciation and amortization | 800,325 | 726,778 | |||||
Total premises and equipment | $ | 1,138,431 | $ | 1,133,044 |
(Dollars in thousands) | Year ended December 31 | ||
2018 | $ | 25,797 | |
2019 | 18,838 | ||
2020 | 12,691 | ||
2021 | 10,780 | ||
2022 | 9,181 | ||
Thereafter | 45,138 | ||
Total minimum payments | $ | 122,425 |
(Dollars in thousands) | Covered | Noncovered | Total | ||||||||
Balance at January 1, 2016 | $ | 6,817 | $ | 58,742 | $ | 65,559 | |||||
Additions | 4,888 | 30,384 | 35,272 | ||||||||
Additions acquired in the Cordia acquisition | — | 1,170 | 1,170 | ||||||||
Additions acquired in the FCSB acquisition | — | 375 | 375 | ||||||||
Sales | (937 | ) | (33,241 | ) | (34,178 | ) | |||||
Write-downs | (580 | ) | (6,387 | ) | (6,967 | ) | |||||
Transfers (1) | (9,716 | ) | 9,716 | — | |||||||
Balance at December 31, 2016 | 472 | 60,759 | 61,231 | ||||||||
Additions | 260 | 34,720 | 34,980 | ||||||||
Additions acquired in the Guaranty acquisition | — | 55 | 55 | ||||||||
Sales | (369 | ) | (37,997 | ) | (38,366 | ) | |||||
Write-downs | (92 | ) | (6,711 | ) | (6,803 | ) | |||||
Balance at December 31, 2017 | $ | 271 | $ | 50,826 | $ | 51,097 |
Year ended December 31 | |||||||||||
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
Balance at January 1 | $ | 4,172 | $ | 4,054 | $ | 28,701 | |||||
Amortization | (1,865 | ) | (4,734 | ) | (10,899 | ) | |||||
Net cash payments to the FDIC | 7,440 | 21,059 | 33,296 | ||||||||
Post-acquisition adjustments | (7,764 | ) | (14,745 | ) | (47,044 | ) | |||||
Termination of FDIC shared-loss agreements | 240 | (1,462 | ) | — | |||||||
Balance at December 31 | $ | 2,223 | $ | 4,172 | $ | 4,054 |
(Dollars in thousands) | 2017 | 2016 | |||||
Demand | $ | 11,237,375 | $ | 10,130,549 | |||
Checking with interest | 5,230,060 | 4,919,727 | |||||
Money market accounts | 8,059,271 | 8,193,392 | |||||
Savings | 2,340,449 | 2,099,579 | |||||
Time | 2,399,120 | 2,818,096 | |||||
Total deposits | $ | 29,266,275 | $ | 28,161,343 |
(Dollars in thousands) | Year ended December 31 | ||
2018 | $ | 1,684,017 | |
2019 | 378,234 | ||
2020 | 202,134 | ||
2021 | 95,179 | ||
2022 | 39,553 | ||
Thereafter | 3 | ||
Total time deposits | $ | 2,399,120 |
(Dollars in thousands) | 2017 | 2016 | |||||
Repurchase agreements | $ | 586,171 | $ | 590,772 | |||
Notes payable to Federal Home Loan Banks | 90,000 | 10,000 | |||||
Federal funds purchased | 2,551 | 2,551 | |||||
Subordinated notes payable | 15,000 | — | |||||
Unamortized purchase accounting adjustments | 85 | 164 | |||||
Total short-term borrowings | $ | 693,807 | $ | 603,487 |
December 31, 2017 | |||||||||||||||||||
Remaining Contractual Maturity of the Agreements | |||||||||||||||||||
(Dollars in thousands) | Overnight and continuous | Up to 30 Days | 30-90 Days | Greater than 90 Days | Total | ||||||||||||||
Repurchase agreements | |||||||||||||||||||
U.S. Treasury | $ | 556,171 | $ | — | $ | 30,000 | $ | — | $ | 586,171 | |||||||||
Gross amount of recognized liabilities for repurchase agreements | $ | 586,171 | |||||||||||||||||
December 31, 2016 | |||||||||||||||||||
Remaining Contractual Maturity of the Agreements | |||||||||||||||||||
Overnight and continuous | Up to 30 Days | 30-90 Days | Greater than 90 Days | Total | |||||||||||||||
Repurchase agreements | |||||||||||||||||||
U.S. Treasury | $ | 590,772 | $ | — | $ | — | $ | 30,000 | $ | 620,772 | |||||||||
Gross amount of recognized liabilities for repurchase agreements | $ | 620,772 |
(Dollars in thousands) | 2017 | 2016 | |||||
Junior subordinated debenture at 3-month LIBOR plus 1.75 percent maturing June 30, 2036 | $ | 90,207 | $ | 90,207 | |||
Junior subordinated debenture at 3-month LIBOR plus 2.25 percent maturing June 15, 2034 | 19,588 | 24,742 | |||||
Junior subordinated debenture at 3-month LIBOR plus 2.85 percent maturing April 7, 2034 | 10,310 | 10,310 | |||||
Subordinated notes payable at 8.00 percent maturing June 1, 2018 | — | 15,000 | |||||
Obligations under capitalized leases extending to June 2026 | 7,795 | 5,701 | |||||
Notes payable to Federal Home Loan Bank of Atlanta with rates ranging from 2.00 percent to 3.06 percent and maturing through February 2026 | 745,221 | 660,237 | |||||
Unamortized purchase accounting adjustments | (2,964 | ) | (3,350 | ) | |||
Other long-term debt | 83 | 30,095 | |||||
Total long-term obligations | $ | 870,240 | $ | 832,942 |
Year ended December 31 | |||
2018 | $ | 1,298 | |
2019 | 1,340 | ||
2020 | 1,384 | ||
2021 | 71,431 | ||
2022 | 76,241 | ||
Thereafter | 718,546 | ||
Total long-term obligations | $ | 870,240 |
• | Level 1 values are based on quoted prices for identical instruments in active markets. |
• | Level 2 values are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market. |
• | Level 3 values are generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates that market participants would use in pricing the asset or liability. Valuation techniques include the use of discounted cash flow models and similar techniques. |
December 31, 2017 | December 31, 2016 | ||||||||||||||
(Dollars in thousands) | Carrying value | Fair value | Carrying value | Fair value | |||||||||||
Cash and due from banks | $ | 336,150 | $ | 336,150 | $ | 539,741 | $ | 539,741 | |||||||
Overnight investments | 1,387,927 | 1,387,927 | 1,872,594 | 1,872,594 | |||||||||||
Investment securities available for sale | 7,180,180 | 7,180,180 | 7,006,580 | 7,006,580 | |||||||||||
Investment securities held to maturity | 76 | 81 | 98 | 104 | |||||||||||
Loans held for sale | 51,179 | 51,179 | 74,401 | 74,401 | |||||||||||
Net loans and leases | 23,374,932 | 22,257,803 | 21,519,083 | 20,614,548 | |||||||||||
Receivable from the FDIC for shared-loss agreements | 2,223 | 2,223 | 4,172 | 4,172 | |||||||||||
Income earned not collected | 95,249 | 95,249 | 79,839 | 79,839 | |||||||||||
Federal Home Loan Bank stock | 52,685 | 52,685 | 43,495 | 43,495 | |||||||||||
Mortgage servicing rights | 21,945 | 26,170 | 20,415 | 24,446 | |||||||||||
Deposits | 29,266,275 | 29,230,768 | 28,161,343 | 28,135,698 | |||||||||||
Short-term borrowings | 693,807 | 693,807 | 603,487 | 603,487 | |||||||||||
Long-term obligations | 870,240 | 852,112 | 832,942 | 832,201 | |||||||||||
Payable to the FDIC for shared-loss agreements | 101,342 | 102,684 | 97,008 | 100,069 | |||||||||||
Accrued interest payable | 3,952 | 3,952 | 3,797 | 3,797 |
December 31, 2017 | |||||||||||||||
Fair value measurements using: | |||||||||||||||
(Dollars in thousands) | Fair value | Level 1 | Level 2 | Level 3 | |||||||||||
Assets measured at fair value | |||||||||||||||
Investment securities available for sale | |||||||||||||||
U.S. Treasury | $ | 1,657,864 | $ | — | $ | 1,657,864 | $ | — | |||||||
Mortgage-backed securities | 5,349,426 | — | 5,349,426 | — | |||||||||||
Equity securities | 105,208 | 19,341 | 85,867 | — | |||||||||||
Corporate bonds | 59,963 | — | 59,963 | — | |||||||||||
Other | 7,719 | — | 7,719 | — | |||||||||||
Total investment securities available for sale | $ | 7,180,180 | $ | 19,341 | $ | 7,160,839 | $ | — | |||||||
Loans held for sale | $ | 51,179 | $ | — | $ | 51,179 | $ | — | |||||||
December 31, 2016 | |||||||||||||||
Fair value measurements using: | |||||||||||||||
Fair value | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets measured at fair value | |||||||||||||||
Investment securities available for sale | |||||||||||||||
U.S. Treasury | $ | 1,650,319 | $ | — | $ | 1,650,319 | $ | — | |||||||
Government agency | 40,398 | — | 40,398 | — | |||||||||||
Mortgage-backed securities | 5,175,425 | — | 5,175,425 | — | |||||||||||
Equity securities | 83,507 | 29,145 | 54,362 | — | |||||||||||
Corporate bonds | 49,562 | — | 49,562 | — | |||||||||||
Other | 7,369 | — | 7,369 | — | |||||||||||
Total investment securities available for sale | $ | 7,006,580 | $ | 29,145 | $ | 6,977,435 | $ | — | |||||||
Loans held for sale | $ | 74,401 | $ | — | $ | 74,401 | $ | — |
December 31, 2017 | |||||||||||
(Dollars in thousands) | Fair Value | Aggregate Unpaid Principal Balance | Difference | ||||||||
Originated loans held for sale | $ | 51,179 | $ | 49,796 | $ | 1,383 | |||||
December 31, 2016 | |||||||||||
Fair Value | Aggregate Unpaid Principal Balance | Difference | |||||||||
Originated loans held for sale | $ | 74,401 | $ | 75,893 | $ | (1,492 | ) |
December 31, 2017 | |||||||||||||||
Fair value measurements using: | |||||||||||||||
(Dollars in thousands) | Fair value | Level 1 | Level 2 | Level 3 | |||||||||||
Impaired loans | $ | 72,539 | $ | — | $ | — | $ | 72,539 | |||||||
Other real estate remeasured during current year | 40,167 | — | — | 40,167 | |||||||||||
December 31, 2016 | |||||||||||||||
Fair value measurements using: | |||||||||||||||
Fair value | Level 1 | Level 2 | Level 3 | ||||||||||||
Impaired loans | $ | 70,977 | $ | — | $ | — | $ | 70,977 | |||||||
Other real estate remeasured during current year | 45,402 | — | — | 45,402 | |||||||||||
Mortgage servicing rights | 342 | — | — | 342 |
(Dollars in thousands) | 2017 | 2016 | |||||
Change in benefit obligation | |||||||
Projected benefit obligation at January 1 | $ | 673,227 | $ | 611,502 | |||
Service cost | 12,638 | 12,618 | |||||
Interest cost | 28,940 | 28,892 | |||||
Actuarial loss | 57,041 | 40,571 | |||||
Benefits paid | (21,898 | ) | (20,356 | ) | |||
Projected benefit obligation at December 31 | 749,948 | 673,227 | |||||
Change in plan assets | |||||||
Fair value of plan assets at January 1 | 600,616 | 550,025 | |||||
Actual return on plan assets | 84,281 | 20,947 | |||||
Employer contributions | 50,000 | 50,000 | |||||
Benefits paid | (21,898 | ) | (20,356 | ) | |||
Fair value of plan assets at December 31 | 712,999 | 600,616 | |||||
Funded status at December 31 | $ | (36,949 | ) | $ | (72,611 | ) |
(Dollars in thousands) | 2017 | 2016 | |||||
Other assets | $ | — | $ | — | |||
Other liabilities | (36,949 | ) | (72,611 | ) | |||
Net liability recognized | $ | (36,949 | ) | $ | (72,611 | ) |
(Dollars in thousands) | 2017 | 2016 | |||||
Net loss | $ | 125,745 | $ | 119,766 | |||
Less prior service cost | 137 | 347 | |||||
Accumulated other comprehensive loss, excluding income taxes | $ | 125,882 | $ | 120,113 |
(Dollars in thousands) | |||
Actuarial loss | $ | 12,998 | |
Prior service cost | 79 | ||
Total | $ | 13,077 |
Year ended December 31 | |||||||||||
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
Service cost | $ | 12,638 | $ | 12,618 | $ | 14,083 | |||||
Interest cost | 28,940 | 28,892 | 26,975 | ||||||||
Expected return on assets | (42,074 | ) | (36,643 | ) | (33,198 | ) | |||||
Amortization of prior service cost | 210 | 210 | 210 | ||||||||
Amortization of net actuarial loss | 8,855 | 6,859 | 11,376 | ||||||||
Total net periodic benefit cost | 8,569 | 11,936 | 19,446 | ||||||||
Current year actuarial loss | 14,834 | 56,268 | 927 | ||||||||
Amortization of actuarial loss | (8,855 | ) | (6,859 | ) | (11,376 | ) | |||||
Amortization of prior service cost | (210 | ) | (210 | ) | (210 | ) | |||||
Total recognized in other comprehensive income | 5,769 | 49,199 | (10,659 | ) | |||||||
Total recognized in net periodic benefit cost and other comprehensive income | $ | 14,338 | $ | 61,135 | $ | 8,787 |
(Dollars in thousands) | 2017 | 2016 | |||
Discount rate | 3.76 | % | 4.30 | % | |
Rate of compensation increase | 4.00 | 4.00 |
(Dollars in thousands) | 2017 | 2016 | 2015 | |||||
Discount rate | 4.30 | % | 4.68 | % | 4.27 | % | ||
Rate of compensation increase | 4.00 | 4.00 | 4.00 | |||||
Expected long-term return on plan assets | 7.50 | 7.50 | 7.50 |
(Dollars in thousands) | 2017 | 2016 | |||||
Change in benefit obligation | |||||||
Projected benefit obligation at January 1 | $ | 156,831 | $ | 143,241 | |||
Service cost | 2,548 | 2,567 | |||||
Interest cost | 6,653 | 6,775 | |||||
Actuarial loss | 9,168 | 9,682 | |||||
Benefits paid | (5,720 | ) | (5,434 | ) | |||
Projected benefit obligation at December 31 | 169,480 | 156,831 | |||||
Change in plan assets | |||||||
Fair value of plan assets at January 1 | 152,084 | 150,893 | |||||
Actual return on plan assets | 22,227 | 6,625 | |||||
Benefits paid | (5,720 | ) | (5,434 | ) | |||
Fair value of plan assets at December 31 | 168,591 | 152,084 | |||||
Funded status at December 31 | $ | (889 | ) | $ | (4,747 | ) |
(Dollars in thousands) | 2017 | 2016 | |||||
Other assets | $ | — | $ | — | |||
Other liabilities | (889 | ) | (4,747 | ) | |||
Net liability recognized | $ | (889 | ) | $ | (4,747 | ) |
(Dollars in thousands) | 2017 | 2016 | |||||
Net loss | $ | 19,117 | $ | 21,661 | |||
Less prior service cost | — | — | |||||
Accumulated other comprehensive loss, excluding income taxes | $ | 19,117 | $ | 21,661 |
(Dollars in thousands) | |||
Actuarial loss | $ | 329 | |
Prior service cost | — | ||
Total | $ | 329 |
Year ended December 31 | |||||||||||
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
Service cost | $ | 2,548 | $ | 2,567 | $ | 3,341 | |||||
Interest cost | 6,653 | 6,775 | 6,393 | ||||||||
Expected return on assets | (11,170 | ) | (11,101 | ) | (11,482 | ) | |||||
Amortization of net actuarial loss | 655 | — | — | ||||||||
Total net periodic benefit cost | (1,314 | ) | (1,759 | ) | (1,748 | ) | |||||
Current year actuarial loss | (1,889 | ) | 14,157 | 458 | |||||||
Amortization of actuarial loss | (655 | ) | — | — | |||||||
Curtailments | — | — | (2,076 | ) | |||||||
Total recognized in other comprehensive income | (2,544 | ) | 14,157 | (1,618 | ) | ||||||
Total recognized in net periodic benefit cost and other comprehensive income | $ | (3,858 | ) | $ | 12,398 | $ | (3,366 | ) |
(Dollars in thousands) | 2017 | 2016 | |||
Discount rate | 3.76 | % | 4.30 | % | |
Rate of compensation increase | 4.00 | 4.00 |
(Dollars in thousands) | 2017 | 2016 | 2015 | |||||
Discount rate | 4.30 | % | 4.68 | % | 4.27 | % | ||
Rate of compensation increase | 4.00 | 4.00 | 4.00 | |||||
Expected long-term return on plan assets | 7.50 | 7.50 | 7.50 |
December 31, 2017 | ||||||||||||||||||||
(Dollars in thousands) | Market Value | Quoted prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Nonobservable Inputs (Level 3) | Target Allocation | Actual % of Plan Assets | ||||||||||||||
Cash and equivalents | $ | 67,084 | $ | 67,084 | — | — | 0-5% | 9 | % | |||||||||||
Equity securities | 30-70% | 65 | % | |||||||||||||||||
Common and preferred stock | 76,920 | 76,920 | — | — | ||||||||||||||||
Mutual funds | 381,747 | 360,175 | 21,572 | — | ||||||||||||||||
Fixed income | 15-45% | 23 | % | |||||||||||||||||
U.S. government and government agency securities | 60,663 | — | 60,663 | — | ||||||||||||||||
Corporate bonds | 83,571 | — | 83,571 | — | ||||||||||||||||
Mutual funds | 20,497 | 20,497 | — | — | ||||||||||||||||
Alternative investments | 0-30% | 3 | % | |||||||||||||||||
Mutual funds | 22,517 | 22,517 | — | — | ||||||||||||||||
Total pension assets | $ | 712,999 | $ | 547,193 | $ | 165,806 | $ | — | 100 | % | ||||||||||
December 31, 2016 | ||||||||||||||||||||
Market Value | Quoted prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Nonobservable Inputs (Level 3) | Target Allocation | Actual % of Plan Assets | |||||||||||||||
Cash and equivalents | $ | 60,674 | $ | 60,674 | $ | — | $ | — | 0 - 1% | 10 | % | |||||||||
Equity securities | 30 - 70% | 54 | % | |||||||||||||||||
Common and preferred stock | 66,015 | 65,964 | 51 | — | ||||||||||||||||
Mutual funds | 256,976 | 252,710 | 4,266 | — | ||||||||||||||||
Fixed income | 15 - 45% | 28 | % | |||||||||||||||||
U.S. government and government agency securities | 57,890 | — | 57,890 | — | ||||||||||||||||
Corporate bonds | 68,198 | — | 68,198 | — | ||||||||||||||||
Mutual funds | 42,849 | 42,849 | — | — | ||||||||||||||||
Alternative investments | 0 - 30% | 8 | % | |||||||||||||||||
Mutual funds | 48,014 | 48,014 | — | — | ||||||||||||||||
Total pension assets | $ | 600,616 | $ | 470,211 | $ | 130,405 | $ | — | 100 | % |
December 31, 2017 | ||||||||||||||||||||
(Dollars in thousands) | Market Value | Quoted prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Nonobservable Inputs (Level 3) | Target Allocation | Actual % of Plan Assets | ||||||||||||||
Cash and equivalents | $ | 3,941 | $ | 3,941 | $ | — | $ | — | 0-5% | 2 | % | |||||||||
Equity securities | 30-70% | 70 | % | |||||||||||||||||
Common and preferred stock | 26,892 | 26,892 | — | — | ||||||||||||||||
Mutual funds | 90,466 | 84,954 | 5,512 | — | ||||||||||||||||
Fixed income | 15-45% | 25 | % | |||||||||||||||||
U.S. government and government agency securities | 15,798 | — | 15,798 | — | ||||||||||||||||
Corporate bonds | 20,572 | — | 20,572 | — | ||||||||||||||||
Mutual funds | 5,163 | 5,163 | — | — | ||||||||||||||||
Alternative investments | 0-30% | 3 | % | |||||||||||||||||
Mutual funds | 5,759 | 5,759 | — | — | ||||||||||||||||
Total pension assets | $ | 168,591 | $ | 126,709 | $ | 41,882 | — | 100 | % | |||||||||||
December 31, 2016 | ||||||||||||||||||||
Market Value | Quoted prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Nonobservable Inputs (Level 3) | Target Allocation | Actual % of Plan Assets | |||||||||||||||
Cash and equivalents | $ | 3,839 | $ | 3,839 | $ | — | $ | — | 0 - 1% | 2 | % | |||||||||
Equity securities | 30 - 70% | 58 | % | |||||||||||||||||
Common and preferred stock | 18,274 | 18,260 | 14 | — | ||||||||||||||||
Mutual funds | 69,978 | 68,832 | 1,146 | — | ||||||||||||||||
Fixed income | 15 - 45% | 31 | % | |||||||||||||||||
U.S. government and government agency securities | 15,407 | — | 15,407 | — | ||||||||||||||||
Corporate bonds | 19,496 | — | 19,496 | — | ||||||||||||||||
Mutual funds | 11,822 | 11,822 | — | — | ||||||||||||||||
Alternative investments | 0 - 30% | 9 | % | |||||||||||||||||
Mutual funds | 13,268 | 13,268 | — | — | ||||||||||||||||
Total pension assets | $ | 152,084 | $ | 116,021 | $ | 36,063 | — | 100 | % |
(Dollars in thousands) | BancShares Plan | Bancorporation Plan | |||||
2018 | $ | 26,051 | $ | 6,797 | |||
2019 | 27,514 | 7,099 | |||||
2020 | 29,061 | 7,451 | |||||
2021 | 30,634 | 7,879 | |||||
2022 | 32,074 | 8,364 | |||||
2023-2027 | 186,617 | 47,307 |
(Dollars in thousands) | 2017 | 2016 | |||||
Present value of accrued liability as of January 1 | $ | 38,597 | $ | 39,878 | |||
Benefit expense and interest cost | 3,262 | 3,232 | |||||
Benefits paid | (4,560 | ) | (4,194 | ) | |||
Benefits forfeited | — | (319 | ) | ||||
Present value of accrued liability as of December 31 | $ | 37,299 | $ | 38,597 | |||
Discount rate at December 31 | 3.76 | % | 4.30 | % |
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
Processing fees paid to third parties | 25,673 | 18,976 | 18,779 | ||||||||
Cardholder reward programs | 9,956 | 10,615 | 11,069 | ||||||||
Telecommunications | 12,172 | 14,496 | 14,406 | ||||||||
Consultant | 14,963 | 10,931 | 8,925 | ||||||||
Core deposit intangible amortization | 17,194 | 16,851 | 18,892 | ||||||||
Advertising | 11,227 | 10,239 | 12,431 | ||||||||
Other | 95,014 | 98,607 | 87,938 | ||||||||
Total other noninterest expense | $ | 186,199 | $ | 180,715 | $ | 172,440 |
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
Current tax expense | |||||||||||
Federal | $ | 87,992 | $ | 84,946 | $ | 105,367 | |||||
State | 6,116 | 7,493 | 16,111 | ||||||||
Total current tax expense | 94,108 | 92,439 | 121,478 | ||||||||
Deferred tax expense (benefit) | |||||||||||
Federal | 115,392 | 23,144 | (2,758 | ) | |||||||
State | 10,446 | 10,002 | 3,308 | ||||||||
Total deferred tax expense | 125,838 | 33,146 | 550 | ||||||||
Total income tax expense | $ | 219,946 | $ | 125,585 | $ | 122,028 |
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
Income taxes at federal statutory rates | $ | 190,294 | $ | 122,874 | $ | 116,345 | |||||
Increase (reduction) in income taxes resulting from: | |||||||||||
Nontaxable income on loans, leases and investments, net of nondeductible expenses | (2,525 | ) | (2,901 | ) | (3,020 | ) | |||||
State and local income taxes, including change in valuation allowance, net of federal income tax benefit | 10,765 | 11,372 | 12,622 | ||||||||
Effect of federal rate change | 25,762 | — | — | ||||||||
Acquisition stock settlement | — | (98 | ) | — | |||||||
Tax credits net of amortization | (4,840 | ) | (4,138 | ) | (3,060 | ) | |||||
Other, net | 490 | (1,524 | ) | (859 | ) | ||||||
Total income tax expense | $ | 219,946 | $ | 125,585 | $ | 122,028 |
(Dollars in thousands) | 2017 | 2016 | |||||
Allowance for loan and lease losses | $ | 50,853 | $ | 80,939 | |||
Pension liability | 704 | 15,679 | |||||
Executive separation from service agreements | 8,548 | 14,278 | |||||
Federal net operating loss carryforward | 2,685 | 5,019 | |||||
Net unrealized loss on securities included in accumulated other comprehensive loss | 10,849 | 26,832 | |||||
Accelerated depreciation | — | 133 | |||||
FDIC assisted transactions timing differences | — | 52,579 | |||||
Other reserves | 5,570 | 10,504 | |||||
Other | 10,116 | 26,663 | |||||
Deferred tax asset | 89,325 | 232,626 | |||||
Accelerated depreciation | 7,562 | — | |||||
Lease financing activities | 9,131 | 11,651 | |||||
Net deferred loan fees and costs | 8,708 | 10,867 | |||||
Intangible assets | 12,252 | 6,335 | |||||
Security, loan and debt valuations | 7,018 | 22,656 | |||||
FDIC assisted transactions timing differences | 1,113 | — | |||||
Other | 4,565 | 8,501 | |||||
Deferred tax liability | 50,349 | 60,010 | |||||
Net deferred tax asset | $ | 38,976 | $ | 172,616 |
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
Unrecognized tax benefits at the beginning of the year | $ | 28,879 | $ | 5,975 | $ | 3,865 | |||||
Reductions related to tax positions taken in prior year | — | (327 | ) | (79 | ) | ||||||
Additions related to tax positions taken in current year | 125 | 23,231 | 2,189 | ||||||||
Unrecognized tax benefits at the end of the year | $ | 29,004 | $ | 28,879 | $ | 5,975 |
Year ended December 31 | |||||||
(dollars in thousands) | 2017 | 2016 | |||||
Balance at January 1 | $ | 353 | $ | 79 | |||
New loans | 11 | 314 | |||||
Repayments | (290 | ) | (40 | ) | |||
Balance at December 31 | $ | 74 | $ | 353 |
(Dollars in thousands) | 2017 | 2016 | |||||
Balance at January 1 | $ | 150,601 | $ | 139,773 | |||
Acquired in the Cordia merger | — | 10,828 | |||||
Balance at December 31 | $ | 150,601 | $ | 150,601 |
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
Balance at January 1 | $ | 20,415 | $ | 19,351 | $ | 16,688 | |||||
Servicing rights originated | 7,174 | 5,931 | 5,910 | ||||||||
Amortization | (5,648 | ) | (4,958 | ) | (4,002 | ) | |||||
Valuation allowance reversal | 4 | 91 | 755 | ||||||||
Balance at December 31 | $ | 21,945 | $ | 20,415 | $ | 19,351 |
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
Balance at January 1 | $ | 4 | $ | 95 | $ | 850 | |||||
Valuation allowance reversal | (4 | ) | (91 | ) | (755 | ) | |||||
Balance at December 31 | $ | — | $ | 4 | $ | 95 |
2017 | 2016 | ||||||
Discount rate - conventional fixed loans | 9.41 | % | 9.45 | % | |||
Discount rate - all loans excluding conventional fixed loans | 10.41 | % | 10.45 | % | |||
Weighted average constant prepayment rate | 10.93 | % | 10.42 | % | |||
Weighted average cost to service a loan | $ | 64.03 | $ | 62.75 |
(Dollars in thousands) | 2017 | 2016 | |||||
Balance at January 1 | $ | 57,625 | $ | 71,635 | |||
Acquired in the NMSB acquisition | — | 240 | |||||
Acquired in the FCSB acquisition | — | 390 | |||||
Acquired in the Cordia acquisition | — | 2,210 | |||||
Acquired in the HCB acquisition | 850 | — | |||||
Acquired in the Guaranty acquisition | 9,870 | — | |||||
Amortization | (17,194 | ) | (16,850 | ) | |||
Balance at December 31 | $ | 51,151 | $ | 57,625 |
(Dollars in thousands) | 2017 | 2016 | |||||
Gross balance | $ | 128,761 | $ | 118,041 | |||
Accumulated amortization | (77,610 | ) | (60,416 | ) | |||
Carrying value | $ | 51,151 | $ | 57,625 |
(Dollars in thousands) | |||
2018 | $ | 15,394 | |
2019 | 12,275 | ||
2020 | 9,431 | ||
2021 | 6,799 | ||
2022 | 4,288 |
December 31, 2017 | December 31, 2016 | ||||||||||||||||||
(Dollars in thousands) | Amount | Ratio | Requirements to be well-capitalized | Amount | Ratio | Requirements to be well-capitalized | |||||||||||||
BancShares | |||||||||||||||||||
Tier 1 risk-based capital | $ | 3,287,364 | 12.88 | % | 8.00 | % | $ | 2,995,557 | 12.42 | % | 8.00 | % | |||||||
Common equity Tier 1 | 3,287,364 | 12.88 | 6.50 | 2,995,557 | 12.42 | 6.50 | |||||||||||||
Total risk-based capital | 3,626,789 | 14.21 | 10.00 | 3,339,986 | 13.85 | 10.00 | |||||||||||||
Leverage capital | 3,287,364 | 9.47 | 5.00 | 2,995,557 | 9.05 | 5.00 | |||||||||||||
FCB | |||||||||||||||||||
Tier 1 risk-based capital | 3,189,709 | 12.54 | 8.00 | 2,942,829 | 12.25 | 8.00 | |||||||||||||
Common equity Tier 1 | 3,189,709 | 12.54 | 6.50 | 2,942,829 | 12.25 | 6.50 | |||||||||||||
Total risk-based capital | 3,422,634 | 13.46 | 10.00 | 3,172,757 | 13.21 | 10.00 | |||||||||||||
Leverage capital | 3,189,709 | 9.22 | 5.00 | 2,942,829 | 8.94 | 5.00 |
(Dollars in thousands) | 2017 | 2016 | |||
Unused commitments to extend credit | 9,629,365 | 8,808,218 | |||
Standby letters of credit | 81,530 | 83,750 | |||
Unfunded commitments for investments in affordable housing projects | 61,819 | 57,079 |
December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||
(Dollars in thousands) | Accumulated other comprehensive loss | Deferred tax benefit | Accumulated other comprehensive loss, net of tax | Accumulated other comprehensive loss | Deferred tax benefit | Accumulated other comprehensive loss, net of tax | |||||||||||||||||
Unrealized losses on investment securities available for sale | $ | (48,834 | ) | $ | (17,889 | ) | $ | (30,945 | ) | $ | (72,707 | ) | $ | (26,832 | ) | $ | (45,875 | ) | |||||
Funded status of defined benefit plan | (144,999 | ) | (53,650 | ) | (91,349 | ) | (141,774 | ) | (52,457 | ) | (89,317 | ) | |||||||||||
Total | $ | (193,833 | ) | $ | (71,539 | ) | $ | (122,294 | ) | $ | (214,481 | ) | $ | (79,289 | ) | $ | (135,192 | ) |
(Dollars in thousands) | Unrealized (losses) gains on available-for-sale securities(1) | (Losses) gains on cash flow hedges(1) | Defined benefit pension items(1) | Total | |||||||||||
Balance at January 1, 2016 | $ | (15,125 | ) | $ | (892 | ) | $ | (48,423 | ) | $ | (64,440 | ) | |||
Other comprehensive (loss) income before reclassifications | (13,946 | ) | 892 | (45,347 | ) | (58,401 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive loss | (16,804 | ) | — | 4,453 | (12,351 | ) | |||||||||
Net current period other comprehensive (loss) income | (30,750 | ) | 892 | (40,894 | ) | (70,752 | ) | ||||||||
Balance at December 31, 2016 | (45,875 | ) | — | (89,317 | ) | (135,192 | ) | ||||||||
Other comprehensive income (loss) before reclassifications | 17,635 | — | (8,156 | ) | 9,479 | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | (2,705 | ) | — | 6,124 | 3,419 | ||||||||||
Net current period other comprehensive income (loss) | 14,930 | — | (2,032 | ) | 12,898 | ||||||||||
Balance at December 31, 2017 | $ | (30,945 | ) | $ | — | $ | (91,349 | ) | $ | (122,294 | ) |
(Dollars in thousands) | Year ended December 31, 2017 | |||||
Details about accumulated other comprehensive (loss) income | Amount reclassified from accumulated other comprehensive (loss) income(1) | Affected line item in the statement where net income is presented | ||||
Unrealized gains and losses on available for sale securities | $ | 4,293 | Securities gains | |||
(1,588 | ) | Income taxes | ||||
$ | 2,705 | Net income | ||||
Amortization of defined benefit pension items | ||||||
Prior service costs | $ | (210 | ) | Employee benefits | ||
Actuarial losses | (9,510 | ) | Employee benefits | |||
(9,720 | ) | Employee benefits | ||||
3,596 | Income taxes | |||||
$ | (6,124 | ) | Net income | |||
Total reclassifications for the period | $ | (3,419 | ) | |||
Year ended December 31, 2016 | ||||||
Details about accumulated other comprehensive (loss) income | Amount reclassified from accumulated other comprehensive (loss) income(1) | Affected line item in the statement where net income is presented | ||||
Unrealized gains and losses on available for sale securities | $ | 26,673 | Securities gains | |||
(9,869 | ) | Income taxes | ||||
$ | 16,804 | Net income | ||||
Amortization of defined benefit pension items | ||||||
Prior service costs | $ | (210 | ) | Employee benefits | ||
Actuarial losses | (6,859 | ) | Employee benefits | |||
(7,069 | ) | Employee benefits | ||||
2,616 | Income taxes | |||||
$ | (4,453 | ) | Net income | |||
Total reclassifications for the period | $ | 12,351 |
Parent Company | |||||||
Condensed Balance Sheets | |||||||
(Dollars in thousands) | December 31, 2017 | December 31, 2016 | |||||
Assets | |||||||
Cash | $ | 45,411 | $ | 8,278 | |||
Overnight investments | 14,476 | 26,157 | |||||
Investment securities available for sale | 117,513 | 95,564 | |||||
Investment in banking subsidiaries | 3,203,491 | 2,932,048 | |||||
Investment in other subsidiaries | 41,165 | 41,066 | |||||
Due from subsidiaries | 4 | — | |||||
Other assets | 46,674 | 43,077 | |||||
Total assets | $ | 3,468,734 | $ | 3,146,190 | |||
Liabilities and Shareholders' Equity | |||||||
Short-term borrowings | $ | 15,000 | $ | — | |||
Long-term obligations | 107,479 | 126,861 | |||||
Due to subsidiaries | 728 | 2,350 | |||||
Other liabilities | 11,463 | 4,552 | |||||
Shareholders' equity | 3,334,064 | 3,012,427 | |||||
Total liabilities and shareholders' equity | $ | 3,468,734 | $ | 3,146,190 |
Parent Company | |||||||||||
Condensed Income Statements | |||||||||||
Year ended December 31 | |||||||||||
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
Interest income | $ | 921 | $ | 1,110 | $ | 645 | |||||
Interest expense | 4,814 | 6,067 | 6,793 | ||||||||
Net interest loss | (3,893 | ) | (4,957 | ) | (6,148 | ) | |||||
Dividends from banking subsidiaries | 50,424 | 90,055 | 75,006 | ||||||||
Dividends from other subsidiaries | — | — | 23,500 | ||||||||
Other income | 8,377 | 9,330 | 1,870 | ||||||||
Other operating expense | 6,821 | 5,641 | 2,634 | ||||||||
Income before income tax benefit and equity in undistributed net income of subsidiaries | 48,087 | 88,787 | 91,594 | ||||||||
Income tax benefit | (5,395 | ) | (730 | ) | (2,618 | ) | |||||
Income before equity in undistributed net income of subsidiaries | 53,482 | 89,517 | 94,212 | ||||||||
Equity in undistributed net income of subsidiaries | 270,270 | 135,965 | 116,174 | ||||||||
Net income | $ | 323,752 | $ | 225,482 | $ | 210,386 |
Parent Company | |||||||||||
Condensed Statements of Cash Flows | |||||||||||
Year ended December 31 | |||||||||||
(Dollars in thousands) | 2017 | 2016 | 2015 | ||||||||
OPERATING ACTIVITIES | |||||||||||
Net income | $ | 323,752 | $ | 225,482 | $ | 210,386 | |||||
Adjustments | |||||||||||
Undistributed net income of subsidiaries | (270,270 | ) | (135,965 | ) | (116,174 | ) | |||||
Net amortization of premiums and discounts | 759 | 398 | (2,712 | ) | |||||||
Gain on extinguishment of long-term obligations | (919 | ) | (1,717 | ) | — | ||||||
Securities gains | (8,003 | ) | (9,446 | ) | (236 | ) | |||||
Change in other assets | (10,509 | ) | (980 | ) | 22,663 | ||||||
Change in other liabilities | 2,707 | 2,483 | (1,157 | ) | |||||||
Net cash provided by operating activities | 37,517 | 80,255 | 112,770 | ||||||||
INVESTING ACTIVITIES | |||||||||||
Net change in due from subsidiaries | (4 | ) | — | 299,889 | |||||||
Net change in overnight investments | 11,681 | (24,741 | ) | (1,416 | ) | ||||||
Purchases of investment securities | (28,012 | ) | (93,003 | ) | (7,818 | ) | |||||
Proceeds from sales, calls, and maturities of securities | 32,463 | 38,316 | 100,586 | ||||||||
Net cash provided (used) by investing activities | 16,128 | (79,428 | ) | 391,241 | |||||||
FINANCING ACTIVITIES | |||||||||||
Net change in due to subsidiaries | (1,622 | ) | 2,296 | 54 | |||||||
Net change in short-term borrowings | — | — | (485,207 | ) | |||||||
Repayment of long-term obligations | (4,081 | ) | (5,302 | ) | — | ||||||
Cash dividends paid | (10,809 | ) | (14,412 | ) | (18,015 | ) | |||||
Net cash provided (used) by financing activities | (16,512 | ) | (17,418 | ) | (503,168 | ) | |||||
Net change in cash | 37,133 | (16,591 | ) | 843 | |||||||
Cash balance at beginning of year | 8,278 | 24,869 | 24,026 | ||||||||
Cash balance at end of year | $ | 45,411 | $ | 8,278 | $ | 24,869 |
2.1 | |
2.2 | |
2.3 | |
2.4 | |
2.5 | |
2.6 | |
3.1 | |
3.2 | |
4.1 | |
4.2 | |
4.3 | |
4.4 | |
4.5 | |
4.6 | |
4.7 | |
4.8 | |
4.9 | |
4.10 | |
4.11 | |
10.1 | |
10.2 |
10.3 | |
10.4 | |
10.5 | |
10.6 | |
10.7 | |
10.8 | |
10.9 | |
10.10 | |
10.11 | |
10.12 | |
10.13 | |
10.14 | |
10.15 | |
10.16 | |
21 | |
24 | |
31.1 | |
31.2 | |
32.1 | |
32.2 | |
*101.INS | XBRL Instance Document (filed herewith) |
*101.SCH | XBRL Taxonomy Extension Schema (filed herewith) |
*101.CAL | XBRL Taxonomy Extension Calculation Linkbase (filed herewith) |
*101.LAB | XBRL Taxonomy Extension Label Linkbase (filed herewith) |
*101.PRE | XBRL Taxonomy Extension Presentation Linkbase (filed herewith) |
*101.DEF | XBRL Taxonomy Definition Linkbase (filed herewith) |
* | Interactive data files are furnished but not filed for purposes of Sections 11 and 12 of the Securities Act of 1933, as amended, and Section 18 of the Securities Exchange Act of 1934, as amended. |
FIRST CITIZENS BANCSHARES, INC. (Registrant) | |
/S/ FRANK B. HOLDING, JR. | |
Frank B. Holding, Jr. Chairman and Chief Executive Officer |
Signature | Title | Date | ||
/s/ FRANK B. HOLDING, JR. Frank B. Holding, Jr. | Chairman and Chief Executive Officer | February 21, 2018 | ||
/S/ CRAIG L. NIX Craig L. Nix | Chief Financial Officer (principal financial officer) | February 21, 2018 | ||
/S/ JASON W. GROOTERS Jason W. Grooters | Assistant Vice President and Chief Accounting Officer (principal accounting officer) | February 21, 2018 | ||
/s/ JOHN M. ALEXANDER, JR. * John M. Alexander, Jr. | Director | February 21, 2018 | ||
/s/ VICTOR E. BELL, III * Victor E. Bell, III | Director | February 21, 2018 | ||
/s/ HOPE HOLDING BRYANT * Hope Holding Bryant | Director | February 21, 2018 | ||
