| ý | Annual 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) | |
including area code)
6.50% Subordinated Notes due 2042
(Title of class)
Large Accelerated Filer x | Accelerated Filer ¨ | Non-Accelerated Filer ¨ | Non-Accelerated Filer ¨ | |||
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18, 2015.
Item 1A. Item 1B. Item 2. Item 3. Item 4. Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. Item 10. Item 11. Item 12. Item 13. Item 14. Item 15. Total loans(1) Assets(1) Demand deposits Total deposits Stockholders’ equity Commercial loans Total real estate loans Construction loans Real estate term loans Mortgage finance loans Loans held for sale from discontinued operations Equipment leases Consumer loans companies, securities firms, insurance companies, commercial finance and leasing companies, full service brokerage firms and discount brokerage firms. We believe that many middle market companies and successful professionals and entrepreneurs are interested in banking with a company headquartered in, and with decision-making authority based in, Texas and with established Texas bankers who have the expertise to act as trusted advisors to Targeting middle market Growing our loan and deposit base in our existing markets by hiring additional experienced Continuing our emphasis on credit policy to maintain credit quality consistent with long-term objectives; Leveraging our existing infrastructure to support a larger volume of business; Maintaining stringent internal approval processes for capital and operating Continuing our extensive use of outsourcing to provide cost-effective operational support Extending our reach within our target markets and lines of commercial loans for general corporate purposes including financing for working capital, internal growth, acquisitions and financing for business insurance premiums; real estate term and construction loans; mortgage finance lending; equipment leasing; treasury management services; wealth management and trust services; and letters of credit. personal wealth management and trust services; certificates of deposit;TABLE OF CONTENTSPART I Item 1. Item 1.Business11122232424PART II 2426295760104104106PART III 106106106106106PART IV 1072ITEM 1. BUSINESS BackgroundThe disclosures set forth in this item are qualified by Item 1A. Risk Factors and the section captioned “Forward-Looking Statements” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this report and other cautionary statements set forth elsewhere in this report.Texas Capital Bancshares, Inc. (“we”, “us” or the “Company”), a Delaware corporation organized in 1996, is the parent of Texas Capital Bank, National Association (the “Bank”). The Company is a registered bank holding company and a financial holding company.The Bank is headquartered in Dallas, with primary banking offices in Austin, Dallas, Fort Worth, Houston, and San Antonio, the five largest metropolitan areas of Texas. All of our business activities are conducted through the Bank. We have focused on organic growth, maintenance of credit quality and recruiting and retaining experienced bankers with strong personal and professional relationships in their communities.We serve the needs of commercial businesses and successful professionals and entrepreneurs located in Texas as well as operate several lines of business serving a regional or national clientele of commercial borrowers. We are primarily a secured lender, with a majority of our greatest concentration of loans, other than our businesses with activities throughout the United States, to businesses headquartered or with operations in Texas. We have benefitted from the Texas economysuccess of our business model since our inception, producing strong loan growth and favorable loss experience amidst the challenging environment for banking nationally.Growth HistoryWe have grown substantially in both size and profitability since our formation. The table below sets forth data regarding the growth of key areas of our business from 20092010 through 20132014 (in thousands): December 31 2013 2012 2011 2010 2009 11,270,574 9,960,807 7,652,452 5,905,539 5,150,797 11,714,397 10,540,542 8,137,225 6,445,679 5,698,318 3,347,567 2,535,375 1,751,944 1,451,307 899,492 9,257,379 7,440,804 5,556,257 5,455,401 4,120,725 1,096,350 836,242 616,331 528,319 481,360 (1)From continuing operations. December 31, 2014 2013 2012 2011 2010 Total loans $ 14,257,012 $ 11,270,868 $ 9,961,109 $ 7,652,845 $ 5,906,029 Assets 15,899,946 11,720,064 10,540,844 8,137,618 6,446,169 Demand deposits 5,011,619 3,347,567 2,535,375 1,751,944 1,451,307 Total deposits 12,673,300 9,257,379 7,440,804 5,556,257 5,455,401 Stockholders’ equity 1,484,190 1,096,350 836,242 616,331 528,319 The following table provides information about the growth of our loan portfolio by type of loan from December 2009 to December 20132010 through 2014 (in thousands): December 31 2013 2012 2011 2010 2009 $ 5,020,565 $ 4,106,419 $ 3,275,150 $ 2,592,924 $ 2,457,533 3,409,133 2,630,088 2,241,277 2,029,766 1,903,127 1,262,905 737,637 422,026 270,008 669,426 2,146,228 1,892,451 1,819,251 1,759,758 1,233,701 2,784,265 3,175,272 2,080,081 1,194,209 693,504 294 302 393 490 586 93,160 69,470 61,792 95,607 99,129 15,350 19,493 24,822 21,470 25,065 December 31, 2014 2013 2012 2011 2010 Commercial $ 5,869,219 $ 5,020,565 $ 4,106,419 $ 3,275,150 $ 2,592,924 Total real estate 4,223,532 3,409,427 2,630,390 2,241,670 2,030,256 Construction 1,416,405 1,262,905 737,637 422,026 270,008 Real estate term 2,807,127 2,146,522 1,892,753 1,819,644 1,760,248 Mortgage finance 4,102,125 2,784,265 3,175,272 2,080,081 1,194,209 Equipment leases 99,495 93,160 69,470 61,792 95,607 Consumer 19,699 15,350 19,493 24,822 21,470 3The Texas MarketThe Texas market for banking services is highly competitive. Texas’ largest banking organizations are headquartered outside of Texas and are controlled by out-of-state organizations. We also compete with other providers of financial services, such as savings and loan associations, credit unions, consumer financethe customercustomers with regard to itstheir banking needs. Our banking centers in our target markets are served by experienced bankers with lending expertise in the specific industries found in their market areas and established community ties. We believe our bank can offer customers more responsive and personalized service. We believe that, ifservice than our competitors. If we service these customers properly, we believe we will be able to establish long-term relationships and provide multiple products to our customers, thereby enhancing our profitability.Business StrategyDrawing on the business and community ties of our management and their banking experience, our strategy is to continue building an independent bank that focuses primarily on middle market business customers and successful professionals and entrepreneurs in each of the five major metropolitan markets of Texas. To achieve this, we seek to implement the following strategies:businessbusinesses and successful professionals and entrepreneurs;Texas bankers;expenses;withand service levels consistent with large-bank operations; andAustin, Dallas, Fort Worth, Houston and San Antoniobusiness through service innovation and service excellence.Products and ServicesWe offer a variety of loan, deposit account and other financial products and services to our customers.Business Customers. We offer a full range of products and services oriented to the needs of our business customers, including:Individual Customers. We also provide complete banking services for our individual customers, including:•interest bearing and non-interest bearing checking accounts with optional features such as Visa® debit/ATM cards and overdraft protection;
interest-bearing and non-interest-bearing checking accounts with optional features such as Visa® debit/ATM cards and overdraft protection;
loans, both secured and unsecured; and
internetInternet banking.
outside of the U.S. and there are no federal or state income tax benefits to our bank or our customers as a result of these operations. Foreign deposits maintained at our Cayman Islands branch at December 31, 2014 and 2013 were $312.7 million and 2012 were $330.3 million, and $329.3 million, respectively.
required at times when, absent this Federal Reserve policy, a holding company may not be inclined to provide it. We could in certain circumstances be required to guarantee the capital plan of our bank if it became undercapitalized.
Well capitalized—equals or exceeds a 10 percent10% total risk-based capital ratio, 6 percent tier6% Tier 1 risk-based capital ratio, and 5 percent5% leverage ratio and is not subject to any written agreement, order or directive requiring it to maintain a specific level for any capital measure;
Adequately capitalized—equals or exceeds an 8 percent8% total risk-based capital ratio, 4 percent4% tier 1 risk-based capital ratio, and 4 percent4% leverage ratio;
Undercapitalized—total risk-based capital ratio of less than 8 percent,8%, or a tier 1 risk-based ratio of less than 4 percent,4%, or a leverage ratio of less than 4 percent (3 percent4% (3% for institutions with a regulatory rating of 1 that do not evidence rapid growth or other heightened risk indicators);
Significantly undercapitalized—total risk-based capital ratio of less than 6 percent,6%, or a tier 1 risk-based capital ratio of less than 3 percent,3%, or a leverage ratio of less than 3 percent;3%; and
Critically undercapitalized—a ratio of tangible equity to total assets equal to or less than 2 percent.
total consolidated assets. A minimum leverage ratio of 3.0% is required for banks and bank holding companies that either have the highest supervisory rating or have implemented the appropriate federal regulatory authority’s risk-adjusted measure for market risk. All other banks and bank holding companies are required to maintain a minimum leverage ratio of 4.0%, unless a different minimum is specified by an appropriate regulatory authority. In order to be considered well capitalized the leverage ratio must be at least 5.0%. Most organizations seek to maintain leverage ratios that are at least 100 to 200 basis points above the minimum ratio.
ensure that a banking entity maintains an adequate level of unencumbered high-quality liquid assets equal to the entity’s expected net cash outflow for a 30-day time horizon (or, if greater, 25% of its expected total cash outflow) under an acute liquidity stress scenario. The other test, referred to as the net stable funding ratio (“NSFR”), is designed to promote more medium- and long-term funding of the assets and activities of banking entities over a one-year time horizon. These requirements are predicted to encourage the covered banking entities to increase their holdings of U.S. Treasury securities and other sovereign debt as a component of assets, and also to increase the use of long-term debt as a funding source. Regulators may change capital and liquidity requirements including previous interpretations of practices related to risk weights that could require an increase to the allocation of capital to assets held by our bank, and they could require banks to make retroactive adjustments to financial statements to reflect such changes.
allows bank holding companies meeting management, capital and Community Reinvestment Act standards to engage in a substantially broader range of non-banking activities than was permissible prior to enactment, including insurance underwriting and making merchant banking investments in commercial and financial companies;
allows insurers and other financial services companies to acquire banks;
removes various restrictions that applied to bank holding company ownership of securities firms and mutual fund advisory companies; and
establishes the overall regulatory structure applicable to bank holding companies that also engage in insurance and securities operations.
companies and their subsidiaries which represent unsafe and unsound banking practices or which constitute violations of laws or regulations, and have considerable discretion in identifying what they deem to be unsafe and unsound practices. Regulators can assess civil money penalties for certain activities based upon finding unsafe and unsound conduct on a knowing and reckless basis, if those activities cause a substantial loss to a depository institution. The penalties can be as high as $1.0 million for each day the activity continues.
us in 2014 and may contribute to increasing and less predictable deposit insurance expense in future years.
| ITEM 1A. | RISK FACTORS |
industry conditions, declines in the value of collateral, concentrations of credit associated with specific loan categories, industries or collateral types and risks related to individual borrowers. We rely heavily on information provided by third parties when originating and monitoring loans. If this information is intentionally or negligently misrepresented and we do not detect such misrepresentations, the credit risk associated with the transaction may be increased. Although we attempt to manage our credit risk by carefully monitoring the concentration of our loans within specific loan categories and industries and through prudent loan approval and monitoring practices in all categories of our lending, we cannot assure you that our approval and monitoring procedures will reduce these lending risks. If our credit administration personnel, policies and procedures are not able to adequately adapt to changes in economic or other conditions that affect customers and the quality of the loan portfolio, we may incur increased losses that could adversely affect our financial results. continue to identify and expand into suitable markets and lines of business, in Texas, regionally and nationally; develop new products and services and execute our full range of products and services more efficiently and effectively; attract and retain qualified bankers in each of our targeted markets to build our customer base; respond to market opportunities promptly and nimbly while balancing the demands of risk management and compliance with regulatory requirements; attract sufficient deposits and capital to fund our anticipated loan control expenses; and acquire and maintain sufficient qualified staffing and information technology and operational infrastructure to support growth and compliance with increasing and changing regulatory requirements. We must continue to attract, retain and Our business is subject to risk. The following discussion, along with management’s discussion and analysis and our financial statements and footnotes, sets forth the most significant risks and uncertainties that we believe could adversely affect our business, financial condition or results of operations. Additional risks and uncertainties that management is not aware of or that management currently deems immaterial may also have a material adverse effect on our business, financial condition or results of operations. There is no assurance that this discussion covers all potential risks that we face. The occurrence of the described risks could cause our results to differ materially from those described in our forward-looking statements included elsewhere in this report, and could have a material adverse impact on our business or results of operations.Risk Factors Associated With Our BusinessWe must effectively manage our credit risk. The risk of non-payment of loans is inherent in commercial banking. Increased credit risk may result from several factors, including adverse changes in local, U.S. and global economic andA significant portion of our assets consists of commercial loans. We generally invest a greater proportion of our assets in commercial loans to business customers than other banking institutions of our size, and our business plan calls for continued efforts to increase our assets invested in these loans. At December 31, 2013,2014, approximately 44%41% of our loan portfolio was comprised of commercial loans. Commercial loans may involve a higher degree of credit risk than other types of loans due, in part, to their larger average size, the effects of changing economic conditions on the businesses of our commercial loan customers, the dependence of borrowers on operating cash flow to service debt and our reliance upon collateral which may not be readily marketable. Due to the proportionate amountproportion of these commercial loans in our portfolio and because the balances of these loans are, on average, larger than other categories of loans, losses incurred on a relatively small number of commercial loans could have a materially adverse impact on our results of operations and financial condition.A significant portion of our loans are secured by commercial and residential real estate. At December 31, 2013,2014, approximately 30% of our loan portfolio was comprised of loans with real estate as the primary component of collateral. Our real estate lending activities, and our exposure to fluctuations in real estate collateral values, are significant and expected to increase as our assets increase. The market value of real estate can fluctuate significantly in a relatively short period of time as a result of market conditions in the geographic area in which the real estate is located. If the value of real estate serving as collateral for our loans declines materially, a significant part of our loan portfolio could become under-collateralized and losses incurred upon borrower defaults would increase. Conditions in certain segments of the real estate industry, including homebuilding, lot development and mortgage lending, may have an effect on values of real estate pledged as collateral for our loans. The inability of purchasers of real estate, including residential real estate, to obtain financing may weaken the financial condition of our borrowers who are dependent on the sale or refinancing of property to repay their loans. Changes in the economic health of certain industries can have a significant impact on other sectors or industries which are both directly and indirectly associated with the industry.Our business is concentrated in Texas; Energy industry exposure. A substantial majority of our customers are located in Texas. As a result, our financial condition and results of operations may be strongly affected by any prolonged period of economic recession or other adverse business, economic or regulatory conditions affecting Texas businesses and financial institutions. While Texas is a more diversified economy than it was in the 1980’s, the energy sector continues to be an important part of the Texas economy. Approximately 7% of our total loans at December 31, 2014, were to borrowers engaged in exploration and production, transportation and processing of oil and natural gas and companies providing oilfield and related energy industry12services. These businesses can be significantly affected by volatility in oil and natural gas prices and material declines in the level of drilling and production activity in Texas and in other areas of the United States. Adverse developments in the energy sector can have significant spillover effects on the Texas economy, including commercial and residential real estate values and the general level of economic activity. We are carefully monitoring the impact of the recent significant declines in oil and natural gas prices and drilling activity on our loan portfolio, and have reflected these events in the determination of our allowance for loan and lease losses as of December 31, 2014. There is no assurance that we will not be adversely impacted by the direct and indirect effects of current and future conditions in the energy industry in Texas and nationally.Our future profitability depends, to a significant extent, upon our middle market business customers. Our future profitability depends, to a significant extent, upon revenue we receive from middle market business customers, and their ability to continue to meet their loan obligations. Adverse economic conditions or other factors affecting this market segment may have a greater adverse effect on us than on other financial institutions that have a more diversified customer base.We must maintain an adequate allowance for loan losses. Our experience in the banking industry indicates that some portion of our loans will become delinquent, and some may only be partially repaid or may never be repaid at all. We maintain an allowance for loan losses, which is a reserve established through a provision for loan losses charged to expense each quarter, that is consistent with management’s assessment of the collectability of the loan portfolio in light of the amount of loans committed and outstanding and current economic conditions and market trends. When specific loan losses are identified, the amount of the expected loss is removed, or charged-off, from the allowance. Our methodology for establishing the adequacy of the allowance for loan losses depends on our subjective application of risk grades as indicators of each borrower’s ability to repay specific loans, together with our assessment of how actual or projected changes in competitor underwriting practices, competition for borrowers and depositors and other conditions in our markets are likely to impact improvement or deterioration in the loan.collectability of our loans as compared to our historical experience.Our business model makes our bank more vulnerable to changes in underlying business credit quality than other banks with which we compete. We have a substantially larger percentage of commercial, real estate and other categories of loans relative to total assets than most other banks in our market. We have a substantially smaller portion of securities and other earning assets categories that can be less vulnerable to changes in local, regional or industry-specific economic trends, causing our potential for credit losses to be more severe than other banks. Our business model has focused on growth in various loan categories that can be more sensitive to changes in the economic trends. We believe our ability to maintain above-peer rates of growth in commercial loans is dependent on maintaining above-peer credit quality metrics. The failure to do so would have a material adverse impact on our growth and profitability.If our assessment of future losses is inaccurate, or economic and market conditions or theour borrower’s financial performance experience material unanticipated changes, the allowance may become inadequate, requiring larger provisions for loan losses that can materially decrease our earnings. Certain of our loans individually represent a significant percentage of our total allowance for loan losses. Adverse collection experience in a relatively small number of these loans could require an increase in the provision for loan losses. Federal regulators periodically review our allowance for loan losses and, based on their judgments, which may be different than ours, may require us to change classifications or grades of loans, increase the allowance for loan losses and recognize further loan charge-offs. Any increase in the allowance for loan losses or in the amount of loan charge-offs required by these regulatory agencies could have a negative effect on our results of operations and financial condition.We must effectively manage our interest rate risk. Our profitability is dependent to a large extent on our net interest income, which is the difference between the interest income paid to us on our loans and investments and the interest we pay to third parties such as our depositors, lenders and debtholders. Changes in interest rates can impact our profits and the fair values of certain of our assets and liabilities. Prolonged periodsWe have experienced a prolonged period of unusually low interest rates, maywhich have had an adverse effect on our earnings by reducing yields on loans and other earning assets. A continued low rate environment will continue to place downward pressure on our net interest income. Increases in market interest rates may reduce our customers’customers' desire to borrow money from us or adversely affect their ability to repay their outstanding loans by increasing their debt service obligations through the periodic reset of adjustable interest rate loans. If our borrowers’ ability to pay their loans is impaired by increasing interest payment obligations, our level of non-performing assets would increase, producing an adverse effect on operating results.Increases in interest rates and economic conditions affecting consumer demand for housing can have a material impact on the volume of mortgage originations and refinancings, adversely affecting the profitability of our mortgage finance business. Interest rate risk can also result from mismatches between the dollar amounts of repricing or maturing assets and liabilities and from mismatches in the timing and rates at which our assets and liabilities reprice. We actively monitor and manage the balances of our maturing and repricing assets and liabilities to reduce the adverse impact of changes in interest rates, but there can be no assurance that we will be able to avoid material adverse effects on our net interest margin in all market conditions.Federal prohibitions on the ability of financial institutions to pay interest on demand deposit accounts were repealed in 2011 by the Dodd-Frank Act. This change has had limited impact to date due to the excess of commercial liquidity and the very low interest13rate environment in recent years. There can be no assurance that we will not be materially adversely affected in the future if economic activity increases and interest rates rise, which may result in our interest expense increasing, andwith a commensurate effect on our net interest margin decreasing,income, if we must offer interest on demand deposits to attract or retain customer deposits.We must effectively execute our business strategy in order to continue our asset and earnings growth. Our core strategy is to develop our business principally through organic growth. Our prospects for continued growth must be considered in light of the risks, expenses and difficulties frequently encountered by companies seeking to realize significant growth. In order to execute our growth strategy successfully, we must, among other things:expand our loan portfolio while maintaining credit quality;growth;Failure to effectively execute our business strategy could have a material adverse effect on our business, future prospects, financial condition or results of operations.Our past achievement of safe and sound balance sheet growth, even during difficult years such as the period of 2008-2010, provides no assurance of comparable future profitability depends, to a significant extent, upon our middle marketsuccess.We must be effective in developing and executing new lines of business customersand new products and services while managing associated risks. Our futurebusiness strategy requires that we develop and grow new lines of business and offer new products and services within existing lines of business in order to compete successfully and realize our growth objectives for both loans and deposits to fund them. Substantial costs, risks and uncertainties are associated with these efforts, particularly in instances where the markets are not fully developed. Developing and marketing new activities requires that we invest significant time and resources before revenues and profits can be realized. Timetables for the development and launch of new activities may not be achieved and price and profitability depends,targets may not prove feasible. External factors, such as compliance with regulations, receipt of necessary licenses or permits, competitive alternatives and shifting market preferences, may also adversely impact the successful execution of new activities. New activities necessarily entail additional risks and may present additional risks to a significant extent, upon revenue we receive from middlethe effectiveness of our system of internal controls. All service offerings, including current offerings and new activities, may become more risky due to changes in economic, competitive and market conditions beyond our control. Our regulators could determine that our risk management practices are not adequate and take action to restrain our growth. Failure to successfully manage these risks, generally and to the satisfaction of our regulators, in the development and implementation of new lines of business customers, and their ability to continue to meet their loan obligations. Adverse economic conditions or other factors affecting this market segment maynew products or services could have a greatermaterial adverse effect on us than on other financial institutions that have a more diversified customer base.Ourour business, is concentrated in Texas. A substantial majority of our customers are located in Texas. As a result, our financial condition and results of operations may be strongly affected by any prolonged period of economic recession or other adverse business, economic or regulatory conditions affecting Texas businesses and financial institutions.condition.Our growth plans are dependent on the availability of capital and funding. Our historical ability to raise capital through the sale of capital stock and debt securities may be affected by economic and market conditions or regulatory changes that are beyond our control. Adverse changes in our operating performance or financial condition could make raising additional capital difficult or more expensive or limit our access to customary sources of funding, including inter-bank borrowings, repurchase agreements and borrowings from the Federal Reserve Bank of Dallas or the Federal Home Loan Bank. Unexpected changes in requirements for regulatory capital resulting from regulatory actions or the results of our Dodd-Frank Act stress testing could require us to raise capital at a time, and at a price, that might be unfavorable, or require that we forego continuing growth or shrink our balance sheet. We cannot offer assurance that sufficient capital and funding will be available to us in the future, in needed amounts, upon acceptable terms or at all. Our efforts to raise capital could require the issuance of securities at times and with maturities, conditions and rates that are disadvantageous, and which could have a dilutive impact on our current stockholders. Factors that could adversely affect our ability to raise additional capital include conditions in the capital markets, our financial performance, regulatory actions and general economic conditions. Increases in our cost of capital, including increased interest or dividend requirements, could have a direct adverse impact on our operating performance and our ability to achieve our growth objectives. Trust preferred securities are no longer viable as a viable source of new long-term debt capital as a result of regulatory changes. The treatment of our existing trust preferred securities as capital may be subject to further regulatory change prior to their maturity, which could require the Company to seek additional capital.We must effectively manage our liquidity risk. Our bank requires available funds (liquidity) to meet its deposit, debt and other obligations as they come due, borrower requests to draw on committed credit facilities as well as unexpected demands for cash14payments. While we are not subject to Basel III liquidity regulations, the adequacy of our liquidity is a matter of regulatory interest given the significant portion of our balance sheet represented by loans as opposed to securities and other more marketable investments. Our bank’s principal source of funding consists of customer deposits. A substantial majority of our bank’s liabilities consist of demand, savings, interest checking and money market deposits, which are payable on demand or upon several days’ notice. By comparison, a substantial portion of our assets are loans, most of which, excluding our mortgage finance loans, cannot be collected or sold in so short a time frame, creating the potential for an imbalance in the availability of liquid assets to satisfy depositors and loan funding requirements.We hold smaller balances of marketable securities than many of our competitors, limiting our ability to increase our liquidity by completing market sales of these assets. An inability to raise funds through deposits, borrowings, the sale of securities and loans and other sources, including our access to capital market transactions, could have a substantial negative effect on our bank’s liquidity. We actively manage our available sources of funds to meet our expected needs under normal and financially stressed conditions, but there is no assurance that our bank will be able to make new loans, meet ongoing funding commitments to borrowers and replace maturing deposits and advances as necessary under all possible circumstances. Our bank’s ability to obtain funding could be impaired by factors beyond its control, such as disruptions in financial markets, negative expectations regarding the financial services industry generally or in our markets or negative perceptions of our bank.Our mortgage finance business has experienced, and will likely continue to experience, highly variable usage of our funding capacity resulting from seasonal demands for credit, surges in consumer demand driven by changes in interest rates and month-end “spikes” of residential mortgage closings. We have responded to these variable funding demands by, among other things, increasing the extent of participations sold in our mortgage loan interests and by opening an expanded borrowing relationship with the Federal Home Loan Bank in the fourth quarter of 2014. Our mortgage finance customers have in recent periods provided significant low-cost deposit balances associated with the borrower escrow accounts created at the time certain mortgage loans are funded, which have benefitted our liquidity and net interest margin. Individual escrow account balances also experience significant variability during the year as ad valorem taxes and insurance premiums are paid periodically. While the short average holding period of our mortgage interests of approximately 20 days will allow us, if necessitated by a funding shortfall, to rapidly decrease the size of the portfolio and its associated funding requirements, any such action might significantly damage business relationships important to that business.Our bank sources a significant volume of its demand deposits from financial services companies, mortgage finance customers and other commercial sources, resulting in a larger percentage of larger deposits and a smaller number of largersources of deposits than would be typical of other banks in our markets. In recent periods over half of our total deposits have been attributable to customers whose balances exceed the $250,000 FDIC insurance limit. Many of these customers actively monitor our financial condition and results of operations and could withdraw their deposits quickly upon the occurrence of a material adverse development affecting our bank. One potential source of liquidity for our bank consists of “brokered deposits” arranged by brokers acting as intermediaries, typically larger money-center financial institutions. We have significant balances of other deposits defined for regulatory purposes to be brokered deposits, includingreceive deposits provided by certain of our customers in connection with our delivery of other financial services to them or their customers. customers which are subject to the regulatory classification of “brokered deposits” even though we consider these to be relationship deposits and they are not subject to the typical risks or market pricing associated with conventional brokered deposits.If we do not maintain our regulatory capital above the level required to be well capitalized FDIC consentwe would be required to obtain FDIC consent for us to continue to obtainaccept deposits classified as brokered deposits and there can be no assurance that the FDIC would consent under any circumstances. We could be required to suspend or eliminate deposit gathering from any source classified as “brokered” deposits. OurThe FDIC can change the definition of or extend the classification to deposits not currently classified as brokered deposits. These non-traditional deposits are subject to greater operational and reputational risk of unexpected withdrawal than traditional demand and time deposits, particularly those provided by consumers. A significant decrease in our balances of brokered deposits could have a material adverse effect upon our financial condition and results of operations. SeeManagement’s Discussion and Analysis of Financial Condition and Results of Operations below for further discussion of our liquidity.We must be effective in developing and executing new lines of business and new products and services while managing associated risks. Our business strategy requires that we develop and grow new lines of business and offer new products and services within existing lines of business in order to compete successfully and realize our growth objectives. Substantial costs, risks and uncertainties are associated with these efforts, particularly in instanceswhere the markets are not fully developed. Developing and marketing new activities requires that we invest significant time and resources before revenues and profits can be realized. Timetables for the development and launch of new activities may not be achieved and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives and shifting market preferences, may also adversely impact the successful execution of new activities. New activities necessarily entail additional risks and may present additional risks to the effectiveness of our system of internal controls. All service offerings, including current offerings and new activities, may become more risky due to changes in economic, competitive and market conditions beyond our control. Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on our business, results of operations and financial condition.retaindevelop key personnel. Our success depends to a significant extent upon our ability to attract and retain experienced bankers in each of our markets.markets as well as managers with the operational skills to build and maintain the infrastructure and controls required to support continuing loan growth. Competition for the best people in our industry can be intense, and there is no assurance that we will continue to have the same level of success in this effort that has supported our historical results. Factors that affect our ability to attract and retain key employees include our compensation and benefits programs, our profitability, and our reputation for rewarding and promoting qualified employees.employees and market competition for employees with certain skills, including information systems development and security. The cost of employee compensation is a significant portion of our operating expenses and can materially impact our results of operations. The unanticipated loss of the services of key personnel could have an adverse effect on our business. Although we have entered into employment agreements with certain key employees, we cannot assure you that we will be successful in retaining them.Our business faces unpredictable economic and business conditions. Our business is directly impacted by general economic and business conditions in the United States and abroad. The credit quality15national, regional and local economic conditions;general economic consequences of international conditions, such as weakness in European sovereign debt and the impact of that weakness on the US and global economies;legislative and regulatory changes impacting our industry;the financial health of our customers and economic conditions affecting them and the value of our collateral, including changes in the price of energy and other commodities;the incidence of fraud, illegal payments, security breaches and other illegal acts among or impacting our bank and our customers;structural changes in the markets for origination, sale and servicing of residential mortgages;changes in governmental economic and regulatory policies generally, including the extent and timing of intervention in credit markets by the Federal Reserve Board or withdrawal from that intervention;changes in the availability of liquidity at a systemic level; andmaterial inflation or deflation.Substantial deterioration in any of the foregoing conditions, including continuation of weak economic recovery and employment growth in recent years, can have a material adverse effect on our prospects and our results of operations and financial condition. There is no assurance that we will be able to sustain our historical rate of growth or our profitability. Our bank’s customer base is primarily commercial in nature, and our bank does not have a significant retail branch network or retail consumer deposit base. In periods of economic downturn, business and commercial deposits may be more volatile than traditional retail consumer deposits. As a result, our financial condition and results of operations could be adversely affected to a greater degree by these uncertainties than our competitors who have a larger retail customer base.
We compete with many larger banks and other financial service providers. Competition among providers of financial services in our markets, in Texas, regionally and nationally, is intense. We compete with other financial and bank holding companies, state and national commercial banks, savings and loan associations, consumer finance companies, credit unions, securities brokerages, insurance companies, mortgage banking companies, money market mutual funds, asset-based non-bank lenders, government sponsored or subsidized lenders and other financial services providers. Many of these competitors have substantially greater financial resources, lending limits and larger branch networks than we do, and are able to offer a broader range of products and services than we can, including systems and services that could protect customers from cyber threats. We are increasingly faced with competition in many of our products and services by non-bank providers who may have competitive advantages of size, access to potential customers and fewer regulatory requirements. Failure to compete effectively for deposit, loan and other banking customers in our markets could cause us to lose market share, slow our growth rate or suffer adverse effects on our financial condition and results of operations.
Our accounting estimates and risk management processes rely on management judgment, which may be supported by analytical and forecasting models. The processes we use to estimate probable credit losses for purposes of establishing the allowance for loan losses and to measure the fair value of financial instruments, as well as the processes we use to estimate the effects of changing interest rates and other market measures on our financial condition and results of operations, depend upon management’s judgment. Management’s judgment and the data relied upon by management may be based on assumptions that prove to be inaccurate, particularly in times of market stress or other unforeseen circumstances. Even if the relevant factual assumptions are accurate, our decisions may prove to be inadequate or inaccurate because of other flaws in the design or use of analytical tools used by management. Any such failures in our processes for producing accounting estimates and managing risks could have a material adverse effect on our business, financial condition and results of operations.
We are dependent on funds obtained from capital transactions or from our bank to fund our obligations. We are a financial holding company engaged in the business of managing, controlling and operating our bank. We conduct no material business or other activity at the parent company level other than activities incidental to holding equity and debt investments in our bank. As a result, we rely on the proceeds of capital transactions and payments of interest and principal on loans made to our bank to pay our operating expenses, to satisfy our obligations to debtholders and to pay dividends on our preferred stock. We may in the future rely on dividends from our bank to satisfy all or part of our parent company financial obligations. Our bank’s ability to pay dividends may be limited. The profitability of our bank is subject to fluctuation based upon, among other things, the cost and availability of funds, changes in interest rates and economic conditions in general. Our bank’s ability to pay dividends to us is subject to regulatory limitations that can, under certain adverse circumstances, prohibit the payment of dividends to us by our bank. Our right to participate in any distribution from the sale or liquidation of our bank is subject to the prior claims of our bank’s creditors. If we are unable to access funds from capital transactions or our bank we may be unable to satisfy our obligations to creditors or debtholders or pay dividends on our preferred stock.
We must effectively manage our counterparty risk. Financial services institutions are interrelated as a result of trading, clearing, counterparty and other relationships. Our bank has exposure to many different industries and counterparties, and routinely executes transactions with counterparties in the financial services industry, including commercial banks, brokers and dealers, investment banks, and other institutional clients. Many of these transactions expose our bank to credit risk in the event of a default by a counterparty or client. In addition, our bank’s credit risk may be increased when the collateral it is entitled to cannot be realized upon or is liquidated at prices not sufficient to recover the full amount of its credit or derivative exposure. Any such losses could have a material adverse effect on our business, financial condition and results of operations.
We must effectively manage our information systems risk. We rely heavily on our communications and information systems to conduct our business. The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products and services. Our ability to compete successfully depends in part upon our ability to use technology to provide products and
services that will satisfy customer demands. Many of the Company’sour competitors invest substantially greater resources in technological improvementscapabilities than we do. We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers, which may negatively affect our business, results of operations or financial condition.
Successful cyber-attacks on our Bank or customers may affect the reputation of our bank, and failure to meet customer expectations could have a material impact on our ability to attract and retain deposits as a primary source of funding.
ability of non-bank financial services providers to offer competing financial services and products, among other things. The Dodd-Frank Act has not yet been fully implemented and there are many additional regulations that have not been proposed, or if proposed, have not been adopted. The full impact of the Dodd-Frank Act on our business strategies is unknown at this time and cannot be predicted.
We increased our capital and liquidity and expanded our regulatory compliance staffing and systems during 2014 in order to assure that we continue to satisfy regulatory expectations for high-growth institutions, which reduced our net interest margin and earnings in 2014. There is no assurance that our financial performance in 2015 and future years will not be similarly burdened.
these regulations on our business, but among the possible effects are requirements that we slow our rate of growth or obtain additional capital which could reduce our earnings or dilute our existing stockholders.
