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 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: |
( |
Title of each class |
Trading Symbol(s) |
Name of exchange on which registered | ||
☒ |
Accelerated filer |
☐ | ||||
Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
Page |
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PART I |
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ITEM 1. |
3 |
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ITEM 1A. |
22 |
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ITEM 1B. |
36 |
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ITEM 2. |
36 |
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ITEM 3. |
36 |
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ITEM 4. |
36 |
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PART II |
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ITEM 5. |
37 |
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ITEM 6. |
39 |
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ITEM 7. |
40 |
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ITEM 7A. |
59 |
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ITEM 8. |
60 |
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ITEM 9. |
62 |
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ITEM 9A. |
62 |
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ITEM 9B. |
64 |
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PART III |
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ITEM 10. |
65 |
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ITEM 11. |
65 |
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ITEM 12. |
65 |
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ITEM 13. |
65 |
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ITEM 14. |
65 |
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PART IV |
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ITEM 15. |
66 |
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ITEM 16. |
68 |
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68 |
• | general economic conditions, including our local, state and national real estate markets and employment trends; |
• | effect of the coronavirus (“COVID”) on our Company, the communities where we have our branches, the state of Texas and the United States, related to the economy and overall financial stability; |
• | government and regulatory responses to the COVID pandemic; |
• | effect of severe weather conditions, including hurricanes, tornadoes, flooding and droughts; |
• | volatility and disruption in national and international financial and commodity markets; |
• | government intervention in the U.S. financial system including the effects of recent legislative, tax, accounting and regulatory actions and reforms, including the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the Jumpstart Our Business Startups Act, the Consumer Financial Protection Bureau (“CFPB”), the capital ratios of Basel III as adopted by the federal banking authorities and the Tax Cuts and Jobs Act; |
• | political and racial instability; |
• | the ability of the Federal government to address the national economy; |
• | changes in our competitive environment from other financial institutions and financial service providers; |
• | the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”); |
• | the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board (“PCAOB”), the Financial Accounting Standards Board (“FASB”) and other accounting standard setters; |
• | the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which we and our subsidiaries must comply; |
• | changes in the demand for loans, including loans originated for sale in the secondary market; |
• | fluctuations in the value of collateral securing our loan portfolio and in the level of the allowance for credit losses; |
• | the accuracy of our estimates of future credit losses; |
• | the accuracy of our estimates and assumptions regarding the performance of our securities portfolio; |
• | soundness of other financial institutions with which we have transactions; |
• | inflation, interest rate, market and monetary fluctuations; |
• | changes in consumer spending, borrowing and savings habits; |
• | changes in commodity prices (e.g., oil and gas, cattle, and wind energy); |
• | our ability to attract deposits and increase market share; |
• | changes in our liquidity position; |
• | changes in the reliability of our vendors, internal control system or information systems; |
• | cyber attacks on our technology information systems, including fraud from our customers and external third-party vendors; |
• | our ability to attract and retain qualified employees; |
• | acquisitions and integration of acquired businesses; |
• | the possible impairment of goodwill and other intangibles associated with our acquisitions; |
• | consequences of continued bank mergers and acquisitions in our market area, resulting in fewer but much larger and stronger competitors; |
• | expansion of operations, including branch openings, new product offerings and expansion into new markets; |
• | changes in our compensation and benefit plans; |
• | acts of God or of war or terrorism; |
• | potential risk of environmental liability associated with lending activities; and |
• | our success at managing the risk involved in the foregoing items. |
ITEM 1. |
BUSINESS |
• | First Financial Bank, N.A., Abilene, Texas; |
• | First Technology Services, Inc., Abilene, Texas, a wholly-owned subsidiary of First Financial Bank, N.A., Abilene, Texas; |
• | First Financial Trust & Asset Management Company, N.A., Abilene, Texas; |
• | First Financial Insurance Agency, Inc., Abilene, Texas; and |
• | First Financial Investments, Inc., Abilene, Texas. |
• | asset and liability management; |
• | investments; |
• | accounting; |
• | budgeting and forecasting; |
• | training; |
• | marketing; |
• | planning; |
• | capital expenditures; |
• | risk management; |
• | loan review; |
• | loan analysis; |
• | human resources; |
• | insurance; |
• | capitalization; |
• | regulatory compliance; and |
• | internal and external audit. |
• | Expanded reverse repo operations, adding liquidity to the banking system. |
• | Restarted quantitative easing. |
• | Lowered the interest rate on the discount window by 150 basis points to 25 basis points. |
• | Reduced reserve requirement ratios to zero percent. |
• | Encouraged banks to use their capital and liquidity buffers to lend. |
• | Participated in the Main Street Loan Program. |
• | Introduced and expanded several new programs that will operate on a temporary basis to help preserve market liquidity. |
• | Established daily, at first, then weekly meetings of our management team to monitor and address COVID developments on our business and the impact to our customers and associates. |
• | Implemented an internal communications plan to ensure our employees, customers and critical vendors are kept abreast of developments affecting our operations. |
• | Restricted all non-essential travel and large external gatherings and instituted mandatory quarantine period for anyone that has known exposure to COVID. |
• | We kept our branch locations open following the onset of COVID, except where the employees of the branch had direct COVID exposure. Each branch was deep cleaned daily and following potential exposure at a branch, the facility was sprayed to disinfect for the virus. |
• | Expanded remote-access availability so that nearly all our workforce has the capability to work from home or other remote locations, if needed. All remotes access was provided in accordance with our compliance and information security policies designed to ensure customer data and other information is properly safeguarded. Much of our remote workforce has returned to the office. |
• | Instituted mandatory social distancing policies for those employees not working remotely. Members of certain operations teams were split into separate buildings or locations to create redundancy for key functions across the organization. |
• | The Company provided testing, free of charge, to all employees and we required testing of any employees with direct COVID exposure. Employees exposed were placed on quarantine based on the applicable CDC Guidelines. |
• | We required employees and customers to wear masks, prior to the state mandates and publicly assisted in communicating that message to the public to increase awareness of the benefits of wearing masks. |
• | We provided a vitamin and supplement package for employees to help build their immune systems as well as recover from the virus. |
• | We are encouraging our employees to take the COVID vaccinations when available. |
• | First Financial Bank, N.A.; |
• | First Financial Trust & Asset Management Company, N.A.; and |
• | First Technology Services, Inc. (a wholly-owned subsidiary of First Financial Bank, N.A.) |
• | requires each national banking association to maintain reserves against deposits; |
• | restricts the nature and amount of loans that may be made and the interest that may be charged; and |
• | restricts investments and other activities. |
• | the loans must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not affiliated with us or our subsidiary bank; |
• | the subsidiary bank must follow credit underwriting procedures at least as stringent as those applicable to comparable transactions with persons who are not affiliated with us or our subsidiary bank; and |
• | the loans must not involve a greater than normal risk of non-payment or include other features not favorable to our subsidiary bank. |
• | 4.5% CET1 to risk-weighted assets; |
• | 6.0% tier 1 capital to risk-weighted assets; |
• | 8.0% total capital to risk-weighted assets; and |
• | 4.0% tier 1 capital to average consolidated assets (known as the “leverage ratio”). |
• | to conduct enhanced scrutiny of account relationships to guard against money laundering and report any suspicious transaction; |
• | to ascertain the identity of the nominal and beneficial owners of, and the source of funds deposited into, each account as needed to guard against money laundering and report any suspicious transactions; |
• | to ascertain for any foreign bank, the shares of which are not publicly traded, the identity of the owners of the foreign bank, and the nature and extent of the ownership interest of each such owner; and |
• | to ascertain whether any foreign bank provides correspondent accounts to other foreign banks and, if so, the identity of those foreign banks and related due diligence information. |
• | the development of internal policies, procedures, and controls; |
• | the designation of a compliance officer; |
• | an ongoing employee training program; and |
• | an independent audit function to test the programs. |
• | creation of a new Financial Stability Oversight Council to identify systemic risks in the financial system and gives federal regulators new authority to take control of and liquidate financial firms; |
• | elimination of the federal statutory prohibition against the payment of interest on business checking accounts; |
• | prohibition on state-chartered banks engaging in derivatives transactions unless the loans to one borrower of the state in which the bank is chartered takes into consideration credit exposure to derivative transactions. For this purpose, derivative transactions include any contract, agreement, swap, warrant, note or option that is based in whole or in part on the value of, any interest in, or any quantitative measure or the occurrence of any event relating to, one or more commodity securities, currencies, interest or other rates, indices or other assets; |
• | requirement that the amount of any interchange fee charged by a debit card issuer with respect to a debit card transaction must be reasonable and proportional to the cost incurred by the issuer. On June 29, 2011, the Federal Reserve Board set the interchange rate cap at $0.21 per transaction and 5 basis points multiplied by the value of the transaction. The restrictions on interchange fees apply to banks that, together with their affiliates, have assets of $10 billion or more; however, on November 20, 2020, the federal bank regulatory agencies announced an interim final rule that provides temporary relief for certain community banking organizations that have crossed the threshold as of December 31, 2020 if they had less than $10 billion in assets as of December 31, 2019. Under the interim final rule, these banks will generally have until 2022 to either reduce their size to below $10 billion in assets, or to prepare for the regulatory and reporting standards under the Dodd Frank Act; and |
