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.
|
Delaware
|
|
75-2679109
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification Number)
|
2000 McKinney Avenue, Suite 700,
Dallas, Texas, U.S.A.
|
|
75201
|
(Address of principal executive officers)
|
|
(Zip Code)
|
Large Accelerated Filer
x
|
|
Accelerated Filer
¨
|
|
|
|
|
Non-Accelerated Filer
¨
|
|
Smaller Reporting Company
¨
|
|
|
|
|
Emerging Growth Company
¨
|
|
|
|
|
|
|
|
Item 1.
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
Item 2.
|
||
|
|
||
|
Item 3.
|
||
|
Item 4.
|
||
|
|
||
|
Item 1.
|
||
|
Item 1A.
|
||
|
Item 6.
|
||
|
|
||
(in thousands except per share data)
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Cash and due from banks
|
$
|
177,137
|
|
|
$
|
214,191
|
|
Interest-bearing deposits in other banks
|
2,129,155
|
|
|
2,815,684
|
|
||
Federal funds sold and securities purchased under resale agreements
|
25,000
|
|
|
50,190
|
|
||
Investment securities
|
230,749
|
|
|
120,216
|
|
||
Loans held for sale ($1,901.6 million at March 31, 2019 and $1,969.2 million at December 31, 2018, at fair value)
|
1,901,637
|
|
|
1,969,474
|
|
||
Loans held for investment, mortgage finance
|
6,299,710
|
|
|
5,877,524
|
|
||
Loans held for investment (net of unearned income)
|
17,061,590
|
|
|
16,690,550
|
|
||
Less: Allowance for loan losses
|
208,573
|
|
|
191,522
|
|
||
Loans held for investment, net
|
23,152,727
|
|
|
22,376,552
|
|
||
Mortgage servicing rights, net
|
44,088
|
|
|
42,474
|
|
||
Premises and equipment, net
|
24,200
|
|
|
23,802
|
|
||
Accrued interest receivable and other assets
|
679,966
|
|
|
626,614
|
|
||
Goodwill and intangible assets, net
|
18,452
|
|
|
18,570
|
|
||
Total assets
|
$
|
28,383,111
|
|
|
$
|
28,257,767
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Deposits:
|
|
|
|
||||
Non-interest-bearing
|
$
|
6,743,607
|
|
|
$
|
7,317,161
|
|
Interest-bearing
|
13,906,520
|
|
|
13,288,952
|
|
||
Total deposits
|
20,650,127
|
|
|
20,606,113
|
|
||
Accrued interest payable
|
24,488
|
|
|
20,675
|
|
||
Other liabilities
|
233,398
|
|
|
194,238
|
|
||
Federal funds purchased and repurchase agreements
|
897,892
|
|
|
641,174
|
|
||
Other borrowings
|
3,600,000
|
|
|
3,900,000
|
|
||
Subordinated notes, net
|
281,858
|
|
|
281,767
|
|
||
Trust preferred subordinated debentures
|
113,406
|
|
|
113,406
|
|
||
Total liabilities
|
25,801,169
|
|
|
25,757,373
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $.01 par value, $1,000 liquidation value:
|
|
|
|
||||
Authorized shares—10,000,000
|
|
|
|
||||
Issued shares—6,000,000 shares issued at March 31, 2019 and December 31, 2018
|
150,000
|
|
|
150,000
|
|
||
Common stock, $.01 par value:
|
|
|
|
||||
Authorized shares—100,000,000
|
|
|
|
||||
Issued shares—50,264,028 and 50,201,127 at March 31, 2019 and December 31, 2018, respectively
|
503
|
|
|
502
|
|
||
Additional paid-in capital
|
969,079
|
|
|
967,890
|
|
||
Retained earnings
|
1,461,893
|
|
|
1,381,492
|
|
||
Treasury stock (shares at cost: 417 at March 31, 2019 and December 31, 2018)
|
(8
|
)
|
|
(8
|
)
|
||
Accumulated other comprehensive income, net of taxes
|
475
|
|
|
518
|
|
||
Total stockholders’ equity
|
2,581,942
|
|
|
2,500,394
|
|
||
Total liabilities and stockholders’ equity
|
$
|
28,383,111
|
|
|
$
|
28,257,767
|
|
|
|
Three months ended March 31,
|
||||||
(in thousands except per share data)
|
|
2019
|
|
2018
|
||||
Interest income
|
|
|
|
|
||||
Interest and fees on loans
|
|
$
|
312,703
|
|
|
$
|
243,864
|
|
Investment securities
|
|
1,460
|
|
|
206
|
|
||
Federal funds sold and securities purchased under resale agreements
|
|
379
|
|
|
1,045
|
|
||
Interest-bearing deposits in other banks
|
|
11,019
|
|
|
8,754
|
|
||
Total interest income
|
|
325,561
|
|
|
253,869
|
|
||
Interest expense
|
|
|
|
|
||||
Deposits
|
|
69,054
|
|
|
31,702
|
|
||
Federal funds purchased
|
|
3,516
|
|
|
969
|
|
||
Other borrowings
|
|
11,854
|
|
|
5,680
|
|
||
Subordinated notes
|
|
4,191
|
|
|
4,191
|
|
||
Trust preferred subordinated debentures
|
|
1,332
|
|
|
1,027
|
|
||
Total interest expense
|
|
89,947
|
|
|
43,569
|
|
||
Net interest income
|
|
235,614
|
|
|
210,300
|
|
||
Provision for credit losses
|
|
20,000
|
|
|
12,000
|
|
||
Net interest income after provision for credit losses
|
|
215,614
|
|
|
198,300
|
|
||
Non-interest income
|
|
|
|
|
||||
Service charges on deposit accounts
|
|
2,979
|
|
|
3,137
|
|
||
Wealth management and trust fee income
|
|
2,009
|
|
|
1,924
|
|
||
Brokered loan fees
|
|
5,066
|
|
|
5,168
|
|
||
Servicing income
|
|
2,734
|
|
|
5,492
|
|
||
Swap fees
|
|
1,031
|
|
|
1,562
|
|
||
Net gain/(loss) on sale of loans held for sale
|
|
(505
|
)
|
|
(2,173
|
)
|
||
Other
|
|
16,700
|
|
|
4,837
|
|
||
Total non-interest income
|
|
30,014
|
|
|
19,947
|
|
||
Non-interest expense
|
|
|
|
|
||||
Salaries and employee benefits
|
|
77,823
|
|
|
72,537
|
|
||
Net occupancy expense
|
|
7,879
|
|
|
7,234
|
|
||
Marketing
|
|
11,708
|
|
|
8,677
|
|
||
Legal and professional
|
|
10,030
|
|
|
7,530
|
|
||
Communications and technology
|
|
9,198
|
|
|
6,633
|
|
||
FDIC insurance assessment
|
|
5,122
|
|
|
6,103
|
|
||
Servicing related expenses
|
|
5,382
|
|
|
3,805
|
|
||
Allowance and other carrying costs for other real estate owned
|
|
—
|
|
|
2,155
|
|
||
Other
|
|
13,236
|
|
|
12,286
|
|
||
Total non-interest expense
|
|
140,378
|
|
|
126,960
|
|
||
Income before income taxes
|
|
105,250
|
|
|
91,287
|
|
||
Income tax expense
|
|
22,411
|
|
|
19,342
|
|
||
Net income
|
|
82,839
|
|
|
71,945
|
|
||
Preferred stock dividends
|
|
2,438
|
|
|
2,438
|
|
||
Net income available to common stockholders
|
|
$
|
80,401
|
|
|
$
|
69,507
|
|
Other comprehensive income (loss)
|
|
|
|
|
||||
Change in unrealized gain (loss) on available-for-sale debt securities arising during period, before tax
|
|
$
|
(53
|
)
|
|
$
|
(63
|
)
|
Income tax expense (benefit) related to unrealized loss on available-for-sale debt securities
|
|
(10
|
)
|
|
(13
|
)
|
||
Other comprehensive income (loss), net of tax
|
|
(43
|
)
|
|
(50
|
)
|
||
Comprehensive income
|
|
$
|
82,796
|
|
|
$
|
71,895
|
|
Basic earnings per common share
|
|
$
|
1.60
|
|
|
$
|
1.40
|
|
Diluted earnings per common share
|
|
$
|
1.60
|
|
|
$
|
1.38
|
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional
|
|
|
|
Treasury Stock
|
|
Accumulated
Other
|
|
|
|||||||||||||||||||||||
|
Paid-in
|
|
Retained
|
|
Comprehensive
|
|
|
|||||||||||||||||||||||||||||
(In thousands except share data)
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Shares
|
|
Amount
|
|
Income
|
|
Total
|
|||||||||||||||||
Balance at December 31, 2017 (audited)
|
6,000,000
|
|
|
$
|
150,000
|
|
|
49,643,761
|
|
|
$
|
496
|
|
|
$
|
961,305
|
|
|
$
|
1,090,500
|
|
|
(417
|
)
|
|
$
|
(8
|
)
|
|
$
|
428
|
|
|
$
|
2,202,721
|
|
Impact of adoption of new accounting standards(1)
|
|
|
|
|
|
|
|
|
|
|
$
|
(82
|
)
|
|
|
|
|
|
$
|
84
|
|
|
$
|
2
|
|
|||||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71,945
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71,945
|
|
|||||||
Change in unrealized gain on available-for-sale securities, net of taxes of $13
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
(50
|
)
|
|||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
71,895
|
|
||||||||||||||||
Stock-based compensation expense recognized in earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,957
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,957
|
|
|||||||
Preferred stock dividend
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,438
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,438
|
)
|
|||||||
Issuance of stock related to stock-based awards
|
—
|
|
|
—
|
|
|
26,430
|
|
|
1
|
|
|
(709
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(708
|
)
|
|||||||
Balance at March 31, 2018
|
6,000,000
|
|
|
$
|
150,000
|
|
|
49,670,191
|
|
|
$
|
497
|
|
|
$
|
962,553
|
|
|
$
|
1,159,925
|
|
|
(417
|
)
|
|
$
|
(8
|
)
|
|
$
|
462
|
|
|
$
|
2,273,429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2018 (audited)
|
6,000,000
|
|
|
$
|
150,000
|
|
|
50,201,127
|
|
|
$
|
502
|
|
|
$
|
967,890
|
|
|
$
|
1,381,492
|
|
|
(417
|
)
|
|
$
|
(8
|
)
|
|
$
|
518
|
|
|
$
|
2,500,394
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82,839
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82,839
|
|
|||||||
Change in unrealized gain on available-for-sale securities, net of taxes of $10
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
(43
|
)
|
|||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
82,796
|
|
||||||||||||||||
Stock-based compensation expense recognized in earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,423
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,423
|
|
|||||||
Preferred stock dividend
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,438
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,438
|
)
|
|||||||
Issuance of stock related to stock-based awards
|
—
|
|
|
—
|
|
|
54,133
|
|
|
1
|
|
|
(1,234
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,233
|
)
|
|||||||
Issuance of common stock related to warrants
|
—
|
|
|
—
|
|
|
8,768
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance at March 31, 2019
|
6,000,000
|
|
|
$
|
150,000
|
|
|
50,264,028
|
|
|
$
|
503
|
|
|
$
|
969,079
|
|
|
$
|
1,461,893
|
|
|
(417
|
)
|
|
$
|
(8
|
)
|
|
$
|
475
|
|
|
$
|
2,581,942
|
|
(1)
|
Represents the impact of adopting Accounting Standard Update ("ASU") 2018-02 and ASU 2016-01. See Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 for more information.
