XML 45 R26.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Employee Benefit Plans | 12 Months Ended
--- | ---
Dec. 31, 2021
Retirement Benefits, Description [Abstract] |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS BancShares sponsors benefit plans for its qualifying employees and former employees of Bancorporation, Inc. (“Bancorporation”). The plans include noncontributory defined benefit pension plans, a 401(k) savings plan and an enhanced 401(k) savings plan. These plans are qualified under the Internal Revenue Code. BancShares also maintains agreements with certain executives providing supplemental benefits paid upon death or separation from service at an agreed-upon age. Defined Benefit Pension Plans BancShares employees who were hired prior to April 1, 2007 and qualified under length of service and other requirements are covered by the FCB-North Pension Plan (the “BancShares Pension Plan”), which was closed to new participants as of April 1, 2007. Discretionary contributions of $32 thousand were made to the BancShares Pension Plan in 2021, while discretionary contributions of $80 million were made in 2020. Certain legacy Bancorporation employees that qualified under length of service and other requirements are covered by the FCB-South Pension Plan (the “Bancorporation Pension Plan” and together with the BancShares Pension Plan, the “Plans”), which was closed to new participants as of September 1, 2007. There were no discretionary contributions made to the legacy Bancorporation Pension Plan for 2021, while discretionary contributions were $20 million in 2020. Participants in the Plans were fully vested after five years of service. Retirement benefits are based on years of service and highest annual compensation for five consecutive years during the last ten years of employment. BancShares makes contributions to the Plans in amounts between the minimum required for funding and the maximum amount deductible for federal income tax purposes. Management evaluates the need for its contributions to the Plans on a periodic basis based upon numerous factors including, but not limited to, funded status, returns on plan assets, discount rates and the current economic environment. The following tables and disclosures are on a combined basis as the Plans have the same terms in both form and substance. Obligations and Funded Status The following table provides the changes in benefit obligation and plan assets and the funded status of the Plans at December 31, 2021 and 2020.
(Dollars in thousands) | 2021 |  | 2020
Change in benefit obligation |  |  |
Projected benefit obligation at January 1 | $ | 1,077,653 |  |  | $ | 990,406 |
Service cost | 15,351 |  |  | 14,279 |
Interest cost | 29,864 |  |  | 34,197 |
Actuarial (gains)/losses | (30,591) |  |  | 72,080 |
Benefits paid | (35,967) |  |  | (33,309) |
Projected benefit obligation at December 31 | 1,056,310 |  |  | 1,077,653 |
Change in plan assets |  |  |
Fair value of plan assets at January 1 | 1,235,555 |  |  | 976,072 |
Actual return on plan assets | 145,720 |  |  | 192,792 |
Employer contributions | 32 |  |  | 100,000 |
Benefits paid | (35,967) |  |  | (33,309) |
Fair value of plan assets at December 31 | 1,345,340 |  |  | 1,235,555 |
Funded status at December 31 | $ | 289,030 |  |  | $ | 157,902 |
The amounts recognized in other assets at December 31, 2021 and December 31, 2020 were $289.0 million and $157.9 million, respectively. The following table details the amounts recognized in accumulated other comprehensive income at December 31, 2021 and 2020.
(Dollars in thousands) | 2021 |  | 2020
Net actuarial (gain) loss | $ | (33,223) |  |  | $ | 91,751 |
The accumulated benefit obligation for the Plans at December 31, 2021 and 2020, was $972.7 million and $985.0 million, respectively. The Plans use a measurement date of December 31. The following table shows the components of periodic benefit cost related to the Plans and changes in plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31, 2021, 2020 and 2019.
