þ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Michigan | 38-2022454 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
235 E. Main Street Midland, Michigan | 48640 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer | þ | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | |||
Emerging growth company | ¨ |
Page | ||
Consolidated Statements of Financial Position as of June 30, 2017 (unaudited) and December 31, 2016 | ||
Consolidated Statements of Income for the Three and Six Months Ended June 30, 2017 and 2016 (unaudited) | ||
Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2017 and 2016 (unaudited) | ||
Consolidated Statements of Changes in Shareholders’ Equity for the Six Months Ended June 30, 2017 and 2016 (unaudited) | ||
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2017 and 2016 (unaudited) | ||
(Dollars in thousands, except per share data) | June 30, 2017 | December 31, 2016 | ||||||
(Unaudited) | ||||||||
Assets | ||||||||
Cash and cash equivalents: | ||||||||
Cash and cash due from banks | $ | 230,219 | $ | 237,758 | ||||
Interest-bearing deposits with the Federal Reserve Bank and other banks | 389,022 | 236,644 | ||||||
Total cash and cash equivalents | 619,241 | 474,402 | ||||||
Investment securities: | ||||||||
Available-for-sale, at fair value | 1,767,478 | 1,234,964 | ||||||
Held-to-maturity, at amortized cost (fair value of $640,043 and $608,531, respectively) | 645,605 | 623,427 | ||||||
Total investment securities | 2,413,083 | 1,858,391 | ||||||
Loans held-for-sale, at fair value | 65,371 | 81,830 | ||||||
Loans | 13,667,372 | 12,990,779 | ||||||
Allowance for loan losses | (83,797 | ) | (78,268 | ) | ||||
Net loans | 13,583,575 | 12,912,511 | ||||||
Premises and equipment | 146,460 | 145,012 | ||||||
Loan servicing rights ($64,522 and $48,085 measured at fair value, respectively) | 64,522 | 58,315 | ||||||
Goodwill | 1,133,534 | 1,133,534 | ||||||
Other intangible assets | 37,322 | 40,211 | ||||||
Interest receivable and other assets | 718,297 | 650,973 | ||||||
Total assets | $ | 18,781,405 | $ | 17,355,179 | ||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 3,626,592 | $ | 3,341,520 | ||||
Interest-bearing | 9,577,775 | 9,531,602 | ||||||
Total deposits | 13,204,367 | 12,873,122 | ||||||
Interest payable and other liabilities | 141,702 | 134,637 | ||||||
Securities sold under agreements to repurchase with customers | 310,042 | 343,047 | ||||||
Short-term borrowings | 2,050,000 | 825,000 | ||||||
Long-term borrowings | 435,852 | 597,847 | ||||||
Total liabilities | 16,141,963 | 14,773,653 | ||||||
Shareholders’ equity | ||||||||
Preferred stock, no par value: | ||||||||
Authorized – 2,000,000 shares at 6/30/17 and 12/31/16, none issued | — | — | ||||||
Common stock, $1.00 par value per share: | ||||||||
Authorized – 135,000,000 shares at 6/30/17 and 100,000,000 share at 12/31/16 | ||||||||
Issued and outstanding – 71,131,042 shares at 6/30/17 and 70,599,133 shares at 12/31/16 | 71,131 | 70,599 | ||||||
Additional paid-in capital | 2,197,501 | 2,210,762 | ||||||
Retained earnings | 404,939 | 340,201 | ||||||
Accumulated other comprehensive loss | (34,129 | ) | (40,036 | ) | ||||
Total shareholders’ equity | 2,639,442 | 2,581,526 | ||||||
Total liabilities and shareholders’ equity | $ | 18,781,405 | $ | 17,355,179 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Dollars in thousands, except per share data) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Interest income | ||||||||||||||||
Interest and fees on loans | $ | 141,314 | $ | 77,578 | $ | 273,799 | $ | 151,979 | ||||||||
Interest on investment securities: | ||||||||||||||||
Taxable | 7,125 | 1,798 | 11,881 | 3,727 | ||||||||||||
Tax-exempt | 4,426 | 2,640 | 8,661 | 5,305 | ||||||||||||
Dividends on nonmarketable equity securities | 1,246 | 777 | 1,867 | 1,033 | ||||||||||||
Interest on deposits with the Federal Reserve Bank, other banks and Federal funds sold | 1,022 | 144 | 1,821 | 357 | ||||||||||||
Total interest income | 155,133 | 82,937 | 298,029 | 162,401 | ||||||||||||
Interest expense | ||||||||||||||||
Interest on deposits | 10,582 | 4,260 | 19,498 | 8,319 | ||||||||||||
Interest on short-term borrowings | 4,659 | 226 | 6,317 | 326 | ||||||||||||
Interest on long-term borrowings | 1,944 | 956 | 4,169 | 1,931 | ||||||||||||
Total interest expense | 17,185 | 5,442 | 29,984 | 10,576 | ||||||||||||
Net interest income | 137,948 | 77,495 | 268,045 | 151,825 | ||||||||||||
Provision for loan losses | 6,229 | 3,000 | 10,279 | 4,500 | ||||||||||||
Net interest income after provision for loan losses | 131,719 | 74,495 | 257,766 | 147,325 | ||||||||||||
Noninterest income | ||||||||||||||||
Service charges and fees on deposit accounts | 8,777 | 6,337 | 16,781 | 12,057 | ||||||||||||
Wealth management revenue | 6,958 | 5,782 | 12,785 | 10,983 | ||||||||||||
Other charges and fees for customer services | 9,734 | 6,463 | 18,625 | 12,855 | ||||||||||||
Net gain on sale of loans and other mortgage banking revenue | 9,879 | 1,595 | 19,039 | 3,000 | ||||||||||||
Gain on sale of investment securities | 77 | 18 | 167 | 37 | ||||||||||||
Other | 6,143 | 702 | 12,181 | 1,384 | ||||||||||||
Total noninterest income | 41,568 | 20,897 | 79,578 | 40,316 | ||||||||||||
Operating expenses | ||||||||||||||||
Salaries, wages and employee benefits | 52,601 | 33,127 | 112,849 | 67,017 | ||||||||||||
Occupancy | 8,745 | 5,514 | 16,137 | 10,419 | ||||||||||||
Equipment and software | 8,149 | 4,875 | 16,666 | 9,279 | ||||||||||||
Merger and acquisition-related transaction expenses | 465 | 3,054 | 4,632 | 5,648 | ||||||||||||
Other | 28,277 | 12,515 | 52,149 | 25,609 | ||||||||||||
Total operating expenses | 98,237 | 59,085 | 202,433 | 117,972 | ||||||||||||
Income before income taxes | 75,050 | 36,307 | 134,911 | 69,669 | ||||||||||||
Income tax expense | 23,036 | 10,532 | 35,293 | 20,289 | ||||||||||||
Net income | $ | 52,014 | $ | 25,775 | $ | 99,618 | $ | 49,380 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.73 | $ | 0.67 | $ | 1.41 | $ | 1.29 | ||||||||
Diluted | 0.73 | 0.67 | 1.39 | 1.28 | ||||||||||||
Cash dividends declared per common share | $ | 0.27 | $ | 0.26 | $ | 0.54 | $ | 0.52 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | 52,014 | $ | 25,775 | $ | 99,618 | $ | 49,380 | ||||||||
Other comprehensive income, net of tax: | ||||||||||||||||
Unrealized holding gains on securities available-for-sale arising during the period | 5,528 | 2,121 | 8,267 | 6,320 | ||||||||||||
Reclassification adjustment for gains on realized income | (77 | ) | (18 | ) | (167 | ) | (37 | ) | ||||||||
Tax effect | (1,908 | ) | (736 | ) | (2,835 | ) | (2,199 | ) | ||||||||
Net unrealized gains on securities available-for-sale, net of tax | 3,543 | 1,367 | 5,265 | 4,084 | ||||||||||||
Unrealized losses on interest rate swaps designated as cash flow hedges | (466 | ) | — | (466 | ) | — | ||||||||||
Reclassification adjustment for losses included in net income | 409 | — | 409 | — | ||||||||||||
Net unrealized losses on interest rate swaps designated as cash flow hedges, net of tax | (57 | ) | — | (57 | ) | — | ||||||||||
Adjustment for pension and other postretirement benefits | 539 | (577 | ) | 1,076 | (1,154 | ) | ||||||||||
Tax effect | (189 | ) | 202 | (377 | ) | 404 | ||||||||||
Net adjustment for pension and other postretirement benefits | 350 | (375 | ) | 699 | (750 | ) | ||||||||||
Other comprehensive income, net of tax | 3,836 | 992 | 5,907 | 3,334 | ||||||||||||
Total comprehensive income, net of tax | $ | 55,850 | $ | 26,767 | $ | 105,525 | $ | 52,714 |
(Dollars in thousands) | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Total | |||||||||||||||
Balances at December 31, 2015 | $ | 38,168 | $ | 725,280 | $ | 281,558 | $ | (29,032 | ) | $ | 1,015,974 | |||||||||
Comprehensive income | 49,380 | 3,334 | 52,714 | |||||||||||||||||
Cash dividends declared and paid of $0.52 per share | (19,942 | ) | (19,942 | ) | ||||||||||||||||
Shares issued – stock options | 48 | 352 | 400 | |||||||||||||||||
Shares issued – directors’ stock plans | 5 | 120 | 125 | |||||||||||||||||
Shares issued – restricted stock units | 45 | (797 | ) | (752 | ) | |||||||||||||||
Share-based compensation expense | 1 | 1,779 | 1,780 | |||||||||||||||||
Balances at June 30, 2016 | $ | 38,267 | $ | 726,734 | $ | 310,996 | $ | (25,698 | ) | $ | 1,050,299 | |||||||||
Balances at December 31, 2016 | $ | 70,599 | $ | 2,210,762 | $ | 340,201 | $ | (40,036 | ) | $ | 2,581,526 | |||||||||
Cumulative effect adjustment of change in accounting policy, net of tax impact(1) | 3,659 | 3,659 | ||||||||||||||||||
Comprehensive income | 99,618 | 5,907 | 105,525 | |||||||||||||||||
Cash dividends declared and paid of $0.54 per share | (38,539 | ) | (38,539 | ) | ||||||||||||||||
Shares issued – stock options | 523 | (17,601 | ) | (17,078 | ) | |||||||||||||||
Shares issued – restricted stock units | 35 | (1,331 | ) | (1,296 | ) | |||||||||||||||
Net shares – restricted stock awards | (27 | ) | (1,256 | ) | (1,283 | ) | ||||||||||||||
Share-based compensation expense | 1 | 6,927 | 6,928 | |||||||||||||||||
Balances at June 30, 2017 | $ | 71,131 | $ | 2,197,501 | $ | 404,939 | $ | (34,129 | ) | $ | 2,639,442 |
Six Months Ended June 30, | ||||||||
(Dollars in thousands) | 2017 | 2016 | ||||||
Cash flows from operating activities | ||||||||
Net income | $ | 99,618 | $ | 49,380 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Provision for loan losses | 10,279 | 4,500 | ||||||
Gain on sales of loans | (20,025 | ) | (3,431 | ) | ||||
Proceeds from sales of loans | 391,475 | 119,845 | ||||||
Loans originated for sale | (353,034 | ) | (120,077 | ) | ||||
Net gains on sale of investment securities | (167 | ) | (37 | ) | ||||
Net gains from sales/writedowns of other real estate and repossessed assets | (871 | ) | (2,512 | ) | ||||
Depreciation of premises and equipment | 8,989 | 5,562 | ||||||
Amortization of intangible assets | 3,039 | 4,339 | ||||||
Additions to loan servicing rights | (4,137 | ) | (917 | ) | ||||
Valuation change in loan servicing rights | 3,591 | 412 | ||||||
Net amortization of premiums and discounts on investment securities | 8,880 | 2,891 | ||||||
Share-based compensation expense | 6,928 | 1,780 | ||||||
Deferred income tax expense | 30,986 | — | ||||||
Net increase in interest receivable and other assets | (105,853 | ) | (12,287 | ) | ||||
Net increase (decrease) in interest payable and other liabilities | 7,865 | (4,139 | ) | |||||
Net cash provided by operating activities | 87,563 | 45,309 | ||||||
Cash flows from investing activities | ||||||||
Investment securities – available-for-sale: | ||||||||
Proceeds from maturities, calls and principal reductions | 143,335 | 94,528 | ||||||
Proceeds from sales and redemptions | 10,050 | 5,000 | ||||||
Purchases | (685,689 | ) | — | |||||
Investment securities – held-to-maturity: | ||||||||
Proceeds from maturities, calls and principal reductions | 63,339 | 57,518 | ||||||
Purchases | (86,340 | ) | (101,295 | ) | ||||
Net increase in loans | (689,632 | ) | (385,814 | ) | ||||
Proceeds from sales of other real estate and repossessed assets | 9,606 | 6,528 | ||||||
Purchases of premises and equipment, net of disposals | (10,437 | ) | (3,897 | ) | ||||
Net cash used in investing activities | (1,245,768 | ) | (327,432 | ) | ||||
Cash flows from financing activities | ||||||||
Net increase in interest- and noninterest-bearing demand deposits and savings accounts | 354,480 | 95,263 | ||||||
Net decrease in time deposits | (23,235 | ) | (87,384 | ) | ||||
Net increase in securities sold under agreements to repurchase with customers and other short-term borrowings | 1,191,995 | 159,014 | ||||||
Proceeds from issuance of long-term borrowings | — | 150,000 | ||||||
Repayment of long-term borrowings | (162,000 | ) | (20,558 | ) | ||||
Cash dividends paid | (38,539 | ) | (19,942 | ) | ||||
Proceeds from directors’ stock plans and exercise of stock options, net of shares withheld | 1,639 | 653 | ||||||
Cash paid for payroll taxes upon conversion of share-based awards | (21,296 | ) | (752 | ) | ||||
Net cash provided by financing activities | 1,303,044 | 276,294 | ||||||
Net increase (decrease) in cash and cash equivalents | 144,839 | (5,829 | ) | |||||
Cash and cash equivalents at beginning of period | 474,402 | 238,789 | ||||||
Cash and cash equivalents at end of period | $ | 619,241 | $ | 232,960 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Interest paid | $ | 30,287 | $ | 10,764 | ||||
Net income tax (refunds) payments | (4,689 | ) | 11,700 | |||||
Loans transferred to other real estate and repossessed assets | 6,332 | 3,370 | ||||||
Net transfer of loans held-for-sale to loans held- for-investment | (1,957 | ) | — | |||||
Closed branch offices transferred to other assets | — | 1,863 |
(Dollars in thousands) | ||||
Consideration paid: | ||||
Stock | $ | 1,504,811 | ||
Cash | 107,638 | |||
Total consideration | 1,612,449 | |||
Fair value of identifiable assets acquired: | ||||
Cash and cash equivalents | 433,352 | |||
Investment securities: | ||||
Available-for-sale | 808,894 | |||
Held-to-maturity | 1,657 | |||
Loans held-for-sale | 244,916 | |||
Loans | 4,882,402 | |||
Premises and equipment | 38,793 | |||
Loan servicing rights | 42,462 | |||
Other intangible assets | 19,088 | |||
Interest receivable and other assets | 395,119 | |||
Total identifiable assets acquired | $ | 6,866,683 | ||
Fair value of liabilities assumed: | ||||
Noninterest-bearing deposits | 1,236,902 | |||
Interest-bearing deposits | 4,057,716 | |||
Interest payable and other liabilities | 99,482 | |||
Securities sold under agreements to repurchase with customers | 19,704 | |||
Short-term borrowings | 387,500 | |||
Long-term borrowings | 299,597 | |||
Total liabilities assumed | $ | 6,100,901 | ||
Fair value of net identifiable assets acquired | $ | 765,782 | ||
Goodwill resulting from acquisition | $ | 846,667 |
(Dollars in thousands) | ||||
Accounted for under ASC 310-30: | ||||
Contractual cash flows | $ | 5,968,488 | ||
Contractual cash flows not expected to be collected (nonaccretable difference) | 223,959 | |||
Expected cash flows | 5,744,529 | |||
Interest component of expected cash flows (accretable yield) | 862,127 | |||
Fair value at acquisition | $ | 4,882,402 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Dollars in thousands) (1) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Net interest and other income | $ | 179,516 | $ | 168,130 | $ | 347,623 | $ | 326,100 | ||||||||
Net Income | 52,014 | 42,111 | 99,618 | 81,163 | ||||||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.73 | $ | 0.60 | $ | 1.41 | $ | 1.15 | ||||||||
Diluted | 0.73 | 0.59 | 1.39 | 1.14 |
Level 1 | Valuation is based upon quoted prices for identical instruments traded in active markets. Level 1 valuations for the Corporation include U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets. Valuations are obtained from a third-party pricing service for these investment securities. |
Level 2 | Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 2 valuations for the Corporation include government sponsored agency securities, including securities issued by the Federal Home Loan Bank, Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, Federal Farm Credit Bank, Student Loan Marketing Corporation and the Small Business Administration, securities issued by certain state and political subdivisions, residential mortgage-backed securities, collateralized mortgage obligations, corporate bonds, preferred stock and available-for-sale trust preferred securities. Valuations are obtained from a third-party pricing service for these investment securities. Additionally included in Level 2 valuations are loans held for sale and derivative assets and liabilities. |
Level 3 | Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models, yield curves and similar techniques. The determination of fair value requires management judgment or estimation and generally is corroborated by external data, which includes third-party pricing services. Level 3 valuations for the Corporation include securities issued by certain state and political subdivisions, held-to-maturity trust preferred investment securities, impaired loans, goodwill, core deposit intangible assets, non-compete intangible assets, LSRs and other real estate and repossessed assets. |
(Dollars in thousands) | Quoted Prices In Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||
June 30, 2017 | |||||||||||||||
Investment securities – available-for-sale: | |||||||||||||||
U.S. Treasury securities | $ | 5,793 | $ | — | $ | — | $ | 5,793 | |||||||
Government sponsored agencies | — | 247,474 | — | 247,474 | |||||||||||
State and political subdivisions | — | 292,035 | — | 292,035 | |||||||||||
Residential mortgage-backed securities | — | 292,912 | — | 292,912 | |||||||||||
Collateralized mortgage obligations | — | 733,187 | — | 733,187 | |||||||||||
Corporate bonds | — | 158,168 | — | 158,168 | |||||||||||
Preferred stock and trust preferred securities | — | 37,909 | — | 37,909 | |||||||||||
Total investment securities – available-for-sale | 5,793 | 1,761,685 | — | 1,767,478 | |||||||||||
Loans held-for-sale | — | 65,371 | — | 65,371 | |||||||||||
Loan servicing rights | — | — | 64,522 | 64,522 | |||||||||||
Derivative assets: | |||||||||||||||
Customer-initiated derivatives | — | 8,636 | — | 8,636 | |||||||||||
Forward contracts related to mortgage loans to be delivered for sale | — | 617 | — | 617 | |||||||||||
Interest rate lock commitments | — | 1,997 | — | 1,997 | |||||||||||
Power Equity CD | — | 2,062 | — | 2,062 | |||||||||||
Risk management derivatives | — | 224 | — | 224 | |||||||||||
Total derivatives | — | 13,536 | — | 13,536 | |||||||||||
Total assets at fair value | $ | 5,793 | $ | 1,840,592 | $ | 64,522 | $ | 1,910,907 | |||||||
Derivative liabilities: | |||||||||||||||
Customer-initiated derivatives | — | 9,152 | — | 9,152 | |||||||||||
Power Equity CD | — | 2,062 | — | 2,062 | |||||||||||
Risk management derivatives | — | 282 | — | 282 | |||||||||||
Total derivatives | — | 11,496 | — | 11,496 | |||||||||||
Total liabilities at fair value | $ | — | $ | 11,496 | $ | — | $ | 11,496 | |||||||
December 31, 2016 | |||||||||||||||
Investment securities – available-for-sale: | |||||||||||||||
U.S. Treasury securities | $ | 5,793 | $ | — | $ | — | $ | 5,793 | |||||||
Government sponsored agencies | — | 215,011 | — | 215,011 | |||||||||||
State and political subdivisions | — | 300,088 | — | 300,088 | |||||||||||
Residential mortgage-backed securities | — | 272,282 | — | 272,282 | |||||||||||
Collateralized mortgage obligations | — | 320,025 | — | 320,025 | |||||||||||
Corporate bonds | — | 89,474 | — | 89,474 | |||||||||||
Preferred stock and trust preferred securities | — | 32,291 | — | 32,291 | |||||||||||
Total investment securities – available-for-sale | 5,793 | 1,229,171 | — | 1,234,964 | |||||||||||
Loans held-for-sale | — | 81,830 | — | 81,830 | |||||||||||
Loan servicing rights | — | — | 48,085 | 48,085 | |||||||||||
Derivative assets: | |||||||||||||||
Customer-initiated derivatives | — | 4,406 | — | 4,406 | |||||||||||
Forward contracts related to mortgage loans to be delivered for sale | — | 635 | — | 635 | |||||||||||
Interest rate lock commitments | — | 956 | — | 956 | |||||||||||
Power Equity CD | — | 2,218 | — | 2,218 | |||||||||||
Total derivatives | — | 8,215 | — | 8,215 | |||||||||||
Total assets at fair value | $ | 5,793 | $ | 1,319,216 | $ | 48,085 | $ | 1,373,094 | |||||||
Derivative liabilities: | |||||||||||||||
Customer-initiated derivatives | — | 4,141 | — | 4,141 | |||||||||||
Power Equity CD | — | 2,218 | — | 2,218 | |||||||||||
Total derivatives | — | 6,359 | — | 6,359 | |||||||||||
Total liabilities at fair value | $ | — | $ | 6,359 | $ | — | $ | 6,359 |
Three Months Ended June 30, 2017 | Six Months Ended June 30, 2017 | |||||||
(Dollars in thousands) | Loan servicing rights | |||||||
Balance, beginning of period | $ | 64,604 | $ | 48,085 | ||||
Transfer in based on new accounting policy election(1) | — | 15,891 | ||||||
Gains (losses): | ||||||||
Recorded in earnings (realized): | ||||||||
Recorded in "Net gain on sale of loans and other mortgage banking revenue" | (2,466 | ) | (3,591 | ) | ||||
New originations | 2,384 | 4,137 | ||||||
Balance, end of period | $ | 64,522 | $ | 64,522 |
(Dollars in thousands) | June 30, 2017 | December 31, 2016 | ||||||
Aggregate fair value | $ | 65,371 | $ | 81,830 | ||||
Contractual balance | 63,162 | 81,009 | ||||||
Unrealized gain (loss) | 2,209 | 821 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Interest income(1) | $ | 463 | $ | 20 | $ | 1,014 | $ | 39 | ||||||||
Change in fair value(2) | 787 | — | 1,388 | — | ||||||||||||
Net gain on sales of loans(2) | 13,905 | 2,135 | 20,025 | 3,431 | ||||||||||||
Total included in earnings | $ | 15,155 | $ | 2,155 | $ | 22,427 | $ | 3,470 |
(Dollars in thousands) | Significant Unobservable Inputs (Level 3) | Total | |||||||
June 30, 2017 | |||||||||
Impaired originated loans | $ | 63,694 | $ | 63,694 | |||||
Other real estate/repossessed assets | 3,811 | 3,811 | |||||||
Total | $ | 67,505 | $ | 67,505 | |||||
December 31, 2016 | |||||||||
Impaired originated loans | $ | 62,184 | $ | 62,184 | |||||
Other real estate/repossessed assets | 1,386 | 1,386 | |||||||
Loan servicing rights | 2 | 2 | |||||||
Total | $ | 63,572 | $ | 63,572 |
(Dollars in thousands) | Fair Value at June 30, 2017 | Valuation Technique | Significant Unobservable Inputs | Range | ||||||
Impaired originated loans | $ | 63,694 | Appraisal of collateral | Discount for type of collateral and age of appraisal | 10%-25% | |||||
Other real estate/repossessed assets | 3,811 | Appraisal of property | Discount for type of property and age of appraisal | 10%-25% |
Level in Fair Value Measurement Hierarchy | June 30, 2017 | December 31, 2016 | ||||||||||||||||
(Dollars in thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||
Financial assets: | ||||||||||||||||||
Cash and cash equivalents | Level 1 | $ | 619,241 | $ | 619,241 | $ | 474,402 | $ | 474,402 | |||||||||
Investment securities: | ||||||||||||||||||
Held-to-maturity | Level 2 | 645,105 | 639,683 | 622,927 | 608,221 | |||||||||||||
Held-to-maturity | Level 3 | 500 | 360 | 500 | 310 | |||||||||||||
Nonmarketable equity securities | Level 2 | 180,196 | 180,196 | 97,350 | 97,350 | |||||||||||||
Net loans(1) | Level 3 | 13,583,575 | 13,758,368 | 12,912,511 | 13,069,315 | |||||||||||||
Interest receivable | Level 2 | 45,832 | 45,832 | 42,235 | 42,235 | |||||||||||||
Bank-owned life insurance | Level 2 | 145,671 | 145,671 | 143,718 | 143,718 | |||||||||||||
Financial liabilities: | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Deposits without defined maturities | Level 2 | $ | 10,217,235 | $ | 10,217,235 | $ | 9,862,755 | $ | 9,862,755 | |||||||||
Time deposits | Level 2 | 2,987,132 | 2,987,779 | 3,010,367 | 3,010,048 | |||||||||||||
Total deposits | 13,204,367 | 13,205,014 | 12,873,122 | 12,872,803 | ||||||||||||||
Interest payable | Level 2 | 5,112 | 5,112 | 5,415 | 5,415 | |||||||||||||
Securities sold under agreements to repurchase with customers | Level 2 | 310,042 | 310,042 | 343,047 | 343,047 | |||||||||||||
Short-term borrowings | Level 2 | 2,050,000 | 2,048,744 | 825,000 | 825,000 | |||||||||||||
Long-term borrowings | Level 2 | 435,852 | 431,345 | 597,847 | 591,227 |
(1) | Included $63.7 million and $62.2 million of impaired loans recorded at fair value on a nonrecurring basis at June 30, 2017 and December 31, 2016, respectively. |
Investment Securities Available-for-Sale | ||||||||||||||||
(Dollars in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
June 30, 2017 | ||||||||||||||||
U.S. Treasury securities | $ | 5,795 | $ | — | $ | 2 | $ | 5,793 | ||||||||
Government sponsored agencies | 248,021 | 619 | 1,166 | 247,474 | ||||||||||||
State and political subdivisions | 297,560 | 114 | 5,639 | 292,035 | ||||||||||||
Residential mortgage-backed securities | 296,898 | 26 | 4,012 | 292,912 | ||||||||||||
Collateralized mortgage obligations | 737,963 | 173 | 4,949 | 733,187 | ||||||||||||
Corporate bonds | 158,828 | 276 | 936 | 158,168 | ||||||||||||
Preferred stock and trust preferred securities | 36,070 | 1,871 | 32 | 37,909 | ||||||||||||
Total | $ | 1,781,135 | $ | 3,079 | $ | 16,736 | $ | 1,767,478 | ||||||||
December 31, 2016 | ||||||||||||||||
U.S. Treasury securities | $ | 5,788 | $ | 5 | $ | — | $ | 5,793 | ||||||||
Government sponsored agencies | 216,890 | 189 | 2,068 | 215,011 | ||||||||||||
State and political subdivisions | 311,704 | 163 | 11,779 | 300,088 | ||||||||||||
Residential mortgage-backed securities | 276,162 | 112 | 3,992 | 272,282 | ||||||||||||
Collateralized mortgage obligations | 323,965 | 63 | 4,003 | 320,025 | ||||||||||||
Corporate bonds | 90,859 | 16 | 1,401 | 89,474 | ||||||||||||
Preferred stock and trust preferred securities | 31,353 | 1,018 | 80 | 32,291 | ||||||||||||
Total | $ | 1,256,721 | $ | 1,566 | $ | 23,323 | $ | 1,234,964 |
Investment Securities Held-to-Maturity | ||||||||||||||||
(Dollars in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
June 30, 2017 | ||||||||||||||||
State and political subdivisions | $ | 645,105 | $ | 5,281 | $ | 10,703 | $ | 639,683 | ||||||||
Trust preferred securities | 500 | — | 140 | 360 | ||||||||||||
Total | $ | 645,605 | $ | 5,281 | $ | 10,843 | $ | 640,043 | ||||||||
December 31, 2016 | ||||||||||||||||
State and political subdivisions | $ | 622,927 | $ | 2,648 | $ | 17,354 | $ | 608,221 | ||||||||
Trust preferred securities | 500 | — | 190 | 310 | ||||||||||||
Total | $ | 623,427 | $ | 2,648 | $ | 17,544 | $ | 608,531 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Proceeds | $ | 10,050 | $ | 4,356 | $ | 10,050 | $ | 5,000 | ||||||||
Gross gains | 77 | 18 | 167 | 37 |
June 30, 2017 | ||||||||
(Dollars in thousands) | Amortized Cost | Fair Value | ||||||
Investment Securities Available-for-Sale: | ||||||||
Due in one year or less | $ | 345,833 | $ | 344,064 | ||||
Due after one year through five years | 731,523 | 726,231 | ||||||
Due after five years through ten years | 488,832 | 485,107 | ||||||
Due after ten years | 213,558 | 210,229 | ||||||
Preferred stock | 1,389 | 1,847 | ||||||
Total | $ | 1,781,135 | $ | 1,767,478 | ||||
Investment Securities Held-to-Maturity: | ||||||||
Due in one year or less | $ | 85,434 | $ | 85,398 | ||||
Due after one year through five years | 253,002 | 251,488 | ||||||
Due after five years through ten years | 143,396 | 141,140 | ||||||
Due after ten years | 163,773 | 162,017 | ||||||
Total | $ | 645,605 | $ | 640,043 |
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
(Dollars in thousands) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
June 30, 2017 | ||||||||||||||||||||||||
U.S. Treasury securities | $ | 5,793 | $ | 2 | $ | — | $ | — | $ | 5,793 | $ | 2 | ||||||||||||
Government sponsored agencies | 104,655 | 1,042 | 10,816 | 124 | 115,471 | 1,166 | ||||||||||||||||||
State and political subdivisions | 614,276 | 15,504 | 46,588 | 838 | 660,864 | 16,342 | ||||||||||||||||||
Residential mortgage-backed securities | 284,277 | 4,012 | — | — | 284,277 | 4,012 | ||||||||||||||||||
Collateralized mortgage obligations | 627,054 | 4,765 | 11,061 | 184 | 638,115 | 4,949 | ||||||||||||||||||
Corporate bonds | 111,931 | 935 | 1,499 | 1 | 113,430 | 936 | ||||||||||||||||||