/s/ PETER M. BRISTOW * Peter M. Bristow | Director | February 21, 2018 |
Signature | Title | Date | ||
/s/ H. LEE DURHAM, JR. * H. Lee Durham, Jr. | Director | February 21, 2018 | ||
/s/ DANIEL L. HEAVNER * Daniel L. Heavner | Director | February 21, 2018 | ||
/s/ ROBERT R. HOPPE * Robert R. Hoppe | Director | February 21, 2018 | ||
/s/ FLOYD L. KEELS * Floyd L. Keels | Director | February 21, 2018 | ||
/s/ ROBERT E. MASON, IV * Robert E. Mason, IV | Director | February 21, 2018 | ||
/s/ ROBERT T. NEWCOMB * Robert T. Newcomb | Director | February 21, 2018 | ||
/s/ JAMES M. PARKER * James M. Parker | Director | February 21, 2018 |
* | Craig L. Nix hereby signs this Annual Report on Form 10-K on February 21, 2018, on behalf of each of the indicated persons for whom he is attorney-in-fact pursuant to a Power of Attorney filed herewith. |
By: | /S/ CRAIG L. NIX | |
Craig L. Nix As Attorney-In-Fact |
Subsidiary | State or Jurisdiction of Incorporation | |
First-Citizens Bank & Trust Company | North Carolina | |
First Citizens Housing Development, LLC | South Carolina | |
FCB/NC Capital Trust III | Delaware | |
FCB/SC Capital Trust II | Delaware | |
Neuse, Incorporated | North Carolina |
Signature | Title | Date | ||
/s/ John M. Alexander, Jr. | Director | January 30, 2018 | ||
John M. Alexander, Jr. | ||||
/s/ Victor E. Bell III | Director | January 30, 2018 | ||
Victor E. Bell III | ||||
/s/ Peter M. Bristow | Director | January 30, 2018 | ||
Peter M. Bristow | ||||
/s/ Hope Holding Bryant | Vice Chairman | January 30, 2018 | ||
Hope Holding Bryant | ||||
/s/ H. Lee Durham | Director | January 30, 2018 | ||
H. Lee Durham | ||||
/s/ Daniel L. Heavner | Director | January 30, 2018 | ||
Daniel L. Heavner | ||||
/s/ Frank B. Holding, Jr. | Chairman of the Board; Chief Executive Officer | January 30, 2018 | ||
Frank B. Holding, Jr. | ||||
/s/ Robert R. Hoppe | Director | January 30, 2018 | ||
Robert R. Hoppe | ||||
/s/ Floyd L. Keels | Director | January 30, 2018 | ||
Floyd L. Keels | ||||
/s/ Robert E. Mason, IV | Director | January 30, 2018 | ||
Robert E. Mason, IV | ||||
/s/ Robert T. Newcomb | Director | January 30, 2018 | ||
Robert T. Newcomb | ||||
/s/ James M. Parker | Director | January 30, 2018 | ||
James M. Parker |
1. | I have reviewed this Annual Report on Form 10-K of First Citizens 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 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: |
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. |
/s/ Frank B. Holding, Jr. |
Frank B. Holding, Jr. |
Chief Executive Officer |
1. | I have reviewed this Annual Report on Form 10-K of First Citizens 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 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: |
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. |
/s/ Craig L. Nix |
Craig L. Nix |
Chief Financial Officer |
/s/ Frank B. Holding, Jr. |
Frank B. Holding, Jr. |
Chief Executive Officer |
/s/ Craig L. Nix |
Craig L. Nix |
Chief Financial Officer |
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Document And Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Feb. 20, 2018 |
Jun. 30, 2017 |
|
Entity Registrant Name | FIRST CITIZENS BANCSHARES INC /DE/ | ||
Entity Central Index Key | 0000798941 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 2,736,470,741 | ||
Class A Common Stock | |||
Entity Common Stock, Shares Outstanding | 11,005,220 | ||
Class B Common Stock | |||
Entity Common Stock, Shares Outstanding | 1,005,185 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Available-for-sale Securities, Amortized Cost Basis | $ 7,229,014 | $ 7,079,287 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shared authorized | 16,000,000 | 16,000,000 |
Common stock, shares issued | 11,005,220 | 11,005,220 |
Common stock, shares outstanding | 11,005,220 | 11,005,220 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shared authorized | 2,000,000 | 2,000,000 |
Common stock, shares issued | 1,005,185 | 1,005,185 |
Common stock, shares outstanding | 1,005,185 | 1,005,185 |
Mortgage Backed Securities | ||
Available-for-sale Securities, Amortized Cost Basis | $ 5,428,074 | $ 5,259,466 |
Held-to-maturity Securities, Fair Value | $ 81 | $ 104 |
Consolidated Statements of Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Interest income | |||
Loans and leases | $ 955,637 | $ 876,472 | $ 874,892 |
Investment securities: | |||
U. S. Treasury | 17,657 | 11,837 | 15,353 |
Government agency | 634 | 2,883 | 6,843 |
Residential mortgage-backed securities | 98,341 | 79,336 | 65,815 |
Corporate bonds | 3,877 | 1,783 | 0 |
Other | 698 | 912 | 239 |
Total investment securities interest and dividend income | 121,207 | 96,751 | 88,250 |
Overnight investments | 26,846 | 14,534 | 6,067 |
Total interest income | 1,103,690 | 987,757 | 969,209 |
Interest expense | |||
Deposits | 16,196 | 18,169 | 21,230 |
Short-term borrowings | 4,838 | 1,965 | 4,660 |
Long-term obligations | 22,760 | 22,948 | 18,414 |
Total interest expense | 43,794 | 43,082 | 44,304 |
Net interest income (loss) | 1,059,896 | 944,675 | 924,905 |
Provision for loan and lease losses | 25,692 | 32,941 | 20,664 |
Net interest income after provision for loan and lease losses | 1,034,204 | 911,734 | 904,241 |
Noninterest income | |||
Gain on acquisitions | 134,745 | 5,831 | 42,930 |
Cardholder services | 95,365 | 83,417 | 77,342 |
Merchant services | 103,962 | 95,774 | 84,207 |
Service charges on deposit accounts | 101,201 | 89,359 | 90,546 |
Wealth management services | 86,719 | 80,221 | 82,865 |
Securities gains (losses) | 4,293 | 26,673 | 10,817 |
Other service charges and fees | 28,321 | 27,011 | 23,987 |
Mortgage income | 23,251 | 20,348 | 18,168 |
Insurance commissions | 12,465 | 11,150 | 11,757 |
ATM income | 9,143 | 7,283 | 7,119 |
Adjustments to FDIC receivable | (6,232) | (9,725) | (19,009) |
Net impact from FDIC shared-loss termination | (45) | 16,559 | 0 |
Other | 47,841 | 34,170 | 36,359 |
Total noninterest income | 641,029 | 488,071 | 467,088 |
Noninterest expense | |||
Salaries and wages | 475,214 | 428,351 | 429,742 |
Employee benefits | 113,231 | 104,518 | 113,309 |
Occupancy expense | 104,690 | 102,609 | 98,191 |
Equipment expense | 97,478 | 92,501 | 92,639 |
Merchant processing | 78,537 | 71,150 | 62,473 |
Cardholder processing | 30,573 | 29,207 | 25,296 |
FDIC insurance expense | 22,191 | 20,967 | 18,340 |
Foreclosure-related expenses | 14,407 | 13,379 | 12,311 |
Merger-related expenses | 9,015 | 5,341 | 14,174 |
Other | 186,199 | 180,715 | 172,440 |
Total noninterest expense | 1,131,535 | 1,048,738 | 1,038,915 |
Income before income taxes | 543,698 | 351,067 | 332,414 |
Income taxes | 219,946 | 125,585 | 122,028 |
Net income | $ 323,752 | $ 225,482 | $ 210,386 |
Average shares outstanding (in shares) | 12,010,405 | 12,010,405 | 12,010,405 |
Cash dividends (in dollars per share) | $ 1.25 | $ 1.20 | $ 1.20 |
Net income per share | $ 26.96 | $ 18.77 | $ 17.52 |
Consolidated Statements of Changes In Shareholders' Equity - USD ($) $ in Thousands |
Total |
Common Stock
Class A Common Stock
|
Common Stock
Class B Common Stock
|
Surplus |
Retained Earnings [Member] |
Accumulated Other Comprehensive Loss |
---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2014 | $ 2,687,594 | $ 11,005 | $ 1,005 | $ 658,918 | $ 2,069,647 | $ (52,981) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 210,386 | 0 | 0 | 0 | 210,386 | 0 |
Net current period other comprehensive income | (11,459) | 0 | 0 | 0 | 0 | (11,459) |
Cash dividends | (14,412) | 0 | 0 | 0 | (14,412) | 0 |
Ending balance at Dec. 31, 2015 | 2,872,109 | 11,005 | 1,005 | 658,918 | 2,265,621 | (64,440) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 225,482 | 0 | 0 | 0 | 225,482 | 0 |
Net current period other comprehensive income | (70,752) | 0 | 0 | 0 | 0 | (70,752) |
Cash dividends | (14,412) | 0 | 0 | 0 | (14,412) | 0 |
Ending balance at Dec. 31, 2016 | 3,012,427 | 11,005 | 1,005 | 658,918 | 2,476,691 | (135,192) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 323,752 | 0 | 0 | 0 | 323,752 | 0 |
Net current period other comprehensive income | 12,898 | 0 | 0 | 0 | 0 | 12,898 |
Cash dividends | (15,013) | 0 | 0 | 0 | (15,013) | 0 |
Ending balance at Dec. 31, 2017 | $ 3,334,064 | $ 11,005 | $ 1,005 | $ 658,918 | $ 2,785,430 | $ (122,294) |
Consolidated Statements of Changes In Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends (in dollars per share) | $ 1.25 | $ 1.20 |
Stock issuance costs | $ 0 | $ 0 |
Class A Common Stock | ||
Statement of Stockholders' Equity [Abstract] | ||
Stock Repurchased During Period, Shares | 0 | 0 |
Class B Common Stock | ||
Statement of Stockholders' Equity [Abstract] | ||
Stock Repurchased and Retired During Period, Shares | 0 | 0 |
Accounting Policies and Basis of Presentation |
12 Months Ended | ||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||
Accounting Policies and Basis of Presentation | ACCOUNTING POLICIES AND BASIS OF PRESENTATION Nature of Operations First Citizens BancShares, Inc. (BancShares) is a financial holding company organized under the laws of Delaware and conducts operations through its banking subsidiary, First-Citizens Bank & Trust Company (FCB), which is headquartered in Raleigh, North Carolina. FCB operates 545 branches in Arizona, California, Colorado, Florida, Georgia, Illinois, Kansas, Maryland, Minnesota, Missouri, New Mexico, North Carolina, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia and Wisconsin. FCB provides full-service banking services designed to meet the needs of retail and commercial customers in the markets in which they operate. The services provided include transaction and savings deposit accounts, commercial and consumer loans, trust and asset management. Investment services, including sales of annuities and third party mutual funds are offered through First Citizens Investor Services, Inc. (FCIS), title insurance is offered through Neuse Financial Services, Inc., and investment advisory services are provided through First Citizens Asset Management, Inc. (FCAM). Principles of Consolidation and Segment Reporting The accounting and reporting policies of BancShares and its subsidiaries are in accordance with accounting principles generally accepted in the United States of America (GAAP). Additionally, where applicable, BancShares' policies conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. The consolidated financial statements of BancShares include the accounts of BancShares and its subsidiaries that are majority or wholly-owned, certain partnership interests, and variable interest entities. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies or assets acquired are included only from the dates of acquisition. BancShares operates with centralized management and combined reporting, thus BancShares operates as one consolidated reportable segment. FCB has investments in certain partnerships and limited liability entities primarily for the purposes of fulfilling Community Reinvestment Act requirements and/or obtaining tax credits. These entities have been evaluated and determined to be variable interest entities (VIEs). VIEs are legal entities in which equity investors do not have sufficient equity at risk for the entity to independently finance its activities without additional subordinated financial support or, as a group, the holders of the equity investment at risk lack the power through voting or similar rights to direct the activities of the entity that most significantly impact its economic performance, or do not have the obligation to absorb the expected losses of the entity or the right to receive expected residual returns of the entity. Consolidation of a VIE is considered appropriate if a reporting entity holds a controlling financial interest in the VIE. Management concluded that FCB is not the primary beneficiary and does not hold a controlling interest in the VIEs as it does not have the power to direct the activities that most significantly impact the VIEs economic performance. Assets and liabilities of these entities are not consolidated into the financial statements of FCB or BancShares. The recorded investment in these entities is reported within other assets in the Consolidated Balance Sheets. Reclassifications In certain instances, amounts reported in prior years' consolidated financial statements have been reclassified to conform to the current financial statement presentation. Such reclassifications had no effect on previously reported cash flows, shareholders' equity or net income. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates, and different assumptions in the application of these policies could result in material changes in BancShares' consolidated financial position, the consolidated results of its operations or related disclosures. Material estimates that are particularly susceptible to significant change include:
Business Combinations BancShares accounts for all business combinations using the acquisition method of accounting. Under this method of accounting, acquired assets and assumed liabilities are included with the acquirer's accounts as of the date of acquisition, with any excess of purchase price over the fair value of the net assets acquired recognized as either finite lived intangibles or capitalized as goodwill. In addition, acquisition-related costs and restructuring costs are recognized as period expenses as incurred. See Note B for additional information regarding Business Combinations. Cash and Cash Equivalents Cash and cash equivalents include cash and due from banks, interest-bearing deposits with banks and federal funds sold. Cash and cash equivalents have initial maturities of three months or less. The carrying value of cash and cash equivalents approximates its fair value due to its short-term nature. Investment Securities BancShares classifies marketable investment securities as held to maturity, available for sale or trading. At December 31, 2017 and 2016, BancShares had no investment securities held for trading purposes. Interest income and dividends on securities are recognized in interest income on an accrual basis. Premiums and discounts on debt securities are amortized as an adjustment to interest income using the interest method. Debt securities are classified as held to maturity where BancShares has both the intent and ability to hold the securities to maturity. These securities are reported at amortized cost. Investment securities that may be sold to meet liquidity needs arising from unanticipated deposit and loan fluctuations, changes in regulatory capital requirements or unforeseen changes in market conditions, are classified as available for sale. Securities available for sale are reported at estimated fair value, with unrealized gains and losses reported in accumulated other comprehensive income or loss, net of deferred income taxes, in the shareholders' equity section of the Consolidated Balance Sheets. Gains or losses realized from the sale of securities available for sale are determined by specific identification on a trade date basis and are included in noninterest income. BancShares evaluates each held to maturity and available for sale security in a loss position for other-than-temporary impairment (OTTI) at least quarterly. BancShares considers such factors as the length of time and the extent to which the market value has been below amortized cost, long term expectations and recent experience regarding principal and interest payments, BancShares' intent to sell, and whether it is more likely than not that it would be required to sell those securities before the anticipated recovery of the amortized cost basis. The credit component of an OTTI loss is recognized in earnings and the non-credit component is recognized in accumulated other comprehensive income in situations where BancShares does not intend to sell the security, and it is more likely than not that BancShares will not be required to sell the security prior to recovery. Non-marketable Securities Federal law requires a member institution of the Federal Home Loan Bank (FHLB) system to purchase and hold restricted stock of its district FHLB according to a predetermined formula. This stock is restricted in that it may only be sold to the FHLB and all sales must be at par. Accordingly, the FHLB restricted stock is carried at cost, less any applicable impairment charges. Non-marketable securities are periodically evaluated for impairment. BancShares considers positive and negative evidence, including the profitability and asset quality of the issuer, dividend payment history and recent redemption experience when determining the ultimate recoverability of the recorded investment. Non-marketable securities are recorded within other assets in the Consolidated Balance Sheets. FHLB and non-marketable securities were $53.0 million and $43.8 million at December 31, 2017 and 2016, respectively. Investments in Qualified Affordable Housing Projects BancShares and FCB have investments in certain partnerships and limited liability entities that typically include qualified affordable housing projects primarily for the purposes of fulfilling Community Reinvestment Act requirements and obtaining tax credits. These investments are accounted for using the proportional amortization method if certain conditions are met. Under the proportional amortization method, the initial cost of the investment is amortized in proportion to the tax credits and other tax benefits received and the net investment performance is recognized in the income statement as a component of income tax expense. All of the investments held in qualified affordable housing projects qualify for the proportional amortization method and were $128.0 million and $109.8 million at December 31, 2017 and December 31, 2016, respectively, and are included in other assets on the Consolidated Balance Sheets. Loans Held For Sale BancShares elected to apply the fair value option for new originations of prime residential mortgage loans to be sold. BancShares elected the fair value option and accounts for the forward commitments used to economically hedge the loans held for sale at fair value. Gains and losses on sales of mortgage loans are recognized in the Consolidated Statements of Income in mortgage income. Origination fees collected are deferred and recorded in mortgage income in the period the corresponding loan is sold. Loans and Leases BancShares' accounting methods for loans and leases differ depending on whether they are purchased credit impaired (PCI) or non-PCI loans. All acquired loans are recorded at fair value at the date of acquisition. Non-Purchased Credit Impaired (Non-PCI) Loans and Leases Loans and leases for which management has the intent and ability to hold for the foreseeable future are classified as held for investment and carried at the principal amount outstanding net of any unearned income, charge-offs and unamortized fees and costs. Nonrefundable fees collected and certain direct costs incurred related to loan originations are deferred and recorded as an adjustment to loans and leases outstanding. The net amount of the nonrefundable fees and costs is amortized to interest income over the contractual lives using methods that approximate a constant yield. Non-PCI loans include originated commercial, originated noncommercial, purchased non-credit impaired loans and leases and certain purchased revolving credit. Purchased non-credit impaired loans are acquired loans that do not reflect credit deterioration at acquisition. The difference between fair value and unpaid principal balance of the loan at the acquisition date is amortized or accreted to interest income over the estimated life of the loans using the effective interest method or on a straight-line basis for revolving credits. Purchased Credit Impaired (PCI) Loans PCI loans are recorded at fair value at the date of acquisition. No allowance for loan and lease losses is recorded on the acquisition date as the fair value of the acquired assets incorporates assumptions regarding credit risk. PCI loans are evaluated at acquisition and where a discount is required at least in part due to credit, the loans are accounted for under the guidance in Accounting Standard Codification (ASC) 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. PCI loans reflect credit deterioration since origination such that it is probable at acquisition that BancShares will be unable to collect all contractually required payments. If the timing and amount of the future cash flows is reasonably estimable, any excess of cash flows expected at acquisition over the estimated fair value are recognized as interest income over the life of the loans using the effective yield method. Subsequent to the acquisition date, increases in cash flows over those expected at the acquisition date are recognized prospectively as interest income. Decreases in expected cash flows due to credit deterioration are recognized by recording an allowance for loan losses. Impaired Loans, Troubled Debt Restructurings (TDR) and Nonperforming Assets Management will deem non-PCI loans and leases to be impaired when, based on current information and events, it is probable that a borrower will be unable to pay all amounts due according to the contractual terms of the loan agreement. Generally, management considers the following loans to be impaired: all TDR loans, commercial and consumer relationships which are nonaccrual or 90+ days past due and greater than $500,000 as well as any other loan management deems impaired. Non-PCI loans and leases $500,000 and greater are individually evaluated for impairment where as those less than $500,000 are collectively evaluated for impairment. When the ultimate collectability of an impaired loan's principal is doubtful, all cash receipts are applied to principal. Once the recorded principal balance has been reduced to zero, future cash receipts are applied first to all previously charged-off principal until fully collected, then to interest income, to the extent that any interest has been foregone. A loan is considered a TDR when both of the following occur: (1) a modification to a borrower's debt agreement is made and (2) a concession is granted for economic or legal reasons related to a borrower's financial difficulties that otherwise would not be granted. TDRs are undertaken in order to improve the likelihood of collection on the loan and may result in a stated interest rate lower than the current market rate for new debt with similar risk, other modifications to the structure of the loan that fall outside of normal underwriting policies and procedures or, in certain limited circumstances, forgiveness of principal or interest. Loans that have been restructured as a TDR are treated and reported as such for the remaining life of the loan. Modifications of PCI loans that are part of a pool accounted for as a single asset are not designated as TDRs. Modifications of non-pooled PCI loans are designated as TDRs in the same manner as non-PCI loans and leases. TDRs can be loans remaining on nonaccrual, moving to nonaccrual or continuing on accruing status, depending on the individual facts and circumstances of the borrower. In circumstances where a portion of the loan balance is charged-off, BancShares typically classifies the remaining balance as nonaccrual. In connection with commercial TDRs, the decision to maintain accrual status for loans that have been restructured is based on a current credit evaluation of the borrower's financial condition and prospects for repayment under the modified terms. This evaluation includes consideration of the borrower's current capacity to pay, which may include a review of the borrower's current financial statements, an analysis of cash flow documenting the borrower's capacity to pay all debt obligations and an evaluation of secondary sources of payment from the borrower and any guarantors. This process also includes an evaluation of the borrower's payment history, an evaluation of the borrower's willingness to provide information on a timely basis and consideration of offers from the borrower to provide additional collateral or guarantor support. The credit evaluation also reflects consideration of the adequacy of collateral, where applicable, to cover all principal and interest and trends indicating improving profitability and collectability of receivables. Nonperforming assets include nonaccrual loans and leases and foreclosed property. Foreclosed property consists of real estate and other assets acquired as a result of loan defaults. BancShares classifies all non-PCI loans and leases as past due when the payment of principal and interest based upon contractual terms is greater than 30 days delinquent. Generally, commercial loans are placed on nonaccrual status when principal or interest becomes 90 days past due or when it is probable that principal or interest is not fully collectible, whichever occurs first. Once a loan is placed on nonaccrual status it is evaluated for impairment and a charge-off is recorded in the amount of the impairment if the loss is deemed confirmed. Consumer loans are subject to mandatory charge-off at a specified delinquency date consistent with regulatory guidelines. Generally, when loans and leases are placed on nonaccrual status all previously uncollected accrued interest is reversed from interest income. All payments received thereafter are applied as a reduction of the remaining principal balance as long as doubt exists as to the ultimate collection of the principal. Loans and leases, including TDRs, are generally removed from nonaccrual status when they become current as to both principal and interest, the borrower has demonstrated a sustained period of repayment performance for a reasonable period, generally a minimum of six months, and doubt no longer exists as to the collectability of principal and interest. Other Real Estate Owned (OREO) OREO acquired as a result of foreclosure is initially recorded at the asset’s estimated fair value less costs to sell. Any excess in the recorded investment in the loan over the estimated fair value less costs to sell is charged-off against the allowance for loan losses at the time of foreclosure. OREO is subsequently carried at the lower of cost or market less estimated selling costs. OREO is subject to at least annual periodic evaluations of the underlying collateral. The periodic evaluations are generally based on the appraised value of the property and may include additional adjustments based upon management's review of the valuation and specific knowledge of the OREO. Routine maintenance costs, income and expenses related to the operation of the foreclosed asset, subsequent declines in market value and net gains or losses on disposal are included in foreclosure-related expense. Covered Assets and Receivable from FDIC for Shared-Loss Agreements Assets subject to shared-loss agreements with the FDIC include certain loans and leases and OREO. These shared-loss agreements afford BancShares significant protection as they cover realized losses on certain loans and other assets purchased from the FDIC during the time period specified in the agreements. Realized losses covered include loan contractual balances, accrued interest on loans for up to 90 days, the book value of foreclosed real estate acquired and certain direct costs, less cash or other consideration received by BancShares. The FDIC indemnification asset is a receivable recorded for expected losses incurred by the bank subject to shared-loss agreements where the FDIC reimburses a certain percentage (dependent on each agreement). The indemnification asset is measured on the same basis as the underlying assets and initially valued during the same time period. Subsequent to initial valuation, the indemnification asset is adjusted quarterly for changes in loss expectations. The indemnification asset is amortized based on the calculated remaining difference between the carrying value of the indemnification assets and the gross undiscounted cash flows of the asset over the remaining contractual life of the loans or the respective shared-loss agreement, whichever is shorter. Payable to the FDIC for Shared-Loss Agreements The purchase and assumption agreements for certain FDIC-assisted transactions include payments that may be owed to the FDIC at the termination of the shared-loss agreements. The payment is due to the FDIC if actual cumulative losses on acquired covered assets are lower than the cumulative losses originally estimated by the FDIC at the time of acquisition. The liability is calculated by discounting estimated future payments and is reported in the Consolidated Balance Sheets as an FDIC shared-loss payable. The ultimate settlement amount of the payment is dependent upon the performance of the underlying covered loans, recoveries, the passage of time and actual claims submitted to the FDIC. Allowance for Loan and Lease Losses (ALLL) The ALLL represents management's best estimate of probable credit losses within the loan and lease portfolio at the balance sheet date. Management determines the ALLL based on an ongoing evaluation of the loan portfolio. Estimates for loan losses are determined by analyzing historical loan losses, historical loan migration to charge-off experience, current trends in delinquencies and charge-offs, expected cash flows on PCI loans, current assessment of impaired loans, changes in the size, and composition and risk assessment of the loan portfolio. This allowance estimate also contains qualitative components that allow management to adjust reserves based on changes in the economic environment and other factors not captured in the quantitative calculation. Adjustments to the ALLL are recorded with a corresponding entry to provision for loan and lease losses. Loan balances deemed to be uncollectible are charged-off against the ALLL. Recoveries of amounts previously charged-off are generally credited to the ALLL. Accounting standards require the presentation of certain ALLL information at the portfolio segment level, which represents the level at which the company has developed and documents a systematic methodology to determine its ALLL. BancShares evaluates its loan and lease portfolio using three portfolio segments; non-PCI commercial, non-PCI noncommercial and PCI. The non-PCI commercial segment includes classes as follows: commercial construction and land development, commercial mortgage, commercial and industrial, lease financing and other commercial real estate loans. The non-PCI noncommercial segment includes classes as follows: noncommercial construction and land development, residential mortgage, revolving mortgage and consumer loans. The PCI segment includes classes as follows: commercial construction and land development, commercial mortgage, commercial and industrial, other commercial real estate, noncommercial construction and land development, residential mortgage, and revolving mortgage loans. A primary component of determining the general allowance for performing and classified loans not analyzed specifically is the actual loss history of the various classes. Loan loss factors based on historical experience may be adjusted for significant factors that in management's judgment affect the collectability of the portfolio at the balance sheet date. For non-PCI commercial loans and leases, management incorporates historical net loss data to develop the applicable loan loss factors. For the non-PCI noncommercial segment, management incorporates specific loan class and delinquency status trends into the loan loss factors. In accordance with our allowance methodology, loan loss factors are monitored quarterly and may be adjusted based on changes in the level of historical net charge-offs and updates by management, such as the number of periods included in the calculation of loss factors, loss severity and portfolio attrition. The qualitative framework used in estimating the general allowance considers economic conditions, composition of the loan portfolio, trends in delinquent and nonperforming loans, historical loss experience by categories of loans, concentrations of credit, changes in lending policies and underwriting standards, regulatory exam results and other factors indicative of inherent losses remaining in the portfolio. Management may adjust the ALLL by the factors in the qualitative framework to address environmental factors not reflected in the historical experience. These adjustments are specific to the loan class level. If it is probable that a borrower will be unable to pay all amounts due according to the contractual terms of the loan agreement a specific valuation allowance component is determined when management believes a loss is probable. For purchased impaired loans, the methodology also considers the remaining discounts recognized upon acquisition in estimating a general allowance. PCI loans are aggregated into loan pools based upon common risk characteristics or evaluated at the loan level. At each balance sheet date, BancShares evaluates whether the estimated cash flows and corresponding present value of its loans determined using their effective interest rates has decreased and if so, recognizes provision for loan losses. Management continuously monitors and actively manages the credit quality of the entire loan portfolio and adjusts the ALLL to an appropriate level. By assessing the probable estimated incurred losses in the loan portfolio on a quarterly basis, management is able to adjust specific and general loss estimates based upon the most recent information available. Future adjustments to the ALLL may be necessary based on changes in economic and other conditions. Management considers the established ALLL adequate to absorb probable losses that relate to loans and leases outstanding as of December 31, 2017. Each portfolio segment and the classes within those segments are subject to risks that could have an adverse