• | restrictions under the Volcker Rule of the Company’s ability to engage in proprietary trading and to invest in, sponsor and engage in certain types of transactions with certain private funds. The Company initially had until July 15, 2015 to fully conform to the Volcker Rules restrictions. In 2018, banks smaller than $10 billion in assets were provided with an exception to the Volcker Rule. However, the Company is now subject to the Volcker Rule now that it has exceeded $10 billion in assets. |
ITEM 1A. |
RISK FACTORS |
• | existing clients may withdraw funds from our wealth management business in favor of better performing products; |
• | asset-based management fees could decline from a decrease in assets under management; |
• | our ability to attract funds from existing and new clients might diminish; and |
• | our wealth managers and investment advisors may depart to join a competitor or otherwise. |
• | actual or anticipated variations in quarterly results of operations; |
• | recommendations by securities analysts; |
• | operating and stock price performance of other companies that investors deem comparable to the Company; |
• | new reports relating to trends, concerns and other issues in the financial services industry or Texas economy, including oil and gas and cattle prices; |
• | perceptions in the marketplace regarding the Company and/or its competitors; |
• | new technology used, or services offered, by competitors; |
• | significant acquisitions or business combinations involving the Company or its competitors; and |
• | changes in government regulations, including tax laws. |
• | general economic conditions, including national and local real estate markets and the price of oil and gas, wind farm subsidies from the federal government and other commodity prices; |
• | the supply of and demand for investable funds; |
• | demand for loans and access to credit; |
• | interest rates; and |
• | federal, state and local laws affecting these matters. |
ITEM 1B. |
UNRESOLVED STAFF COMMENTS |
ITEM 2. |
PROPERTIES |
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 |
Period Ending |
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Index |
12/31/15 |
12/31/16 |
12/31/17 |
12/31/18 |
12/31/19 |
12/31/20 |
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First Financial Bankshares, Inc. |
100.00 | 152.85 | 155.07 | 201.53 | 248.81 | 260.80 | ||||||||||||||||||
Russell 3000 Index |
100.00 | 112.74 | 136.56 | 129.40 | 169.54 | 204.95 | ||||||||||||||||||
SNL Bank $5B-$10B Index |
100.00 | 143.27 | 142.73 | 129.17 | 160.06 | 145.37 |
ITEM 6. |
SELECTED FINANCIAL DATA |
Year Ended December 31, |
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2020 |
2019 |
2018 |
2017 |
2016 |
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(dollars in thousands, except per share data) |
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Summary Income Statement Information: |
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Interest income |
$ | 364,128 | $ | 319,192 | $ | 291,690 | $ | 245,975 | $ | 232,288 | ||||||||||
Interest expense |
14,243 | 30,102 | 18,930 | 9,288 | 5,451 | |||||||||||||||
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Net interest income |
349,885 | 289,090 | 272,760 | 236,687 | 226,837 | |||||||||||||||
Provision for credit losses |
19,517 | 2,965 | 5,665 | 6,530 | 10,212 | |||||||||||||||
Noninterest income |
139,935 | 108,428 | 101,764 | 91,017 | 85,132 | |||||||||||||||
Noninterest expense |
227,938 | 196,521 | 190,684 | 173,986 | 165,830 | |||||||||||||||
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Earnings before income taxes |
242,365 | 198,032 | 178,175 | 147,188 | 135,927 | |||||||||||||||
Income tax expense |
40,331 | 33,220 | 27,537 | 26,817 | 31,153 | |||||||||||||||
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Net earnings |
$ | 202,034 | $ | 164,812 | $ | 150,638 | $ | 120,371 | $ | 104,774 | ||||||||||
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Per Share Data: |
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Earnings per share, basic |
$ | 1.42 | $ | 1.22 | $ | 1.11 | $ | 0.91 | $ | 0.80 | ||||||||||
Earnings per share, diluted |
1.42 | 1.21 | 1.11 | 0.91 | 0.80 | |||||||||||||||
Cash dividends declared |
0.51 | 0.47 | 0.41 | 0.38 | 0.35 | |||||||||||||||
Book value at period-end |
11.80 | 9.03 | 7.77 | 6.97 | 6.34 | |||||||||||||||
Earnings performance ratios: |
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Return on average assets |
1.98 | % | 2.08 | % | 1.98 | % | 1.72 | % | 1.59 | % | ||||||||||
Return on average equity |
12.93 | 14.37 | 15.37 | 13.63 | 12.36 | |||||||||||||||
Dividend payout ratio |
35.88 | 38.31 | 36.84 | 41.24 | 44.14 | |||||||||||||||
Summary Balance Sheet Data (Period-end): |
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Securities |
$ | 4,393,029 | $ | 3,413,317 | $ | 3,158,777 | $ | 3,087,473 | $ | 2,860,958 | ||||||||||
Loans, held-for-investment |
5,171,033 | 4,194,969 | 3,953,636 | 3,485,569 | 3,357,307 | |||||||||||||||
Total assets |
10,904,500 | 8,262,227 | 7,731,854 | 7,254,715 | 6,809,931 | |||||||||||||||
Deposits |
8,675,817 | 6,603,806 | 6,180,389 | 5,962,961 | 5,478,539 | |||||||||||||||
Total liabilities |
9,226,310 | 7,035,030 | 6,678,559 | 6,331,947 | 5,972,046 | |||||||||||||||
Total shareholders’ equity |
1,678,190 | 1,227,197 | 1,053,295 | 922,768 | 837,885 | |||||||||||||||
Asset quality ratios: |
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Allowance for credit losses/period-end loans held-for-investment |
1.29 | % | 1.25 | % | 1.30 | % | 1.38 | % | 1.36 | % | ||||||||||
Nonperforming assets/period-end loans held-for-investment plus foreclosed assets |
0.83 | 0.61 | 0.75 | 0.58 | 0.86 | |||||||||||||||
Net charge offs/average loans |
0.06 | 0.04 | 0.07 | 0.12 | 0.19 | |||||||||||||||
Capital ratios: |
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Average shareholders’ equity/average assets |
15.32 | % | 14.44 | % | 12.89 | % | 12.65 | % | 12.85 | % | ||||||||||
Leverage ratio (1) |
11.86 | 12.60 | 11.85 | 11.09 | 10.71 | |||||||||||||||
Tier 1 risk-based capital (2) |
20.79 | 20.06 | 19.47 | 18.66 | 17.30 | |||||||||||||||
Common equity tier 1 capital (3) |
20.79 | 20.06 | 19.47 | 18.66 | 17.30 | |||||||||||||||
Total risk-based capital (4) |
22.03 | 21.13 | 20.61 | 19.85 | 18.45 |
(1) | Calculated by dividing at period-end, shareholders’ equity (before accumulated other comprehensive earnings/loss) less intangible assets by fourth quarter average assets less intangible assets. |
(2) | Calculated by dividing at period-end, shareholders’ equity (before accumulated other comprehensive earnings/loss) less intangible assets by risk-adjusted assets. |
(3) | Calculated by dividing at period-end, shareholders’ equity (before accumulated other comprehensive earnings/loss) less intangible assets by risk-adjusted assets. |
(4) | Calculated by dividing at period-end, shareholders’ equity (before accumulated other comprehensive earnings/loss) less intangible assets plus allowance for loan losses to the extent allowed under regulatory guidelines by risk-adjusted assets. |
ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
2020 Compared to 2019 |
2019 Compared to 2018 |
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Change Attributable to |
Total Change |
Change Attributable to |
Total Change |
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Volume |
Rate |
Volume |
Rate |
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Short-term investments |
$ | 3,689 | $ | (4,628 | ) | $ | (939 | ) | $ | (106 | ) | $ | 367 | $ | 261 | |||||||||
Taxable investment securities |
3,812 | (8,026 | ) | (4,214 | ) | 4,045 | 1,573 | 5,618 | ||||||||||||||||
Tax-exempt investment securities (1) |
24,671 | (8,932 | ) | 15,739 | (2,634 | ) | (2,203 | ) | (4,837 | ) | ||||||||||||||
Loans (1) (2) |
59,719 | (20,900 | ) | 38,819 | 12,983 | 11,276 | 24,259 | |||||||||||||||||
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Interest income |
91,891 | (42,486 | ) | 49,405 | 14,288 | 11,013 | 25,301 | |||||||||||||||||
Interest-bearing deposits |
6,379 | (20,382 | ) | (14,003 | ) | 654 | 9,523 | 10,177 | ||||||||||||||||
Short-term borrowings |
1,223 | (3,079 | ) | (1,856 | ) | (99 | ) | 1,095 | 996 | |||||||||||||||
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Interest expense |
7,602 | (23,461 | ) | (15,859 | ) | 555 | 10,618 | 11,173 | ||||||||||||||||
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Net interest income |
$ | 84,289 | $ | (19,025 | ) | $ | 65,264 | $ | 13,733 | $ | 395 | $ | 14,128 | |||||||||||
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(1) | Computed on a tax-equivalent basis assuming a marginal tax rate of 21%. |
(2) | Nonaccrual loans are included in loans. |
2020 |
2019 |
2018 |
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Average Balance |
Income/ Expense |
Yield/ Rate |
Average Balance |
Income/ Expense |
Yield/ Rate |
Average Balance |
Income/ Expense |
Yield/ Rate |
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Assets |
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Short-term investments (1) |
$ | 251,086 | $ | 953 | 0.38 | % | $ | 84,430 | $ | 1,892 | 2.24 | % | $ | 90,374 | $ | 1,631 | 1.80 | % | ||||||||||||||||||
Taxable investment securities (2) |
2,233,634 | 51,456 | 2.30 | 2,090,490 | 55,670 | 2.66 | 1,934,160 | 50,052 | 2.59 | |||||||||||||||||||||||||||
Tax-exempt investment securities (2)(3) |
1,882,711 | 58,403 | 3.10 | 1,192,908 | 42,664 | 3.58 | 1,262,947 | 47,501 | 3.76 | |||||||||||||||||||||||||||
Loans (3)(4) |
5,152,531 | 264,576 | 5.13 | 4,074,667 | 225,757 | 5.54 | 3,828,040 | 201,498 | 5.26 | |||||||||||||||||||||||||||
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Total earning assets |
9,519,962 | $ | 375,388 | 3.94 | % | 7,442,495 | $ | 325,983 | 4.38 | % | 7,115,521 | $ | 300,682 | 4.23 | % | |||||||||||||||||||||
Cash and due from banks |
189,849 | 175,417 | 176,799 | |||||||||||||||||||||||||||||||||
Bank premises and equipment, net |
139,880 | 133,239 | 129,715 | |||||||||||||||||||||||||||||||||
Other assets |
92,612 | 66,003 | 62,595 | |||||||||||||||||||||||||||||||||
Goodwill and other intangible assets, net |
318,818 | 174,138 | 172,425 | |||||||||||||||||||||||||||||||||
Allowance for credit losses |
(67,606 | ) | (52,170 | ) | (50,323 | ) | ||||||||||||||||||||||||||||||
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Total assets |
$ | 10,193,515 | $ | 7,939,122 | $ | 7,606,732 | ||||||||||||||||||||||||||||||
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Liabilities and Shareholders’ Equity |
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Interest-bearing deposits |
$ | 5,198,554 | $ | 13,119 | 0.25 | % | $ | 4,208,666 | $ | 27,122 | 0.64 | % | $ | 4,052,614 | $ | 16,945 | 0.42 | % | ||||||||||||||||||
Short-term borrowings |
561,505 | 1,124 | 0.20 | 398,142 | 2,980 | 0.75 | 418,977 | 1,984 | 0.47 | |||||||||||||||||||||||||||
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Total interest-bearing liabilities |
5,760,059 | $ | 14,243 | 0.25 | % | 4,606,808 | $ | 30,102 | 0.65 | % | 4,471,591 | $ | 18,929 | 0.42 | % | |||||||||||||||||||||
Noninterest-bearing deposits |
2,782,896 | 2,137,089 | 2,124,004 | |||||||||||||||||||||||||||||||||
Other liabilities |
88,550 | 48,658 | 30,931 | |||||||||||||||||||||||||||||||||
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Total liabilities |
8,631,505 | 6,792,555 | 6,626,526 | |||||||||||||||||||||||||||||||||
Shareholders’ equity |
1,562,010 | 1,146,567 | 980,206 | |||||||||||||||||||||||||||||||||
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Total liabilities and shareholders’ equity |
$ | 10,193,515 | $ | 7,939,122 | $ | 7,606,732 | ||||||||||||||||||||||||||||||
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Net interest income |
$ | 361,145 | $ | 295,881 | $ | 281,753 | ||||||||||||||||||||||||||||||
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Rate Analysis: |
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Interest income/earning assets |
3.94 | % | 4.38 | % | 4.23 | % | ||||||||||||||||||||||||||||||
Interest expense/earning assets |