Trust preferred securities | 3,843 | 32 | 360 | 140 | 4,203 | 172 | ||||||||||||||||||
Total | $ | 1,751,829 | $ | 26,292 | $ | 70,324 | $ | 1,287 | $ | 1,822,153 | $ | 27,579 | ||||||||||||
December 31, 2016 | ||||||||||||||||||||||||
Government sponsored agencies | $ | 105,702 | $ | 1,707 | $ | 15,023 | $ | 361 | $ | 120,725 | $ | 2,068 | ||||||||||||
State and political subdivisions | 758,063 | 28,158 | 26,810 | 975 | 784,873 | 29,133 | ||||||||||||||||||
Residential mortgage-backed securities | 244,239 | 3,992 | — | — | 244,239 | 3,992 | ||||||||||||||||||
Collateralized mortgage obligations | 279,001 | 3,778 | 14,754 | 225 | 293,755 | 4,003 | ||||||||||||||||||
Corporate bonds | 80,536 | 1,401 | — | — | 80,536 | 1,401 | ||||||||||||||||||
Trust preferred securities | 10,699 | 80 | 310 | 190 | 11,009 | 270 | ||||||||||||||||||
Total | $ | 1,478,240 | $ | 39,116 | $ | 56,897 | $ | 1,751 | $ | 1,535,137 | $ | 40,867 |
(Dollars in thousands) | Originated | Acquired(1) | Total Loans | ||||||||||
June 30, 2017 | |||||||||||||
Commercial loan portfolio: | |||||||||||||
Commercial | $ | 2,184,283 | $ | 1,175,878 | $ | 3,360,161 | |||||||
Commercial real estate | 2,405,772 | 1,918,551 | 4,324,323 | ||||||||||
Real estate construction and land development | 349,395 | 97,283 | 446,678 | ||||||||||
Subtotal | 4,939,450 | 3,191,712 | 8,131,162 | ||||||||||
Consumer loan portfolio: | |||||||||||||
Residential mortgage | 1,683,550 | 1,441,847 | 3,125,397 | ||||||||||
Consumer installment | 1,429,088 | 124,879 | 1,553,967 | ||||||||||
Home equity | 607,534 | 249,312 | 856,846 | ||||||||||
Subtotal | 3,720,172 | 1,816,038 | 5,536,210 | ||||||||||
Total loans | $ | 8,659,622 | $ | 5,007,750 | $ | 13,667,372 | (2) | ||||||
December 31, 2016 | |||||||||||||
Commercial loan portfolio: | |||||||||||||
Commercial | $ | 1,901,526 | $ | 1,315,774 | $ | 3,217,300 | |||||||
Commercial real estate | 1,921,799 | 2,051,341 | 3,973,140 | ||||||||||
Real estate construction and land development | 281,724 | 122,048 | 403,772 | ||||||||||
Subtotal | 4,105,049 | 3,489,163 | 7,594,212 | ||||||||||
Consumer loan portfolio: | |||||||||||||
Residential mortgage | 1,475,342 | 1,611,132 | 3,086,474 | ||||||||||
Consumer installment | 1,282,588 | 151,296 | 1,433,884 | ||||||||||
Home equity | 595,422 | 280,787 | 876,209 | ||||||||||
Subtotal | 3,353,352 | 2,043,215 | 5,396,567 | ||||||||||
Total loans | $ | 7,458,401 | $ | 5,532,378 | $ | 12,990,779 | (2) |
(Dollars in thousands) | Talmer | Lake Michigan | Monarch | North-western | OAK | Total | ||||||||||||||||||
Three Months Ended June 30, 2017 | ||||||||||||||||||||||||
Balance at beginning of period | $ | 774,778 | $ | 113,211 | $ | 26,055 | $ | 64,897 | $ | 21,467 | $ | 1,000,408 | ||||||||||||
Accretion recognized in interest income | (45,091 | ) | (7,583 | ) | (1,159 | ) | (5,467 | ) | (3,314 | ) | (62,614 | ) | ||||||||||||
Net reclassification (to) from nonaccretable difference(1) | 71,682 | 15,944 | (626 | ) | 11,782 | 1,643 | 100,425 | |||||||||||||||||
Balance at end of period | $ | 801,369 | $ | 121,572 | $ | 24,270 | $ | 71,212 | $ | 19,796 | $ | 1,038,219 | ||||||||||||
Three Months Ended June 30, 2016 | ||||||||||||||||||||||||
Balance at beginning of period | $ | — | $ | 137,975 | $ | 33,235 | $ | 76,368 | $ | 27,036 | $ | 274,614 | ||||||||||||
Accretion recognized in interest income | — | (8,338 | ) | (1,385 | ) | (4,028 | ) | (3,727 | ) | (17,478 | ) | |||||||||||||
Net reclassification (to) from nonaccretable difference(1) | — | (4,294 | ) | (991 | ) | 1,406 | 3,283 | (596 | ) | |||||||||||||||
Balance at end of period | $ | — | $ | 125,343 | $ | 30,859 | $ | 73,746 | $ | 26,592 | $ | 256,540 | ||||||||||||
Six Months Ended June 30, 2017 | ||||||||||||||||||||||||
Balance at beginning of period | $ | 798,210 | $ | 121,416 | $ | 27,182 | $ | 69,847 | $ | 23,316 | $ | 1,039,971 | ||||||||||||
Accretion recognized in interest income | (89,662 | ) | (14,849 | ) | (2,340 | ) | (9,359 | ) | (6,591 | ) | (122,801 | ) | ||||||||||||
Net reclassification (to) from nonaccretable difference(1) | 92,821 | 15,005 | (572 | ) | 10,724 | 3,071 | 121,049 | |||||||||||||||||
Balance at end of period | $ | 801,369 | $ | 121,572 | $ | 24,270 | $ | 71,212 | $ | 19,796 | $ | 1,038,219 | ||||||||||||
Six Months Ended June 30, 2016 | ||||||||||||||||||||||||
Balance at beginning of period | $ | — | $ | 152,999 | $ | 34,558 | $ | 82,623 | $ | 28,077 | $ | 298,257 | ||||||||||||
Accretion recognized in interest income | — | (17,291 | ) | (2,836 | ) | (8,029 | ) | (6,284 | ) | (34,440 | ) | |||||||||||||
Net reclassification (to) from nonaccretable difference(1) | — | (10,365 | ) | (863 | ) | (848 | ) | 4,799 | (7,277 | ) | ||||||||||||||
Balance at end of period | $ | — | $ | 125,343 | $ | 30,859 | $ | 73,746 | $ | 26,592 | $ | 256,540 |
(Dollars in thousands) | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
June 30, 2017 | ||||||||||||||||||||
Originated Portfolio: | ||||||||||||||||||||
Commercial | $ | 2,101,781 | $ | 31,051 | $ | 47,871 | $ | 3,580 | $ | 2,184,283 | ||||||||||
Commercial real estate | 2,341,493 | 29,840 | 33,390 | 1,049 | 2,405,772 | |||||||||||||||
Real estate construction and land development | 349,339 | — | 56 | — | 349,395 | |||||||||||||||
Subtotal | 4,792,613 | 60,891 | 81,317 | 4,629 | 4,939,450 | |||||||||||||||
Acquired Portfolio: | ||||||||||||||||||||
Commercial | 1,100,238 | 30,686 | 44,951 | 3 | 1,175,878 | |||||||||||||||
Commercial real estate | 1,777,461 | 62,807 | 78,118 | 165 | 1,918,551 | |||||||||||||||
Real estate construction and land development | 93,301 | 1,941 | 2,041 | — | 97,283 | |||||||||||||||
Subtotal | 2,971,000 | 95,434 | 125,110 | 168 | 3,191,712 | |||||||||||||||
Total | $ | 7,763,613 | $ | 156,325 | $ | 206,427 | $ | 4,797 | $ | 8,131,162 | ||||||||||
December 31, 2016 | ||||||||||||||||||||
Originated Portfolio: | ||||||||||||||||||||
Commercial | $ | 1,803,750 | $ | 44,809 | $ | 51,898 | $ | 1,069 | $ | 1,901,526 | ||||||||||
Commercial real estate | 1,849,315 | 36,981 | 35,502 | 1 | 1,921,799 | |||||||||||||||
Real estate construction and land development | 280,968 | 157 | 599 | — | 281,724 | |||||||||||||||
Subtotal | 3,934,033 | 81,947 | 87,999 | 1,070 | 4,105,049 | |||||||||||||||
Acquired Portfolio: | ||||||||||||||||||||
Commercial | 1,218,848 | 46,643 | 50,283 | — | 1,315,774 | |||||||||||||||
Commercial real estate | 1,897,011 | 61,441 | 92,636 | 253 | 2,051,341 | |||||||||||||||
Real estate construction and land development | 117,505 | 1,982 | 2,561 | — | 122,048 | |||||||||||||||
Subtotal | 3,233,364 | 110,066 | 145,480 | 253 | 3,489,163 | |||||||||||||||
Total | $ | 7,167,397 | $ | 192,013 | $ | 233,479 | $ | 1,323 | $ | 7,594,212 |
(Dollars in thousands) | Residential Mortgage | Consumer Installment | Home Equity | Total Consumer | ||||||||||||
June 30, 2017 | ||||||||||||||||
Originated Loans: | ||||||||||||||||
Performing | $ | 1,675,836 | $ | 1,428,331 | $ | 603,663 | $ | 3,707,830 | ||||||||
Nonperforming | 7,714 | 757 | 3,871 | 12,342 | ||||||||||||
Subtotal | 1,683,550 | 1,429,088 | 607,534 | 3,720,172 | ||||||||||||
Acquired Loans | 1,441,847 | 124,879 | 249,312 | 1,816,038 | ||||||||||||
Total | $ | 3,125,397 | $ | 1,553,967 | $ | 856,846 | $ | 5,536,210 | ||||||||
December 31, 2016 | ||||||||||||||||
Originated Loans: | ||||||||||||||||
Performing | $ | 1,468,373 | $ | 1,281,709 | $ | 592,071 | $ | 3,342,153 | ||||||||
Nonperforming | 6,969 | 879 | 3,351 | 11,199 | ||||||||||||
Subtotal | 1,475,342 | 1,282,588 | 595,422 | 3,353,352 | ||||||||||||
Acquired Loans | 1,611,132 | 151,296 | 280,787 | 2,043,215 | ||||||||||||
Total | $ | 3,086,474 | $ | 1,433,884 | $ | 876,209 | $ | 5,396,567 |
(Dollars in thousands) | June 30, 2017 | December 31, 2016 | ||||||
Nonperforming assets | ||||||||
Nonaccrual loans: | ||||||||
Commercial | $ | 18,773 | $ | 13,178 | ||||
Commercial real estate | 19,723 | 19,877 | ||||||
Real estate construction and land development | 56 | 80 | ||||||
Residential mortgage | 7,714 | 6,969 | ||||||
Consumer installment | 757 | 879 | ||||||
Home equity | 3,871 | 3,351 | ||||||
Total nonaccrual loans | 50,894 | 44,334 | ||||||
Other real estate owned and repossessed assets | 14,582 | 17,187 | ||||||
Total nonperforming assets | $ | 65,476 | $ | 61,521 | ||||
Accruing loans contractually past due 90 days or more as to interest or principal payments, excluding acquired loans accounted for under ASC 310-30 | ||||||||
Commercial | 58 | 11 | ||||||
Commercial real estate | 262 | 277 | ||||||
Home equity | 2,026 | 995 | ||||||
Total accruing loans contractually past due 90 days or more as to interest or principal payments, excluding acquired loans accounted for under ASC 310-30 | $ | 2,346 | $ | 1,283 |
(Dollars in thousands) | 30-59 days past due | 60-89 days past due | 90 days or more past due | Total past due | Current | Total loans | 90 days or more past due and still accruing | |||||||||||||||||||||
June 30, 2017 | ||||||||||||||||||||||||||||
Originated Portfolio: | ||||||||||||||||||||||||||||
Commercial | $ | 6,578 | $ | 5,408 | $ | 7,604 | $ | 19,590 | $ | 2,164,693 | $ | 2,184,283 | $ | 58 | ||||||||||||||
Commercial real estate | 21,106 | 7,518 | 5,221 | 33,845 | 2,371,927 | 2,405,772 | 262 | |||||||||||||||||||||
Real estate construction and land development | — | — | — | — | 349,395 | 349,395 | — | |||||||||||||||||||||
Residential mortgage | 411 | 2,607 | 1,418 | 4,436 | 1,679,114 | 1,683,550 | — | |||||||||||||||||||||
Consumer installment | 2,553 | 363 | 156 | 3,072 | 1,426,016 | 1,429,088 | — | |||||||||||||||||||||
Home equity | 3,798 | 1,095 | 2,775 | 7,668 | 599,866 | 607,534 | 2,026 | |||||||||||||||||||||
Total | $ | 34,446 | $ | 16,991 | $ | 17,174 | $ | 68,611 | $ | 8,591,011 | $ | 8,659,622 | $ | 2,346 | ||||||||||||||
December 31, 2016 | ||||||||||||||||||||||||||||
Originated Portfolio: | ||||||||||||||||||||||||||||
Commercial | $ | 10,421 | $ | 4,842 | $ | 3,641 | $ | 18,904 | $ | 1,882,622 | $ | 1,901,526 | $ | 11 | ||||||||||||||
Commercial real estate | 6,551 | 1,589 | 5,165 | 13,305 | 1,908,494 | 1,921,799 | 277 | |||||||||||||||||||||
Real estate construction and land development | 2,721 | 499 | — | 3,220 | 278,504 | 281,724 | — | |||||||||||||||||||||
Residential mortgage | 3,147 | 62 | 1,752 | 4,961 | 1,470,381 | 1,475,342 | — | |||||||||||||||||||||
Consumer installment | 3,991 | 675 | 238 | 4,904 | 1,277,684 | 1,282,588 | — | |||||||||||||||||||||
Home equity | 3,097 | 893 | 2,349 | 6,339 | 589,083 | 595,422 | 995 | |||||||||||||||||||||
Total | $ | 29,928 | $ | 8,560 | $ | 13,145 | $ | 51,633 | $ | 7,406,768 | $ | 7,458,401 | $ | 1,283 |
(Dollars in thousands) | Recorded Investment | Unpaid Principal Balance | Related Valuation Allowance | |||||||||
June 30, 2017 | ||||||||||||
Impaired loans with a valuation allowance: | ||||||||||||
Commercial | $ | 28,623 | $ | 31,419 | $ | 4,335 | ||||||
Commercial real estate | 20,209 | 25,552 | 1,334 | |||||||||
Real estate construction and land development | 189 | 189 | 4 | |||||||||
Residential mortgage | 16,711 | 16,711 | 724 | |||||||||
Consumer installment | 851 | 851 | 88 | |||||||||
Home equity | 4,658 | 4,658 | 1,062 | |||||||||
Subtotal | 71,241 | 79,380 | 7,547 | |||||||||
Impaired loans with no related valuation allowance: | ||||||||||||
Commercial | 7,677 | 9,761 | — | |||||||||
Commercial real estate | 21,512 | 25,411 | — | |||||||||
Real estate construction and land development | 56 | 56 | — | |||||||||
Residential mortgage | 4,386 | 4,386 | — | |||||||||
Home equity | 1,258 | 1,258 | — | |||||||||
Subtotal | 34,889 | 40,872 | — | |||||||||
Total impaired loans: | ||||||||||||
Commercial | 36,300 | 41,180 | 4,335 | |||||||||
Commercial real estate | 41,721 | 50,963 | 1,334 | |||||||||
Real estate construction and land development | 245 | 245 | 4 | |||||||||
Residential mortgage | 21,097 | 21,097 | 724 | |||||||||
Consumer installment | 851 | 851 | 88 | |||||||||
Home equity | 5,916 | 5,916 | 1,062 | |||||||||
Total | $ | 106,130 | $ | 120,252 | $ | 7,547 | ||||||
December 31, 2016 | ||||||||||||
Impaired loans with a valuation allowance: | ||||||||||||
Commercial | $ | 28,925 | $ | 33,209 | $ | 3,128 | ||||||
Commercial real estate | 21,318 | 27,558 | 2,102 | |||||||||
Real estate construction and land development | 177 | 177 | 4 | |||||||||
Residential mortgage | 20,864 | 20,864 | 3,528 | |||||||||
Consumer installment | 879 | 879 | 240 | |||||||||
Home equity | 2,577 | 2,577 | 390 | |||||||||
Subtotal | 74,740 | 85,264 | 9,392 | |||||||||
Impaired loans with no related valuation allowance: | ||||||||||||
Commercial | 7,435 | 11,153 | — | |||||||||
Commercial real estate | 20,588 | 23,535 | — | |||||||||
Real estate construction and land development | 80 | 80 | — | |||||||||
Residential mortgage | 3,252 | 3,252 | — | |||||||||
Home equity | 774 | 774 | — | |||||||||
Subtotal | 32,129 | 38,794 | — | |||||||||
Total impaired loans: | ||||||||||||
Commercial | 36,360 | 44,362 | 3,128 | |||||||||
Commercial real estate | 41,906 | 51,093 | 2,102 | |||||||||
Real estate construction and land development | 257 | 257 | 4 | |||||||||
Residential mortgage | 24,116 | 24,116 | 3,528 | |||||||||
Consumer installment | 879 | 879 | 240 | |||||||||
Home equity | 3,351 | 3,351 | 390 | |||||||||
Total | $ | 106,869 | $ | 124,058 | $ | 9,392 |
Three Months Ended June 30, 2017 | Three Months Ended June 30, 2016 | Six Months Ended June 30, 2017 | Six Months Ended June 30, 2016 | |||||||||||||||||||||||||||||
(Dollars in thousands) | Average recorded investment | Interest income recognized while on impaired status | Average recorded investment | Interest income recognized while on impaired status | Average recorded investment | Interest income recognized while on impaired status | Average recorded investment | Interest income recognized while on impaired status | ||||||||||||||||||||||||
Impaired loans with a valuation allowance: | ||||||||||||||||||||||||||||||||
Commercial | $ | 24,493 | $ | 201 | $ | 3,867 | $ | — | $ | 25,103 | $ | 425 | $ | 7,209 | $ | — | ||||||||||||||||
Commercial real estate | 19,026 | 202 | 3,360 | — | 19,530 | 405 | 5,476 | — | ||||||||||||||||||||||||
Real estate construction and land development | 141 | 3 | — | — | 151 | 5 | — | — | ||||||||||||||||||||||||
Residential mortgage | 16,243 | 68 | 20,949 | 333 | 16,821 | 302 | 20,969 | 666 | ||||||||||||||||||||||||
Consumer installment | 682 | 1 | — | — | 731 | 2 | — | — | ||||||||||||||||||||||||
Home equity | 4,024 | 16 | — | — | 4,047 | 37 | — | — | ||||||||||||||||||||||||
Subtotal | $ | 64,609 | $ | 491 | $ | 28,176 | $ | 333 | $ | 66,383 | $ | 1,176 | $ | 33,654 | $ | 666 | ||||||||||||||||
Impaired loans with no related valuation allowance: | ||||||||||||||||||||||||||||||||
Commercial | $ | 11,010 | $ | 48 | $ | 32,502 | $ | 310 | $ | 10,153 | $ | 78 | $ | 31,952 | $ | 587 | ||||||||||||||||
Commercial real estate | 25,183 | 99 | 45,679 | 312 | 24,329 | 203 | 45,708 | 692 | ||||||||||||||||||||||||
Real estate construction and land development | 106 | — | 860 | 2 | 93 | — | 889 | 8 | ||||||||||||||||||||||||
Residential mortgage | 4,581 | 10 | 5,094 | — | 4,194 | 17 | 5,121 | — | ||||||||||||||||||||||||
Consumer installment | 142 | — | 281 | — | 179 | — | 311 | — | ||||||||||||||||||||||||
Home equity | 1,162 | 5 | 1,984 | — | 1,021 | 6 | 2,186 | — | ||||||||||||||||||||||||
Subtotal | $ | 42,184 | $ | 162 | $ | 86,400 | $ | 624 | $ | 39,969 | $ | 304 | $ | 86,167 | $ | 1,287 | ||||||||||||||||
Total impaired loans: | ||||||||||||||||||||||||||||||||
Commercial | $ | 35,503 | $ | 249 | $ | 36,369 | $ | 310 | $ | 35,256 | $ | 503 | $ | 39,161 | $ | 587 | ||||||||||||||||
Commercial real estate | 44,209 | 301 | 49,039 | 312 | 43,859 | 608 | 51,184 | 692 | ||||||||||||||||||||||||
Real estate construction and land development | 247 | 3 | 860 | 2 | 244 | 5 | 889 | 8 | ||||||||||||||||||||||||
Residential mortgage | 20,824 | 78 | 26,043 | 333 | 21,015 | 319 | 26,090 | 666 | ||||||||||||||||||||||||
Consumer installment | 824 | 1 | 281 | — | 910 | 2 | 311 | — | ||||||||||||||||||||||||
Home equity | 5,186 | 21 | 1,984 | — | 5,068 | 43 | 2,186 | — | ||||||||||||||||||||||||
Total | $ | 106,793 | $ | 653 | $ | 114,576 | $ | 957 | $ | 106,352 | $ | 1,480 | $ | 119,821 | $ | 1,953 |
Concession type | |||||||||||||||||||||||
(Dollars in thousands) | Principal deferral | Interest rate | Forbearance agreement | Total number of loans | Pre-modification recorded investment | Post-modification recorded investment | |||||||||||||||||
For the three months ended June 30, 2017 | |||||||||||||||||||||||
Commercial loan portfolio: | |||||||||||||||||||||||
Commercial | $ | 285 | $ | 266 | $ | — | 7 | $ | 564 | $ | 551 | ||||||||||||
Commercial real estate | — | 65 | 122 | 3 | 194 | 187 | |||||||||||||||||
Subtotal | 285 | 331 | 122 | 10 | 758 | 738 | |||||||||||||||||
Consumer loan portfolio: | |||||||||||||||||||||||
Residential mortgage | 37 | 261 | — | 5 | 316 | 298 | |||||||||||||||||
Consumer installment | 22 | — | — | 4 | 24 | 22 | |||||||||||||||||
Home equity | 153 | — | — | 4 | 160 | 153 | |||||||||||||||||
Subtotal | 212 | 261 | — | 13 | 500 | 473 | |||||||||||||||||
Total loans | $ | 497 | $ | 592 | $ | 122 | 23 | $ | 1,258 | $ | 1,211 | ||||||||||||
For the six months ended June 30, 2017 | |||||||||||||||||||||||
Commercial loan portfolio: | |||||||||||||||||||||||
Commercial | $ | 335 | $ | 1,367 | $ | 579 | 12 | $ | 2,303 | $ | 2,281 | ||||||||||||
Commercial real estate | 447 | 140 | 122 | 6 | 716 | 709 | |||||||||||||||||
Subtotal | 782 | 1,507 | 701 | 18 | 3,019 | 2,990 | |||||||||||||||||
Consumer loan portfolio: | |||||||||||||||||||||||
Residential mortgage | 135 | 261 | — | 6 | 414 | 396 | |||||||||||||||||
Consumer installment | 32 | — | — | 6 | 35 | 32 | |||||||||||||||||
Home equity | 264 | — | — | 5 | 325 | 264 | |||||||||||||||||
Subtotal | 431 | 261 | — | 17 | 774 | 692 | |||||||||||||||||
Total loans | $ | 1,213 | $ | 1,768 | $ | 701 | 35 | $ | 3,793 | $ | 3,682 |
Concession type | |||||||||||||||||||||||
(Dollars in thousands) | Principal deferral | Interest rate | Forbearance agreement | Total number of loans | Pre-modification recorded investment | Post-modification recorded investment | |||||||||||||||||
For the three months ended June 30, 2016 | |||||||||||||||||||||||
Commercial loan portfolio: | |||||||||||||||||||||||
Commercial | $ | 2,399 | $ | — | $ | 1,750 | 21 | $ | 4,149 | $ | 4,149 | ||||||||||||
Commercial real estate | 1,454 | — | — | 2 | 1,454 | 1,454 | |||||||||||||||||
Subtotal | 3,853 | — | 1,750 | 23 | 5,603 | 5,603 | |||||||||||||||||
Consumer loan portfolio: | |||||||||||||||||||||||
Residential mortgage | 174 | — | — | 2 | 174 | 174 | |||||||||||||||||
Consumer installment | 47 | — | — | 8 | 47 | 47 | |||||||||||||||||
Home equity | 98 | 171 | — | 4 | 269 | 269 | |||||||||||||||||
Subtotal | 319 | 171 | — | 14 | 490 | 490 | |||||||||||||||||
Total loans | $ | 4,172 | $ | 171 | $ | 1,750 | 37 | $ | 6,093 | $ | 6,093 | ||||||||||||
For the six months ended June 30, 2016 | |||||||||||||||||||||||
Commercial loan portfolio: | |||||||||||||||||||||||
Commercial | $ | 6,231 | $ | — | $ | 1,750 | 28 | $ | 7,981 | $ | 7,981 | ||||||||||||
Commercial real estate | 2,441 | — | — | 6 | 2,441 | 2,441 | |||||||||||||||||
Subtotal | 8,672 | — | 1,750 | 34 | 10,422 | 10,422 | |||||||||||||||||
Consumer loan portfolio: | |||||||||||||||||||||||
Residential mortgage | 279 | — | — | 3 | 279 | 279 | |||||||||||||||||
Consumer installment | 80 | — | — | 12 | 80 | 80 | |||||||||||||||||
Home equity | 127 | 208 | — | 6 | 335 | 335 | |||||||||||||||||
Subtotal | 486 | 208 | — | 21 | 694 | 694 | |||||||||||||||||
Total loans | $ | 9,158 | $ | 208 | $ | 1,750 | 55 | $ | 11,116 | $ | 11,116 |
(Dollars in thousands) | Accruing TDRs | Nonaccrual TDRs | Total | |||||||||
June 30, 2017 | ||||||||||||
Commercial loan portfolio | $ | 39,714 | $ | 21,296 | $ | 61,010 | ||||||
Consumer loan portfolio | 15,522 | 4,409 | 19,931 | |||||||||
Total | $ | 55,236 | $ | 25,705 | $ | 80,941 | ||||||
December 31, 2016 | ||||||||||||
Commercial loan portfolio | $ | 45,388 | $ | 25,397 | $ | 70,785 | ||||||
Consumer loan portfolio | 17,147 | 5,134 | 22,281 | |||||||||
Total | $ | 62,535 | $ | 30,531 | $ | 93,066 |
For The Three Months Ended June 30, 2017 | For The Six Months Ended June 30, 2017 | |||||||||||||
(Dollars in thousands) | Number of loans | Principal balance | Number of loans | Principal balance | ||||||||||
Commercial loan portfolio (commercial) | 2 | $ | 997 | 5 | $ | 1,617 | ||||||||
Consumer loan portfolio (residential mortgage) | 3 | 58 | 5 | 163 | ||||||||||
Total | 5 | $ | 1,055 | 10 | $ | 1,780 | ||||||||
For The Three Months Ended June 30, 2016 | For The Six Months Ended June 30, 2016 | |||||||||||||
(Dollars in thousands) | Number of loans | Principal balance | Number of loans | Principal balance | ||||||||||
Commercial loan portfolio (commercial real estate) | 1 | $ | 788 | 2 | $ | 1,721 | ||||||||
Consumer loan portfolio (residential mortgage) | 1 | — | 2 | — | ||||||||||
Total | 2 | $ | 788 | 4 | $ | 1,721 |
(Dollars in thousands) | Commercial Loan Portfolio | Consumer Loan Portfolio | Total | |||||||||
Changes in allowance for loan losses for the three months ended June 30, 2017: | ||||||||||||
Beginning balance | $ | 54,315 | $ | 24,459 | $ | 78,774 | ||||||
Provision for loan losses | 4,084 | 2,145 | 6,229 | |||||||||
Charge-offs | (726 | ) | (1,578 | ) | (2,304 | ) | ||||||
Recoveries | 282 | 816 | 1,098 | |||||||||
Ending balance | $ | 57,955 | $ | 25,842 | $ | 83,797 | ||||||
Changes in allowance for loan losses for the six months ended June 30, 2017: | ||||||||||||
Beginning balance | $ | 51,201 | $ | 27,067 | $ | 78,268 | ||||||
Provision for loan losses | 8,476 | 1,803 | 10,279 | |||||||||
Charge-offs | (3,417 | ) | (4,461 | ) | (7,878 | ) | ||||||
Recoveries | 1,695 | 1,433 | 3,128 | |||||||||
Ending balance | $ | 57,955 | $ | 25,842 | $ | 83,797 | ||||||
Changes in allowance for loan losses for the three months ended June 30, 2016: | ||||||||||||
Beginning balance | $ | 44,668 | $ | 25,650 | $ | 70,318 | ||||||
Provision for loan losses | 900 | 2,100 | 3,000 | |||||||||
Charge-offs | (2,542 | ) | (1,078 | ) | (3,620 | ) | ||||||
Recoveries | 1,202 | 606 | 1,808 | |||||||||
Ending balance | $ | 44,228 | $ | 27,278 | $ | 71,506 | ||||||
Changes in allowance for loan losses for the six months ended June 30, 2016: | ||||||||||||
Beginning balance | $ | 47,234 | $ | 26,094 | $ | 73,328 | ||||||
Provision for loan losses | 1,900 | 2,600 | 4,500 | |||||||||
Charge-offs | (6,438 | ) | (2,640 | ) | (9,078 | ) | ||||||
Recoveries | 1,532 | 1,224 | 2,756 | |||||||||
Ending balance | $ | 44,228 | $ | 27,278 | $ | 71,506 | ||||||
Allowance for loan losses balance at June 30, 2017 attributable to: | ||||||||||||
Loans individually evaluated for impairment | $ | 5,673 | $ | 1,874 | $ | 7,547 | ||||||
Loans collectively evaluated for impairment | 52,282 | 23,968 | 76,250 | |||||||||
Loans acquired with deteriorated credit quality | — | — | — | |||||||||
Total | $ | 57,955 | $ | 25,842 | $ | 83,797 | ||||||
Recorded investment (loan balance) at June 30, 2017: | ||||||||||||
Loans individually evaluated for impairment | $ | 78,266 | $ | 27,864 | $ | 106,130 | ||||||
Loans collectively evaluated for impairment | 4,861,184 | 3,692,308 | 8,553,492 | |||||||||
Loans acquired with deteriorated credit quality | 3,191,712 | 1,816,038 | 5,007,750 | |||||||||
Total | $ | 8,131,162 | $ | 5,536,210 | $ | 13,667,372 |
(Dollars in thousands) | Commercial Loan Portfolio | Consumer Loan Portfolio | Total | |||||||||
Allowance for loan losses balance at December 31, 2016 attributable to: | ||||||||||||
Loans individually evaluated for impairment | $ | 5,234 | $ | 4,158 | $ | 9,392 | ||||||
Loans collectively evaluated for impairment | 45,967 | 22,909 | 68,876 | |||||||||
Loans acquired with deteriorated credit quality | — | — | — | |||||||||
Total | $ | 51,201 | $ | 27,067 | $ | 78,268 | ||||||
Recorded investment (loan balance) at December 31, 2016: | ||||||||||||
Loans individually evaluated for impairment | $ | 78,523 | $ | 28,346 | $ | 106,869 | ||||||
Loans collectively evaluated for impairment | 4,026,526 | 3,325,006 | 7,351,532 | |||||||||
Loans acquired with deteriorated credit quality | 3,489,163 | 2,043,215 | 5,532,378 | |||||||||
Total | $ | 7,594,212 | $ | 5,396,567 | $ | 12,990,779 |
(Dollars in thousands) | Other real estate owned | Repossessed assets | ||||||
Balance at January 1, 2017 | $ | 16,812 | $ | 375 | ||||
Other additions (1) | 3,776 | 2,556 | ||||||
Net payments received | (202 | ) | — | |||||
Disposals | (5,976 | ) | (1,986 | ) | ||||
Write-downs | (773 | ) | — | |||||
Balance at June 30, 2017 | $ | 13,637 | $ | 945 | ||||
Balance at January 1, 2016 | $ | 9,716 | $ | 219 | ||||
Other additions (1) | 2,155 | 1,215 | ||||||
Net payments received | (85 | ) | (764 | ) | ||||
Disposals | (3,230 | ) | (556 | ) | ||||
Write-downs | (230 | ) | — | |||||
Balance at June 30, 2016 | $ | 8,326 | $ | 114 |
(1) | Includes loans transferred to other real estate owned and other repossessed assets. |
(Dollars in thousands) | Other real estate owned | Repossessed assets | ||||||
For the three months ended June 30, 2017 | ||||||||
Net gain (loss) on sale | $ | 768 | $ | (93 | ) | |||
Write-downs | (504 | ) | — | |||||
Net operating expenses | (710 | ) | (3 | ) | ||||
Total | $ | (446 | ) | $ | (96 | ) | ||
For the six months ended June 30, 2017 | ||||||||
Net gain (loss) on sale | $ | 1,815 | $ | (171 | ) | |||
Write-downs | (773 | ) | — | |||||
Net operating expenses | (1,218 | ) | (6 | ) | ||||
Total | $ | (176 | ) | $ | (177 | ) | ||
For the three months ended June 30, 2016 | ||||||||
Net gain (loss) on sale | $ | 1,320 | $ | 708 | ||||
Write-downs | (63 | ) | — | |||||
Net operating expenses | (260 | ) | 1 | |||||
Total | $ | 997 | $ | 709 | ||||
For the six months ended June 30, 2016 | ||||||||
Net gain (loss) on sale | $ | 2,042 | $ | 700 | ||||
Write-downs | (230 | ) | — | |||||
Net operating expenses | (412 | ) | (3 | ) | ||||
Total | $ | 1,400 | $ | 697 |
(Dollars in thousands) | Commercial Real Estate | Mortgage | Total | |||||||||
For the three months ended June 30, 2017 | ||||||||||||
Fair value, beginning of period | $ | 320 | $ | 64,284 | $ | 64,604 | ||||||
Additions from loans sold with servicing retained | 188 | 2,196 | 2,384 | |||||||||
Changes in fair value due to: | ||||||||||||
Reductions from pay-offs, pay downs and run-off | (22 | ) | (642 | ) | (664 | ) | ||||||
Changes in estimates of fair value (1) | — | (1,802 | ) | (1,802 | ) | |||||||
Fair value, end of period | $ | 486 | $ | 64,036 | $ | 64,522 | ||||||
For the six months ended June 30, 2017 | 344 | 47741 | 48085 | |||||||||
Fair value, beginning of period | $ | 344 | $ | 47,741 | $ | 48,085 | ||||||
Transfers based on new accounting policy election | — | 15,891 | 15,891 | |||||||||
Additions from loans sold with servicing retained | 188 | 3,949 | 4,137 | |||||||||
Changes in fair value due to: | 0 | 0 | ||||||||||
Reductions from pay-offs, pay downs and run-off | (46 | ) | (1,224 | ) | (1,270 | ) | ||||||
Changes in estimates of fair value (1) | — | (2,321 | ) | (2,321 | ) | |||||||
Fair value, end of period | $ | 486 | $ | 64,036 | $ | 64,522 | ||||||
Principal balance of loans serviced for others that have servicing capitalized | $ | 47,349 | $ | 7,167,904 | $ | 7,215,253 |
(Dollars in thousands) | For the Three Months Ended June 30, 2016 | For the Six Months Ended June 30, 2016 | ||||||
Balance at beginning of period | $ | 10,478 | $ | 11,122 | ||||
Additions | 586 | 917 | ||||||
Amortization | (975 | ) | (1,950 | ) | ||||
Change in valuation allowance | (412 | ) | (412 | ) | ||||
Balance at end of period | $ | 9,677 | $ | 9,677 |
Mortgage | ||||
As of June 30, 2017 | ||||
Prepayment speed | 0.0 - 35.7% | |||
Weighted average ("WA") discount rate | 10.1 | % | ||
Cost to service/per year | $ | 65 | ||
Ancillary income/per year | $ | 31 | ||
WA float range | 1.2 | % | ||
As of December 31, 2016 | ||||
Prepayment speed | 0.0 - 99.8% | |||
WA discount rate | 10.1 | % | ||
Cost to service/per year | $65-$90 | |||
Ancillary income/per year | $ | 28 | ||
WA float range | 1.0 | % |
(Dollars in thousands) | June 30, 2017 | December 31, 2016 | ||||||
Core deposit intangible assets | $ | 37,235 | $ | 40,211 | ||||
Non-compete intangible assets | 87 | — | ||||||
Total other intangible assets | $ | 37,322 | $ | 40,211 |
(Dollars in thousands) | June 30, 2017 | December 31, 2016 | ||||||
Gross original amount | $ | 59,143 | $ | 59,143 | ||||
Accumulated amortization | 21,908 | 18,932 | ||||||
Net carrying amount | $ | 37,235 | $ | 40,211 |
June 30, 2017 | December 31, 2016 | |||||||||||||||||||||||
Fair Value | Fair Value | |||||||||||||||||||||||
(Dollars in thousands) | Notional Amount (1) | Gross Derivative Assets (2) | Gross Derivative Liabilities (2) | Notional Amount (1) | Gross Derivative Assets (2) | Gross Derivative Liabilities (2) | ||||||||||||||||||
Risk management purposes: | ||||||||||||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||||||
Interest rate swaps | $ | 400,000 | $ | 224 | $ | 282 | $ | — | $ | — | $ | — | ||||||||||||
Total risk management purposes | 400,000 | 224 | 282 | — | — | — | ||||||||||||||||||
Customer-initiated and mortgage banking derivatives: | ||||||||||||||||||||||||
Customer-initiated derivatives | 1,055,917 | 8,636 | 9,152 | 600,598 | 4,406 | 4,141 | ||||||||||||||||||
Forward contracts related to mortgage loans to be delivered for sale | 168,533 | 617 | — | 140,155 | 635 | — | ||||||||||||||||||
Interest rate lock commitments | 120,095 | 1,997 | — | 76,034 | 956 | — | ||||||||||||||||||
Power Equity CD | 38,540 | 2,062 | 2,062 | 36,807 | 2,218 | 2,218 | ||||||||||||||||||
Total customer-initiated and mortgage banking derivatives | 1,383,085 | 13,312 | 11,214 | 853,594 | 8,215 | 6,359 | ||||||||||||||||||
Total gross derivatives | $ | 1,783,085 | $ | 13,536 | $ | 11,496 | $ | 853,594 | $ | 8,215 | $ | 6,359 |
(1) | Notional or contract amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the Consolidated Statements of Financial Position. |
(2) | Derivative assets are included within "Interest receivable and other assets" and derivative liabilities are included within "Interest payable and other liabilities" on the Consolidated Statements of Financial Position. Included in the fair value of the derivative assets are credit valuation adjustments for counterparty credit risk totaling $538 thousand at June 30, 2017 and $99 thousand at December 31, 2016. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
(Dollars in thousands) | Location of Gain (Loss) | 2017 | 2016 | 2017 | 2016 | |||||||||||||
Forward contracts related to mortgage loans to be delivered for sale | Net gain on sale of loans and other mortgage banking revenue | $ | 959 | $ | (409 | ) | $ | (18 | ) | $ | (642 | ) | ||||||
Interest rate lock commitments | Net gain on sale of loans and other mortgage banking revenue | (181 | ) | 325 | 1,041 | 486 | ||||||||||||
Customer-initiated derivatives | Other noninterest income | (551 | ) | — | (781 | ) | — | |||||||||||
Total gain (loss) recognized in income | $ | 227 | $ | (84 | ) | $ | 242 | $ | (156 | ) |
(Dollars in thousands) | Amount of gain (loss) recognized in other comprehensive income (Effective portion) | Amount of gain (loss) reclassified from other comprehensive income to interest income or expense (Effective portion) | Amount of gain (loss) recognized in other noninterest income (Ineffective portion) | |||||||||
Three Months Ended June 30, 2017 | ||||||||||||
Interest rate swaps designated as cash flow hedges | $ | (57 | ) | $ | (409 | ) | $ | — | ||||
Six Months Ended June 30, 2017 | ||||||||||||
Interest rate swaps designated as cash flow hedges | $ | (57 | ) | $ | (409 | ) | $ | — |
Gross amounts not offset in the statements of financial position | ||||||||||||||||||||||||
(Dollars in thousands) | Gross amounts recognized | Gross amounts offset in the statements of financial condition | Net amounts presented in the statements of financial position | Financial instruments | Collateral (received)/posted | Net Amount | ||||||||||||||||||
June 30, 2017 | ||||||||||||||||||||||||
Offsetting derivative assets | ||||||||||||||||||||||||
Derivative assets | $ | 8,838 | $ | — | $ | 8,838 | $ | — | $ | — | $ | 8,838 | ||||||||||||
Offsetting derivative liabilities | ||||||||||||||||||||||||
Derivative liabilities | 9,434 | — | 9,434 | — | 9,037 | 397 | ||||||||||||||||||
December 31, 2016 | ||||||||||||||||||||||||
Offsetting derivative assets | ||||||||||||||||||||||||
Derivative assets | $ | 4,405 | $ | — | $ | 4,405 | $ | — | $ | — | $ | 4,405 | ||||||||||||
Offsetting derivative liabilities | ||||||||||||||||||||||||
Derivative liabilities | 4,141 | — | 4,141 | — | 2,550 | 1,591 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Reserve balance at beginning of period | $ | 5,689 | $ | 3,825 | $ | 6,459 | $ | 4,048 | |||||||
Reserve reduction | (220 | ) | — | (990 | ) | (150 | ) | ||||||||
Charge-offs | — | — | — | (73 | ) | ||||||||||
Ending reserve balance | $ | 5,469 | $ | 3,825 | $ | 5,469 | $ | 3,825 |
(Dollars in thousands) | June 30, 2017 | December 31, 2016 | |||||
Reserve balance | |||||||
Liability for specific claims | $ | 9 | $ | 730 | |||
General allowance | 5,460 | 5,729 | |||||
Total reserve balance | $ | 5,469 | $ | 6,459 |
June 30, 2017 | December 31, 2016 | |||||||||||||
(Dollars in thousands) | Amount | Weighted Average Rate (1) | Amount | Weighted Average Rate (1) | ||||||||||
Securities sold under agreements to repurchase with customers: | ||||||||||||||
Securities sold under agreements to repurchase with customers | $ | 310,042 | 0.26 | % | $ | 343,047 | 0.16 | % | ||||||
Short-term borrowings: | ||||||||||||||
FHLB advances: 0.96% - 1.40% fixed-rate notes | 2,050,000 | 1.02 | 825,000 | 0.65 | ||||||||||
Long-term borrowings: | ||||||||||||||
FHLB advances: 0.92% - 7.44% fixed-rate notes due 2017 to 2020(2) | 351,324 | 1.30 | 438,538 | 1.24 | ||||||||||
Securities sold under agreements to repurchase: 1.48% - 2.75% fixed-rate notes due in 2017(3) | 9,048 | 2.11 | 19,144 | 3.17 | ||||||||||
Line-of-credit: floating-rate based on one-month LIBOR plus 1.75% | 59,854 | 2.80 | 124,625 | 2.52 | ||||||||||
Subordinated debt obligations: floating-rate based on three-month LIBOR plus 1.45% - 2.85% due 2034 to 2035(4) | 11,354 | 3.42 | 11,285 | 3.14 | ||||||||||
Subordinated debt obligations: floating-rate based on three-month LIBOR plus 3.25% due in 2032(5) | 4,272 | 4.40 | 4,255 | 4.25 | ||||||||||
Total long-term borrowings | 435,852 | 1.61 | 597,847 | 1.63 | ||||||||||
Total borrowings | $ | 2,795,894 | 1.03 | % | $ | 1,765,894 | 0.89 | % |
(1) | Weighted average rate presented is the contractual rate which excludes premiums and discounts related to purchase accounting. |
(2) | The June 30, 2017 balances include advances payable of $350.9 million and purchase accounting premiums of $0.5 million. The December 31, 2016 balance includes advances payable of $437.8 million and purchase accounting premiums of $0.7 million. |
(3) | The June 30, 2017 balance includes advances payable of $9.0 million and purchase accounting premiums of $55 thousand. The December 31, 2016 balance includes advance payable of $19.0 million and purchase accounting premiums of $0.1 million. |
(4) | The June 30, 2017 balance includes advances payable of $15.0 million and purchase accounting discounts of $3.6 million. The December 31, 2016 balance includes advances payable of $15.0 million and purchase accounting discounts of $3.7 million. |
(5) | The June 30, 2017 balance includes advances payable of $5.0 million and purchase accounting discounts of $0.7 million. The December 31, 2016 balance includes advances payable of $5.0 million and purchase accounting discounts of $0.7 million. |
June 30, 2017 | |||||||||||||||||||
Remaining Contractual Maturities of the Agreements | |||||||||||||||||||
(Dollars in thousands) | Overnight and continuous | Up to 30 Days | 30-90 Days | Greater than 90 Days | Total | ||||||||||||||
Securities sold under agreements to repurchase | $ | — | $ | — | $ | 4,000 | $ | 5,000 | $ | 9,000 | |||||||||
Total borrowings | $ | — | $ | — | $ | 4,000 | $ | 5,000 | $ | 9,000 | |||||||||
Amounts related to securities sold under agreements to repurchase not included in offsetting disclosure in Note 10 | $ | 9,000 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||
(Dollars in thousands) | Amount | Rate | Amount | Rate | Amount | Rate | Amount | Rate | |||||||||||||||||||
Tax at statutory rate | $ | 26,268 | 35.0 | % | $ | 12,707 | 35.0 | % | $ | 47,219 | 35.0 | % | $ | 24,384 | 35.0 | % | |||||||||||
Changes resulting from: | |||||||||||||||||||||||||||
Tax-exempt interest income | (1,832 | ) | (2.4 | ) | (1,139 | ) | (3.1 | ) | (3,589 | ) | (2.7 | ) | (2,278 | ) | (3.3 | ) | |||||||||||
State taxes, net of federal benefit | 258 | 0.3 | — | — | 470 | 0.4 | — | — | |||||||||||||||||||
Change in valuation allowance | 38 | — | — | — | 49 | — | — | — | |||||||||||||||||||
Bank-owned life insurance adjustments | (335 | ) | (0.4 | ) | (287 | ) | (0.8 | ) | (679 | ) | (0.5 | ) | (355 | ) | (0.5 | ) | |||||||||||
Income tax credits, net | (1,102 | ) | (1.5 | ) | (834 | ) | (2.3 | ) | (1,797 | ) | (1.3 | ) | (1,631 | ) | (2.3 | ) | |||||||||||
Tax benefits in excess of compensation costs on share-based payments(1) | (248 | ) | (0.3 | ) | (68 | ) | (0.2 | ) | (6,382 | ) | (4.7 | ) | (411 | ) | (0.6 | ) | |||||||||||
Other, net | (11 | ) | — | 153 | 0.4 | 2 | — | 580 | 0.8 | ||||||||||||||||||
Income tax expense | $ | 23,036 | 30.7 | % | $ | 10,532 | 29.0 | % | $ | 35,293 | 26.2 | % | $ | 20,289 | 29.1 | % |
Non-Vested Stock Options Outstanding | Stock Options Outstanding | |||||||||||||||||
Number of Options | Weighted- Average Exercise Price Per Share | Weighted- Average Grant Date Fair Value Per Share | Number of Options | Weighted- Average Exercise Price Per Share | ||||||||||||||
Outstanding at December 31, 2016 | 407,939 | $ | 32.81 | $ | 6.15 | 2,453,395 | $ | 21.41 | ||||||||||
Granted | 126,691 | 53.72 | 10.05 | 126,691 | 53.72 | |||||||||||||
Exercised | — | — | — | (1,256,355 | ) | 16.19 | ||||||||||||
Vested | (81,584 | ) | 32.81 | 6.15 | — | — | ||||||||||||
Forfeited/expired | (10,337 | ) | 39.59 | 7.42 | (10,337 | ) | 39.59 | |||||||||||
Outstanding at June 30, 2017 | 442,709 | $ | 38.64 | $ | 7.24 | 1,313,394 | $ | 29.39 | ||||||||||
Exercisable/vested at June 30, 2017 | 870,685 | $ | 24.68 |
Expected dividend yield | 3.32 | % | |
Risk-free interest rate | 2.06 | % | |
Expected stock price volatility | 26.9 | % | |
Expected life of options – in years | 6.0 | ||
Weighted average fair value of options granted | $ | 10.05 |
Number of Units | Weighted-average grant date fair value per unit | ||||||
Outstanding at December 31, 2016 | 298,357 | $ | 32.81 | ||||
Granted | 162,771 | 52.10 | |||||
Converted into shares of common stock | (40,141 | ) | 26.86 | ||||
Forfeited/expired | (3,529 | ) | 47.27 | ||||
Outstanding at June 30, 2017 | 417,458 | $ | 40.79 |
Nonvested restricted stock awards | Number of Awards | Weighted-average acquisition-date fair value | |||||
Nonvested at January 1, 2017 | 365,891 | $ | 46.23 | ||||
Vested | (61,049 | ) | 46.23 | ||||
Forfeited | (3,657 | ) | 46.23 | ||||
Nonvested at June 30, 2017 | 301,185 | $ | 46.23 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Defined Benefit Pension Plans | ||||||||||||||||
Service cost | $ | 234 | $ | 277 | $ | 467 | $ | 554 | ||||||||
Interest cost | 1,301 | 1,358 | 2,603 | 2,716 | ||||||||||||
Expected return on plan assets | (2,217 | ) | (2,140 | ) | (4,434 | ) | (4,281 | ) | ||||||||
Amortization of unrecognized net loss | 579 | 572 | 1,157 | 1,144 | ||||||||||||
Net periodic benefit cost (income) | $ | (103 | ) | $ | 67 | $ | (207 | ) | $ | 133 | ||||||
Postretirement Benefit Plan | ||||||||||||||||
Service cost | $ | 1 | $ | 2 | $ | 2 | $ | 4 | ||||||||
Interest cost | 23 | 33 | 47 | 66 | ||||||||||||
Amortization of prior service cost | — | 29 | — | 58 | ||||||||||||
Amortization of unrecognized net gain | (40 | ) | (25 | ) | (81 | ) | (49 | ) | ||||||||
Net periodic benefit cost (income) | $ | (16 | ) | $ | 39 | $ | (32 | ) | $ | 79 |
Actual | Minimum Required for Capital Adequacy Purposes | Minimum Required for Capital Adequacy Purposes Plus Capital Conservation Buffer | Required to be Well Capitalized Under Prompt Corrective Action Regulations | ||||||||||||||||||||||||
(Dollars in thousands) | Capital Amount | Ratio | Capital Amount | Ratio | Capital Amount | Ratio | Capital Amount | Ratio | |||||||||||||||||||
June 30, 2017 | |||||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets | |||||||||||||||||||||||||||
Corporation | $ | 1,598,217 | 11.1 | % | $ | 1,147,806 | 8.0 | % | $ | 1,327,151 | 9.3 | % | N/A | N/A | |||||||||||||
Chemical Bank | 1,608,525 | 11.2 | 1,144,292 | 8.0 | 1,323,088 | 9.3 | $ | 1,430,365 | 10.0 | % | |||||||||||||||||
Tier 1 Capital to Risk-Weighted Assets | |||||||||||||||||||||||||||
Corporation | 1,492,038 | 10.4 | 860,855 | 6.0 | 1,040,199 | 7.3 | N/A | N/A | |||||||||||||||||||
Chemical Bank | 1,517,972 | 10.6 | 858,219 | 6.0 | 1,037,015 | 7.3 | 1,144,292 | 8.0 | |||||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets | |||||||||||||||||||||||||||
Corporation | 1,492,038 | 10.4 | 645,641 | 4.5 | 824,986 | 5.8 | N/A | N/A | |||||||||||||||||||
Chemical Bank | 1,517,972 | 10.6 | 643,664 | 4.5 | 822,460 | 5.8 | 929,737 | 6.5 | |||||||||||||||||||
Leverage Ratio | |||||||||||||||||||||||||||
Corporation | 1,492,038 | 8.7 | 683,677 | 4.0 | 683,677 | 4.0 | N/A | N/A | |||||||||||||||||||
Chemical Bank | 1,517,972 | 8.9 | 682,224 | 4.0 | 682,224 | 4.0 | 852,780 | 5.0 | |||||||||||||||||||
December 31, 2016 | |||||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets | |||||||||||||||||||||||||||
Corporation | $ | 1,543,018 | 11.5 | % | $ | 1,073,431 | 8.0 | % | $ | 1,157,293 | 8.6 | % | N/A | N/A | |||||||||||||
Chemical Bank | 1,608,980 | 12.0 | 1,068,560 | 8.0 | 1,152,041 | 8.6 | $ | 1,335,700 | 10.0 | % | |||||||||||||||||
Tier 1 Capital to Risk-Weighted Assets | |||||||||||||||||||||||||||
Corporation | 1,441,209 | 10.7 | 805,073 | 6.0 | 888,935 | 6.6 | N/A | N/A | |||||||||||||||||||
Chemical Bank | 1,522,711 | 11.4 | 801,420 | 6.0 | 884,901 | 6.6 | 1,068,560 | 8.0 | |||||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Asset | |||||||||||||||||||||||||||
Corporation | 1,441,209 | 10.7 | 603,805 | 4.5 | 687,667 | 5.1 | N/A | N/A | |||||||||||||||||||
Chemical Bank | 1,522,711 | 11.4 | 601,065 | 4.5 | 684,546 | 5.1 | 868,205 | 6.5 | |||||||||||||||||||
Leverage Ratio | |||||||||||||||||||||||||||
Corporation | 1,441,209 | 9.0 | 643,603 | 4.0 | 643,603 | 4.0 | N/A | N/A | |||||||||||||||||||
Chemical Bank | 1,522,711 | 9.5 | 641,457 | 4.0 | 641,457 | 4.0 | 801,822 | 5.0 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In thousands, except per share data) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | 52,014 | $ | 25,775 | $ | 99,618 | $ | 49,380 | ||||||||
Net income allocated to participating securities | 219 | — | 446 | — | ||||||||||||
Net income allocated to common shareholders (1) | $ | 51,795 | $ | 25,775 | $ | 99,172 | $ | 49,380 | ||||||||
Weighted average common shares - issued | 71,122 | 38,258 | 71,046 | 38,228 | ||||||||||||
Average unvested restricted share awards | (303 | ) | — | (321 | ) | — | ||||||||||
Weighted average common shares outstanding - basic | 70,819 | 38,258 | 70,725 | 38,228 | ||||||||||||
Effect of dilutive securities | ||||||||||||||||
Weighted average common stock equivalents | 624 | 342 | 704 | 332 | ||||||||||||
Weighted average common shares outstanding - diluted | 71,443 | 38,600 | 71,429 | 38,560 | ||||||||||||
EPS available to common shareholders | ||||||||||||||||
Basic earnings per common share | $ | 0.73 | $ | 0.67 | $ | 1.41 | $ | 1.29 | ||||||||
Diluted earnings per common share | $ | 0.73 | $ | 0.67 | $ | 1.39 | $ | 1.28 |
(1) | Net income allocated to common shareholders for basic and diluted earnings per share may differ under the two-class method as a result of adding common share equivalents for options and warrants to dilutive shares outstanding, which alters the ratio used to allocate net income to common shareholders and participating securities for the purposes of calculating diluted earnings per share. |
(Dollars in thousands) | Unrealized gains (losses) on securities available-for-sale, net of tax | Defined Benefit Pension Plans | Unrealized gains (losses) on cash flow hedges, net of tax | Total | ||||||||||||
For the three months ended June 30, 2017 | ||||||||||||||||
Beginning balance | $ | (12,420 | ) | $ | (25,545 | ) | $ | — | $ | (37,965 | ) | |||||
Other comprehensive income before reclassifications | 3,593 | — | (466 | ) | 3,127 | |||||||||||
Amounts reclassified from accumulated other comprehensive income | (50 | ) | 350 | 409 | 709 | |||||||||||
Net current period other comprehensive income | 3,543 | 350 | (57 | ) | 3,836 | |||||||||||
Ending balance | $ | (8,877 | ) | $ | (25,195 | ) | $ | (57 | ) | $ | (34,129 | ) | ||||
For the three months ended June 30, 2016 | ||||||||||||||||
Beginning balance | $ | 829 | $ | (27,519 | ) | $ | — | $ | (26,690 | ) | ||||||
Other comprehensive income before reclassifications | 1,379 | — | — | 1,379 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | (12 | ) | (375 | ) | — | (387 | ) | |||||||||
Net current period other comprehensive income (loss) | 1,367 | (375 | ) | — | 992 | |||||||||||
Ending balance | $ | 2,196 | $ | (27,894 | ) | $ | — | $ | (25,698 | ) | ||||||
For the six months ended June 30, 2017 | ||||||||||||||||
Beginning balance | $ | (14,142 | ) | $ | (25,894 | ) | $ | — | $ | (40,036 | ) | |||||
Other comprehensive income (loss) before reclassifications | 5,374 | — | (466 | ) | 4,908 | |||||||||||
Amounts reclassified from accumulated other comprehensive income | (109 | ) | 699 | 409 | 999 | |||||||||||
Net current period other comprehensive income (loss) | 5,265 | 699 | (57 | ) | 5,907 | |||||||||||
Ending balance | $ | (8,877 | ) | $ | (25,195 | ) | $ | (57 | ) | $ | (34,129 | ) | ||||
For the six months ended June 30, 2016 | ||||||||||||||||
Beginning balance | $ | (1,888 | ) | $ | (27,144 | ) | $ | — | $ | (29,032 | ) | |||||
Other comprehensive income before reclassifications | 4,108 | — | — | 4,108 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | (24 | ) | (750 | ) | — | (774 | ) | |||||||||
Net current period other comprehensive income | 4,084 | (750 | ) | — | 3,334 | |||||||||||
Ending balance | $ | 2,196 | $ | (27,894 | ) | $ | — | $ | (25,698 | ) |
(Dollars in thousands) | Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | Affected Line Item in the Income Statement | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
Gains and losses on available-for-sale securities | $ | 77 | $ | 18 | $ | 167 | $ | 37 | Gain on sale of investment securities (noninterest income) | |||||||||
(27 | ) | (6 | ) | (58 | ) | (13 | ) | Income tax (expense)/benefit | ||||||||||
$ | 50 | $ | 12 | $ | 109 | $ | 24 | Net Income | ||||||||||
Amortization of defined benefit pension plan items | $ | (539 | ) | $ | 577 | $ | (1,076 | ) | $ | 1,154 | Salaries, wages and employee benefits (operating expenses) | |||||||
189 | (202 | ) | 377 | (404 | ) | Income tax (expense)/benefit | ||||||||||||
$ | (350 | ) | $ | 375 | (699 | ) | $ | 750 | Net Income (loss) | |||||||||
Gains and losses on cash flow hedges | $ | 409 | $ | — | $ | 409 | $ | — | Interest on short-term borrowings (interest expense) | |||||||||
$ | (409 | ) | $ | — | $ | (409 | ) | $ | — | Net Income (loss) |
Three Months Ended | Six Months Ended | ||||||||||||||||||
(Dollars in thousands, except per share data) | June 30, 2017 | March 31, 2017 | June 30, 2016 | June 30, 2017 | June 30, 2016 | ||||||||||||||
Summary of Operations | |||||||||||||||||||
Interest income | $ | 155,133 | $ | 142,896 | $ | 82,937 | $ | 298,029 | $ | 162,401 | |||||||||
Interest expense | 17,185 | 12,799 | 5,442 | 29,984 | 10,576 | ||||||||||||||
Net interest income | 137,948 | 130,097 | 77,495 | 268,045 | 151,825 | ||||||||||||||
Provision for loan losses | 6,229 | 4,050 | 3,000 | 10,279 | 4,500 | ||||||||||||||
Net interest income after provision for loan losses | 131,719 | 126,047 | 74,495 | 257,766 | 147,325 | ||||||||||||||
Noninterest income | 41,568 | 38,010 | 20,897 | 79,578 | 40,316 | ||||||||||||||
Operating expenses, excluding transaction expenses (non-GAAP)(2) | 97,772 | 100,029 | 56,031 | 197,801 | 112,324 | ||||||||||||||
Transaction expenses | 465 | 4,167 | 3,054 | 4,632 | 5,648 | ||||||||||||||
Income before income taxes | 75,050 | 59,861 | 36,307 | 134,911 | 69,669 | ||||||||||||||
Income tax expense | 23,036 | 12,257 | 10,532 | 35,293 | 20,289 | ||||||||||||||
Net income | $ | 52,014 | $ | 47,604 | $ | 25,775 | $ | 99,618 | $ | 49,380 | |||||||||
Significant items, net of tax(1) | 1,474 | 3,046 | 1,985 | 4,520 | 3,671 | ||||||||||||||
Net income, excluding significant items (non-GAAP)(2) | $ | 53,488 | $ | 50,650 | $ | 27,760 | $ | 104,138 | $ | 53,051 | |||||||||
Per Common Share Data | |||||||||||||||||||
Net income: | |||||||||||||||||||
Basic | $ | 0.73 | $ | 0.67 | $ | 0.67 | $ | 1.41 | $ | 1.29 | |||||||||
Diluted | 0.73 | 0.67 | 0.67 | 1.39 | 1.28 | ||||||||||||||
Diluted, excluding significant items (non-GAAP)(2) | 0.75 | 0.71 | 0.72 | 1.45 | 1.38 | ||||||||||||||
Cash dividends declared | 0.27 | 0.27 | 0.26 | 0.54 | 0.52 | ||||||||||||||
Book value - period-end | 37.11 | 36.56 | 27.45 | 37.11 | 27.45 | ||||||||||||||
Tangible book value - period-end (non-GAAP)(2) | 20.89 | 20.32 | 19.68 | 20.89 | 19.68 | ||||||||||||||
Market value - period-end | 48.41 | 51.15 | 37.29 | 48.41 | 37.29 | ||||||||||||||
Key Ratios (annualized where applicable) | |||||||||||||||||||
Net interest margin (GAAP) | 3.41 | % | 3.41 | % | 3.60 | % | 3.41 | % | 3.55 | % | |||||||||
Net interest margin (taxable equivalent basis) (non-GAAP)(3) | 3.48 | % | 3.49 | % | 3.70 | % | 3.49 | % | 3.65 | % | |||||||||
Efficiency ratio (GAAP) | 54.7 | % | 62.0 | % | 60.1 | % | 58.2 | % | 61.4 | % | |||||||||
Efficiency ratio - adjusted (non-GAAP)(2) | 52.2 | % | 57.4 | % | 54.6 | % | 54.7 | % | 56.1 | % | |||||||||
Return on average assets | 1.14 | % | 1.09 | % | 1.10 | % | 1.11 | % | 1.06 | % | |||||||||
Return on average shareholders' equity | 8.0 | % | 7.4 | % | 10.0 | % | 7.7 | % | 9.6 | % | |||||||||
Return on average tangible shareholders' equity (non-GAAP)(2) | 14.3 | % | 13.3 | % | 14.3 | % | 14.0 | % | 13.9 | % | |||||||||
Average shareholders' equity as a percent of average assets | 14.3 | % | 14.8 | % | 11.1 | % | 14.5 | % | 11.0 | % | |||||||||
Capital ratios (period end): | |||||||||||||||||||
Tangible shareholders' equity as a percent of tangible assets (non-GAAP)(2) | 8.4 | % | 8.8 | % | 8.2 | % | 8.4 | % | 8.2 | % | |||||||||
Total risk-based capital ratio | 11.1 | % | 11.4 | % | 11.4 | % | 11.1 | % | 11.4 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||
(Dollars in thousands, except per share data) | June 30, 2017 | March 31, 2017 | June 30, 2016 | June 30, 2017 | June 30, 2016 | |||||||||||||||
Reconciliation of Non-GAAP Operating Results | ||||||||||||||||||||
Net Income | ||||||||||||||||||||
Net income, as reported | $ | 52,014 | $ | 47,604 | $ | 25,775 | $ | 99,618 | $ | 49,380 | ||||||||||
Transaction expenses | 465 | 4,167 | 3,054 | 4,632 | 5,648 | |||||||||||||||
Loan servicing rights change in fair value | 1,802 | 519 | — | 2,321 | — | |||||||||||||||
Significant items | 2,267 | 4,686 | 3,054 | 6,953 | 5,648 | |||||||||||||||
Income tax benefit (1) | (793 | ) | (1,640 | ) | (1,069 | ) | (2,433 | ) | (1,977 | ) | ||||||||||
Significant items, net of tax | 1,474 | 3,046 | 1,985 | 4,520 | 3,671 | |||||||||||||||
Net income, excluding significant items | $ | 53,488 | $ | 50,650 | $ | 27,760 | $ | 104,138 | $ | 53,051 | ||||||||||
Diluted Earnings Per Share | ||||||||||||||||||||
Diluted earnings per share, as reported | $ | 0.73 | $ | 0.67 | $ | 0.67 | $ | 1.39 | $ | 1.28 | ||||||||||
Effect of significant items, net of tax | 0.02 | 0.04 | 0.05 | 0.06 | 0.10 | |||||||||||||||
Diluted earnings per share, excluding significant items | $ | 0.75 | $ | 0.71 | $ | 0.72 | $ | 1.45 | $ | 1.38 | ||||||||||
Return on Average Assets | ||||||||||||||||||||
Return on average assets, as reported | 1.14 | % | 1.09 | % | 1.10 | % | 1.11 | % | 1.06 | % | ||||||||||
Effect of significant items, net of tax | 0.03 | 0.07 | 0.09 | 0.06 | 0.08 | |||||||||||||||
Return on average assets, excluding significant items | 1.17 | % | 1.16 | % | 1.19 | % | 1.17 | % | 1.14 | % | ||||||||||
Return on Average Shareholders' Equity | ||||||||||||||||||||
Return on average shareholders' equity, as reported | 8.0 | % | 7.4 | % | 10.0 | % | 7.7 | % | 9.6 | % | ||||||||||
Effect of significant items, net of tax | 0.2 | 0.4 | 0.7 | 0.3 | 0.7 | |||||||||||||||
Return on average shareholders' equity, excluding significant items | 8.2 | % | 7.8 | % | 10.7 | % | 8.0 | % | 10.3 | % | ||||||||||
Return on Average Tangible Shareholders' Equity | ||||||||||||||||||||
Average shareholders' equity | $ | 2,606,517 | $ | 2,584,501 | $ | 1,033,014 | $ | 2,595,567 | $ | 1,025,471 | ||||||||||
Average goodwill, CDI and noncompete agreements, net of tax | 1,171,593 | 1,173,019 | 312,033 | 1,172,302 | 312,893 | |||||||||||||||
Average tangible shareholders' equity | $ | 1,434,924 | $ | 1,411,482 | $ | 720,981 | $ | 1,423,265 | $ | 712,578 | ||||||||||
Return on average tangible shareholders' equity | 14.3 | % | 13.3 | % | 14.3 | % | 14.0 | % | 13.9 | % | ||||||||||
Effect of significant items, net of tax | 0.4 | 0.9 | 1.1 | 0.6 | 1.0 | |||||||||||||||
Return on average tangible shareholders' equity, excluding significant items | 14.7 | % | 14.2 | % | 15.4 | % | 14.6 | % | 14.9 | % |
Efficiency Ratio | ||||||||||||||||||||
Net interest income | $ | 137,948 | $ | 130,097 | $ | 77,495 | $ | 268,045 | $ | 151,825 | ||||||||||
Noninterest income | 41,568 | 38,010 | 20,897 | 79,578 | 40,316 | |||||||||||||||
Total revenue - GAAP | 179,516 | 168,107 | 98,392 | 347,623 | 192,141 | |||||||||||||||
Net interest income FTE adjustment | 3,169 | 3,068 | 2,138 | 6,237 | 4,271 | |||||||||||||||
Loan servicing rights change in fair value | 1,802 | 519 | — | 2,321 | — | |||||||||||||||
Gains from sale of investment securities and closed branch locations | (77 | ) | (90 | ) | (123 | ) | (167 | ) | (292 | ) | ||||||||||
Total revenue - Non-GAAP | $ | 184,410 | $ | 171,604 | $ | 100,407 | $ | 356,014 | $ | 196,120 | ||||||||||
Operating expenses - GAAP | $ | 98,237 | $ | 104,196 | $ | 59,085 | $ | 202,433 | $ | 117,972 | ||||||||||
Transaction expenses | (465 | ) | (4,167 | ) | (3,054 | ) | (4,632 | ) | (5,648 | ) | ||||||||||