impact on the credit quality of the loan and lease portfolio and the related ALLL. Management has identified the most significant risks as described below that are generally similar among the segments and classes. While the list is not exhaustive, it provides a description of the risks management has determined are the most significant. Non-PCI Commercial Loans and Leases Non-PCI commercial loans or leases, excluding purchased non-impaired loans, purchased leases and certain purchased revolving credit, are centrally underwritten based primarily upon the customer's ability to generate the required cash flow to service the debt in accordance with the contractual terms and conditions of the loan agreement. A complete understanding of the borrower's business, including the experience and background of the principals, is obtained prior to approval. To the extent that the loan or lease is secured by collateral, which is true for the majority of commercial loans and leases, the likely value of the collateral and what level of strength the collateral brings to the transaction is evaluated. To the extent that the principals or other parties provide personal guarantees, the relative financial strength and liquidity of each guarantor is assessed. The significant majority of relationships in the non-PCI commercial segment are assigned credit risk grades based upon an assessment of conditions that affect the borrower's ability to meet contractual obligations under the loan agreement. This process includes reviewing the borrowers' financial information, payment history, credit documentation, public information and other information specific to each borrower. Credit risk grades are reviewed annually, or at any point management becomes aware of information affecting the borrowers' ability to fulfill their obligations. Our credit risk grading standards are described in Note D. The impairment assessment and determination of the related specific reserve for each impaired loan is based on the loan's characteristics. Impairment measurement for loans that are dependent on borrower cash flow for repayment is based on the present value of expected cash flows discounted at the loan's effective interest rate. Impairment measurement for most real estate loans, particularly when a loan is considered to be a probable foreclosure, is based on the fair value of the underlying collateral. Collateral is appraised and market value, appropriately adjusted for an assessment of the sales and marketing costs, is used to calculate a fair value estimate. A specific valuation allowance is established or partial charge-off is recorded for the difference between the excess recorded investment in the loan and the loans estimated fair value less costs to sell. General reserves for collective impairment are based on estimated incurred losses related to unimpaired commercial loans as of the balance sheet date. Incurred loss estimates for the originated commercial segment are based on average loss rates by credit risk ratings, which are estimated using historical loss experience and credit risk rating migrations. Incurred loss estimates may be adjusted through a qualitative assessment to reflect current economic conditions and portfolio trends including credit quality, concentrations, aging of the portfolio and significant policy and underwriting changes. Common risks to each class of commercial loans include general economic conditions within the markets BancShares serves, as well as risks that are specific to each transaction including demand for products and services, personal events, such as disability or change in marital status and reductions in the value of collateral. Due to the concentration of loans in the medical, dental and related fields, BancShares is susceptible to risks that governmental actions will materially alter the medical care industry in the United States. In addition to these common risks for the majority of the non-PCI commercial segment, additional risks are inherent in certain classes of non-PCI commercial loans and leases. Commercial construction and land development Commercial construction and land development loans are highly dependent on the supply and demand for commercial real estate in the markets served by BancShares as well as the demand for newly constructed residential homes and lots that customers are developing. Deterioration in demand could result in decreases in collateral values and could make repayment of the outstanding loans more difficult for customers. Commercial mortgage, commercial and industrial and lease financing Commercial mortgage loans, commercial and industrial loans and lease financing are primarily dependent on the ability of borrowers to achieve business results consistent with those projected at loan origination resulting in cash flow sufficient to service the debt. To the extent that a customer's business results are materially unfavorable versus the original projections, the ability for the loan to be serviced on a basis consistent with the contractual terms may be at risk. While these loans and leases are generally secured by real property, personal property or business assets such as inventory or accounts receivable, it is possible that the liquidation of the collateral will not fully satisfy the obligation. Other commercial real estate Other commercial real estate loans consist primarily of loans secured by multifamily housing and agricultural loans. The primary risk associated with multifamily loans is the ability of the income-producing property that collateralizes the loan to produce adequate cash flow to service the debt. High unemployment or generally weak economic conditions may result in borrowers having to provide rental rate concessions to achieve adequate occupancy rates. The performance of agricultural loans is highly dependent on favorable weather, reasonable costs for seed and fertilizer and the ability to successfully market the product at a profitable margin. The demand for these products is also dependent on macroeconomic conditions that are beyond the control of the borrower. Non-PCI Noncommercial Loans and Leases Non-PCI noncommercial loans, excluding purchased non-impaired loans and certain purchased revolving credit, are centrally underwritten using automated credit scoring and analysis tools. These credit scoring tools take into account factors such as payment history, credit utilization, length of credit history, types of credit currently in use and recent credit inquiries. To the extent that the loan is secured by collateral, the likely value of that collateral is evaluated. The ALLL for the non-PCI noncommercial segment is primarily calculated on a pooled basis using a delinquency-based approach. Estimates of incurred losses are based on historical loss experience and the migration of receivables through the various delinquency pools applied to the current risk mix. These estimates may be adjusted through a qualitative assessment to reflect current economic conditions, portfolio trends and other factors. The remaining portion of the ALLL related to the non-PCI noncommercial segment results from loans that are deemed impaired. The impairment assessment and determination of the related specific reserve for each impaired loan is based on the loan's characteristics. Impairment measurement for loans that are dependent on borrower cash flow for repayment is based on the present value of expected cash flows discounted at the loan's effective interest rate. Impairment measurement for most real estate loans, particularly when a loan is considered to be a probable foreclosure, is based on the fair value of the underlying collateral. Collateral is appraised and market value, appropriately adjusted for an assessment of the sales and marketing costs, are used to calculate a fair value estimate. A specific valuation allowances is established or partial charge-off is recorded for the excess of the recorded investment in the loan and the loan’s estimated fair value less cost to sell. Common risks to each class of noncommercial loans include risks that are not specific to individual transactions such as general economic conditions within the markets BancShares serves, particularly unemployment and declines in real estate values. Personal events such as death, disability or change in marital status also add risk to noncommercial loans. In addition to these common risks for the majority of noncommercial loans, additional risks are inherent in certain classes of noncommercial loans. Revolving mortgage Revolving mortgage loans are often secured by second liens on residential real estate, thereby making such loans particularly susceptible to declining collateral values. A substantial decline in collateral value could render a second lien position to be effectively unsecured. Additional risks include lien perfection inaccuracies, disputes with first lienholders and uncertainty regarding the customer's performance with respect to the first lien that may further weaken the collateral position. Further, the open-end structure of these loans creates the risk that customers may draw on the lines in excess of the collateral value if there have been significant declines since origination. Consumer The consumer loan portfolio includes loans secured by personal property such as automobiles, marketable securities, other titled recreational vehicles including boats and motorcycles, as well as unsecured consumer debt and student loans. The value of underlying collateral within this class is especially volatile due to potential rapid depreciation in values since date of loan origination, potentially in excess of principal balances. Residential mortgage and noncommercial construction and land development Residential mortgage and noncommercial construction and land development loans are made to individuals and are typically secured by 1-4 family residential property, undeveloped land and partially developed land in anticipation of pending construction of a personal residence. Significant and rapid declines in real estate values can result in residential mortgage loan borrowers having debt levels in excess of the current market value of the collateral. Noncommercial construction and land development projects can experience delays in completion and cost overruns that exceed the borrower's financial ability to complete the project. Such cost overruns can routinely result in foreclosure of partially completed and unmarketable collateral. PCI Loans The risks associated with PCI loans are generally consistent with the risks identified for commercial and noncommercial non-PCI loans and the classes of loans within those segments. However, these loans were underwritten by other institutions, often with different lending standards and methods. Additionally, in some cases, collateral for PCI loans is located in regions that have experienced deterioration in real estate values and the underlying collateral may therefore not support full repayment of these loans. The ALLL for PCI loans is estimated based on the expected cash flows over the life of the loan. BancShares continues to estimate and update cash flows expected to be collected on individual loans or pools of loans sharing common risk characteristics. BancShares compares the carrying value of all PCI loans to the present value at each balance sheet date. The present value is calculated by updating the life of loan cash flows and discounting that result by the individual loan's effective interest rate. If the updated present value is less than the current value, then ALLL is recorded and if so, recognizes provision for loan and lease losses. For any increases in cash flows expected to be collected, BancShares adjusts any prior recorded allowance for loan and lease losses first and then the amount of accretable yield recognized on a prospective basis over the loan's or pool's remaining life. Reserve for Unfunded Commitments The reserve for unfunded commitments represents the estimated probable losses related to standby letters of credit and other commitments to extend credit. The reserve is calculated in a manner similar to the loans evaluated collectively for impairment, while also considering the applicable regulatory capital credit conversion factors for these off-balance sheet instruments as well as the exposure upon default. The reserve for unfunded commitments is presented within other liabilities on the Consolidated Balance Sheets, distinct from the ALLL, and adjustments to the reserve for unfunded commitments are included in other noninterest expense in the Consolidated Statements of Income. The reserve for unfunded commitments was not material at December 31, 2017 or 2016. Premises and Equipment Premises, equipment and capital leases are stated at cost less accumulated depreciation and amortization. For financial reporting purposes, depreciation and amortization are computed using the straight-line method and are expensed over the estimated useful lives of the assets, which range from 3 to 40 years for premises and 3 to 10 years for furniture, software and equipment. Leasehold improvements are amortized over the terms of the respective leases, including renewal period if renewal period is reasonably assured (often through the presence of a bargain renewal option), or the useful lives of the improvements, whichever is shorter. Gains and losses on dispositions are recorded in other noninterest expense. Maintenance and repairs are charged to occupancy expense or equipment expense as incurred. Obligations under capital leases are amortized over the life of the lease using the effective interest method to allocate payments between principal and interest. Rent expense and rental income on operating leases are recorded in noninterest expense and noninterest income, respectively, using the straight-line method over the appropriate lease terms. Goodwill and Other Intangible Assets BancShares accounts for acquisitions using the acquisition method of accounting. Under that methodology, if the purchase price of an acquired company exceeds the fair value of its net assets, the excess is carried on the acquirer's balance sheet as goodwill. An intangible asset is recognized as an asset apart from goodwill if it arises from contractual or other legal rights, or if it is capable of being separated or divided from the acquired entity and sold, transferred, licensed, rented or exchanged. Intangible assets that are separately identifiable assets, such as core deposit intangibles, resulting from acquisitions are amortized on an accelerated basis over an estimated useful life and evaluated for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. Goodwill is not amortized, but is evaluated at least annually for impairment as of July 31st or more frequently if events occur or circumstances change that may trigger a decline in the value of the reporting unit or otherwise indicate that a potential impairment exists. The evaluation of goodwill is based on a variety of factors, including common stock trading multiples and data from recent market transactions. Potential impairment of goodwill exists when the carrying amount of a reporting unit exceeds its fair value. If the carrying value of the reporting unit exceeds its fair value, a second analysis is performed that requires an assignment of the reporting unit’s fair value to the reporting unit’s assets and liabilities to determine the implied fair value of the reporting unit’s goodwill. If the implied fair value of the reporting unit's goodwill is lower than its carrying amount, an impairment loss is recognized for the excess of carrying value. Based on the July 31, 2017 impairment tests, management concluded there was no indication of goodwill impairment. Subsequent to the annual impairment test, no events occurred or circumstances changed that would indicate goodwill should be tested for impairment during the interim period between annual tests. Mortgage servicing rights (MSRs) are recognized separately when they are retained as loans are sold or acquired through acquisition. When mortgage loans are sold, servicing rights are initially recorded at fair value within other assets in the Consolidated Balance Sheets and gains on sale of loans are recorded within mortgage income in the Consolidated Statements of Income. All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized against mortgage income in noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans with the offset being a reduction in the cost basis of the servicing asset. MSRs are evaluated for impairment quarterly based upon the fair value of the rights as compared to carrying amount. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics and is recorded as a reduction of mortgage income in the Consolidated Statements of Income. If BancShares later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the valuation reserve may be recorded as an increase to mortgage income in the Consolidated Statements of Income, but only to the extent of previous impairment recognized. Other intangible assets with estimable lives are amortized over their estimated useful lives, which are periodically reviewed for reasonableness. Identifiable intangible assets represent the estimated value of the core deposits acquired and certain customer relationships. Securities Sold Under Repurchase Agreements Securities sold under repurchase agreements primarily with commercial customers generally have maturities of one day and are reflected as short-term borrowings on the Consolidated Balance Sheets and are recorded based on the amount of cash received in connection with the borrowing. Fair Values Fair value disclosures are required for all financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. Under GAAP, individual fair value estimates are ranked on a three-tier scale based on the relative reliability of the inputs used in the valuation. Fair values determined using level 1 inputs rely on active and observable markets to price identical assets or liabilities. In situations where identical assets and liabilities are not traded in active markets, fair values may be determined based on level 2 inputs, which represent observable data for similar assets and liabilities. Fair values for assets and liabilities that are not actively traded in observable markets are based on level 3 inputs, which are considered to be nonobservable. Fair value estimates derived from level 3 inputs cannot be substantiated by comparison to independent markets and, in many cases, cannot be realized through immediate settlement of the instrument. Additionally, valuation adjustments, such as those pertaining to counterparty and BancShares' own credit quality and liquidity, may be necessary to ensure that assets and liabilities are recorded at fair value. Credit valuation adjustments are made when market pricing does not accurately reflect the counterparty's credit quality. As determined by BancShares management, liquidity valuation adjustments may be made to the fair value of certain assets to reflect the uncertainty in the pricing and trading of the instruments when recent market transactions for identical or similar instruments are not observed. Accordingly, the aggregate fair value amounts presented do not necessarily represent the underlying value to BancShares. For additional information, see Note M. Income Taxes Deferred income taxes are reported when different accounting methods have been used in determining income for income tax purposes and for financial reporting purposes. Deferred taxes are computed using the asset and liability approach as prescribed in ASC 740, Income Taxes. Under this method, a deferred tax asset or liability is determined based on the currently enacted tax rates applicable to the period in which the differences between the financial statement carrying amounts and tax basis of existing assets and liabilities are expected to be reported in BancShares' income tax returns. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. BancShares continually monitors and evaluates the potential impact of current events on the estimates used to establish income tax expenses and income tax liabilities. On a periodic basis, BancShares evaluates its income tax positions based on current tax law, positions taken by various tax auditors within the jurisdictions that BancShares is required to file income tax returns, as well as potential or pending audits or assessments by such tax auditors. BancShares has unrecognized tax benefits related to the uncertain portion of tax positions that BancShares has taken or expects to take. A liability may be created or an amount refundable may be reduced for the amount of unrecognized tax benefits. These uncertainties result from the application of complex tax laws, rules, regulations and interpretations, primarily in state taxing jurisdictions. Unrecognized tax benefits are assessed quarterly and may be adjusted through current income tax expense in future periods based on changing facts and circumstances, completion of examinations by taxing authorities or expiration of a statute of limitations. Estimated penalties and interest on uncertain tax positions are recognized in income tax expense. BancShares files a consolidated federal income tax return and various combined and separate company state tax returns. See Note P in the Notes to Consolidated Financial Statements for additional disclosures. Derivative Financial Instruments A derivative is a financial instrument that derives its cash flows, and therefore its value, by reference to an underlying instrument, index or referenced interest rate. These instruments include interest rate swaps, caps, floors, collars, options or other financial instruments designed to hedge exposures to interest rate risk or for speculative purposes. BancShares selectively uses interest rate swaps for interest rate risk management purposes. BancShares had an interest rate swap, entered into during 2011, that qualified as a cash flow hedge under GAAP and which converted variable-rate exposure on outstanding debt to a fixed rate. BancShares' interest rate swap expired in June 2016. Per Share Data Net income per share is computed by dividing net income by the average number of both classes of common shares outstanding during each period. BancShares had no potential common shares outstanding in any period and did not report diluted net income per share. Cash dividends per share apply to both Class A and Class B common stock. Shares of Class A common stock carry one vote per share, while shares of Class B common stock carry 16 votes per share. Defined Benefit Pension Plan BancShares maintains noncontributory defined benefit pension plans covering certain qualifying employees. The calculation of the obligations and related expenses under the plans require the use of actuarial valuation methods and assumptions. Actuarial assumptions used in the determination of future values of plan assets and liabilities are subject to management judgment and may differ significantly if different assumptions are used. The discount rate assumption used to measure the plan obligations is based on a yield curve developed from high-quality corporate bonds across a full maturity spectrum. The projected cash flows of the pension plans are discounted based on this yield curve, and a single discount rate is calculated to achieve the same present value. The assumed rate of future compensation increases is reviewed annually based on actual experience and future salary expectations. We also estimate a long-term rate of return on pension plan assets that is used to estimate the future value of plan assets. In developing the long-term rate of return, we consider such factors as the actual return earned on plan assets, historical returns on the various asset classes in the plans and projections of future returns on various asset classes. Refer to Note N for disclosures related to BancShares' defined benefit pension plans. Recently Adopted Accounting Pronouncements Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings (SEC Update) This ASU adds an SEC paragraph and amends other Topics pursuant to an SEC Staff Announcement that states a registrant should evaluate ASUs that have not yet been adopted, including ASU 2014-09, Revenue from Contracts with Customers (Topic 606), ASU 2016-02, Leases (Topic 842), and ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, to determine the appropriate financial statement disclosures about the potential material effects of those ASUs on the financial statements when adopted. If a registrant does not know or cannot reasonably estimate the impact that adoption of the ASUs referenced are expected to have on the financial statements, then in addition to making a statement to that effect, the registrant should consider additional qualitative financial statement disclosures to assist the reader in assessing the significance of the impact the adoption will have on the financial statements, and a comparison to the registrant's current accounting policies. A registrant should describe the status of its process to implement the new standards and the significant matters yet to be addressed. This ASU also addresses the accounting for tax benefits resulting from investments in qualified affordable housing projects where the decision to apply the proportional amortization method of accounting is an accounting policy decision to be applied consistently to all investments that meet the conditions, rather than a decision to be applied to individual investments that qualify for the use of the proportional amortization method. The amendments in this ASU are effective upon issuance. We adopted the guidance effective in the first quarter of 2017. The disclosures required by this ASU are included within the “Recently Issued Accounting Pronouncements” section below. The adoption did not have an impact to our consolidated financial position or consolidated results of operations. FASB ASU 2016-17, Consolidation (Topic 810): Interests Held Through Related Parties That Are Under Common Control This ASU does not change the characteristics of a primary beneficiary in current GAAP; however, it requires that a reporting entity, in determining whether it satisfies the second characteristic of a primary beneficiary, to include all of its direct variable interests in a VIE and, on a proportionate basis, its indirect variable interests in a VIE held through related parties, including related parties that are under common control with the reporting entity. If, after performing that assessment, a reporting entity that is the single decision maker of a VIE concludes that it does not have the characteristics of a primary beneficiary, the amendments continue to require that reporting entity to evaluate whether it and one or more of its related parties under common control, as a group, have the characteristics of a primary beneficiary, then the party within the related party group that is most closely associated with the VIE is the primary beneficiary. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We adopted the guidance effective in the first quarter of 2017. The adoption did not have an impact to our consolidated financial position or consolidated results of operations. FASB ASU 2016-07, Investments-Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting This ASU eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The ASU requires that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. Further, the ASU requires that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings, the unrealized gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We adopted the guidance effective in the first quarter of 2017. The adoption did not have an impact on our consolidated financial position or consolidated results of operations. Recently Issued Accounting Pronouncements FASB ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income This ASU requires a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017 (Tax Act), which was enacted on December 22, 2017. The Tax Act included a reduction to the corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. The amount of the reclassification would be the difference between the historical corporate income tax rate and the newly enacted 21 percent corporate income tax rate. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We will adopt the guidance during the first quarter of 2018. The change in accounting principle will be accounted for as a cumulative-effect adjustment to the balance sheet resulting in a $27.2 million increase to retained earnings and a corresponding decrease to AOCI on January 1, 2018. FASB ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost This ASU requires employers to present the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. Employers will present the other components separately from the line item that includes the service cost. In addition, only the service cost component of net benefit cost is eligible for capitalization. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We will adopt the guidance during the first quarter of 2018. BancShares does not anticipate any material impact to our consolidated financial position or consolidated results of operations as a result of the adoption. FASB ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment This ASU eliminates Step 2 from the goodwill impairment test. Under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This ASU eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative test. This ASU will be effective for BancShares' annual or interim goodwill impairment tests for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We expect to adopt the guidance for our annual impairment test in fiscal year 2020. BancShares does not anticipate any impact to our consolidated financial position or consolidated results of operations as a result of the adoption. FASB ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments This ASU addresses the diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this ASU provide guidance on (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon debt instruments; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The guidance requires application using a retrospective transition method. We will adopt the guidance during the first quarter of 2018. BancShares does not anticipate a material impact to our Consolidated Statements of Cash Flows. FASB ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments This ASU eliminates the delayed recognition of the full amount of credit losses until the loss was probable of occurring and instead will reflect an entity's current estimate of all expected credit losses. The amendments in this ASU broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The ASU does not specify a method for measuring expected credit losses and allows an entity to apply methods that reasonably reflect its expectations of the credit loss estimate based on the entity's size, complexity and risk profile. In addition, the disclosures of credit quality indicators in relation to the amortized cost of financing receivables, a current disclosure requirement, are further disaggregated by year of origination. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. We will adopt the guidance by the first quarter of 2020 with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. For BancShares, the standard will apply to loans, unfunded loan commitments and debt securities held to maturity. We have formed a cross-functional team co-led by Finance and Risk Management and engaged a third party to assist with the adoption. The implementation team has developed a detailed project plan and is staying informed about the broader industry's perspective and insights, and identifying and researching key decision points. We have completed the readiness assessment and gap analysis related to data, modeling IT, accounting policy, controls and reporting which has enabled us to determine the areas of focus and estimate total body of work. Our current critical activities include model design, accounting policy development, data feasibility analysis, evaluation of reporting and disclosure solutions and completion of specific work stream project plans. We will continue to evaluate the impact the new standard will have on our consolidated financial statements as the final impact will be dependent, among other items, upon the loan portfolio composition and credit quality at the adoption date, as well as economic conditions, financial models used and forecasts at that time. FASB ASU 2016-02, Leases (Topic 842) This ASU increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The key difference between existing standards and this ASU is the requirement for lessees to recognize on their balance sheet all lease contracts. An entity may make an accounting election by classification to not recognize leases with terms less than 12 months on their balance sheet. Both a right-of-use asset, representing the right to use the leased asset, and a lease liability, representing the contractual obligation, are required to be recognized on the balance sheet of the lessee at lease commencement. Further, this ASU requires lessees to classify leases as either operating or finance leases, which are substantially similar to the current operating and capital leases classifications. The distinction between these two classifications under the new standard does not relate to balance sheet treatment, but relates to treatment in the statements of income and cash flows. Lessor guidance remains largely unchanged with the exception of how a lessor determines the appropriate lease classification for each lease to better align the lessor guidance with revised lessee classification guidance. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. For BancShares, the impact of this ASU will primarily relate to its accounting and reporting of leases as a lessee. We will adopt during the first quarter of 2019. We have engaged a third party and completed an inventory of all leases and their terms and service contracts with embedded leases. While we continue to evaluate the impact of the new standard, we expect an increase to the Consolidated Balance Sheets for right-of-use assets and associated lease liabilities, as well as resulting depreciation expense of the right-of-use assets and interest expense of the lease liabilities in the Consolidated Statements of Income, for arrangements previously accounted for as operating leases. Additionally, adding these assets to our balance sheet will impact our total risk-weighted assets used to determine our regulatory capital levels. Our impact analysis on this change in accounting principle estimates an increase to the Consolidated Balance Sheets for total lease liability ranging between $65.0 million and $85.0 million, as the initial gross up of both assets and liabilities. Capital is expected to be impacted by an estimated four to six basis points. These preliminary ranges are subject to change and will continue to be refined closer to adoption. FASB ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities This ASU addresses certain aspects of recognition, measurement, presentation and disclosure of certain financial instruments. The amendments in this ASU (1) require most equity investments to be measured at fair value with changes in fair value recognized in net income; (2) simplify the impairment assessment of equity investments without a readily determinable fair value; (3) eliminate the requirement to disclose the method(s) and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet; (4) require public business entities to use exit price notion, rather than entry prices, when measuring fair value of financial instruments for disclosure purposes; (5) require separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements; (6) require separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; and (7) state that a valuation allowance on deferred tax assets related to available-for-sale securities should be evaluated in combination with other deferred tax assets. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We will adopt the ASU during the first quarter of 2018. The change in accounting principle will be accounted for as a cumulative-effect adjustment to the balance sheet resulting in an $18.7 million increase to retained earnings and a decrease to AOCI on January 1, 2018. With the adoption of this ASU equity securities can no longer be classified as available for sale, as such marketable equity securities will be disclosed as a separate line item on the balance sheet with changes in the fair value of equity securities reflected in net income. For equity investments without a readily determinable fair value, BancShares has elected to measure the equity investments using the measurement alternative which requires BancShares to make a qualitative assessment of whether the investment is impaired at each reporting period. Under the measurement alternative these investments will be measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. If a qualitative assessment indicates that the investment is impaired, BancShares will have to estimate the investment's fair value in accordance with ASC 820 and, if the fair value is less than the investment's carrying value, recognize an impairment loss in net income equal to the difference between carrying value and fair value. Equity investments without a readily determinable fair value are recorded within other assets in the consolidated balance sheets. FASB ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In May 2014, the FASB issued a standard on the recognition of revenue from contracts with customers with the core principle being for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard also results in enhanced disclosures about revenue, provides guidance for transactions that were not previously addressed comprehensively and improves guidance for multiple-element arrangements. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations, to improve the operability and understandability of the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, to clarify guidance for identifying performance obligations and licensing implementation. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, to clarify and improve the guidance for certain aspects of Topic 606. In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, to clarify guidance for certain aspects of Topic 606. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments (SEC Update). This ASU adds SEC paragraphs to the new revenue and leases sections of the Codification pursuant to an SEC Staff announcement made on July 20, 2017 as well as supersedes certain SEC paragraphs related to previous SEC staff announcements. In November 2017, the FASB issued ASU 2017-14, Income Statement - Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606) (SEC Update), to supersede, amend and add SEC paragraphs to the Codification to reflect the August 2017 issuance of SEC staff Accounting Bulletin (SAB) 116 and SEC Release No. 33-10403. Per ASU 2015-14, Deferral of the Effective Date, this guidance was deferred and is effective for fiscal periods beginning after December 15, 2017, including interim reporting periods within that reporting period. We will adopt the guidance during the first quarter of 2018. Our revenue is comprised of net interest income on financial assets and liabilities, which is explicitly excluded from the scope of the new guidance, and noninterest income. The contracts that are in scope of the guidance are primarily related to service charges on deposit accounts, cardholder and merchant income, wealth advisory services income, other service charges and fees, sales of other real estate, insurance commissions and miscellaneous fees. Based on our overall assessment of revenue streams and review of related contracts affected by the ASU, BancShares does not anticipate a material impact to our consolidated financial position or consolidated results of operations as a result of the adoption. |
Business Combinations |
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Business Combinations | BUSINESS COMBINATIONS HomeBancorp, Inc. On December 18, 2017, FCB and HomeBancorp, Inc. (HomeBancorp) entered into a definitive merger agreement. The agreement provides for the acquisition of Tampa, Florida-based HomeBancorp by FCB. Under the terms of the agreement, cash consideration of $15.03 will be paid to the shareholders of HomeBancorp for each share of HomeBancorp's common stock totaling approximately $113.6 million. The transaction is expected to close no later than the second quarter of 2018, subject to the receipt of regulatory approvals and the approval of HomeBancorp's shareholders, and will be accounted for under the acquisition method of accounting. The merger will allow FCB to expand its presence in Florida and enter into two new markets in Tampa and Orlando. As of September 30, 2017, HomeBancorp reported $954.9 million in consolidated assets, $699.4 million in deposits and $637.5 million in loans. Guaranty Bank On May 5, 2017, FCB entered into an agreement with the FDIC, as Receiver, to purchase certain assets and assume certain liabilities of Guaranty Bank (Guaranty) of Milwaukee, Wisconsin. The acquisition provides FCB with the opportunity to grow capital and enhance earnings. The Guaranty transaction was accounted for under the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition date. Fair values are preliminary and subject to refinement for up to one year after the closing date of the relevant acquisition as additional information regarding closing date fair values becomes available. As of December 31, 2017, there have been no refinements to the fair value of these assets acquired and liabilities assumed. The fair value of the assets acquired was $875.1 million, including $574.6 million in non-PCI loans, $114.5 million in PCI loans and $9.9 million in a core deposit intangible. Liabilities assumed were $982.7 million, of which $982.3 million were deposits. The total gain on the transaction was $122.7 million which is included in noninterest income in the Consolidated Statements of Income. The following table provides the identifiable assets acquired and liabilities assumed at their estimated fair values as of the acquisition date.
Merger-related expenses of $7.4 million from the Guaranty transaction were recorded in the Consolidated Statements of Income for the year ended December 31, 2017. Loan-related interest income generated from Guaranty was approximately $20.5 million since the acquisition date. While the acquisition gain of $122.7 million is significant for 2017, the ongoing contributions of this transaction to BancShares' financial statements is not considered material and therefore pro forma financial data is not included. Based on such credit factors as past due status, nonaccrual status, loan-to-value, credit scores, and other quantitative and qualitative considerations, the acquired loans were divided into loans with evidence of credit quality deterioration, which are accounted for under ASC 310-30 (included in PCI loans), and loans that do not meet this criteria, which are accounted for under ASC 310-20 (included in non-PCI loans). Harvest Community Bank On January 13, 2017, FCB entered into an agreement with the FDIC, as Receiver, to purchase certain assets and assume certain liabilities of Harvest Community Bank (HCB) of Pennsville, New Jersey. The acquisition provides FCB with the opportunity to grow capital and enhance earnings. The HCB transaction was accounted for under the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition date. Fair values are preliminary and subject to refinement for up to one year after the closing date of the relevant acquisition as additional information regarding closing date fair values becomes available. As of December 31, 2017, there have been no refinements to the fair value of these assets acquired and liabilities assumed. The fair value of the assets acquired was $111.6 million, including $85.1 million in PCI loans and $850 thousand in a core deposit intangible. Liabilities assumed were $121.8 million, of which the majority were deposits. As a result of the transaction, FCB recorded a gain on the acquisition of $12.0 million which is included in noninterest income in the Consolidated Statements of Income. The following table provides the identifiable assets acquired and liabilities assumed at their estimated fair values as of the acquisition date.
Merger-related expenses of $1.2 million were recorded in the Consolidated Statements of Income for the year ended December 31, 2017. Loan-related interest income generated from HCB was approximately $3.8 million for the year ended December 31, 2017. The transaction is not considered material to BancShares' financial statements and therefore pro forma financial data is not included. All loans resulting from the HCB transaction were recorded at the acquisition date with a discount attributable, at least in part, to credit quality deterioration, and are therefore accounted for as PCI under ASC 310-30. Cordia Bancorp, Inc. On September 1, 2016, FCB completed the merger of Midlothian, Virginia-based Cordia Bancorp, Inc. (Cordia) and its subsidiary, Bank of Virginia (BVA), into FCB. Under the terms of the merger agreement, cash consideration of $5.15 was paid to Cordia’s shareholders for each of their shares of Cordia’s common stock, with total consideration paid of $37.1 million. The Cordia transaction was accounted for under the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition date. These fair values were subject to refinement for up to one year after the closing date of the acquisition. The measurement period ended on August 31, 2017. The fair value of assets acquired was $349.3 million, including $241.4 million in loans and $2.2 million in a core deposit intangible. Liabilities assumed were $323.1 million, including $292.2 million in deposits. As a result of the transaction, FCB recorded $10.8 million of goodwill. The amount of goodwill recorded represents the excess purchase price over the estimated fair value of the net assets acquired. This premium paid reflects the increased market share and related synergies that are expected to result from the acquisition. None of the goodwill is deductible for income tax purposes as the merger is accounted for as a qualified stock purchase. Merger-related expenses of $260 thousand and $3.8 million were recorded in the Consolidated Statements of Income for the years ended December 31, 2017 and 2016, respectively. Loan-related interest income generated from Cordia was approximately $5.6 million and $4.2 million for the years ended December 31, 2017 and 2016, respectively. The transaction is not considered material to BancShares' financial statements and therefore pro forma financial data is not included. Due to the immaterial amount of loans resulting from the Cordia transaction that had evidence of credit quality deterioration, all loans were accounted for as non-PCI loans under ASC 310-20. First CornerStone Bank On May 6, 2016, FCB entered into an agreement with the FDIC, as Receiver, to purchase certain assets and assume certain liabilities of First Cornerstone Bank (FCSB) of King of Prussia, Pennsylvania. The FCSB transaction was accounted for under the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition date. These fair values were subject to refinement for up to one year after the closing date of the acquisition. The measurement period ended on May 5, 2017. The fair value of the assets acquired was $87.4 million, including $43.8 million in loans and $390 thousand of cored deposit intangible. Liabilities assumed were $96.9 million, of which the majority were deposits. The fair value of the net liabilities assumed was $9.5 million and cash received from the FDIC was $12.5 million. The total gain on the transaction was $3.0 million which is included in noninterest income in the Consolidated Statements of Income for the year ended December 31, 2016. Merger-related expenses were immaterial for the year ended December 31, 2017 and $1.0 million were recorded in the Consolidated Statements of Income for the year ended December 31, 2016. Loan-related interest income generated from FCSB was approximately $1.7 million and $1.6 million for the years ended December 31, 2017 and 2016, respectively. The transaction is not considered material to BancShares' financial statements and therefore pro forma financial data is not included. All loans resulting from the FCSB transaction were recorded at the acquisition date with a discount attributable, at least in part, to credit quality deterioration, and are therefore accounted for as PCI loans under ASC 310-30. North Milwaukee State Bank On March 11, 2016, FCB entered into an agreement with the FDIC, as Receiver, to purchase certain assets and assume certain liabilities of North Milwaukee State Bank (NMSB) of Milwaukee, Wisconsin. The NMSB transaction was accounted for under the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition date. These fair values were subject to refinement for up to one year after the closing date of the acquisition. The measurement period ended on March 10, 2017. The fair value of the assets acquired was $53.6 million, including $36.9 million in loans and $240 thousand of core deposit intangible. Liabilities assumed were $60.9 million, of which $59.2 million were deposits. The fair value of the net liabilities assume was $7.3 million and cash received from the FDIC was $10.2 million. The total gain on the transaction was $2.9 million which is included in noninterest income in the Consolidated Statements of Income for the year ended December 31, 2016. Merger-related expenses of $112 thousand and $517 thousand were recorded in the Consolidated Statements of Income for the years ended December 31, 2017 and 2016, respectively. Loan-related interest income generated from NMSB was approximately $2.4 million and $1.9 million for the years ended December 31, 2017 and 2016, respectively. The transaction is not considered material to BancShares' financial statements and therefore pro forma financial data is not included. All loans resulting from the NMSB transaction were recorded at the acquisition date with a discount attributable, at least in part, to credit quality deterioration, and are therefore accounted for as PCI loans under ASC 310-30. |
Investments |
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Investments | INVESTMENTS The amortized cost and fair value of investment securities classified as available for sale and held to maturity at December 31, 2017 and 2016, were as follows:
Investments in mortgage-backed securities primarily represent securities issued by the Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation. Investments in equity securities and corporate bonds represent positions in securities of other financial institutions. Other investments include trust preferred securities of financial institutions. The following table provides the amortized cost and fair value by contractual maturity. Expected maturities will differ from contractual maturities on certain securities because borrowers and issuers may have the right to call or prepay obligations with or without prepayment penalties. Repayments of mortgage-backed securities are dependent on the repayments of the underlying loan balances. Equity securities do not have a stated maturity date.
For each period presented, securities gains (losses) include the following:
The following table provides information regarding securities with unrealized losses as of December 31, 2017 and 2016:
Investment securities with an aggregate fair value of $2.98 billion have had continuous unrealized losses for more than 12 months as of December 31, 2017 with an aggregate unrealized loss of $59.5 million. As of December 31, 2017, 227 of these investments are government sponsored enterprise-issued mortgage-backed securities and 4 are U.S. Treasury securities. None of the unrealized losses identified as of December 31, 2017 or December 31, 2016 relate to the marketability of the securities or the issuer’s ability to honor redemption obligations. Rather, the unrealized losses related to changes in interest rates relative to when the investment securities were purchased. For all periods presented, BancShares had the ability and intent to retain these securities for a period of time sufficient to recover all unrealized losses. Therefore, none of the securities were deemed to be other than temporarily impaired. Investment securities having an aggregate carrying value of $4.59 billion at December 31, 2017 and $4.55 billion at December 31, 2016 were pledged as collateral to secure public funds on deposit and certain short-term borrowings, and for other purposes as required by law. |
Loans and Leases |
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Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Leases | LOANS AND LEASES BancShares' accounting methods for loans and leases differ depending on whether they are purchased credit-impaired (PCI) or non-PCI. Non-PCI loans and leases include originated commercial, originated noncommercial, purchased non-impaired loans, purchased leases and certain purchased revolving credit. For purchased non-impaired loans to be included as non-PCI, it must be determined that the loans do not have any credit deterioration at the time of acquisition. Conversely, loans for which it is probable at acquisition that all required payments will not be collected in accordance with contractual terms are considered impaired and, therefore, classified as PCI loans. PCI loans are accounted for under the guidance in ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. PCI loans are recorded at fair value at the date of acquisition. No allowance for loan and lease losses is recorded on the acquisition date as the fair value of the acquired assets incorporates assumptions regarding credit risk over the life of the loans. An allowance is recorded if there is additional credit deterioration after the acquisition date. See Note A for additional information on PCI and non-PCI loans and leases. BancShares reports PCI and non-PCI loan portfolios separately, and each portfolio is further divided into commercial and non-commercial based on the type of borrower, purpose, collateral, and/or our underlying credit management processes. Additionally, commercial and non-commercial loans are assigned to loan classes, which further disaggregate loans based upon common risk characteristics. Commercial – Commercial loan classes include construction and land development, commercial mortgage, other commercial real estate, commercial and industrial, lease financing and other. Construction and land development – Construction and land development consists of loans to finance land for development, investment, and use in a commercial business enterprise; multifamily apartments; and other commercial buildings that may be owner-occupied or income generating investments for the owner. Commercial mortgage – Commercial mortgage consists of loans to purchase or refinance owner-occupied nonresidential and investment properties. Investment properties include office buildings and other facilities that are rented or leased to unrelated parties. Other commercial real estate – Other commercial real estate consists of loans secured by farmland (including residential farms and other improvements) and multifamily (5 or more) residential properties. Commercial and industrial – Commercial and industrial consists of loans or lines of credit to finance corporate credit cards, accounts receivable, inventory and other general business purposes. Lease financing – Lease financing consists solely of lease financing agreements for business equipment, vehicles and other assets. Other – Other consists of all other commercial loans not classified in one of the preceding classes. These typically include loans to non-profit organizations such as churches, hospitals, educational and charitable organizations, and certain loans repurchased with government guarantees. Noncommercial – Noncommercial loan classes consist of residential and revolving mortgage, construction and land development, and consumer loans. Residential mortgage – Residential real estate consists of loans to purchase, construct or refinance the borrower's primary dwelling, second residence or vacation home. Revolving mortgage – Revolving mortgage consists of home equity lines of credit that are secured by first or second liens on the borrower's primary residence. Construction and land development – Construction and land development consists of loans to construct the borrower's primary or secondary residence or vacant land upon which the owner intends to construct a dwelling at a future date. Consumer – Consumer loans consist of installment loans to finance purchases of vehicles, unsecured home improvements, student loans and revolving lines of credit that can be secured or unsecured, including personal credit cards. Loans and leases outstanding include the following at December 31, 2017 and 2016:
At December 31, 2017, $67.8 million of total residential loans and leases were covered under shared-loss agreements with the FDIC, compared to $84.8 million at December 31, 2016. The shared-loss agreements, for their terms, protect BancShares from a substantial portion of the credit and asset quality risk that would otherwise be incurred. At December 31, 2017, $8.75 billion in noncovered loans with a lendable collateral value of $6.08 billion were used to secure $835.2 million in FHLB of Atlanta advances, resulting in additional borrowing capacity of $5.24 billion. At December 31, 2016, $8.26 billion in noncovered loans with a lendable collateral value of $5.50 billion were used to secure $660.2 million in FHLB of Atlanta advances, resulting in additional borrowing capacity of $4.84 billion. At December 31, 2017, $2.77 billion in noncovered loans with a lendable collateral value of $2.08 billion were used to secure additional borrowing capacity at the Federal Reserve Bank (FRB). There were no loans used to secure additional borrowing capacity at the FRB at December 31, 2016. Certain residential real estate loans are originated to be sold to investors and are recorded in loans held for sale at fair value. Loans held for sale were $51.2 million and $74.4 million at December 31, 2017 and 2016, respectively. In addition, we may change our strategy for certain portfolio loans and sell them in the secondary market. At that time, portfolio loans are transferred to loans held for sale at the lower of amortized cost or market. During 2017, total proceeds from sales of loans held for sale were $823.5 million of which $162.6 million in sales were transferred to loans held for sale from the residential mortgage portfolio, resulting in a gain of $1.0 million. During 2016, total proceeds from sales of loans held for sale were $874.8 million of which $77.7 million in sales were transferred to loans held for sale from the residential mortgage portfolio, resulting in a gain of $3.8 million. Net deferred fees on originated non-PCI loans and leases, including unearned income, unamortized costs and fees, were $1.7 million and $6.7 million at December 31, 2017 and December 31, 2016, respectively. The unamortized discount related to purchased non-PCI loans and leases in the Guaranty, Cordia and First Citizens Bancorporation, Inc. (Bancorporation) acquisitions was $14.2 million, $2.7 million and $18.1 million at December 31, 2017, respectively. At December 31, 2016, the unamortized discount related to purchased non-PCI loans and leases from the Cordia and Bancorporation acquisitions was $4.2 million and $27.4 million, respectively. During the years ended December 31, 2017 and December 31, 2016, accretion income on purchased non-PCI loans and leases was $13.6 million and $14.3 million, respectively. Loans and leases to borrowers in medical, dental or related fields were $4.86 billion as of December 31, 2017, which represents 20.6 percent of total loans and leases, compared to $4.66 billion or 21.5 percent of total loans and leases at December 31, 2016. The credit risk of this industry concentration is mitigated through our underwriting policies which emphasize reliance on adequate borrower cash flow rather than underlying collateral value and our preference for financing secured by owner-occupied real property. Except for this single concentration, no other industry represented more than 10 percent of total loans and leases outstanding at December 31, 2017. Credit quality indicators Loans and leases are monitored for credit quality on a recurring basis. The credit quality indicators used are dependent on the portfolio segment to which the loan relates. Commercial and noncommercial loans and leases have different credit quality indicators as a result of the unique characteristics of the loan segment being evaluated. The credit quality indicators for non-PCI and PCI commercial loans and leases are developed through a review of individual borrowers on an ongoing basis. Commercial loans are evaluated periodically with more frequent evaluations done on more severely criticized loans or leases. The credit quality indicators for PCI and non-PCI noncommercial loans are based on the delinquency status of the borrower. As the borrower becomes more delinquent, the likelihood of loss increases. The indicators represent the rating for loans or leases as of the date presented based on the most recent assessment performed. These credit quality indicators are defined as follows: Pass – A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification. Special mention – A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification. Substandard – A substandard asset is inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected. Doubtful – An asset classified as doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently existing facts, conditions and values. Loss – Assets classified as loss are considered uncollectible and of such little value that it is inappropriate to be carried as an asset. This classification is not necessarily equivalent to any potential for recovery or salvage value, but rather that it is not appropriate to defer a full charge-off even though partial recovery may be affected in the future. Ungraded – Ungraded loans represent loans that are not included in the individual credit grading process due to their relatively small balances or borrower type. The majority of ungraded loans at December 31, 2017 and December 31, 2016 relate to business credit cards. Business credit card loans are subject to automatic charge-off when they become 120 days past due in the same manner as unsecured consumer lines of credit. The remaining balance is comprised of a small amount of commercial mortgage, lease financing and other commercial real estate loans. The composition of the loans and leases outstanding at December 31, 2017, and December 31, 2016, by credit quality indicator is provided below:
The aging of the outstanding non-PCI loans and leases, by class, at December 31, 2017, and December 31, 2016 is provided in the table below. The calculation of days past due begins on the day after payment is due and includes all days through which all required interest or principal has not been paid. Loans and leases 30 days or less past due are considered current as various grace periods that allow borrowers to make payments within a stated period after the due date and still remain in compliance with the loan agreement.
The recorded investment, by class, in loans and leases on nonaccrual status, and loans and leases greater than 90 days past due and still accruing at December 31, 2017 and December 31, 2016 for non-PCI loans, were as follows:
Purchased non-PCI loans and leases The following table relates to purchased non-PCI loans acquired in the Guaranty transaction in 2017 and the Cordia transaction in 2016 and provides the contractually required payments, estimate of contractual cash flows not expected to be collected and fair value of the acquired loans at the acquisition date.
The recorded fair values of purchased non-PCI loans acquired in the Guaranty transaction in 2017 and the Cordia transaction in 2016 as of the acquisition date are as follows:
Purchased credit-impaired (PCI) loans The following table relates to PCI loans acquired in the HCB and Guaranty transactions in 2017 and the NMSB and FCSB transactions in 2016. The table summarizes the contractually required payments, which include principal and interest, expected cash flows to be collected, and the fair value of PCI loans at the respective acquisition dates.
The recorded fair values of PCI loans acquired in the HCB and Guaranty transactions in 2017 and the NMSB and FCSB transactions in 2016 as of their respective acquisition date were as follows:
The following table provides changes in the carrying value of PCI loans during the years ended December 31, 2017 and 2016:
The carrying value of loans on the cost recovery method was $345 thousand at December 31, 2017, and $498 thousand at December 31, 2016. The cost recovery method is applied to loans when the timing of future cash flows is not reasonably estimable due to borrower nonperformance or uncertainty in the ultimate disposition of the asset. The recorded investment of PCI loans on nonaccrual status was $624 thousand and $3.5 million at December 31, 2017 and December 31, 2016, respectively. For PCI loans, improved credit loss expectations generally result in the reclassification of nonaccretable difference to accretable yield. Changes in expected cash flows not related to credit improvements or deterioration do not affect the nonaccretable difference. The following table documents changes to the amount of accretable yield for 2017 and 2016.
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Allowance for Loan and Lease Losses | The following tables provide information on non-PCI impaired loans and leases, exclusive of loans and leases evaluated collectively as a homogeneous group, including interest income recognized in the period during which the loans and leases were considered impaired.
Non-PCI impaired loans less than $500,000 that are collectively evaluated were $49.1 million and $47.4 million at December 31, 2017 and 2016, respectively. The following tables show the average non-PCI impaired loan balance and the interest income recognized by loan class for the years ended December 31, 2017, 2016 and 2015:
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and Equipment | PREMISES AND EQUIPMENT Major classifications of premises and equipment at December 31, 2017 and 2016 are summarized as follows:
BancShares leases certain premises and equipment under various lease agreements that provide for payment of property taxes, insurance and maintenance costs. Operating leases frequently provide for one or more renewal options on the same basis as current rental terms. However, certain leases require increased rentals under cost of living escalation clauses. Some leases also provide purchase options. Future minimum rental commitments for noncancellable operating leases with initial or remaining terms of one or more years consisted of the following at December 31, 2017:
Total rent expense for all operating leases amounted to $15.2 million in 2017, $13.0 million in 2016 and $13.8 million in 2015, net of rent income, which was $6.6 million, $6.5 million and $6.4 million during 2017, 2016 and 2015, respectively. |
Other Real Estate Owned |
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Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Real Estate Owned | OTHER REAL ESTATE OWNED (OREO) The following table explains changes in other real estate owned during 2017 and 2016.
(1) Transfers include OREO balances associated with expired or terminated shared-loss agreements. At December 31, 2017 and 2016, BancShares had $19.8 million and $15.0 million, respectively, of foreclosed residential real estate property in OREO. The recorded investment in consumer mortgage loans collateralized by residential real estate property in the process of foreclosure was $26.9 million and $21.8 million at December 31, 2017 and December 31, 2016, respectively. |
Receivable from FDIC for Loss Share Agreements |
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FDIC Shared-Loss Receivable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivable from FDIC for Loss Share Agreements | FDIC SHARED-LOSS RECEIVABLE BancShares completed six FDIC-assisted transactions with shared-loss agreements during the period beginning in 2009 through 2011. Prior to its merger into BancShares, First Citizens Bancorporation, Inc. (Bancorporation) completed three FDIC-assisted transactions with shared-loss agreements: Georgian Bank (acquired in 2009); Williamsburg First National Bank (acquired in 2010); and Atlantic Bank & Trust (acquired in 2011). During 2017, FCB entered into an agreement with the FDIC to terminate the shared-loss agreement for Venture Bank (VB). Under the terms of the agreement, FCB made a payment of $285 thousand to the FDIC as consideration for early termination of the shared-loss agreement. The early termination resulted in an adjustment of $240 thousand to the FDIC shared-loss receivable and a $45 thousand loss on the termination of the shared-loss agreement. In addition to the shared-loss agreement termination for VB, FCB terminated five shared-loss agreements in 2016, including Temecula Valley Bank, Sun American Bank, Williamsburg First National Bank, Atlantic Bank & Trust and Colorado Capital Bank. The resulting positive net impact to pre-tax earnings from the early termination of the five FDIC shared-loss agreements in 2016 was $16.6 million. As of December 31, 2017, shared-loss agreements are still active for First Regional Bank (FRB), Georgian Bank (GB) and United Western Bank (UWB). Shared-loss protection remains for single family residential loans acquired from UWB and GB in the amount of $67.8 million. FRB remains in a recovery period, where any recoveries are shared with the FDIC, until March 2020. The following table provides changes in the receivable from the FDIC for the years ended December 31, 2017, 2016 and 2015:
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Deposits |
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Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | DEPOSITS Deposits at December 31 are summarized as follows:
Time deposits with a denomination of $250,000 or more were $414.0 million and $519.7 million at December 31, 2017 and 2016, respectively. At December 31, 2017, the scheduled maturities of time deposits were:
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Short-Term Borrowings |
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Short-term Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term Borrowings | SHORT-TERM BORROWINGS Short-term borrowings at December 31 are as follows:
At December 31, 2017, BancShares had unused credit lines allowing contingent access to overnight borrowings of up to $665.0 million on an unsecured basis. Additionally, under borrowing arrangements with the Federal Reserve Bank of Richmond and Federal Home Loan Bank of Atlanta, BancShares has access to an additional $7.33 billion on a secured basis. |
Repurchase Agreements |
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Repurchase Agreements, Resale Agreements, Securities Borrowed, and Securities Loaned Disclosure [Text Block] | NOTE K REPURCHASE AGREEMENTS BancShares utilizes securities sold under agreements to repurchase to facilitate the needs of our customers and secure wholesale funding needs. Repurchase agreements are transactions whereby BancShares offers to sell to a counterparty an undivided interest in an eligible security at an agreed upon purchase price, and which obligates BancShares to repurchase the security on an agreed upon date at an agreed upon repurchase price plus interest at an agreed upon rate. Securities sold under agreements to repurchase are recorded at the amount of cash received in connection with the transaction and are generally reflected as short-term borrowings on the Consolidated Balance Sheets. BancShares monitors collateral levels on a continuous basis and maintains records of each transaction specifically describing the applicable security and the counterparty’s fractional interest in that security, and segregates the security from general assets in accordance with regulations governing custodial holdings of securities. The primary risk with our repurchase agreements is market risk associated with the investments securing the transactions, as additional collateral may be required based on fair value changes of the underlying investments. Securities pledged as collateral under repurchase agreements are maintained with safekeeping agents. The carrying value of available for sale investment securities pledged as collateral under repurchase agreements was $684.2 million and $690.8 million at December 31, 2017 and December 31, 2016, respectively. The remaining contractual maturity of the securities sold under agreements to repurchase by class of collateral pledged included in borrowings on the Consolidated Balance Sheets as of December 31, 2017 and December 31, 2016 is presented in the following tables.
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Long-Term Obligations |
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Long-term Obligations | LONG-TERM OBLIGATIONS Long-term obligations at December 31 include:
At December 31, 2017, long-term obligations included $120.1 million in junior subordinated debentures representing obligations to FCB/NC Capital Trust III, FCB/SC Capital Trust II, and SCB Capital Trust I, special purpose entities and grantor trusts for $116.5 million of trust preferred securities. FCB/NC Capital Trust III, FCB/SC Capital Trust II and SCB Capital Trust I's (the Trusts) trust preferred securities mature in 2036, 2034 and 2034, respectively, and may be redeemed at par in whole or in part at any time. BancShares has guaranteed all obligations of the Trusts. On January 17, 2018, BancShares prepaid four FHLB advances totaling $325.0 million resulting in a net gain of $13.6 million. On February 7, 2018, BancShares acquired $2.0 million aggregate principal amount of Trust Preferred Securities issued by FCB/NC Capital Trust III. BancShares paid approximately $1.8 million, plus unpaid accrued distributions on the securities for the current distribution period. On February 9, 2018, BancShares prepaid four additional FHLB advances totaling $350.0 million resulting in a net gain of $12.1 million. Long-term obligations maturing in each of the five years subsequent to December 31, 2017 and thereafter include:
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Estimated Fair Values |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Fair Values | ESTIMATED FAIR VALUES Fair value estimates are intended to represent the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. Where there is no active market for a financial instrument, BancShares has made estimates using discounted cash flows or other valuation techniques. Inputs to these valuation techniques are subjective in nature, involve uncertainties and require significant judgment and therefore cannot be determined with precision. Accordingly, the derived fair value estimates presented below are not necessarily indicative of the amounts BancShares could realize in a current market exchange. ASC 820, Fair Value Measurements and Disclosures, indicates that assets and liabilities are recorded at fair value according to a fair value hierarchy comprised of three levels. The levels are based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The level within the fair value hierarchy for an asset or liability is based on the highest level of input that is significant to the fair value measurement (with Level 1 considered highest and Level 3 considered lowest). A brief description of each level follows:
BancShares' management reviews any changes to its valuation methodologies to ensure they are appropriate and justified, and refines valuation methodologies as more market-based data becomes available. Transfers between levels of the fair value hierarchy are recognized at the end of the reporting period. There have been no changes for 2017 or 2016. The methodologies used to estimate the fair value of financial assets and financial liabilities are discussed below: Investment securities available for sale. U.S. Treasury, government agency, mortgage-backed securities, municipal securities, corporate bonds and trust preferred securities are generally measured at fair value using a third party pricing service or recent comparable market transactions in similar or identical securities and are classified as Level 2 instruments. Equity securities are measured at fair value using observable closing prices and the valuation also considers the amount of market activity by examining the trade volume of each security. Equity securities are classified as Level 1 if they are traded on a heavily active market and as Level 2 if the observable closing price is from a less than active market. Loans held for sale. Certain residential real estate loans are originated to be sold to investors are carried at fair value based on quoted market prices for similar types of loans. Accordingly, the inputs used to calculate fair value of originated residential real estate loans held for sale are classified as Level 2 inputs. Portfolio loans that are subsequently transferred to held for sale to be sold in the secondary market are carried at the lower of amortized cost or fair value. The fair value of the transferred portfolio loans is based on the quoted prices and is considered a Level 1 input. Net loans and leases (PCI and Non-PCI). Fair value is estimated based on discounted future cash flows using the current interest rates at which loans with similar terms would be made to borrowers of similar credit quality. An additional valuation adjustment is made for liquidity. The inputs used in the fair value measurements for loans and leases are considered Level 3 inputs. FHLB stock. The carrying amount of FHLB stock is a reasonable estimate of fair value as these securities are not readily marketable and are evaluated for impairment based on the ultimate recoverability of the par value. BancShares considers positive and negative evidence, including the profitability and asset quality of the issuer, dividend payment history and recent redemption experience, when determining the ultimate recoverability of the par value. BancShares believes its investment in FHLB stock is ultimately recoverable at par. The inputs used in the fair value measurement for the FHLB stock are considered Level 2 inputs. Mortgage servicing rights. Mortgage servicing rights are carried at the lower of amortized cost or market and are, therefore, carried at fair value only when fair value is less than the asset cost. The fair value of mortgage servicing rights is performed using a pooling methodology. Similar loans are pooled together and a model that relies on discount rates, estimates of prepayment rates and the weighted average cost to service the loans is used to determine the fair value. The inputs used in the fair value measurement for mortgage servicing rights are considered Level 3 inputs. Deposits. For non-time deposits, carrying value is a reasonable estimate of fair value. The fair value of time deposits is estimated by discounting future cash flows using the interest rates currently offered for deposits of similar remaining maturities. The inputs used in the fair value measurement for deposits are considered Level 2 inputs. Long-term obligations. For fixed rate trust preferred securities, the fair values are determined based on recent trades of the actual security if available. For other long-term obligations, fair values are estimated by discounting future cash flows using current interest rates for similar financial instruments. The inputs used in the fair value measurement for long-term obligations are considered Level 2 inputs. Payable to the FDIC for shared-loss agreements. The fair value of the payable to the FDIC for shared-loss agreements is determined by the projected cash flows based on expected payments to the FDIC in accordance with the shared-loss agreements. Cash flows are discounted using current discount rates to reflect the timing of the estimated amounts due to the FDIC. The inputs used in the fair value measurement for the payable to the FDIC are considered Level 3 inputs. Off-balance-sheet commitments and contingencies. Carrying amounts are reasonable estimates of the fair values for such financial instruments. Carrying amounts include unamortized fee income and, in some cases, reserves for any credit losses from those financial instruments. These amounts are not material to BancShares' financial position. For all other financial assets and financial liabilities, the carrying value is a reasonable estimate of the fair value as of December 31, 2017 and 2016. The carrying value and fair value for these assets and liabilities are equivalent because they are relatively short term in nature and there is no interest rate or credit risk that would cause the fair value to differ from the carrying value. Cash and due from banks is classified on the fair value hierarchy as Level 1. Overnight investments, income earned not collected, short-term borrowings and accrued interest payable are considered Level 2. Lastly, the receivable from the FDIC for shared-loss agreements is designated as Level 3.
Among BancShares’ assets and liabilities, investment securities available for sale and loans held for sale are reported at their fair values on a recurring basis. For assets and liabilities carried at fair value on a recurring basis, the following table provides fair value information as of December 31, 2017 and December 31, 2016.
There were no transfers between levels during the years ended December 31, 2017 and 2016. Fair Value Option BancShares has elected the fair value option for residential real estate loans originated to be sold. This election reduces certain timing differences in the Consolidated Statements of Income and better aligns with the management of the portfolio from a business perspective. The changes in fair value are recorded as a component of mortgage income and were gains of $2.9 million and $176 thousand for the years ended December 31, 2017 and 2015, respectively, and a loss of $2.4 million for the year ended December 31, 2016. The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for residential real estate originated for sale measured at fair value as of December 31, 2017 and 2016.
No originated loans held for sale were 90 or more days past due or on nonaccrual status as of December 31, 2017 and 2016. Certain other assets are adjusted to their fair value on a nonrecurring basis, including impaired loans, OREO, and goodwill, which are periodically tested for impairment, and mortgage servicing rights, which are carried at the lower of amortized cost or market. Non-impaired loans held for investment, deposits, short-term borrowings and long-term obligations are not reported at fair value. Impaired loans are deemed to be at fair value if an associated allowance or current period charge-off has been recorded. The value of impaired loans is determined by either collateral valuations or discounted present value of the expected cash flow calculations. Collateral values are determined using appraisals or other third-party value estimates of the subject property with discounts generally between 6 and 11 percent applied for estimated holding and selling costs and other external factors that may impact the marketability of the property. Expected cash flows are determined using expected payment information at the individual loan level, discounted using the effective interest rate. The effective interest rate generally ranges between 2 and 18 percent. OREO that has been acquired or written down in the current year is deemed to be at fair value, which uses asset valuations. Asset values are determined using appraisals or other third-party value estimates of the subject property with discounts generally between 6 and 11 percent applied for estimated holding and selling costs and other external factors that may impact the marketability of the property. Changes to the value of the assets between scheduled valuation dates are monitored through continued communication with brokers and monthly reviews by the asset manager assigned to each asset. If there are any significant changes in the market or the subject property, valuations are adjusted or new appraisals ordered to ensure the reported values reflect the most current information. Mortgage servicing rights are carried at the lower of cost or market and are, therefore, carried at fair value only when fair value is less than the amortized asset cost. The fair value of mortgage servicing rights is performed using a pooling methodology. Similar loans are pooled together and a discounted cash flow model, which takes into consideration discount rates, prepayment rates, and the weighted average cost to service the loans, is used to determine the fair value. For financial assets and liabilities carried at fair value on a nonrecurring basis, the following table provides fair value information as of December 31, 2017 and December 31, 2016.
No financial liabilities were carried at fair value on a nonrecurring basis as of December 31, 2017 and December 31, 2016. |
Employee Benefit Plans |
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Employee Benefit Plans | EMPLOYEE BENEFIT PLANS FCB sponsors benefit plans for its qualifying employees and former First Citizens Bancorporation, Inc. employees (legacy Bancorporation) including noncontributory defined benefit pension plans, a 401(k) savings plan and an enhanced 401(k) savings plan. These plans are qualified under the Internal Revenue Code. FCB also maintains agreements with certain executives that provide supplemental benefits that are paid upon death or separation from service at an agreed-upon age. Defined Benefit Pension Plans Employees who were hired prior to April 1, 2007 and qualified under length of service and other requirements are covered by a noncontributory defined benefit pension plan (BancShares Plan). The BancShares plan was closed to new participants as of April 1, 2007. Retirement benefits are based on years of service and highest annual compensation for five consecutive years during the last ten years of employment. Covered employees fully vested in the BancShares Plan after five years of service. FCB makes contributions to the pension plan in amounts between the minimum required for funding and the maximum amount deductible for federal income tax purposes. Discretionary contributions of $50.0 million were made to the BancShares Plan during both 2017 and 2016. Management evaluates the need for its pension plan contributions on a periodic basis based upon numerous factors including, but not limited to, the funded status of and returns on the BancShares Plan, discount rates and the current economic environment. Certain legacy Bancorporation employees who qualified under length of service and other requirements are covered by a noncontributory defined benefit pension plan (Bancorporation Plan). The Bancorporation plan was closed to new participants as of September 1, 2007. Retirement benefits are based on years of service and highest average annual compensation for five consecutive years during the last ten years of employment. Covered employees fully vested in the Bancorporation Plan after five years of service. FCB makes contributions to the Bancorporation Plan in amounts between the minimum required for funding and the maximum amount deductible for federal income tax purposes. No contributions were made to the Bancorporation Plan for 2017 and 2016. Management evaluates the need for its pension plan contributions on a periodic basis based upon numerous factors including, but not limited to, the funded status of and returns on the BancShares Plan, discount rates and the current economic environment. Obligations and Funded Status BancShares Plan The following table provides the changes in benefit obligation and plan assets and the funded status of the plan at December 31, 2017 and 2016.
The amounts recognized in the consolidated balance sheets at December 31, 2017 and 2016 consist of:
The following table details the amounts recognized in accumulated other comprehensive income at December 31, 2017 and 2016.
The following table provides expected amortization amounts for 2018.
The accumulated benefit obligation for the plan at December 31, 2017 and 2016 was $659.0 million and $587.3 million, respectively. The BancShares Plan uses a measurement date of December 31. The projected benefit obligation exceeded the fair value of plan assets as of December 31, 2017 and 2016. The fair value of plan assets exceeded the accumulated benefit obligation as of December 31, 2017 and 2016. The following table shows the components of periodic benefit cost related to the pension plan and changes in plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31, 2017, 2016 and 2015.
The assumptions used to determine the benefit obligations at December 31, 2017 and 2016 are as follows:
The assumptions used to determine the net periodic benefit cost for the years ended December 31, 2017, 2016 and 2015, are as follows:
The estimated discount rate, which represents the interest rate that could be obtained for a suitable investment used to fund the benefit obligations, is based on a yield curve developed from high-quality corporate bonds across a full maturity spectrum. The projected cash flows of the pension plan are discounted based on this yield curve and a single discount rate is calculated to achieve the same present value. The weighted average expected long-term rate of return on BancShares Plan assets represents the average rate of return expected to be earned on BancShares Plan assets over the period the benefits included in the benefit obligation are to be paid. In developing the expected rate of return, historical and current returns, as well as investment allocation strategies, on BancShares Plan assets are considered. Bancorporation Plan The following table provides the changes in benefit obligation and plan assets and the funded status of the plan at December 31, 2017 and 2016.
The amounts recognized in the consolidated balance sheets at December 31, 2017 and 2016 consist of:
The following table details the amounts recognized in accumulated other comprehensive loss at December 31, 2017 and 2016.
The following table provides expected amortization amounts for 2018.
The accumulated benefit obligation for the plan at December 31, 2017 and 2016 was $157.6 million and $143.7 million, respectively. The Bancorporation Plan uses a measurement date of December 31. The projected benefit obligation exceeded the fair value of plan assets as of December 31, 2017 and 2016. The fair value of plan assets exceeded the accumulated benefit obligation as of December 31, 2017 and 2016. The following table shows the components of periodic benefit cost related to the pension plan and changes in plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31, 2017, 2016 and 2015.
The assumptions used to determine the benefit obligations at December 31, 2017 and 2016 are as follows:
The assumptions used to determine the net periodic benefit cost for the years ended December 31, 2017, 2016 and 2015 are as follows:
The estimated discount rate, which represents the interest rate that could be obtained for a suitable investment used to fund the benefit obligations, is based on a yield curve developed from high-quality corporate bonds across a full maturity spectrum. The projected cash flows of the pension plan are discounted based on this yield curve and a single discount rate is calculated to achieve the same present value. The weighted average expected long-term rate of return on Bancorporation Plan assets represents the average rate of return expected to be earned on Bancorporation Plan assets over the period the benefits included in the benefit obligation are to be paid. In developing the expected rate of return, historical and current returns, as well as investment allocation strategies, on Bancorporation Plan assets are considered. Plan Assets For the BancShares Plan and Bancorporation Plan, our primary total return objective is to achieve returns that, over the long term, will fund retirement liabilities and provide for the desired plan benefits in a manner that satisfies the fiduciary requirements of the Employee Retirement Income Security Act. The plan assets have a long-term time horizon that runs concurrent with the average life expectancy of the participants. As such, the Plans can assume a time horizon that extends well beyond a full market cycle and can assume a reasonable level of risk. It is expected, however, that both professional investment management and sufficient portfolio diversification will smooth volatility and help to generate a reasonable consistency of return. The investments are broadly diversified across global, economic and market risk factors in an attempt to reduce volatility and target multiple return sources. Within approved guidelines and restrictions, the investment manager has discretion over the timing and selection of individual investments. Plan assets are currently held by FCB Trust Department. BancShares Plan The fair values of pension plan assets at December 31, 2017 and 2016, by asset class are as follows:
Cash and equivalents comprise approximately 9 percent of BancShares actual plan assets at December 31, 2017, exceeding the target allocation range due to the $50.0 million contribution to the plan in December 2017. Bancorporation Plan
Cash Flows Following are estimated payments to pension plan participants in the indicated periods for each plan:
401(k) Savings Plans Effective January 1, 2015, FCB merged the legacy Bancorporation 401(k) savings plan and Bancorporation enhanced 401(k) savings plan into the existing BancShares 401(k) savings plan and BancShares enhanced 401(k) savings plan. Participation in and terms of the FCB 401(k) plan and enhanced 401(k) plan did not change as a result of the mergers. Certain employees enrolled in the defined benefit plan are also eligible to participate in a 401(k) savings plan through deferral of portions of their salary. For employees who participate in the 401(k) savings plan who also continue to accrue additional years of service under the defined benefit plan, FCB makes a makes a matching contribution equal to 100 percent of the first 3 percent and 50 percent of the next 3 percent of the participant's deferral up to and including a maximum contribution of 4.5 percent of the participant's eligible compensation. The matching contribution immediately vests. At the end of 2007, current employees were given the option to continue to accrue additional years of service under the defined benefit plan or to elect to join an enhanced 401(k) savings plan. Under the enhanced 401(k) savings plan, FCB matches up to 100 percent of the participant's deferrals not to exceed 6 percent of the participant's eligible compensation. The matching contribution immediately vests. In addition to the employer match of the employee contributions, the enhanced 401(k) savings plan provides a guaranteed contribution equal to 3 percent of the compensation of a participant who remains employed at the end of the calendar year. Employees who elected to enroll in the enhanced 401(k) savings plan discontinued the accrual of additional years of service under the defined benefit plan and became enrolled in the enhanced 401(k) savings plan effective January 1, 2008. Eligible employees hired after January 1, 2008, are eligible to participate in the enhanced 401(k) savings plan. FCB made participating contributions to the 401(k) plans of $25.3 million, $23.5 million and $22.6 million during 2017, 2016 and 2015, respectively. Additional Benefits for Executives and Directors and Officers of Acquired Entities FCB has entered into contractual agreements with certain executives that provide payments for a period of no more than ten years following separation from service that occurs no earlier than an agreed-upon age. These agreements also provide a death benefit in the event a participant dies prior to separation from service or during the payment period following separation from service. FCB has also assumed liability for contractual obligations to directors and officers of previously-acquired entities. The following table provides the accrued liability as of December 31, 2017 and 2016, and the changes in the accrued liability during the years then ended:
Other Compensation Plans FCB offers various short-term and long-term incentive plans for certain employees. Compensation awarded under these plans may be based on defined formulas or other performance criteria, or it may be at the discretion of management. The incentive compensation programs were designed to motivate employees through a balanced approach of risk and reward for their contributions toward FCB's success. As of December 31, 2017 and 2016, the accrued liability for incentive compensation was $33.4 million and $28.4 million, respectively. |
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Other Noninterest Income and Other Noninterest Expense | OTHER NONINTEREST INCOME AND OTHER NONINTEREST EXPENSE Other noninterest income for the years ended December 31, 2017, 2016 and 2015 was $47.8 million, $34.2 million and $36.4 million, respectively. The most significant item in other noninterest income was recoveries on PCI loans that have been previously charged-off. BancShares records the portion of recoveries not covered under shared-loss agreements as noninterest income rather than as an adjustment to the allowance for loan losses. These recoveries were $21.1 million, $20.1 million and $21.2 million for the years ended December 31, 2017, 2016 and 2015, respectively. Charge-offs on PCI loans are recorded against the discount recognized on the date of acquisition versus through the allowance for loan losses unless an allowance was established subsequent to the acquisition date due to declining expected cash flow. Additionally, another large increase in other noninterest income in 2017 was related to the early termination of two forward starting FHLB advances that resulted in a gain of $12.5 million. Other noninterest expense for the years ended December 31, 2017, 2016 and 2015 included the following:
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES At December 31, income tax expense consisted of the following:
Income tax expense differed from the amounts computed by applying the federal income tax rate of 35 percent to pretax income as a result of the following:
The net deferred tax asset included the following components at December 31:
At December 31, 2017, $12.8 million of existing gross deferred tax assets relate to net operating loss carryforwards which expire in years beginning in 2024 through 2034. The net operating losses were acquired through the acquisition of Cordia and are subject to the annual limitation set forth by Internal Revenue Code Section 382. No valuation allowance was necessary as of December 31, 2017 to reduce BancShares’ gross deferred tax asset to the amount that is more likely than not to be realized. The Tax Act was enacted on December 22, 2017. The SEC issued Staff Accounting Bulletin No. 118 to address uncertainty in applying ASC Topic 740 in the reporting period in which the Tax Act was enacted. The Tax Act included a reduction to the corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. Tax expense was increased in the fourth quarter by a provisional $25.8 million to reflect the Tax Act changes. This increase includes additional tax expense related to our investments in low income housing tax credits and revaluation of the deferred tax asset for items charged or credited directly to AOCI. The revaluation of the deferred tax asset related to items that are charged or credited directly to AOCI was a component of 2017 income tax expense and recognized in continuing operations as required by ASC Topic 740. The ultimate impact may differ from this provisional amount due to additional analysis, changes in interpretations and assumptions and additional regulatory guidance that may be issued. The provisional amount is expected to be finalized when the 2017 U.S. Corporate income tax return is filed in 2018. During the second quarter of 2017 and third quarter of 2016, BancShares adjusted its net deferred tax asset as a result of reductions in the North Carolina corporate income tax rate that were enacted June 28, 2017 and July 23, 2013, respectively. The lower corporate income tax rate resulted in a reduction in the deferred tax asset and an increase in income tax expense in 2017 and 2016. The lower state corporate income tax rate did not have a material impact on income tax expense. BancShares and its subsidiaries' federal income tax returns for 2014 through 2016 remain open for examination. Generally, the state jurisdictions in which BancShares files income tax returns are subject to examination for a period up to four years after returns are filed. BancShares' state tax returns are currently under exam by North Carolina for 2012 through 2015, California for 2011 through 2015 and Florida for 2012 through 2013. The following table provides a rollforward of Bancshares’ gross unrecognized tax benefits, excluding interest and penalties, during the years ended December 31:
All of the unrecognized tax benefits, if recognized, would affect Bancshares’ effective tax rate. BancShares has unrecognized tax benefits relating to uncertain state tax positions in North Carolina and other state jurisdictions resulting from tax filings submitted to the states. No tax benefit has been recorded for these uncertain tax positions in the financial statements. Bancshares does not expect the unrecognized tax benefits to change significantly during 2018. BancShares recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. For the years ended December 31, 2017, 2016 and 2015, Bancshares recorded $450 thousand, $357 thousand and $298 thousand which primarily represent accrued interest. |
Transactions with Related Persons |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transactions with related persons | TRANSACTIONS WITH RELATED PERSONS BancShares has, and expects to have in the future, banking transactions in the ordinary course of business with directors, officers and their associates (Related Persons) and entities that are controlled by Related Persons. For those identified as Related Persons as of December 31, 2017, the following table provides an analysis of changes in the loans outstanding during 2017 and 2016:
Unfunded loan commitments available to Related Persons were $2.1 million and $1.8 million as of December 31, 2017 and 2016, respectively. |
Derivatives |
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Dec. 31, 2017 | |
Summary of Derivative Instruments [Abstract] | |
Derivatives | DERIVATIVES BancShares had an interest rate swap entered into during 2011 that qualified as a cash flow hedge under GAAP. The interest rate swap agreement expired in June 2016. At December 31, 2015, the interest rate swap had a notional amount of $0.0 million and the fair value of the outstanding derivative, which was included in the Consolidated Balance Sheets, was $0.0 million. The net change in fair value was included in the Consolidated Statements of Cash Flows under the caption net change in other liabilities. For the year ended December 31, 2016, BancShares recognized interest expense of $0.0 million, and for the years ended December 31, 2015 and 2014, recognized interest expense of $1.5 million for both periods, resulting from incremental interest paid to the interest rate swap counterparty, none of which related to ineffectiveness. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill was $150.6 million at December 31, 2017 and 2016, with no impairment recorded during 2017, 2016 and 2015. The following table presents the changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016:
Mortgage Servicing Rights Our portfolio of residential mortgage loans serviced for third parties was $2.81 billion, $2.49 billion and $2.15 billion as of December 31, 2017, 2016 and 2015, respectively. These loans were originated by BancShares and sold to third parties on a non-recourse basis with servicing rights retained. These retained servicing rights are recorded as a servicing asset and reported in other intangible assets on the Consolidated Balance Sheets. The mortgage servicing rights are initially recorded at fair value and then carried at the lower of amortized cost or fair market value. The activity of the servicing asset for the years ended December 31, 2017, 2016 and 2015 is presented in the following table:
The following table presents the activity in the servicing asset valuation allowance for the years ended December 31, 2017, 2016 and 2015:
Contractually specified mortgage servicing fees, late fees, and ancillary fees earned for the years ended December 31, 2017, 2016 and 2015 were $7.1 million, $5.8 million, and $5.4 million, respectively, and reported in mortgage income in the Consolidated Statements of Income. Valuation of mortgage servicing rights is performed using a pooling methodology. Similar loans are pooled together and evaluated on a discounted earnings basis to determine the present value of future earnings. Key economic assumptions used to value mortgage servicing rights as of December 31, 2017 and 2016 were as follows:
Other Intangible Assets Core deposit intangibles comprise the majority of the other intangible assets as of December 31, 2017 and 2016. Intangible assets generated by acquisitions, which represent the estimated fair value of core deposits and other customer relationships that were acquired, are being amortized on an accelerated basis over their estimated useful lives. The estimated useful remaining lives range from 1 year to less than 8 years. The following information relates to other intangible assets, all customer-related, which are being amortized over their estimated useful lives:
The gross amount of other intangible assets and accumulated amortization as of December 31, 2017 and 2016, are:
Based on current estimated useful lives and carrying values, BancShares anticipates amortization expense for intangible assets in subsequent periods will be:
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Shareholders' Equity, Dividends Restrictions and Other Regulatory Matters |
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Regulatory Capital Requirements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity, Dividend Restrictions and Other Regulatory Matters | SHAREHOLDERS' EQUITY, DIVIDEND RESTRICTIONS AND OTHER REGULATORY MATTERS BancShares and FCB are required to meet minimum capital requirements set forth by regulatory authorities. Bank regulatory agencies approved regulatory capital guidelines (Basel III) aimed at strengthening existing capital requirements for banking organizations. Under Basel III, requirements include a common equity Tier 1 ratio minimum of 4.50 percent, Tier 1 risk-based capital minimum of 6.00 percent, total risk-based capital ratio minimum of 8.00 percent and Tier 1 leverage capital ratio minimum of 4.00 percent. Failure to meet minimum capital requirements may result in certain actions by regulators that could have a direct material effect on the consolidated financial statements. A new capital conservation buffer, comprised of common equity Tier 1 capital, was also established by Basel III above the regulatory minimum requirements. This capital conservation buffer was phased in beginning January 1, 2016 at 0.625 percent of risk-weighted assets and will increase each subsequent year by an additional 0.625 percent until reaching its final level of 2.50 percent on January 1, 2019. Basel III became effective for BancShares on January 1, 2015, with full compliance of all Basel III requirements phased in over a multi-year schedule, to be fully phased in by January 1, 2019. Based on the most recent notifications from its regulators, FCB is well-capitalized under the regulatory framework for prompt corrective action. As of December 31, 2017, BancShares and FCB met all capital adequacy requirements to which they are subject and were not aware of any conditions or events that would affect each entity's well-capitalized status. Following is an analysis of capital ratios under Basel III guidelines for BancShares and FCB as of December 31, 2017 and 2016:
BancShares and FCB had capital conservation buffers above minimum total risk-based capital requirements of 6.21 percent and 5.46 percent, respectively, at December 31, 2017. The buffers exceed the 1.25 percent requirement and, therefore, result in no limit on distributions. BancShares had no trust preferred capital securities included in Tier 1 capital at December 31, 2017 and December 31, 2016 under Basel III guidelines. Trust preferred capital securities continue to be a component of total risk-based capital. At December 31, 2017, Tier 2 capital of BancShares included no amount of qualifying subordinated debt with a scheduled maturity date of June 18, 2018 compared to $3.0 million at December 31, 2016. Under current regulatory guidelines, when subordinated debt is within five years of its scheduled maturity date, issuers must discount the amount included in Tier 2 capital by 20 percent for each year until the debt matures. Once the debt is within one year of its scheduled maturity date, no amount of the debt is allowed to be included in Tier 2 capital. BancShares has two classes of common stock—Class A common and Class B common. Shares of Class A common have one vote per share, while shares of Class B common have 16 votes per share. During 2017, our Board authorized the purchase of up to 800,000 shares of our Class A common stock. The shares may be purchased from time to time at management's discretion from November 1, 2017 through October 31, 2018. It does not obligate BancShares to purchase any particular amount of shares and purchases may be suspended or discontinued at any time. The Board's action replaced existing authority to purchase up to 200,000 shares in effect during the twelve months preceding November 1, 2017. As of December 31, 2017, no purchases had occurred pursuant to either authorization. The Board of Directors of FCB may approve distributions, including dividends, as it deems appropriate, subject to the requirements of the FDIC and the General Statutes of North Carolina, provided that the distributions do not reduce capital below applicable capital requirements. As of December 31, 2017, the maximum amount of the dividend was limited to $1.07 billion to preserve well-capitalized status. Dividends declared by FCB and paid to BancShares amounted to $50.4 million in 2017, $90.1 million in 2016 and $75.0 million in 2015. BancShares and FCB are subject to various requirements imposed by state and federal banking statutes and regulations, including regulations requiring the maintenance of noninterest-bearing reserve balances at the Federal Reserve Bank. Banks are allowed to reduce the required balances by the amount of vault cash. For 2017, the requirements averaged $625.7 million. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES To meet the financing needs of its customers, BancShares and its subsidiaries have financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit, standby letters of credit and recourse obligations on mortgage loans sold. These instruments involve elements of credit, interest rate or liquidity risk. Commitments to extend credit are legally binding agreements to lend to customers. Commitments generally have fixed expiration dates or other termination clauses and may require payment of fees. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future liquidity requirements. Established credit standards control the credit risk exposure associated with these commitments. In some cases, BancShares requires that collateral be pledged to secure the commitment, including cash deposits, securities and other assets. Standby letters of credit are commitments guaranteeing performance of a customer to a third party. Those commitments are primarily issued to support public and private borrowing arrangements, and the fair value of those commitments is not material. To mitigate its risk, BancShares’ credit policies govern the issuance of standby letters of credit. The credit risk related to the issuance of these letters of credit is essentially the same as that involved in extending loans to clients and, therefore, these letters of credit are collateralized when necessary. The following table presents the commitments to extend credit and unfunded commitments as of December 31, 2017 and 2016:
Pursuant to standard representations and warranties relating to residential mortgage loan sales sold on a non-recourse basis, contingent obligations exist for various events that may occur following the loan sale. If underwriting or documentation deficiencies are discovered at any point in the life of the loan or if the loan fails to perform per the terms of the loan purchase agreement, typically within 180 days from the date of sale, the investor may require BancShares to repurchase the loan or to repay a portion of the sale proceeds. Other liabilities included reserves of $882 thousand and $3.0 million as of December 31, 2017 and 2016, respectively, for estimated losses arising from these standard representation and warranty provisions. The methodology used to estimate the loan repurchase obligation was enhanced during 2017. The enhancements resulted in lower required reserves as of December 31, 2017. BancShares has a receivable from the FDIC totaling $2.2 million and $4.2 million as of December 31, 2017 and 2016, respectively, for the expected reimbursement of losses on assets covered under the various shared-loss agreements. The shared-loss agreements are subject to interpretation by both the FDIC and BancShares, and disagreements may arise regarding coverage of losses, expenses and contingencies and requests for reimbursement may be delayed or disallowed for noncompliance. See Note H for additional information on the receivable from the FDIC regarding the early termination of a shared-loss agreement during 2017. The shared-loss agreements for two FDIC-assisted transactions, FRB and UWB, include provisions related to payments that may be owed to the FDIC at the termination of the agreements (clawback liability).The clawback liability represents a payment by BancShares to the FDIC if actual cumulative losses on acquired covered assets are lower than the cumulative losses originally estimated by the FDIC at the time of acquisition. The clawback liability is estimated by discounting estimated future payments and is recorded in the Consolidated Balance Sheets as a payable to the FDIC under the relevant shared-loss agreements. As of December 31, 2017 and 2016, the clawback liability was $101.3 million and $97.0 million, respectively. The clawback liability payment dates for FRB and UWB are March 2020 and March 2021, respectively. BancShares entered into forward-starting advances with the FHLB of Atlanta in June 2016 to receive $200.0 million of fixed rate long-term funding. There were two advances of $100.0 million each scheduled to fund in June 2018 but both advances were terminated in December 2017. BancShares received cash of $12.5 million associated with the early termination and recorded this as a gain in other noninterest income in the Consolidated Statements of Income. BancShares and various subsidiaries have been named as defendants in legal actions arising from their normal business activities in which damages in various amounts are claimed. BancShares is also exposed to litigation risk relating to the prior business activities of banks from which assets were acquired and liabilities assumed in the various merger transactions. Although the amount of any ultimate liability with respect to such matters cannot be determined, in the opinion of management, any such liability will not have a material effect on BancShares’ consolidated financial statements. |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME Accumulated other comprehensive loss included the following at December 31, 2017 and 2016:
The following table highlights changes in accumulated other comprehensive (loss) income by component for the years ended December 31, 2017 and 2016:
(1) All amounts are net of tax. Amounts in parentheses indicate debits. The following table presents the amounts reclassified from accumulated other comprehensive (loss) income and the line item affected in the statement where net income is presented for the twelve months ended December 31, 2017 and 2016:
(1) Amounts in parentheses indicate debits to profit/loss. |
Parent Company Financial Statements |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Parent Company Financial Statements | PARENT COMPANY FINANCIAL STATEMENTS
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Subsequent Events |
12 Months Ended |
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Subsequent Event [Line Items] | |
Subsequent Events | SUBSEQUENT EVENTS |
Accounting Policies and Basis of Presentation (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||
Nature of Operations | Nature of Operations First Citizens BancShares, Inc. (BancShares) is a financial holding company organized under the laws of Delaware and conducts operations through its banking subsidiary, First-Citizens Bank & Trust Company (FCB), which is headquartered in Raleigh, North Carolina. FCB operates 545 branches in Arizona, California, Colorado, Florida, Georgia, Illinois, Kansas, Maryland, Minnesota, Missouri, New Mexico, North Carolina, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia and Wisconsin. FCB provides full-service banking services designed to meet the needs of retail and commercial customers in the markets in which they operate. The services provided include transaction and savings deposit accounts, commercial and consumer loans, trust and asset management. Investment services, including sales of annuities and third party mutual funds are offered through First Citizens Investor Services, Inc. (FCIS), title insurance is offered through Neuse Financial Services, Inc., and investment advisory services are provided through First Citizens Asset Management, Inc. (FCAM). |
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Principles of Consolidation and Segment Reporting | Principles of Consolidation and Segment Reporting The accounting and reporting policies of BancShares and its subsidiaries are in accordance with accounting principles generally accepted in the United States of America (GAAP). Additionally, where applicable, BancShares' policies conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. The consolidated financial statements of BancShares include the accounts of BancShares and its subsidiaries that are majority or wholly-owned, certain partnership interests, and variable interest entities. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies or assets acquired are included only from the dates of acquisition. BancShares operates with centralized management and combined reporting, thus BancShares operates as one consolidated reportable segment. FCB has investments in certain partnerships and limited liability entities primarily for the purposes of fulfilling Community Reinvestment Act requirements and/or obtaining tax credits. These entities have been evaluated and determined to be variable interest entities (VIEs). VIEs are legal entities in which equity investors do not have sufficient equity at risk for the entity to independently finance its activities without additional subordinated financial support or, as a group, the holders of the equity investment at risk lack the power through voting or similar rights to direct the activities of the entity that most significantly impact its economic performance, or do not have the obligation to absorb the expected losses of the entity or the right to receive expected residual returns of the entity. Consolidation of a VIE is considered appropriate if a reporting entity holds a controlling financial interest in the VIE. Management concluded that FCB is not the primary beneficiary and does not hold a controlling interest in the VIEs as it does not have the power to direct the activities that most significantly impact the VIEs economic performance. Assets and liabilities of these entities are not consolidated into the financial statements of FCB or BancShares. The recorded investment in these entities is reported within other assets in the Consolidated Balance Sheets. |
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Reclassifications | Reclassifications In certain instances, amounts reported in prior years' consolidated financial statements have been reclassified to conform to the current financial statement presentation. Such reclassifications had no effect on previously reported cash flows, shareholders' equity or net income. |
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Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates, and different assumptions in the application of these policies could result in material changes in BancShares' consolidated financial position, the consolidated results of its operations or related disclosures. Material estimates that are particularly susceptible to significant change include:
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Business Combinations | Business Combinations BancShares accounts for all business combinations using the acquisition method of accounting. Under this method of accounting, acquired assets and assumed liabilities are included with the acquirer's accounts as of the date of acquisition, with any excess of purchase price over the fair value of the net assets acquired recognized as either finite lived intangibles or capitalized as goodwill. In addition, acquisition-related costs and restructuring costs are recognized as period expenses as incurred. See Note B for additional information regarding Business Combinations. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and due from banks, interest-bearing deposits with banks and federal funds sold. Cash and cash equivalents have initial maturities of three months or less. The carrying value of cash and cash equivalents approximates its fair value due to its short-term nature. |
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Investment Securities | Investment Securities BancShares classifies marketable investment securities as held to maturity, available for sale or trading. At December 31, 2017 and 2016, BancShares had no investment securities held for trading purposes. Interest income and dividends on securities are recognized in interest income on an accrual basis. Premiums and discounts on debt securities are amortized as an adjustment to interest income using the interest method. Debt securities are classified as held to maturity where BancShares has both the intent and ability to hold the securities to maturity. These securities are reported at amortized cost. Investment securities that may be sold to meet liquidity needs arising from unanticipated deposit and loan fluctuations, changes in regulatory capital requirements or unforeseen changes in market conditions, are classified as available for sale. Securities available for sale are reported at estimated fair value, with unrealized gains and losses reported in accumulated other comprehensive income or loss, net of deferred income taxes, in the shareholders' equity section of the Consolidated Balance Sheets. Gains or losses realized from the sale of securities available for sale are determined by specific identification on a trade date basis and are included in noninterest income. BancShares evaluates each held to maturity and available for sale security in a loss position for other-than-temporary impairment (OTTI) at least quarterly. BancShares considers such factors as the length of time and the extent to which the market value has been below amortized cost, long term expectations and recent experience regarding principal and interest payments, BancShares' intent to sell, and whether it is more likely than not that it would be required to sell those securities before the anticipated recovery of the amortized cost basis. The credit component of an OTTI loss is recognized in earnings and the non-credit component is recognized in accumulated other comprehensive income in situations where BancShares does not intend to sell the security, and it is more likely than not that BancShares will not be required to sell the security prior to recovery. Non-marketable Securities Federal law requires a member institution of the Federal Home Loan Bank (FHLB) system to purchase and hold restricted stock of its district FHLB according to a predetermined formula. This stock is restricted in that it may only be sold to the FHLB and all sales must be at par. Accordingly, the FHLB restricted stock is carried at cost, less any applicable impairment charges. Non-marketable securities are periodically evaluated for impairment. BancShares considers positive and negative evidence, including the profitability and asset quality of the issuer, dividend payment history and recent redemption experience when determining the ultimate recoverability of the recorded investment. Non-marketable securities are recorded within other assets in the Consolidated Balance Sheets. FHLB and non-marketable securities were $53.0 million and $43.8 million at December 31, 2017 and 2016, respectively. Investments in Qualified Affordable Housing Projects BancShares and FCB have investments in certain partnerships and limited liability entities that typically include qualified affordable housing projects primarily for the purposes of fulfilling Community Reinvestment Act requirements and obtaining tax credits. These investments are accounted for using the proportional amortization method if certain conditions are met. Under the proportional amortization method, the initial cost of the investment is amortized in proportion to the tax credits and other tax benefits received and the net investment performance is recognized in the income statement as a component of income tax expense. All of the investments held in qualified affordable housing projects qualify for the proportional amortization method and were $128.0 million and $109.8 million at December 31, 2017 and December 31, 2016, respectively, and are included in other assets on the Consolidated Balance Sheets. |
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Loans Held For Sale | Loans Held For Sale BancShares elected to apply the fair value option for new originations of prime residential mortgage loans to be sold. BancShares elected the fair value option and accounts for the forward commitments used to economically hedge the loans held for sale at fair value. Gains and losses on sales of mortgage loans are recognized in the Consolidated Statements of Income in mortgage income. Origination fees collected are deferred and recorded in mortgage income in the period the corresponding loan is sold. |
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Loans and Leases | Loans and Leases BancShares' accounting methods for loans and leases differ depending on whether they are purchased credit impaired (PCI) or non-PCI loans. All acquired loans are recorded at fair value at the date of acquisition. Non-Purchased Credit Impaired (Non-PCI) Loans and Leases Loans and leases for which management has the intent and ability to hold for the foreseeable future are classified as held for investment and carried at the principal amount outstanding net of any unearned income, charge-offs and unamortized fees and costs. Nonrefundable fees collected and certain direct costs incurred related to loan originations are deferred and recorded as an adjustment to loans and leases outstanding. The net amount of the nonrefundable fees and costs is amortized to interest income over the contractual lives using methods that approximate a constant yield. Non-PCI loans include originated commercial, originated noncommercial, purchased non-credit impaired loans and leases and certain purchased revolving credit. Purchased non-credit impaired loans are acquired loans that do not reflect credit deterioration at acquisition. The difference between fair value and unpaid principal balance of the loan at the acquisition date is amortized or accreted to interest income over the estimated life of the loans using the effective interest method or on a straight-line basis for revolving credits. Purchased Credit Impaired (PCI) Loans PCI loans are recorded at fair value at the date of acquisition. No allowance for loan and lease losses is recorded on the acquisition date as the fair value of the acquired assets incorporates assumptions regarding credit risk. PCI loans are evaluated at acquisition and where a discount is required at least in part due to credit, the loans are accounted for under the guidance in Accounting Standard Codification (ASC) 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. PCI loans reflect credit deterioration since origination such that it is probable at acquisition that BancShares will be unable to collect all contractually required payments. If the timing and amount of the future cash flows is reasonably estimable, any excess of cash flows expected at acquisition over the estimated fair value are recognized as interest income over the life of the loans using the effective yield method. Subsequent to the acquisition date, increases in cash flows over those expected at the acquisition date are recognized prospectively as interest income. Decreases in expected cash flows due to credit deterioration are recognized by recording an allowance for loan losses. |
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Impaired Loans, Troubled Debt Restructurings (TDR) and Nonperforming Assets | Impaired Loans, Troubled Debt Restructurings (TDR) and Nonperforming Assets Management will deem non-PCI loans and leases to be impaired when, based on current information and events, it is probable that a borrower will be unable to pay all amounts due according to the contractual terms of the loan agreement. Generally, management considers the following loans to be impaired: all TDR loans, commercial and consumer relationships which are nonaccrual or 90+ days past due and greater than $500,000 as well as any other loan management deems impaired. Non-PCI loans and leases $500,000 and greater are individually evaluated for impairment where as those less than $500,000 are collectively evaluated for impairment. When the ultimate collectability of an impaired loan's principal is doubtful, all cash receipts are applied to principal. Once the recorded principal balance has been reduced to zero, future cash receipts are applied first to all previously charged-off principal until fully collected, then to interest income, to the extent that any interest has been foregone. A loan is considered a TDR when both of the following occur: (1) a modification to a borrower's debt agreement is made and (2) a concession is granted for economic or legal reasons related to a borrower's financial difficulties that otherwise would not be granted. TDRs are undertaken in order to improve the likelihood of collection on the loan and may result in a stated interest rate lower than the current market rate for new debt with similar risk, other modifications to the structure of the loan that fall outside of normal underwriting policies and procedures or, in certain limited circumstances, forgiveness of principal or interest. Loans that have been restructured as a TDR are treated and reported as such for the remaining life of the loan. Modifications of PCI loans that are part of a pool accounted for as a single asset are not designated as TDRs. Modifications of non-pooled PCI loans are designated as TDRs in the same manner as non-PCI loans and leases. TDRs can be loans remaining on nonaccrual, moving to nonaccrual or continuing on accruing status, depending on the individual facts and circumstances of the borrower. In circumstances where a portion of the loan balance is charged-off, BancShares typically classifies the remaining balance as nonaccrual. In connection with commercial TDRs, the decision to maintain accrual status for loans that have been restructured is based on a current credit evaluation of the borrower's financial condition and prospects for repayment under the modified terms. This evaluation includes consideration of the borrower's current capacity to pay, which may include a review of the borrower's current financial statements, an analysis of cash flow documenting the borrower's capacity to pay all debt obligations and an evaluation of secondary sources of payment from the borrower and any guarantors. This process also includes an evaluation of the borrower's payment history, an evaluation of the borrower's willingness to provide information on a timely basis and consideration of offers from the borrower to provide additional collateral or guarantor support. The credit evaluation also reflects consideration of the adequacy of collateral, where applicable, to cover all principal and interest and trends indicating improving profitability and collectability of receivables. Nonperforming assets include nonaccrual loans and leases and foreclosed property. Foreclosed property consists of real estate and other assets acquired as a result of loan defaults. BancShares classifies all non-PCI loans and leases as past due when the payment of principal and interest based upon contractual terms is greater than 30 days delinquent. Generally, commercial loans are placed on nonaccrual status when principal or interest becomes 90 days past due or when it is probable that principal or interest is not fully collectible, whichever occurs first. Once a loan is placed on nonaccrual status it is evaluated for impairment and a charge-off is recorded in the amount of the impairment if the loss is deemed confirmed. Consumer loans are subject to mandatory charge-off at a specified delinquency date consistent with regulatory guidelines. Generally, when loans and leases are placed on nonaccrual status all previously uncollected accrued interest is reversed from interest income. All payments received thereafter are applied as a reduction of the remaining principal balance as long as doubt exists as to the ultimate collection of the principal. Loans and leases, including TDRs, are generally removed from nonaccrual status when they become current as to both principal and interest, the borrower has demonstrated a sustained period of repayment performance for a reasonable period, generally a minimum of six months, and doubt no longer exists as to the collectability of principal and interest. |
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Other Real Estate Owned (OREO) | Other Real Estate Owned (OREO) OREO acquired as a result of foreclosure is initially recorded at the asset’s estimated fair value less costs to sell. Any excess in the recorded investment in the loan over the estimated fair value less costs to sell is charged-off against the allowance for loan losses at the time of foreclosure. OREO is subsequently carried at the lower of cost or market less estimated selling costs. OREO is subject to at least annual periodic evaluations of the underlying collateral. The periodic evaluations are generally based on the appraised value of the property and may include additional adjustments based upon management's review of the valuation and specific knowledge of the OREO. Routine maintenance costs, income and expenses related to the operation of the foreclosed asset, subsequent declines in market value and net gains or losses on disposal are included in foreclosure-related expense. |
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Covered Assets and Receivable from FDIC for Shared-Loss Agreements | Covered Assets and Receivable from FDIC for Shared-Loss Agreements Assets subject to shared-loss agreements with the FDIC include certain loans and leases and OREO. These shared-loss agreements afford BancShares significant protection as they cover realized losses on certain loans and other assets purchased from the FDIC during the time period specified in the agreements. Realized losses covered include loan contractual balances, accrued interest on loans for up to 90 days, the book value of foreclosed real estate acquired and certain direct costs, less cash or other consideration received by BancShares. The FDIC indemnification asset is a receivable recorded for expected losses incurred by the bank subject to shared-loss agreements where the FDIC reimburses a certain percentage (dependent on each agreement). The indemnification asset is measured on the same basis as the underlying assets and initially valued during the same time period. Subsequent to initial valuation, the indemnification asset is adjusted quarterly for changes in loss expectations. The indemnification asset is amortized based on the calculated remaining difference between the carrying value of the indemnification assets and the gross undiscounted cash flows of the asset over the remaining contractual life of the loans or the respective shared-loss agreement, whichever is shorter. |
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Payable to the FDIC for Loss Share Agreements | Payable to the FDIC for Shared-Loss Agreements The purchase and assumption agreements for certain FDIC-assisted transactions include payments that may be owed to the FDIC at the termination of the shared-loss agreements. The payment is due to the FDIC if actual cumulative losses on acquired covered assets are lower than the cumulative losses originally estimated by the FDIC at the time of acquisition. The liability is calculated by discounting estimated future payments and is reported in the Consolidated Balance Sheets as an FDIC shared-loss payable. The ultimate settlement amount of the payment is dependent upon the performance of the underlying covered loans, recoveries, the passage of time and actual claims submitted to the FDIC. |
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Allowance for Loan and Lease Losses (ALLL) | Allowance for Loan and Lease Losses (ALLL) The ALLL represents management's best estimate of probable credit losses within the loan and lease portfolio at the balance sheet date. Management determines the ALLL based on an ongoing evaluation of the loan portfolio. Estimates for loan losses are determined by analyzing historical loan losses, historical loan migration to charge-off experience, current trends in delinquencies and charge-offs, expected cash flows on PCI loans, current assessment of impaired loans, changes in the size, and composition and risk assessment of the loan portfolio. This allowance estimate also contains qualitative components that allow management to adjust reserves based on changes in the economic environment and other factors not captured in the quantitative calculation. Adjustments to the ALLL are recorded with a corresponding entry to provision for loan and lease losses. Loan balances deemed to be uncollectible are charged-off against the ALLL. Recoveries of amounts previously charged-off are generally credited to the ALLL. Accounting standards require the presentation of certain ALLL information at the portfolio segment level, which represents the level at which the company has developed and documents a systematic methodology to determine its ALLL. BancShares evaluates its loan and lease portfolio using three portfolio segments; non-PCI commercial, non-PCI noncommercial and PCI. The non-PCI commercial segment includes classes as follows: commercial construction and land development, commercial mortgage, commercial and industrial, lease financing and other commercial real estate loans. The non-PCI noncommercial segment includes classes as follows: noncommercial construction and land development, residential mortgage, revolving mortgage and consumer loans. The PCI segment includes classes as follows: commercial construction and land development, commercial mortgage, commercial and industrial, other commercial real estate, noncommercial construction and land development, residential mortgage, and revolving mortgage loans. A primary component of determining the general allowance for performing and classified loans not analyzed specifically is the actual loss history of the various classes. Loan loss factors based on historical experience may be adjusted for significant factors that in management's judgment affect the collectability of the portfolio at the balance sheet date. For non-PCI commercial loans and leases, management incorporates historical net loss data to develop the applicable loan loss factors. For the non-PCI noncommercial segment, management incorporates specific loan class and delinquency status trends into the loan loss factors. In accordance with our allowance methodology, loan loss factors are monitored quarterly and may be adjusted based on changes in the level of historical net charge-offs and updates by management, such as the number of periods included in the calculation of loss factors, loss severity and portfolio attrition. The qualitative framework used in estimating the general allowance considers economic conditions, composition of the loan portfolio, trends in delinquent and nonperforming loans, historical loss experience by categories of loans, concentrations of credit, changes in lending policies and underwriting standards, regulatory exam results and other factors indicative of inherent losses remaining in the portfolio. Management may adjust the ALLL by the factors in the qualitative framework to address environmental factors not reflected in the historical experience. These adjustments are specific to the loan class level. If it is probable that a borrower will be unable to pay all amounts due according to the contractual terms of the loan agreement a specific valuation allowance component is determined when management believes a loss is probable. For purchased impaired loans, the methodology also considers the remaining discounts recognized upon acquisition in estimating a general allowance. PCI loans are aggregated into loan pools based upon common risk characteristics or evaluated at the loan level. At each balance sheet date, BancShares evaluates whether the estimated cash flows and corresponding present value of its loans determined using their effective interest rates has decreased and if so, recognizes provision for loan losses. Management continuously monitors and actively manages the credit quality of the entire loan portfolio and adjusts the ALLL to an appropriate level. By assessing the probable estimated incurred losses in the loan portfolio on a quarterly basis, management is able to adjust specific and general loss estimates based upon the most recent information available. Future adjustments to the ALLL may be necessary based on changes in economic and other conditions. Management considers the established ALLL adequate to absorb probable losses that relate to loans and leases outstanding as of December 31, 2017. Each portfolio segment and the classes within those segments are subject to risks that could have an adverse impact on the credit quality of the loan and lease portfolio and the related ALLL. Management has identified the most significant risks as described below that are generally similar among the segments and classes. While the list is not exhaustive, it provides a description of the risks management has determined are the most significant. Non-PCI Commercial Loans and Leases Non-PCI commercial loans or leases, excluding purchased non-impaired loans, purchased leases and certain purchased revolving credit, are centrally underwritten based primarily upon the customer's ability to generate the required cash flow to service the debt in accordance with the contractual terms and conditions of the loan agreement. A complete understanding of the borrower's business, including the experience and background of the principals, is obtained prior to approval. To the extent that the loan or lease is secured by collateral, which is true for the majority of commercial loans and leases, the likely value of the collateral and what level of strength the collateral brings to the transaction is evaluated. To the extent that the principals or other parties provide personal guarantees, the relative financial strength and liquidity of each guarantor is assessed. The significant majority of relationships in the non-PCI commercial segment are assigned credit risk grades based upon an assessment of conditions that affect the borrower's ability to meet contractual obligations under the loan agreement. This process includes reviewing the borrowers' financial information, payment history, credit documentation, public information and other information specific to each borrower. Credit risk grades are reviewed annually, or at any point management becomes aware of information affecting the borrowers' ability to fulfill their obligations. Our credit risk grading standards are described in Note D. The impairment assessment and determination of the related specific reserve for each impaired loan is based on the loan's characteristics. Impairment measurement for loans that are dependent on borrower cash flow for repayment is based on the present value of expected cash flows discounted at the loan's effective interest rate. Impairment measurement for most real estate loans, particularly when a loan is considered to be a probable foreclosure, is based on the fair value of the underlying collateral. Collateral is appraised and market value, appropriately adjusted for an assessment of the sales and marketing costs, is used to calculate a fair value estimate. A specific valuation allowance is established or partial charge-off is recorded for the difference between the excess recorded investment in the loan and the loans estimated fair value less costs to sell. General reserves for collective impairment are based on estimated incurred losses related to unimpaired commercial loans as of the balance sheet date. Incurred loss estimates for the originated commercial segment are based on average loss rates by credit risk ratings, which are estimated using historical loss experience and credit risk rating migrations. Incurred loss estimates may be adjusted through a qualitative assessment to reflect current economic conditions and portfolio trends including credit quality, concentrations, aging of the portfolio and significant policy and underwriting changes. Common risks to each class of commercial loans include general economic conditions within the markets BancShares serves, as well as risks that are specific to each transaction including demand for products and services, personal events, such as disability or change in marital status and reductions in the value of collateral. Due to the concentration of loans in the medical, dental and related fields, BancShares is susceptible to risks that governmental actions will materially alter the medical care industry in the United States. In addition to these common risks for the majority of the non-PCI commercial segment, additional risks are inherent in certain classes of non-PCI commercial loans and leases. Commercial construction and land development Commercial construction and land development loans are highly dependent on the supply and demand for commercial real estate in the markets served by BancShares as well as the demand for newly constructed residential homes and lots that customers are developing. Deterioration in demand could result in decreases in collateral values and could make repayment of the outstanding loans more difficult for customers. Commercial mortgage, commercial and industrial and lease financing Commercial mortgage loans, commercial and industrial loans and lease financing are primarily dependent on the ability of borrowers to achieve business results consistent with those projected at loan origination resulting in cash flow sufficient to service the debt. To the extent that a customer's business results are materially unfavorable versus the original projections, the ability for the loan to be serviced on a basis consistent with the contractual terms may be at risk. While these loans and leases are generally secured by real property, personal property or business assets such as inventory or accounts receivable, it is possible that the liquidation of the collateral will not fully satisfy the obligation. Other commercial real estate Other commercial real estate loans consist primarily of loans secured by multifamily housing and agricultural loans. The primary risk associated with multifamily loans is the ability of the income-producing property that collateralizes the loan to produce adequate cash flow to service the debt. High unemployment or generally weak economic conditions may result in borrowers having to provide rental rate concessions to achieve adequate occupancy rates. The performance of agricultural loans is highly dependent on favorable weather, reasonable costs for seed and fertilizer and the ability to successfully market the product at a profitable margin. The demand for these products is also dependent on macroeconomic conditions that are beyond the control of the borrower. Non-PCI Noncommercial Loans and Leases Non-PCI noncommercial loans, excluding purchased non-impaired loans and certain purchased revolving credit, are centrally underwritten using automated credit scoring and analysis tools. These credit scoring tools take into account factors such as payment history, credit utilization, length of credit history, types of credit currently in use and recent credit inquiries. To the extent that the loan is secured by collateral, the likely value of that collateral is evaluated. The ALLL for the non-PCI noncommercial segment is primarily calculated on a pooled basis using a delinquency-based approach. Estimates of incurred losses are based on historical loss experience and the migration of receivables through the various delinquency pools applied to the current risk mix. These estimates may be adjusted through a qualitative assessment to reflect current economic conditions, portfolio trends and other factors. The remaining portion of the ALLL related to the non-PCI noncommercial segment results from loans that are deemed impaired. The impairment assessment and determination of the related specific reserve for each impaired loan is based on the loan's characteristics. Impairment measurement for loans that are dependent on borrower cash flow for repayment is based on the present value of expected cash flows discounted at the loan's effective interest rate. Impairment measurement for most real estate loans, particularly when a loan is considered to be a probable foreclosure, is based on the fair value of the underlying collateral. Collateral is appraised and market value, appropriately adjusted for an assessment of the sales and marketing costs, are used to calculate a fair value estimate. A specific valuation allowances is established or partial charge-off is recorded for the excess of the recorded investment in the loan and the loan’s estimated fair value less cost to sell. Common risks to each class of noncommercial loans include risks that are not specific to individual transactions such as general economic conditions within the markets BancShares serves, particularly unemployment and declines in real estate values. Personal events such as death, disability or change in marital status also add risk to noncommercial loans. In addition to these common risks for the majority of noncommercial loans, additional risks are inherent in certain classes of noncommercial loans. Revolving mortgage Revolving mortgage loans are often secured by second liens on residential real estate, thereby making such loans particularly susceptible to declining collateral values. A substantial decline in collateral value could render a second lien position to be effectively unsecured. Additional risks include lien perfection inaccuracies, disputes with first lienholders and uncertainty regarding the customer's performance with respect to the first lien that may further weaken the collateral position. Further, the open-end structure of these loans creates the risk that customers may draw on the lines in excess of the collateral value if there have been significant declines since origination. Consumer The consumer loan portfolio includes loans secured by personal property such as automobiles, marketable securities, other titled recreational vehicles including boats and motorcycles, as well as unsecured consumer debt and student loans. The value of underlying collateral within this class is especially volatile due to potential rapid depreciation in values since date of loan origination, potentially in excess of principal balances. Residential mortgage and noncommercial construction and land development Residential mortgage and noncommercial construction and land development loans are made to individuals and are typically secured by 1-4 family residential property, undeveloped land and partially developed land in anticipation of pending construction of a personal residence. Significant and rapid declines in real estate values can result in residential mortgage loan borrowers having debt levels in excess of the current market value of the collateral. Noncommercial construction and land development projects can experience delays in completion and cost overruns that exceed the borrower's financial ability to complete the project. Such cost overruns can routinely result in foreclosure of partially completed and unmarketable collateral. PCI Loans The risks associated with PCI loans are generally consistent with the risks identified for commercial and noncommercial non-PCI loans and the classes of loans within those segments. However, these loans were underwritten by other institutions, often with different lending standards and methods. Additionally, in some cases, collateral for PCI loans is located in regions that have experienced deterioration in real estate values and the underlying collateral may therefore not support full repayment of these loans. The ALLL for PCI loans is estimated based on the expected cash flows over the life of the loan. BancShares continues to estimate and update cash flows expected to be collected on individual loans or pools of loans sharing common risk characteristics. BancShares compares the carrying value of all PCI loans to the present value at each balance sheet date. The present value is calculated by updating the life of loan cash flows and discounting that result by the individual loan's effective interest rate. If the updated present value is less than the current value, then ALLL is recorded and if so, recognizes provision for loan and lease losses. For any increases in cash flows expected to be collected, BancShares adjusts any prior recorded allowance for loan and lease losses first and then the amount of accretable yield recognized on a prospective basis over the loan's or pool's remaining life. |