0.15 | 0.40 | 0.27 | |||||||||||||||||||||||||||||||||
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Net interest margin |
3.79 | % | 3.98 | % | 3.96 | % | ||||||||||||||||||||||||||||||
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|
|
|
|
(1) | Short-term investments are comprised of federal funds sold, interest-bearing deposits in banks and interest- bearing time deposits in banks. |
(2) | Average balances include unrealized gains and losses on available-for-sale |
(3) | Computed on a tax-equivalent basis assuming a marginal tax rate of 21%. |
(4) | Nonaccrual loans are included in loans. |
2020 |
Increase (Decrease) |
2019 |
Increase (Decrease) |
2018 |
||||||||||||||||
Trust fees |
$ | 29,531 | $ | 1,130 | $ | 28,401 | $ | 220 | $ | 28,181 | ||||||||||
Service charges on deposit accounts |
20,572 | (1,467 | ) | 22,039 | 376 | 21,663 | ||||||||||||||
ATM, interchange and credit card fees |
32,469 | 2,606 | 29,863 | 1,331 | 28,532 | |||||||||||||||
Gain on sale and fees of mortgage loans |
43,872 | 25,728 | 18,144 | 2,987 | 15,157 | |||||||||||||||
Net gain on sale of available-for-sale |
3,633 | 2,900 | 733 | (621 | ) | 1,354 | ||||||||||||||
Net gain (loss) on sale of foreclosed assets |
159 | (115 | ) | 274 | 158 | 116 | ||||||||||||||
Net gain (loss) on sale of assets |
112 | (207 | ) | 319 | 466 | (147 | ) | |||||||||||||
Interest on loan recoveries |
856 | (1,236 | ) | 2,092 | 1,154 | 938 | ||||||||||||||
Other: |
||||||||||||||||||||
Wire transfer fees |
1,153 | 141 | 1,012 | 110 | 902 | |||||||||||||||
Check printing fees |
293 | 82 | 211 | (5 | ) | 216 | ||||||||||||||
Safe deposit rental fees |
732 | 197 | 535 | (9 | ) | 544 | ||||||||||||||
Credit life and debt protection fees |
876 | (102 | ) | 978 | 237 | 741 | ||||||||||||||
Brokerage commissions |
1,310 | (271 | ) | 1,581 | (126 | ) | 1,707 | |||||||||||||
Miscellaneous income |
4,367 | 2,121 | 2,246 | 386 | 1,860 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total other |
8,731 | 2,168 | 6,563 | 593 | 5,970 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Noninterest Income |
$ | 139,935 | $ | 31,507 | $ | 108,428 | $ | 6,664 | $ | 101,764 | ||||||||||
|
|
|
|
|
|
|
|
|
|
2020 |
Increase (Decrease) |
2019 |
Increase (Decrease) |
2018 |
||||||||||||||||
Salaries |
$ | 101,360 | $ | 17,079 | $ | 84,281 | $ | 4,807 | $ | 79,474 | ||||||||||
Medical |
10,406 | 1,281 | 9,125 | 426 | 8,699 | |||||||||||||||
Profit sharing |
10,740 | 3,079 | 7,661 | 612 | 7,049 | |||||||||||||||
Pension |
— | (351 | ) | 351 | 529 | (178 | ) | |||||||||||||
401(k) match expense |
3,374 | 615 | 2,759 | 171 | 2,588 | |||||||||||||||
Payroll taxes |
6,565 | 890 | 5,675 | 306 | 5,369 | |||||||||||||||
Stock option expense |
1,377 | (112 | ) | 1,489 | (19 | ) | 1,508 | |||||||||||||
Restricted stock expense |
1,301 | 306 | 995 | 315 | 680 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total salaries and employee benefits |
135,123 | 22,787 | 112,336 | 7,147 | 105,189 | |||||||||||||||
Cost related to termination of pension plan |
— | (2,673 | ) | 2,673 | 1,127 | 1,546 | ||||||||||||||
Net occupancy expense |
12,388 | 1,232 | 11,156 | (17 | ) | 11,173 | ||||||||||||||
Equipment expense |
8,396 | (656 | ) | 9,052 | (1,066 | ) | 10,118 | |||||||||||||
FDIC insurance premiums |
1,758 | 667 | 1,091 | (1,242 | ) | 2,333 | ||||||||||||||
ATM, interchange and credit card expenses |
11,235 | 1,379 | 9,856 | 574 | 9,282 | |||||||||||||||
Professional and service fees |
9,346 | 1,493 | 7,853 | (1,041 | ) | 8,894 | ||||||||||||||
Printing, stationery and supplies |
2,163 | 351 | 1,812 | (185 | ) | 1,997 | ||||||||||||||
Amortization of intangible assets |
1,990 | 974 | 1,016 | (256 | ) | 1,272 | ||||||||||||||
Other: |
||||||||||||||||||||
Data processing fees |
1,619 | 69 | 1,550 | 88 | 1,462 | |||||||||||||||
Postage |
1,446 | (101 | ) | 1,547 | (202 | ) | 1,749 | |||||||||||||
Advertising |
1,952 | (1,655 | ) | 3,607 | 4 | 3,603 | ||||||||||||||
Correspondent bank service charges |
908 | 201 | 707 | (65 | ) | 772 | ||||||||||||||
Telephone |
3,819 | 141 | 3,678 | 116 | 3,562 | |||||||||||||||
Public relations and business development |
2,650 | (556 | ) | 3,206 | 145 | 3,061 | ||||||||||||||
Directors’ fees |
2,363 | 391 | 1,972 | 227 | 1,745 | |||||||||||||||
Audit and accounting fees |
2,232 | 772 | 1,460 | (165 | ) | 1,625 | ||||||||||||||
Legal fees |
1,276 | 62 | 1,214 | 66 | 1,148 | |||||||||||||||
Regulatory exam fees |
1,105 | (74 | ) | 1,179 | (96 | ) | 1,275 | |||||||||||||
Travel |
967 | (674 | ) | 1,641 | 176 | 1,465 | ||||||||||||||
Courier expense |
855 | (3 | ) | 858 | 28 | 830 | ||||||||||||||
Operational and other losses |
2,462 | 583 | 1,879 | (309 | ) | 2,188 | ||||||||||||||
Other real estate |
83 | (119 | ) | 202 | 73 | 129 | ||||||||||||||
Software amortization and expense |
8,862 | 1,557 | 7,305 | 1,285 | 6,020 | |||||||||||||||
Other miscellaneous expense |
12,940 | 5,269 | 7,671 | (575 | ) | 8,246 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total other |
45,539 | 5,863 | 39,676 | 796 | 38,880 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Noninterest Expense |
$ | 227,938 | $ | 31,417 | $ | 196,521 | $ | 5,837 | $ | 190,684 | ||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Commercial: |
||||||||||||||||||||
C&I |
$ | 1,131,382 | $ | N/A | $ | N/A | $ | N/A | $ | N/A | ||||||||||
Municipal |
181,325 | N/A | N/A | N/A | N/A | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Commercial |
1,312,707 | 856,326 | 844,953 | 684,099 | 674,410 | |||||||||||||||
Agricultural |
94,864 | 103,640 | 96,677 | 94,543 | 84,021 | |||||||||||||||
Real Estate: |
||||||||||||||||||||
Construction & Development |
553,959 | N/A | N/A | N/A | N/A | |||||||||||||||
Farm |
152,237 | N/A | N/A | N/A | N/A | |||||||||||||||
Non-Owner Occupied CRE |
617,686 | N/A | N/A | N/A | N/A | |||||||||||||||
Owner Occupied CRE |
746,974 | N/A | N/A | N/A | N/A | |||||||||||||||
Residential |
1,248,409 | N/A | N/A | N/A | N/A | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Real Estate |
3,319,265 | 2,823,372 | 2,639,346 | 2,302,998 | 2,189,844 | |||||||||||||||
Consumer: |
||||||||||||||||||||
Auto |
353,595 | N/A | N/A | N/A | N/A | |||||||||||||||
Non-Auto |
90,602 | N/A | N/A | N/A | N/A | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Consumer |
444,197 | 411,631 | 372,660 | 403,929 | 409,032 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 5,171,033 | $ | 4,194,969 | $ | 3,953,636 | $ | 3,485,569 | $ | 3,357,307 | ||||||||||
|
|
|
|
|
|
|
|
|
|
One Year or less |
After One Year Through Five Years |
After Five Years |
Total | |||||||||||||
Commercial and agricultural |
$ | 362,416 | $ | 803,779 | $ | 241,376 | $ | 1,407,571 | ||||||||
Real estate – construction and development |
255,960 | 91,816 | 206,183 | 553,959 |
Maturities After One Year |
||||||
Loans with fixed interest rates |
$ | 892,141 | ||||
Loans with floating or adjustable interest rates |
451,013 |
December 31, |
||||||||
2020 |
2019 |
|||||||
Oil and gas related loans, excluding PPP loans |
$ | 106,237 | $ | 119,789 | ||||
Oil and gas related loans as a % of total loans held-for-investment, |
2.27 | % | 2.86 | % | ||||
Classified oil and gas related loans |
$ | 13,298 | $ | 7,041 | ||||
Nonaccrual oil and gas related loans |
$ | 4,774 | $ | 481 | ||||
Net charge-offs for oil and gas related loans for year then ended |
$ | 825 | $ | — |
December 31, 2020 |
||||
Retail loans |
$ | 216,244 | ||
Restaurant loans |
48,618 | |||
Hotel loans |
71,716 | |||
Other hospitality loans |
21,970 | |||
Travel loans |
780 | |||
|
|
|||
Total Retail/Restaurant/Hospitality loans, excluding PPP loans |
$ | 359,328 | ||
|
|
|||
Retail/Restaurant/Hospitality loans as a % of total loans held-for-investment, |
7.67 | % | ||
Classified Retail/Restaurant/Hospitality loans |
$ | 31,192 | ||
Nonaccrual Retail/Restaurant/Hospitality loans |
5,975 | |||
Net Charge-Offs for Retail/Restaurant/Hospitality loans |
895 |
At December 31, |
||||||||||||||||||||
2020 |
2019 |
2018 |
2017 |
2016 |
||||||||||||||||
Nonaccrual loans |
$ | 42,619 | $ | 24,582 | $ | 27,534 | $ | 17,670 | $ | 27,371 | ||||||||||
Loans still accruing and past due 90 days or more |
113 | 153 | 1,008 | 288 | 284 | |||||||||||||||
Troubled debt restructured loans* |
24 | 26 | 513 | 627 | 701 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonperforming loans |
42,756 | 24,761 | 29,055 | 18,585 | 28,356 | |||||||||||||||
Foreclosed assets |
142 | 1,009 | 577 | 1,532 | 644 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total nonperforming assets |
$ | 42,898 | $ | 25,770 | $ | 29,632 | $ | 20,117 | $ | 29,000 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
As a % of loans held-for-investment |
0.83 | % | 0.61 | % | 0.75 | % | 0.58 | % | 0.86 | % | ||||||||||
As a % of total assets |
0.39 | 0.31 | 0.38 | 0.28 | 0.43 |
* | Troubled debt restructured loans of $7.41 million, $4.79 million, $3.84 million, $4.63 million and $6.86 million, respectively, whose interest collection, after considering economic and business conditions and collection efforts, is doubtful are included in nonaccrual loans as of December 31, 2020, 2019, 2018, 2017 and 2016. |
2020 |
2019 |
2018 |
2017 |
2016 |
||||||||||||||||
Balance at January 1, |
$ | 52,499 | $ | 51,202 | $ | 48,156 | $ | 45,779 | $ | 41,877 | ||||||||||
Impact of adopting ASC 326 |
(619 | ) | — | — | — | — | ||||||||||||||
Initial allowance on acquired TB&T PCD loans |
1,678 | — | — | — | — | |||||||||||||||
Charge-offs: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
C&I |
2,516 | N/A | N/A | N/A | N/A | |||||||||||||||
Municipal |
— | N/A | N/A | N/A | N/A | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Commercial |
2,516 | 1,545 | 1,418 | 3,018 | 6,990 | |||||||||||||||
Agricultural |
372 | 319 | — | 71 | 219 | |||||||||||||||
Real estate: |
||||||||||||||||||||
Construction & Development |
— | N/A | N/A | N/A | N/A | |||||||||||||||
Farm |
— | N/A | N/A | N/A | N/A | |||||||||||||||
Non-Owner Occupied CRE |
563 | N/A | N/A | N/A | N/A | |||||||||||||||
Owner Occupied CRE |
567 | N/A | N/A | N/A | N/A | |||||||||||||||
Residential real estate |
373 | N/A | N/A | N/A | N/A | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total real estate |
1,503 | 1,335 | 1,479 | 1,215 | 682 | |||||||||||||||
Consumer: |
||||||||||||||||||||
Auto |
548 | N/A | N/A | N/A | N/A | |||||||||||||||
Non-Auto |
375 | N/A | N/A | N/A | N/A | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Consumer |
923 | 927 | 1,550 | 1,517 | 1,925 | |||||||||||||||
Total charge-offs |
5,314 | 4,126 | 4,447 | 5,821 | 9,816 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Recoveries: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
C&I |
1,315 | N/A | N/A | N/A | N/A | |||||||||||||||
Municipal |
— | N/A | N/A | N/A | N/A | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Commercial |
1,315 | 1,364 | 839 | 942 | 952 | |||||||||||||||
Agricultural |
31 | 158 | 15 | 33 | 25 | |||||||||||||||
Real estate: |
||||||||||||||||||||
Construction & Development |
— | N/A | N/A | N/A | N/A | |||||||||||||||
Farm |
157 | N/A | N/A | N/A | N/A | |||||||||||||||
Non-Owner Occupied CRE |
131 | N/A | N/A | N/A | N/A | |||||||||||||||
Owner Occupied CRE |
17 | N/A | N/A | N/A | N/A | |||||||||||||||
Residential real estate |
151 | N/A | N/A | N/A | N/A | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Real Estate |
456 | 404 | 462 | 192 | 2,021 | |||||||||||||||
Consumer: |
||||||||||||||||||||
Auto |
269 | N/A | N/A | N/A | N/A | |||||||||||||||
Non-Auto |
171 | N/A | N/A | N/A | N/A | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Consumer |
440 | 532 | 512 | 501 | 508 | |||||||||||||||
Total recoveries |
2,242 | 2,458 | 1,828 | 1,668 | 3,506 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net charge-offs |
3,072 | 1,668 | 2,619 | 4,153 | 6,310 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Provision for credit losses (excluding provision for unfunded commitment) |
16,048 | 2,965 | 5,665 | 6,530 | 10,212 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 31, |
$ | 66,534 | $ | 52,499 | $ | 51,202 | $ | 48,156 | $ | 45,779 | ||||||||||
|
|
|
|
|
|
|
|
|
|
2020 |
2019 |
2018 |
2017 |
2016 |
||||||||||||||||
Loans, held-for-investment year-end |
$ | 5,171,033 | $ | 4,194,969 | $ | 3,953,636 | $ | 3,485,569 | $ | 3,357,307 | ||||||||||
Average loans |
5,152,531 | 4,074,667 | 3,828,040 | 3,435,447 | 3,333,241 | |||||||||||||||
Net charge-offs/average loans |
0.06 | % | 0.04 | % | 0.07 | % | 0.12 | % | 0.19 | % | ||||||||||
Allowance for credit losses/year-end loans held-for- |
1.29 | % | 1.25 | % | 1.30 | % | 1.38 | % | 1.36 | % | ||||||||||
Allowance for credit losses/nonaccrual, past due 90 days still accruing and restructured loans |
155.61 | 212.02 | 176.22 | 259.11 | 161.44 |
At December 31, |
||||||||||||||||||||
2020 |
2019 |
2018 |
2017 |
2016 |
||||||||||||||||
Allocation Amount |
Allocation Amount |
Allocation Amount |
Allocation Amount |
Allocation Amount |
||||||||||||||||
Commercial: |
||||||||||||||||||||
C&I |
$ | 13,609 | $ | N/A | $ | N/A | $ | N/A | $ | N/A | ||||||||||
Municipal |
1,552 | N/A | N/A | N/A | N/A | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Commercial |
15,161 | 12,122 | 11,948 | 10,865 | 11,707 | |||||||||||||||
Agricultural |
1,255 | 1,206 | 1,446 | 1,305 | 1,101 | |||||||||||||||
Real estate: |
||||||||||||||||||||
Construction & Development |
13,512 | N/A | N/A | N/A | N/A | |||||||||||||||
Farm |
1,876 | N/A | N/A | N/A | N/A | |||||||||||||||
Non-Owner Occupied CRE |
8,391 | N/A | N/A | N/A | N/A | |||||||||||||||
Owner Occupied CRE |
12,347 | N/A | N/A | N/A | N/A | |||||||||||||||
Residential real estate |
12,601 | N/A | N/A | N/A | N/A | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Real Estate |
48,727 | 33,974 | 32,342 | 29,896 | 26,864 | |||||||||||||||
Consumer: |
||||||||||||||||||||
Auto |
1,020 | N/A | N/A | N/A | N/A | |||||||||||||||
Non-Auto |
371 | N/A | N/A | N/A | N/A | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Consumer |
1,391 | 5,197 | 5,466 | 6,090 | 6,107 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 66,534 | $ | 52,499 | $ | 51,202 | $ | 48,156 | $ | 45,779 | ||||||||||
|
|
|
|
|
|
|
|
|
|
2020 |
2019 |
2018 |
2017 |
2016 |
||||||||||||||||
Commercial: |
||||||||||||||||||||
C&I |
21.78 | % | N/A | N/A | N/A | N/A | ||||||||||||||
Municipal |
3.51 | % | N/A | N/A | N/A | N/A | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Commercial |
25.29 | % | 20.41 | % | 21.37 | % | 19.63 | % | 20.09 | % | ||||||||||
Agricultural |
1.83 | % | 2.47 | % | 2.45 | % | 2.71 | % | 2.50 | % | ||||||||||
Real estate: |
||||||||||||||||||||
Construction & Development |
10.72 | % | N/A | N/A | N/A | N/A | ||||||||||||||
Farm |
2.94 | % | N/A | N/A | N/A | N/A | ||||||||||||||
Non-Owner Occupied CRE |
10.55 | % | N/A | N/A | N/A | N/A | ||||||||||||||
Owner Occupied CRE |
14.45 | % | N/A | N/A | N/A | N/A | ||||||||||||||
Residential real estate |
25.59 | % | N/A | N/A | N/A | N/A | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Real Estate |
64.25 | % | 67.31 | % | 66.75 | % | 66.07 | % | 65.23 | % | ||||||||||
Consumer: |
||||||||||||||||||||
Auto |
6.89 | % | N/A | N/A | N/A | N/A | ||||||||||||||
Non-Auto |
1.74 | % | N/A | N/A | N/A | N/A | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Consumer |
8.63 | % | 9.81 | % | 9.43 | % | 11.59 | % | 12.18 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
Maturing |
||||||||||||||||||||||||||||||||||||||||
One Year or Less |
After One Year Through Five Years |
After Five Years Through Ten Years |
After Ten Years |
Total |
||||||||||||||||||||||||||||||||||||
Available-for-Sale: |
Amount |
Yield |
Amount |
Yield |
Amount |
Yield |
Amount |
Yield |
Amount |
Yield |
||||||||||||||||||||||||||||||
Obligations of states and political subdivisions |
$ | 98,345 | 4.71 | % | $ | 673,036 | 4.01 | % | $ | 1,647,476 | 2.85 | % | $ | 8,019 | 2.39 | % | $ | 2,426,876 | 3.25 | % | ||||||||||||||||||||
Corporate bonds and other securities |
4,557 | 1.86 | — | — | — | — | — | — | 4,557 | 1.86 | ||||||||||||||||||||||||||||||
Mortgage-backed securities |
186,698 | 2.02 | 1,514,743 | 2.27 | 260,155 | 1.68 | — | — | 1,961,596 | 2.17 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
$ | 289,600 | 2.93 | % | $ | 2,187,779 | 2.81 | % | $ | 1,907,631 | 2.69 | % | $ | 8,019 | 2.39 | % | $ | 4,393,029 | 2.76 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 |
2019 |
2018 |
||||||||||||||||||||||
Average Balance |
Average Rate |
Average Balance |
Average Rate |
Average Balance |
Average Rate |
|||||||||||||||||||
Noninterest-bearing deposits |
$ | 2,782,896 | — | % | $ | 2,137,089 | — | % | $ | 2,124,005 | — | % | ||||||||||||
Interest-bearing deposits |
||||||||||||||||||||||||
Interest-bearing checking |
2,513,627 | 0.21 | 2,097,109 | 0.68 | 2,025,810 | 0.53 | ||||||||||||||||||
Savings and money market accounts |
2,214,569 | 0.20 | 1,679,168 | 0.54 | 1,558,889 | 0.28 | ||||||||||||||||||
Time deposits under $100,000 |
195,425 | 0.43 | 186,709 | 0.70 | 204,929 | 0.25 | ||||||||||||||||||
Time deposits of $100,000 or more |
274,933 | 0.88 | 245,680 | 1.04 | 262,986 | 0.48 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total interest-bearing deposits |
5,198,554 | 0.25 | % | 4,208,666 | 0.64 | % | 4,052,614 | 0.42 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total average deposits |
$ | 7,981,450 | $ | 6,345,755 | $ | 6,176,619 | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total cost of deposits |
0.16 | % | 0.42 | % | 0.27 | % | ||||||||||||||||||
|
|
|
|
|
|
As of December 31, 2020 |
||||
Three months or less |
$ | 109,096 | ||
Over three through six months |
54,915 | |||
Over six through twelve months |
79,159 | |||
Over twelve months |
43,142 | |||
|
|
|||
Total time deposits of $100,000 or more |
$ | 286,312 | ||
|
|
Payment Due by Period |
||||||||||||||||||||
Total Amounts |
Less than 1 year |
More than 1 year but less than 3 years |
More than 3 years but less than 5 years |
Over 5 years |
||||||||||||||||
Deposits with stated maturity dates |
$ | 475,425 | $ | 391,638 | $ | 64,495 | $ | 19,267 | $ | 25 | ||||||||||
Operating leases |
2,577 | 1,094 | 870 | 535 | 78 | |||||||||||||||
Outsourcing service contracts |
15,278 | 7,469 | 6,002 | 1,807 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Contractual Obligations |
$ | 493,280 | $ | 400,201 | $ | 71,367 | $ | 21,609 | $ | 103 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Total Notional Amounts Committed |
Less than 1 year |
More than 1 year but less than 3 years |
More than 3 years but less than 5 years |
Over 5 years |
||||||||||||||||
Unfunded lines of credit |
$ | 871,960 | $ | 608,972 | $ | 152,592 | $ | 20,846 | $ | 89,550 | ||||||||||
Unfunded commitments to extend credit |
742,538 | 426,108 | 42,010 | 51,757 | 222,663 | |||||||||||||||
Standby letters of credit |
40,050 | 36,849 | 3,166 | 5 | 30 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Commercial Commitments |
$ | 1,654,548 | $ | 1,071,929 | $ | 197,768 | $ | 72,608 | $ | 312,243 | ||||||||||
|
|
|
|
|
|
|
|
|
|
ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
2020 |
||||||||||||||||
4 th |
3 rd |
2 nd |
1 st |
|||||||||||||
(dollars in thousands, except per share amounts) |
||||||||||||||||
Summary Income Statement Information: |
||||||||||||||||
Interest income |
$ | 92,457 | $ | 91,373 | $ | 92,197 | $ | 88,100 | ||||||||
Interest expense |
1,920 | 2,163 | 2,962 | 7,198 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net interest income |
90,537 | 89,210 | 89,235 | 80,902 | ||||||||||||
Provision for credit losses |
(8,033 | ) | 9,000 | 8,700 | 9,850 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net interest income after provision for credit losses |
98,570 | 80,210 | 80,535 | 71,052 | ||||||||||||
Noninterest income |
35,686 | 38,539 | 35,407 | 26,670 | ||||||||||||
Net gain on securities transactions |
23 | 36 | 1,512 | 2,062 | ||||||||||||
Noninterest expense |
63,705 | 55,593 | 53,321 | 55,318 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings before income taxes |
70,574 | 63,192 | 64,133 | 44,466 | ||||||||||||
Income tax expense |
12,099 | 10,335 | 10,663 | 7,234 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net earnings |
$ | 58,475 | $ | 52,857 | $ | 53,470 | $ | 37,232 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Per Share Data: |
||||||||||||||||
Earnings per share, basic |
$ | 0.41 | $ | 0.37 | $ | 0.38 | $ | 0.26 | ||||||||
Earnings per share, diluted |
0.41 | 0.37 | 0.38 | 0.26 | ||||||||||||
Cash dividends declared |
0.13 | 0.13 | 0.13 | 0.12 | ||||||||||||
Book value at period-end |
11.80 | 11.40 | 11.14 | 9.03 | ||||||||||||
Common stock sales price: |
||||||||||||||||
High |
$ | 36.43 | $ | 32.80 | $ | 33.81 | $ | 35.94 | ||||||||
Low |
27.49 | 26.71 | 23.44 | 20.70 | ||||||||||||
Close |
36.17 | 27.91 | 28.89 | 26.84 |
2019 |
||||||||||||||||
4 th |
3 rd |
2 nd |
1 st |
|||||||||||||
(dollars in thousands, except per share amounts) |
||||||||||||||||
Summary Income Statement Information: |
||||||||||||||||
Interest income |
$ | 82,123 | $ | 80,591 | $ | 79,576 | $ | 76,901 | ||||||||
Interest expense |
6,801 | 7,953 | 7,961 | 7,387 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net interest income |
75,322 | 72,638 | 71,615 | 69,514 | ||||||||||||
Provision for loan losses |
950 | 450 | 600 | 965 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net interest income after provision for loan losses |
74,372 | 72,188 | 71,015 | 68,549 | ||||||||||||
Noninterest income |
27,342 | 28,617 | 27,300 | 24,437 | ||||||||||||
Net gain on securities transactions |
5 | 52 | 676 | — | ||||||||||||
Noninterest expense |
51,938 | 48,910 | 48,304 | 47,367 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings before income taxes |
49,781 | 51,947 | 50,687 | 45,619 | ||||||||||||
Income tax expense |
8,393 | 8,867 | 8,594 | 7,367 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net earnings |
$ | 41,388 | $ | 43,080 | $ | 42,093 | $ | 38,252 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Per Share Data: |
||||||||||||||||
Earnings per share, basic |
$ | 0.30 | $ | 0.32 | $ | 0.31 | $ | 0.28 | ||||||||
Earnings per share, diluted |
0.30 | 0.32 | 0.31 | 0.28 | ||||||||||||
Cash dividends declared |
0.12 | 0.12 | 0.12 | 0.11 | ||||||||||||
Book value at period-end |
9.03 | 8.87 | 8.58 | 8.16 | ||||||||||||
Common stock sales price: |
||||||||||||||||
High |
$ | 36.45 | $ | 33.97 | $ | 31.54 | $ | 32.65 | ||||||||
Low |
32.01 | 29.50 | 28.00 | 27.13 | ||||||||||||
Close |
35.10 | 33.33 | 30.79 | 28.89 |
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. |
CONTROLS AND PROCEDURES |
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 |
Number of Shares To be Issued Upon Exercise of Outstanding Awards |
Weighted Average Exercise Price of Outstanding Awards |
Number of Shares Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Far Left Column) |
||||||||||
Equity compensation plans approved by security holders |
1,928,945 | (1) | $ | 20.85 | (2) | 4,177,826 | ||||||
Equity compensation plans not approved by security holders |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total |
1,928,945 | $ | 20.85 | 4,177,826 | ||||||||
|
|
|
|
|
|
(1) | Includes 1,833,057 shares related to the Company’s stock option plan and 95,888 shares related to the Company’s restricted stock plan. |
(2) | Excludes outstanding restricted stock which are granted for no consideration. |
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
ITEM 15. |
EXHIBIT AND FINANCIAL STATEMENT SCHEDULES |
(a) | The following documents are filed as part of this report: |
(1) | Financial Statements: |
(2) | Financial Statement Schedules: |
(3) | Exhibits: |
2.1 | ||
2.2 | ||
3.1 | ||
3.2 | ||
4.1 | ||
4.2 | ||
10.1 | ||
10.2 | ||
10.3 | ||
10.4 | ||
10.5 | ||
10.6 | ||
10.7 | ||
10.8 | ||
21.1 | ||
23.1 | ||
24.1 | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | — XBRL Instance Document. – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded with the Inline XBRL 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. This Exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section, and shall not be deemed to be incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934. |
++ | Management contract or compensatory plan on arrangement. |
ITEM 16. |
FORM 10-K SUMMARY |
FIRST FINANCIAL BANKSHARES, INC. | ||||||
Date: February 22, 2021 | By: | /s/ F. Scott Dueser | ||||
F. SCOTT DUESER | ||||||
Chairman of the Board, Director, President and | ||||||
Chief Executive Officer | ||||||
(Principal Executive Officer) |
Name |
Title |
Date | ||
/s/ F. Scott Dueser F. Scott Dueser |
Chairman of the Board, Director, President, and Chief Executive Officer (Principal Executive Officer) | February 22, 2021 | ||
/s/ James R. Gordon James R. Gordon |