Operating expenses, excluding transaction expenses | 97,772 | 100,029 | 56,031 | 197,801 | 112,324 | |||||||||||||||
Amortization of intangibles | (1,525 | ) | (1,513 | ) | (1,195 | ) | (3,038 | ) | (2,389 | ) | ||||||||||
Operating expenses - Non-GAAP | $ | 96,247 | $ | 98,516 | $ | 54,836 | $ | 194,763 | $ | 109,935 | ||||||||||
Efficiency ratio - GAAP | 54.7 | % | 62.0 | % | 60.1 | % | 58.2 | % | 61.4 | % | ||||||||||
Efficiency ratio - adjusted Non-GAAP | 52.2 | % | 57.4 | % | 54.6 | % | 54.7 | % | 56.1 | % | ||||||||||
(1) Assumes transaction expenses are deductible at an income tax rate of 35%, except for the impact of estimated nondeductible expenses incurred in periods when the Corporation completes merger and acquisition transactions. |
(Dollars in thousands, except per share data) | June 30, 2017 | March 31, 2017 | December 31, 2016 | June 30, 2016 | ||||||||||||
Tangible Book Value | ||||||||||||||||
Shareholders' equity, as reported | $ | 2,639,442 | $ | 2,600,051 | $ | 2,581,526 | $ | 1,050,299 | ||||||||
Goodwill, CDI and noncompete agreements, net of tax | (1,153,595 | ) | (1,154,915 | ) | (1,155,617 | ) | (297,044 | ) | ||||||||
Tangible shareholders' equity | $ | 1,485,847 | $ | 1,445,136 | $ | 1,425,909 | $ | 753,255 | ||||||||
Common shares outstanding | 71,131 | 71,118 | 70,599 | 38,267 | ||||||||||||
Book value per share (shareholders' equity, as reported, divided by common shares outstanding) | $ | 37.11 | $ | 36.56 | $ | 36.57 | $ | 27.45 | ||||||||
Tangible book value per share (tangible shareholders' equity divided by common shares outstanding) | $ | 20.89 | $ | 20.32 | $ | 20.20 | $ | 19.68 | ||||||||
Tangible Shareholders' Equity to Tangible Assets | ||||||||||||||||
Total assets, as reported | $ | 18,781,405 | $ | 17,636,973 | $ | 17,355,179 | $ | 9,514,172 | ||||||||
Goodwill, CDI and noncompete agreements, net of tax | (1,153,595 | ) | (1,154,915 | ) | (1,155,617 | ) | (297,044 | ) | ||||||||
Tangible assets | $ | 17,627,810 | $ | 16,482,058 | $ | 16,199,562 | $ | 9,217,128 | ||||||||
Shareholders' equity to total assets | 14.1 | % | 14.7 | % | 14.9 | % | 11.0 | % | ||||||||
Tangible shareholders' equity to tangible assets | 8.4 | % | 8.8 | % | 8.8 | % | 8.2 | % |
Maturity as of June 30, 2017(1) | ||||||||||||||||||||||||||||||||||||||
Within One Year | After One but Within Five Years | After Five but Within Ten Years | After Ten Years | Total Carrying Value(2) | Total Fair Value | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | Amount | Yield(3) | Amount | Yield(3) | Amount | Yield(3) | Amount | Yield(3) | Amount | Yield(3) | ||||||||||||||||||||||||||||
Available-for-Sale: | ||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities | $ | 5,793 | 0.95 | % | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | 5,793 | 0.95 | % | $ | 5,793 | ||||||||||||||||
Government sponsored agencies | 81,857 | 1.43 | 77,773 | 1.95 | 71,153 | 2.12 | 16,691 | 2.20 | 247,474 | 1.84 | 247,474 | |||||||||||||||||||||||||||
State and political subdivisions | 10,846 | 1.49 | 74,329 | 1.33 | 111,432 | 1.55 | 95,428 | 1.94 | 292,035 | 1.62 | 292,035 | |||||||||||||||||||||||||||
Residential mortgage-backed securities | 61,701 | 1.64 | 157,379 | 1.72 | 49,457 | 2.16 | 24,375 | 2.29 | 292,912 | 1.82 | 292,912 | |||||||||||||||||||||||||||
Collateralized mortgage obligations | 167,184 | 2.35 | 373,871 | 2.36 | 147,132 | 2.55 | 45,000 | 2.86 | 733,187 | 2.43 | 733,187 | |||||||||||||||||||||||||||
Corporate bonds | 16,683 | 1.63 | 42,879 | 1.91 | 83,013 | 3.56 | 15,593 | 2.66 | 158,168 | 2.82 | 158,168 | |||||||||||||||||||||||||||
Preferred stock and trust preferred securities | — | — | — | — | 22,920 | 3.29 | 14,989 | 3.07 | 37,909 | 3.20 | 37,909 | |||||||||||||||||||||||||||
Total investment securities available-for-sale | 344,064 | 1.92 | 726,231 | 2.05 | 485,107 | 2.43 | 212,076 | 2.33 | 1,767,478 | 2.16 | 1,767,478 | |||||||||||||||||||||||||||
Held-to-Maturity: | ||||||||||||||||||||||||||||||||||||||
State and political subdivisions | 85,434 | 1.55 | 253,002 | 2.03 | 143,396 | 2.67 | 163,273 | 2.25 | 645,105 | 2.16 | 639,683 | |||||||||||||||||||||||||||
Trust preferred securities | — | — | — | — | — | — | 500 | 4.75 | 500 | 4.75 | 360 | |||||||||||||||||||||||||||
Total investment securities held-to-maturity | 85,434 | 1.55 | 253,002 | 2.03 | 143,396 | 2.67 | 163,773 | 2.26 | 645,605 | 2.17 | 640,043 | |||||||||||||||||||||||||||
Total investment securities | $ | 429,498 | 1.84 | % | $ | 979,233 | 2.04 | % | $ | 628,503 | 2.48 | % | $ | 375,849 | 2.30 | % | $ | 2,413,083 | 2.16 | % | $ | 2,407,521 |
(1) | Residential mortgage-backed securities, collateralized mortgage obligations and certain government sponsored agencies are based on scheduled principal maturity. All other investment securities are based on final contractual maturity. |
(2) | The aggregate book value of securities issued by any single issuer, other than the U.S. government and government sponsored agencies, did not exceed 10% of the Corporation's shareholders' equity. |
(3) | Yields are weighted by amount and time to contractual maturity, are on a taxable equivalent basis using a 35% federal income tax rate and are based on carrying value. Yields disclosed are actual yields based on carrying value at June 30, 2017. Approximately 19% of the Corporation's investment securities at June 30, 2017 were variable-rate financial instruments. |
Maturity as of December 31, 2016(1) | ||||||||||||||||||||||||||||||||||||||
Within One Year | After One but Within Five Years | After Five but Within Ten Years | After Ten Years | Total Carrying Value(2) | Total Fair Value | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | Amount | Yield(3) | Amount | Yield(3) | Amount | Yield(3) | Amount | Yield(3) | Amount | Yield(3) | ||||||||||||||||||||||||||||
Available-for-Sale: | ||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities | $ | 5,793 | 0.95 | % | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | 5,793 | 0.95 | % | $ | 5,793 | ||||||||||||||||
Government sponsored agencies | 71,233 | 1.11 | 82,888 | 1.43 | 56,363 | 1.78 | 4,527 | 1.85 | 215,011 | 1.42 | 215,011 | |||||||||||||||||||||||||||
State and political subdivisions | 9,438 | 2.53 | 70,435 | 2.11 | 116,239 | 2.39 | 103,976 | 2.94 | 300,088 | 2.52 | 300,088 | |||||||||||||||||||||||||||
Residential mortgage-backed securities | 54,204 | 1.55 | 143,937 | 1.60 | 48,400 | 2.08 | 25,741 | 2.31 | 272,282 | 1.74 | 272,282 | |||||||||||||||||||||||||||
Collateralized mortgage obligations | 87,400 | 2.04 | 135,646 | 2.26 | 79,496 | 2.42 | 17,483 | 2.58 | 320,025 | 2.26 | 320,025 | |||||||||||||||||||||||||||
Corporate bonds | 7,778 | 1.47 | 52,315 | 1.85 | 29,381 | 3.66 | — | — | 89,474 | 2.41 | 89,474 | |||||||||||||||||||||||||||
Preferred stock and trust preferred securities | — | — | — | — | — | — | 32,291 | 2.95 | 32,291 | 2.95 | 32,291 | |||||||||||||||||||||||||||
Total investment securities available-for-sale | 235,846 | 1.62 | 485,221 | 1.86 | 329,879 | 2.36 | 184,018 | 2.79 | 1,234,964 | 2.09 | 1,234,964 | |||||||||||||||||||||||||||
Held-to-Maturity: | ||||||||||||||||||||||||||||||||||||||
State and political subdivisions | 66,090 | 2.18 | 262,136 | 2.74 | 145,225 | 3.90 | 149,476 | 3.13 | 622,927 | 3.04 | 608,221 | |||||||||||||||||||||||||||
Trust preferred securities | — | — | — | — | — | — | 500 | 4.00 | 500 | 4.00 | 310 | |||||||||||||||||||||||||||
Total investment securities held-to-maturity | 66,090 | 2.18 | 262,136 | 2.74 | 145,225 | 3.90 | 149,976 | 3.13 | 623,427 | 3.05 | 608,531 | |||||||||||||||||||||||||||
Total investment securities | $ | 301,936 | 1.74 | % | $ | 747,357 | 2.17 | % | $ | 475,104 | 2.83 | % | $ | 333,994 | 2.95 | % | $ | 1,858,391 | 2.41 | % | $ | 1,843,495 |
(1) | Residential mortgage-backed securities, collateralized mortgage obligations and certain government sponsored agencies are based on scheduled principal maturity. All other investment securities are based on final contractual maturity. |
(2) | The aggregate book value of securities issued by any single issuer, other than the U.S. government and government sponsored agencies, did not exceed 10% of the Corporation's shareholders' equity. |
(3) | Yields are weighted by amount and time to contractual maturity, are on a taxable equivalent basis using a 35% federal income tax rate and are based on carrying value. Yields disclosed are actual yields based on carrying value at December 31, 2016. Approximately 10% of the Corporation's investment securities at December 31, 2016 were variable-rate financial instruments. |
(Dollars in thousands) | June 30, 2017 | December 31, 2016 | ||||||
Available-for-sale: | ||||||||
U.S. Treasury securities | $ | 5,793 | $ | 5,793 | ||||
Government sponsored agencies | 247,474 | 215,011 | ||||||
State and political subdivisions | 292,035 | 300,088 | ||||||
Residential mortgage-backed securities | 292,912 | 272,282 | ||||||
Collateralized mortgage obligations | 733,187 | 320,025 | ||||||
Corporate bonds | 158,168 | 89,474 | ||||||
Preferred stock and trust preferred securities | 37,909 | 32,291 | ||||||
Total investment securities available-for-sale | 1,767,478 | 1,234,964 | ||||||
Held-to-maturity: | ||||||||
State and political subdivisions | 645,105 | 622,927 | ||||||
Trust preferred securities | 500 | 500 | ||||||
Total investment securities held-to-maturity | 645,605 | 623,427 | ||||||
Total investment securities | $ | 2,413,083 | $ | 1,858,391 |
(Dollars in thousands) | Talmer Bancorp, Inc. (August 31, 2016) | |||
Commercial loan portfolio: | ||||
Commercial | $ | 1,223,179 | ||
Commercial real estate | 1,589,900 | |||
Real estate construction | 166,364 | |||
Subtotal | 2,979,443 | |||
Consumer loan portfolio: | ||||
Residential mortgage | 1,531,641 | |||
Consumer installment | 158,835 | |||
Home equity | 212,483 | |||
Subtotal | 1,902,959 | |||
Total loans | $ | 4,882,402 |
(Dollars in thousands) | June 30, 2017 | December 31, 2016 | ||||||
Commercial loan portfolio: | ||||||||
Commercial | $ | 3,360,161 | $ | 3,217,300 | ||||
Commercial real estate: | ||||||||
Owner-occupied | 1,695,947 | 1,697,238 | ||||||
Non-owner occupied | 2,550,396 | 2,217,594 | ||||||
Vacant land | 77,980 | 58,308 | ||||||
Total commercial real estate | 4,324,323 | 3,973,140 | ||||||
Real estate construction and land development | 446,678 | 403,772 | ||||||
Subtotal - commercial loan portfolio | 8,131,162 | 7,594,212 | ||||||
Consumer loan portfolio: | ||||||||
Residential mortgage | 3,125,397 | 3,086,474 | ||||||
Consumer installment | 1,553,967 | 1,433,884 | ||||||
Home equity | 856,846 | 876,209 | ||||||
Subtotal - consumer loan portfolio | 5,536,210 | 5,396,567 | ||||||
Total loans | $ | 13,667,372 | $ | 12,990,779 |
June 30, 2017 | ||||||||||||||||
Due In | ||||||||||||||||
(Dollars in thousands) | 1 Year or Less | 1 to 5 Years | Over 5 Years | Total | ||||||||||||
Loan maturities: | ||||||||||||||||
Commercial | $ | 1,061,455 | $ | 1,833,918 | $ | 464,788 | $ | 3,360,161 | ||||||||
Commercial real estate | 545,363 | 2,498,678 | 1,280,282 | 4,324,323 | ||||||||||||
Real estate construction and land development | 94,702 | 214,205 | 137,771 | 446,678 | ||||||||||||
Total | $ | 1,701,520 | $ | 4,546,801 | $ | 1,882,841 | $ | 8,131,162 | ||||||||
Percent of total | 20.9 | % | 55.9 | % | 23.2 | % | 100.0 | % | ||||||||
Interest sensitivity of above loans: | ||||||||||||||||
Fixed interest rates | $ | 556,748 | $ | 3,096,773 | $ | 1,017,797 | $ | 4,671,318 | ||||||||
Variable interest rates | 1,144,772 | 1,450,028 | 865,044 | 3,459,844 | ||||||||||||
Total | $ | 1,701,520 | $ | 4,546,801 | $ | 1,882,841 | $ | 8,131,162 |
December 31, 2016 | ||||||||||||||||
Due In | ||||||||||||||||
(Dollars in thousands) | 1 Year or Less | 1 to 5 Years | Over 5 Years | Total | ||||||||||||
Loan maturities: | ||||||||||||||||
Commercial | $ | 1,064,276 | $ | 1,739,072 | $ | 413,952 | $ | 3,217,300 | ||||||||
Commercial real estate | 517,175 | 2,333,992 | 1,121,973 | 3,973,140 | ||||||||||||
Real estate construction and land development | 91,514 | 223,846 | 88,412 | 403,772 | ||||||||||||
Total | $ | 1,672,965 | $ | 4,296,910 | $ | 1,624,337 | $ | 7,594,212 | ||||||||
Percent of total | 22.0 | % | 56.6 | % | 21.4 | % | 100.0 | % | ||||||||
Interest sensitivity of above loans: | ||||||||||||||||
Fixed interest rates | $ | 572,841 | $ | 2,972,849 | $ | 1,080,768 | $ | 4,626,458 | ||||||||
Variable interest rates | 1,100,124 | 1,324,061 | 543,569 | 2,967,754 | ||||||||||||
Total | $ | 1,672,965 | $ | 4,296,910 | $ | 1,624,337 | $ | 7,594,212 |
(Dollars in thousands) | June 30, 2017 | December 31, 2016 | ||||||
Nonaccrual loans: | ||||||||
Commercial | $ | 18,773 | $ | 13,178 | ||||
Commercial real estate | 19,723 | 19,877 | ||||||
Real estate construction and land development | 56 | 80 | ||||||
Residential mortgage | 7,714 | 6,969 | ||||||
Consumer installment | 757 | 879 | ||||||
Home equity | 3,871 | 3,351 | ||||||
Total nonaccrual loans | 50,894 | 44,334 | ||||||
Other real estate and repossessed assets | 14,582 | 17,187 | ||||||
Total nonperforming assets | 65,476 | 61,521 | ||||||
Accruing troubled debt restructurings | ||||||||
Commercial loan portfolio | 39,714 | 45,388 | ||||||
Consumer loan portfolio | 15,522 | 17,147 | ||||||
Total performing troubled debt restructurings | 55,236 | 62,535 | ||||||
Total impaired assets | $ | 120,712 | $ | 124,056 | ||||
Accruing loans contractually past due 90 days or more as to interest or principal payments, excluding loans accounted for under ASC 310-30 | ||||||||
Commercial loan portfolio | $ | 320 | $ | 288 | ||||
Consumer loan portfolio | 2,026 | 995 | ||||||
Total accruing loans contractually past due 90 days or more as to interest or principal payments | $ | 2,346 | $ | 1,283 | ||||
Nonperforming loans as a percent of total loans | 0.37 | % | 0.34 | % | ||||
Nonperforming assets as a percent of total assets | 0.35 | % | 0.35 | % | ||||
Impaired assets as a percent of total assets | 0.64 | % | 0.71 | % |
(Dollars in thousands) | Amount | Valuation Allowance | Confirmed Losses | Cumulative Inherent Loss Percentage | |||||||||||
June 30, 2017 | |||||||||||||||
Impaired loans – originated commercial loan portfolio: | |||||||||||||||
With valuation allowance and no charge-offs | $ | 38,836 | $ | 3,743 | $ | — | 10 | % | |||||||
With valuation allowance and charge-offs | 10,185 | 1,930 | 8,139 | 55 | % | ||||||||||
With charge-offs and no valuation allowance | 3,886 | — | 5,983 | 61 | % | ||||||||||
Without valuation allowance or charge-offs | 25,359 | — | — | — | % | ||||||||||
Total impaired loans to commercial borrowers | $ | 78,266 | $ | 5,673 | $ | 14,122 | 21 | % | |||||||
December 31, 2016 | |||||||||||||||
Impaired loans – originated commercial loan portfolio: | |||||||||||||||
With valuation allowance and no charge-offs | $ | 41,305 | $ | 4,377 | $ | — | 11 | % | |||||||
With valuation allowance and charge-offs | 9,115 | 857 | 10,524 | 58 | % | ||||||||||
With charge-offs and no valuation allowance | 4,001 | — | 6,665 | 62 | % | ||||||||||
Without valuation allowance or charge-offs | 24,102 | — | — | — | % | ||||||||||
Total impaired loans to commercial borrowers | $ | 78,523 | $ | 5,234 | $ | 17,189 | 23 | % |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Balance at beginning of period | $ | 47,841 | $ | 53,419 | $ | 44,334 | $ | 62,225 | ||||||||
Additions during period | 11,044 | 5,467 | 25,082 | 10,740 | ||||||||||||
Principal balances charged off | (1,564 | ) | (3,166 | ) | (6,307 | ) | (8,220 | ) | ||||||||
Transfers to other real estate/repossessed assets | (1,661 | ) | (1,455 | ) | (3,381 | ) | (2,902 | ) | ||||||||
Returned to accrual status | (519 | ) | (3,874 | ) | (1,895 | ) | (4,217 | ) | ||||||||
Payments received | (4,247 | ) | (6,394 | ) | (6,939 | ) | (13,629 | ) | ||||||||
Balance at end of period | $ | 50,894 | $ | 43,997 | $ | 50,894 | $ | 43,997 |
June 30, 2017 | December 31, 2016 | |||||||||||||
(Dollars in thousands) | Number of Borrowers | Amount | Number of Borrowers | Amount | ||||||||||
$5,000,000 or more | — | $ | — | — | $ | — | ||||||||
$2,500,000 – $4,999,999 | 2 | 9,354 | 1 | 4,793 | ||||||||||
$1,000,000 – $2,499,999 | 3 | 3,842 | 7 | 10,526 | ||||||||||
$500,000 – $999,999 | 14 | 10,502 | 8 | 5,652 | ||||||||||
$250,000 – $499,999 | 16 | 5,308 | 10 | 3,809 | ||||||||||
Under $250,000 | 134 | 9,546 | 105 | 8,355 | ||||||||||
Total | 169 | $ | 38,552 | 131 | $ | 33,135 |
Accruing TDRs | Nonaccrual TDRs | Total | ||||||||||||||||||
(Dollars in thousands) | Current | Past due 31-90 days | Subtotal | |||||||||||||||||
June 30, 2017 | ||||||||||||||||||||
Commercial loan portfolio | $ | 34,484 | $ | 5,230 | $ | 39,714 | $ | 21,296 | $ | 61,010 | ||||||||||
Consumer loan portfolio | 15,233 | 289 | 15,522 | 4,409 | 19,931 | |||||||||||||||
Total TDRs | $ | 49,717 | $ | 5,519 | $ | 55,236 | $ | 25,705 | $ | 80,941 | ||||||||||
December 31, 2016 | ||||||||||||||||||||
Commercial loan portfolio | $ | 43,041 | $ | 2,347 | $ | 45,388 | $ | 25,397 | $ | 70,785 | ||||||||||
Consumer loan portfolio | 16,690 | 457 | 17,147 | 5,134 | 22,281 | |||||||||||||||
Total TDRs | $ | 59,731 | $ | 2,804 | $ | 62,535 | $ | 30,531 | $ | 93,066 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Balance at beginning of period | $ | 41,055 | $ | 47,247 | $ | 45,388 | $ | 46,141 | ||||||||
Additions for modifications | 611 | 2,262 | 1,219 | 5,683 | ||||||||||||
Principal payments and pay-offs | (796 | ) | (3,899 | ) | (3,815 | ) | (5,081 | ) | ||||||||
Transfers from nonaccrual status | 99 | 922 | 1,176 | 970 | ||||||||||||
Transfers to nonaccrual status | (1,255 | ) | (1,426 | ) | (4,254 | ) | (2,607 | ) | ||||||||
Balance at end of period | $ | 39,714 | $ | 45,106 | $ | 39,714 | $ | 45,106 |
(Dollars in thousands) | June 30, 2017 | December 31, 2016 | ||||||
Composition of ORE: | ||||||||
Vacant land | $ | 4,452 | $ | 5,473 | ||||
Commercial real estate properties | 6,007 | 6,812 | ||||||
Residential real estate properties | 3,178 | 4,527 | ||||||
Total ORE | $ | 13,637 | $ | 16,812 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Balance at beginning of year | $ | 15,895 | $ | 8,931 | $ | 16,812 | $ | 9,716 | ||||||||
Additions attributable to foreclosures | 657 | 1,217 | 3,776 | 2,155 | ||||||||||||
Write-downs to fair value | (504 | ) | (63 | ) | (773 | ) | (230 | ) | ||||||||
Net payments received | (163 | ) | 100 | (202 | ) | (85 | ) | |||||||||
Dispositions | (2,248 | ) | (1,859 | ) | (5,976 | ) | (3,230 | ) | ||||||||
Balance at end of year | $ | 13,637 | $ | 8,326 | $ | 13,637 | $ | 8,326 |
(Dollars in thousands) | June 30, 2017 | December 31, 2016 | ||||||
Allowance for loan losses: | ||||||||
Originated loans | $ | 83,797 | $ | 78,268 | ||||
Acquired loans | — | — | ||||||
Total | $ | 83,797 | $ | 78,268 | ||||
Nonperforming loans | $ | 50,894 | $ | 44,334 | ||||
Allowance for originated loans as a percent of: | ||||||||
Total originated loans | 0.97 | % | 1.05 | % | ||||
Nonperforming loans | 165 | % | 177 | % | ||||
Nonperforming loans, less impaired originated loans for which the expected loss has been charged-off | 178 | % | 194 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||
(Dollars in thousands) | June 30, 2017 | March 31, 2017 | June 30, 2016 | June 30, 2017 | June 30, 2016 | |||||||||||||||
Allowance for loan losses - beginning of period | $ | 78,774 | $ | 78,268 | $ | 70,318 | $ | 78,268 | $ | 73,328 | ||||||||||
Provision for loan losses | 6,229 | 4,050 | 3,000 | 10,279 | 4,500 | |||||||||||||||
Loan charge-offs: | ||||||||||||||||||||
Commercial | (355 | ) | (2,637 | ) | (1,682 | ) | (2,992 | ) | (5,018 | ) | ||||||||||
Commercial real estate | (371 | ) | (45 | ) | (860 | ) | (416 | ) | (1,409 | ) | ||||||||||
Real estate construction and land development | — | (9 | ) | — | (9 | ) | (11 | ) | ||||||||||||
Residential mortgage | (168 | ) | (643 | ) | (80 | ) | (811 | ) | (429 | ) | ||||||||||
Consumer installment | (1,347 | ) | (1,814 | ) | (911 | ) | (3,161 | ) | (1,907 | ) | ||||||||||
Home equity | (63 | ) | (426 | ) | (87 | ) | (489 | ) | (304 | ) | ||||||||||
Total loan charge-offs | (2,304 | ) | (5,574 | ) | (3,620 | ) | (7,878 | ) | (9,078 | ) | ||||||||||
Recoveries of loans previously charged off: | ||||||||||||||||||||
Commercial | 116 | 638 | 529 | 754 | 750 | |||||||||||||||
Commercial real estate | 166 | 775 | 673 | 941 | 782 | |||||||||||||||
Residential mortgage | 187 | 76 | 88 | 263 | 265 | |||||||||||||||
Consumer installment | 600 | 504 | 425 | 1,104 | 819 | |||||||||||||||
Home equity | 29 | 37 | 93 | 66 | 140 | |||||||||||||||
Total loan recoveries | 1,098 | 2,030 | 1,808 | 3,128 | 2,756 | |||||||||||||||
Net loan charge-offs | (1,206 | ) | (3,544 | ) | (1,812 | ) | (4,750 | ) | (6,322 | ) | ||||||||||
Allowance for loan losses - end of period | $ | 83,797 | $ | 78,774 | $ | 71,506 | $ | 83,797 | $ | 71,506 | ||||||||||
Net loan charge-offs as a percent of average loans (annualized) | 0.04 | % | 0.11 | % | 0.10 | % | 0.07 | % | 0.17 | % |
June 30, 2017 | December 31, 2016 | |||||||||||||
(Dollars in millions) | Allowance Amount | Percent of originated loans in each category to total loans | Allowance Amount | Percent of originated loans in each category to total loans | ||||||||||
Originated loans: | ||||||||||||||
Commercial | $ | 26.8 | 25 | % | $ | 22.4 | 25 | % | ||||||
Commercial real estate | 27.4 | 28 | 25.4 | 26 | ||||||||||
Real estate construction and land development | 3.8 | 4 | 3.4 | 4 | ||||||||||
Residential mortgage | 12.4 | 19 | 13.8 | 20 | ||||||||||
Consumer Installment | 9.3 | 17 | 8.9 | 17 | ||||||||||
Home equity | 4.1 | 7 | 4.4 | 8 | ||||||||||
Subtotal — originated loans | 83.8 | 100 | % | 78.3 | 100 | % | ||||||||
Acquired loans | — | — | ||||||||||||
Total | $ | 83.8 | $ | 78.3 |
(Dollars in thousands) | Amount | Weighted Average Interest Rate | |||||
2017 maturities: | |||||||
Third quarter | $ | 684,206 | 0.7 | % | |||
Fourth quarter | 461,085 | 0.8 | |||||
2017 remaining maturities | 1,145,291 | 0.7 | |||||
2018 maturities | 1,204,020 | 1.1 | |||||
2019 maturities | 274,439 | 1.1 | |||||
2020 maturities | 165,572 | 1.5 | |||||
2021 maturities | 135,671 | 1.6 | |||||
2022 maturities and beyond | 62,139 | 1.6 | |||||
Total time deposits | $ | 2,987,132 | 0.6 | % |
June 30, 2017 | |||||||
(Dollars in thousands) | Amount | Percent | |||||
Maturity: | |||||||
Within 3 months | $ | 327,033 | 26.0 | % | |||
After 3 but within 6 months | 256,534 | 20.4 | |||||
After 6 but within 12 months | 393,585 | 31.2 | |||||
After 12 months | 282,225 | 22.4 | |||||
Total | $ | 1,259,377 | 100.0 | % |
(Dollars in thousands) | June 30, 2017 | December 31, 2016 | ||||||
Long-term borrowings: | ||||||||
Long-term FHLB advances | $ | 351,324 | $ | 438,538 | ||||
Securities sold under agreements to repurchase | 9,048 | 19,144 | ||||||
Non-revolving line-of-credit | 59,854 | 124,625 | ||||||
Subordinated debt obligations | 15,626 | 15,540 | ||||||
Total long-term borrowings | $ | 435,852 | $ | 597,847 |
(Dollars in thousands) | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | Total | |||||||||||||||
Unused commitments to extend credit: | ||||||||||||||||||||
Loans to commercial borrowers | $ | 981,940 | $ | 629,304 | $ | 204,683 | $ | 414,039 | $ | 2,229,966 | ||||||||||
Loans to consumer borrowers | 215,263 | 173,105 | 144,893 | 164,942 | 698,203 | |||||||||||||||
Total unused commitments to extend credit | 1,197,203 | 802,409 | 349,576 | 578,981 | 2,928,169 | |||||||||||||||
Undisbursed loan commitments | 606,654 | — | — | — | 606,654 | |||||||||||||||
Standby letters of credit | 89,608 | 10,733 | 12,348 | 26,281 | 138,970 | |||||||||||||||
Total credit-related commitments | $ | 1,893,465 | $ | 813,142 | $ | 361,924 | $ | 605,262 | $ | 3,673,793 |
June 30, 2017 | ||||||||||||
Leverage Ratio | Risk-Based Capital Ratios | |||||||||||
CET Tier 1 | Tier 1 | Total | ||||||||||
Actual Capital Ratios: | ||||||||||||
Chemical Financial Corporation | 8.7 | % | 10.4 | % | 10.4 | % | 11.1 | % | ||||
Chemical Bank | 8.9 | 10.6 | 10.6 | 11.2 | ||||||||
Minimum required for capital adequacy purposes | 4.0 | 4.5 | 6.0 | 8.0 | ||||||||
Minimum required for “well-capitalized” capital adequacy purposes | 5.0 | 6.5 | 8.0 | 10.0 |
Three Months Ended | ||||||||||||||||||||||||||||||||
June 30, 2017 | March 31, 2017 | June 30, 2016 | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Average Balance | Interest (FTE) | Effective Yield/ Rate(1) | Average Balance | Interest (FTE) | Effective Yield/ Rate(1) | Average Balance | Interest (FTE) | Effective Yield/ Rate(1) | |||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Interest-earning Assets: | ||||||||||||||||||||||||||||||||
Loans(2) | $ | 13,513,927 | $ | 142,128 | 4.22 | % | $ | 13,155,846 | $ | 133,293 | 4.11 | % | $ | 7,511,192 | $ | 78,295 | 4.19 | % | ||||||||||||||
Taxable investment securities | 1,364,358 | 7,125 | 2.09 | 1,005,489 | 4,756 | 1.89 | 515,303 | 1,798 | 1.40 | |||||||||||||||||||||||
Tax-exempt investment securities | 882,445 | 6,781 | 3.07 | 861,508 | 6,495 | 3.02 | 484,271 | 4,061 | 3.35 | |||||||||||||||||||||||
Other interest-earning assets | 166,244 | 1,246 | 3.01 | 103,334 | 621 | 2.44 | 43,615 | 777 | 7.16 | |||||||||||||||||||||||
Interest-bearing deposits with the FRB and other banks and federal funds sold | 302,022 | 1,022 | 1.36 | 269,288 | 799 | 1.20 | 82,246 | 144 | 0.70 | |||||||||||||||||||||||
Total interest-earning assets | 16,228,996 | 158,302 | 3.91 | 15,395,465 | 145,964 | 3.83 | 8,636,627 | 85,075 | 3.96 | |||||||||||||||||||||||
Less: Allowance for loan losses | (80,690 | ) | (78,616 | ) | (71,790 | ) | ||||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||||
Cash and cash due from banks | 222,954 | 229,203 | 148,034 | |||||||||||||||||||||||||||||
Premises and equipment | 145,320 | 146,044 | 104,488 | |||||||||||||||||||||||||||||
Interest receivable and other assets | 1,748,119 | 1,781,923 | 515,039 | |||||||||||||||||||||||||||||
Total assets | $ | 18,264,699 | $ | 17,474,019 | $ | 9,332,398 | ||||||||||||||||||||||||||
Liabilities and shareholders' equity | ||||||||||||||||||||||||||||||||
Interest-bearing Liabilities: | ||||||||||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 2,682,652 | $ | 1,289 | 0.19 | % | $ | 2,898,061 | $ | 1,018 | 0.14 | % | $ | 1,892,512 | $ | 582 | 0.12 | % | ||||||||||||||
Savings deposits | 3,881,260 | 3,047 | 0.31 | 3,842,594 | 1,721 | 0.18 | 2,073,412 | 476 | 0.09 | |||||||||||||||||||||||
Time deposits | 2,958,436 | 6,246 | 0.85 | 2,953,069 | 6,177 | 0.85 | 1,582,467 | 3,202 | 0.81 | |||||||||||||||||||||||
Short-term borrowings | 2,027,505 | 4,659 | 0.92 | 1,225,888 | 1,658 | 0.55 | 418,232 | 226 | 0.22 | |||||||||||||||||||||||
Long-term borrowings | 474,086 | 1,944 | 1.65 | 539,032 | 2,225 | 1.67 | 281,327 | 956 | 1.37 | |||||||||||||||||||||||
Total interest-bearing liabilities | 12,023,939 | 17,185 | 0.57 | 11,458,644 | 12,799 | 0.45 | 6,247,950 | 5,442 | 0.35 | |||||||||||||||||||||||
Noninterest-bearing deposits | 3,499,686 | — | — | 3,305,201 | — | — | 1,979,423 | — | — | |||||||||||||||||||||||
Total deposits and borrowed funds | 15,523,625 | 17,185 | 0.44 | 14,763,845 | 12,799 | 0.35 | 8,227,373 | 5,442 | 0.27 | |||||||||||||||||||||||
Interest payable and other liabilities | 134,557 | 125,673 | 72,011 | |||||||||||||||||||||||||||||