|
|
Three months ended March 31,
|
||||||
(In thousands)
|
2019
|
|
2018
|
||||
Operating activities
|
|
|
|
||||
Net income
|
$
|
82,839
|
|
|
$
|
71,945
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Provision for credit losses
|
20,000
|
|
|
12,000
|
|
||
Depreciation and amortization
|
7,792
|
|
|
8,240
|
|
||
Net (gain)/loss on sale of loans held for sale
|
505
|
|
|
2,173
|
|
||
Increase (decrease) in valuation allowance on mortgage servicing rights
|
2,931
|
|
|
(757
|
)
|
||
Stock-based compensation expense
|
4,488
|
|
|
5,971
|
|
||
Purchases and originations of loans held for sale
|
(1,550,059
|
)
|
|
(1,479,006
|
)
|
||
Proceeds from sales and repayments of loans held for sale
|
1,602,923
|
|
|
1,381,277
|
|
||
Other real estate owned write-down
|
—
|
|
|
2,000
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accrued interest receivable and other assets
|
(58,278
|
)
|
|
15,238
|
|
||
Accrued interest payable and other liabilities
|
51,023
|
|
|
(13,757
|
)
|
||
Net cash provided by (used in) operating activities
|
164,164
|
|
|
5,324
|
|
||
Investing activities
|
|
|
|
||||
Purchases of available-for-sale investment securities
|
(109,928
|
)
|
|
(2,455
|
)
|
||
Principal payments received on available-for-sale securities
|
307
|
|
|
763
|
|
||
Originations of mortgage finance loans
|
(24,328,971
|
)
|
|
(19,821,894
|
)
|
||
Proceeds from pay-offs of mortgage finance loans
|
23,906,785
|
|
|
20,440,116
|
|
||
Net increase in loans held for investment, excluding mortgage finance loans
|
(375,628
|
)
|
|
(380,725
|
)
|
||
Purchase of premises and equipment, net
|
(2,642
|
)
|
|
(4,441
|
)
|
||
Proceeds from sale of other real estate owned, net
|
79
|
|
|
184
|
|
||
Net cash provided by/(used in) by investing activities
|
(909,998
|
)
|
|
231,548
|
|
||
Financing activities
|
|
|
|
||||
Net increase/(decrease) in deposits
|
44,014
|
|
|
(358,647
|
)
|
||
Costs from issuance of stock related to stock-based awards and warrants
|
(1,233
|
)
|
|
(708
|
)
|
||
Preferred dividends paid
|
(2,438
|
)
|
|
(2,438
|
)
|
||
Net increase/(decrease) in other borrowings
|
(300,000
|
)
|
|
(500,000
|
)
|
||
Net increase (decrease) in Federal funds purchased and repurchase agreements
|
256,718
|
|
|
170,500
|
|
||
Net cash provided by/(used in) financing activities
|
(2,939
|
)
|
|
(691,293
|
)
|
||
Net increase/(decrease) in cash and cash equivalents
|
(748,773
|
)
|
|
(454,421
|
)
|
||
Cash and cash equivalents at beginning of period
|
3,080,065
|
|
|
2,905,591
|
|
||
Cash and cash equivalents at end of period
|
$
|
2,331,292
|
|
|
$
|
2,451,170
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid during the period for interest
|
$
|
86,134
|
|
|
$
|
46,075
|
|
Cash paid during the period for income taxes
|
6
|
|
|
266
|
|
|
Three months ended March 31,
|
||||||
(in thousands except per share data)
|
2019
|
|
2018
|
||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
82,839
|
|
|
$
|
71,945
|
|
Preferred stock dividends
|
2,438
|
|
|
2,438
|
|
||
Net income available to common stockholders
|
$
|
80,401
|
|
|
$
|
69,507
|
|
Denominator:
|
|
|
|
||||
Denominator for basic earnings per share—weighted average shares
|
50,229,797
|
|
|
49,650,884
|
|
||
Effect of employee stock-based awards(1)
|
115,602
|
|
|
255,794
|
|
||
Effect of warrants to purchase common stock
|
—
|
|
|
446,819
|
|
||
Denominator for dilutive earnings per share—adjusted weighted average shares and assumed conversions
|
50,345,399
|
|
|
50,353,497
|
|
||
Basic earnings per common share
|
$
|
1.60
|
|
|
$
|
1.40
|
|
Diluted earnings per common share
|
$
|
1.60
|
|
|
$
|
1.38
|
|
(1)
|
SARs and RSUs outstanding of
411,065
at
March 31, 2019
and
5,139
at
March 31, 2018
have not been included in diluted earnings per share because to do so would have been antidilutive for the periods presented.
|
(in thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
March 31, 2019
|
|
|
|
|
|
|
|
||||||||
Available-for-sale debt securities:
|
|
|
|
|
|
|
|
||||||||
Residential mortgage-backed securities
|
$
|
6,567
|
|
|
$
|
361
|
|
|
$
|
—
|
|
|
$
|
6,928
|
|
Tax-exempt asset-backed securities
|
187,528
|
|
|
4,316
|
|
|
—
|
|
|
191,844
|
|
||||
Credit risk transfer securities
|
14,713
|
|
|
—
|
|
|
(4,076
|
)
|
|
10,637
|
|
||||
|
$
|
208,808
|
|
|
$
|
4,677
|
|
|
$
|
(4,076
|
)
|
|
$
|
209,409
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Available-for-sale debt securities:
|
|
|
|
|
|
|
|
||||||||
Residential mortgage-backed securities
|
$
|
6,874
|
|
|
$
|
368
|
|
|
$
|
—
|
|
|
$
|
7,242
|
|
Tax-exempt asset-backed securities
|
95,518
|
|
|
286
|
|
|
—
|
|
|
95,804
|
|
||||
|
$
|
102,392
|
|
|
$
|
654
|
|
|
$
|
—
|
|
|
$
|
103,046
|
|
(in thousands, except percentage data)
|
Less Than
One Year
|
|
After One
Through
Five Years
|
|
After Five
Through
Ten Years
|
|
After Ten
Years
|
|
Total
|
||||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed securities:(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
—
|
|
|
$
|
1,419
|
|
|
$
|
—
|
|
|
$
|
5,148
|
|
|
$
|
6,567
|
|
Estimated fair value
|
—
|
|
|
1,516
|
|
|
—
|
|
|
5,412
|
|
|
6,928
|
|
|||||
Weighted average yield(3)
|
6.50
|
%
|
|
5.54
|
%
|
|
—
|
%
|
|
4.59
|
%
|
|
4.79
|
%
|
|||||
Tax-exempt asset-backed securities:(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized Cost
|
—
|
|
|
—
|
|
|
—
|
|
|
187,528
|
|
|
187,528
|
|
|||||
Estimated fair value
|
—
|
|
|
—
|
|
|
—
|
|
|
191,844
|
|
|
191,844
|
|
|||||
Weighted average yield(2)(3)
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
4.20
|
%
|
|
4.20
|
%
|
|||||
CRT securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized Cost
|
—
|
|
|
—
|
|
|
—
|
|
|
14,713
|
|
|
14,713
|
|
|||||
Estimated fair value
|
—
|
|
|
—
|
|
|
—
|
|
|
10,637
|
|
|
10,637
|
|
|||||
Weighted average yield(3)
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
2.49
|
%
|
|
2.49
|
%
|
|||||
Total available-for-sale debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized cost
|
|
|
|
|
|
|
|
|
$
|
208,808
|
|
||||||||
Estimated fair value
|
|
|
|
|
|
|
|
|
$
|
209,409
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed securities:(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
3
|
|
|
$
|
1,573
|
|
|
$
|
—
|
|
|
$
|
5,298
|
|
|
$
|
6,874
|
|
Estimated fair value
|
4
|
|
|
1,668
|
|
|
—
|
|
|
5,570
|
|
|
7,242
|
|
|||||
Weighted average yield(3)
|
6.50
|
%
|
|
5.54
|
%
|
|
—
|
%
|
|
4.53
|
%
|
|
4.76
|
%
|
|||||
Tax-exempt asset-backed securities:(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized Cost
|
—
|
|
|
—
|
|
|
—
|
|
|
95,518
|
|
|
95,518
|
|
|||||
Estimated fair value
|
—
|
|
|
—
|
|
|
—
|
|
|
95,804
|
|
|
95,804
|
|
|||||
Weighted average yield(2)(3)
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
4.25
|
%
|
|
4.25
|
%
|
|||||
Total available-for-sale debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized cost
|
|
|
|
|
|
|
|
|
$
|
102,392
|
|
||||||||
Estimated fair value
|
|
|
|
|
|
|
|
|
$
|
103,046
|
|
(1)
|
Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without prepayment penalties.
|
(2)
|
Yields have been adjusted to a tax equivalent basis assuming a
21%
federal tax rate.
|
(3)
|
Yields are calculated based on amortized cost.
|
March 31, 2019
|
Less Than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
(in thousands)
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
||||||||||||
CRT securities
|
$
|
14,713
|
|
|
$
|
(4,076
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,713
|
|
|
$
|
(4,076
|
)
|
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Net gains/(losses) recognized during the period
|
|
$
|
1,266
|
|
|
$
|
(212
|
)
|
Less: Realized net gains/(losses) recognized during the period on equity securities sold
|
|
(30
|
)
|
|
—
|
|
||
Unrealized net gains/(losses) recognized during the period on equity securities still held
|
|
$
|
1,296
|
|
|
$
|
(212
|
)
|
(in thousands)
|
March 31, 2019
|
|
December 31, 2018
|
||||
Commercial
|
$
|
10,673,960
|
|
|
$
|
10,373,288
|
|
Mortgage finance(1)
|
6,299,710
|
|
|
5,877,524
|
|
||
Construction
|
2,493,192
|
|
|
2,120,966
|
|
||
Real estate
|
3,642,566
|
|
|
3,929,117
|
|
||
Consumer
|
61,377
|
|
|
63,438
|
|
||
Equipment leases
|
292,248
|
|
|
312,191
|
|
||
Gross loans held for investment
|
23,463,053
|
|
|
22,676,524
|
|
||
Deferred income (net of direct origination costs)
|
(101,753
|
)
|
|
(108,450
|
)
|
||
Allowance for loan losses
|
(208,573
|
)
|
|
(191,522
|
)
|
||
Total loans held for investment, net
|
$
|
23,152,727
|
|
|
$
|
22,376,552
|
|
(1)
|
Balances at March 31, 2019 and December 31, 2018 are stated net of
$185.4 million
and
$193.0 million
of participations sold, respectively.
