|
ý
|
Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
|
Montana
|
|
81-0331430
|
(State or other jurisdiction of
incorporation or organization)
|
|
(IRS Employer
Identification No.)
|
|
|
|
401 North 31st Street, Billings, MT
|
|
59116-0918
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
¨
|
|
Accelerated filer
|
ý
|
|
|
|
|
|
Non-accelerated filer
|
¨
|
|
Smaller reporting company
|
¨
|
|
September 30, 2015 – Class A common stock
|
|
21,583,324
|
|
|
|
September 30, 2015 – Class B common stock
|
|
23,761,683
|
|
|
|
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Quarterly Report on Form 10-Q
Index
|
|||
|
|
Page
|
|
Part I.
|
Financial Information
|
|
|
|
|
|
|
Item 1.
|
Financial Statements (unaudited)
|
|
|
|
|
|
|
|
Consolidated Balance Sheets - September 30, 2015 and December 31, 2014
|
3
|
|
|
|
|
|
|
Consolidated Statements of Income - Three and Nine Months Ended September 30, 2015 and 2014
|
4
|
|
|
|
|
|
|
Consolidated Statements of Comprehensive Income - Three and Nine Months Ended September 30, 2015 and 2014
|
5
|
|
|
|
|
|
|
Consolidated Statements of Changes in Stockholders’ Equity - Nine Months Ended September 30, 2015 and 2014
|
6
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2015 and 2014
|
7
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
37
|
|
|
|
|
|
Item 3.
|
53
|
|
|
|
|
|
|
Item 4.
|
53
|
|
|
|
|
||
Part II.
|
|
||
|
|
|
|
Item 1.
|
53
|
|
|
|
|
|
|
Item 1A .
|
54
|
|
|
|
|
|
|
Item 2.
|
54
|
|
|
|
|
|
|
Item 3.
|
54
|
|
|
|
|
|
|
Item 4.
|
Mine Safety Disclosures
|
54
|
|
|
|
|
|
Item 5.
|
54
|
|
|
|
|
|
|
Item 6.
|
54
|
|
|
|
|
||
56
|
|
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
|
|||||||
|
September 30,
2015 |
|
December 31,
2014 |
||||
Assets
|
|
|
|
||||
Cash and due from banks
|
$
|
139,879
|
|
|
$
|
147,894
|
|
Federal funds sold
|
2,263
|
|
|
543
|
|
||
Interest bearing deposits in banks
|
566,153
|
|
|
650,233
|
|
||
Total cash and cash equivalents
|
708,295
|
|
|
798,670
|
|
||
Investment securities:
|
|
|
|
||||
Available-for-sale
|
1,545,093
|
|
|
1,711,924
|
|
||
Held-to-maturity (estimated fair values of $534,633 and $584,533 at September 30, 2015 and December 31, 2014, respectively)
|
522,543
|
|
|
575,186
|
|
||
Total investment securities
|
2,067,636
|
|
|
2,287,110
|
|
||
Loans held for investment
|
5,120,794
|
|
|
4,856,615
|
|
||
Mortgage loans held for sale
|
55,686
|
|
|
40,828
|
|
||
Total loans
|
5,176,480
|
|
|
4,897,443
|
|
||
Less allowance for loan losses
|
74,256
|
|
|
74,200
|
|
||
Net loans
|
5,102,224
|
|
|
4,823,243
|
|
||
Goodwill
|
204,409
|
|
|
205,574
|
|
||
Premises and equipment, net of accumulated depreciation
|
190,386
|
|
|
195,212
|
|
||
Company-owned life insurance
|
185,990
|
|
|
153,821
|
|
||
Other real estate owned (“OREO”)
|
8,031
|
|
|
13,554
|
|
||
Accrued interest receivable
|
31,590
|
|
|
27,063
|
|
||
Core deposit intangibles, net of accumulated amortization
|
11,425
|
|
|
13,282
|
|
||
Mortgage servicing rights, net of accumulated amortization and impairment reserve
|
15,336
|
|
|
14,038
|
|
||
Deferred tax asset, net
|
—
|
|
|
4,874
|
|
||
Other assets
|
79,208
|
|
|
73,495
|
|
||
Total assets
|
$
|
8,604,530
|
|
|
$
|
8,609,936
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Deposits:
|
|
|
|
||||
Non-interest bearing
|
$
|
1,832,535
|
|
|
$
|
1,791,364
|
|
Interest bearing
|
5,203,259
|
|
|
5,214,848
|
|
||
Total deposits
|
7,035,794
|
|
|
7,006,212
|
|
||
Securities sold under repurchase agreements
|
437,533
|
|
|
502,250
|
|
||
Accounts payable and accrued expenses
|
48,698
|
|
|
66,164
|
|
||
Accrued interest payable
|
5,327
|
|
|
5,833
|
|
||
Deferred tax liability
|
13,027
|
|
|
—
|
|
||
Long-term debt
|
43,089
|
|
|
38,067
|
|
||
Other borrowed funds
|
10
|
|
|
9
|
|
||
Subordinated debentures held by subsidiary trusts
|
82,477
|
|
|
82,477
|
|
||
Total liabilities
|
7,665,955
|
|
|
7,701,012
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Nonvoting noncumulative preferred stock without par value; authorized 100,000 shares; no shares issued and outstanding as of September 30, 2015 or December 31, 2014
|
—
|
|
|
—
|
|
||
Common stock
|
309,167
|
|
|
323,596
|
|
||
Retained earnings
|
623,967
|
|
|
587,862
|
|
||
Accumulated other comprehensive income (loss), net
|
5,441
|
|
|
(2,534
|
)
|
||
Total stockholders’ equity
|
938,575
|
|
|
908,924
|
|
||
Total liabilities and stockholders’ equity
|
$
|
8,604,530
|
|
|
$
|
8,609,936
|
|
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
|
|||||||||||||||
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Interest income:
|
|
|
|
|
|
|
|
||||||||
Interest and fees on loans
|
$
|
62,062
|
|
|
$
|
61,007
|
|
|
$
|
181,835
|
|
|
$
|
170,290
|
|
Interest and dividends on investment securities:
|
|
|
|
|
|
|
|
||||||||
Taxable
|
7,410
|
|
|
7,259
|
|
|
23,381
|
|
|
22,208
|
|
||||
Exempt from federal taxes
|
962
|
|
|
1,085
|
|
|
3,061
|
|
|
3,265
|
|
||||
Interest on deposits in banks
|
342
|
|
|
374
|
|
|
1,002
|
|
|
830
|
|
||||
Interest on federal funds sold
|
4
|
|
|
3
|
|
|
11
|
|
|
7
|
|
||||
Total interest income
|
70,780
|
|
|
69,728
|
|
|
209,290
|
|
|
196,600
|
|
||||
Interest expense:
|
|
|
|
|
|
|
|
||||||||
Interest on deposits
|
3,241
|
|
|
3,487
|
|
|
9,789
|
|
|
10,238
|
|
||||
Interest on securities sold under repurchase agreements
|
55
|
|
|
52
|
|
|
162
|
|
|
181
|
|
||||
Interest on other borrowed funds
|
—
|
|
|
27
|
|
|
—
|
|
|
27
|
|
||||
Interest on long-term debt
|
544
|
|
|
482
|
|
|
1,596
|
|
|
1,431
|
|
||||
Interest on subordinated debentures held by subsidiary trusts
|
610
|
|
|
598
|
|
|
1,800
|
|
|
1,778
|
|
||||
Total interest expense
|
4,450
|
|
|
4,646
|
|
|
13,347
|
|
|
13,655
|
|
||||
Net interest income
|
66,330
|
|
|
65,082
|
|
|
195,943
|
|
|
182,945
|
|
||||
Provision for loan losses
|
1,098
|
|
|
261
|
|
|
3,533
|
|
|
(6,740
|
)
|
||||
Net interest income after provision for loan losses
|
65,232
|
|
|
64,821
|
|
|
192,410
|
|
|
189,685
|
|
||||
Non-interest income:
|
|
|
|
|
|
|
|
||||||||
Other service charges, commissions and fees
|
11,095
|
|
|
10,458
|
|
|
32,135
|
|
|
29,313
|
|
||||
Income from the origination and sale of loans
|
7,983
|
|
|
7,346
|
|
|
22,691
|
|
|
18,386
|
|
||||
Wealth management revenues
|
5,233
|
|
|
5,157
|
|
|
15,067
|
|
|
14,221
|
|
||||
Service charges on deposit accounts
|
4,379
|
|
|
4,331
|
|
|
12,376
|
|
|
12,135
|
|
||||
Investment securities gains (losses), net
|
23
|
|
|
(8
|
)
|
|
75
|
|
|
80
|
|
||||
Other income
|
1,769
|
|
|
2,079
|
|
|
7,690
|
|
|
5,905
|
|
||||
Total non-interest income
|
30,482
|
|
|
29,363
|
|
|
90,034
|
|
|
80,040
|
|
||||
Non-interest expense:
|
|
|
|
|
|
|
|
||||||||
Salaries and wages
|
25,460
|
|
|
25,914
|
|
|
76,902
|
|
|
72,796
|
|
||||
Employee benefits
|
7,312
|
|
|
7,841
|
|
|
23,162
|
|
|
23,318
|
|
||||
Occupancy, net
|
4,413
|
|
|
4,534
|
|
|
13,434
|
|
|
13,026
|
|
||||
Furniture and equipment
|
3,849
|
|
|
3,338
|
|
|
11,345
|
|
|
9,696
|
|
||||
Outsourced technology services
|
2,520
|
|
|
2,346
|
|
|
7,576
|
|
|
6,955
|
|
||||
OREO expense, net of income
|
(720
|
)
|
|
(58
|
)
|
|
(1,604
|
)
|
|
(211
|
)
|
||||
Professional fees
|
1,916
|
|
|
1,233
|
|
|
4,731
|
|
|
3,881
|
|
||||
FDIC insurance premiums
|
1,190
|
|
|
1,172
|
|
|
3,636
|
|
|
3,381
|
|
||||
Mortgage servicing rights amortization
|
617
|
|
|
591
|
|
|
1,863
|
|
|
1,774
|
|
||||
Mortgage servicing rights impairment recovery
|
(76
|
)
|
|
(61
|
)
|
|
(147
|
)
|
|
(117
|
)
|
||||
Core deposit intangibles amortization
|
842
|
|
|
688
|
|
|
2,551
|
|
|
1,396
|
|
||||
Other expenses
|
12,613
|
|
|
12,368
|
|
|
37,994
|
|
|
33,672
|
|
||||
Loss contingency expenses
|
5,000
|
|
|
4,000
|
|
|
5,000
|
|
|
4,000
|
|
||||
Acquisition expenses
|
566
|
|
|
1,052
|
|
|
629
|
|
|
1,649
|
|
||||
Total non-interest expense
|
65,502
|
|
|
64,958
|
|
|
187,072
|
|
|
175,216
|
|
||||
Income before income tax expense
|
30,212
|
|
|
29,226
|
|
|
95,372
|
|
|
94,509
|
|
||||
Income tax expense
|
10,050
|
|
|
10,071
|
|
|
32,008
|
|
|
32,884
|
|
||||
Net income
|
$
|
20,162
|
|
|
$
|
19,155
|
|
|
$
|
63,364
|
|
|
$
|
61,625
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
|
$
|
0.45
|
|
|
$
|
0.43
|
|
|
$
|
1.40
|
|
|
$
|
1.39
|
|
Diluted earnings per common share
|
$
|
0.44
|
|
|
$
|
0.42
|
|
|
$
|
1.39
|
|
|
$
|
1.37
|
|
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
|
|||||||||||||
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||
|
2015
|
2014
|
|
2015
|
2014
|
||||||||
Net income
|
$
|
20,162
|
|
$
|
19,155
|
|
|
$
|
63,364
|
|
$
|
61,625
|
|
Other comprehensive income, before tax:
|
|
|
|
|
|
||||||||
Investment securities available-for sale:
|
|
|
|
|
|
||||||||
Change in net unrealized gains (losses) during period
|
10,855
|
|
(3,773
|
)
|
|
12,264
|
|
12,942
|
|
||||
Reclassification adjustment for net (gains) losses included in income
|
(23
|
)
|
8
|
|
|
(75
|
)
|
(80
|
)
|
||||
Change in unamortized loss on available-for-sale securities transferred into held-to-maturity
|
448
|
|
451
|
|
|
1,353
|
|
902
|
|
||||
Unrealized loss on derivatives
|
(436
|
)
|
—
|
|
|
(436
|
)
|
—
|
|
||||
Defined benefit post-retirement benefits plans:
|
|
|
|
|
|
||||||||
Change in net actuarial loss
|
15
|
|
33
|
|
|
43
|
|
103
|
|
||||
Other comprehensive income (loss), before tax
|
10,859
|
|
(3,281
|
)
|
|
13,149
|
|
13,867
|
|
||||
Deferred tax benefit (expense) related to other comprehensive income
|
(4,273
|
)
|
1,291
|
|
|
(5,174
|
)
|
(5,456
|
)
|
||||
Other comprehensive income (loss), net of tax
|
6,586
|
|
(1,990
|
)
|
|
7,975
|
|
8,411
|
|
||||
Comprehensive income, net of tax
|
$
|
26,748
|
|
$
|
17,165
|
|
|