Shareholders’ equity | 2,606,517 | 2,584,501 | 1,033,014 | |||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 18,264,699 | $ | 17,474,019 | $ | 9,332,398 | ||||||||||||||||||||||||||
Net Interest Spread (Average yield earned minus average rate paid) | 3.34 | % | 3.38 | % | 3.61 | % | ||||||||||||||||||||||||||
Net Interest Income (FTE) | $ | 141,117 | $ | 133,165 | $ | 79,633 | ||||||||||||||||||||||||||
Net Interest Margin (Net interest income (FTE) divided by total average interest-earning assets) | 3.48 | % | 3.49 | % | 3.70 | % | ||||||||||||||||||||||||||
Reconciliation to Reported Net Interest Income | ||||||||||||||||||||||||||||||||
Net interest income, fully taxable equivalent (non-GAAP) | $ | 141,117 | $ | 133,165 | $ | 79,633 | ||||||||||||||||||||||||||
Adjustments for taxable equivalent interest(1): | ||||||||||||||||||||||||||||||||
Loans | (814 | ) | (808 | ) | (717 | ) | ||||||||||||||||||||||||||
Tax-exempt investment securities | (2,355 | ) | (2,260 | ) | (1,421 | ) | ||||||||||||||||||||||||||
Total taxable equivalent interest adjustments | (3,169 | ) | (3,068 | ) | (2,138 | ) | ||||||||||||||||||||||||||
Net interest income (GAAP) | $ | 137,948 | $ | 130,097 | $ | 77,495 | ||||||||||||||||||||||||||
Net interest margin (GAAP) | 3.41 | % | 3.41 | % | 3.60 | % | ||||||||||||||||||||||||||
(1) Fully taxable equivalent (FTE) basis using a federal income tax rate of 35%. The presentation of net interest income on a FTE basis is not in accordance with GAAP, but is customary in the banking industry. Please refer to the section entitled "Non-GAAP Financial Measures." | ||||||||||||||||||||||||||||||||
(2) Nonaccrual loans and loans held-for-sale are included in average balances reported and are included in the calculation of yields. Also, tax equivalent interest includes net loan fees. |
Six Months Ended | ||||||||||||||||||||||
June 30, 2017 | June 30, 2016 | |||||||||||||||||||||
(Dollars in thousands) | Average Balance | Interest (FTE) | Effective Yield/ Rate(1) | Average Balance | Interest (FTE) | Effective Yield/ Rate(1) | ||||||||||||||||
Assets | ||||||||||||||||||||||
Interest-earning Assets: | ||||||||||||||||||||||
Loans(2) | $ | 13,335,876 | $ | 275,421 | 4.16 | % | $ | 7,405,332 | $ | 153,394 | 4.16 | % | ||||||||||
Taxable investment securities | 1,185,915 | 11,881 | 2.00 | 534,914 | 3,727 | 1.39 | ||||||||||||||||
Tax-exempt investment securities | 872,034 | 13,276 | 3.04 | 490,287 | 8,161 | 3.33 | ||||||||||||||||
Other interest-earning assets | 134,962 | 1,867 | 2.79 | 41,554 | 1,033 | 5.00 | ||||||||||||||||
Interest-bearing deposits with the FRB and other banks and federal funds sold | 285,746 | 1,821 | 1.28 | 109,582 | 357 | 0.66 | ||||||||||||||||
Total interest-earning assets | 15,814,533 | 304,266 | 3.87 | 8,581,669 | 166,672 | 3.90 | ||||||||||||||||
Less: Allowance for loan losses | (79,658 | ) | (72,669 | ) | ||||||||||||||||||
Other assets: | ||||||||||||||||||||||
Cash and cash due from banks | 226,061 | 153,156 | ||||||||||||||||||||
Premises and equipment | 145,680 | 105,223 | ||||||||||||||||||||
Interest receivable and other assets | 1,764,925 | 519,337 | ||||||||||||||||||||
Total assets | $ | 17,871,541 | $ | 9,286,716 | ||||||||||||||||||
Liabilities and shareholders' equity | ||||||||||||||||||||||
Interest-bearing Liabilities: | ||||||||||||||||||||||
Interest-bearing demand deposits | $ | 2,789,762 | $ | 2,307 | 0.17 | % | $ | 1,923,068 | $ | 1,050 | 0.11 | % | ||||||||||
Savings deposits | 3,862,033 | 4,768 | 0.25 | 2,061,141 | 865 | 0.08 | ||||||||||||||||
Time deposits | 2,955,768 | 12,423 | 0.85 | 1,604,020 | 6,404 | 0.80 | ||||||||||||||||
Short-term borrowings | 1,628,911 | 6,317 | 0.78 | 383,966 | 326 | 0.17 | ||||||||||||||||
Long-term borrowings | 506,379 | 4,169 | 1.66 | 273,675 | 1,931 | 1.42 | ||||||||||||||||
Total interest-bearing liabilities | 11,742,853 | 29,984 | 0.51 | 6,245,870 | 10,576 | 0.34 | ||||||||||||||||
Noninterest-bearing deposits | 3,402,981 | — | — | 1,943,159 | — | — | ||||||||||||||||
Total deposits and borrowed funds | 15,145,834 | 29,984 | 0.40 | 8,189,029 | 10,576 | 0.26 | ||||||||||||||||
Interest payable and other liabilities | 130,140 | 72,216 | ||||||||||||||||||||
Shareholders’ equity | 2,595,567 | 1,025,471 | ||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 17,871,541 | $ | 9,286,716 | ||||||||||||||||||
Net Interest Spread (Average yield earned minus average rate paid) | 3.36 | % | 3.56 | % | ||||||||||||||||||
Net Interest Income (FTE) | $ | 274,282 | $ | 156,096 | ||||||||||||||||||
Net Interest Margin (Net Interest Income (FTE) divided by total average interest-earning assets) | 3.49 | % | 3.65 | % | ||||||||||||||||||
Reconciliation to Reported Net Interest Income | ||||||||||||||||||||||
Net interest income, fully taxable equivalent (non-GAAP) | $ | 274,282 | $ | 156,096 | ||||||||||||||||||
Adjustments for taxable equivalent interest(1): | ||||||||||||||||||||||
Loans | (1,622 | ) | (1,415 | ) | ||||||||||||||||||
Tax-exempt investment securities | (4,615 | ) | (2,856 | ) | ||||||||||||||||||
Total taxable equivalent interest adjustments | (6,237 | ) | (4,271 | ) | ||||||||||||||||||
Net interest income (GAAP) | $ | 268,045 | $ | 151,825 | ||||||||||||||||||
Net interest margin (GAAP) | 3.41 | % | 3.55 | % | ||||||||||||||||||
(1) Fully taxable equivalent (FTE) basis using a federal income tax rate of 35%. The presentation of net interest income on a FTE basis is not in accordance with GAAP, but is customary in the banking industry. Please refer to the section entitled "Non-GAAP Financial Measures." | ||||||||||||||||||||||
(2) Nonaccrual loans and loans held-for-sale are included in average balances reported and are included in the calculation of yields. Also, tax equivalent interest includes net loan fees. |
Three Months Ended June 30, 2017 | ||||||||||||||||||||||||
Compared to Three Months Ended March 31, 2017 | Compared to Three Months Ended June 30, 2016 | |||||||||||||||||||||||
Increase (Decrease) Due to Changes in | Increase (Decrease) Due to Changes in | |||||||||||||||||||||||
(Dollars in thousands) | Average Volume(1) | Average Yield/Rate(1) | Combined Increase/ (Decrease) | Average Volume(1) | Average Yield/Rate(1) | Combined Increase/ (Decrease) | ||||||||||||||||||
Changes in Interest Income on Interest-Earning Assets: | ||||||||||||||||||||||||
Loans | $ | 4,680 | $ | 4,155 | $ | 8,835 | $ | 64,111 | $ | (278 | ) | $ | 63,833 | |||||||||||
Taxable investment securities/other assets | 2,305 | 689 | 2,994 | 5,248 | 548 | 5,796 | ||||||||||||||||||
Tax-exempt investment securities | 170 | 116 | 286 | 3,092 | (372 | ) | 2,720 | |||||||||||||||||
Interest-bearing deposits with the FRB and other banks | 108 | 115 | 223 | 763 | 115 | 878 | ||||||||||||||||||
Total change in interest income on interest-earning assets | 7,263 | 5,075 | 12,338 | 73,214 | 13 | 73,227 | ||||||||||||||||||
Changes in Interest Expense on Interest-Bearing Liabilities: | ||||||||||||||||||||||||
Interest-bearing demand deposits | (88 | ) | 359 | 271 | 281 | 426 | 707 | |||||||||||||||||
Savings deposits | 8 | 1,318 | 1,326 | 952 | 1,619 | 2,571 | ||||||||||||||||||
Time deposits | (13 | ) | 82 | 69 | 2,980 | 62 | 3,042 | |||||||||||||||||
Short-term borrowings | 1,849 | 1,152 | 3,001 | 3,800 | 633 | 4,433 | ||||||||||||||||||
Long-term borrowings | (360 | ) | 79 | (281 | ) | 1,011 | (21 | ) | 990 | |||||||||||||||
Total change in interest expense on interest-bearing liabilities | 1,396 | 2,990 | 4,386 | 9,024 | 2,719 | 11,743 | ||||||||||||||||||
Total Change in Net Interest Income (FTE)(2) | $ | 5,867 | $ | 2,085 | $ | 7,952 | $ | 64,190 | $ | (2,706 | ) | $ | 61,484 | |||||||||||
(1) The change in interest income and interest expense due to both volume and rate has been allocated to the volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each. | ||||||||||||||||||||||||
(2) Fully taxable equivalent basis using a federal income tax rate of 35%. The presentation of net interest income on a FTE basis is not in accordance with GAAP, but is customary in the banking industry. |
Six Months Ended June 30 2017 Compared to Six Months Ended June 30, 2016 | ||||||||||||
Increase (Decrease) Due to Changes in | Combined Increase/ (Decrease) | |||||||||||
(Dollars in thousands) | Average Volume(1) | Average Yield/Rate(1) | ||||||||||
Changes in Interest Income on Interest-Earning Assets: | ||||||||||||
Loans | $ | 123,301 | $ | (1,274 | ) | $ | 122,027 | |||||
Taxable investment securities/other assets | 7,479 | 1,509 | 8,988 | |||||||||
Tax-exempt investment securities | 5,886 | (771 | ) | 5,115 | ||||||||
Interest-bearing deposits with the FRB and other banks | 1,196 | 268 | 1,464 | |||||||||
Total change in interest income on interest-earning assets | 137,862 | (268 | ) | 137,594 | ||||||||
Changes in Interest Expense on Interest-Bearing Liabilities: | ||||||||||||
Interest-bearing demand deposits | 542 | 715 | 1,257 | |||||||||
Savings deposits | 1,678 | 2,225 | 3,903 | |||||||||
Time deposits | 5,789 | 230 | 6,019 | |||||||||
Short-term borrowings | 5,279 | 712 | 5,991 | |||||||||
Long-term borrowings | 2,255 | (17 | ) | 2,238 | ||||||||
Total change in interest expense on interest-bearing liabilities | 15,543 | 3,865 | 19,408 | |||||||||
Total Change in Net Interest Income (FTE)(2) | $ | 122,319 | $ | (4,133 | ) | $ | 118,186 | |||||
(1) The change in interest income and interest expense due to both volume and rate has been allocated to the volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each. | ||||||||||||
(2) Fully taxable equivalent basis using a federal income tax rate of 35%. The presentation of net interest income on a FTE basis is not in accordance with GAAP, but is customary in the banking industry. |
Three Months Ended | Six Months Ended | |||||||||||||||||||
(Dollars in thousands) | June 30, 2017 | March 31, 2017 | June 30, 2016 | June 30, 2017 | June 30, 2016 | |||||||||||||||
Noninterest income | ||||||||||||||||||||
Service charges and fees on deposit accounts | $ | 8,777 | $ | 8,004 | $ | 6,337 | $ | 16,781 | $ | 12,057 | ||||||||||
Wealth management revenue | 6,958 | 5,827 | 5,782 | 12,785 | 10,983 | |||||||||||||||
Electronic banking fees | 7,482 | 6,817 | 4,786 | 14,299 | 9,704 | |||||||||||||||
Net gain on sale of loans and other mortgage banking revenue | 9,879 | 9,160 | 1,595 | 19,039 | 3,000 | |||||||||||||||
Other fees for customer services | 1,739 | 1,567 | 1,191 | 3,306 | 2,322 | |||||||||||||||
Title insurance commissions | 513 | 507 | 486 | 1,020 | 829 | |||||||||||||||
Gain on sale of investment securities | 77 | 90 | 18 | 167 | 37 | |||||||||||||||
Bank-owned life insurance | 1,106 | 1,211 | 237 | 2,317 | 433 | |||||||||||||||
Rental income | 139 | 159 | 153 | 298 | 290 | |||||||||||||||
Gain on sale of closed branch offices and other assets | — | — | 105 | — | 262 | |||||||||||||||
Other | 4,898 | 4,668 | 207 | 9,566 | 399 | |||||||||||||||
Total noninterest income | $ | 41,568 | $ | 38,010 | $ | 20,897 | $ | 79,578 | $ | 40,316 | ||||||||||
Significant items(1) | 1,802 | 519 | — | 2,321 | — | |||||||||||||||
Noninterest income excluding significant items(1) | $ | 39,766 | $ | 37,491 | $ | 20,897 | $ | 77,257 | $ | 40,316 | ||||||||||
Noninterest income as a percentage of: | ||||||||||||||||||||
Net revenue (net interest income plus noninterest income) | 23.2 | % | 22.6 | % | 21.2 | % | 22.9 | % | 21.0 | % | ||||||||||
Average total assets | 0.2 | 0.2 | 0.2 | 0.4 | 0.4 | |||||||||||||||
Net revenue, excluding significant items(1) | 22.4 | 22.4 | 21.2 | 22.4 | 21.0 | |||||||||||||||
Average total assets, excluding significant items(1) | 0.2 | 0.2 | 0.2 | 0.4 | 0.4 |
Three Months Ended | Six Months Ended | ||||||||||||||||||
(Dollars in thousands) | June 30, 2017 | March 31, 2017 | June 30, 2016 | June 30, 2017 | June 30, 2016 | ||||||||||||||
Operating expense | |||||||||||||||||||
Salaries and wages | $ | 44,959 | $ | 48,526 | $ | 26,887 | $ | 93,485 | $ | 53,630 | |||||||||
Employee benefits | 7,642 | 11,722 | 6,240 | 19,364 | 13,387 | ||||||||||||||
Occupancy | 8,745 | 7,392 | 5,514 | 16,137 | 10,419 | ||||||||||||||
Equipment and software | 8,149 | 8,517 | 4,875 | 16,666 | 9,279 | ||||||||||||||
Outside processing and service fees | 8,924 | 7,511 | 4,833 | 16,435 | 8,544 | ||||||||||||||
FDIC insurance premiums | 2,460 | 1,406 | 1,338 | 3,866 | 2,745 | ||||||||||||||
Professional fees | 2,567 | 1,968 | 1,020 | 4,535 | 2,056 | ||||||||||||||
Intangible asset amortization | 1,525 | 1,513 | 1,195 | 3,038 | 2,389 | ||||||||||||||
Advertising and marketing | 2,098 | 2,025 | 793 | 4,123 | 1,559 | ||||||||||||||
Postage and express mail | 1,486 | 1,551 | 866 | 3,037 | 1,850 | ||||||||||||||
Training, travel and other employee expenses | 1,785 | 1,624 | 870 | 3,409 | 1,667 | ||||||||||||||
Telephone | 1,038 | 988 | 614 | 2,026 | 1,344 | ||||||||||||||
Supplies | 773 | 687 | 631 | 1,460 | 1,111 | ||||||||||||||
Donations | 690 | 518 | 379 | 1,208 | 990 | ||||||||||||||
Credit-related expenses | 1,895 | 1,200 | (1,331 | ) | 3,095 | (1,301 | ) | ||||||||||||
Merger and acquisition-related transaction expenses | 465 | 4,167 | 3,054 | 4,632 | 5,648 | ||||||||||||||
Other | 3,036 | 2,881 | 1,307 | 5,917 | 2,655 | ||||||||||||||
Total operating expenses | $ | 98,237 | $ | 104,196 | $ | 59,085 | $ | 202,433 | $ | 117,972 | |||||||||
Operating expenses, excluding transaction expenses(1) | $ | 97,772 | $ | 100,029 | $ | 56,031 | $ | 197,801 | $ | 112,324 | |||||||||
Full-time equivalent staff (at period end) | 3,364 | 3,273 | 2,198 | 3,364 | 2,198 | ||||||||||||||
Average assets | $ | 18,264,699 | $ | 17,474,019 | $ | 9,332,398 | $ | 17,871,541 | $ | 9,286,716 | |||||||||
Efficiency ratio - GAAP | 54.7 | % | 62.0 | % | 60.1 | % | 58.2 | % | 61.4 | % | |||||||||
Efficiency ratio - adjusted non-GAAP(1) | 52.2 | % | 57.4 | % | 54.6 | % | 54.7 | % | 56.1 | % | |||||||||
Total operating expenses as a percentage of total average assets | 0.5 | % | 0.6 | % | 0.6 | % | 1.1 | % | 1.3 | % | |||||||||
Total operating expenses as a percentage of total average assets - adjusted Non-GAAP (1) | 0.5 | % | 0.6 | % | 0.6 | % | 1.1 | % | 1.2 | % |
Gradual Change | Immediate Change | |||||||||||||||||
June 30, 2017 | ||||||||||||||||||
Twelve month interest rate change projection (in basis points) | -200 | -100 | 0 | +100 | +200 | +400 | ||||||||||||
Percent change in net interest income vs. constant rates | (2.6 | )% | — | % | — | % | (1.4 | )% | (2.7 | )% | (6.1 | )% | ||||||
December 31, 2016 | ||||||||||||||||||
Twelve month interest rate change projection (in basis points) | -200 | -100 | 0 | +100 | +200 | +400 | ||||||||||||
Percent change in net interest income vs. constant rates | (3.9 | )% | (0.9 | )% | — | % | (1.4 | )% | (2.6 | )% | (6.8 | )% |
Issuer Purchases of Equity Securities | ||||||||||||
Period Beginning on First Day of Month Ended | Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under Plans or Programs | ||||||||
April 30, 2017 | 3,796 | $ | 48.76 | — | 500,000 | |||||||
May 31, 2017 | — | — | — | 500,000 | ||||||||
June 30, 2017 | 27,275 | 46.37 | — | 500,000 | ||||||||
Total | 31,071 | $ | 46.67 | — |
(1) | Represents shares delivered or attested in satisfaction of the exercise price and/or tax withholding obligations by employees who received shares of the Corporation's common stock under the Corporation's share-based compensation plans, as these plans permit employees to use the Corporation's stock to satisfy such obligations based on the market value of the stock on the date of exercise or date of vesting, as applicable. |
Exhibit Number | Document | ||
3.1 | Restated Articles of Incorporation. Previously filed as Exhibit 3.1 to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed with the SEC on May 10, 2017. Here incorporated by reference. | ||
3.2 | Bylaws. Previously filed as Exhibit 3.2 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 26, 2014. Here incorporated by reference. | ||
4.1 | Restated Articles of Incorporation. Exhibit 3.1 is here incorporated by reference. | ||
4.2 | Bylaws. Exhibit 3.2 is here incorporated by reference. | ||
31.1 | Certification of Chief Executive Officer. | ||
31.2 | Certification of Chief Financial Officer. | ||
32.1 | Certification pursuant to 18 U.S.C. §1350. | ||
101.1 | Interactive Data File. | ||
CHEMICAL FINANCIAL CORPORATION | |||
Date: | August 9, 2017 | By: | /s/ David T. Provost |
David T. Provost | |||
Chief Executive Officer and President | |||
(Principal Executive Officer) | |||
Date: | August 9, 2017 | By: | /s/ Dennis L. Klaeser |
Dennis L. Klaeser | |||
Executive Vice President and Chief Financial Officer | |||
(Principal Financial and Accounting Officer) |
Exhibit Number | Document | ||
3.1 | Restated Articles of Incorporation. Previously filed as Exhibit 3.1 to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed with the SEC on May 10, 2017. Here incorporated by reference. | ||
3.2 | Bylaws. Previously filed as Exhibit 3.2 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 26, 2014. Here incorporated by reference. | ||
4.1 | Restated Articles of Incorporation. Exhibit 3.1 is here incorporated by reference. | ||
4.2 | Bylaws. Exhibit 3.2 is here incorporated by reference. | ||
31.1 | Certification of Chief Executive Officer. | ||
31.2 | Certification of Chief Financial Officer. | ||
32.1 | Certification pursuant to 18 U.S.C. §1350. | ||
101.1 | Interactive Data File. | ||
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 of Chemical Financial Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 9, 2017 | |
/s/ David T. Provost | ||
David T. Provost Chief Executive Officer and President Chemical Financial Corporation |
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 of Chemical Financial Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 9, 2017 | |
/s/ Dennis L. Klaeser | ||
Dennis L. Klaeser Executive Vice President and Chief Financial Officer Chemical Financial Corporation |
Dated: | August 9, 2017 | /s/ David T. Provost |
David T. Provost Chief Executive Officer and President | ||
Dated: | August 9, 2017 | /s/ Dennis L. Klaeser |
Dennis L. Klaeser Executive Vice President and Chief Financial Officer |
Document and Entity Information - shares |
6 Months Ended | |
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Jun. 30, 2017 |
Aug. 07, 2017 |
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Document and Entity Information [Abstract] | ||
Entity Registrant Name | CHEMICAL FINANCIAL CORP | |
Entity Central Index Key | 0000019612 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 71,144,387 |
Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
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Statement of Financial Position [Abstract] | ||
Held-to-maturity, fair value | $ 640,043 | $ 608,531 |
Loan servicing rights, fair value | $ 64,522 | $ 48,085 |
Preferred stock, no par value (dollars per share) | ||
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 135,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 71,131,042 | 70,599,133 |
Common stock, shares outstanding (in shares) | 71,131,042 | 70,599,133 |
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands |
Total |
Directors' stock plans |
Stock options |
Restricted stock units |
Restricted stock awards |
Common stock |
Common stock
Directors' stock plans
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Common stock
Stock options
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Common stock
Restricted stock units
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Common stock
Restricted stock awards
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Additional paid-in capital |
Additional paid-in capital
Directors' stock plans
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Additional paid-in capital
Stock options
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Additional paid-in capital
Restricted stock units
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Additional paid-in capital
Restricted stock awards
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Retained earnings |
Accumulated other comprehensive income (loss) |
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Beginning balance at Dec. 31, 2015 | $ 1,015,974 | $ 38,168 | $ 725,280 | $ 281,558 | $ (29,032) | ||||||||||||||
Changes in Stockholders' Equity | |||||||||||||||||||
Comprehensive income | 52,714 | 49,380 | 3,334 | ||||||||||||||||
Cash dividends declared and paid, $0.54 and $0.52 per share at June 30, 2017 and June 30, 2016, respectively | (19,942) | (19,942) | |||||||||||||||||
Shares issued under share-based compensation | $ 125 | $ 400 | $ 5 | $ 48 | $ 120 | $ 352 | |||||||||||||
Net shares issued - restricted stock units/awards | $ (752) | $ 45 | $ (797) | ||||||||||||||||
Share-based compensation expense | 1,780 | 1 | 1,779 | ||||||||||||||||
Ending balance at Jun. 30, 2016 | 1,050,299 | 38,267 | 726,734 | 310,996 | (25,698) | ||||||||||||||
Beginning balance at Mar. 31, 2016 | (26,690) | ||||||||||||||||||
Changes in Stockholders' Equity | |||||||||||||||||||
Comprehensive income | 26,767 | ||||||||||||||||||
Ending balance at Jun. 30, 2016 | 1,050,299 | 38,267 | 726,734 | 310,996 | (25,698) | ||||||||||||||
Changes in Stockholders' Equity | |||||||||||||||||||
Cumulative effect adjustment of change in accounting policy, net of tax impact | [1] | 3,659 | 3,659 | ||||||||||||||||
Beginning balance at Dec. 31, 2016 | 2,581,526 | 70,599 | 2,210,762 | 340,201 | (40,036) | ||||||||||||||
Changes in Stockholders' Equity | |||||||||||||||||||
Comprehensive income | 105,525 | 99,618 | 5,907 | ||||||||||||||||
Cash dividends declared and paid, $0.54 and $0.52 per share at June 30, 2017 and June 30, 2016, respectively | (38,539) | (38,539) | |||||||||||||||||
Shares issued under share-based compensation | $ (17,078) | $ 523 | $ (17,601) | ||||||||||||||||
Net shares issued - restricted stock units/awards | $ (1,296) | $ (1,283) | $ 35 | $ (27) | $ (1,331) | $ (1,256) | |||||||||||||
Share-based compensation expense | 6,928 | 1 | 6,927 | ||||||||||||||||
Ending balance at Jun. 30, 2017 | 2,639,442 | 71,131 | 2,197,501 | 404,939 | (34,129) | ||||||||||||||
Beginning balance at Mar. 31, 2017 | (37,965) | ||||||||||||||||||
Changes in Stockholders' Equity | |||||||||||||||||||
Comprehensive income | 55,850 | ||||||||||||||||||
Ending balance at Jun. 30, 2017 | $ 2,639,442 | $ 71,131 | $ 2,197,501 | $ 404,939 | $ (34,129) | ||||||||||||||
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Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
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Statement of Stockholders' Equity [Abstract] | ||||
Dividend declared (dollars per share) | $ 0.27 | $ 0.26 | $ 0.54 | $ 0.52 |
Basis of Presentation and Significant Accounting Policies |
6 Months Ended |
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Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Nature of Operations Chemical Financial Corporation ("Corporation" or "Chemical") operates in a single operating segment — commercial banking. The Corporation is a financial holding company, headquartered in Midland, Michigan, that operates through one commercial bank, Chemical Bank. Chemical Bank operates within Michigan, Ohio and Indiana as a Michigan state-chartered commercial bank. Chemical Bank operates through an internal organizational structure of seven regional banking units and offers a full range of traditional banking and fiduciary products and services to the residents and business customers in the bank’s geographical market areas. The products and services offered by the regional banking units, through branch banking offices, are generally consistent throughout the Corporation, as is the pricing of those products and services. The marketing of products and services throughout the Corporation’s regional banking units is generally uniform, as many of the markets served by the regional banking units overlap. The distribution of products and services is generally uniform throughout the Corporation’s regional banking units and is achieved primarily through retail branch banking offices, automated teller machines and electronically accessed banking products. The Corporation’s primary sources of revenue are interest from its loan products and investment securities, service charges and fees from customer deposit accounts, wealth management revenue and net gain on sale of loans and other mortgage banking revenue. Basis of Presentation and Principles of Consolidation The accompanying unaudited consolidated financial statements of the Corporation and its subsidiaries have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") for interim financial information and with instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the interim consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Corporation’s consolidated financial statements and footnotes thereto included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2016. In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments believed necessary to present fairly the financial condition and results of operations of the Corporation for the periods presented. Operating results for the six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. Use of Estimates Management makes estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying footnotes. Estimates that are particularly susceptible to significant change include the determination of the allowance for loan losses, expected cash flows from acquired loans, fair value amounts related to business combinations, income taxes, goodwill impairment and those assets and liabilities that require fair value measurement. Actual results could differ from these estimates. Reclassifications Certain amounts appearing in the consolidated financial statements and notes thereto for prior periods have been reclassified to conform with the current presentation. The reclassification had no effect on net income or shareholders’ equity as previously reported. Recently Adopted Accounting Principles Loan Servicing Rights Effective January 1, 2017, the Corporation elected to account for all loan servicing rights ("LSRs") previously accounted for under the lower of cost or fair value method under the fair value method. The guidance in Accounting Standards Codification Subtopic 860-50, "Transfers and Servicing-Servicing Assets and Liabilities" provides that an entity may make an irrevocable decision to subsequently measure a class of servicing assets and servicing liabilities at fair value at the beginning of any fiscal year. The guidance allows for the Corporation to apply this election prospectively to all new and existing servicing assets and servicing liabilities. Management believes this election will provide more comparable results to peers as many of those within our industry group account for loan servicing rights under the fair value method. The change in accounting policy in the first quarter of 2017 results in a cumulative adjustment to increase retained earnings in the amount of $3.7 million, net of taxes. Investment Securities The Corporation has elected to early adopt Accounting Standards Update ("ASU") No. 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities ("ASU 2017-08") during the second quarter of 2017. The guidance in ASU 2017-08 shortens the amortization period for certain callable debt securities that are held at a premium to the earliest call date. Debt securities held at a discount will continue to be amortized as a yield adjustment over the life of the instrument. The early adoption of ASU 2017-08 in the second quarter of 2017 did not have a material impact on the consolidated financial statements. |
Mergers and Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mergers and Acquisitions | Mergers and Acquisitions Merger with Talmer Bancorp, Inc. On August 31, 2016, the Corporation completed a merger with Talmer Bancorp, Inc. ("Talmer") for total consideration of $1.61 billion. As a result of the merger, the Corporation issued 32.1 million shares of its common stock based on an exchange ratio where each Talmer shareholder received 0.4725 shares of the Corporation's common stock, and $1.61 in cash, for each share of Talmer common stock. In conjunction with the merger, the Corporation entered into and drew on a $125.0 million credit facility. The proceeds from the credit facility were used to pay off the Corporation's $25.0 million line-of-credit and a $37.5 million line-of-credit of Talmer, with the remaining proceeds used to partially fund the cash portion of the merger consideration. The Corporation incurred $4.6 million and $5.6 million of merger and acquisition-related transaction expenses during the six months ended June 30, 2017 and 2016, respectively, primarily related to the merger with Talmer. As a result of the merger, Talmer Bank and Trust became a wholly-owned subsidiary of the Corporation. Talmer Bank and Trust was consolidated with and into Chemical Bank during the fourth quarter of 2016. The Corporation determined that the merger with Talmer constitutes a business combination as defined by ASC 805. Accordingly, the assets acquired and liabilities assumed were recorded at their fair values on the date of acquisition. Fair values were determined in accordance with the guidance provided in ASC Topic 820, Fair Value Measurements. In many cases the determination of the fair values required management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature and subject to change. The following allocation is based on the information that was available to make preliminary estimates of the fair value and may change as additional information becomes available and additional analyses are completed. While the Corporation believes that information provided a reasonable basis for estimating the fair values, it expects that it could obtain additional information and evidence during the measurement period that may result in changes to the estimated fair value amounts. This measurement period ends on the earlier of one year after the merger date or the date we receive the information about the facts and circumstances that existed at the merger date. Subsequent adjustments, if necessary, will be reflected in future filings. These refinements include: (1) changes in the estimated fair value of loans acquired: (2) changes in the estimated fair value of intangible assets acquired: (3) changes in deferred tax assets related to fair value estimates and a change in the expected realization of items considered to be net operating loss carry forwards and (4) a change in the goodwill caused by the net effect of these adjustments. The following table presents the allocation of fair value at the merger date:
Information regarding loans accounted for under ASC 310-30 at the merger date is as follows:
Unaudited Pro Forma Combined Results of Operations The following unaudited pro forma financial information presents the consolidated results of operation of the Corporation and Talmer as if the merger had occurred as of January 1, 2016. The unaudited pro forma combined results of operations are presented solely for information purposes and are not intended to represent or be indicative of the consolidated results of operations that Chemical would have reported had these transactions been completed as of the dates and for the periods presented, nor are they necessarily indicative of future results. In particular, no adjustments have been made to eliminate the amount of Talmer's provision for loan losses incurred prior to the acquisition date that would not have been necessary had the acquired loans been recorded at fair value as of the beginning of each period indicated. In accordance with Article 11 of SEC Regulation S-X, transaction costs directly attributable to the acquisitions have been excluded.
(1) As the business combination was effective August 31, 2016, there were no proforma adjustments for the three and six months ended June 30, 2017. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value, as defined by GAAP, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for market activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact. The Corporation utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Investment securities — available-for-sale, loans held-for-sale, loan servicing rights and derivatives are recorded at fair value on a recurring basis. Additionally, the Corporation may be required to record other assets, such as impaired loans, goodwill, other intangible assets, other real estate and repossessed assets, at fair value on a nonrecurring basis. These nonrecurring fair value adjustments typically involve the application of lower of cost or market accounting or write-downs of individual assets. The Corporation determines the fair value of its financial instruments based on a three-level hierarchy established by GAAP. The classification and disclosure of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. Observable inputs reflect market-derived or market-based information obtained from independent sources, while unobservable inputs reflect management’s estimates about market data. The three levels of inputs that may be used to measure fair value within the GAAP hierarchy are as follows:
A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Corporation’s financial assets and financial liabilities carried at fair value and all financial instruments disclosed at fair value. Transfers of assets or liabilities between levels of the fair value hierarchy are recognized at the beginning of the reporting period, when applicable. In general, fair value is based upon quoted market prices, where available. If quoted market prices are not available, fair value is based upon third-party pricing services when available. Fair value may also be based on internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be required to record financial instruments at fair value. Any such valuation adjustments are applied consistently over time. The Corporation's valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Corporation’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Furthermore, the fair value amounts may change significantly after the date of the statement of financial position from the amounts reported in the consolidated financial statements and related notes. Assets and Liabilities Recorded at Fair Value on a Recurring Basis Investment securities: Investment securities classified as available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are generally measured using independent pricing models or other model-based valuation techniques that include market inputs, such as benchmark yields, reported trades, broker dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data and industry and economic events. Loans held-for-sale: The Corporation has elected the fair value option for all loans held-for-sale. Accordingly, loans held-for-sale are recorded at fair value on a recurring basis. The fair values of loans held-for-sale are based on the market price for similar loans sold in the secondary market, and therefore, are classified as Level 2 valuations. Loan servicing rights: Effective January 1, 2017, the Corporation elected to account for all LSRs under the fair value measurement method. LSRs acquired related to the merger with Talmer effective August 31, 2016 were also previously accounted for under the fair value measurement method based on accounting election. A third party valuation model is used to determine the fair value at the end of each reporting period utilizing a discounted cash flow analysis using interest rates and prepayment speed assumptions currently quoted for comparable instruments and a discount rate determined by management. Because of the nature of the valuation inputs, the Corporation classifies loan servicing rights as Level 3. Refer to Note 8, "Loan Servicing Rights," for the assumptions included in the valuation of loan servicing rights. Derivatives: The Corporation enters into interest rate lock commitments with prospective borrowers to be sold into the secondary market and forward commitments for the future delivery of mortgage loans to third party investors, which are carried at fair value on a recurring basis. The fair value of these commitments is based on the fair value of related mortgage loans determined using observable market data. Interest rate lock commitments are adjusted for expectations of exercise and funding. This adjustment is not considered to be a material input. The Corporation classifies interest rate lock commitments and forward contracts related to mortgage loans to be delivered for sale as recurring Level 2. Derivative instruments held or issued for risk management or customer-initiated activities are traded in over-the counter markets where quoted market prices are not readily available. Fair value for over-the-counter derivative instruments is measured on a recurring basis using third party models that use primarily market observable inputs, such as yield curves and option volatilities. The fair value for these derivatives may include a credit valuation adjustment that is determined by applying a credit spread for the counterparty or the Corporation, as appropriate, to the total expected exposure of the derivative after considering collateral and other master netting arrangements. These adjustments, which are considered Level 3 inputs, are based on estimates of current credit spreads to evaluate the likelihood of default. The Corporation assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions at both June 30, 2017 and December 31, 2016 and it was determined that the credit valuation adjustments were not significant to the overall valuation of its derivatives. As a result, the Corporation classifies its risk management interest rate swaps designated as cash flow hedges and customer-initiated derivatives valuations in Level 2 of the fair value hierarchy. Written and purchased option derivatives consist of instruments to facilitate an equity-linked time deposit product (the "Power Equity CD"). The Power Equity CD is a time deposit that provides the purchaser a guaranteed return of principal at maturity plus a potential equity return, while the Corporation receives a known stream of funds based on equity returns. The written and purchased options are mirror derivative instruments which are carried at fair value on the Consolidated Statements of Financial Position. Fair value measurements for the Power Equity CD are determined using quoted prices of underlying stocks, along with other terms and features of the derivative instrument. As a result, the Power Equity CD derivatives are classified as Level 2 valuations. Disclosure of Recurring Basis Fair Value Measurements For assets and liabilities measured at fair value on a recurring basis, quantitative disclosures about the fair value measurements for each major category of assets and liabilities follow:
There were no transfers between levels within the fair value hierarchy during the three or six months ended June 30, 2017. The following table summarizes the changes in Level 3 assets measured at fair value on a recurring basis.
(1) Refer to Note 1, Basis of Presentation and Significant Accounting Policies, for further details. The Corporation has elected the fair value option for loans held-for-sale. These loans are intended for sale and the Corporation believes that the fair value is the best indicator of the resolution of these loans. Interest income is recorded based on the contractual terms of the loans in accordance with the Corporation's policy on loans held for investment in "Interest and fees on loans" in the Consolidated Statements of Income. There were no loans held-for-sale on nonaccrual status or 90 days past due and on accrual status as of June 30, 2017 and December 31, 2016. The aggregate fair value, contractual balance (including accrued interest), and gain or loss for loans held-for-sale carried at fair value option was as follows:
The total amount of gains (losses) from loans held-for-sale included in the Consolidated Statements of Income were as follows:
(1) Included in "Interest and fees on loans" in the Consolidated Statements of Income. (2) Included in "Net gain on sale of loans and other mortgage banking revenue" in the Consolidated Statements of Income. Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis Investment securities: Investment securities classified as held to maturity are recorded at fair value if the value is below amortized cost and the Corporation has determined that such unrealized loss is an other-than-temporary impairment. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are generally measured using independent pricing models or other model-based valuation techniques that include market inputs, such as benchmark yields, reported trades, broker dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data and industry and economic events. Loans: The Corporation does not record loans held for investment at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allocation of the allowance (valuation allowance) may be established or a portion of the loan is charged off. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. The fair value of impaired loans is estimated using one of several methods, including the loan’s observable market price, the fair value of the collateral or the present value of the expected future cash flows discounted at the loan’s effective interest rate. Those impaired loans not requiring a valuation allowance represent loans for which the fair value of the expected repayments or collateral exceed the remaining carrying amount of such loans. Impaired loans where a valuation allowance is established or a portion of the loan is charged off based on the fair value of collateral are subject to nonrecurring fair value measurement and require classification in the fair value hierarchy. The Corporation records impaired loans as Level 3 valuations as there is generally no observable market price or management determines the fair value of the collateral is further impaired below the independent appraised value. When management determines the fair value of the collateral is further impaired below appraised value, discounts ranging between 10% and 25% of the appraised value are used depending on the nature of the collateral and the age of the most recent appraisal. Goodwill: Goodwill is subject to impairment testing on an annual basis. The assessment of goodwill for impairment requires a significant degree of judgment. In the event the assessment indicates that it is more-likely-than-not that the fair value is less than the carrying value, the asset is considered impaired and recorded at fair value. Goodwill that is impaired and subject to nonrecurring fair value measurements is a Level 3 valuation. At June 30, 2017 and December 31, 2016, no goodwill was impaired. Other intangible assets: Other intangible assets consist of core deposit intangible assets and non-compete intangible assets. These items are recorded at fair value when initially recorded. Subsequently, core deposit intangible assets and non-compete intangible assets are amortized primarily on an accelerated basis over periods ranging from ten to fifteen years for core deposit intangible assets and one year for non-compete intangible assets and are subject to impairment testing whenever events or changes in circumstances indicate that the carrying amount exceeds the fair value of the asset. If core deposit intangible asset or non-compete intangible asset impairment is identified, the Corporation classifies impaired core deposit intangible assets and impaired non-compete intangible assets subject to nonrecurring fair value measurements as Level 3 valuations. At June 30, 2017 and December 31, 2016, there was no impairment identified for core deposit intangible assets or non-compete intangible assets. Loan servicing rights: Prior to January 1, 2017, LSRs originated by the Corporation and those acquired in acquisitions of other institutions prior to the merger with Talmer were accounted for under the amortization method. The fair value of these LSRs were initially estimated using a model that calculates the net present value of estimated future cash flows using various assumptions, including prepayment speeds, the discount rate and servicing costs. If the valuation model reflected a value less than the carrying value, LSRs were adjusted to fair value, as determined by the model, through a valuation allowance. The Corporation classified the LSRs subject to nonrecurring fair value measurements as Level 3 valuations. At December 31, 2016, the Corporation recognized a valuation allowance of $8 thousand related to impairment within certain pools attributable to the Corporation's servicing portfolios. As a result, the LSRs related to these servicing portfolios were considered to be recorded at fair value on a nonrecurring basis as of December 31, 2016. Other real estate owned and repossessed assets: The carrying amounts for other real estate and repossessed assets are reported in the Consolidated Statements of Financial Position under “Interest receivable and other assets.” Other real estate and repossessed assets include real estate and other types of assets repossessed by the Corporation. Other real estate and repossessed assets are recorded at the lower of cost or fair value upon the transfer of a loan to other real estate and repossessed assets and, subsequently, continue to be measured and carried at the lower of cost or fair value. Fair value is based upon independent market prices, appraised values of the property or management’s estimation of the value of the property. The Corporation records other real estate and repossessed assets as Level 3 valuations as management generally determines that the fair value of the property is impaired below the appraised value. When management determines the fair value of the property is further impaired below appraised value, discounts ranging between 10% and 25% of the appraised value are used depending on the nature of the property and the age of the most recent appraisal. Disclosure of Nonrecurring Basis Fair Value Measurements For assets measured at fair value on a nonrecurring basis, quantitative disclosures about fair value measurements for each major category of assets follows:
There were no liabilities recorded at fair value on a nonrecurring basis at June 30, 2017 and December 31, 2016. The following table presents additional information about the significant unobservable inputs used in the fair value measurement of financial assets measured on a nonrecurring basis that were categorized within the Level 3 of the fair value hierarchy:
Disclosures about Fair Value of Financial Instruments GAAP requires disclosures about the estimated fair value of the Corporation's financial instruments, including those financial assets and liabilities that are not measured and reported at fair value on a recurring or nonrecurring basis. However, the method of estimating fair value for certain financial instruments, such as loans, that are not required to be measured on a recurring or nonrecurring basis, as prescribed by FASB ASC Topic 820, "Fair Value Measurement", does not incorporate the exit-price concept of fair value. The Corporation utilized the fair value hierarchy in computing the fair values of its financial instruments. In cases where quoted market prices were not available, the Corporation employed present value methods using unobservable inputs requiring management's judgment to estimate the fair values of its financial instruments, which are considered Level 3 valuations. These Level 3 valuations are affected by the assumptions made and, accordingly, do not necessarily indicate amounts that could be realized in a current market exchange. It is also the Corporation's general practice and intent to hold the majority of its financial instruments until maturity and, therefore, the Corporation does not expect to realize the estimated amounts disclosed. The methodologies for estimating the fair value of financial assets and financial liabilities on a recurring or nonrecurring basis are discussed above. At June 30, 2017 and December 31, 2016, the estimated fair values of cash and cash equivalents, interest receivable and interest payable approximated their carrying values at those dates. The methodologies for other financial assets and financial liabilities follow. Investment securities — held-to-maturity: Fair value measurements for investment securities — held-to-maturity fair values are measured using independent pricing models or other model-based valuation techniques that include market inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data and industry and economic events. Fair value measurements using Level 2 valuations of investment securities — held-to-maturity includes investment securities issued by state and political subdivisions. Level 3 valuations include trust preferred investment securities. Nonmarketable equity securities: Fair value measurements of nonmarketable equity securities, which consist of Federal Home Loan Bank (FHLB) and Federal Reserve Bank (FRB) stock, are based on their redeemable value, which is cost. The market for these securities is restricted to the issuer of the stock and subject to impairment evaluation. It is not practicable to determine the fair value of these securities within the fair value hierarchy due to the restrictions placed on their transferability. Loans: The fair values of loans that are not considered impaired are estimated using a discounted cash flow model. The cash flows take into consideration current portfolio interest rates and repricing characteristics as well as assumptions relating to prepayment speeds. The discount rates take into consideration the current market interest rate environment, a credit risk component based on the credit characteristics of each loan portfolio, and a liquidity premium reflecting the liquidity or illiquidity of the market. The fair value measurements for loans are Level 3 valuations. Bank-owned life insurance: Life insurance policies are held on certain officers. The carrying value of these policies approximates fair value as it is based on the cash surrender value adjusted for other charges or amounts due that are probable at settlement. As such, the Corporation classifies the estimated fair value of bank-owned life insurance as Level 2. Bank-owned life insurance is recorded within "Interest receivable and other assets." Deposits: The fair values of deposit accounts without defined maturities, such as interest- and noninterest-bearing checking, savings and money market accounts, are estimated to be the amounts payable on demand. The fair values for variable-interest rate time deposits with defined maturities approximate their carrying amounts. Fair value measurements for fixed-interest rate time deposits with defined maturities are based on the discounted value of contractual cash flows, using the Corporation’s interest rates currently being offered for deposits of similar maturities, and are therefore classified as Level 2 valuations. However, if the estimated fair value is less than the carrying value, the carrying value is reported as the fair value. Securities sold under agreements to repurchase: Fair value measurements are based on the present value of future estimated cash flows using current interest rates offered to the Corporation under similar terms and are Level 2 valuations. Short-term borrowings: Short-term borrowings consist of short-term FHLB advances. Fair value measurements for short-term borrowings are based on the present value of future estimated cash flows using current interest rates offered to the Corporation for debt with similar terms and are Level 2 valuations. Long-term borrowings: Long-term borrowings consist of long-term FHLB advances, securities sold under agreements to repurchase with an unaffiliated financial institution, a term line-of-credit and subordinated debt obligations. Fair value measurements for long-term borrowings are based on the present value of future estimated cash flows using current interest rates offered to the Corporation for debt with similar terms and are therefore classified as Level 2 valuations. Financial guarantees: The Corporation’s unused commitments to extend credit, standby letters of credit and loan commitments have no carrying amount and have been estimated to have no realizable fair value. Historically, a majority of the unused commitments to extend credit have not been drawn upon and, generally, the Corporation does not receive fees in connection with these commitments other than standby letter of credit fees, which are not significant. A summary of carrying amounts and estimated fair values of the Corporation’s financial instruments not recorded at fair value in their entirety on a recurring basis on the Consolidated Statements of Financial Position was as follows:
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Investment Securities The following is a summary of the amortized cost and fair value of investment securities available-for-sale and investment securities held-to-maturity at June 30, 2017 and December 31, 2016:
The majority of the Corporation’s residential mortgage-backed securities and collateralized mortgage obligations are backed by a U.S. government agency (Government National Mortgage Association) or a government sponsored enterprise (Federal Home Loan Mortgage Corporation or Federal National Mortgage Association). Proceeds from sales of securities and the associated gains and losses recorded in earnings are listed below:
The following is a summary of the amortized cost and fair value of investment securities at June 30, 2017, by maturity, for both available-for-sale and held-to-maturity investment securities. The maturities of residential mortgage-backed securities and collateralized mortgage obligations are based on scheduled principal payments. The maturities of all other debt securities are based on final contractual maturity.
Securities with a carrying value of $1.05 billion and $794.0 million were pledged at June 30, 2017 and December 31, 2016, respectively, to secure borrowings and deposits. At June 30, 2017 and December 31, 2016, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders' equity. The following schedule summarizes information for both available-for-sale and held-to-maturity investment securities with gross unrealized losses at June 30, 2017 and December 31, 2016, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position. As of June 30, 2017, the Corporation’s securities portfolio consisted of 2,336 securities, 1,351 of which were in an unrealized loss position.