| Year ended December 31
(Dollars in thousands) | 2021 |  | 2020 |  | 2019
Service cost | $ | 15,351 |  |  | $ | 14,279 |  |  | $ | 12,767 |
Interest cost | 29,864 |  |  | 34,197 |  |  | 37,260 |
Expected return on assets | (78,430) |  |  | (65,689) |  |  | (62,590) |
Amortization of prior service cost | — |  |  | — |  |  | 57 |
Amortization of net actuarial loss | 27,093 |  |  | 25,324 |  |  | 10,924 |
Total net periodic benefit cost (income) | (6,122) |  |  | 8,111 |  |  | (1,582) |
Current year actuarial (gain) loss | (97,880) |  |  | (55,023) |  |  | 20,049 |
Amortization of actuarial loss | (27,093) |  |  | (25,324) |  |  | (10,924) |
Amortization of prior service cost | — |  |  | — |  |  | (57) |
Net (gain) loss recognized in other comprehensive income | (124,973) |  |  | (80,347) |  |  | 9,068 |
Total recognized in net periodic benefit cost and other comprehensive income | $ | (131,095) |  |  | $ | (72,236) |  |  | $ | 7,486 |
Actuarial gains in 2021 and 2020 were primarily driven by return on assets greater than expected, partially offset by the impact of a decreased discount rate. Service costs and the amortization of prior service costs are recorded in personnel expense, while interest cost, expected return on plan assets and the amortization of actuarial (gains)losses are recorded in other noninterest expense. The assumptions used to determine the benefit obligations at December 31, 2021 and 2020 are as follows:
| 2021 |  | 2020
Discount rate | 3.04 | % |  | 2.76 | %
Rate of compensation increase | 5.60 |  |  | 5.60 |
The assumptions used to determine the net periodic benefit cost for the years ended December 31, 2021, 2020 and 2019, are as follows:
| 2021 |  | 2020 |  | 2019
Discount rate | 2.76 | % |  | 3.46 | % |  | 4.38 | %
Rate of compensation increase | 5.60 |  |  | 5.60 |  |  | 5.60 |
Expected long-term return on plan assets | 7.50 |  |  | 7.50 |  |  | 7.50 |
The estimated discount rate, which represents the interest rate that could be obtained for a suitable investment used to fund the benefit obligations, is based on a yield curve developed from high-quality corporate bonds across a full maturity spectrum. The projected cash flows of the pension plans are discounted based on this yield curve and a single discount rate is calculated to achieve the same present value. The weighted average expected long-term rate of return on the Plans’ assets represents the average rate of return expected to be earned on the Plans’ assets over the period the benefits included in the benefit obligation are to be paid. In developing the expected rate of return, historical and current returns, as well as investment allocation strategies, on the Plans’ assets are considered. Plan Assets For the Plans, our primary total return objective is to achieve returns over the long term that will fund retirement liabilities and provide desired plan benefits in a manner that satisfies the fiduciary requirements of the Employee Retirement Income Security Act. The Plans’ assets have a long-term time horizon that runs concurrent with the average life expectancy of the participants. As such, the Plans can assume a time horizon that extends well beyond a full market cycle and can assume a reasonable level of risk. It is expected, however, that both professional investment management and sufficient portfolio diversification will smooth volatility and help generate a consistent level of return. The investments are broadly diversified across global, economic and market risk factors in an attempt to reduce volatility and target multiple return sources. Within approved guidelines and restrictions, the investment manager has discretion over the timing and selection of individual investments. The Plans’ assets are currently held by the BancShares trust department. Equity securities are measured at fair value using observable closing prices. These securities are classified as Level 1 as they are traded in an active market. Fixed income securities are generally estimated using a third party pricing service. The third party provider evaluates securities based on comparable investments with trades and market data and will utilize pricing models which use a variety of inputs, such as benchmark yields, reported trades, issuer spreads, benchmark securities, bids and offers as needed. These securities are generally classified as Level 2. The fair values of pension plan assets at December 31, 2021 and 2020, by asset class are as follows:
| December 31, 2021
(Dollars in thousands) | Market Value |  | Level 1 |  | Level 2 |  | Level 3 |  | Target Allocation |  | Actual % of Plan Assets
Cash and equivalents | $ | 16,674 |  |  | $ | 16,674 |  |  | $ | — |  |  | $ | — |  |  | 0 - 5% |  | 1 | %
Equity securities |  |  |  |  |  |  |  |  | 30 - 70% |  | 61 | %
Common and preferred stock | 76,240 |  |  | 76,240 |  |  | — |  |  | — |  |  |  |  |
Mutual funds | 481,630 |  |  | 481,630 |  |  | — |  |  | — |  |  |  |  |
Exchange traded funds | 263,072 |  |  | 263,072 |  |  | — |  |  | — |  |  |  |  |
Fixed income |  |  |  |  |  |  |  |  | 15 - 45% |  | 38 | %
U.S. government and government agency securities | 228,399 |  |  | — |  |  | 228,399 |  |  | — |  |  |  |  |
Corporate bonds | 279,325 |  |  | 2,902 |  |  | 276,423 |  |  | — |  |  |  |  |
Total pension assets | $ | 1,345,340 |  |  | $ | 840,518 |  |  | $ | 504,822 |  |  | $ | — |  |  |  |  | 100 | %
| December 31, 2020
| Market Value |  | Level 1 |  | Level 2 |  | Level 3 |  | Target Allocation |  | Actual % of Plan Assets
Cash and equivalents | $ | 37,913 |  |  | $ | 37,913 |  |  | $ | — |  |  | $ | — |  |  | 0 - 5% |  | 3 | %
Equity securities |  |  |  |  |  |  |  |  | 30 - 70% |  | 77 | %
Common and preferred stock | 144,924 |  |  | 144,924 |  |  | — |  |  | — |  |  |  |  |