Our controls and procedures may fail or be circumvented. Management regularly reviews and updates our internal controls over financial reporting, disclosure controls and procedures, and corporate governance policies and procedures. Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. Any failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our business, results of operations and financial condition.
actual or anticipated variations in quarterly and annual results of operations;
changes in recommendations by securities analysts;
news reports relating to trends, concerns and other issues in the financial services industry, including regulatory actions against other financial institutions;
actual or expected economic conditions that are perceived to affect our company such as changes in commodity prices, real estate values or interest rates;
new technology used, or services offered, by competitors;
significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors;
changes in government regulations and interpretation of those regulations, changes in our practices requested or required by regulators and changes in regulatory enforcement focus; and
geopolitical conditions such as acts or threats of terrorism or military conflicts.
addition, under Section 18(i) of the FDIA, our bank is required to obtain the advance consent of the FDIC to retire any part of its subordinated notes. Under the FDIA, a bank may not pay interest on its subordinated notes if such interest is required to be paid only out of net profits, or distribute any of its capital assets, while it remains in default on any assessment due to the FDIC.
| ITEM 1B. | UNRESOLVED STAFF COMMENTS |
| ITEM 2. | PROPERTIES |
| Type of Location | Address | |
Executive offices, banking location | 2000 McKinney Avenue | |
Banking Center — Suite 190 Executive Offices — Suite 700 | ||
| Dallas, Texas 75201 | ||
Operations center, banking location | 2350 Lakeside Drive Banking Center — Suite 105 | |
Operations Center — Suite 800 | ||
| Richardson, Texas 75082 | ||
Banking location | 14131 Midway Road | |
| Suite 100 | ||
| Addison, Texas 75001 | ||
Banking location | 5910 North Central Expressway | |
| Suite 150 | ||
| Dallas, Texas 75206 | ||
Banking location | 5800 Granite Parkway | |
| Suite 150 | ||
| Plano, Texas 75024 | ||
Executive offices, banking location | ||
Banking center — Suite Executive offices — Suite 200 | ||
| Fort Worth, Texas 76102 | ||
| ||
Executive offices, banking location | 98 San Jacinto Boulevard Banking center — Suite 150 Executive offices — Suite 200 | |
| Austin, Texas 78701 | ||
Banking location | Westlake Hills | |
| 3818 Bee Caves Road | ||
| Austin, Texas 78746 | ||
|
| |
Executive offices, banking location | 745 East Mulberry Street | |
Banking center — Suite 150 Executive offices — Suite 350 | ||
| San Antonio, Texas 78212 | ||
Banking location | 7373 Broadway | |
| Suite 100 | ||
| San Antonio, Texas 78209 | ||
Executive offices, banking location | One Riverway | |
Banking center — Suite 150 Executive offices — Suite 2100 | ||
| Houston, Texas 77056 | ||
Banking location | Westway II | |
| 4424 West Sam Houston Parkway N. | ||
| Suite 170 | ||
| Houston, TX 77041 | ||
| Executive offices | Kempwood | |
| 2930 West Sam Houston Parkway North | ||
Executive offices — Suite 300 | ||
| Houston, Texas 77056 | ||
| ITEM 3. | LEGAL PROCEEDINGS |
| ITEM 4. | MINE SAFETY DISCLOSURES |
| ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Price Per Share | ||||||||||
| Quarter Ended | High | Low | ||||||||
March 31, 2012 | $ | 36.61 | $ | 30.57 | ||||||
June 30, 2012 | 42.08 | 32.55 | ||||||||
September 30, 2012 | 49.96 | 39.50 | ||||||||
December 31, 2012 | 52.17 | 41.50 | ||||||||
March 31, 2013 | $ | 47.39 | $ | 39.87 | ||||||
June 30, 2013 | 45.22 | 36.75 | ||||||||
September 30, 2013 | 50.15 | 43.43 | ||||||||
December 31, 2013 | 62.25 | 44.53 | ||||||||
2014.
| Price Per Share | |||||||
| Quarter Ended | High | Low | |||||
| March 31, 2013 | $ | 47.39 | $ | 39.87 | |||
| June 30, 2013 | 45.22 | 36.75 | |||||
| September 30, 2013 | 50.15 | 43.43 | |||||
| December 31, 2013 | 62.25 | 44.53 | |||||
| March 31, 2014 | 67.08 | 56.45 | |||||
| June 30, 2014 | 66.62 | 50.76 | |||||
| September 30, 2014 | 60.74 | 49.90 | |||||
| December 31, 2014 | 62.07 | 51.58 | |||||
| Plan category | Number of Securities Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available Under Equity | |||||||||
Equity compensation plans approved by security holders | 592,751 | $ | 28.69 | 262,315 | ||||||||
Equity compensation plans not approvedby security holders | — | — | — | |||||||||
| ||||||||||||
Total | 592,751 | $ | 28.69 | 262,315 | ||||||||
| ||||||||||||
2014.
| Plan category | Number of Securities To Be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans | ||||||
| Equity compensation plans approved by security holders | 434,336 | $ | 34.23 | 224,775 | |||||
| Equity compensation plans not approved by security holders | — | — | — | ||||||
| Total | 434,336 | $ | 34.23 | 224,775 | |||||
| 12/31/08 | 12/31/09 | 12/31/10 | 12/31/11 | 12/31/12 | 12/31/13 | |||||||||||||||||||
Texas Capital | ||||||||||||||||||||||||
Bancshares, Inc. | $ | 100.00 | $ | 104.49 | $ | 159.73 | $ | 229.12 | $ | 335.48 | $ | 465.57 | ||||||||||||
Russell 2000 | ||||||||||||||||||||||||
Index RTY | 100.00 | 124.38 | 155.54 | 147.52 | 169.17 | 231.17 | ||||||||||||||||||
Nasdaq Bank | ||||||||||||||||||||||||
Index CBNK | 100.00 | 80.70 | 89.71 | 78.82 | 91.45 | 126.15 | ||||||||||||||||||
| 12/31/2009 | 12/31/2010 | 12/31/2011 | 12/31/2012 | 12/31/2013 | 12/31/2014 | ||||||||||||||||||
| Texas Capital | |||||||||||||||||||||||
| Bancshares, Inc. | $ | 100.00 | $ | 152.87 | $ | 219.27 | $ | 321.06 | $ | 445.56 | $ | 389.18 | |||||||||||
| Russell 2000 | |||||||||||||||||||||||
| Index (RTY) | 100.00 | 125.06 | 118.60 | 136.01 | 185.56 | 192.62 | |||||||||||||||||
| Nasdaq Bank | |||||||||||||||||||||||
| Index (CBNK) | 100.00 | 111.16 | 97.68 | 113.32 | 156.32 | 161.05 | |||||||||||||||||
| ITEM 6. | SELECTED CONSOLIDATED FINANCIAL DATA |
| At or For the Year Ended December 31 | ||||||||||||||||||||
| 2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||
| (In thousands, except per share, average share and percentage data) | ||||||||||||||||||||
Consolidated Operating Data(1) | ||||||||||||||||||||
Interest income | $ | 444,625 | $ | 398,457 | $ | 321,600 | $ | 279,810 | $ | 243,153 | ||||||||||
Interest expense | 25,112 | 21,578 | 18,663 | 38,136 | 46,462 | |||||||||||||||
| ||||||||||||||||||||
Net interest income | 419,513 | 376,879 | 302,937 | 241,674 | 196,691 | |||||||||||||||
Provision for credit losses | 19,000 | 11,500 | 28,500 | 53,500 | 43,500 | |||||||||||||||
| ||||||||||||||||||||
Net interest income after provision for credit losses | 400,513 | 365,379 | 274,437 | 188,174 | 153,191 | |||||||||||||||
Non-interest income | 44,024 | 43,040 | 32,232 | 32,263 | 29,260 | |||||||||||||||
Non-interest expense | 256,734 | 219,844 | 188,201 | 163,488 | 145,542 | |||||||||||||||
| ||||||||||||||||||||
Income from continuing operations before income taxes | 187,803 | 188,575 | 118,468 | 56,949 | 36,909 | |||||||||||||||
Income tax expense | 66,757 | 67,866 | 42,366 | 19,626 | 12,522 | |||||||||||||||
| ||||||||||||||||||||
Income from continuing operations | 121,046 | 120,709 | 76,102 | 37,323 | 24,387 | |||||||||||||||
Income (loss) from discontinued operations (after-tax) | 5 | (37 | ) | (126 | ) | (136 | ) | (235 | ) | |||||||||||
| ||||||||||||||||||||
Net income | 121,051 | 120,672 | 75,976 | 37,187 | 24,152 | |||||||||||||||
Preferred stock dividends | 7,394 | — | — | — | 5,383 | |||||||||||||||
| ||||||||||||||||||||
Net income available to common shareholders | $ | 113,657 | $ | 120,672 | $ | 75,976 | $ | 37,187 | $ | 18,769 | ||||||||||
| ||||||||||||||||||||
Consolidated Balance Sheet Data(1) | ||||||||||||||||||||
Total assets(2) | $ | 11,714,397 | $ | 10,540,542 | $ | 8,137,225 | $ | 6,445,679 | $ | 5,698,318 | ||||||||||
Loans held for investment | 8,486,309 | 6,785,535 | 5,572,371 | 4,711,330 | 4,457,293 | |||||||||||||||
Loans held for investment, mortgage finance loans | 2,784,265 | 3,175,272 | 2,080,081 | 1,194,209 | 693,504 | |||||||||||||||
Securities available-for-sale | 63,214 | 100,195 | 143,710 | 185,424 | 266,128 | |||||||||||||||
Demand deposits | 3,347,567 | 2,535,375 | 1,751,944 | 1,451,307 | 899,492 | |||||||||||||||
Total deposits | 9,257,379 | 7,440,804 | 5,556,257 | 5,455,401 | 4,120,725 | |||||||||||||||
Federal funds purchased | 148,650 | 273,179 | 412,249 | 283,781 | 580,519 | |||||||||||||||
Other borrowings | 876,980 | 1,673,982 | 1,355,867 | 14,106 | 376,510 | |||||||||||||||
Subordinated notes | 111,000 | 111,000 | — | — | — | |||||||||||||||
Trust preferred subordinated debentures | 113,406 | 113,406 | 113,406 | 113,406 | 113,406 | |||||||||||||||
Stockholders’ equity | 1,096,350 | 836,242 | 616,331 | 528,319 | 481,360 | |||||||||||||||
Other Financial Data Income per share Basic Income from continuing operations Net income Diluted Income from continuing operations Net income Tangible book value per share(3) Book value per share(3) Weighted average shares Basic Diluted Selected Financial Ratios Performance Ratios Net interest margin Return on average assets Return on average equity Efficiency ratio Non-interest expense to average earning assets Asset Quality Ratios Net charge-offs (recoveries) to average loans Net charge-offs (recoveries) to average loans excluding mortgage finance loans(5) Reserve for loan losses to loans Reserve for loan losses to loans excluding mortgage finance loans(5) Reserve for loan losses to non-accrual loans Non-accrual loans to loans Non-accrual loans to loans excluding mortgage finance loans(5) Total NPAs to loans plus OREO Total NPAs to loans excluding mortgage finance loans plus OREO(5) Capital and Liquidity Ratios Total capital ratio(4) Tier 1 capital ratio(4) Tier 1 leverage ratio Average equity/average assets Tangible common equity/total tangible assets(3) Average net loans/average deposits At or For the Year Ended December 31 2013 2012 2011 2010 2009 (In thousands, except per share, average share and percentage data) $ 2.78 $ 3.09 $ 2.04 $ 1.02 $ 0.56 2.78 3.09 2.03 1.02 0.55 $ 2.72 $ 3.01 $ 1.99 $ 1.00 $ 0.56 2.72 3.00 1.98 1.00 0.55 22.50 19.96 15.69 13.89 12.96 23.02 20.45 16.24 14.15 13.23 40,864,225 39,046,340 37,334,743 36,627,329 34,113,285 41,779,881 40,165,847 38,333,077 37,346,028 34,410,454 4.22 % 4.41 % 4.68 % 4.28 % 3.89 % 1.17 % 1.35 % 1.12 % 0.63 % 0.46 % 12.82 % 16.93 % 13.39 % 7.23 % 5.15 % 55.39 % 52.35 % 56.15 % 59.68 % 64.41 % 2.58 % 2.57 % 2.90 % 2.88 % 2.87 % 0.05 % 0.07 % 0.47 % 0.95 % 0.41 % 0.07 % 0.10 % 0.58 % 1.14 % 0.46 % 0.78 % 0.75 % 0.92 % 1.21 % 1.32 % 1.03 % 1.10 % 1.26 % 1.52 % 1.52 % 2.7x 1.3x 1.3x .6x .7x 0.29 % 0.56 % 0.71 % 1.90 % 1.86 % 0.38 % 0.82 % 0.98 % 2.38 % 2.15 % 0.33 % 0.72 % 1.17 % 2.60 % 2.38 % 0.44 % 1.06 % 1.61 % 3.26 % 2.74 % 10.73 % 9.97 % 9.25 % 11.83 % 11.98 % 9.15 % 8.27 % 8.38 % 10.58 % 10.73 % 10.87 % 9.41 % 8.78 % 9.36 % 10.54 % 9.68 % 7.95 % 8.33 % 8.67 % 8.91 % 7.87 % 7.73 % 7.29 % 7.98 % 8.18 % 116.25 % 129.97 % 115.68 % 105.50 % 128.43 %
| At or For the Year Ended December 31, | |||||||||||||||||||
| 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||
| (In thousands, except per share, average share and percentage data) | |||||||||||||||||||
| Consolidated Operating Data(1) | |||||||||||||||||||
| Interest income | $ | 514,547 | $ | 444,625 | $ | 398,457 | $ | 321,600 | $ | 279,810 | |||||||||
| Interest expense | 37,582 | 25,112 | 21,578 | 18,663 | 38,136 | ||||||||||||||
| Net interest income | 476,965 | 419,513 | 376,879 | 302,937 | 241,674 | ||||||||||||||
| Provision for credit losses | 22,000 | 19,000 | 11,500 | 28,500 | 53,500 | ||||||||||||||
| Net interest income after provision for credit losses | 454,965 | 400,513 | 365,379 | 274,437 | 188,174 | ||||||||||||||
| Non-interest income | 42,511 | 44,024 | 43,040 | 32,232 | 32,263 | ||||||||||||||
| Non-interest expense | 285,114 | 256,729 | 219,881 | 188,327 | 163,624 | ||||||||||||||
| Income before income taxes | 212,362 | 187,808 | 188,538 | 118,342 | 56,813 | ||||||||||||||
| Income tax expense | 76,010 | 66,757 | 67,866 | 42,366 | 19,626 | ||||||||||||||
| Net income | 136,352 | 121,051 | 120,672 | 75,976 | 37,187 | ||||||||||||||
| Preferred stock dividends | 9,750 | 7,394 | — | — | — | ||||||||||||||
| Net income available to common stockholders | $ | 126,602 | $ | 113,657 | $ | 120,672 | $ | 75,976 | $ | 37,187 | |||||||||
| Consolidated Balance Sheet Data(1) | |||||||||||||||||||
| Total assets | $ | 15,899,946 | $ | 11,720,064 | $ | 10,540,844 | $ | 8,137,618 | $ | 6,446,169 | |||||||||
| Loans held for investment | 10,154,887 | 8,486,603 | 6,785,837 | 5,572,764 | 4,711,820 | ||||||||||||||
| Loans held for investment, mortgage finance loans | 4,102,125 | 2,784,265 | 3,175,272 | 2,080,081 | 1,194,209 | ||||||||||||||
| Securities available-for-sale | 41,719 | 63,214 | 100,195 | 143,710 | 185,424 | ||||||||||||||
| Demand deposits | 5,011,619 | 3,347,567 | 2,535,375 | 1,751,944 | 1,451,307 | ||||||||||||||
| Total deposits | 12,673,300 | 9,257,379 | 7,440,804 | 5,556,257 | 5,455,401 | ||||||||||||||
| Federal funds purchased and repurchase agreements | 92,676 | 170,604 | 297,115 | 436,050 | 294,701 | ||||||||||||||
| Other borrowings | 1,100,005 | 855,026 | 1,650,046 | 1,332,066 | 3,186 | ||||||||||||||
| Subordinated notes | 286,000 | 111,000 | 111,000 | — | — | ||||||||||||||
| Trust preferred subordinated debentures | 113,406 | 113,406 | 113,406 | 113,406 | 113,406 | ||||||||||||||
| Stockholders’ equity | 1,484,190 | 1,096,350 | 836,242 | 616,331 | 528,319 | ||||||||||||||
| At or For the Year Ended December 31, | |||||||||||||||||||
| 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||
| (In thousands, except per share, average share and percentage data) | |||||||||||||||||||
| Other Financial Data | |||||||||||||||||||
| Income per share | |||||||||||||||||||
| Basic | $ | 2.93 | $ | 2.78 | $ | 3.09 | $ | 2.03 | $ | 1.02 | |||||||||
| Diluted | 2.88 | 2.72 | 3.00 | 1.98 | 1.00 | ||||||||||||||
| Tangible book value per share | 28.72 | 22.54 | 20.04 | 15.82 | 14.04 | ||||||||||||||
| Book value per share | 29.17 | 23.06 | 20.53 | 16.36 | 14.30 | ||||||||||||||
| Weighted average shares | |||||||||||||||||||
| Basic | 43,236,344 | 40,864,225 | 39,046,340 | 37,334,743 | 36,627,329 | ||||||||||||||
| Diluted | 44,003,256 | 41,779,881 | 40,165,847 | 38,333,077 | 37,346,028 | ||||||||||||||
| Selected Financial Ratios | |||||||||||||||||||
| Performance Ratios | |||||||||||||||||||
| Net interest margin | 3.78 | % | 4.22 | % | 4.41 | % | 4.68 | % | 4.28 | % | |||||||||
| Return on average assets | 1.05 | % | 1.17 | % | 1.35 | % | 1.12 | % | 0.63 | % | |||||||||
| Return on average equity | 11.31 | % | 12.82 | % | 16.93 | % | 13.39 | % | 7.23 | % | |||||||||
| Efficiency ratio | 54.88 | % | 55.39 | % | 52.35 | % | 56.15 | % | 59.68 | % | |||||||||
| Non-interest expense to average earning assets | 2.26 | % | 2.58 | % | 2.57 | % | 2.90 | % | 2.88 | % | |||||||||
| Asset Quality Ratios | |||||||||||||||||||
| Net charge-offs (recoveries) to average loans | 0.05 | % | 0.05 | % | 0.07 | % | 0.47 | % | 0.95 | % | |||||||||
| Net charge-offs (recoveries) to average loans excluding mortgage finance loans | 0.07 | % | 0.07 | % | 0.10 | % | 0.58 | % | 1.14 | % | |||||||||
| Reserve for loan losses to loans | 0.71 | % | 0.78 | % | 0.75 | % | 0.92 | % | 1.21 | % | |||||||||
| Reserve for loan losses to loans excluding mortgage finance loans | 0.99 | % | 1.03 | % | 1.10 | % | 1.26 | % | 1.52 | % | |||||||||
| Reserve for loan losses to non-accrual loans | 2.3x | 2.7x | 1.3x | 1.3x | .6x | ||||||||||||||
| Non-accrual loans to loans | 0.30 | % | 0.29 | % | 0.56 | % | 0.71 | % | 1.90 | % | |||||||||
| Non-accrual loans to loans excluding mortgage finance loans | 0.43 | % | 0.38 | % | 0.82 | % | 0.98 | % | 2.38 | % | |||||||||
| Total NPAs to loans plus OREO | 0.31 | % | 0.33 | % | 0.72 | % | 1.17 | % | 2.60 | % | |||||||||
| Total NPAs to loans excluding mortgage finance loans plus OREO | 0.43 | % | 0.44 | % | 1.06 | % | 1.61 | % | 3.26 | % | |||||||||
| Capital and Liquidity Ratios | |||||||||||||||||||
| Total capital ratio(2) | 11.83 | % | 10.73 | % | 9.97 | % | 9.25 | % | 11.83 | % | |||||||||
| Tier 1 capital ratio(2) | 9.46 | % | 9.15 | % | 8.27 | % | 8.38 | % | 10.58 | % | |||||||||
| Tier 1 leverage ratio | 10.76 | % | 10.87 | % | 9.41 | % | 8.78 | % | 9.36 | % | |||||||||
| Average equity/average assets | 9.75 | % | 9.68 | % | 7.95 | % | 8.33 | % | 8.67 | % | |||||||||
| Tangible common equity/total tangible assets(2) | 8.26 | % | 7.87 | % | 7.73 | % | 7.29 | % | 7.98 | % | |||||||||
| Average net loans/average deposits | 111.57 | % | 116.25 | % | 129.97 | % | 115.68 | % | 105.50 | % | |||||||||
| (1) | The consolidated |
| In response to FFIEC Call Report instructions issued in early April 2013, we began using a 100% risk weight for |
| ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Deterioration of the credit quality of our loan portfolio, increased default rates and loan losses or adverse changes in the industry concentrations of our loan portfolio.
Developments adversely affecting our commercial, entrepreneurentrepreneurial and professional customers.
Changes in the U.S. economy in general or the Texas economy specifically resulting in deterioration of credit quality or reduced demand for credit or other financial services we offer, including declines and volatility in oil and gas prices.
The failure of assumptions supporting our allowance for loan losses causing it to become inadequate as loan quality decreases and losses and charge-offs increase.
A failure to effectively manage our interest rate risk resulting from unexpectedly large or sudden changes in interest rates or rate or maturity imbalances in our assets and liabilities.
Failure to execute our business strategy, including any inability to expand into new markets and lines of business in Texas, regionally and nationally.
Loss of access to capital market transactions and other sources of funding, or a failure to effectively balance our funding sources with cash demands by depositors and borrowers.
Failure to successfully develop and launch new lines of business and new products and services within the expected time frames and budgets, or failure to anticipate and appropriately manage the associated risks.
The failure to attract and retain key personnel or the loss of key individuals or groups of employees.
Changes in the U.S. economy in general or the Texas economy specifically resulting in deterioration of credit quality or reduced demand for credit or other financial services we offer.
Legislative and regulatory changes imposing further restrictions and costs on our business, a failure to remain well capitalized or well managed or regulatory enforcement actions against us.
An increase in the incidence or severity of fraud, illegal payments, security breaches and other illegal acts impacting our bank and our customers.
Structural changes in the markets for origination, sale and servicing of residential mortgages.
Increased or more effective competition from banks and other financial service providers in our markets.
Material failures of our accounting estimates and risk management processes based on management judgment, or the supporting analytical and forecasting models.
Unavailability of funds obtained from capital transactions or from our bank to fund our obligations.
Failures of counterparties or third party vendors to perform their obligations.
Failures or breaches of our information systems that are not effectively managed.
Severe weather, natural disasters, acts of war or terrorism and other external events.
Incurrence of material costs and liabilities associated with claimslegal and litigation.
Failure of our risk management strategies and procedures, including failure or circumvention of our controls.
Except as otherwise noted, all amounts
from a combination of reduced yields on loans and an increase in average liquidity assets for the year ended December 31, 2014 compared to the same period of 2013.
Year ended December 31, 2012 compared to year ended December 31, 2011
We reported net
Net incomedemand deposits increased $44.6 million, or 59%,to $4.2 billion from $3.0 billion. The average cost of total deposits and borrowed funds remained flat at 0.17% for the year ended December 31, 20122014, compared to the same period in the prior year. The total cost of 2011. The $44.6interest-bearing liabilities included $8.7 million increase was primarilyattributable to the result of a $73.9$175.0 million in long-term subordinated debt issued in January 2014. Including the increase in net interest income, a $17 million decrease inlong-term subordinated debt during 2014, the provisionaverage cost of interest-bearing liabilities increased from 0.40% for credit losses and a $10.8 million increase in non-interest income, offset by a $31.6 million increase in non-interest expense and a $25.5 million increase in income tax expense.
Detailsthe year ended December 31, 2013 to 0.50% for the same period of the changes in the various components of net income are further discussed below.
Net Interest Income
2014.
Net interest income was $376.8 million for
Average interest bearing liabilities for the year ended December 31, 2012 increased $1.5 billion from the year ended December 31, 2011, which included a $613.4 million increase in interest bearing deposits, an $862.6 million increase in other borrowings and a $30.9 million increase in subordinated notes. For the same periods, the average balance of demand deposits increased to $2.0 billion from $1.5 billion. The average cost of interest bearing liabilities decreased from 0.40% for the year ended December 31, 2011 to 0.35% in 2012, reflecting the continued low market interest rates,rate on those assets and our focus on reducing deposit rates.
Volume/Rate Analysis
| Years Ended December 31, | ||||||||||||||||||||||||
| 2013/2012 | 2012/2011 | |||||||||||||||||||||||
Net Change | Change Due To(1) | Net Change | Change Due To(1) | |||||||||||||||||||||
| (in thousands) | Volume | Yield/Rate | Volume | Yield/Rate | ||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||
Securities(2) | $ | (1,845 | ) | $ | (1,780 | ) | $ | (65 | ) | $ | (1,912 | ) | $ | (1,788 | ) | $ | (124 | ) | ||||||
Loans held for investment, mortgage finance loans | (5,411 | ) | 1,765 | (7,176 | ) | 39,335 | 48,450 | (9,115 | ) | |||||||||||||||
Loans held for investment | 53,177 | 64,598 | (11,421 | ) | 39,460 | 56,178 | (16,718 | ) | ||||||||||||||||
Federal funds sold | 52 | 49 | 3 | (24 | ) | (18 | ) | (6 | ) | |||||||||||||||
Deposits in other banks | 23 | 96 | (73 | ) | (144 | ) | (152 | ) | 8 | |||||||||||||||
Total | 45,996 | 64,728 | (18,732 | ) | 76,715 | 102,670 | (25,955 | ) | ||||||||||||||||
Interest expense: | ||||||||||||||||||||||||
Transaction deposits | (165 | ) | 172 | (337 | ) | 634 | 180 | 454 | ||||||||||||||||
Savings deposits | 1,857 | 3,110 | (1,253 | ) | 877 | 1,178 | (301 | ) | ||||||||||||||||
Time deposits | (1,146 | ) | (698 | ) | (448 | ) | (2,456 | ) | (296 | ) | (2,160 | ) | ||||||||||||
Deposits in foreign branches | (160 | ) | (220 | ) | 60 | (361 | ) | (277 | ) | (84 | ) | |||||||||||||
Other borrowings | (1,922 | ) | (1,847 | ) | (75 | ) | 2,001 | 1,360 | 641 | |||||||||||||||
Long-term debt | 5,070 | 5,272 | (202 | ) | 2,220 | — | 2,220 | |||||||||||||||||
| ||||||||||||||||||||||||
Total | 3,534 | 5,789 | (2,255 | ) | 2,915 | 2,145 | 770 | |||||||||||||||||
| ||||||||||||||||||||||||
Net interest income | $ | 42,462 | $ | 58,939 | $ | (16,477 | ) | $ | 73,800 | $ | 100,525 | $ | (26,725 | ) | ||||||||||
| ||||||||||||||||||||||||
liabilities.
| Years Ended December 31, | |||||||||||||||||||||||
| 2014/2013 | 2013/2012 | ||||||||||||||||||||||
Net Change | Change Due To(1) | Net Change | Change Due To(1) | ||||||||||||||||||||
| Volume | Yield/Rate | Volume | Yield/Rate | ||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||
| Securities(2) | $ | (1,430 | ) | $ | (1,330 | ) | $ | (100 | ) | $ | (1,845 | ) | $ | (1,780 | ) | $ | (65 | ) | |||||
| Loans held for investment, mortgage finance loans | 6,197 | 22,763 | (16,566 | ) | (5,411 | ) | 1,765 | (7,176 | ) | ||||||||||||||
| Loans held for investment | 64,095 | 84,854 | (20,759 | ) | 53,177 | 64,598 | (11,421 | ) | |||||||||||||||
| Federal funds sold | 142 | 35 | 107 | 52 | 49 | 3 | |||||||||||||||||
| Deposits in other banks | 675 | 700 | (25 | ) | 23 | 96 | (73 | ) | |||||||||||||||
| Total | 69,679 | 107,022 | (37,343 | ) | 45,996 | 64,728 | (18,732 | ) | |||||||||||||||
| Interest expense: | |||||||||||||||||||||||
| Transaction deposits | 274 | 38 | 236 | (165 | ) | 172 | (337 | ) | |||||||||||||||
| Savings deposits | 3,808 | 3,312 | 496 | 1,857 | 3,110 | (1,253 | ) | ||||||||||||||||
| Time deposits | — | 82 | (82 | ) | (1,146 | ) | (698 | ) | (448 | ) | |||||||||||||
| Deposits in foreign branches | 33 | 55 | (22 | ) | (160 | ) | (220 | ) | 60 | ||||||||||||||
| Other borrowings | (473 | ) | (510 | ) | 37 | (1,922 | ) | (1,847 | ) | (75 | ) | ||||||||||||
| Long-term debt | 8,828 | 10,602 | (1,774 | ) | 5,070 | 5,272 | (202 | ) | |||||||||||||||
| Total | 12,470 | 13,579 | (1,109 | ) | 3,534 | 5,789 | (2,255 | ) | |||||||||||||||
| Net interest income | $ | 57,209 | $ | 93,443 | $ | (36,234 | ) | $ | 42,462 | $ | 58,939 | $ | (16,477 | ) | |||||||||
| (1) | Changes attributable to both volume and yield/rate are allocated to both volume and yield/rate on an equal basis. |
| (2) | Taxable equivalent rates used where applicable assuming a 35% tax rate. |
| Year ended December 31 | ||||||||||||||||||||||||||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
| Average Balance | Revenue / Expense(1) | Yield / Rate | Average Balance | Revenue / Expense(1) | Yield / Rate | Average Balance | Revenue / Expense(1) | Yield / Rate | ||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Securities—Taxable | $ | 59,031 | $ | 2,325 | 3.94 | % | $ | 90,796 | $ | 3,681 | 4.05 | % | $ | 123,124 | $ | 5,186 | 4.21 | % | ||||||||||||||||||
Securities—Non-taxable(2) | 18,147 | 1,061 | 5.85 | % | 26,579 | 1,550 | 5.83 | % | 33,996 | 1,957 | 5.76 | % | ||||||||||||||||||||||||
Federal funds sold | 54,547 | 65 | 0.12 | % | 11,497 | 13 | 0.11 | % | 21,897 | 37 | 0.17 | % | ||||||||||||||||||||||||
Deposits in other banks | 89,503 | 231 | 0.26 | % | 61,192 | 208 | 0.34 | % | 107,734 | 352 | 0.33 | % | ||||||||||||||||||||||||
Loans held for investment, mortgage finance loans | 2,342,149 | 87,864 | 3.75 | % | 2,298,651 | 93,275 | 4.06 | % | 1,210,954 | 53,940 | 4.45 | % | ||||||||||||||||||||||||
Loans held for investment | 7,471,676 | 353,450 | 4.73 | % | 6,148,860 | 300,273 | 4.88 | % | 5,059,134 | 260,813 | 5.16 | % | ||||||||||||||||||||||||
Less reserve for loan losses | 78,282 | — | — | 72,087 | — | — | 67,888 | — | — | |||||||||||||||||||||||||||
Loans, net | 9,735,543 | 441,314 | 4.53 | % | 8,375,424 | 393,548 | 4.70 | % | 6,202,200 | 314,753 | 5.07 | % | ||||||||||||||||||||||||
Total earning assets | 9,956,771 | 444,996 | 4.47 | % | 8,565,488 | 399,000 | 4.66 | % | 6,488,951 | 322,285 | 4.97 | % | ||||||||||||||||||||||||
Cash and other assets | 391,633 | 400,472 | 330,137 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total assets | $ | 10,348,404 | $ | 8,965,960 | $ | 6,819,088 | ||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Liabilities and stockholders’ equity | ||||||||||||||||||||||||||||||||||||
Transaction deposits | $ | 908,415 | $ | 664 | 0.07 | % | $ | 752,040 | $ | 829 | 0.11 | % | $ | 391,100 | $ | 195 | 0.05 | % | ||||||||||||||||||
Savings deposits | 3,756,560 | 10,531 | 0.28 | % | 2,765,089 | 8,674 | 0.31 | % | 2,401,997 | 7,797 | 0.32 | % | ||||||||||||||||||||||||
Time deposits | 397,329 | 1,629 | 0.41 | % | 530,816 | 2,775 | 0.52 | % | 562,654 | 5,231 | 0.93 | % | ||||||||||||||||||||||||
Deposits in foreign branches | 345,506 | 1,206 | 0.35 | % | 411,891 | 1,366 | 0.33 | % | 490,703 | 1,727 | 0.35 | % | ||||||||||||||||||||||||
Total interest bearing deposits | 5,407,810 | 14,030 | 0.26 | % | 4,459,836 | 13,644 | 0.31 | % | 3,846,454 | 14,950 | 0.39 | % | ||||||||||||||||||||||||
Other borrowings | 653,318 | 1,219 | 0.19 | % | 1,585,723 | 3,141 | 0.20 | % | 723,172 | 1,140 | 0.16 | % | ||||||||||||||||||||||||
Subordinated notes | 111,000 | 7,327 | 6.60 | % | 30,934 | 2,037 | 6.58 | % | — | — | — | |||||||||||||||||||||||||
Trust preferred subordinated debentures | 113,406 | 2,536 | 2.24 | % | 113,406 | 2,756 | 2.43 | % | 113,406 | 2,573 | 2.27 | % | ||||||||||||||||||||||||
Total interest bearing liabilities | 6,285,534 | 25,112 | 0.40 | % | 6,189,899 | 21,578 | 0.35 | % | 4,683,032 | 18,663 | 0.40 | % | ||||||||||||||||||||||||
Demand deposits | 2,967,063 | 1,984,171 | 1,515,021 | |||||||||||||||||||||||||||||||||
Other liabilities | 94,592 | 78,700 | 52,888 | |||||||||||||||||||||||||||||||||
Stockholders’ equity | 1,001,215 | 713,190 | 568,147 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 10,348,404 | $ | 8,965,960 | $ | 6,819,088 | ||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
equity | ||||||||||||||||||||||||||||||||||||
Net interest income | $ | 419,884 | $ | 377,422 | $ | 303,622 | ||||||||||||||||||||||||||||||
Net interest margin | 4.22 | % | 4.41 | % | 4.68 | % | ||||||||||||||||||||||||||||||
Net interest spread | 4.07 | % | 4.31 | % | 4.57 | % | ||||||||||||||||||||||||||||||
| Year ended December 31, | ||||||||||||||||||||||||||||||||
| 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||
Average Balance | Revenue / Expense(1) | Yield / Rate(2) | Average Balance | Revenue / Expense(1) | Yield / Rate(2) | Average Balance | Revenue / Expense(1) | Yield / Rate(2) | ||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Securities—taxable | $ | 43,029 | $ | 1,590 | 3.70 | % | $ | 59,031 | $ | 2,325 | 3.94 | % | $ | 90,796 | $ | 3,681 | 4.05 | % | ||||||||||||||
| Securities—non-taxable | 6,171 | 366 | 5.93 | % | 18,147 | 1,061 | 5.85 | % | 26,579 | 1,550 | 5.83 | % | ||||||||||||||||||||
| Federal funds sold | 83,816 | 207 | 0.25 | % | 54,547 | 65 | 0.12 | % | 11,497 | 13 | 0.11 | % | ||||||||||||||||||||
| Deposits in other banks | 360,857 | 906 | 0.25 | % | 89,503 | 231 | 0.26 | % | 61,192 | 208 | 0.34 | % | ||||||||||||||||||||
| Loans held for investment, mortgage finance loans | 2,948,938 | 94,061 | 3.19 | % | 2,342,149 | 87,864 | 3.75 | % | 2,298,651 | 93,275 | 4.06 | % | ||||||||||||||||||||
| Loans held for investment | 9,265,435 | 417,545 | 4.51 | % | 7,471,676 | 353,450 | 4.73 | % | 6,148,860 | 300,273 | 4.88 | % | ||||||||||||||||||||
| Less reserve for loan losses | 91,363 | — | — | 78,282 | — | — | 72,087 | — | — | |||||||||||||||||||||||
| Loans, net | 12,123,010 | 511,606 | 4.22 | % | 9,735,543 | 441,314 | 4.53 | % | 8,375,424 | 393,548 | 4.70 | % | ||||||||||||||||||||
| Total earning assets | 12,616,883 | 514,675 | 4.08 | % | 9,956,771 | 444,996 | 4.47 | % | 8,565,488 | 399,000 | 4.66 | % | ||||||||||||||||||||
| Cash and other assets | 399,728 | 391,633 | 400,472 | |||||||||||||||||||||||||||||
| Total assets | $ | 13,016,611 | $ | 10,348,404 | $ | 8,965,960 | ||||||||||||||||||||||||||
| Liabilities and stockholders’ equity | ||||||||||||||||||||||||||||||||
| Transaction deposits | $ | 960,812 | $ | 938 | 0.10 | % | $ | 908,415 | $ | 664 | 0.07 | % | $ | 752,040 | $ | 829 | 0.11 | % | ||||||||||||||
| Savings deposits | 4,938,039 | 14,339 | 0.29 | % | 3,756,560 | 10,531 | 0.28 | % | 2,765,089 | 8,674 | 0.31 | % | ||||||||||||||||||||
| Time deposits | 417,317 | 1,629 | 0.39 | % | 397,329 | 1,629 | 0.41 | % | 530,816 | 2,775 | 0.52 | % | ||||||||||||||||||||
| Deposits in foreign branches | 361,203 | 1,239 | 0.34 | % | 345,506 | 1,206 | 0.35 | % | 411,891 | 1,366 | 0.33 | % | ||||||||||||||||||||
| Total interest-bearing deposits | 6,677,371 | 18,145 | 0.27 | % | 5,407,810 | 14,030 | 0.26 | % | 4,459,836 | 13,644 | 0.31 | % | ||||||||||||||||||||
| Other borrowings | 379,877 | 746 | 0.20 | % | 653,318 | 1,219 | 0.19 | % | 1,585,723 | 3,141 | 0.20 | % | ||||||||||||||||||||
| Subordinated notes | 271,617 | 16,202 | 5.97 | % | 111,000 | 7,327 | 6.60 | % | 30,934 | 2,037 | 6.58 | % | ||||||||||||||||||||
| Trust preferred subordinated debentures | 113,406 | 2,489 | 2.19 | % | 113,406 | 2,536 | 2.24 | % | 113,406 | 2,756 | 2.43 | % | ||||||||||||||||||||
| Total interest-bearing liabilities | 7,442,271 | 37,582 | 0.50 | % | 6,285,534 | 25,112 | 0.40 | % | 6,189,899 | 21,578 | 0.35 | % | ||||||||||||||||||||
| Demand deposits | 4,188,173 | 2,967,063 | 1,984,171 | |||||||||||||||||||||||||||||
| Other liabilities | 116,566 | 94,592 | 78,700 | |||||||||||||||||||||||||||||
| Stockholders’ equity | 1,269,601 | 1,001,215 | 713,190 | |||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 13,016,611 | $ | 10,348,404 | $ | 8,965,960 | ||||||||||||||||||||||||||
| Net interest income | $ | 477,093 | $ | 419,884 | $ | 377,422 | ||||||||||||||||||||||||||
| Net interest margin | 3.78 | % | 4.22 | % | 4.41 | % | ||||||||||||||||||||||||||
| Net interest spread | 3.58 | % | 4.07 | % | 4.31 | % | ||||||||||||||||||||||||||
| Loan spread | 4.05 | % | 4.36 | % | 4.49 | % | ||||||||||||||||||||||||||
| (1) | The loan averages include loans on which the accrual of interest has been discontinued and are stated net of unearned income. Loan interest income includes loan fees totaling |
| (2) | Taxable equivalent rates used where applicable assuming a 35% tax rate. |
| Year ended December 31 | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
| (in thousands) | ||||||||||||
Service charges on deposit accounts | $ | 6,783 | $ | 6,605 | $ | 6,480 | ||||||
Trust fee income | 5,023 | 4,822 | 4,219 | |||||||||
Bank owned life insurance (BOLI) income | 1,917 | 2,168 | 2,095 | |||||||||
Brokered loan fees | 16,980 | 17,596 | 11,335 | |||||||||
Swap fees | 5,520 | 4,909 | 1,935 | |||||||||
Other(1) | 7,801 | 6,940 | 6,168 | |||||||||
Total non-interest income | $ | 44,024 | $ | 43,040 | $ | 32,232 | ||||||
| Year ended December 31, | |||||||||||
| 2014 | 2013 | 2012 | |||||||||
| (in thousands) | |||||||||||
| Service charges on deposit accounts | $ | 7,253 | $ | 6,783 | $ | 6,605 | |||||
| Trust fee income | 4,937 | 5,023 | 4,822 | ||||||||
| Bank owned life insurance (BOLI) income | 2,067 | 1,917 | 2,168 | ||||||||
| Brokered loan fees | 13,981 | 16,980 | 17,596 | ||||||||
| Swap fees | 2,992 | 5,520 | 4,909 | ||||||||
| Other | 11,281 | 7,801 | 6,940 | ||||||||
| Total non-interest income | $ | 42,511 | $ | 44,024 | $ | 43,040 | |||||
Non-interest income increased by $10.8 million during the year ended December 31, 2012 to $43.0 million, compared to $32.2 million during the same period in 2011. The increase was primarily due to a $6.3 million increase in brokered loan fees due to an increase in our mortgage finance lending volume. Swap fee income increased $3.0 million during the year ended December 31, 2012 due to an increase in swap transactions during 2012. Swap fees are fees related to customer swap transactions and are received from the institution that is our counterparty on the transactions. See Note 20 – Derivative Financial Instruments for further discussion.
resources and introduce new risks to our business.
| Year ended December 31 | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
| (in thousands) | ||||||||||||
Salaries and employee benefits | $ | 157,752 | $ | 121,456 | $ | 100,535 | ||||||
Net occupancy expense | 16,821 | 14,852 | 13,657 | |||||||||
Marketing | 16,203 | 13,449 | 11,109 | |||||||||
Legal and professional | 18,104 | 17,557 | 14,996 | |||||||||
Communications and technology | 13,762 | 11,158 | 9,608 | |||||||||
FDIC insurance assessment | 8,057 | 5,568 | 7,543 | |||||||||
Allowance and other carrying costs for OREO | 1,788 | 9,075 | 9,586 | |||||||||
Litigation settlement expense | (908) | 4,000 | — | |||||||||
Other(1) | 25,155 | 22,729 | 21,167 | |||||||||
Total non-interest expense | $ | 256,734 | $ | 219,844 | $ | 188,201 | ||||||
| Year ended December 31, | ||||||||||||
| 2014 | 2013 | 2012 | ||||||||||
| (in thousands) | ||||||||||||
| Salaries and employee benefits | $ | 169,051 | $ | 157,752 | $ | 121,456 | ||||||
| Net occupancy expense | 20,866 | 16,821 | 14,852 | |||||||||
| Marketing | 15,989 | 16,203 | 13,449 | |||||||||
| Legal and professional | 21,182 | 18,104 | 17,557 | |||||||||
| Communications and technology | 18,667 | 13,762 | 11,158 | |||||||||
| FDIC insurance assessment | 10,919 | 8,057 | 5,568 | |||||||||
| Allowance and other carrying costs for OREO | 85 | 1,788 | 9,075 | |||||||||
| Litigation settlement expense | — | (908 | ) | 4,000 | ||||||||
| Other(1) | 28,355 | 25,150 | 22,766 | |||||||||
| Total non-interest expense | $ | 285,114 | $ | 256,729 | $ | 219,881 | ||||||
| (1) | Other expense includes such items as courier expenses, regulatory assessments other than FDIC insurance, due from bank charges and other general operating expenses, none of which account for 1% or more of total interest income and non-interest income. |
Non-interest expense for the year ended December 31, 2012 increased $31.6 million compared to the same period of 2011 primarily related to increases in salaries and employee benefits, marketing expense, legal and professional expenses and litigation settlement expense.
Salaries and employee benefits expense increased $20.9 million to $121.5 million during the year ended December 31, 2012. This increase resulted primarily from general business growth and costs of performance-based incentives resulting from the increase in stock price.
Marketing expense for the year ended December 31, 2012 increased $2.3 million compared to the same period in 2011. Marketing expense for the year ended December 31, 2012 included $850,000 of direct marketing and advertising expense and $3.1 million in business development expense compared to
$669,000 and $2.6 million, respectively, in 2011. Marketing expense for the year ended December 31, 2012 also included $9.5 million for the purchase of miles related to the American Airlines AAdvantage® program and treasury management deposit programs compared to $7.8 million during 2011. Marketing expense may increase as we seek to further develop our brand, reach more of our target customers and expand in our target markets.
Legal and professional expense increased $2.6 million, or 17%, for the year ended December 31, 2012 compared to the same period in 2011. Our legal and professional expense will continue to fluctuate from year to year and could increase in the future as we respond to continued regulatory changes and strategic initiatives, but we should see a decrease in the cost of resolving problem assets under improving economic conditions.
During the fourth quarter of 2012 we recorded a pre-tax charge of $4.0 million for settlement of the judgment of $65.5 million against us in Oklahoma district court. In the settlement, all litigation against us in the Oklahoma courts and actions by us against the plaintiff in the Texas courts will be dismissed with prejudice. Because the settlement was within policy limits of insurance coverage maintained by us, we have claims against our insurance carrier for more than the charge. In the third quarter of 2013, we settled one claim with our insurance company and recorded a recovery in the amount of $908,000. We intend to pursue the remaining claims aggressively.
Communications and technology expense increased $1.6 million to $11.6 million during the year ended December 31, 2012 as a result of general business and customer growth.
FDIC insurance assessment expense decreased by $1.9 million from $7.5 million in 2011 to $5.6 million as a result of changes to the FDIC assessment method.
rates and tend to peak at the end of each month.
| December 31 | ||||||||||||||||||||
| 2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||
Commercial | $ | 5,020,565 | $ | 4,106,419 | $ | 3,275,150 | $ | 2,592,924 | $ | 2,457,533 | ||||||||||
Mortgage finance | 2,784,265 | 3,175,272 | 2,080,081 | 1,194,209 | 693,504 | |||||||||||||||
Construction | 1,262,905 | 737,637 | 422,026 | 270,008 | 669,426 | |||||||||||||||
Real estate | 2,146,228 | 1,892,451 | 1,819,251 | 1,759,758 | 1,233,701 | |||||||||||||||
Consumer | 15,350 | 19,493 | 24,822 | 21,470 | 25,065 | |||||||||||||||
Equipment leases | 93,160 | 69,470 | 61,792 | 95,607 | 99,129 | |||||||||||||||
Total | $ | 11,322,473 | $ | 10,000,742 | $ | 7,683,122 | $ | 5,933,976 | $ | 5,178,358 | ||||||||||
| December 31, | |||||||||||||||||||
| 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||
| Commercial | $ | 5,869,219 | $ | 5,020,565 | $ | 4,106,419 | $ | 3,275,150 | $ | 2,592,924 | |||||||||
| Mortgage finance | 4,102,125 | 2,784,265 | 3,175,272 | 2,080,081 | 1,194,209 | ||||||||||||||
| Construction | 1,416,405 | 1,262,905 | 737,637 | 422,026 | 270,008 | ||||||||||||||
| Real estate | 2,807,127 | 2,146,522 | 1,892,753 | 1,819,644 | 1,760,248 | ||||||||||||||
| Consumer | 19,699 | 15,350 | 19,493 | 24,822 | 21,470 | ||||||||||||||
| Equipment leases | 99,495 | 93,160 | 69,470 | 61,792 | 95,607 | ||||||||||||||
| Total | $ | 14,314,070 | $ | 11,322,767 | $ | 10,001,044 | $ | 7,683,515 | $ | 5,934,466 | |||||||||
loans secured by real estate. Our real estate loans generally have maximum terms of five to seven years, and we provide loans with both floating and fixed rates. We generally avoid long-term loans for commercial real estate held for investment. Real estate loans may be more adversely affected by conditions in the real estate markets orand in the
We continue to lend primarily in Texas.
| (in thousands except percentage data) | Amount | Percent of Total Loans | ||||||
Services | $ | 4,077,881 | 36.0 | % | ||||
Mortgage finance loans | 2,784,265 | 24.6 | % | |||||
Contracting—construction and real estate development | 1,173,233 | 10.4 | % | |||||
Investors and investment management companies | 1,164,685 | 10.3 | % | |||||
Petrochemical and mining | 995,263 | 8.8 | % | |||||
Manufacturing | 389,857 | 3.4 | % | |||||
Personal/household | 207,337 | 1.8 | % | |||||
Wholesale | 201,220 | 1.8 | % | |||||
Retail | 207,607 | 1.8 | % | |||||
Contracting—trades | 79,326 | 0.7 | % | |||||
Government | 28,421 | 0.3 | % | |||||
Agriculture | 13,378 | 0.1 | % | |||||
Total | $ | 11,322,473 | 100.0 | % | ||||
| (in thousands except percentage data) | Amount | Percent of Total Loans | ||||
| Services | $ | 5,141,989 | 35.9 | % | ||
| Mortgage finance loans | 4,102,125 | 28.7 | % | |||
| Contracting—construction and real estate development | 1,484,354 | 10.4 | % | |||
| Investors and investment management companies | 1,270,389 | 8.9 | % | |||
| Petrochemical and mining | 1,189,304 | 8.3 | % | |||
| Manufacturing | 447,305 | 3.1 | % | |||
| Personal/household | 188,693 | 1.3 | % | |||
| Wholesale | 185,774 | 1.3 | % | |||
| Retail | 152,022 | 1.1 | % | |||
| Contracting—trades | 102,335 | 0.7 | % | |||
| Government | 31,674 | 0.2 | % | |||
| Agriculture | 18,106 | 0.1 | % | |||
| Total | $ | 14,314,070 | 100.0 | % | ||
| Amount | Percent of Total Loans | |||||||
Collateral type: | ||||||||
Business assets | $ | 3,472,108 | 30.7 | % | ||||
Real property | 3,409,133 | 30.1 | % | |||||
Mortgage finance loans | 2,784,265 | 24.7 | % | |||||
Energy | 854,046 | 7.5 | % | |||||
Unsecured | 261,621 | 2.3 | % | |||||
Other assets | 264,686 | 2.3 | % | |||||
Highly liquid assets | 184,139 | 1.6 | % | |||||
Rolling stock | 50,754 | 0.4 | % | |||||
U. S. Government guaranty | 41,721 | 0.4 | % | |||||
| ||||||||
Total | $ | 11,322,473 | 100.0 | % | ||||
| ||||||||
| Amount | Percent of Total Loans | |||||
| Collateral type: | ||||||
| Business assets | $ | 4,090,374 | 28.6 | % | ||
| Real property | 4,223,532 | 29.5 | % | |||
| Mortgage finance loans | 4,102,125 | 28.7 | % | |||
| Energy | 906,899 | 6.3 | % | |||
| Unsecured | 315,302 | 2.2 | % | |||
| Other assets | 363,061 | 2.5 | % | |||
| Highly liquid assets | 208,399 | 1.5 | % | |||
| Rolling stock | 57,439 | 0.4 | % | |||
| U. S. Government guaranty | 46,939 | 0.3 | % | |||
| Total | $ | 14,314,070 | 100.0 | % | ||
| Amount | Percent of Real Estate Loans | |||||||
Property type: | ||||||||
Market risk | ||||||||
Commercial buildings | $ | 787,244 | 23.1 | % | ||||
Unimproved land | 133,259 | 3.9 | % | |||||
Apartment buildings | 353,734 | 10.4 | % | |||||
Shopping center/mall buildings | 298,090 | 8.7 | % | |||||
1-4 Family dwellings (other than condominium) | 517,549 | 15.2 | % | |||||
Residential lots | 306,491 | 9.0 | % | |||||
Hotel/motel buildings | 140,317 | 4.1 | % | |||||
Other | 323,306 | 9.5 | % | |||||
Other than market risk | ||||||||
Commercial buildings | 289,795 | 8.5 | % | |||||
1-4 Family dwellings (other than condominium) | 95,207 | 2.8 | % | |||||
Other | 164,141 | 4.8 | % | |||||
| ||||||||
Total real estate loans | $ | 3,409,133 | 100.0 | % | ||||
| ||||||||
| Amount | Percent of Total Real Estate Loans | |||||
| Property type: | ||||||
| Market risk | ||||||
| Commercial buildings | $ | 941,192 | 22.3 | % | ||
| Unimproved land | 111,266 | 2.6 | % | |||
| Apartment buildings | 449,244 | 10.6 | % | |||
| Shopping center/mall buildings | 315,575 | 7.5 | % | |||
| 1-4 Family dwellings (other than condominium) | 613,261 | 14.5 | % | |||
| Residential lots | 400,668 | 9.5 | % | |||
| Hotel/motel buildings | 171,262 | 4.1 | % | |||
| Other | 486,607 | 11.5 | % | |||
| Other than market risk | ||||||
| Commercial buildings | 347,596 | 8.2 | % | |||
| 1-4 Family dwellings (other than condominium) | 109,715 | 2.6 | % | |||
| Other | 277,146 | 6.6 | % | |||
| Total real estate loans | $ | 4,223,532 | 100.0 | % | ||
| Amount | Percent of Total | |||||||
Geographic region: | ||||||||
Dallas/Fort Worth | $ | 1,018,719 | 35.7 | % | ||||
Houston | 753,156 | 26.3 | % | |||||
Austin | 347,286 | 12.1 | % | |||||
San Antonio | 274,873 | 9.6 | % | |||||
Other Texas cities | 251,014 | 8.8 | % | |||||
Other states | 214,942 | 7.5 | % | |||||
Total market risk real estate loans | $ | 2,859,990 | 100.0 | % | ||||
| Amount | Percent of Total | |||||
| Geographic region: | ||||||
| Dallas/Fort Worth | $ | 1,246,418 | 35.7 | % | ||
| Houston | 876,534 | 25.1 | % | |||
| Austin | 299,490 | 8.6 | % | |||
| San Antonio | 370,004 | 10.6 | % | |||
| Other Texas cities | 274,322 | 7.9 | % | |||
| Other states | 422,307 | 12.1 | % | |||
| Total market risk real estate loans | $ | 3,489,075 | 100.0 | % | ||
approximately $199$264 million and our house limit is generally $25 million or less. Larger hold positions will be accepted occasionally for exceptionally strong borrowers and otherwise where business opportunity and perceived credit risk warrant a somewhat larger investment. We consider large credit relationships to be those with commitments equal to or in excess of $10.0 million. The following table provides additional information on our large credit relationships outstanding at year-end (in thousands):
| 2013 | 2012 | |||||||||||||||||||||||
| Period-End Balances | Period-End Balances | |||||||||||||||||||||||
| Number of Relationships | Committed | Outstanding | Number of Relationships | Committed | Outstanding | |||||||||||||||||||
$20.0 million and greater | 141 | $ | 3,694,305 | $ | 2,213,744 | 86 | $ | 2,123,328 | $ | 1,339,070 | ||||||||||||||
$10.0 million to $19.9 million | 215 | 2,977,111 | 1,979,001 | 178 | 2,467,089 | 1,715,180 | ||||||||||||||||||
| ||||||||||||||||||||||||
| December 31, 2014 | December 31, 2013 | ||||||||||||||||||||
| Period End Balances | Period End Balances | ||||||||||||||||||||
Number of Relationships | Committed | Outstanding | Number of Relationships | Committed | Outstanding | ||||||||||||||||
| $20.0 million and greater | 206 | $ | 5,589,823 | $ | 2,966,627 | 141 | $ | 3,694,305 | $ | 2,213,744 | |||||||||||
| $10.0 million to $19.9 million | 271 | 3,768,588 | 2,515,899 | 215 | 2,977,111 | 1,979,001 | |||||||||||||||
| 2013 Average Balance | 2012 Average Balance | |||||||||||||||
| Committed | Outstanding | Committed | Outstanding | |||||||||||||
$20.0 million and greater | $ | 26,201 | $ | 15,700 | $ | 24,690 | $ | 15,571 | ||||||||
$10.0 million to $19.9 million | 13,847 | 9,205 | 13,860 | 9,636 | ||||||||||||
| 2014 Average Balance | 2013 Average Balance | ||||||||||||||
| Committed | Outstanding | Committed | Outstanding | ||||||||||||
| $20.0 million and greater | $ | 27,135 | $ | 14,401 | $ | 26,201 | $ | 15,700 | |||||||
| $10.0 million to $19.9 million | 13,906 | 9,284 | 13,847 | 9,205 | |||||||||||
| Remaining Maturities of Selected Loans | ||||||||||||||||
| (in thousands) | Total | Within 1 Year | 1-5 Years | After 5 Years | ||||||||||||
Loan maturity: | ||||||||||||||||
Commercial | $ | 5,020,565 | $ | 2,048,407 | $ | 2,762,786 | $ | 209,372 | ||||||||
Mortgage finance | 2,784,265 | 2,784,265 | — | — | ||||||||||||
Construction | 1,262,905 | 300,615 | 910,004 | 52,286 | ||||||||||||
Real estate | 2,146,228 | 368,286 | 1,153,417 | 624,525 | ||||||||||||
Consumer | 15,350 | 10,316 | 4,319 | 715 | ||||||||||||
Equipment leases | 93,160 | 10,227 | 82,440 | 493 | ||||||||||||
Total loans held for investment | $ | 11,322,473 | $ | 5,522,116 | $ | 4,912,966 | $ | 887,391 | ||||||||
Interest rate sensitivity for selected loans with: | ||||||||||||||||
Predetermined interest rates | $ | 1,426,574 | $ | 886,367 | $ | 407,544 | $ | 132,663 | ||||||||
Floating or adjustable interest rates | 9,895,899 | 4,635,749 | 4,505,422 | 754,728 | ||||||||||||
Total loans held for investment | $ | 11,322,473 | $ | 5,522,116 | $ | 4,912,966 | $ | 887,391 | ||||||||
2014
| Remaining Maturities of Selected Loans | |||||||||||||||
| (in thousands) | Total | Within 1 Year | 1-5 Years | After 5 Years | |||||||||||
| Loan maturity: | |||||||||||||||
| Commercial | $ | 5,869,219 | $ | 2,244,841 | $ | 1,784,512 | $ | 1,839,866 | |||||||
| Mortgage finance | 4,102,125 | 4,102,125 | — | — | |||||||||||
| Construction | 1,416,405 | 392,289 | 856,090 | 168,026 | |||||||||||
| Real estate | 2,807,127 | 517,832 | 732,566 | 1,556,729 | |||||||||||
| Consumer | 19,699 | 17,417 | 866 | 1,416 | |||||||||||
| Equipment leases | 99,495 | 3,127 | 47,833 | 48,535 | |||||||||||
| Total loans held for investment | $ | 14,314,070 | $ | 7,277,631 | $ | 3,421,867 | $ | 3,614,572 | |||||||
| Interest rate sensitivity for selected loans with: | |||||||||||||||
| Predetermined interest rates | $ | 1,662,585 | $ | 985,508 | $ | 223,665 | $ | 453,412 | |||||||
| Floating or adjustable interest rates | 12,651,485 | 6,292,123 | 3,198,202 | 3,161,160 | |||||||||||
| Total loans held for investment | $ | 14,314,070 | $ | 7,277,631 | $ | 3,421,867 | $ | 3,614,572 | |||||||
balance of the loan. When drawn, the interest is capitalized and added to the loan balance, subject to conditions specified at the time the credit is approved and during the initial underwriting. We have effective and ongoing controls for monitoring compliance with loan covenants for advancing funds and determination of default conditions. When lending relationships involve financing of land on which improvements will be constructed, construction funds are not advanced until the borrower has received lease or purchase commitments which will meet cash flow coverage requirements, and/or our analysis of market conditions and project feasibility indicateindicates to management’s satisfaction that such lease or purchase commitments are forthcoming and/or other sources of repayment have been identified to repay the loan. We maintain current financial statements on the borrowing entity and guarantors, as well as conduct periodic inspections of the project and analysis of whether the project is on schedule or delayed. Updated appraisals are ordered when necessary to validate the collateral values to support all advances, including reserve interest. Advances of interest reserves are discontinued if collateral values do not support the advances or if the borrower does not comply with other terms and conditions in the loan agreements. In addition, most of our construction lending is performed in Texas and our lenders are very familiar with trends in local real estate. At a point whereIf at any time we believe that our collateral position is jeopardized, we retain the right to stop the use of the interest reserves. As of December 31, 2013,2014, none of our loans with interest reserves were on nonaccrual.
non-accrual.
| As of December 31 | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
Non-accrual loans(1)(4) | ||||||||||||
Commercial | $ | 12,896 | $ | 15,373 | $ | 12,913 | ||||||
Construction | 705 | 17,217 | 21,119 | |||||||||
Real estate | 18,670 | 23,066 | 19,803 | |||||||||
Consumer | 54 | 57 | 313 | |||||||||
Equipment leases | 50 | 120 | 432 | |||||||||
Total non-accrual loans | 32,375 | 55,833 | 54,580 | |||||||||
Repossessed assets: | ||||||||||||
OREO(3) | 5,110 | 15,991 | 34,077 | |||||||||
Other repossessed assets | — | 42 | 1,516 | |||||||||
Total other repossessed assets | 5,110 | 16,033 | 35,593 | |||||||||
Total non-performing assets | $ | 37,485 | $ | 71,866 | $ | 90,173 | ||||||
| ||||||||||||
Restructured loans(4) | $ | 1,935 | �� | $ | 10,407 | $ | 25,104 | |||||
Loans past due 90 days and accruing(2) | $ | 9,325 | $ | 3,674 | $ | 5,467 | ||||||
| As of December 31, | |||||||||||
| 2014 | 2013 | 2012 | |||||||||
| Non-accrual loans(1)(4) | |||||||||||
| Commercial | $ | 33,122 | $ | 12,896 | $ | 15,373 | |||||
| Construction | — | 705 | 17,217 | ||||||||
| Real estate | 9,947 | 18,670 | 23,066 | ||||||||
| Consumer | 62 | 54 | 57 | ||||||||
| Equipment leases | 173 | 50 | 120 | ||||||||
| Total non-accrual loans | 43,304 | 32,375 | 55,833 | ||||||||
| Repossessed assets: | |||||||||||
| OREO(3) | 568 | 5,110 | 15,991 | ||||||||
| Other repossessed assets | — | — | 42 | ||||||||
| Total other repossessed assets | 568 | 5,110 | 16,033 | ||||||||
| Total non-performing assets | $ | 43,872 | $ | 37,485 | $ | 71,866 | |||||
| Restructured loans(4) | $ | 1,806 | $ | 1,935 | $ | 10,407 | |||||
| Loans past due 90 days and accruing(2) | $ | 5,274 | $ | 9,325 | $ | 3,674 | |||||
| (1) | The accrual of interest on loans is discontinued when there is a clear indication that the borrower’s cash flow may not be sufficient to meet payments as they become due, which is generally when a loan is 90 days past due. When a loan is placed on non-accrual status, all previously accrued and unpaid interest is reversed. Interest income is subsequently recognized on a cash basis as long as the remaining unpaid principal amount of the loan is deemed to be fully collectible. If |
| (2) | At December 31, 2014, 2013 |
| (3) | At December 31, 2014 and 2013, there is no valuation allowance recorded against the OREO balance. At December 31, 2012, |
| (4) | As of December 31, 2014, 2013 |
2013.
Non-accrual loans: | ||||
Commercial | ||||
Lines of credit secured by the following: | ||||
Oil and gas properties | $ | 1,614 | ||
Assets of the borrowers | 9,819 | |||
Other | 1,463 | |||
Total commercial | 12,896 | |||
Real estate | ||||
Secured by: | ||||
Commercial property | 9,606 | |||
Unimproved land and/or developed residential lots | 4,819 | |||
Single family residences | 888 | |||
Other | 3,357 | |||
|
| |||
Total real estate | 18,670 | |||
Construction | ||||
Secured by: | ||||
Other | 705 | |||
Consumer | 54 | |||
Equipment leases (commercial leases primarily secured by assets of the lessor) | 50 | |||
|
| |||
Total non-accrual loans | $ | 32,375 | ||
| Non-accrual loans: | |||
| Commercial | |||
| Lines of credit secured by the following: | |||
| Oil and gas properties | $ | 694 | |
| Assets of the borrowers | 31,179 | ||
| Other | 1,249 | ||
| Total commercial | 33,122 | ||
| Real estate | |||
| Secured by: | |||
| Commercial property | 4,781 | ||
| Unimproved land and/or developed residential lots | 3,735 | ||
| Other | 1,431 | ||
| Total real estate | 9,947 | ||
| Construction | — | ||
| Consumer | 62 | ||
| Equipment leases | 173 | ||
| Total non-accrual loans | $ | 43,304 | |
income is subsequently recognized on a cash basis as long as the remaining unpaid principal amount of the loan is deemed to be fully collectible. If collectibilitycollectability is questionable, then cash payments are applied to principal. As of December 31, 2013, none2014, $310,000 of our non-accrual loans were earning on a cash basis. A loan is placed back on accrual status when both principal and interest are current and it is probable that we will be able to collect all amounts due (both principal and interest) according to the terms of the loan agreement.
| Year ended December 31 | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
Beginning balance | $ | 15,991 | $ | 34,077 | $ | 42,261 | ||||||
Additions | 1,331 | 3,434 | 22,180 | |||||||||
Sales | (11,292 | ) | (14,637 | ) | (23,566 | ) | ||||||
Valuation allowance for OREO | 958 | (4,488 | ) | (3,922 | ) | |||||||
Direct write-downs | (1,878 | ) | (2,395 | ) | (2,876 | ) | ||||||
Ending balance | $ | 5,110 | $ | 15,991 | $ | 34,077 | ||||||
| Year ended December 31, | |||||||||||
| 2014 | 2013 | 2012 | |||||||||
| Beginning balance | $ | 5,110 | $ | 15,991 | $ | 34,077 | |||||
| Additions | 851 | 1,331 | 3,434 | ||||||||
| Sales | (5,393 | ) | (11,292 | ) | (14,637 | ) | |||||
| Valuation allowance for OREO | — | 958 | (4,488 | ) | |||||||
| Direct write-downs | — | (1,878 | ) | (2,395 | ) | ||||||
| Ending balance | $ | 568 | $ | 5,110 | $ | 15,991 | |||||
OREO: | ||||
Commercial buildings | 1,170 | |||
Undeveloped land and residential lots | 3,223 | |||
Other | 717 | |||
|
| |||
Total OREO | $ | 5,110 | ||
| OREO: | |||
| Undeveloped land and residential lots | $ | 487 | |
| Other | 81 | ||
| Total OREO | $ | 568 | |
2012.
in estimating loan and lease losses including factors and conditions that may not be fully reflected in the determination and application of the allowance allocation percentages. Examples of risks that support the Bank's maintaining an unallocated reserve include the possibility of precipitous negative changes in economic conditions and borrowers' submission of financial statements or certifications of collateral value that subsequently prove to be materially inaccurate for reason of either misstatement or omission of critical information. These situations, while not common, do not necessarily correlate well with the general risk profile presented by assigned credit grade and product type categories. We evaluate many such factors and conditions in determining the unallocated portion of the allowance, including the economicamount and business conditions affecting key lending areas, credit quality trends and general growthfrequency of losses attributable to issues not specifically addressed or included in the portfolio.determination and application of the allowance allocation percentages. The allowance is considered appropriate, given management’s assessment of potential losses within the portfolio as of the evaluation date, the significant growth in the loan and lease portfolio, current economic conditions in the Company’s market areas and other factors.
basis of the Company's consolidated financial statements.
| Year Ended December 31 | ||||||||||||||||||||
| 2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||
Reserve for loan losses: | ||||||||||||||||||||
Beginning balance | $ | 74,337 | $ | 70,295 | $ | 71,510 | $ | 67,931 | $ | 45,365 | ||||||||||
Loans charged-off: | ||||||||||||||||||||
Commercial | 6,575 | 6,708 | 8,518 | 27,723 | 4,000 | |||||||||||||||
Construction | — | — | — | 12,438 | 6,508 | |||||||||||||||
Real estate | 144 | 899 | 21,275 | 9,517 | 4,696 | |||||||||||||||
Consumer | 45 | 49 | 317 | 216 | 502 | |||||||||||||||
Equipment leases | 2 | 204 | 1,218 | 1,555 | 4,022 | |||||||||||||||
Total charge-offs | 6,766 | 7,860 | 31,328 | 51,449 | 19,728 | |||||||||||||||
Recoveries: | ||||||||||||||||||||
Commercial | 1,203 | 832 | 1,188 | 176 | 124 | |||||||||||||||
Construction | — | 10 | 248 | 1 | 13 | |||||||||||||||
Real estate | 270 | 812 | 350 | 138 | 53 | |||||||||||||||
Consumer | 73 | 33 | 9 | 4 | 28 | |||||||||||||||
Equipment leases | 322 | 108 | 383 | 158 | 54 | |||||||||||||||
Total recoveries | 1,868 | 1,795 | 2,178 | 477 | 272 | |||||||||||||||
Net charge-offs | 4,898 | 6,065 | 29,150 | 50,972 | 19,456 | |||||||||||||||
Provision for loan losses | 18,165 | 10,107 | 27,935 | 54,551 | 42,022 | |||||||||||||||
Ending balance | $ | 87,604 | $ | 74,337 | $ | 70,295 | $ | 71,510 | $ | 67,931 | ||||||||||
Reserve for off-balance sheet credit losses: | ||||||||||||||||||||
Beginning balance | $ | 3,855 | $ | 2,462 | $ | 1,897 | $ | 2,948 | $ | 1,470 | ||||||||||
Provision (benefit) for off-balance sheet credit losses | 835 | 1,393 | 565 | (1,051 | ) | 1,478 | ||||||||||||||
Ending balance | $ | 4,690 | $ | 3,855 | $ | 2,462 | $ | 1,897 | $ | 2,948 | ||||||||||
Total reserve for credit losses | $ | 92,294 | $ | 78,192 | $ | 72,757 | $ | 73,407 | $ | 70,879 | ||||||||||
Total provision for credit losses | $ | 19,000 | $ | 11,500 | $ | 28,500 | $ | 53,500 | $ | 43,500 | ||||||||||
Reserve for loan losses to loans | 0.78 | % | 0.75 | % | 0.92 | % | 1.21 | % | 1.32 | % | ||||||||||
Reserve for loan losses to loans excluding mortgage finance loans(5) | 1.03 | % | 1.10 | % | 1.26 | % | 1.52 | % | 1.52 | % | ||||||||||
Net charge-offs to average loans | 0.05 | % | 0.07 | % | 0.47 | % | 0.95 | % | 0.41 | % | ||||||||||
Net charge-offs to average loans excluding mortgage finance loans(5) | 0.07 | % | 0.10 | % | 0.58 | % | 1.14 | % | 0.46 | % | ||||||||||
Total provision for credit losses to average loans | 0.19 | % | 0.14 | % | 0.45 | % | 1.00 | % | 0.91 | % | ||||||||||
Total provision for credit losses to average loans excluding mortgage finance loans(5) | 0.25 | % | 0.19 | % | 0.56 | % | 1.20 | % | 1.04 | % | ||||||||||
Recoveries to total charge-offs | 27.61 | % | 22.84 | % | 6.95 | % | 0.93 | % | 1.38 | % | ||||||||||
Reserve for off-balance sheet credit losses to off-balance sheet credit commitments | 0.12 | % | 0.14 | % | 0.14 | % | 0.14 | % | 0.24 | % | ||||||||||
Combined reserves for credit losses to loans held for investment | 0.82 | % | 0.78 | % | 0.95 | % | 1.24 | % | 1.38 | % | ||||||||||
Combined reserves for credit losses to loans excluding mortgage finance loans(5) | 1.09 | % | 1.15 | % | 1.31 | % | 1.56 | % | 1.59 | % | ||||||||||
Non-performing assets: | ||||||||||||||||||||
Non-accrual loans(1)(4) | $ | 32,375 | $ | 55,833 | $ | 54,580 | $ | 112,090 | $ | 95,625 | ||||||||||
OREO(3) | 5,110 | 15,991 | 34,077 | 42,261 | 27,264 | |||||||||||||||
Other repossessed assets | — | 42 | 1,516 | 451 | 162 | |||||||||||||||
Total | $ | 37,485 | $ | 71,866 | $ | 90,173 | $ | 154,802 | $ | 123,051 | ||||||||||
Restructured loans | $ | 1,935 | $ | 10,407 | $ | 25,104 | $ | 4,319 | $ | — | ||||||||||
Loans past due 90 days and still accruing(2) | $ | 9,325 | $ | 3,674 | $ | 5,467 | $ | 6,706 | $ | 6,081 | ||||||||||
Reserve as a percent of non-performing loans | 2.7 | x | 1.3 | x | 1.3 | x | .6 | x | .7 | x | ||||||||||
| Year Ended December 31, | ||||||||||||||||||||||||
| 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Reserve for loan losses: | ||||||||||||||||||||||||
| Beginning balance | $ | 87,604 | $ | 74,337 | $ | 70,295 | $ | 71,510 | $ | 67,931 | ||||||||||||||
| Loans charged-off: | ||||||||||||||||||||||||
| Commercial | 9,803 | 6,575 | 6,708 | 8,518 | 27,723 | |||||||||||||||||||
| Construction | — | — | — | — | 12,438 | |||||||||||||||||||
| Real estate | 296 | 144 | 899 | 21,275 | 9,517 | |||||||||||||||||||
| Consumer | 266 | 45 | 49 | 317 | 216 | |||||||||||||||||||
| Equipment leases | — | 2 | 204 | 1,218 | 1,555 | |||||||||||||||||||
| Total charge-offs | 10,365 | 6,766 | 7,860 | 31,328 | 51,449 | |||||||||||||||||||
| Recoveries: | ||||||||||||||||||||||||
| Commercial | 2,762 | 1,203 | 832 | 1,188 | 176 | |||||||||||||||||||
| Construction | — | — | 10 | 248 | 1 | |||||||||||||||||||
| Real estate | 79 | 270 | 812 | 350 | 138 | |||||||||||||||||||
| Consumer | 162 | 73 | 33 | 9 | 4 | |||||||||||||||||||
| Equipment leases | 1,082 | 322 | 108 | 383 | 158 | |||||||||||||||||||
| Total recoveries | 4,085 | 1,868 | 1,795 | 2,178 | 477 | |||||||||||||||||||
| Net charge-offs | 6,280 | 4,898 | 6,065 | 29,150 | 50,972 | |||||||||||||||||||
| Provision for loan losses | 19,630 | 18,165 | 10,107 | 27,935 | 54,551 | |||||||||||||||||||
| Ending balance | $ | 100,954 | $ | 87,604 | $ | 74,337 | $ | 70,295 | $ | 71,510 | ||||||||||||||
| Reserve for off-balance sheet credit losses: | ||||||||||||||||||||||||
| Beginning balance | $ | 4,690 | $ | 3,855 | $ | 2,462 | $ | 1,897 | $ | 2,948 | ||||||||||||||
| Provision (benefit) for off-balance sheet credit losses | 2,370 | 835 | 1,393 | 565 | (1,051 | ) | ||||||||||||||||||
| Ending balance | $ | 7,060 | $ | 4,690 | $ | 3,855 | $ | 2,462 | $ | 1,897 | ||||||||||||||
| Total reserve for credit losses | $ | 108,014 | $ | 92,294 | $ | 78,192 | $ | 72,757 | $ | 73,407 | ||||||||||||||
| Total provision for credit losses | $ | 22,000 | $ | 19,000 | $ | 11,500 | $ | 28,500 | $ | 53,500 | ||||||||||||||
| Reserve for loan losses to loans | 0.71 | % | 0.78 | % | 0.75 | % | 0.92 | % | 1.21 | % | ||||||||||||||
| Reserve for loan losses to loans excluding mortgage finance loans | 0.99 | % | 1.03 | % | 1.10 | % | 1.26 | % | 1.52 | % | ||||||||||||||
| Net charge-offs to average loans | 0.05 | % | 0.05 | % | 0.07 | % | 0.47 | % | 0.95 | % | ||||||||||||||
| Net charge-offs to average loans excluding mortgage finance loans | 0.07 | % | 0.07 | % | 0.10 | % | 0.58 | % | 1.14 | % | ||||||||||||||
| Total provision for credit losses to average loans | 0.18 | % | 0.19 | % | 0.14 | % | 0.45 | % | 1.00 | % | ||||||||||||||
| Total provision for credit losses to average loans excluding mortgage finance loans | 0.24 | % | 0.25 | % | 0.19 | % | 0.56 | % | 1.20 | % | ||||||||||||||
| Recoveries to total charge-offs | 39.41 | % | 27.61 | % | 22.84 | % | 6.95 | % | 0.93 | % | ||||||||||||||
| Reserve for off-balance sheet credit losses to off-balance sheet credit commitments | 0.13 | % | 0.12 | % | 0.14 | % | 0.14 | % | 0.14 | % | ||||||||||||||
| Combined reserves for credit losses to loans held for investment | 0.76 | % | 0.82 | % | 0.78 | % | 0.95 | % | 1.24 | % | ||||||||||||||
| Combined reserves for credit losses to loans excluding mortgage finance loans | 1.06 | % | 1.09 | % | 1.15 | % | 1.31 | % | 1.56 | % | ||||||||||||||
| Non-performing assets: | ||||||||||||||||||||||||
| Non-accrual loans(1)(4) | $ | 43,304 | $ | 32,375 | $ | 55,833 | $ | 54,580 | $ | 112,090 | ||||||||||||||
| OREO(3) | 568 | 5,110 | 15,991 | 34,077 | 42,261 | |||||||||||||||||||
| Other repossessed assets | — | — | 42 | 1,516 | 451 | |||||||||||||||||||
| Total | $ | 43,872 | $ | 37,485 | $ | 71,866 | $ | 90,173 | $ | 154,802 | ||||||||||||||
| Restructured loans | $ | 1,806 | $ | 1,935 | $ | 10,407 | $ | 25,104 | $ | 4,319 | ||||||||||||||
| Loans past due 90 days and still accruing(2) | $ | 5,274 | $ | 9,325 | $ | 3,674 | $ | 5,467 | $ | 6,706 | ||||||||||||||
| Reserve as a multiple of non-performing loans | 2.3 | x | 2.7 | x | 1.3 | x | 1.3 | x | 0.6 | x | ||||||||||||||
| (1) | The accrual of interest on loans is discontinued when there is a clear indication that the borrower’s cash flow may not be sufficient to meet payments as they become due, which is generally when a loan is 90 days past due. When a loan is placed on non-accrual status, all previously accrued and unpaid interest is reversed. Interest income is subsequently recognized on a cash basis as long as the remaining unpaid principal amount of the loan is deemed to be fully collectible. If |
| (2) | At December 31, 2014, 2013 |
| (3) | At December 31, 2014 and 2013, we did not have a valuation allowance recorded against the OREO balance. At December 31, 2012, |
| (4) | As of December 31, 2014, 2013 |
| December 31, | |||||||||||||||||||||||||||||||||||
| 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||||||||||||||
(in thousands except percentage data) | Reserve | % of Loans | Reserve | % of Loans | Reserve | % of Loans | Reserve | % of Loans | Reserve | % of Loans | |||||||||||||||||||||||||
| Loan category: | |||||||||||||||||||||||||||||||||||
| Commercial | $ | 70,654 | 41 | % | $ | 39,868 | 44 | % | $ | 21,547 | 41 | % | $ | 17,337 | 43 | % | $ | 15,918 | 43 | % | |||||||||||||||
| Mortgage finance loans(1) | — | 28 | % | — | 25 | % | — | 32 | % | — | 27 | % | — | 20 | % | ||||||||||||||||||||
| Construction | 7,935 | 10 | % | 14,553 | 11 | % | 12,097 | 7 | % | 7,845 | 5 | % | 7,336 | 5 | % | ||||||||||||||||||||
| Real estate | 15,582 | 20 | % | 24,210 | 19 | % | 30,893 | 19 | % | 33,721 | 24 | % | 38,049 | 30 | % | ||||||||||||||||||||
| Consumer | 240 | — | 149 | — | 226 | — | 223 | — | 306 | — | |||||||||||||||||||||||||
| Equipment leases | 1,141 | 1 | % | 3,105 | 1 | % | 2,460 | 1 | % | 2,356 | 1 | % | 5,405 | 2 | % | ||||||||||||||||||||
| Unallocated | 5,402 | — | 5,719 | — | 7,114 | — | 8,813 | — | 4,496 | — | |||||||||||||||||||||||||
| Total | $ | 100,954 | 100 | % | $ | 87,604 | 100 | % | $ | 74,337 | 100 | % | $ | 70,295 | 100 | % | $ | 71,510 | 100 | % | |||||||||||||||
| (1) | No amount of |
Loan Loss Reserve Allocation
| December 31 | ||||||||||||||||||||||||||||||||||||||||
| 2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||||||||||||||||||
| (in thousands except percentage data) | Reserve | % of Loans | Reserve | % of Loans | Reserve | % of Loans | Reserve | % of Loans | Reserve | % of Loans | ||||||||||||||||||||||||||||||
Loan category: | ||||||||||||||||||||||||||||||||||||||||
Commercial | $ | 39,868 | 44 | % | $ | 21,547 | 41 | % | $ | 17,337 | 43 | % | $ | 15,918 | 43 | % | $ | 33,269 | 48 | % | ||||||||||||||||||||
Mortgage finance loans(1) | — | 25 | % | — | 32 | % | — | 27 | % | — | 20 | % | — | 13 | % | |||||||||||||||||||||||||
Construction | 14,553 | 11 | % | 12,097 | 7 | % | 7,845 | 5 | % | 7,336 | 5 | % | 10,974 | 13 | % | |||||||||||||||||||||||||
Real estate | 24,210 | 19 | % | 30,893 | 19 | % | 33,721 | 24 | % | 38,049 | 30 | % | 14,874 | 24 | % | |||||||||||||||||||||||||
Consumer | 149 | — | 226 | — | 223 | — | 306 | — | 1,258 | — | ||||||||||||||||||||||||||||||
Equipment leases | 3,105 | 1 | % | 2,460 | 1 | % | 2,356 | 1 | % | 5,405 | 2 | % | 2,960 | 2 | % | |||||||||||||||||||||||||
Unallocated | 5,719 | — | 7,114 | — | 8,813 | — | 4,496 | — | 4,596 | — | ||||||||||||||||||||||||||||||
Total | $ | 87,604 | 100 | % | $ | 74,337 | 100 | % | $ | 70,295 | 100 | % | $ | 71,510 | 100 | % | $ | 67,931 | 100 | % | ||||||||||||||||||||
As our credit quality has improved during 2013, increases
requirements. Held-to-maturity securities are carried at cost, adjusted for amortization of premiums or accretion of discounts. Available-for-sale securities are securities that may be sold prior to maturity based upon asset/liability management decisions. Securities identified as available-for-sale are carried at fair value. Unrealized gains or losses on available-for-sale securities are recorded as accumulated other comprehensive income (loss) in stockholders’ equity, net of taxes. Amortization of premiums or accretion of discounts on mortgage-backed securities is periodically adjusted for estimated prepayments.
Realized gains and losses and declines in value judged to be other-than-temporary are included in gain (loss) on sale of securities. The cost of securities sold is based on the specific identification method.
2013.
| At December 31 | ||||||||||||||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||||||||||
| Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||
Mortgage-backed securities | $ | 38,786 | $ | 41,462 | $ | 57,342 | $ | 61,581 | $ | 84,363 | $ | 90,083 | ||||||||||||
Corporate securities | — | — | 5,000 | 5,080 | 5,000 | 5,225 | ||||||||||||||||||
Municipals | 14,401 | 14,505 | 25,300 | 25,894 | 29,577 | 30,742 | ||||||||||||||||||
Equity securities(1) | 7,522 | 7,247 | 7,519 | 7,640 | 7,506 | 7,660 | ||||||||||||||||||
Other | — | — | — | — | 10,000 | 10,000 | ||||||||||||||||||
Total available-for-sale securities | $ | 60,709 | $ | 63,214 | $ | 95,161 | $ | 100,195 | $ | 136,446 | $ | 143,710 | ||||||||||||
| ||||||||||||||||||||||||
| At December 31, | |||||||||||||||||||||||
| 2014 | 2013 | 2012 | |||||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||
| Available-for-sale: | |||||||||||||||||||||||
| Mortgage-backed securities | $ | 28,957 | $ | 31,065 | $ | 38,786 | $ | 41,462 | $ | 57,342 | $ | 61,581 | |||||||||||
| Corporate securities | — | — | — | — | 5,000 | 5,080 | |||||||||||||||||
| Municipals | 3,257 | 3,267 | 14,401 | 14,505 | 25,300 | 25,894 | |||||||||||||||||
| Equity securities(1) | 7,522 | 7,387 | 7,522 | 7,247 | 7,519 | 7,640 | |||||||||||||||||
| Total available-for-sale securities | $ | 39,736 | $ | 41,719 | $ | 60,709 | $ | 63,214 | $ | 95,161 | $ | 100,195 | |||||||||||
| (1) | Equity securities consist of Community Reinvestment Act funds. |
| At December 31, 2013 | ||||||||||||||||||||
| Less Than One Year | After One Through Five Years | After Five Through Ten Years | After Ten Years | Total | ||||||||||||||||
Available-for-sale: | ||||||||||||||||||||
Mortgage-backed securities:(1) | ||||||||||||||||||||
Amortized cost | $ | 238 | $ | 14,720 | $ | 7,718 | $ | 16,110 | $ | 38,786 | ||||||||||
Estimated fair value | 252 | 15,641 | 8,456 | 17,113 | 41,462 | |||||||||||||||
Weighted average yield(3) | 4.32 | % | 4.78 | % | 5.56 | % | 2.40 | % | 3.94 | % | ||||||||||
Municipals:(2) | ||||||||||||||||||||
Amortized cost | 7,749 | 6,652 | — | — | 14,401 | |||||||||||||||
Estimated fair value | 7,818 | 6,687 | — | — | 14,505 | |||||||||||||||
Weighted average yield(3) | 5.76 | % | 5.71 | % | 0.00 | % | — | 5.73 | % | |||||||||||
Equity securities:(4) | ||||||||||||||||||||
Amortized cost | 7,522 | — | — | — | 7,522 | |||||||||||||||
Estimated fair value | 7,247 | — | — | — | 7,247 | |||||||||||||||
|
| |||||||||||||||||||
Total available-for-sale securities: | ||||||||||||||||||||
Amortized cost | $ | 60,709 | ||||||||||||||||||
|
| |||||||||||||||||||
Estimated fair value | $ | 63,214 | ||||||||||||||||||
|
| |||||||||||||||||||
| At December 31, 2012 | ||||||||||||||||||||
| Less Than One Year | After One Through Five Years | After Five Through Ten Years | After Ten Years | Total | ||||||||||||||||
Available-for-sale: | ||||||||||||||||||||
Mortgage-backed securities:(1) | ||||||||||||||||||||
Amortized cost | $ | 656 | $ | 5,698 | $ | 23,111 | $ | 27,877 | $ | 57,342 | ||||||||||
Estimated fair value | 690 | 6,113 | 24,948 | 29,830 | 61,581 | |||||||||||||||
Weighted average yield(3) | 4.20 | % | 5.29 | % | 4.86 | % | 3.41 | % | 4.19 | % | ||||||||||
Corporate securities: | ||||||||||||||||||||
Amortized cost | — | 5,000 | — | — | 5,000 | |||||||||||||||
Estimated fair value | — | 5,080 | — | — | 5,080 | |||||||||||||||
Weighted average yield(3) | — | 7.38 | % | — | — | 7.38 | % | |||||||||||||
Municipals:(2) | ||||||||||||||||||||
Amortized cost | 6,575 | 16,448 | 2,277 | — | 25,300 | |||||||||||||||
Estimated fair value | 6,646 | 16,895 | 2,353 | — | 25,894 | |||||||||||||||
Weighted average yield(3) | 5.75 | % | 5.66 | % | 6.01 | % | — | 5.72 | % | |||||||||||
Equity securities:(4) | ||||||||||||||||||||
Amortized cost | 7,519 | — | — | — | 7,519 | |||||||||||||||
Estimated fair value | 7,640 | — | — | — | 7,640 | |||||||||||||||
|
| |||||||||||||||||||
Total available-for-sale securities: | ||||||||||||||||||||
Amortized cost | $ | 95,161 | ||||||||||||||||||
|
| |||||||||||||||||||
Estimated fair value | $ | 100,195 | ||||||||||||||||||
|
| |||||||||||||||||||
| At December 31, 2014 | |||||||||||||||||||
Less Than One Year | After One Through Five Years | After Five Through Ten Years | After Ten Years | Total | |||||||||||||||
| Available-for-sale: | |||||||||||||||||||
| Mortgage-backed securities:(1) | |||||||||||||||||||
| Amortized cost | $ | 1 | $ | 9,151 | $ | 5,661 | $ | 14,144 | $ | 28,957 | |||||||||
| Estimated fair value | 1 | 9,662 | 6,333 | 15,069 | 31,065 | ||||||||||||||
| Weighted average yield(3) | 6.50 | % | 4.79 | % | 5.54 | % | 2.36 | % | 3.75 | % | |||||||||
| Municipals:(2) | |||||||||||||||||||
| Amortized cost | 1,669 | 1,588 | — | — | 3,257 | ||||||||||||||
| Estimated fair value | 1,674 | 1,593 | — | — | 3,267 | ||||||||||||||
| Weighted average yield(3) | 5.78 | % | 5.79 | % | — | — | 5.79 | % | |||||||||||
| Equity securities:(4) | |||||||||||||||||||
| Amortized cost | 7,522 | — | — | — | 7,522 | ||||||||||||||
| Estimated fair value | 7,387 | — | — | — | 7,387 | ||||||||||||||
| Total available-for-sale securities: | |||||||||||||||||||
| Amortized cost | $ | 39,736 | |||||||||||||||||
| Estimated fair value | $ | 41,719 | |||||||||||||||||
| At December 31, 2013 | |||||||||||||||||||
Less Than One Year | After One Through Five Years | After Five Through Ten Years | After Ten Years | Total | |||||||||||||||
| Available-for-sale: | |||||||||||||||||||
| Mortgage-backed securities:(1) | |||||||||||||||||||
| Amortized cost | $ | 238 | $ | 14,720 | $ | 7,718 | $ | 16,110 | $ | 38,786 | |||||||||
| Estimated fair value | 252 | 15,641 | 8,456 | 17,113 | 41,462 | ||||||||||||||
| Weighted average yield(3) | 4.32 | % | 4.78 | % | 5.56 | % | 2.40 | % | 3.94 | % | |||||||||
| Municipals:(2) | |||||||||||||||||||
| Amortized cost | 7,749 | 6,652 | — | — | 14,401 | ||||||||||||||
| Estimated fair value | 7,818 | 6,687 | — | — | 14,505 | ||||||||||||||
| Weighted average yield(3) | 5.76 | % | 5.71 | % | — | — | 5.73 | % | |||||||||||
| Equity securities:(4) | |||||||||||||||||||
| Amortized cost | 7,522 | — | — | — | 7,522 | ||||||||||||||
| Estimated fair value | 7,247 | — | — | — | 7,247 | ||||||||||||||
| Total available-for-sale securities: | |||||||||||||||||||
| Amortized cost | $ | 60,709 | |||||||||||||||||
| Estimated fair value | $ | 63,214 | |||||||||||||||||
| (1) | Actual maturities may differ significantly 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 35% federal tax rate. |
| (3) | Yields are calculated based on amortized cost. |
| (4) | These equity securities do not have a stated maturity. |
| Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
| Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | |||||||||||||||||||
Equity securities | $ | 7,247 | $ | (275 | ) | $ | — | $ | — | $ | 7,247 | $ | (275 | ) | ||||||||||
| December 31, 2014 | Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
| Equity securities | $ | — | $ | — | $ | 6,349 | $ | (151 | ) | $ | 6,349 | $ | (151 | ) | |||||||||
| December 31, 2013 | Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||
| Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
| Equity securities | $ | 7,247 | $ | (275 | ) | $ | — | $ | — | $ | 7,247 | $ | (275 | ) | |||||||||
At December 31, 2012, we did not have any investment securities in an unrealized loss position.
Average deposits for the year ended December 31, 2012 increased $1.1 billion compared to the same period of 2011. Average demand deposits, interest bearing transaction deposits and savings deposits increased by $469.2 million, $360.9 million and $363.1 million, respectively, while time deposits (including deposits in foreign branches) decreased $110.7 million during the year ended December 31, 2012 as compared to the same period of 2011. The average cost of deposits decreased in 2012 mainly due to our focused effort to reduce rates paid on deposits.
| Average Balances | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
Non-interest bearing | $ | 2,967,063 | $ | 1,984,171 | $ | 1,515,021 | ||||||
Interest bearing transaction | 908,415 | 752,040 | 391,100 | |||||||||
Savings | 3,756,560 | 2,765,089 | 2,401,997 | |||||||||
Time deposits | 397,329 | 530,816 | 562,654 | |||||||||
Deposits in foreign branches | 345,506 | 411,891 | 490,703 | |||||||||
Total average deposits | $ | 8,374,873 | $ | 6,444,007 | $ | 5,361,475 | ||||||
| ||||||||||||
| Average Balances | |||||||||||
| 2014 | 2013 | 2012 | |||||||||
| Non-interest-bearing | $ | 4,188,173 | $ | 2,967,063 | $ | 1,984,171 | |||||
| Interest-bearing transaction | 960,812 | 908,415 | 752,040 | ||||||||
| Savings | 4,938,039 | 3,756,560 | 2,765,089 | ||||||||
| Time deposits | 417,317 | 397,329 | 530,816 | ||||||||
| Deposits in foreign branches | 361,203 | 345,506 | 411,891 | ||||||||
| Total average deposits | $ | 10,865,544 | $ | 8,374,873 | $ | 6,444,007 | |||||
| December 31 | ||||||||||||
| (In thousands) | 2013 | 2012 | 2011 | |||||||||
Months to maturity: | ||||||||||||
3 or less | $ | 130,180 | $ | 147,840 | $ | 302,319 | ||||||
Over 3 through 6 | 82,435 | 77,770 | 95,474 | |||||||||
Over 6 through 12 | 89,910 | 96,219 | 118,649 | |||||||||
Over 12 | 21,426 | 70,909 | 34,887 | |||||||||
Total | $ | 323,951 | $ | 392,738 | $ | 551,329 | ||||||
| ||||||||||||
| December 31, | |||||||||||
| (In thousands) | 2014 | 2013 | 2012 | ||||||||
| Months to maturity: | |||||||||||
| 3 or less | $ | 160,504 | $ | 130,180 | $ | 147,840 | |||||
| Over 3 through 6 | 77,199 | 82,435 | 77,770 | ||||||||
| Over 6 through 12 | 103,396 | 89,910 | 96,219 | ||||||||
| Over 12 | 22,359 | 21,426 | 70,909 | ||||||||
| Total | $ | 363,458 | $ | 323,951 | $ | 392,738 | |||||
borrowings, generally used to fund mortgage finance assets.
deposits of these core customers. These deposits are generated principally through development of long-term relationships with customers and stockholders, with a significant focus on treasury management products. In addition to deposits from our core customers, we also have access to deposits through brokered customer relationships. For regulatory purposes, these relationship brokered deposits are now categorized as brokered deposits in our Call Reports;deposits; however, since these deposits arise from a customer relationship which involves extensive treasury services, we consider these deposits to be core deposits for financialour reporting purposes. We also have access to incremental deposits through brokered retail certificates of deposit, or CDs. These traditional brokered deposits are generally of short maturities, 30 to 90 days, and are used to supportsupplement temporary differences in the growth in loans, including growth in loans held for sale or other specific categories of loans, compared to customer deposits. The following table summarizes our period-end and average year-to-date core customer deposits and brokered deposits (in millions):
| December 31 | ||||||||
| 2013 | 2012 | |||||||
Deposits from core customers | $ | 7,840.1 | $ | 6,448.8 | ||||
Deposits from core customers as a percent of total deposits | 84.7 | % | 86.7 | % | ||||
Relationship brokered deposits | $ | 1,417.3 | $ | 992.0 | ||||
Relationship brokered deposits as a percent of average total deposits | 15.3 | % | 13.3 | % | ||||
Traditional brokered deposits | $ | — | $ | — | ||||
Traditional brokered deposits as a percent of total deposits | 0.0 | % | 0.0 | % | ||||
Average deposits from core customers | $ | 7,040.4 | $ | 5,483.3 | ||||
Average deposits from core customers as a percent of average total deposits | 84.1 | % | 85.1 | % | ||||
Average relationship brokered deposits | $ | 1,334.5 | $ | 852.7 | ||||
Average relationship brokered deposits as a percent of average total deposits | 15.9 | % | 13.2 | % | ||||
Average traditional brokered deposits | $ | — | $ | 108.0 | ||||
Average traditional brokered deposits as a percent of average total deposits | 0.0 | % | 1.7 | % | ||||
| December 31, | |||||||
| 2014 | 2013 | ||||||
| Deposits from core customers | $ | 10,900.0 | $ | 7,840.1 | |||
| Deposits from core customers as a percent of total deposits | 86.0 | % | 84.7 | % | |||
| Relationship brokered deposits | $ | 1,773.3 | $ | 1,417.3 | |||
| Relationship brokered deposits as a percent of average total deposits | 14.0 | % | 15.3 | % | |||
| Traditional brokered deposits | $ | — | $ | — | |||
| Traditional brokered deposits as a percent of total deposits | — | % | — | % | |||
| Average deposits from core customers | $ | 9,135.0 | $ | 7,040.4 | |||
| Average deposits from core customers as a percent of average total deposits | 84.1 | % | 84.1 | % | |||
| Average relationship brokered deposits | $ | 1,709.8 | $ | 1,334.5 | |||
| Average relationship brokered deposits as a percent of average total deposits | 15.7 | % | 15.9 | % | |||
| Average traditional brokered deposits | $ | 20.7 | $ | — | |||
| Average traditional brokered deposits as a percent of average total deposits | 0.2 | % | — | % | |||
2013.
| 2013 | 2011 | 2011 | ||||||||||||||||||||||||||||||||||
| Balance | Rate(3) | Maximum Outstanding at Any Month End | Balance | Rate(3) | Maximum Outstanding at Any Month End | Balance | Rate(3) | Maximum Outstanding at Any Month End | ||||||||||||||||||||||||||||
Federal funds purchased(4) | $ | 148,650 | 0.22 | % | $ | 273,179 | 0.26 | % | $ | 412,249 | 0.27 | % | ||||||||||||||||||||||||
Customer repurchase agreements(1) | 21,954 | 0.31 | % | 23,936 | 0.04 | % | 23,801 | 0.06 | % | |||||||||||||||||||||||||||
FHLB borrowings (2) | 840,026 | 0.12 | % | 1,650,046 | 0.09 | % | 1,200,066 | 0.14 | % | |||||||||||||||||||||||||||
Line of credit | 15,000 | 2.65 | % | — | — | — | — | |||||||||||||||||||||||||||||
Fed borrowings | — | — | — | — | 132,000 | 0.75 | % | |||||||||||||||||||||||||||||
Subordinated notes | 111,000 | 6.50 | % | 111,000 | 6.50 | % | — | — | ||||||||||||||||||||||||||||
Trust preferred subordinated debentures | 113,406 | 2.17 | % | 113,406 | 2.24 | % | 113,406 | 2.48 | % | |||||||||||||||||||||||||||
Total borrowings | $ | 1,250,036 | $ | 1,859,036 | $ | 2,171,567 | $ | 2,432,945 | $ | 1,881,522 | $ | 1,986,324 | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||
| 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||
| Balance | Rate(3) | Maximum Outstanding at Any Month End | Balance | Rate(3) | Maximum Outstanding at Any Month End | Balance | Rate(3) | Maximum Outstanding at Any Month End | ||||||||||||||||||||||||
| Federal funds purchased(4) | $ | 66,971 | 0.30 | % | $ | 148,650 | 0.22 | % | $ | 273,179 | 0.26 | % | ||||||||||||||||||||
| Customer repurchase agreements(1) | 25,705 | 0.38 | % | 21,954 | 0.31 | % | 23,936 | 0.04 | % | |||||||||||||||||||||||
| FHLB borrowings (2) | 1,100,005 | 0.13 | % | 840,026 | 0.12 | % | 1,650,046 | 0.09 | % | |||||||||||||||||||||||
| Total borrowings | $ | 1,192,681 | $ | 1,192,681 | $ | 1,010,630 | $ | 1,634,630 | $ | 1,947,161 | $ | 2,208,539 | ||||||||||||||||||||
| (1) | Securities pledged for customer repurchase agreements were $21.8 million, $37.7 million |
| (2) | FHLB borrowings are collateralized by a blanket floating lien on certain real |
| (3) | Interest rate as of period end. |
| (4) | The weighted-average interest rate on federal funds purchased for the years ended December 31, 2014, 2013 |
| 2013 | 2012 | 2011 | ||||||||||
FHLB borrowing capacity relating to loans | $ | 693,302 | $ | 267,542 | $ | 4,524 | ||||||
FHLB borrowing capacity relating to securities | 8,482 | 33,204 | 15,909 | |||||||||
Total FHLB borrowing capacity | $ | 701,784 | $ | 300,746 | $ | 20,433 | ||||||
Unused federal funds lines available from commercial banks | $ | 890,000 | $ | 706,000 | $ | 390,720 | ||||||
| 2014 | 2013 | 2012 | |||||||||
| FHLB borrowing capacity relating to loans | $ | 3,602,994 | $ | 693,302 | $ | 267,542 | |||||
| FHLB borrowing capacity relating to securities | 535 | 8,482 | 33,204 | ||||||||
| Total FHLB borrowing capacity | $ | 3,603,529 | $ | 701,784 | $ | 300,746 | |||||
| Unused Federal funds lines available from commercial banks | $ | 1,186,000 | $ | 890,000 | $ | 706,000 | |||||
| Unused Federal Reserve Borrowings capacity | $ | 2,643,000 | $ | 2,284,000 | $ | 1,940,000 | |||||
At December 31, 2012, we
outstanding at December 31, 2013.
Texas Capital Trust I | Texas Capital Bancshares Statutory Trust II | Texas Capital Bancshares Statutory Trust III | Texas Capital Bancshares Statutory Trust IV | Texas Capital Trust V | ||||||||||||||||
Date issued | November 19, 2002 | April 10, 2003 | October 6, 2005 | April 28, 2006 | September 29, 2006 | |||||||||||||||
Trust preferred securities issued | $10,310 | $10,310 | $25,774 | $25,774 | $41,238 | |||||||||||||||
Floating or fixed rate | Floating | Floating | Floating | Floating | Floating | |||||||||||||||
securities | ||||||||||||||||||||
Interest rate on subordinated debentures |
| 3 month LIBOR + 3.35% |
| | 3 month LIBOR + 3.25% | | | 3 month LIBOR + 1.51% | | | 3 month LIBOR + 1.60% | |
| 3 month LIBOR + 1.71% |
| |||||
Maturity date | November 2032 | April 2033 | December 2035 | June 2036 | September 2036 | |||||||||||||||
| ||||||||||||||||||||
After deducting underwriter’s compensation and other expenses of each offering, the net proceeds were available to the Company to increase capital and for general corporate purposes, including use in investment and lending activities. Interest payments on all trust preferred subordinated debentures are deductible for federal income tax purposes. As of December 31, 2013,2014, the weighted average quarterly rate on the trust preferred subordinated debentures was 2.21%2.19%, compared to 2.24%2.19% average for all of 2013,2014, and 2.43%2.24% for all of 2012.
2013.
Our equity capital averaged $1.0$1.3 billion for the year ended December 31, 20132014 as compared to $1.0 billion in 2013 and $713.2 million in 2012 and $568.1 million in 2011.2012. We have not paid any cash dividends on our common stock since we commenced operations and have no plans to do so in the foreseeable future.
On August 1, 2012 we completed a sale
On
In response to supplemental FFIEC Call Report instructions issued in early April 2013, we began using a 100% risk weight for the mortgage finance loans with our March 31, 2013 Call Report and Form 10-Q. In previous filings, we applied a 50% risk weight (or 20% risk weight for government-guaranteed loans) to these assets for purposes
| Regulatory Capital Adequacy | ||||||||||||||||
| December 31, 2013 | December 31, 2012 | |||||||||||||||
| Amount | Ratio | Amount | Ratio | |||||||||||||
Total capital (to risk-weighted assets): | ||||||||||||||||
Company | ||||||||||||||||
Actual | $ | 1,387,312 | 10.73 | % | $ | 1,112,924 | 9.97 | % | ||||||||
Minimum required | 1,034,721 | 8.00 | % | 893,231 | 8.00 | % | ||||||||||
Excess above minimum | 352,591 | 2.73 | % | 219,693 | 1.97 | % | ||||||||||
Bank | ||||||||||||||||
Actual | $ | 1,328,227 | 10.27 | % | $ | 948,328 | 8.50 | % | ||||||||
To be well-capitalized | 1,293,007 | 10.00 | % | 1,116,008 | 10.00 | % | ||||||||||
Minimum required | 1,034,406 | 8.00 | % | 892,806 | 8.00 | % | ||||||||||
Excess above (amount below) well-capitalized | 35,222 | 0.27 | % | (167,679 | ) | -1.50 | % | |||||||||
Excess above minimum | 293,822 | 2.27 | % | 55,522 | 0.50 | % | ||||||||||
Tier 1 capital (to risk-weighted assets): | ||||||||||||||||
Company | ||||||||||||||||
Actual | $ | 1,184,018 | 9.15 | % | $ | 923,677 | 8.27 | % | ||||||||
Minimum required | 517,361 | 4.00 | % | 446,616 | 4.00 | % | ||||||||||
Excess above minimum | 666,657 | 5.15 | % | 477,062 | 4.27 | % | ||||||||||
Bank | ||||||||||||||||
Actual | $ | 975,933 | 7.55 | % | $ | 800,081 | 7.17 | % | ||||||||
To be well-capitalized | 775,804 | 6.00 | % | 669,605 | 6.00 | % | ||||||||||
Minimum required | 517,203 | 4.00 | % | 446,403 | 4.00 | % | ||||||||||
Excess above well-capitalized | 200,127 | 1.55 | % | 130,477 | 1.17 | % | ||||||||||
Excess above minimum | 458,729 | 3.55 | % | 353,678 | 3.17 | % | ||||||||||
Tier 1 capital (to average assets): | ||||||||||||||||
Company | ||||||||||||||||
Actual | $ | 1,184,018 | 10.87 | % | $ | 923,677 | 9.41 | % | ||||||||
Minimum required | 435,750 | 4.00 | % | 392,649 | 4.00 | % | ||||||||||
Excess above minimum | 748,267 | 6.87 | % | 531,029 | 5.41 | % | ||||||||||
Bank | ||||||||||||||||
Actual | $ | 975,933 | 8.96 | % | $ | 800,081 | 8.16 | % | ||||||||
To be well-capitalized | 544,502 | 5.00 | % | 490,541 | 5.00 | % | ||||||||||
Minimum required | 435,601 | 4.00 | % | 392,433 | 4.00 | % | ||||||||||
Excess above well-capitalized | 431,431 | 3.96 | % | 309,540 | 3.16 | % | ||||||||||
Excess above minimum | 540,330 | 4.96 | % | 407,649 | 4.16 | % | ||||||||||
In July 2013,
| Regulatory Capital Adequacy | |||||||||||||
| December 31, 2014 | December 31, 2013 | ||||||||||||
| Amount | Ratio | Amount | Ratio | ||||||||||
| Total capital (to risk-weighted assets): | |||||||||||||
| Company | |||||||||||||
| Actual | $ | 1,967,021 | 11.83 | % | $ | 1,387,312 | 10.73 | % | |||||
| Minimum required | 1,330,568 | 8.00 | % | 1,034,721 | 8.00 | % | |||||||
| Excess above minimum | 636,453 | 3.83 | % | 352,591 | 2.73 | % | |||||||
| Bank | |||||||||||||
| Actual | $ | 1,757,365 | 10.57 | % | $ | 1,328,227 | 10.27 | % | |||||
| To be well-capitalized | 1,662,782 | 10.00 | % | 1,293,007 | 10.00 | % | |||||||
| Minimum required | 1,330,226 | 8.00 | % | 1,034,406 | 8.00 | % | |||||||
| Excess above well-capitalized | 94,583 | 0.57 | % | 35,222 | 0.27 | % | |||||||
| Excess above minimum | 427,139 | 2.57 | % | 293,822 | 2.27 | % | |||||||
| Tier 1 capital (to risk-weighted assets): | |||||||||||||
| Company | |||||||||||||
| Actual | $ | 1,573,007 | 9.46 | % | $ | 1,184,018 | 9.15 | % | |||||
| Minimum required | 665,284 | 4.00 | % | 517,361 | 4.00 | % | |||||||
| Excess above minimum | 907,723 | 5.46 | % | 666,657 | 5.15 | % | |||||||
| Bank | |||||||||||||
| Actual | $ | 1,424,351 | 8.57 | % | $ | 975,933 | 7.55 | % | |||||
| To be well-capitalized | 997,669 | 6.00 | % | 775,804 | 6.00 | % | |||||||
| Minimum required | 665,113 | 4.00 | % | 517,203 | 4.00 | % | |||||||
| Excess above well-capitalized | 426,682 | 2.57 | % | 200,127 | 1.55 | % | |||||||
| Excess above minimum | 759,238 | 4.57 | % | 458,729 | 3.55 | % | |||||||
| Tier 1 capital (to average assets): | |||||||||||||
| Company | |||||||||||||
| Actual | $ | 1,573,007 | 10.76 | % | $ | 1,184,018 | 10.87 | % | |||||
| Minimum required | 584,765 | 4.00 | % | 435,750 | 4.00 | % | |||||||
| Excess above minimum | 988,242 | 6.76 | % | 748,267 | 6.87 | % | |||||||
| Bank | |||||||||||||
| Actual | $ | 1,424,351 | 9.75 | % | $ | 975,933 | 8.96 | % | |||||
| To be well-capitalized | 730,746 | 5.00 | % | 544,502 | 5.00 | % | |||||||
| Minimum required | 584,597 | 4.00 | % | 435,601 | 4.00 | % | |||||||
| Excess above well-capitalized | 693,605 | 4.75 | % | 431,431 | 3.96 | % | |||||||
| Excess above minimum | 839,754 | 5.75 | % | 540,330 | 4.96 | % | |||||||
| (In thousands) | Note Reference | Within One Year | After One But Within Three Years | After Three But Within Five Years | After Five Years | Total | ||||||||||||||||||
Deposits without a stated maturity(1) | 7 | $ | 8,554,433 | $ | — | $ | — | $ | — | $ | 8,554,433 | |||||||||||||
Time deposits(1) | 7 | 673,961 | 26,704 | 2,208 | 73 | 702,946 | ||||||||||||||||||
Federal funds purchased(1) | 8 | 148,650 | — | — | — | 148,650 | ||||||||||||||||||
Customer repurchase agreements(1) | 8 | 21,954 | — | — | — | 21,954 | ||||||||||||||||||
FHLB borrowings(1) | 8 | 840,000 | 46 | — | — | 840,046 | ||||||||||||||||||
Line of credit(1) | 8 | 15,000 | — | — | — | 15,000 | ||||||||||||||||||
Operating lease obligations(1)(2) | 16 | 13,483 | 28,221 | 27,998 | 62,335 | 132,037 | ||||||||||||||||||
Subordinated notes(1) | 8 | — | — | — | 111,000 | 111,000 | ||||||||||||||||||
Trust preferred subordinated debentures(1) | | 8, 9 | | — | — | — | 113,406 | 113,406 | ||||||||||||||||
Total contractual obligations(1) | $10,267,481 | $ | 54,971 | $ | 30,206 | $ | 286,814 | $ | 10,639,472 | |||||||||||||||
| ||||||||||||||||||||||||
| (In thousands) | Note Reference | Within One Year | After One But Within Three Years | After Three But Within Five Years | After Five Years | Total | ||||||||||||||||
| Deposits without a stated maturity(1) | 7 | $ | 11,934,260 | $ | — | $ | — | $ | — | $ | 11,934,260 | |||||||||||
| Time deposits(1) | 7 | 709,901 | 24,855 | 4,284 | — | 739,040 | ||||||||||||||||
| Federal funds purchased and customer repurchase agreements(1) | 8 | 92,676 | — | — | — | 92,676 | ||||||||||||||||
| FHLB borrowings(1) | 8 | 1,100,005 | — | — | — | 1,100,005 | ||||||||||||||||
| Operating lease obligations(1)(2) | 16 | 15,557 | 31,116 | 30,912 | 54,021 | 131,606 | ||||||||||||||||
| Subordinated notes(1) | 8 | — | — | — | 286,000 | 286,000 | ||||||||||||||||
| Trust preferred subordinated debentures(1) | 8, 9 | — | — | — | 113,406 | 113,406 | ||||||||||||||||
| Total contractual obligations(1) | $ | 13,852,399 | $ | 55,971 | $ | 35,196 | $ | 453,427 | $ | 14,396,993 | ||||||||||||
| (1) | Excludes interest. |
| (2) | Non-balance sheet item. |
| Within One Year | After One But Within Three Years | After Three But Within Five Years | After Five Years | Total | ||||||||||||||||
Commitments to extend credit | $ | 1,075,303 | $ | 1,865,971 | $ | 693,399 | $ | 39,718 | $ | 3,674,391 | ||||||||||
Standby and commercial letters of credit | 114,408 | 27,106 | 3,523 | 625 | 145,662 | |||||||||||||||
Total financial instruments with off-balance sheet risk | $ | 1,189,711 | $ | 1,893,077 | $ | 696,922 | $ | 40,343 | $ | 3,820,053 | ||||||||||
| ||||||||||||||||||||
Within One Year | After One But Within Three Years | After Three But Within Five Years | After Five Years | Total | |||||||||||||||
| Commitments to extend credit | $ | 1,593,049 | $ | 2,492,796 | $ | 1,170,651 | $ | 67,964 | $ | 5,324,460 | |||||||||
| Standby and commercial letters of credit | 143,080 | 29,083 | 5,645 | — | 177,808 | ||||||||||||||
| Total financial instruments with off-balance sheet risk | $ | 1,736,129 | $ | 2,521,879 | $ | 1,176,296 | $ | 67,964 | $ | 5,502,268 | |||||||||
| ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK |
Additionally, the Credit Policy Committee ("CPC") specifically manages risk relative to commodity price market risks. They establish maximum portfolio concentration levels for energy loans as well as maximum advance rates for energy collateral.
The Company employs interest rate floors in certain variable rate loans to enhance the yield on those loans at times when market interest rates are extraordinarily low. The degree of asset sensitivity, spreads on loans and net interest margin may be reduced until rates increase by an amount sufficient to eliminate the effects of floors. The adverse effect of floors as market rates increase may also be offset by the positive gap, the extent to which rates on deposits and other funding sources lag increasing market rates and changes in composition of funding.
| (in thousands) | 0-3 mo Balance | 4-12 mo Balance | 1-3 yr Balance | 3+ yr Balance | Total Balance | |||||||||||||||
Assets: | ||||||||||||||||||||
Securities(1) | $ | 16,130 | $ | 18,311 | $ | 19,920 | $ | 8,853 | $ | 63,214 | ||||||||||
Total variable loans | 9,840,315 | 5,626 | 506 | 6,448 | 9,852,895 | |||||||||||||||
Total fixed loans | 728,593 | 326,722 | 222,848 | 191,415 | 1,469,578 | |||||||||||||||
| ||||||||||||||||||||
Total loans(2) | 10,568,908 | 332,348 | 223,354 | 197,863 | 11,322,473 | |||||||||||||||
| ||||||||||||||||||||
Total interest sensitive assets | $ | 10,585,038 | $ | 350,659 | $ | 243,274 | $ | 206,716 | $ | 11,385,687 | ||||||||||
| ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Interest bearing customer deposits | $ | 5,537,173 | $ | — | $ | — | $ | — | $ | 5,537,173 | ||||||||||
CDs & IRAs | 144,958 | 198,696 | 26,704 | 2,281 | 372,639 | |||||||||||||||
| ||||||||||||||||||||
Total interest bearing deposits | 5,682,131 | 198,696 | 26,704 | 2,281 | 5,909,812 | |||||||||||||||
| ||||||||||||||||||||
Repo, Federal Funds purchased, FHLB borrowings | 1,025,604 | — | 26 | — | 1,025,630 | |||||||||||||||
Subordinated notes | — | — | — | 111,000 | 111,000 | |||||||||||||||
Trust preferred subordinated debentures | — | — | — | 113,406 | 113,406 | |||||||||||||||
| ||||||||||||||||||||
Total borrowings | 1,025,604 | — | 26 | 224,406 | 1,250,036 | |||||||||||||||
| ||||||||||||||||||||
Total interest sensitive liabilities | $ | 6,707,735 | $ | 198,696 | $ | 26,730 | $ | 226,687 | $ | 7,159,848 | ||||||||||
| ||||||||||||||||||||
GAP | $ | 3,877,303 | $ | 151,963 | $ | 216,544 | $ | (19,971 | ) | $ | — | |||||||||
Cumulative GAP | 3,877,303 | 4,029,266 | 4,245,809 | 4,225,839 | 4,225,839 | |||||||||||||||
Demand deposits | $ | 3,347,567 | ||||||||||||||||||
Stockholders’ equity | 1,096,350 | |||||||||||||||||||
|
| |||||||||||||||||||
Total | $ | 4,443,917 | ||||||||||||||||||
|
| |||||||||||||||||||
2014
| (in thousands) | 0-3 mo Balance | 4-12 mo Balance | 1-3 yr Balance | 3+ yr Balance | Total Balance | ||||||||||||||
| Assets: | |||||||||||||||||||
| Securities(1) | $ | 12,086 | $ | 11,647 | $ | 8,172 | $ | 9,814 | $ | 41,719 | |||||||||
| Total variable loans | 12,581,698 | 22,871 | 513 | — | 12,605,082 | ||||||||||||||
| Total fixed loans | 805,695 | 384,834 | 269,029 | 249,430 | 1,708,988 | ||||||||||||||
| Total loans(2) | 13,387,393 | 407,705 | 269,542 | 249,430 | 14,314,070 | ||||||||||||||
| Total interest sensitive assets | $ | 13,399,479 | $ | 419,352 | $ | 277,714 | $ | 259,244 | $ | 14,355,789 | |||||||||
| Liabilities | |||||||||||||||||||
| Interest-bearing customer deposits | $ | 7,235,351 | $ | — | $ | — | $ | — | $ | 7,235,351 | |||||||||
| CDs & IRAs | 177,291 | 219,900 | 24,855 | 4,284 | 426,330 | ||||||||||||||
| Total interest-bearing deposits | 7,412,642 | 219,900 | 24,855 | 4,284 | 7,661,681 | ||||||||||||||
| Repurchase agreements, Federal Funds purchased, FHLB borrowings | 1,192,681 | — | — | — | 1,192,681 | ||||||||||||||
| Subordinated notes | — | — | — | 286,000 | 286,000 | ||||||||||||||
| Trust preferred subordinated debentures | — | — | — | 113,406 | 113,406 | ||||||||||||||
| Total borrowings | 1,192,681 | — | — | 399,406 | 1,592,087 | ||||||||||||||
| Total interest sensitive liabilities | $ | 8,605,323 | $ | 219,900 | $ | 24,855 | $ | 403,690 | $ | 9,253,768 | |||||||||
| GAP | $ | 4,794,156 | $ | 199,452 | $ | 252,859 | $ | (144,446 | ) | $ | — | ||||||||
| Cumulative GAP | 4,794,156 | 4,993,608 | 5,246,467 | 5,102,021 | 5,102,021 | ||||||||||||||
| Demand deposits | $ | 5,011,619 | |||||||||||||||||
| Stockholders’ equity | 1,484,190 | ||||||||||||||||||
| Total | $ | 6,495,809 | |||||||||||||||||
| (1) | Securities based on fair market value. |
| (2) | Loans are stated at gross. |
, at which point we will resume evaluations of shock scenarios in which interest rates decrease.
| Anticipated Impact Over the Next Twelve Months as Compared to Most Likely Scenario | ||||||||
| 200 bp Increase December 31, 2013 | 200 bp Increase December 31, 2012 | |||||||
Change in net interest income | $ | 103,950 | $ | 56,242 | ||||
Anticipated Impact Over the Next Twelve Months as Compared to Most Likely Scenario | |||||||||||||||
| December 31, 2014 | December 31, 2013 | ||||||||||||||
| 100 bp Increase | 200 bp Increase | 100 bp Increase | 200 bp Increase | ||||||||||||
| Change in net interest income | $ | 61,615 | $ | 133,822 | $ | 45,847 | $ | 103,950 | |||||||
| ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
Page Reference | ||||
19, 2015
| December 31, | December 31, | |||||||
| (In thousands except per share data) | 2013 | 2012 | ||||||
Assets |
| |||||||
Cash and due from banks | $ | 92,484 | $ | 111,938 | ||||
Interest-bearing deposits | 61,337 | 94,410 | ||||||
Federal funds sold | 90 | — | ||||||
Securities, available-for-sale | 63,214 | 100,195 | ||||||
Loans held for sale from discontinued operations | 294 | 302 | ||||||
Loans held for investment, mortgage finance | 2,784,265 | 3,175,272 | ||||||
Loans held for investment (net of unearned income) | 8,486,309 | 6,785,535 | ||||||
Less: Allowance for loan losses | 87,604 | 74,337 | ||||||
| ||||||||
Loans held for investment, net | 11,182,970 | 9,886,470 | ||||||
Premises and equipment, net | 11,482 | 11,445 | ||||||
Accrued interest receivable and other assets | 281,534 | 316,201 | ||||||
Goodwill and intangible assets, net | 21,286 | 19,883 | ||||||
| ||||||||
Total assets | $ | 11,714,691 | $ | 10,540,844 | ||||
| ||||||||
Liabilities and Stockholders’ Equity |
| |||||||
Liabilities: |
| |||||||
Deposits: | ||||||||
Non-interest bearing | $ | 3,347,567 | $ | 2,535,375 | ||||
Interest bearing | 5,579,505 | 4,576,120 | ||||||
Interest bearing in foreign branches | 330,307 | 329,309 | ||||||
| ||||||||
Total deposits | 9,257,379 | 7,440,804 | ||||||
Accrued interest payable | 749 | 650 | ||||||
Other liabilities | 110,177 | 91,581 | ||||||
Federal funds purchased | 148,650 | 273,179 | ||||||
Repurchase agreements | 21,954 | 23,936 | ||||||
Other borrowings | 855,026 | 1,650,046 | ||||||
Subordinated notes | 111,000 | 111,000 | ||||||
Trust preferred subordinated debentures | 113,406 | 113,406 | ||||||
| ||||||||
Total liabilities | 10,618,341 | 9,704,602 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock, $.01 par value, $1,000 liquidation value: | ||||||||
Authorized shares—10,000,000 | ||||||||
Issued shares—6,000,000 shares issued at December 31, 2013 | 150,000 | — | ||||||
Common stock, $.01 par value: | ||||||||
Authorized shares—100,000,000 | ||||||||
Issued shares—41,036,787 and 40,727,996 at December 31, 2013 and 2012, respectively | 410 | 407 | ||||||
Additional paid-in capital | 448,208 | 450,116 | ||||||
Retained earnings | 496,112 | 382,455 | ||||||
Treasury stock (shares at cost: 417 at December 31, 2013 and 2012) | (8 | ) | (8 | ) | ||||
Accumulated other comprehensive income, net of taxes | 1,628 | 3,272 | ||||||
| ||||||||
Total stockholders’ equity | 1,096,350 | 836,242 | ||||||
| ||||||||
Total liabilities and stockholders’ equity | $ | 11,714,691 | $ | 10,540,844 | ||||
| ||||||||
| December 31, | December 31, | ||||||
| (In thousands except per share data) | 2014 | 2013 | |||||
| Assets | |||||||
| Cash and due from banks | $ | 96,524 | $ | 92,484 | |||
| Interest-bearing deposits | 1,233,990 | 61,337 | |||||
| Federal funds sold | — | 90 | |||||
| Securities, available-for-sale | 41,719 | 63,214 | |||||
| Loans held for investment, mortgage finance | 4,102,125 | 2,784,265 | |||||
| Loans held for investment (net of unearned income) | 10,154,887 | 8,486,603 | |||||
| Less: Allowance for loan losses | 100,954 | 87,604 | |||||
| Loans held for investment, net | 14,156,058 | 11,183,264 | |||||
| Premises and equipment, net | 17,368 | 11,482 | |||||
| Accrued interest receivable and other assets | 333,699 | 286,907 | |||||
| Goodwill and intangible assets, net | 20,588 | 21,286 | |||||
| Total assets | $ | 15,899,946 | $ | 11,720,064 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Liabilities: | |||||||
| Deposits: | |||||||
| Non-interest-bearing | $ | 5,011,619 | $ | 3,347,567 | |||
| Interest-bearing | 7,348,972 | 5,579,505 | |||||
| Interest-bearing in foreign branches | 312,709 | 330,307 | |||||
| Total deposits | 12,673,300 | 9,257,379 | |||||
| Accrued interest payable | 4,747 | 749 | |||||
| Other liabilities | 145,622 | 115,550 | |||||
| Federal funds purchased and repurchase agreements | 92,676 | 170,604 | |||||
| Other borrowings | 1,100,005 | 855,026 | |||||
| Subordinated notes | 286,000 | 111,000 | |||||
| Trust preferred subordinated debentures | 113,406 | 113,406 | |||||
| Total liabilities | 14,415,756 | 10,623,714 | |||||
| Stockholders’ equity: | |||||||
| Preferred stock, $.01 par value, $1,000 liquidation value: | |||||||
| Authorized shares—10,000,000 | |||||||
| Issued shares—6,000,000 shares issued at December 31, 2014 and 2013 | 150,000 | 150,000 | |||||
| Common stock, $.01 par value: | |||||||
| Authorized shares—100,000,000 | |||||||
| Issued shares—45,735,424 and 41,036,787 at December 31, 2014 and 2013, respectively | 457 | 410 | |||||
| Additional paid-in capital | 709,738 | 448,208 | |||||
| Retained earnings | 622,714 | 496,112 | |||||
| Treasury stock (shares at cost: 417 at December 31, 2014 and 2013) | (8 | ) | (8 | ) | |||
| Accumulated other comprehensive income, net of taxes | 1,289 | 1,628 | |||||
| Total stockholders’ equity | 1,484,190 | 1,096,350 | |||||
| Total liabilities and stockholders’ equity | $ | 15,899,946 | $ | 11,720,064 | |||
| Year ended December 31 | ||||||||||||
| (In thousands except per share data) | 2013 | 2012 | 2011 | |||||||||
Interest income | ||||||||||||
| Interest and fees on loans | $ | 441,314 | $ | 393,548 | $ | 314,753 | ||||||
| Securities | 3,015 | 4,688 | 6,458 | |||||||||
| Federal funds sold | 65 | 13 | 37 | |||||||||
| Deposits in other banks | 231 | 208 | 352 | |||||||||
| ||||||||||||
| Total interest income | 444,625 | 398,457 | 321,600 | |||||||||
Interest expense | ||||||||||||
| Deposits | 14,030 | 13,644 | 14,950 | |||||||||
| Federal funds purchased | 686 | 979 | 602 | |||||||||
| Repurchase agreements | 18 | 13 | 10 | |||||||||
| Other borrowings | 515 | 2,149 | 528 | |||||||||
| Subordinated notes | 7,327 | 2,037 | — | |||||||||
| Trust preferred subordinated debentures | 2,536 | 2,756 | 2,573 | |||||||||
| ||||||||||||
| Total interest expense | 25,112 | 21,578 | 18,663 | |||||||||
| ||||||||||||
| Net interest income | 419,513 | 376,879 | 302,937 | |||||||||
| Provision for credit losses | 19,000 | 11,500 | 28,500 | |||||||||
| ||||||||||||
| Net interest income after provision for credit losses | 400,513 | 365,379 | 274,437 | |||||||||
Non-interest income | ||||||||||||
| Service charges on deposit accounts | 6,783 | 6,605 | 6,480 | |||||||||
| Trust fee income | 5,023 | 4,822 | 4,219 | |||||||||
| Bank owned life insurance (BOLI) income | 1,917 | 2,168 | 2,095 | |||||||||
| Brokered loan fees | 16,980 | 17,596 | 11,335 | |||||||||
| Swap fees | 5,520 | 4,909 | 1,935 | |||||||||
| Other | 7,801 | 6,940 | 6,168 | |||||||||
| ||||||||||||
| Total non-interest income | 44,024 | 43,040 | 32,232 | |||||||||
Non-interest expense | ||||||||||||
| Salaries and employee benefits | 157,752 | 121,456 | 100,535 | |||||||||
| Net occupancy expense | 16,821 | 14,852 | 13,657 | |||||||||
| Marketing | 16,203 | 13,449 | 11,109 | |||||||||
| Legal and professional | 18,104 | 17,557 | 14,996 | |||||||||
| Communications and technology | 13,762 | 11,158 | 9,608 | |||||||||
| FDIC insurance assessment | 8,057 | 5,568 | 7,543 | |||||||||
| Allowance and other carrying costs for OREO | 1,788 | 9,075 | 9,586 | |||||||||
| Litigation settlement expense | (908 | ) | 4,000 | — | ||||||||
| Other | 25,155 | 22,729 | 21,167 | |||||||||
| ||||||||||||
| Total non-interest expense | 256,734 | 219,844 | 188,201 | |||||||||
| ||||||||||||
| Income from continuing operations before income taxes | 187,803 | 188,575 | 118,468 | |||||||||
| Income tax expense | 66,757 | 67,866 | 42,366 | |||||||||
| ||||||||||||
| Income from continuing operations | 121,046 | 120,709 | 76,102 | |||||||||
| Income (loss) from discontinued operations (after-tax) | 5 | (37 | ) | (126 | ) | |||||||
| ||||||||||||
| Net income | 121,051 | 120,672 | 75,976 | |||||||||
| Preferred stock dividends | 7,394 | — | — | |||||||||
| ||||||||||||
| Net income available to common shareholders | $ | 113,657 | $ | 120,672 | $ | 75,976 | ||||||
| ||||||||||||
Other comprehensive income | ||||||||||||
| Change in unrealized gain on available-for-sale securities arising during period, before tax | $ | (2,529 | ) | $ | (2,231 | ) | $ | (974 | ) | |||
| Income tax benefit related to unrealized loss on available-for-sale securities | (885 | ) | (781 | ) | (341 | ) | ||||||
| ||||||||||||
| Other comprehensive loss net of tax | (1,644 | ) | (1,450 | ) | (633 | ) | ||||||
| ||||||||||||
| Comprehensive income | $ | 119,407 | $ | 119,222 | $ | 75,343 | ||||||
| ||||||||||||
| Basic earnings per common share | ||||||||||||
| Income from continuing operations | $ | 2.78 | $ | 3.09 | $ | 2.04 | ||||||
| Net income | $ | 2.78 | $ | 3.09 | $ | 2.03 | ||||||
| Diluted earnings per common share | ||||||||||||
| Income from continuing operations | $ | 2.72 | $ | 3.01 | $ | 1.99 | ||||||
| Net income | $ | 2.72 | $ | 3.00 | $ | 1.98 | ||||||
| Year ended December 31, | |||||||||||
| (In thousands except per share data) | 2014 | 2013 | 2012 | ||||||||
| Interest income | |||||||||||
| Interest and fees on loans | $ | 511,606 | $ | 441,314 | $ | 393,548 | |||||
| Securities | 1,828 | 3,015 | 4,688 | ||||||||
| Federal funds sold | 207 | 65 | 13 | ||||||||
| Deposits in other banks | 906 | 231 | 208 | ||||||||
| Total interest income | 514,547 | 444,625 | 398,457 | ||||||||
| Interest expense | |||||||||||
| Deposits | 18,145 | 14,030 | 13,644 | ||||||||
| Federal funds purchased | 373 | 686 | 979 | ||||||||
| Repurchase agreements | 17 | 18 | 13 | ||||||||
| Other borrowings | 356 | 515 | 2,149 | ||||||||
| Subordinated notes | 16,202 | 7,327 | 2,037 | ||||||||
| Trust preferred subordinated debentures | 2,489 | 2,536 | 2,756 | ||||||||
| Total interest expense | 37,582 | 25,112 | 21,578 | ||||||||
| Net interest income | 476,965 | 419,513 | 376,879 | ||||||||
| Provision for credit losses | 22,000 | 19,000 | 11,500 | ||||||||
| Net interest income after provision for credit losses | 454,965 | 400,513 | 365,379 | ||||||||
| Non-interest income | |||||||||||
| Service charges on deposit accounts | 7,253 | 6,783 | 6,605 | ||||||||
| Trust fee income | 4,937 | 5,023 | 4,822 | ||||||||
| Bank owned life insurance (BOLI) income | 2,067 | 1,917 | 2,168 | ||||||||
| Brokered loan fees | 13,981 | 16,980 | 17,596 | ||||||||
| Swap fees | 2,992 | 5,520 | 4,909 | ||||||||
| Other | 11,281 | 7,801 | 6,940 | ||||||||
| Total non-interest income | 42,511 | 44,024 | 43,040 | ||||||||
| Non-interest expense | |||||||||||
| Salaries and employee benefits | 169,051 | 157,752 | 121,456 | ||||||||
| Net occupancy expense | 20,866 | 16,821 | 14,852 | ||||||||
| Marketing | 15,989 | 16,203 | 13,449 | ||||||||
| Legal and professional | 21,182 | 18,104 | 17,557 | ||||||||
| Communications and technology | 18,667 | 13,762 | 11,158 | ||||||||
| FDIC insurance assessment | 10,919 | 8,057 | 5,568 | ||||||||
| Allowance and other carrying costs for OREO | 85 | 1,788 | 9,075 | ||||||||
| Other | 28,355 | 24,242 | 26,766 | ||||||||
| Total non-interest expense | 285,114 | 256,729 | 219,881 | ||||||||
| Income before income taxes | 212,362 | 187,808 | 188,538 | ||||||||
| Income tax expense | 76,010 | 66,757 | 67,866 | ||||||||
| Net income | 136,352 | 121,051 | 120,672 | ||||||||
| Preferred stock dividends | 9,750 | 7,394 | — | ||||||||
| Net income available to common stockholders | $ | 126,602 | $ | 113,657 | $ | 120,672 | |||||
| Other comprehensive gain (loss) | |||||||||||
| Change in unrealized gain on available-for-sale securities arising during period, before tax | $ | (522 | ) | $ | (2,529 | ) | $ | (2,231 | ) | ||
| Income tax benefit related to unrealized loss on available-for-sale securities | (183 | ) | (885 | ) | (781 | ) | |||||
| Other comprehensive loss net of tax | (339 | ) | (1,644 | ) | (1,450 | ) | |||||
| Comprehensive income | $ | 136,013 | $ | 119,407 | $ | 119,222 | |||||
| Basic earnings per common share | $ | 2.93 | $ | 2.78 | $ | 3.09 | |||||
| Diluted earnings per common share | $ | 2.88 | $ | 2.72 | $ | 3.00 | |||||
| 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, 2010 | — | $ | — | 36,957,104 | $ | 369 | $ | 336,796 | $ | 185,807 | (417 | ) | $ | (8 | ) | $ | 5,355 | $ | 528,319 | |||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 75,976 | — | — | — | 75,976 | ||||||||||||||||||||||||||||||
Change in unrealized gain (loss) on available-for-sale securities, net of taxes of $341 | — | — | — | — | — | — | — | — | (633 | ) | (633 | ) | ||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
Total comprehensive income | 75,343 | |||||||||||||||||||||||||||||||||||||||
Tax expense related to exercise of stock-based awards | — | — | — | — | 3,139 | — | — | — | — | 3,139 | ||||||||||||||||||||||||||||||
Stock-based compensation expense recognized in earnings | — | — | — | — | 7,340 | — | — | — | — | 7,340 | ||||||||||||||||||||||||||||||
Issuance of stock related to stock-based awards | — | — | 709,604 | 7 | 2,183 | — | — | — | — | 2,190 | ||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2011 | — | — | 37,666,708 | 376 | 349,458 | 261,783 | (417 | ) | (8 | ) | 4,722 | 616,331 | ||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 120,672 | — | — | — | 120,672 | ||||||||||||||||||||||||||||||
Change in unrealized gain (loss) on available-for-sale securities, net of taxes of $781 | — | — | — | — | — | — | — | — | (1,450 | ) | (1,450 | ) | ||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
Total comprehensive income | 119,222 | |||||||||||||||||||||||||||||||||||||||
Tax expense related to exercise of stock-based awards | — | — | — | — | 7,769 | — | — | — | — | 7,769 | ||||||||||||||||||||||||||||||
Stock-based compensation expense recognized in earnings | — | — | — | — | 5,578 | — | — | — | — | 5,578 | ||||||||||||||||||||||||||||||
Issuance of stock related to stock-based awards | — | — | 761,288 | 8 | 347 | — | — | — | — | 355 | ||||||||||||||||||||||||||||||
Issuance of common stock | — | — | 2,300,000 | 23 | 86,964 | — | — | — | — | 86,987 | ||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2012 | — | — | 40,727,996 | 407 | 450,116 | 382,455 | (417 | ) | (8 | ) | 3,272 | 836,242 | ||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 121,051 | — | — | — | 121,051 | ||||||||||||||||||||||||||||||
Change in unrealized gain (loss) on available-for-sale securities, net of taxes of $885 | — | — | — | — | — | — | — | — | (1,644 | ) | (1,644 | ) | ||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
Total comprehensive income | 119,407 | |||||||||||||||||||||||||||||||||||||||
Tax expense related to exercise of stock-based awards | — | — | — | — | 1,200 | — | — | — | — | 1,200 | ||||||||||||||||||||||||||||||
Stock-based compensation expense recognized in earnings | — | — | — | — | 4,118 | — | — | — | — | 4,118 | ||||||||||||||||||||||||||||||
Issuance of preferred stock | 6,000,000 | 150,000 | — | — | (5,013 | ) | — | — | — | — | 144,987 | |||||||||||||||||||||||||||||
Preferred stock dividend | — | — | — | — | — | (7,394 | ) | — | — | — | (7,394 | ) | ||||||||||||||||||||||||||||
Issuance of stock related to stock-based awards | — | — | 272,452 | 3 | (2,253 | ) | — | — | — | — | (2,250 | ) | ||||||||||||||||||||||||||||
Issuance of stock related to warrants | — | — | 36,339 | — | 40 | — | — | — | — | 40 | ||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2013 | 6,000,000 | $ | 150,000 | 41,036,787 | $ | 410 | $ | 448,208 | $ | 496,112 | (417 | ) | $ | (8 | ) | $ | 1,628 | $ | 1,096,350 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||
| 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, 2011 | — | $ | — | 37,666,708 | $ | 376 | $ | 349,458 | $ | 261,783 | (417 | ) | $ | (8 | ) | $ | 4,722 | $ | 616,331 | |||||||||||||||||
| Comprehensive income: | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 120,672 | — | — | — | 120,672 | ||||||||||||||||||||||||||
| Change in unrealized gain (loss) on available-for-sale securities, net of taxes of $781 | — | — | — | — | — | — | — | — | (1,450 | ) | (1,450 | ) | ||||||||||||||||||||||||
| Total comprehensive income | 119,222 | |||||||||||||||||||||||||||||||||||
| Tax expense related to exercise of stock-based awards | — | — | — | — | 7,769 | — | — | — | — | 7,769 | ||||||||||||||||||||||||||
| Stock-based compensation expense recognized in earnings | — | — | — | — | 5,578 | — | — | — | — | 5,578 | ||||||||||||||||||||||||||
| Issuance of stock related to stock-based awards | — | — | 761,288 | 8 | 347 | — | — | — | — | 355 | ||||||||||||||||||||||||||
| Issuance of common stock | — | — | 2,300,000 | 23 | 86,964 | — | — | — | — | 86,987 | ||||||||||||||||||||||||||
| Balance at December 31, 2012 | — | — | 40,727,996 | 407 | 450,116 | 382,455 | (417 | ) | (8 | ) | 3,272 | 836,242 | ||||||||||||||||||||||||
| Comprehensive income: | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 121,051 | — | — | — | 121,051 | ||||||||||||||||||||||||||
| Change in unrealized gain (loss) on available-for-sale securities, net of taxes of $885 | — | — | — | — | — | — | — | — | (1,644 | ) | (1,644 | ) | ||||||||||||||||||||||||
| Total comprehensive income | 119,407 | |||||||||||||||||||||||||||||||||||
| Tax expense related to exercise of stock-based awards | — | — | — | — | 1,200 | — | — | — | — | 1,200 | ||||||||||||||||||||||||||
| Stock-based compensation expense recognized in earnings | — | — | — | — | 4,118 | — | — | — | — | 4,118 | ||||||||||||||||||||||||||
| Issuance of preferred stock | 6,000,000 | 150,000 | — | — | (5,013 | ) | — | — | — | — | 144,987 | |||||||||||||||||||||||||
| Preferred stock dividend | — | — | — | — | — | (7,394 | ) | — | — | — | (7,394 | ) | ||||||||||||||||||||||||
| Issuance of stock related to stock-based awards | — | — | 272,452 | 3 | (2,253 | ) | — | — | — | — | (2,250 | ) | ||||||||||||||||||||||||
| Issuance of common stock | — | — | 36,339 | — | 40 | — | — | — | — | 40 | ||||||||||||||||||||||||||
| Balance at December 31, 2013 | 6,000,000 | 150,000 | 41,036,787 | 410 | 448,208 | 496,112 | (417 | ) | (8 | ) | 1,628 | 1,096,350 | ||||||||||||||||||||||||
| Comprehensive income: | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 136,352 | — | — | — | 136,352 | ||||||||||||||||||||||||||
| Change in unrealized gain (loss) on available-for-sale securities, net of taxes of $183 | — | — | — | — | — | — | — | — | (339 | ) | (339 | ) | ||||||||||||||||||||||||
| Total comprehensive income | 136,013 | |||||||||||||||||||||||||||||||||||
| Tax expense related to exercise of stock-based awards | — | — | — | — | 2,929 | — | — | — | — | 2,929 | ||||||||||||||||||||||||||
| Stock-based compensation expense recognized in earnings | — | — | — | — | 4,628 | — | — | — | — | 4,628 | ||||||||||||||||||||||||||
| Preferred stock dividend | — | — | — | — | — | (9,750 | ) | — | — | — | (9,750 | ) | ||||||||||||||||||||||||
| Issuance of common stock related to stock-based awards | — | — | 201,280 | 2 | (2,205 | ) | — | — | — | — | (2,203 | ) | ||||||||||||||||||||||||
| Issuance of common stock | — | — | 4,398,128 | 44 | 256,179 | — | — | — | — | 256,223 | ||||||||||||||||||||||||||
| Issuance of stock related to warrants | — | — | 99,229 | 1 | (1 | ) | — | — | — | — | — | |||||||||||||||||||||||||
| Balance at December 31, 2014 | 6,000,000 | $ | 150,000 | 45,735,424 | $ | 457 | $ | 709,738 | $ | 622,714 | (417 | ) | $ | (8 | ) | $ | 1,289 | $ | 1,484,190 | |||||||||||||||||
| Year ended December 31 | ||||||||||||
| (In thousands) | 2013 | 2012 | 2011 | |||||||||
Operating activities | ||||||||||||
Net income from continuing operations | $ | 121,046 | $ | 120,709 | $ | 76,102 | ||||||
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: | ||||||||||||
Provision for credit losses | 19,000 | 11,500 | 28,500 | |||||||||
Deferred tax expense | (11,599 | ) | (3,131 | ) | (6,682 | ) | ||||||
Depreciation and amortization | 11,480 | 9,437 | 9,103 | |||||||||
Amortization on securities | 22 | 38 | 78 | |||||||||
Bank owned life insurance (BOLI) income | (1,917 | ) | (2,168 | ) | (2,095 | ) | ||||||
Stock-based compensation expense | 20,953 | 12,018 | 7,340 | |||||||||
Tax benefit from stock option exercises | 1,200 | 7,769 | 3,139 | |||||||||
Excess tax benefits from stock-based compensation arrangements | (3,427 | ) | (22,197 | ) | (8,970 | ) | ||||||
Gain on sale of assets | (931 | ) | (917 | ) | (80 | ) | ||||||
Changes in operating assets and liabilities: | ||||||||||||
Accrued interest receivable and other assets | 31,002 | (61,334 | ) | (63,247 | ) | |||||||
Accrued interest payable and other liabilities | 2,308 | 3,066 | 32,694 | |||||||||
| ||||||||||||
Net cash provided by operating activities of continuing operations | 189,137 | 74,790 | 75,882 | |||||||||
Net cash provided by (used in) operating activities of discontinued operations | 13 | 54 | (29 | ) | ||||||||
| ||||||||||||
Net cash provided by operating activities | 189,150 | 74,844 | 75,853 | |||||||||
Investing activities | ||||||||||||
Purchases of available-for-sale securities | (2 | ) | (13 | ) | (10,000 | ) | ||||||
Maturities and calls of available-for-sale securities | 15,890 | 14,260 | 8,240 | |||||||||
Principal payments received on available-for-sale securities | 18,542 | 27,000 | 42,421 | |||||||||
Originations of mortgage finance loans | (51,087,328 | ) | (51,110,692 | ) | (27,234,509 | ) | ||||||
Proceeds from pay-offs of mortgage finance loans | 51,478,335 | 50,015,503 | 26,348,634 | |||||||||
Net increase in loans held for investment, excluding mortgage finance loans | (1,706,505 | ) | (1,220,626 | ) | (890,753 | ) | ||||||
Purchase of premises and equipment, net | (4,029 | ) | (3,538 | ) | (3,286 | ) | ||||||
Proceeds from sale of foreclosed assets | 11,667 | 14,921 | 23,329 | |||||||||
Cash paid for acquisition | (2,445 | ) | — | (11,482 | ) | |||||||
| ||||||||||||
Net cash used in investing activities of continuing operations | (1,275,875 | ) | (2,263,185 | ) | (1,727,406 | ) | ||||||
Financing activities | ||||||||||||
Net increase in deposits | 1,816,575 | 1,884,547 | 100,856 | |||||||||
Proceeds (costs) from issuance of stock related to stock-based awards and warrants | (2,210 | ) | 355 | 2,190 | ||||||||
Net proceeds from issuance of common stock | — | 86,987 | — | |||||||||
Net proceeds from issuance of preferred stock | 144,987 | — | — | |||||||||
Preferred dividends paid | (6,960 | ) | — | — | ||||||||
Net increase (decrease) in other borrowings | (797,002 | ) | 318,115 | 1,341,761 | ||||||||
Excess tax benefits from stock-based compensation arrangements | 3,427 | 22,197 | 8,970 | |||||||||
Net increase (decrease) in federal funds purchased | (124,529 | ) | (139,070 | ) | 128,468 | |||||||
Issuance of subordinated notes | — | 111,000 | — | |||||||||
| ||||||||||||
Net cash provided by financing activities of continuing operations | 1,034,288 | 2,284,131 | 1,582,245 | |||||||||
| ||||||||||||
Net increase (decrease) in cash and cash equivalents | (52,437 | ) | 95,790 | (69,308 | ) | |||||||
Cash and cash equivalents at beginning of period | 206,348 | 110,558 | 179,866 | |||||||||
| ||||||||||||
Cash and cash equivalents at end of period | $ | 153,911 | $ | 206,348 | $ | 110,558 | ||||||
| ||||||||||||
Supplemental disclosures of cash flow information: | ||||||||||||
Cash paid during the period for interest | $ | 24,962 | $ | 21,527 | $ | 20,643 | ||||||
Cash paid during the period for income taxes | 77,635 | 69,095 | 32,127 | |||||||||
Transfers from loans/leases to OREO and other repossessed assets | 1,331 | 3,489 | 24,327 | |||||||||
| Year ended December 31, | |||||||||||
| (In thousands) | 2014 | 2013 | 2012 | ||||||||
| Operating activities | |||||||||||
| Net income | $ | 136,352 | $ | 121,051 | $ | 120,672 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Provision for credit losses | 22,000 | 19,000 | 11,500 | ||||||||
| Deferred tax expense | (3,969 | ) | (11,599 | ) | (3,131 | ) | |||||
| Depreciation and amortization | 14,798 | 11,480 | 9,437 | ||||||||
| Amortization on securities | — | 22 | 38 | ||||||||
| Bank owned life insurance (BOLI) income | (2,067 | ) | (1,917 | ) | (2,168 | ) | |||||
| Stock-based compensation expense | 14,577 | 20,953 | 12,018 | ||||||||
| Excess tax benefits from stock-based compensation arrangements | (2,929 | ) | (1,200 | ) | (7,769 | ) | |||||
| Gain on sale of assets | (822 | ) | (931 | ) | (917 | ) | |||||
| Changes in operating assets and liabilities: | |||||||||||
| Accrued interest receivable and other assets | (58,579 | ) | 31,010 | (61,243 | ) | ||||||
| Accrued interest payable and other liabilities | 32,599 | 3,508 | 10,835 | ||||||||
| Net cash provided by operating activities | 151,960 | 191,377 | 89,272 | ||||||||
| Investing activities | |||||||||||
| Purchases of available-for-sale securities | — | (2 | ) | (13 | ) | ||||||
| Maturities and calls of available-for-sale securities | 11,150 | 15,890 | 14,260 | ||||||||
| Principal payments received on available-for-sale securities | 9,822 | 18,542 | 27,000 | ||||||||
| Originations of mortgage finance loans | (58,090,177 | ) | (51,087,328 | ) | (51,110,692 | ) | |||||
| Proceeds from pay-offs of mortgage finance loans | 56,772,317 | 51,478,335 | 50,015,503 | ||||||||
| Net increase in loans held for investment, excluding mortgage finance loans | (1,676,927 | ) | (1,706,505 | ) | (1,220,626 | ) | |||||
| Purchase of premises and equipment, net | (9,965 | ) | (4,029 | ) | (3,538 | ) | |||||
| Proceeds from sale of foreclosed assets | 5,877 | 11,667 | 14,921 | ||||||||
| Cash paid for acquisition | — | (2,445 | ) | — | |||||||
| Net cash used in investing activities | (2,977,903 | ) | (1,275,875 | ) | (2,263,185 | ) | |||||
| Financing activities | |||||||||||
| Net increase in deposits | 3,415,921 | 1,816,575 | 1,884,547 | ||||||||
| Proceeds (costs) from issuance of stock related to stock-based awards and warrants | (2,203 | ) | (2,210 | ) | 355 | ||||||
| Net proceeds from issuance of common stock | 256,223 | — | 86,987 | ||||||||
| Net proceeds from issuance of preferred stock | — | 144,987 | — | ||||||||
| Preferred dividends paid | (9,750 | ) | (6,960 | ) | — | ||||||
| Net increase (decrease) in other borrowings | 244,979 | (797,002 | ) | 318,115 | |||||||
| Excess tax benefits from stock-based compensation arrangements | 2,929 | 1,200 | 7,769 | ||||||||
| Net decrease in federal funds purchased and repurchase agreements | (77,928 | ) | (124,529 | ) | (139,070 | ) | |||||
| Issuance of subordinated notes | 172,375 | — | 111,000 | ||||||||
| Net cash provided by financing activities | 4,002,546 | 1,032,061 | 2,269,703 | ||||||||
| Net increase (decrease) in cash and cash equivalents | 1,176,603 | (52,437 | ) | 95,790 | |||||||
| Cash and cash equivalents at beginning of period | 153,911 | 206,348 | 110,558 | ||||||||
| Cash and cash equivalents at end of period | $ | 1,330,514 | $ | 153,911 | $ | 206,348 | |||||
| Supplemental disclosures of cash flow information: | |||||||||||
| Cash paid during the period for interest | $ | 33,584 | $ | 24,962 | $ | 21,527 | |||||
| Cash paid during the period for income taxes | 74,998 | 77,635 | 69,095 | ||||||||
| Transfers from loans/leases to OREO and other repossessed assets | 851 | 1,331 | 3,489 | ||||||||
entrepreneurs located in Texas as well as operate several lines of business serving a regional or national clientele of commercial borrowers. We are primarily a secured lender, with our greatest concentration of loans in Texas.
The
Correction of an Error in the Financial Statements
We determined during the fourth quarter of 2013 that purchases and sales of mortgage finance loan interests that had been reported on our consolidated statements of cash flows as cash flows from operating activities should have been reported as investing activities because the related asset balances should have been reported as held for investment rather than held for sale on our consolidated balance sheets.
We have corrected the classification of these assets on the consolidated balance sheets to reflect them as held for investment. We have corrected the previously presented cash flows for these loans and in doing so the consolidated statements of cash flows for 2012 and 2011 were adjusted to increase net cash flows from operating activities by $1.1 billion and $885.9 million, respectively, with corresponding decreases in net cash flows from investing activities. The change does not impact our reported earnings as we do not believe any reserve for loan losses relating to the mortgage finance portfolio is necessary based upon the risk profile of the assets and the less than one basis point loss experience of the program over the last ten years. This reclassification does not change total loans or total assets on our consolidated balance sheets. We have evaluated the effect of the incorrect presentation, both qualitatively and quantitatively, and concluded that it did not materially misstate our previously issued financial statements.
2013.
uncollectable.
made to the originator. Because we have an actual, legal ownership interest in the underlying residential mortgage loan, these interests are not extensions of credit to the originators that are secured by the mortgage loans as collateral.
balance sheets.
equity and consolidated statements of income and other comprehensive income.
| December 31, 2013 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
Available-for-Sale Securities: | ||||||||||||||||
Residential mortgage-backed securities | $ | 38,786 | $ | 2,676 | $ | — | $ | 41,462 | ||||||||
Municipals | 14,401 | 104 | — | 14,505 | ||||||||||||
Equity securities(1) | 7,522 | — | (275 | ) | 7,247 | |||||||||||
| $ | 60,709 | $ | 2,780 | $ | (275 | ) | $ | 63,214 | ||||||||
| December 31, 2013 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
Available-for-Sale Securities: | ||||||||||||||||
Residential mortgage-backed securities | $ | 57,342 | $ | 4,239 | $ | — | $ | 61,581 | ||||||||
Corporate securities | 5,000 | 80 | — | 5,080 | ||||||||||||
Municipals | 25,300 | 594 | — | 25,894 | ||||||||||||
Equity securities(1) | 7,519 | 121 | — | 7,640 | ||||||||||||
| $ | 95,161 | $ | 5,034 | $ | — | $ | 100,195 | |||||||||
| December 31, 2014 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
| Available-for-sale securities: | |||||||||||||||
| Residential mortgage-backed securities | $ | 28,957 | $ | 2,108 | $ | — | $ | 31,065 | |||||||
| Municipals | 3,257 | 10 | — | 3,267 | |||||||||||
| Equity securities(1) | 7,522 | 16 | (151 | ) | 7,387 | ||||||||||
| $ | 39,736 | $ | 2,134 | $ | (151 | ) | $ | 41,719 | |||||||
| December 31, 2013 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
| Available-for-sale securities: | |||||||||||||||
| Residential mortgage-backed securities | $ | 38,786 | $ | 2,676 | $ | — | $ | 41,462 | |||||||
| Municipals | 14,401 | 104 | — | 14,505 | |||||||||||
| Equity securities(1) | 7,522 | — | (275 | ) | 7,247 | ||||||||||
| $ | 60,709 | $ | 2,780 | $ | (275 | ) | $ | 63,214 | |||||||
| (1) | Equity securities consist of Community Reinvestment Act funds. |
| December 31, 2013 | ||||||||||||||||||||
Less Than One Year | After One Through Five Years | After Five Through Ten Years | After Ten Years | Total | ||||||||||||||||
Available-for-sale: | ||||||||||||||||||||
Residential mortgage-backed securities:(1) | ||||||||||||||||||||
Amortized cost | $ | 238 | $ | 14,720 | $ | 7,718 | $ | 16,110 | $ | 38,786 | ||||||||||
Estimated fair value | 252 | 15,641 | 8,456 | 17,113 | 41,462 | |||||||||||||||
Weighted average yield(3) | 4.32 | % | 4.78 | % | 5.56 | % | 2.40 | % | 3.94 | % | ||||||||||
Municipals:(2) | ||||||||||||||||||||
Amortized cost | 7,749 | 6,652 | — | — | 14,401 | |||||||||||||||
Estimated fair value | 7,818 | 6,687 | — | — | 14,505 | |||||||||||||||
Weighted average yield(3) | 5.76 | % | 5.71 | % | 0.00 | % | — | 5.73 | % | |||||||||||
Equity securities:(4) | ||||||||||||||||||||
Amortized cost | 7,522 | — | — | — | 7,522 | |||||||||||||||
Estimated fair value | 7,247 | — | — | — | 7,247 | |||||||||||||||
|
| |||||||||||||||||||
Total available-for-sale securities: | ||||||||||||||||||||
Amortized cost | $ | 60,709 | ||||||||||||||||||
|
| |||||||||||||||||||
Estimated fair value | $ | 63,214 | ||||||||||||||||||
|
| |||||||||||||||||||
Less Than One Year After One Through Five Years After Five Through Ten Years After Ten Years Available-for-sale: Residential mortgage-backed securities:(1) Amortized cost Estimated fair value Weighted average yield(3) Corporate securities: Amortized cost Estimated fair value Weighted average yield(3) Municipals:(2) Amortized cost Estimated fair value Weighted average yield(3) Equity securities:(4) Amortized cost Estimated fair value Total available-for-sale securities: Amortized cost Estimated fair value December 31, 2012 Total $ 656 $ 5,698 $ 23,111 $ 27,877 $ 57,342 690 6,113 24,948 29,830 61,581 4.20 % 5.29 % 4.86 % 3.41 % 4.19 % — 5,000 — — 5,000 — 5,080 — — 5,080 — 7.38 % — — 7.38 % 6,575 16,448 2,277 — 25,300 6,646 16,895 2,353 — 25,894 5.75 % 5.66 % 6.01 % — 5.72 % 7,519 — — — 7,519 7,640 — — — 7,640 $ 95,161 $ 100,195
| December 31, 2014 | |||||||||||||||||||
Less Than One Year | After One Through Five Years | After Five Through Ten Years | After Ten Years | Total | |||||||||||||||
| Available-for-sale: | |||||||||||||||||||
| Residential mortgage-backed securities:(1) | |||||||||||||||||||
| Amortized cost | $ | 1 | $ | 9,151 | $ | 5,661 | $ | 14,144 | $ | 28,957 | |||||||||
| Estimated fair value | 1 | 9,662 | 6,333 | 15,069 | 31,065 | ||||||||||||||
| Weighted average yield(3) | 6.50 | % | 4.79 | % | 5.54 | % | 2.36 | % | 3.75 | % | |||||||||
| Municipals:(2) | |||||||||||||||||||
| Amortized cost | 1,669 | 1,588 | — | — | 3,257 | ||||||||||||||
| Estimated fair value | 1,674 | 1,593 | — | — | 3,267 | ||||||||||||||
| Weighted average yield(3) | 5.78 | % | 5.79 | % | — | % | — | % | 5.79 | % | |||||||||
| Equity securities:(4) | |||||||||||||||||||
| Amortized cost | 7,522 | — | — | — | 7,522 | ||||||||||||||
| Estimated fair value | 7,387 | — | — | — | 7,387 | ||||||||||||||
| Total available-for-sale securities: | |||||||||||||||||||
| Amortized cost | $ | 39,736 | |||||||||||||||||
| Estimated fair value | $ | 41,719 | |||||||||||||||||
| December 31, 2013 | |||||||||||||||||||
Less Than One Year | After One Through Five Years | After Five Through Ten Years | After Ten Years | Total | |||||||||||||||
| Available-for-sale: | |||||||||||||||||||
| Residential mortgage-backed securities:(1) | |||||||||||||||||||
| Amortized cost | $ | 238 | $ | 14,720 | $ | 7,718 | $ | 16,110 | $ | 38,786 | |||||||||
| Estimated fair value | 252 | 15,641 | 8,456 | 17,113 | 41,462 | ||||||||||||||
| Weighted average yield(3) | 4.32 | % | 4.78 | % | 5.56 | % | 2.40 | % | 3.94 | % | |||||||||
| Municipals:(2) | |||||||||||||||||||
| Amortized cost | 7,749 | 6,652 | — | — | 14,401 | ||||||||||||||
| Estimated fair value | 7,818 | 6,687 | — | — | 14,505 | ||||||||||||||
| Weighted average yield(3) | 5.76 | % | 5.71 | % | — | % | — | % | 5.73 | % | |||||||||
| Equity securities:(4) | |||||||||||||||||||
| Amortized cost | 7,522 | — | — | — | 7,522 | ||||||||||||||
| Estimated fair value | 7,247 | — | — | — | 7,247 | ||||||||||||||
| Total available-for-sale securities: | |||||||||||||||||||
| Amortized cost | $ | 60,709 | |||||||||||||||||
| Estimated fair value | $ | 63,214 | |||||||||||||||||
| (1) | Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without prepayment penalties. The average expected life of the mortgage-backed securities was 1.2 years at December 31, 2014 and 1.4 years at December 31, |
| (2) | Yields have been adjusted to a tax equivalent basis assuming a 35% federal tax rate. |
| (3) | Yields are calculated based on amortized cost. |
| (4) | These equity securities do not have a stated maturity. |
| Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | |||||||||||||||||||
Equity securities | $ | 7,247 | $ | (275 | ) | $ | — | $ | — | $ | 7,247 | $ | (275 | ) | ||||||||||
| December 31, 2014 | Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
| Equity securities | $ | — | $ | — | $ | 6,349 | $ | (151 | ) | $ | 6,349 | $ | (151 | ) | |||||||||
| December 31, 2013 | Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||
| Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
| Equity securities | $ | 7,247 | $ | (275 | ) | $ | — | $ | — | $ | 7,247 | $ | (275 | ) | |||||||||
At December 31, 2012, we did not have any investment securities in an unrealized loss position.
income of $136.0 million for the year ended
| December 31 | ||||||||
| 2013 | 2012 | |||||||
Commercial | $ | 5,020,565 | $ | 4,106,419 | ||||
Mortgage finance | 2,784,265 | 3,175,272 | ||||||
Construction | 1,262,905 | 737,637 | ||||||
Real estate | 2,146,228 | 1,892,451 | ||||||
Consumer | 15,350 | 19,493 | ||||||
Equipment leases | 93,160 | 69,470 | ||||||
| ||||||||
Gross loans held for investment | 11,322,473 | 10,000,742 | ||||||
Deferred income (net of direct origination costs) | (51,899 | ) | (39,935 | ) | ||||
Allowance for loan losses | (87,604 | ) | (74,337 | ) | ||||
| ||||||||
Total | $ | 11,182,970 | $ | 9,886,470 | ||||
| ||||||||
| December 31, | |||||||
| 2014 | 2013 | ||||||
| Commercial | $ | 5,869,219 | $ | 5,020,565 | |||
| Mortgage finance | 4,102,125 | 2,784,265 | |||||
| Construction | 1,416,405 | 1,262,905 | |||||
| Real estate | 2,807,127 | 2,146,522 | |||||
| Consumer | 19,699 | 15,350 | |||||
| Equipment leases | 99,495 | 93,160 | |||||
| Gross loans held for investment | 14,314,070 | 11,322,767 | |||||
| Deferred income (net of direct origination costs) | (57,058 | ) | (51,899 | ) | |||
| Allowance for loan losses | (100,954 | ) | (87,604 | ) | |||
| Total | $ | 14,156,058 | $ | 11,183,264 | |||
primary source of repayment is expected to come from the sale, permanent financing or lease of the real property collateral. We generally provide temporary financing for commercial and residential property. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Our real estate loans generally have maximum terms of five to seven years, and we provide loans with both floating and fixed rates. We generally avoid long-term loans for commercial real estate held for investment. Real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. Appraised values may be highly variable due to market conditions and the impact of the inability of potential purchasers and lessees to obtain financing and a lack of transactions at comparable values.
At December 31, 2013, we had a blanket floating lien based on certain real estate loans used as collateral for FHLB borrowings.
non-accrual.
things asincluding general economic conditions, changes in credit policies and lending standards. Historical loss rates are adjusted to account for current environmental conditions which we believe are likely to cause loss rates to be higher or lower than past experience. Each quarter we produce an adjustment range for environmental factors unique to us and our market. Changes in the trend and severity of problem loans can cause the estimation of losses to differ from past experience. In addition, the reserve considers the results of reviews performed by independent third party reviewers as reflected in their confirmations of assigned credit grades within the portfolio. The portion of the allowance that is not derived by the allowance allocation percentages compensates for the uncertainty and complexity in estimating loan and lease losses including factors and conditions that may not be fully reflected in the determination and application of the allowance allocation percentages. Examples of risks that support the Bank's maintaining an unallocated reserve include the possibility of precipitous negative changes in economic conditions and borrowers' submission of financial statements or certifications of collateral value that subsequently prove to be materially inaccurate for reason of either misstatement or omission of critical information. These situations, while not common, do not necessarily correlate well with the general risk profile presented by assigned credit grade and product type categories. We evaluate many such factors and conditions in determining the unallocated portion of the allowance, including the economicamount and business conditions affecting key lending areas, credit quality trends and general growthfrequency of losses attributable to issues not specifically addressed or included in the portfolio.determination and application of the allowance allocation percentages. The allowance is considered appropriate, given management’s assessment of potential losses within the portfolio as of the evaluation date, the significant growth in the loan and lease portfolio, current economic conditions in the Company’s market areas and other factors.
basis of the Company's consolidated financial statements.
| Commercial | Mortgage Finance | Construction | Real Estate | Consumer | Leases | Total | ||||||||||||||||||||||||
December 31,2013 | ||||||||||||||||||||||||||||||
Grade: | ||||||||||||||||||||||||||||||
Pass | $ | 4,908,944 | $ | 2,784,265 | $ | 1,261,995 | $ | 2,099,450 | $ | 15,251 | $ | 89,317 | $ | 11,159,222 | ||||||||||||||||
Special mention | 24,132 | — | 102 | 6,338 | — | 51 | 30,623 | |||||||||||||||||||||||
Substandard- accruing | 74,593 | — | 103 | 21,770 | 45 | 3,742 | 100,253 | |||||||||||||||||||||||
Non-accrual | 12,896 | — | 705 | 18,670 | 54 | 50 | 32,375 | |||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Total loans held for investment | $ | 5,020,565 | $ | 2,784,265 | $ | 1,262,905 | $ | 2,146,228 | $ | 15,350 | $ | 93,160 | $ | 11,322,473 | ||||||||||||||||
| ||||||||||||||||||||||||||||||
| Commercial | Mortgage Finance | Construction | Real Estate | Consumer | Leases | Total | ||||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||||||||
Grade: | ||||||||||||||||||||||||||||
Pass | $ | 4,013,538 | $ | 3,175,272 | $ | 703,673 | $ | 1,816,027 | $ | 19,436 | $ | 68,327 | $ | 9,796,273 | ||||||||||||||
Special mention | 33,137 | — | 11,957 | 12,461 | — | 919 | 58,474 | |||||||||||||||||||||
Substandard-accruing | 44,371 | — | 4,790 | 40,897 | — | 104 | 90,162 | |||||||||||||||||||||
Non-accrual | 15,373 | — | 17,217 | 23,066 | 57 | 120 | 55,833 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Total loans held for investment | $ | 4,106,419 | $ | 3,175,272 | $ | 737,637 | $ | 1,892,451 | $ | 19,493 | $ | 69,470 | $ | 10,000,742 | ||||||||||||||
| ||||||||||||||||||||||||||||
| Commercial | Mortgage Finance | Construction | Real Estate | Consumer | Equipment Leases | Total | |||||||||||||||||||||
| December 31, 2014 | |||||||||||||||||||||||||||
| Grade: | |||||||||||||||||||||||||||
| Pass | $ | 5,738,474 | $ | 4,102,125 | $ | 1,414,671 | $ | 2,785,804 | $ | 19,579 | $ | 91,044 | $ | 14,151,697 | |||||||||||||
| Special mention | 53,839 | — | 1,734 | 8,723 | 11 | 4,363 | 68,670 | ||||||||||||||||||||
| Substandard- accruing | 43,784 | — | — | 2,653 | 47 | 3,915 | 50,399 | ||||||||||||||||||||
| Non-accrual | 33,122 | — | — | 9,947 | 62 | 173 | 43,304 | ||||||||||||||||||||
| Total loans held for investment | $ | 5,869,219 | $ | 4,102,125 | $ | 1,416,405 | $ | 2,807,127 | $ | 19,699 | $ | 99,495 | $ | 14,314,070 | |||||||||||||
| Commercial | Mortgage Finance | Construction | Real Estate | Consumer | Equipment Leases | Total | |||||||||||||||||||||
| December 31, 2013 | |||||||||||||||||||||||||||
| Grade: | |||||||||||||||||||||||||||
| Pass | $ | 4,908,944 | $ | 2,784,265 | $ | 1,261,995 | $ | 2,099,744 | $ | 15,251 | $ | 89,317 | $ | 11,159,516 | |||||||||||||
| Special mention | 24,132 | — | 102 | 6,338 | — | 51 | 30,623 | ||||||||||||||||||||
| Substandard-accruing | 74,593 | — | 103 | 21,770 | 45 | 3,742 | 100,253 | ||||||||||||||||||||
| Non-accrual | 12,896 | — | 705 | 18,670 | 54 | 50 | 32,375 | ||||||||||||||||||||
| Total loans held for investment | $ | 5,020,565 | $ | 2,784,265 | $ | 1,262,905 | $ | 2,146,522 | $ | 15,350 | $ | 93,160 | $ | 11,322,767 | |||||||||||||
| Commercial | Mortgage Finance | Construction | Real Estate | Consumer | Leases | Unallocated | Total | |||||||||||||||||||||||||
December 31, 2013 (in thousands) | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 21,547 | $ | — | $ | 12,097 | $ | 30,893 | $ | 226 | $ | 2,460 | $ | 7,114 | $ | 74,337 | ||||||||||||||||
Provision for loan losses | 23,693 | — | 2,456 | (6,809 | ) | (105 | ) | 325 | (1,395 | ) | 18,165 | |||||||||||||||||||||
Charge-offs | 6,575 | — | — | 144 | 45 | 2 | — | 6,766 | ||||||||||||||||||||||||
Recoveries | 1,203 | — | — | 270 | 73 | 322 | — | 1,868 | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
Net charge-offs (recoveries) | 5,372 | — | — | (126 | ) | (28 | ) | (320 | ) | — | 4,898 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
Ending balance | $ | 39,868 | $ | — | $ | 14,553 | $ | 24,210 | $ | 149 | $ | 3,105 | $ | 5,719 | $ | 87,604 | ||||||||||||||||
| ||||||||||||||||||||||||||||||||
Period end amount allocated to: | ||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 2,015 | $ | — | $ | — | $ | 1,143 | $ | 8 | $ | 8 | $ | — | $ | 3,174 | ||||||||||||||||
Loans collectively evaluated for impairment | 37,853 | — | 14,553 | 23,067 | 141 | 3,097 | 5,719 | 84,430 | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
Ending balance | $ | 39,868 | $ | — | $ | 14,553 | $ | 24,210 | $ | 149 | $ | 3,105 | $ | 5,719 | $ | 87,604 | ||||||||||||||||
| ||||||||||||||||||||||||||||||||
| Commercial | Mortgage Finance | Construction | Real Estate | Consumer | Leases | Unallocated | Total | |||||||||||||||||||||||||
December 31, 2012 (in thousands) | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 17,337 | $ | — | $ | 7,845 | $ | 33,721 | $ | 223 | $ | 2,356 | $ | 8,813 | $ | 70,295 | ||||||||||||||||
Provision for loan losses | 10,086 | — | 4,242 | (2,741 | ) | 19 | 200 | (1,699 | ) | 10,107 | ||||||||||||||||||||||
Charge-offs | 6,708 | — | — | 899 | 49 | 204 | — | 7,860 | ||||||||||||||||||||||||
Recoveries | 832 | — | 10 | 812 | 33 | 108 | — | 1,795 | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
Net charge-offs (recoveries) | 5,876 | — | (10 | ) | 87 | 16 | 96 | — | 6,065 | |||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
Ending balance | $ | 21,547 | $ | — | $ | 12,097 | $ | 30,893 | $ | 226 | $ | 2,460 | $ | 7,114 | $ | 74,337 | ||||||||||||||||
| ||||||||||||||||||||||||||||||||
Period end amount allocated to: | ||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 2,983 | $ | — | $ | 14 | $ | 899 | $ | 16 | $ | 18 | $ | — | $ | 3,930 | ||||||||||||||||
Loans collectively evaluated for impairment | 18,564 | — | 12,083 | 29,994 | 210 | 2,442 | 7,114 | 70,407 | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
Ending balance | $ | 21,547 | $ | — | $ | 12,097 | $ | 30,893 | $ | 226 | $ | 2,460 | $ | 7,114 | $ | 74,337 | ||||||||||||||||
| ||||||||||||||||||||||||||||||||
| Commercial | Mortgage Finance | Construction | Real Estate | Consumer | Equipment Leases | Unallocated | Total | ||||||||||||||||||||||||
December 31, 2014 (in thousands) | |||||||||||||||||||||||||||||||
| Beginning balance | $ | 39,868 | $ | — | $ | 14,553 | $ | 24,210 | $ | 149 | $ | 3,105 | $ | 5,719 | $ | 87,604 | |||||||||||||||
| Provision for loan losses | 37,827 | — | (6,618 | ) | (8,411 | ) | 195 | (3,046 | ) | (317 | ) | 19,630 | |||||||||||||||||||
| Charge-offs | 9,803 | — | 296 | 266 | — | — | 10,365 | ||||||||||||||||||||||||
| Recoveries | 2,762 | — | 79 | 162 | 1,082 | — | 4,085 | ||||||||||||||||||||||||
| Net charge-offs (recoveries) | 7,041 | — | — | 217 | 104 | (1,082 | ) | — | 6,280 | ||||||||||||||||||||||
| Ending balance | $ | 70,654 | $ | — | $ | 7,935 | $ | 15,582 | $ | 240 | $ | 1,141 | $ | 5,402 | $ | 100,954 | |||||||||||||||
| Period end amount allocated to: | |||||||||||||||||||||||||||||||
| Loans individually evaluated for impairment | $ | 7,705 | $ | — | $ | — | $ | 636 | $ | 9 | $ | 26 | $ | — | $ | 8,376 | |||||||||||||||
| Loans collectively evaluated for impairment | 62,949 | — | 7,935 | 14,946 | 231 | 1,115 | 5,402 | 92,578 | |||||||||||||||||||||||
| Ending balance | $ | 70,654 | $ | — | $ | 7,935 | $ | 15,582 | $ | 240 | $ | 1,141 | $ | 5,402 | $ | 100,954 | |||||||||||||||
| Commercial | Mortgage Finance | Construction | Real Estate | Consumer | Equipment Leases | Unallocated | Total | ||||||||||||||||||||||||
December 31, 2013 (in thousands) | |||||||||||||||||||||||||||||||
| Beginning balance | $ | 21,547 | $ | — | $ | 12,097 | $ | 30,893 | $ | 226 | $ | 2,460 | $ | 7,114 | $ | 74,337 | |||||||||||||||
| Provision for loan losses | 23,693 | — | 2,456 | (6,809 | ) | (105 | ) | 325 | (1,395 | ) | 18,165 | ||||||||||||||||||||
| Charge-offs | 6,575 | — | — | 144 | 45 | 2 | — | 6,766 | |||||||||||||||||||||||
| Recoveries | 1,203 | — | — | 270 | 73 | 322 | — | 1,868 | |||||||||||||||||||||||
| Net charge-offs (recoveries) | 5,372 | — | — | (126 | ) | (28 | ) | (320 | ) | — | 4,898 | ||||||||||||||||||||
| Ending balance | $ | 39,868 | $ | — | $ | 14,553 | $ | 24,210 | $ | 149 | $ | 3,105 | $ | 5,719 | $ | 87,604 | |||||||||||||||
| Period end amount allocated to: | |||||||||||||||||||||||||||||||
| Loans individually evaluated for impairment | $ | 2,015 | $ | — | $ | — | $ | 1,143 | $ | 8 | $ | 8 | $ | — | $ | 3,174 | |||||||||||||||
| Loans collectively evaluated for impairment | 37,853 | — | 14,553 | 23,067 | 141 | 3,097 | 5,719 | 84,430 | |||||||||||||||||||||||
| Ending balance | $ | 39,868 | $ | — | $ | 14,553 | $ | 24,210 | $ | 149 | $ | 3,105 | $ | 5,719 | $ | 87,604 | |||||||||||||||
| Commercial | Mortgage Finance | Construction | Real Estate | Consumer | Lease | Total | ||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 15,140 | $ | — | $ | 705 | $ | 24,027 | $ | 54 | $ | 50 | $ | 39,976 | ||||||||||||||
Loans collectively evaluated for impairment | 5,005,425 | 2,784,265 | 1,262,200 | 2,122,201 | 15,296 | 93,110 | 11,282,497 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Total | $ | 5,020,565 | $ | 2,784,265 | $ | 1,262,905 | $ | 2,146,228 | $ | 15,350 | $ | 93,160 | $ | 11,322,473 | ||||||||||||||
| ||||||||||||||||||||||||||||
Mortgage Finance December 31, 2012 Loans individually evaluated for impairment Loans collectively evaluated for impairment Total Commercial Construction Real
Estate Consumer Lease Total $ 15,373 $ — $ 18,179 $ 32,512 $ 57 $ 120 $ 66,241 4,091,046 3,175,272 719,458 1,859,939 19,436 69,350 9,934,501 $ 4,106,419 $ 3,175,272 $ 737,637 $ 1,892,451 $ 19,493 $ 69,470 $ 10,000,742
| Commercial | Mortgage Finance | Construction | Real Estate | Consumer | Equipment Leases | Total | |||||||||||||||||||||
| December 31, 2014 | |||||||||||||||||||||||||||
| Loans individually evaluated for impairment | $ | 35,165 | $ | — | $ | — | $ | 13,880 | $ | 62 | $ | 173 | $ | 49,280 | |||||||||||||
| Loans collectively evaluated for impairment | 5,834,054 | 4,102,125 | 1,416,405 | 2,793,247 | 19,637 | 99,322 | 14,264,790 | ||||||||||||||||||||
| Total | $ | 5,869,219 | $ | 4,102,125 | $ | 1,416,405 | $ | 2,807,127 | $ | 19,699 | $ | 99,495 | $ | 14,314,070 | |||||||||||||
| Commercial | Mortgage Finance | Construction | Real Estate | Consumer | Equipment Leases | Total | |||||||||||||||||||||
| December 31, 2013 | |||||||||||||||||||||||||||
| Loans individually evaluated for impairment | $ | 15,139 | $ | — | $ | 705 | $ | 24,028 | $ | 54 | $ | 50 | $ | 39,976 | |||||||||||||
| Loans collectively evaluated for impairment | 5,005,426 | 2,784,265 | 1,262,200 | 2,122,494 | 15,296 | 93,110 | 11,282,791 | ||||||||||||||||||||
| Total | $ | 5,020,565 | $ | 2,784,265 | $ | 1,262,905 | $ | 2,146,522 | $ | 15,350 | $ | 93,160 | $ | 11,322,767 | |||||||||||||
| December 31, 2013 | ||||||||||||||||||||
| Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | ||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||
Commercial | ||||||||||||||||||||
Business loans | $ | 2,005 | $ | 2,005 | $ | — | $ | 4,265 | $ | — | ||||||||||
Energy loans | 1,614 | 3,443 | — | 969 | — | |||||||||||||||
Construction | ||||||||||||||||||||
Market risk | 705 | 705 | — | 3,111 | 114 | |||||||||||||||
Real estate | ||||||||||||||||||||
Market risk | 13,524 | 13,524 | — | 9,796 | — | |||||||||||||||
Commercial | 508 | 508 | — | 5,458 | — | |||||||||||||||
Secured by 1-4 family | 1,320 | 1,320 | — | 2,464 | — | |||||||||||||||
Consumer | — | — | — | — | — | |||||||||||||||
Equipment leases | — | — | — | — | — | |||||||||||||||
| ||||||||||||||||||||
Total impaired loans with no allowance recorded | $ | 19,676 | $ | 21,505 | $ | — | $ | 26,063 | $ | 114 | ||||||||||
| ||||||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||
Commercial | ||||||||||||||||||||
Business loans | $ | 11,060 | $ | 12,425 | $ | 1,946 | $ | 14,240 | $ | — | ||||||||||
Energy loans | 460 | 460 | 69 | 913 | — | |||||||||||||||
Construction | ||||||||||||||||||||
Market risk | — | — | — | 160 | — | |||||||||||||||
Real estate | ||||||||||||||||||||
Market risk | 6,289 | 6,289 | 822 | 7,912 | — | |||||||||||||||
Commercial | — | — | — | 477 | — | |||||||||||||||
Secured by 1-4 family | 2,387 | 2,387 | 321 | 914 | — | |||||||||||||||
Consumer | 54 | 54 | 8 | 43 | — | |||||||||||||||
Equipment leases | 50 | 50 | 8 | 72 | — | |||||||||||||||
| ||||||||||||||||||||
Total impaired loans with an allowance recorded | $ | 20,300 | $ | 21,665 | $ | 3,174 | $ | 24,731 | $ | — | ||||||||||
| ||||||||||||||||||||
Combined: | ||||||||||||||||||||
Commercial | ||||||||||||||||||||
Business loans | $ | 13,065 | $ | 14,430 | $ | 1,946 | $ | 18,505 | $ | — | ||||||||||
Energy loans | 2,074 | 3,903 | 69 | 1,882 | — | |||||||||||||||
Construction | ||||||||||||||||||||
Market risk | 705 | 705 | — | 3,271 | 114 | |||||||||||||||
Real estate | ||||||||||||||||||||
Market risk | 19,813 | 19,813 | 822 | 17,708 | — | |||||||||||||||
Commercial | 508 | 508 | — | 5,935 | — | |||||||||||||||
Secured by 1-4 family | 3,707 | 3,707 | 321 | 3,378 | — | |||||||||||||||
Consumer | 54 | 54 | 8 | 43 | — | |||||||||||||||
Equipment leases | 50 | 50 | 8 | 72 | — | |||||||||||||||
Total impaired loans | $ | 39,976 | $ | 43,170 | $ | 3,174 | $ | 50,794 | $ | 114 | ||||||||||
December 31, 2012 With no related allowance recorded: Commercial Business loans Construction Market risk Real estate Market risk Commercial Secured by 1-4 family Consumer Equipment leases Total impaired loans with no allowance recorded With an allowance recorded: Commercial Business loans Construction Market risk Real estate Market risk Commercial Secured by 1-4 family Consumer Equipment leases Total impaired loans with an allowance recorded Combined: Commercial Business loans Construction Market risk Real estate Market risk Commercial Secured by 1-4 family Consumer Equipment leases Total impaired loans Recorded
Investment Unpaid
Principal
Balance Related
Allowance Average
Recorded
Investment Interest
Income
Recognized $ 2,938 $ 2,938 $ — $ 1,409 $ — 17,217 17,217 — 18,571 677 9,061 9,061 — 7,944 — 6,604 6,604 — 6,451 — 2,632 2,632 — 1,827 — — — — — — — — — — — $ 38,452 $ 38,452 $ — $ 36,202 $ 677 $ 12,435 $ 18,391 $ 2,983 $ 15,484 $ — 962 962 14 321 — 11,439 11,439 535 11,811 — 2,013 2,013 89 671 — 763 763 275 1,632 — 57 57 16 59 — 120 120 18 182 — $ 27,789 $ 33,745 $ 3,930 $ 30,160 $ — $ 15,373 $ 21,329 $ 2,983 $ 16,893 $ — 18,179 18,179 14 18,892 677 20,500 20,500 535 19,755 — 8,617 8,617 89 7,122 — 3,395 3,395 275 3,459 — 57 57 16 59 — 120 120 18 182 — $ 66,241 $ 72,197 $ 3,930 $ 66,362 $ 677
| December 31, 2014 | |||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | |||||||||||||||
| With no related allowance recorded: | |||||||||||||||||||
| Commercial | |||||||||||||||||||
| Business loans | $ | 9,608 | $ | 11,857 | $ | — | $ | 7,334 | $ | — | |||||||||
| Energy loans | — | — | — | 375 | 25 | ||||||||||||||
| Construction | |||||||||||||||||||
| Market risk | — | — | — | 118 | — | ||||||||||||||
| Real estate | |||||||||||||||||||
| Market risk | 3,735 | 3,735 | — | 7,970 | — | ||||||||||||||
| Commercial | 3,521 | 3,521 | — | 2,795 | — | ||||||||||||||
| Secured by 1-4 family | — | — | — | 1,210 | — | ||||||||||||||
| Consumer | — | — | — | — | — | ||||||||||||||
| Equipment leases | — | — | — | — | — | ||||||||||||||
| Total impaired loans with no allowance recorded | $ | 16,864 | $ | 19,113 | $ | — | $ | 19,802 | $ | 25 | |||||||||
| With an allowance recorded: | |||||||||||||||||||
| Commercial | |||||||||||||||||||
| Business loans | $ | 24,553 | $ | 25,553 | $ | 7,433 | $ | 17,705 | $ | — | |||||||||
| Energy loans | 1,004 | 1,004 | 272 | 991 | — | ||||||||||||||
| Construction | |||||||||||||||||||
| Market risk | — | — | — | — | — | ||||||||||||||
| Real estate | |||||||||||||||||||
| Market risk | 4,203 | 4,203 | 317 | 5,064 | — | ||||||||||||||
| Commercial | 526 | 526 | 79 | 705 | — | ||||||||||||||
| Secured by 1-4 family | 1,895 | 1,895 | 240 | 2,119 | — | ||||||||||||||
| Consumer | 62 | 62 | 9 | 16 | — | ||||||||||||||
| Equipment leases | 173 | 173 | 26 | 41 | — | ||||||||||||||
| Total impaired loans with an allowance recorded | $ | 32,416 | $ | 33,416 | $ | 8,376 | $ | 26,641 | $ | — | |||||||||
| Combined: | |||||||||||||||||||
| Commercial | |||||||||||||||||||
| Business loans | $ | 34,161 | $ | 37,410 | $ | 7,433 | $ | 25,039 | $ | — | |||||||||
| Energy loans | 1,004 | 1,004 | 272 | 1,366 | 25 | ||||||||||||||
| Construction | |||||||||||||||||||
| Market risk | — | — | — | 118 | — | ||||||||||||||
| Real estate | |||||||||||||||||||
| Market risk | 7,938 | 7,938 | 317 | 13,034 | — | ||||||||||||||
| Commercial | 4,047 | 4,047 | 79 | 3,500 | — | ||||||||||||||
| Secured by 1-4 family | 1,895 | 1,895 | 240 | 3,329 | — | ||||||||||||||
| Consumer | 62 | 62 | 9 | 16 | — | ||||||||||||||
| Equipment leases | 173 | 173 | 26 | 41 | — | ||||||||||||||
| Total impaired loans | $ | 49,280 | $ | 52,529 | $ | 8,376 | $ | 46,443 | $ | 25 | |||||||||
| December 31, 2013 | |||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | |||||||||||||||
| With no related allowance recorded: | |||||||||||||||||||
| Commercial | |||||||||||||||||||
| Business loans | $ | 2,005 | $ | 2,005 | $ | — | $ | 4,265 | $ | — | |||||||||
| Energy loans | 1,614 | 3,443 | — | 969 | — | ||||||||||||||
| Construction | |||||||||||||||||||
| Market risk | 705 | 705 | — | 3,111 | 114 | ||||||||||||||
| Real estate | |||||||||||||||||||
| Market risk | 13,524 | 13,524 | — | 9,796 | — | ||||||||||||||
| Commercial | 508 | 508 | — | 5,458 | — | ||||||||||||||
| Secured by 1-4 family | 1,320 | 1,320 | — | 2,464 | — | ||||||||||||||
| Consumer | — | — | — | — | — | ||||||||||||||
| Equipment leases | — | — | — | — | — | ||||||||||||||
| Total impaired loans with no allowance recorded | $ | 19,676 | $ | 21,505 | $ | — | $ | 26,063 | $ | 114 | |||||||||
| With an allowance recorded: | |||||||||||||||||||
| Commercial | |||||||||||||||||||
| Business loans | $ | 11,060 | $ | 12,425 | $ | 1,946 | $ | 14,240 | $ | — | |||||||||
| Energy loans | 460 | 460 | 69 | 913 | — | ||||||||||||||
| Construction | |||||||||||||||||||
| Market risk | — | — | — | 160 | — | ||||||||||||||
| Real estate | |||||||||||||||||||
| Market risk | 6,289 | 6,289 | 822 | 7,912 | — | ||||||||||||||
| Commercial | — | — | — | 477 | — | ||||||||||||||
| Secured by 1-4 family | 2,387 | 2,387 | 321 | 914 | — | ||||||||||||||
| Consumer | 54 | 54 | 8 | 43 | — | ||||||||||||||
| Equipment leases | 50 | 50 | 8 | 72 | — | ||||||||||||||
| Total impaired loans with an allowance recorded | $ | 20,300 | $ | 21,665 | $ | 3,174 | $ | 24,731 | $ | — | |||||||||
| Combined: | |||||||||||||||||||
| Commercial | |||||||||||||||||||
| Business loans | $ | 13,065 | �� | $ | 14,430 | $ | 1,946 | $ | 18,505 | $ | — | ||||||||
| Energy loans | 2,074 | 3,903 | 69 | 1,882 | — | ||||||||||||||
| Construction | |||||||||||||||||||
| Market risk | 705 | 705 | — | 3,271 | 114 | ||||||||||||||
| Real estate | |||||||||||||||||||
| Market risk | 19,813 | 19,813 | 822 | 17,708 | — | ||||||||||||||
| Commercial | 508 | 508 | — | 5,935 | — | ||||||||||||||
| Secured by 1-4 family | 3,707 | 3,707 | 321 | 3,378 | — | ||||||||||||||
| Consumer | 54 | 54 | 8 | 43 | — | ||||||||||||||
| Equipment leases | 50 | 50 | 8 | 72 | — | ||||||||||||||
| Total impaired loans | $ | 39,976 | $ | 43,170 | $ | 3,174 | $ | 50,794 | $ | 114 | |||||||||
| 30-59 Days Past Due | 60-89 Days Past Due | Greater Than 90 Days | Total Past Due | Current | Total(1) | |||||||||||||||||||
Commercial | ||||||||||||||||||||||||
Business loans | $ | 29,946 | $ | 7,683 | $ | 7,528 | $ | 45,157 | $ | 4,027,409 | $ | 4,072,566 | ||||||||||||
Energy | 5,239 | 1,092 | — | 6,331 | 928,772 | 935,103 | ||||||||||||||||||
Mortgage finance loans | — | — | — | — | 2,784,265 | 2,784,265 | ||||||||||||||||||
Construction | ||||||||||||||||||||||||
Market risk | 1 | — | 103 | 104 | 1,245,388 | 1,245,492 | ||||||||||||||||||
Secured by 1-4 family | — | — | — | — | 16,708 | 16,708 | ||||||||||||||||||
Real estate | ||||||||||||||||||||||||
Market risk | 6,013 | 3,100 | — | 9,113 | 1,623,706 | 1,632,819 | ||||||||||||||||||
Commercial | 15,024 | — | — | 15,024 | 387,856 | 402,880 | ||||||||||||||||||
Secured by 1-4 family | 2,607 | 266 | 1,694 | 4,567 | 87,292 | 91,859 | ||||||||||||||||||
Consumer | 37 | 177 | — | 214 | 15,082 | 15,296 | ||||||||||||||||||
Equipment leases | 189 | — | — | 189 | 92,921 | 93,110 | ||||||||||||||||||
Total loans held for investment | $ | 59,056 | $ | 12,318 | $ | 9,325 | $ | 80,699 | $ | 11,209,399 | $ | 11,290,098 | ||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | Greater Than 90 Days | Total Past Due(1) | Non-accrual | Current | Total | |||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||
| Business loans | $ | 37,459 | $ | 4,355 | $ | 5,274 | $ | 47,088 | $ | 32,118 | $ | 4,680,114 | $ | 4,759,320 | |||||||||||||
| Energy | — | — | — | — | 1,004 | 1,108,895 | 1,109,899 | ||||||||||||||||||||
| Mortgage finance loans | — | — | — | — | — | 4,102,125 | 4,102,125 | ||||||||||||||||||||
| Construction | |||||||||||||||||||||||||||
| Market risk | 3,571 | — | — | 3,571 | — | 1,393,513 | 1,397,084 | ||||||||||||||||||||
| Secured by 1-4 family | — | — | — | — | — | 19,321 | 19,321 | ||||||||||||||||||||
| Real estate | |||||||||||||||||||||||||||
| Market risk | — | — | — | — | 5,134 | 2,176,939 | 2,182,073 | ||||||||||||||||||||
| Commercial | 5,758 | — | — | 5,758 | 4,047 | 523,855 | 533,660 | ||||||||||||||||||||
| Secured by 1-4 family | 599 | — | — | 599 | 766 | 90,029 | 91,394 | ||||||||||||||||||||
| Consumer | 43 | 8 | — | 51 | 62 | 19,586 | 19,699 | ||||||||||||||||||||
| Equipment leases | 9,396 | — | — | 9,396 | 173 | 89,926 | 99,495 | ||||||||||||||||||||
| Total loans held for investment | $ | 56,826 | $ | 4,363 | $ | 5,274 | $ | 66,463 | $ | 43,304 | $ | 14,204,303 | $ | 14,314,070 | |||||||||||||
| (1) | Loans past due 90 days and still accruing includes premium finance loans of |
December 31, 2013 | ||||||||||||
| Number of Contracts | Pre-Restructuring Outstanding Recorded Investment | Post-Restructuring Outstanding Recorded Investment | ||||||||||
Commercial business loans | 3 | $ | 10,823 | $ | 8,921 | |||||||
Real estate market risk | 1 | 892 | 874 | |||||||||
Total new restructured loans in 2012 | 4 | $ | 11,715 | $ | 9,795 | |||||||
Commercial business loans Real estate market risk Real estate — 1-4 family Total new restructured loans in 2012December 31, 2012 Number of
Contracts Pre-Restructuring
Outstanding Recorded
Investment Post-Restructuring
Outstanding Recorded
Investment 3 $ 7,140 $ 7,103 2 1,726 1,147 1 1,424 1,393 6 $ 10,290 $ 9,643
| December 31, 2014 | ||||||||||
Number of Contracts | Pre-Restructuring Outstanding Recorded Investment | Post-Restructuring Outstanding Recorded Investment | ||||||||
| Real estate - commercial | 1 | $ | 1,441 | $ | 1,441 | |||||
| Commercial business loans | 1 | $ | 95 | $ | 80 | |||||
| Total new restructured loans in 2014 | 2 | $ | 1,536 | $ | 1,521 | |||||
| December 31, 2013 | ||||||||||
Number of Contracts | Pre-Restructuring Outstanding Recorded Investment | Post-Restructuring Outstanding Recorded Investment | ||||||||
| Commercial business loans | 3 | $ | 10,823 | $ | 8,921 | |||||
| Real estate market risk | 1 | 892 | 874 | |||||||
| Total new restructured loans in 2013 | 4 | $ | 11,715 | $ | 9,795 | |||||
2013.
| December 31, | ||||||||
| 2013 | 2012 | |||||||
Extended maturity | $ | 874 | $ | 1,913 | ||||
Adjusted payment schedule | — | 1,393 | ||||||
Combination of maturity extension and payment schedule adjustment | 8,921 | 6,337 | ||||||
Total | $ | 9,795 | $ | 9,643 | ||||
| December 31, | |||||||
| 2014 | 2013 | ||||||
| Extended maturity | $ | 1,441 | $ | 874 | |||
| Adjusted payment schedule | — | — | |||||
| Combination of maturity extension and payment schedule adjustment | 80 | 8,921 | |||||
| Total | $ | 1,521 | $ | 9,795 | |||
| Year ended December 31 | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
Beginning balance | $ | 15,991 | $ | 34,077 | $ | 42,261 | ||||||
Additions | 1,331 | 3,434 | 22,180 | |||||||||
Sales | (11,292 | ) | (14,637 | ) | (23,566 | ) | ||||||
Valuation allowance for OREO | 958 | (4,488 | ) | (3,922 | ) | |||||||
Direct write-downs | (1,878 | ) | (2,395 | ) | (2,876 | ) | ||||||
Ending balance | $ | 5,110 | $ | 15,991 | $ | 34,077 | ||||||
| Year ended December 31, | |||||||||||
| 2014 | 2013 | 2012 | |||||||||
| Beginning balance | $ | 5,110 | $ | 15,991 | $ | 34,077 | |||||
| Additions | 851 | 1,331 | 3,434 | ||||||||
| Sales | (5,393 | ) | (11,292 | ) | (14,637 | ) | |||||
| Valuation allowance for OREO | — | 958 | (4,488 | ) | |||||||
| Direct write-downs | — | (1,878 | ) | (2,395 | ) | ||||||
| Ending balance | $ | 568 | $ | 5,110 | $ | 15,991 | |||||
In June 2011, we acquired the assets
| Gross Goodwill and Intangible Assets | Accumulated Amortization | Net Goodwill and Intangible Assets | ||||||||||
December 31, 2013 | ||||||||||||
Goodwill | $ | 15,370 | $ | (374 | ) | $ | 14,996 | |||||
Intangible assets—customer relationships and trademarks | 9,104 | (2,814 | ) | 6,290 | ||||||||
Total goodwill and intangible assets | $ | 24,474 | $ | (3,188 | ) | $ | 21,286 | |||||
December 31, 2012 | ||||||||||||
Goodwill | $ | 14,416 | $ | (374 | ) | $ | 14,042 | |||||
Intangible assets—customer relationships and trademarks | 7,996 | (2,155 | ) | 5,841 | ||||||||
Total goodwill and intangible assets | $ | 22,412 | $ | (2,529 | ) | $ | 19,883 | |||||
Gross Goodwill and Intangible Assets | Accumulated Amortization | Net Goodwill and Intangible Assets | |||||||||
| December 31, 2014 | |||||||||||
| Goodwill | $ | 15,370 | $ | (374 | ) | $ | 14,996 | ||||
| Intangible assets—customer relationships and trademarks | 9,104 | (3,512 | ) | 5,592 | |||||||
| Total goodwill and intangible assets | $ | 24,474 | $ | (3,886 | ) | $ | 20,588 | ||||
| December 31, 2013 | |||||||||||
| Goodwill | $ | 15,370 | $ | (374 | ) | $ | 14,996 | ||||
| Intangible assets—customer relationships and trademarks | 9,104 | (2,814 | ) | 6,290 | |||||||
| Total goodwill and intangible assets | $ | 24,474 | $ | (3,188 | ) | $ | 21,286 | ||||
2014 | $ | 699 | ||
2015 | 598 | |||
2016 | 501 | |||
2017 | 473 | |||
2018 | 473 | |||
Thereafter | 3,546 | |||
| $ | 6,290 | |||
| 2015 | $ | 598 | |
| 2016 | 501 | ||
| 2017 | 474 | ||
| 2018 | 473 | ||
| 2019 | 473 | ||
| Thereafter | 3,073 | ||
| $ | 5,592 | ||
| December 31 | ||||||||
| 2013 | 2012 | |||||||
Premises | $ | 14,113 | $ | 12,950 | ||||
Furniture and equipment | 28,865 | 26,478 | ||||||
| 42,978 | 39,428 | |||||||
Accumulated depreciation | (31,496 | ) | (27,983 | ) | ||||
Total premises and equipment, net | $ | 11,482 | $ | 11,445 | ||||
| December 31, | |||||||
| 2014 | 2013 | ||||||
| Premises | $ | 17,235 | $ | 14,113 | |||
| Furniture and equipment | 22,418 | 28,865 | |||||
| 39,653 | 42,978 | ||||||
| Accumulated depreciation | (22,285 | ) | (31,496 | ) | |||
| Total premises and equipment, net | $ | 17,368 | $ | 11,482 | |||
| 2013 | 2012 | |||||||
Non-interest bearing demand deposits | $ | 3,347,567 | $ | 2,535,375 | ||||
Interest-bearing deposits | ||||||||
Transaction | 792,186 | 979,642 | ||||||
Savings | 4,414,680 | 3,170,401 | ||||||
Time | 372,639 | 426,077 | ||||||
Deposits in foreign branches | 330,307 | 329,309 | ||||||
Total interest-bearing deposits | 5,909,812 | 4,905,429 | ||||||
Total deposits | $ | 9,257,379 | $ | 7,440,804 | ||||
| 2014 | 2013 | ||||||
| Non-interest-bearing demand deposits | $ | 5,011,619 | $ | 3,347,567 | |||
| Interest-bearing deposits | |||||||
| Transaction | 1,292,388 | 792,186 | |||||
| Savings | 5,630,253 | 4,414,680 | |||||
| Time | 426,331 | 372,639 | |||||
| Deposits in foreign branches | 312,709 | 330,307 | |||||
| Total interest-bearing deposits | 7,661,681 | 5,909,812 | |||||
| Total deposits | $ | 12,673,300 | $ | 9,257,379 | |||
2014 | $ | 343,654 | ||
2015 | 25,599 | |||
2016 | 1,105 | |||
2017 | 2,041 | |||
2018 | 167 | |||
2019 and after | 73 | |||
| $ | 372,639 | |||
| 2015 | $ | 397,192 | |
| 2016 | 20,514 | ||
| 2017 | 4,341 | ||
| 2018 | 233 | ||
| 2019 | 4,051 | ||
| 2020 and after | — | ||
| $ | 426,331 | ||
| 2013 | 2012 | 2011 | ||||||||||||||||||||||
| Balance | Rate(3) | Balance | Rate(3) | Balance | Rate(3) | |||||||||||||||||||
Federal funds purchased(4) | $ | 148,650 | 0.22 | % | $ | 273,179 | 0.26 | % | $ | 412,249 | 0.27 | % | ||||||||||||
Customer repurchase agreements(1) | 21,954 | 0.31 | % | 23,936 | 0.04 | % | 23,801 | 0.06 | % | |||||||||||||||
FHLB borrowings(2) | 840,026 | 0.12 | % | 1,650,046 | 0.09 | % | 1,200,066 | 0.14 | % | |||||||||||||||
Line of credit | 15,000 | 2.65 | % | — | — | — | — | |||||||||||||||||
Fed borrowings | — | — | — | — | 132,000 | 0.75 | % | |||||||||||||||||
Subordinated notes | 111,000 | 6.50 | % | 111,000 | 6.50 | % | — | — | ||||||||||||||||
Trust preferred subordinated debentures | 113,406 | 2.17 | % | 113,406 | 2.24 | % | 113,406 | 2.48 | % | |||||||||||||||
Total borrowings | $ | 1,250,036 | $ | 2,171,567 | $ | 1,881,522 | ||||||||||||||||||
Maximum outstanding at any month end | $ | 1,859,036 | $ | 2,432,945 | $ | 1,986,324 | ||||||||||||||||||
| 2014 | 2013 | 2012 | ||||||||||||||||||
| Balance | Rate(3) | Balance | Rate(3) | Balance | Rate(3) | |||||||||||||||
| Federal funds purchased(4) | $ | 66,971 | 0.30 | % | $ | 148,650 | 0.22 | % | $ | 273,179 | 0.26 | % | ||||||||
| Customer repurchase agreements(1) | 25,705 | 0.38 | % | 21,954 | 0.31 | % | 23,936 | 0.04 | % | |||||||||||
| FHLB borrowings(2) | 1,100,005 | 0.13 | % | 840,026 | 0.12 | % | 1,650,046 | 0.09 | % | |||||||||||
| Line of credit | — | — | % | 15,000 | 2.65 | % | — | — | % | |||||||||||
| Subordinated notes | 286,000 | 5.82 | % | 111,000 | 6.50 | % | 111,000 | 6.50 | % | |||||||||||
| Trust preferred subordinated debentures | 113,406 | 2.18 | % | 113,406 | 2.17 | % | 113,406 | 2.24 | % | |||||||||||
| Total borrowings | $ | 1,592,087 | $ | 1,250,036 | $ | 2,171,567 | ||||||||||||||
| Maximum outstanding at any month end | $ | 1,592,087 | $ | 1,859,036 | $ | 2,432,945 | ||||||||||||||
| (1) | Securities pledged for customer repurchase agreements were $21.8 million, $37.7 million |
| (2) | FHLB borrowings are collateralized by a blanket floating lien on certain real estate secured loans, mortgage finance assets and also certain pledged securities. The weighted-average interest rate for the years ended December 31, 2014, 2013 and 2012 was 0.15%, 0.14% and |
| (3) | Interest rate as of period end. |
| (4) | The weighted-average interest rate on federal funds purchased for the years ended December 31, 2014, 2013 |
| 2013 | 2012 | 2011 | ||||||||||
FHLB borrowing capacity relating to loans | $ | 693,302 | $ | 267,542 | $ | 4,524 | ||||||
FHLB borrowing capacity relating to securities | 8,482 | 33,204 | 15,909 | |||||||||
Total FHLB borrowing capacity | $ | 701,784 | $ | 300,746 | $ | 20,433 | ||||||
Unused federal funds lines available from commercial banks | $ | 890,000 | $ | 706,000 | $ | 390,720 | ||||||
At December 31, 2012, we
| 2014 | 2013 | 2012 | |||||||||
| FHLB borrowing capacity relating to loans | $ | 3,602,994 | $ | 693,302 | $ | 267,542 | |||||
| FHLB borrowing capacity relating to securities | 535 | 8,482 | 33,204 | ||||||||
| Total FHLB borrowing capacity | $ | 3,603,529 | $ | 701,784 | $ | 300,746 | |||||
| Unused Federal funds lines available from commercial banks | $ | 1,186,000 | $ | 890,000 | $ | 706,000 | |||||
| Unused Federal Reserve Borrowings capacity | $ | 2,643,000 | $ | 2,284,000 | $ | 1,940,000 | |||||
outstanding at December 31, 2013.
| Within One Year | After One But Within Three Years | After Three But Within Five Years | After Five Years | Total | ||||||||||||||||
Federal funds purchased(1) | $ | 148,650 | $ | — | $ | — | $ | — | $ | 148,650 | ||||||||||
Customer repurchase agreements(1) | 21,954 | — | — | — | 21,954 | |||||||||||||||
FHLB borrowings(1) | 840,000 | 26 | — | — | 840,026 | |||||||||||||||
Line of credit | 15,000 | — | — | — | 15,000 | |||||||||||||||
Subordinated notes(1) | — | — | — | 111,000 | 111,000 | |||||||||||||||
Trust preferred subordinated debentures(1) | — | — | — | 113,406 | 113,406 | |||||||||||||||
Total borrowings | $ | 1,025,604 | $ | 26 | $ | — | $ | 224,406 | $ | 1,250,036 | ||||||||||
Within One Year | After One But Within Three Years | After Three But Within Five Years | After Five Years | Total | |||||||||||||||
| Federal funds purchased and customer repurchase agreements(1) | $ | 92,676 | $ | — | $ | — | $ | — | $ | 92,676 | |||||||||
| FHLB borrowings(1) | 1,100,005 | — | — | — | 1,100,005 | ||||||||||||||
| Subordinated notes(1) | — | — | — | 286,000 | 286,000 | ||||||||||||||
| Trust preferred subordinated debentures(1) | — | — | — | 113,406 | 113,406 | ||||||||||||||
| Total borrowings | $ | 1,192,681 | $ | — | $ | — | $ | 399,406 | $ | 1,592,087 | |||||||||
| (1) | Excludes interest. |
| Texas Capital Bancshares Statutory Trust I | Texas Capital Trust II | Texas Capital Statutory Trust III | Texas Capital Trust IV | Texas Capital Statutory Trust V | ||||||||||||||
Date issued | November 19, 2002 | April 10, 2003 | October 6, 2005 | April 28, 2006 | September 29, 2006 | |||||||||||||
Trust preferred securities issued | $ 10,310 | $ | 10,310 | $ | 25,774 | $ | 25,774 | $ | 41,238 | |||||||||
Floating or fixed rate securities | Floating | Floating | Floating | Floating | Floating | |||||||||||||
Interest rate on subordinated debentures | 3 month LIBOR + 3.35% | | 3 month LIBOR + 3.25 | % | | 3 month LIBOR + 1.51 | % | | 3 month LIBOR + 1.60 | % | | 3 month LIBOR + 1.71 | % | |||||
Maturity date | November 2032 | April 2033 | December 2035 | June 2036 | December 2036 | |||||||||||||
Texas Capital Bancshares Statutory Trust I | Texas Capital Statutory Trust II | Texas Capital Statutory Trust III | Texas Capital Statutory Trust IV | Texas Capital Statutory Trust V | |||||
| Date issued | November 19, 2002 | April 10, 2003 | October 6, 2005 | April 28, 2006 | September 29, 2006 | ||||
| Trust preferred securities issued | $10,310 | $10,310 | $25,774 | $25,774 | $41,238 | ||||
| Floating or fixed rate securities | Floating | Floating | Floating | Floating | Floating | ||||
| Interest rate on subordinated debentures | 3 month LIBOR + 3.35% | 3 month LIBOR + 3.25% | 3 month LIBOR + 1.51% | 3 month LIBOR + 1.60% | 3 month LIBOR + 1.71% | ||||
| Maturity date | November 2032 | April 2033 | December 2035 | June 2036 | December 2036 | ||||
| Year ended December 31 | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
Current: | ||||||||||||
Federal | $ | 76,481 | $ | 69,092 | $ | 47,799 | ||||||
State | 1,878 | 1,885 | 1,183 | |||||||||
Total | $ | 78,359 | $ | 70,977 | $ | 48,982 | ||||||
Deferred | ||||||||||||
Federal | $ | (11,599 | ) | $ | (3,131 | ) | $ | (6,927 | ) | |||
State | — | — | 245 | |||||||||
Total | $ | (11,599 | ) | $ | (3,131 | ) | $ | (6,682 | ) | |||
Total expense | ||||||||||||
Federal | $ | 64,882 | $ | 65,961 | $ | 40,872 | ||||||
State | 1,878 | 1,885 | 1,428 | |||||||||
Total | $ | 66,760 | $ | 67,846 | $ | 42,300 | ||||||
The following table shows the breakdown of total income tax expense for continuing operations and discontinued operations for the years ended December 31, 2013, 2012 and 2011 (in thousands):
| 2013 | 2012 | 2011 | ||||||||||
Total expense (benefit): | ||||||||||||
From continuing operations | $ | 66,757 | $ | 67,866 | $ | 42,366 | ||||||
From discontinued operations | 3 | (20 | ) | (66 | ) | |||||||
Total | $ | 66,760 | $ | 67,846 | $ | 42,300 | ||||||
| Year ended December 31, | |||||||||||
| 2014 | 2013 | 2012 | |||||||||
| Current: | |||||||||||
| Federal | $ | 77,855 | $ | 76,478 | $ | 69,112 | |||||
| State | 2,124 | 1,878 | 1,885 | ||||||||
| Total | $ | 79,979 | $ | 78,356 | $ | 70,997 | |||||
| Deferred | |||||||||||
| Federal | $ | (3,969 | ) | $ | (11,599 | ) | $ | (3,131 | ) | ||
| State | — | — | — | ||||||||
| Total | $ | (3,969 | ) | $ | (11,599 | ) | $ | (3,131 | ) | ||
| Total expense | |||||||||||
| Federal | $ | 73,886 | $ | 64,879 | $ | 65,981 | |||||
| State | 2,124 | 1,878 | 1,885 | ||||||||
| Total | $ | 76,010 | $ | 66,757 | $ | 67,866 | |||||
| December 31 | ||||||||
| 2013 | 2012 | |||||||
Deferred tax assets: | ||||||||
Allowance for credit losses | $ | 32,752 | $ | 27,725 | ||||
Loan origination fees | 11,580 | 8,991 | ||||||
Stock compensation | 10,786 | 5,777 | ||||||
Mark to market on mortgage loans | 220 | 245 | ||||||
Reserve for potential mortgage loan repurchases | 20 | 20 | ||||||
Non-accrual interest | 1,907 | 2,739 | ||||||
Deferred lease expense | 1,316 | 957 | ||||||
OREO valuation allowance | 499 | 3,168 | ||||||
Other | 1,157 | 1,452 | ||||||
Total deferred tax assets | 60,237 | 51,074 | ||||||
Deferred tax liabilities: | ||||||||
Loan origination costs | (1,048 | ) | (1,113 | ) | ||||
Leases | (6,587 | ) | (9,077 | ) | ||||
Depreciation | (1,183 | ) | (1,077 | ) | ||||
Unrealized gain on securities | (877 | ) | (1,762 | ) | ||||
Other | (1,819 | ) | (1,769 | ) | ||||
Total deferred tax liabilities | (11,514 | ) | (14,798 | ) | ||||
Net deferred tax asset | $ | 48,723 | $ | 36,276 | ||||
| December 31, | |||||||
| 2014 | 2013 | ||||||
| Deferred tax assets: | |||||||
| Allowance for credit losses | $ | 38,356 | $ | 32,752 | |||
| Loan origination fees | 13,651 | 11,580 | |||||
| Stock compensation | 8,263 | 10,786 | |||||
| Mark to market on mortgage loans | 215 | 220 | |||||
| Reserve for potential mortgage loan repurchases | 20 | 20 | |||||
| Non-accrual interest | 1,272 | 1,907 | |||||
| Deferred lease expense | 1,688 | 1,316 | |||||
| Depreciation | 691 | — | |||||
| OREO valuation allowance | 22 | 499 | |||||
| Other | 1,298 | 1,157 | |||||
| Total deferred tax assets | 65,476 | 60,237 | |||||
| Deferred tax liabilities: | |||||||
| Loan origination costs | (1,488 | ) | (1,048 | ) | |||
| Leases | (9,466 | ) | (6,587 | ) | |||
| Depreciation | — | (2,224 | ) | ||||
| Unrealized gain on securities | (694 | ) | (877 | ) | |||
| Other | (1,914 | ) | (1,819 | ) | |||
| Total deferred tax liabilities | (13,562 | ) | (12,555 | ) | |||
| Net deferred tax asset | $ | 51,914 | $ | 47,682 | |||
| Year ended December 31 | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
Tax at U.S. statutory rate | 35 | % | 35 | % | 35 | % | ||||||
State taxes | 1 | % | 1 | % | 1 | % | ||||||
Non-deductible expenses | 1 | % | 1 | % | 1 | % | ||||||
Non-taxable income | (1 | )% | (1 | )% | (1 | )% | ||||||
Total | 36 | % | 36 | % | 36 | % | ||||||
| Year ended December 31, | ||||||||
| 2014 | 2013 | 2012 | ||||||
| Tax at U.S. statutory rate | 35 | % | 35 | % | 35 | % | ||
| State taxes | 1 | % | 1 | % | 1 | % | ||
| Non-deductible expenses | 1 | % | 1 | % | 1 | % | ||
| Non-taxable income | (1 | )% | (1 | )% | (1 | )% | ||
| Total | 36 | % | 36 | % | 36 | % | ||
| 2013 | 2012 | 2011 | ||||||||||
Risk-free rate | 1.17 | % | 0.76 | % | 1.83 | % | ||||||
Market price volatility factor | 0.409 | 0.404 | 0.414 | |||||||||
Weighted-average expected life of options | 5 years | 5 years | 5 years | |||||||||
| 2014 | 2013 | 2012 | ||||||
| Risk-free rate | 1.46 | % | 1.17 | % | 0.76 | % | ||
| Market price volatility factor | 0.402 | 0.409 | 0.404 | |||||
| Weighted-average expected life of options | 5 years | 5 years | 5 years | |||||
| December 31, 2013 | December 31, 2012 | December 31, 2011 | ||||||||||||||||||||||
| Options | Weighted Average Exercise Price | Options | Weighted Average Exercise Price | Options | Weighted Average Exercise Price | |||||||||||||||||||
Options outstanding at beginning of year | 174,062 | $ | 13.51 | 569,410 | $ | 13.02 | 943,820 | $ | 12.62 | |||||||||||||||
Options exercised | (119,162 | ) | 11.14 | (391,348 | ) | 12.74 | (374,410 | ) | 12.00 | |||||||||||||||
Options forfeited | — | — | (4,000 | ) | 19.37 | — | — | |||||||||||||||||
Options outstanding at year-end | 54,900 | $ | 18.65 | 174,062 | $ | 13.51 | 569,410 | $ | 13.02 | |||||||||||||||
Options vested and exercisable atyear-end | 54,900 | $ | 18.65 | 174,062 | $ | 13.51 | 569,410 | $ | 13.02 | |||||||||||||||
Intrinsic value of options vested and exercisable | $ | 2,391,014 | $ | 5,450,620 | $ | 10,015,721 | ||||||||||||||||||
Weighted average remaining contractual life of options vested and exercisable (in years) | 0.97 | 1.15 | 2.06 | |||||||||||||||||||||
Intrinsic value of options exercised | $ | 4,176,787 | $ | 10,246,387 | $ | 5,496,861 | ||||||||||||||||||
Weighted average remaining contractual life of options currently outstanding (in years) | 0.97 | 1.15 | 2.06 | |||||||||||||||||||||
| December 31, 2014 | December 31, 2013 | December 31, 2012 | |||||||||||||||||||||
| Options | Weighted Average Exercise Price | Options | Weighted Average Exercise Price | Options | Weighted Average Exercise Price | ||||||||||||||||||
| Options outstanding at beginning of year | 54,900 | $ | 18.65 | 174,062 | $ | 13.51 | 569,410 | $ | 13.02 | ||||||||||||||
| Options exercised | (28,400 | ) | 17.34 | (119,162 | ) | 11.14 | (391,348 | ) | 12.74 | ||||||||||||||
| Options forfeited | (1,500 | ) | 14.91 | — | — | (4,000 | ) | 19.37 | |||||||||||||||
| Options outstanding at year-end | 25,000 | $ | 20.60 | 54,900 | $ | 18.65 | 174,062 | $ | 13.51 | ||||||||||||||
| Options vested and exercisable at year-end | 25,000 | $ | 20.60 | 54,900 | $ | 18.65 | 174,062 | $ | 13.51 | ||||||||||||||
| Intrinsic value of options vested and exercisable | $ | 843,190 | $ | 2,391,014 | $ | 5,450,620 | |||||||||||||||||
| Weighted average remaining contractual life of options vested and exercisable (in years) | 0.30 | 0.97 | 1.15 | ||||||||||||||||||||
| Intrinsic value of options exercised | $ | 1,193,070 | $ | 4,176,787 | $ | 10,246,387 | |||||||||||||||||
| Weighted average remaining contractual life of options currently outstanding (in years) | 0.30 | 0.97 | 1.15 | ||||||||||||||||||||
In connection with2012.
| December 31, 2013 | December 31, 2012 | December 31, 2011 | ||||||||||||||||||||||
| SARs | Weighted Average Exercise Price | SARs / PSARs | Weighted Average Exercise Price | SARs / PSARs | Weighted Average Exercise Price | |||||||||||||||||||
SARs outstanding at beginning of year | 640,220 | $ | 20.90 | 983,700 | $ | 19.56 | 1,213,257 | $ | 19.42 | |||||||||||||||
SARs granted | 53,500 | 43.73 | 36,000 | 44.94 | 33,000 | 24.70 | ||||||||||||||||||
SARs exercised | (134,271 | ) | 19.21 | (345,480 | ) | 19.44 | (236,610 | ) | 19.86 | |||||||||||||||
SARs forfeited | (22,300 | ) | 18.99 | (34,000 | ) | 24.79 | (25,947 | ) | 16.56 | |||||||||||||||
SARs outstanding at year-end | 537,149 | $ | 23.68 | 640,220 | $ | 20.90 | 983,700 | $ | 19.56 | |||||||||||||||
SARs vested and exercisable at year-end | 384,974 | $ | 20.64 | 446,970 | $ | 20.41 | 687,175 | $ | 20.29 | |||||||||||||||
Weighted average remaining contractual life of SARs vested | 3.46 | 4.25 | 5.24 | |||||||||||||||||||||
Compensation expense | $ | 564,000 | $ | 704,000 | $ | 1,272,000 | ||||||||||||||||||
Weighted average fair value of SARs granted during 2013, 2012 and 2011 (in years) | $ | 16.26 | $ | 16.21 | $ | 9.54 | ||||||||||||||||||
Fair value of shares vested during the year | $ | 566,341 | $ | 758,543 | $ | 1,612,435 | ||||||||||||||||||
Weighted average remaining contractual life of SARs currently outstanding (in years) | 4.68 | 5.19 | 5.95 | |||||||||||||||||||||
| December 31, 2014 | December 31, 2013 | December 31, 2012 | |||||||||||||||||||||
| SARs | Weighted Average Exercise Price | SARs | Weighted Average Exercise Price | SARs / PSARs | Weighted Average Exercise Price | ||||||||||||||||||
| SARs outstanding at beginning of year | 537,149 | $ | 23.68 | 640,220 | $ | 20.90 | 983,700 | $ | 19.56 | ||||||||||||||
| SARs granted | 8,000 | 62.02 | 53,500 | 43.73 | 36,000 | 44.94 | |||||||||||||||||
| SARs exercised | (92,640 | ) | 20.87 | (134,271 | ) | 19.21 | (345,480 | ) | 19.44 | ||||||||||||||
| SARs forfeited | (7,500 | ) | 31.16 | (22,300 | ) | 18.99 | (34,000 | ) | 24.79 | ||||||||||||||
| SARs outstanding at year-end | 445,009 | $ | 24.83 | 537,149 | $ | 23.68 | 640,220 | $ | 20.90 | ||||||||||||||
| SARs vested and exercisable at year-end | 355,509 | $ | 21.16 | 384,974 | $ | 20.64 | 446,970 | $ | 20.41 | ||||||||||||||
| Weighted average remaining contractual life of SARs vested | 2.89 | 3.46 | 4.25 | ||||||||||||||||||||
| Compensation expense | $ | 530,000 | $ | 564,000 | $ | 704,000 | |||||||||||||||||
| Weighted average fair value of SARs granted | $ | 23.02 | $ | 16.26 | $ | 16.21 | |||||||||||||||||
| Fair value of shares vested during the year | $ | 580,345 | $ | 566,341 | $ | 758,543 | |||||||||||||||||
| Weighted average remaining contractual life of SARs currently outstanding (in years) | 3.85 | 4.68 | 5.19 | ||||||||||||||||||||
| Non-Vested Stock Awards Outstanding | ||||||||
| Number of Shares | Weighted- Average Grant- Date Fair Value | |||||||
Balance, January 1, 2011 | 897,351 | $ | 14.64 | |||||
Granted | 165,891 | 24.77 | ||||||
Vested and issued | (364,065 | ) | 16.07 | |||||
Forfeited | (37,685 | ) | 18.70 | |||||
Balance, December 31, 2011 | 661,492 | 17.44 | ||||||
Granted | 105,000 | 39.89 | ||||||
Vested and issued | (311,410 | ) | 18.82 | |||||
Forfeited | (43,163 | ) | 25.25 | |||||
Balance, December 31, 2012 | 411,919 | 23.80 | ||||||
Granted | 163,500 | 45.35 | ||||||
Vested and issued | (151,480 | ) | 20.47 | |||||
Forfeited | (20,200 | ) | 24.96 | |||||
Balance, December 31, 2013 | 403,739 | $ | 33.72 | |||||
Non-Vested Stock Awards Outstanding | ||||||
Number of Shares | Weighted- Average Grant- Date Fair Value | |||||
| Balance, January 1, 2012 | 661,492 | $ | 17.44 | |||
| Granted | 105,000 | 39.89 | ||||
| Vested and issued | (311,410 | ) | 18.82 | |||
| Forfeited | (43,163 | ) | 25.25 | |||
| Balance, December 31, 2012 | 411,919 | 23.80 | ||||
| Granted | 163,500 | 45.35 | ||||
| Vested and issued | (151,480 | ) | 20.47 | |||
| Forfeited | (20,200 | ) | 24.96 | |||
| Balance, December 31, 2013 | 403,739 | 33.72 | ||||
| Granted | 64,050 | 57.84 | ||||
| Vested and issued | (161,249 | ) | 26.40 | |||
| Forfeited | (17,375 | ) | 37.40 | |||
| Balance, December 31, 2014 | 289,165 | $ | 42.93 | |||
In connection with
| December 31 | ||||||||
| 2013 | 2012 | |||||||
Commitments to extend credit | $ | 3,674,391 | $ | 2,648,454 | ||||
Standby letters of credit | 145,662 | 83,429 | ||||||
| December 31, | |||||||
| 2014 | 2013 | ||||||
| Commitments to extend credit | $ | 5,324,460 | $ | 3,674,391 | |||
| Standby letters of credit | 177,808 | 145,662 | |||||
In response to supplemental FFIEC Call Report instructions issued in early April 2013, we began using a 100% risk weight for the mortgage finance loans with our March 31, 2013 Call Report and Form 10-Q. In previous filings, we applied a 50% risk weight (or 20% risk weight for government-guaranteed loans) to these assets for purposes of calculating the Bank’s risk-based capital ratios. Having determined that the 100% risk weight must be applied under our current program we were required to amend our year-end Call Reports for 2012 and 2011. This change required application of the 100% risk weight to our mortgage finance loans in these earlier periods, which is consistent with all of our 2013 Call Reports. The amendment of Call Reports had no impact on our consolidated balance sheet or statements of operations, stockholders’ equity and cash flows.
This retroactive change in risk weighting of our mortgage finance loans required that we amend the previously reported values for our risk-weighted capital ratios for December 31, 2012 and 2011. See below for amended December 31, 2012 and 2011 risk-weighted capital ratios. These amended ratios exceed levels required to be “adequately capitalized” on a consolidated basis and at the Bank. As amended, the Bank was “well capitalized” in the Tier 1 measure of capital adequacy, but the total risk-based capital ratio was below that required to be considered “well capitalized”. The adjustment had no impact on the ratio of tangible common equity to total assets. We believe that we had the financial and operational capacity to maintain well-capitalized status had we determined that the higher risk weighting was required to be applied to our ownership interests in mortgage finance loans at year-end 2012 and 2011.
Incidental to the amended Call Reports described above, we were assessed an additional $3.0 million for deposit insurance by the FDIC that was paid during the third quarter of 2013.
| Actual | For Capital Adequacy Purposes | To Be Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||||||||||||||
| (Dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||
As of December 31, 2013: | ||||||||||||||||||||||||
Total capital (to risk-weighted assets): | ||||||||||||||||||||||||
Company | $ | 1,387,312 | 10.73 | % | $ | 1,034,721 | 8.00 | % | N/A | N/A | ||||||||||||||
Bank | 1,328,227 | 10.27 | % | 1,034,406 | 8.00 | % | $ | 1,293,007 | 10.00 | % | ||||||||||||||
Tier 1 capital (to risk-weighted assets): | ||||||||||||||||||||||||
Company | $ | 1,184,018 | 9.15 | % | $ | 517,361 | 4.00 | % | N/A | N/A | ||||||||||||||
Bank | 975,933 | 7.55 | % | 517,203 | 4.00 | % | $ | 775,804 | 6.00 | % | ||||||||||||||
Tier 1 capital (to average assets): | ||||||||||||||||||||||||
Company | $ | 1,184,018 | 10.87 | % | $ | 435,750 | 4.00 | % | N/A | N/A | ||||||||||||||
Bank | 975,933 | 8.96 | % | 435,601 | 4.00 | % | $ | 544,502 | 5.00 | % | ||||||||||||||
As of December 31, 2012: | ||||||||||||||||||||||||
Total capital (to risk-weighted assets): | ||||||||||||||||||||||||
Company | $ | 1,112,924 | 9.97 | % | $ | 893,231 | 8.00 | % | N/A | N/A | ||||||||||||||
Bank | 948,328 | 8.50 | % | 892,806 | 8.00 | % | $ | 1,116,008 | 10.00 | % | ||||||||||||||
Tier 1 capital (to risk-weighted assets): | ||||||||||||||||||||||||
Company | $ | 923,677 | 8.27 | % | $ | 446,616 | 4.00 | % | N/A | N/A | ||||||||||||||
Bank | 800,081 | 7.17 | % | 446,403 | 4.00 | % | $ | 669,605 | 6.00 | % | ||||||||||||||
Tier 1 capital (to average assets): | ||||||||||||||||||||||||
Company | $ | 923,677 | 9.41 | % | $ | 392,649 | 4.00 | % | N/A | N/A | ||||||||||||||
Bank | 800,081 | 8.16 | % | 392,433 | 4.00 | % | $ | 490,541 | 5.00 | % | ||||||||||||||
| Actual | For Capital Adequacy Purposes | To Be Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||||||||||
| (Dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||
| As of December 31, 2014: | ||||||||||||||||||||
| Total capital (to risk-weighted assets): | ||||||||||||||||||||
| Company | $ | 1,967,021 | 11.83 | % | $ | 1,330,568 | 8.00 | % | N/A | N/A | ||||||||||
| Bank | 1,757,365 | 10.57 | % | 1,330,226 | 8.00 | % | $ | 1,662,782 | 10.00 | % | ||||||||||
| Tier 1 capital (to risk-weighted assets): | ||||||||||||||||||||
| Company | $ | 1,573,007 | 9.46 | % | $ | 665,284 | 4.00 | % | N/A | N/A | ||||||||||
| Bank | 1,424,351 | 8.57 | % | 665,113 | 4.00 | % | $ | 997,669 | 6.00 | % | ||||||||||
| Tier 1 capital (to average assets): | ||||||||||||||||||||
| Company | $ | 1,573,007 | 10.76 | % | $ | 584,765 | 4.00 | % | N/A | N/A | ||||||||||
| Bank | 1,424,351 | 9.75 | % | 584,597 | 4.00 | % | $ | 730,746 | 5.00 | % | ||||||||||
| As of December 31, 2013: | ||||||||||||||||||||
| Total capital (to risk-weighted assets): | ||||||||||||||||||||
| Company | $ | 1,387,312 | 10.73 | % | $ | 1,034,721 | 8.00 | % | N/A | N/A | ||||||||||
| Bank | 1,328,227 | 10.27 | % | 1,034,406 | 8.00 | % | $ | 1,293,007 | 10.00 | % | ||||||||||
| Tier 1 capital (to risk-weighted assets): | ||||||||||||||||||||
| Company | $ | 1,184,018 | 9.15 | % | $ | 517,361 | 4.00 | % | N/A | N/A | ||||||||||
| Bank | 975,933 | 7.55 | % | 517,203 | 4.00 | % | $ | 775,804 | 6.00 | % | ||||||||||
| Tier 1 capital (to average assets): | ||||||||||||||||||||
| Company | $ | 1,184,018 | 10.87 | % | $ | 435,750 | 4.00 | % | N/A | N/A | ||||||||||
| Bank | 975,933 | 8.96 | % | 435,601 | 4.00 | % | $ | 544,502 | 5.00 | % | ||||||||||
2012.
| Year ended December | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
Numerator: | ||||||||||||
Net income from continuing operations | $ | 121,046 | $ | 120,709 | $ | 76,102 | ||||||
Preferred stock dividends | 7,394 | — | — | |||||||||
Net income from continuing operations available to common shareholders | 113,652 | 120,709 | 76,102 | |||||||||
Gain (loss) from discontinued operations | 5 | (37 | ) | (126 | ) | |||||||
Net income | $ | 113,657 | $ | 120,672 | $ | 75,976 | ||||||
Denominator: | ||||||||||||
Denominator for basic earnings per share—weighted average shares | 40,864,225 | 39,046,340 | 37,334,743 | |||||||||
Effect of employee stock-based awards(1) | 402,593 | 645,771 | 682,694 | |||||||||
Effect of warrants to purchase common stock | 513,063 | 473,736 | 315,640 | |||||||||
Denominator for dilutive earnings per share—adjusted weighted average shares and assumed conversions | 41,779,881 | 40,165,847 | 38,333,077 | |||||||||
Basic earnings per common share from continuing operations | $ | 2.78 | $ | 3.09 | $ | 2.04 | ||||||
Basic earnings per common share | $ | 2.78 | $ | 3.09 | $ | 2.03 | ||||||
Diluted earnings per share from continuing operations | $ | 2.72 | $ | 3.01 | $ | 1.99 | ||||||
Diluted earnings per common share | $ | 2.72 | $ | 3.00 | $ | 1.98 | ||||||
| Year ended December 31, | |||||||||||
| 2014 | 2013 | 2012 | |||||||||
| Numerator: | |||||||||||
| Net income | $ | 136,352 | $ | 121,051 | $ | 120,672 | |||||
| Preferred stock dividends | 9,750 | 7,394 | — | ||||||||
| Net income available to common stockholders | 126,602 | 113,657 | 120,672 | ||||||||
| Denominator: | |||||||||||
| Denominator for basic earnings per share—weighted average shares | 43,236,344 | 40,864,225 | 39,046,340 | ||||||||
| Effect of employee stock-based awards(1) | 311,423 | 402,593 | 645,771 | ||||||||
| Effect of warrants to purchase common stock | 455,489 | 513,063 | 473,736 | ||||||||
| Denominator for dilutive earnings per share—adjusted weighted average shares and assumed conversions | 44,003,256 | 41,779,881 | 40,165,847 | ||||||||
| Basic earnings per common share | $ | 2.93 | $ | 2.78 | $ | 3.09 | |||||
| Diluted earnings per common share | $ | 2.88 | $ | 2.72 | $ | 3.00 | |||||
| (1) | Stock options, SARs and RSUs outstanding of 51,300, 118,500 and 79,500 in 2014, 2013 and |
| 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 2 assets include U.S. government and agency mortgage-backed debt |
| 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. This category also includes impaired loans and OREO where collateral values have been based on third party appraisals; however, due to current economic conditions, comparative sales data typically used in appraisals may be unavailable or more subjective due to lack of market activity. |
| Fair Value Measurements Using | ||||||||||||
| December 31, 2013 | Level 1 | Level 2 | Level 3 | |||||||||
Available for sale securities:(1) | ||||||||||||
Mortgage-backed securities | $ | — | $ | 41,462 | $ | — | ||||||
Municipals | — | 14,505 | — | |||||||||
Equity securities | — | 7,247 | — | |||||||||
Loans(2)(4) | — | — | 13,474 | |||||||||
OREO(3)(4) | — | — | 5,110 | |||||||||
Derivative asset(5) | — | 9,317 | — | |||||||||
Derivative liability(5) | — | (9,317 | ) | — | ||||||||
| Fair Value Measurements Using | ||||||||||||
| December 31, 2012 | Level 1 | Level 2 | Level 3 | |||||||||
Available for sale securities:(1) | ||||||||||||
Mortgage-backed securities | $ | — | $ | 61,581 | $ | — | ||||||
Corporate securities | — | 5,080 | — | |||||||||
Municipals | — | 25,894 | — | |||||||||
Equity securities | — | 7,640 | — | |||||||||
Loans(2)(4) | — | — | 11,639 | |||||||||
OREO(3)(4) | — | — | 15,991 | |||||||||
Derivative asset(5) | �� | — | 28,473 | — | ||||||||
Derivative liability(5) | — | (28,473 | ) | — | ||||||||
| Fair Value Measurements Using | |||||||||||
| December 31, 2014 | Level 1 | Level 2 | Level 3 | ||||||||
| Available for sale securities:(1) | |||||||||||
| Mortgage-backed securities | $ | — | $ | 31,065 | $ | — | |||||
| Municipals | — | 3,267 | — | ||||||||
| Equity securities(2) | — | 7,387 | — | ||||||||
| Loans(3)(5) | — | — | 23,536 | ||||||||
| OREO(4)(5) | — | — | 568 | ||||||||
| Derivative assets(6) | — | 31,176 | — | ||||||||
| Derivative liabilities(6) | — | 31,176 | — | ||||||||
| December 31, 2013 | |||||||||||
| Available for sale securities:(1) | |||||||||||
| Mortgage-backed securities | $ | — | $ | 41,462 | $ | — | |||||
| Municipals | — | 14,505 | — | ||||||||
| Equity securities(2) | — | 7,247 | — | ||||||||
| Loans(3)(5) | — | — | 13,474 | ||||||||
| OREO(4)(5) | — | — | 5,110 | ||||||||
| Derivative assets(6) | — | 14,690 | — | ||||||||
| Derivative liabilities(6) | — | 14,690 | — | ||||||||
| (1) | Securities are measured at fair value on a recurring basis, generally monthly. |
| (2) | Equity securities consist of Community Reinvestment Act funds. |
| (3) | Includes impaired loans that have been measured for impairment at the fair value of the loan’s collateral. |
| (4) | OREO is transferred from loans to OREO at fair value less selling costs. |
| (5) | Fair value of loans and OREO is measured on a nonrecurring basis, generally annually or more often as warranted by market and economic conditions |
| (6) | Derivative assets and liabilities are measured at fair value on a recurring basis, generally quarterly. |
appraisals.
| December 31, 2013 | December 31, 2012 | |||||||||||||||
| Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | |||||||||||||
Cash and cash equivalents | $ | 153,911 | $ | 153,911 | $ | 206,348 | $ | 206,348 | ||||||||
Securities, available-for-sale | 63,214 | 63,214 | 100,195 | 100,195 | ||||||||||||
Loans held for sale from discontinued operations | 294 | 294 | 302 | 302 | ||||||||||||
Loans held for investment, net | 11,182,970 | 11,179,145 | 9,886,470 | 9,889,303 | ||||||||||||
Derivative asset | 9,317 | 9,317 | 28,473 | 28,473 | ||||||||||||
Deposits | 9,257,379 | 9,257,574 | 7,440,804 | 7,441,240 | ||||||||||||
Federal funds purchased | 148,650 | 148,650 | 273,179 | 273,179 | ||||||||||||
Other borrowings | 876,980 | 861,981 | 1,673,982 | 1,673,983 | ||||||||||||
Subordinated notes | 111,000 | 96,647 | 111,000 | 112,757 | ||||||||||||
Trust preferred subordinated debentures | 113,406 | 113,406 | 113,406 | 113,406 | ||||||||||||
Derivative liability | 9,317 | 9,317 | 28,473 | 28,473 | ||||||||||||
| December 31, 2014 | December 31, 2013 | ||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||
| Cash and cash equivalents | $ | 1,330,514 | $ | 1,330,514 | $ | 153,911 | $ | 153,911 | |||||||
| Securities, available-for-sale | 41,719 | 41,719 | 63,214 | 63,214 | |||||||||||
| Loans held for investment, net | 14,156,058 | 14,161,484 | 11,183,264 | 11,179,439 | |||||||||||
| Derivative assets | 31,176 | 31,176 | 14,690 | 14,690 | |||||||||||
| Deposits | 12,673,300 | 12,673,607 | 9,257,379 | 9,257,574 | |||||||||||
| Federal funds purchased | 66,971 | 66,971 | 148,650 | 148,650 | |||||||||||
| Customer repurchase agreements | 25,705 | 25,705 | 21,954 | 21,954 | |||||||||||
| Other borrowings | 1,100,005 | 1,100,005 | 855,026 | 855,026 | |||||||||||
| Subordinated notes | 286,000 | 289,947 | 111,000 | 96,647 | |||||||||||
| Trust preferred subordinated debentures | 113,406 | 113,406 | 113,406 | 113,406 | |||||||||||
| Derivative liabilities | 31,176 | 31,176 | 14,690 | 14,690 | |||||||||||
| Year ending December 31, | Minimum Payments | |||
2014 | $ | 13,483 | ||
2015 | 14,136 | |||
2016 | 14,085 | |||
2017 | 14,038 | |||
2018 | 13,960 | |||
2019 and thereafter | 62,335 | |||
| $ | 132,037 | |||
| Year ending December 31, | Minimum Payments | ||
| 2015 | $ | 15,557 | |
| 2016 | 15,544 | ||
| 2017 | 15,572 | ||
| 2018 | 15,534 | ||
| 2019 | 15,378 | ||
| 2020 and thereafter | 54,021 | ||
| $ | 131,606 | ||
| December 31 | ||||||||||
| 2013 | 2012 | |||||||||
Assets | ||||||||||
Cash and cash equivalents | $ | 47,605 | $ | 141,257 | ||||||
Investment in subsidiaries | 1,011,823 | 836,204 | ||||||||
Other assets | 287,734 | 94,121 | ||||||||
Total assets | $ | 1,347,162 | $ | 1,071,582 | ||||||
Liabilities and Stockholders’ Equity | ||||||||||
Other liabilities | $ | 1,254 | $ | 782 | ||||||
Line of credit | 15,000 | — | ||||||||
Subordinated notes | 111,000 | 111,000 | ||||||||
Trust preferred subordinated debentures | 113,406 | 113,406 | ||||||||
Total liabilities | 240,660 | 225,188 | ||||||||
Preferred stock | 150,000 | — | ||||||||
Common stock | 410 | 407 | ||||||||
Additional paid-in capital | 458,360 | 460,268 | ||||||||
Retained earnings | 496,112 | 382,455 | ||||||||
Treasury stock | (8 | ) | (8 | ) | ||||||
Accumulated other comprehensive income | 1,628 | 3,272 | ||||||||
Total stockholders’ equity | 1,106,502 | 846,394 | ||||||||
Total liabilities and stockholders’ equity | $ | 1,347,162 | $ | 1,071,582 | ||||||
| December 31, | |||||||
| 2014 | 2013 | ||||||
| Assets | |||||||
| Cash and cash equivalents | $ | 176,324 | $ | 47,605 | |||
| Investment in subsidiaries | 1,459,092 | 1,011,823 | |||||
| Other assets | 82,783 | 287,734 | |||||
| Total assets | $ | 1,718,199 | $ | 1,347,162 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Other liabilities | $ | 1,328 | $ | 1,254 | |||
| Line of credit | — | 15,000 | |||||
| Subordinated notes | 111,000 | 111,000 | |||||
| Trust preferred subordinated debentures | 113,406 | 113,406 | |||||
| Total liabilities | 225,734 | 240,660 | |||||
| Preferred stock | 150,000 | 150,000 | |||||
| Common stock | 457 | 410 | |||||
| Additional paid-in capital | 719,890 | 458,360 | |||||
| Retained earnings | 620,837 | 496,112 | |||||
| Treasury stock | (8 | ) | (8 | ) | |||
| Accumulated other comprehensive income | 1,289 | 1,628 | |||||
| Total stockholders’ equity | 1,492,465 | 1,106,502 | |||||
| Total liabilities and stockholders’ equity | $ | 1,718,199 | $ | 1,347,162 | |||
| Year ended December 31 | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
Loan income | $ | 10,382 | $ | 1,484 | $ | — | ||||||
Dividend income | 76 | 83 | 77 | |||||||||
Other income | 72 | 38 | 72 | |||||||||
Total income | 10,530 | 1,605 | 149 | |||||||||
Interest expense | 9,863 | 4,913 | 2,573 | |||||||||
Salaries and employee benefits | 669 | 668 | 618 | |||||||||
Legal and professional | 2,605 | 2,094 | 1,919 | |||||||||
Other non-interest expense | 651 | 744 | 450 | |||||||||
Total expense | 13,788 | 8,419 | 5,560 | |||||||||
Loss before income taxes and equity in undistributed income of subsidiary | (3,258 | ) | (6,814 | ) | (5,411 | ) | ||||||
Income tax benefit | (1,165 | ) | (2,435 | ) | (1,887 | ) | ||||||
Loss before equity in undistributed income of subsidiary | (2,093 | ) | (4,379 | ) | (3,524 | ) | ||||||
Equity in undistributed income of subsidiary | 123,144 | 124,951 | 79,500 | |||||||||
Net income | 121,051 | 120,572 | 75,976 | |||||||||
Preferred stock dividends | 7,394 | — | — | |||||||||
Net income available to common shareholders | $ | 113,657 | $ | 120,572 | $ | 75,976 | ||||||
| Year ended December 31, | |||||||||||
| 2014 | 2013 | 2012 | |||||||||
| Loan income | $ | 10,850 | $ | 10,382 | $ | 1,484 | |||||
| Dividend income | 5,275 | 76 | 83 | ||||||||
| Other income | 28 | 72 | 38 | ||||||||
| Total income | 16,153 | 10,530 | 1,605 | ||||||||
| Interest expense | 10,038 | 9,863 | 4,913 | ||||||||
| Salaries and employee benefits | 617 | 669 | 668 | ||||||||
| Legal and professional | 2,237 | 2,605 | 2,094 | ||||||||
| Other non-interest expense | 933 | 651 | 744 | ||||||||
| Total expense | 13,825 | 13,788 | 8,419 | ||||||||
| Income (loss) before income taxes and equity in undistributed income of subsidiary | 2,328 | (3,258 | ) | (6,814 | ) | ||||||
| Income tax expense (benefit) | 833 | (1,165 | ) | (2,435 | ) | ||||||
| Income (loss) before equity in undistributed income of subsidiary | 1,495 | (2,093 | ) | (4,379 | ) | ||||||
| Equity in undistributed income of subsidiary | 132,980 | 123,144 | 124,951 | ||||||||
| Net income | 134,475 | 121,051 | 120,572 | ||||||||
| Preferred stock dividends | 9,750 | 7,394 | — | ||||||||
| Net income available to common stockholders | $ | 124,725 | $ | 113,657 | $ | 120,572 | |||||
| Year ended December 31 | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
| (in thousands) | ||||||||||||
Operating Activities | ||||||||||||
Net income | $ | 121,051 | $ | 120,572 | $ | 75,976 | ||||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||||||
Equity in undistributed income of subsidiary | (123,144 | ) | (124,951 | ) | (79,500 | ) | ||||||
Increase in other assets | (3,613 | ) | (11,562 | ) | (3,747 | ) | ||||||
Tax benefit from stock option exercises | 1,200 | 7,769 | 3,139 | |||||||||
Excess tax benefits from stock-based compensation arrangements | (3,427 | ) | (22,197 | ) | (8,970 | ) | ||||||
Increase (decrease) in other liabilities | 37 | 83 | 262 | |||||||||
Net cash used in operating activities of continuing operations | (7,896 | ) | (30,286 | ) | (12,840 | ) | ||||||
Investing Activity | ||||||||||||
Investment in subsidiaries | (240,000 | ) | (70,000 | ) | (66,000 | ) | ||||||
Net cash used in investing activity | (240,000 | ) | (70,000 | ) | (66,000 | ) | ||||||
Financing Activities | ||||||||||||
Proceeds from sale of stock related to stock-based awards | (2,210 | ) | 355 | 2,190 | ||||||||
Proceeds from sale of stock | — | 86,987 | — | |||||||||
Proceeds from issuance of preferred stock | 144,987 | — | — | |||||||||
Preferred dividends paid | (6,960 | ) | — | — | ||||||||
Issuance of subordinated notes | — | 111,000 | — | |||||||||
Net other borrowings | 15,000 | — | — | |||||||||
Excess tax benefits from stock-based compensation arrangements | 3,427 | 22,197 | 8,970 | |||||||||
Net cash provided by financing activities | 154,244 | 220,539 | 11,160 | |||||||||
Net increase (decrease) in cash and cash equivalents | (93,652 | ) | 120,253 | (67,680 | ) | |||||||
Cash and cash equivalents at beginning of year | 141,257 | 21,004 | 88,684 | |||||||||
Cash and cash equivalents at end of year | $ | 47,605 | $ | 141,257 | $ | 21,004 | ||||||
| Year ended December 31, | |||||||||||
| 2014 | 2013 | 2012 | |||||||||
| (in thousands) | |||||||||||
| Operating Activities | |||||||||||
| Net income | $ | 134,475 | $ | 121,051 | $ | 120,572 | |||||
| Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
| Equity in undistributed income of subsidiary | (132,980 | ) | (123,144 | ) | (124,951 | ) | |||||
| Increase in other assets | (2,120 | ) | (2,413 | ) | (3,793 | ) | |||||
| Excess tax benefits from stock-based compensation arrangements | (2,929 | ) | (1,200 | ) | (7,769 | ) | |||||
| Increase (decrease) in other liabilities | 74 | 37 | 83 | ||||||||
| Net cash used in operating activities of continuing operations | (3,480 | ) | (5,669 | ) | (15,858 | ) | |||||
| Investing Activity | |||||||||||
| Investments in and advances to subsidiaries | (100,000 | ) | (240,000 | ) | (70,000 | ) | |||||
| Net cash used in investing activity | (100,000 | ) | (240,000 | ) | (70,000 | ) | |||||
| Financing Activities | |||||||||||
| Proceeds from sale of stock related to stock-based awards | (2,203 | ) | (2,210 | ) | 355 | ||||||
| Proceeds from sale of common stock | 256,223 | — | 86,987 | ||||||||
| Proceeds from issuance of preferred stock | — | 144,987 | — | ||||||||
| Preferred dividends paid | (9,750 | ) | (6,960 | ) | — | ||||||
| Issuance of subordinated notes | — | — | 111,000 | ||||||||
| Net other borrowings | (15,000 | ) | 15,000 | — | |||||||
| Excess tax benefits from stock-based compensation arrangements | 2,929 | 1,200 | 7,769 | ||||||||
| Net cash provided by financing activities | 232,199 | 152,017 | 206,111 | ||||||||
| Net increase (decrease) in cash and cash equivalents | 128,719 | (93,652 | ) | 120,253 | |||||||
| Cash and cash equivalents at beginning of year | 47,605 | 141,257 | 21,004 | ||||||||
| Cash and cash equivalents at end of year | $ | 176,324 | $ | 47,605 | $ | 141,257 | |||||
Subsequent to the end of the first quarter of 2007, we and the purchaser of our residential mortgage loan division (“RML”) agreed to terminate and settle the contractual arrangements related to the sale of the division, which had been completed as of the end of the third quarter of 2006. Historical operating results of RML are reflected as discontinued operations in the financial statements.
During 2013, the income from discontinued operations was $5,000, net of taxes. We still have approximately $294,000 in loans held for sale from discontinued operations that are carried at the estimated market value at December 31, 2013, which is less than the original cost. We plan to sell these loans, but timing and price to be realized cannot be determined at this time due to market conditions. In addition, we continue to address requests from investors to repurchase loans previously sold. While the balances as of December 31, 2013 include a liability for exposure to additional contingencies, including risk of having to
repurchase loans previously sold, we recognize that market conditions may result in additional exposure to loss and the extension of time necessary to complete the disposition of the discontinued mortgage operation.
The results of operations of the discontinued components are presented separately in the accompanying consolidated statements of income for 2013, 2012 and 2011, net of tax, following income from continuing operations. Details are presented in the following tables (in thousands):
| Year ended December 31 | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
Revenues | $ | 27 | $ | (26 | ) | $ | 58 | |||||
Expenses | 19 | 31 | 250 | |||||||||
Income (loss) before income taxes | 8 | (57 | ) | (192 | ) | |||||||
Income tax expense (benefit) | 3 | (20 | ) | (66 | ) | |||||||
Income (loss) from discontinued operations | $ | 5 | $ | (37 | ) | $ | (126 | ) | ||||
(20) Derivative Financial Instruments
sheets on a net basis when a right of offset exists, based on transactions with a single counterparty that are subject to a legally enforceable master netting agreement.
| December 31, 2013 | December 31, 2012 | |||||||||||||||
| Notional Amount | Estimated Fair Value | Notional Amount | Estimated Fair Value | |||||||||||||
Non-hedging interest rate derivative: | ||||||||||||||||
Commercial loan/lease interest rate swaps | $ | 764,939 | $ | 8,652 | $ | 523,216 | $ | 28,469 | ||||||||
Commercial loan/lease interest rate swaps | (764,939 | ) | (8,652 | ) | (523,216 | ) | (28,469 | ) | ||||||||
Commercial loan/lease interest rate caps | (58,706 | ) | (665 | ) | (42,380 | ) | (4 | ) | ||||||||
Commercial loan/lease interest rate caps | 58,706 | 665 | 42,380 | 4 | ||||||||||||
| December 31, 2014 | December 31, 2013 | ||||||||||||||||||||
| Estimated Fair Value | Estimated Fair Value | ||||||||||||||||||||
Notional Amount | Asset Derivative | Liability Derivative | Notional Amount | Asset Derivative | Liability Derivative | ||||||||||||||||
| Non-hedging interest rate derivatives: | |||||||||||||||||||||
| Financial institution counterparties: | |||||||||||||||||||||
| Commercial loan/lease interest rate swaps | $ | 866,432 | $ | 361 | $ | 30,162 | $ | 764,939 | $ | 5,374 | $ | 14,026 | |||||||||
| Commercial loan/lease interest rate caps | 63,414 | $ | 1,014 | — | 58,706 | 664 | $ | — | |||||||||||||
| Customer counterparties: | |||||||||||||||||||||
| Commercial loan/lease interest rate swaps | 866,432 | 30,162 | 361 | 764,939 | 14,026 | 5,374 | |||||||||||||||
| Commercial loan/lease interest rate caps | 63,414 | — | 1,014 | 58,706 | — | 664 | |||||||||||||||
| Gross derivatives | 31,537 | 31,537 | 20,064 | 20,064 | |||||||||||||||||
| Offsetting derivative assets/liabilities | (361 | ) | (361 | ) | (5,374 | ) | (5,374 | ) | |||||||||||||
| Net derivatives included in the consolidated balance sheets | $ | 31,176 | $ | 31,176 | $ | 14,690 | $ | 14,690 | |||||||||||||
| December 31, 2013 Weighted-Average Interest Rate | December 31, 2012 Weighted-Average Interest Rate | |||||||||||||||
| Received | Paid | Received | Paid | |||||||||||||
Non-hedging interest rate swaps | 2.99 | % | 4.89 | % | 4.76 | % | 3.11 | % | ||||||||
December 31, 2014 Weighted-Average Interest Rate | December 31, 2013 Weighted-Average Interest Rate | ||||||||||
| Received | Paid | Received | Paid | ||||||||
| Non-hedging interest rate swaps | 2.79 | % | 4.82 | % | 2.99 | % | 4.89 | % | |||
(21)
On August 1, 2012 we completed a sale of 2.3 million shares of our common stock in a public offering. Net proceeds from the sale totaled $87.0 million. The additional equity is being used for general corporate purposes, including retirement of $15.0 million of debt and additional capital to support continued loan growth at our bank.
(22) Quarterly Financial Data (unaudited)
The tables below summarize our quarterly financial information for the years December 31, 2013 and 2012 (in thousands except per share and average share data):
| 2013 Selected Quarterly Financial Data | ||||||||||||||||||
| Fourth | Third | Second | First | |||||||||||||||
Interest income | $ | 117,965 | $ | 115,217 | $ | 107,264 | $ | 104,179 | ||||||||||
Interest expense | 6,490 | 6,441 | 6,044 | 6,137 | ||||||||||||||
Net interest income | 111,475 | 108,776 | 101,220 | 98,042 | ||||||||||||||
Provision for credit losses | 5,000 | 5,000 | 7,000 | 2,000 | ||||||||||||||
Net interest income after provision for credit losses | 106,475 | 103,776 | 94,220 | 96,042 | ||||||||||||||
Non-interest income | 11,184 | 10,431 | 11,128 | 11,281 | ||||||||||||||
Non-interest expense | 70,291 | 62,009 | 68,734 | 55,700 | ||||||||||||||
Income from continuing operations before income taxes | 47,368 | 52,198 | 36,614 | 51,623 | ||||||||||||||
Income tax expense | 17,012 | 18,724 | 12,542 | 18,479 | ||||||||||||||
Income from continuing operations | 30,356 | 33,474 | 24,072 | 33,144 | ||||||||||||||
Loss from discontinued operations (after-tax) | 3 | 2 | 1 | (1 | ) | |||||||||||||
Net income | 30,359 | 33,476 | 24,073 | 33,143 | ||||||||||||||
Preferred stock dividends | 2,438 | 2,437 | 2,438 | 81 | ||||||||||||||
Net income available to common shareholders | $ | 27,921 | $ | 31,039 | $ | 21,635 | $ | 33,062 | ||||||||||
Basic earnings per share: | ||||||||||||||||||
Income from continuing operations | $ | 0.68 | $ | 0.76 | $ | 0.53 | $ | 0.82 | ||||||||||
Net income | $ | 0.68 | $ | 0.76 | $ | 0.53 | $ | 0.82 | ||||||||||
Diluted earnings per share: | ||||||||||||||||||
Income from continuing operations | $ | 0.67 | $ | 0.74 | $ | 0.52 | $ | 0.80 | ||||||||||
Net income | $ | 0.67 | $ | 0.74 | $ | 0.52 | $ | 0.80 | ||||||||||
Average shares | ||||||||||||||||||
Basic | 40,983,000 | 40,902,000 | 40,814,000 | 40,474,000 | ||||||||||||||
Diluted | 41,889,000 | 41,792,000 | 41,724,000 | 41,429,000 | ||||||||||||||
Interest income Interest expense Net interest income Provision for credit losses Net interest income after provision for credit losses Non-interest income Non-interest expense Income from continuing operations before income taxes Income tax expense Income from continuing operations Loss from discontinued operations (after-tax) Net income Basic earnings per share: Income from continuing operations Net income Diluted earnings per share: Income from continuing operations Net income Average shares Basic Diluted 2012 Selected Quarterly Financial Data (In thousands except per share and average share data) Fourth Third Second First $ 107,769 $ 102,011 $ 95,546 $ 93,131 6,614 5,156 4,906 4,902 101,155 96,855 90,640 88,229 4,500 3,000 1,000 3,000 96,655 93,855 89,640 85,229 12,836 10,552 10,462 9,190 60,074 53,521 53,973 52,276 49,417 50,886 46,129 42,143 17,982 18,316 16,506 15,062 31,435 32,570 29,623 27,081 (6 ) (34 ) (1 ) 4 $ 31,429 $ 32,536 $ 29,622 $ 27,085 $ 0.78 $ 0.82 $ 0.78 $ 0.72 $ 0.78 $ 0.82 $ 0.78 $ 0.72 $ 0.76 $ 0.80 $ 0.76 $ 0.70 $ 0.76 $ 0.80 $ 0.76 $ 0.70 40,446,000 39,618,000 38,013,000 37,795,000 41,505,000 40,756,000 39,142,000 38,914,000
(23) Subsequent Events
OnIn January 29, 2014, we completed a salean offering of 1.71.9 million shares of our common stock in a public offering.stock. Net proceeds from the sale totaled $96.6$106.5 million. On January 31, 2014, the Bank issued $175.0 million of subordinated notes in an offering to institutional investors exempt from registration under Section 3(a)(2) of the Securities Act of 1933 and 12 C.F.R. Part 16. Net proceeds from the transaction were $172.1 million. The notes mature in January 2026 and bear interest at a rate of 5.25% per annum, payable semi-annually.
The notes are unsecured and are subordinate to the Bank’s obligations to its depositors, its obligations under banker’s acceptances and letters of credit, certain obligations to Federal Reserve Banks and the FDIC and the Bank’s obligations to its other creditors, except any obligations which expressly rank on a parity with or junior to the notes. The notes are expected to qualify as Tier 2 capital for regulatory capital purposes, subject to applicable limitations.
The net proceeds of the offeringsoffering were available to the Company for general corporate purposes, including retirement of $15.0 million of short-term debt that was outstanding at December 31, 2013, and as additional capital to support continued loan growth.
(24)
| 2014 Selected Quarterly Financial Data | |||||||||||||||
| Fourth | Third | Second | First | ||||||||||||
| Interest income | $ | 137,833 | $ | 135,290 | $ | 124,813 | $ | 116,611 | |||||||
| Interest expense | 10,251 | 9,629 | 9,406 | 8,296 | |||||||||||
| Net interest income | 127,582 | 125,661 | 115,407 | 108,315 | |||||||||||
| Provision for credit losses | 6,500 | 6,500 | 4,000 | 5,000 | |||||||||||
| Net interest income after provision for credit losses | 121,082 | 119,161 | 111,407 | 103,315 | |||||||||||
| Non-interest income | 11,226 | 10,396 | 10,533 | 10,356 | |||||||||||
| Non-interest expense | 74,117 | 71,915 | 69,765 | 69,317 | |||||||||||
| Income before income taxes | 58,191 | 57,642 | 52,175 | 44,354 | |||||||||||
| Income tax expense | 20,357 | 20,810 | 18,754 | 16,089 | |||||||||||
| Net income | 37,834 | 36,832 | 33,421 | 28,265 | |||||||||||
| Preferred stock dividends | 2,437 | 2,438 | 2,437 | 2,438 | |||||||||||
| Net income available to common stockholders | $ | 35,397 | $ | 34,394 | $ | 30,984 | $ | 25,827 | |||||||
| Basic earnings per share: | $ | 0.80 | $ | 0.80 | $ | 0.72 | $ | 0.61 | |||||||
| Diluted earnings per share: | $ | 0.78 | $ | 0.78 | $ | 0.71 | $ | 0.60 | |||||||
| Average shares | |||||||||||||||
| Basic | 44,406,000 | 43,144,000 | 43,075,000 | 42,298,000 | |||||||||||
| Diluted | 45,093,000 | 43,850,000 | 43,845,000 | 43,220,000 | |||||||||||
| 2013 Selected Quarterly Financial Data | |||||||||||||||
| Fourth | Third | Second | First | ||||||||||||
| Interest income | $ | 117,965 | $ | 115,217 | $ | 107,264 | $ | 104,179 | |||||||
| Interest expense | 6,490 | 6,441 | 6,044 | 6,137 | |||||||||||
| Net interest income | 111,475 | 108,776 | 101,220 | 98,042 | |||||||||||
| Provision for credit losses | 5,000 | 5,000 | 7,000 | 2,000 | |||||||||||
| Net interest income after provision for credit losses | 106,475 | 103,776 | 94,220 | 96,042 | |||||||||||
| Non-interest income | 11,184 | 10,431 | 11,128 | 11,281 | |||||||||||
| Non-interest expense | 70,288 | 62,007 | 68,733 | 55,701 | |||||||||||
| Income before income taxes | 47,371 | 52,200 | 36,615 | 51,622 | |||||||||||
| Income tax expense | 17,012 | 18,724 | 12,542 | 18,479 | |||||||||||
| Net income | 30,359 | 33,476 | 24,073 | 33,143 | |||||||||||
| Preferred stock dividends | $ | 2,438 | $ | 2,437 | $ | 2,438 | $ | 81 | |||||||
| Net income available to common stockholders | $ | 27,921 | $ | 31,039 | $ | 21,635 | $ | 33,062 | |||||||
| Basic earnings per share: | $ | 0.68 | $ | 0.76 | $ | 0.53 | $ | 0.82 | |||||||
| Diluted earnings per share: | $ | 0.67 | $ | 0.74 | $ | 0.52 | $ | 0.80 | |||||||
| Average shares | |||||||||||||||
| Basic | 40,983,000 | 40,902,000 | 40,814,000 | 40,474,000 | |||||||||||
| Diluted | 41,889,000 | 41,792,000 | 41,724,000 | 41,429,000 | |||||||||||
securities borrowing and securities lending transactions that are offset in accordance with Topic 815, “Derivatives and Hedging”. ASU 2013-01 was effective January 1, 2013 and did not have a significant impact on our financial statements.
ASU 2013-02, “Comprehensive Income (Topic 220)—Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” (“ASU 2013-02”) amends Topic 220, “Comprehensive Income” to improve the reporting of reclassifications out of accumulated other comprehensive income. Entities are required to separately present significant amounts reclassified out of accumulated other comprehensive income for each component of accumulated other comprehensive income and to disclose, for each affected line item in the income statement, the amount of accumulated other comprehensive income that has been reclassified into that line item. ASU 2013-02 was effective for fiscal years, and interim periods within those years, beginning after December 13, 2012 and did not have a significant impact on ourconsolidated financial statements.
ASU 2011-05, “Comprehensive Income (Topic 220)—Presentation of Comprehensive Income” (“ASU 2011-05”) amends Topic 220, “Comprehensive Income,” to require that all non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, ASU 2011-05 requires entities to present, on the face of the financial statements, reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement or statements where the components of net income and the components of other comprehensive income are presented. The option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity was eliminated. ASU 2011-05 was2014-09 is effective for annual and interim periods beginning after December 15, 2011; however certain provisions related to the presentation of reclassification adjustments have been deferred by ASU 2011-12 “Comprehensive Income (Topic 820)—Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.” ASU 2011-05 did not have a significant impact on our financial statements.
ASU 2011-08, “Intangibles—Goodwill and Other (Topic 350)—Testing Goodwill for Impairment” (“ASU 2011-08”) amends Topic 350, “Intangibles – Goodwill and Other,” to give entities the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. ASU 2011-08 was effective of annual and interim impairment tests beginning after December 15, 2011, and did not have a significant impact on our financial statements.
ASU 2011-11, “Balance Sheet (Topic 210)—“Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”) amends Topic 210, “Balance Sheet,” to require an entity to disclose both gross and net information about financial instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. ASU 2011-11 is effective for annual and interim periods beginning on January 1, 2013,2016 and is not expected to have a significant impact on our consolidated financial statements.
| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
| ITEM 9A. | CONTROLS AND PROCEDURES |
We have established
Reporting
2014.
criteria
.
19, 2015
| ITEM 9B. | OTHER INFORMATION |
| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
| ITEM 11. | EXECUTIVE COMPENSATION |
| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
| ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES |
| ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
| 3.1 | Certificate of Incorporation, which is incorporated by reference to Exhibit 3.1 to our registration statement on Form 10 dated August 24, 2000 | |
| 3.2 | Certificate of Amendment of Certificate of Incorporation, which is incorporated by reference to Exhibit 3.2 to our registration statement on Form 10 dated August 24, 2000 | |
| 3.3 | Certificate of Amendment of Certificate of Incorporation, which is incorporated by reference to Exhibit 3.3 to our registration statement on Form 10 dated August 24, 2000 | |
| 3.4 | Certificate of Amendment of Certificate of Incorporation, which is incorporated by reference to Exhibit 3.4 to our registration statement on Form 10 dated August 24, 2000 | |
| 3.5 | Amended and Restated Bylaws of Texas Capital Bancshares, Inc. which is incorporated by reference to Exhibit 3.5 to our registration statement on Form 10 dated August 24, 2000 | |
| 3.6 | First Amendment to Amended and Restated Bylaws of Texas Capital Bancshares, Inc. which is incorporated by reference to Current Report on Form 8-K dated July 18, 2007 | |
| 3.7 | Certificate of Designation of 6.50% Non-Cumulative Perpetual Preferred Stock, Series A, which is incorporated by reference to Exhibit 4.1 to our Current Report on form 8-K dated March 28, 2013 | |
| 3.8 | Form of Preferred Stock Certificate for 6.50% Non-Cumulative Perpetual Preferred Stock, Series A, which is incorporated by reference to Exhibit 4.2 to our Current report on Form 8-K dated March 28, 2013 | |
| 4.1 | Placement Agreement by and between Texas Capital Bancshares Statutory Trust I and SunTrust Capital Markets, Inc., which is incorporated by reference to our Current Report on Form 8-K dated December 4, 2002 | |
| 4.2 | Certificate of Trust of Texas Capital Bancshares Statutory Trust I, dated November 12, 2002 which is incorporated by reference to our Current Report on Form 8-K dated December 4, 2002 | |
| 4.3 | Amended and Restated Declaration of Trust by and among State Street Bank and Trust Company of Connecticut, National Association, Texas Capital Bancshares, Inc. and Joseph M. Grant, Raleigh Hortenstine III and Gregory B. Hultgren, dated November 19, 2002 which is incorporated by reference to our Current Report on Form 8- K dated December 4, 2002 | |
| 4.4 | Indenture dated November 19, 2002 which is incorporated by reference to our Current Report on Form 8-K dated December 4, 2002 | |
| 4.5 | Guarantee Agreement between Texas Capital Bancshares, Inc. and State Street Bank and Trust of Connecticut, National Association dated November 19, 2002, which is incorporated by reference to our Current Report on Form 8-K dated December 4, 2002 | |
| 4.6 | Placement Agreement by and among Texas Capital Bancshares, Inc., Texas Capital Statutory Trust II and Sandler O’Neill & Partners, L.P., which is incorporated by reference to our Current Report Form 8-K dated June 11, 2003 | |
| 4.7 | Certificate of Trust of Texas Capital Statutory Trust II, which is incorporated by reference to our Current Report on Form 8-K dated June 11, 2003 | |
| 4.8 | Amended and Restated Declaration of Trust by and among Wilmington Trust Company, Texas Capital Bancshares, Inc., and Joseph M. Grant and Gregory B. Hultgren, dated April 10, 2003, which is incorporated by reference to our Current Report on Form 8-K dated June 11, 2003 | |
| 4.9 | Indenture between Texas Capital Bancshares, Inc. and Wilmington Trust Company, dated April 10, 2003, which is incorporated by reference to our Current Report on Form 8-K dated June 11, 2003 | |
| 4.10 | Guarantee Agreement between Texas Capital Bancshares, Inc. and Wilmington Trust Company, dated April 10, 2003, which is incorporated by reference to our Current Report on Form 8-K dated June 11, 2003 | |
| 4.11 | Amended and Restated Declaration of Trust for Texas Capital Statutory Trust III by and among Wilmington Trust Company, as Institutional Trustee and Delaware Trustee, Texas Capital Bancshares, Inc. as Sponsor, and the Administrators named therein, dated as of October 6, 2005, which is incorporated by reference to our Current Report on Form 8-K dated October 13, 2005 | |
| 4.12 | Indenture between Texas Capital Bancshares, Inc., as Issuer, and Wilmington Trust Company, as Trustee, for Fixed/Floating Rate Junior Subordinated Deferrable Interest Debentures, dated as of October 6, 2005, which is incorporated by reference to our Current Report on Form 8-K dated October 13, 2005 | |
| 4.13 | Guarantee Agreement between Texas Capital Bancshares, Inc. and Wilmington Trust Company, dated as of October 6, 2005, which is incorporated by reference to our Current Report on Form 8-K dated October 13, 2005 | |
| 4.14 | Amended and Restated Declaration of Trust for Texas Capital Statutory Trust IV by and among Wilmington Trust Company, as Institutional Trustee and Delaware Trustee, Texas Capital Bancshares, Inc. as Sponsor, and the Administrators named therein, dated as of April 28, 2006, which is incorporated by reference to our Current Report on Form 8-K dated May 3, 2006 | |
| 4.15 | Indenture between Texas Capital Bancshares, Inc., as Issuer, and Wilmington Trust Company, as Trustee, for Floating Rate Junior Subordinated Deferrable Interest Debentures dated as of April 28, 2006, which is incorporated by reference to our Current Report on Form 8-K dated May 3, 2006 | |
| 4.16 | Guarantee Agreement between Texas Capital Bancshares, Inc. and Wilmington Trust Company, dated as of April 28, 2006, which is incorporated by reference to our Current Report on Form 8-K dated May 3, 2006 | |
| 4.17 | Amended and Restated Trust Agreement for Texas Capital Statutory Trust V by and among Wilmington Trust Company, as Property Trustee and Delaware Trustee, Texas Capital Bancshares, Inc., as Depositor, and the Administrative Trustees named therein, dated as of September 29, 2006, which is incorporated by reference to our Current Report on Form 8-K dated October 5, 2006 | |
| 4.18 | Junior Subordinated Indenture between Texas Capital Bancshares, Inc. and Wilmington Trust Company, as Trustee, for Floating Rate Junior Subordinated Note dated as of September 29, 2006, which is incorporated by reference to our Current Report on Form 8-K dated October 5, 2006 | |
| 4.19 | Guarantee Agreement between Texas Capital Bancshares, Inc. and Wilmington Trust Company, dated as of September 29, 2006, which is incorporated by reference to our Current Report on Form 8-K dated October 5, 2006 | |
| 4.20 | Subordinated Indenture between Texas Capital Bancshares, Inc. and U.S. Bank National Association, as Trustee, dated September 21, 2012, which is incorporated by reference to our Current Report on Form 8-K dated September 18, 2012 | |
| 4.21 | Issuing and Paying Agency Agreement, dated January 31, 2014, between Texas Capital Bank, N.A., as Issuer, and U.S. Bank National Association, as Agent, which is incorporated by reference to our Current Report on Form 8-K dated January 31, 2014. | |
| 4.22 | Form of Global 5.25% Subordinated Note due 2026, which is incorporated by reference to our Current Report on Form 8-K dated January 31, 2014. | |
| 10.1 | Deferred Compensation Agreement, which is incorporated by reference to Exhibit 10.2 to our registration statement on Form 10 dated August 24, 2000+ | |
| 10.2 | Amended and Restated Deferred Compensation Agreement Irrevocable Trust dated as of November 2, 2004, by and between Texas Capital Bancshares, Inc. and Texas Capital Bank, National Association, which is incorporated by reference to our Annual Report on Form 10-K dated March 14, 2005.+ | |
| 10.3 | Retirement Transition Agreement and Release dated June 10, 2013, between Texas Capital Bancshares, Inc. and George F. Jones, Jr., which is incorporated by reference to Exhibit 99.2 to our Current Report on Form 8-K dated June 11, 2013+ | |
| 10.4 | Amendment to Performance Award Agreements under the Texas Capital Bancshares, Inc. 2010 Long-Term Incentive Plan between George Jones and the Company with respect to the Performance Units described therein dated January 10, 2011, February 21, 2012 and March 2013 and the Stock Appreciation Rights Agreement between George Jones and the Company dated April 24, 2006, which is incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K dated January 3, 2014+ | |
| 10.5 | Restricted Stock Unit Award Agreement under the Texas Capital Bancshares, Inc. 2010 Long-Term Incentive Plan between George Jones and the Company (2017 vesting), which is incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K dated January 3, 2014+ | |
| 10.6 | Restricted Stock Unit Award Agreement under the Texas Capital Bancshares, Inc. 2010 Long-Term Incentive Plan between George Jones and the Company (2018 vesting), which is incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K dated January 3, 2014+ | |
| Amended and Restated Executive Employment Agreement between C. Keith Cargill and Texas Capital Bancshares, Inc. dated | ||
| 10.8 | Form of Amended and Restated Executive Employment Agreement for executive officers of Texas Capital Bancshares, Inc. | |
| 10.9 | Form of Indemnity Agreement for directors and officers of Texas Capital Bancshares, Inc. | |
| 10.10 | Texas Capital Bancshares, Inc. 1999 Omnibus Stock Plan, which is incorporated by reference to Exhibit 4.1 to our registration statement on Form 10 dated August 24, 2000+ | |
| 10.11 | Texas Capital Bancshares, Inc. 2006 Employee Stock Purchase Plan, which is incorporated by reference to our registration statement on Form S-8 dated February 3, 2006+ | |
| 10.12 | Texas Capital Bancshares, Inc. 2005 Long-Term Incentive Plan, which is incorporated by reference to our registration statement on Form S-8 dated June 3, 2005+ | |
| 10.13 | Texas Capital Bancshares, Inc. 2010 Long-Term Incentive Plan, which is incorporated by reference to our registration statement on Form S-8 dated May 19, 2010+ | |
| 10.14 | Form of Restricted Stock Unit Award Agreement under the Texas Capital Bancshares, Inc. 2010 Long-Term Incentive | |
| Plan, which is incorporated by reference to Exhibit 10.19 to our Annual Report on Form 10-K dated February 21, 2014+ | ||
| 10.15 | Form of Stock Appreciation Rights Agreement under the Texas Capital Bancshares, Inc. 2010 Long-Term Incentive | |
| 10.16 | Form of Performance Award Agreement under the Texas Capital Bancshares, Inc. 2010 Long-Term Incentive |
| 21 | Subsidiaries of the Registrant* | |
| 23.1 | Consent of Ernst & Young LLP* | |
| 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act* | |
| 31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act* | |
| 32.1 | Section 1350 Certification of Chief Executive Officer** | |
| 32.2 | Section 1350 Certification of Chief Financial Officer** | |
| 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 |
| Date: | February | 19, 2015 | TEXAS CAPITAL BANCSHARES, INC. | |||||
| By: | /S/ C. KEITH CARGILL | |||||||
C. Keith Cargill President and Chief Executive Officer | ||||||||
| Date: | February | /S/ LARRY L. HELM | |||
Larry L. Helm Chairman of the Board and Director | |||||
| Date: | February | /S/ PETER BARTHOLOW | |||
Peter Bartholow
Chief Financial Officer, and Director (principal financial officer) | |||||
| Date: | February | /S/ JULIE ANDERSON | |||
Julie Anderson
Controller and Chief Accounting Officer (principal accounting officer) | |||||
| Date: | February | /S/ JAMES H. BROWNING | |||
James H. Browning Director | |||||
| Date: | February | /S/ PRESTON M. GEREN III | |||
Preston M. Geren III Director | |||||
| Date: | February | /S/ FREDERICK B. HEGI, JR. | |||
Frederick B. Hegi, Jr. Director | |||||
| Date: | February | /S/ CHARLES S. HYLE | |||
Charles S. Hyle Director | |||||
| Date: | February | /S/ JAMES R. HOLLAND, JR. | |||
James R. Holland, Jr. Director | |||||
| Date: | |||||
/S/ WALTER W. MCALLISTER III | |||||
Walter W. McAllister III Director | |||||
| Date: | February | /S/ ELYSIA H. RAGUSA | |||
Elysia H. Ragusa Director | |||||
| Date: | February | /S/ STEVEN P. ROSENBERG | |||
Steven P. Rosenberg Director | |||||
| Date: | February |
| |||
/S/ ROBERT W. STALLINGS | |||||
Robert W. Stallings Director | |||||
| Date: | February | /S/ DALE W. TREMBLAY | |||
Dale W. Tremblay Director | |||||
| Date: | February | /S/ IAN J. TURPIN | |||
Ian J. Turpin Director | |||||
112