An assessment is performed quarterly by the Corporation to determine whether unrealized losses in its investment securities portfolio are temporary or other-than-temporary by carefully considering all reasonably available information. The Corporation reviews factors such as financial statements, credit ratings, news releases and other pertinent information of the underlying issuer or company to make its determination. Management did not believe any individual unrealized loss on any investment security, as of June 30, 2017, represented other-than-temporary impairment (OTTI) as the unrealized losses for these securities resulted primarily from changes in benchmark U.S. Treasury interest rates and not credit issues. Management believed that the unrealized losses on investment securities at June 30, 2017 were temporary in nature and due primarily to changes in interest rates and reduced market liquidity and not as a result of credit-related issues. At June 30, 2017, the Corporation did not have the intent to sell any of its impaired investment securities and believed that it was more-likely-than-not that the Corporation will not have to sell any such investment securities before a full recovery of amortized cost. Accordingly, at June 30, 2017, the Corporation believed the impairments in its investment securities portfolio were temporary in nature. However, there is no assurance that OTTI may not occur in the future. |
Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Loans Loan portfolio segments are defined as the level at which an entity develops and documents a systematic methodology to determine its allowance. The Corporation has two loan portfolio segments (commercial loans and consumer loans) that it uses in determining the allowance. Both quantitative and qualitative factors are used by management at the loan portfolio segment level in determining the adequacy of the allowance for the Corporation. Classes of loans are a disaggregation of an entity’s loan portfolio segments. Classes of loans are defined as a group of loans which share similar initial measurement attributes, risk characteristics, and methods for monitoring and assessing credit risk. The Corporation has six classes of loans, which are set forth below. Commercial — Loans and lines of credit to varying types of businesses, including municipalities, school districts and nonprofit organizations, for the purpose of supporting working capital, operational needs and term financing of equipment. Repayment of such loans is generally provided through operating cash flows of the business. Commercial loans are predominately secured by equipment, inventory, accounts receivable, personal guarantees of the owner and other sources of repayment, although the Corporation may also secure commercial loans with real estate. Commercial real estate — Loans secured by real estate occupied by the borrower for ongoing operations, non-owner occupied real estate leased to one or more tenants and vacant land that has been acquired for investment or future land development. Real estate construction and land development — Real estate construction loans represent secured loans for the construction of business properties. Real estate construction loans often convert to a commercial real estate loan at the completion of the construction period. Land development loans represent secured development loans made to borrowers for the purpose of infrastructure improvements to vacant land to create finished marketable residential and commercial lots/land. Most land development loans are originated with the intention that the loans will be paid through the sale of developed lots/land by the developers within twelve months of the completion date. Land development loans at June 30, 2017 and December 31, 2016 were primarily comprised of loans to develop residential properties. Residential mortgage — Loans secured by one- to four-family residential properties, generally with fixed interest rates for periods of fifteen years or less. The loan-to-value ratio at the time of origination is generally 80% or less. Residential mortgage loans with a loan-to-value ratio of more than 80% generally require private mortgage insurance. Consumer installment — Loans to consumers primarily for the purpose of acquiring automobiles, recreational vehicles and personal watercraft and comprised primarily of indirect loans purchased from dealers. These loans consist of relatively small amounts that are spread across many individual borrowers. Home equity — Loans and lines of credit whereby consumers utilize equity in their personal residence, generally through a second mortgage, as collateral to secure the loan. Commercial, commercial real estate, and real estate construction and land development loans are referred to as the Corporation’s commercial loan portfolio, while residential mortgage, consumer installment and home equity loans are referred to as the Corporation’s consumer loan portfolio. A summary of the Corporation's loans follows:
(2) Reported net of deferred costs totaling $20.0 million and $14.8 million at June 30, 2017 and December 31, 2016, respectively. The Corporation acquired loans at fair value as of the acquisition date, which includes loans acquired in the acquisitions of Talmer, Lake Michigan Financial Corporation ("Lake Michigan"), Monarch Community Bancorp, Inc. ("Monarch"), Northwestern Bancorp, Inc. ("Northwestern") and O.A.K. Financial Corporation ("OAK"). Acquired loans are accounted for under ASC 310-30 which recognizes the expected shortfall of expected future cash flows, as compared to the contractual amount due, as nonaccretable discount. Any excess of the net present value of expected future cash flows over the acquisition date fair value is recognized as the accretable discount, or accretable yield. The accretable discount is recognized over the expected remaining life of the acquired loans on a pool basis. Activity for the accretable yield, which includes contractually due interest for acquired loans that have been renewed or extended since the date of acquisition and continue to be accounted for in loan pools in accordance with ASC 310-30, follows:
(1) The net reclassification results from changes in expected cash flows of the acquired loans which may include increases in the amount of contractual principal and interest expected to be collected due to improvement in credit quality, increases in balances outstanding from advances, renewals, extensions and interest rates; as well as reductions in contractual principal and interest expected to be collected due to credit deterioration, payoffs, and decreases in interest rates. Credit Quality Monitoring The Corporation maintains loan policies and credit underwriting standards as part of the process of managing credit risk. These standards include making loans generally only within the Corporation’s market areas. The Corporation’s lending markets generally consist of communities throughout Michigan and additional communities located within Northeast Ohio and Northern Indiana. The Corporation, through Chemical Bank, has a commercial loan portfolio approval process involving underwriting and individual and group loan approval authorities to consider credit quality and loss exposure at loan origination. The loans in the Corporation’s commercial loan portfolio are risk rated at origination based on the grading system set forth below. The approval authority of relationship managers is established based on experience levels, with credit decisions greater than $2.0 million requiring group loan authority approval, except for six executive and senior officers who have varying loan limits exceeding $2.0 million and up to $3.5 million. With respect to the group loan authorities, Chemical Bank has various regional loan committees that meet weekly to consider loans ranging in amounts of $2.0 million to $5.0 million, and a senior loan committee, consisting of certain executive and senior officers, that meets weekly to consider loans ranging in amounts from $5.0 million to $10.0 million, depending on risk rating and credit action required. A directors’ loan committee of Chemical Bank, consisting of eight independent directors of Chemical Bank, the chief executive officer of Chemical Bank and the chief credit officer of Chemical Bank, meets bi-weekly to consider loans in amounts over $10.0 million, and certain loans under $10.0 million depending on a loan’s risk rating and credit action required. Loans over $25.0 million require the approval of the board of directors of Chemical Bank. The majority of the Corporation’s consumer loan portfolio is comprised of secured loans that are relatively small. The Corporation’s consumer loan portfolio has a centralized approval process which utilizes standardized underwriting criteria. The ongoing measurement of credit quality of the consumer loan portfolio is largely done on an exception basis. If payments are made on schedule, as agreed, then no further monitoring is performed. However, if delinquency occurs, the delinquent loans are turned over to the Corporation’s collection department for resolution, resulting in repossession or foreclosure if payments are not brought current. Credit quality for the entire consumer loan portfolio is measured by the periodic delinquency rate, nonaccrual amounts and actual losses incurred. Loans in the commercial loan portfolio tend to be larger and more complex than those in the consumer loan portfolio, and therefore, are subject to more intensive monitoring. All loans in the commercial loan portfolio have an assigned relationship manager, and most borrowers provide periodic financial and operating information that allows the relationship managers to stay abreast of credit quality during the life of the loans. The risk ratings of loans in the commercial loan portfolio are reassessed at least annually, with loans below an acceptable risk rating reassessed more frequently and reviewed by various loan committees within the Corporation at least quarterly. The Corporation maintains a centralized independent loan review function that monitors the approval process and ongoing asset quality of the loan portfolio, including the accuracy of loan grades. The Corporation also maintains an independent appraisal review function that participates in the review of all appraisals obtained by the Corporation for loans in the commercial loan portfolio. Credit Quality Indicators Commercial Loan Portfolio Risk categories for the Corporation's commercial loan portfolio establish the credit quality of a borrower by measuring liquidity, debt capacity, coverage and payment behavior as shown in the borrower's financial statements. The risk categories also measure the quality of the borrower's management and the repayment support offered by any guarantors. Risk categories for the Corporation's commercial loan portfolio are described as follows: Pass: Includes all loans without weaknesses or potential weaknesses identified in the categories of special mention, substandard or doubtful. Special Mention: Loans with potential credit weakness or credit deficiency, which, if not corrected, pose an unwarranted financial risk that could weaken the loan by adversely impacting the future repayment ability of the borrower. Substandard: Loans with a well-defined weakness, or weaknesses, such as loans to borrowers who may be experiencing losses from operations or inadequate liquidity of a degree and duration that jeopardizes the orderly repayment of the loan. Substandard loans also are distinguished by the distinct possibility of loss in the future if these weaknesses are not corrected. Doubtful: Loans with all the characteristics of a loan classified as Substandard, with the added characteristic that credit weaknesses make collection in full highly questionable and improbable. The primary source of repayment is nonexistent and there is doubt as to the value of the secondary source of repayments. A doubtful asset has a high probability of total or substantial loss, but because of pending events that may strengthen the asset, its classification as loss is deferred. Loss: An asset classified as loss is considered uncollectible and of such little value that the continuance as a bankable asset is not warranted. This classification does not mean that an asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even through partial recovery may occur in the future. The following schedule presents the recorded investment of loans in the commercial loan portfolio by credit risk categories at June 30, 2017 and December 31, 2016:
Consumer Loan Portfolio The Corporation evaluates the credit quality of loans in the consumer loan portfolio based on the performing or nonperforming status of the loan. Loans in the consumer loan portfolio that are performing in accordance with original contractual terms and are less than 90 days past due and accruing interest are considered to be in a performing status, while those that are in nonaccrual status, contractually past due 90 days or more as to interest or principal payments, are considered to be in a nonperforming status. Loans accounted for under ASC 310-30, "Acquired loans", that are not performing in accordance with contractual terms are not reported as nonperforming because these loans are recorded in pools at their net realizable value based on the principal and interest the Corporation expects to collect on these loans. The following schedule presents the recorded investment of loans in the consumer loan portfolio based on loans in a performing status and loans in a nonperforming status at June 30, 2017 and December 31, 2016:
Nonperforming Assets and Past Due Loans Nonperforming assets consist of loans for which the accrual of interest has been discounted, other real estate owned acquired through acquisitions, other real estate owned obtained through foreclosure and other repossessed assets. Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement or any portion thereof remains unpaid after the due date of the scheduled payments. Loans outside of those accounted for under ASC 310-30 are classified as nonaccrual when, in the opinion of management, collection of principal or interest is doubtful. The accrual of interest is discontinued when a loan is placed in nonaccrual status and any payments received reduce the carrying value of the loan. A loan may be placed back on accrual status if all contractual payments have been received and collection of future principal and interest payments are no longer doubtful. Acquired loans that are not performing in accordance with contractual terms are not reported as nonperforming because these loans are recorded in pools at their net realizable value based on the principal and interest the Corporation expects to collect on these loans. A summary of nonperforming loans follows:
The Corporation’s nonaccrual loans at June 30, 2017 and December 31, 2016 included $25.7 million and $30.5 million, respectively, of nonaccrual TDRs. The Corporation had $4.6 million of residential mortgage loans that were in the process of foreclosure at June 30, 2017, compared to $7.3 million at December 31, 2016. Loan delinquency, excluding acquired loans accounted for under ASC 310-30, was as follows:
Impaired Loans A loan is impaired when, based on current information and events, it is probable that the Corporation will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans include nonperforming loans and all TDRs. Impaired loans are accounted for at the lower of the present value of expected cash flows or the estimated fair value of the collateral. When the present value of expected cash flows or the fair value of the collateral of an impaired loan not accounted for under ASC 310-30 is less than the amount of unpaid principal outstanding on the loan, the recorded principal balance of the loan is reduced to its carrying value through either a specific allowance for loan loss or a partial charge-off of the loan balance. The following schedules present impaired loans by classes of loans at June 30, 2017 and December 31, 2016:
The following schedule presents additional information regarding impaired loans by classes of loans segregated by those requiring a valuation allowance and those not requiring a valuation allowance for the three and six months ended June 30, 2017 and 2016, and the respective interest income amounts recognized:
The difference between an impaired loan’s recorded investment and the unpaid principal balance for originated loans represents a partial charge-off resulting from a confirmed loss due to the value of the collateral securing the loan being below the loan balance and management’s assessment that full collection of the loan balance is not likely. Impaired loans included $55.2 million and $62.5 million at June 30, 2017 and December 31, 2016, respectively, of accruing TDRs. Loans Modified Under Troubled Debt Restructurings (TDRs) The following tables present the recorded investment of loans modified into TDRs during the three and six months ended June 30, 2017 and 2016 by type of concession granted. In cases where more than one type of concession was granted, the loans were categorized based on the most significant concession.
The pre-modification and post-modification recorded investment represents amounts as of the date of loan modification. The difference between the pre-modification and post-modification recorded investment of residential mortgage TDRs represents impairment recognized by the Corporation through the provision for loan losses computed based on a loan's post-modification present value of expected future cash flows discounted at the loan's original effective interest rate. The following schedule presents the Corporation's TDRs at June 30, 2017 and December 31, 2016:
The following schedule includes TDRs for which there was a payment default during the three and six months ended June 30, 2017 and 2016, whereby the borrower was past due with respect to principal and/or interest for 90 days or more, and the loan became a TDR during the twelve-month period prior to the default:
At June 30, 2017, commitments to lend additional funds to borrowers whose terms have been modified in TDRs totaled $1.6 million. Allowance for Loan Losses The following schedule presents, by loan portfolio segment, the changes in the allowance for the three and six months ended June 30, 2017 and 2016, and details regarding the balance in the allowance and the recorded investment in loans at June 30, 2017 by impairment evaluation method.
The following schedule presents, by loan portfolio segment, details regarding the balance in the allowance and the recorded investment in loans at December 31, 2016 by impairment evaluation method.
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Other Real Estate Owned and Repossessed Assets |
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Other Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Real Estate Owned and Repossessed Assets | Other Real Estate Owned and Repossessed Assets Changes in other real estate owned and repossessed assets, included in interest receivable and other assets on the consolidated statements of financial position, were as follows:
At June 30, 2017, the Corporation had $0.9 million of other real estate owned and repossessed assets as a result of obtaining physical possession in accordance with ASU No. 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans Upon Foreclosure. In addition, there were $4.6 million of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process as of June 30, 2017. Income and expenses related to other real estate owned and repossessed assets, recorded as a component of "Other expense" in the Consolidated Statements of Income, were as follows:
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Goodwill |
6 Months Ended |
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Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Goodwill was $1.13 billion for both the periods ended June 30, 2017 and December 31, 2016. Goodwill recorded is primarily attributable to the synergies and economies of scale expected from combining the operations of the Corporation and acquired organizations. The Corporation recorded goodwill in the amount of $846.7 million related to the merger with Talmer completed on August 31, 2016. Goodwill is not amortized but is evaluated at least annually for impairment. The Corporation’s most recent annual goodwill impairment review performed as of October 31, 2016 did not indicate that an impairment of goodwill existed. The Corporation also determined that no triggering events have occurred that indicated impairment from the most recent valuation date through June 30, 2017 and that the Corporation's goodwill was not impaired at June 30, 2017. |
Loan Servicing Rights |
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Transfers and Servicing [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan Servicing Rights | Loan Servicing Rights Loan servicing rights ("LSRs") are created as a result of selling residential mortgage and commercial real estate loans in the secondary market while retaining the right to service these loans and receive servicing income over the life of the loan, and from acquisitions of other banks that had LSRs. Loans serviced for others are not reported as assets in the Consolidated Statements of Financial Position. The Corporation elected to account for LSRs acquired related to the merger with Talmer under the fair value measurement method. Prior to January 1, 2017, the Corporation accounted for all other LSRs at the lower of cost or fair value ("Amortized LSRs"). The Corporation elected as of January 1, 2017 to account for all previously Amortized LSRs under the fair value measurement method. This change in accounting policy resulted in a cumulative adjustment to retained earnings as of January 1, 2017 in the amount of $3.7 million. For further information on this election, refer to Note 1, Basis of Presentation and Significant Accounting Policies. LSRs are established and recorded at the estimated fair value by calculating the present value of estimated future net servicing cash flows, taking into consideration actual and expected mortgage loan prepayment rates, discount rates, servicing costs, and other economic factors, which are determined based on current market conditions. The following table represents the activity for LSRs and the related fair value changes:
(1) Represents estimated LSR value change resulting primarily from market-driven changes in interest rates and prepayments. Included in "Net gain on sale of loans and other mortgage banking revenue" in the Consolidated Statements of Income. During the three and six months ended June 30, 2016, the Corporation accounted for LSRs using the amortization method. Activity for LSRs and the related valuation allowance for the three and six months ended June 30, 2016 are as follows:
Expected and actual loan prepayment speeds are the most significant factors driving the fair value of loan servicing rights. The following table presents assumptions utilized in determining the fair value of loan servicing rights as of June 30, 2017 and December 31, 2016.
The Corporation realized total loan servicing fee income, included in "Net gain on sale of loans and other mortgage banking revenue" in the Consolidated Statements of Income, of $4.5 million and $1.3 million for the three months ended June 30, 2017 and 2016, respectively, and $9.1 million and $2.6 million for the six months ended June 30, 2017 and 2016, respectively. |
Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Intangible Assets | Other Intangible Assets The following table shows the net carrying value of the Corporation’s other intangible assets:
The following table sets forth the carrying amount and accumulated amortization of core deposit intangible assets that are amortizable and arose from business combinations or other acquisitions:
Amortization expense recognized on core deposit intangible assets was $1.5 million and $1.1 million for the three months ended June 30, 2017 and 2016, respectively, and $3.0 million and $2.2 million for the six months ended June 30, 2017 and 2016, respectively. The estimated future amortization expense on core deposit intangible assets for periods ending after June 30, 2017 is as follows: 2017 — $3.0 million; 2018 — $5.7 million; 2019 — $5.4 million; 2020 — $4.9 million; 2021 — $4.5 million; 2022 and thereafter — $13.8 million. |
Derivative Instruments and Balance Sheet Offsetting |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Balance Sheet Offsetting | Derivative Instruments and Balance Sheet Offsetting In the normal course of business, the Corporation enters into various transactions involving derivative instruments to manage exposure to fluctuations in interest rates and to meet the financing needs of customers (customer-initiated derivatives). These financial instruments involve, to varying degrees, elements of market and credit risk. Market and credit risk are included in the determination of fair value. Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of mortgage loans to third party investors are considered derivatives. It is the Corporation’s practice to enter into forward commitments for the future delivery of mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from its commitments to fund the loans. The Corporation enters into interest rate derivatives to provide a service to certain qualifying customers to help facilitate their respective risk management strategies, customer-initiated derivatives, and, therefore, are not used for interest rate risk management purposes. The Corporation generally takes offsetting positions with dealer counterparts to mitigate the inherent risk. Income primarily results from the spread between the customer derivative and the offsetting dealer positions. The Corporation utilizes interest rate swaps designated as cash flow hedges for risk management purposes to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. These interest rate swaps designated as cash flow hedges are used to manage differences in the amount, timing and duration of the Corporation's known or expected cash receipts and its known or expected cash payments principally related to certain variable rate borrowings. The Corporation assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative instruments with the changes in cash flows of the designated hedged transactions. The effective portion of changes in fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Any ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The Corporation's cash flow hedges had no amount of ineffectiveness included in net income during each period presented. The Corporation expects the hedges to remain fully effective during the remaining terms of the swaps. The Corporation additionally has written and purchased option derivatives consisting of instruments to facilitate an equity-linked time deposit product (the "Power Equity CD"). The Power Equity CD is a time deposit that provides the purchaser a guaranteed return of principal at maturity plus a potential equity return (a written option), while the Corporation receives a known stream of funds based on the equity return (a purchased option). The written and purchased options are mirror derivative instruments which are carried at fair value on the Consolidated Statements of Financial Position. The following table presents the notional amount and fair value of the Corporation’s derivative instruments held or issued in connection with customer-initiated and mortgage banking activities.
In the normal course of business, the Corporation may decide to settle a forward contract rather than fulfill the contract. Cash received or paid in this settlement manner is included in "Net gain on sale of loans and other mortgage banking revenue" in the Consolidated Statements of Income and is considered a cost of executing a forward contract. The following table presents the net gains (losses) related to derivative instruments reflecting the changes in fair value.
The following table presents the net gains (losses) recorded in accumulated other comprehensive income and the Consolidated Statements of Income relating to interest rate swaps designated as cash flow hedges for the three and six months ended June 30, 2017.
At June 30, 2017, the Corporation expected $1.2 million of unrealized losses to be reclassified as an increase to interest expense during the following twelve months. Methods and assumptions used by the Corporation in estimating the fair value of its forward contracts, interest rate lock commitments and customer-initiated derivatives are discussed in Note 3: Fair Value Measurements. Balance Sheet Offsetting Certain financial instruments, including customer-initiated derivatives and interest rate swaps, may be eligible for offset in the Consolidated Statements of Financial Position and/or subject to master netting arrangements or similar agreements. The Corporation is party to master netting arrangements with its financial institution counterparties; however, the Corporation does not offset assets and liabilities under these arrangements for financial statement presentation purposes based on an accounting policy election. The tables below present information about the Corporation’s financial instruments that are eligible for offset.
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Investments in Qualified Affordable Housing Projects, Federal Historic Projects and New Market Tax Credits |
6 Months Ended |
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Jun. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Qualified Affordable Housing Projects, Federal Historic Projects and New Market Tax Credits | Investments in Qualified Affordable Housing Projects, Federal Historic Projects and New Market Tax Credits The Corporation invests in qualified affordable housing projects, federal historic projects, and new market projects for the purpose of community reinvestment and obtaining tax credits. Return on the Corporation's investment in these projects comes in the form of the tax credits and tax losses that pass through to the Corporation. The carrying value of the investments are reflected in "Interest receivable and other assets" on the Consolidated Statements of Financial Position. The Corporation utilizes the proportional amortization method to account for investments in qualified affordable housing projects and the equity method to account for investments in other tax credit projects. Under the proportional amortization method, the Corporation amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits. The Corporation recognized additional income tax expense attributable to the amortization of investments in qualified affordable housing projects of $0.8 million and $0.6 million during the three months ended June 30, 2017 and 2016, respectively, and $1.5 million and $1.2 million during the six months ended June 30, 2017 and 2016, respectively. The Corporation's remaining investment in qualified affordable housing projects accounted for under the proportional amortization method totaled $36.2 million at June 30, 2017 and $29.5 million at December 31, 2016. Under the equity method, the Corporation's share of the earnings or losses are included in "Other operating expenses" on the Consolidated Statements of Income. The Corporation's remaining investment in new market projects accounted for under the equity method totaled $20.2 million and $10.9 million at June 30, 2017 and December 31, 2016, respectively. The Corporation's unfunded equity contributions relating to investments in qualified affordable housing projects, federal historic tax projects and new market projects is recorded in "Interest payable and other liabilities" on the Consolidated Statements of Financial Position. The Corporation's remaining unfunded equity contributions totaled $31.6 million and $16.0 million at June 30, 2017 and December 31, 2016, respectively. Management analyzes these investments for potential impairment when events or changes in circumstances indicate that it is more-likely-than-not that the carrying amount of the investment will not be realized. An impairment loss is measured as the amount by which the carrying amount of an investment exceeds its fair value. There were no impairment losses recognized as of June 30, 2017 or December 31, 2016. The Corporation consolidates variable interest entities ("VIEs") in which it is the primary beneficiary. In general, a VIE is an entity that either (i) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (ii) has a group of equity owners that are unable to make significant decisions about its activities or (iii) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns as generated by its operations. If any of these characteristics are present, the entity is subject to a variable interests consolidation model, and consolidation is based on variable interests, not on ownership of the entity's outstanding voting stock. Variable interests are defined as contractual, ownership, or other monetary interests in an entity that change with fluctuations in the entity's net asset value. The primary beneficiary consolidates the VIE. The primary beneficiary is defined as the enterprise that has the power to direct the activities and absorb losses or the right to receive benefits. The Corporation is a significant limited partner in the qualified affordable housing, federal historic and new market projects it has invested in. These projects meet the definition of VIEs. However, the Corporation is not the primary beneficiary of any of the VIEs in which it holds a limited partnership interest; therefore, the VIEs are not consolidated in the Corporation's consolidated financial statements. |
Commitments, Contingencies and Guarantees |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments, Contingencies and Guarantees | Commitments, Contingencies and Guarantees Commitments In the normal course of business, the Corporation offers a variety of financial instruments containing credit risk that are not required to be reflected in the Consolidated Statements of Financial Position. These financial instruments include outstanding commitments to extend credit, approved but undisbursed loans (undisbursed loan commitments), credit lines, commercial letters of credit and standby letters of credit. The Corporation has risk management policies to identify, monitor and limit exposure to credit risk. To mitigate credit risk for these financial guarantees, the Corporation generally determines the need for specific covenant, guarantee and collateral requirements on a case-by-case basis, depending on the nature of the financial instrument and the customer’s creditworthiness. At June 30, 2017 and December 31, 2016, the Corporation had $139.0 million and $118.9 million, respectively, of outstanding financial and performance standby letters of credit. The majority of these standby letters of credit are collateralized. The Corporation determined that there were no potential losses from standby letters of credit at June 30, 2017 and December 31, 2016. Commitments to extend credit are agreements to lend to a customer provided there is no violation of any condition established in the commitment. Commitments generally have fixed expiration dates or other termination clauses and may not require payment of a fee. Since many commitments expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Corporation evaluates each customer's creditworthiness on an individual basis. The amount of collateral obtained, if deemed necessary by the Corporation upon extension of credit, is based on management's credit evaluation of the counterparty. The collateral held varies, but may include securities, real estate, accounts receivable, inventory, plant or equipment. Unfunded commitments under commercial lines of credit, revolving credit lines and overdraft protection agreements are included in commitments to extend credit. These lines of credit are generally not collateralized, usually do not contain a specified maturity date and may be drawn upon only to the total extent to which the Corporation is committed. At June 30, 2017 and December 31, 2016, the Corporation had $2.93 billion and $2.70 billion, respectively, of commitments to extend credit. The Corporation had undisbursed loan commitments of $606.7 million and $578.2 million at June 30, 2017 and December 31, 2016, respectively. Undisbursed loan commitments are not included in loans on the Consolidated Statements of Financial Position. The majority of undisbursed loan commitments will be funded and convert to a portfolio loan within a one year period. The allowance for credit losses on lending-related commitments included $1.1 million and $1.3 million at June 30, 2017 and December 31, 2016, respectively, for probable credit losses inherent in the Corporation's unused commitments and was recorded in "Interest payable and other liabilities" in the Consolidated Statements of Financial Position. Contingencies and Guarantees The Corporation has originated and sold certain loans, and additionally acquired the potential liability for those historical originated and sold loans by Talmer, for which the buyer has limited recourse to us in the event the loans do not perform as specified in the agreements. These loans had an outstanding balance of $14.8 million and $16.9 million at June 30, 2017 and December 31, 2016, respectively. The maximum potential amount of undiscounted future payments that the Corporation could be required to make in the event of nonperformance by the borrower totaled $14.2 million and $16.1 million at June 30, 2017 and December 31, 2016, respectively. In the event of nonperformance, the Corporation has rights to the underlying collateral securing the loans. At both June 30, 2017 and December 31, 2016, the Corporation had recorded a liability of $0.2 million in connection with the recourse agreements, recorded in "Interest payable and other liabilities" in the Consolidated Statements of Financial Position. Representations and Warranties In connection with the Corporation's mortgage banking loan sales, and the historical sales of Talmer, the Corporation makes certain representations and warranties that the loans meet certain criteria, such as collateral type and underwriting standards. The Corporation may be required to repurchase individual loans and/or indemnify the purchaser against losses if the loan fails to meet established criteria. At June 30, 2017 and December 31, 2016, respectively, the liability recorded in connection with these representations and warranties totaled $5.5 million and $6.5 million, respectively. A summary of the reserve for representations and warranties of the Corporation is as follows:
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Borrowings |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | Borrowings A summary of the Corporation's short- and long-term borrowings follows:
Chemical Bank is a member of the FHLB, which provides short- and long-term funding collateralized by mortgage related assets to its members. Each advance is payable at its maturity date, with a prepayment penalty for fixed-rate advances. The Corporation's FHLB advances, including both short-term and long-term, require monthly interest payments and are collateralized by commercial and residential mortgage loans totaling $7.28 billion as of June 30, 2017. The Corporation's additional borrowing availability through the FHLB, subject to the FHLB's credit requirements and policies and based on the amount of FHLB stock owned by the Corporation, was $50.0 million at June 30, 2017. Securities sold under agreements to repurchase are with an unaffiliated financial institution and are secured by available for-sale-securities. The Corporation's securities sold under agreements to repurchase do not qualify as sales for accounting purposes. The remaining contractual maturity, excluding purchase accounting adjustments, of long-term securities under agreement to repurchase, is as follows:
The line-of-credit agreement contains certain restrictive covenants. The Corporation was in compliance with all of the covenants at June 30, 2017. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The Corporation records its federal income tax expense using its estimate of the effective income tax rate expected for the full year and applies that rate on a year-to-date basis. The fluctuations in the Corporation's effective federal income tax rate reflect changes each period in the proportion of interest income exempt from federal taxation and other nondeductible expenses relative to pretax income and tax credits. A reconciliation of expected income tax expense at the federal statutory income tax rate and the amounts recorded in the Consolidated Financial Statements were as follows:
(1) Represents excess tax benefits resulting from the exercise or settlement of share-based payment transactions. |
Share-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation The Corporation maintains share-based compensation plans under which it periodically grants share-based awards for a fixed number of shares to certain officers of the Corporation. The fair value of share-based awards is recognized as compensation expense over the requisite service or performance period. During the three months ended June 30, 2017 and 2016, share-based compensation expense related to share-based awards totaled $3.2 million and $1.0 million, respectively. During the six months ended June 30, 2017 and 2016, share-based compensation expense related to share-based awards totaled $7.0 million and $1.8 million, respectively. The excess tax benefit realized from shared-based compensation transactions during the three months ended June 30, 2017 and 2016 was $248 thousand and $68 thousand, respectively, and during the six months ended June 30, 2017 and 2016 was $6.4 million and $411 thousand, respectively. During the six months ended June 30, 2017, the Corporation granted options to purchase 126,691 shares of common stock, 162,771 restricted stock units and 13,500 shares of common stock to certain officers of the Corporation. On April 26, 2017, the shareholders of the Corporation approved the Stock Incentive Plan of 2017, which provides for 1,750,000 shares of the Corporation's common stock to be made available for future equity-based awards and canceled the amount of shares available for future grant under prior share-based compensation plans. At June 30, 2017, there were 1,748,616 shares of common stock available for future grants under the Stock Incentive Plan of 2017. Stock Options The Corporation issues stock options to certain officers from time to time. The exercise price on stock options equals the current market price of the Corporation's common stock on the date of grant and stock options expire ten years from the date of grant. Stock options granted after 2012 vest ratably over a five-year period. Stock options granted prior to 2013 generally vest ratably over a three-year period. Stock options granted prior to 2016 fully vested upon the merger with Talmer. Stock options assumed by the Corporation in the merger with Talmer were fully vested prior to assumption. A summary of activity for the Corporation’s stock options as of and for the six months ended June 30, 2017 is presented below:
The weighted-average remaining contractual terms were 6.8 years for all outstanding stock options and 5.7 years for exercisable stock options at June 30, 2017. The intrinsic value of all outstanding in-the-money stock options and exercisable in-the-money stock options was $24.6 million and $20.7 million, respectively, at June 30, 2017. The aggregate intrinsic values of outstanding and exercisable options at June 30, 2017 were calculated based on the closing market price of the Corporation’s common stock on June 30, 2017 of $48.41 per share less the exercise price. Options with intrinsic values less than zero, or "out-of-the-money" options, are not included in the aggregate intrinsic value reported. The total intrinsic value of stock options as of June 30, 2016 was $11.2 million. Total cash received from options exercises during the six months ended June 30, 2017 and 2016 was $1.0 million and $0.7 million, respectively, resulting in the issuance of 511,144 shares and 47,758 shares, respectively. At June 30, 2017, unrecognized compensation expense related to stock options totaled $3.0 million and is expected to be recognized over a remaining weighted average period of 4.1 years. The fair value of the stock options granted during the six months ended June 30, 2017 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions.