$
|
71,339
|
|
$
|
70,036
|
|
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands, except share and per share data)
(Unaudited)
|
|||||||||||||||
|
Common
stock
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Total
stockholders’
equity
|
||||||||
Balance at December 31, 2014
|
$
|
323,596
|
|
|
$
|
587,862
|
|
|
$
|
(2,534
|
)
|
|
$
|
908,924
|
|
Net income
|
—
|
|
|
63,364
|
|
|
—
|
|
|
63,364
|
|
||||
Other comprehensive income, net of tax expense
|
—
|
|
|
—
|
|
|
7,975
|
|
|
7,975
|
|
||||
Common stock transactions:
|
|
|
|
|
|
|
|
||||||||
789,743 common shares purchased and retired
|
(20,548
|
)
|
|
—
|
|
|
—
|
|
|
(20,548
|
)
|
||||
21,414 common shares issued
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
169,577 non-vested common shares issued
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
3,484 non-vested common shares forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
158,828 stock options exercised, net of 58,996 shares tendered in payment of option price and income tax withholding amounts
|
1,909
|
|
|
—
|
|
|
—
|
|
|
1,909
|
|
||||
Tax benefit of stock-based compensation
|
979
|
|
|
—
|
|
|
—
|
|
|
979
|
|
||||
Stock-based compensation expense
|
3,231
|
|
|
—
|
|
|
—
|
|
|
3,231
|
|
||||
Common cash dividend declared ($0.60 per share)
|
—
|
|
|
(27,259
|
)
|
|
—
|
|
|
(27,259
|
)
|
||||
Balance at September 30, 2015
|
$
|
309,167
|
|
|
$
|
623,967
|
|
|
$
|
5,441
|
|
|
$
|
938,575
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2013
|
$
|
285,535
|
|
|
$
|
532,087
|
|
|
$
|
(16,041
|
)
|
|
$
|
801,581
|
|
Net income
|
—
|
|
|
61,625
|
|
|
—
|
|
|
61,625
|
|
||||
Other comprehensive income, net of tax expense
|
—
|
|
|
—
|
|
|
8,411
|
|
|
8,411
|
|
||||
Common stock transactions:
|
|
|
|
|
|
|
|
||||||||
387,967 common shares purchased and retired
|
(9,736
|
)
|
|
—
|
|
|
—
|
|
|
(9,736
|
)
|
||||
1,402,811 common shares issued
|
35,972
|
|
|
—
|
|
|
—
|
|
|
35,972
|
|
||||
147,876 non-vested common shares issued
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
17,741 non-vested common shares forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
372,880 stock options exercised, net of 166,780 shares tendered in payment of option price and income tax withholding amounts
|
4,914
|
|
|
—
|
|
|
—
|
|
|
4,914
|
|
||||
Tax benefit of stock-based compensation
|
1,541
|
|
|
—
|
|
|
—
|
|
|
1,541
|
|
||||
Stock-based compensation expense
|
2,906
|
|
|
—
|
|
|
—
|
|
|
2,906
|
|
||||
Common cash dividend declared ($0.48 per share)
|
—
|
|
|
(21,350
|
)
|
|
—
|
|
|
(21,350
|
)
|
||||
Balance at September 30, 2014
|
$
|
321,132
|
|
|
$
|
572,362
|
|
|
$
|
(7,630
|
)
|
|
$
|
885,864
|
|
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|||||||
|
Nine Months Ended September 30,
|
||||||
|
2015
|
|
2014
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
63,364
|
|
|
$
|
61,625
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Provision for loan losses
|
3,533
|
|
|
(6,740
|
)
|
||
Net gain on disposal of premises and equipment
|
(822
|
)
|
|
(68
|
)
|
||
Depreciation and amortization
|
13,702
|
|
|
12,168
|
|
||
Net premium amortization on investment securities
|
11,527
|
|
|
10,784
|
|
||
Net gain on investment securities transactions
|
(75
|
)
|
|
(80
|
)
|
||
Net gain on sale of mortgage loans held for sale
|
(16,397
|
)
|
|
(12,947
|
)
|
||
Net gain on sale of OREO
|
(2,862
|
)
|
|
(551
|
)
|
||
Write-downs of OREO and other assets pending disposal
|
985
|
|
|
87
|
|
||
Net reversal of impairment of mortgage servicing rights
|
(147
|
)
|
|
(117
|
)
|
||
Deferred income tax expense
|
12,975
|
|
|
8,537
|
|
||
Net increase in cash surrender value of company-owned life insurance
|
(9,669
|
)
|
|
(2,540
|
)
|
||
Stock-based compensation expense
|
3,231
|
|
|
2,906
|
|
||
Tax benefits from stock-based compensation expense
|
979
|
|
|
1,541
|
|
||
Excess tax benefits from stock-based compensation expense
|
(884
|
)
|
|
(1,503
|
)
|
||
Originations of mortgage loans held for sale
|
(856,384
|
)
|
|
(682,011
|
)
|
||
Proceeds from sales of mortgage loans held for sale
|
865,833
|
|
|
676,061
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Increase in interest receivable
|
(3,962
|
)
|
|
(2,749
|
)
|
||
Increase in other assets
|
(4,766
|
)
|
|
(1,585
|
)
|
||
Increase (decrease) in accrued interest payable
|
(639
|
)
|
|
22
|
|
||
Increase (decrease) in accounts payable and accrued expenses
|
(17,583
|
)
|
|
1,321
|
|
||
Net cash provided by operating activities
|
61,939
|
|
|
64,161
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of investment securities:
|
|
|
|
||||
Held-to-maturity
|
(28,745
|
)
|
|
(10,431
|
)
|
||
Available-for-sale
|
(253,049
|
)
|
|
(322,838
|
)
|
||
Proceeds from maturities, pay-downs and sales of investment securities:
|
|
|
|
||||
Held-to-maturity
|
80,759
|
|
|
29,432
|
|
||
Available-for-sale
|
450,462
|
|
|
398,383
|
|
||
Purchases of company-owned life insurance
|
(22,500
|
)
|
|
(15,000
|
)
|
||
Proceeds from sales of mortgage servicing rights
|
—
|
|
|
266
|
|
||
Extensions of credit to customers, net of repayments
|
(251,450
|
)
|
|
(148,854
|
)
|
||
Recoveries of loans charged-off
|
4,439
|
|
|
7,323
|
|
||
Proceeds from sales of OREO
|
13,586
|
|
|
5,877
|
|
||
Acquisition of bank and bank holding company, net of cash and cash equivalents received
|
(1,636
|
)
|
|
35,556
|
|
||
Capital expenditures, net of sales
|
(2,236
|
)
|
|
(6,599
|
)
|
||
Net cash used in investing activities
|
$
|
(10,370
|
)
|
|
$
|
(26,885
|
)
|
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(In thousands)
(Unaudited)
|
|||||||
|
Nine Months Ended September 30,
|
||||||
|
2015
|
|
2014
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Net increase (decrease) in deposits
|
$
|
(33,983
|
)
|
|
$
|
310,370
|
|
Net decrease in securities sold under repurchase agreements
|
(66,717
|
)
|
|
(25,880
|
)
|
||
Net increase (decrease) in other borrowed funds
|
1
|
|
|
(11,926
|
)
|
||
Repayments of long-term debt
|
(1,297
|
)
|
|
(35
|
)
|
||
Advances on long-term debt
|
5,066
|
|
|
—
|
|
||
Proceeds from issuance of common stock
|
1,909
|
|
|
4,914
|
|
||
Excess tax benefits from stock-based compensation expense
|
884
|
|
|
1,503
|
|
||
Purchase and retirement of common stock
|
(20,548
|
)
|
|
(9,736
|
)
|
||
Dividends paid to common stockholders
|
(27,259
|
)
|
|
(21,350
|
)
|
||
Net cash provided by (used in) financing activities
|
(141,944
|
)
|
|
247,860
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(90,375
|
)
|
|
285,136
|
|
||
Cash and cash equivalents at beginning of period
|
798,670
|
|
|
534,827
|
|
||
Cash and cash equivalents at end of period
|
$
|
708,295
|
|
|
$
|
819,963
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid during the period for income taxes
|
$
|
27,335
|
|
|
$
|
21,100
|
|
Cash paid during the period for interest expense
|
13,853
|
|
|
13,049
|
|
(1)
|
Basis of Presentation
|
(2)
|
Acquisitions
|
|
As Recorded
|
Fair Value
|
|
As Recorded
|
||||||
As of July 24, 2015
|
by Absarokee
|
Adjustments
|
|
by the Company
|
||||||
|
|
|
|
|
||||||
Assets acquired:
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
5,598
|
|
$
|
—
|
|
|
$
|
5,598
|
|
Investment securities
|
27,574
|
|
—
|
|
|
27,574
|
|
|||
Loans
|
37,520
|
|
(876
|
)
|
(1)
|
36,644
|
|
|||
Allowance for loan losses
|
(899
|
)
|
899
|
|
(2)
|
—
|
|
|||
Premises and equipment
|
2,851
|
|
277
|
|
(3)
|
3,128
|
|
|||
Core deposit intangible assets
|
—
|
|
695
|
|
(4)
|
695
|
|
|||
Other assets
|
816
|
|
82
|
|
(5)
|
898
|
|
|||
Total assets acquired
|
73,460
|
|
1,077
|
|
|
74,537
|
|
|||
Liabilities assumed:
|
|
|
|
|
||||||
Deposits
|
63,565
|
|
—
|
|
|
63,565
|
|
|||
Repurchase agreements
|
2,000
|
|
—
|
|
|
2,000
|
|
|||
Long term debt
|
1,222
|
|
31
|
|
(6)
|
1,253
|
|
|||
Other liabilities
|
79
|
|
440
|
|
(7)
|
519
|
|
|||
Total liabilities assumed
|
66,866
|
|
471
|
|
|
67,337
|
|
|||
Net assets acquired
|
$
|
6,594
|
|
$
|
606
|
|
|
7,200
|
|
|
Cash consideration paid
|
|
|
|
7,234
|
|
|||||
Goodwill
|
|
|
|
$
|
34
|
|
||||
|
|
|
|
|
Explanation of fair value adjustments:
|
|
(1)
|
Write down of the book value of loans to their estimated fair values. The fair value of loans was estimated using cash flow projections based on the remaining maturity and repricing terms, adjusted for estimated future credit losses and prepayments and discounted to present value using a risk-adjusted market rate for similar loans.
|
(2)
|
Adjustment to remove the Absarokee allowance for loan losses at acquisition date as the credit risk is accounted for in the fair value adjustment for loans receivable described in (1) above.
|
(3)
|
Write up of the book value of premises and equipment to their estimated fair values based upon fair value estimates developed internally based upon comparable in-market transactions.
|
(4)
|
Adjustment represents the value of the core deposit base assumed in the acquisition based upon an internal valuation based on analysis of recent acquisitions.
|
(5)
|
Adjustment consists of a reduction in the value of accrued interest receivable, the write-off of pre-existing goodwill and recording the value of mortgage servicing assets acquired.
|
(6)
|
Adjustment represents increase in the book value of a Federal Home Loan Bank borrowing to its estimated fair market value based upon interest interest rates of similar advances with similar characteristics on the date of acquisition.
|
(7)
|
Adjustment represents the net deferred tax liability resulting from fair value adjustments related to acquired assets, assumed liabilities, core deposit intangible assets and other purchase accounting adjustments.
|
(3)
|
Investment Securities
|
September 30, 2015
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated
Fair
Value
|
||||||||
Available-for-Sale:
|
|
|
|
|
||||||||
U.S. Treasury notes
|
$
|
3,913
|
|
$
|
28
|
|
$
|
—
|
|
$
|
3,941
|
|
Obligations of U.S. government agencies
|
604,198
|
|
2,196
|
|
(350
|
)
|
606,044
|
|
||||
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations
|
917,025
|
|
15,314
|
|
(1,284
|
)
|
931,055
|
|
||||
Private mortgage-backed securities
|
257
|
|
3
|
|
(2
|
)
|
258
|
|
||||
Other investments
|
3,795
|
|
—
|
|
—
|
|
3,795
|
|
||||
Total
|
$
|
1,529,188
|
|
$
|
17,541
|
|
$
|
(1,636
|
)
|
$
|
1,545,093
|
|
September 30, 2015
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated
Fair
Value
|
||||||||
Held-to-Maturity:
|
|
|
|
|
||||||||
State, county and municipal securities
|
$
|
176,569
|
|
$
|
5,471
|
|
$
|
(200
|
)
|
$
|
181,840
|
|
Corporate securities
|
50,178
|
|
186
|
|
(49
|
)
|
50,315
|
|
||||
U.S agency residential mortgage-backed securities &
collateralized mortgage obligations
|
295,418
|
|
10,346
|
|
(3,665
|
)
|
302,099
|
|
||||
Other investments
|
378
|
|
1
|
|
—
|
|
379
|
|
||||
Total
|
$
|
522,543
|
|
$
|
16,004
|
|
$
|
(3,914
|
)
|
$
|
534,633
|
|
December 31, 2014
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated
Fair
Value
|
||||||||
Available-for-Sale:
|
|
|
|
|
||||||||
Obligations of U.S. government agencies
|
$
|
725,408
|
|
$
|
895
|
|
$
|
(5,370
|
)
|
$
|
720,933
|
|
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations
|
982,764
|
|
11,526
|
|
(3,624
|
)
|
990,666
|
|
||||
Private mortgage-backed securities
|
322
|
|
5
|
|
(2
|
)
|
325
|
|
||||
Total
|
$
|
1,708,494
|
|
$
|
12,426
|
|
$
|
(8,996
|
)
|
$
|
1,711,924
|
|
December 31, 2014
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated
Fair
Value
|
||||||||
Held-to-Maturity:
|
|
|
|
|
||||||||
State, county and municipal securities
|
$
|
188,941
|
|
$
|
5,949
|
|
$
|
(386
|
)
|
$
|
194,504
|
|
Corporate securities
|
32,565
|
|
54
|
|
(75
|
)
|
32,544
|
|
||||
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations
|
353,176
|
|
5,563
|
|
(1,758
|
)
|
356,981
|
|
||||
Other Investments
|
504
|
|
—
|
|
—
|
|
504
|
|
||||
Total
|
$
|
575,186
|
|
$
|
11,566
|
|
$
|
(2,219
|
)
|
$
|
584,533
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Gross realized gains
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
75
|
|
|
$
|
243
|
|
Gross realized losses
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(163
|
)
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
|||||||||||||||
September 30, 2015
|
Fair
Value
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
Gross
Unrealized
Losses
|
||||||||||||
Available-for-Sale:
|
|
|
|
|
|
|
|
|
||||||||||||
Obligations of U.S. government agencies
|
$
|
106,516
|
|
$
|
(85
|
)
|
|
$
|
131,365
|
|
$
|
(265
|
)
|
|
$
|
237,881
|
|
$
|
(350
|
)
|
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations
|
25,664
|
|
(106
|
)
|
|
80,116
|
|
(1,178
|
)
|
|
105,780
|
|
(1,284
|
)
|
||||||
Private mortgage-backed securities
|
—
|
|
—
|
|
|
71
|
|
(2
|
)
|
|
71
|
|
(2
|
)
|
||||||
Total
|
$
|
132,180
|
|
$
|
(191
|
)
|
|
$
|
211,552
|
|
$
|
(1,445
|
)
|
|
$
|
343,732
|
|
$
|
(1,636
|
)
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
|||||||||||||||
September 30, 2015
|
Fair
Value
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
Gross
Unrealized
Losses
|
||||||||||||
Held-to-Maturity:
|
|
|
|
|
|
|
|
|
||||||||||||
State, county and municipal securities
|
$
|
6,398
|
|
$
|
(26
|
)
|
|
$
|
10,493
|
|
$
|
(174
|
)
|
|
$
|
16,891
|
|
$
|
(200
|
)
|
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations
|
14,834
|
|
(3,081
|
)
|
|
27,344
|
|
(584
|
)
|
|
42,178
|
|
(3,665
|
)
|
||||||
Corporate securities
|
15,042
|
|
(49
|
)
|
|
—
|
|
—
|
|
|
15,042
|
|
(49
|
)
|
||||||
Total
|
$
|
36,274
|
|
$
|
(3,156
|
)
|
|
$
|
37,837
|
|
$
|
(758
|
)
|
|
$
|
74,111
|
|
$
|
(3,914
|
)
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
|||||||||||||||
December 31, 2014
|
Fair
Value
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
Gross
Unrealized
Losses
|
||||||||||||
Available-for-Sale:
|
|
|
|
|
|
|
|
|
||||||||||||
Obligations of U.S. government agencies
|
$
|
135,888
|
|
$
|
(702
|
)
|
|
$
|
309,283
|
|
$
|
(4,668
|
)
|
|
$
|
445,171
|
|
$
|
(5,370
|
)
|
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations
|
219,214
|
|
(887
|
)
|
|
151,380
|
|
(2,737
|
)
|
|
370,594
|
|
(3,624
|
)
|
||||||
Private mortgage-backed securities
|
—
|
|
—
|
|
|
90
|
|
(2
|
)
|
|
90
|
|
(2
|
)
|
||||||
Total
|
$
|
355,102
|
|
$
|
(1,589
|
)
|
|
$
|
460,753
|
|
$
|
(7,407
|
)
|
|
$
|
815,855
|
|
$
|
(8,996
|
)
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
|||||||||||||||
December 31, 2014
|
Fair
Value
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
Gross
Unrealized
Losses
|
||||||||||||
Held-to-Maturity:
|
|
|
|
|
|
|
|
|
||||||||||||
State, county and municipal securities
|
$
|
7,979
|
|
$
|
(13
|
)
|
|
$
|
20,097
|
|
$
|
(373
|
)
|
|
$
|
28,076
|
|
$
|
(386
|
)
|
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations
|
61,201
|
|
(1,758
|
)
|
|
—
|
|
—
|
|
|
61,201
|
|
(1,758
|
)
|
||||||
Corporate securities
|
14,755
|
|
(75
|
)
|
|
—
|
|
—
|
|
|
14,755
|
|
(75
|
)
|
||||||
Total
|
$
|
83,935
|
|
$
|
(1,846
|
)
|
|
$
|
20,097
|
|
$
|
(373
|
)
|
|
$
|
104,032
|
|
$
|
(2,219
|
)
|
|
Available-for-Sale
|
|
Held-to-Maturity
|
||||||||||
September 30, 2015
|
Amortized
Cost
|
Estimated
Fair Value
|
|
Amortized
Cost
|
Estimated
Fair Value
|
||||||||
Within one year
|
$
|
344,473
|
|
$
|
348,859
|
|
|
$
|
92,096
|
|
$
|
94,244
|
|
After one year but within five years
|
1,119,450
|
|
1,130,128
|
|
|
266,554
|
|
271,638
|
|
||||
After five years but within ten years
|
56,054
|
|
56,755
|
|
|
120,530
|
|
123,839
|
|
||||
After ten years
|
9,211
|
|
9,351
|
|
|
43,363
|
|
44,912
|
|
||||
Total
|
$
|
1,529,188
|
|
$
|
1,545,093
|
|
|
$
|
522,543
|
|
$
|
534,633
|
|
(4)
|
Loans
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
Real estate loans:
|
|
|
|
||||
Commercial
|
$
|
1,750,797
|
|
|
$
|
1,639,422
|
|
Construction:
|
|
|
|
||||
Land acquisition & development
|
212,990
|
|
|
220,443
|
|
||
Residential
|
112,495
|
|
|
96,580
|
|
||
Commercial
|
93,775
|
|
|
101,246
|
|
||
Total construction loans
|
419,260
|
|
|
418,269
|
|
||
Residential
|
1,020,445
|
|
|
999,903
|
|
||
Agricultural
|
163,116
|
|
|
167,659
|
|
||
Total real estate loans
|
3,353,618
|
|
|
3,225,253
|
|
||
Consumer:
|
|
|
|
||||
Indirect consumer
|
616,142
|
|
|
552,863
|
|
||
Other consumer
|
150,170
|
|
|
144,141
|
|
||
Credit card
|
65,649
|
|
|
65,467
|
|
||
Total consumer loans
|
831,961
|
|
|
762,471
|
|
||
Commercial
|
778,648
|
|
|
740,073
|
|
||
Agricultural
|
154,855
|
|
|
124,859
|
|
||
Other, including overdrafts
|
1,712
|
|
|
3,959
|
|
||
Loans held for investment
|
5,120,794
|
|
|
4,856,615
|
|
||
Mortgage loans held for sale
|
55,686
|
|
|
40,828
|
|
||
Total loans
|
$
|
5,176,480
|
|
|
$
|
4,897,443
|
|
As of September 30,
|
2015
|
|
2014
|
||||
|
|
|
|
||||
Outstanding balance
|
$
|
35,265
|
|
|
$
|
42,627
|
|
|
|
|
|
||||
Carrying value
|
|
|
|
||||
Loans on accrual status
|
22,867
|
|
|
32,350
|
|
||
Loans on non-accrual status
|
—
|
|
|
—
|
|
||
Total carrying value
|
$
|
22,867
|
|
|
$
|
32,350
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||
|
2015
|
2014
|
|
2015
|
2014
|
||||||||
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
7,482
|
|
$
|
—
|
|
|
$
|
5,781
|
|
$
|
—
|
|
Additions
|
624
|
|
5,233
|
|
|
1,073
|
|
5,233
|
|
||||
Accretion income
|
(845
|
)
|
(289
|
)
|
|
(2,200
|
)
|
(289
|
)
|
||||
Reductions due to exit events
|
(143
|
)
|
(16
|
)
|
|
(539
|
)
|
(16
|
)
|
||||
Reclassifications from nonaccretable differences
|
347
|
|
—
|
|
|
3,350
|
|
—
|
|
||||
Ending balance
|
$
|
7,465
|
|
$
|
4,928
|
|
|
$
|
7,465
|
|
$
|
4,928
|
|
|
|
|
|
Total Loans
|
|
|
|
||||||||||||||
|
30 - 59
|
60 - 89
|
> 90
|
30 or More
|
|
|
|
||||||||||||||
|
Days
|
Days
|
Days
|
Days
|
Current
|
Non-accrual
|
Total
|
||||||||||||||
As of September 30, 2015
|
Past Due
|
Past Due
|
Past Due
|
Past Due
|
Loans
|
Loans
|
Loans
|
||||||||||||||
Real estate
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
$
|
5,968
|
|
$
|
664
|
|
$
|
398
|
|
$
|
7,030
|
|
$
|
1,720,928
|
|
$
|
22,839
|
|
$
|
1,750,797
|
|
Construction:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Land acquisition & development
|
4,495
|
|
6,530
|
|
44
|
|
11,069
|
|
192,819
|
|
9,102
|
|
212,990
|
|
|||||||
Residential
|
1,011
|
|
134
|
|
—
|
|
1,145
|
|
111,021
|
|
329
|
|
112,495
|
|
|||||||
Commercial
|
—
|
|
—
|
|
—
|
|
—
|
|
92,792
|
|
983
|
|
93,775
|
|
|||||||
Total construction loans
|
5,506
|
|
6,664
|
|
44
|
|
12,214
|
|
396,632
|
|
10,414
|
|
419,260
|
|
|||||||
Residential
|
5,639
|
|
2,355
|
|
761
|
|
8,755
|
|
1,009,119
|
|
2,571
|
|
1,020,445
|
|
|||||||
Agricultural
|
881
|
|
—
|
|
—
|
|
881
|
|
155,443
|
|
6,792
|
|
163,116
|
|
|||||||
Total real estate loans
|
17,994
|
|
9,683
|
|
1,203
|
|
28,880
|
|
3,282,122
|
|
42,616
|
|
3,353,618
|
|
|||||||
Consumer:
|
|
|
|
|
|
|
|
|
|||||||||||||
Indirect consumer
|
3,991
|
|
683
|
|
91
|
|
4,765
|
|
610,641
|
|
736
|
|
616,142
|
|
|||||||
Other consumer
|
1,012
|
|
264
|
|
25
|
|
1,301
|
|
148,119
|
|
750
|
|
150,170
|
|
|||||||
Credit card
|
402
|
|
325
|
|
518
|
|
1,245
|
|
64,391
|
|
13
|
|
65,649
|
|
|||||||
Total consumer loans
|
5,405
|
|
1,272
|
|
634
|
|
7,311
|
|
823,151
|
|
1,499
|
|
831,961
|
|
|||||||
Commercial
|
3,440
|
|
717
|
|
1,083
|
|
5,240
|
|
751,769
|
|
21,639
|
|
778,648
|
|
|||||||
Agricultural
|
281
|
|
—
|
|
126
|
|
407
|
|
153,843
|
|
605
|
|
154,855
|
|
|||||||
Other, including overdrafts
|
—
|
|
—
|
|
311
|
|
311
|
|
1,401
|
|
—
|
|
1,712
|
|
|||||||
Loans held for investment
|
27,120
|
|
11,672
|
|
3,357
|
|
42,149
|
|
5,012,286
|
|
66,359
|
|
5,120,794
|
|
|||||||
Mortgage loans originated for sale
|
—
|
|
—
|
|
—
|
|
—
|
|
55,686
|
|
—
|
|
55,686
|
|
|||||||
Total loans
|
$
|
27,120
|
|
$
|
11,672
|
|
$
|
3,357
|
|
$
|
42,149
|
|
$
|
5,067,972
|
|
$
|
66,359
|
|
$
|
5,176,480
|
|
|
|
|
|
Total Loans
|
|
|
|
||||||||||||||
|
30 - 59
|
60 - 89
|
> 90
|
30 or More
|
|
|
|
||||||||||||||
|
Days
|
Days
|
Days
|
Days
|
Current
|
Non-accrual
|
Total
|
||||||||||||||
As of December 31, 2014
|
Past Due
|
Past Due
|
Past Due
|
Past Due
|
Loans
|
Loans
|
Loans
|
||||||||||||||
Real estate
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
$
|
4,692
|
|
$
|
1,609
|
|
$
|
331
|
|
$
|
6,632
|
|
$
|
1,605,421
|
|
$
|
27,369
|
|
$
|
1,639,422
|
|
Construction:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Land acquisition & development
|
839
|
|
383
|
|
—
|
|
1,222
|
|
210,969
|
|
8,252
|
|
220,443
|
|
|||||||
Residential
|
—
|
|
475
|
|
—
|
|
475
|
|
95,833
|
|
272
|
|
96,580
|
|
|||||||
Commercial
|
100
|
|
—
|
|
—
|
|
100
|
|
98,582
|
|
2,564
|
|
101,246
|
|
|||||||
Total construction loans
|
939
|
|
858
|
|
—
|
|
1,797
|
|
405,384
|
|
11,088
|
|
418,269
|
|
|||||||
Residential
|
6,969
|
|
645
|
|
1,762
|
|
9,376
|
|
987,735
|
|
2,792
|
|
999,903
|
|
|||||||
Agricultural
|
1,624
|
|
236
|
|
—
|
|
1,860
|
|
158,957
|
|
6,842
|
|
167,659
|
|
|||||||
Total real estate loans
|
14,224
|
|
3,348
|
|
2,093
|
|
19,665
|
|
3,157,497
|
|
48,091
|
|
3,225,253
|
|
|||||||
Consumer:
|
|
|
|
|
|
|
|
|
|||||||||||||
Indirect consumer
|
3,235
|
|
482
|
|
6
|
|
3,723
|
|
548,757
|
|
383
|
|
552,863
|
|
|||||||
Other consumer
|
988
|
|
140
|
|
32
|
|
1,160
|
|
142,432
|
|
549
|
|
144,141
|
|
|||||||
Credit card
|
369
|
|
284
|
|
315
|
|
968
|
|
64,484
|
|
15
|
|
65,467
|
|
|||||||
Total consumer loans
|
4,592
|
|
906
|
|
353
|
|
5,851
|
|
755,673
|
|
947
|
|
762,471
|
|
|||||||
Commercial
|
3,659
|
|
994
|
|
147
|
|
4,800
|
|
722,575
|
|
12,698
|
|
740,073
|
|
|||||||
Agricultural
|
1,125
|
|
—
|
|
—
|
|
1,125
|
|
123,288
|
|
446
|
|
124,859
|
|
|||||||
Other, including overdrafts
|
—
|
|
—
|
|
—
|
|
—
|
|
3,959
|
|
—
|
|
3,959
|
|
|||||||
Loans held for investment
|
23,600
|
|
5,248
|
|
2,593
|
|
31,441
|
|
4,762,992
|
|
62,182
|
|
4,856,615
|
|
|||||||
Mortgage loans originated for sale
|
—
|
|
—
|
|
—
|
|
—
|
|
40,828
|
|
—
|
|
40,828
|
|
|||||||
Total loans
|
$
|
23,600
|
|
$
|
5,248
|
|
$
|
2,593
|
|
$
|
31,441
|
|
$
|
4,803,820
|
|
$
|
62,182
|
|
$
|
4,897,443
|
|
As of September 30, 2015
|
Unpaid
Total
Principal
Balance
|
Recorded
Investment
With No
Allowance
|
Recorded
Investment
With
Allowance
|
Total
Recorded
Investment
|
Related
Allowance
|
||||||||||
Real estate:
|
|
|
|
|
|
||||||||||
Commercial
|
$
|
55,910
|
|
$
|
26,265
|
|
$
|
17,131
|
|
$
|
43,396
|
|
$
|
1,451
|
|
Construction:
|
|
|
|
|
|
||||||||||
Land acquisition & development
|
19,349
|
|
9,509
|
|
1,212
|
|
10,721
|
|
254
|
|
|||||
Residential
|
1,037
|
|
329
|
|
—
|
|
329
|
|
—
|
|
|||||
Commercial
|
1,290
|
|
369
|
|
740
|
|
1,109
|
|
740
|
|
|||||
Total construction loans
|
21,676
|
|
10,207
|
|
1,952
|
|
12,159
|
|
994
|
|
|||||
Residential
|
3,664
|
|
2,186
|
|
645
|
|
2,831
|
|
148
|
|
|||||
Agricultural
|
9,043
|
|
6,407
|
|
2,191
|
|
8,598
|
|
708
|
|
|||||
Total real estate loans
|
90,293
|
|
45,065
|
|
21,919
|
|
66,984
|
|
3,301
|
|
|||||
Commercial
|
28,653
|
|
10,315
|
|
13,461
|
|
23,776
|
|
5,154
|
|
|||||
Agricultural
|
2,043
|
|
367
|
|
1,106
|
|
1,473
|
|
462
|
|
|||||
Total
|
$
|
120,989
|
|
$
|
55,747
|
|
$
|
36,486
|
|
$
|
92,233
|
|
$
|
8,917
|
|
As of December 31, 2014
|
Unpaid
Total
Principal
Balance
|
Recorded
Investment
With No
Allowance
|
Recorded
Investment
With
Allowance
|
Total
Recorded
Investment
|
Related
Allowance
|
||||||||||
Real estate:
|
|
|
|
|
|
||||||||||
Commercial
|
$
|
41,603
|
|
$
|
28,143
|
|
$
|
11,246
|
|
$
|
39,389
|
|
$
|
1,608
|
|
Construction:
|
|
|
|
|
|
||||||||||
Land acquisition & development
|
12,511
|
|
7,262
|
|
1,615
|
|
8,877
|
|
574
|
|
|||||
Residential
|
459
|
|
272
|
|
—
|
|
272
|
|
—
|
|
|||||
Commercial
|
2,729
|
|
253
|
|
2,442
|
|
2,695
|
|
904
|
|
|||||
Total construction loans
|
15,699
|
|
7,787
|
|
4,057
|
|
11,844
|
|
1,478
|
|
|||||
Residential
|
2,959
|
|
2,452
|
|
341
|
|
2,793
|
|
143
|
|
|||||
Agricultural
|
8,844
|
|
6,444
|
|
2,305
|
|
8,749
|
|
732
|
|
|||||
Total real estate loans
|
69,105
|
|
44,826
|
|
17,949
|
|
62,775
|
|
3,961
|
|
|||||
Commercial
|
16,904
|
|
11,882
|
|
2,644
|
|
14,526
|
|
1,190
|
|
|||||
Agricultural
|
1,231
|
|
342
|
|
837
|
|
1,179
|
|
641
|
|
|||||
Total
|
$
|
87,240
|
|
$
|
57,050
|
|
$
|
21,430
|
|
$
|
78,480
|
|
$
|
5,792
|
|
|
Three Months Ended September 30,
|
||||||||||||||
|
2015
|
|
2014
|
||||||||||||
|
Average Recorded Investment
|
|
Income Recognized
|
|
Average Recorded Investment
|
|
Income Recognized
|
||||||||
|
|
|
|||||||||||||
|
|
|
|||||||||||||
Real estate:
|
|
|
|
|
|
|
|
||||||||
Commercial
|
$
|
36,075
|
|
|
$
|
226
|
|
|
$
|
53,492
|
|
|
$
|
211
|
|
Construction:
|
|
|
|
|
|
|
|
||||||||
Land acquisition & development
|
9,325
|
|
|
29
|
|
|
11,611
|
|
|
11
|
|
||||
Residential
|
330
|
|
|
—
|
|
|
304
|
|
|
—
|
|
||||
Commercial
|
2,339
|
|
|
4
|
|
|
2,709
|
|
|
2
|
|
||||
Total construction loans
|
11,994
|
|
|
33
|
|
|
14,624
|
|
|
13
|
|
||||
Residential
|
2,607
|
|
|
4
|
|
|
4,773
|
|
|
1
|
|
||||
Agricultural
|
8,578
|
|
|
27
|
|
|
9,031
|
|
|
25
|
|
||||
Total real estate loans
|
59,254
|
|
|
290
|
|
|
81,920
|
|
|
250
|
|
||||
Commercial
|
22,483
|
|
|
2
|
|
|
14,252
|
|
|
14
|
|
||||
Agricultural
|
937
|
|
|
13
|
|
|
906
|
|
|
6
|
|
||||
Total
|
$
|
82,674
|
|
|
$
|
305
|
|
|
$
|
97,078
|
|
|
$
|
270
|
|
|
Nine Months Ended September 30,
|
||||||||||||||
|
2015
|
|
2014
|
||||||||||||
|
Average Recorded Investment
|
|
Income Recognized
|
|
Average Recorded Investment
|
|
Income Recognized
|
||||||||
|
|||||||||||||||
|
|||||||||||||||
Real estate:
|
|
|
|
|
|
|
|
||||||||
Commercial
|
$
|
38,639
|
|
|
$
|
587
|
|
|
$
|
57,743
|
|
|
$
|
668
|
|
Construction:
|
|
|
|
|
|
|
|
||||||||
Land acquisition & development
|
9,591
|
|
|
51
|
|
|
13,529
|
|
|
33
|
|
||||
Residential
|
300
|
|
|
—
|
|
|
799
|
|
|
—
|
|
||||
Commercial
|
1,902
|
|
|
6
|
|
|
1,520
|
|
|
6
|
|
||||
Total construction loans
|
11,793
|
|
|
57
|
|
|
15,848
|
|
|
39
|
|
||||
Residential
|
2,720
|
|
|
6
|
|
|
5,537
|
|
|
4
|
|
||||
Agricultural
|
8,661
|
|
|
62
|
|
|
10,223
|
|
|
54
|
|
||||
Total real estate loans
|
61,813
|
|
|
712
|
|
|
89,351
|
|
|
765
|
|
||||
Commercial
|
18,175
|
|
|
122
|
|
|
14,001
|
|
|
42
|
|
||||
Agricultural
|
848
|
|
|
26
|
|
|
707
|
|
|
18
|
|
||||
Total
|
$
|
80,836
|
|
|
$
|
860
|
|
|
$
|
104,059
|
|
|
$
|
825
|
|
|
Three Months Ended September 30, 2015
|
|
Nine Months Ended September 30, 2015
|
||||||||
|
Number of Notes
|
|
Balance
|
|
Number of Notes
|
|
Balance
|
||||
Commercial Real Estate
|
—
|
|
$
|
—
|
|
|
1
|
|
$
|
1,745
|
|
Commercial
|
3
|
|
264
|
|
|
3
|
|
264
|
|
||
Total
|
3
|
|
$
|
264
|
|
|
4
|
|
$
|
2,009
|
|
As of September 30, 2015
|
Other Assets
Especially
Mentioned
|
Substandard
|
Doubtful
|
Total
Criticized
Loans
|
||||||||
Real estate:
|
|
|
|
|
||||||||
Commercial
|
$
|
76,483
|
|
$
|
86,047
|
|
$
|
5,095
|
|
$
|
167,625
|
|
Construction:
|
|
|
|
|
||||||||
Land acquisition & development
|
14,928
|
|
16,137
|
|
630
|
|
31,695
|
|
||||
Residential
|
1,230
|
|
2,219
|
|
27
|
|
3,476
|
|
||||
Commercial
|
—
|
|
352
|
|
757
|
|
1,109
|
|
||||
Total construction loans
|
16,158
|
|
18,708
|
|
1,414
|
|
36,280
|
|
||||
Residential
|
6,016
|
|
12,117
|
|
645
|
|
18,778
|
|
||||
Agricultural
|
8,549
|
|
16,095
|
|
612
|
|
25,256
|
|
||||
Total real estate loans
|
107,206
|
|
132,967
|
|
7,766
|
|
247,939
|
|
||||
Consumer:
|
|
|
|
|
||||||||
Indirect consumer
|
774
|
|
1,180
|
|
164
|
|
2,118
|
|
||||
Other consumer
|
687
|
|
928
|
|
307
|
|
1,922
|
|
||||
Credit card
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Total consumer loans
|
1,461
|
|
2,108
|
|
471
|
|
4,040
|
|
||||
Commercial
|
43,384
|
|
21,213
|
|
15,638
|
|
80,235
|
|
||||
Agricultural
|
3,106
|
|
7,558
|
|
672
|
|
11,336
|
|
||||
Total
|
$
|
155,157
|
|
$
|
163,846
|
|
$
|
24,547
|
|
$
|
343,550
|
|
As of December 31, 2014
|
Other Assets
Especially
Mentioned
|
Substandard
|
Doubtful
|
Total
Criticized
Loans
|
||||||||
Real estate:
|
|
|
|
|
||||||||
Commercial
|
$
|
84,533
|
|
$
|
83,448
|
|
$
|
15,246
|
|
$
|
183,227
|
|
Construction:
|
|
|
|
|
||||||||
Land acquisition & development
|
11,826
|
|
15,016
|
|
2,507
|
|
29,349
|
|
||||
Residential
|
2,029
|
|
2,666
|
|
—
|
|
4,695
|
|
||||
Commercial
|
39
|
|
253
|
|
2,442
|
|
2,734
|
|
||||
Total construction loans
|
13,894
|
|
17,935
|
|
4,949
|
|
36,778
|
|
||||
Residential
|
10,473
|
|
10,848
|
|
1,121
|
|
22,442
|
|
||||
Agricultural
|
10,122
|
|
12,328
|
|
612
|
|
23,062
|
|
||||
Total real estate loans
|
119,022
|
|
124,559
|
|
21,928
|
|
265,509
|
|
||||
Consumer:
|
|
|
|
|
||||||||
Indirect consumer
|
916
|
|
1,590
|
|
121
|
|
2,627
|
|
||||
Other consumer
|
553
|
|
1,085
|
|
432
|
|
2,070
|
|
||||
Credit card
|
—
|
|
348
|
|
1,263
|
|
1,611
|
|
||||
Total consumer loans
|
1,469
|
|
3,023
|
|
1,816
|
|
6,308
|
|
||||
Commercial
|
25,766
|
|
32,433
|
|
10,273
|
|
68,472
|
|
||||
Agricultural
|
7,827
|
|
3,660
|
|
837
|
|
12,324
|
|
||||
Total
|
$
|
154,084
|
|
$
|
163,675
|
|
$
|
34,854
|
|
$
|
352,613
|
|
(5)
|
Allowance for Loan Losses
|
Three Months Ended September 30, 2015
|
Real Estate
|
Consumer
|
Commercial
|
Agriculture
|
Other
|
Total
|
||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
||||||||||||
Beginning balance
|
$
|
53,935
|
|
$
|
5,828
|
|
$
|
15,797
|
|
$
|
992
|
|
$
|
—
|
|
$
|
76,552
|
|
Provision charged to operating expense
|
(1,149
|
)
|
430
|
|
2,004
|
|
(187
|
)
|
—
|
|
1,098
|
|
||||||
Less loans charged-off
|
(2,219
|
)
|
(1,537
|
)
|
(791
|
)
|
—
|
|
—
|
|
(4,547
|
)
|
||||||
Add back recoveries of loans previously
charged-off
|
389
|
|
653
|
|
111
|
|
—
|
|
—
|
|
1,153
|
|
||||||
Ending balance
|
$
|
50,956
|
|
$
|
5,374
|
|
$
|
17,121
|
|
$
|
805
|
|
$
|
—
|
|
$
|
74,256
|
|
|
|
|
|
|
|
|
||||||||||||
Nine Months Ended September 30, 2015
|
Real Estate
|
Consumer
|
Commercial
|
Agriculture
|
Other
|
Total
|
||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
||||||||||||
Beginning balance
|
$
|
53,884
|
|
$
|
5,035
|
|
$
|
14,307
|
|
$
|
974
|
|
$
|
—
|
|
$
|
74,200
|
|
Provision charged to operating expense
|
(1,718
|
)
|
2,201
|
|
3,220
|
|
(170
|
)
|
—
|
|
3,533
|
|
||||||
Less loans charged-off
|
(3,014
|
)
|
(3,675
|
)
|
(1,227
|
)
|
—
|
|
—
|
|
(7,916
|
)
|
||||||
Add back recoveries of loans previously
charged-off
|
1,804
|
|
1,813
|
|
821
|
|
1
|
|
—
|
|
4,439
|
|
||||||
Ending balance
|
$
|
50,956
|
|
$
|
5,374
|
|
$
|
17,121
|
|
$
|
805
|
|
$
|
—
|
|
$
|
74,256
|
|
|
|
|
|
|
|
|
||||||||||||
As of September 30, 2015
|
Real Estate
|
Consumer
|
Commercial
|
Agriculture
|
Other
|
Total
|
||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
||||||||||||
Loans individually evaluated for impairment
|
$
|
3,301
|
|
$
|
—
|
|
$
|
5,154
|
|
$
|
462
|
|
$
|
—
|
|
$
|
8,917
|
|
Loans collectively evaluated for impairment
|
47,655
|
|
5,374
|
|
11,967
|
|
343
|
|
—
|
|
65,339
|
|
||||||
Allowance for loan losses
|
$
|
50,956
|
|
$
|
5,374
|
|
$
|
17,121
|
|
$
|
805
|
|
$
|
—
|
|
$
|
74,256
|
|
|
|
|
|
|
|
|
||||||||||||
Total loans:
|
|
|
|
|
|
|
||||||||||||
Individually evaluated for impairment
|
$
|
67,195
|
|
$
|
—
|
|
$
|
23,565
|
|
$
|
1,473
|
|
$
|
—
|
|
$
|
92,233
|
|
Collectively evaluated for impairment
|
3,342,109
|
|
831,961
|
|
755,083
|
|
153,382
|
|
1,712
|
|
5,084,247
|
|
||||||
Total loans
|
$
|
3,409,304
|
|
$
|
831,961
|
|
$
|
778,648
|
|
$
|
154,855
|
|
$
|
1,712
|
|
$
|
5,176,480
|
|
Three Months Ended September 30, 2014
|
Real Estate
|
Consumer
|
Commercial
|
Agriculture
|
Other
|
Total
|
||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
57,312
|
|
$
|
5,347
|
|
$
|
14,986
|
|
$
|
621
|
|
$
|
—
|
|
$
|
78,266
|
|
Provision charged to operating expense
|
(3,839
|
)
|
423
|
|
3,598
|
|
67
|
|
12
|
|
261
|
|
||||||
Less loans charged-off
|
(147
|
)
|
(1,437
|
)
|
(4,678
|
)
|
—
|
|
(12
|
)
|
(6,274
|
)
|
||||||
Add back recoveries of loans previously
charged-off
|
999
|
|
495
|
|
484
|
|
—
|
|
—
|
|
1,978
|
|
||||||
Ending balance
|
$
|
54,325
|
|
$
|
4,828
|
|
$
|
14,390
|
|
$
|
688
|
|
$
|
—
|
|
$
|
74,231
|
|
Nine Months Ended September 30, 2014
|
Real Estate
|
|
Consumer
|
|
Commercial
|
|
Agriculture
|
|
Other
|
|
Total
|
|
||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
63,923
|
|
$
|
6,193
|
|
$
|
14,747
|
|
$
|
476
|
|
$
|
—
|
|
$
|
85,339
|
|
Provision charged to operating expense
|
(9,225
|
)
|
191
|
|
2,032
|
|
250
|
|
12
|
|
(6,740
|
)
|
||||||
Less loans charged-off
|
(2,390
|
)
|
(3,217
|
)
|
(6,008
|
)
|
(64
|
)
|
(12
|
)
|
(11,691
|
)
|
||||||
Add back recoveries of loans previously
charged-off
|
2,017
|
|
1,661
|
|
3,619
|
|
26
|
|
—
|
|
7,323
|
|
||||||
Ending balance
|
$
|
54,325
|
|
$
|
4,828
|
|
$
|
14,390
|
|
$
|
688
|
|
$
|
—
|
|
$
|
74,231
|
|
|
|
|
|
|
|
|
||||||||||||
As of December 31, 2014
|
Real Estate
|
|
Consumer
|
|
Commercial
|
|
Agriculture
|
|
Other
|
|
Total
|
|
||||||
Allowance for loan losses:
|
|
|
|
|
|
|
||||||||||||
Loans individually evaluated for impairment
|
$
|
3,961
|
|
$
|
—
|
|
$
|
1,190
|
|
$
|
641
|
|
$
|
—
|
|
$
|
5,792
|
|
Loans collectively evaluated for impairment
|
49,923
|
|
5,035
|
|
13,117
|
|
333
|
|
—
|
|
68,408
|
|
||||||
Allowance for loan losses
|
$
|
53,884
|
|
$
|
5,035
|
|
$
|
14,307
|
|
$
|
974
|
|
$
|
—
|
|
$
|
74,200
|
|
|
|
|
|
|
|
|
||||||||||||
Total loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Individually evaluated for impairment
|
$
|
62,775
|
|
$
|
—
|
|
$
|
14,526
|
|
$
|
1,179
|
|
$
|
—
|
|
$
|
78,480
|
|
Collectively evaluated for impairment
|
3,203,306
|
|
762,471
|
|
725,547
|
|
123,680
|
|
3,959
|
|
4,818,963
|
|
||||||
Total loans
|
$
|
3,266,081
|
|
$
|
762,471
|
|
$
|
740,073
|
|
$
|
124,859
|
|
$
|
3,959
|
|
$
|
4,897,443
|
|
(6)
|
Other Real Estate Owned
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Beginning balance
|
$
|
11,773
|
|
|
$
|
16,425
|
|
|
$
|
13,554
|
|
|
$
|
15,504
|
|
OREO acquired through acquisition
|
—
|
|
|
3,608
|
|
|
—
|
|
|
3,608
|
|
||||
Additions
|
984
|
|
|
398
|
|
|
5,380
|
|
|
4,797
|
|
||||
Valuation adjustments
|
(73
|
)
|
|
(77
|
)
|
|
(179
|
)
|
|
(87
|
)
|
||||
Dispositions
|
(4,653
|
)
|
|
(1,858
|
)
|
|
(10,724
|
)
|
|
(5,326
|
)
|
||||
Ending balance
|
$
|
8,031
|
|
|
$
|
18,496
|
|
|
$
|
8,031
|
|
|
$
|
18,496
|
|
(7)
|
Derivatives and Hedging Activities
|
|
September 30, 2015
|
|
December 31, 2014
|
||||||||||
|
Notional Amount
|
Estimated
Fair Value
|
|
Notional Amount
|
Estimated
Fair Value
|
||||||||
Derivatives designated as hedges:
|
|
|
|
|
|
||||||||
Interest rate swap-liabilities
|
$
|
100,000
|
|
$
|
436
|
|
|
$
|
—
|
|
$
|
—
|
|
Non-hedging interest rate derivatives:
|
|
|
|
|
|
||||||||
Interest rate swap-assets
|
9,456
|
|
918
|
|
|
3,149
|
|
61
|
|
||||
Interest rate swap-liabilities
|
9,456
|
|
964
|
|
|
3,149
|
|
59
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||
|
September 30, 2015
|
September 30, 2014
|
|
September 30, 2015
|
September 30, 2014
|
||||||||
Derivatives designated as hedges:
|
|
|
|
|
|
||||||||
Amount of loss recognized in other comprehensive income (effective portion)
|
$
|
436
|
|
$
|
—
|
|
|
$
|
436
|
|
$
|
—
|
|
Non-hedging interest rate derivatives:
|
|
|
|
|
|
||||||||
Amount of loss recognized in other non-interest income
|
31
|
|
—
|
|
|
48
|
|
—
|
|
(8)
|
Long-Term Debt
|
(9)
|
Capital Stock
|
(10)
|
Earnings per Common Share
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||
|
2015
|
2014
|
|
2015
|
2014
|
||||||||
Net income
|
$
|
20,162
|
|
$
|
19,155
|
|
|
$
|
63,364
|
|
$
|
61,625
|
|
Weighted average common shares outstanding for basic earnings per share computation
|
45,150,104
|
|
44,911,858
|
|
|
45,223,988
|
|
44,321,326
|
|
||||
Dilutive effects of stock-based compensation
|
428,874
|
|
548,430
|
|
|
481,636
|
|
562,667
|
|
||||
Weighted average common shares outstanding for diluted earnings per common share computation
|
45,578,978
|
|
45,460,288
|
|
|
45,705,624
|
|
44,883,993
|
|
||||
|
|
|
|
|
|
||||||||
Basic earnings per common share
|
$
|
0.45
|
|
$
|
0.43
|
|
|
$
|
1.40
|
|
$
|
1.39
|
|
Diluted earnings per common share
|
$
|
0.44
|
|
$
|
0.42
|
|
|
$
|
1.39
|
|
$
|
1.37
|
|
(11)
|
Regulatory Capital
|
|
Actual
|
|
Adequately Capitalized
|
|
Well Capitalized (1)
|
||||||||||||
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|||||||||
September 30, 2015
|
|
|
|
|
|
|
|
|
|||||||||
Total risk-based capital:
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
$
|
931,352
|
|
15.3
|
%
|
|
$
|
487,670
|
|
8.0
|
%
|
|
$
|
609,588
|
|
10.0
|
%
|
FIB
|
868,800
|
|
14.3
|
|
|
486,925
|
|
8.0
|
|
|
608,656
|
|
10.0
|
|
|||
Tier 1 risk-based capital:
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
843,096
|
|
13.8
|
|
|
365,753
|
|
6.0
|
|
|
487,670
|
|
8.0
|
|
|||
FIB
|
788,544
|
|
13.0
|
|
|
365,194
|
|
6.0
|
|
|
486,925
|
|
8.0
|
|
|||
Common equity tier 1 risk-based capital:
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
763,096
|
|
12.5
|
|
|
274,315
|
|
4.5
|
|
|
396,232
|
|
6.5
|
|
|||
FIB
|
788,544
|
|
13.0
|
|
|
273,895
|
|
4.5
|
|
|
395,626
|
|
6.5
|
|
|||
Leverage capital ratio:
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
843,096
|
|
10.1
|
|
|
332,961
|
|
4.0
|
|
|
416,202
|
|
5.0
|
|
|||
FIB
|
788,544
|
|
9.5
|
|
|
332,071
|
|
4.0
|
|
|
415,089
|
|
5.0
|
|
|
Actual
|
|
Adequately Capitalized
|
|
Well Capitalized (1)
|
||||||||||||
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|||||||||
Total risk-based capital:
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
$
|
897,769
|
|
16.2
|
%
|
|
$
|
444,685
|
|
8.0
|
%
|
|
$
|
555,856
|
|
10.0
|
%
|
FIB
|
832,907
|
|
15.1
|
|
|
442,468
|
|
8.0
|
|
|
553,085
|
|
10.0
|
|
|||
Tier 1 risk-based capital:
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
807,229
|
|
14.5
|
|
|
222,343
|
|
4.0
|
|
|
333,514
|
|
6.0
|
|
|||
FIB
|
754,708
|
|
13.7
|
|
|
221,234
|
|
4.0
|
|
|
331,851
|
|
6.0
|
|
|||
Leverage capital ratio:
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
807,229
|
|
9.6
|
|
|
335,897
|
|
4.0
|
|
|
419,871
|
|
5.0
|
|
|||
FIB
|
754,708
|
|
9.2
|
|
|
330,006
|
|
4.0
|
|
|
412,507
|
|
5.0
|
|
(1)
|
The ratios for the well-capitalized requirement are only applicable to FIB. However, the Company manages its capital position as if the requirement applies to the consolidated entity and has presented the ratios as if they also applied on a consolidated basis.
|
(12)
|
Commitments and Contingencies
|
(13)
|
Financial Instruments with Off-Balance Sheet Risk
|
(14)
|
Supplemental Disclosures to Consolidated Statement of Cash Flows
|
(15)
|
Other Comprehensive Income/Loss
|
|
Pre-tax
|
|
Tax Expense (Benefit)
|
|
Net of Tax
|
||||||||||||||||||
Three Months Ended September 30,
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
Investment securities available-for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in net unrealized gains/losses
during period |
$
|
10,855
|
|
|
$
|
(3,773
|
)
|
|
$
|
4,272
|
|
|
$
|
(1,581
|
)
|
|
$
|
6,583
|
|
|
$
|
(2,192
|
)
|
Reclassification adjustment for net gains
included in net income
|
(23
|
)
|
|
8
|
|
|
(10
|
)
|
|
3
|
|
|
(13
|
)
|
|
5
|
|
||||||
Change in unamortized loss on available-
for-sale securities transferred into held-to-
maturity
|
448
|
|
|
451
|
|
|
177
|
|
|
274
|
|
|
271
|
|
|
177
|
|
||||||
Unrealized loss on derivatives
|
(436
|
)
|
|
—
|
|
|
(172
|
)
|
|
—
|
|
|
(264
|
)
|
|
—
|
|
||||||
Defined benefits post-retirement benefit plan:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in net actuarial loss
|
15
|
|
|
33
|
|
|
6
|
|
|
13
|
|
|
9
|
|
|
20
|
|
||||||
Total other comprehensive income (loss)
|
$
|
10,859
|
|
|
$
|
(3,281
|
)
|
|
$
|
4,273
|
|
|
$
|
(1,291
|
)
|
|
$
|
6,586
|
|
|
$
|
(1,990
|
)
|
|
Pre-tax
|
|
Tax Expense (Benefit)
|
|
Net of Tax
|
||||||||||||||||||
Nine Months Ended September 30,
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
Investment securities available-for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in net unrealized gains/losses
during period |
$
|
12,264
|
|
|
$
|
12,942
|
|
|
$
|
4,827
|
|
|
$
|
4,900
|
|
|
$
|
7,437
|
|
|
$
|
8,042
|
|
Reclassification adjustment for net gains
included in net income
|
(75
|
)
|
|
(80
|
)
|
|
(30
|
)
|
|
(32
|
)
|
|
(45
|
)
|
|
(48
|
)
|
||||||
Change in unamortized loss on available-
for-sale securities transferred into held-to-
maturity
|
1,353
|
|
|
902
|
|
|
532
|
|
|
547
|
|
|
821
|
|
|
355
|
|
||||||
Unrealized loss on derivatives
|
(436
|
)
|
|
—
|
|
|
(172
|
)
|
|
—
|
|
|
(264
|
)
|
|
—
|
|
||||||
Defined benefits post-retirement benefit plan:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in net actuarial loss
|
43
|
|
|
103
|
|
|
17
|
|
|
41
|
|
|
26
|
|
|
62
|
|
||||||
Total other comprehensive income
|
$
|
13,149
|
|
|
$
|
13,867
|
|
|
$
|
5,174
|
|
|
$
|
5,456
|
|
|
$
|
7,975
|
|
|
$
|
8,411
|
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
Net unrealized loss on investment securities available-for-sale
|
$
|
6,264
|
|
|
$
|
(2,121
|
)
|
Net unrealized loss on derivatives
|
(436
|
)
|
|
—
|
|
||
Net actuarial loss on defined benefit post-retirement benefit plans
|
(387
|
)
|
|
(413
|
)
|
||
Net accumulated other comprehensive income (loss)
|
$
|
5,441
|
|
|
$
|
(2,534
|
)
|
(16)
|
Fair Value Measurements
|
|
|
Fair Value Measurements at Reporting Date Using
|
|||||||||
As of September 30, 2015
|
Balance
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||
Investment securities available-for-sale:
|
|
|
|
|
|
|
|||||
U.S. Treasury Notes
|
$
|
3,941
|
|
$
|
—
|
$
|
3,941
|
|
$
|
—
|
|
Obligations of U.S. government agencies
|
606,044
|
|
|
—
|
606,044
|
|
|
—
|
|||
U.S. agencies mortgage-backed securities & collateralized mortgage obligations
|
931,055
|
|
|
—
|
931,055
|
|
|
—
|
|||
Private mortgage-backed securities
|
258
|
|
|
—
|
258
|
|
|
—
|
|||
Other investments
|
3,795
|
|
|
—
|
3,795
|
|
|
—
|
|||
Derivative assets:
|
|
|
|
|
|
|
|||||
Interest rate swaps
|
918
|
|
|
—
|
|
918
|
|
|
—
|
||
Derivative liabilities:
|
|
|
|
|
|
|
|||||
Interest rate swaps
|
1,400
|
|
|
—
|
1,400
|
|
|
—
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||
As of December 31, 2014
|
Balance
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||
Investment securities available-for-sale:
|
|
|
|
|
|
|
||||
Obligations of U.S. government agencies
|
$
|
720,933
|
|
$
|
—
|
$
|
720,933
|
|
$
|
—
|
U.S. agencies mortgage-backed securities & collateralized mortgage obligations
|
990,666
|
|
|
—
|
990,666
|
|
|
—
|
||
Private mortgage-backed securities
|
325
|
|
|
—
|
325
|
|
|
—
|
||
Derivative assets:
|
|
|
|
|
|
|
||||
Interest rate swaps
|
61
|
|
|
—
|
61
|
|
|
—
|
||
Derivative liabilities:
|
|
|
|
|
|
|
||||
Interest rate swaps
|
59
|
|
|
—
|
59
|
|
|
—
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
|||||||
As of September 30, 2015
|
Balance
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||
Impaired loans
|
$
|
44,940
|
|
$
|
—
|
$
|
—
|
$
|
44,940
|
|
Other real estate owned
|
4,067
|
|
|
—
|
|
—
|
4,067
|
|
||
Long-lived assets to be disposed of by sale
|
2,083
|
|
|
—
|
|
—
|
2,083
|
|
||
|
|
|
|
|
|
|
||||
|
|
|
Fair Value Measurements at Reporting Date Using
|
|||||||
As of December 31, 2014
|
Balance
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||
Impaired loans
|
$
|
30,494
|
|
$
|
—
|
$
|
—
|
$
|
30,494
|
|
Other real estate owned
|
4,554
|
|
|
—
|
|
—
|
4,554
|
|
||
Long-lived assets to be disposed of by sale
|
1,083
|
|
|
—
|
|
—
|
1,083
|
|
As of September 30, 2015
|
Fair
Value
|
Valuation
Technique
|
Unobservable
Inputs
|
Range
(Weighted Average)
|
|||||
Impaired loans
|
$
|
44,940
|
|
Appraisal
|
Appraisal adjustment
|
0%
|
-
|
51%
|
(19%)
|
Other real estate owned
|
4,067
|
|
Appraisal
|
Appraisal adjustment
|
0%
|
-
|
50%
|
(15%)
|
|
Long-lived assets to be disposed of by sale
|
2,083
|
|
Appraisal
|
Appraisal adjustment
|
0%
|
-
|
9%
|
(5%)
|
|
|
|
|
|
|
|
|
|
||
As of December 31, 2014
|
Fair
Value
|
Valuation
Technique
|
Unobservable
Inputs
|
Range
(Weighted Average)
|
|||||
Impaired loans
|
$
|
30,494
|
|
Appraisal
|
Appraisal adjustment
|
0%
|
-
|
51%
|
(19%)
|
Other real estate owned
|
4,554
|
|
Appraisal
|
Appraisal adjustment
|
0%
|
-
|
50%
|
(15%)
|
|
Long-lived assets to be disposed of by sale
|
1,083
|
|
Appraisal
|
Appraisal adjustment
|
0%
|
-
|
9%
|
(5%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
As of September 30, 2015
|
Carrying Amount
|
Estimated
Fair Value
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||
Financial assets:
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
708,295
|
|
$
|
708,295
|
|
$
|
708,295
|
|
$
|
—
|
|
$
|
—
|
|
Investment securities available-for-sale
|
1,545,093
|
|
1,545,093
|
|
—
|
|
1,545,093
|
|
—
|
|
|||||
Investment securities held-to-maturity
|
522,543
|
|
534,633
|
|
—
|
|
534,633
|
|
—
|
|
|||||
Accrued interest receivable
|
31,590
|
|
31,590
|
|
—
|
|
31,590
|
|
—
|
|
|||||
Mortgage servicing rights, net
|
15,336
|
|
31,544
|
|
—
|
|
31,544
|
|
—
|
|
|||||
Net loans
|
5,102,244
|
|
5,055,788
|
|
—
|
|
5,010,848
|
|
44,940
|
|
|||||
Total financial assets
|
$
|
7,925,101
|
|
$
|
7,906,943
|
|
$
|
708,295
|
|
$
|
7,153,708
|
|
$
|
44,940
|
|
|
|
|
|
|
|
||||||||||
Financial liabilities:
|
|
|
|
|
|
||||||||||
Total deposits, excluding time deposits
|
$
|
5,885,462
|
|
$
|
5,885,462
|
|
$
|
5,885,462
|
|
$
|
—
|
|
$
|
—
|
|
Time deposits
|
1,150,332
|
|
1,154,128
|
|
—
|
|
1,154,128
|
|
—
|
|
|||||
Securities sold under repurchase agreements
|
437,533
|
|
437,533
|
|
—
|
|
437,533
|
|
—
|
|
|||||
Other borrowed funds
|
10
|
|
10
|
|
—
|
|
10
|
|
—
|
|
|||||
Derivative liabilities
|
436
|
|
436
|
|
—
|
|
436
|
|
—
|
|
|||||
Accrued interest payable
|
5,327
|
|
5,327
|
|
—
|
|
5,327
|
|
—
|
|
|||||
Long-term debt
|
43,089
|
|
41,818
|
|
—
|
|
41,818
|
|
—
|
|
|||||
Subordinated debentures held by subsidiary
trusts
|
82,477
|
|
74,723
|
|
—
|
|
74,723
|
|
—
|
|
|||||
Total financial liabilities
|
$
|
7,604,666
|
|
$
|
7,599,437
|
|
$
|
5,885,462
|
|
$
|
1,713,975
|
|
$
|
—
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
As of December 31, 2014
|
Carrying Amount
|
Estimated
Fair Value
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||
Financial assets:
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
798,670
|
|
$
|
798,670
|
|
$
|
798,670
|
|
$
|
—
|
|
$
|
—
|
|
Investment securities available-for-sale
|
1,711,924
|
|
1,711,924
|
|
—
|
|
1,711,924
|
|
—
|
|
|||||
Investment securities held-to-maturity
|
575,186
|
|
584,533
|
|
—
|
|
584,533
|
|
—
|
|
|||||
Accrued interest receivable
|
27,063
|
|
27,063
|
|
—
|
|
27,063
|
|
—
|
|
|||||
Mortgage servicing rights, net
|
14,038
|
|
21,434
|
|
—
|
|
21,434
|
|
—
|
|
|||||
Net loans
|
4,823,243
|
|
4,800,725
|
|
—
|
|
4,770,231
|
|
30,494
|
|
|||||
Total financial assets
|
$
|
7,950,124
|
|
$
|
7,944,349
|
|
$
|
798,670
|
|
$
|
7,115,185
|
|
$
|
30,494
|
|
|
|
|
|
|
|
||||||||||
Financial liabilities:
|
|
|
|
|
|
||||||||||
Total deposits, excluding time deposits
|
$
|
5,767,992
|
|
$
|
5,767,992
|
|
$
|
5,767,992
|
|
$
|
—
|
|
$
|
—
|
|
Time deposits
|
1,238,220
|
|
1,244,324
|
|
—
|
|
1,244,324
|
|
—
|
|
|||||
Securities sold under repurchase agreements
|
502,250
|
|
502,250
|
|
—
|
|
502,250
|
|
—
|
|
|||||
Other borrowed funds
|
9
|
|
9
|
|
—
|
|
9
|
|
—
|
|
|||||
Accrued interest payable
|
5,833
|
|
5,833
|
|
—
|
|
5,833
|
|
—
|
|
|||||
Long-term debt
|
38,067
|
|
37,781
|
|
—
|
|
37,781
|
|
—
|
|
|||||
Subordinated debentures held by subsidiary
trusts
|
82,477
|
|
75,734
|
|
—
|
|
75,734
|
|
—
|
|
|||||
Total financial liabilities
|
$
|
7,634,848
|
|
$
|
7,633,923
|
|
$
|
5,767,992
|
|
$
|
1,865,931
|
|
$
|
—
|
|
(17)
|
Recent Authoritative Accounting Guidance
|
(18)
|
Subsequent Events
|
Average Balance Sheets, Yields and Rates
|
|
|
|
|
|
|
|
||||||||||
(Dollars in thousands)
|
Three Months Ended September 30,
|
||||||||||||||||
|
2015
|
|
2014
|
||||||||||||||
|
Average
Balance |
Interest
|
Average
Rate |
|
Average
Balance |
Interest
|
Average
Rate |
||||||||||
Interest earning assets:
|
|
|
|
|
|
|
|
||||||||||
Loans (1) (2)
|
$
|
5,141,484
|
|
$
|
62,577
|
|
4.83
|
%
|
|
$
|
4,751,928
|
|
$
|
61,445
|
|
5.13
|
%
|
Investment securities (2)
|
2,097,835
|
|
8,927
|
|
1.69
|
|
|
2,094,449
|
|
8,953
|
|
1.70
|
|
||||
Interest bearing deposits in banks
|
471,682
|
|
342
|
|
0.29
|
|
|
548,794
|
|
374
|
|
0.27
|
|
||||
Federal funds sold
|
2,876
|
|
4
|
|
0.55
|
|
|
1,909
|
|
3
|
|
0.62
|
|
||||
Total interest earnings assets
|
7,713,877
|
|
71,850
|
|
3.70
|
|
|
7,397,080
|
|
70,775
|
|
3.80
|
|
||||
Non-earning assets
|
781,559
|
|
|
|
|
753,324
|
|
|
|
||||||||
Total assets
|
$
|
8,495,436
|
|
|
|
|
$
|
8,150,404
|
|
|
|
||||||
Interest bearing liabilities:
|
|
|
|
|
|
|
|
||||||||||
Demand deposits
|
$
|
2,086,112
|
|
$
|
528
|
|
0.10
|
%
|
|
$
|
2,100,931
|
|
$
|
532
|
|
0.10
|
%
|
Savings deposits
|
1,924,612
|
|
645
|
|
0.13
|
|
|
1,751,595
|
|
616
|
|
0.14
|
|
||||
Time deposits
|
1,150,223
|
|
2,068
|
|
0.71
|
|
|
1,217,023
|
|
2,339
|
|
0.76
|
|
||||
Repurchase agreements
|
433,007
|
|
55
|
|
0.05
|
|
|
439,739
|
|
52
|
|
0.05
|
|
||||
Other borrowed funds
|
6
|
|
—
|
|
—
|
|
|
1,781
|
|
27
|
|
6.01
|
|
||||
Long-term debt
|
43,200
|
|
544
|
|
5.00
|
|
|
36,886
|
|
482
|
|
5.18
|
|
||||
Subordinated debentures held by subsidiary trusts
|
82,477
|
|
610
|
|
2.93
|
|
|
89,142
|
|
598
|
|
2.66
|
|
||||
Total interest bearing liabilities
|
5,719,637
|
|
4,450
|
|
0.31
|
|
|
5,637,097
|
|
4,646
|
|
0.33
|
|
||||
Non-interest bearing deposits
|
1,787,419
|
|
|
|
|
1,570,121
|
|
|
|
||||||||
Other non-interest bearing liabilities
|
58,623
|
|
|
|
|
54,722
|
|
|
|
||||||||
Stockholders’ equity
|
929,757
|
|
|
|
|
888,464
|
|
|
|
||||||||
Total liabilities and stockholders’ equity
|
$
|
8,495,436
|
|
|
|
|
|
$
|
8,150,404
|
|
|
|
|
||||
Net FTE interest income
|
|
67,400
|
|
|
|
|
66,129
|
|
|
||||||||
Less FTE adjustments (2)
|
|
(1,070
|
)
|
|
|
|
(1,047
|
)
|
|
||||||||
Net interest income from consolidated statements of income
|
|
$
|
66,330
|
|
|
|
|
|
$
|
65,082
|
|
|
|
||||
Interest rate spread
|
|
|
3.39
|
%
|
|
|
|
3.47
|
%
|
||||||||
Net FTE interest margin (3)
|
|
|
3.47
|
%
|
|
|
|
3.55
|
%
|
||||||||
Cost of funds, including non-interest bearing demand deposits (4)
|
|
|
0.24
|
%
|
|
|
|
0.26
|
%
|
(1)
|
Average loan balances include non-accrual loans. Interest income on loans includes amortization of deferred loan fees net of deferred loan costs, which is not material.
|
(2)
|
Interest income and average rates for tax exempt loans and securities are presented on an FTE basis.
|
(3)
|
Net FTE interest margin during the period equals (i) the difference between annualized interest income on interest earning assets and the annualized interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period.
|
(4)
|
Calculated by dividing total annualized interest on interest bearing liabilities by the sum of total interest bearing liabilities plus non-interest bearing deposits.
|
Average Balance Sheets, Yields and Rates
|
|
|
|
|
|
|
|
||||||||||
(Dollars in thousands)
|
Nine Months Ended September 30,
|
||||||||||||||||
|
2015
|
|
2014
|
||||||||||||||
|
Average
Balance |
Interest
|
Average
Rate |
|
Average
Balance |
Interest
|
Average
Rate |
||||||||||
Interest earning assets:
|
|
|
|
|
|
|
|
||||||||||
Loans (1) (2)
|
$
|
5,010,251
|
|
$
|
183,305
|
|
4.89
|
%
|
|
$
|
4,512,726
|
|
$
|
171,656
|
|
5.09
|
%
|
Investment securities (2)
|
2,236,581
|
|
28,209
|
|
1.69
|
|
|
2,098,125
|
|
27,341
|
|
1.74
|
|
||||
Interest bearing deposits in banks
|
462,262
|
|
1,002
|
|
0.29
|
|
|
425,489
|
|
830
|
|
0.26
|
|
||||
Federal funds sold
|
2,412
|
|
11
|
|
0.61
|
|
|
1,658
|
|
7
|
|
0.56
|
|
||||
Total interest earnings assets
|
7,711,506
|
|
212,527
|
|
3.68
|
|
|
7,037,998
|
|
199,834
|
|
3.80
|
|
||||
Non-earning assets
|
759,169
|
|
|
|
|
695,924
|
|
|
|
||||||||
Total assets
|
$
|
8,470,675
|
|
|
|
|
$
|
7,733,922
|
|
|
|
||||||
Interest bearing liabilities:
|
|
|
|
|
|
|
|
||||||||||
Demand deposits
|
$
|
2,087,241
|
|
$
|
1,558
|
|
0.10
|
%
|
|
$
|
1,940,007
|
|
$
|
1,556
|
|
0.11
|
%
|
Savings deposits
|
1,894,132
|
|
1,897
|
|
0.13
|
|
|
1,681,782
|
|
1,810
|
|
0.14
|
|
||||
Time deposits
|
1,181,931
|
|
6,334
|
|
0.72
|
|
|
1,179,735
|
|
6,872
|
|
0.78
|
|
||||
Repurchase agreements
|
453,610
|
|
162
|
|
0.05
|
|
|
444,952
|
|
181
|
|
0.05
|
|
||||
Other borrowed funds
|
5
|
|
—
|
|
—
|
|
|
475
|
|
27
|
|
7.60
|
|
||||
Long-term debt
|
41,469
|
|
1,596
|
|
5.15
|
|
|
36,897
|
|
1,431
|
|
5.19
|
|
||||
Subordinated debentures held by subsidiary trusts
|
82,477
|
|
1,800
|
|
2.92
|
|
|
84,723
|
|
1,778
|
|
2.81
|
|
||||
Total interest bearing liabilities
|
5,740,865
|
|
13,347
|
|
0.31
|
|
|
5,368,571
|
|
13,655
|
|
0.34
|
|
||||
Non-interest bearing deposits
|
1,750,152
|
|
|
|
|
1,473,003
|
|
|
|
||||||||
Other non-interest bearing liabilities
|
60,149
|
|
|
|
|
49,879
|
|
|
|
||||||||
Stockholders’ equity
|
919,509
|
|
|
|
|
842,469
|
|
|
|
||||||||
Total liabilities and stockholders’ equity
|
$
|
8,470,675
|
|
|
|
|
|
$
|
7,733,922
|
|
|
|
|
||||
Net FTE interest income
|
|
199,180
|
|
|
|
|
186,179
|
|
|
||||||||
Less FTE adjustments (2)
|
|
(3,237
|
)
|
|
|
|
(3,234
|
)
|
|
||||||||
Net interest income from consolidated statements of income
|
|
$
|
195,943
|
|
|
|
|
|
$
|
182,945
|
|
|
|
||||
Interest rate spread
|
|
|
3.37
|
%
|
|
|
|
3.46
|
%
|
||||||||
Net FTE interest margin (3)
|
|
|
3.45
|
%
|
|
|
|
3.54
|
%
|
||||||||
Cost of funds, including non-interest bearing demand deposits (4)
|
|
|
0.24
|
%
|
|
|
|
0.27
|
%
|
(1)
|
Average loan balances include non-accrual loans. Interest income on loans includes amortization of deferred loan fees net of deferred loan costs, which is not material.
|
(2)
|
Interest income and average rates for tax exempt loans and securities are presented on an FTE basis.
|
(3)
|
Net FTE interest margin during the period equals (i) the difference between annualized interest income on interest earning assets and the annualized interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period.
|
(4)
|
Calculated by dividing total annualized interest on interest bearing liabilities by the sum of total interest bearing liabilities plus non-interest bearing deposits.
|
Analysis of Interest Changes Due to Volume and Rates
|
|
|
|
|
|
|
|
|
|||||||||||||||
(Dollars in thousands)
|
Three Months Ended September 30, 2015
compared with
Three Months Ended September 30, 2014
|
|
Nine Months Ended September 30, 2015
compared with
Nine Months Ended September 30, 2014
|
||||||||||||||||||||
|
Volume
|
|
Rate
|
|
Net
|
|
Volume
|
|
Rate
|
|
Net
|
||||||||||||
Interest earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans (1)
|
$
|
4,982
|
|
|
$
|
(3,850
|
)
|
|
$
|
1,132
|
|
|
$
|
12,547
|
|
|
$
|
(898
|
)
|
|
$
|
11,649
|
|
Investment securities (1)
|
14
|
|
|
(40
|
)
|
|
(26
|
)
|
|
1,196
|
|
|
(328
|
)
|
|
868
|
|
||||||
Interest bearing deposits in banks
|
(52
|
)
|
|
20
|
|
|
(32
|
)
|
|
48
|
|
|
124
|
|
|
172
|
|
||||||
Federal funds sold
|
2
|
|
|
(1
|
)
|
|
1
|
|
|
2
|
|
|
2
|
|
|
4
|
|
||||||
Total change
|
4,946
|
|
|
(3,871
|
)
|
|
1,075
|
|
|
13,793
|
|
|
(1,100
|
)
|
|
12,693
|
|
||||||
Interest bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Demand deposits
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
78
|
|
|
(76
|
)
|
|
2
|
|
||||||
Savings deposits
|
60
|
|
|
(31
|
)
|
|
29
|
|
|
152
|
|
|
(65
|
)
|
|
87
|
|
||||||
Time deposits
|
(127
|
)
|
|
(144
|
)
|
|
(271
|
)
|
|
8
|
|
|
(546
|
)
|
|
(538
|
)
|
||||||
Repurchase agreements
|
(1
|
)
|
|
4
|
|
|
3
|
|
|
2
|
|
|
(21
|
)
|
|
(19
|
)
|
||||||
Other borrowed funds
|
(27
|
)
|
|
—
|
|
|
(27
|
)
|
|
(18
|
)
|
|
(9
|
)
|
|
(27
|
)
|
||||||
Long-term debt
|
82
|
|
|
(20
|
)
|
|
62
|
|
|
118
|
|
|
47
|
|
|
165
|
|
||||||
Subordinated debentures held by subsidiary trusts
|
(44
|
)
|
|
56
|
|
|
12
|
|
|
(31
|
)
|
|
53
|
|
|
22
|
|
||||||
Total change
|
(61
|
)
|
|
(135
|
)
|
|
(196
|
)
|
|
309
|
|
|
(617
|
)
|
|
(308
|
)
|
||||||
Increase (decrease) in FTE net interest income
|
$
|
5,007
|
|
|
$
|
(3,736
|
)
|
|
$
|
1,271
|
|
|
$
|
13,484
|
|
|
$
|
(483
|
)
|
|
$
|
13,001
|
|
Non-Performing Loans by Loan Type
|
|
|
|
|
|
|
|
||||||
(Dollars in thousands)
|
September 30, 2015
|
|
Percent
of Total
|
|
December 31,
2014
|
|
Percent
of Total
|
||||||
Real estate:
|
|
|
|
|
|
|
|
||||||
Commercial
|
$
|
23,237
|
|
|
33.4
|
%
|
|
$
|
27,700
|
|
|
42.9
|
%
|
Construction:
|
|
|
.