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Reserve for Unfunded Commitments | Reserve for Unfunded Commitments The reserve for unfunded commitments represents the estimated probable losses related to standby letters of credit and other commitments to extend credit. The reserve is calculated in a manner similar to the loans evaluated collectively for impairment, while also considering the applicable regulatory capital credit conversion factors for these off-balance sheet instruments as well as the exposure upon default. The reserve for unfunded commitments is presented within other liabilities on the Consolidated Balance Sheets, distinct from the ALLL, and adjustments to the reserve for unfunded commitments are included in other noninterest expense in the Consolidated Statements of Income. The reserve for unfunded commitments was not material at December 31, 2017 or 2016. |
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Premises and Equipment | Premises and Equipment Premises, equipment and capital leases are stated at cost less accumulated depreciation and amortization. For financial reporting purposes, depreciation and amortization are computed using the straight-line method and are expensed over the estimated useful lives of the assets, which range from 3 to 40 years for premises and 3 to 10 years for furniture, software and equipment. Leasehold improvements are amortized over the terms of the respective leases, including renewal period if renewal period is reasonably assured (often through the presence of a bargain renewal option), or the useful lives of the improvements, whichever is shorter. Gains and losses on dispositions are recorded in other noninterest expense. Maintenance and repairs are charged to occupancy expense or equipment expense as incurred. Obligations under capital leases are amortized over the life of the lease using the effective interest method to allocate payments between principal and interest. Rent expense and rental income on operating leases are recorded in noninterest expense and noninterest income, respectively, using the straight-line method over the appropriate lease terms. |
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Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets BancShares accounts for acquisitions using the acquisition method of accounting. Under that methodology, if the purchase price of an acquired company exceeds the fair value of its net assets, the excess is carried on the acquirer's balance sheet as goodwill. An intangible asset is recognized as an asset apart from goodwill if it arises from contractual or other legal rights, or if it is capable of being separated or divided from the acquired entity and sold, transferred, licensed, rented or exchanged. Intangible assets that are separately identifiable assets, such as core deposit intangibles, resulting from acquisitions are amortized on an accelerated basis over an estimated useful life and evaluated for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. Goodwill is not amortized, but is evaluated at least annually for impairment as of July 31st or more frequently if events occur or circumstances change that may trigger a decline in the value of the reporting unit or otherwise indicate that a potential impairment exists. The evaluation of goodwill is based on a variety of factors, including common stock trading multiples and data from recent market transactions. Potential impairment of goodwill exists when the carrying amount of a reporting unit exceeds its fair value. If the carrying value of the reporting unit exceeds its fair value, a second analysis is performed that requires an assignment of the reporting unit’s fair value to the reporting unit’s assets and liabilities to determine the implied fair value of the reporting unit’s goodwill. If the implied fair value of the reporting unit's goodwill is lower than its carrying amount, an impairment loss is recognized for the excess of carrying value. Based on the July 31, 2017 impairment tests, management concluded there was no indication of goodwill impairment. Subsequent to the annual impairment test, no events occurred or circumstances changed that would indicate goodwill should be tested for impairment during the interim period between annual tests. Mortgage servicing rights (MSRs) are recognized separately when they are retained as loans are sold or acquired through acquisition. When mortgage loans are sold, servicing rights are initially recorded at fair value within other assets in the Consolidated Balance Sheets and gains on sale of loans are recorded within mortgage income in the Consolidated Statements of Income. All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized against mortgage income in noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans with the offset being a reduction in the cost basis of the servicing asset. MSRs are evaluated for impairment quarterly based upon the fair value of the rights as compared to carrying amount. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics and is recorded as a reduction of mortgage income in the Consolidated Statements of Income. If BancShares later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the valuation reserve may be recorded as an increase to mortgage income in the Consolidated Statements of Income, but only to the extent of previous impairment recognized. Other intangible assets with estimable lives are amortized over their estimated useful lives, which are periodically reviewed for reasonableness. Identifiable intangible assets represent the estimated value of the core deposits acquired and certain customer relationships. |
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Securities Sold Under Repurchase Agreements | Securities Sold Under Repurchase Agreements Securities sold under repurchase agreements primarily with commercial customers generally have maturities of one day and are reflected as short-term borrowings on the Consolidated Balance Sheets and are recorded based on the amount of cash received in connection with the borrowing. |
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Fair Values | Fair Values Fair value disclosures are required for all financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. Under GAAP, individual fair value estimates are ranked on a three-tier scale based on the relative reliability of the inputs used in the valuation. Fair values determined using level 1 inputs rely on active and observable markets to price identical assets or liabilities. In situations where identical assets and liabilities are not traded in active markets, fair values may be determined based on level 2 inputs, which represent observable data for similar assets and liabilities. Fair values for assets and liabilities that are not actively traded in observable markets are based on level 3 inputs, which are considered to be nonobservable. Fair value estimates derived from level 3 inputs cannot be substantiated by comparison to independent markets and, in many cases, cannot be realized through immediate settlement of the instrument. Additionally, valuation adjustments, such as those pertaining to counterparty and BancShares' own credit quality and liquidity, may be necessary to ensure that assets and liabilities are recorded at fair value. Credit valuation adjustments are made when market pricing does not accurately reflect the counterparty's credit quality. As determined by BancShares management, liquidity valuation adjustments may be made to the fair value of certain assets to reflect the uncertainty in the pricing and trading of the instruments when recent market transactions for identical or similar instruments are not observed. Accordingly, the aggregate fair value amounts presented do not necessarily represent the underlying value to BancShares. For additional information, see Note M. |
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Income Taxes | Income Taxes Deferred income taxes are reported when different accounting methods have been used in determining income for income tax purposes and for financial reporting purposes. Deferred taxes are computed using the asset and liability approach as prescribed in ASC 740, Income Taxes. Under this method, a deferred tax asset or liability is determined based on the currently enacted tax rates applicable to the period in which the differences between the financial statement carrying amounts and tax basis of existing assets and liabilities are expected to be reported in BancShares' income tax returns. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. BancShares continually monitors and evaluates the potential impact of current events on the estimates used to establish income tax expenses and income tax liabilities. On a periodic basis, BancShares evaluates its income tax positions based on current tax law, positions taken by various tax auditors within the jurisdictions that BancShares is required to file income tax returns, as well as potential or pending audits or assessments by such tax auditors. BancShares has unrecognized tax benefits related to the uncertain portion of tax positions that BancShares has taken or expects to take. A liability may be created or an amount refundable may be reduced for the amount of unrecognized tax benefits. These uncertainties result from the application of complex tax laws, rules, regulations and interpretations, primarily in state taxing jurisdictions. Unrecognized tax benefits are assessed quarterly and may be adjusted through current income tax expense in future periods based on changing facts and circumstances, completion of examinations by taxing authorities or expiration of a statute of limitations. Estimated penalties and interest on uncertain tax positions are recognized in income tax expense. BancShares files a consolidated federal income tax return and various combined and separate company state tax returns. See Note P in the Notes to Consolidated Financial Statements for additional disclosures. |
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Derivative Financial Instruments | Derivative Financial Instruments A derivative is a financial instrument that derives its cash flows, and therefore its value, by reference to an underlying instrument, index or referenced interest rate. These instruments include interest rate swaps, caps, floors, collars, options or other financial instruments designed to hedge exposures to interest rate risk or for speculative purposes. BancShares selectively uses interest rate swaps for interest rate risk management purposes. BancShares had an interest rate swap, entered into during 2011, that qualified as a cash flow hedge under GAAP and which converted variable-rate exposure on outstanding debt to a fixed rate. BancShares' interest rate swap expired in June 2016. |
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Per Share Data | Per Share Data Net income per share is computed by dividing net income by the average number of both classes of common shares outstanding during each period. BancShares had no potential common shares outstanding in any period and did not report diluted net income per share. Cash dividends per share apply to both Class A and Class B common stock. Shares of Class A common stock carry one vote per share, while shares of Class B common stock carry 16 votes per share. |
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Defined Benefit Pension Plan | Defined Benefit Pension Plan BancShares maintains noncontributory defined benefit pension plans covering certain qualifying employees. The calculation of the obligations and related expenses under the plans require the use of actuarial valuation methods and assumptions. Actuarial assumptions used in the determination of future values of plan assets and liabilities are subject to management judgment and may differ significantly if different assumptions are used. The discount rate assumption used to measure the plan obligations is based on a yield curve developed from high-quality corporate bonds across a full maturity spectrum. The projected cash flows of the pension plans are discounted based on this yield curve, and a single discount rate is calculated to achieve the same present value. The assumed rate of future compensation increases is reviewed annually based on actual experience and future salary expectations. We also estimate a long-term rate of return on pension plan assets that is used to estimate the future value of plan assets. In developing the long-term rate of return, we consider such factors as the actual return earned on plan assets, historical returns on the various asset classes in the plans and projections of future returns on various asset classes. Refer to Note N for disclosures related to BancShares' defined benefit pension plans. |
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Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings (SEC Update) This ASU adds an SEC paragraph and amends other Topics pursuant to an SEC Staff Announcement that states a registrant should evaluate ASUs that have not yet been adopted, including ASU 2014-09, Revenue from Contracts with Customers (Topic 606), ASU 2016-02, Leases (Topic 842), and ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, to determine the appropriate financial statement disclosures about the potential material effects of those ASUs on the financial statements when adopted. If a registrant does not know or cannot reasonably estimate the impact that adoption of the ASUs referenced are expected to have on the financial statements, then in addition to making a statement to that effect, the registrant should consider additional qualitative financial statement disclosures to assist the reader in assessing the significance of the impact the adoption will have on the financial statements, and a comparison to the registrant's current accounting policies. A registrant should describe the status of its process to implement the new standards and the significant matters yet to be addressed. This ASU also addresses the accounting for tax benefits resulting from investments in qualified affordable housing projects where the decision to apply the proportional amortization method of accounting is an accounting policy decision to be applied consistently to all investments that meet the conditions, rather than a decision to be applied to individual investments that qualify for the use of the proportional amortization method. The amendments in this ASU are effective upon issuance. We adopted the guidance effective in the first quarter of 2017. The disclosures required by this ASU are included within the “Recently Issued Accounting Pronouncements” section below. The adoption did not have an impact to our consolidated financial position or consolidated results of operations. FASB ASU 2016-17, Consolidation (Topic 810): Interests Held Through Related Parties That Are Under Common Control This ASU does not change the characteristics of a primary beneficiary in current GAAP; however, it requires that a reporting entity, in determining whether it satisfies the second characteristic of a primary beneficiary, to include all of its direct variable interests in a VIE and, on a proportionate basis, its indirect variable interests in a VIE held through related parties, including related parties that are under common control with the reporting entity. If, after performing that assessment, a reporting entity that is the single decision maker of a VIE concludes that it does not have the characteristics of a primary beneficiary, the amendments continue to require that reporting entity to evaluate whether it and one or more of its related parties under common control, as a group, have the characteristics of a primary beneficiary, then the party within the related party group that is most closely associated with the VIE is the primary beneficiary. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We adopted the guidance effective in the first quarter of 2017. The adoption did not have an impact to our consolidated financial position or consolidated results of operations. FASB ASU 2016-07, Investments-Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting This ASU eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The ASU requires that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. Further, the ASU requires that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings, the unrealized gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We adopted the guidance effective in the first quarter of 2017. The adoption did not have an impact on our consolidated financial position or consolidated results of operations. Recently Issued Accounting Pronouncements FASB ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income This ASU requires a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017 (Tax Act), which was enacted on December 22, 2017. The Tax Act included a reduction to the corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. The amount of the reclassification would be the difference between the historical corporate income tax rate and the newly enacted 21 percent corporate income tax rate. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We will adopt the guidance during the first quarter of 2018. The change in accounting principle will be accounted for as a cumulative-effect adjustment to the balance sheet resulting in a $27.2 million increase to retained earnings and a corresponding decrease to AOCI on January 1, 2018. FASB ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost This ASU requires employers to present the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. Employers will present the other components separately from the line item that includes the service cost. In addition, only the service cost component of net benefit cost is eligible for capitalization. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We will adopt the guidance during the first quarter of 2018. BancShares does not anticipate any material impact to our consolidated financial position or consolidated results of operations as a result of the adoption. FASB ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment This ASU eliminates Step 2 from the goodwill impairment test. Under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This ASU eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative test. This ASU will be effective for BancShares' annual or interim goodwill impairment tests for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We expect to adopt the guidance for our annual impairment test in fiscal year 2020. BancShares does not anticipate any impact to our consolidated financial position or consolidated results of operations as a result of the adoption. FASB ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments This ASU addresses the diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this ASU provide guidance on (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon debt instruments; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The guidance requires application using a retrospective transition method. We will adopt the guidance during the first quarter of 2018. BancShares does not anticipate a material impact to our Consolidated Statements of Cash Flows. FASB ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments This ASU eliminates the delayed recognition of the full amount of credit losses until the loss was probable of occurring and instead will reflect an entity's current estimate of all expected credit losses. The amendments in this ASU broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The ASU does not specify a method for measuring expected credit losses and allows an entity to apply methods that reasonably reflect its expectations of the credit loss estimate based on the entity's size, complexity and risk profile. In addition, the disclosures of credit quality indicators in relation to the amortized cost of financing receivables, a current disclosure requirement, are further disaggregated by year of origination. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. We will adopt the guidance by the first quarter of 2020 with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. For BancShares, the standard will apply to loans, unfunded loan commitments and debt securities held to maturity. We have formed a cross-functional team co-led by Finance and Risk Management and engaged a third party to assist with the adoption. The implementation team has developed a detailed project plan and is staying informed about the broader industry's perspective and insights, and identifying and researching key decision points. We have completed the readiness assessment and gap analysis related to data, modeling IT, accounting policy, controls and reporting which has enabled us to determine the areas of focus and estimate total body of work. Our current critical activities include model design, accounting policy development, data feasibility analysis, evaluation of reporting and disclosure solutions and completion of specific work stream project plans. We will continue to evaluate the impact the new standard will have on our consolidated financial statements as the final impact will be dependent, among other items, upon the loan portfolio composition and credit quality at the adoption date, as well as economic conditions, financial models used and forecasts at that time. FASB ASU 2016-02, Leases (Topic 842) This ASU increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The key difference between existing standards and this ASU is the requirement for lessees to recognize on their balance sheet all lease contracts. An entity may make an accounting election by classification to not recognize leases with terms less than 12 months on their balance sheet. Both a right-of-use asset, representing the right to use the leased asset, and a lease liability, representing the contractual obligation, are required to be recognized on the balance sheet of the lessee at lease commencement. Further, this ASU requires lessees to classify leases as either operating or finance leases, which are substantially similar to the current operating and capital leases classifications. The distinction between these two classifications under the new standard does not relate to balance sheet treatment, but relates to treatment in the statements of income and cash flows. Lessor guidance remains largely unchanged with the exception of how a lessor determines the appropriate lease classification for each lease to better align the lessor guidance with revised lessee classification guidance. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. For BancShares, the impact of this ASU will primarily relate to its accounting and reporting of leases as a lessee. We will adopt during the first quarter of 2019. We have engaged a third party and completed an inventory of all leases and their terms and service contracts with embedded leases. While we continue to evaluate the impact of the new standard, we expect an increase to the Consolidated Balance Sheets for right-of-use assets and associated lease liabilities, as well as resulting depreciation expense of the right-of-use assets and interest expense of the lease liabilities in the Consolidated Statements of Income, for arrangements previously accounted for as operating leases. Additionally, adding these assets to our balance sheet will impact our total risk-weighted assets used to determine our regulatory capital levels. Our impact analysis on this change in accounting principle estimates an increase to the Consolidated Balance Sheets for total lease liability ranging between $65.0 million and $85.0 million, as the initial gross up of both assets and liabilities. Capital is expected to be impacted by an estimated four to six basis points. These preliminary ranges are subject to change and will continue to be refined closer to adoption. FASB ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities This ASU addresses certain aspects of recognition, measurement, presentation and disclosure of certain financial instruments. The amendments in this ASU (1) require most equity investments to be measured at fair value with changes in fair value recognized in net income; (2) simplify the impairment assessment of equity investments without a readily determinable fair value; (3) eliminate the requirement to disclose the method(s) and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet; (4) require public business entities to use exit price notion, rather than entry prices, when measuring fair value of financial instruments for disclosure purposes; (5) require separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements; (6) require separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; and (7) state that a valuation allowance on deferred tax assets related to available-for-sale securities should be evaluated in combination with other deferred tax assets. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We will adopt the ASU during the first quarter of 2018. The change in accounting principle will be accounted for as a cumulative-effect adjustment to the balance sheet resulting in an $18.7 million increase to retained earnings and a decrease to AOCI on January 1, 2018. With the adoption of this ASU equity securities can no longer be classified as available for sale, as such marketable equity securities will be disclosed as a separate line item on the balance sheet with changes in the fair value of equity securities reflected in net income. For equity investments without a readily determinable fair value, BancShares has elected to measure the equity investments using the measurement alternative which requires BancShares to make a qualitative assessment of whether the investment is impaired at each reporting period. Under the measurement alternative these investments will be measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. If a qualitative assessment indicates that the investment is impaired, BancShares will have to estimate the investment's fair value in accordance with ASC 820 and, if the fair value is less than the investment's carrying value, recognize an impairment loss in net income equal to the difference between carrying value and fair value. Equity investments without a readily determinable fair value are recorded within other assets in the consolidated balance sheets. FASB ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In May 2014, the FASB issued a standard on the recognition of revenue from contracts with customers with the core principle being for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard also results in enhanced disclosures about revenue, provides guidance for transactions that were not previously addressed comprehensively and improves guidance for multiple-element arrangements. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations, to improve the operability and understandability of the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, to clarify guidance for identifying performance obligations and licensing implementation. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, to clarify and improve the guidance for certain aspects of Topic 606. In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, to clarify guidance for certain aspects of Topic 606. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments (SEC Update). This ASU adds SEC paragraphs to the new revenue and leases sections of the Codification pursuant to an SEC Staff announcement made on July 20, 2017 as well as supersedes certain SEC paragraphs related to previous SEC staff announcements. In November 2017, the FASB issued ASU 2017-14, Income Statement - Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606) (SEC Update), to supersede, amend and add SEC paragraphs to the Codification to reflect the August 2017 issuance of SEC staff Accounting Bulletin (SAB) 116 and SEC Release No. 33-10403. Per ASU 2015-14, Deferral of the Effective Date, this guidance was deferred and is effective for fiscal periods beginning after December 15, 2017, including interim reporting periods within that reporting period. We will adopt the guidance during the first quarter of 2018. Our revenue is comprised of net interest income on financial assets and liabilities, which is explicitly excluded from the scope of the new guidance, and noninterest income. The contracts that are in scope of the guidance are primarily related to service charges on deposit accounts, cardholder and merchant income, wealth advisory services income, other service charges and fees, sales of other real estate, insurance commissions and miscellaneous fees. Based on our overall assessment of revenue streams and review of related contracts affected by the ASU, BancShares does not anticipate a material impact to our consolidated financial position or consolidated results of operations as a result of the adoption. |
Business Combinations (Tables) |
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Schedule of Assets Acquired and Liabilities Assumed |
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Schedule of Assets Acquired and Liabilities Assumed |
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Investments (Tables) |
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Aggregate Values And Unrealized Gains And Losses Of Investment Securities | The amortized cost and fair value of investment securities classified as available for sale and held to maturity at December 31, 2017 and 2016, were as follows:
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Investment Securities Maturity Information | The following table provides the amortized cost and fair value by contractual maturity. Expected maturities will differ from contractual maturities on certain securities because borrowers and issuers may have the right to call or prepay obligations with or without prepayment penalties. Repayments of mortgage-backed securities are dependent on the repayments of the underlying loan balances. Equity securities do not have a stated maturity date.
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Securities Gains (Losses) | For each period presented, securities gains (losses) include the following:
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Investment Securities With Unrealized Losses | The following table provides information regarding securities with unrealized losses as of December 31, 2017 and 2016:
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Loans and Leases (Tables) |
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Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Carrying Value of Accretable Yield for PCI Loans [Table Text Block] | The following table documents changes to the amount of accretable yield for 2017 and 2016.
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Loans And Leases Outstanding | Loans and leases outstanding include the following at December 31, 2017 and 2016:
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Composition Of The Loans And Leases Outstanding By Credit Quality Indicator | The composition of the loans and leases outstanding at December 31, 2017, and December 31, 2016, by credit quality indicator is provided below:
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Aging Of The Outstanding Loans And Leases By Class Excluding Loans Impaired At Acquisition Date | The aging of the outstanding non-PCI loans and leases, by class, at December 31, 2017, and December 31, 2016 is provided in the table below. The calculation of days past due begins on the day after payment is due and includes all days through which all required interest or principal has not been paid. Loans and leases 30 days or less past due are considered current as various grace periods that allow borrowers to make payments within a stated period after the due date and still remain in compliance with the loan agreement.
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Recorded Investment, By Class, In Loans And Leases On Nonaccrual Status And Loans And Leases Greater Than 90 Days Past Due And Still Accruing | The recorded investment, by class, in loans and leases on nonaccrual status, and loans and leases greater than 90 days past due and still accruing at December 31, 2017 and December 31, 2016 for non-PCI loans, were as follows:
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Schedule of Contractually Required Payments Including Principal and Interest Expected Cash Flows to be Collected and Fair Values [Table Text Block] | The following table relates to PCI loans acquired in the HCB and Guaranty transactions in 2017 and the NMSB and FCSB transactions in 2016. The table summarizes the contractually required payments, which include principal and interest, expected cash flows to be collected, and the fair value of PCI loans at the respective acquisition dates.
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Changes In Carrying Value Of Acquired Impaired Loans | The recorded fair values of PCI loans acquired in the HCB and Guaranty transactions in 2017 and the NMSB and FCSB transactions in 2016 as of their respective acquisition date were as follows:
The following table provides changes in the carrying value of PCI loans during the years ended December 31, 2017 and 2016:
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Changes In The Amount Of Accretable Yield | Purchased non-PCI loans and leases The following table relates to purchased non-PCI loans acquired in the Guaranty transaction in 2017 and the Cordia transaction in 2016 and provides the contractually required payments, estimate of contractual cash flows not expected to be collected and fair value of the acquired loans at the acquisition date.
The recorded fair values of purchased non-PCI loans acquired in the Guaranty transaction in 2017 and the Cordia transaction in 2016 as of the acquisition date are as follows:
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Schedule of Loans Receivable (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans And Leases Outstanding | Loans and leases outstanding include the following at December 31, 2017 and 2016:
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Allowance for Loan and Lease Losses Allowance for Loan and Lease Losses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allocation of Allowance for Loan and Lease Losses [Table Text Block] | Activity in the allowance for loan and lease losses is as follows:
Activity in the allowance for loan and lease losses, ending balances of loans and leases and related allowance by class of loans is summarized as follows:
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Allowance for Loan and Lease Losses | The following tables provide information on non-PCI impaired loans and leases, exclusive of loans and leases evaluated collectively as a homogeneous group, including interest income recognized in the period during which the loans and leases were considered impaired.
Non-PCI impaired loans less than $500,000 that are collectively evaluated were $49.1 million and $47.4 million at December 31, 2017 and 2016, respectively. The following tables show the average non-PCI impaired loan balance and the interest income recognized by loan class for the years ended December 31, 2017, 2016 and 2015:
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Troubled Debt Restructuring, Summary of Accrual Status [Table Text Block] | Subsequent modification of a PCI loan accounted for in a pool that would otherwise meet the definition of a TDR is not reported, or accounted for, as a TDR since pooled PCI loans are excluded from the scope of TDR accounting. The following table provides a summary of total TDRs by accrual status.
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Troubled Debt Restructurings on Financing Receivables | The following tables provide the types of TDRs made during the years ended December 31, 2017, and 2016, as well as a summary of loans that were modified as a TDR during the years ended December 31, 2017, and 2016 that subsequently defaulted during the years ended December 31, 2017, and 2016. BancShares defines payment default as movement of the TDR to nonaccrual status, which is generally 90 days past due for TDRs, foreclosure or charge-off, whichever occurs first.
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Premises and Equipment (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and Equipment | Major classifications of premises and equipment at December 31, 2017 and 2016 are summarized as follows:
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Future Minimum Rental Payments for Operating Leases | Future minimum rental commitments for noncancellable operating leases with initial or remaining terms of one or more years consisted of the following at December 31, 2017:
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Other Real Estate Owned (Tables) |
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Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Other Real Estate Owned | The following table explains changes in other real estate owned during 2017 and 2016.
(1) Transfers include OREO balances associated with expired or terminated shared-loss agreements. At December 31, 2017 and 2016, BancShares had $19.8 million and $15.0 million, respectively, of foreclosed residential real estate property in OREO. The recorded investment in consumer mortgage loans collateralized by residential real estate property in the process of foreclosure was $26.9 million and $21.8 million at December 31, 2017 and December 31, 2016, respectively. |
FDIC Shared-Loss Receivable and Payable (Tables) |
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FDIC Shared-Loss Receivable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Receivable From FDIC | The following table provides changes in the receivable from the FDIC for the years ended December 31, 2017, 2016 and 2015:
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Deposits (Tables) |
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Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | Deposits at December 31 are summarized as follows:
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Maturities Of Time Deposits | At December 31, 2017, the scheduled maturities of time deposits were:
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Short-Term Borrowings (Tables) |
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Short-term Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Short-term Debt | Short-term borrowings at December 31 are as follows:
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Repurchase Agreements (Tables) |
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Repurchase Agreements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Repurchase Agreements [Table Text Block] | The remaining contractual maturity of the securities sold under agreements to repurchase by class of collateral pledged included in borrowings on the Consolidated Balance Sheets as of December 31, 2017 and December 31, 2016 is presented in the following tables.
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Long-Term Obligations (Tables) |
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Long-term Obligations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | ong-term obligations at December 31 include:
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Schedule of Maturities of Long-term Debt | Long-term obligations maturing in each of the five years subsequent to December 31, 2017 and thereafter include:
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Estimated Fair Values (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Fair Values For Certain Financial Assets And Financial Liabilities | For all other financial assets and financial liabilities, the carrying value is a reasonable estimate of the fair value as of December 31, 2017 and 2016. The carrying value and fair value for these assets and liabilities are equivalent because they are relatively short term in nature and there is no interest rate or credit risk that would cause the fair value to differ from the carrying value. Cash and due from banks is classified on the fair value hierarchy as Level 1. Overnight investments, income earned not collected, short-term borrowings and accrued interest payable are considered Level 2. Lastly, the receivable from the FDIC for shared-loss agreements is designated as Level 3.
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Assets And Liabilities Carried At Fair Value On A Recurring Basis | Among BancShares’ assets and liabilities, investment securities available for sale and loans held for sale are reported at their fair values on a recurring basis. For assets and liabilities carried at fair value on a recurring basis, the following table provides fair value information as of December 31, 2017 and December 31, 2016.
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Fair Value Option | The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for residential real estate originated for sale measured at fair value as of December 31, 2017 and 2016.
No originated loans held for sale were 90 or more days past due or on nonaccrual status as of December 31, 2017 and 2016. |
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Assets And Liabilities Carried At Fair Value On A Nonrecurring Basis | For financial assets and liabilities carried at fair value on a nonrecurring basis, the following table provides fair value information as of December 31, 2017 and December 31, 2016.
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Employee Benefit Plans (Tables) |
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Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amount Included in Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive loss included the following at December 31, 2017 and 2016:
The following table highlights changes in accumulated other comprehensive (loss) income by component for the years ended December 31, 2017 and 2016:
(1) All amounts are net of tax. Amounts in parentheses indicate debits. |
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Schedule of Expected Benefit Payments | Cash Flows Following are estimated payments to pension plan participants in the indicated periods for each plan:
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Deferred Benefit Plans Liability Rollforward | The following table provides the accrued liability as of December 31, 2017 and 2016, and the changes in the accrued liability during the years then ended:
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BancShares Plan | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Funded Status | The following table provides the changes in benefit obligation and plan assets and the funded status of the plan at December 31, 2017 and 2016.
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Schedule of Amounts Recognized in the Balance Sheets | The amounts recognized in the consolidated balance sheets at December 31, 2017 and 2016 consist of:
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Schedule of Amount Included in Accumulated Other Comprehensive Income (Loss) | The following table details the amounts recognized in accumulated other comprehensive income at December 31, 2017 and 2016.
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Schedule of Amounts in Accumulated Other Comprehensive Income (Loss) to be Recognized over Next Fiscal Year | The following table provides expected amortization amounts for 2018.
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Schedule of Net Benefit Costs | The following table shows the components of periodic benefit cost related to the pension plan and changes in plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31, 2017, 2016 and 2015.
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Schedule of Assumptions Used | The assumptions used to determine the benefit obligations at December 31, 2017 and 2016 are as follows:
The assumptions used to determine the net periodic benefit cost for the years ended December 31, 2017, 2016 and 2015, are as follows:
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Schedule of Fair Value and Allocation of Plan Assets | BancShares Plan The fair values of pension plan assets at December 31, 2017 and 2016, by asset class are as follows:
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Bancorporation Plan | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Funded Status | The following table provides the changes in benefit obligation and plan assets and the funded status of the plan at December 31, 2017 and 2016.
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Schedule of Amounts Recognized in the Balance Sheets | The amounts recognized in the consolidated balance sheets at December 31, 2017 and 2016 consist of:
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Schedule of Amount Included in Accumulated Other Comprehensive Income (Loss) | The following table details the amounts recognized in accumulated other comprehensive loss at December 31, 2017 and 2016.
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Schedule of Amounts in Accumulated Other Comprehensive Income (Loss) to be Recognized over Next Fiscal Year | The following table provides expected amortization amounts for 2018.
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Schedule of Net Benefit Costs | The following table shows the components of periodic benefit cost related to the pension plan and changes in plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31, 2017, 2016 and 2015.
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Schedule of Assumptions Used | The assumptions used to determine the benefit obligations at December 31, 2017 and 2016 are as follows:
The assumptions used to determine the net periodic benefit cost for the years ended December 31, 2017, 2016 and 2015 are as follows:
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Schedule of Fair Value and Allocation of Plan Assets |
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Other Noninterest Income and Other Noninterest Expense (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noninterest Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Operating Cost and Expense, by Component |
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | At December 31, income tax expense consisted of the following:
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Schedule of Effective Income Tax Rate Reconciliation | Income tax expense differed from the amounts computed by applying the federal income tax rate of 35 percent to pretax income as a result of the following:
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Schedule of Deferred Tax Assets and Liabilities | The net deferred tax asset included the following components at December 31:
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Schedule of Unrecognized Tax Benefits | The following table provides a rollforward of Bancshares’ gross unrecognized tax benefits, excluding interest and penalties, during the years ended December 31:
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Transactions with Related Persons (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | For those identified as Related Persons as of December 31, 2017, the following table provides an analysis of changes in the loans outstanding during 2017 and 2016:
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Derivatives (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive loss included the following at December 31, 2017 and 2016:
The following table highlights changes in accumulated other comprehensive (loss) income by component for the years ended December 31, 2017 and 2016:
(1) All amounts are net of tax. Amounts in parentheses indicate debits. |
Goodwill and Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Goodwill | The following table presents the changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016:
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Mortgage Servicing Rights Key Economic Assumptions Used to Value | Key economic assumptions used to value mortgage servicing rights as of December 31, 2017 and 2016 were as follows:
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Schedule of Mortgage Servicing Rights at Amortized Cost | The activity of the servicing asset for the years ended December 31, 2017, 2016 and 2015 is presented in the following table:
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Schedule of Valuation Allowance for Impairment of Recognized Servicing Assets [Table Text Block] | The following table presents the activity in the servicing asset valuation allowance for the years ended December 31, 2017, 2016 and 2015:
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Schedule of Other Intangible Assets | The following information relates to other intangible assets, all customer-related, which are being amortized over their estimated useful lives:
The gross amount of other intangible assets and accumulated amortization as of December 31, 2017 and 2016, are:
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Future Amortization Expense Schedule | Based on current estimated useful lives and carrying values, BancShares anticipates amortization expense for intangible assets in subsequent periods will be:
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Shareholders' Equity, Dividends Restrictions and Other Regulatory Matters (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Capital Requirements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compliance with Regulatory Capital Requirements | Following is an analysis of capital ratios under Basel III guidelines for BancShares and FCB as of December 31, 2017 and 2016:
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Commitments and Contingencies Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Off-balance Sheet Risks [Table Text Block] | The following table presents the commitments to extend credit and unfunded commitments as of December 31, 2017 and 2016:
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Accumulated Other Comprehensive Loss (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive loss included the following at December 31, 2017 and 2016:
The following table highlights changes in accumulated other comprehensive (loss) income by component for the years ended December 31, 2017 and 2016:
(1) All amounts are net of tax. Amounts in parentheses indicate debits. |
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Reclassification out of Accumulated Other Comprehensive Income |
(1) Amounts in parentheses indicate debits to profit/loss. |
Parent Company Financial Statements (Tables) |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Balance Sheets |
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Condensed Income Statements |
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Condensed Statements of Cash Flows |
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Investments (Securities Gains (Losses)) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Investments [Abstract] | |||
Gross gains on sales of investment securities available for sale | $ 11,635 | $ 27,104 | $ 10,834 |
Gross losses on sales of investment securities available for sale | (7,342) | (431) | (17) |
Total securities gains (losses) | $ 4,293 | $ 26,673 | $ 10,817 |
Loans and Leases (Changes In Carrying Amount Of Accretable Yield) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Changes in Amount of Accretable Yield [Roll Forward] | |||
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield | $ 316,679 | $ 335,074 | $ 343,856 |
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield, Additions | 44,120 | 12,488 | |
Accretion | (76,594) | (76,565) | |
Reclassifications from nonaccretable difference | 18,901 | 29,931 | |
Changes in expected cash flows that do not affect nonaccretable difference | $ (4,822) | $ 25,364 |
Premises and Equipment (Major Classifications) (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 1,938,756 | $ 1,859,822 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 800,325 | 726,778 |
Property, Plant and Equipment, Net | 1,138,431 | 1,133,044 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 290,990 | 285,612 |
Premises and leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,158,699 | 1,130,650 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 489,067 | $ 443,560 |
Premises and Equipment (Operating Leases) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Property, Plant and Equipment [Abstract] | |||
2018 | $ 25,797 | ||
2019 | 18,838 | ||
2020 | 12,691 | ||
2021 | 10,780 | ||
2022 | 9,181 | ||
Thereafter | 45,138 | ||
Total minimum payments | 122,425 | ||
Rent expense, net | 15,200 | $ 13,000 | $ 13,800 |
Rent income | $ 6,600 | $ 6,500 | $ 6,400 |
FDIC Shared-Loss Receivable and Payable (Changes in Receivable from FDIC) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
FDIC Shared-Loss Receivable [Abstract] | |||
Cash Paid To FDIC For Termination Of Loss Share Agreements | $ 300 | ||
FDIC Indemnification Asset [Roll Forward] | |||
Beginning balance | 4,172 | $ 4,054 | $ 28,701 |
Accretion of discounts and premiums, net | (1,865) | (4,734) | (10,899) |
Receipt of payments from FDIC | 7,440 | 21,059 | 33,296 |
Post-acquisition and other adjustments, net | (7,764) | (14,745) | (47,044) |
FDIC Indemnification Asset, Disposals | 240 | 1,462 | 0 |
Ending balance | 2,223 | 4,172 | 4,054 |
Gain (Loss) on Contract Termination | (45) | (3,377) | 0 |
FDIC shared-loss payable | 101,342 | 97,008 | |
Net impact from FDIC shared-loss termination | 45 | (16,559) | $ 0 |
Loans and Leases Receivable, Gross, Carrying Amount, Covered | $ 67,800 | $ 84,800 |
Mortgage Servicing Rights (Details) - USD ($) |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|---|---|
Mortgage Banking [Abstract] | ||||
Servicing Asset at Amortized Cost | $ 21,945,000 | $ 20,415,000 | $ 19,351,000 | $ 16,688,000 |
Deposits (Details) - USD ($) |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Deposits [Abstract] | ||
FDIC Deposit Insurance Limit | $ 250,000 | |
Time Deposits Greater than $250,000, Carrying Value | 414,000,000 | $ 519,700,000 |
Deposits, by Type [Abstract] | ||
Demand | 11,237,375,000 | 10,130,549,000 |
Checking With Interest | 5,230,060,000 | 4,919,727,000 |
Money market accounts | 8,059,271,000 | 8,193,392,000 |
Savings | 2,340,449,000 | 2,099,579,000 |
Time | 2,399,120,000 | 2,818,096,000 |
Total deposits | 29,266,275,000 | $ 28,161,343,000 |
Maturities of Time Deposits [Abstract] | ||
2018 | 1,684,017,000 | |
2019 | 378,234,000 | |
2020 | 202,134,000 | |
2021 | 95,179,000 | |
2022 | 39,553,000 | |
Thereafter | $ 3,000 |
Short-Term Borrowings (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Short-term Debt [Line Items] | ||
Short-term borrowings | $ 693,807 | $ 603,487 |
Federal Home Loan Bank And Federal Reserve Bank Amount Of Available Unused Funds | 7,330,000 | |
Repurchase Agreements [Member] | ||
Short-term Debt [Line Items] | ||
Short-term borrowings | 586,171 | 590,772 |
Federal Home Loan Bank Advances [Member] | ||
Short-term Debt [Line Items] | ||
Short-term borrowings | 90,000 | 10,000 |
Federal Funds Purchased [Member] | ||
Short-term Debt [Line Items] | ||
Short-term borrowings | 2,551 | 2,551 |
Subordinated Debt Obligations [Member] | ||
Short-term Debt [Line Items] | ||
Short-term borrowings | 15,000 | 0 |
Unamortized Purchase Accounting Adjustments [Member] | ||
Short-term Debt [Line Items] | ||
Short-term borrowings | 85 | $ 164 |
Unsecured Debt [Member] | ||
Short-term Debt [Line Items] | ||
Line of Credit Facility, Remaining Borrowing Capacity | $ 665,000 |
Estimated Fair Values (Fair Value Option) (Details) - Loans Held For Sale - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Fair Value Of Items For Which Fair Value Option Was Elected Assets | $ 51,179 | $ 74,401 |
Aggregate Unpaid Principal Balance Of Items For Which Fair Value Option Was Elected Assets | 49,796 | 75,893 |
Fair Value Option Aggregate Difference Assets | $ 1,383 | $ (1,492) |
Employee Benefit Plans (Amounts Recognized in the Financial Statements) (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
BancShares Plan | ||
Amounts recognized in the consolidated balance sheets | ||
Other assets | $ 0 | $ 0 |
Other liabilities | (36,949) | (72,611) |
Net asset (liability) recognized | (36,949) | (72,611) |
Amount recognized in accumulated other comprehensive income | ||
Net loss (gain) | 125,745 | 119,766 |
Less prior service cost | 137 | 347 |
Accumulated other comprehensive loss, excluding income taxes | 125,882 | 120,113 |
Actuarial loss | 12,998 | |
Prior service cost | 79 | |
Total | 13,077 | |
Bancorporation Plan | ||
Amounts recognized in the consolidated balance sheets | ||
Other assets | 0 | 0 |
Other liabilities | (889) | (4,747) |
Net asset (liability) recognized | (889) | (4,747) |
Amount recognized in accumulated other comprehensive income | ||
Net loss (gain) | 19,117 | 21,661 |
Less prior service cost | 0 | 0 |
Accumulated other comprehensive loss, excluding income taxes | 19,117 | $ 21,661 |
Actuarial loss | 329 | |
Prior service cost | 0 | |
Total | $ 329 |
Employee Benefit Plans (Assumptions Used) (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
BancShares Plan | |||
Assumptions used to determine the benefit obligations | |||
Discount rate | 3.76% | 4.30% | |
Rate of compensation increase | 4.00% | 4.00% | |
Assumptions used to determine net periodic benefit cost | |||
Discount rate | 4.30% | 4.68% | 4.27% |
Rate of compensation increase | 4.00% | 4.00% | 4.00% |
Expected long-term rate of return on plan assets (percent) | 7.50% | 7.50% | 7.50% |
Bancorporation Plan | |||
Assumptions used to determine the benefit obligations | |||
Discount rate | 3.76% | 4.30% | |
Rate of compensation increase | 4.00% | 4.00% | |
Assumptions used to determine net periodic benefit cost | |||
Discount rate | 4.30% | 4.68% | 4.27% |
Rate of compensation increase | 4.00% | 4.00% | 4.00% |
Expected long-term rate of return on plan assets (percent) | 7.50% | 7.50% | 7.50% |
Employee Benefit Plans (Projected Benefit Payments) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
BancShares Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined Benefit Plan, Accumulated Benefit Obligation | $ 659,023 | $ 587,327 |
Defined Benefit Plan, Estimated Future Employer Contributions in Next Fiscal Year | 50,000 | 50,000 |
2018 | 26,051 | |
2019 | 27,514 | |
2020 | 29,061 | |
2021 | 30,634 | |
2022 | 32,074 | |
2023-2027 | 186,617 | |
Bancorporation Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined Benefit Plan, Accumulated Benefit Obligation | 157,613 | $ 143,676 |
2018 | 6,797 | |
2019 | 7,099 | |
2020 | 7,451 | |
2021 | 7,879 | |
2022 | 8,364 | |
2023-2027 | $ 47,307 |
Employee Benefit Plans (Present Value of Accrued Liability) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Executives Directors And Officer Of Acquired Entities [Member] | |||
Present Value Of Accrued Liability [Roll Forward] | |||
Present value of accrued liability as of January 1 | $ 38,597 | $ 39,878 | |
Benefit expense and interest cost | 3,262 | 3,232 | |
Benefits paid | 4,560 | 4,194 | |
Benefits forfeited | 0 | (319) | |
Present value of accrued liability as of December 31 | 37,299 | 38,597 | $ 39,878 |
BancShares Plan | |||
Present Value Of Accrued Liability [Roll Forward] | |||
Benefit expense and interest cost | 8,569 | 11,936 | 19,446 |
Interest cost | $ 28,940 | $ 28,892 | $ 26,975 |
Discount rate | 3.76% | 4.30% |
Transactions with Related Persons (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Loans and Leases Receivable, Related Parties [Roll Forward] | ||
Beginning balance | $ 353 | $ 79 |
New loans | 11 | 314 |
Repayments | (290) | (40) |
Ending balance | 74 | 353 |
Unfunded loan commitments available to related parties | $ 2,100 | $ 1,800 |
Derivatives (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Derivative [Line Items] | ||
Incremental interest expense paid to interest rate swap counterparties | $ 0 | $ 1,488 |
2011 Interest Rate Swap | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | 0 | |
Notional amount of interest rate derivatives | 0 | |
Interest Rate Cash Flow Hedge Liability at Fair Value | $ 0 | $ 0 |
Derivatives (Schedule Of Interest Rate Swaps) (Details) - 2011 Interest Rate Swap - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Derivative [Line Items] | ||
Interest Rate Cash Flow Hedge Liability at Fair Value | $ 0 | $ 0 |
Derivative, Notional Amount | $ 0 |
Accumulated Other Comrehensive Loss (Components of AOCI) (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Beginning balance | $ (135,192) | $ (64,440) | ||||||
Other comprehensive (loss) income before reclassifications | 9,479 | (58,401) | ||||||
Amounts reclassified from accumulated other comprehensive loss | [1] | 3,419 | (12,351) | |||||
Net current period other comprehensive income (loss) | 12,898 | (70,752) | $ (11,459) | |||||
Ending balance | (122,294) | (135,192) | (64,440) | |||||
Unrealized Loss on Cash Flow Hedges | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Beginning balance | [2] | 0 | (892) | |||||
Other comprehensive (loss) income before reclassifications | [2] | 0 | 892 | |||||
Amounts reclassified from accumulated other comprehensive loss | [2] | 0 | 0 | |||||
Net current period other comprehensive income (loss) | [2] | 0 | 892 | |||||
Ending balance | [2] | 0 | 0 | (892) | ||||
Unrealized Gains on Investment Securities Available for Sale | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Beginning balance | [2] | (45,875) | (15,125) | |||||
Other comprehensive (loss) income before reclassifications | [2] | 17,635 | (13,946) | |||||
Amounts reclassified from accumulated other comprehensive loss | [1],[2] | (2,705) | (16,804) | |||||
Net current period other comprehensive income (loss) | [2] | 14,930 | (30,750) | |||||
Ending balance | [2] | (30,945) | (45,875) | (15,125) | ||||
Defined Benefit Pension Items | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Beginning balance | [2] | (89,317) | (48,423) | |||||
Other comprehensive (loss) income before reclassifications | [2] | (8,156) | (45,347) | |||||
Amounts reclassified from accumulated other comprehensive loss | [1],[2] | 6,124 | 4,453 | |||||
Net current period other comprehensive income (loss) | [2] | (2,032) | (40,894) | |||||
Ending balance | [2] | $ (91,349) | $ (89,317) | $ (48,423) | ||||
|
Accumulated Other Comprehensive Loss (Reclassifications out of AOCI) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||
Long-term obligations | $ 1,059,896 | $ 944,675 | $ 924,905 | ||||||
Securities gains (losses) | 4,293 | 26,673 | 10,817 | ||||||
Income taxes | (219,946) | (125,585) | $ (122,028) | ||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | [1] | 3,419 | (12,351) | ||||||
Unrealized Loss on Cash Flow Hedges | |||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | [2] | 0 | 0 | ||||||
Unrealized Gains on Investment Securities Available for Sale | |||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||
Securities gains (losses) | [1] | 4,293 | 26,673 | ||||||
Income taxes | [1] | (1,588) | (9,869) | ||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | [1],[2] | (2,705) | (16,804) | ||||||
Defined Benefit Pension Items | |||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||
Employee Benefits, prior service costs | [1] | (210) | (210) | ||||||
Reclassification adjustment for losses included in income before income taxes | [1] | (9,510) | (6,859) | ||||||
Total before taxes | (9,720) | (7,069) | [1] | ||||||
Income taxes | [1] | 3,596 | 2,616 | ||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | [1],[2] | $ 6,124 | $ 4,453 | ||||||
|
Parent Company Financial Statements (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Assets | ||||
Overnight investments | $ 1,387,927,000 | $ 1,872,594,000 | ||
Investment securities | 7,180,180,000 | 7,006,580,000 | ||
Other assets | 686,371,000 | 471,412,000 | ||
Total assets | 34,527,512,000 | 32,990,836,000 | ||
Liabilities and Shareholders' Equity | ||||
Short-term borrowings | 693,807,000 | 603,487,000 | ||
Long-term obligations | 870,240,000 | 832,942,000 | ||
Other liabilities | 261,784,000 | 283,629,000 | ||
Stockholders' equity | 3,334,064,000 | 3,012,427,000 | $ 2,872,109,000 | $ 2,687,594,000 |
Total liabilities and shareholders' equity | 34,527,512,000 | 32,990,836,000 | ||
Income Statement [Abstract] | ||||
Interest expense | 43,794,000 | 43,082,000 | 44,304,000 | |
Net interest income (loss) | 1,059,896,000 | 944,675,000 | 924,905,000 | |
Dividends from subsidiaries | 50,424,000 | |||
Income tax benefit | 219,946,000 | 125,585,000 | 122,028,000 | |
Net income | 323,752,000 | 225,482,000 | 210,386,000 | |
OPERATING ACTIVITIES | ||||
Net income | 323,752,000 | 225,482,000 | 210,386,000 | |
Net amortization of premiums and accretion of discounts | (40,028,000) | (44,618,000) | (85,066,000) | |
Gain on elimination of acquired debt | (919,000) | (1,717,000) | 0 | |
Securities (gains) losses | (4,293,000) | (26,673,000) | (10,817,000) | |
Other than temporary impairment on securities | 0 | |||
Change in other assets | (46,920,000) | (27,873,000) | (12,904,000) | |
Change in other liabilities | (29,542,000) | (25,520,000) | 14,458,000 | |
INVESTING ACTIVITIES | ||||
Net change in overnight investments | 586,279,000 | 233,433,000 | (338,213,000) | |
Business acquisitions, net of cash acquired | 304,820,000 | (727,000) | 123,137,000 | |
FINANCING ACTIVITIES | ||||
Net change in short-term borrowings | (44,680,000) | (33,072,000) | (397,952,000) | |
Retirement of long-term obligations | (6,955,000) | (9,279,000) | (5,896,000) | |
Cash dividends paid | (10,809,000) | (14,412,000) | (18,015,000) | |
Net change in cash | (203,591,000) | 5,655,000 | (70,096,000) | |
Cash and due from banks at beginning of period | 539,741,000 | 534,086,000 | 604,182,000 | |
Cash and due from banks at end of period | 336,150,000 | 539,741,000 | 534,086,000 | |
Cash payments for | ||||
Interest | 43,639,000 | 44,998,000 | 46,785,000 | |
Income taxes | 88,565,000 | 108,741,000 | 136,900,000 | |
Parent | ||||
Assets | ||||
Cash | 45,411,000 | 8,278,000 | ||
Overnight investments | 14,476,000 | 26,157,000 | ||
Investment securities | 117,513,000 | 95,564,000 | ||
Investment in Banking Subsidiaries | 3,203,491,000 | 2,932,048,000 | ||
Investment in Other Subsidiaries | 41,165,000 | 41,066,000 | ||
Due from subsidiaries | 4,000 | 0 | ||
Other assets | 46,674,000 | 43,077,000 | ||
Total assets | 3,468,734,000 | 3,146,190,000 | ||
Liabilities and Shareholders' Equity | ||||
Short-term borrowings | 15,000,000 | 0 | ||
Long-term obligations | 107,479,000 | 126,861,000 | ||
Due to Affiliate | 728,000 | 2,350,000 | ||
Other liabilities | 11,463,000 | 4,552,000 | ||
Stockholders' equity | 3,334,064,000 | 3,012,427,000 | ||
Total liabilities and shareholders' equity | 3,468,734,000 | 3,146,190,000 | ||
Income Statement [Abstract] | ||||
Interest income | 921,000 | 1,110,000 | 645,000 | |
Interest expense | 4,814,000 | 6,067,000 | 6,793,000 | |
Net interest income (loss) | (3,893,000) | (4,957,000) | (6,148,000) | |
Dividends from subsidiaries | 90,055,000 | 75,000,000 | ||
Dividend Income, Banking Subsidiaries | 75,006,000 | |||
Dividends from subsidiaries | 0 | 0 | 23,500,000 | |
Other income (loss) | 8,377,000 | 9,330,000 | 1,870,000 | |
Other operating expense | 6,821,000 | 5,641,000 | 2,634,000 | |
Income tax benefit | (5,395,000) | (730,000) | (2,618,000) | |
Income before income tax benefit and equity in undistributed net income of subsidiaries | 48,087,000 | 88,787,000 | 91,594,000 | |
Excess distributions (undistributed ) net income of subsidiaries | (270,270,000) | (135,965,000) | (116,174,000) | |
Net income | 323,752,000 | 225,482,000 | 210,386,000 | |
Income before equity in undistributed net income of subsidiaries | 53,482,000 | 89,517,000 | 94,212,000 | |
OPERATING ACTIVITIES | ||||
Net income | 323,752,000 | 225,482,000 | 210,386,000 | |
Excess distributions (undistributed ) net income of subsidiaries | (270,270,000) | (135,965,000) | (116,174,000) | |
Net amortization of premiums and accretion of discounts | 759,000 | 398,000 | (2,712,000) | |
Gain on elimination of acquired debt | (919,000) | (1,717,000) | 0 | |
Securities (gains) losses | (8,003,000) | (9,446,000) | (236,000) | |
Change in other assets | (10,509,000) | (980,000) | 22,663,000 | |
Change in other liabilities | 2,707,000 | 2,483,000 | (1,157,000) | |
Net cash provided by (Used in) Operating Activities | 37,517,000 | 80,255,000 | 112,770,000 | |
INVESTING ACTIVITIES | ||||
Net change in due from subsidiaries | (4,000) | 0 | 299,889,000 | |
Net change in overnight investments | 11,681,000 | (24,741,000) | (1,416,000) | |
Purchases of investment securities | (28,012,000) | (93,003,000) | (7,818,000) | |
Maturities and sales of investment securities | 32,463,000 | 38,316,000 | 100,586,000 | |
Net Cash Provided by (Used in) Investing Activities | 16,128,000 | (79,428,000) | 391,241,000 | |
FINANCING ACTIVITIES | ||||
Change in Due to Subsidiaries | (1,622,000) | 2,296,000 | 54,000 | |
Net change in short-term borrowings | 0 | 0 | (485,207,000) | |
Retirement of long-term obligations | (4,081,000) | (5,302,000) | 0 | |
Cash dividends paid | (10,809,000) | (14,412,000) | (18,015,000) | |
Net cash used by financing activities | (16,512,000) | (17,418,000) | (503,168,000) | |
Net change in cash | 37,133,000 | (16,591,000) | 843,000 | |
Cash and due from banks at beginning of period | 8,278,000 | 24,869,000 | 24,026,000 | |
Cash and due from banks at end of period | $ 45,411,000 | $ 8,278,000 | $ 24,869,000 |
Subsequent Event (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Jan. 13, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Subsequent Event [Line Items] | |||
Deposits | $ 29,266,275 | $ 28,161,343 | |
Loans and Leases | $ 23,596,825 | $ 21,737,878 | |
Harvest Community Bank | |||
Subsequent Event [Line Items] | |||
Business Combination Cash Received From FDIC In Acquisition | $ 22,296 |
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