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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
|
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
|
|
75701
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(Address of principal executive offices)
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(Zip Code)
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PART I. FINANCIAL INFORMATION
|
|
PART II. OTHER INFORMATION
|
|
SOUTHSIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share amounts)
|
||||||||
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
ASSETS
|
|
|
|
|
||||
Cash and due from banks
|
|
$
|
57,947
|
|
|
$
|
59,363
|
|
Interest earning deposits
|
|
120,996
|
|
|
102,251
|
|
||
Federal funds sold
|
|
5,570
|
|
|
8,040
|
|
||
Total cash and cash equivalents
|
|
184,513
|
|
|
169,654
|
|
||
Securities available for sale, at estimated fair value
|
|
1,292,072
|
|
|
1,479,600
|
|
||
Securities held to maturity, at carrying value (estimated fair value of $928,507 and $944,282, respectively)
|
|
909,844
|
|
|
937,487
|
|
||
FHLB stock, at cost
|
|
61,845
|
|
|
61,084
|
|
||
Other investments
|
|
5,439
|
|
|
5,508
|
|
||
Loans held for sale
|
|
2,177
|
|
|
7,641
|
|
||
Loans:
|
|
|
|
|
|
|
||
Loans
|
|
2,682,766
|
|
|
2,556,537
|
|
||
Less: Allowance for loan losses
|
|
(19,871
|
)
|
|
(17,911
|
)
|
||
Net Loans
|
|
2,662,895
|
|
|
2,538,626
|
|
||
Premises and equipment, net
|
|
107,099
|
|
|
106,003
|
|
||
Goodwill
|
|
91,520
|
|
|
91,520
|
|
||
Other intangible assets, net
|
|
3,379
|
|
|
4,608
|
|
||
Interest receivable
|
|
18,792
|
|
|
25,183
|
|
||
Deferred tax asset, net
|
|
21,842
|
|
|
28,891
|
|
||
Unsettled trades to sell securities
|
|
11,843
|
|
|
—
|
|
||
Bank owned life insurance
|
|
99,616
|
|
|
97,775
|
|
||
Other assets
|
|
11,554
|
|
|
10,187
|
|
||
Total assets
|
|
$
|
5,484,430
|
|
|
$
|
5,563,767
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
||
Deposits:
|
|
|
|
|
|
|
||
Noninterest bearing
|
|
$
|
781,701
|
|
|
$
|
704,013
|
|
Interest bearing
|
|
2,782,474
|
|
|
2,829,063
|
|
||
Total deposits
|
|
3,564,175
|
|
|
3,533,076
|
|
||
Short-term obligations:
|
|
|
|
|
|
|
||
Federal funds purchased and repurchase agreements
|
|
9,083
|
|
|
7,097
|
|
||
FHLB advances
|
|
990,500
|
|
|
866,518
|
|
||
Total short-term obligations
|
|
999,583
|
|
|
873,615
|
|
||
Long-term obligations:
|
|
|
|
|
|
|
||
FHLB advances
|
|
152,056
|
|
|
443,128
|
|
||
Subordinated notes, net of unamortized debt issuance costs
|
|
98,209
|
|
|
98,100
|
|
||
Long-term debt, net of unamortized debt issuance costs
|
|
60,240
|
|
|
60,236
|
|
||
Total long-term obligations
|
|
310,505
|
|
|
601,464
|
|
||
Unsettled trades to purchase securities
|
|
16,673
|
|
|
160
|
|
||
Other liabilities
|
|
37,471
|
|
|
37,178
|
|
||
Total liabilities
|
|
4,928,407
|
|
|
5,045,493
|
|
||
|
|
|
|
|
||||
Off-balance-sheet arrangements, commitments and contingencies (Note 13)
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
|
|
|
||
Common stock ($1.25 par value, 40,000,000 shares authorized, 32,256,777 shares issued at September 30, 2017 and 31,455,951 shares issued at December 31, 2016)
|
|
40,321
|
|
|
39,320
|
|
||
Paid-in capital
|
|
563,553
|
|
|
535,240
|
|
||
Retained earnings
|
|
25,677
|
|
|
30,098
|
|
||
Treasury stock, at cost (2,823,340 shares at September 30, 2017 and 2,913,064 shares at December 31, 2016)
|
|
(47,291
|
)
|
|
(47,891
|
)
|
||
Accumulated other comprehensive loss
|
|
(26,237
|
)
|
|
(38,493
|
)
|
||
Total shareholders’ equity
|
|
556,023
|
|
|
518,274
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
5,484,430
|
|
|
$
|
5,563,767
|
|
SOUTHSIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except per share data)
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interest income
|
|
|
|
|
|
|
|
||||||||
Loans
|
$
|
29,322
|
|
|
$
|
25,740
|
|
|
$
|
84,666
|
|
|
$
|
79,738
|
|
Investment securities – taxable
|
58
|
|
|
251
|
|
|
702
|
|
|
572
|
|
||||
Investment securities – tax-exempt
|
5,670
|
|
|
5,467
|
|
|
18,381
|
|
|
15,959
|
|
||||
Mortgage-backed securities
|
10,567
|
|
|
9,399
|
|
|
31,430
|
|
|
28,156
|
|
||||
FHLB stock and other investments
|
329
|
|
|
186
|
|
|
926
|
|
|
588
|
|
||||
Other interest earning assets
|
527
|
|
|
89
|
|
|
1,265
|
|
|
220
|
|
||||
Total interest income
|
46,473
|
|
|
41,132
|
|
|
137,370
|
|
|
125,233
|
|
||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deposits
|
5,420
|
|
|
3,604
|
|
|
14,839
|
|
|
10,375
|
|
||||
Short-term obligations
|
3,382
|
|
|
1,122
|
|
|
7,927
|
|
|
2,724
|
|
||||
Long-term obligations
|
2,711
|
|
|
2,476
|
|
|
8,940
|
|
|
7,210
|
|
||||
Total interest expense
|
11,513
|
|
|
7,202
|
|
|
31,706
|
|
|
20,309
|
|
||||
Net interest income
|
34,960
|
|
|
33,930
|
|
|
105,664
|
|
|
104,924
|
|
||||
Provision for loan losses
|
960
|
|
|
1,631
|
|
|
3,404
|
|
|
7,715
|
|
||||
Net interest income after provision for loan losses
|
34,000
|
|
|
32,299
|
|
|
102,260
|
|
|
97,209
|
|
||||
Noninterest income
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deposit services
|
5,476
|
|
|
5,335
|
|
|
15,845
|
|
|
15,519
|
|
||||
Net gain on sale of securities available for sale
|
627
|
|
|
2,343
|
|
|
874
|
|
|
5,512
|
|
||||
Gain on sale of loans
|
347
|
|
|
818
|
|
|
1,553
|
|
|
2,334
|
|
||||
Trust income
|
873
|
|
|
867
|
|
|
2,662
|
|
|
2,591
|
|
||||
Bank owned life insurance income
|
636
|
|
|
656
|
|
|
1,905
|
|
|
1,977
|
|
||||
Brokerage services
|
561
|
|
|
551
|
|
|
1,790
|
|
|
1,661
|
|
||||
Other
|
888
|
|
|
1,162
|
|
|
3,745
|
|
|
3,104
|
|
||||
Total noninterest income
|
9,408
|
|
|
11,732
|
|
|
28,374
|
|
|
32,698
|
|
||||
Noninterest expense
|
|
|
|
|
|
|
|
|
|
|
|
||||
Salaries and employee benefits
|
14,395
|
|
|
15,203
|
|
|
45,229
|
|
|
47,784
|
|
||||
Occupancy expense
|
2,981
|
|
|
4,569
|
|
|
8,741
|
|
|
10,897
|
|
||||
Advertising, travel & entertainment
|
487
|
|
|
588
|
|
|
1,618
|
|
|
1,995
|
|
||||
ATM and debit card expense
|
1,024
|
|
|
868
|
|
|
2,840
|
|
|
2,316
|
|
||||
Professional fees
|
996
|
|
|
1,148
|
|
|
2,985
|
|
|
3,964
|
|
||||
Software and data processing expense
|
732
|
|
|
736
|
|
|
2,145
|
|
|
2,224
|
|
||||
Telephone and communications
|
459
|
|
|
407
|
|
|
1,461
|
|
|
1,359
|
|
||||
FDIC insurance
|
441
|
|
|
643
|
|
|
1,327
|
|
|
1,926
|
|
||||
Other
|
3,492
|
|
|
4,263
|
|
|
10,056
|
|
|
11,180
|
|
||||
Total noninterest expense
|
25,007
|
|
|
28,425
|
|
|
76,402
|
|
|
83,645
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income before income tax expense
|
18,401
|
|
|
15,606
|
|
|
54,232
|
|
|
46,262
|
|
||||
Income tax expense
|
3,890
|
|
|
2,741
|
|
|
10,251
|
|
|
8,486
|
|
||||
Net income
|
$
|
14,511
|
|
|
$
|
12,865
|
|
|
$
|
43,981
|
|
|
$
|
37,776
|
|
Earnings per common share – basic
|
$
|
0.49
|
|
|
$
|
0.48
|
|
|
$
|
1.50
|
|
|
$
|
1.40
|
|
Earnings per common share – diluted
|
$
|
0.49
|
|
|
$
|
0.48
|
|
|
$
|
1.49
|
|
|
$
|
1.39
|
|
Dividends paid per common share
|
$
|
0.28
|
|
|
$
|
0.24
|
|
|
$
|
0.81
|
|
|
$
|
0.71
|
|
SOUTHSIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands)
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
$
|
14,511
|
|
|
$
|
12,865
|
|
|
$
|
43,981
|
|
|
$
|
37,776
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Securities available for sale and transferred securities:
|
|
|
|
|
|
|
|
||||||||
Change in net unrealized holding gains (losses) on available for sale securities during the period
|
344
|
|
|
(10,960
|
)
|
|
18,450
|
|
|
33,031
|
|
||||
Reclassification adjustment for amortization of unrealized losses on securities transferred to held to maturity
|
490
|
|
|
16
|
|
|
1,191
|
|
|
160
|
|
||||
Reclassification adjustment for net gain on sale of available for sale securities, included in net income
|
(627
|
)
|
|
(2,343
|
)
|
|
(874
|
)
|
|
(5,512
|
)
|
||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
Change in net unrealized (loss) gain on effective cash flow hedge interest rate swap derivatives
|
(236
|
)
|
|
1,070
|
|
|
(2,084
|
)
|
|
(5,125
|
)
|
||||
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
|
122
|
|
|
521
|
|
|
746
|
|
|
1,338
|
|
||||
Reclassification adjustment for amortization of unrealized gains on terminated interest rate swap derivatives
|
(21
|
)
|
|
—
|
|
|
(52
|
)
|
|
—
|
|
||||
Pension plans:
|
|
|
|
|
|
|
|
||||||||
Amortization of net actuarial loss, included in net periodic benefit cost
|
403
|
|
|
458
|
|
|
1,210
|
|
|
1,371
|
|
||||
Amortization of prior service credit, included in net periodic benefit cost
|
(1
|
)
|
|
(10
|
)
|
|
(5
|
)
|
|
(6
|
)
|
||||
