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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TEXAS
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75-1848732
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1201 S. Beckham Avenue, Tyler, Texas
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75701
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(Address of principal executive offices)
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(Zip Code)
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PART I. FINANCIAL INFORMATION
|
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PART II. OTHER INFORMATION
|
|
SOUTHSIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share amounts)
|
||||||||
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
ASSETS
|
|
|
|
|
||||
Cash and due from banks
|
|
$
|
54,345
|
|
|
$
|
59,363
|
|
Interest earning deposits
|
|
185,289
|
|
|
102,251
|
|
||
Federal funds sold
|
|
7,360
|
|
|
8,040
|
|
||
Total cash and cash equivalents
|
|
246,994
|
|
|
169,654
|
|
||
Securities available for sale, at estimated fair value
|
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1,444,043
|
|
|
1,479,600
|
|
||
Securities held to maturity, at carrying value (estimated fair value of $940,409 and $944,282, respectively)
|
|
929,793
|
|
|
937,487
|
|
||
FHLB stock, at cost
|
|
61,305
|
|
|
61,084
|
|
||
Other investments
|
|
5,442
|
|
|
5,508
|
|
||
Loans held for sale
|
|
5,303
|
|
|
7,641
|
|
||
Loans:
|
|
|
|
|
|
|
||
Loans
|
|
2,538,918
|
|
|
2,556,537
|
|
||
Less: Allowance for loan losses
|
|
(18,485
|
)
|
|
(17,911
|
)
|
||
Net Loans
|
|
2,520,433
|
|
|
2,538,626
|
|
||
Premises and equipment, net
|
|
105,327
|
|
|
106,003
|
|
||
Goodwill
|
|
91,520
|
|
|
91,520
|
|
||
Other intangible assets, net
|
|
4,177
|
|
|
4,608
|
|
||
Interest receivable
|
|
18,273
|
|
|
25,183
|
|
||
Deferred tax asset, net
|
|
26,827
|
|
|
28,891
|
|
||
Unsettled trades to sell securities
|
|
57,385
|
|
|
—
|
|
||
Unsettled issuances of brokered certificates of deposit
|
|
31,232
|
|
|
—
|
|
||
Bank owned life insurance
|
|
98,377
|
|
|
97,775
|
|
||
Other assets
|
|
9,818
|
|
|
10,187
|
|
||
Total assets
|
|
$
|
5,656,249
|
|
|
$
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5,563,767
|
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LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
||
Deposits:
|
|
|
|
|
|
|
||
Noninterest bearing
|
|
$
|
753,224
|
|
|
$
|
704,013
|
|
Interest bearing
|
|
2,952,072
|
|
|
2,829,063
|
|
||
Total deposits
|
|
3,705,296
|
|
|
3,533,076
|
|
||
Short-term obligations:
|
|
|
|
|
|
|
||
Federal funds purchased and repurchase agreements
|
|
7,814
|
|
|
7,097
|
|
||
FHLB advances
|
|
952,916
|
|
|
866,518
|
|
||
Total short-term obligations
|
|
960,730
|
|
|
873,615
|
|
||
Long-term obligations:
|
|
|
|
|
|
|
||
FHLB advances
|
|
252,940
|
|
|
443,128
|
|
||
Subordinated notes, net of unamortized debt issuance costs
|
|
98,133
|
|
|
98,100
|
|
||
Long-term debt, net of unamortized debt issuance costs
|
|
60,237
|
|
|
60,236
|
|
||
Total long-term obligations
|
|
411,310
|
|
|
601,464
|
|
||
Unsettled trades to purchase securities
|
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10,465
|
|
|
160
|
|
||
Other liabilities
|
|
36,982
|
|
|
37,178
|
|
||
Total liabilities
|
|
5,124,783
|
|
|
5,045,493
|
|
||
|
|
|
|
|
||||
Off-balance-sheet arrangements, commitments and contingencies (Note 11)
|
|
|
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|
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|
||||
Shareholders’ equity:
|
|
|
|
|
|
|
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Common stock ($1.25 par value, 40,000,000 shares authorized, 31,499,980 shares issued at March 31, 2017 and 31,455,951 shares issued at December 31, 2016)
|
|
39,375
|
|
|
39,320
|
|
||
Paid-in capital
|
|
536,653
|
|
|
535,240
|
|
||
Retained earnings
|
|
37,920
|
|
|
30,098
|
|
||
Treasury stock, at cost (2,913,064 shares at March 31, 2017 and December 31, 2016)
|
|
(47,891
|
)
|
|
(47,891
|
)
|
||
Accumulated other comprehensive loss
|
|
(34,591
|
)
|
|
(38,493
|
)
|
||
Total shareholders’ equity
|
|
531,466
|
|
|
518,274
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
5,656,249
|
|
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$
|
5,563,767
|
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SOUTHSIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except per share data)
|
|||||||
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2017
|
|
2016
|
||||
Interest income
|
|
|
|
||||
Loans
|
$
|
27,254
|
|
|
$
|
27,765
|
|
Investment securities – taxable
|
377
|
|
|
214
|
|
||
Investment securities – tax-exempt
|
6,554
|
|
|
5,355
|
|
||
Mortgage-backed securities
|
10,045
|
|
|
9,391
|
|
||
FHLB stock and other investments
|
298
|
|
|
217
|
|
||
Other interest earning assets
|
360
|
|
|
70
|
|
||
Total interest income
|
44,888
|
|
|
43,012
|
|
||
Interest expense
|
|
|
|
|
|
||
Deposits
|
4,281
|
|
|
3,256
|
|
||
Short-term obligations
|
2,065
|
|
|
696
|
|
||
Long-term obligations
|
3,262
|
|
|
2,444
|
|
||
Total interest expense
|
9,608
|
|
|
6,396
|
|
||
Net interest income
|
35,280
|
|
|
36,616
|
|
||
Provision for loan losses
|
1,098
|
|
|
2,316
|
|
||
Net interest income after provision for loan losses
|
34,182
|
|
|
34,300
|
|
||
Noninterest income
|
|
|
|
|
|
||
Deposit services
|
5,114
|
|
|
5,085
|
|
||
Net gain on sale of securities available for sale
|
322
|
|
|
2,441
|
|
||
Gain on sale of loans
|
701
|
|
|
643
|
|
||
Trust income
|
890
|
|
|
855
|
|
||
Bank owned life insurance income
|
634
|
|
|
674
|
|
||
Brokerage services
|
547
|
|
|
575
|
|
||
Other
|
1,465
|
|
|
1,323
|
|
||
Total noninterest income
|
9,673
|
|
|
11,596
|
|
||
Noninterest expense
|
|
|
|
|
|
||
Salaries and employee benefits
|
15,919
|
|
|
17,732
|
|
||
Occupancy expense
|
2,863
|
|
|
3,335
|
|
||
Advertising, travel & entertainment
|
583
|
|
|
685
|
|
||
ATM and debit card expense
|
927
|
|
|
712
|
|
||
Professional fees
|
939
|
|
|
1,338
|
|
||
Software and data processing expense
|
725
|
|
|
749
|
|
||
Telephone and communications
|
526
|
|
|
484
|
|
||
FDIC insurance
|
441
|
|
|
638
|
|
||
Other
|
2,935
|
|
|
3,734
|
|
||
Total noninterest expense
|
25,858
|
|
|
29,407
|
|
||
|
|
|
|
||||
Income before income tax expense
|
17,997
|
|
|
16,489
|
|
||
Income tax expense
|
3,008
|
|
|
2,973
|
|
||
Net income
|
$
|
14,989
|
|
|
$
|
13,516
|
|
Earnings per common share – basic
|
$
|
0.52
|
|
|
$
|
0.51
|
|
Earnings per common share – diluted
|
$
|
0.52
|
|
|
$
|
0.51
|
|
Dividends paid per common share
|
$
|
0.25
|
|
|
$
|
0.23
|
|
SOUTHSIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands)
|
|||||||
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net income
|
$
|
14,989
|
|
|
$
|
13,516
|
|
Other comprehensive income:
|
|
|
|
|
|
||
Securities available for sale and transferred securities:
|
|
|
|
||||
Change in net unrealized holding gains on available for sale securities during the period
|
4,885
|
|
|
27,744
|
|
||
Reclassification adjustment for amortization of unrealized losses on securities transferred to held to maturity
|
488
|
|
|
57
|
|
||
Reclassification adjustment for net gain on sale of available for sale securities, included in net income
|
(322
|
)
|
|
(2,441
|
)
|
||
Derivatives:
|
|
|
|
||||
Change in net unrealized loss on effective cash flow hedge interest rate swap derivatives
|
(80
|
)
|
|
(2,601
|
)
|
||
Change in net unrealized gains on interest rate swap derivatives terminated during the period
|
273
|
|
|
—
|
|
||
Reclassification adjustment for net loss on interest rate swap derivatives, included in net income
|
379
|
|
|
357
|
|
||
Reclassification adjustment for amortization of unrealized gains on terminated interest rate swap derivatives
|
(9
|
)
|
|
—
|
|
||
Pension plans:
|
|
|
|
||||
Amortization of net actuarial loss, included in net periodic benefit cost
|
391
|
|
|
411
|
|
||
Amortization of prior service credit, included in net periodic benefit cost
|
(2
|
)
|
|
(4
|
)
|
||
Other comprehensive income, before tax
|
6,003
|
|
|
23,523
|
|
||
Income tax expense related to items of other comprehensive income
|
(2,101
|
)
|
|
(8,233
|
)
|
||
Other comprehensive income, net of tax
|
3,902
|
|
|
15,290
|
|
||
Comprehensive income
|
$
|
18,891
|
|
|
$
|
28,806
|
|
SOUTHSIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(UNAUDITED)
(in thousands, except share and per share data)
|
|||||||||||||||||||||||
|
Common
Stock
|
|
Paid In
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Shareholders’
Equity
|
||||||||||||
Balance at December 31, 2015
|
$
|
34,832
|
|
|
$
|
424,078
|
|
|
$
|
41,527
|
|
|
$
|
(37,692
|
)
|
|
$
|
(18,683
|
)
|
|
$
|
444,062
|
|
Net income
|
—
|
|
|
—
|
|
|
13,516
|
|
|
—
|
|
|
—
|
|
|
13,516
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,290
|
|
|
15,290
|
|
||||||
Issuance of common stock for dividend reinvestment plan (12,030 shares)
|
15
|
|
|
299
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
314
|
|
||||||
Purchase of common stock (443,426 shares)
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,199
|
)
|
|
—
|
|
|
(10,199
|
)
|
||||||
Stock compensation expense
|
—
|
|
|
355
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
355
|
|
||||||
Tax expense related to stock awards
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
||||||
Net issuance of common stock under employee stock plans (4,912 shares)
|
6
|
|
|
33
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
24
|
|
||||||
Cash dividends paid on common stock ($0.23 per share)
|
—
|
|
|
—
|
|
|
(5,774
|
)
|
|
—
|
|
|
—
|
|
|
(5,774
|
)
|
||||||
Balance at March 31, 2016
|
$
|
34,853
|
|
|
$
|
424,753
|
|
|
$
|
49,254
|
|
|
$
|
(47,891
|
)
|
|
$
|
(3,393
|
)
|
|
$
|
457,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2016
|
$
|
39,320
|
|
|
$
|
535,240
|
|
|
$
|
30,098
|
|
|
$
|
(47,891
|
)
|
|
$
|
(38,493
|
)
|
|
$
|
518,274
|
|
Net income
|
—
|
|
|
—
|
|
|
14,989
|
|
|
—
|
|
|
—
|
|
|
14,989
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,902
|
|
|
3,902
|
|
||||||
Issuance of common stock for dividend reinvestment plan (10,433 shares)
|
13
|
|
|
340
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
353
|
|
||||||
Stock compensation expense
|
—
|
|
|
494
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
494
|
|
||||||
Net issuance of common stock under employee stock plans (33,596 shares)
|
42
|
|
|
579
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
597
|
|
||||||
Cash dividends paid on common stock ($0.25 per share)
|
—
|
|
|
—
|
|
|
(7,143
|
)
|
|
—
|
|
|
—
|
|
|
(7,143
|
)
|
||||||
Balance at March 31, 2017
|
$
|
39,375
|
|
|
$
|
536,653
|
|
|
$
|
37,920
|
|
|
$
|
(47,891
|
)
|
|
$
|
(34,591
|
)
|
|
$
|
531,466
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Basic and Diluted Earnings:
|
|
|
|
||||
Net income
|
$
|
14,989
|
|
|
$
|
13,516
|
|
Basic weighted-average shares outstanding
|
28,569
|
|
|
26,449
|
|
||
Add: Stock awards
|
208
|
|
|
70
|
|
||
Diluted weighted-average shares outstanding
|
28,777
|
|
|
26,519
|
|
||
|
|
|
|
|
|
||
Basic Earnings Per Share:
|
|
|
|
||||
Net Income
|
$
|
0.52
|
|
|
$
|
0.51
|
|
Diluted Earnings Per Share:
|
|
|
|
||||
Net Income
|
$
|
0.52
|
|
|
$
|
0.51
|
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||
|
|
|
|
Pension Plans
|
|
|
|||||||||||||
|
Unrealized Gains (Losses) on Securities
|
|
Unrealized Gains (Losses) on Derivatives
|
|
Net Prior
Service (Cost) Credit |
|
Net Gain (Loss)
|
|
Total
|
||||||||||
Beginning balance, net of tax
|
$
|
(23,708
|
)
|
|
$
|
4,595
|
|
|
$
|
(133
|
)
|
|
$
|
(19,247
|
)
|
|
$
|
(38,493
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income before reclassifications
|
4,885
|
|
|
193
|
|
|
—
|
|
|
—
|
|
|
5,078
|
|
|||||
Reclassified from accumulated other comprehensive income
|
166
|
|
|
370
|
|
|
(2
|
)
|
|
391
|
|
|
925
|
|
|||||
Income tax (expense) benefit
|
(1,768
|
)
|
|
(197
|
)
|
|
1
|
|
|
(137
|
)
|
|
(2,101
|
)
|
|||||
Net current-period other comprehensive income (loss), net of tax
|
3,283
|
|
|
366
|
|
|
(1
|
)
|
|
254
|
|
|
3,902
|
|
|||||
Ending balance, net of tax
|
$
|
(20,425
|
)
|
|
$
|
4,961
|
|
|
$
|
(134
|
)
|
|
$
|
(18,993
|
)
|
|
$
|
(34,591
|
)
|
|
Three Months Ended March 31, 2016
|
||||||||||||||||||
|
|
|
|
Pension Plans
|
|
|
|||||||||||||
|
Unrealized Gains (Losses) on Securities
|
|
Unrealized Gains (Losses) on Derivatives
|
|
Net Prior
Service
(Cost)
Credit
|
|
Net Gain (Loss)
|
|
Total
|
||||||||||
Beginning balance, net of tax
|
$
|
(239
|
)
|
|
$
|
—
|
|
|
$
|
(44
|
)
|
|
$
|
(18,400
|
)
|
|
$
|
(18,683
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss) before reclassifications
|
27,744
|
|
|
(2,601
|
)
|
|
—
|
|
|
—
|
|
|
25,143
|
|
|||||
Reclassified from accumulated other comprehensive income
|
(2,384
|
)
|
|
357
|
|
|
(4
|
)
|
|
411
|
|
|
(1,620
|
)
|
|||||
Income tax (expense) benefit
|
(8,876
|
)
|
|
785
|
|
|
1
|
|
|
(143
|
)
|
|
(8,233
|
)
|
|||||
Net current-period other comprehensive income (loss), net of tax
|
16,484
|
|
|
(1,459
|
)
|
|
(3
|
)
|
|
268
|
|
|
15,290
|
|
|||||
Ending balance, net of tax
|
$
|
16,245
|
|
|
$
|
(1,459
|
)
|
|
$
|
(47
|
)
|
|
$
|
(18,132
|
)
|
|
$
|
(3,393
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Unrealized losses on securities transferred to held to maturity:
|
|
|
|
||||
Amortization of unrealized losses
(1)
|
$
|
(488
|
)
|
|
$
|
(57
|
)
|
Tax benefit
|
171
|
|
|
20
|
|
||
Net of tax
|
$
|
(317
|
)
|
|
$
|
(37
|
)
|
|
|
|
|
||||
Unrealized gains and losses on available for sale securities:
|
|
|
|
||||
Realized net gain on sale of securities
(2)
|
$
|
322
|
|
|
$
|
2,441
|
|
Tax expense
|
(113
|
)
|
|
(854
|
)
|
||
Net of tax
|
$
|
209
|
|
|
$
|
1,587
|
|
|
|
|
|
||||
Derivatives:
|
|
|
|
||||
Realized net loss on interest rate swap derivatives
(3)
|
$
|
(379
|
)
|
|
$
|
(357
|
)
|
Tax benefit
|
133
|
|
|
125
|
|
||
Net of tax
|
$
|
(246
|
)
|
|
$
|
(232
|
)
|
|
|
|
|
||||
Amortization of unrealized gains on terminated interest rate swap derivatives
(3)
|
$
|
9
|
|
|
$
|
—
|
|
Tax expense
|
(3
|
)
|
|
—
|
|
||
Net of tax
|
$
|
6
|
|
|
$
|
—
|
|
|
|
|
|
||||
Amortization of pension plan:
|
|
|
|
||||
Net actuarial loss
(4)
|
$
|
(391
|
)
|
|
$
|
(411
|
)
|
Prior service credit
(4)
|
2
|
|
|
4
|
|
||
Total before tax
|
(389
|
)
|
|
(407
|
)
|
||
Tax benefit
|
136
|
|
|
142
|
|
||
Net of tax
|
(253
|
)
|
|
(265
|
)
|
||
Total reclassifications for the period, net of tax
|
$
|
(601
|
)
|
|
$
|
1,053
|
|
(4)
|
These accumulated other comprehensive income components are included in the computation of net periodic pension cost (income) presented in “Note 7 - Employee Benefit Plans.”
|
|
|
March 31, 2017
|
||||||||||||||||||||||||||
|
|
|
|
Recognized in OCI
|
|
|
|
Not recognized in OCI
|
|
|
||||||||||||||||||
|
|
Amortized
|
|
Gross
Unrealized
|
|
Gross Unrealized
|
|
Carrying
|
|
Gross
Unrealized |
|
Gross Unrealized
|
|
Estimated
|
||||||||||||||
AVAILABLE FOR SALE
|
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
|
Gains
|
|
Losses
|
|
Fair Value
|
||||||||||||||
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury
|
|
$
|
62,015
|
|
|
$
|
—
|
|
|
$
|
2,801
|
|
|
$
|
59,214
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
59,214
|
|
State and Political Subdivisions
|
|
328,395
|
|
|
3,227
|
|
|
10,775
|
|
|
320,847
|
|
|
—
|
|
|
—
|
|
|
320,847
|
|
|||||||
Other Stocks and Bonds
|
|
6,574
|
|
|
84
|
|
|
—
|
|
|
6,658
|
|
|
—
|
|
|
—
|
|
|
6,658
|
|
|||||||
Other Equity Securities
|
|
6,036
|
|
|
—
|
|
|
116
|
|
|
5,920
|
|
|
—
|
|
|
—
|
|
|
5,920
|
|
|||||||
Mortgage-backed Securities:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Residential
|
|
685,934
|
|
|
6,621
|
|
|
7,893
|
|
|
684,662
|
|
|
—
|
|
|
—
|
|
|
684,662
|
|
|||||||
Commercial
|
|
368,330
|
|
|
896
|
|
|
2,484
|
|
|
366,742
|
|
|
—
|
|
|
—
|
|
|
366,742
|
|
|||||||
Total
|
|
$
|
1,457,284
|
|
|
$
|
10,828
|
|
|
$
|
24,069
|
|
|
$
|
1,444,043
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,444,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
HELD TO MATURITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
State and Political Subdivisions
|
|
$
|
430,350
|
|
|
$
|
3,631
|
|
|
$
|
12,848
|
|
|
$
|
421,133
|
|
|
$
|
8,902
|
|
|
$
|
2,747
|
|
|
$
|
427,288
|
|
Mortgage-backed Securities:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Residential
|
|
137,693
|
|
|
—
|
|
|
5,478
|
|
|
132,215
|
|
|
1,536
|
|
|
370
|
|
|
133,381
|
|
|||||||
Commercial
|
|
379,931
|
|
|
1,025
|
|
|
4,511
|
|
|
376,445
|
|
|
4,952
|
|
|
1,657
|
|
|
379,740
|
|
|||||||
Total
|
|
$
|
947,974
|
|
|
$
|
4,656
|
|
|
$
|
22,837
|
|
|
$
|
929,793
|
|
|
$
|
15,390
|
|
|
$
|
4,774
|
|
|
$
|
940,409
|
|
|
|
December 31, 2016
|
||||||||||||||||||||||||||
|
|
|
|
Recognized in OCI
|
|
|
|
Not recognized in OCI
|
|
|
||||||||||||||||||
|
|
Amortized
|
|
Gross
Unrealized
|
|
Gross Unrealized
|
|
Carrying
|
|
Gross
Unrealized |
|
Gross Unrealized
|
|
Estimated
|
||||||||||||||
AVAILABLE FOR SALE
|
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
|
Gains
|
|
Losses
|
|
Fair Value
|
||||||||||||||
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury
|
|
$
|
74,016
|
|
|
$
|
—
|
|
|
$
|
3,947
|
|
|
$
|
70,069
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70,069
|
|
State and Political Subdivisions
|
|
394,050
|
|
|
3,217
|
|
|
12,070
|
|
|
385,197
|
|
|
—
|
|
|
—
|
|
|
385,197
|
|
|||||||
Other Stocks and Bonds
|
|
6,587
|
|
|
64
|
|
|
—
|
|
|
6,651
|
|
|
—
|
|
|
—
|
|
|
6,651
|
|
|||||||
Other Equity Securities
|
|
6,039
|
|
|
—
|
|
|
119
|
|
|
5,920
|
|
|
—
|
|
|
—
|
|
|
5,920
|
|
|||||||
Mortgage-backed Securities:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Residential
|
|
630,603
|
|
|
6,434
|
|
|
9,529
|
|
|
627,508
|
|
|
—
|
|
|
—
|
|
|
627,508
|
|
|||||||
Commercial
|
|
386,109
|
|
|
1,201
|
|
|
3,055
|
|
|
384,255
|
|
|
—
|
|
|
—
|
|
|
384,255
|
|
|||||||
Total
|
|
$
|
1,497,404
|
|
|
$
|
10,916
|
|
|
$
|
28,720
|
|
|
$
|
1,479,600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,479,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
HELD TO MATURITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
State and Political Subdivisions
|
|
$
|
435,080
|
|
|
$
|
3,987
|
|
|
$
|
13,257
|
|
|
$
|
425,810
|
|
|
$
|
7,595
|
|
|
$
|
3,493
|
|
|
$
|
429,912
|
|
Mortgage-backed Securities:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential
|
|
142,060
|
|
|
—
|
|
|
5,748
|
|
|
136,312
|
|
|
1,534
|
|
|
950
|
|
|
136,896
|
|
|||||||
Commercial
|
|
379,016
|
|
|
1,067
|
|
|
4,718
|
|
|
375,365
|
|
|
4,372
|
|
|
2,263
|
|
|
377,474
|
|
|||||||
Total
|
|
$
|
956,156
|
|
|
$
|
5,054
|
|
|
$
|
23,723
|
|
|
$
|
937,487
|
|
|
$
|
13,501
|
|
|
$
|
6,706
|
|
|
$
|
944,282
|
|
(1)
|
All mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.
|
|
As of March 31, 2017
|
||||||||||||||||||||||
|
Less Than 12 Months
|
|
More Than 12 Months
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Unrealized
Loss
|
|
Fair Value
|
|
Unrealized
Loss
|
|
Fair Value
|
|
Unrealized
Loss
|
||||||||||||
AVAILABLE FOR SALE
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
59,214
|
|
|
$
|
2,801
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
59,214
|
|
|
$
|
2,801
|
|
State and Political Subdivisions
|
209,637
|
|
|
10,774
|
|
|
886
|
|
|
1
|
|
|
210,523
|
|
|
10,775
|
|
||||||
Other Equity Securities
|
5,920
|
|
|
116
|
|
|
—
|
|
|
—
|
|
|
5,920
|
|
|
116
|
|
||||||
Mortgage-backed Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
361,710
|
|
|
7,887
|
|
|
2,344
|
|
|
6
|
|
|
364,054
|
|
|
7,893
|
|
||||||
Commercial
|
248,331
|
|
|
2,484
|
|
|
—
|
|
|
—
|
|
|
248,331
|
|
|
2,484
|
|
||||||
Total
|
$
|
884,812
|
|
|
$
|
24,062
|
|
|
$
|
3,230
|
|
|
$
|
7
|
|
|
$
|
888,042
|
|
|
$
|
24,069
|
|
HELD TO MATURITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
State and Political Subdivisions
|
$
|
99,422
|
|
|
$
|
1,372
|
|
|
$
|
25,976
|
|
|
$
|
1,375
|
|
|
$
|
125,398
|
|
|
$
|
2,747
|
|
Mortgage-backed Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
55,917
|
|
|
370
|
|
|
—
|
|
|
—
|
|
|
55,917
|
|
|
370
|
|
||||||
Commercial
|
172,138
|
|
|
1,657
|
|
|
—
|
|
|
—
|
|
|
172,138
|
|
|
1,657
|
|
||||||
Total
|
$
|
327,477
|
|
|
$
|
3,399
|
|
|
$
|
25,976
|
|
|
$
|
1,375
|
|
|
$
|
353,453
|
|
|
$
|
4,774
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
As of December 31, 2016
|
||||||||||||||||||||||
|
Less Than 12 Months
|
|
More Than 12 Months
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Unrealized
Loss |
|
Fair Value
|
|
Unrealized
Loss |
|
Fair Value
|
|
Unrealized
Loss |
||||||||||||
AVAILABLE FOR SALE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
70,069
|
|
|
$
|
3,947
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70,069
|
|
|
$
|
3,947
|
|
State and Political Subdivisions
|
264,485
|
|
|
12,069
|
|
|
887
|
|
|
1
|
|
|
265,372
|
|
|
12,070
|
|
||||||
Other Equity Securities
|
5,920
|
|
|
119
|
|
|
—
|
|
|
—
|
|
|
5,920
|
|
|
119
|
|
||||||
Mortgage-backed Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
369,903
|
|
|
9,491
|
|
|
6,199
|
|
|
38
|
|
|
376,102
|
|
|
9,529
|
|
||||||
Commercial
|
245,422
|
|
|
3,055
|
|
|
—
|
|
|
—
|
|
|
245,422
|
|
|
3,055
|
|
||||||
Total
|
$
|
955,799
|
|
|
$
|
28,681
|
|
|
$
|
7,086
|
|
|
$
|
39
|
|
|
$
|
962,885
|
|
|
$
|
28,720
|
|
HELD TO MATURITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
State and Political Subdivisions
|
$
|
179,939
|
|
|
$
|
2,190
|
|
|
$
|
29,427
|
|
|
$
|
1,303
|
|
|
$
|
209,366
|
|
|
$
|
3,493
|
|
Mortgage-backed Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
107,024
|
|
|
950
|
|
|
—
|
|
|
—
|
|
|
107,024
|
|
|
950
|
|
||||||
Commercial
|
186,854
|
|
|
2,263
|
|
|
—
|
|
|
—
|
|
|
186,854
|
|
|
2,263
|
|
||||||
Total
|
$
|
473,817
|
|
|
$
|
5,403
|
|
|
$
|
29,427
|
|
|
$
|
1,303
|
|
|
$
|
503,244
|
|
|
$
|
6,706
|
|
|
|
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
U.S. Treasury
|
$
|
315
|
|
|
$
|
127
|
|
State and Political Subdivisions
|
6,554
|
|
|
5,355
|
|
||
Other Stocks and Bonds
|
34
|
|
|
58
|
|
||
Other Equity Securities
|
28
|
|
|
29
|
|
||
Mortgage-backed Securities
|
10,045
|
|
|
9,391
|
|
||
Total interest income on securities
|
$
|
16,976
|
|
|
$
|
14,960
|
|
|
March 31, 2017
|
||||||
|
Amortized Cost
|
|
Fair Value
|
||||
AVAILABLE FOR SALE
|
|
||||||
Investment Securities:
|
|
|
|
||||
Due in one year or less
|
$
|
6,694
|
|
|
$
|
6,851
|
|
Due after one year through five years
|
23,638
|
|
|
24,655
|
|
||
Due after five years through ten years
|
96,416
|
|
|
93,961
|
|
||
Due after ten years
|
270,236
|
|
|
261,252
|
|
||
|
396,984
|
|
|
386,719
|
|
||
Mortgage-backed Securities and Other Equity Securities:
|
1,060,300
|
|
|
1,057,324
|
|
||
Total
|
$
|
1,457,284
|
|
|
$
|
1,444,043
|
|
|
March 31, 2017
|
||||||
|
Carrying Value
|
|
Fair Value
|
||||
HELD TO MATURITY
|
|
||||||
Investment Securities:
|
|
|
|
||||
Due in one year or less
|
$
|
10,119
|
|
|
$
|
10,181
|
|
Due after one year through five years
|
39,539
|
|
|
39,935
|
|
||
Due after five years through ten years
|
101,274
|
|
|
101,898
|
|
||
Due after ten years
|
270,201
|
|
|
275,274
|
|
||
|
421,133
|
|
|
427,288
|
|
||
Mortgage-backed Securities:
|
508,660
|
|
|
513,121
|
|
||
Total
|
$
|
929,793
|
|
|
$
|
940,409
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Real Estate Loans:
|
|
|
|
||||
Construction
|
$
|
362,367
|
|
|
$
|
380,175
|
|
1-4 Family Residential
|
622,881
|
|
|
637,239
|
|
||
Commercial
|
974,307
|
|
|
945,978
|
|
||
Commercial Loans
|
176,908
|
|
|
177,265
|
|
||
Municipal Loans
|
297,417
|
|
|
298,583
|
|
||
Loans to Individuals
|
105,038
|
|
|
117,297
|
|
||
Total Loans
(1)
|
2,538,918
|
|
|
2,556,537
|
|
||
Less: Allowance for Loan Losses
(2)
|
18,485
|
|
|
17,911
|
|
||
Net Loans
|
$
|
2,520,433
|
|
|
$
|
2,538,626
|
|
(1)
|
Includes approximately
$324.9 million
and
$372.4 million
of loans acquired with the Omni acquisition as of
March 31, 2017
and
December 31, 2016
, respectively.
|
(2)
|
The allowance for loan loss recorded on
purchase credit impaired (“PCI”)
loans totaled
$3,000
as of
March 31, 2017
and
December 31, 2016
.
|
•
|
Pass (Rating 1 – 4) – This rating is assigned to all satisfactory loans. This category, by definition, consists of acceptable credit. Credit and collateral exceptions should not be present, although their presence would not necessarily prohibit a loan from being rated Pass, if deficiencies are in process of correction. These loans are not included in the Watch List.
|
•
|
Pass Watch (Rating 5) – These loans require some degree of special treatment, but not due to credit quality. This category does not include loans specially mentioned or adversely classified; however, particular attention is warranted to characteristics such as:
|
◦
|
A lack of, or abnormally extended payment program;
|
◦
|
A heavy degree of concentration of collateral without sufficient margin;
|
◦
|
A vulnerability to competition through lesser or extensive financial leverage; and
|
◦
|
A dependence on a single or few customers or sources of supply and materials without suitable substitutes or alternatives.
|
•
|
Special Mention (Rating 6) – A Special Mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in our credit position at some future date. Special Mention assets are not adversely classified and do not expose us to sufficient risk to warrant adverse classification.
|
•
|
Substandard (Rating 7) – Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
|
•
|
Doubtful (Rating 8) – Loans classified as Doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation, in full, on the basis of currently known facts, conditions and values, highly questionable and improbable.
|
•
|
Changes in lending policies or procedures, including underwriting, collection, charge-off, and recovery procedures;
|
•
|
Changes in local, regional and national economic and business conditions, including entry into new markets;
|
•
|
Changes in the volume or type of credit extended;
|
•
|
Changes in the experience, ability, and depth of lending management;
|
•
|
Changes in the volume and severity of past due, nonaccrual, restructured, or classified loans;
|
•
|
Changes in charge-off trends;
|
•
|
Changes in loan review or Board oversight;
|
•
|
Changes in the level of concentrations of credit; and
|
•
|
Changes in external factors, such as competition and legal and regulatory requirements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||||||||||
|
Real Estate
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Construction
|
|
1-4 Family
Residential
|
|
Commercial
|
|
Commercial
Loans
|
|
Municipal
Loans
|
|
Loans to
Individuals
|
|
Total
|
||||||||||||||
Balance at beginning of period
|
$
|
4,147
|
|
|
$
|
2,665
|
|
|
$
|
7,204
|
|
|
$
|
2,263
|
|
|
$
|
750
|
|
|
$
|
882
|
|
|
$
|
17,911
|
|
Provision (reversal) for loan losses
(1)
|
(722
|
)
|
|
(62
|
)
|
|
1,577
|
|
|
(112
|
)
|
|
(4
|
)
|
|
421
|
|
|
1,098
|
|
|||||||
Loans charged off
|
(18
|
)
|
|
(287
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(746
|
)
|
|
(1,054
|
)
|
|||||||
Recoveries of loans charged off
|
—
|
|
|
1
|
|
|
6
|
|
|
111
|
|
|
—
|
|
|
412
|
|
|
530
|
|
|||||||
Balance at end of period
|
$
|
3,407
|
|
|
$
|
2,317
|
|
|
$
|
8,787
|
|
|
$
|
2,259
|
|
|
$
|
746
|
|
|
$
|
969
|
|
|
$
|
18,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2016
|
||||||||||||||||||||||||||
|
Real Estate
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Construction
|
|
1-4 Family
Residential
|
|
Commercial
|
|
Commercial
Loans
|
|
Municipal
Loans
|
|
Loans to
Individuals
|
|
Total
|
||||||||||||||
Balance at beginning of period
|
$
|
4,350
|
|
|
$
|
2,595
|
|
|
$
|
4,577
|
|
|
$
|
6,596
|
|
|
$
|
725
|
|
|
$
|
893
|
|
|
$
|
19,736
|
|
Provision (reversal) for loan losses
(1)
|
(42
|
)
|
|
(551
|
)
|
|
(116
|
)
|
|
2,620
|
|
|
(5
|
)
|
|
410
|
|
|
2,316
|
|
|||||||
Loans charged off
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
(273
|
)
|
|
—
|
|
|
(848
|
)
|
|
(1,140
|
)
|
|||||||
Recoveries of loans charged off
|
269
|
|
|
130
|
|
|
6
|
|
|
21
|
|
|
—
|
|
|
461
|
|
|
887
|
|
|||||||
Balance at end of period
|
$
|
4,577
|
|
|
$
|
2,155
|
|
|
$
|
4,467
|
|
|
$
|
8,964
|
|
|
$
|
720
|
|
|
$
|
916
|
|
|
$
|
21,799
|
|
(1)
|
Of the
$1.1 million
and
$2.3 million
recorded in provision for loan losses for the
three months ended March 31, 2017
and
March 31, 2016
,
none
related to provision expense on PCI loans as of
March 31, 2017
and
$296,000
related to provision expense on PCI loans as of
March 31, 2016
.
|
|
As of March 31, 2017
|
||||||||||||||||||||||||||
|
Real Estate
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Construction
|
|
1-4 Family
Residential
|
|
Commercial
|
|
Commercial
Loans
|
|
Municipal
Loans
|
|
Loans to
Individuals
|
|
Total
|
||||||||||||||
Ending balance – individually evaluated for impairment
(1)
|
$
|
10
|
|
|
$
|
13
|
|
|
$
|
15
|
|
|
$
|
982
|
|
|
$
|
11
|
|
|
$
|
91
|
|
|
$
|
1,122
|
|
Ending balance – collectively evaluated for impairment
|
3,397
|
|
|
2,304
|
|
|
8,772
|
|
|
1,277
|
|
|
735
|
|
|
878
|
|
|
17,363
|
|
|||||||
Balance at end of period
|
$
|
3,407
|
|
|
$
|
2,317
|
|
|
$
|
8,787
|
|
|
$
|
2,259
|
|
|
$
|
746
|
|
|
$
|
969
|
|
|
$
|
18,485
|
|
|
As of December 31, 2016
|
||||||||||||||||||||||||||
|
Real Estate
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Construction
|
|
1-4 Family
Residential
|
|
Commercial
|
|
Commercial
Loans
|
|
Municipal
Loans
|
|
Loans to
Individuals
|
|
Total
|
||||||||||||||
Ending balance – individually evaluated for impairment
(1)
|
$
|
13
|
|
|
$
|
16
|
|
|
$
|
17
|
|
|
$
|
923
|
|
|
$
|
11
|
|
|
$
|
106
|
|
|
$
|
1,086
|
|
Ending balance – collectively evaluated for impairment
|
4,134
|
|
|
2,649
|
|
|
7,187
|
|
|
1,340
|
|
|
739
|
|
|
776
|
|
|
16,825
|
|
|||||||
Balance at end of period
|
$
|
4,147
|
|
|
$
|
2,665
|
|
|
$
|
7,204
|
|
|
$
|
2,263
|
|
|
$
|
750
|
|
|
$
|
882
|
|
|
$
|
17,911
|
|
(1)
|
There was approximately
$3,000
of allowance for loan losses associated with PCI loans as of
March 31, 2017
and
December 31, 2016
.
|
|
March 31, 2017
|
||||||||||||||||||||||||||
|
Real Estate
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Construction
|
|
1-4 Family
Residential
|
|
Commercial
|
|
Commercial
Loans
|
|
Municipal
Loans
|
|
Loans to
Individuals
|
|
Total
|
||||||||||||||
Loans individually evaluated for impairment
|
$
|
430
|
|
|
$
|
1,672
|
|
|
$
|
1,081
|
|
|
$
|
5,529
|
|
|
$
|
571
|
|
|
$
|
225
|
|
|
$
|
9,508
|
|
Loans collectively evaluated for impairment
|
361,784
|
|
|
615,628
|
|
|
971,593
|
|
|
170,090
|
|
|
296,846
|
|
|
104,712
|
|
|
2,520,653
|
|
|||||||
Purchased credit impaired loans
|
153
|
|
|
5,581
|
|
|
1,633
|
|
|
1,289
|
|
|
—
|
|
|
101
|
|
|
8,757
|
|
|||||||
Total ending loan balance
|
$
|
362,367
|
|
|
$
|
622,881
|
|
|
$
|
974,307
|
|
|
$
|
176,908
|
|
|
$
|
297,417
|
|
|
$
|
105,038
|
|
|
$
|
2,538,918
|
|
|
December 31, 2016
|
||||||||||||||||||||||||||
|
Real Estate
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Construction
|
|
1-4 Family
Residential
|
|
Commercial
|
|
Commercial
Loans
|
|
Municipal
Loans
|
|
Loans to
Individuals
|
|
Total
|
||||||||||||||
Loans individually evaluated for impairment
|
$
|
480
|
|
|
$
|
1,693
|
|
|
$
|
1,184
|
|
|
$
|
5,840
|
|
|
$
|
571
|
|
|
$
|
241
|
|
|
$
|
10,009
|
|
Loans collectively evaluated for impairment
|
379,526
|
|
|
629,893
|
|
|
942,818
|
|
|
170,159
|
|
|
298,012
|
|
|
116,923
|
|
|
2,537,331
|
|
|||||||
Purchased credit impaired loans
|
169
|
|
|
5,653
|
|
|
1,976
|
|
|
1,266
|
|
|
—
|
|
|
133
|
|
|
9,197
|
|
|||||||
Total ending loan balance
|
$
|
380,175
|
|
|
$
|
637,239
|
|
|
$
|
945,978
|
|
|
$
|
177,265
|
|
|
$
|
298,583
|
|
|
$
|
117,297
|
|
|
$
|
2,556,537
|
|
|
March 31, 2017
|
||||||||||||||||||||||
|
Pass
|
|
Pass Watch
(1)
|
|
Special Mention
(1)
|
|
Substandard
(1)
|
|
Doubtful
(1)
|
|
Total
|
||||||||||||
Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction
|
$
|
358,837
|
|
|
$
|
33
|
|
|
$
|
159
|
|
|
$
|
3,320
|
|
|
$
|
18
|
|
|
$
|
362,367
|
|
1-4 Family Residential
|
618,810
|
|
|
14
|
|
|
—
|
|
|
3,626
|
|
|
431
|
|
|
622,881
|
|
||||||
Commercial
|
922,584
|
|
|
3,258
|
|
|
8,657
|
|
|
39,808
|
|
|
—
|
|
|
974,307
|
|
||||||
Commercial Loans
|
162,780
|
|
|
1,167
|
|
|
4,372
|
|
|
8,544
|
|
|
45
|
|
|
176,908
|
|
||||||
Municipal Loans
|
295,896
|
|
|
—
|
|
|
950
|
|
|
571
|
|
|
—
|
|
|
297,417
|
|
||||||
Loans to Individuals
|
103,874
|
|
|
—
|
|
|
27
|
|
|
650
|
|
|
487
|
|
|
105,038
|
|
||||||
Total
|
$
|
2,462,781
|
|
|
$
|
4,472
|
|
|
$
|
14,165
|
|
|
$
|
56,519
|
|
|
$
|
981
|
|
|
$
|
2,538,918
|
|
|
December 31, 2016
|
||||||||||||||||||||||
|
Pass
|
|
Pass Watch
(1)
|
|
Special Mention
(1)
|
|
Substandard
(1)
|
|
Doubtful
(1)
|
|
Total
|
||||||||||||
Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction
|
$
|
374,443
|
|
|
$
|
34
|
|
|
$
|
571
|
|
|
$
|
5,108
|
|
|
$
|
19
|
|
|
$
|
380,175
|
|
1-4 Family Residential
|
632,937
|
|
|
68
|
|
|
—
|
|
|
3,380
|
|
|
854
|
|
|
637,239
|
|
||||||
Commercial
|
885,049
|
|
|
17,739
|
|
|
10,587
|
|
|
32,603
|
|
|
—
|
|
|
945,978
|
|
||||||
Commercial Loans
|
158,943
|
|
|
1,187
|
|
|
8,086
|
|
|
9,012
|
|
|
37
|
|
|
177,265
|
|
||||||
Municipal Loans
|
297,014
|
|
|
—
|
|
|
998
|
|
|
571
|
|
|
—
|
|
|
298,583
|
|
||||||
Loans to Individuals
|
115,952
|
|
|
—
|
|
|
9
|
|
|
629
|
|
|
707
|
|
|
117,297
|
|
||||||
Total
|
$
|
2,464,338
|
|
|
$
|
19,028
|
|
|
$
|
20,251
|
|
|
$
|
51,303
|
|
|
$
|
1,617
|
|
|
$
|
2,556,537
|
|
(1)
|
Includes PCI loans comprised of
$5,000
pass watch,
$507,000
special mention,
$1.1 million
substandard and
$28,000
doubtful as of
March 31, 2017
. Includes PCI loans comprised of
$5,000
pass watch,
$511,000
special mention,
$1.5 million
substandard and
$28,000
doubtful as of
December 31, 2016
.
|
|
At
March 31, 2017 |
|
At
December 31, 2016 |
||||
Nonaccrual loans
(1)
|
$
|
7,261
|
|
|
$
|
8,280
|
|
Accruing loans past due more than 90 days
(1)
|
1
|
|
|
6
|
|
||
Restructured loans
(2)
|
6,424
|
|
|
6,431
|
|
||
Other real estate owned
|
367
|
|
|
339
|
|
||
Repossessed assets
|
26
|
|
|
49
|
|
||
Total Nonperforming Assets
|
$
|
14,079
|
|
|
$
|
15,105
|
|
(1)
|
Excludes PCI loans measured at fair value at acquisition.
|
(2)
|
Includes
$3.0 million
and
$3.1 million
in PCI loans restructured as of
March 31, 2017
and
December 31, 2016
, respectively.
|
|
Nonaccrual Loans
|
||||||
|
March 31, 2017
|
|
December 31, 2016
|
||||
Real Estate Loans:
|
|
|
|
||||
Construction
|
$
|
55
|
|
|
$
|
105
|
|
1-4 Family Residential
|
673
|
|
|
1,067
|
|
||
Commercial
|
723
|
|
|
808
|
|
||
Commercial Loans
|
5,127
|
|
|
5,477
|
|
||
Loans to Individuals
|
683
|
|
|
823
|
|
||
Total
|
$
|
7,261
|
|
|
$
|
8,280
|
|
|
March 31, 2017
|
||||||||||
|
Unpaid Contractual Principal Balance
|
|
Recorded Investment
|
|
Related
Allowance for
Loan Losses
|
||||||
Real Estate Loans:
|
|
|
|
|
|
||||||
Construction
|
$
|
437
|
|
|
$
|
430
|
|
|
$
|
10
|
|
1-4 Family Residential
|
4,429
|
|
|
4,221
|
|
|
13
|
|
|||
Commercial
|
1,530
|
|
|
1,465
|
|
|
15
|
|
|||
Commercial Loans
|
5,798
|
|
|
5,638
|
|
|
982
|
|
|||
Municipal Loans
|
571
|
|
|
571
|
|
|
11
|
|
|||
Loans to Individuals
|
256
|
|
|
225
|
|
|
91
|
|
|||
Total
(1)
|
$
|
13,021
|
|
|
$
|
12,550
|
|
|
$
|
1,122
|
|
|
December 31, 2016
|
||||||||||
|
Unpaid
Contractual
Principal
Balance
|
|
Recorded
Investment
|
|
Related
Allowance for
Loan Losses
|
||||||
Real Estate Loans:
|
|
|
|
|
|
||||||
Construction
|
$
|
486
|
|
|
$
|
480
|
|
|
$
|
13
|
|
1-4 Family Residential
|
4,487
|
|
|
4,264
|
|
|
16
|
|
|||
Commercial
|
1,631
|
|
|
1,574
|
|
|
17
|
|
|||
Commercial Loans
|
6,108
|
|
|
5,941
|
|
|
923
|
|
|||
Municipal Loans
|
571
|
|
|
571
|
|
|
11
|
|
|||
Loans to Individuals
|
277
|
|
|
241
|
|
|
106
|
|
|||
Total
(1)
|
$
|
13,560
|
|
|
$
|
13,071
|
|
|
$
|
1,086
|
|
(1)
|
Includes
$3.0 million
and
$3.1 million
of PCI loans that experienced deterioration in credit quality subsequent to the acquisition date as of
March 31, 2017
and
December 31, 2016
, respectively.
|
|
March 31, 2017
|
||||||||||||||||||||||
|
30-59 Days
Past Due
|
|
60-89 Days
Past Due
|
|
Greater than 90 Days Past Due
|
|
Total Past
Due
|
|
Current
(1)
|
|
Total
|
||||||||||||
Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction
|
$
|
2,423
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
2,445
|
|
|
$
|
359,922
|
|
|
$
|
362,367
|
|
1-4 Family Residential
|
5,330
|
|
|
81
|
|
|
329
|
|
|
5,740
|
|
|
617,141
|
|
|
622,881
|
|
||||||
Commercial
|
1,179
|
|
|
151
|
|
|
81
|
|
|
1,411
|
|
|
972,896
|
|
|
974,307
|
|
||||||
Commercial Loans
|
2,020
|
|
|
686
|
|
|
2,707
|
|
|
5,413
|
|
|
171,495
|
|
|
176,908
|
|
||||||
Municipal Loans
|
663
|
|
|
—
|
|
|
—
|
|
|
663
|
|
|
296,754
|
|
|
297,417
|
|
||||||
Loans to Individuals
|
850
|
|
|
108
|
|
|
267
|
|
|
1,225
|
|
|
103,813
|
|
|
105,038
|
|
||||||
Total
|
$
|
12,465
|
|
|
$
|
1,026
|
|
|
$
|
3,406
|
|
|
$
|
16,897
|
|
|
$
|
2,522,021
|
|
|
$
|
2,538,918
|
|
|
December 31, 2016
|
||||||||||||||||||||||
|
30-59 Days Past Due
|
|
60-89 Days Past Due
|
|
Greater than 90 Days
Past Due
|
|
Total Past
Due
|
|
Current
(1)
|
|
Total
|
||||||||||||
Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction
|
$
|
917
|
|
|
$
|
64
|
|
|
$
|
86
|
|
|
$
|
1,067
|
|
|
$
|
379,108
|
|
|
$
|
380,175
|
|
1-4 Family Residential
|
6,225
|
|
|
755
|
|
|
600
|
|
|
7,580
|
|
|
629,659
|
|
|
637,239
|
|
||||||
Commercial
|
70
|
|
|
154
|
|
|
154
|
|
|
378
|
|
|
945,600
|
|
|
945,978
|
|
||||||
Commercial Loans
|
783
|
|
|
300
|
|
|
3,459
|
|
|
4,542
|
|
|
172,723
|
|
|
177,265
|
|
||||||
Municipal Loans
|
113
|
|
|
—
|
|
|
—
|
|
|
113
|
|
|
298,470
|
|
|
298,583
|
|
||||||
Loans to Individuals
|
1,550
|
|
|
320
|
|
|
185
|
|
|
2,055
|
|
|
115,242
|
|
|
117,297
|
|
||||||
Total
|
$
|
9,658
|
|
|
$
|
1,593
|
|
|
$
|
4,484
|
|
|
$
|
15,735
|
|
|
$
|
2,540,802
|
|
|
$
|
2,556,537
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||||||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||||||||||
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
Average Recorded
Investment |
|
Interest Income Recognized
|
||||||||
Real Estate Loans:
|
|
|
|
|
|
|
|
||||||||
Construction
|
$
|
467
|
|
|
$
|
4
|
|
|
$
|
454
|
|
|
$
|
6
|
|
1-4 Family Residential
|
4,262
|
|
|
57
|
|
|
1,865
|
|
|
14
|
|
||||
Commercial
|
1,522
|
|
|
19
|
|
|
5,488
|
|
|
21
|
|
||||
Commercial Loans
|
5,787
|
|
|
19
|
|
|
21,675
|
|
|
167
|
|
||||
Municipal Loans
|
571
|
|
|
8
|
|
|
637
|
|
|
9
|
|
||||
Loans to Individuals
|
265
|
|
|
2
|
|
|
247
|
|
|
2
|
|
||||
Total
|
$
|
12,874
|
|
|
$
|
109
|
|
|
$
|
30,366
|
|
|
$
|
219
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2017
|
|||||||||||||||||
|
Extend Amortization
Period
|
|
Interest Rate Reductions
|
|
Combination
|
|
Total Modifications
|
|
Number of Loans
|
|||||||||
Commercial Loans
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
47
|
|
|
1
|
|
Loans to Individuals
|
5
|
|
|
—
|
|
|
12
|
|
|
17
|
|
|
2
|
|
||||
Total
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
64
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2016
|
|||||||||||||||||
|
Extend Amortization
Period
|
|
Interest Rate Reductions
|
|
Combination
|
|
Total Modifications
|
|
Number of Loans
|
|||||||||
Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|||||||||
Construction
|
$
|
554
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
554
|
|
|
1
|
|
Commercial
|
2,118
|
|
|
—
|
|
|
—
|
|
|
2,118
|
|
|
1
|
|
||||
Commercial Loans
|
1,176
|
|
|
—
|
|
|
—
|
|
|
1,176
|
|
|
4
|
|
||||
Total
|
$
|
3,848
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,848
|
|
|
6
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Outstanding principal balance
|
$
|
9,924
|
|
|
$
|
10,612
|
|
Carrying amount
|
$
|
8,757
|
|
|
$
|
9,197
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Balance at beginning of period
|
$
|
2,480
|
|
|
$
|
2,493
|
|
Reclassifications (to) from nonaccretable discount
|
1,819
|
|
|
443
|
|
||
Accretion
|
(296
|
)
|
|
(594
|
)
|
||
Balance at end of period
|
$
|
4,003
|
|
|
$
|
2,342
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Parent Company
|
|
|
|
||||
Subordinated notes:
(1)
|
|
|
|
||||
5.50% Subordinated Notes Due 2026, net of unamortized debt issuance costs
(2)
|
$
|
98,133
|
|
|
$
|
98,100
|
|
Total Subordinated notes
|
98,133
|
|
|
98,100
|
|
||
Long-term debt:
(3)
|
|
|
|
||||
Southside Statutory Trust III Due 2033, net of unamortized debt issuance costs
(4)
|
20,545
|
|
|
20,544
|
|
||
Southside Statutory Trust IV Due 2037
(5)
|
23,196
|
|
|
23,196
|
|
||
Southside Statutory Trust V Due 2037
(6)
|
12,887
|
|
|
12,887
|
|
||
Magnolia Trust Company I Due 2035
(7)
|
3,609
|
|
|
3,609
|
|
||
Total Long-term debt
|
60,237
|
|
|
60,236
|
|
||
Total Parent Company
|
158,370
|
|
|
158,336
|
|
||
|
|
|
|
||||
Subsidiaries
|
|
|
|
||||
FHLB advances
(8)
|
252,940
|
|
|
443,128
|
|
||
Total Subsidiaries
|
252,940
|
|
|
443,128
|
|
||
Total Long-term obligations
|
$
|
411,310
|
|
|
$
|
601,464
|
|
(1)
|
This long-term debt consists of subordinated notes with a remaining maturity greater than
one
year that qualify under the risk-based capital guidelines as Tier 2 capital, subject to certain limitations.
|
(2)
|
This debt carries a fixed rate of
5.50%
through
September 29, 2021
and thereafter, adjusts quarterly at a rate equal to
three-month LIBOR plus 429.7 basis points
.
|
(3)
|
This long-term debt consists of trust preferred securities that qualify under the risk-based capital guidelines as Tier 1 capital, subject to certain limitations.
|
(4)
|
This debt carries an adjustable rate of
4.08678%
through
June 29, 2017
and adjusts quarterly at a rate equal to
three-month LIBOR plus 294 basis points
.
|
(5)
|
This debt carries an adjustable rate of
2.339%
through
April 29, 2017
and adjusts quarterly at a rate equal to
three-month LIBOR plus 130 basis points
.
|
(6)
|
This debt carries an adjustable rate of
3.38122%
through
June 14, 2017
and adjusts quarterly at a rate equal to
three-month LIBOR plus 225 basis points
.
|
(7)
|
This debt carries an adjustable rate of
2.85344%
through
May 22, 2017
and adjusts quarterly at a rate equal to
three-month LIBOR plus 180 basis points
.
|
(8)
|
At
March 31, 2017
, the weighted average cost of these advances was
1.5%
. Long-term FHLB advances have maturities ranging from
April 2018
through
July 2028
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
|
Defined Benefit
Pension Plan |
|
Defined Benefit Pension Plan Acquired
|
|
Restoration
Plan |
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
Service cost
|
|
$
|
358
|
|
|
$
|
368
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51
|
|
|
$
|
47
|
|
Interest cost
|
|
912
|
|
|
917
|
|
|
45
|
|
|
53
|
|
|
132
|
|
|
135
|
|
||||||
Expected return on assets
|
|
(1,512
|
)
|
|
(1,354
|
)
|
|
(54
|
)
|
|
(67
|
)
|
|
—
|
|
|
—
|
|
||||||
Net loss amortization
|
|
344
|
|
|
358
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
53
|
|
||||||
Prior service (credit) cost amortization
|
|
(4
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||
Special and contractual termination benefits
|
|
—
|
|
|
1,520
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost (income)
|
|
$
|
98
|
|
|
$
|
1,803
|
|
|
$
|
(9
|
)
|
|
$
|
(14
|
)
|
|
$
|
232
|
|
|
$
|
237
|
|
(1)
|
Notional amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk, and are not reflected in the consolidated balance sheets.
|
(2)
|
Net derivative assets are included in “other assets” and net derivative liabilities are included in “other liabilities” on the consolidated balance sheets. Included in the fair value of net derivative assets and net derivative liabilities are credit valuation adjustments reflecting counterparty credit risk and our credit risk. We had net credit exposure of
$8,000
related to interest rate swaps with financial institutions and
$499,000
related to interest rate swaps with customers at
March 31, 2017
. The credit risk associated with customer transactions is partially mitigated as these transactions are generally secured by the non-cash collateral securing the underlying transaction being hedged. We had
no
credit exposure related to interest rate swaps with financial or customer counterparties at
December 31, 2016
.
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
|
|
|
Weighted Average
|
|
|
|
Weighted Average
|
||||||||||||||||
|
|
Notional Amount
|
|
Remaining Maturity
(in years)
|
|
Receive Rate
|
|
Pay
Rate
|
|
Notional Amount
|
|
Remaining Maturity
(in years) |
|
Receive Rate
|
|
Pay
Rate |
||||||||
Swaps-Cash Flow Hedge
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial institution counterparties
|
|
$
|
240,000
|
|
|
6.0
|
|
0.91
|
%
|
|
1.43
|
%
|
|
$
|
250,000
|
|
|
5.4
|
|
0.68
|
%
|
|
1.31
|
%
|
Swaps-Non-Hedging
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial institution counterparties
|
|
46,196
|
|
|
10.3
|
|
0.83
|
|
|
2.32
|
|
|
2,182
|
|
|
9.7
|
|
0.62
|
|
|
1.57
|
|
||
Customer counterparties
|
|
46,196
|
|
|
10.3
|
|
2.32
|
|
|
0.83
|
|
|
2,182
|
|
|
9.7
|
|
1.57
|
|
|
0.62
|
|
|
As of March 31, 2017
|
||||||||||||||
|
|
|
Fair Value Measurements at the End of the Reporting Period Using
|
||||||||||||
|
Carrying
Amount
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
||||||||
Investment Securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
59,214
|
|
|
$
|
59,214
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State and Political Subdivisions
|
320,847
|
|
|
—
|
|
|
320,847
|
|
|
—
|
|
||||
Other Stocks and Bonds
|
6,658
|
|
|
—
|
|
|
6,658
|
|
|
—
|
|
||||
Other Equity Securities
|
5,920
|
|
|
5,920
|
|
|
—
|
|
|
—
|
|
||||
Mortgage-backed Securities:
(1)
|
|
|
|
|
|
|
|
||||||||
Residential
|
684,662
|
|
|
—
|
|
|
684,662
|
|
|
—
|
|
||||
Commercial
|
366,742
|
|
|
—
|
|
|
366,742
|
|
|
—
|
|
||||
Derivative assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
7,994
|
|
|
—
|
|
|
7,994
|
|
|
—
|
|
||||
Total asset recurring fair value measurements
|
$
|
1,452,037
|
|
|
$
|
65,134
|
|
|
$
|
1,386,903
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
626
|
|
|
$
|
—
|
|
|
$
|
626
|
|
|
$
|
—
|
|
Total liability recurring fair value measurements
|
$
|
626
|
|
|
$
|
—
|
|
|
$
|
626
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Nonrecurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreclosed assets
|
$
|
393
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
393
|
|
Impaired loans
(2)
|
9,137
|
|
|
—
|
|
|
—
|
|
|
9,137
|
|
||||
Total asset nonrecurring fair value measurements
|
$
|
9,530
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,530
|
|
|
As of December 31, 2016
|
||||||||||||||
|
|
|
Fair Value Measurements at the End of the Reporting Period Using
|
||||||||||||
|
Carrying
Amount
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
||||||||
Investment Securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
70,069
|
|
|
$
|
70,069
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State and Political Subdivisions
|
385,197
|
|
|
—
|
|
|
385,197
|
|
|
—
|
|
||||
Other Stocks and Bonds
|
6,651
|
|
|
—
|
|
|
6,651
|
|
|
—
|
|
||||
Other Equity Securities
|
5,920
|
|
|
5,920
|
|
|
—
|
|
|
—
|
|
||||
Mortgage-backed Securities:
(1)
|
|
|
|
|
|
|
|
|
|||||||
Residential
|
627,508
|
|
|
—
|
|
|
627,508
|
|
|
—
|
|
||||
Commercial
|
384,255
|
|
|
—
|
|
|
384,255
|
|
|
—
|
|
||||
Derivative assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
7,154
|
|
|
—
|
|
|
7,154
|
|
|
—
|
|
||||
Total asset recurring fair value measurements
|
$
|
1,486,754
|
|
|
$
|
75,989
|
|
|
$
|
1,410,765
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
85
|
|
|
$
|
—
|
|
|
$
|
85
|
|
|
$
|
—
|
|
Total liability recurring fair value measurements
|
$
|
85
|
|
|
$
|
—
|
|
|
$
|
85
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Nonrecurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreclosed assets
|
$
|
388
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
388
|
|
Impaired loans
(2)
|
9,693
|
|
|
—
|
|
|
—
|
|
|
9,693
|
|
||||
Total asset nonrecurring fair value measurements
|
$
|
10,081
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,081
|
|
(1)
|
All mortgage-backed securities are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.
|
(2)
|
Impaired loans represent collateral-dependent loans with a specific valuation allowance. Losses on these loans represent charge-offs which are netted against the allowance for loan losses.
|
|
|
|
Estimated Fair Value
|
||||||||||||||||
March 31, 2017
|
Carrying
Amount |
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
246,994
|
|
|
$
|
246,994
|
|
|
$
|
246,994
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Held to maturity, at carrying value
|
421,133
|
|
|
427,288
|
|
|
—
|
|
|
427,288
|
|
|
—
|
|
|||||
Mortgage-backed Securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Held to maturity, at carrying value
|
508,660
|
|
|
513,121
|
|
|
—
|
|
|
513,121
|
|
|
—
|
|
|||||
FHLB stock, at cost, and other investments
|
66,747
|
|
|
66,747
|
|
|
—
|
|
|
66,747
|
|
|
—
|
|
|||||
Loans, net of allowance for loan losses
|
2,520,433
|
|
|
2,601,382
|
|
|
—
|
|
|
—
|
|
|
2,601,382
|
|
|||||
Loans held for sale
|
5,303
|
|
|
5,303
|
|
|
—
|
|
|
5,303
|
|
|
—
|
|
|||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
$
|
3,705,296
|
|
|
$
|
3,701,697
|
|
|
$
|
—
|
|
|
$
|
3,701,697
|
|
|
$
|
—
|
|
Federal funds purchased and repurchase agreements
|
7,814
|
|
|
7,814
|
|
|
—
|
|
|
7,814
|
|
|
—
|
|
|||||
FHLB advances
|
1,205,856
|
|
|
1,206,415
|
|
|
—
|
|
|
1,206,415
|
|
|
—
|
|
|||||
Subordinated notes, net of unamortized debt issuance costs
|
98,133
|
|
|
100,561
|
|
|
—
|
|
|
100,561
|
|
|
—
|
|
|||||
Long-term debt
, net of unamortized debt issuance costs
|
60,237
|
|
|
45,572
|
|
|
—
|
|
|
45,572
|
|
|
—
|
|
|
|
|
Estimated Fair Value
|
||||||||||||||||
December 31, 2016
|
Carrying
Amount |
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
169,654
|
|
|
$
|
169,654
|
|
|
$
|
169,654
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Held to maturity, at carrying value
|
425,810
|
|
|
429,912
|
|
|
—
|
|
|
429,912
|
|
|
—
|
|
|||||
Mortgage-backed Securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Held to maturity, at carrying value
|
511,677
|
|
|
514,370
|
|
|
—
|
|
|
514,370
|
|
|
—
|
|
|||||
FHLB stock, at cost, and other investments
|
66,592
|
|
|
66,592
|
|
|
—
|
|
|
66,592
|
|
|
—
|
|
|||||
Loans, net of allowance for loan losses
|
2,538,626
|
|
|
2,630,009
|
|
|
—
|
|
|
—
|
|
|
2,630,009
|
|
|||||
Loans held for sale
|
7,641
|
|
|
7,641
|
|
|
—
|
|
|
7,641
|
|
|
—
|
|
|||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
$
|
3,533,076
|
|
|
$
|
3,293,352
|
|
|
$
|
—
|
|
|
$
|
3,293,352
|
|
|
$
|
—
|
|
Federal funds purchased and repurchase agreements
|
7,097
|
|
|
7,097
|
|
|
—
|
|
|
7,097
|
|
|
—
|
|
|||||
FHLB advances
|
1,309,646
|
|
|
1,331,517
|
|
|
—
|
|
|
1,331,517
|
|
|
—
|
|
|||||
Subordinated notes, net of unamortized debt issuance costs
|
98,100
|
|
|
101,627
|
|
|
—
|
|
|
101,627
|
|
|
—
|
|
|||||
Long-term debt
, net of unamortized debt issuance costs
|
60,236
|
|
|
45,147
|
|
|
—
|
|
|
45,147
|
|
|
—
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Current income tax expense
|
$
|
3,027
|
|
|
$
|
3,785
|
|
Deferred income tax (benefit) expense
|
(19
|
)
|
|
(812
|
)
|
||
Income tax expense
|
$
|
3,008
|
|
|
$
|
2,973
|
|
|
At
March 31, 2017 |
|
At
December 31, 2016 |
||||
Unused commitments:
|
|
|
|
|
|
||
Commitments to extend credit
|
$
|
666,207
|
|
|
$
|
665,663
|
|
Standby letters of credit
|
8,612
|
|
|
9,075
|
|
||
Total
|
$
|
674,819
|
|
|
$
|
674,738
|
|
•
|
general economic conditions, either globally, nationally, in the State of Texas, or in the specific markets in which we operate, including, without limitation, the deterioration of the commercial real estate, residential real estate, construction and development, energy, oil, and gas credit and liquidity markets, which could cause an adverse change in our net interest margin, or a decline in the value of our assets, which could result in realized losses;
|
•
|
current or future legislation, regulatory changes or changes in monetary or fiscal policy that adversely affect the businesses in which we are engaged, including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”), the Federal Reserve’s actions with respect to interest rates, the capital requirements promulgated by the Basel Committee on Banking Supervision (“Basel Committee”) and other regulatory responses to economic conditions;
|
•
|
adverse changes in the status or financial condition of the Government-Sponsored Enterprises (the “GSEs”) which impact the GSEs’ guarantees or ability to pay or issue debt;
|
•
|
adverse changes in the credit portfolio of other U.S. financial institutions relative to the performance of certain of our investment securities;
|
•
|
economic or other disruptions caused by acts of terrorism in the United States, Europe or other areas;
|
•
|
changes in the interest rate yield curve such as flat, inverted or steep yield curves, or changes in the interest rate environment that impact interest margins and may impact prepayments on our mortgage-backed securities (“MBS”) portfolio;
|
•
|
increases in our nonperforming assets;
|
•
|
our ability to maintain adequate liquidity to fund operations and growth;
|
•
|
any applicable regulatory limits or other restrictions on Southside Bank’s ability to pay dividends to us;
|
•
|
the failure of our assumptions underlying allowance for loan losses and other estimates;
|
•
|
the effectiveness of our derivative financial instruments and hedging activities to manage risk;
|
•
|
unexpected outcomes of, and the costs associated with, existing or new litigation involving us;
|
•
|
changes impacting our balance sheet and leverage strategy;
|
•
|
risks related to actual mortgage prepayments diverging from projections;
|
•
|
risks related to actual U.S. Agency MBS prepayments exceeding projected prepayment levels;
|
•
|
risks related to U.S. Agency MBS prepayments increasing due to U.S. Government programs designed to assist homeowners to refinance their mortgage that might not otherwise have qualified;
|
•
|
our ability to monitor interest rate risk;
|
•
|
risks related to the price per barrel of crude oil;
|
•
|
significant increases in competition in the banking and financial services industry;
|
•
|
changes in consumer spending, borrowing and saving habits;
|
•
|
technological changes, including potential cyber-security incidents;
|
•
|
execution of future acquisition, reorganization or disposition transactions, including the risk that the anticipated benefits of such transactions are not realized;
|
•
|
our ability to increase market share and control expenses;
|
•
|
our ability to develop competitive new products and services in a timely manner and the acceptance of such products and services by our customers;
|
•
|
the effect of changes in federal or state tax laws;
|
•
|
the effect of compliance with legislation or regulatory changes;
|
•
|
the effect of changes in accounting policies and practices;
|
•
|
credit risks of borrowers, including any increase in those risks due to changing economic conditions;
|
•
|
risks related to loans secured by real estate, including the risk that the value and marketability of collateral could decline; and
|
•
|
other risks and uncertainties discussed in Part I - “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2016
.
|
|
At
March 31, 2017 |
|
At
December 31, 2016 |
||||
Unused commitments:
|
|
|
|
|
|
||
Commitments to extend credit
|
$
|
666,207
|
|
|
$
|
665,663
|
|
Standby letters of credit
|
8,612
|
|
|
9,075
|
|
||
Total
|
$
|
674,819
|
|
|
$
|
674,738
|
|
|
Average Balances with Average Yields and Rates
|
||||||||||||||||||||
|
|
|
|
|
(unaudited)
|
|
|
|
|
||||||||||||
|
|
|
|
|
Three Months Ended
|
|
|
|
|
||||||||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||||||||||||||||
|
Avg Balance
|
|
Interest
|
|
Avg Yield/Rate
|
|
Avg Balance
|
|
Interest
|
|
Avg Yield/Rate
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans
(1) (2)
|
$
|
2,549,230
|
|
|
$
|
28,241
|
|
|
4.49
|
%
|
|
$
|
2,434,837
|
|
|
$
|
28,793
|
|
|
4.76
|
%
|
Loans held for sale
|
7,023
|
|
|
48
|
|
|
2.77
|
%
|
|
3,581
|
|
|
32
|
|
|
3.59
|
%
|
||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities (taxable)
(4)
|
86,511
|
|
|
377
|
|
|
1.77
|
%
|
|
41,659
|
|
|
214
|
|
|
2.07
|
%
|
||||
Investment securities (tax-exempt)
(3) (4)
|
779,772
|
|
|
9,929
|
|
|
5.16
|
%
|
|
635,766
|
|
|
8,494
|
|
|
5.37
|
%
|
||||
Mortgage-backed and related securities
(4)
|
1,570,510
|
|
|
10,045
|
|
|
2.59
|
%
|
|
1,454,343
|
|
|
9,391
|
|
|
2.60
|
%
|
||||
Total securities
|
2,436,793
|
|
|
20,351
|
|
|
3.39
|
%
|
|
2,131,768
|
|
|
18,099
|
|
|
3.41
|
%
|
||||
FHLB stock, at cost, and other investments
|
66,547
|
|
|
298
|
|
|
1.82
|
%
|
|
55,116
|
|
|
217
|
|
|
1.58
|
%
|
||||
Interest earning deposits
|
162,235
|
|
|
346
|
|
|
0.86
|
%
|
|
51,246
|
|
|
70
|
|
|
0.55
|
%
|
||||
Federal funds sold
|
7,217
|
|
|
14
|
|
|
0.79
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total earning assets
|
5,229,045
|
|
|
49,298
|
|
|
3.82
|
%
|
|
4,676,548
|
|
|
47,211
|
|
|
4.06
|
%
|
||||
Cash and due from banks
|
53,528
|
|
|
|
|
|
|
55,732
|
|
|
|
|
|
||||||||
Accrued interest and other assets
|
350,729
|
|
|
|
|
|
|
370,022
|
|
|
|
|
|
||||||||
Less: Allowance for loan losses
|
(18,130
|
)
|
|
|
|
|
|
(20,088
|
)
|
|
|
|
|
||||||||
Total assets
|
$
|
5,615,172
|
|
|
|
|
|
|
$
|
5,082,214
|
|
|
|
|
|
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Savings deposits
|
$
|
252,744
|
|
|
92
|
|
|
0.15
|
%
|
|
$
|
235,492
|
|
|
65
|
|
|
0.11
|
%
|
||
Time deposits
|
927,610
|
|
|
2,227
|
|
|
0.97
|
%
|
|
915,316
|
|
|
1,723
|
|
|
0.76
|
%
|
||||
Interest bearing demand deposits
|
1,707,996
|
|
|
1,962
|
|
|
0.47
|
%
|
|
1,717,717
|
|
|
1,468
|
|
|
0.34
|
%
|
||||
Total interest bearing deposits
|
2,888,350
|
|
|
4,281
|
|
|
0.60
|
%
|
|
2,868,525
|
|
|
3,256
|
|
|
0.46
|
%
|
||||
Short-term interest bearing liabilities
|
1,007,546
|
|
|
2,065
|
|
|
0.83
|
%
|
|
413,985
|
|
|
696
|
|
|
0.68
|
%
|
||||
Long-term interest bearing liabilities – FHLB Dallas
|
301,775
|
|
|
1,402
|
|
|
1.88
|
%
|
|
566,825
|
|
|
2,039
|
|
|
1.45
|
%
|
||||
Subordinated notes
(5)
|
98,117
|
|
|
1,393
|
|
|
5.76
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Long-term debt
(6)
|
60,237
|
|
|
467
|
|
|
3.14
|
%
|
|
60,232
|
|
|
405
|
|
|
2.70
|
%
|
||||
Total interest bearing liabilities
|
4,356,025
|
|
|
9,608
|
|
|
0.89
|
%
|
|
3,909,567
|
|
|
6,396
|
|
|
0.66
|
%
|
||||
Noninterest bearing deposits
|
693,729
|
|
|
|
|
|
|
672,865
|
|
|
|
|
|
||||||||
Accrued expenses and other liabilities
|
39,960
|
|
|
|
|
|
|
45,390
|
|
|
|
|
|
||||||||
Total liabilities
|
5,089,714
|
|
|
|
|
|
|
4,627,822
|
|
|
|
|
|
||||||||
Shareholders’ equity
|
525,458
|
|
|
|
|
|
|
454,392
|
|
|
|
|
|
||||||||
Total liabilities and shareholders’ equity
|
$
|
5,615,172
|
|
|
|
|
|
|
$
|
5,082,214
|
|
|
|
|
|
||||||
Net interest income
|
|
|
$
|
39,690
|
|
|
|
|
|
|
$
|
40,815
|
|
|
|
||||||
Net interest margin on average earning assets
|
|
|
|
|
3.08
|
%
|
|
|
|
|
|
3.51
|
%
|
||||||||
Net interest spread
|
|
|
|
|
2.93
|
%
|
|
|
|
|
|
3.40
|
%
|
(1)
|
Interest on loans includes net fees on loans that are not material in amount.
|
(2)
|
Interest income includes taxable-equivalent adjustments of
$1,035
and
$1,060
for the
three
months ended
March 31, 2017
and
2016
, respectively. See “Non-GAAP Financial Measures.”
|
(3)
|
Interest income includes taxable-equivalent adjustments of
$3,375
and
$3,139
for the
three
months ended
March 31, 2017
and
2016
, respectively. See “Non-GAAP Financial Measures.”
|
(4)
|
For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.
|
(5)
|
The unamortized discount and debt issuance costs reflected in the carrying amount of the subordinated notes totaled approximately $1.9 million for the three months ended
March 31, 2017
.
|
(6)
|
Represents issuance of junior subordinated debentures. In connection with the adoption of ASU 2015-03 that requires unamortized debt issuance costs be presented as a direct deduction from the related debt liability, our average long-term debt for the three months ended
March 31, 2017
and
2016
reflect unamortized debt issuance costs of $74,000 and $79,000, respectively.
|
|
Three Months Ended March 31,
2017 Compared to 2016 |
||||||||||
|
Average
Volume |
|
Average
Yield/Rate |
|
Increase
(Decrease)
|
||||||
INTEREST INCOME:
|
|
|
|
|
|
||||||
Loans
(1)
|
$
|
1,316
|
|
|
$
|
(1,868
|
)
|
|
$
|
(552
|
)
|
Loans held for sale
|
25
|
|
|
(9
|
)
|
|
16
|
|
|||
Investment securities (taxable)
|
200
|
|
|
(37
|
)
|
|
163
|
|
|||
Investment securities (tax exempt)
(1)
|
1,849
|
|
|
(414
|
)
|
|
1,435
|
|
|||
Mortgage-backed securities
|
744
|
|
|
(90
|
)
|
|
654
|
|
|||
FHLB stock, at cost and other investments
|
49
|
|
|
32
|
|
|
81
|
|
|||
Interest earning deposits
|
219
|
|
|
57
|
|
|
276
|
|
|||
Federal funds sold
|
14
|
|
|
—
|
|
|
14
|
|
|||
Total interest income
|
4,416
|
|
|
(2,329
|
)
|
|
2,087
|
|
|||
INTEREST EXPENSE:
|
|
|
|
|
|
||||||
Savings deposits
|
5
|
|
|
22
|
|
|
27
|
|
|||
Time deposits
|
23
|
|
|
481
|
|
|
504
|
|
|||
Interest bearing demand deposits
|
(8
|
)
|
|
502
|
|
|
494
|
|
|||
Short-term interest bearing liabilities
|
1,188
|
|
|
181
|
|
|
1,369
|
|
|||
Long-term FHLB advances
|
(1,125
|
)
|
|
488
|
|
|
(637
|
)
|
|||
Subordinated notes
|
1,393
|
|
|
—
|
|
|
1,393
|
|
|||
Long-term debt
|
—
|
|
|
62
|
|
|
62
|
|
|||
Total interest expense
|
1,476
|
|
|
1,736
|
|
|
3,212
|
|
|||
Net interest income
|
$
|
2,940
|
|
|
$
|
(4,065
|
)
|
|
$
|
(1,125
|
)
|
(1)
|
Interest yields on loans and securities that are nontaxable for federal income tax purposes are presented on a taxable equivalent basis. See “Non-GAAP Financial Measures.”
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2017
|
|
2016
|
||||
Deposit services
|
|
$
|
5,114
|
|
|
$
|
5,085
|
|
Net gain on sale of securities available for sale
|
|
322
|
|
|
2,441
|
|
||
Gain on sale of loans
|
|
701
|
|
|
643
|
|
||
Trust income
|
|
890
|
|
|
855
|
|
||
Bank owned life insurance income
|
|
634
|
|
|
674
|
|
||
Brokerage services
|
|
547
|
|
|
575
|
|
||
Other noninterest income
|
|
1,465
|
|
|
1,323
|
|
||
Total noninterest income
|
|
$
|
9,673
|
|
|
$
|
11,596
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2017
|
|
2016
|
||||
Salaries and employee benefits
|
|
$
|
15,919
|
|
|
$
|
17,732
|
|
Occupancy expense
|
|
2,863
|
|
|
3,335
|
|
||
Advertising, travel & entertainment
|
|
583
|
|
|
685
|
|
||
ATM and debit card expense
|
|
927
|
|
|
712
|
|
||
Professional fees
|
|
939
|
|
|
1,338
|
|
||
Software and data processing expense
|
|
725
|
|
|
749
|
|
||
Telephone and communications
|
|
526
|
|
|
484
|
|
||
FDIC insurance
|
|
441
|
|
|
638
|
|
||
Other noninterest expense
|
|
2,935
|
|
|
3,734
|
|
||
Total noninterest expense
|
|
$
|
25,858
|
|
|
$
|
29,407
|
|
|
Actual
|
|
For Capital
Adequacy Purposes
|
|
To Be Well Capitalized
Under Prompt
Corrective Actions
Provisions
|
|||||||||||||||
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Amount
|
|||||||||
March 31, 2017
|
(dollars in thousands)
|
|||||||||||||||||||
Common Equity Tier 1 (to Risk Weighted Assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Consolidated
|
$
|
468,396
|
|
|
14.58
|
%
|
|
$
|
144,598
|
|
|
4.50
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Bank Only
|
$
|
583,575
|
|
|
18.16
|
%
|
|
$
|
144,592
|
|
|
4.50
|
%
|
|
$
|
208,856
|
|
|
6.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 Capital (to Risk Weighted Assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Consolidated
|
$
|
525,036
|
|
|
16.34
|
%
|
|
$
|
192,797
|
|
|
6.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Bank Only
|
$
|
583,575
|
|
|
18.16
|
%
|
|
$
|
192,790
|
|
|
6.00
|
%
|
|
$
|
257,053
|
|
|
8.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Capital (to Risk Weighted Assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Consolidated
|
$
|
643,106
|
|
|
20.01
|
%
|
|
$
|
257,062
|
|
|
8.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Bank Only
|
$
|
603,512
|
|
|
18.78
|
%
|
|
$
|
257,053
|
|
|
8.00
|
%
|
|
$
|
321,316
|
|
|
10.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 Capital (to Average Assets)
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Consolidated
|
$
|
525,036
|
|
|
9.51
|
%
|
|
$
|
220,800
|
|
|
4.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Bank Only
|
$
|
583,575
|
|
|
10.58
|
%
|
|
$
|
220,721
|
|
|
4.00
|
%
|
|
$
|
275,901
|
|
|
5.00
|
%
|
|
Actual
|
|
For Capital
Adequacy Purposes
|
|
To Be Well Capitalized
Under Prompt
Corrective Actions
Provisions
|
|||||||||||||||
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
December 31, 2016
|
(dollars in thousands)
|
|||||||||||||||||||
Common Equity Tier 1 (to Risk Weighted Assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Consolidated
|
$
|
461,158
|
|
|
14.64
|
%
|
|
$
|
141,759
|
|
|
4.50
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Bank Only
|
$
|
566,423
|
|
|
17.98
|
%
|
|
$
|
141,734
|
|
|
4.50
|
%
|
|
$
|
204,726
|
|
|
6.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 Capital (to Risk Weighted Assets)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
$
|
515,831
|
|
|
16.37
|
%
|
|
$
|
189,013
|
|
|
6.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Bank Only
|
$
|
566,423
|
|
|
17.98
|
%
|
|
$
|
188,978
|
|
|
6.00
|
%
|
|
$
|
251,971
|
|
|
8.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Capital (to Risk Weighted Assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Consolidated
|
$
|
633,289
|
|
|
20.10
|
%
|
|
$
|
252,017
|
|
|
8.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Bank Only
|
$
|
585,781
|
|
|
18.60
|
%
|
|
$
|
251,971
|
|
|
8.00
|
%
|
|
$
|
314,964
|
|
|
10.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 Capital (to Average Assets)
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Consolidated
|
$
|
515,831
|
|
|
9.46
|
%
|
|
$
|
218,029
|
|
|
4.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Bank Only
|
$
|
566,423
|
|
|
10.40
|
%
|
|
$
|
217,892
|
|
|
4.00
|
%
|
|
$
|
272,365
|
|
|
5.00
|
%
|
(1)
|
Refers to quarterly average assets as calculated in accordance with policies established by bank regulatory agencies.
|
|
Three Months Ended
March 31, |
||||
|
2017
|
|
2016
|
||
Return on Average Assets
|
1.08
|
%
|
|
1.07
|
%
|
Return on Average Shareholders’ Equity
|
11.57
|
|
|
11.96
|
|
Dividend Payout Ratio – Basic
|
48.08
|
|
|
45.10
|
|
Dividend Payout Ratio – Diluted
|
48.08
|
|
|
45.10
|
|
Average Shareholders’ Equity to Average Total Assets
|
9.36
|
|
|
8.94
|
|
|
At
March 31, 2017 |
|
At
December 31, 2016 |
|
At
March 31, 2016 |
||||||
|
(in thousands)
|
||||||||||
Real Estate Loans:
|
|
|
|
|
|
|
|
|
|||
Construction
|
$
|
362,367
|
|
|
$
|
380,175
|
|
|
$
|
464,750
|
|
1-4 Family Residential
|
622,881
|
|
|
637,239
|
|
|
644,826
|
|
|||
Commercial
|
974,307
|
|
|
945,978
|
|
|
657,962
|
|
|||
Commercial Loans
|
176,908
|
|
|
177,265
|
|
|
233,857
|
|
|||
Municipal Loans
|
297,417
|
|
|
298,583
|
|
|
286,217
|
|
|||
Loans to Individuals
|
105,038
|
|
|
117,297
|
|
|
155,619
|
|
|||
Total Loans
|
$
|
2,538,918
|
|
|
$
|
2,556,537
|
|
|
$
|
2,443,231
|
|
|
At
March 31, 2017 |
|
At
December 31, 2016 |
|
At
March 31, 2016 |
||||||
Nonaccrual loans
|
$
|
7,261
|
|
|
$
|
8,280
|
|
|
$
|
21,927
|
|
Accruing loans past due more than 90 days
|
1
|
|
|
6
|
|
|
7
|
|
|||
Restructured loans
|
6,424
|
|
|
6,431
|
|
|
11,762
|
|
|||
Other real estate owned
|
367
|
|
|
339
|
|
|
265
|
|
|||
Repossessed assets
|
26
|
|
|
49
|
|
|
85
|
|
|||
Total Nonperforming Assets
|
$
|
14,079
|
|
|
$
|
15,105
|
|
|
$
|
34,046
|
|
|
At
March 31, 2017 |
|
At
December 31, 2016 |
|
At
March 31, 2016 |
|||
Asset Quality Ratios:
|
|
|
|
|
|
|||
Nonaccruing loans to total loans
|
0.29
|
%
|
|
0.32
|
%
|
|
0.90
|
%
|
Allowance for loan losses to nonaccruing loans
|
254.58
|
|
|
216.32
|
|
|
99.42
|
|
Allowance for loan losses to nonperforming assets
|
131.29
|
|
|
118.58
|
|
|
64.03
|
|
Allowance for loan losses to total loans
|
0.73
|
|
|
0.70
|
|
|
0.89
|
|
Nonperforming assets to total assets
|
0.25
|
|
|
0.27
|
|
|
0.68
|
|
Net charge-offs to average loans
|
0.08
|
|
|
0.02
|
|
|
0.04
|
|
|
|
SOUTHSIDE BANCSHARES, INC.
|
|
|
|
|
|
DATE:
|
April 28, 2017
|
BY:
|
/s/ Lee R. Gibson
|
|
|
|
Lee R. Gibson, CPA
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DATE:
|
April 28, 2017
|
BY:
|
/s/ Julie N. Shamburger
|
|
|
|
Julie N. Shamburger, CPA
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Filed Herewith
|
|
Exhibit
|
|
Form
|
|
Filing Date
|
|
File No.
|
(3)
|
|
Articles of Incorporation and Bylaws
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
|
|
|
3 (a)
|
|
10-Q
|
|
5/9/2014
|
|
0-12247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
|
|
|
3 (b)(i)
|
|
8-K
|
|
11/24/2014
|
|
0-12247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10)
|
|
Material Contracts
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
Employment Agreement, Julie Shamburger
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
Deferred Compensation Agreement, Tim Alexander
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3
|
|
Deferred Compensation Agreement, Julie Shamburger
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(31)
|
|
Rule 13a-14(a)/15d-14(a) Certifications
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(32)
|
|
Section 1350 Certification
|
|
|
|
|
|
|
|
|
|
|
†32
|
|
Certification of Executive Officer and Chief Financial Officer
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(101)
|
|
Interactive Date File
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
† The certification attached as Exhibit 32 accompanies this Quarterly Report on Form 10-Q and is “furnished” to the Commission pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” by us for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
|
THE EMPLOYEE:
|
SOUTHSIDE BANK
|
|
|
|
/s/ Julie Shamburger
|
By:
|
/s/ B.G. Hartley
|
|
|
JULIE SHAMBURGER
|
Title:
|
Chairman and CEO
|
|
|
|
|
EXECUTED this 12
th
day of December, 2008
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Tim Alexander
|
|||||
|
|
|
TIM ALEXANDER, EXECUTIVE
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
SOUTHSIDE BANK
|
|
|
|||
|
|
|
|
|
|
|||
|
|
BY:
|
/s/ B.G. Hartley
|
|||||
|
|
|
B.G. HARTLEY, CHAIRMAN OF THE BOARD And CHIEF EXECUTIVE OFFICER
|
|||||
ATTEST:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTED this 12
th
day of December, 2008
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Julie Shamburger
|
|
||||
|
|
|
JULIE SHAMBURGER, EXECUTIVE
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
SOUTHSIDE BANK
|
|
|
|||
|
|
|
|
|
|
|||
|
|
BY:
|
/s/ B.G. Hartley
|
|
||||
|
|
|
B.G. HARTLEY, CHAIRMAN OF THE BOARD And CHIEF EXECUTIVE OFFICER
|
|||||
ATTEST:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this
Quarterly
Report on Form
10-Q
of Southside Bancshares, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
April 28, 2017
|
By:
|
/s/ LEE R. GIBSON
|
|
|
|
Lee R. Gibson, CPA
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this
Quarterly
Report on Form
10-Q
of Southside Bancshares, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
April 28, 2017
|
By:
|
/s/ JULIE N. SHAMBURGER
|
|
|
|
Julie N. Shamburger, CPA
|
|
|
|
Executive Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Registrant.
|
Date:
|
April 28, 2017
|
By:
|
/s/ LEE R. GIBSON
|
|
|
|
Lee R. Gibson, CPA
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
Date:
|
April 28, 2017
|
By:
|
/s/ JULIE N. SHAMBURGER
|
|
|
|
Julie N. Shamburger, CPA
|
|
|
|
Executive Vice President and Chief Financial Officer
|