Executive Vice President and Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer) | February 22, 2021 | ||
/s/ April K. Anthony April K. Anthony |
Director | February 22, 2021 | ||
/s/ Vianei Lopez Braun Vianei Lopez Braun |
Director | February 22, 2021 | ||
/s/ Tucker S. Bridwell Tucker S. Bridwell |
Director | February 22, 2021 | ||
/s/ David L. Copeland David L. Copeland |
Director | February 22, 2021 |
Name |
Title |
Date | ||
/s/ Michael B. Denny Michael B. Denny |
Director | February 22, 2021 | ||
/s/ Murray H. Edwards Murray H. Edwards |
Director | February 22, 2021 | ||
/s/ I. Tim Lancaster I. Tim Lancaster |
Director | February 22, 2021 | ||
/s/ Kade Matthews Kade Matthews |
Director | February 22, 2021 | ||
/s/ Robert C. Nickles Robert C. Nickles |
Director | February 22, 2021 | ||
/s/ Johnny Trotter Johnny Trotter |
Director | February 22, 2021 |
Allowance for Loan Losses | ||
Description of the Matter |
As of December 31, 2020, the Company’s loan portfolio totaled $5.2 billion and the related allowance for loan losses (ALL) was $66.5 million. As noted above and in Note 1, as of January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses, which introduces a forward-looking expected loss model (the “Current Expected Credit Losses (CECL)” model) to estimate credit losses over the remaining expected life of the Company’s loan portfolio. As discussed in Notes 1 and 3 of the consolidated financial statements, the ALL is an amount which represents management’s best estimate of expected credit losses over the contractual life of the Company’s loan portfolio as of the balance sheet date. The ALL includes credit loss estimates for loans evaluated using common risk characteristics such as financial asset type, collateral type and industry of the borrower. Historical losses are correlated to economic variables that are determined to be the most relevant indicators of expected losses. Those economic variables are forecasted over the reasonable and supportable forecast period to determine the current expected credit losses. Qualitative adjustments are then made to account for factors that management does not believe are captured in the CECL quantitative models. Management applies judgment in estimating the ALL and, in particular, in identifying and quantifying qualitative adjustments included within the ALL.Auditing management’s estimate of the allowance for loan losses involved a high degree of subjectivity due to the complexity of the models and the qualitative adjustments included in the estimate. Management’s identification and measurement of the qualitative adjustments is highly judgmental and could have a significant impact on the allowance for loan losses. | |
How We Addressed the Matter in Our Audit |
We obtained an understanding of the Company’s process for establishing the allowance for loan losses, including the models used and the qualitative adjustments made to the ALL. We evaluated the design and tested the operating effectiveness of the controls and governance over the model methodology and qualitative adjustment methodology, including the validation and monitoring procedures performed over the models, the identification and the assessment of the need for qualitative adjustments, the reliability and accuracy of data used to estimate the various components of the qualitative adjustments, and management’s review and approval of the qualitative adjustments. To test the models, with the support of specialists, we evaluated the model methodology and design, including the Company’s selection of economic variables that were deemed to be the most relevant indicators of expected credit losses, as well as performed procedures over the Company’s correlation of those economic variables to historical losses. On a sample basis, we independently tested and agreed the key inputs used in the models to internal and external sources. Additionally, on a sample basis, we performed an independent recalculation of the models’ output. To test the qualitative adjustments, we evaluated the identification and measurement of the adjustments, including the basis for concluding the adjustments were warranted when considering the model methodology and the historical data used in the adjustments. We tested the completeness and accuracy of data used by the Company to estimate the qualitative adjustments by agreeing underlying data to internal sources and recalculated the analyses used by the Company to measure the adjustments. We also reviewed peer-bank allowance coverage ratios and subsequent event information and considered whether it corroborated or contradicted the Company’s overall estimate of the ALL. |
2020 |
2019 |
|||||||
ASSETS |
||||||||
CASH AND DUE FROM BANKS |
$ | $ | ||||||
FEDERAL FUNDS SOLD |
— | |||||||
INTEREST-BEARING DEMAND DEPOSITS IN BANKS |
||||||||
|
|
|
|
|||||
Total cash and cash equivalents |
||||||||
SECURITIES AVAILABLE-FOR-SALE, securities was $$ |
||||||||
LOANS: |
||||||||
Held-for-investment |
||||||||
Less – allowance for loan losses |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net loans held - for- investment |
||||||||
Held-for-sale 2019 respectively), |
||||||||
BANK PREMISES AND EQUIPMENT, net |
||||||||
INTANGIBLE ASSETS , net |
||||||||
OTHER ASSETS |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
NONINTEREST-BEARING DEPOSITS |
$ | $ | ||||||
INTEREST-BEARING DEPOSITS |
||||||||
|
|
|
|
|||||
Total deposits |
||||||||
DIVIDENDS PAYABLE |
||||||||
BORROWINGS |
||||||||
OTHER LIABILITIES |
||||||||
|
|
|
|
|||||
Total liabilities |
||||||||
|
|
|
|
|||||
COMMITMENTS AND CONTINGENCIES |
||||||||
SHAREHOLDERS’ EQUITY: |
||||||||
Common stock—$ |
||||||||
Capital surplus |
||||||||
Retained earnings |
||||||||
Treasury stock (shares at cost: |
|
|
||||||
December 31, 2020 and 2019, respectively) |
( |
) | ( |
) | ||||
Deferred c ompensation |
||||||||
Accumulated other comprehensive earnings |
||||||||
|
|
|
|
|||||
Total shareholders’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and shareholders’ equity |
$ | $ | ||||||
|
|
|
|
2020 |
2019 |
2018 |
||||||||||
INTEREST INCOME: |
||||||||||||
Interest and fees on loans |
$ | $ | $ | |||||||||
Interest on investment securities: |
||||||||||||
Taxable |
||||||||||||
Exempt from federal income tax |
||||||||||||
Interest on federal funds sold and interest-bearing deposits in banks |
||||||||||||
|
|
|
|
|
|
|||||||
|
||||||||||||
|
|
|
|
|
|
|||||||
INTEREST EXPENSE: |
||||||||||||
Interest on deposits |
||||||||||||
Other |
||||||||||||
|
|
|
|
|
|
|||||||
Total interest expense |
||||||||||||
|
|
|
|
|
|
|||||||
|
||||||||||||
PROVISION FOR CREDIT LOSSES |
||||||||||||
|
|
|
|
|
|
|||||||
|
||||||||||||
|
|
|
|
|
|
|||||||
NONINTEREST INCOME: |
||||||||||||
Trust fees |
||||||||||||
Service charges on deposit accounts |
||||||||||||
ATM, interchange and credit card fees |
||||||||||||
Gain on sale and fees on mortgage loans |
||||||||||||
Net gain on sale of available-for-sale |
||||||||||||
Net gain (loss) on sale of foreclosed assets |
||||||||||||
Net gain (loss) on sale of assets |
( |
) | ||||||||||
Interest on loan recoveries |
||||||||||||
Other |
||||||||||||
|
|
|
|
|
|
|||||||
|
||||||||||||
|
|
|
|
|
|
|||||||
NONINTEREST EXPENSE: |
||||||||||||
Salaries and employee benefits |
||||||||||||
Cost related to termination of pension plan |
— | |||||||||||
Net occupancy expense |
||||||||||||
Equipment expense |
||||||||||||
FDIC insurance premiums |
||||||||||||
ATM, interchange and credit card expenses |
||||||||||||
Professional and service fees |
||||||||||||
Printing, stationery and supplies |
||||||||||||
Operational and other losses |
||||||||||||
Software amortization and expense |
||||||||||||
Amortization of intangible assets |
||||||||||||
Other |
||||||||||||
|
|
|
|
|
|
|||||||
|
||||||||||||
|
|
|
|
|
|
|||||||
EARNINGS BEFORE INCOME TAXES |
||||||||||||
INCOME TAX EXPENSE |
||||||||||||
|
|
|
|
|
|
|||||||
NET EARNINGS |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
NET EARNINGS PER SHARE, BASIC |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
NET EARNINGS PER SHARE, DILUTED |
$ | $ | $ | |||||||||
|
|
|
|
|
|
2020 | 2019 | 2018 | ||||||||||
NET EARNINGS |
$ | $ | $ | |||||||||
OTHER ITEMS OF COMPREHENSIVE EARNINGS (LOSS): |
||||||||||||
Change in unrealized gain (loss) on investment securities available-for-sale, |
( |
) | ||||||||||
Reclassification adjustment for realized gains on investment securities included in net earnings, before income tax |
( |
) | ( |
) | ( |
) | ||||||
Minimum liability pension adjustment, before income tax |
— | |||||||||||
|
|
|
|
|
|
|||||||
Total other items of comprehensive earnings (losses) |
( |
) | ||||||||||
Income tax benefit (expense) related to: |
||||||||||||
Investment securities |
( |
) | ( |
) | ||||||||
Reclassification adjustment for realized gains on investment securities included in net earnings |
|
|
|
|
|
|
|
|
|
|
|
|
Minimum liability pension adjustment |
— | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Total income tax benefit (expense) |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
COMPREHENSIVE EARNINGS |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Common Stock |
Capital Surplus |
Retained Earnings |
Treasury Stock |
Deferred Compensation |
Accumulated Other Total Comprehensive Earnings (Losses) |
Shareholders’ Equity |
||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amounts |
|||||||||||||||||||||||||||||||||
BALANCE, December 31, 2017 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
$ |
|||||||||||||||||||||||||
Net earnings |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Stock option exercises |
— |
— |
— |
|||||||||||||||||||||||||||||||||
Restricted stock grant, net |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Cash dividends declared, $ per share |
— |
— |
— |
( |
) |
— |
— |
— |
— |
( |
) | |||||||||||||||||||||||||
Stock issued in acquisition of Bancshares, Inc. |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Minimum liability pension adjustment, net of related income taxes |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Change in unrealized gain (loss) in investment securities available-for-sale, |
— |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||||||||
Shares purchased in connection with directors’ deferred compensation plan, net |
— |
— |
— |
— |
( |
) |
— |
— |
||||||||||||||||||||||||||||
Stock option expense |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Reclassification of certain income tax effects related to the U.S. statutory federal income tax rate under the Tax Cuts and Jobs Acts to retained earnings |
— |
— |
— |
( |
) |
— |
— |
— |
||||||||||||||||||||||||||||
Reclassification of unrealized gain in equity securities At December 31, 2017 from accumulated other Comprehensive earnings to retained earnings |
— |
— |
— |
— |
— |
— |
( |
) |
— |
|||||||||||||||||||||||||||
BALANCE, December 31, 2018 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
$ |
|||||||||||||||||||||||||
Net earnings |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Stock option exercises |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Restricted stock grant, net |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||
Cash dividends declared, $ per share |
— |
— |
— |
( |
) |
— |
— |
— |
— |
( |
) | |||||||||||||||||||||||||
Minimum liability pension adjustment, net of related income taxes |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Change in unrealized gain in investment securities available-for-sale, |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Shares purchased in connection with directors’ deferred compensation plan, net |
— |
— |
— |
— |
( |
) |
— |
— |
||||||||||||||||||||||||||||
Stock option expense |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Two-for-one |
— |
( |
) |
( |
) |
— |
— |
— |
||||||||||||||||||||||||||||
BALANCE, December 31, 2019 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
$ |
Cumulative effect of adopting ASC 326 on January 1, 2020, net of related income taxes |
— |
— |
— |
( |
) |
— |
— |
— |
— |
( |
) | |||||||||||||||||||||||||
Total shareholders’ equity at beginning of period, as adjusted |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||