Mutual funds | 559,472 |  |  | 559,472 |  |  | — |  |  | — |  |  |  |  |
Exchange traded funds | 248,819 |  |  | 248,819 |  |  | — |  |  | — |  |  |  |  |
Fixed income |  |  |  |  |  |  |  |  | 15 - 45% |  | 20 | %
U.S. government and government agency securities | 90,292 |  |  | — |  |  | 90,292 |  |  | — |  |  |  |  |
Corporate bonds | 154,135 |  |  | — |  |  | 154,135 |  |  | — |  |  |  |  |
Total pension assets | $ | 1,235,555 |  |  | $ | 991,128 |  |  | $ | 244,427 |  |  | $ | — |  |  |  |  | 100 | %
There were no direct investments in equity securities of BancShares included in pension plan assets in any of the years presented. Cash Flows The following are estimated payments to pension plan participants in the indicated periods:
(Dollars in thousands) | Estimated Payments
2022 | $ | 41,051 |
2023 | 43,686 |
2024 | 46,266 |
2025 | 48,548 |
2026 | 50,756 |
2027-2031 | 280,173 |
401(k) Savings Plans Certain employees enrolled in the defined benefit plan are also eligible to participate in a 401(k) savings plan through deferral of portions of their salary. For employees who participate in the 401(k) savings plan who also continue to accrue additional years of service under the defined benefit plans, BancShares makes a matching contribution equal to 100% of the first 3% and 50% of the next 3% of the participant’s deferral up to and including a maximum contribution of 4.5% of the participant’s eligible compensation. The matching contribution immediately vests. At the end of 2007, current employees were given the option to continue to accrue additional years of service under the defined benefit plans or to elect to join an enhanced 401(k) savings plan. Under the enhanced 401(k) savings plan, BancShares matches up to 100% of the participant’s deferrals not to exceed 6% of the participant’s eligible compensation. The matching contribution immediately vests. In addition to the employer match of the employee contributions, the enhanced 401(k) savings plan provides a required employer non-elective contribution equal to 3% of the compensation of a participant who remains employed at the end of the calendar year. This employer contribution vests after three years of service. Employees who elected to enroll in the enhanced 401(k) savings plan discontinued the accrual of additional years of service under the defined benefit plans and became enrolled in the enhanced 401(k) savings plan effective January 1, 2008. Eligible employees hired after January 1, 2008, are eligible to participate in the enhanced 401(k) savings plan. BancShares recognized expense related to contributions to the 401(k) plans of $36.2 million, $35.6 million and $30.8 million during 2021, 2020 and 2019, respectively. Additional Benefits for Executives, Directors, and Officers BancShares has entered into contractual agreements with certain executives providing payments for a period of no more than ten years following separation from service occurring no earlier than an agreed-upon age. These agreements also provide a death benefit in the event a participant dies prior to separation from service or during the payment period following separation from service. BancShares has also assumed liability for contractual obligations to directors and officers of previously acquired entities. The following table provides the accrued liability as of December 31, 2021 and 2020, and the changes in the accrued liability during the years then ended:
(Dollars in thousands) | 2021 |  | 2020
Accrued liability as of January 1 | $ | 42,655 |  |  | $ | 45,295 |
Discount rate adjustment | (680) |  |  | 1,719 |
Benefit expense and interest cost | 2,015 |  |  | 3,503 |
Benefits paid | (5,244) |  |  | (7,862) |
Accrued liability as of December 31 | $ | 38,746 |  |  | $ | 42,655 |
Discount rate at December 31 | 3.04 | % |  | 2.76 | %
Other Compensation Plans BancShares offers various short-term and long-term incentive plans for certain employees. Compensation awarded under these plans may be based on defined formulas, performance criteria, or at the discretion of management. The incentive compensation programs were designed to motivate employees through a balanced approach of risk and reward for their contributions toward BancShares’ success. As of December 31, 2021 and 2020, the accrued liability for incentive compensation was $84.0 million and $68.2 million, respectively.

X
- References No definition available. + Details
Name: | us-gaap_GeneralDiscussionOfPensionAndOtherPostretirementBenefitsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for retirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 55 -Paragraph 17 -URI http://asc.fasb.org/extlink&oid=123450688&loc=d3e4179-114921 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section S99 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=21916913&loc=d3e273930-122802 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(i) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (o) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (p) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 70 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=49170846&loc=d3e28014-114942 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 60 -Section 50 -Paragraph 3 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=6414203&loc=d3e39689-114964 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(iv)(03) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (q) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (r)(1) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(iii) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (l) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (r)(2) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration