ý | Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 |
Montana | 81-0331430 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
401 North 31st Street, Billings, MT | 59116-0918 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ¨ | Accelerated filer | ý | |
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
June 30, 2013 – Class A common stock | 18,952,123 | ||||
June 30, 2013 – Class B common stock | 24,883,758 |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES Quarterly Report on Form 10-Q Index | |||
Page | |||
Part I. | Financial Information | ||
Item 1. | Financial Statements (unaudited) | ||
Consolidated Balance Sheets - June 30, 2013 and December 31, 2012 | 3 | ||
Consolidated Statements of Income - Three and Six Months Ended June 30, 2013 and 2012 | 4 | ||
Consolidated Statements of Comprehensive Income - Three and Six Months Ended June 30, 2013 and 2012 | 5 | ||
Consolidated Statements of Changes in Stockholders’ Equity - Six Months Ended June 30, 2013 and 2012 | 6 | ||
Consolidated Statements of Cash Flows - Six Months Ended June 30, 2013 and 2012 | 7 | ||
9 | |||
Item 2. | 31 | ||
Item 3. | 47 | ||
Item 4. | 47 | ||
Part II. | |||
Item 1. | 47 | ||
Item 1A . | 47 | ||
Item 2. | 47 | ||
Item 3. | 48 | ||
Item 4. | Mine Safety Disclosures | 49 | |
Item 5. | 48 | ||
Item 6. | 49 | ||
50 |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited) | |||||||
June 30, 2013 | December 31, 2012 | ||||||
Assets | |||||||
Cash and due from banks | $ | 128,452 | $ | 177,978 | |||
Federal funds sold | 786 | 730 | |||||
Interest bearing deposits in banks | 238,979 | 622,624 | |||||
Total cash and cash equivalents | 368,217 | 801,332 | |||||
Investment securities: | |||||||
Available-for-sale | 1,923,216 | 1,995,258 | |||||
Held-to-maturity (estimated fair values of $219,028 and $218,933 at June 30, 2013 and December 31, 2012, respectively) | 215,323 | 208,223 | |||||
Total investment securities | 2,138,539 | 2,203,481 | |||||
Loans held for investment | 4,223,078 | 4,157,470 | |||||
Mortgage loans held for sale | 74,286 | 66,442 | |||||
Total loans | 4,297,364 | 4,223,912 | |||||
Less allowance for loan losses | 98,528 | 100,511 | |||||
Net loans | 4,198,836 | 4,123,401 | |||||
Premises and equipment, net of accumulated depreciation | 181,940 | 187,565 | |||||
Goodwill | 183,673 | 183,673 | |||||
Company-owned life insurance | 77,602 | 76,729 | |||||
Other real estate owned (“OREO”) | 22,782 | 32,571 | |||||
Accrued interest receivable | 29,272 | 28,869 | |||||
Mortgage servicing rights, net of accumulated amortization and impairment reserve | 13,304 | 12,653 | |||||
Deferred tax asset, net | 15,397 | 2,597 | |||||
Core deposit intangibles, net of accumulated amortization | 5,228 | 5,937 | |||||
Other assets | 56,718 | 62,953 | |||||
Total assets | $ | 7,291,508 | $ | 7,721,761 | |||
Liabilities and Stockholders’ Equity | |||||||
Deposits: | |||||||
Non-interest bearing | $ | 1,393,732 | $ | 1,495,309 | |||
Interest bearing | 4,536,600 | 4,745,102 | |||||
Total deposits | 5,930,332 | 6,240,411 | |||||
Securities sold under repurchase agreements | 421,314 | 505,785 | |||||
Accounts payable and accrued expenses | 44,054 | 48,208 | |||||
Accrued interest payable | 6,236 | 6,502 | |||||
Long-term debt | 37,139 | 37,160 | |||||
Other borrowed funds | 2 | 32 | |||||
Preferred stock pending redemption | — | 50,000 | |||||
Subordinated debentures held by subsidiary trusts | 82,477 | 82,477 | |||||
Total liabilities | 6,521,554 | 6,970,575 | |||||
Stockholders’ equity: | |||||||
Nonvoting noncumulative preferred stock without par value; authorized 100,000 shares; no shares issued and outstanding as of June 30, 2013 and 5,000 shares issued and outstanding as of December 31, 2012 | — | — | |||||
Common stock | 279,232 | 271,335 | |||||
Retained earnings | 499,761 | 463,860 | |||||
Accumulated other comprehensive income (loss), net | (9,039 | ) | 15,991 | ||||
Total stockholders’ equity | 769,954 | 751,186 | |||||
Total liabilities and stockholders’ equity | $ | 7,291,508 | $ | 7,721,761 |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Interest income: | |||||||||||||||
Interest and fees on loans | $ | 54,853 | $ | 58,084 | $ | 110,346 | $ | 115,994 | |||||||
Interest and dividends on investment securities: | |||||||||||||||
Taxable | 7,671 | 9,458 | 15,717 | 19,163 | |||||||||||
Exempt from federal taxes | 1,215 | 1,240 | 2,441 | 2,444 | |||||||||||
Interest on deposits in banks | 212 | 279 | 510 | 516 | |||||||||||
Interest on federal funds sold | 5 | 6 | 9 | 7 | |||||||||||
Total interest income | 63,956 | 69,067 | 129,023 | 138,124 | |||||||||||
Interest expense: | |||||||||||||||
Interest on deposits | 4,038 | 5,779 | 8,393 | 12,041 | |||||||||||
Interest on securities sold under repurchase agreements | 74 | 152 | 174 | 308 | |||||||||||
Interest on long-term debt | 483 | 495 | 963 | 993 | |||||||||||
Interest on preferred stock pending redemption | — | — | 159 | — | |||||||||||
Interest on subordinated debentures held by subsidiary trusts | 601 | 1,467 | 1,297 | 2,974 | |||||||||||
Total interest expense | 5,196 | 7,893 | 10,986 | 16,316 | |||||||||||
Net interest income | 58,760 | 61,174 | 118,037 | 121,808 | |||||||||||
Provision for loan losses | 375 | 12,000 | 875 | 23,250 | |||||||||||
Net interest income after provision for loan losses | 58,385 | 49,174 | 117,162 | 98,558 | |||||||||||
Non-interest income: | |||||||||||||||
Income from the origination and sale of loans | 10,043 | 9,420 | 20,718 | 17,804 | |||||||||||
Other service charges, commissions and fees | 8,977 | 8,254 | 17,233 | 16,678 | |||||||||||
Service charges on deposit accounts | 4,323 | 4,455 | 8,391 | 8,616 | |||||||||||
Wealth management revenues | 4,020 | 3,815 | 8,154 | 7,098 | |||||||||||
Investment securities gains (losses), net | (12 | ) | 198 | (4 | ) | 229 | |||||||||
Other income | 2,228 | 1,520 | 3,906 | 3,619 | |||||||||||
Total non-interest income | 29,579 | 27,662 | 58,398 | 54,044 | |||||||||||
Non-interest expense: | |||||||||||||||
Salaries and wages | 23,470 | 21,640 | 46,875 | 43,204 | |||||||||||
Employee benefits | 7,546 | 6,819 | 15,721 | 15,785 | |||||||||||
Occupancy, net | 4,063 | 4,037 | 8,089 | 8,025 | |||||||||||
Furniture and equipment | 3,163 | 3,189 | 6,215 | 6,327 | |||||||||||
Outsourced technology services | 2,195 | 2,179 | 4,352 | 4,445 | |||||||||||
OREO expense, net of income | (915 | ) | 1,806 | 981 | 2,911 | ||||||||||
FDIC insurance premiums | 1,356 | 1,601 | 2,733 | 3,196 | |||||||||||
Professional fees | 1,136 | 1,002 | 2,263 | 1,935 | |||||||||||
Mortgage servicing rights amortization | 719 | 817 | 1,558 | 1,712 | |||||||||||
Mortgage servicing rights impairment (recovery) | (11 | ) | 52 | (59 | ) | (816 | ) | ||||||||
Core deposit intangibles amortization | 355 | 355 | 709 | 710 | |||||||||||
Other expenses | 11,943 | 13,802 | 22,268 | 27,305 | |||||||||||
Total non-interest expense | 55,020 | 57,299 | 111,705 | 114,739 | |||||||||||
Income before income tax expense | 32,944 | 19,537 | 63,855 | 37,863 | |||||||||||
Income tax expense | 11,439 | 6,527 | 22,306 | 12,639 | |||||||||||
Net income | 21,505 | 13,010 | 41,549 | 25,224 | |||||||||||
Preferred stock dividends | — | 853 | — | 1,706 | |||||||||||
Net income available to common shareholders | $ | 21,505 | $ | 12,157 | $ | 41,549 | $ | 23,518 | |||||||
Basic earnings per common share | $ | 0.49 | $ | 0.28 | $ | 0.96 | $ | 0.55 | |||||||
Diluted earnings per common share | $ | 0.49 | $ | 0.28 | $ | 0.95 | $ | 0.55 | |||||||
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited) | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
Net income | $ | 21,505 | $ | 13,010 | $ | 41,549 | $ | 25,224 | |||||
Other comprehensive loss, before tax: | |||||||||||||
Investment securities available-for sale: | |||||||||||||
Change in net unrealized gains/losses during period | (35,625 | ) | (1,864 | ) | (41,342 | ) | (1,107 | ) | |||||
Reclassification adjustment for net losses (gains) included in income | 12 | (198 | ) | 4 | (229 | ) | |||||||
Defined benefit post-retirement benefits plans: | |||||||||||||
Change in net actuarial loss | 35 | 35 | 70 | 68 | |||||||||
Other comprehensive loss, before tax | (35,578 | ) | (2,027 | ) | (41,268 | ) | (1,268 | ) | |||||
Deferred tax benefit related to other comprehensive loss | 13,999 | 797 | 16,238 | 499 | |||||||||
Other comprehensive loss, net of tax | (21,579 | ) | (1,230 | ) | (25,030 | ) | (769 | ) | |||||
Comprehensive income (loss), net of tax | $ | (74 | ) | $ | 11,780 | $ | 16,519 | $ | 24,455 |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (In thousands, except share and per share data) (Unaudited) | |||||||||||||||||||
Preferred stock | Common stock | Retained earnings | Accumulated other comprehensive income (loss) | Total stockholders’ equity | |||||||||||||||
Balance at December 31, 2012 | $ | — | $ | 271,335 | $ | 463,860 | $ | 15,991 | $ | 751,186 | |||||||||
Comprehensive income: | |||||||||||||||||||
Net income | — | — | 41,549 | — | 41,549 | ||||||||||||||
Other comprehensive loss, net of tax benefit | — | — | — | (25,030 | ) | (25,030 | ) | ||||||||||||
Common stock transactions: | |||||||||||||||||||
25,677 common shares purchased and retired | — | (448 | ) | — | — | (448 | ) | ||||||||||||
26,096 common shares issued | — | — | — | — | — | ||||||||||||||
108,873 non-vested common shares issued | — | — | — | — | — | ||||||||||||||
10,138 non-vested common shares forfeited | — | — | — | — | — | ||||||||||||||
446,404 stock options exercised, net of 150,290 shares tendered in payment of option price and income tax withholding amounts | — | 5,799 | — | — | 5,799 | ||||||||||||||
Tax benefit of stock-based compensation | — | 524 | — | — | 524 | ||||||||||||||
Stock-based compensation expense | — | 2,022 | — | — | 2,022 | ||||||||||||||
Cash dividends declared: | |||||||||||||||||||
Common ($0.13 per share) | — | — | (5,648 | ) | — | (5,648 | ) | ||||||||||||
Balance at June 30, 2013 | $ | — | $ | 279,232 | $ | 499,761 | $ | (9,039 | ) | $ | 769,954 | ||||||||
Balance at December 31, 2011 | $ | 50,000 | $ | 266,842 | $ | 435,144 | $ | 19,034 | $ | 771,020 | |||||||||
Comprehensive income: | |||||||||||||||||||
Net income | — | — | 25,224 | — | 25,224 | ||||||||||||||
Other comprehensive loss, net of tax benefit | — | — | — | (769 | ) | (769 | ) | ||||||||||||
Common stock transactions: | |||||||||||||||||||
17,981 common shares purchased and retired | — | (257 | ) | — | — | (257 | ) | ||||||||||||
23,973 common shares issued | — | — | — | — | — | ||||||||||||||
122,912 non-vested common shares issued | — | — | — | — | — | ||||||||||||||
3,193 non-vested common shares forfeited | — | — | — | — | — | ||||||||||||||
118,865 stock options exercised, net of 39,667 shares tendered in payment of option price and income tax withholding amounts | — | 1,263 | — | — | 1,263 | ||||||||||||||
Tax benefit of stock-based compensation | — | 126 | — | — | 126 | ||||||||||||||
Stock-based compensation expense | — | 1,724 | — | — | 1,724 | ||||||||||||||
Cash dividends declared: | |||||||||||||||||||
Common ($0.24 per share) | — | — | (10,290 | ) | — | (10,290 | ) | ||||||||||||
Preferred (6.75% per share) | — | — | (1,706 | ) | — | (1,706 | ) | ||||||||||||
Balance at June 30, 2012 | $ | 50,000 | $ | 269,698 | $ | 448,372 | $ | 18,265 | $ | 786,335 |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) | |||||||
Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 41,549 | $ | 25,224 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for loan losses | 875 | 23,250 | |||||
Net gain on disposal of property and equipment | (16 | ) | (501 | ) | |||
Depreciation and amortization | 8,298 | 8,568 | |||||
Net premium amortization on investment securities | 7,902 | 5,188 | |||||
Net loss (gain) on investment securities transactions | 4 | (229 | ) | ||||
Net gain on sale of mortgage loans held for sale | (14,984 | ) | (12,423 | ) | |||
Net loss (gain) on sale of OREO | (2,671 | ) | 6 | ||||
Write-down of OREO and other assets pending disposal | 3,180 | 1,217 | |||||
Net reversal of impairment of mortgage servicing rights | (59 | ) | (816 | ) | |||
Net gain on sale of mortgage servicing rights | — | (19 | ) | ||||
Deferred income tax expense | 3,456 | 5,030 | |||||
Net increase in cash surrender value of company-owned life insurance policies | (873 | ) | (969 | ) | |||
Stock-based compensation expense | 2,022 | 1,724 | |||||
Tax benefits from stock-based compensation expense | 524 | 126 | |||||
Excess tax benefits from stock-based compensation | (468 | ) | (108 | ) | |||
Originations of mortgage loans held for sale, net of sales | 4,991 | (12,265 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Decrease (increase) in interest receivable | (403 | ) | 1,038 | ||||
Decrease in other assets | 7,004 | 1,754 | |||||
Increase (decrease) in accrued interest payable | (266 | ) | 92 | ||||
Decrease in accounts payable and accrued expenses | (4,112 | ) | (8,659 | ) | |||
Net cash provided by operating activities | 55,953 | 37,228 | |||||
Cash flows from investing activities: | |||||||
Purchases of investment securities: | |||||||
Held-to-maturity | (13,755 | ) | (19,104 | ) | |||
Available-for-sale | (430,395 | ) | (439,614 | ) | |||
Proceeds from maturities and pay-downs of investment securities: | |||||||
Held-to-maturity | 5,807 | 4,739 | |||||
Available-for-sale | 453,678 | 536,527 | |||||
Capital distribution by unconsolidated subsidiary trust | — | 1,238 | |||||
Proceeds from sales of mortgage servicing rights | 470 | 907 | |||||
Extensions of credit to customers, net of repayments | (84,078 | ) | (29,736 | ) | |||
Recoveries of loans charged-off | 7,057 | 2,795 | |||||
Proceeds from sales of OREO | 18,464 | 15,674 | |||||
Capital expenditures, net of sales | (1,886 | ) | (8,467 | ) | |||
Net cash provided by (used in) investing activities | $ | (44,638 | ) | $ | 64,959 |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (In thousands) (Unaudited) | |||||||
Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
Cash flows from financing activities: | |||||||
Net increase (decrease) in deposits | $ | (310,079 | ) | $ | 74,408 | ||
Net decrease in repurchase agreements | (84,471 | ) | (60,250 | ) | |||
Net decrease in other borrowed funds | (30 | ) | — | ||||
Repayment of junior subordinated debentures held by subsidiary trusts | — | (41,238 | ) | ||||
Repayments of long-term debt | (21 | ) | (19 | ) | |||
Redemption of preferred stock | (50,000 | ) | |||||
Proceeds from issuance of common stock | 5,799 | 1,263 | |||||
Excess tax benefits from stock-based compensation | 468 | 108 | |||||
Purchase and retirement of common stock | (448 | ) | (257 | ) | |||
Dividends paid to common stockholders | (5,648 | ) | (10,290 | ) | |||
Dividends paid to preferred stockholders | — | (1,706 | ) | ||||
Net cash used in financing activities | (444,430 | ) | (37,981 | ) | |||
Net increase (decrease) in cash and cash equivalents | (433,115 | ) | 64,206 | ||||
Cash and cash equivalents at beginning of period | 801,332 | 472,447 | |||||
Cash and cash equivalents at end of period | $ | 368,217 | $ | 536,653 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid during the period for income taxes | $ | 20,838 | $ | 12,740 | |||
Cash paid during the period for interest expense | 11,252 | 16,224 |
(1) | Basis of Presentation |
(2) | Investment Securities |
June 30, 2013 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||
Available-for-Sale: | ||||||||||||
Obligations of U.S. government agencies | $ | 744,215 | $ | 1,158 | $ | (11,559 | ) | $ | 733,814 | |||
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations | 1,190,975 | 15,783 | (17,819 | ) | 1,188,939 | |||||||
Private mortgage-backed securities | 457 | 9 | (3 | ) | 463 | |||||||
Total | $ | 1,935,647 | $ | 16,950 | $ | (29,381 | ) | $ | 1,923,216 |
June 30, 2013 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||
Held-to Maturity: | ||||||||||||
State, county and municipal securities | $ | 197,193 | $ | 5,730 | $ | (1,990 | ) | $ | 200,933 | |||
Corporate securities | 18,130 | 64 | (99 | ) | 18,095 | |||||||
Total | $ | 215,323 | $ | 5,794 | $ | (2,089 | ) | $ | 219,028 |
December 31, 2012 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||
Available-for-Sale: | ||||||||||||
Obligations of U.S. government agencies | $ | 751,501 | $ | 3,518 | $ | (163 | ) | $ | 754,856 | |||
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations | 1,214,377 | 27,000 | (1,526 | ) | 1,239,851 | |||||||
Private mortgage-backed securities | 539 | 13 | (1 | ) | 551 | |||||||
Total | $ | 1,966,417 | $ | 30,531 | $ | (1,690 | ) | $ | 1,995,258 |
December 31, 2012 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||
Held-to Maturity: | ||||||||||||
State, county and municipal securities | $ | 192,875 | $ | 10,835 | $ | (176 | ) | $ | 203,534 | |||
Corporate securities | 14,975 | 64 | (13 | ) | 15,026 | |||||||
Other securities | 373 | — | — | 373 | ||||||||
Total | $ | 208,223 | $ | 10,899 | $ | (189 | ) | $ | 218,933 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Gross realized gains | $ | 4 | $ | 201 | $ | 12 | $ | 232 | |||||||
Gross realized losses | 16 | 3 | 16 | 3 |
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||
June 30, 2013 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||
Available-for-Sale: | ||||||||||||||||||||
Obligations of U.S. government agencies | $ | 442,307 | $ | (11,559 | ) | $ | — | $ | — | $ | 442,307 | $ | (11,559 | ) | ||||||
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations | 742,630 | (17,819 | ) | — | — | 742,630 | (17,819 | ) | ||||||||||||
Private mortgage-backed securities | — | — | 112 | (3 | ) | 112 | (3 | ) | ||||||||||||
Total | $ | 1,184,937 | $ | (29,378 | ) | $ | 112 | $ | (3 | ) | $ | 1,185,049 | $ | (29,381 | ) |
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||
June 30, 2013 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||
Held-to-Maturity: | ||||||||||||||||||||
State, county and municipal securities | $ | 52,225 | $ | (1,963 | ) | $ | 504 | $ | (27 | ) | $ | 52,729 | $ | (1,990 | ) | |||||
Corporate securities | 12,399 | (99 | ) | — | — | 12,399 | (99 | ) | ||||||||||||
Total | $ | 64,624 | $ | (2,062 | ) | $ | 504 | $ | (27 | ) | $ | 65,128 | $ | (2,089 | ) |
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||
December 31, 2012 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||
Available-for-Sale: | ||||||||||||||||||||
Obligations of U.S. government agencies | $ | 93,982 | $ | (163 | ) | $ | — | $ | — | $ | 93,982 | $ | (163 | ) | ||||||
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations | 250,198 | (1,526 | ) | — | — | 250,198 | (1,526 | ) | ||||||||||||
Private mortgage-backed securities | — | — | 137 | (1 | ) | 137 | (1 | ) | ||||||||||||
Total | $ | 344,180 | $ | (1,689 | ) | $ | 137 | $ | (1 | ) | $ | 344,317 | $ | (1,690 | ) |
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||
December 31, 2012 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||
Held-to-Maturity: | ||||||||||||||||||||
State, county and municipal securities | $ | 19,389 | $ | (168 | ) | $ | 557 | $ | (8 | ) | $ | 19,946 | $ | (176 | ) | |||||
Corporate securities | 9,312 | (13 | ) | — | — | 9,312 | (13 | ) | ||||||||||||
Total | $ | 28,701 | $ | (181 | ) | $ | 557 | $ | (8 | ) | $ | 29,258 | $ | (189 | ) |
Available-for-Sale | Held-to-Maturity | ||||||||||||
June 30, 2013 | Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||
Within one year | $ | 328,967 | $ | 328,602 | $ | 4,898 | $ | 4,935 | |||||
After one year but within five years | 944,490 | 940,392 | 57,519 | 58,058 | |||||||||
After five years but within ten years | 602,366 | 594,500 | 88,943 | 90,890 | |||||||||
After ten years | 59,824 | 59,722 | 63,963 | 65,145 | |||||||||
Total | $ | 1,935,647 | $ | 1,923,216 | $ | 215,323 | $ | 219,028 |