|
(in thousands)
|
Commercial
|
|
Mortgage
Finance
|
|
Construction
|
|
Real Estate
|
|
Consumer
|
|
Equipment Leases
|
|
Total
|
||||||||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Grade:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pass
|
$
|
10,205,865
|
|
|
$
|
6,299,710
|
|
|
$
|
2,478,880
|
|
|
$
|
3,526,380
|
|
|
$
|
59,759
|
|
|
$
|
289,664
|
|
|
$
|
22,860,258
|
|
Special mention
|
200,920
|
|
|
—
|
|
|
—
|
|
|
75,755
|
|
|
—
|
|
|
1,975
|
|
|
278,650
|
|
|||||||
Substandard-accruing
|
145,988
|
|
|
—
|
|
|
14,312
|
|
|
27,980
|
|
|
1,566
|
|
|
609
|
|
|
190,455
|
|
|||||||
Non-accrual
|
121,187
|
|
|
—
|
|
|
—
|
|
|
12,451
|
|
|
52
|
|
|
—
|
|
|
133,690
|
|
|||||||
Total loans held for investment
|
$
|
10,673,960
|
|
|
$
|
6,299,710
|
|
|
$
|
2,493,192
|
|
|
$
|
3,642,566
|
|
|
$
|
61,377
|
|
|
$
|
292,248
|
|
|
$
|
23,463,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Grade:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pass
|
$
|
10,034,597
|
|
|
$
|
5,877,524
|
|
|
$
|
2,099,955
|
|
|
$
|
3,850,811
|
|
|
$
|
61,815
|
|
|
$
|
309,775
|
|
|
$
|
22,234,477
|
|
Special mention
|
120,531
|
|
|
—
|
|
|
21,011
|
|
|
47,644
|
|
|
—
|
|
|
2,223
|
|
|
191,409
|
|
|||||||
Substandard-accruing
|
140,297
|
|
|
—
|
|
|
—
|
|
|
28,205
|
|
|
1,568
|
|
|
193
|
|
|
170,263
|
|
|||||||
Non-accrual
|
77,863
|
|
|
—
|
|
|
—
|
|
|
2,457
|
|
|
55
|
|
|
—
|
|
|
80,375
|
|
|||||||
Total loans held for investment
|
$
|
10,373,288
|
|
|
$
|
5,877,524
|
|
|
$
|
2,120,966
|
|
|
$
|
3,929,117
|
|
|
$
|
63,438
|
|
|
$
|
312,191
|
|
|
$
|
22,676,524
|
|
(in thousands)
|
Commercial
|
Mortgage
Finance
|
Construction
|
Real
Estate
|
Consumer
|
Equipment Leases
|
Additional Qualitative Reserve
|
Total
|
||||||||||||||||
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
|
||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Beginning balance
|
$
|
129,442
|
|
$
|
—
|
|
$
|
19,242
|
|
$
|
33,353
|
|
$
|
425
|
|
$
|
1,829
|
|
$
|
7,231
|
|
$
|
191,522
|
|
Provision for loan losses
|
25,506
|
|
1,300
|
|
3,583
|
|
(1,272
|
)
|
(46
|
)
|
(201
|
)
|
(7,231
|
)
|
21,639
|
|
||||||||
Charge-offs
|
4,865
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,865
|
|
||||||||
Recoveries
|
266
|
|
—
|
|
—
|
|
—
|
|
10
|
|
1
|
|
—
|
|
277
|
|
||||||||
Net charge-offs (recoveries)
|
4,599
|
|
—
|
|
—
|
|
—
|
|
(10
|
)
|
(1
|
)
|
—
|
|
4,588
|
|
||||||||
Ending balance
|
$
|
150,349
|
|
$
|
1,300
|
|
$
|
22,825
|
|
$
|
32,081
|
|
$
|
389
|
|
$
|
1,629
|
|
$
|
—
|
|
$
|
208,573
|
|
Period end allowance for loan losses allocated to:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loans individually evaluated for impairment
|
$
|
27,409
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,599
|
|
$
|
10
|
|
$
|
—
|
|
$
|
—
|
|
$
|
29,018
|
|
Loans collectively evaluated for impairment
|
122,940
|
|
1,300
|
|
22,825
|
|
30,482
|
|
379
|
|
1,629
|
|
—
|
|
179,555
|
|
||||||||
Total
|
$
|
150,349
|
|
$
|
1,300
|
|
$
|
22,825
|
|
$
|
32,081
|
|
$
|
389
|
|
$
|
1,629
|
|
$
|
—
|
|
$
|
208,573
|
|
Period end loans allocated to:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loans individually evaluated for impairment
|
$
|
121,187
|
|
$
|
—
|
|
$
|
—
|
|
$
|
18,709
|
|
$
|
52
|
|
$
|
—
|
|
$
|
—
|
|
$
|
139,948
|
|
Loans collectively evaluated for impairment
|
10,552,773
|
|
6,299,710
|
|
2,493,192
|
|
3,623,857
|
|
61,325
|
|
292,248
|
|
—
|
|
23,323,105
|
|
||||||||
Total
|
$
|
10,673,960
|
|
$
|
6,299,710
|
|
$
|
2,493,192
|
|
$
|
3,642,566
|
|
$
|
61,377
|
|
$
|
292,248
|
|
$
|
—
|
|
$
|
23,463,053
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Three months ended March 31, 2018
|
|
|
|
|
|
|
|
|
||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Beginning balance
|
$
|
118,806
|
|
$
|
—
|
|
$
|
19,273
|
|
$
|
34,287
|
|
$
|
357
|
|
$
|
3,542
|
|
$
|
8,390
|
|
$
|
184,655
|
|
Provision for loan losses
|
17,546
|
|
—
|
|
(518
|
)
|
(200
|
)
|
(178
|
)
|
(18
|
)
|
(5,184
|
)
|
11,448
|
|
||||||||
Charge-offs
|
5,667
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,667
|
|
||||||||
Recoveries
|
360
|
|
—
|
|
—
|
|
24
|
|
59
|
|
19
|
|
—
|
|
462
|
|
||||||||
Net charge-offs (recoveries)
|
5,307
|
|
—
|
|
—
|
|
(24
|
)
|
(59
|
)
|
(19
|
)
|
—
|
|
5,205
|
|
||||||||
Ending balance
|
$
|
131,045
|
|
$
|
—
|
|
$
|
18,755
|
|
$
|
34,111
|
|
$
|
238
|
|
$
|
3,543
|
|
$
|
3,206
|
|
$
|
190,898
|
|
Period end allowance for loan losses allocated to:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loans individually evaluated for impairment
|
$
|
34,897
|
|
$
|
—
|
|
$
|
—
|
|
$
|
22
|
|
$
|
2
|
|
$
|
—
|
|
$
|
—
|
|
$
|
34,921
|
|
Loans collectively evaluated for impairment
|
96,148
|
|
—
|
|
18,755
|
|
34,089
|
|
236
|
|
3,543
|
|
3,206
|
|
155,977
|
|
||||||||
Total
|
$
|
131,045
|
|
$
|
—
|
|
$
|
18,755
|
|
$
|
34,111
|
|
$
|
238
|
|
$
|
3,543
|
|
$
|
3,206
|
|
$
|
190,898
|
|
Period end loans allocated to:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loans individually evaluated for impairment
|
$
|
123,206
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,187
|
|
$
|
72
|
|
$
|
—
|
|
$
|
—
|
|
$
|
124,465
|
|
Loans collectively evaluated for impairment
|
9,337,818
|
|
4,689,938
|
|
2,224,403
|
|
3,833,571
|
|
47,239
|
|
276,303
|
|
—
|
|
20,409,272
|
|
||||||||
Total
|
$
|
9,461,024
|
|
$
|
4,689,938
|
|
$
|
2,224,403
|
|
$
|
3,834,758
|
|
$
|
47,311
|
|
$
|
276,303
|
|
$
|
—
|
|
$
|
20,533,737
|
|
(in thousands)
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Related
Allowance
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
||||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
|
|
|
|
|
|
|
|
||||||||||
Business loans
|
$
|
21,075
|
|
|
$
|
37,077
|
|
|
$
|
—
|
|
|
$
|
12,218
|
|
|
$
|
—
|
|
Energy loans
|
9,048
|
|
|
10,124
|
|
|
—
|
|
|
5,724
|
|
|
—
|
|
|||||
Real estate
|
|
|
|
|
|
|
|
|
|
||||||||||
Market risk
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commercial
|
7,220
|
|
|
7,220
|
|
|
—
|
|
|
4,048
|
|
|
—
|
|
|||||
Secured by 1-4 family
|
1,228
|
|
|
1,228
|
|
|
—
|
|
|
683
|
|
|
—
|
|
|||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Equipment leases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total impaired loans with no allowance recorded
|
$
|
38,571
|
|
|
$
|
55,649
|
|
|
$
|
—
|
|
|
$
|
22,673
|
|
|
$
|
—
|
|
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
|
|
|
|
|
|
|
|
||||||||||
Business loans
|
$
|
23,374
|
|
|
$
|
23,909
|
|
|
$
|
9,663
|
|
|
$
|
11,687
|
|
|
$
|
—
|
|
Energy loans
|
67,690
|
|
|
70,551
|
|
|
17,746
|
|
|
28,195
|
|
|
—
|
|
|||||
Real estate
|
|
|
|
|
|
|
|
|
|
||||||||||
Market risk
|
8,478
|
|
|
8,478
|
|
|
1,378
|
|
|
2,826
|
|
|
—
|
|
|||||
Commercial
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Secured by 1-4 family
|
1,783
|
|
|
1,783
|
|
|
221
|
|
|
647
|
|
|
—
|
|
|||||
Consumer
|
52
|
|
|
52
|
|
|
10
|
|
|
30
|
|
|
—
|
|
|||||
Equipment leases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total impaired loans with an allowance recorded
|
$
|
101,377
|
|
|
$
|
104,773
|
|
|
$
|
29,018
|
|
|
$
|
43,385
|
|
|
$
|
—
|
|
Combined:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
|
|
|
|
|
|
|
|
||||||||||
Business loans
|
$
|
44,449
|
|
|
$
|
60,986
|
|
|
$
|
9,663
|
|
|
$
|
23,905
|
|
|
$
|
—
|
|
Energy loans
|
76,738
|
|
|
80,675
|
|
|
17,746
|
|
|
33,919
|
|
|
—
|
|
|||||
Real estate
|
|
|
|
|
|
|
|
|
|
||||||||||
Market risk
|
8,478
|
|
|
8,478
|
|
|
1,378
|
|
|
2,826
|
|
|
—
|
|
|||||
Commercial
|
7,220
|
|
|
7,220
|
|
|
—
|
|
|
4,048
|
|
|
—
|
|
|||||
Secured by 1-4 family
|
3,011
|
|
|
3,011
|
|
|
221
|
|
|
1,330
|
|
|
—
|
|
|||||
Consumer
|
52
|
|
|
52
|
|
|
10
|
|
|
30
|
|
|
—
|
|
|||||
Equipment leases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total impaired loans
|
$
|
139,948
|
|
|
$
|
160,422
|
|
|
$
|
29,018
|
|
|
$
|
66,058
|
|
|
$
|
—
|
|
(in thousands)
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Related
Allowance
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
|
|
|
|
|
|
|
|
||||||||||
Business loans
|
$
|
23,367
|
|
|
$
|
55,008
|
|
|
$
|
—
|
|
|
$
|
16,426
|
|
|
$
|
133
|
|
Energy loans
|
12,188
|
|
|
13,363
|
|
|
—
|
|
|
17,135
|
|
|
—
|
|
|||||
Real estate
|
|
|
|
|
|
|
|
|
|
||||||||||
Market risk
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commercial
|
7,388
|
|
|
7,388
|
|
|
—
|
|
|
3,215
|
|
|
—
|
|
|||||
Secured by 1-4 family
|
1,233
|
|
|
1,233
|
|
|
—
|
|
|
734
|
|
|
—
|
|
|||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Equipment leases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total impaired loans with no allowance recorded
|
$
|
44,176
|
|
|
$
|
76,992
|
|
|
$
|
—
|
|
|
$
|
37,510
|
|
|
$
|
133
|
|
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
|
|
|
|
|
|
|
|
||||||||||
Business loans
|
$
|
17,529
|
|
|
$
|
17,564
|
|
|
$
|
4,679
|
|
|
$
|
41,307
|
|
|
$
|
—
|
|
Energy loans
|
25,344
|
|
|
28,105
|
|
|
3,573
|
|
|
25,672
|
|
|
—
|
|
|||||
Real estate
|
|
|
|
|
|
|
|
|
|
||||||||||
Market risk
|
—
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|
—
|
|
|||||
Commercial
|
—
|
|
|
—
|
|
|
—
|
|
|
83
|
|
|
—
|
|
|||||
Secured by 1-4 family
|
236
|
|
|
236
|
|
|
48
|
|
|
188
|
|
|
—
|
|
|||||
Consumer
|
55
|
|
|
55
|
|
|
10
|
|
|
54
|
|
|
—
|
|
|||||
Equipment leases
|
—
|
|
|
—
|
|
|
—
|
|
|
275
|
|
|
—
|
|
|||||
Total impaired loans with an allowance recorded
|
$
|
43,164
|
|
|
$
|
45,960
|
|
|
$
|
8,310
|
|
|
$
|
67,628
|
|
|
$
|
—
|
|
Combined:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
|
|
|
|
|
|
|
|
||||||||||
Business loans
|
$
|
40,896
|
|
|
$
|
72,572
|
|
|
$
|
4,679
|
|
|
$