Other comprehensive income (loss), before tax
|
474
|
|
|
(11,248
|
)
|
|
18,855
|
|
|
25,257
|
|
||||
Income tax (expense) benefit related to items of other comprehensive income
|
(166
|
)
|
|
3,937
|
|
|
(6,599
|
)
|
|
(8,840
|
)
|
||||
Other comprehensive income (loss), net of tax
|
308
|
|
|
(7,311
|
)
|
|
12,256
|
|
|
16,417
|
|
||||
Comprehensive income
|
$
|
14,819
|
|
|
$
|
5,554
|
|
|
$
|
56,237
|
|
|
$
|
54,193
|
|
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
|
—
|
|
|
—
|
|
|
37,776
|
|
|
—
|
|
|
—
|
|
|
37,776
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,417
|
|
|
16,417
|
|
||||||
Issuance of common stock for dividend reinvestment plan (33,622 shares)
|
42
|
|
|
950
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
992
|
|
||||||
Purchase of common stock (443,426 shares)
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,199
|
)
|
|
—
|
|
|
(10,199
|
)
|
||||||
Stock compensation expense
|
—
|
|
|
1,156
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,156
|
|
||||||
Tax benefits related to stock awards
|
—
|
|
|
79
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79
|
|
||||||
Net issuance of common stock under employee stock plans (39,468 shares)
|
50
|
|
|
345
|
|
|
(49
|
)
|
|
—
|
|
|
—
|
|
|
346
|
|
||||||
Cash dividends paid on common stock ($0.71 per share)
|
—
|
|
|
—
|
|
|
(18,069
|
)
|
|
—
|
|
|
—
|
|
|
(18,069
|
)
|
||||||
Stock dividend declared (1,252,353 shares)
|
1,565
|
|
|
33,200
|
|
|
(34,765
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at September 30, 2016
|
$
|
36,489
|
|
|
$
|
459,808
|
|
|
$
|
26,420
|
|
|
$
|
(47,891
|
)
|
|
$
|
(2,266
|
)
|
|
$
|
472,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2016
|
$
|
39,320
|
|
|
$
|
535,240
|
|
|
$
|
30,098
|
|
|
$
|
(47,891
|
)
|
|
$
|
(38,493
|
)
|
|
$
|
518,274
|
|
Net income
|
—
|
|
|
—
|
|
|
43,981
|
|
|
—
|
|
|
—
|
|
|
43,981
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,256
|
|
|
12,256
|
|
||||||
Issuance of common stock for dividend reinvestment plan (33,000 shares)
|
41
|
|
|
1,057
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,098
|
|
||||||
Stock compensation expense
|
—
|
|
|
1,393
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,393
|
|
||||||
Net issuance of common stock under employee stock plans (138,035 shares)
|
61
|
|
|
1,802
|
|
|
(73
|
)
|
|
600
|
|
|
—
|
|
|
2,390
|
|
||||||
Cash dividends paid on common stock ($0.81 per share)
|
—
|
|
|
—
|
|
|
(23,369
|
)
|
|
—
|
|
|
—
|
|
|
(23,369
|
)
|
||||||
Stock dividend declared (719,515 shares)
|
899
|
|
|
24,061
|
|
|
(24,960
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at September 30, 2017
|
$
|
40,321
|
|
|
$
|
563,553
|
|
|
$
|
25,677
|
|
|
$
|
(47,291
|
)
|
|
$
|
(26,237
|
)
|
|
$
|
556,023
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Basic and Diluted Earnings:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
14,511
|
|
|
$
|
12,865
|
|
|
$
|
43,981
|
|
|
$
|
37,776
|
|
Basic weighted-average shares outstanding
|
29,370
|
|
|
26,923
|
|
|
29,326
|
|
|
26,976
|
|
||||
Add: Stock awards
|
200
|
|
|
157
|
|
|
205
|
|
|
115
|
|
||||
Diluted weighted-average shares outstanding
|
29,570
|
|
|
27,080
|
|
|
29,531
|
|
|
27,091
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic Earnings Per Share:
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
0.49
|
|
|
$
|
0.48
|
|
|
$
|
1.50
|
|
|
$
|
1.40
|
|
Diluted Earnings Per Share:
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
0.49
|
|
|
$
|
0.48
|
|
|
$
|
1.49
|
|
|
$
|
1.39
|
|
|
Three Months Ended September 30, 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
|
$
|
(11,644
|
)
|
|
$
|
3,957
|
|
|
$
|
(136
|
)
|
|
$
|
(18,722
|
)
|
|
$
|
(26,545
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss) before reclassifications
|
344
|
|
|
(236
|
)
|
|
—
|
|
|
—
|
|
|
108
|
|
|||||
Reclassified from accumulated other comprehensive (loss) income
|
(137
|
)
|
|
101
|
|
|
(1
|
)
|
|
403
|
|
|
366
|
|
|||||
Income (expense) tax benefit
|
(72
|
)
|
|
47
|
|
|
—
|
|
|
(141
|
)
|
|
(166
|
)
|
|||||
Net current-period other comprehensive income (loss), net of tax
|
135
|
|
|
(88
|
)
|
|
(1
|
)
|
|
262
|
|
|
308
|
|
|||||
Ending balance, net of tax
|
$
|
(11,509
|
)
|
|
$
|
3,869
|
|
|
$
|
(137
|
)
|
|
$
|
(18,460
|
)
|
|
$
|
(26,237
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Nine Months Ended September 30, 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 (loss) before reclassifications
|
18,450
|
|
|
(1,811
|
)
|
|
—
|
|
|
—
|
|
|
16,639
|
|
|||||
Reclassified from accumulated other comprehensive income (loss)
|
317
|
|
|
694
|
|
|
(5
|
)
|
|
1,210
|
|
|
2,216
|
|
|||||
Income tax (expense) benefit
|
(6,568
|
)
|
|
391
|
|
|
1
|
|
|
(423
|
)
|
|
(6,599
|
)
|
|||||
Net current-period other comprehensive income (loss), net of tax
|
12,199
|
|
|
(726
|
)
|
|
(4
|
)
|
|
787
|
|
|
12,256
|
|
|||||
Ending balance, net of tax
|
$
|
(11,509
|
)
|
|
$
|
3,869
|
|
|
$
|
(137
|
)
|
|
$
|
(18,460
|
)
|
|
$
|
(26,237
|
)
|
|
Three Months Ended September 30, 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
|
$
|
26,389
|
|
|
$
|
(3,496
|
)
|
|
$
|
(42
|
)
|
|
$
|
(17,806
|
)
|
|
$
|
5,045
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive (loss) income before reclassifications
|
(10,960
|
)
|
|
1,070
|
|
|
—
|
|
|
—
|
|
|
(9,890
|
)
|
|||||
Reclassified from accumulated other comprehensive (loss) income
|
(2,327
|
)
|
|
521
|
|
|
(10
|
)
|
|
458
|
|
|
(1,358
|
)
|
|||||
Income tax benefit (expense)
|
4,650
|
|
|
(557
|
)
|
|
4
|
|
|
(160
|
)
|
|
3,937
|
|
|||||
Net current-period other comprehensive (loss) income, net of tax
|
(8,637
|
)
|
|
1,034
|
|
|
(6
|
)
|
|
298
|
|
|
(7,311
|
)
|
|||||
Ending balance, net of tax
|
$
|
17,752
|
|
|
$
|
(2,462
|
)
|
|
$
|
(48
|
)
|
|
$
|
(17,508
|
)
|
|
$
|
(2,266
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Nine Months Ended September 30, 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
|
33,031
|
|
|
(5,125
|
)
|
|
—
|
|
|
—
|
|
|
27,906
|
|
|||||
Reclassified from accumulated other comprehensive (loss) income
|
(5,352
|
)
|
|
1,338
|
|
|
(6
|
)
|
|
1,371
|
|
|
(2,649
|
)
|
|||||
Income tax (expense) benefit
|
(9,688
|
)
|
|
1,325
|
|
|
2
|
|
|
(479
|
)
|
|
(8,840
|
)
|
|||||
Net current-period other comprehensive income (loss), net of tax
|
17,991
|
|
|
(2,462
|
)
|
|
(4
|
)
|
|
892
|
|
|
16,417
|
|
|||||
Ending balance, net of tax
|
$
|
17,752
|
|
|
$
|
(2,462
|
)
|
|
$
|
(48
|
)
|
|
$
|
(17,508
|
)
|
|
$
|
(2,266
|
)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Unrealized losses on securities transferred to held to maturity:
|
|
|
|
|
|
|
|
||||||||
Amortization of unrealized losses
(1)
|
$
|
(490
|
)
|
|
$
|
(16
|
)
|
|
$
|
(1,191
|
)
|
|
$
|
(160
|
)
|
Tax benefit
|
172
|
|
|
6
|
|
|
417
|
|
|
56
|
|
||||
Net of tax
|
$
|
(318
|
)
|
|
$
|
(10
|
)
|
|
$
|
(774
|
)
|
|
$
|
(104
|
)
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gains and losses on available for sale securities:
|
|
|
|
|
|
|
|
||||||||
Realized net gain on sale of securities
(2)
|
$
|
627
|
|
|
$
|
2,343
|
|
|
$
|
874
|
|
|
$
|
5,512
|
|
Tax expense
|
(220
|
)
|
|
(820
|
)
|
|
(306
|
)
|
|
(1,929
|
)
|
||||
Net of tax
|
$
|
407
|
|
|
$
|
1,523
|
|
|
$
|
568
|
|
|
$
|
3,583
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
Realized net loss on interest rate swap derivatives
(3)
|
$
|
(122
|
)
|
|
$
|
(521
|
)
|
|
$
|
(746
|
)
|
|
$
|
(1,338
|
)
|
Tax benefit
|
43
|
|
|
182
|
|
|
261
|
|
|
468
|
|
||||
Net of tax
|
$
|
(79
|
)
|
|
$
|
(339
|
)
|
|
$
|
(485
|
)
|
|
$
|
(870
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amortization of unrealized gains on terminated interest rate swap derivatives
(3)
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
52
|
|
|
$
|
—
|
|
Tax expense
|
(7
|
)
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
||||
Net of tax
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of pension plan:
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss
(4)
|
$
|
(403
|
)
|
|
$
|
(458
|
)
|
|
$
|
(1,210
|
)
|
|
$
|
(1,371
|
)
|
Prior service credit
(4)
|
1
|
|
|
10
|
|
|
5
|
|
|
6
|
|
||||
Total before tax
|
(402
|
)
|
|
(448
|
)
|
|
(1,205
|
)
|
|
(1,365
|
)
|
||||
Tax benefit
|
141
|
|
|
156
|
|
|
422
|
|
|
477
|
|
||||
Net of tax
|
(261
|
)
|
|
(292
|
)
|
|
(783
|
)
|
|
(888
|
)
|
||||
Total reclassifications for the period, net of tax
|
$
|
(237
|
)
|
|
$
|
882
|
|
|
$
|
(1,440
|
)
|
|
$
|
1,721
|
|
(4)
|
These accumulated other comprehensive income components are included in the computation of net periodic pension cost (income) presented in “Note 8 - Employee Benefit Plans.”
|
|
|
September 30, 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
State and Political Subdivisions
|
|
$
|
340,790
|
|
|
$
|
2,757
|
|
|
$
|
6,387
|
|
|
$
|
337,160
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
337,160
|
|
Other Stocks and Bonds
|
|
5,042
|
|
|
73
|
|
|
—
|
|
|
5,115
|
|
|
—
|
|
|
—
|
|
|
5,115
|
|
|||||||
Other Equity Securities
|
|
6,031
|
|
|
—
|
|
|
71
|
|
|
5,960
|
|
|
—
|
|
|
—
|
|
|
5,960
|
|
|||||||
Mortgage-backed Securities:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Residential
|
|
617,860
|
|
|
6,319
|
|
|
4,484
|
|
|
619,695
|
|
|
—
|
|
|
—
|
|
|
619,695
|
|
|||||||
Commercial
|
|
322,577
|
|
|
2,320
|
|
|
755
|
|
|
324,142
|
|
|
—
|
|
|
—
|
|
|
324,142
|
|
|||||||
Total
|
|
$
|
1,292,300
|
|
|
$
|
11,469
|
|
|
$
|
11,697
|
|
|
$
|
1,292,072
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,292,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
HELD TO MATURITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
State and Political Subdivisions
|
|
$
|
424,729
|
|
|
$
|
2,812
|
|
|
$
|
12,299
|
|
|
$
|
415,242
|
|
|
$
|
13,019
|
|
|
$
|
2,039
|
|
|
$
|
426,222
|
|
Mortgage-backed Securities:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Residential
|
|
132,426
|
|
|
—
|
|
|
5,143
|
|
|
127,283
|
|
|
2,513
|
|
|
181
|
|
|
129,615
|
|
|||||||
Commercial
|
|
370,167
|
|
|
941
|
|
|
3,789
|
|
|
367,319
|
|
|
5,925
|
|
|
574
|
|
|
372,670
|
|
|||||||
Total
|
|
$
|
927,322
|
|
|
$
|
3,753
|
|
|
$
|
21,231
|
|
|
$
|
909,844
|
|
|
$
|
21,457
|
|
|
$
|
2,794
|
|
|
$
|
928,507
|
|
|
|
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 September 30, 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:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
State and Political Subdivisions
|
$
|
67,886
|
|
|
$
|
991
|
|
|
$
|
153,073
|
|
|
$
|
5,396
|
|
|
$
|
220,959
|
|
|
$
|
6,387
|
|
Other Equity Securities
|
5,960
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
5,960
|
|
|
71
|
|
||||||
Mortgage-backed Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
161,949
|
|
|
710
|
|
|
110,503
|
|
|
3,774
|
|
|
272,452
|
|
|
4,484
|
|
||||||
Commercial
|
36,549
|
|
|
258
|
|
|
13,122
|
|
|
497
|
|
|
49,671
|
|
|
755
|
|
||||||
Total
|
$
|
272,344
|
|
|
$
|
2,030
|
|
|
$
|
276,698
|
|
|
$
|
9,667
|
|
|
$
|
549,042
|
|
|
$
|
11,697
|
|
HELD TO MATURITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
State and Political Subdivisions
|
$
|
52,088
|
|
|
$
|
643
|
|
|
$
|
41,006
|
|
|
$
|
1,396
|
|
|
$
|
93,094
|
|
|
$
|
2,039
|
|
Mortgage-backed Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
3,795
|
|
|
57
|
|
|
2,922
|
|
|
124
|
|
|
6,717
|
|
|
181
|
|
||||||
Commercial
|
36,340
|
|
|
561
|
|
|
895
|
|
|
13
|
|
|
37,235
|
|
|
574
|
|
||||||
Total
|
$
|
92,223
|
|
|
$
|
1,261
|
|
|
$
|
44,823
|
|
|
$
|
1,533
|
|
|
$
|
137,046
|
|
|
$
|
2,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
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
September 30, |
||||||
|
2017
|
|
2016
|
||||
U.S. Treasury
|
$
|
—
|
|
|
$
|
182
|
|
State and Political Subdivisions
|
5,670
|
|
|
5,467
|
|
||
Other Stocks and Bonds
|
27
|
|
|
39
|
|
||
Other Equity Securities
|
31
|
|
|
30
|
|
||
Mortgage-backed Securities
|
10,567
|
|
|
9,399
|
|
||
Total interest income on securities
|
$
|
16,295
|
|
|
$
|
15,117
|
|
|
Nine Months Ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
U.S. Treasury
|
$
|
519
|
|
|
$
|
330
|
|
State and Political Subdivisions
|
18,381
|
|
|
15,959
|
|
||
Other Stocks and Bonds
|
96
|
|
|
154
|
|
||
Other Equity Securities
|
87
|
|
|
88
|
|
||
Mortgage-backed Securities
|
31,430
|
|
|
28,156
|
|
||
Total interest income on securities
|
$
|
50,513
|
|
|
$
|
44,687
|
|
|
September 30, 2017
|
||||||
|
Amortized Cost
|
|
Fair Value
|
||||
AVAILABLE FOR SALE
|
|
||||||
Investment Securities:
|
|
|
|
||||
Due in one year or less
|
$
|
9,844
|
|
|
$
|
9,965
|
|
Due after one year through five years
|
15,651
|
|
|
16,066
|
|
||
Due after five years through ten years
|
34,121
|
|
|
34,655
|
|
||
Due after ten years
|
286,216
|
|
|
281,589
|
|
||
|
345,832
|
|
|
342,275
|
|
||
Mortgage-backed Securities and Other Equity Securities:
|
946,468
|
|
|
949,797
|
|
||
Total
|
$
|
1,292,300
|
|
|
$
|
1,292,072
|
|
|
September 30, 2017
|
||||||
|
Carrying Value
|
|
Fair Value
|
||||
HELD TO MATURITY
|
|
||||||
Investment Securities:
|
|
|
|
||||
Due in one year or less
|
$
|
23,631
|
|
|
$
|
23,372
|
|
Due after one year through five years
|
57,827
|
|
|
58,663
|
|
||
Due after five years through ten years
|
110,903
|
|
|
113,443
|
|
||
Due after ten years
|
222,881
|
|
|
230,744
|
|
||
|
415,242
|
|
|
426,222
|
|
||
Mortgage-backed Securities:
|
494,602
|
|
|
502,285
|
|
||
Total
|
$
|
909,844
|
|
|
$
|
928,507
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Real Estate Loans:
|
|
|
|
||||
Construction
|
$
|
420,497
|
|
|
$
|
380,175
|
|
1-4 Family Residential
|
609,159
|
|
|
637,239
|
|
||
Commercial
|
1,073,646
|
|
|
945,978
|
|
||
Commercial Loans
|
166,919
|
|
|
177,265
|
|
||
Municipal Loans
|
322,286
|
|
|
298,583
|
|
||
Loans to Individuals
|
90,259
|
|
|
117,297
|
|
||
Total Loans
(1)
|
2,682,766
|
|
|
2,556,537
|
|
||
Less: Allowance for Loan Losses
(2)
|
19,871
|
|
|
17,911
|
|
||
Net Loans
|
$
|
2,662,895
|
|
|
$
|
2,538,626
|
|
(1)
|
Includes approximately
$278.7 million
and
$372.4 million
of loans acquired with the Omni acquisition as of
September 30, 2017
and
December 31, 2016
, respectively.
|
(2)
|
The allowance for loan loss recorded on
purchase credit impaired (“PCI”)
loans totaled
$53,000
and
$3,000
as of
September 30, 2017
and
December 31, 2016
, respectively.
|
•
|
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 the 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 loan 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 loan or in our credit position at some future date. Special Mention loans 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 September 30, 2017
|
||||||||||||||||||||||||||
|
Real Estate
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Construction
|
|
1-4 Family
Residential
|
|
Commercial
|
|
Commercial
Loans
|
|
Municipal
Loans
|
|
Loans to
Individuals
|
|
Total
|
||||||||||||||
Balance at beginning of period
|
$
|
3,573
|
|
|
$
|
2,392
|
|
|
$
|
9,970
|
|
|
$
|
1,624
|
|
|
$
|
765
|
|
|
$
|
917
|
|
|
$
|
19,241
|
|
Provision (reversal) for loan losses
(1)
|
(20
|
)
|
|
34
|
|
|
383
|
|
|
189
|
|
|
41
|
|
|
333
|
|
|
960
|
|
|||||||
Loans charged off
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(73
|
)
|
|
—
|
|
|
(593
|
)
|
|
(677
|
)
|
|||||||
Recoveries of loans charged off
|
—
|
|
|
10
|
|
|
2
|
|
|
89
|
|
|
—
|
|
|
246
|
|
|
347
|
|
|||||||
Balance at end of period
|
$
|
3,553
|
|
|
$
|
2,425
|
|
|
$
|
10,355
|
|
|
$
|
1,829
|
|
|
$
|
806
|
|
|
$
|
903
|
|
|
$
|
19,871
|
|
|
Nine Months Ended September 30, 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)
|
(560
|
)
|
|
46
|
|
|
3,140
|
|
|
(84
|
)
|
|
56
|
|
|
806
|
|
|
3,404
|
|
|||||||
Loans charged off
|
(35
|
)
|
|
(299
|
)
|
|
—
|
|
|
(650
|
)
|
|
—
|
|
|
(1,835
|
)
|
|
(2,819
|
)
|
|||||||
Recoveries of loans charged off
|
1
|
|
|
13
|
|
|
11
|
|
|
300
|
|
|
—
|
|
|
1,050
|
|
|
1,375
|
|
|||||||
Balance at end of period
|
$
|
3,553
|
|
|
$
|
2,425
|
|
|
$
|
10,355
|
|
|
$
|
1,829
|
|
|
$
|
806
|
|
|
$
|
903
|
|
|
$
|
19,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Three Months Ended September 30, 2016
|
||||||||||||||||||||||||||
|
Real Estate
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Construction
|
|
1-4 Family
Residential
|
|
Commercial
|
|
Commercial
Loans
|
|
Municipal
Loans
|
|
Loans to
Individuals
|
|
Total
|
||||||||||||||
Balance at beginning of period
|
$
|
4,423
|
|
|
$
|
1,686
|
|
|
$
|
4,680
|
|
|
$
|
2,474
|
|
|
$
|
737
|
|
|
$
|
908
|
|
|
$
|
14,908
|
|
Provision (reversal) for loan losses
(1)
|
734
|
|
|
574
|
|
|
556
|
|
|
(682
|
)
|
|
1
|
|
|
448
|
|
|
1,631
|
|
|||||||
Loans charged off
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
(452
|
)
|
|
—
|
|
|
(781
|
)
|
|
(1,257
|
)
|
|||||||
Recoveries of loans charged off
|
—
|
|
|
7
|
|
|
6
|
|
|
344
|
|
|
—
|
|
|
354
|
|
|
711
|
|
|||||||
Balance at end of period
|
$
|
5,157
|
|
|
$
|
2,243
|
|
|
$
|
5,242
|
|
|
$
|
1,684
|
|
|
$
|
738
|
|
|
$
|
929
|
|
|
$
|
15,993
|
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||||||||||||||
|
Real Estate
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Construction
|
|
1-4 Family
Residential
|
|
Commercial
|
|
Commercial
Loans
(2)
|
|
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)
|
538
|
|
|
(449
|
)
|
|
648
|
|
|
6,032
|
|
|
(236
|
)
|
|
1,182
|
|
|
7,715
|
|
|||||||
Loans charged off
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(11,375
|
)
|
|
—
|
|
|
(2,283
|
)
|
|
(13,701
|
)
|
|||||||
Recoveries of loans charged off
|
269
|
|
|
140
|
|
|
17
|
|
|
431
|
|
|
249
|
|
|
1,137
|
|
|
2,243
|
|
|||||||
Balance at end of period
|
$
|
5,157
|
|
|
$
|
2,243
|
|
|
$
|
5,242
|
|
|
$
|
1,684
|
|
|
$
|
738
|
|
|
$
|
929
|
|
|
$
|
15,993
|
|
(1)
|
Of the
$960,000
and
$3.4 million
recorded in provision for loan losses for the
three and nine months ended September 30, 2017
,
$50,000
related to provision expense on PCI loans. Of the
$1.6 million
recorded in provision for loan losses for the
three months ended September 30, 2016
,
none
related to provision expense on PCI loans. Of the
$7.7 million
recorded in provision for loan losses for the
nine months ended September 30, 2016
, approximately
$1.4 million
related to provision expense on PCI loans.
|
(2)
|
Of the
$11.4 million
in commercial charge-offs recorded for the
nine months ended September 30, 2016
,
$10.9 million
includes the partial charge-off of two large commercial borrowing relationships.
|
|
As of September 30, 2017
|
||||||||||||||||||||||||||
|
Real Estate
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Construction
|
|
1-4 Family
Residential
|
|
Commercial
|
|
Commercial
Loans
|
|
Municipal
Loans
|
|
Loans to
Individuals
|
|
Total
|
||||||||||||||
Ending balance – individually evaluated for impairment
(1)
|
$
|
7
|
|
|
$
|
12
|
|
|
$
|
15
|
|
|
$
|
175
|
|
|
$
|
10
|
|
|
$
|
100
|
|
|
$
|
319
|
|
Ending balance – collectively evaluated for impairment
|
3,546
|
|
|
2,413
|
|
|
10,340
|
|
|
1,654
|
|
|
796
|
|
|
803
|
|
|
19,552
|
|
|||||||
Balance at end of period
|
$
|
3,553
|
|
|
$
|
2,425
|
|
|
$
|
10,355
|
|
|
$
|
1,829
|
|
|
$
|
806
|
|
|
$
|
903
|
|
|
$
|
19,871
|
|
|
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
$53,000
and
$3,000
of allowance for loan losses associated with PCI loans as of
September 30, 2017
and
December 31, 2016
, respectively.
|
|
September 30, 2017
|
||||||||||||||||||||||||||
|
Real Estate
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Construction
|
|
1-4 Family
Residential
|
|
Commercial
|
|
Commercial
Loans
|
|
Municipal
Loans
|
|
Loans to
Individuals
|
|
Total
|
||||||||||||||
Loans individually evaluated for impairment
|
$
|
90
|
|
|
$
|
1,629
|
|
|
$
|
1,078
|
|
|
$
|
941
|
|
|
$
|
502
|
|
|
$
|
243
|
|
|
$
|
4,483
|
|
Loans collectively evaluated for impairment
|
420,286
|
|
|
602,102
|
|
|
1,071,148
|
|
|
165,027
|
|
|
321,784
|
|
|
89,965
|
|
|
2,670,312
|
|
|||||||
Purchased credit impaired loans
|
121
|
|
|
5,428
|
|
|
1,420
|
|
|
951
|
|
|
—
|
|
|
51
|
|
|
7,971
|
|
|||||||
Total ending loan balance
|
$
|
420,497
|
|
|
$
|
609,159
|
|
|
$
|
1,073,646
|
|
|
$
|
166,919
|
|
|
$
|
322,286
|
|
|
$
|
90,259
|
|
|
$
|
2,682,766
|
|
|
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
|
|
|
September 30, 2017
|
||||||||||||||||||||||
|
Pass
|
|
Pass Watch
(1)
|
|
Special Mention
(1)
|
|
Substandard
(1)
|
|
Doubtful
(1)
|
|
Total
|
||||||||||||
Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction
|
$
|
420,118
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
365
|
|
|
$
|
14
|
|
|
$
|
420,497
|
|
1-4 Family Residential
|
603,761
|
|
|
35
|
|
|
—
|
|
|
4,996
|
|
|
367
|
|
|
609,159
|
|
||||||
Commercial
|
961,054
|
|
|
16,189
|
|
|
43,423
|
|
|
52,826
|
|
|
154
|
|
|
1,073,646
|
|
||||||
Commercial Loans
|
157,449
|
|
|
955
|
|
|
4,760
|
|
|
3,480
|
|
|
275
|
|
|
166,919
|
|
||||||
Municipal Loans
|
320,854
|
|
|
—
|
|
|
930
|
|
|
502
|
|
|
—
|
|
|
322,286
|
|
||||||
Loans to Individuals
|
89,419
|
|
|
—
|
|
|
31
|
|
|
466
|
|
|
343
|
|
|
90,259
|
|
||||||
Total
|
$
|
2,552,655
|
|
|
$
|
17,179
|
|
|
$
|
49,144
|
|
|
$
|
62,635
|
|
|
$
|
1,153
|
|
|
$
|
2,682,766
|
|
|
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
$6,000
pass watch,
$482,000
special mention,
$2.0 million
substandard and
$315,000
doubtful as of
September 30, 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
September 30, 2017 |
|
At
December 31, 2016 |
||||
Nonaccrual loans
(1)
|
$
|
3,095
|
|
|
$
|
8,280
|
|
Accruing loans past due more than 90 days
(1)
|
—
|
|
|
6
|
|
||
Restructured loans
(2)
|
5,725
|
|
|
6,431
|
|
||
Other real estate owned
|
298
|
|
|
339
|
|
||
Repossessed assets
|
1
|
|
|
49
|
|
||
Total Nonperforming Assets
|
$
|
9,119
|
|
|
$
|
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
September 30, 2017
and
December 31, 2016
, respectively.
|
|
Nonaccrual Loans
|
||||||
|
September 30, 2017
|
|
December 31, 2016
|
||||
Real Estate Loans:
|
|
|
|
||||
Construction
|
$
|
90
|
|
|
$
|
105
|
|
1-4 Family Residential
|
1,127
|
|
|
1,067
|
|
||
Commercial
|
765
|
|
|
808
|
|
||
Commercial Loans
|
641
|
|
|
5,477
|
|
||
Loans to Individuals
|
472
|
|
|
823
|
|
||
Total
|
$
|
3,095
|
|
|
$
|
8,280
|
|
|
September 30, 2017
|
||||||||||
|
Unpaid Contractual Principal Balance
|
|
Recorded Investment
|
|
Related
Allowance for
Loan Losses
|
||||||
Real Estate Loans:
|
|
|
|
|
|
||||||
Construction
|
$
|
94
|
|
|
$
|
90
|
|
|
$
|
7
|
|
1-4 Family Residential
|
4,351
|
|
|
4,149
|
|
|
12
|
|
|||
Commercial
|
1,531
|
|
|
1,433
|
|
|
15
|
|
|||
Commercial Loans
|
1,442
|
|
|
1,304
|
|
|
175
|
|
|||
Municipal Loans
|
502
|
|
|
502
|
|
|
10
|
|
|||
Loans to Individuals
|
276
|
|
|
243
|
|
|
100
|
|
|||
Total
(1)
|
$
|
8,196
|
|
|
$
|
7,721
|
|
|
$
|
319
|
|
|
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
$3.2 million
and
$3.1 million
of PCI loans that experienced deterioration in credit quality subsequent to the acquisition date as of
September 30, 2017
and
December 31, 2016
, respectively.
|
|
September 30, 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
|
$
|
5,471
|
|
|
$
|
—
|
|
|
$
|
75
|
|
|
$
|
5,546
|
|
|
$
|
414,951
|
|
|
$
|
420,497
|
|
1-4 Family Residential
|
98
|
|
|
340
|
|
|
817
|
|
|
1,255
|
|
|
607,904
|
|
|
609,159
|
|
||||||
Commercial
|
577
|
|
|
—
|
|
|
154
|
|
|
731
|
|
|
1,072,915
|
|
|
1,073,646
|
|
||||||
Commercial Loans
|
91
|
|
|
177
|
|
|
14
|
|
|
282
|
|
|
166,637
|
|
|
166,919
|
|
||||||
Municipal Loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
322,286
|
|
|
322,286
|
|
||||||
Loans to Individuals
|
411
|
|
|
157
|
|
|
192
|
|
|
760
|
|
|
89,499
|
|
|
90,259
|
|
||||||
Total
|
$
|
6,648
|
|
|
$
|
674
|
|
|
$
|
1,252
|
|
|
$
|
8,574
|
|
|
$
|
2,674,192
|
|
|
$
|
2,682,766
|
|
|
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
|
||||||||||||||
|
September 30, 2017
|
|
September 30, 2016
|
||||||||||||
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
||||||||
Real Estate Loans:
|
|
|
|
|
|
|
|
||||||||
Construction
|
$
|
62
|
|
|
$
|
—
|
|
|
$
|
564
|
|
|
$
|
5
|
|
1-4 Family residential
|
4,170
|
|
|
26
|
|
|
4,559
|
|
|
42
|
|
||||
Commercial
|
1,459
|
|
|
2
|
|
|
4,281
|
|
|
21
|
|
||||
Commercial loans
|
1,148
|
|
|
28
|
|
|
7,457
|
|
|
13
|
|
||||
Municipal loans
|
537
|
|
|
7
|
|
|
604
|
|
|
8
|
|
||||
Loans to individuals
|
250
|
|
|
1
|
|
|
275
|
|
|
2
|
|
||||
Total
|
$
|
7,626
|
|
|
$
|
64
|
|
|
$
|
17,740
|
|
|
$
|
91
|
|
|
Nine Months Ended
|
||||||||||||||
|
September 30, 2017
|
|
September 30, 2016
|
||||||||||||
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
Average Recorded
Investment |
|
Interest Income Recognized
|
||||||||
Real Estate Loans:
|
|
|
|
|
|
|
|
||||||||
Construction
|
$
|
301
|
|
|
$
|
—
|
|
|
$
|
519
|
|
|
$
|
17
|
|
1-4 Family Residential
|
4,322
|
|
|
134
|
|
|
2,915
|
|
|
124
|
|
||||
Commercial
|
1,368
|
|
|
27
|
|
|
4,952
|
|
|
64
|
|
||||
Commercial Loans
|
3,320
|
|
|
118
|
|
|
15,990
|
|
|
30
|
|
||||
Municipal Loans
|
558
|
|
|
23
|
|
|
624
|
|
|
26
|
|
||||
Loans to Individuals
|
248
|
|
|
4
|
|
|
262
|
|
|
6
|
|
||||
Total
|
$
|
10,117
|
|
|
$
|
306
|
|
|
$
|
25,262
|
|
|
$
|
267
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended September 30, 2017
|
|||||||||||||||||
|
Extend Amortization
Period
|
|
Interest Rate Reductions
|
|
Combination
|
|
Total Modifications
|
|
Number of Loans
|
|||||||||
Loans to Individuals
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
8
|
|
|
1
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
8
|
|
|
1
|
|
|
Nine Months Ended September 30, 2017
|
|||||||||||||||||
|
Extend Amortization
Period
|
|
Interest Rate Reductions
|
|
Combination
|
|
Total Modifications
|
|
Number of Loans
|
|||||||||
Commercial Loans
|
$
|
810
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
810
|
|
|
3
|
|
Loans to Individuals
|
27
|
|
|
—
|
|
|
56
|
|
|
83
|
|
|
6
|
|
||||
Total
|
$
|
837
|
|
|
$
|
—
|
|
|
$
|
56
|
|
|
$
|
893
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended September 30, 2016
|
|||||||||||||||||
|
Extend Amortization
Period
|
|
Interest Rate Reductions
|
|
Combination
|
|
Total Modifications
|
|
Number of Loans
|
|||||||||
Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|||||||||
1-4 Family Residential
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
30
|
|
|
2
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
30
|
|
|
2
|
|
|
Nine Months Ended September 30, 2016
|
|||||||||||||||||
|
Extend Amortization
Period
|
|
Interest Rate Reductions
|
|
Combination
|
|
Total Modifications
|
|
Number of Loans
|
|||||||||
Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|||||||||
Construction
|
$
|
375
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
398
|
|
|
2
|
|
1-4 Family Residential
|
—
|
|
|
73
|
|
|
2,737
|
|
|
2,810
|
|
|
5
|
|
||||
Commercial
|
2,068
|
|
|
—
|
|
|
—
|
|
|
2,068
|
|
|
1
|
|
||||
Commercial Loans
|
1,082
|
|
|
—
|
|
|
—
|
|
|
1,082
|
|
|
4
|
|
||||
Loans to Individuals
|
19
|
|
|
—
|
|
|
72
|
|
|
91
|
|
|
6
|
|
||||
Total
|
$
|
3,544
|
|
|
$
|
73
|
|
|
$
|
2,832
|
|
|
$
|
6,449
|
|
|
18
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Outstanding principal balance
|
$
|
8,878
|
|
|
$
|
10,612
|
|
Carrying amount
|
$
|
7,971
|
|
|
$
|
9,197
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Balance at beginning of period
|
$
|
3,758
|
|
|
$
|
1,598
|
|
|
$
|
2,480
|
|
|
$
|
2,493
|
|
Reclassifications (to) from nonaccretable discount
|
(79
|
)
|
|
1,558
|
|
|
1,735
|
|
|
1,731
|
|
||||
Accretion
|
(156
|
)
|
|
(336
|
)
|
|
(692
|
)
|
|
(1,404
|
)
|
||||
Balance at end of period
|
$
|
3,523
|
|
|
$
|
2,820
|
|
|
$
|
3,523
|
|
|
$
|
2,820
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Parent Company
|
|
|
|
||||
Subordinated notes:
(1)
|
|
|
|
||||
5.50% Subordinated Notes Due 2026, net of unamortized debt issuance costs
(2)
|
$
|
98,209
|
|
|
$
|
98,100
|
|
Total Subordinated notes
|
98,209
|
|
|
98,100
|
|
||
Long-term debt:
(3)
|
|
|
|
||||
Southside Statutory Trust III Due 2033, net of unamortized debt issuance costs
(4)
|
20,548
|
|
|
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
|
60,240
|
|
|
60,236
|
|
||
Total Parent Company
|
158,449
|
|
|
158,336
|
|
||
|
|
|
|
||||
Subsidiaries
|
|
|
|
||||
FHLB advances
(8)
|
152,056
|
|
|
443,128
|
|
||
Total Subsidiaries
|
152,056
|
|
|
443,128
|
|
||
Total Long-term obligations
|
$
|
310,505
|
|
|
$
|
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
4.275%
through
December 30, 2017
and adjusts quarterly at a rate equal to
three-month LIBOR plus 294 basis points
.
|
(5)
|
This debt carries an adjustable rate of
2.61111%
through
October 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
3.57%
through
December 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
3.11444%
through
November 23, 2017
and adjusts quarterly at a rate equal to
three-month LIBOR plus 180 basis points
.
|
(8)
|
At
September 30, 2017
, the weighted average cost of these advances was
1.8%
. Long-term FHLB advances have maturities ranging from
October 2018
through
July 2028
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Three Months Ended September 30,
|
||||||||||||||||||||||
|
|
Defined Benefit
Pension Plan |
|
Defined Benefit Pension Plan Acquired
|
|
Restoration
Plan |
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
Service cost
|
|
$
|
349
|
|
|
$
|
347
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
61
|
|
|
$
|
52
|
|
Interest cost
|
|
901
|
|
|
928
|
|
|
44
|
|
|
53
|
|
|
142
|
|
|
133
|
|
||||||
Expected return on assets
|
|
(1,513
|
)
|
|
(1,306
|
)
|
|
(53
|
)
|
|
(66
|
)
|
|
—
|
|
|
—
|
|
||||||
Net loss amortization
|
|
328
|
|
|
412
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|
46
|
|
||||||
Prior service (credit) cost amortization
|
|
(3
|
)
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||
Net periodic benefit cost (income)
|
|
$
|
62
|
|
|
$
|
369
|
|
|
$
|
(9
|
)
|
|
$
|
(13
|
)
|
|
$
|
280
|
|
|
$
|
233
|
|
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||
|
|
Defined Benefit
Pension Plan |
|
Defined Benefit Pension Plan Acquired
|
|
Restoration
Plan |
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
Service cost
|
|
$
|
1,048
|
|
|
$
|
1,031
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
185
|
|
|
$
|
155
|
|
Interest cost
|
|
2,701
|
|
|
2,798
|
|
|
133
|
|
|
159
|
|
|
425
|
|
|
401
|
|
||||||
Expected return on assets
|
|
(4,538
|
)
|
|
(3,917
|
)
|
|
(160
|
)
|
|
(199
|
)
|
|
—
|
|
|
—
|
|
||||||
Net loss amortization
|
|
984
|
|
|
1,232
|
|
|
—
|
|
|
—
|
|
|
226
|
|
|
139
|
|
||||||
Prior service (credit) cost amortization
|
|
(10
|
)
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
||||||
Special and contractual termination benefits
|
|
—
|
|
|
1,549
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost (income)
|
|
$
|
185
|
|
|
$
|
2,682
|
|
|
$
|
(27
|
)
|
|
$
|
(40
|
)
|
|
$
|
841
|
|
|
$
|
700
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
|
Estimated Fair Value
|
|
Estimated Fair Value
|
||||||||||||||||||||
|
|
Notional
Amount (1) |
|
Asset Derivative
|
|
Liability Derivative
|
|
Notional
Amount (1) |
|
Asset Derivative
|
|
Liability Derivative
|
||||||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Swaps-Cash Flow Hedge-Financial institution counterparties
|
|
$
|
240,000
|
|
|
$
|
6,059
|
|
|
$
|
328
|
|
|
$
|
250,000
|
|
|
$
|
7,069
|
|
|
$
|
—
|
|
Derivatives designated as non-hedging instruments
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Swaps-Financial institution counterparties
|
|
67,573
|
|
|
73
|
|
|
1,263
|
|
|
2,182
|
|
|
85
|
|
|
—
|
|
||||||
Swaps-Customer counterparties
|
|
67,573
|
|
|
1,263
|
|
|
73
|
|
|
2,182
|
|
|
—
|
|
|
85
|
|
||||||
Gross derivatives
|
|
|
|
7,395
|
|
|
1,664
|
|
|
|
|
7,154
|
|
|
85
|
|
||||||||
Offsetting derivative assets/liabilities
|
|
|
|
(401
|
)
|
|
(401
|
)
|
|
|
|
—
|
|
|
—
|
|
||||||||
Cash collateral received/posted
|
|
|
|
(5,570
|
)
|
|
(1,190
|
)
|
|
|
|
(7,154
|
)
|
|
—
|
|
||||||||
Net derivatives included in the consolidated balance sheets
(2)
|
|
|
|
$
|
1,424
|
|
|
$
|
73
|
|
|
|
|
$
|
—
|
|
|
$
|
85
|
|
(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
$271,000
related to interest rate swaps with financial institutions and
$1.3 million
related to interest rate swaps with customers at
September 30, 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
.
|
|
|
September 30, 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
|
|
|
5.5
|
|
1.24
|
%
|
|
1.43
|
%
|
|
$
|
250,000
|
|
|
5.4
|
|
0.68
|
%
|
|
1.31
|
%
|
Swaps-Non-Hedging
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial institution counterparties
|
|
67,573
|
|
|
13.0
|
|
1.23
|
|
|
2.37
|
|
|
2,182
|
|
|
9.7
|
|
0.62
|
|
|
1.57
|
|
||
Customer counterparties
|
|
67,573
|
|
|
13.0
|
|
2.37
|
|
|
1.23
|
|
|
2,182
|
|
|
9.7
|
|
1.57
|
|
|
0.62
|
|
|
As of September 30, 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:
|
|
|
|
|
|
|
|
||||||||
State and Political Subdivisions
|
$
|
337,160
|
|
|
$
|
—
|
|
|
$
|
337,160
|
|
|
$
|
—
|
|
Other Stocks and Bonds
|
5,115
|
|
|
—
|
|
|
5,115
|
|
|
—
|
|
||||
Other Equity Securities
|
5,960
|
|
|
5,960
|
|
|
—
|
|
|
—
|
|
||||
Mortgage-backed Securities:
(1)
|
|
|
|
|
|
|
|
||||||||
Residential
|
619,695
|
|
|
—
|
|
|
619,695
|
|
|
—
|
|
||||
Commercial
|
324,142
|
|
|
—
|
|
|
324,142
|
|
|
—
|
|
||||
Derivative assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
7,395
|
|
|
—
|
|
|
7,395
|
|
|
—
|
|
||||
Total asset recurring fair value measurements
|
$
|
1,299,467
|
|
|
$
|
5,960
|
|
|
$
|
1,293,507
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
1,664
|
|
|
$
|
—
|
|
|
$
|
1,664
|
|
|
$
|
—
|
|
Total liability recurring fair value measurements
|
$
|
1,664
|
|
|
$
|
—
|
|
|
$
|
1,664
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Nonrecurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreclosed assets
|
$
|
299
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
299
|
|
Impaired loans
(2)
|
6,737
|
|
|
—
|
|
|
—
|
|
|
6,737
|
|
||||
Total asset nonrecurring fair value measurements
|
$
|
7,036
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,036
|
|
|
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
|
||||||||||||||||
September 30, 2017
|
Carrying
Amount |
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
184,513
|
|
|
$
|
184,513
|
|
|
$
|
184,513
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investment Securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Held to maturity, at carrying value
|
415,242
|
|
|
426,222
|
|
|
—
|
|
|
426,222
|
|
|
—
|
|
|||||
Mortgage-backed Securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Held to maturity, at carrying value
|
494,602
|
|
|
502,285
|
|
|
—
|
|
|
502,285
|
|
|
—
|
|
|||||
FHLB stock, at cost, and other investments
|
67,284
|
|
|
67,284
|
|
|
—
|
|
|
67,284
|
|
|
—
|
|
|||||
Loans, net of allowance for loan losses
|
2,662,895
|
|
|
2,666,081
|
|
|
—
|
|
|
—
|
|
|
2,666,081
|
|
|||||
Loans held for sale
|
2,177
|
|
|
2,177
|
|
|
—
|
|
|
2,177
|
|
|
—
|
|
|||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
$
|
3,564,175
|
|
|
$
|
3,560,777
|
|
|
$
|
—
|
|
|
$
|
3,560,777
|
|
|
$
|
—
|
|
Federal funds purchased and repurchase agreements
|
9,083
|
|
|
9,083
|
|
|
—
|
|
|
9,083
|
|
|
—
|
|
|||||
FHLB advances
|
1,142,556
|
|
|
1,137,171
|
|
|
—
|
|
|
1,137,171
|
|
|
—
|
|
|||||
Subordinated notes, net of unamortized debt issuance costs
|
98,209
|
|
|
102,569
|
|
|
—
|
|
|
102,569
|
|
|
—
|
|
|||||
Long-term debt
, net of unamortized debt issuance costs
|
60,240
|
|
|
48,422
|
|
|
—
|
|
|
48,422
|
|
|
—
|
|
|
|
|
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
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Current income tax expense
|
|
$
|
3,454
|
|
|
$
|
1,331
|
|
|
$
|
9,798
|
|
|
$
|
6,570
|
|
Deferred income tax (benefit) expense
|
|
436
|
|
|
1,410
|
|
|
453
|
|
|
1,916
|
|
||||
Income tax expense
|
|
$
|
3,890
|
|
|
$
|
2,741
|
|
|
$
|
10,251
|
|
|
$
|
8,486
|
|
|
At
September 30, 2017 |
|
At
December 31, 2016 |
||||
Unused commitments:
|
|
|
|
|
|
||
Commitments to extend credit
|
$
|
710,359
|
|
|
$
|
665,663
|
|
Standby letters of credit
|
9,746
|
|
|
9,075
|
|
||
Total
|
$
|
720,105
|
|
|
$
|
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 or pending acquisitions, 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
September 30, 2017 |
|
At
December 31, 2016 |
||||
Unused commitments:
|
|
|
|
|
|
||
Commitments to extend credit
|
$
|
710,359
|
|
|
$
|
665,663
|
|
Standby letters of credit
|
9,746
|
|
|
9,075
|
|
||
Total
|
$
|
720,105
|
|
|
$
|
674,738
|
|
|
Average Balances with Average Yields and Rates
|
||||||||||||||||||||
|
(unaudited)
|
||||||||||||||||||||
|
Three Months Ended
|
||||||||||||||||||||
|
September 30, 2017
|
|
September 30, 2016
|
||||||||||||||||||
|
Avg Balance
|
|
Interest Income
|
|
Avg Yield/Rate
|
|
Avg Balance
|
|
Interest Income
|
|
Avg Yield/Rate
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans
(1) (2)
|
$
|
2,657,562
|
|
|
$
|
30,378
|
|
|
4.54
|
%
|
|
$
|
2,436,349
|
|
|
$
|
26,750
|
|
|
4.37
|
%
|
Loans held for sale
|
5,060
|
|
|
47
|
|
|
3.69
|
%
|
|
6,718
|
|
|
54
|
|
|
3.20
|
%
|
||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities (taxable)
(4)
|
11,085
|
|
|
58
|
|
|
2.08
|
%
|
|
61,238
|
|
|
251
|
|
|
1.63
|
%
|
||||
Investment securities (tax-exempt)
(3) (4)
|
758,828
|
|
|
9,214
|
|
|
4.82
|
%
|
|
690,635
|
|
|
8,911
|
|
|
5.13
|
%
|
||||
Mortgage-backed and related securities
(4)
|
1,550,494
|
|
|
10,567
|
|
|
2.70
|
%
|
|
1,492,271
|
|
|
9,399
|
|
|
2.51
|
%
|
||||
Total securities
|
2,320,407
|
|
|
19,839
|
|
|
3.39
|
%
|
|
2,244,144
|
|
|
18,561
|
|
|
3.29
|
%
|
||||
FHLB stock, at cost, and other investments
|
66,994
|
|
|
329
|
|
|
1.95
|
%
|
|
54,085
|
|
|
186
|
|
|
1.37
|
%
|
||||
Interest earning deposits
|
144,700
|
|
|
506
|
|
|
1.39
|
%
|
|
57,598
|
|
|
89
|
|
|
0.61
|
%
|
||||
Federal funds sold
|
4,626
|
|
|
21
|
|
|
1.80
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total earning assets
|
5,199,349
|
|
|
51,120
|
|
|
3.90
|
%
|
|
4,798,894
|
|
|
45,640
|
|
|
3.78
|
%
|
||||
Cash and due from banks
|
53,220
|
|
|
|
|
|
|
49,418
|
|
|
|
|
|
||||||||
Accrued interest and other assets
|
360,073
|
|
|
|
|
|
|
385,917
|
|
|
|
|
|
||||||||
Less: Allowance for loan losses
|
(19,556
|
)
|
|
|
|
|
|
(14,989
|
)
|
|
|
|
|
||||||||
Total assets
|
$
|
5,593,086
|
|
|
|
|
|
|
$
|
5,219,240
|
|
|
|
|
|
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Savings deposits
|
$
|
260,860
|
|
|
117
|
|
|
0.18
|
%
|
|
$
|
248,364
|
|
|
71
|
|
|
0.11
|
%
|
||
Time deposits
|
988,380
|
|
|
2,878
|
|
|
1.16
|
%
|
|
949,019
|
|
|
2,073
|
|
|
0.87
|
%
|
||||
Interest bearing demand deposits
|
1,562,993
|
|
|
2,425
|
|
|
0.62
|
%
|
|
1,634,898
|
|
|
1,460
|
|
|
0.36
|
%
|
||||
Total interest bearing deposits
|
2,812,233
|
|
|
5,420
|
|
|
0.76
|
%
|
|
2,832,281
|
|
|
3,604
|
|
|
0.51
|
%
|
||||
Short-term interest bearing liabilities
|
1,095,968
|
|
|
3,382
|
|
|
1.22
|
%
|
|
608,130
|
|
|
1,122
|
|
|
0.73
|
%
|
||||
Long-term interest bearing liabilities – FHLB Dallas
|
149,512
|
|
|
778
|
|
|
2.06
|
%
|
|
472,470
|
|
|
1,857
|
|
|
1.56
|
%
|
||||
Subordinated notes
(5)
|
98,190
|
|
|
1,413
|
|
|
5.71
|
%
|
|
12,823
|
|
|
189
|
|
|
5.86
|
%
|
||||
Long-term debt
(6)
|
60,239
|
|
|
520
|
|
|
3.42
|
%
|
|
60,234
|
|
|
430
|
|
|
2.84
|
%
|
||||
Total interest bearing liabilities
|
4,216,142
|
|
|
11,513
|
|
|
1.08
|
%
|
|
3,985,938
|
|
|
7,202
|
|
|
0.72
|
%
|
||||
Noninterest bearing deposits
|
773,739
|
|
|
|
|
|
|
702,539
|
|
|
|
|
|
||||||||
Accrued expenses and other liabilities
|
48,682
|
|
|
|
|
|
|
55,783
|
|
|
|
|
|
||||||||
Total liabilities
|
5,038,563
|
|
|
|
|
|
|
4,744,260
|
|
|
|
|
|
||||||||
Shareholders’ equity
|
554,523
|
|
|
|
|
|
|
474,980
|
|
|
|
|
|
||||||||
Total liabilities and shareholders’ equity
|
$
|
5,593,086
|
|
|
|
|
|
|
$
|
5,219,240
|
|
|
|
|
|
||||||
Net interest income (tax-equivalent basis)
(7)
|
|
|
$
|
39,607
|
|
|
|
|
|
|
$
|
38,438
|
|
|
|
||||||
Net interest margin on average earning assets (tax-equivalent basis)
(7)
|
|
|
|
|
3.02
|
%
|
|
|
|
|
|
3.19
|
%
|
||||||||
Net interest spread (tax-equivalent basis)
(7)
|
|
|
|
|
2.82
|
%
|
|
|
|
|
|
3.06
|
%
|
(1)
|
Interest on loans includes net fees on loans that are not material in amount.
|
(2)
|
Interest income includes taxable-equivalent adjustments of
$1,103
and
$1,064
for the three months ended
September 30, 2017
and
2016
, respectively. See “Non-GAAP Financial Measures.”
|
(3)
|
Interest income includes taxable-equivalent adjustments of
$3,544
and
$3,444
for the three months ended
September 30, 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
$1.8 million
and
$220,000
for the three months ended
September 30, 2017
and
2016
, respectively.
|
(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
September 30, 2017
and
2016
reflect unamortized debt issuance costs of
$72,000
and
$77,000
, respectively.
|
(7)
|
See “Non-GAAP Financial Measures.”
|
|
Three Months Ended September 30,
2017 Compared to 2016 |
||||||||||
|
Average
Volume |
|
Average
Yield/Rate |
|
Increase
(Decrease)
|
||||||
INTEREST INCOME:
|
|
|
|
|
|
||||||
Loans
(1)
|
$
|
2,498
|
|
|
$
|
1,130
|
|
|
$
|
3,628
|
|
Loans held for sale
|
(15
|
)
|
|
8
|
|
|
(7
|
)
|
|||
Investment securities (taxable)
|
(248
|
)
|
|
55
|
|
|
(193
|
)
|
|||
Investment securities (tax-exempt)
(1)
|
847
|
|
|
(544
|
)
|
|
303
|
|
|||
Mortgage-backed securities
|
376
|
|
|
792
|
|
|
1,168
|
|
|||
FHLB stock, at cost and other investments
|
51
|
|
|
92
|
|
|
143
|
|
|||
Interest earning deposits
|
227
|
|
|
190
|
|
|
417
|
|
|||
Federal funds sold
|
21
|
|
|
—
|
|
|
21
|
|
|||
Total interest income
|
3,757
|
|
|
1,723
|
|
|
5,480
|
|
|||
INTEREST EXPENSE:
|
|
|
|
|
|
||||||
Savings deposits
|
4
|
|
|
42
|
|
|
46
|
|
|||
Time deposits
|
89
|
|
|
716
|
|
|
805
|
|
|||
Interest bearing demand deposits
|
(67
|
)
|
|
1,032
|
|
|
965
|
|
|||
Short-term interest bearing liabilities
|
1,229
|
|
|
1,031
|
|
|
2,260
|
|
|||
Long-term interest bearing liabilities – FHLB Dallas
|
(1,548
|
)
|
|
469
|
|
|
(1,079
|
)
|
|||
Subordinated notes
|
1,229
|
|
|
(5
|
)
|
|
1,224
|
|
|||
Long-term debt
|
—
|
|
|
90
|
|
|
90
|
|
|||
Total interest expense
|
936
|
|
|
3,375
|
|
|
4,311
|
|
|||
Net interest income
|
$
|
2,821
|
|
|
$
|
(1,652
|
)
|
|
$
|
1,169
|
|
(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.”
|
|
Average Balances with Average Yields and Rates
|
||||||||||||||||||||
|
(unaudited)
|
||||||||||||||||||||
|
Nine Months Ended
|
||||||||||||||||||||
|
September 30, 2017
|
|
September 30, 2016
|
||||||||||||||||||
|
Avg Balance
|
|
Interest Income
|
|
Avg Yield/Rate
|
|
Avg Balance
|
|
Interest Income
|
|
Avg Yield/Rate
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans
(1) (2)
|
$
|
2,588,358
|
|
|
$
|
87,699
|
|
|
4.53
|
%
|
|
$
|
2,432,652
|
|
|
$
|
82,818
|
|
|
4.55
|
%
|
Loans held for sale
|
5,992
|
|
|
155
|
|
|
3.46
|
%
|
|
5,100
|
|
|
126
|
|
|
3.30
|
%
|
||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities (taxable)
(4)
|
51,645
|
|
|
702
|
|
|
1.82
|
%
|
|
41,708
|
|
|
572
|
|
|
1.83
|
%
|
||||
Investment securities (tax-exempt)
(3) (4)
|
762,543
|
|
|
28,529
|
|
|
5.00
|
%
|
|
661,430
|
|
|
26,041
|
|
|
5.26
|
%
|
||||
Mortgage-backed and related securities
(4)
|
1,571,685
|
|
|
31,430
|
|
|
2.67
|
%
|
|
1,465,923
|
|
|
28,156
|
|
|
2.57
|
%
|
||||
Total securities
|
2,385,873
|
|
|
60,661
|
|
|
3.40
|
%
|
|
2,169,061
|
|
|
54,769
|
|
|
3.37
|
%
|
||||
FHLB stock, at cost, and other investments
|
66,763
|
|
|
926
|
|
|
1.85
|
%
|
|
54,051
|
|
|
588
|
|
|
1.45
|
%
|
||||
Interest earning deposits
|
154,289
|
|
|
1,216
|
|
|
1.05
|
%
|
|
55,378
|
|
|
220
|
|
|
0.53
|
%
|
||||
Federal funds sold
|
5,713
|
|
|
49
|
|
|
1.15
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total earning assets
|
5,206,988
|
|
|
150,706
|
|
|
3.87
|
%
|
|
4,716,242
|
|
|
138,521
|
|
|
3.92
|
%
|
||||
Cash and due from banks
|
52,568
|
|
|
|
|
|
|
50,738
|
|
|
|
|
|
||||||||
Accrued interest and other assets
|
356,212
|
|
|
|
|
|
|
378,000
|
|
|
|
|
|
||||||||
Less: Allowance for loan losses
|
(18,732
|
)
|
|
|
|
|
|
(19,136
|
)
|
|
|
|
|
||||||||
Total assets
|
$
|
5,597,036
|
|
|
|
|
|
|
$
|
5,125,844
|
|
|
|
|
|
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Savings deposits
|
$
|
258,568
|
|
|
330
|
|
|
0.17
|
%
|
|
$
|
242,852
|
|
|
204
|
|
|
0.11
|
%
|
||
Time deposits
|
976,919
|
|
|
7,828
|
|
|
1.07
|
%
|
|
946,986
|
|
|
5,723
|
|
|
0.81
|
%
|
||||
Interest bearing demand deposits
|
1,628,477
|
|
|
6,681
|
|
|
0.55
|
%
|
|
1,693,135
|
|
|
4,448
|
|
|
0.35
|
%
|
||||
Total interest bearing deposits
|
2,863,964
|
|
|
14,839
|
|
|
0.69
|
%
|
|
2,882,973
|
|
|
10,375
|
|
|
0.48
|
%
|
||||
Short-term interest bearing liabilities
|
1,038,326
|
|
|
7,927
|
|
|
1.02
|
%
|
|
469,831
|
|
|
2,724
|
|
|
0.77
|
%
|
||||
Long-term interest bearing liabilities – FHLB Dallas
|
220,007
|
|
|
3,255
|
|
|
1.98
|
%
|
|
510,392
|
|
|
5,770
|
|
|
1.51
|
%
|
||||
Subordinated notes
(5)
|
98,153
|
|
|
4,204
|
|
|
5.73
|
%
|
|
4,305
|
|
|
189
|
|
|
5.86
|
%
|
||||
Long-term debt
(6)
|
60,238
|
|
|
1,481
|
|
|
3.29
|
%
|
|
60,233
|
|
|
1,251
|
|
|
2.77
|
%
|
||||
Total interest bearing liabilities
|
4,280,688
|
|
|
31,706
|
|
|
0.99
|
%
|
|
3,927,734
|
|
|
20,309
|
|
|
0.69
|
%
|
||||
Noninterest bearing deposits
|
732,637
|
|
|
|
|
|
|
685,982
|
|
|
|
|
|
||||||||
Accrued expenses and other liabilities
|
42,749
|
|
|
|
|
|
|
48,120
|
|
|
|
|
|
||||||||
Total liabilities
|
5,056,074
|
|
|
|
|
|
|
4,661,836
|
|
|
|
|
|
||||||||
Shareholders’ equity
|
540,962
|
|
|
|
|
|
|
464,008
|
|
|
|
|
|
||||||||
Total liabilities and shareholders’ equity
|
$
|
5,597,036
|
|
|
|
|
|
|
$
|
5,125,844
|
|
|
|
|
|
||||||
Net interest income (tax-equivalent basis)
(7)
|
|
|
$
|
119,000
|
|
|
|
|
|
|
$
|
118,212
|
|
|
|
||||||
Net interest margin on average earning assets (tax-equivalent basis)
(7)
|
|
|
|
|
3.06
|
%
|
|
|
|
|
|
3.35
|
%
|
||||||||
Net interest spread (tax-equivalent basis)
(7)
|
|
|
|
|
2.88
|
%
|
|
|
|
|
|
3.23
|
%
|
(1)
|
Interest on loans includes net fees on loans that are not material in amount.
|
(2)
|
Interest income includes taxable-equivalent adjustments of
$3,188
and
$3,206
for the
nine
months ended
September 30, 2017
and
2016
, respectively. See “Non-GAAP Financial Measures.”
|
(3)
|
Interest income includes taxable-equivalent adjustments of
$10,148
and
$10,082
for the
nine
months ended
September 30, 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
$1.8 million
and
$74,000
for the
nine
months ended
September 30, 2017
and
2016
, respectively.
|
(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
nine
months ended
September 30, 2017
and
2016
reflect unamortized debt issuance costs of
$73,000
and
$78,000
, respectively.
|
(7)
|
See “Non-GAAP Financial Measures.”
|
|
Nine Months Ended September 30,
2017 Compared to 2016 |
||||||||||
|
Average
Volume |
|
Average
Yield/Rate |
|
Increase
(Decrease)
|
||||||
INTEREST INCOME:
|
|
|
|
|
|
||||||
Loans
(1)
|
$
|
5,277
|
|
|
$
|
(396
|
)
|
|
$
|
4,881
|
|
Loans held for sale
|
23
|
|
|
6
|
|
|
29
|
|
|||
Investment securities (taxable)
|
135
|
|
|
(5
|
)
|
|
130
|
|
|||
Investment securities (tax-exempt)
(1)
|
3,832
|
|
|
(1,344
|
)
|
|
2,488
|
|
|||
Mortgage-backed securities
|
2,085
|
|
|
1,189
|
|
|
3,274
|
|
|||
FHLB stock, at cost and other investments
|
156
|
|
|
182
|
|
|
338
|
|
|||
Interest earning deposits
|
642
|
|
|
354
|
|
|
996
|
|
|||
Federal funds sold
|
49
|
|
|
—
|
|
|
49
|
|
|||
Total interest income
|
12,199
|
|
|
(14
|
)
|
|
12,185
|
|
|||
INTEREST EXPENSE:
|
|
|
|
|
|
||||||
Savings deposits
|
14
|
|
|
112
|
|
|
126
|
|
|||
Time deposits
|
186
|
|
|
1,919
|
|
|
2,105
|
|
|||
Interest bearing demand deposits
|
(176
|
)
|
|
2,409
|
|
|
2,233
|
|
|||
Short-term interest bearing liabilities
|
4,123
|
|
|
1,080
|
|
|
5,203
|
|
|||
Long-term interest bearing liabilities – FHLB Dallas
|
(3,940
|
)
|
|
1,425
|
|
|
(2,515
|
)
|
|||
Subordinated notes
|
4,020
|
|
|
(5
|
)
|
|
4,015
|
|
|||
Long-term debt
|
—
|
|
|
230
|
|
|
230
|
|
|||
Total interest expense
|
4,227
|
|
|
7,170
|
|
|
11,397
|
|
|||
Net interest income
|
$
|
7,972
|
|
|
$
|
(7,184
|
)
|
|
$
|
788
|
|
(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
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Deposit services
|
$
|
5,476
|
|
|
$
|
5,335
|
|
|
$
|
15,845
|
|
|
$
|
15,519
|
|
Net gain on sale of securities available for sale
|
627
|
|
|
2,343
|
|
|
874
|
|
|
5,512
|
|
||||
Gain on sale of loans
|
347
|
|
|
818
|
|
|
1,553
|
|
|
2,334
|
|
||||
Trust income
|
873
|
|
|
867
|
|
|
2,662
|
|
|
2,591
|
|
||||
Bank owned life insurance income
|
636
|
|
|
656
|
|
|
1,905
|
|
|
1,977
|
|
||||
Brokerage services
|
561
|
|
|
551
|
|
|
1,790
|
|
|
1,661
|
|
||||
Other noninterest income
|
888
|
|
|
1,162
|
|
|
3,745
|
|
|
3,104
|
|
||||
Total noninterest income
|
$
|
9,408
|
|
|
$
|
11,732
|
|
|
$
|
28,374
|
|
|
$
|
32,698
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Salaries and employee benefits
|
$
|
14,395
|
|
|
$
|
15,203
|
|
|
$
|
45,229
|
|
|
$
|
47,784
|
|
Occupancy expense
|
2,981
|
|
|
4,569
|
|
|
8,741
|
|
|
10,897
|
|
||||
Advertising, travel & entertainment
|
487
|
|
|
588
|
|
|
1,618
|
|
|
1,995
|
|
||||
ATM and debit card expense
|
1,024
|
|
|
868
|
|
|
2,840
|
|
|
2,316
|
|
||||
Professional fees
|
996
|
|
|
1,148
|
|
|
2,985
|
|
|
3,964
|
|
||||
Software and data processing expense
|
732
|
|
|
736
|
|
|
2,145
|
|
|
2,224
|
|
||||
Telephone and communications
|
459
|
|
|
407
|
|
|
1,461
|
|
|
1,359
|
|
||||
FDIC insurance
|
441
|
|
|
643
|
|
|
1,327
|
|
|
1,926
|
|
||||
Other noninterest expense
|
3,492
|
|
|
4,263
|
|
|
10,056
|
|
|
11,180
|
|
||||
Total noninterest expense
|
$
|
25,007
|
|
|
$
|
28,425
|
|
|
$
|
76,402
|
|
|
$
|
83,645
|
|
|
Actual
|
|
For Capital
Adequacy Purposes
|
|
To Be Well Capitalized
Under Prompt
Corrective Actions
Provisions
|
|||||||||||||||
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Amount
|
|||||||||
September 30, 2017
|
(dollars in thousands)
|
|||||||||||||||||||
Common Equity Tier 1 (to Risk Weighted Assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Consolidated
|
$
|
486,009
|
|
|
14.87
|
%
|
|
$
|
147,040
|
|
|
4.50
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Bank Only
|
$
|
619,234
|
|
|
18.96
|
%
|
|
$
|
147,006
|
|
|
4.50
|
%
|
|
$
|
212,341
|
|
|
6.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 Capital (to Risk Weighted Assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Consolidated
|
$
|
542,939
|
|
|
16.62
|
%
|
|
$
|
196,054
|
|
|
6.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Bank Only
|
$
|
619,234
|
|
|
18.96
|
%
|
|
$
|
196,007
|
|
|
6.00
|
%
|
|
$
|
261,343
|
|
|
8.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Capital (to Risk Weighted Assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Consolidated
|
$
|
662,783
|
|
|
20.28
|
%
|
|
$
|
261,405
|
|
|
8.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Bank Only
|
$
|
640,869
|
|
|
19.62
|
%
|
|
$
|
261,343
|
|
|
8.00
|
%
|
|
$
|
326,679
|
|
|
10.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 Capital (to Average Assets)
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Consolidated
|
$
|
542,939
|
|
|
9.90
|
%
|
|
$
|
219,431
|
|
|
4.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Bank Only
|
$
|
619,234
|
|
|
11.29
|
%
|
|
$
|
219,337
|
|
|
4.00
|
%
|
|
$
|
274,172
|
|
|
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
September 30, |
||||
|
2017
|
|
2016
|
||
Return on Average Assets
|
1.03
|
%
|
|
0.98
|
%
|
Return on Average Shareholders’ Equity
|
10.38
|
|
|
10.78
|
|
Dividend Payout Ratio – Basic
|
57.14
|
|
|
50.00
|
|
Dividend Payout Ratio – Diluted
|
57.14
|
|
|
50.00
|
|
Average Shareholders’ Equity to Average Total Assets
|
9.91
|
|
|
9.10
|
|
|
Nine Months Ended
September 30, |
||||
|
2017
|
|
2016
|
||
Return on Average Assets
|
1.05
|
%
|
|
0.98
|
%
|
Return on Average Shareholders’ Equity
|
10.87
|
|
|
10.87
|
|
Dividend Payout Ratio – Basic
|
54.00
|
|
|
50.71
|
|
Dividend Payout Ratio – Diluted
|
54.36
|
|
|
51.08
|
|
Average Shareholders’ Equity to Average Total Assets
|
9.67
|
|
|
9.05
|
|
|
At
September 30, 2017 |
|
At
December 31, 2016 |
|
At
September 30, 2016 |
||||||
|
(in thousands)
|
||||||||||
Real Estate Loans:
|
|
|
|
|
|
|
|
|
|||
Construction
|
$
|
420,497
|
|
|
$
|
380,175
|
|
|
$
|
466,323
|
|
1-4 Family Residential
|
609,159
|
|
|
637,239
|
|
|
644,746
|
|
|||
Commercial
|
1,073,646
|
|
|
945,978
|
|
|
759,795
|
|
|||
Commercial Loans
|
166,919
|
|
|
177,265
|
|
|
191,154
|
|
|||
Municipal Loans
|
322,286
|
|
|
298,583
|
|
|
293,949
|
|
|||
Loans to Individuals
|
90,259
|
|
|
117,297
|
|
|
127,674
|
|
|||
Total Loans
|
$
|
2,682,766
|
|
|
$
|
2,556,537
|
|
|
$
|
2,483,641
|
|
|
At
September 30, 2017 |
|
At
December 31, 2016 |
|
At
September 30, 2016 |
||||||
Nonaccrual loans
(1)
|
$
|
3,095
|
|
|
$
|
8,280
|
|
|
$
|
8,536
|
|
Accruing loans past due more than 90 days
(1)
|
—
|
|
|
6
|
|
|
1
|
|
|||
Restructured loans
(2)
|
5,725
|
|
|
6,431
|
|
|
7,193
|
|
|||
Other real estate owned
|
298
|
|
|
339
|
|
|
237
|
|
|||
Repossessed assets
|
1
|
|
|
49
|
|
|
41
|
|
|||
Total Nonperforming Assets
|
$
|
9,119
|
|
|
$
|
15,105
|
|
|
$
|
16,008
|
|
|
At
September 30, 2017 |
|
At
December 31, 2016 |
|
At
September 30, 2016 |
|||
Asset Quality Ratios:
|
|
|
|
|
|
|||
Nonaccruing loans to total loans
|
0.12
|
%
|
|
0.32
|
%
|
|
0.34
|
%
|
Allowance for loan losses to nonaccruing loans
|
642.04
|
|
|
216.32
|
|
|
187.36
|
|
Allowance for loan losses to nonperforming assets
|
217.91
|
|
|
118.58
|
|
|
99.91
|
|
Allowance for loan losses to total loans
|
0.74
|
|
|
0.70
|
|
|
0.64
|
|
Nonperforming assets to total assets
|
0.17
|
|
|
0.27
|
|
|
0.29
|
|
Net charge-offs to average loans
|
0.07
|
|
|
0.47
|
|
|
0.63
|
|
|
|
|
|
|
|
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
|
|
|
|
|
3.1
|
|
8-K
|
|
11/24/2014
|
|
0-12247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10)
|
|
Material Contracts
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(31)
|
|
Rule 13a-14(a)/15d-14(a) Certifications
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(32)
|
|
Section 1350 Certification
|
|
|
|
|
|
|
|
|
|
|
†32
|
|
|
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.
|
|
|
SOUTHSIDE BANCSHARES, INC.
|
|
|
|
|
|
DATE:
|
October 27, 2017
|
BY:
|
/s/ Lee R. Gibson
|
|
|
|
Lee R. Gibson, CPA
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DATE:
|
October 27, 2017
|
BY:
|
/s/ Julie N. Shamburger
|
|
|
|
Julie N. Shamburger, CPA
|
|
|
|
Senior Executive Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
If to the Bank, to:
|
Southside Bank
1201 South Beckham
Tyler, Texas 75701
FAX: 903-592-3692
TELE: 903-531-7111
|
If to the Employee, to:
|
Tim Carter
3408 Rustwood
Fort Worth, TX 76109
|
Continuous Service
after Grant Date
|
|
Percent of Units Vested
|
|
|
|
|
|
|
|
|
|
SOUTHSIDE BANCSHARES, INC.
By: ___________________________
Its: Authorized Officer
|
Grant Date:
|
TERMS AND CONDITIONS
1.
Vesting of Units
. The Units have been credited to a bookkeeping account on behalf of Grantee. The Units shall vest (become non-forfeitable) in accordance with the schedule shown on the cover page of this Award Certificate. Notwithstanding the vesting schedule, the Units shall become fully vested and exercisable upon (i) the termination of Grantee’s Continuous Status as a Participant due to death or Disability, (ii) a Change in Control, unless the Units are assumed by the surviving entity or otherwise equitably converted or substituted in connection with the Change in Control, or (iii) if the Units are assumed by the surviving entity or otherwise equitably converted or substituted in connection with a Change in Control, the termination of Grantee’s employment without Cause (or Grantee‘s resignation for Good Reason as provided in any employment, severance or similar agreement, if applicable) within two years after the effective date of the Change in Control.
If Grantee’s employment terminates prior to the vesting date, Grantee shall forfeit all right, title and interest in and to the Units as of the date of such termination and the Units will be reconveyed to the Company without further consideration or any act or action by Grantee.
2.
Conversion to Stock
. Unless the Units are forfeited prior to the vesting date as provided in Section 1 above, the Units will be converted on the vesting date to actual shares of Stock, and such Shares will be registered on the books of the Company in the name of Grantee (or in street name to Grantee’s brokerage account) as of the vesting date and will be delivered to Grantee in certificated or uncertificated (book-entry) form.
3.
Dividend Equivalents
. If any dividends or other distributions are paid with respect to the Shares while the Units or are outstanding, the dollar amount or fair market value of such dividends or distributions with respect to the number of Shares then underlying the Units shall be converted into additional restricted stock units in Grantee’s name, based on the Fair Market Value of the Stock as of the date such dividends or distributions were payable, and such additional stock units shall be subject to the same forfeiture and transfer restrictions and deferral terms as apply to the Units with respect to which they relate. In other words, Dividend Equivalents credited to outstanding Units are only earned to the extent that the related Units are vested.
4.
Changes in Capital Structure
. In the event the Stock shall be changed into or exchanged for a different number or class of shares of stock or securities of the Company or of another company, whether through reorganization, recapitalization, statutory share exchange, reclassification, stock split-up, combination of shares, merger or consolidation, or otherwise, there shall be substituted for each share of Stock then underlying a Unit subject to this Certificate the number and class of shares into which each outstanding share of Stock shall be so exchanged.
5.
Restrictions on Transfer
. No right or interest of Grantee in the Units may be pledged, hypothecated or otherwise encumbered to or in favor of any party other than the Company or an Affiliate, or be subjected to any lien, obligation or liability of Grantee to any other party other than the Company or an Affiliate. Units are not assignable or transferable by Grantee other than by will or the laws of descent and distribution; but the Committee may permit other transfers.
6.
Limitation of Rights
. The Units do not confer to Grantee or Grantee’s beneficiary any voting rights or other rights of a stockholder of the Company unless and until shares of Stock are in fact issued to such person in connection with the Units. Nothing in this Certificate shall
|
|
interfere with or limit in any way the right of the Company or any Affiliate to terminate Grantee’s employment at any time, nor confer upon Grantee any right to continue in employment of the Company or any Affiliate.
7.
Payment of Taxes
. The Company or any Affiliate employing Grantee has the authority and the right to deduct or withhold, or require Grantee to remit to the employer, an amount sufficient to satisfy federal, state, and local taxes (including Grantee’s FICA obligation) required by law to be withheld with respect to any taxable event arising as a result of the vesting or settlement of the Units. Unless the Committee determines otherwise, any such withholding requirement will be satisfied by the Company withholding from the Units upon settlement a number of shares of Stock having a Fair Market Value on the date of withholding, equal to the amount required to be withheld for tax purposes. The obligations of the Company under this Certificate will be conditional on such payment or arrangements, and the Company, and, where applicable, its Affiliates will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to Grantee.
8.
Amendment
. The Committee may amend, modify or terminate this Certificate without approval of Grantee; provided, however, that such amendment, modification or termination shall not, without Grantee’s consent, reduce or diminish the value of this award determined as if it had been fully vested (i.e., as if all restrictions on the Units hereunder had expired) on the date of such amendment or termination.
9.
Plan Controls
. The terms contained in the Plan shall be and are hereby incorporated into and made a part of this Certificate and this Certificate shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the provisions of the approved Plan and the provisions of this Certificate, the provisions of the Plan shall be controlling and determinative.
10.
Notice
. Notices hereunder must be in writing and either personally delivered or sent by registered or certified United States mail, return receipt requested, postage prepaid. Notices to the Company must be addressed to Southside Bancshares, Inc., 1201 S. Beckham, Tyler, Texas 75701; Attn: Secretary, or any other address designated by the Company in a written notice to Grantee. Notices to Grantee will be directed to the address of Grantee then currently on file with the Company, or at any other address given by Grantee in a written notice to the Company.
11.
Code Section 409A
. This Certificate shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code).
|
Continuous Service
after Grant Date
|
|
Percent of Option Shares Vested
|
|
|
|
|
|
|
|
|
|
SOUTHSIDE BANCSHARES, INC.
By: ________________________________
Its: Authorized Officer
|
Grant Date:
|
TERMS AND CONDITIONS
1.
Vesting of Option
. The Option shall vest (become exercisable) in accordance with the schedule shown on the cover page of this Award Certificate. Notwithstanding the vesting schedule, the Option shall become fully vested and exercisable upon (i) the termination of Optionee’s Continuous Status as a Participant due to death or Disability, (ii) a Change in Control, unless the Option is assumed by the surviving entity or otherwise equitably converted or substituted in connection with the Change in Control, or (iii) if the Option is assumed by the surviving entity or otherwise equitably converted or substituted in connection with a Change in Control, the termination of Optionee’s employment without Cause (or Optionee‘s resignation for Good Reason as provided in any employment, severance or similar agreement, if applicable) within two years after the effective date of the Change in Control.
2.
Term of Option and Limitations on Right to Exercise
. The term of the Option will be for a period of ten years, expiring at 5:00 p.m., Eastern Time, on the tenth anniversary of the Grant Date (the “Expiration Date”). To the extent not previously exercised, the vested Option will lapse prior to the Expiration Date upon the earliest to occur of the following circumstances:
(a) Three (3) months after the date of termination of Optionee’s Continuous Service for any reason other than (i) for Cause, or (ii) by reason of Optionee’s death or Disability.
(b) Twelve (12) months after the date of termination of Optionee’s Continuous Service by reason of Optionee’s Disability or Retirement.
(c) Twelve (12) months after the date of Optionee’s death, if Optionee dies while employed, or during the three-month period described in subsection (a) above or during the twelve-month period described in subsection (b) above and before the Option otherwise expires.
(d) Immediately upon the date of termination of Optionee’s Continuous Service by the Company for Cause.
If Optionee or his or her beneficiary exercises an Option after termination of service, the Option may be exercised only with respect to the Shares that were
|
|
otherwise vested on Optionee’s termination of service, including Option Shares vested by acceleration under Section 1.
3.
Exercise of Option
. The Option shall be exercised by (a) written notice directed to the Secretary of the Company or his or her designee at the address and in the form specified by the Secretary from time to time and (b) payment to the Company in full for the Shares subject to such exercise (unless the exercise is a broker-assisted cashless exercise, as described below). If the person exercising an Option is not Optionee, such person shall also deliver with the notice of exercise appropriate proof of his or her right to exercise the Option. Payment for such Shares shall be (a) in cash, (b) by delivery (actual or by attestation) of Shares previously acquired by the purchaser, (c) by withholding of Shares from the Option, or (d) any combination thereof, for the number of Shares specified in such written notice. The value of Shares surrendered or withheld for this purpose shall be the Fair Market Value as of the last trading day immediately prior to the exercise date. To the extent permitted under Regulation T of the Federal Reserve Board, and subject to applicable securities laws and any limitations as may be applied from time to time by the Committee (which need not be uniform), the Option may be exercised through a broker in a so-called “cashless exercise” whereby the broker sells the Option Shares on behalf of Optionee and delivers cash sales proceeds to the Company in payment of the exercise price.
4.
Withholding
. The Company or any employer Affiliate has the authority and the right to deduct or withhold, or require Optionee to remit to the employer, an amount sufficient to satisfy federal, state, and local taxes (including Optionee’s FICA obligation) required by law to be withheld with respect to any taxable event arising as a result of the exercise of the Option. Unless the Committee determines otherwise, the withholding requirement will be satisfied by withholding from the Option Shares having a Fair Market Value on the date of withholding equal to the amount required to be withheld for tax purposes. The obligations of the Company under this Award Certificate will be conditional on such payment or arrangements, and the Company, and, where applicable, its Affiliates will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to Optionee.
5.
Limitation of Rights
. The Option does not confer to Optionee or Optionee’s beneficiary designated pursuant to the Plan any rights of a shareholder of the Company unless and until Shares are in fact issued to such person in connection
|
with the exercise of the Option. Nothing in this Award Certificate shall interfere with or limit in any way the right of the Company or any Affiliate to terminate Optionee’s service at any time, nor confer upon Optionee any right to continue in the service of the Company or any Affiliate.
6.
Restrictions on Transfer and Pledge
. No right or interest of Optionee in the Option may be pledged, encumbered, or hypothecated to or in favor of any party other than the Company or an Affiliate, or shall be subject to any lien, obligation, or liability of Optionee to any other party other than the Company or an Affiliate. The Option is not assignable or transferable by Optionee other than by will or the laws of descent and distribution; provided, however, that the Committee may (but need not) permit other transfers. The Option may be exercised during the lifetime of Optionee only by Optionee or any permitted transferee.
7.
Restrictions on Issuance of Shares
. If at any time the Committee or the Board shall determine in its discretion, that registration, listing or qualification of the Shares covered by the Option upon any Exchange or under any foreign, federal, or local law or practice, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition to the exercise of the Option, the Option may not be exercised in whole or in part unless and until such registration, listing, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee or the Board.
8.
Plan Controls
. The terms contained in the Plan are incorporated into and made a part of this Award Certificate and this Award Certificate shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Award Certificate, the provisions of the Plan shall be controlling and determinative.
9.
Successors
. This Award Certificate shall be binding upon any successor of the Company, in accordance with the terms of this Award Certificate and the Plan.
10.
Notice
. Notices hereunder must be in writing, delivered personally or sent by registered or certified U.S. mail, return receipt requested, postage prepaid. Notices to the Company must be addressed to Southside Bancshares, Inc., 1201
|
|
S. Beckham, Tyler, Texas 75701; Attn: Secretary, or any other address designated by the Company in a written notice to Optionee. Notices to Optionee will be directed to the address of Optionee then currently on file with the Company, or at any other address given by Optionee in a written notice to the Company.
|
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:
|
October 27, 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;
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c.
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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
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d.
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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
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5.
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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):
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a.
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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
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b.
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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.
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Date:
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October 27, 2017
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By:
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/s/ JULIE N. SHAMBURGER
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|
|
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Julie N. Shamburger, CPA
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|
|
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Senior Executive Vice President and Chief Financial Officer
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1.
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
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2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Registrant.
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Date:
|
October 27, 2017
|
By:
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/s/ LEE R. GIBSON
|
|
|
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Lee R. Gibson, CPA
|
|
|
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President and Chief Executive Officer
|
|
|
|
|
Date:
|
October 27, 2017
|
By:
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/s/ JULIE N. SHAMBURGER
|
|
|
|
Julie N. Shamburger, CPA
|
|
|
|
Senior Executive Vice President and Chief Financial Officer
|