Stock issued in acquisition of TB&T Bancshares, Inc. |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Net earnings |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Stock option exercises |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Restricted stock grant, net |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||
Cash dividends declared, $ per share |
— |
— |
— |
( |
) |
— |
— |
— |
— |
( |
) | |||||||||||||||||||||||||
Change in unrealized gain in investment securities available-for-sale, |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Shares purchased in connection with directors’ deferred compensation plan, net |
— |
— |
— |
— |
( |
) |
( |
) |
— |
— |
||||||||||||||||||||||||||
Stock option expense |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Shares repurchased and retired under stock repurchase authorization |
( |
) |
( |
) |
( |
) |
— |
— |
— |
— |
— |
( |
) | |||||||||||||||||||||||
BALANCE, December 31, 2020 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
$ |
2020 | 2019 | 2018 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||||||
Net earnings |
$ | $ | $ | |||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||||||
Depreciation and amortization |
||||||||||||
Provision for credit losses |
||||||||||||
Securities premium amortization, net |
||||||||||||
Discount accretion on purchased loans |
( |
) | ( |
) | ( |
) | ||||||
Gain on sale of assets, net |
( |
) | ( |
) | ( |
) | ||||||
Deferred federal income tax (expense) benefit |
( |
) | ( |
) | ( |
) | ||||||
Change in loans held-for-sale |
( |
) | ( |
) | ( |
) | ||||||
Change in other assets |
( |
) | ( |
) | ||||||||
Change in other liabilities |
||||||||||||
|
|
|
|
|
|
|||||||
Total adjustments |
||||||||||||
|
|
|
|
|
|
|||||||
Net cash provided by operating activities |
||||||||||||
|
|
|
|
|
|
|||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||||||
Cash received in acquisition of TB&T Bancshares, Inc., net |
— | — | ||||||||||
Cash received in acquisition of Commercial Bancshares, Inc., net |
— | — | ||||||||||
Net decrease in interest-bearing time deposits in banks |
— | — | ||||||||||
Activity in available-for-sale |
||||||||||||
Sales |
||||||||||||
Maturities |
||||||||||||
Purchases |
( |
) | ( |
) | ( |
) | ||||||
Net increase in loans held-for-investment |
( |
) | ( |
) | ( |
) | ||||||
Purchases of bank premises and equipment |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from sale of bank premises and equipment and other assets |
||||||||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||||||
Net increase (decrease) in noninterest-bearing deposits |
( |
) | ( |
) | ||||||||
Net increase (decrease) in interest-bearing deposits |
( |
) | ||||||||||
Net increase (decrease) in borrowings |
( |
) | ||||||||||
Common stock transactions: |
||||||||||||
Proceeds from stock option exercises |
||||||||||||
Dividends paid |
( |
) | ( |
) | ( |
) | ||||||
Repurchase of stock |
( |
) | — | — | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) financing activities |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
( |
) | ||||||||||
CASH AND CASH EQUIVALENTS, beginning of year |
||||||||||||
|
|
|
|
|
|
|||||||
CASH AND CASH EQUIVALENTS, end of year |
$ | $ | $ | |||||||||
|
|
|
|
|
|
For the year ended December 31, 2020: |
Net Earnings (in thousands) |
Weighted Average Shares |
Per Share Amount |
|||||||||
Net earnings per share, basic |
$ | $ | ||||||||||
Effect of stock options and stock grants |
||||||||||||
|
|
|
|
|
|
|||||||
Net earnings per share, diluted |
$ | $ | ||||||||||
|
|
|
|
|
|
|||||||
For the year ended December 31, 2019: |
||||||||||||
Net earnings per share, basic |
$ | $ | ||||||||||
Effect of stock options and stock grants |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net earnings per share, diluted |
$ | $ | ||||||||||
|
|
|
|
|
|
|||||||
For the year ended December 31, 2018: |
||||||||||||
Net earnings per share, basic |
$ | $ | ||||||||||
Effect of stock options and stock grants |
||||||||||||
|
|
|
|
|
|
|||||||
Net earnings per share, diluted |
$ | $ | ||||||||||
|
|
|
|
|
|
December 31, 2020 | ||||||||||||||||
Amortized Cost Basis |
Gross Unrealized Holding Gains |
Gross Unrealized Holding Losses |
Estimated Value |
|||||||||||||
Securities available-for-sale: |
||||||||||||||||
Obligations of state and political subdivisions |
$ | $ | $ | ( |
) | $ | ||||||||||
Residential mortgage-backed securities |
( |
) | ||||||||||||||
Commercial mortgage-backed securities |
( |
) | ||||||||||||||
Corporate bonds and other |
||||||||||||||||
Total securities available-for-sale |
$ | $ | $ | ( |
) | $ | ||||||||||
December 31, 2019 | ||||||||||||||||
Amortized Cost Basis |
Gross Unrealized Holding Gains |
Gross Unrealized Holding Losses |
Estimated Fair Value |
|||||||||||||
Securities available-for-sale: |
||||||||||||||||
U.S. Treasury securities |
$ | $ | $ | — | $ | |||||||||||
Obligations of state and |
( |
) | ||||||||||||||
Corporate bonds and other |
— | |||||||||||||||
Residential mortgage-backed securities |
( |
) | ||||||||||||||
Commercial mortgage-backed securities |
( |
) | ||||||||||||||
Total securities available-for-sale |
$ | $ | $ | ( |
) | $ | ||||||||||
Amortized Cost Basis |
Estimated Fair Value |
|||||||
Due within one year |
$ | $ | ||||||
Due after one year through five years |
||||||||
Due after five years through ten years |
||||||||
Due after ten years |
||||||||
Total |
$ | $ | ||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
December 31, 2020 |
Fair Value |
Unrealized Loss |
Fair Value |
Unrealized Loss |
Fair Value |
Unrealized Loss |
||||||||||||||||||
Obligations of state and political subdivisions |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Residential mortgage-backed securities |
||||||||||||||||||||||||
Commercial mortgage-backed securities |
||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
December 31, 2019 |
Fair |
Unrealized Loss |
Fair Value |
Unrealized Loss |
Fair Value |
Unrealized Loss |
||||||||||||||||||
Obligations of state and political subdivisions |
$ | $ | |
|
$ | $ | $ | $ | ||||||||||||||||
Residential mortgage-backed securities |
||||||||||||||||||||||||
Commercial mortgage-backed securities |
||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
December 31, | ||||||||
2020 | 2019 | |||||||
Commercial: |
||||||||
C&I |
$ | $ | N/A | |||||
Municipal |
N/A | |||||||
Total Commercial |
||||||||
Agricultural |
||||||||
Real Estate: |
||||||||
Construction & Development |
N/A | |||||||
Farm |
N/A | |||||||
Non-Owner Occupied CRE |
N/A | |||||||
Owner Occupied CRE |
N/A | |||||||
Residential |
N/A | |||||||
Total Real Estate |
||||||||
Consumer: |
||||||||
Auto |
N/A | |||||||
Non-Auto |
N/A | |||||||
Total Consumer |
||||||||
Total Loans |
||||||||
Less: Allowance for credit losses |
( |
) | ( |
) | ||||
Loans, net |
$ | $ |
December 31, |
||||||||
2020 |
2019 |
|||||||
Nonaccrual loans |
$ | $ | ||||||
Loans still accruing and past due 90 days or more |
||||||||
Troubled debt restructured loans* |
||||||||
Total |
$ | $ | ||||||
* |
Troubled debt restructured loans of $ |
December 31, | ||||||||
2020 | 2019 | |||||||
Commercial: |
||||||||
C&I |
$ | $ | N/A | |||||
Municipal |
— | N/A | ||||||
Total Commercial |
||||||||
Agricultural |
||||||||
Real Estate: |
||||||||
Construction & Development |
N/A | |||||||
Farm |
N/A | |||||||
Non-Owner Occupied CRE |
N/A | |||||||
Owner Occupied CRE |
N/A | |||||||
Residential |
N/A | |||||||
Total Real Estate |
||||||||
Consumer: |
||||||||
Auto |
N/A | |||||||
Non-Auto |
N/A | |||||||
Total Consumer |
||||||||
$ | $ | |||||||
December 31, 2020 |
C&I | Municipal | Agricultural | Construction & Development |
Farm | |||||||||||||||
Beginning balance, prior to adoption of ASC 326 |
$ | $ | $ | $ | $ | |||||||||||||||
Impact of adopting ASC 326 |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Initial allowance on acquired TB&T PCD loans |
— | — | — | — | ||||||||||||||||
Provision for loan losses |
||||||||||||||||||||
Recoveries |
— | — | ||||||||||||||||||
Charge-offs |
( |
) | — | ( |
) | — | — | |||||||||||||
Ending balance |
$ | $ | $ | $ | $ | |||||||||||||||
December 31, 2020 (continued) |
Non-Owner Occupied CRE |
Owner Occupied CRE |
Residential | Auto | Non- Auto |
Total | ||||||||||||||||||
Beginning balance, prior to adoption of ASC 326 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Impact of adopting ASC 326 |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Initial allowance on acquired TB&T PCD loans |
— | — | — | |||||||||||||||||||||
Provision for loan losses |
( |
) | ( |
) | ||||||||||||||||||||
Recoveries |
||||||||||||||||||||||||
Charge-offs |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Ending balance |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
December 31, 2019 |
Commercial | Agricultural | Real Estate | Consumer | Total | |||||||||||||||
Beginning balance |
$ | $ | $ | $ | $ | |||||||||||||||
Provision for loan losses |
( |
) | ||||||||||||||||||
Recoveries |
||||||||||||||||||||
Charge-offs |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Ending balance |
$ | $ | $ | $ | $ | |||||||||||||||
December 31, 2020 |
Collateral Dependent Loans Individually Evaluated for Credit Losses Without an Allowance |
Collateral Dependent Loans Individually Evaluated for Credit Losses With an Allowance |
Non-Collateral Dependent Loans Individually Evaluated for Credit Losses |
Total Loans Individually Evaluated for Credit Losses |
Related Allowance on Collateral Dependent Loans |
Related Allowance on Non- Collateral Dependent Loans |
Total Allowance for Credit Losses on Loans Individually Evaluated for Credit Losses |
|||||||||||||||||||||
Commercial: |
||||||||||||||||||||||||||||
C&I |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Municipal |
— | — | — | |||||||||||||||||||||||||
Total Commercial |
||||||||||||||||||||||||||||
Agricultural |
||||||||||||||||||||||||||||
Real Estate: |
||||||||||||||||||||||||||||
Construction & Development |
||||||||||||||||||||||||||||
Farm |
||||||||||||||||||||||||||||
Non-Owner Occupied CRE |
||||||||||||||||||||||||||||
Owner Occupied CRE |
||||||||||||||||||||||||||||
Residential |
||||||||||||||||||||||||||||
Total Real Estate |
||||||||||||||||||||||||||||
Consumer: |
||||||||||||||||||||||||||||
Auto |
— | |||||||||||||||||||||||||||
Non-Auto |
— | |||||||||||||||||||||||||||
Total Consumer |
— | |||||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
December 31, 2019 |
Unpaid Contractual Principal Balance |
Recorded Investment With No Allowance |
Recorded Investment With Allowance |
Total Recorded Investment |
Related Allowance |
12 Month Average Recorded Investment |
||||||||||||||||||
Commercial |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Agricultural |
||||||||||||||||||||||||
Real Estate |
||||||||||||||||||||||||
Consumer |
— | |||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
December 31, 2020 |
C&I | Municipal | Agricultural | Construction & Development |
Farm | ||||||||||||||||||
Loans individually evaluated for credit losses |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
Loans collectively evaluated for credit losses |
|||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
December 31, 2020 (continued) |
Non-Owner Occupied C RE |
Owner Occupied C R E |
Residential | Auto | Non-Auto |
Total | ||||||||||||||||||
Loans individually evaluated for credit losses |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
Loans collectively evaluated for credit losses |
||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
December 31, 2019 |
Commercial | Agricultural | Real |
Consumer | Total | ||||||||||||||||||
Loans individually evaluated for impairment |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
Loan collectively evaluated for impairment |
|||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
December 31, 2020 |
C&I | Municipal | Agriculture | Construction & Development |
Farm | ||||||||||||||||||
Loans individually evaluated for credit losses |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
Loans collectively evaluated for credit losses |
|||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
December 31, 2020 (continued) |
Non - OwnerOccupied CRE |
Owner Occupied CRE |
Residential |
Auto |
Non-Auto |
Total |
||||||||||||||||||
Loans individually evaluated for credit losses |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
Loans collectively evaluated for credit losses |
||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
December 31, 2019 |