|
57,733
|
|
|
$
|
133
|
|
Energy loans
|
37,532
|
|
|
41,468
|
|
|
3,573
|
|
|
42,807
|
|
|
—
|
|
|||||
Real estate
|
|
|
|
|
|
|
|
|
|
||||||||||
Market risk
|
—
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|
—
|
|
|||||
Commercial
|
7,388
|
|
|
7,388
|
|
|
—
|
|
|
3,298
|
|
|
—
|
|
|||||
Secured by 1-4 family
|
1,469
|
|
|
1,469
|
|
|
48
|
|
|
922
|
|
|
—
|
|
|||||
Consumer
|
55
|
|
|
55
|
|
|
10
|
|
|
54
|
|
|
—
|
|
|||||
Equipment leases
|
—
|
|
|
—
|
|
|
—
|
|
|
275
|
|
|
—
|
|
|||||
Total impaired loans
|
$
|
87,340
|
|
|
$
|
122,952
|
|
|
$
|
8,310
|
|
|
$
|
105,138
|
|
|
$
|
133
|
|
(in thousands)
|
30-59 Days
Past Due
|
|
60-89 Days
Past Due
|
|
Greater Than
90 Days(1)
|
|
Total Past
Due
|
|
Non-accrual
|
|
Current
|
|
Total
|
||||||||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Business loans
|
$
|
32,935
|
|
|
$
|
13,524
|
|
|
$
|
12,093
|
|
|
$
|
58,552
|
|
|
$
|
44,449
|
|
|
$
|
8,869,686
|
|
|
$
|
8,972,687
|
|
Energy
|
603
|
|
|
—
|
|
|
—
|
|
|
603
|
|
|
76,738
|
|
|
1,623,932
|
|
|
1,701,273
|
|
|||||||
Mortgage finance loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,299,710
|
|
|
6,299,710
|
|
|||||||
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Market risk
|
688
|
|
|
14,312
|
|
|
—
|
|
|
15,000
|
|
|
—
|
|
|
2,367,746
|
|
|
2,382,746
|
|
|||||||
Commercial
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80,659
|
|
|
80,659
|
|
|||||||
Secured by 1-4 family
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,787
|
|
|
29,787
|
|
|||||||
Real estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Market risk
|
5,030
|
|
|
607
|
|
|
—
|
|
|
5,637
|
|
|
8,478
|
|
|
2,546,670
|
|
|
2,560,785
|
|
|||||||
Commercial
|
4,834
|
|
|
669
|
|
|
—
|
|
|
5,503
|
|
|
962
|
|
|
719,349
|
|
|
725,814
|
|
|||||||
Secured by 1-4 family
|
7,748
|
|
|
—
|
|
|
86
|
|
|
7,834
|
|
|
3,011
|
|
|
345,122
|
|
|
355,967
|
|
|||||||
Consumer
|
2,442
|
|
|
75
|
|
|
66
|
|
|
2,583
|
|
|
52
|
|
|
58,742
|
|
|
61,377
|
|
|||||||
Equipment leases
|
1,697
|
|
|
—
|
|
|
—
|
|
|
1,697
|
|
|
—
|
|
|
290,551
|
|
|
292,248
|
|
|||||||
Total loans held for investment
|
$
|
55,977
|
|
|
$
|
29,187
|
|
|
$
|
12,245
|
|
|
$
|
97,409
|
|
|
$
|
133,690
|
|
|
$
|
23,231,954
|
|
|
$
|
23,463,053
|
|
(1)
|
Loans past due 90 days and still accruing includes premium finance loans of
$12.0 million
. These loans are generally secured by obligations of insurance carriers to refund premiums on canceled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date.
|
|
|
Extended Maturity
|
|
Adjusted Payment Schedule
|
|
Total
|
||||||||||||
(in thousands, except number of contracts)
|
|
Number of Contracts
|
Balance at Period End
|
|
Number of Contracts
|
Balance at Period End
|
|
Number of Contracts
|
Balance at Period End
|
|||||||||
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial:
|
|
|
|
|
|
|
|
|
|
|||||||||
Energy loans
|
|
1
|
|
$
|
22,540
|
|
|
—
|
|
$
|
—
|
|
|
1
|
|
$
|
22,540
|
|
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Beginning balance
|
|
$
|
79
|
|
|
$
|
11,742
|
|
Sales
|
|
(79
|
)
|
|
(184
|
)
|
||
Valuation allowance for OREO
|
|
—
|
|
|
(2,000
|
)
|
||
Ending balance
|
|
$
|
—
|
|
|
$
|
9,558
|
|
|
|
Three Months Ended March 31,
|
|
Three Months Ended March 31,
|
||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Outstanding balance:
|
|
|
|
|
||||
Beginning balance(1)
|
|
$
|
1,949,785
|
|
|
$
|
1,012,580
|
|
Loans purchased
|
|
1,550,059
|
|
|
1,479,006
|
|
||
Payments and loans sold
|
|
(1,617,518
|
)
|
|
(1,399,683
|
)
|
||
Ending balance
|
|
1,882,326
|
|
|
1,091,903
|
|
||
Fair value adjustment:
|
|
|
|
|
||||
Beginning balance(1)
|
|
19,689
|
|
|
(1,576
|
)
|
||
Increase/(decrease) to fair value
|
|
(378
|
)
|
|
(1,762
|
)
|
||
Ending balance
|
|
19,311
|
|
|
(3,338
|
)
|
||
Loans held for sale at fair value
|
|
$
|
1,901,637
|
|
|
$
|
1,088,565
|
|
(1)
|
Includes
$299,000
of loans held for sale that are carried at lower of cost or market as of
December 31, 2018
.
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
MSRs:
|
|
|
|
||||
Balance, beginning of year
|
$
|
42,474
|
|
|
$
|
88,150
|
|
Capitalized servicing rights
|
6,138
|
|
|
16,750
|
|
||
Amortization
|
(1,593
|
)
|
|
(2,741
|
)
|
||
Sales
|
—
|
|
|
(25,598
|
)
|
||
Balance, end of period
|
$
|
47,019
|
|
|
$
|
76,561
|
|
Valuation allowance:
|
|
|
|
||||
Balance, beginning of year
|
$
|
—
|
|
|
$
|
2,823
|
|
Increase (decrease) in valuation allowance
|
2,931
|
|
|
(2,823
|
)
|
||
Balance, end of period
|
$
|
2,931
|
|
|
$
|
—
|
|
MSRs, net
|
$
|
44,088
|
|
|
$
|
76,561
|
|
MSRs, fair value
|
$
|
44,691
|
|
|
$
|
82,274
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||
Average discount rates
|
9.54
|
%
|
|
9.55
|
%
|
Expected prepayment speeds
|
12.07
|
%
|
|
9.77
|
%
|
Weighted-average life, in years
|
6.1
|
|
|
7.0
|
|
(in thousands)
|
March 31, 2019
|
|
December 31, 2018
|
||||
50 bp adverse change in prepayment speed
|
$
|
(6,407
|
)
|
|
$
|
(6,028
|
)
|
100 bp adverse change in prepayment speed
|
(10,989
|
)
|
|
(11,629
|
)
|
(in thousands)
|
|
Three months ended
March 31, 2019 |
||
Operating lease cost
|
|
$
|
3,516
|
|
Variable lease cost
|
|
903
|
|
|
Sublease income
|
|
(31
|
)
|
|
Net lease cost
|
|
$
|
4,388
|
|
(in thousands except for percent and period data)
|
|
Three months ended
March 31, 2019 |
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
3,781
|
|
Right-of-use assets obtained in exchange for new finance lease liabilities
|
|
64,493
|
|
|
Weighted-average remaining lease term - operating leases, in years
|
|
5.9
|
|
|
Weighted-average discount rate - operating leases
|
|
2.8
|
%
|
(in thousands)
|
|
March 31, 2019
|
||
2019
|
|
$
|
10,878
|
|
2020
|
|
14,521
|
|
|
2021
|
|
14,236
|
|
|
2022
|
|
13,372
|
|
|
2023
|
|
12,400
|
|
|
2024 and thereafter
|
|
12,327
|
|
|
Total lease payments
|
|
77,734
|
|
|
Less: Interest
|
|
(6,048
|
)
|
|
Present value of lease liabilities
|
|
$
|
71,686
|
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Beginning balance of allowance for off-balance sheet credit losses
|
$
|
11,434
|
|
|
$
|
9,071
|
|
Provision for off-balance sheet credit losses
|
(1,639
|
)
|
|
552
|
|
||
Ending balance of allowance for off-balance sheet credit losses
|
$
|
9,795
|
|
|
$
|
9,623
|
|
|
|
|
|
||||
(in thousands)
|
March 31, 2019
|
|
December 31, 2018
|
||||
Commitments to extend credit - period end balance
|
$
|
7,846,910
|
|
|
$
|
8,030,198
|
|
Standby letters of credit - period end balance
|
$
|
265,125
|
|
|
$
|
236,537
|
|
|
|
Actual
|
|
Minimum Capital Required - Basel III Phase-In Schedule
|
|
Minimum capital Required - Basel III Fully Phased-In
|
|
Required to be Considered Well Capitalized
|
|||||||||||||||
(dollars in thousands)
|
|
Capital Amount
|
Ratio
|
|
Capital Amount
|
Ratio
|
|
Capital Amount
|
Ratio
|
|
Capital Amount
|
Ratio
|
|||||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
CET1
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Company
|
|
$
|
2,412,290
|
|
8.64
|
%
|
|
N/A
|
N/A
|
|
$
|
1,954,119
|
|
7.00
|
%
|
|
N/A
|
|
N/A
|
|
|||
Bank
|
|
2,426,687
|
|
8.70
|
%
|
|
N/A
|
N/A
|
|
1,953,530
|
|
7.00
|
%
|
|
1,813,992
|
|
6.50
|
%
|
|||||
Total capital (to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Company
|
|
3,169,288
|
|
11.35
|
%
|
|
N/A
|
N/A
|
|
2,931,179
|
|
10.50
|
%
|
|
N/A
|
|
N/A
|
|
|||||
Bank
|
|
3,025,046
|
|
10.84
|
%
|
|
N/A
|
N/A
|
|
2,930,295
|
|
10.50
|
%
|
|
2,790,757
|
|
10.00
|
%
|
|||||
Tier 1 capital (to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Company
|
|
2,669,063
|
|
9.56
|
%
|
|
N/A
|
N/A
|
|
2,372,859
|
|
8.50
|
%
|
|
N/A
|
|
N/A
|
|
|||||
Bank
|
|
2,583,460
|
|
9.26
|
%
|
|
N/A
|
N/A
|
|
2,372,143
|
|
8.50
|
%
|
|
2,232,605
|
|
8.00
|
%
|
|||||
Tier 1 capital (to average assets)(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Company
|
|
2,669,063
|
|
10.02
|
%
|
|
N/A
|
N/A
|
|
1,065,414
|
|
4.00
|
%
|
|
N/A
|
|
N/A
|
|
|||||
Bank
|
|
2,583,460
|
|
9.70
|
%
|
|
N/A
|
N/A
|
|
1,064,951
|
|
4.00
|
%
|
|
1,331,188
|
|
5.00
|
%
|
|||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
CET1
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Company
|
|
$
|
2,330,599
|
|
8.58
|
%
|
|
$
|
1,732,501
|
|
6.38
|
%
|
|
$
|
1,902,354
|
|
7.00
|
%
|
|
N/A
|
|
N/A
|
|
Bank
|
|
2,340,988
|
|
8.62
|
%
|
|
1,731,955
|
|
6.38
|
%
|
|
1,901,755
|
|
7.00
|
%
|
|
1,765,915
|
|
6.50
|
%
|
|||
Total capital (to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Company
|
|
3,074,097
|
|
11.31
|
%
|
|
2,683,679
|
|
9.88
|
%
|
|
2,853,532
|
|
10.50
|
%
|
|
N/A
|
|
N/A
|
|
|||
Bank
|
|
2,925,872
|
|
10.77
|
%
|
|
2,682,833
|
|
9.88
|
%
|
|
2,852,632
|
|
10.50
|
%
|
|
2,716,793
|
|
10.00
|
%
|
|||
Tier 1 capital (to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Company
|
|
2,589,374
|
|
9.53
|
%
|
|
2,140,149
|
|
7.88
|
%
|
|
2,310,002
|
|
8.50
|
%
|
|
N/A
|
|
N/A
|
|
|||
Bank
|
|
2,499,763
|
|
9.20
|
%
|
|
2,139,474
|
|
7.88
|
%
|
|
2,309,274
|
|
8.50
|
%
|
|
2,173,434
|
|
8.00
|
%
|
|||
Tier 1 capital (to average assets)(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Company
|
|
2,589,374
|
|
9.87
|
%
|
|
1,049,694
|
|
4.00
|
%
|
|
1,049,694
|
|
4.00
|
%
|
|
N/A
|
|
N/A
|
|
|||
Bank
|
|
2,499,763
|
|
9.53
|
%
|
|
1,049,296
|
|
4.00
|
%
|
|
1,049,296
|
|
4.00
|
%
|
|
1,311,620
|
|
5.00
|
%
|
(1)
|
The Tier 1 capital ratio (to average assets) is not impacted by the Basel III Capital Rules; however, the Federal Reserve Board and the FDIC may require the Company and the Bank, respectively, to maintain a Tier 1 capital ratio (to average assets) above the required minimum.
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Stock-settled awards:
|
|
|
|
||||
SARs
|
$
|
6
|
|
|
$
|
50
|
|
RSUs
|
2,407
|
|
|
1,896
|
|
||
Restricted stock
|
10
|
|
|
11
|
|
||
Cash-settled performance units
|
2,065
|
|
|
4,014
|
|
||
Total
|
$
|
4,488
|
|
|
$
|
5,971
|
|
(in thousands except period data)
|
March 31, 2019
|
||
Unrecognized compensation expense related to unvested stock-settled awards
|
$
|
30,167
|
|
Weighted average period over which expense is expected to be recognized, in years
|
3.3
|
|
Level 1
|
Quoted prices in active markets for identical assets or liabilities.
|
Level 2
|
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
Level 3
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair values requires significant management judgment or estimation.
|
|
Fair Value Measurements Using
|
||||||||||
(in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
March 31, 2019
|
|
|
|
|
|
||||||
Available-for-sale debt securities:(1)
|
|
|
|
|
|
||||||
Residential mortgage-backed securities
|
$
|
—
|
|
|
$
|
6,928
|
|
|
$
|
—
|
|
Tax-exempt asset-backed securities
|
—
|
|
|
—
|
|
|
191,844
|
|
|||
CRT securities
|
—
|
|
|
—
|
|
|
10,637
|
|
|||
Equity securities(1)(2)
|
14,338
|
|
|
7,002
|
|
|
—
|
|
|||
Loans held for sale(3)
|
—
|
|
|
1,888,591
|
|
|
13,046
|
|
|||
Loans held for investment(4)(6)
|
—
|
|
|
—
|
|
|
39,719
|
|
|||
Derivative assets(7)
|
—
|
|
|
31,049
|
|
|
—
|
|
|||
Derivative liabilities(7)
|
—
|
|
|
42,288
|
|
|
—
|
|
|||
Non-qualified deferred compensation plan liabilities(8)
|
14,548
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
December 31, 2018
|
|
|
|
|
|
||||||
Available-for-sale debt securities:(1)
|
|
|
|
|
|
||||||
Residential mortgage-backed securities
|
$
|
—
|
|
|
$
|
7,242
|
|
|
$
|
—
|
|
Tax-exempt asset-backed securities
|
—
|
|
|
—
|
|
|
95,804
|
|
|||
Equity securities(1)(2)
|
10,262
|
|
|
6,908
|
|
|
—
|
|
|||
Loans held for sale(3)
|
—
|
|
|
1,952,760
|
|
|
16,415
|
|
|||
Loans held for investment(4)(6)
|
—
|
|
|
—
|
|
|
29,885
|
|
|||
OREO(5)(6)
|
—
|
|
|
—
|
|
|
79
|
|
|||
Derivative assets(7)
|
—
|
|
|
21,806
|
|
|
—
|
|
|||
Derivative liabilities(7)
|
—
|
|
|
41,375
|
|
|
—
|
|
|||
Non-qualified deferred compensation plan liabilities(8)
|
10,148
|
|
|
—
|
|
|
—
|
|
(1)
|
Securities are measured at fair value on a recurring basis, generally monthly, except for tax-exempt asset-backed securities and CRT securities which are measured quarterly.
|
(2)
|
Equity securities consist of Community Reinvestment Act funds and investments related to our non-qualified deferred compensation plan.
|
(3)
|
Loans held for sale purchased through our MCA program are measured at fair value on a recurring basis, generally monthly.
|
(4)
|
Includes impaired loans that have been measured for impairment at the fair value of the loan’s collateral.
|
(5)
|
OREO is transferred from loans to OREO at fair value less selling costs.
|
(6)
|
Loans held for investment and OREO are measured on a nonrecurring basis, generally annually or more often as warranted by market and economic conditions.
|
(7)
|
Derivative assets and liabilities are measured at fair value on a recurring basis, generally quarterly.
|
(8)
|
Non-qualified deferred compensation plan liabilities represent the fair value of the obligation to the employee, which generally corresponds to the fair value of the invested assets, and are measured at fair value on a recurring basis, generally monthly.
|
|
|
|
|
|
|
|
Net Realized/Unrealized Gains (Losses)
|
|
|
||||||||||||||
(in thousands)
|
Balance at Beginning of Period
|
|
Purchases / Additions
|
|
Sales / Reductions
|
|
Realized
|
|
Unrealized
|
|
Balance at End of Period
|
||||||||||||
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Available-for-sale debt securities:(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tax-exempt asset-backed securities
|
$
|
95,804
|
|
|
$
|
92,010
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,030
|
|
|
$
|
191,844
|
|
CRT securities
|
$
|
—
|
|
|
$
|
15,044
|
|
|
$
|
—
|
|
|
$
|
(331
|
)
|
|
$
|
(4,076
|
)
|
|
$
|
10,637
|
|
Loans held for sale(2)
|
$
|
16,415
|
|
|
$
|
—
|
|
|
$
|
(3,878
|
)
|
|
$
|
216
|
|
|
$
|
293
|
|
|
$
|
13,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three months ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans held for sale(2)
|
$
|
—
|
|
|
$
|
36,092
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,841
|
)
|
|
$
|
34,251
|
|
(1)
|
Unrealized gains/(losses) on available-for-sale debt securities are recorded in AOCI. Realized gains/(losses) are recorded in other non-interest income.
|
(2)
|
Realized and unrealized gains/(losses) on loans held for sale are recorded in gain/(loss) on sale of loans held for sale.
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
(in thousands)
|
Carrying
Amount
|
|
Estimated
Fair Value
|
|
Carrying
Amount |
|
Estimated
Fair Value |
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Level 1 inputs:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
2,331,292
|
|
|
$
|
2,331,292
|
|
|
$
|
3,080,065
|
|
|
$
|
3,080,065
|
|
Investment securities
|
14,338
|
|
|
14,338
|
|
|
10,262
|
|
|
10,262
|
|
||||
Level 2 inputs:
|
|
|
|
|
|
|
|
||||||||
Investment securities
|
13,930
|
|
|
13,930
|
|
|
14,150
|
|
|
14,150
|
|
||||
Loans held for sale
|
1,888,591
|
|
|
1,888,591
|
|
|
1,953,059
|
|
|
1,953,059
|
|
||||
Derivative assets
|
31,049
|
|
|
31,049
|
|
|
21,806
|
|
|
21,806
|
|
||||
Level 3 inputs:
|
|
|
|
|
|
|
|
||||||||
Investment securities
|
202,481
|
|
|
202,481
|
|
|
95,804
|
|
|
95,804
|
|
||||
Loans held for sale
|
13,046
|
|
|
13,046
|
|
|
16,415
|
|
|
16,415
|
|
||||
Loans held for investment, net
|
23,152,727
|
|
|
23,152,057
|
|
|
22,376,552
|
|
|
22,347,876
|
|
||||
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Level 2 inputs:
|
|
|
|
|
|
|
|
||||||||
Federal funds purchased
|
886,426
|
|
|
886,426
|
|
|
629,169
|
|
|
629,169
|
|
||||
Customer repurchase agreements
|
11,466
|
|
|
11,466
|
|
|
12,005
|
|
|
12,005
|
|
||||
Other borrowings
|
3,600,000
|
|
|
3,600,000
|
|
|
3,900,000
|
|
|
3,900,000
|
|
||||
Subordinated notes
|
281,858
|
|
|
289,179
|
|
|
281,767
|
|
|
283,349
|
|
||||
Trust preferred subordinated debentures
|
113,406
|
|
|
113,406
|
|
|
113,406
|
|
|
113,406
|
|
||||
Derivative liabilities
|
42,288
|
|
|
42,288
|
|
|
41,375
|
|
|
41,375
|
|
||||
Level 3 inputs:
|
|
|
|
|
|
|
|
||||||||
Deposits
|
20,650,127
|
|
|
20,651,839
|
|
|
20,606,113
|
|
|
20,608,494
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||
|
|
|
Estimated Fair Value
|
|
|
|
Estimated Fair Value
|
||||||||||||||
(in thousands)
|
Notional
Amount
|
|
Asset Derivative
|
Liability Derivative
|
|
Notional
Amount
|
|
Asset Derivative
|
Liability Derivative
|
||||||||||||
Non-hedging derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financial institution counterparties:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial loan/lease interest rate swaps
|
$
|
1,590,394
|
|
|
$
|
3,626
|
|
$
|
27,508
|
|
|
$
|
1,579,328
|
|
|
$
|
7,978
|
|
$
|
16,719
|
|
Commercial loan/lease interest rate caps
|
649,549
|
|
|
383
|
|
2
|
|
|
606,950
|
|
|
1,109
|
|
4
|
|
||||||
Foreign currency forward contracts
|
21,580
|
|
|
1,847
|
|
14
|
|
|
39,737
|
|
|
2,263
|
|
59
|
|
||||||
Customer counterparties:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial loan/lease interest rate swaps
|
1,590,394
|
|
|
27,508
|
|
3,626
|
|
|
1,579,328
|
|
|
16,719
|
|
7,978
|
|
||||||
Commercial loan/lease interest rate caps
|
649,549
|
|
|
2
|
|
383
|
|
|
606,950
|
|
|
4
|
|
1,109
|
|
||||||
Foreign currency forward contracts
|
21,580
|
|
|
14
|
|
1,847
|
|
|
39,737
|
|
|
59
|
|
2,263
|
|
||||||
Economic hedging interest rate derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loan purchase commitments
|
239,573
|
|
|
1,297
|
|
77
|
|
|
167,984
|
|
|
1,442
|
|
6
|
|
||||||
Forward sale commitments
|
1,623,500
|
|
|
—
|
|
12,459
|
|
|
1,928,527
|
|
|
—
|
|
21,005
|
|
||||||
Gross derivatives
|
|
|
34,677
|
|
45,916
|
|
|
|
|
29,574
|
|
49,143
|
|
||||||||
Offsetting derivative assets/liabilities
|
|
|
(3,628
|
)
|
(3,628
|
)
|
|
|
|
(7,768
|
)
|
(7,768
|
)
|
||||||||
Net derivatives included in the consolidated balance sheets
|
|
|
$
|
31,049
|
|
$
|
42,288
|
|
|
|
|
$
|
21,806
|
|
$
|
41,375
|
|
|
March 31, 2019
Weighted-Average Interest Rate
|
|
December 31, 2018 Weighted-Average Interest Rate
|
||||||||
|
Received
|
|
Paid
|
|
Received
|
|
Paid
|
||||
Non-hedging interest rate swaps
|
4.14
|
%
|
|
4.09
|
%
|
|
4.24
|
%
|
|
4.20
|
%
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Deterioration of the credit quality of our loan portfolio or declines in the value of collateral related to external factors such as commodity prices, real estate values or interest rates, increased default rates and loan losses or adverse changes in the industry concentrations of our loan portfolio.
|
•
|
Changes in the value of commercial and residential real estate securing our loans or in the demand for credit to support the purchase and ownership of such assets.
|
•
|
Changing economic conditions or other developments adversely affecting our commercial, entrepreneurial and professional customers.
|
•
|
Adverse economic conditions and other factors affecting our middle market customers and their ability to continue to meet their loan obligations.
|
•
|
The failure to correctly assess and model the assumptions supporting our allowance for loan losses, causing it to become inadequate in the event of deteriorations in loan quality and increases in charge-offs, or increases to our allowance for loan losses as a result of the implementation of CECL.
|
•
|
Changes in the U.S. economy in general or the Texas economy specifically resulting in deterioration of credit quality, increases in non-performing assets or charge-offs or reduced demand for credit or other financial services we offer, including the effects from declines in the level of drilling and production related to volatility in oil and gas prices.
|
•
|
Adverse changes in economic or market conditions, in Texas, the United States or internationally, that could affect the credit quality of our loan portfolio or our operating performance.
|
•
|
Unanticipated effects from the Tax Act may limit its benefits or adversely impact our business, which could include decreased demand for borrowing by our middle market customers or increased price competition that offsets the benefits of decreased federal income tax expense.
|
•
|
Unexpected market conditions or regulatory changes that could cause access to capital market transactions and other sources of funding to become more difficult to obtain on terms and conditions that are acceptable to us.
|
•
|
The inadequacy of our available funds to meet our deposit, debt and other obligations as they become due, or our failure to maintain our capital ratios as a result of adverse changes in our operating performance or financial condition, or changes in applicable regulations or regulator interpretation of regulations impacting our business or the characterization or risk weight of our assets.
|
•
|
The failure to effectively balance our funding sources with cash demands by depositors and borrowers.
|
•
|
The failure to manage information systems risk or to prevent cyber-attacks against us, our customers or our third party vendors, or to manage risks from disruptions or security breaches affecting us, our customers or our third party vendors.
|
•
|
The failure to effectively manage our interest rate risk resulting from unexpectedly large or sudden changes in interest rates, maturity imbalances in our assets and liabilities, potential adverse effects to our borrowers including their
|
•
|
Legislative and regulatory changes imposing further restrictions and costs on our business, a failure to remain well capitalized or well managed status or regulatory enforcement actions against us, and uncertainty related to future implementation and enforcement of regulatory requirements resulting from the current political environment.
|
•
|
The failure to successfully execute our business strategy, which may include expanding into new markets, developing and launching new lines of business or new products and services within the expected timeframes and budgets or to successfully manage the risks related to the development and implementation of these new businesses, products or services.
|
•
|
The failure to attract and retain key personnel or the loss of key individuals or groups of employees.
|
•
|
Increased or more effective competition from banks and other financial service providers in our markets.
|
•
|
Structural changes in the markets for origination, sale and servicing of residential mortgages.
|
•
|
Uncertainty in the pricing of mortgage loans that we purchase, and later sell or securitize, as well as competition for the MSRs related to these loans and related interest rate risk or price risk resulting from retaining MSRs, and the potential effects of higher interest rates on our MCA loan volumes.
|
•
|
Material failures of our accounting estimates and risk management processes based on management judgment, or the supporting analytical and forecasting models.
|
•
|
Failure of our risk management strategies and procedures, including failure or circumvention of our controls.
|
•
|
Credit risk resulting from our exposure to counterparties.
|
•
|
An increase in the incidence or severity of fraud, illegal payments, security breaches and other illegal acts impacting our Bank and our customers.
|
•
|
The failure to maintain adequate regulatory capital to support our business.
|
•
|
Unavailability of funds obtained from borrowing or capital transactions or from our Bank to fund our obligations.
|
•
|
Incurrence of material costs and liabilities associated with legal and regulatory proceedings and related matters with respect to the financial services industry, including those directly involving us or our Bank.
|
•
|
Environmental liability associated with properties related to our lending activities.
|
•
|
Severe weather, natural disasters, acts of war or terrorism and other external events.
|
|
Three months ended March 31, 2019
|
|
Three months ended March 31, 2018
|
||||||||||||||||||
in thousands except percentages)
|
Average
Balance
|
|
Revenue/
Expense
|
|
Yield/
Rate
|
|
Average
Balance
|
|
Revenue/
Expense |
|
Yield/
Rate
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities – taxable
|
$
|
30,625
|
|
|
$
|
274
|
|
|
3.62
|
%
|
|
$
|
23,854
|
|
|
$
|
206
|
|
|
3.50
|
%
|
Investment securities – non-taxable
(2)
|
114,341
|
|
|
1,501
|
|
|
5.33
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Federal funds sold and securities purchased under resale agreements
|
63,652
|
|
|
379
|
|
|
2.41
|
%
|
|
261,641
|
|
|
1,045
|
|
|
1.62
|
%
|
||||
Interest-bearing deposits in other banks
|
1,823,106
|
|
|
11,019
|
|
|
2.45
|
%
|
|
2,302,938
|
|
|
8,754
|
|
|
1.54
|
%
|
||||
Loans held for sale
|
2,122,302
|
|
|
25,303
|
|
|
4.84
|
%
|
|
1,187,594
|
|
|
12,535
|
|
|
4.28
|
%
|
||||
Loans held for investment, mortgage finance
|
4,931,879
|
|
|
46,368
|
|
|
3.81
|
%
|
|
4,097,995
|
|
|
37,362
|
|
|
3.70
|
%
|
||||
Loans held for investment
(1)(2)
|
16,866,456
|
|
|
242,155
|
|
|
5.82
|
%
|
|
15,425,323
|
|
|
195,333
|
|
|
5.14
|
%
|
||||
Less reserve for loan losses
|
192,122
|
|
|
—
|
|
|
—
|
|
|
184,238
|
|
|
—
|
|
|
—
|
|
||||
Loans held for investment, net
|
21,606,213
|
|
|
288,523
|
|
|
5.42
|
%
|
|
19,339,080
|
|
|
232,695
|
|
|
4.88
|
%
|
||||
Total earning assets
|
25,760,239
|
|
|
326,999
|
|
|
5.15
|
%
|
|
23,115,107
|
|
|
255,235
|
|
|
4.48
|
%
|
||||
Cash and other assets
|
894,797
|
|
|
|
|
|
|
797,506
|
|
|
|
|
|
||||||||
Total assets
|
$
|
26,655,036
|
|
|
|
|
|
|
$
|
23,912,613
|
|
|
|
|
|
||||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transaction deposits
|
$
|
3,263,976
|
|
|
$
|
16,001
|
|
|
1.99
|
%
|
|
$
|
2,792,954
|
|
|
$
|
8,651
|
|
|
1.26
|
%
|
Savings deposits
|
8,751,200
|
|
|
41,673
|
|
|
1.93
|
%
|
|
7,982,256
|
|
|
21,958
|
|
|
1.12
|
%
|
||||
Time deposits
|
2,010,476
|
|
|
11,380
|
|
|
2.30
|
%
|
|
506,375
|
|
|
1,093
|
|
|
0.88
|
%
|
||||
Total interest-bearing deposits
|
14,025,652
|
|
|
69,054
|
|
|
2.00
|
%
|
|
11,281,585
|
|
|
31,702
|
|
|
1.14
|
%
|
||||
Other borrowings
|
2,412,254
|
|
|
15,370
|
|
|
2.58
|
%
|
|
1,721,914
|
|
|
6,649
|
|
|
1.57
|
%
|
||||
Subordinated notes
|
281,799
|
|
|
4,191
|
|
|
6.03
|
%
|
|
281,437
|
|
|
4,191
|
|
|
6.04
|
%
|
||||
Trust preferred subordinated debentures
|
113,406
|
|
|
1,332
|
|
|
4.76
|
%
|
|
113,406
|
|
|
1,027
|
|
|
3.67
|
%
|
||||
Total interest-bearing liabilities
|
16,833,111
|
|
|
89,947
|
|
|
2.17
|
%
|
|
13,398,342
|
|
|
43,569
|
|
|
1.32
|
%
|
||||
Demand deposits
|
7,047,120
|
|
|
|
|
|
|
8,147,721
|
|
|
|
|
|
||||||||
Other liabilities
|
223,142
|
|
|
|
|
|
|
110,698
|
|
|
|
|
|
||||||||
Stockholders’ equity
|
2,551,663
|
|
|
|
|
|
|
2,255,852
|
|
|
|
|
|
||||||||
Total liabilities and stockholders’ equity
|
$
|
26,655,036
|
|
|
|
|
|
|
$
|
23,912,613
|
|
|
|
|
|
||||||
Net interest income
(2)
|
|
|
$
|
237,052
|
|
|
|
|
|
|
$
|
211,666
|
|
|
|
||||||
Net interest margin
|
|
|
|
|
3.73
|
%
|
|
|
|
|
|
3.71
|
%
|
||||||||
Net interest spread
|
|
|
|
|
2.98
|
%
|
|
|
|
|
|
3.16
|
%
|
||||||||
Loan spread
(3)
|
|
|
|
|
3.90
|
%
|
|
|
|
|
|
4.10
|
%
|
(1)
|
The loan averages include non-accrual loans and are stated net of unearned income.
|
(2)
|
Taxable equivalent rates used where applicable.
|
(3)
|
Yield on loans, net of reserves, less funding cost including all deposits and borrowed funds.
|
|
Three months ended March 31, 2019/2018
|
||||||||||
|
Net
Change
|
|
Change due to(1)
|
||||||||
(in thousands)
|
Volume
|
|
Yield/Rate(2)
|
||||||||
Interest income:
|
|
|
|
|
|
||||||
Investment securities
|
$
|
1,569
|
|
|
$
|
1,045
|
|
|
$
|
524
|
|
Loans held for sale
|
12,768
|
|
|
9,864
|
|
|
2,904
|
|
|||
Loans held for investment, mortgage finance loans
|
9,006
|
|
|
7,608
|
|
|
1,398
|
|
|||
Loans held for investment
|
46,822
|
|
|
18,265
|
|
|
28,557
|
|
|||
Federal funds sold and securities purchased under resale agreements
|
(666
|
)
|
|
(791
|
)
|
|
125
|
|
|||
Interest-bearing deposits in other banks
|
2,265
|
|
|
(1,822
|
)
|
|
4,087
|
|
|||
Total
|
71,764
|
|
|
34,169
|
|
|
37,595
|
|
|||
Interest expense:
|
|
|
|
|
|
||||||
Transaction deposits
|
7,350
|
|
|
1,463
|
|
|
5,887
|
|
|||
Savings deposits
|
19,715
|
|
|
2,124
|
|
|
17,591
|
|
|||
Time deposits
|
10,287
|
|
|
3,264
|
|
|
7,023
|
|
|||
Other borrowings
|
8,721
|
|
|
2,672
|
|
|
6,049
|
|
|||
Long-term debt
|
305
|
|
|
5
|
|
|
300
|
|
|||
Total
|
46,378
|
|
|
9,528
|
|
|
36,850
|
|
|||
Net interest income
|
$
|
25,386
|
|
|
$
|
24,641
|
|
|
$
|
745
|
|
(1)
|
Yield/rate and volume variances are allocated to yield/rate.
|
(2)
|
Taxable equivalent rates used where applicable assuming a 21% tax rate.
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Service charges on deposit accounts
|
$
|
2,979
|
|
|
$
|
3,137
|
|
Wealth management and trust fee income
|
2,009
|
|
|
1,924
|
|
||
Brokered loan fees
|
5,066
|
|
|
5,168
|
|
||
Servicing income
|
2,734
|
|
|
5,492
|
|
||
Swap fees
|
1,031
|
|
|
1,562
|
|
||
Net gain/(Loss) on sale of loans held for sale
|
(505
|
)
|
|
(2,173
|
)
|
||
Other(1)
|
16,700
|
|
|
4,837
|
|
||
Total non-interest income
|
$
|
30,014
|
|
|
$
|
19,947
|
|
(1)
|
Other non-interest income includes such items as letter of credit fees, bank owned life insurance ("BOLI") income, dividends on FHLB and FRB stock and other general operating income.
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Salaries and employee benefits
|
$
|
77,823
|
|
|
$
|
72,537
|
|
Net occupancy expense
|
7,879
|
|
|
7,234
|
|
||
Marketing
|
11,708
|
|
|
8,677
|
|
||
Legal and professional
|
10,030
|
|
|
7,530
|
|
||
Communications and technology
|
9,198
|
|
|
6,633
|
|
||
FDIC insurance assessment
|
5,122
|
|
|
6,103
|
|
||
Servicing related expenses
|
5,382
|
|
|
3,805
|
|
||
Allowance and other carrying costs for OREO
|
—
|
|
|
2,155
|
|
||
Other(1)
|
13,236
|
|
|
12,286
|
|
||
Total non-interest expense
|
$
|
140,378
|
|
|
$
|
126,960
|
|
(1)
|
Other expense includes such items as courier expenses, regulatory assessments other than FDIC insurance, insurance expenses and other general operating expenses.
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
(in thousands)
|
|
||||||
Commercial
|
$
|
10,673,960
|
|
|
$
|
10,373,288
|
|
Mortgage finance
|
6,299,710
|
|
|
5,877,524
|
|
||
Construction
|
2,493,192
|
|
|
2,120,966
|
|
||
Real estate
|
3,642,566
|
|
|
3,929,117
|
|
||
Consumer
|
61,377
|
|
|
63,438
|
|
||
Equipment leases
|
292,248
|
|
|
312,191
|
|
||
Gross loans held for investment
|
$
|
23,463,053
|
|
|
$
|
22,676,524
|
|
Deferred income (net of direct origination costs)
|
(101,753
|
)
|
|
$
|
(108,450
|
)
|
|
Allowance for loan losses
|
(208,573
|
)
|
|
$
|
(191,522
|
)
|
|
Total loans held for investment, net
|
$
|
23,152,727
|
|
|
$
|
22,376,552
|
|
(in thousands)
|
March 31, 2019
|
|
December 31, 2018
|
|
March 31, 2018
|
||||||
Non-accrual loans(1)
|
|
|
|
|
|
||||||
Commercial
|
|
|
|
|
|
||||||
Oil and gas properties
|
$
|
76,738
|
|
|
$
|
37,532
|
|
|
$
|
50,408
|
|
Assets of the borrowers
|
20,395
|
|
|
16,538
|
|
|
30,656
|
|
|||
Inventory
|
19,099
|
|
|
21,300
|
|
|
38,083
|
|
|||
Other
|
4,955
|
|
|
2,493
|
|
|
3,136
|
|
|||
Total commercial
|
121,187
|
|
|
77,863
|
|
|
122,283
|
|
|||
Real estate
|
|
|
|
|
|
|
|
|
|||
Commercial property
|
962
|
|
|
988
|
|
|
1,069
|
|
|||
Single family residences
|
2,777
|
|
|
1,233
|
|
|
—
|
|
|||
Hotel/motel
|
8,478
|
|
|
—
|
|
|
—
|
|
|||
Other
|
234
|
|
|
236
|
|
|
118
|
|
|||
Total real estate
|
12,451
|
|
|
2,457
|
|
|
1,187
|
|
|||
Consumer
|
52
|
|
|
55
|
|
|
72
|
|
|||
Total non-accrual loans
|
133,690
|
|
|
80,375
|
|
|
123,542
|
|
|||
OREO(2)
|
—
|
|
|
79
|
|
|
9,558
|
|
|||
Total non-performing assets
|
$
|
133,690
|
|
|
$
|
80,454
|
|
|
$
|
133,100
|
|
Restructured loans - accruing
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans held for investment past due 90 days and accruing(3)
|
$
|
12,245
|
|
|
$
|
9,353
|
|
|
$
|
13,563
|
|
Loans held for sale past due 90 days and accruing(4)
|
$
|
13,693
|
|
|
$
|
16,829
|
|
|
$
|
35,226
|
|
(1)
|
As of
March 31, 2019
,
December 31, 2018
and
March 31, 2018
, non-accrual loans included
$38.4 million
,
$20.0 million
and
$7.6 million
, respectively, in loans that met the criteria for restructured.
|
(2)
|
At
March 31, 2019
and
December 31, 2018
, there was no valuation allowance recorded against the OREO balance compared to
$2.0 million
at
March 31, 2018
.
|
(3)
|
At
March 31, 2019
,
December 31, 2018
and
March 31, 2018
, loans past due 90 days and still accruing includes premium finance loans of
$12.0 million
, $9.2 million and $4.1 million, respectively.
|
(4)
|
Includes loans guaranteed by U.S. government agencies that were repurchased out of Ginnie Mae securities. Loans are recorded as loans held for sale and carried at fair value on the balance sheet. Interest on these past due loans accrues at the debenture rate guaranteed by the U.S. government. Also includes loans that, pursuant to Ginnie Mae servicing guidelines, we have the unilateral right, but not the obligation, to repurchase if defined delinquent loan criteria are met and therefore must record as loans held for sale on our balance sheet regardless of whether the repurchase option has been exercised.
|
(in thousands except percentage data)
|
|
March 31, 2019
|
|
December 31, 2018
|
|
March 31, 2018
|
||||||
Federal funds sold and securities purchased under resale agreements
|
|
$
|
25,000
|
|
|
$
|
50,190
|
|
|
$
|
25,000
|
|
Interest-bearing deposits
|
|
2,129,155
|
|
|
2,815,684
|
|
|
2,271,673
|
|
|||
Total liquidity assets
|
|
$
|
2,154,155
|
|
|
$
|
2,865,874
|
|
|
$
|
2,296,673
|
|
|
|
|
|
|
|
|
||||||
Total liquidity assets as a percent of:
|
|
|
|
|
|
|
||||||
Total loans held for investment
|
|
9.2
|
%
|
|
12.7
|
%
|
|
11.2
|
%
|
|||
Total earning assets
|
|
7.9
|
%
|
|
10.5
|
%
|
|
9.7
|
%
|
|||
Total deposits
|
|
10.4
|
%
|
|
13.9
|
%
|
|
12.2
|
%
|
(in thousands)
|
March 31, 2019
|
|
December 31, 2018
|
|
March 31, 2018
|
||||||
Deposits from core customers
|
$
|
16,962,888
|
|
|
$
|
17,015,541
|
|
|
$
|
16,881,988
|
|
Deposits from core customers as a percent of total deposits
|
82.1
|
%
|
|
82.6
|
%
|
|
90.0
|
%
|
|||
Relationship brokered deposits
|
$
|
2,124,497
|
|
|
$
|
2,027,850
|
|
|
$
|
1,882,552
|
|
Relationship brokered deposits as a percent of average total deposits
|
10.3
|
%
|
|
9.8
|
%
|
|
10.0
|
%
|
|||
Traditional brokered deposits
|
$
|
1,562,742
|
|
|
$
|
1,562,722
|
|
|
$
|
—
|
|
Traditional brokered deposits as a percent of total deposits
|
7.6
|
%
|
|
7.6
|
%
|
|
—
|
%
|
|||
Average deposits from core customers(1)
|
$
|
17,446,848
|
|
|
$
|
17,504,922
|
|
|
$
|
17,530,644
|
|
Average deposits from core customers as a percent of average total deposits
|
82.8
|
%
|
|
86.6
|
%
|
|
90.2
|
%
|
|||
Average relationship brokered deposits(1)
|
$
|
2,063,222
|
|
|
$
|
1,890,824
|
|
|
$
|
1,898,662
|
|
Average relationship brokered deposits as a percent of average total deposits
|
9.8
|
%
|
|
9.4
|
%
|
|
9.8
|
%
|
|||
Average traditional brokered deposits(1)
|
$
|
1,562,702
|
|
|
$
|
817,857
|
|
|
$
|
—
|
|
Average traditional brokered deposits as a percent of average total deposits
|
7.4
|
%
|
|
4.0
|
%
|
|
—
|
%
|
(in thousands)
|
|
March 31, 2019
|
||
Federal funds purchased
|
|
$
|
886,426
|
|
Repurchase agreements
|
|
11,466
|
|
|
FHLB borrowings
|
|
3,600,000
|
|
|
Line of credit
|
|
—
|
|
|
Total short-term borrowings
|
|
$
|
4,497,892
|
|
Maximum short-term borrowings outstanding at any month-end during 2019
|
|
4,497,892
|
|
(in thousands)
|
|
March 31, 2019
|
||
FHLB borrowing capacity relating to loans
|
|
$
|
4,801,456
|
|
FHLB borrowing capacity relating to securities
|
|
686
|
|
|
Total FHLB borrowing capacity(1)
|
|
$
|
4,802,142
|
|
Unused Federal funds lines available from commercial banks
|
|
$
|
513,000
|
|
Unused Federal Reserve borrowings capacity
|
|
$
|
4,864,714
|
|
Unused revolving line of credit(2)
|
|
$
|
130,000
|
|
(1)
|
FHLB borrowings are collateralized by a blanket floating lien on certain real estate secured loans, mortgage finance assets and also certain pledged securities.
|
(2)
|
Unsecured revolving, non-amortizing line of credit with maturity date of December 17, 2019. Proceeds may be used for general corporate purposes, including funding regulatory capital infusions into the Bank. The loans agreement contains customary financial covenants and restrictions. No borrowings were made against this line of credit during the three months ended March 31, 2019.
|
(In thousands)
|
|
Within One
Year
|
|
After One But
Within Three
Years
|
|
After Three
But Within
Five Years
|
|
After
Five
Years
|
|
Total
|
||||||||||
Deposits without a stated maturity
|
|
$
|
18,622,848
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,622,848
|
|
Time deposits
|
|
2,007,963
|
|
|
17,839
|
|
|
976
|
|
|
501
|
|
|
2,027,279
|
|
|||||
Federal funds purchased and customer repurchase agreements
|
|
897,892
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
897,892
|
|
|||||
FHLB borrowings
|
|
3,600,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,600,000
|
|
|||||
Subordinated notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
281,858
|
|
|
281,858
|
|
|||||
Trust preferred subordinated debentures
|
|
—
|
|
|
—
|
|
|
—
|
|
|
113,406
|
|
|
113,406
|
|
|||||
Total contractual obligations
|
|
$
|
25,128,703
|
|
|
$
|
17,839
|
|
|
$
|
976
|
|
|
$
|
395,765
|
|
|
$
|
25,543,283
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
(in thousands)
|
0-3 mo
Balance
|
|
4-12 mo
Balance
|
|
1-3 yr
Balance
|
|
3+ yr
Balance
|
|
Total
Balance
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits in other banks, federal funds sold and securities purchased under resale agreements
|
$
|
2,154,155
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,154,155
|
|
Investment securities(1)
|
23,955
|
|
|
2,703
|
|
|
—
|
|
|
204,091
|
|
|
230,749
|
|
|||||
Total variable loans
|
21,882,788
|
|
|
33,942
|
|
|
19,060
|
|
|
404,524
|
|
|
22,340,314
|
|
|||||
Total fixed loans
|
362,094
|
|
|
1,533,370
|
|
|
460,730
|
|
|
668,182
|
|
|
3,024,376
|
|
|||||
Total loans(2)
|
22,244,882
|
|
|
1,567,312
|
|
|
479,790
|
|
|
1,072,706
|
|
|
25,364,690
|
|
|||||
Total interest sensitive assets
|
$
|
24,422,992
|
|
|
$
|
1,570,015
|
|
|
$
|
479,790
|
|
|
$
|
1,276,797
|
|
|
$
|
27,749,594
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing customer deposits
|
$
|
11,879,241
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,879,241
|
|
CDs & IRAs
|
162,075
|
|
|
283,146
|
|
|
17,839
|
|
|
1,477
|
|
|
464,537
|
|
|||||
Traditional brokered deposits
|
1,085,752
|
|
|
476,990
|
|
|
—
|
|
|
—
|
|
|
1,562,742
|
|
|||||
Total interest-bearing deposits
|
13,127,068
|
|
|
760,136
|
|
|
17,839
|
|
|
1,477
|
|
|
13,906,520
|
|
|||||
Repurchase agreements, Federal funds purchased, FHLB borrowings
|
4,497,892
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,497,892
|
|
|||||
Subordinated notes
|
—
|
|
|
—
|
|
|
—
|
|
|
281,858
|
|
|
281,858
|
|
|||||
Trust preferred subordinated debentures
|
—
|
|
|
—
|
|
|
—
|
|
|
113,406
|
|
|
113,406
|
|
|||||
Total borrowings
|
4,497,892
|
|
|
—
|
|
|
—
|
|
|
395,264
|
|
|
4,893,156
|
|
|||||
Total interest sensitive liabilities
|
$
|
17,624,960
|
|
|
$
|
760,136
|
|
|
$
|
17,839
|
|
|
$
|
396,741
|
|
|
$
|
18,799,676
|
|
GAP
|
$
|
6,798,032
|
|
|
$
|
809,879
|
|
|
$
|
461,951
|
|
|
$
|
880,056
|
|
|
$
|
—
|
|
Cumulative GAP
|
$
|
6,798,032
|
|
|
$
|
7,607,911
|
|
|
$
|
8,069,862
|
|
|
$
|
8,949,918
|
|
|
$
|
8,949,918
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Demand deposits
|
|
|
|
|
|
|
|
|
6,743,607
|
|
|||||||||
Stockholders’ equity
|
|
|
|
|
|
|
|
|
2,581,942
|
|
|||||||||
Total
|
|
|
|
|
|
|
|
|
$
|
9,325,549
|
|
(1)
|
Investment securities based on fair market value.
|
(2)
|
Total loans includes loans held for investments, stated at gross, and loans held for sale.
|
|
Anticipated Impact Over the Next
Twelve Months as Compared to Most Likely Scenario
|
||||||||||||||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||||||||||||||
(in thousands)
|
100 bps Increase
|
|
200 bps Increase
|
|
100 bps Decrease
|
|
100 bps Increase
|
|
200 bps Increase
|
||||||||||
Change in net interest income
|
$
|
102,923
|
|
|
$
|
206,515
|
|
|
$
|
(116,839
|
)
|
|
$
|
111,887
|
|
|
$
|
224,491
|
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 6.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
10.1
|
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
101.INS
|
XBRL Instance Document*
|
101.SCH
|
XBRL Taxonomy Extension Schema Document*
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document*
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document*
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document*
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document*
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
+
|
Management contract or compensatory plan arrangement
|
/s/ Julie Anderson
|
Julie Anderson
|
Chief Financial Officer
|
(Duly authorized officer and principal financial officer)
|
1.
|
For purposes of this
Exhibit A
and the Agreement, unless the context requires otherwise, the following terms shall have the meanings indicated:
|
a.
|
“
Average ROE %
” shall mean a company’s average reported return on equity for each year during the Performance Period, divided by three (not determined on an aggregate three year basis). Average ROE % of a component company in the Peer Group and of the Company shall be adjusted to take into account stock splits, reverse stock splits, and special dividends that occur during the Performance Period.
|
b.
|
“
Average EPS Growth
” shall mean a company’s average annual growth in earnings per share for the Performance Period, determined by taking the average of each individual year’s annual growth in earnings per share (measured by taking the average of each individual year’s earnings per share growth divided by three; not determined on an aggregate three-year basis) as determined by the Committee. Average EPS Growth of a component company in the Peer Group and of the Company shall be adjusted to take into account stock splits, reverse stock splits, and special dividends that occur during the Performance Period.
|
c.
|
“
Performance Period
” shall mean the period commencing on and including January 1, 2019 and ending on December 31, 2021.
|
d.
|
“
Peer Group
” shall be comprised of the following companies:
|
(i)
|
If during the Performance Period two component companies of the Peer Group merge or otherwise combine into a single entity, the surviving entity shall remain a component company of the Peer Group and the non-surviving entity shall be removed from the Peer Group, provided that the surviving entity continues to meet the criteria for inclusion in the Peer Group; if the surviving entity no longer meets the criteria for inclusion in the Peer Group, the surviving entity will be removed from the Peer Group for all periods after such merger or combination.
|
(ii)
|
If during the applicable Performance Period a component company of the Peer Group merges into or otherwise combines with an entity that is not a component company of the Peer Group, such component company shall be removed from the Peer Group for all periods after such merger or combination.
|
(iii)
|
If during the applicable Performance Period a component company of the Peer Group ceases to be a public company by becoming a private company through the “going dark” process, such component company shall be removed from the Peer Group for all periods after the component company ceases to be a public company.
|
(iv)
|
If during the applicable Performance Period a component company of the Peer Group files a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code or liquidation under Chapter 7 of the U.S. Bankruptcy Code, such component company shall be removed from the Peer Group for all periods after such filing.
|
e.
|
“
Three Year Plan
” means the three year plan approved by the Board in January 2019.
|
2.
|
Subject to paragraph 6 below, upon the achievement of Average EPS Growth for the Performance Period, as determined by the Committee, the percentage of 25% of the Performance Units that shall vest shall be as follows:
|
Average EPS Growth
|
% Vested and Payout
|
[x]%
|
50%
|
[x]%
|
75%
|
[x]%
|
100%
|
[x]%
|
125%
|
[x]%
|
150%
|
3.
|
Subject to paragraph 6 below, upon the achievement of Average EPS Growth measured against Average EPS Growth for the Peer Group during the Performance Period, as determined by the Committee, the percentage of 25% of the Performance Units that shall vest based upon the Company’s ranking within its Peer Group shall be as follows:
|
Rank within Peer Group
Based on Average EPS Growth
|
% Vested and Payout
|
[x]
|
0%
|
[x]
|
50%
|
[x]
|
100%
|
[x]
|
125%
|
[x]
|
150%
|
4.
|
Subject to paragraph 6 below, upon achievement of an Average ROE % measured against the Three Year Plan, as determined by the Committee, the percentage of 25% of the Performance Units that vest shall be as follows:
|
Average ROE %
Against Three Year Plan
|
% Vested
|
[x]%
|
50%
|
[x]%
|
75%
|
[x]%
|
100%
|
[x]%
|
125%
|
[x]%
|
150%
|
5.
|
Subject to paragraph 6 below, upon achievement of Average ROE % performance as measured against the Peer Group for the Performance Period, the percentage of 25% of the Performance Units that vest based on the Company’s ranking within its Peer Group shall be as follows:
|
Rank within Peer Group
Based on Average ROE%
|
% Vested
|
[x]
|
0%
|
[x]
|
50%
|
[x]
|
100%
|
[x]
|
125%
|
[x]
|
150%
|
6.
|
Achievement of the performance goals set forth in paragraphs 2, 3, 4 and 5 of this
Exhibit A
shall be determined by the Committee, in its sole discretion, and shall be subject to the following terms and conditions:
|
a.
|
Payouts between performance levels shall be linear.
|
b.
|
All performance metrics assume that no capital raises occur during the Performance Period. If a capital raise occurs during the Performance Period, performance shall be adjusted to exclude the effects of the capital raise.
|
c.
|
The Committee will review potential adjustments to achievement of the performance metrics based on Federal Funds Rate changes or any other material changes and/or impacts, as determined by the Committee in its sole discretion.
|
d.
|
Performance goals only shall be considered achieved if the Committee determines, in its sole discretion, that the following four goals have been met, in addition to the Average EPS Growth and Average ROE % goals set forth in paragraphs 2, 3, 4 and 5 of this
Exhibit A
:
|
(i)
|
Asset quality: The Company’s asset quality and credit controls are at a level of comparable high performing banks’ asset quality and credit controls;
|
(ii)
|
Tangible Capital Ratio: The Company’s tangible capital ratio is at a level that the Committee determines, in its sole discretion, is at a level for solidly capitalized banks;
|
(iii)
|
Efficiency Ratio: The Company’s guidepost efficiency ratio is at 60% or better (excluding from the calculation of the efficiency ratio, the expense reflected in non-interest expense related to valuation of foreclosed real estate, provided that such expenses are included as credit-related costs in determination of ROE above); and
|
(iv)
|
Deposit Growth: At least 100% of the traditional loans held by the Company for investment are supported by core deposits.
|
1.
|
I have reviewed this report on Form 10-K of Texas Capital Bancshares, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures, (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
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 annual 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;
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 18, 2019
|
|
/S/ C. Keith Cargill
|
C. Keith Cargill
|
Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-K of Texas Capital Bancshares, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures, (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
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 annual 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;
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 18, 2019
|
|
/S/ Julie Anderson
|
Julie Anderson
|
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report, fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/S/ C. Keith Cargill
|
C. Keith Cargill
|
Chief Executive Officer
|
Date: April 18, 2019
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report, fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/S/ Julie Anderson
|
Julie Anderson
|
Chief Financial Officer
|
Date: April 18, 2019
|