|
|
|
|
|
||||||
Land acquisition and development
|
9,146
|
|
|
13.1
|
%
|
|
8,252
|
|
|
12.7
|
%
|
||
Commercial
|
329
|
|
|
0.5
|
%
|
|
2,564
|
|
|
4.0
|
%
|
||
Residential
|
983
|
|
|
1.4
|
%
|
|
272
|
|
|
0.4
|
%
|
||
Total construction
|
10,458
|
|
|
15.0
|
%
|
|
11,088
|
|
|
17.1
|
%
|
||
Residential
|
3,332
|
|
|
4.8
|
%
|
|
4,554
|
|
|
7.0
|
%
|
||
Agricultural
|
6,792
|
|
|
9.7
|
%
|
|
6,842
|
|
|
10.6
|
%
|
||
Total real estate
|
43,819
|
|
|
62.9
|
%
|
|
50,184
|
|
|
77.5
|
%
|
||
Consumer
|
2,133
|
|
|
3.1
|
%
|
|
1,282
|
|
|
2.0
|
%
|
||
Commercial
|
22,722
|
|
|
32.6
|
%
|
|
12,846
|
|
|
19.8
|
%
|
||
Agricultural
|
731
|
|
|
1.0
|
%
|
|
446
|
|
|
0.7
|
%
|
||
Other
|
311
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
Total non-performing loans
|
$
|
69,716
|
|
|
100.0
|
%
|
|
$
|
64,758
|
|
|
100.0
|
%
|
(1)
|
Specific valuation allowances associated with impaired loans. Specific valuation allowances are determined based on assessment of the fair value of the collateral underlying the loans as determined through independent appraisals, the present value of future cash flows, observable market prices and any relevant qualitative or environmental factors impacting the loan. No specific valuation allowances are recorded for impaired loans that are adequately secured.
|
(2)
|
Historical valuation allowances based on loan loss experience for similar loans with similar characteristics and trends. Historical valuation allowances are determined by applying percentage loss factors to the credit exposures from outstanding loans. For commercial, agricultural and real estate loans, loss factors are applied based on the internal risk classifications of these loans. For consumer loans, loss factors are applied on a portfolio basis. For commercial, agriculture and real estate loans, loss factor percentages are based on a migration analysis of our historical loss experience, designed to account for credit deterioration. For consumer loans, loss factor percentages are based on a one-year loss history.
|
(3)
|
General valuation allowances determined based on changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, general economic conditions and other qualitative risk factors both internal and external to us.
|
Allowance for Loan Losses
|
|
|
|
|
|
|
|
|
|
||||||||||
(Dollars in thousands)
|
Three Months Ended
|
||||||||||||||||||
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
||||||||||
|
2015
|
|
2015
|
|
2015
|
|
2014
|
|
2014
|
||||||||||
Balance at beginning of period
|
$
|
76,552
|
|
|
$
|
75,336
|
|
|
$
|
74,200
|
|
|
$
|
74,231
|
|
|
$
|
78,266
|
|
Provision charged to operating expense
|
1,098
|
|
|
1,340
|
|
|
1,095
|
|
|
118
|
|
|
261
|
|
|||||
Charge offs:
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
120
|
|
|
47
|
|
|
109
|
|
|
485
|
|
|
41
|
|
|||||
Construction
|
2,028
|
|
|
—
|
|
|
30
|
|
|
108
|
|
|
20
|
|
|||||
Residential
|
71
|
|
|
510
|
|
|
45
|
|
|
30
|
|
|
84
|
|
|||||
Agricultural
|
—
|
|
|
53
|
|
|
2
|
|
|
1
|
|
|
2
|
|
|||||
Consumer
|
1,537
|
|
|
837
|
|
|
1,301
|
|
|
1,658
|
|
|
1,437
|
|
|||||
Commercial
|
791
|
|
|
61
|
|
|
374
|
|
|
22
|
|
|
4,678
|
|
|||||
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|||||
Total charge-offs
|
4,547
|
|
|
1,508
|
|
|
1,861
|
|
|
2,304
|
|
|
6,274
|
|
|||||
Recoveries:
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
387
|
|
|
293
|
|
|
512
|
|
|
446
|
|
|
181
|
|
|||||
Construction
|
—
|
|
|
49
|
|
|
316
|
|
|
736
|
|
|
728
|
|
|||||
Residential
|
—
|
|
|
80
|
|
|
154
|
|
|
124
|
|
|
88
|
|
|||||
Agricultural
|
—
|
|
|
3
|
|
|
10
|
|
|
—
|
|
|
2
|
|
|||||
Consumer
|
653
|
|
|
520
|
|
|
640
|
|
|
686
|
|
|
495
|
|
|||||
Commercial
|
113
|
|
|
438
|
|
|
270
|
|
|
162
|
|
|
484
|
|
|||||
Agricultural
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||
Total recoveries
|
1,153
|
|
|
1,384
|
|
|
1,902
|
|
|
2,155
|
|
|
1,978
|
|
|||||
Net charge-offs
|
3,394
|
|
|
124
|
|
|
(41
|
)
|
|
149
|
|
|
4,296
|
|
|||||
Balance at end of period
|
$
|
74,256
|
|
|
$
|
76,552
|
|
|
$
|
75,336
|
|
|
$
|
74,200
|
|
|
$
|
74,231
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Period end loans
|
$
|
5,176,480
|
|
|
$
|
5,103,946
|
|
|
$
|
4,927,306
|
|
|
$
|
4,897,443
|
|
|
$
|
4,854,382
|
|
Average loans
|
5,141,484
|
|
|
4,991,416
|
|
|
4,895,146
|
|
|
4,870,509
|
|
|
4,751,928
|
|
|||||
Net loans charged-off to average loans, annualized
|
0.26
|
%
|
|
0.01
|
%
|
|
—
|
%
|
|
0.01
|
%
|
|
0.36
|
%
|
|||||
Allowance to period end loans
|
1.43
|
%
|
|
1.50
|
%
|
|
1.53
|
%
|
|
1.52
|
%
|
|
1.53
|
%
|
Deposits
|
|
|
|
|
|
|
|
||||||
(Dollars in thousands)
|
September 30,
2015 |
|
Percent
of Total
|
|
December 31,
2014
|
|
Percent
of Total
|
||||||
Non-interest bearing demand
|
$
|
1,832,535
|
|
|
26.0
|
%
|
|
$
|
1,791,364
|
|
|
25.5
|
%
|
Interest bearing:
|
|
|
|
|
|
|
|
||||||
Demand
|
2,134,203
|
|
|
30.3
|
|
|
2,133,273
|
|
|
30.5
|
|
||
Savings
|
1,918,724
|
|
|
27.3
|
|
|
1,843,355
|
|
|
26.3
|
|
||
Time, $100 and over
|
496,539
|
|
|
7.1
|
|
|
520,125
|
|
|
7.4
|
|
||
Time, other (1)
|
653,793
|
|
|
9.3
|
|
|
718,095
|
|
|
10.2
|
|
||
Total interest bearing
|
5,203,259
|
|
|
74.0
|
|
|
5,214,848
|
|
|
74.5
|
|
||
Total deposits
|
$
|
7,035,794
|
|
|
100.0
|
%
|
|
$
|
7,006,212
|
|
|
100.0
|
%
|
(1)
|
Included in Time, other are Certificate of Deposit Account Registry Service, or CDAR, deposits of $33 million as of September 30, 2015 and $40 million as of December 31, 2014.
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
|
|
|
|
Total Number of
|
|
Maximum Number
|
|||||
|
|
|
|
|
|
Shares Purchased
|
|
of Shares That
|
|||||
|
|
Total Number
|
|
Average
|
|
as Part of Publicly
|
|
May Yet Be
|
|||||
|
|
of Shares
|
|
Price Paid
|
|
Announced Plans
|
|
Purchased Under the
|
|||||
Period
|
|
Purchased
|
|
Per Share
|
|
or Programs
|
|
Plans or Programs
|
|||||
July 2015
|
|
1,334
|
|
|
$
|
28.09
|
|
|
—
|
|
|
434,125
|
|
August 2015
|
|
58,542
|
|
|
26.06
|
|
|
58,542
|
|
|
375,583
|
|
|
September 2015
|
|
141,458
|
|
|
26.31
|
|
|
141,458
|
|
|
1,000,000
|
|
|
Total
|
|
201,334
|
|
|
$
|
26.25
|
|
|
200,000
|
|
|
1,000,000
|
|
Item 3.
|
Defaults upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Exhibit Number
|
|
Description
|
|
|
|
2.2
|
|
Agreement and Plan of Merger between First Interstate BancSystem, Inc. and Mountain West Financial Corp dated February 10, 2014 (incorporated herein reference to Exhibit 2.1 of the Company's Pre-Effective Amendment No. 1 to Registration Statement on Form S-4, No. 333-194050, dated April 2, 2014)
|
|
|
|
3.1
|
|
Amended and Restated Articles of Incorporation dated March 5, 2010 (incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K/A filed on March 10, 2010)
|
|
|
|
3.2
|
|
Second Amended and Restated Bylaws dated January 27, 2011 (incorporated herein by reference to Exhibit 3.8 of the Company’s Current Report on Form 8-K filed on February 3, 2011)
|
|
|
|
10.1
|
|
Credit Agreement Re: Subordinated Term Note dated as of January 10, 2008, between First Interstate BancSystem, Inc. and First Midwest Bank (incorporated herein by reference to Exhibit 10.24 of the Company’s Current Report on Form 8-K filed on January 16, 2008)
|
|
|
|
10.2
|
|
Lease Agreement between Billings 401 Joint Venture and First Interstate Bank Montana dated September 20, 1985 and addendum thereto (incorporated herein by reference to Exhibit 10.4 of the Company’s Post-Effective Amendment No. 3 to Registration Statement on Form S-1, No. 033-84540, filed on September 29, 1994)
|
|
|
|
10.3†
|
|
First Interstate BancSystem’s Deferred Compensation Plan dated December 1, 2006 (incorporated herein by reference to Exhibit 10.9 of the Company’s Pre-Effective Amendment No. 3 to Registration Statement on Form S-1, No. 333-164380, filed on March 23, 2010)
|
|
|
|
10.4†
|
|
First Amendment to the First Interstate BancSystem’s Deferred Compensation Plan dated October 24, 2008 (incorporated herein by reference to Exhibit 10.10 of the Company’s Pre-Effective Amendment No. 3 to Registration Statement on Form S-1, No. 333-164380, filed on March 23, 2010)
|
|
|
|
10.5†
|
|
2001 Stock Option Plan, as amended (incorporated herein by reference to Exhibit 4.12 of the Company’s Registration Statement on Form S-8, No. 333-106495, filed on June 25, 2003)
|
|
|
|
Exhibit Number
|
|
Description
|
|
|
|
10.6†
|
|
Second Amendment to 2001 Stock Option Plan (incorporated herein by reference to Exhibit 10.6 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010)
|
|
|
|
10.7†
|
|
First Interstate BancSystem, Inc. 2006 Equity Compensation Plan, amended and restated as of November 21, 2013 (incorporated herein by reference to Exhibit 4.4 of the Company's Registration Statement on Form S-8, No. 333-193543, filed January 24, 2014 )
|
|
|
|
10.8†
|
|
Form of First Interstate BancSystem, Inc. 2006 Equity Compensation Plan Restricted Stock Agreement (Performance-ROA) for Certain Executive Officers (incorporated herein by reference to Exhibit 10.8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013)
|
|
|
|
10.9†
|
|
Form of First Interstate BancSystem, Inc. 2006 Equity Compensation Plan Restricted Stock Agreement (Performance-ROE) for Certain Executive Officers (incorporated herein by reference to Exhibit 10.9 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013)
|
|
|
|
10.10†
|
|
Form of First Interstate BancSystem, Inc. 2006 Equity Compensation Plan Restricted Stock Agreement (Performance) for Certain Executive Officers (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on February 13, 2013)
|
|
|
|
10.11†
|
|
First Interstate BancSystem, Inc. 2015 Equity and Incentive Plan (incorporated herein by reference to Appendix A of the Company’s Proxy Statement on Schedule 14A for the 2015 Annual Meeting of Shareholders, filed on April 2, 2015).
|
|
|
|
10.12†*
|
|
Executive Employment Agreement between Kevin P. Riley and First Interstate BancSystem, Inc. dated September 23, 2015.
|
|
|
|
10.13
|
|
Trademark License Agreements between Wells Fargo & Company and First Interstate BancSystem, Inc. (incorporated herein by reference to Exhibit 10.11 of the Registration Statement on Form S-1, filed on April 22, 1997)
|
|
|
|
31.1*
|
|
Certification of Quarterly Report on Form 10-Q pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer
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31.2*
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Certification of Quarterly Report on Form 10-Q pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer
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32*
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Certification of Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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101**
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Interactive data file
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†
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Management contract or compensatory arrangement.
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*
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Filed herewith.
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**
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As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.
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FIRST INTERSTATE BANCSYSTEM, INC.
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Date:
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November 6, 2015
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/
S
/ KEVIN P. RILEY
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Kevin P. Riley
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President and Chief Executive Officer
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Date:
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November 6, 2015
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/
S
/ MARCY D. MUTCH
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Marcy D. Mutch
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Executive Vice President and Chief Financial Officer
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EFFECTIVE DATE:
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This Executive Employment Agreement (this “
Agreement
”) is dated as of September 23, 2015
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PARTIES:
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First Interstate BancSystem, Inc.
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1.
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I have reviewed this quarterly report on Form 10-Q of First Interstate BancSystem, Inc;
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2.
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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;
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3.
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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;
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4.
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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:
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a.
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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;
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b.
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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 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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/s/ KEVIN P. RILEY
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Kevin P. Riley
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President and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of First Interstate BancSystem, Inc;
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2.
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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;
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3.
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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;
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4.
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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:
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a.
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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;
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b.
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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 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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/s/ MARCY D. MUTCH
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Marcy D. Mutch
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Executive Vice President and Chief Financial Officer
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/s/ KEVIN P. RILEY
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Kevin P. Riley
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President and Chief Executive Officer
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/s/ MARCY D. MUTCH
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Marcy D. Mutch
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Executive Vice President and Chief Financial Officer
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