Commercial | Agricultural | Real Estate | Consumer | Total | |||||||||||||||
Loans individually evaluated for impairment |
$ | $ | $ | $ | $ | |||||||||||||||
Loan collectively evaluated for impairment |
||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | |||||||||||||||
December 31, |
2020 | 2019 | 2018 | 2017 | 2016 | Prior | Revolving Loans Amort Cost Basis |
Total | ||||||||||||||||||||||||
C&I |
||||||||||||||||||||||||||||||||
Risk rating: |
||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Special mention |
— | 1 |
— | — | — | |||||||||||||||||||||||||||
Substandard |
— | — | — | — | ||||||||||||||||||||||||||||
Doubtful |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
December 31, |
2020 | 2019 | 2018 | 2017 | 2016 | Prior | Revolving Loans Amort Cost Basis |
Total | |||||||||||||||||||||||||
Municipal |
|||||||||||||||||||||||||||||||||
Risk rating: |
|||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||
Special mention |
— | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Substandard |
— | — | — | ||||||||||||||||||||||||||||||
Doubtful |
— | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||
December 31, |
2020 | 2019 | 2018 | 2017 | 2016 | Prior | Revolving Loans Amort Cost |
Total | |||||||||||||||||||||||||
Agricultural |
|||||||||||||||||||||||||||||||||
Risk rating: |
|||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | — | $ | — | $ | |||||||||||||||||||||||
Special mention |
— | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Substandard |
— | — | — | — | — | — | |||||||||||||||||||||||||||
Doubtful |
— | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||
December 31, |
2020 | 2019 | 2018 | 2017 | 2016 | Prior | Revolving Loans Amort Cost Basis |
Total | |||||||||||||||||||||||||
Construction & Development |
|||||||||||||||||||||||||||||||||
Risk rating: |
|||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||
Special mention |
— | — | — | — | — | ||||||||||||||||||||||||||||
Substandard |
— | — | — | ||||||||||||||||||||||||||||||
Doubtful |
— | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||
December 31, |
2020 | 2019 | 2018 | 2017 | 2016 | Prior | Revolving Loans Amort Cost Basis |
Total | |||||||||||||||||||||||||
Farm |
|||||||||||||||||||||||||||||||||
Risk rating: |
|||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||
Special mention |
— | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Substandard |
— | — | |||||||||||||||||||||||||||||||
Doubtful |
— | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||
December 31, |
2020 |
2019 |
2018 |
2017 |
2016 |
Prior |
Revolving Loans Amort Cost Basis |
Total |
||||||||||||||||||||||||
Non-Owner Occupied CRE |
||||||||||||||||||||||||||||||||
Risk rating: |
||||||||||||||||||||||||||||||||
Pass |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
— |
$ |
|||||||||||||||||||||||
Special mention |
— |
— |
— |
|||||||||||||||||||||||||||||
Substandard |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||
Doubtful |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
— |
$ |
|||||||||||||||||||||||
December 31, |
2020 |
2019 |
2018 |
2017 |
2016 |
Prior |
Revolving Loans Amort Cost Basis |
Total |
||||||||||||||||||||||||
Owner Occupied CRE |
||||||||||||||||||||||||||||||||
Risk rating: |
||||||||||||||||||||||||||||||||
Pass |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
— |
$ |
|||||||||||||||||||||||
Special mention |
— |
|||||||||||||||||||||||||||||||
Substandard |
— |
|||||||||||||||||||||||||||||||
Doubtful |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
— |
$ |
|||||||||||||||||||||||
December 31, |
2020 |
2019 |
2018 |
2017 |
2016 |
Prior |
Revolving Loans Amort Cost Basis |
Total |
||||||||||||||||||||||||
Residential |
||||||||||||||||||||||||||||||||
Risk rating: |
||||||||||||||||||||||||||||||||
Pass |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
Special mention |
— |
|||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||
Doubtful |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
December 31, |
2020 |
2019 |
2018 |
2017 |
2016 |
Prior |
Revolving Loans Amort Cost Basis |
Total |
||||||||||||||||||||||||
Auto |
||||||||||||||||||||||||||||||||
Risk rating: |
||||||||||||||||||||||||||||||||
Pass |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
— |
$ |
|||||||||||||||||||||||
Special mention |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||
Substandard |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||
Doubtful |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
— |
$ |
|||||||||||||||||||||||
December 31, |
2020 |
2019 |
2018 |
2017 |
2016 |
Prior |
Revolving Loans Amort Cost Basis |
Total |
||||||||||||||||||||||||
Non-Auto |
||||||||||||||||||||||||||||||||
Risk rating: |
||||||||||||||||||||||||||||||||
Pass |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
Special mention |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||
Substandard |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||
Doubtful |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
2020 |
2019 |
2018 |
2017 |
2016 |
Prior |
Revolving Loans Amort Cost Basis |
Total |
||||||||||||||||||||||||
Total Loans |
||||||||||||||||||||||||||||||||
Risk rating: |
||||||||||||||||||||||||||||||||
Pass |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
Special mention |
— |
|||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||
Doubtful |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019 |
Pass |
Special Mention |
Substandard |
Doubtful |
Total |
|||||||||||||||
Commercial |
$ |
$ |
$ |
$ |
— |
$ |
||||||||||||||
Agricultural |
— |
— |
||||||||||||||||||
Real Estate |
— |
|||||||||||||||||||
Consumer |
— |
— |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ |
$ |
$ |
$ |
— |
$ |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2020 |
15-59 Days Past Due* |
60-89 Days Past |
Greater Than Days |
Total Due |
Current |
Total Loans |
90 Days Past Due Still Accruing |
|||||||||||||||||||||
Commercial: |
||||||||||||||||||||||||||||
C&I |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Municipal |
— | — | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Commercial |
||||||||||||||||||||||||||||
Agricultural |
— | |||||||||||||||||||||||||||
Real Estate: |
||||||||||||||||||||||||||||
Construction & Development |
— | — | ||||||||||||||||||||||||||
Farm |
— | — | — | |||||||||||||||||||||||||
Non-Owner Occupied CRE |
— | — | — | |||||||||||||||||||||||||
Owner Occupied CRE |
— | |||||||||||||||||||||||||||
Residential |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Real Estate |
||||||||||||||||||||||||||||
Consumer: |
||||||||||||||||||||||||||||
Auto |
||||||||||||||||||||||||||||
Non-Auto |
— | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Consumer |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019 |
15-59 Days Past |
60-89 Days Past Due |
Greater Than 90 Days |
Total Past Due |
Current |
Total Loans |
Total 90 Days e StillAccruing |
|||||||||||||||||||||
Commercial |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Agricultural |
— | |||||||||||||||||||||||||||
Real Estate |
— | |||||||||||||||||||||||||||
Consumer |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | The Company monitors commercial, agricultural and real estate loans after such loans are 15 days past due. Consumer loans are monitored after such loans are 30 days past due. |
Year Ended December 31, 2020 |
||||||||||||
Pre-Modification |
Post- Modification |
|||||||||||
Recorded |
Recorded |
|||||||||||
Number |
Investment |
Investment |
||||||||||
Commercial: |
||||||||||||
C&I |
$ | $ | ||||||||||
Municipal |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total Commercial |
||||||||||||
Agricultural |
||||||||||||
Real Estate: |
||||||||||||
Construction & Development |
||||||||||||
Farm |
— | — | — | |||||||||
Non-Owner Occupied CRE |
— | — | — | |||||||||
Owner Occupied CRE |
||||||||||||
Residential |
||||||||||||
|
|
|
|
|
|
|||||||
Total Real Estate |
||||||||||||
Consumer: |
||||||||||||
Auto |
— | — | — | |||||||||
Non-Auto |
||||||||||||
|
|
|
|
|
|
|||||||
Total Consumer |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
$ | $ | ||||||||||
|
|
|
|
|
|
Year Ended December 31, 2019 |
||||||||||||
Number |
Pre-Modification Recorded Investment |
Post- Modification Recorded Investment |
||||||||||
Commercial |
$ | $ | ||||||||||
Agricultural |
||||||||||||
Real Estate |
||||||||||||
Consumer |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total |
$ | $ | ||||||||||
|
|
|
|
|
|
Year Ended December 31, 2020 |
||||||||||||
Adjusted |
Combined |
|||||||||||
Interest |
Extended |
Rate and |
||||||||||
Rate |
Maturity |
Maturity |
||||||||||
Commercial: |
||||||||||||
C&I |
$ | — | $ | $ | ||||||||
Municipal |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total Commercial |
— | |||||||||||
Agricultural |
— | — | ||||||||||
Real Estate: |
||||||||||||
Construction & Development |
— | — | ||||||||||
Farm |
— | — | — | |||||||||
Non-Owner Occupied CRE |
— | — | — | |||||||||
Owner Occupied CRE |
— | |||||||||||
Residential |
— | — | ||||||||||
|
|
|
|
|
|
|||||||
Total Real Estate |
— | |||||||||||
Consumer: |
||||||||||||
Auto |
— | — | — | |||||||||
Non-Auto |
— | — | ||||||||||
|
|
|
|
|
|
|||||||
Total Consumer |
— | — | ||||||||||
|
|
|
|
|
|
|||||||
Total |
$ | — | $ | $ | ||||||||
|
|
|
|
|
|
Year Ended December 31, 2019 |
||||||||||||
Adjusted Interest Rate |
Extended Maturity |
Combined Rate and Maturity |
||||||||||
Commercial |
$ | — | $ | $ | ||||||||
Agricultural |
— | |||||||||||
Real Estate |
— | |||||||||||
Consumer |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total |
$ | — | $ | $ | ||||||||
|
|
|
|
|
|
Year Ended December 31, 2019 |
||||||||
Number |
Balance |
|||||||
Commercial |
— | $ | — | |||||
Agriculture |
||||||||
Real Estate |
— | — | ||||||
Consumer |
— | — | ||||||
|
|
|
|
|||||
Total |
$ | |||||||
|
|
|
|
Beginning Balance |
Additional Loans |
Payments |
Ending Balance |
|||||||||||||
Year ended December 31, 2020 |
$ | $ | $ | $ |
December 31, 2020: |
Outstanding Notional Balance |
Asset Derivative Fair Value |
Liability Derivative Fair Value |
|||||||||
IRLCs |
$ | $ | $ | |||||||||
Forward mortgage-backed securities trades |
December 31, 2019: |
Outstanding Notional Balance |
Asset Derivative Fair Value |
Liability Derivative Fair Value |
|||||||||
IRLCs |
$ | $ | $ | |||||||||
Forward mortgage-backed securities trades |
Useful Life |
|
December 31, |
||||||||||
|
2020 |
2019 |
||||||||||
Land |
|
– |
|
$ | $ | |||||||
Buildings |
|
|
|
|||||||||
Furniture and equipment |
|
|
|
|||||||||
Leasehold improvements |
|
Lesser of lease or |
|
|||||||||
|
|
|
|
|
|
|||||||
|
|
|||||||||||
Less : accumulated depreciation and amortization |
|
( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Total Bank Premises and Equipment |
|
$ | $ | |||||||||
|
|
|
|
|
|
Year ending December 31, |
||||
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
|
|
|||
$ | ||||
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Securities sold under agreements with customers to repurchase. |
$ | $ | ||||||
Federal funds purchased |
||||||||
Advances from Federal Home Loan Bank of Dallas |
||||||||
|
|
|
|
|||||
Total |
$ | $ |
Year Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Current federal income tax |
$ | $ | $ | |||||||||
Current state income tax |
||||||||||||
Deferred federal income tax expense (benefit) |
( |
) | ( |
) | ( |
) | ||||||
Restatement of net deferred tax liability due to change in income tax rate |
— | — | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Income tax expense |
$ | $ | $ | |||||||||
|
|
|
|
|
|
As a Percent of Pretax Earnings |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Statutory federal income tax rate |
% | % | % | |||||||||
|
|
|
|
|
|
|||||||
Restatement of net deferred tax liability due to change in income tax rate |
— | — | ( |
) | ||||||||
Reductions in tax rate resulting from interest income exempt from federal income tax |
( |
) | ( |
) | ( |
) | ||||||
Effect of state income tax |
||||||||||||
ESOP tax deduction |
( |
) | ( |
) | ( |
) | ||||||
Other |
||||||||||||
|
|
|
|
|
|
|||||||
Effective income tax rate |
% | % | % | |||||||||
|
|
|
|
|
|
2020 |
2019 |
|||||||
Deferred tax assets: |
||||||||
Tax basis of loans in excess of financial statement basis |
$ | $ | ||||||
Recognized for financial reporting purposes but not yet for tax purposes: Deferred compensation |
||||||||
Write-downs and adjustments to other real estate owned and repossessed assets |
— | |||||||
Other deferred tax assets |
||||||||
|
|
|
|
|||||
Total deferred tax assets |
$ | $ | ||||||
|
|
|
|
|||||
Deferred tax liabilities: |
||||||||
Financial statement basis of fixed assets in excess of tax basis |
$ | $ | ||||||
Intangible asset amortization deductible for tax purposes, but not for financial reporting purposes |
||||||||
Recognized for financial reporting purposes but not yet for tax purposes: |
||||||||
Accretion on investment securities |
||||||||
Net unrealized gain on investment securities available-for-sale |
||||||||
Other deferred tax liabilities |
||||||||
|
|
|
|
|||||
Total deferred tax liabilities |
$ | $ | ||||||
|
|
|
|
|||||
Net deferred tax asset (liability) |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
• |
Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. |
• |
Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (for example, interest rates, volatilities, prepayment speeds, loss severities, credit risks and default rates) or inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
• |
Level 3 Inputs – Significant unobservable inputs that reflect an entity’s own assumptions that market participants would use in pricing the assets or liabilities. |
December 31, 2020 |
Level 1 Inputs |
Level 2 Inputs |
Level 3 Inputs |
Total Fair Value |
||||||||||||
Available-for-sale |
||||||||||||||||
Obligations of state and political subdivisions |
$ | — | $ | $ | — | $ | ||||||||||
Residential mortgage-backed securities |
— | — | ||||||||||||||
Commercial mortgage-backed securities |
— | — | ||||||||||||||
Other securities |
— | — | ||||||||||||||
Total |
$ | $ | $ | — | $ | |||||||||||
Loans held-for-sale |
$ | — | $ | $ | — | $ | ||||||||||
IRLCs |
$ | — | $ | $ | — | $ | ||||||||||
Forward mortgage-backed securities traded |
$ | — | $ | ( |
) |
$ | — | $ | ( |
) |
December 31, 2019 |
Level 1 Inputs |
Level 2 Inputs |
Level 3 Inputs |
Total Fair Value |
||||||||||||
Available-for-sale |
||||||||||||||||
U.S Treasury securities |
$ | $ | — | $ | — | $ | ||||||||||
Obligations of state and political subdivisions |
— | — | ||||||||||||||
Corporate bonds |
— | — | ||||||||||||||
Residential mortgage-backed securities |
— | — | ||||||||||||||
Commercial mortgage-backed securities |
— | — | ||||||||||||||
Other securities |
— | — | ||||||||||||||
Total |
$ | $ | $ | — | $ | |||||||||||
Loans held-for-sale |
$ | — | $ | $ | — | $ | ||||||||||
IRLCs |
$ | — | $ | $ | — | $ | ||||||||||
Forward mortgage-backed securities traded |
$ | — | $ | ( |
) |
$ | — | $ | ( |
) |
December 31, |
||||||||
2020 |
2019 |
|||||||
Unpaid principal balance on loans held-for-sale |
$ | $ | ||||||
Net unrealized gains on loans held-for-sale |
||||||||
Loans held-for-sale |
$ | $ | ||||||
Years ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Realized gain on sale and fees on mortgage loans* |
$ | $ | $ | |||||||||
Change in fair value on loans held-for-sale |
||||||||||||
Change in forward mortgage-backed securities trades |
( |
) | ( |
) | ||||||||
Total gain on sale of mortgage loans |
$ | $ | $ | |||||||||
2020 |
2019 |
|
| |||||||||||||||||
Carrying |
Estimated |
Carrying |
Estimated |
Fair Value |
| |||||||||||||||
Value |
Fair Value |
Value |
Fair Value |
Hierarchy |
| |||||||||||||||
Cash and due from banks |
$ | $ | $ | $ | |
Level 1 | | |||||||||||||
Federal funds sold |
— | — | |
Level 1 | | |||||||||||||||
Interest-bearing demand deposits in banks |
|
Level 1 | | |||||||||||||||||
Available-for-sale |
|
Levels 1 and 2 |
| |||||||||||||||||
Loans held-for-investment, |
|
Level 3 | | |||||||||||||||||
Loans held-for-sale |
|
Level 2 | | |||||||||||||||||
Accrued interest receivable |
|
Level 2 | | |||||||||||||||||
Deposits with stated maturities |
|
Level 2 | | |||||||||||||||||
Deposits with no stated maturities |
|
Level 1 | | |||||||||||||||||
Borrowings |
|
Level 2 | | |||||||||||||||||
Accrued interest payable |
|
Level 2 | | |||||||||||||||||
IRLCs |
|
Level 2 | | |||||||||||||||||
Forward mortgage-backed securities trades |
( |
) | ( |
) | ( |
) | ( |
) | |
Level 2 |
|
December 31, 2020 (in thousands) |
||||
Financial instruments whose contract amounts represent credit risk: |
||||
Unfunded lines of credit |
$ | |||
Unfunded commitments to extend credit |
||||
Standby letters of credit |
||||
|
|
|||
Total commercial commitments |
$ | |||
|
|
Actual |
Minimum Capital Required-Basel III Fully Phased-In* |
Required to be Considered Well- Capitalized |
||||||||||||||||||||||
As of December 31, 2020: |
Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
||||||||||||||||||
Total Capital to Risk-Weighted Assets: |
||||||||||||||||||||||||
Consolidated |
$ | % | $ | % | $ | % | ||||||||||||||||||
First Financial Bank, N.A |
$ | % | $ | % | $ | % | ||||||||||||||||||
Tier 1 Capital to Risk-Weighted Assets: |
||||||||||||||||||||||||
Consolidated |
$ | % | $ | % | $ | % | ||||||||||||||||||
First Financial Bank, N.A |
$ | % | $ | % | $ | % | ||||||||||||||||||
Common Equity Tier 1 Capital |
||||||||||||||||||||||||
Consolidated |
$ | % | $ | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A |
$ | % | $ | % | $ | % | ||||||||||||||||||
Leverage Ratio: |
||||||||||||||||||||||||
Consolidated |
$ | % | $ | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A |
$ | % | $ | % | $ | % |
*At |
December 31, 2020 the Capital Conservative Buffer Basel III has been fully phased-in. |
Actual |
Minimum Capital Required-Basel III Fully Phased-In* |
Required to be Considered Well- Capitalized |
||||||||||||||||||||||
As of December 31, 2019: |
Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
||||||||||||||||||
Total Capital to Risk-Weighted Assets: |
||||||||||||||||||||||||
Consolidated |
$ | % | $ | % | $ | % | ||||||||||||||||||
First Financial Bank, N.A |
$ | % | $ | % | $ | % | ||||||||||||||||||
Tier 1 Capital to Risk-Weighted Assets: |
||||||||||||||||||||||||
Consolidated |
$ | % | $ | % | $ | % | ||||||||||||||||||
First Financial Bank, N.A |
$ | % | $ | % | $ | % | ||||||||||||||||||
Common Equity Tier 1 Capital |
||||||||||||||||||||||||
Consolidated |
$ | % | $ | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A |
$ | % | $ | % | $ | % | ||||||||||||||||||
Leverage Ratio: |
||||||||||||||||||||||||
Consolidated |
$ | % | $ | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A |
$ | % | $ | % | $ | % |
Shares |
Weighted- Average Ex. Price |
Weighted- Average Remaining Contractual Term (Years) |
Aggregate Intrinsic Value ($000) |
|||||||||||||
Outstanding, beginning of year |
$ | |
||||||||||||||
Granted |
||||||||||||||||
Exercised |
( |
) | ||||||||||||||
Cancelled |
( |
) | ||||||||||||||
|
|
|
|
|||||||||||||
Outstanding, end of year |
$ | |
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at end of year |
$ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
Exercise Price |
Number Outstanding |
Remaining Contracted Life (Years) |
Number Vested |
|||||||||||
$ | ||||||||||||||
$ | ||||||||||||||
$ | ||||||||||||||
$ | ||||||||||||||
$ | — | |||||||||||||
$ | — |
For the year ended |
For the year ended |
For the year ended |
||||||||||||||||||||||
2020 |
2019 |
2018 |
||||||||||||||||||||||
Restricted Stock Outstanding |
Weighted Average Grant Date Fair Value |
Restricted Stock Outstanding |
Weighted Average Grant Date Fair Value |
Restricted Stock Outstanding |
Weighted Average Grant Date Fair Value |
|||||||||||||||||||
Balance at beginning of period |
$ |
$ |
$ |
|||||||||||||||||||||
Grants |
||||||||||||||||||||||||
Vesting |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Forfeited/expired |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at end of period |
$ |
$ |
$ |
ASSETS |
|
2020 |
2019 |
|||||
Cash in subsidiary bank (1) |
$ | $ | ||||||
Cash in unaffiliated banks (1) |
||||||||
Interest-bearing deposits in subsidiary bank (1) |
||||||||
|
|
|
|
|||||
Total cash and cash equivalents |
||||||||
Securities available-for-sale, |
||||||||
Investment in and advances to subsidiaries, at equity (1) |
||||||||
Intangible assets |
||||||||
Other assets |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
Total liabilities |
$ | $ | ||||||
Shareholders’ equity: |
||||||||
Common stock |
||||||||
Capital surplus |
||||||||
Retained earnings |
||||||||
Treasury stock |
( |
) | ( |
) | ||||
Deferred compensation |
||||||||
Accumulated other comprehensive earnings |
||||||||
|
|
|
|
|||||
Total shareholders’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and shareholders’ equity |
$ | $ | ||||||
|
|
|
|
(1) |
Eliminates in consolidation. |
2020 |
2019 |
2018 |
||||||||||
Income: |
||||||||||||
Cash dividends from subsidiaries (1) |
$ |
$ |
$ |
|||||||||
Excess of earnings over dividends of subsidiaries (1) |
||||||||||||
Other |
||||||||||||
|
|
|
|
|
|
|||||||
Total income |
||||||||||||
|
|
|
|
|
|
|||||||
Expenses: |
||||||||||||
Salaries and employee benefits |
||||||||||||
Other operating expenses |
||||||||||||
|
|
|
|
|
|
|||||||
Total expense |
||||||||||||
|
|
|
|
|
|
|||||||
Earnings before income taxes |
||||||||||||
Income tax benefit |
||||||||||||
|
|
|
|
|
|
|||||||
Net earnings |
$ |
$ |
$ |
|||||||||
|
|
|
|
|
|
(1) |
Eliminates in consolidation. |
2020 | 2019 | 2018 | ||||||||||
Cash flows from operating activities: |
||||||||||||
Net earnings |
$ | $ | $ | |||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||||||
Excess of earnings over dividends of subsidiary bank |
( |
) | ( |
) | ( |
) | ||||||
Depreciation and amortization, net |
||||||||||||
Gain on sale of assets, net |
( |
) | — | — | ||||||||
Decrease (increase) in other assets |
||||||||||||
Increase (decrease) in other liabilities |
||||||||||||
Other |
— | ( |
) | |||||||||
|
|
|
|
|
|
|||||||
|
||||||||||||
|
|
|
|
|
|
|||||||
Cash flows from investing activities: |
||||||||||||
Maturity of available-for-sale |
— | |||||||||||
Purchases of bank premises and equipment and software |
— | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) investing activities |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Cash flows from financing activities: |
||||||||||||
Proceeds of stock issuances |
||||||||||||
Cash dividends paid |
( |
) | ( |
) | ( |
) | ||||||
Repurchase of stock |
( |
) | — | — | ||||||||
|
|
|
|
|
|
|||||||
Net cash used in financing activities |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net increase in cash and cash equivalents |
||||||||||||
Cash and cash equivalents, beginning of year |
||||||||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents, end of year |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|
20. |
CASH FLOW INFORMATION: |
Year Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Supplemental cash flow information: |
||||||||||||
Interest paid |
$ | $ | $ | |||||||||
Federal income taxes paid |
||||||||||||
Schedule of noncash investing and financing activities: |
||||||||||||
Assets acquired through foreclosure |
||||||||||||
Investment securities purchased but not settled |
— | — | ||||||||||
Restricted stock granted to officers and directors |
||||||||||||
Stock issued in acquisition of TB&T Bancshares, Inc. |
— | — | ||||||||||
Stock issued in acquisition of Commercial Bancshares, Inc. |
— | — |
21. |
ACQUISITIONS |
Fair value of consideration paid: |
||||
Common stock issued ( |
$ | |||
|
|
|||
Fair value of identifiable assets acquired: |
||||
Cash and cash equivalents |
||||
Securities available-for-sale |
||||
Loans |
||||
Identifiable intangible assets |
||||
Other assets |
||||
|
|
|||
Total identifiable assets acquired |
||||
|
|
|||
Fair value of liabilities assumed: |
||||
Deposits |
||||
Other liabilities |
( |
) | ||
|
|
|||
Total liabilities assumed |
||||
|
|
|||
Fair value of net identifiable assets acquired |
||||
Goodwill resulting from acquisition |
$ | |||
|
|
Fair value of consideration paid: |
||||
Common stock issued ( |
$ | |||
|
|
|||
Fair value of identifiable assets acquired: |
||||
Cash and cash equivalents |
$ | |||
Securities available-for-sale |
||||
Loans |
||||
Identifiable intangible assets |
||||
Other assets |
||||
|
|
|||
Total identifiable assets acquired |
$ | |||
|
|
|||
Fair value of liabilities assumed: |
||||
Deposits |
$ | |||
Other liabilities |
||||
|
|
|||
Total liabilities assumed |
$ | |||
|
|
|||
Fair value of net identifiable assets acquired |
||||
|
|
|||
Goodwill resulting from acquisition |
$ | |||
|
|