(3) | Loans |
June 30, 2013 | December 31, 2012 | ||||||
Real estate loans: | |||||||
Commercial | $ | 1,447,145 | $ | 1,497,272 | |||
Construction: | |||||||
Land acquisition & development | 210,761 | 220,196 | |||||
Residential | 60,883 | 49,274 | |||||
Commercial | 65,567 | 65,059 | |||||
Total construction loans | 337,211 | 334,529 | |||||
Residential | 804,200 | 708,339 | |||||
Agricultural | 176,799 | 177,244 | |||||
Total real estate loans | 2,765,355 | 2,717,384 | |||||
Consumer: | |||||||
Indirect consumer | 457,151 | 438,245 | |||||
Other consumer | 136,459 | 137,743 | |||||
Credit card | 59,334 | 60,806 | |||||
Total consumer loans | 652,944 | 636,794 | |||||
Commercial | 680,751 | 688,753 | |||||
Agricultural | 121,530 | 113,627 | |||||
Other, including overdrafts | 2,498 | 912 | |||||
Loans held for investment | 4,223,078 | 4,157,470 | |||||
Mortgage loans held for sale | 74,286 | 66,442 | |||||
Total loans | $ | 4,297,364 | $ | 4,223,912 |
Total Loans | |||||||||||||||||||||
30 - 59 | 60 - 89 | > 90 | 30 or More | ||||||||||||||||||
Days | Days | Days | Days | Current | Non-accrual | Total | |||||||||||||||
As of June 30, 2013 | Past Due | Past Due | Past Due | Past Due | Loans | Loans | Loans | ||||||||||||||
Real estate | |||||||||||||||||||||
Commercial | $ | 11,794 | $ | 1,766 | $ | — | $ | 13,560 | $ | 1,387,523 | $ | 46,062 | $ | 1,447,145 | |||||||
Construction: | |||||||||||||||||||||
Land acquisition & development | 4,265 | 974 | 61 | 5,300 | 189,173 | 16,288 | 210,761 | ||||||||||||||
Residential | 1,112 | — | — | 1,112 | 58,245 | 1,526 | 60,883 | ||||||||||||||
Commercial | — | — | — | — | 59,375 | 6,192 | 65,567 | ||||||||||||||
Total construction loans | 5,377 | 974 | 61 | 6,412 | 306,793 | 24,006 | 337,211 | ||||||||||||||
Residential | 2,139 | 1,033 | 701 | 3,873 | 792,782 | 7,545 | 804,200 | ||||||||||||||
Agricultural | 350 | — | 83 | 433 | 166,677 | 9,689 | 176,799 | ||||||||||||||
Total real estate loans | 19,660 | 3,773 | 845 | 24,278 | 2,653,775 | 87,302 | 2,765,355 | ||||||||||||||
Consumer: | |||||||||||||||||||||
Indirect consumer | 2,006 | 416 | 38 | 2,460 | 454,395 | 296 | 457,151 | ||||||||||||||
Other consumer | 867 | 63 | 14 | 944 | 134,975 | 540 | 136,459 | ||||||||||||||
Credit card | 301 | 275 | 487 | 1,063 | 58,250 | 21 | 59,334 | ||||||||||||||
Total consumer loans | 3,174 | 754 | 539 | 4,467 | 647,620 | 857 | 652,944 | ||||||||||||||
Commercial | 8,235 | 1,523 | 361 | 10,119 | 655,189 | 15,443 | 680,751 | ||||||||||||||
Agricultural | 1,264 | 1,025 | — | 2,289 | 119,114 | 127 | 121,530 | ||||||||||||||
Other, including overdrafts | — | — | — | 2,498 | — | 2,498 | |||||||||||||||
Loans held for investment | 32,333 | 7,075 | 1,745 | 41,153 | 4,078,196 | 103,729 | 4,223,078 | ||||||||||||||
Mortgage loans originated for sale | — | — | — | — | 74,286 | — | 74,286 | ||||||||||||||
Total loans | $ | 32,333 | $ | 7,075 | $ | 1,745 | $ | 41,153 | $ | 4,152,482 | $ | 103,729 | $ | 4,297,364 |
Total Loans | |||||||||||||||||||||
30 - 59 | 60 - 89 | > 90 | 30 or More | ||||||||||||||||||
Days | Days | Days | Days | Current | Non-accrual | Total | |||||||||||||||
As of December 31, 2012 | Past Due | Past Due | Past Due | Past Due | Loans | Loans | Loans | ||||||||||||||
Real estate | |||||||||||||||||||||
Commercial | $ | 5,449 | $ | 3,163 | $ | 2 | $ | 8,614 | $ | 1,438,142 | $ | 50,516 | $ | 1,497,272 | |||||||
Construction: | |||||||||||||||||||||
Land acquisition & development | 3,371 | 2,121 | 318 | 5,810 | 195,077 | 19,309 | 220,196 | ||||||||||||||
Residential | 283 | — | — | 283 | 46,816 | 2,175 | 49,274 | ||||||||||||||
Commercial | — | — | — | — | 56,933 | 8,126 | 65,059 | ||||||||||||||
Total construction loans | 3,654 | 2,121 | 318 | 6,093 | 298,826 | 29,610 | 334,529 | ||||||||||||||
Residential | 3,896 | 969 | 1,085 | 5,950 | 691,963 | 10,426 | 708,339 | ||||||||||||||
Agricultural | 1,187 | — | 218 | 1,405 | 171,009 | 4,830 | 177,244 | ||||||||||||||
Total real estate loans | 14,186 | 6,253 | 1,623 | 22,062 | 2,599,940 | 95,382 | 2,717,384 | ||||||||||||||
Consumer: | |||||||||||||||||||||
Indirect consumer | 3,218 | 512 | 32 | 3,762 | 434,200 | 283 | 438,245 | ||||||||||||||
Other consumer | 1,044 | 104 | 31 | 1,179 | 135,574 | 990 | 137,743 | ||||||||||||||
Credit card | 409 | 278 | 392 | 1,079 | 59,704 | 23 | 60,806 | ||||||||||||||
Total consumer loans | 4,671 | 894 | 455 | 6,020 | 629,478 | 1,296 | 636,794 | ||||||||||||||
Commercial | 5,463 | 1,064 | 216 | 6,743 | 671,414 | 10,596 | 688,753 | ||||||||||||||
Agricultural | 1,710 | 361 | — | 2,071 | 111,031 | 525 | 113,627 | ||||||||||||||
Other, including overdrafts | — | — | — | — | 912 | — | 912 | ||||||||||||||
Loans held for investment | 26,030 | 8,572 | 2,294 | 36,896 | 4,012,775 | 107,799 | 4,157,470 | ||||||||||||||
Mortgage loans originated for sale | — | — | — | — | 66,442 | — | 66,442 | ||||||||||||||
Total loans | $ | 26,030 | $ | 8,572 | $ | 2,294 | $ | 36,896 | $ | 4,079,217 | $ | 107,799 | $ | 4,223,912 |
As of June 30, 2013 | Unpaid Total Principal Balance | Recorded Investment With No Allowance | Recorded Investment With Allowance | Total Recorded Investment | Related Allowance | ||||||||||
Real estate: | |||||||||||||||
Commercial | $ | 65,957 | $ | 32,854 | $ | 31,688 | $ | 64,542 | $ | 5,498 | |||||
Construction: | |||||||||||||||
Land acquisition & development | 21,554 | 10,526 | 6,755 | 17,281 | 2,549 | ||||||||||
Residential | 2,227 | 1,526 | — | 1,526 | — | ||||||||||
Commercial | 8,374 | 5,944 | 248 | 6,192 | 63 | ||||||||||
Total construction loans | 32,155 | 17,996 | 7,003 | 24,999 | 2,612 | ||||||||||
Residential | 10,554 | 2,448 | 5,331 | 7,779 | 1,253 | ||||||||||
Agricultural | 10,017 | 7,363 | 2,558 | 9,921 | 904 | ||||||||||
Total real estate loans | 118,683 | 60,661 | 46,580 | 107,241 | 10,267 | ||||||||||
Commercial | 17,776 | 6,792 | 9,918 | 16,710 | 5,205 | ||||||||||
Agricultural | 191 | 117 | 22 | 139 | 22 | ||||||||||
Total | $ | 136,650 | $ | 67,570 | $ | 56,520 | $ | 124,090 | $ | 15,494 |
As of December 31, 2012 | Unpaid Total Principal Balance | Recorded Investment With No Allowance | Recorded Investment With Allowance | Total Recorded Investment | Related Allowance | ||||||||||
Real estate: | |||||||||||||||
Commercial | $ | 84,300 | $ | 39,049 | $ | 34,774 | $ | 73,823 | $ | 4,112 | |||||
Construction: | |||||||||||||||
Land acquisition & development | 28,558 | 15,891 | 7,173 | 23,064 | 1,457 | ||||||||||
Residential | 3,018 | 1,976 | 710 | 2,686 | 251 | ||||||||||
Commercial | 10,447 | 7,785 | 340 | 8,125 | 69 | ||||||||||
Total construction loans | 42,023 | 25,652 | 8,223 | 33,875 | 1,777 | ||||||||||
Residential | 13,271 | 6,152 | 4,495 | 10,647 | 1,677 | ||||||||||
Agricultural | 5,559 | 1,834 | 3,227 | 5,061 | 784 | ||||||||||
Total real estate loans | 145,153 | 72,687 | 50,719 | 123,406 | 8,350 | ||||||||||
Commercial | 12,770 | 9,036 | 3,206 | 12,242 | 1,919 | ||||||||||
Agricultural | 589 | 509 | 28 | 537 | 28 | ||||||||||
Total | $ | 158,512 | $ | 82,232 | $ | 53,953 | $ | 136,185 | $ | 10,297 |
Three Months Ended June 30, | |||||||||||||||
2013 | 2012 | ||||||||||||||
Average Recorded Investment | Income Recognized | Average Recorded Investment | Income Recognized | ||||||||||||
Real estate: | |||||||||||||||
Commercial | $ | 67,605 | $ | 272 | $ | 87,135 | $ | 320 | |||||||
Construction: | |||||||||||||||
Land acquisition & development | 19,007 | 15 | 51,949 | 30 | |||||||||||
Residential | 1,569 | — | 3,637 | — | |||||||||||
Commercial | 6,346 | — | 20,807 | — | |||||||||||
Total construction loans | 26,922 | 15 | 76,393 | 30 | |||||||||||
Residential | 8,311 | 5 | 14,726 | 12 | |||||||||||
Agricultural | 8,255 | 4 | 6,816 | — | |||||||||||
Total real estate loans | 111,093 | 296 | 185,070 | 362 | |||||||||||
Commercial | 16,087 | 18 | 14,355 | 22 | |||||||||||
Agricultural | 373 | 4 | 1,378 | 11 | |||||||||||
Total | $ | 127,553 | $ | 318 | $ | 200,803 | $ | 395 |
Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | ||||||||||||||
Average Recorded Investment | Income Recognized | Average Recorded Investment | Income Recognized | ||||||||||||
Real estate: | |||||||||||||||
Commercial | $ | 67,192 | $ | 610 | $ | 85,701 | $ | 671 | |||||||
Construction: | |||||||||||||||
Land acquisition & development | 20,123 | 456 | 56,924 | 46 | |||||||||||
Residential | 2,040 | — | 8,810 | — | |||||||||||
Commercial | 7,118 | — | 22,536 | — | |||||||||||
Total construction loans | 29,281 | 456 | 88,270 | 46 | |||||||||||
Residential | 9,429 | 9 | 16,251 | 21 | |||||||||||
Agricultural | 6,611 | 8 | 10,039 | 32 | |||||||||||
Total real estate loans | 112,513 | 1,083 | 200,261 | 770 | |||||||||||
Commercial | 14,484 | 36 | 16,195 | 44 | |||||||||||
Agricultural | 502 | 8 | 1,246 | 15 | |||||||||||
Total | $ | 127,499 | $ | 1,127 | $ | 217,702 | $ | 829 |
Number of Notes | Type of Concession | Principal Balance at Restructure Date | |||||||||||||||||
Three Months Ended June 30, 2013 | Interest only period | Extension of terms or maturity | Interest rate adjustment | Other (1) | |||||||||||||||
Real estate: | |||||||||||||||||||
Construction: | |||||||||||||||||||
Land acquisition & development | 1 | $ | — | $ | 334 | $ | — | $ | — | $ | 334 | ||||||||
Residential | 2 | — | 408 | — | — | 408 | |||||||||||||
Total construction loans | 3 | — | 742 | — | — | 742 | |||||||||||||
Residential | 3 | — | 463 | — | — | 463 | |||||||||||||
Total real estate loans | 6 | — | 1,205 | — | — | 1,205 | |||||||||||||
Total loans restructured during period | 6 | $ | — | $ | 1,205 | $ | — | $ | — | $ | 1,205 |
Number of Notes | Type of Concession | Principal Balance at Restructure Date | |||||||||||||||||
Six Months Ended June 30, 2013 | Interest only period | Extension of terms or maturity | Interest rate adjustment | Other (1) | |||||||||||||||
Real estate: | |||||||||||||||||||
Commercial | 10 | $ | — | $ | 389 | $ | 5,345 | $ | 183 | $ | 5,917 | ||||||||
Construction: | |||||||||||||||||||
Land acquisition & development | 2 | 120 | 334 | — | — | 454 | |||||||||||||
Residential | 2 | — | 408 | — | — | 408 | |||||||||||||
Total construction loans | 4 | 120 | 742 | — | — | 862 | |||||||||||||
Residential | 3 | — | 463 | — | — | 463 | |||||||||||||
Total real estate loans | 17 | 120 | 1,594 | 5,345 | 183 | 7,242 | |||||||||||||
Commercial | 4 | 50 | 178 | 265 | 87 | 580 | |||||||||||||
Total loans restructured during period | 21 | $ | 170 | $ | 1,772 | $ | 5,610 | $ | 270 | $ | 7,822 | ||||||||
(1) Other includes concessions that reduce or defer payments for a specified period of time and/or do not fit into other designated categories. |
Three Months Ended June 30, 2013 | Six Months Ended June 30, 2013 | ||||||||||
Number of Notes | Balance | Number of Notes | Balance | ||||||||
Real estate: | |||||||||||
Commercial | 1 | $ | 625 | 1 | $ | 625 | |||||
Construction: | |||||||||||
Residential | — | — | 1 | 278 | |||||||
Total real estate loans | 1 | 625 | 2 | 903 | |||||||
Commercial | 1 | 332 | |||||||||
Total | 1 | $ | 625 | 3 | $ | 1,235 |
As of June 30, 2013 | Other Assets Especially Mentioned | Substandard | Doubtful | Total Criticized Loans | ||||||||
Real estate: | ||||||||||||
Commercial | $ | 102,975 | $ | 101,713 | $ | 18,377 | $ | 223,065 | ||||
Construction: | ||||||||||||
Land acquisition & development | 25,726 | 16,687 | 6,733 | 49,146 | ||||||||
Residential | 2,363 | 1,530 | 279 | 4,172 | ||||||||
Commercial | — | 485 | 5,707 | 6,192 | ||||||||
Total construction loans | 28,089 | 18,702 | 12,719 | 59,510 | ||||||||
Residential | 6,834 | 7,439 | 5,867 | 20,140 | ||||||||
Agricultural | 12,397 | 11,251 | 2,558 | 26,206 | ||||||||
Total real estate loans | 150,295 | 139,105 | 39,521 | 328,921 | ||||||||
Consumer: | ||||||||||||
Indirect consumer | 757 | 1,517 | 124 | 2,398 | ||||||||
Other consumer | 586 | 782 | 386 | 1,754 | ||||||||
Credit card | — | 450 | 2,291 | 2,741 | ||||||||
Total consumer loans | 1,343 | 2,749 | 2,801 | 6,893 | ||||||||
Commercial | 37,458 | 18,437 | 9,922 | 65,817 | ||||||||
Agricultural | 3,294 | 1,495 | 22 | 4,811 | ||||||||
Total | $ | 192,390 | $ | 161,786 | $ | 52,266 | $ | 406,442 |
As of December 31, 2012 | Other Assets Especially Mentioned | Substandard | Doubtful | Total Criticized Loans | ||||||||
Real estate: | ||||||||||||
Commercial | $ | 101,936 | $ | 135,282 | $ | 15,173 | $ | 252,391 | ||||
Construction: | ||||||||||||
Land acquisition & development | 28,137 | 25,884 | 4,739 | 58,760 | ||||||||
Residential | 2,531 | 2,427 | 1,143 | 6,101 | ||||||||
Commercial | 3,000 | 795 | 7,383 | 11,178 | ||||||||
Total construction loans | 33,668 | 29,106 | 13,265 | 76,039 | ||||||||
Residential | 9,542 | 11,680 | 4,511 | 25,733 | ||||||||
Agricultural | 18,490 | 6,737 | 3,228 | 28,455 | ||||||||
Total real estate loans | 163,636 | 182,805 | 36,177 | 382,618 | ||||||||
Consumer: | ||||||||||||
Indirect consumer | 793 | 1,764 | 114 | 2,671 | ||||||||
Other consumer | 684 | 1,395 | 628 | 2,707 | ||||||||
Credit card | — | 415 | 2,085 | 2,500 | ||||||||
Total consumer loans | 1,477 | 3,574 | 2,827 | 7,878 | ||||||||
Commercial | 42,223 | 27,184 | 3,428 | 72,835 | ||||||||
Agricultural | 2,596 | 1,625 | 28 | 4,249 | ||||||||
Total | $ | 209,932 | $ | 215,188 | $ | 42,460 | $ | 467,580 |
(4) | Allowance For Loan Losses |
Three Months Ended June 30, 2013 | Real Estate | Consumer | Commercial | Agriculture | Other | Total | ||||||||||||
Allowance for loan losses: | ||||||||||||||||||
Beginning balance | $ | 71,666 | $ | 7,088 | $ | 18,652 | $ | 480 | $ | 18 | $ | 97,904 | ||||||
Provision charged to operating expense | (1,009 | ) | 579 | 763 | 27 | 15 | 375 | |||||||||||
Less loans charged-off | (2,027 | ) | (1,299 | ) | (569 | ) | — | — | (3,895 | ) | ||||||||
Add back recoveries of loans previously charged-off | 2,873 | 672 | 596 | 3 | — | 4,144 | ||||||||||||
Ending balance | $ | 71,503 | $ | 7,040 | $ | 19,442 | $ | 510 | $ | 33 | $ | 98,528 | ||||||
Six Months Ended June 30, 2013 | Real Estate | Consumer | Commercial | Agriculture | Other | Total | ||||||||||||
Allowance for loan losses: | ||||||||||||||||||
Beginning balance | $ | 75,782 | $ | 7,140 | $ | 17,073 | $ | 504 | $ | 12 | $ | 100,511 | ||||||
Provision charged to operating expense | (2,044 | ) | 1,116 | 1,778 | 4 | 21 | 875 | |||||||||||
Less loans charged-off | (6,170 | ) | (2,361 | ) | (1,380 | ) | (4 | ) | — | (9,915 | ) | |||||||
Add back recoveries of loans previously charged-off | 3,935 | 1,145 | 1,971 | 6 | — | 7,057 | ||||||||||||
Ending balance | $ | 71,503 | $ | 7,040 | $ | 19,442 | $ | 510 | $ | 33 | $ | 98,528 | ||||||
As of June 30, 2013 | Real Estate | Consumer | Commercial | Agriculture | Other | Total | ||||||||||||
Allowance for loan losses: | ||||||||||||||||||
Loans individually evaluated for impairment | $ | 10,267 | $ | — | $ | 5,205 | $ | 22 | $ | — | $ | 15,494 | ||||||
Loans collectively evaluated for impairment | 61,236 | 7,040 | 14,237 | 488 | 33 | 83,034 | ||||||||||||
Allowance for loan losses | $ | 71,503 | $ | 7,040 | $ | 19,442 | $ | 510 | $ | 33 | $ | 98,528 | ||||||
As of June 30, 2013 | Real Estate | Consumer | Commercial | Agriculture | Other | Total | ||||||||||||
Total loans: | ||||||||||||||||||
Individually evaluated for impairment | $ | 107,241 | $ | — | $ | 16,710 | $ | 139 | $ | — | $ | 124,090 | ||||||
Collectively evaluated for impairment | 2,732,400 | 652,944 | 664,041 | 121,391 | 2,498 | 4,173,274 | ||||||||||||
Total loans | $ | 2,839,641 | $ | 652,944 | $ | 680,751 | $ | 121,530 | $ | 2,498 | $ | 4,297,364 |
Three Months Ended June 30, 2012 | Real Estate | Consumer | Commercial | Agriculture | Other | Total | ||||||||||||
Allowance for loan losses: | ||||||||||||||||||
Beginning balance | $ | 89,128 | $ | 7,212 | $ | 18,380 | $ | 1,182 | $ | — | $ | 115,902 | ||||||
Provision charged to operating expense | 10,419 | 784 | 866 | (69 | ) | — | 12,000 | |||||||||||
Less loans charged-off | (22,350 | ) | (1,210 | ) | (3,180 | ) | (5 | ) | — | (26,745 | ) | |||||||
Add back recoveries of loans previously charged-off | 526 | 488 | 609 | 14 | — | 1,637 | ||||||||||||
Ending balance | $ | 77,723 | $ | 7,274 | $ | 16,675 | $ | 1,122 | $ | — | $ | 102,794 |
Six Months Ended June 30, 2012 | Real Estate | Consumer | Commercial | Agriculture | Other | Total | ||||||||||||
Allowance for loan losses: | ||||||||||||||||||
Beginning balance | $ | 87,396 | $ | 8,594 | $ | 15,325 | $ | 1,266 | $ | — | $ | 112,581 | ||||||
Provision charged to operating expense | 16,801 | 193 | 6,307 | (51 | ) | — | 23,250 | |||||||||||
Less loans charged-off | (27,506 | ) | (2,522 | ) | (5,692 | ) | (112 | ) | — | (35,832 | ) | |||||||
Add back recoveries of loans previously charged-off | 1,032 | 1,009 | 735 | 19 | — | 2,795 | ||||||||||||
Ending balance | $ | 77,723 | $ | 7,274 | $ | 16,675 | $ | 1,122 | $ | — | $ | 102,794 | ||||||
As of June 30, 2012 | Real Estate | Consumer | Commercial | Agriculture | Other | Total | ||||||||||||
Allowance for loan losses: | ||||||||||||||||||
Loans individually evaluated for impairment | $ | 15,199 | $ | — | $ | 2,339 | $ | 405 | $ | — | $ | 17,943 | ||||||
Loans collectively evaluated for impairment | 62,524 | 7,274 | 14,336 | 717 | — | 84,851 | ||||||||||||
Allowance for loan losses | $ | 77,723 | $ | 7,274 | $ | 16,675 | $ | 1,122 | $ | — | $ | 102,794 | ||||||
As of June 30, 2012 | Real Estate | Consumer | Commercial | Agriculture | Other | Total | ||||||||||||
Total loans: | ||||||||||||||||||
Individually evaluated for impairment | $ | 150,026 | $ | — | $ | 11,974 | $ | 500 | $ | — | $ | 162,500 | ||||||
Collectively evaluated for impairment | 2,538,281 | 621,212 | 708,036 | 137,615 | 2,319 | 4,007,463 | ||||||||||||
Total loans | $ | 2,688,307 | $ | 621,212 | $ | 720,010 | $ | 138,115 | $ | 2,319 | $ | 4,169,963 |
(5) | Other Real Estate Owned |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Beginning balance | $ | 32,470 | $ | 44,756 | $ | 32,571 | $ | 37,452 | |||||||
Additions | 3,224 | 19,139 | 8,555 | 33,117 | |||||||||||
Capitalized improvements | 3 | 406 | 13 | 75 | |||||||||||
Valuation adjustments | (259 | ) | (569 | ) | (2,564 | ) | (1,147 | ) | |||||||
Dispositions | (12,656 | ) | (9,915 | ) | (15,793 | ) | (15,680 | ) | |||||||
Ending balance | $ | 22,782 | $ | 53,817 | $ | 22,782 | $ | 53,817 |
(6) | Capital Stock |
(7) | Earnings per Common Share |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
Net income | $ | 21,505 | $ | 13,010 | $ | 41,549 | $ | 25,224 | |||||
Less preferred stock dividends | — | 853 | — | 1,706 | |||||||||
Net income available to common shareholders, basic and diluted | $ | 21,505 | $ | 12,157 | $ | 41,549 | $ | 23,518 | |||||
Weighted average common shares outstanding for basic earnings per share computation | 43,480,502 | 42,966,926 | 43,335,682 | 42,920,347 | |||||||||
Dilutive effects of stock-based compensation | 427,785 | 93,278 | 376,978 | 96,111 | |||||||||
Weighted average common shares outstanding for diluted earnings per common share computation | 43,908,287 | 43,060,204 | 43,712,660 | 43,016,458 | |||||||||
Basic earnings per common share | $ | 0.49 | $ | 0.28 | $ | 0.96 | $ | 0.55 | |||||
Diluted earnings per common share | $ | 0.49 | $ | 0.28 | $ | 0.95 | $ | 0.55 |
(8) | Regulatory Capital |
Actual | Adequately Capitalized | Well Capitalized | |||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||
June 30, 2013 | |||||||||||||||||
Total risk-based capital: | |||||||||||||||||
Consolidated | $ | 788,109 | 16.3 | % | $ | 387,029 | 8.0 | % | NA | NA | |||||||
FIB | 715,684 | 14.9 | 384,810 | 8.0 | $ | 481,012 | 10.0 | % | |||||||||
Tier 1 risk-based capital: | |||||||||||||||||
Consolidated | 699,166 | 14.5 | 193,515 | 4.0 | NA | NA | |||||||||||
FIB | 643,083 | 13.4 | 192,405 | 4.0 | $ | 288,607 | 6.0 | ||||||||||
Leverage capital ratio: | |||||||||||||||||
Consolidated | 699,166 | 9.7 | 287,443 | 4.0 | NA | NA | |||||||||||
FIB | 643,083 | 9.0 | 286,562 | 4.0 | $ | 358,203 | 5.0 |
Actual | Adequately Capitalized | Well Capitalized | |||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||
December 31, 2012 | |||||||||||||||||
Total risk-based capital: | |||||||||||||||||
Consolidated | $ | 748,431 | 15.6 | % | $ | 384,014 | 8.0 | % | NA | NA | |||||||
FIB | 697,695 | 14.6 | 382,245 | 8.0 | $ | 477,806 | 10.0 | % | |||||||||
Tier 1 risk-based capital: | |||||||||||||||||
Consolidated | 652,929 | 13.6 | 192,007 | 4.0 | NA | NA | |||||||||||
FIB | 622,466 | 13.0 | 191,122 | 4.0 | $ | 286,683 | 6.0 | ||||||||||
Leverage capital ratio: | |||||||||||||||||
Consolidated | 652,929 | 8.8 | 296,559 | 4.0 | NA | NA | |||||||||||
FIB | 622,466 | 8.4 | 296,061 | 4.0 | $ | 370,077 | 5.0 |
(9) | Commitments and Contingencies |
(10) | Financial Instruments with Off-Balance Sheet Risk |
(11) | Supplemental Disclosures to Consolidated Statement of Cash Flows |
(12) | Other Comprehensive Income |
Pre-tax | Tax Expense (Benefit) | Net of Tax | |||||||||||||||||||||
Three Months Ended June 30, | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Investment securities available-for sale: | |||||||||||||||||||||||
Change in net unrealized gains/losses during period | $ | (35,625 | ) | $ | (1,864 | ) | $ | (14,018 | ) | $ | (733 | ) | $ | (21,607 | ) | $ | (1,131 | ) | |||||
Reclassification adjustment for net losses (gains) included in net income | 12 | (198 | ) | 5 | (78 | ) | 7 | (120 | ) | ||||||||||||||
Defined benefits post-retirement benefit plan: | |||||||||||||||||||||||
Change in net actuarial loss | 35 | 35 | 14 | 14 | 21 | 21 | |||||||||||||||||
Total other comprehensive loss | $ | (35,578 | ) | $ | (2,027 | ) | $ | (13,999 | ) | $ | (797 | ) | $ | (21,579 | ) | $ | (1,230 | ) | |||||
Pre-tax | Tax Expense (Benefit) | Net of Tax | |||||||||||||||||||||
Six Months Ended June 30, | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Investment securities available-for sale: | |||||||||||||||||||||||
Change in net unrealized gains/losses during period | $ | (41,342 | ) | $ | (1,107 | ) | $ | (16,268 | ) | $ | (436 | ) | $ | (25,074 | ) | $ | (671 | ) | |||||
Reclassification adjustment for net losses (gains) included in net income | 4 | (229 | ) | 2 | (90 | ) | 2 | (139 | ) | ||||||||||||||
Defined benefits post-retirement benefit plan: | |||||||||||||||||||||||
Change in net actuarial loss | 70 | 68 | 28 | 27 | 42 | 41 | |||||||||||||||||
Total other comprehensive loss | $ | (41,268 | ) | $ | (1,268 | ) | $ | (16,238 | ) | $ | (499 | ) | $ | (25,030 | ) | $ | (769 | ) |
June 30, 2013 | December 31, 2012 | ||||||
Net unrealized gain (loss) on investment securities available-for-sale | $ | (7,535 | ) | $ | 17,537 | ||
Net actuarial loss on defined benefit post-retirement benefit plans | (1,504 | ) | (1,546 | ) | |||
Net accumulated other comprehensive income (loss) | $ | (9,039 | ) | $ | 15,991 |
(13) | Fair Value Measurements |
Fair Value Measurements at Reporting Date Using | ||||||||||||
As of June 30, 2013 | Balance | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||
Investment securities available-for-sale: | ||||||||||||
Obligations of U.S. government agencies | $ | 733,814 | $ | — | $ | 733,814 | $ | — | ||||
U.S. agencies mortgage-backed securities & collateralized mortgage obligations | 1,188,939 | — | 1,188,939 | — | ||||||||
Private mortgage-backed securities | 463 | — | 463 | — | ||||||||
Mortgage servicing rights | 22,617 | — | 22,617 | — |
Fair Value Measurements at Reporting Date Using | ||||||||||||
As of December 31, 2012 | Balance | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||
Investment securities available-for-sale: | ||||||||||||
Obligations of U.S. government agencies | $ | 754,856 | $ | — | $ | 754,856 | $ | — | ||||
U.S. agencies mortgage-backed securities & collateralized mortgage obligations | 1,239,851 | — | 1,239,851 | — | ||||||||
Private mortgage-backed securities | 551 | — | 551 | — | ||||||||
Mortgage servicing rights | 16,373 | — | 16,373 | — |
Fair Value Measurements at Reporting Date Using | ||||||||||||
As of June 30, 2013 | Balance | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||
Impaired loans | $ | 63,233 | $ | — | $ | — | $ | 63,233 | ||||
Other real estate owned | 8,238 | — | — | 8,238 | ||||||||
Long-lived assets to be disposed of by sale | 1,327 | — | — | 1,327 | ||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||
As of December 31, 2012 | Balance | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||
Impaired loans | $ | 74,623 | $ | — | $ | — | $ | 74,623 | ||||
Other real estate owned | 15,745 | — | — | 15,745 | ||||||||
Long-lived assets to be disposed of by sale | 496 | — | — | 496 |
Fair Value Measurements at Reporting Date Using | |||||||||||||||
As of June 30, 2013 | Carrying Amount | Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||
Financial assets: | |||||||||||||||
Cash and cash equivalents | $ | 368,217 | $ | 368,217 | $ | — | $ | 368,217 | $ | — | |||||
Investment securities available-for-sale | 1,923,216 | 1,923,216 | — | 1,923,216 | — | ||||||||||
Investment securities held-to-maturity | 215,323 | 219,028 | — | 219,028 | — | ||||||||||
Accrued interest receivable | 29,272 | 29,272 | — | 29,272 | — | ||||||||||
Mortgage servicing rights, net | 13,304 | 22,617 | — | 22,617 | — | ||||||||||
Net loans | 4,198,836 | 4,159,610 | — | 4,096,377 | 63,233 | ||||||||||
Total financial assets | $ | 6,748,168 | $ | 6,721,960 | $ | — | $ | 6,658,727 | $ | 63,233 | |||||
Financial liabilities: | |||||||||||||||
Total deposits, excluding time deposits | $ | 4,642,704 | $ | 4,642,704 | $ | — | $ | 4,642,704 | $ | — | |||||
Time deposits | 1,287,628 | 1,296,077 | — | 1,296,077 | — | ||||||||||
Securities sold under repurchase agreements | 421,314 | 421,314 | — | 421,314 | — | ||||||||||
Other borrowed funds | 2 | 2 | — | 2 | — | ||||||||||
Accrued interest payable | 6,236 | 6,236 | — | 6,236 | — | ||||||||||
Long-term debt | 37,139 | 34,962 | — | 34,962 | — | ||||||||||
Subordinated debentures held by subsidiary trusts | 82,477 | 69,951 | — | 69,951 | — | ||||||||||
Total financial liabilities | $ | 6,477,500 | $ | 6,471,246 | $ | — | $ | 6,471,246 | $ | — |
Fair Value Measurements at Reporting Date Using | |||||||||||||||
As of December 31, 2012 | Carrying Amount | Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||
Financial assets: | |||||||||||||||
Cash and cash equivalents | $ | 801,332 | $ | 801,332 | $ | — | $ | 801,332 | $ | — | |||||
Investment securities available-for-sale | 1,995,258 | 1,995,258 | — | 1,995,258 | — | ||||||||||
Investment securities held-to-maturity | 208,223 | 218,933 | — | 218,933 | — | ||||||||||
Accrued interest receivable | 28,869 | 28,869 | — | 28,869 | — | ||||||||||
Mortgage servicing rights, net | 12,653 | 16,373 | — | 16,373 | — | ||||||||||
Net loans | 4,123,401 | 4,142,426 | — | 4,067,803 | 74,623 | ||||||||||
Total financial assets | $ | 7,169,736 | $ | 7,203,191 | $ | — | $ | 7,128,568 | $ | 74,623 | |||||
Financial liabilities: | |||||||||||||||
Total deposits, excluding time deposits | $ | 4,854,927 | $ | 4,854,927 | $ | — | $ | 4,854,927 | $ | — | |||||
Time deposits | 1,385,484 | 1,394,403 | — | 1,394,403 | — | ||||||||||
Securities sold under repurchase agreements | 505,785 | 505,785 | — | 505,785 | — | ||||||||||
Other borrowed funds | 32 | 32 | — | 32 | — | ||||||||||
Accrued interest payable | 6,502 | 6,502 | — | 6,502 | — | ||||||||||
Long-term debt | 37,160 | 35,104 | — | 35,104 | — | ||||||||||
Preferred stock pending redemption | 50,000 | 50,000 | 50,000 | ||||||||||||
Subordinated debentures held by subsidiary trusts | 82,477 | 62,409 | — | 62,409 | — | ||||||||||
Total financial liabilities | $ | 6,922,367 | $ | 6,909,162 | $ | — | $ | 6,909,162 | $ | — |
(14) | Recent Authoritative Accounting Guidance |
(15) | Subsequent Events |
Average Balance Sheets, Yields and Rates | |||||||||||||||||
(Dollars in thousands) | Three Months Ended June 30, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | ||||||||||||
Interest earning assets: | |||||||||||||||||
Loans (1) (2) | $ | 4,256,579 | $ | 55,270 | 5.21 | % | $ | 4,159,565 | $ | 58,564 | 5.66 | % | |||||
Investment securities (2) | 2,153,342 | 9,588 | 1.79 | 2,094,148 | 11,414 | 2.19 | |||||||||||
Interest bearing deposits in banks | 335,761 | 212 | 0.25 | 442,698 | 279 | 0.25 | |||||||||||
Federal funds sold | 3,322 | 5 | 0.60 | 3,668 | 6 | 0.66 | |||||||||||
Total interest earnings assets | 6,749,004 | 65,075 | 3.87 | 6,700,079 | 70,263 | 4.22 | |||||||||||
Non-earning assets | 601,023 | 633,454 | |||||||||||||||
Total assets | $ | 7,350,027 | $ | 7,333,533 | |||||||||||||
Interest bearing liabilities: | |||||||||||||||||
Demand deposits | $ | 1,722,138 | $ | 475 | 0.11 | % | $ | 1,596,076 | $ | 606 | 0.15 | % | |||||
Savings deposits | 1,544,648 | 598 | 0.16 | 1,482,986 | 934 | 0.25 | |||||||||||
Time deposits | 1,312,863 | 2,965 | 0.91 | 1,496,597 | 4,239 | 1.14 | |||||||||||
Repurchase agreements | 466,533 | 74 | 0.06 | 493,450 | 152 | 0.12 | |||||||||||
Other borrowed funds | 10 | — | — | 33 | — | — | |||||||||||
Preferred stock pending redemption | — | — | — | — | — | — | |||||||||||
Long-term debt | 37,142 | 483 | 5.22 | 37,184 | 495 | 5.35 | |||||||||||
Subordinated debentures held by by subsidiary trusts | 82,477 | 601 | 2.92 | 120,996 | 1,467 | 4.88 | |||||||||||
Total interest bearing liabilities | 5,165,811 | 5,196 | 0.40 | 5,227,322 | 7,893 | 0.61 | |||||||||||
Non-interest bearing deposits | 1,356,133 | 1,277,091 | |||||||||||||||
Other non-interest bearing liabilities | 49,323 | 47,781 | |||||||||||||||
Stockholders’ equity | $ | 778,760 | $ | 781,339 | |||||||||||||
Total liabilities and stockholders’ equity | 7,350,027 | 7,333,533 | |||||||||||||||
Net FTE interest income | 59,879 | 62,370 | |||||||||||||||
Less FTE adjustments (2) | $ | (1,119 | ) | $ | (1,196 | ) | |||||||||||
Net interest income from consolidated statements of income | 58,760 | 61,174 | |||||||||||||||
Interest rate spread | 3.47 | % | 3.61 | % | |||||||||||||
Net FTE interest margin (3) | 3.56 | % | 3.74 | % | |||||||||||||
Cost of funds, including non-interest bearing demand deposits (4) | 0.32 | % | 0.49 | % |
(1) | Average loan balances include non-accrual loans. Interest income on loans includes amortization of deferred loan fees net of deferred loan costs, which is not material. |
(2) | Interest income and average rates for tax exempt loans and securities are presented on a FTE basis. |
(3) | Net FTE interest margin during the period equals (i) the difference between annualized interest income on interest earning assets and the annualized interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period. |
(4) | Calculated by dividing total annualized interest on interest bearing liabilities by the sum of total interest bearing liabilities plus non-interest bearing deposits. |
Average Balance Sheets, Yields and Rates | |||||||||||||||||
(Dollars in thousands) | Six Months Ended June 30, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | ||||||||||||
Interest earning assets: | |||||||||||||||||
Loans (1) (2) | $ | 4,236,866 | $ | 111,184 | 5.29 | % | $ | 4,162,384 | $ | 116,938 | 5.65 | % | |||||
Investment securities (2) | 2,178,758 | 19,567 | 1.81 | 2,118,793 | 23,018 | 2.18 | |||||||||||
Interest bearing deposits in banks | 405,919 | 510 | 0.25 | 408,799 | 516 | 0.25 | |||||||||||
Federal funds sold | 2,924 | 9 | 0.62 | 2,139 | 7 | 0.66 | |||||||||||
Total interest earnings assets | 6,824,467 | 131,270 | 3.88 | 6,692,115 | 140,479 | 4.22 | |||||||||||
Non-earning assets | 599,661 | 626,295 | |||||||||||||||
Total assets | $ | 7,424,128 | $ | 7,318,410 | |||||||||||||
Interest bearing liabilities: | |||||||||||||||||
Demand deposits | $ | 1,725,457 | $ | 949 | 0.11 | % | $ | 1,589,440 | $ | 1,253 | 0.16 | % | |||||
Savings deposits | 1,547,381 | 1,251 | 0.16 | 1,466,113 | 1,948 | 0.27 | |||||||||||
Time deposits | 1,338,903 | 6,193 | 0.93 | 1,518,693 | 8,840 | 1.17 | |||||||||||
Repurchase agreements | 489,230 | 174 | 0.07 | 503,428 | 308 | 0.12 | |||||||||||
Other borrowed funds | 9 | — | — | 34 | — | — | |||||||||||
Long-term debt | 37,148 | 963 | 5.23 | 37,189 | 993 | 5.37 | |||||||||||
Preferred stock pending redemption | 4,696 | 159 | 6.83 | — | — | — | |||||||||||
Subordinated debentures held by by subsidiary trusts | 82,477 | 1,297 | 3.17 | 122,356 | 2,974 | 4.89 | |||||||||||
Total interest bearing liabilities | 5,225,301 | 10,986 | 0.42 | 5,237,253 | 16,316 | 0.63 | |||||||||||
Non-interest bearing deposits | 1,377,374 | 1,254,983 | |||||||||||||||
Other non-interest bearing liabilities | 51,554 | 48,926 | |||||||||||||||
Stockholders’ equity | $ | 769,899 | $ | 777,248 | |||||||||||||
Total liabilities and stockholders’ equity | 7,424,128 | 7,318,410 | |||||||||||||||
Net FTE interest income | 120,284 | 124,163 | |||||||||||||||
Less FTE adjustments (2) | $ | (2,247 | ) | $ | (2,355 | ) | |||||||||||
Net interest income from consolidated statements of income | 118,037 | 121,808 | |||||||||||||||
Interest rate spread | 3.46 | % | 3.59 | % | |||||||||||||
Net FTE interest margin (3) | 3.55 | % | 3.73 | % | |||||||||||||
Cost of funds, including non-interest bearing demand deposits (4) | 0.34 | % | 0.51 | % |
(1) | Average loan balances include non-accrual loans. Interest income on loans includes amortization of deferred loan fees net of deferred loan costs, which is not material. |
(2) | Interest income and average rates for tax exempt loans and securities are presented on a FTE basis. |
(3) | Net FTE interest margin during the period equals (i) the difference between annualized interest income on interest earning assets and the annualized interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period. |
(4) | Calculated by dividing total annualized interest on interest bearing liabilities by the sum of total interest bearing liabilities plus non-interest bearing deposits. |
Analysis of Interest Changes Due to Volume and Rates | |||||||||||||||||||||||
(Dollars in thousands) | Three Months Ended June 30, 2013 compared with Three Months Ended June 30, 2012 | Six Months Ended June 30, 2013 compared with Six Months Ended June 30, 2012 | |||||||||||||||||||||
Volume | Rate | Net | Volume | Rate | Net | ||||||||||||||||||
Interest earning assets: | |||||||||||||||||||||||
Loans (1) | $ | 1,366 | $ | (4,660 | ) | $ | (3,294 | ) | $ | 2,092 | $ | (7,846 | ) | $ | (5,754 | ) | |||||||
Investment securities (1) | 323 | (2,149 | ) | (1,826 | ) | 651 | (4,102 | ) | (3,451 | ) | |||||||||||||
Interest bearing deposits in banks | (67 | ) | — | (67 | ) | (4 | ) | (2 | ) | (6 | ) | ||||||||||||
Federal funds sold | (1 | ) | — | (1 | ) | 3 | (1 | ) | 2 | ||||||||||||||
Total change | 1,621 | (6,809 | ) | (5,188 | ) | 2,742 | (11,951 | ) | (9,209 | ) | |||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||||
Demand deposits | 48 | (179 | ) | (131 | ) | 107 | (411 | ) | (304 | ) | |||||||||||||
Savings deposits | 39 | (375 | ) | (336 | ) | 108 | (805 | ) | (697 | ) | |||||||||||||
Time deposits | (520 | ) | (754 | ) | (1,274 | ) | (1,047 | ) | (1,600 | ) | (2,647 | ) | |||||||||||
Repurchase agreements | (8 | ) | (70 | ) | (78 | ) | (9 | ) | (125 | ) | (134 | ) | |||||||||||
Long-term debt | (1 | ) | (11 | ) | (12 | ) | (1 | ) | (29 | ) | (30 | ) | |||||||||||
Preferred stock pending redemption | — | — | — | — | 159 | 159 | |||||||||||||||||
Subordinated debentures | (467 | ) | (399 | ) | (866 | ) | (969 | ) | (708 | ) | (1,677 | ) | |||||||||||
Total change | (909 | ) | (1,788 | ) | (2,697 | ) | (1,811 | ) | (3,519 | ) | (5,330 | ) | |||||||||||
Increase (decrease) in FTE net interest income | $ | 2,530 | $ | (5,021 | ) | $ | (2,491 | ) | $ | 4,553 | $ | (8,432 | ) | $ | (3,879 | ) |
Nonperforming Assets | |||||||||||||||||||
(Dollars in thousands) | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | ||||||||||||||
Non-performing loans: | |||||||||||||||||||
Non-accrual loans | $ | 103,729 | $ | 98,594 | $ | 107,799 | $ | 122,931 | $ | 129,923 | |||||||||
Accruing loans past due 90 days or more | 1,742 | 1,941 | 2,277 | 4,339 | 6,451 | ||||||||||||||
Total non-performing loans | 105,471 | 100,535 | 110,076 | 127,270 | 136,374 | ||||||||||||||
OREO | 22,782 | 32,470 | 32,571 | 39,971 | 53,817 | ||||||||||||||
Total non-performing assets | $ | 128,253 | $ | 133,005 | $ | 142,647 | $ | 167,241 | $ | 190,191 | |||||||||
Non-performing loans to total loans | 2.45 | % | 2.38 | % | 2.61 | % | 3.04 | % | 3.27 | % | |||||||||
Non-performing assets to total loans and OREO | 2.97 | % | 3.12 | % | 3.35 | % | 3.96 | % | 4.50 | % | |||||||||
Non-performing assets to total assets | 1.76 | % | 1.79 | % | 1.85 | % | 2.24 | % | 2.60 | % |
Non-Performing Loans by Loan Type | |||||||||||||
(Dollars in thousands) | June 30, 2013 | Percent of Total | December 31, 2012 | Percent of Total | |||||||||
Real estate: | |||||||||||||
Commercial | $ | 46,062 | 43.7 | % | $ | 50,517 | 45.8 | % | |||||
Construction: | . | ||||||||||||
Land acquisition and development | 16,349 | 15.5 | % | 19,628 | 17.8 | % | |||||||
Commercial | 6,192 | 5.9 | % | 8,126 | 7.4 | % | |||||||
Residential | 1,526 | 1.4 | % | 2,175 | 2.0 | % | |||||||
Total construction | 24,067 | 22.8 | % | 29,929 | 27.2 | % | |||||||
Residential | 8,246 | 7.8 | % | 11,511 | 10.5 | % | |||||||
Agricultural | 9,773 | 9.3 | % | 5,048 | 4.6 | % | |||||||
Total real estate | 88,148 | 83.6 | % | 97,005 | 88.1 | % | |||||||
Consumer | 1,392 | 1.3 | % | 1,727 | 1.6 | % | |||||||
Commercial | 15,804 | 15.0 | % | 10,812 | 9.8 | % | |||||||
Agricultural | 127 | 0.1 | % | 525 | 0.5 | % | |||||||
Other | — | — | % | 7 | — | % | |||||||
Total non-performing loans | $ | 105,471 | 100.0 | % | $ | 110,076 | 100.0 | % |
(1) | Specific valuation allowances associated with impaired loans. Specific valuation allowances are determined based on assessment of the fair value of the collateral underlying the loans as determined through independent appraisals, the present value of future cash flows, observable market prices and any relevant qualitative or environmental factors impacting the loan. No specific valuation allowances are recorded for impaired loans that are adequately secured. |
(2) | Historical valuation allowances based on loan loss experience for similar loans with similar characteristics and trends. Historical valuation allowances are determined by applying percentage loss factors to the credit exposures from outstanding loans. For commercial, agricultural and real estate loans, loss factors are applied based on the internal risk classifications of these loans. For consumer loans, loss factors are applied on a portfolio basis. For commercial, agriculture and real estate loans, loss factor percentages are based on a migration analysis of our historical loss experience, designed to account for credit deterioration. For consumer loans, loss factor percentages are based on a one-year loss history. |
Allowance for Loan Losses | |||||||||||||||||||
(Dollars in thousands) | Three Months Ended | ||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
2013 | 2013 | 2012 | 2012 | 2012 | |||||||||||||||
Balance at beginning of period | $ | 97,904 | $ | 100,511 | $ | 99,006 | $ | 102,794 | $ | 115,902 | |||||||||
Provision charged to operating expense | 375 | 500 | 8,000 | 9,500 | 12,000 | ||||||||||||||
Charge offs: | |||||||||||||||||||
Real estate | |||||||||||||||||||
Commercial | 1,251 | 1,098 | 2,914 | 3,058 | 6,362 | ||||||||||||||
Construction | 449 | 1,723 | 3,355 | 4,477 | 15,107 | ||||||||||||||
Residential | 324 | 1,226 | 590 | 1,603 | 861 | ||||||||||||||
Agricultural | 3 | 96 | 2 | 1 | 20 | ||||||||||||||
Consumer | 1,299 | 1,062 | 1,458 | 1,340 | 1,210 | ||||||||||||||
Commercial | 569 | 811 | 1,963 | 4,334 | 3,180 | ||||||||||||||
Agricultural | — | 4 | 9 | — | 5 | ||||||||||||||
Total charge-offs | 3,895 | 6,020 | 10,291 | 14,813 | 26,745 | ||||||||||||||
Recoveries: | |||||||||||||||||||
Real estate | |||||||||||||||||||
Commercial | 2,140 | 714 | 318 | 24 | 483 | ||||||||||||||
Construction | 593 | 325 | 1,443 | 260 | 13 | ||||||||||||||
Residential | 134 | 22 | 59 | 102 | 30 | ||||||||||||||
Agricultural | 6 | 1 | — | 2 | — | ||||||||||||||
Consumer | 672 | 473 | 471 | 465 | 488 | ||||||||||||||
Commercial | 596 | 1,375 | 1,504 | 665 | 609 | ||||||||||||||
Agricultural | 3 | 3 | 1 | 7 | 14 | ||||||||||||||
Total recoveries | 4,144 | 2,913 | 3,796 | 1,525 | 1,637 | ||||||||||||||
Net charge-offs | (249 | ) | 3,107 | 6,495 | 13,288 | 25,108 | |||||||||||||
Balance at end of period | $ | 98,528 | $ | 97,904 | $ | 100,511 | $ | 99,006 | $ | 102,794 | |||||||||
Period end loans | $ | 4,297,364 | $ | 4,224,559 | $ | 4,223,912 | $ | 4,180,051 | $ | 4,169,963 | |||||||||
Average loans | 4,256,579 | 4,216,934 | 4,197,665 | 4,183,016 | 4,159,565 | ||||||||||||||
Net loans charged-off to average loans, annualized | (0.02 | )% | 0.30 | % | 0.62 | % | 1.26 | % | 2.43 | % | |||||||||
Allowance to period end loans | 2.29 | % | 2.32 | % | 2.38 | % | 2.37 | % | 2.47 | % |
Deposits | |||||||||||||
(Dollars in thousands) | June 30, 2013 | Percent of Total | December 31, 2012 | Percent of Total | |||||||||
Non-interest bearing demand | $ | 1,393,732 | 23.5 | % | $ | 1,495,309 | 24.0 | % | |||||
Interest bearing: | |||||||||||||
Demand | 1,701,057 | 28.7 | 1,811,905 | 29.0 | |||||||||
Savings | 1,547,915 | 26.1 | 1,547,713 | 24.8 | |||||||||
Time, $100 and over | 535,337 | 9.0 | 594,712 | 9.5 | |||||||||
Time, other (1) | 752,291 | 12.7 | 790,772 | 12.7 | |||||||||
Total interest bearing | 4,536,600 | 76.5 | 4,745,102 | 76.0 | |||||||||
Total deposits | $ | 5,930,332 | 100.0 | % | $ | 6,240,411 | 100.0 | % |
(1) | Included in Time, other are Certificate of Deposit Account Registry Service, or CDAR, deposits of $66 million as of June 30, 2013 and $72 million as of December 31, 2012. |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
3.1 | Amended and Restated Articles of Incorporation dated March 5, 2010 (incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K/A filed on March 10, 2010) | |
3.2 | Second Amended and Restated Bylaws dated January 27, 2011 (incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K/A filed on February 3, 2011) | |
4.1 | Specimen of Series A preferred stock certificate of First Interstate BancSystem, Inc. (incorporated herein by reference to Exhibit 4.2 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007) | |
10.1 | Credit Agreement Re: Subordinated Term Note dated as of January 10, 2008, between First Interstate BancSystem, Inc. and First Midwest Bank (incorporated herein by reference to Exhibit 10.24 of the Company’s Current Report on Form 8-K filed on January 16, 2008) | |
10.2 | Lease Agreement between Billings 401 Joint Venture and First Interstate Bank Montana dated September 20, 1985 and addendum thereto (incorporated herein by reference to Exhibit 10.4 of the Company’s Post-Effective Amendment No. 3 to Registration Statement on Form S-1, No. 033-84540, filed on September 29, 1994) | |
10.3† | First Interstate BancSystem’s Deferred Compensation Plan dated December 1, 2006 (incorporated herein by reference to Exhibit 10.9 of the Company’s Pre-Effective Amendment No. 3 to Registration Statement on Form S-1, No. 333-164380, filed on March 23, 2010) | |
10.4† | First Amendment to the First Interstate BancSystem’s Deferred Compensation Plan dated October 24, 2008 (incorporated herein by reference to Exhibit 10.10 of the Company’s Pre-Effective Amendment No. 3 to Registration Statement on Form S-1, No. 333-164380, filed on March 23, 2010) | |
10.5† | 2001 Stock Option Plan (incorporated herein by reference to Exhibit 4.12 of the Company’s Registration Statement on Form S-8, No. 333-106495, filed on June 25, 2003) | |
10.6† | Second Amendment to 2001 Stock Option Plan (incorporated herein by reference to Exhibit 10.6 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010) | |
10.7† | First Interstate BancSystem, Inc. 2006 Equity Compensation Plan (incorporated herein by reference to Appendix A of the Company’s 2006 Definitive Proxy Statement of Schedule 14A) | |
10.8† | Amendment to First Interstate BancSystem, Inc. 2006 Equity Compensation Plan (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on March 22, 2010) | |
10.9† | Second Amendment to First Interstate BancSystem, Inc. 2006 Equity Compensation Plan (incorporated herein by reference to Exhibit 10.9 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010) | |
10.10† | Third Amendment to the First Interstate BancSystem, Inc. 2006 Equity Compensation Plan (incorporated herein by reference to Exhibit 10.10 of the Company’s Quarterly Report on Form 10-Q filed on May 1, 2013) | |
10.11*† | Fourth Amendment to the First Interstate BancSystem, Inc. 2006 Equity Compensation Plan | |
10.12† | Form of First Interstate BancSystem, Inc. 2006 Equity Compensation Plan Restricted Stock Agreement (Time) for Certain Executive Officers, (incorporated herein by reference to Exhibit 10.13 of the Company's Annual Report on form 10-K for the fiscal year ended December 31, 2008) |
10.13† | Form of First Interstate BancSystem, Inc. 2006 Equity Compensation Plan Restricted Stock Agreement (Performance) for Certain Executive Officers, (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on form 8-K filed on February 13, 2013) | |
10.14 | Trademark License Agreements between Wells Fargo & Company and First Interstate BancSystem, Inc. (incorporated herein by reference to Exhibit 10.11 of the Company’s Registration Statement on Form S-1, No. 333-25633 filed on April 22, 1997) | |
31.1* | Certification of Quarterly Report on Form 10-Q pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer | |
31.2* | Certification of Quarterly Report on Form 10-Q pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer | |
32* | Certification of Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101** | Interactive data file |
† | Management contract or compensatory arrangement. |
* | Filed herewith. |
** | As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934. |
FIRST INTERSTATE BANCSYSTEM, INC. | |||
Date: July 31, 2013 | /S/ ED GARDING | ||
Ed Garding | |||
President and Chief Executive Officer | |||
Date: July 31, 2013 | /S/ TERRILL R. MOORE | ||
Terrill R. Moore | |||
Executive Vice President and Chief Financial Officer |
1. | I have reviewed this quarterly report on Form 10-Q of First Interstate BancSystem, Inc; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, as of the end of the period covered by this report based on such evaluation; and |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions); |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ ED GARDING |
Ed Garding |
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of First Interstate BancSystem, Inc; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, as of the end of the period covered by this report based on such evaluation; and |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions); |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ TERRILL R. MOORE |
Terrill R. Moore |
Executive Vice President and Chief Financial Officer |
/s/ ED GARDING |
Ed Garding |
President and Chief Executive Officer |
/s/ TERRILL R. MOORE |
Terrill R. Moore |
Executive Vice President and Chief Financial Officer Chief Financial Officer |
Commitments and Contingencies
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6 Months Ended |
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Jun. 30, 2013
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the normal course of business, the Company is involved in various claims and litigation. In the opinion of management, following consultation with legal counsel, the ultimate liability or disposition thereof is not expected to have a material adverse effect on the consolidated financial condition, results of operations or liquidity of the Company. The Company had commitments under construction agreements of $6,430 as of June 30, 2013. |
Investment Securities
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Jun. 30, 2013
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Investment Securities The amortized cost and approximate fair values of investment securities are summarized as follows:
Gross realized gains and losses from the disposition of investment securities are summarized in the following table:
The following tables show the gross unrealized losses and fair values of investment securities, aggregated by investment category, and the length of time individual investment securities have been in a continuous unrealized loss position, as of June 30, 2013 and December 31, 2012
The investment portfolio is evaluated quarterly for other-than-temporary declines in the market value of each individual investment security. The Company had 212 and 69 individual investment securities that were in an unrealized loss position as of June 30, 2013 and December 31, 2012, respectively. Unrealized losses as of June 30, 2013 and December 31, 2012 related primarily to fluctuations in the current interest rates. The Company does not have the intent to sell any of the available-for-sale securities in the above table and it is not likely that the Company will have to sell any such securities before a recovery in cost. No impairment losses were recorded during the three or six months ended June 30, 2013 and 2012. Maturities of investment securities at June 30, 2013 are shown below. Maturities of mortgage-backed securities have been adjusted to reflect shorter maturities based upon estimated prepayments of principal. All other investment securities maturities are shown at contractual maturity dates.
As of June 30, 2013, the Company had investment securities callable within one year with amortized costs and estimated fair values of $403,826 and $395,608, respectively, including callable structured notes with amortized costs and estimated fair values of $117,486 and $115,366, respectively. These investment securities are primarily classified as available-for-sale and included in the after one year but within five years category in the table above. |
Investment Securities (Tables)
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Jun. 30, 2013
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost and Approximate Fair Values of Investment Securities | The amortized cost and approximate fair values of investment securities are summarized as follows:
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Realized Gains (Losses) on Investments | Gross realized gains and losses from the disposition of investment securities are summarized in the following table:
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Gross Unrealized Losses and Fair Values of Investment Securities | The following tables show the gross unrealized losses and fair values of investment securities, aggregated by investment category, and the length of time individual investment securities have been in a continuous unrealized loss position, as of June 30, 2013 and December 31, 2012
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Maturities of Investment Securities | Maturities of investment securities at June 30, 2013 are shown below. Maturities of mortgage-backed securities have been adjusted to reflect shorter maturities based upon estimated prepayments of principal. All other investment securities maturities are shown at contractual maturity dates.
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Financial Instruments with Off-Balance Sheet Risk
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6 Months Ended |
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Jun. 30, 2013
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|
Financial Instruments with Off-Balance Sheet Risk [Abstract] | |
Financial Instruments with Off-Balance Sheet Risk | Financial Instruments with Off-Balance Sheet Risk The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the commitment contract. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. At June 30, 2013, commitments to extend credit to existing and new borrowers approximated $1,110,057 which included $287,147 on unused credit card lines and $289,285 with commitment maturities beyond one year. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. At June 30, 2013, the Company had outstanding standby letters of credit of $70,957. The estimated fair value of the obligation undertaken by the Company in issuing the standby letters of credit is included in other liabilities in the Company’s consolidated balance sheet. |
Supplemental Cash Flow Information (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |
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Jun. 30, 2013
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Jun. 30, 2012
|
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Supplemental Cash Flow Information [Abstract] | ||
Transferred Loans to OREO | $ 8,555 | $ 33,117 |
Transferred Loans to Mortgage Servicing Assets | 2,149 | 2,061 |
Transfer from Investments | $ 429 |
OREO (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Repossessed Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Real Estate Owned Roll Forward | Information with respect to the Company's other real estate owned follows:
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Allowance for Loan Losses (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Allowance for Loan Losses by Portfolio Segment | The following tables present a summary of changes in the allowance for loan losses by portfolio segment for the periods indicated.
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Commitments and Contingencies (Details) (Construction Contracts, USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
---|---|
Construction Contracts
|
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Unrecorded Unconditional Purchase Obligation [Line Items] | |
Commitments to Purchase | $ 6,430 |
Fair Value Measurements (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis | Financial assets and financial liabilities measured at fair value on a recurring basis are as follows:
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Schedule of Financial Assets and Financial Liabilities Measured at Fair Value on a Non-Recurring Basis | The following table presents information about the Company’s assets and liabilities measured at fair value on a non-recurring basis.
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Schedule of Estimated Fair Values of Financial Instruments by Level of Valuation Inputs | The estimated fair values of financial instruments that are reported in the Company's consolidated balance sheets, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, are as follows:
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Capital Stock (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2013
Class A Common Stock
|
Dec. 31, 2012
Class A Common Stock
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Jun. 30, 2013
Class B Common Stock
|
Dec. 31, 2012
Class B Common Stock
|
Jun. 30, 2013
Series A Preferred Stock [Member]
|
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Class of Stock [Line Items] | |||||
Common Stock, Shares, Outstanding | 18,952,123 | 17,635,369 | 24,883,758 | 25,654,954 | |
Preferred Stock, Aggregate Redemption Price | $ 50,150 |
Loans (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans by Class | The following table presents loans by class as of the dates indicated:
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Schedule of Recorded Investment in Past Due Loans by Class | The following tables present the contractual aging of the Company’s recorded investment in past due loans by class as of the dates indicated:
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Schedule of Recorded Investment in Impaired Loans | The following tables present information on the Company’s recorded investment in impaired loans as of dates indicated:
The following tables present the average recorded investment in and income recognized on impaired loans for the periods indicated:
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Schedule of Loans Renegotiated in Troubled Debt Restructurings | The following table presents information on the Company's troubled debt restructurings during the previous 12 months for which there was a payment default during the periods indicated. The Company considers a payment default to occur on troubled debt restructurings when the loan is 90 days or more past due or was placed on non-accrual status after the modification.
The following tables present information on the Company's troubled debt restructurings that occurred during the three and six months ended June 30, 2013:
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Schedule of Recorded Investment in Criticized Loans by Class and Credit Quality Indicator | The following tables present the Company’s recorded investment in criticized loans by class and credit quality indicator based on the most recent analysis performed as of the dates indicated:
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Loans
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Loans The following table presents loans by class as of the dates indicated:
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The following tables present the contractual aging of the Company’s recorded investment in past due loans by class as of the dates indicated:
If interest on non-accrual loans had been accrued, such income would have been approximately $318 and $584 for the three months ended June 30, 2013 and 2012, respectively and approximately $655 and $1,272 for the six months ended June 30, 2013 and 2012, respectively. The Company considers impaired loans to include all loans risk rated doubtful, loans placed on non-accrual status and loans renegotiated in troubled debt restructurings with the exception of consumer loans. The following tables present information on the Company’s recorded investment in impaired loans as of dates indicated:
The following tables present the average recorded investment in and income recognized on impaired loans for the periods indicated:
The amount of interest income recognized by the Company within the period that the loans were impaired was primarily related to loans modified in a troubled debt restructuring that remained on accrual status. Interest payments received on non-accrual impaired loans are applied to principal. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. If interest on impaired loans had been accrued, interest income on impaired loans would have been approximately $406 and $580 for the three months ended June 30, 2013 and 2012, respectively, and approximately $818 and $1,263 for the six months ended June 30, 2013 and 2012, respectively. Collateralized impaired loans are generally recorded at the fair value of the underlying collateral using discounted cash flows, independent appraisals and management estimates based upon current market conditions. For loans measured under the present value of cash flows method, the change in present value attributable to the passage of time, if applicable, is recognized in the provision for loan losses and thus no interest income is recognized. Modifications of performing loans are made in the ordinary course of business and are completed on a case-by-case basis as negotiated with the borrower. Loan modifications typically include interest rate concessions, interest only periods of less than twelve months, short-term payment deferrals and extension of amortization periods to provide payment relief. A loan modification is considered a troubled debt restructuring if the borrower is experiencing financial difficulties and the Company, for economic or legal reasons, grants a concession to the borrower that it would not otherwise consider. Certain troubled debt restructurings are on non-accrual status at the time of restructuring and are typically returned to accrual status after considering the borrower's sustained repayment performance in accordance with the restructuring agreement for a period of at least six months and management is reasonably assured of future performance. If the troubled debt restructuring meets these performance criteria and the interest rate granted at the modification is equal to or greater than the rate that the Company was willing to accept at the time of the restructuring for a new loan with comparable risk, then the loan will return to performing status and the accrual of interest will resume. The Company had loans renegotiated in troubled debt restructurings of $67,939 as of June 30, 2013, of which $44,533 were included in non-accrual loans and $23,406 were on accrual status. The Company had loans renegotiated in troubled debt restructurings of $76,597 as of December 31, 2012, of which $44,665 were included in non-accrual loans and $31,932 were on accrual status. The following tables present information on the Company's troubled debt restructurings that occurred during the three and six months ended June 30, 2013:
For troubled debt restructurings that were on non-accrual status or otherwise deemed impaired before the modification, a specific reserve may already be recorded. In periods subsequent to modification, the Company continues to evaluate all troubled debt restructurings for possible impairment and recognizes impairment through the allowance. Additionally these loans continue to work their way through the credit cycle through charge-off, pay-off or foreclosure. Financial effects of modifications of troubled debt restructurings may include principal loan forgiveness or other charge-offs directly related to the restructuring. The Company had no charge-offs directly related to modifying troubled debt restructurings during the three and six months ended June 30, 2013 or 2012. The following table presents information on the Company's troubled debt restructurings during the previous 12 months for which there was a payment default during the periods indicated. The Company considers a payment default to occur on troubled debt restructurings when the loan is 90 days or more past due or was placed on non-accrual status after the modification.
At June 30, 2013, there were no material commitments to lend additional funds to borrowers whose existing loans have been renegotiated or are classified as non-accrual. As part of the on-going and continuous monitoring of the credit quality of the Company’s loan portfolio, management tracks internally assigned risk classifications of loans. The Company adheres to a Uniform Classification System developed jointly by the various bank regulatory agencies to internally risk rate loans. The Uniform Classification System defines three broad categories of criticized assets, which the Company uses as credit quality indicators: Other Assets Especially Mentioned — includes loans that exhibit weaknesses in financial condition, loan structure or documentation, which if not promptly corrected, may lead to the development of abnormal risk elements. Substandard — includes loans that are inadequately protected by the current sound worth and paying capacity of the borrower. Although the primary source of repayment for a Substandard is not currently sufficient; collateral or other sources of repayment are sufficient to satisfy the debt. Continuance of a Substandard loan is not warranted unless positive steps are taken to improve the worthiness of the credit. Doubtful — includes loans that exhibit pronounced weaknesses to a point where collection or liquidation in full, on the basis of currently existing facts, conditions and values, is highly questionable and improbable. Doubtful loans are required to be placed on non-accrual status and are assigned specific loss exposure. The following tables present the Company’s recorded investment in criticized loans by class and credit quality indicator based on the most recent analysis performed as of the dates indicated:
The Company maintains a credit review function, which is independent of the credit approval process, to assess assigned internal risk classifications and monitor compliance with internal lending policies and procedures. Written action plans with firm target dates for resolution of identified problems are maintained and reviewed on a quarterly basis for all categories of criticized loans. |
Basis of Presentation
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Jun. 30, 2013
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation In the opinion of management, the accompanying unaudited consolidated financial statements of First Interstate BancSystem, Inc. and subsidiaries (the “Company”) contain all adjustments (all of which are of a normal recurring nature) necessary to present fairly the financial position of the Company at June 30, 2013 and December 31, 2012, and the results of operations for each of the three and six month periods ended June 30, 2013 and 2012 and cash flows for the six months ended June 30, 2013 and 2012, in conformity with U.S. generally accepted accounting principles. The balance sheet information at December 31, 2012 is derived from audited consolidated financial statements. Certain reclassifications, none of which were material, have been made to conform prior year financial statements to the June 30, 2013 presentation. These reclassifications did not change previously reported net income or stockholders’ equity. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. Operating results for the three and six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. |
Earnings per Share (Tables)
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Jun. 30, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings per Share | The following table sets forth the computation of basic and diluted earnings per share for the three and six month periods ended June 30, 2013 and 2012.
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