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant and the expected life of the options granted. Expected stock volatility was based on historical volatility of the Corporation's common stock over the expected life of the option. The expected life of the options represents the period of time that options granted are expected to be outstanding and is based primarily upon historical experience, including option exercise behavior. Because of the unpredictability of the assumptions required, the Black-Scholes (or any other valuation) model is incapable of accurately predicting the Corporation's common stock price or of placing an accurate present value on options to purchase its stock. In addition, the Black-Scholes model was designed to approximate value for types of options that are very different from those issued by the Corporation. In spite of any theoretical value that may be placed on a stock option grant, no value is possible under options issued by the Corporation without an increase in the market price per share of the Corporation's common stock over the market price per share of the Corporation's common stock at the date of grant. Restricted Stock Units The Corporation grants restricted stock performance units and restricted stock service-based units (collectively referred to as restricted stock units) to certain officers from time to time. The restricted stock performance units vest based on the Corporation achieving certain performance target levels and the grantee completing the requisite service period. The restricted stock performance units are eligible to vest from 0.5x to 1.5x the number of units originally granted depending on which, if any, of the performance target levels are met. However, if the minimum performance target levels are not achieved, no shares will become vested or be issued for that respective year’s restricted stock performance units. The restricted stock service-based units vest upon satisfaction of a service condition. Upon achievement of the performance target level and/or satisfaction of a service condition, as applicable, the restricted stock units are converted into shares of the Corporation’s common stock on a one-to-one basis. Compensation expense related to restricted stock units is recognized over the expected requisite performance or service period, as applicable. A summary of the activity for restricted stock units as of and for the six months ended June 30, 2017 is presented below:
At June 30, 2017, unrecognized compensation expense related to restricted stock units totaled $11.5 million and is expected to be recognized over a remaining weighted average period of 3.2 years. Restricted Stock Awards The Corporation assumed restricted stock awards in the merger with Talmer that vest upon completion of future service requirements. The fair value of these awards is equal to the market price of the Corporation's common stock at the date the awards were assumed with the portion of the fair value related to post-combination service. The Corporation recognizes stock-based compensation expense over the vesting period, using the straight-lined method, based upon the number of shares of restricted stock ultimately expected to vest. If an individual awarded restricted stock awards terminates employment prior to the end of the vesting period, the unvested portion of the stock is forfeited, with certain exceptions. The following table provides information regarding nonvested restricted stock awards:
At June 30, 2017, unrecognized compensation expense related to nonvested restricted stock awards totaled $2.7 million and is expected to be recognized over a remaining weighted average period of 1.0 years. |
Pension and Other Postretirement Benefit Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postretirement Benefit Plans | Pension and Other Postretirement Benefit Plans The Corporation's retirement plans include a qualified pension plan, a nonqualified pension plan, a nonqualified postretirement benefit plan, a 401(k) savings plan, and a multi-employer defined benefit plan. Qualified and Nonqualified Pension Plans and Nonqualified Postretirement Benefit Plans The components of net periodic benefit cost for the Corporation’s qualified and nonqualified pension plans and nonqualified postretirement benefit plan are as follows:
The Corporation did not make a contribution to the pension plan during the three and six months ended June 30, 2017 or 2016. The discount rates used to compute the Corporation's qualified and nonqualified pension plan expense are 4.22% and 3.63%, respectively, for 2017. The discount rate used to compute the Corporation's nonqualified postretirement benefit plan for 2017 is 3.79%. 401(k) Savings Plan 401(k) Savings Plan expense for the Corporation’s match of participants’ base compensation contributions and a 4.0% of eligible pay contribution to employees who are not grandfathered under the pension plan was $2.4 million and $1.4 million for the three months ended June 30, 2017 and 2016, respectively, and $5.0 million and $2.7 million for the six months ended June 30, 2017 and 2016, respectively. The Corporation's base compensation match equals 50.0% of the participants' elective deferrals on the first 4.0% of the participants' base compensation up to the maximum amount allowed under the Internal Revenue Code. Multi-Employer Defined Benefit Plan In conjunction with the April 1, 2015 acquisition of Monarch, the Corporation acquired a participation in the Pentegra Defined Benefit Plan for Financial Institutions (Pentegra DB Plan), a qualified defined benefit pension plan. Employee benefits for Monarch employees under the Plan were frozen effective April 1, 2004. The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and as a multiple-employer plan under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code (IRC). The Pentegra DB Plan is a single plan under IRC Section 413(c) and, as a result, all of the plan's assets stand behind all of the plan's liabilities. Accordingly, contributions made by a participating employer may be used to provide benefits to participants of other participating employers. No contributions were made by the Corporation to the Pentegra DB Plan for the three and six months ended June 30, 2017 and 2016. |
Regulatory Capital |
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Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Capital | Regulatory Capital Federal and state banking regulations place certain restrictions on the transfer of assets, in the form of dividends, loans, or advances, from Chemical Bank to the Corporation. As of June 30, 2017, substantially all of the assets of Chemical Bank were restricted from transfer to the Corporation in the form of loans or advances. Dividends from the bank are the principal source of funds for the Corporation. In addition to the statutory limits, the Corporation considers the overall financial and capital position of the bank prior to making any cash dividend decisions. The Corporation and Chemical Bank are subject to various regulatory capital requirements administered by federal banking agencies. Under these capital requirements, Chemical Bank must meet specific capital guidelines that involve quantitative measures of assets and certain off-balance sheet items as calculated under regulatory accounting practices. In addition, capital amounts and classifications are subject to qualitative judgments by regulators. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Corporation’s consolidated financial statements. Management believes as of June 30, 2017, the Corporation and Chemical Bank met all capital adequacy requirements to which they are subject. Quantitative measures established by regulation to ensure capital adequacy require minimum ratios of Tier 1 capital to average assets (Leverage Ratio) and common equity Tier 1, Tier 1 and Total capital to risk-weighted assets. These capital guidelines assign risk weights to on- and off-balance sheet items in arriving at total risk-weighted assets. Minimum capital levels are based upon the perceived risk of various asset categories and certain off-balance sheet instruments. Risk-weighted assets of the Corporation and Chemical Bank totaled $14.35 billion and $14.30 billion at June 30, 2017, respectively, compared to $13.42 billion and $13.36 billion at December 31, 2016, respectively. Effective January 1, 2015, the Corporation adopted the Basel III regulatory capital framework as approved by federal banking agencies, which is subject to a multi-year phase-in period. The adoption of this new framework modified the calculation of the various capital ratios, added a new ratio, common equity tier 1, and revised the adequately and well capitalized thresholds. In addition, Basel III establishes a new capital conservation buffer of 2.5% of risk-weighted assets, which is phased-in over a four-year period beginning January 1, 2016. The capital conservation buffer for 2017 is 1.25% and was 0.625% for 2016. The Corporation has elected to opt-out of including accumulated other comprehensive income in common equity tier 1 capital. At June 30, 2017 and December 31, 2016, Chemical Bank's capital ratios exceeded the quantitative capital ratios required for an institution to be considered "well-capitalized." Significant factors that may affect capital adequacy include, but are not limited to, a disproportionate growth in assets versus capital and a change in mix or credit quality of assets. There are no conditions or events since that notification that management believes have changed the institutions' category. The summary below compares the actual capital amounts and ratios with the quantitative measures established by regulation to ensure capital adequacy:
On July 19, 2017, a cash dividend on the Corporation's common stock of $0.28 per share was declared. The dividend will be paid on September 15, 2017 to shareholders of record as of September 1, 2017. |
Earnings Per Common Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share | Earnings Per Common Share The two-class method is used in the calculation of basic and diluted earnings per share. Under the two-class method, earnings available to common shareholders for the period are allocated between common shareholders and participating securities according to dividends declared (or accumulated) and participating rights in undistributed earnings. Average shares of common stock for diluted net income per common share include shares to be issued upon the exercise of stock options granted under the Corporation’s share-based compensation plans, restricted stock units that may be converted to stock, restricted stock awards and stock to be issued under the deferred stock compensation plan for non-employee directors. The factors used in the earnings per share computation follow:
For effect of dilutive securities, the assumed average stock valuation is $47.78 per share and $37.80 per share for the three months ended June 30, 2017 and 2016, respectively and $49.78 and $35.55 for the six months ended June 30, 2017 and 2016, respectively. The average number of exercisable employee stock options outstanding that were "out-of-the-money," whereby the option exercise price per share exceeded the market price per share and, therefore, were not included in the computation of diluted earnings per common share because they would have been anti-dilutive totaled 125,782 and 90,537 for the three and six months ended June 30, 2017 and zero for both the three and six months ended June 30, 2016. |
Accumulated Other Comprehensive Loss |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table summarizes the changes within each component of accumulated other comprehensive income (loss), net of related tax benefit/expense for the three and six months ended June 30, 2017, and 2016:
The following table summarizes the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2017, and 2016:
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Basis of Presentation and Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations Chemical Financial Corporation ("Corporation" or "Chemical") operates in a single operating segment — commercial banking. The Corporation is a financial holding company, headquartered in Midland, Michigan, that operates through one commercial bank, Chemical Bank. Chemical Bank operates within Michigan, Ohio and Indiana as a Michigan state-chartered commercial bank. Chemical Bank operates through an internal organizational structure of seven regional banking units and offers a full range of traditional banking and fiduciary products and services to the residents and business customers in the bank’s geographical market areas. The products and services offered by the regional banking units, through branch banking offices, are generally consistent throughout the Corporation, as is the pricing of those products and services. The marketing of products and services throughout the Corporation’s regional banking units is generally uniform, as many of the markets served by the regional banking units overlap. The distribution of products and services is generally uniform throughout the Corporation’s regional banking units and is achieved primarily through retail branch banking offices, automated teller machines and electronically accessed banking products. The Corporation’s primary sources of revenue are interest from its loan products and investment securities, service charges and fees from customer deposit accounts, wealth management revenue and net gain on sale of loans and other mortgage banking revenue. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited consolidated financial statements of the Corporation and its subsidiaries have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") for interim financial information and with instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the interim consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Corporation’s consolidated financial statements and footnotes thereto included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2016. In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments believed necessary to present fairly the financial condition and results of operations of the Corporation for the periods presented. Operating results for the six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. |
Use of Estimates | Use of Estimates Management makes estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying footnotes. Estimates that are particularly susceptible to significant change include the determination of the allowance for loan losses, expected cash flows from acquired loans, fair value amounts related to business combinations, income taxes, goodwill impairment and those assets and liabilities that require fair value measurement. Actual results could differ from these estimates. |
Reclassifications | Reclassifications Certain amounts appearing in the consolidated financial statements and notes thereto for prior periods have been reclassified to conform with the current presentation. The reclassification had no effect on net income or shareholders’ equity as previously reported. |
Loan Servicing Rights | Loan Servicing Rights Effective January 1, 2017, the Corporation elected to account for all loan servicing rights ("LSRs") previously accounted for under the lower of cost or fair value method under the fair value method. The guidance in Accounting Standards Codification Subtopic 860-50, "Transfers and Servicing-Servicing Assets and Liabilities" provides that an entity may make an irrevocable decision to subsequently measure a class of servicing assets and servicing liabilities at fair value at the beginning of any fiscal year. The guidance allows for the Corporation to apply this election prospectively to all new and existing servicing assets and servicing liabilities. Management believes this election will provide more comparable results to peers as many of those within our industry group account for loan servicing rights under the fair value method. The change in accounting policy in the first quarter of 2017 results in a cumulative adjustment to increase retained earnings in the amount of $3.7 million, net of taxes. |
Investment Securities | Investment Securities The Corporation has elected to early adopt Accounting Standards Update ("ASU") No. 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities ("ASU 2017-08") during the second quarter of 2017. The guidance in ASU 2017-08 shortens the amortization period for certain callable debt securities that are held at a premium to the earliest call date. Debt securities held at a discount will continue to be amortized as a yield adjustment over the life of the instrument. The early adoption of ASU 2017-08 in the second quarter of 2017 did not have a material impact on the consolidated financial statements. |
Mergers and Acquisitions (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of assets acquired and liabilities assumed | The following allocation is based on the information that was available to make preliminary estimates of the fair value and may change as additional information becomes available and additional analyses are completed. While the Corporation believes that information provided a reasonable basis for estimating the fair values, it expects that it could obtain additional information and evidence during the measurement period that may result in changes to the estimated fair value amounts. This measurement period ends on the earlier of one year after the merger date or the date we receive the information about the facts and circumstances that existed at the merger date. Subsequent adjustments, if necessary, will be reflected in future filings. These refinements include: (1) changes in the estimated fair value of loans acquired: (2) changes in the estimated fair value of intangible assets acquired: (3) changes in deferred tax assets related to fair value estimates and a change in the expected realization of items considered to be net operating loss carry forwards and (4) a change in the goodwill caused by the net effect of these adjustments. The following table presents the allocation of fair value at the merger date:
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Information regarding acquired loans accounted for under ASC 310-30 | Information regarding loans accounted for under ASC 310-30 at the merger date is as follows:
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Pro forma financial information | The following unaudited pro forma financial information presents the consolidated results of operation of the Corporation and Talmer as if the merger had occurred as of January 1, 2016. The unaudited pro forma combined results of operations are presented solely for information purposes and are not intended to represent or be indicative of the consolidated results of operations that Chemical would have reported had these transactions been completed as of the dates and for the periods presented, nor are they necessarily indicative of future results. In particular, no adjustments have been made to eliminate the amount of Talmer's provision for loan losses incurred prior to the acquisition date that would not have been necessary had the acquired loans been recorded at fair value as of the beginning of each period indicated. In accordance with Article 11 of SEC Regulation S-X, transaction costs directly attributable to the acquisitions have been excluded.
(1) As the business combination was effective August 31, 2016, there were no proforma adjustments for the three and six months ended June 30, 2017. |
Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of assets measured at fair value on a recurring basis | For assets and liabilities measured at fair value on a recurring basis, quantitative disclosures about the fair value measurements for each major category of assets and liabilities follow:
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Summary of changes in Level 3 assets measured at fair value on a recurring basis | The following table summarizes the changes in Level 3 assets measured at fair value on a recurring basis.
(1) Refer to Note 1, Basis of Presentation and Significant Accounting Policies, for further details. |
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Schedule of aggregate fair value contractual balance and gain (loss) for loans held-for-sale | The aggregate fair value, contractual balance (including accrued interest), and gain or loss for loans held-for-sale carried at fair value option was as follows:
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Amount of gains (losses) from loans held for sale included in the Consolidated Statements of Income | The total amount of gains (losses) from loans held-for-sale included in the Consolidated Statements of Income were as follows:
(1) Included in "Interest and fees on loans" in the Consolidated Statements of Income. (2) Included in "Net gain on sale of loans and other mortgage banking revenue" in the Consolidated Statements of Income. |
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Summary of assets measured at fair value on a nonrecurring basis | For assets measured at fair value on a nonrecurring basis, quantitative disclosures about fair value measurements for each major category of assets follows:
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Additional information about significant unobservable inputs used in the fair value measurement of financial assets | The following table presents additional information about the significant unobservable inputs used in the fair value measurement of financial assets measured on a nonrecurring basis that were categorized within the Level 3 of the fair value hierarchy:
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Summary of carrying amounts and estimated fair values of the financial instruments | A summary of carrying amounts and estimated fair values of the Corporation’s financial instruments not recorded at fair value in their entirety on a recurring basis on the Consolidated Statements of Financial Position was as follows:
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Investment Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale Securities | The following is a summary of the amortized cost and fair value of investment securities available-for-sale and investment securities held-to-maturity at June 30, 2017 and December 31, 2016:
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Held-to-maturity Securities |
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Proceeds from sales of securities and the associated gains and losses recorded in earnings | Proceeds from sales of securities and the associated gains and losses recorded in earnings are listed below:
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Amortized cost and fair value of debt securities by contractual maturity | The following is a summary of the amortized cost and fair value of investment securities at June 30, 2017, by maturity, for both available-for-sale and held-to-maturity investment securities. The maturities of residential mortgage-backed securities and collateralized mortgage obligations are based on scheduled principal payments. The maturities of all other debt securities are based on final contractual maturity.
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Summary of continuous unrealized loss position of securities | The following schedule summarizes information for both available-for-sale and held-to-maturity investment securities with gross unrealized losses at June 30, 2017 and December 31, 2016, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position. As of June 30, 2017, the Corporation’s securities portfolio consisted of 2,336 securities, 1,351 of which were in an unrealized loss position.
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Loans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of loans under portfolio | A summary of the Corporation's loans follows:
(2) Reported net of deferred costs totaling $20.0 million and $14.8 million at June 30, 2017 and December 31, 2016, respectively. |
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Schedule of activity for accretable yield | Activity for the accretable yield, which includes contractually due interest for acquired loans that have been renewed or extended since the date of acquisition and continue to be accounted for in loan pools in accordance with ASC 310-30, follows:
(1) The net reclassification results from changes in expected cash flows of the acquired loans which may include increases in the amount of contractual principal and interest expected to be collected due to improvement in credit quality, increases in balances outstanding from advances, renewals, extensions and interest rates; as well as reductions in contractual principal and interest expected to be collected due to credit deterioration, payoffs, and decreases in interest rates. |
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Recorded investment of loans in the commercial loan portfolio by risk rating categories | The following schedule presents the recorded investment of loans in the commercial loan portfolio by credit risk categories at June 30, 2017 and December 31, 2016:
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Recorded investment of loans in the consumer loan portfolio based on the credit risk profile of loans in a performing and nonperforming status | The following schedule presents the recorded investment of loans in the consumer loan portfolio based on loans in a performing status and loans in a nonperforming status at June 30, 2017 and December 31, 2016:
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Summary of nonperforming loans | A summary of nonperforming loans follows:
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Schedule representing the aging status of the recorded investment in loans by classes | Loan delinquency, excluding acquired loans accounted for under ASC 310-30, was as follows:
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Schedule of Impaired loans by classes | The following schedules present impaired loans by classes of loans at June 30, 2017 and December 31, 2016:
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Schedule presents information related to impaired loans | The following schedule presents additional information regarding impaired loans by classes of loans segregated by those requiring a valuation allowance and those not requiring a valuation allowance for the three and six months ended June 30, 2017 and 2016, and the respective interest income amounts recognized:
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Schedule providing information on TDRs | The following schedule presents the Corporation's TDRs at June 30, 2017 and December 31, 2016:
The following tables present the recorded investment of loans modified into TDRs during the three and six months ended June 30, 2017 and 2016 by type of concession granted. In cases where more than one type of concession was granted, the loans were categorized based on the most significant concession.
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Troubled debt restructurings on financing receivables with defaults payment | The following schedule includes TDRs for which there was a payment default during the three and six months ended June 30, 2017 and 2016, whereby the borrower was past due with respect to principal and/or interest for 90 days or more, and the loan became a TDR during the twelve-month period prior to the default:
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Schedule of allowance and recorded investment related to financing receivables segregated by portfolio segment | The following schedule presents, by loan portfolio segment, the changes in the allowance for the three and six months ended June 30, 2017 and 2016, and details regarding the balance in the allowance and the recorded investment in loans at June 30, 2017 by impairment evaluation method.
The following schedule presents, by loan portfolio segment, details regarding the balance in the allowance and the recorded investment in loans at December 31, 2016 by impairment evaluation method.
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Other Real Estate Owned and Repossessed Assets (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tabular disclosure of the changes in non-covered and covered other real estate on properties owned | Changes in other real estate owned and repossessed assets, included in interest receivable and other assets on the consolidated statements of financial position, were as follows:
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Schedule of income and expenses related to other real estate owned | Income and expenses related to other real estate owned and repossessed assets, recorded as a component of "Other expense" in the Consolidated Statements of Income, were as follows:
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Loan Servicing Rights (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers and Servicing [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of activity for loan servicing rights and the related fair value changes | The following table represents the activity for LSRs and the related fair value changes:
(1) Represents estimated LSR value change resulting primarily from market-driven changes in interest rates and prepayments. Included in "Net gain on sale of loans and other mortgage banking revenue" in the Consolidated Statements of Income. |
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Activity for capitalized loan servicing rights | Activity for LSRs and the related valuation allowance for the three and six months ended June 30, 2016 are as follows:
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Schedule of assumptions included in loan servicing rights | The following table presents assumptions utilized in determining the fair value of loan servicing rights as of June 30, 2017 and December 31, 2016.
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Other Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net carrying value of intangible assets | The following table shows the net carrying value of the Corporation’s other intangible assets:
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Carrying amount, accumulated amortization and amortization expense of core deposit intangible assets | The following table sets forth the carrying amount and accumulated amortization of core deposit intangible assets that are amortizable and arose from business combinations or other acquisitions:
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Derivative Instruments and Balance Sheet Offsetting (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule reflecting the amount and fair value of risk management derivatives and mortgage banking and customer initiated derivatives | The following table presents the notional amount and fair value of the Corporation’s derivative instruments held or issued in connection with customer-initiated and mortgage banking activities.
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Schedule reflecting the net gains (losses) relating to derivative instruments related to the changes in fair value | The following table presents the net gains (losses) recorded in accumulated other comprehensive income and the Consolidated Statements of Income relating to interest rate swaps designated as cash flow hedges for the three and six months ended June 30, 2017.
The following table presents the net gains (losses) related to derivative instruments reflecting the changes in fair value.
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Schedule of the Company's financial instruments eligible for offset, offsetting assets | The tables below present information about the Corporation’s financial instruments that are eligible for offset.
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Schedule of the Company's financial instruments eligible for offset, offsetting liabilities | The tables below present information about the Corporation’s financial instruments that are eligible for offset.
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Commitments, Contingencies and Guarantees (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the reserve for unfunded commitments | A summary of the reserve for representations and warranties of the Corporation is as follows:
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Borrowings (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Borrowings | A summary of the Corporation's short- and long-term borrowings follows:
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Schedule of Securities Sold Under Agreements to Repurchase | The remaining contractual maturity, excluding purchase accounting adjustments, of long-term securities under agreement to repurchase, is as follows:
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Income Taxes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of expected income tax expense (benefit) at the federal statutory rate to the Company’s provision for income taxes and effective tax rate | A reconciliation of expected income tax expense at the federal statutory income tax rate and the amounts recorded in the Consolidated Financial Statements were as follows:
(1) Represents excess tax benefits resulting from the exercise or settlement of share-based payment transactions. |
Share-Based Compensation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of activity for Corporation's stock options | A summary of activity for the Corporation’s stock options as of and for the six months ended June 30, 2017 is presented below:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assumptions of Black-Scholes option pricing model | The fair value of the stock options granted during the six months ended June 30, 2017 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of activity for restricted stock units and awards | The following table provides information regarding nonvested restricted stock awards:
A summary of the activity for restricted stock units as of and for the six months ended June 30, 2017 is presented below:
|
Pension and Other Postretirement Benefit Plans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of net periodic benefit cost (income) for the Corporation's qualified and nonqualified pension plans and nonqualified postretirement benefits plan | The components of net periodic benefit cost for the Corporation’s qualified and nonqualified pension plans and nonqualified postretirement benefit plan are as follows:
|
Regulatory Capital (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporation's and Chemical Bank's actual capital amounts and ratios with the quantitative measures established by regulation to ensure capital adequacy | The summary below compares the actual capital amounts and ratios with the quantitative measures established by regulation to ensure capital adequacy:
|
Earnings Per Common Share (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Numerator and denominator of the basic and diluted earnings per common share computations | The factors used in the earnings per share computation follow:
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Accumulated Other Comprehensive Loss (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of accumulated other comprehensive loss, net of related tax benefit/expense | The following table summarizes the changes within each component of accumulated other comprehensive income (loss), net of related tax benefit/expense for the three and six months ended June 30, 2017, and 2016:
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Summary of amounts reclassified out of accumulated other comprehensive income (loss) | The following table summarizes the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2017, and 2016:
|
Basis of Presentation and Significant Accounting Policies (Details) $ in Thousands |
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2017
Bank
|
Dec. 31, 2016
USD ($)
|
||||
Accounting Policies [Abstract] | |||||
Number of banks through which company operates (in bank) | Bank | 1 | ||||
Number of regional banking units Chemical Bank operates through (in bank) | Bank | 7 | ||||
Business Acquisition | |||||
Cumulative effect adjustment of change in accounting policy, net of tax impact | $ | [1] | $ 3,659 | |||
Retained earnings | |||||
Business Acquisition | |||||
Cumulative effect adjustment of change in accounting policy, net of tax impact | $ | [1] | $ 3,659 | |||
|
Mergers and Acquisitions - Textual (Details) $ / shares in Units, $ in Thousands, shares in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Aug. 31, 2016
USD ($)
$ / shares
shares
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2016
USD ($)
|
|
Business Acquisition | |||||
Repayments of lines of credit | $ 25,000 | ||||
Merger and acquisition-related transaction expenses | $ 465 | $ 3,054 | $ 4,632 | $ 5,648 | |
Talmer | |||||
Business Acquisition | |||||
Acquisition purchase price | $ 1,612,449 | ||||
Stock consideration given (in shares) | shares | 32.1 | ||||
Exchange ratio of common stock issued | 0.4725 | ||||
Share price (dollars per share) | $ / shares | $ 1.61 | ||||
Credit facility used for acquisition | $ 125,000 | ||||
Repayments of lines of credit | $ 37,500 |
Mergers and Acquisitions - Loans Accounted for Under ASC 310-30 (Details) - Talmer Bank $ in Thousands |
Aug. 31, 2016
USD ($)
|
---|---|
Accounted for under ASC 310-30: | |
Contractual cash flows | $ 5,968,488 |
Contractual cash flows not expected to be collected (nonaccretable difference) | 223,959 |
Expected cash flows | 5,744,529 |
Interest component of expected cash flows (accretable yield) | 862,127 |
Fair value at acquisition | $ 4,882,402 |
Mergers and Acquisitions - Pro Forma Information (Details) - Talmer Bank - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Business Acquisition | ||||
Net interest and other income | $ 179,516 | $ 168,130 | $ 347,623 | $ 326,100 |
Net Income | $ 52,014 | $ 42,111 | $ 99,618 | $ 81,163 |
Earnings per share: | ||||
Basic (dollars per share) | $ 0.73 | $ 0.60 | $ 1.41 | $ 1.15 |
Diluted (dollars per share) | $ 0.73 | $ 0.59 | $ 1.39 | $ 1.14 |
Fair Value Measurements - Changes in Level 3 Assets (Details) - Recurring - Loan servicing rights - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2017 |
|
Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis | ||
Balance, beginning of period | $ 64,604 | $ 48,085 |
Transfer in based on new accounting policy election | 0 | 15,891 |
Gains (losses): Recorded in earnings (realized): | ||
Recorded in Net gain on sale of loans and other mortgage banking revenue | (2,466) | (3,591) |
New originations | 2,384 | 4,137 |
Balance, end of period | $ 64,522 | $ 64,522 |
Fair Value Measurements - Aggregate Fair Value, Contractual Balance, and Gain or Loss for Loans Held-For-Sale (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2017 |
Dec. 31, 2016 |
|
Fair Value Disclosures [Abstract] | ||
Aggregate fair value | $ 65,371 | $ 81,830 |
Contractual balance | 63,162 | 81,009 |
Unrealized gain (loss) | $ 2,209 | $ 821 |
Fair Value Measurements - Gains (Losses) from Loans Held-for-Sale (Details) - Loans Held For Sale - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total included in earnings | $ 15,155 | $ 2,155 | $ 22,427 | $ 3,470 |
Interest income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total included in earnings | 463 | 20 | 1,014 | 39 |
Change in fair value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total included in earnings | 787 | 0 | 1,388 | 0 |
Net gain on sale of loans and other mortgage banking revenue | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total included in earnings | $ 13,905 | $ 2,135 | $ 20,025 | $ 3,431 |
Investment Securities - Held-To-Maturity Investment (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Held-to-maturity Securities | ||
Amortized Cost | $ 645,605 | $ 623,427 |
Unrealized Gains | 5,281 | 2,648 |
Unrealized Losses | 10,843 | 17,544 |
Held-to-maturity, fair value | 640,043 | 608,531 |
State and political subdivisions | ||
Held-to-maturity Securities | ||
Amortized Cost | 645,105 | 622,927 |
Unrealized Gains | 5,281 | 2,648 |
Unrealized Losses | 10,703 | 17,354 |
Held-to-maturity, fair value | 639,683 | 608,221 |
Trust preferred securities | ||
Held-to-maturity Securities | ||
Amortized Cost | 500 | 500 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 140 | 190 |
Held-to-maturity, fair value | $ 360 | $ 310 |
Investment Securities - Gains and (Losses) Recognized in Earnings (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017
USD ($)
security
|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2017
USD ($)
security
|
Jun. 30, 2016
USD ($)
|
|
Investments, Debt and Equity Securities [Abstract] | ||||
Securities in unrealized loss positions, qualitative disclosure, number of positions (in security) | security | 1,351 | 1,351 | ||
Proceeds | $ 10,050 | $ 4,356 | $ 10,050 | $ 5,000 |
Gross gains | $ 77 | $ 18 | $ 167 | $ 37 |
Loans - TDRs with a Payment Default During the Period (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017
USD ($)
loan
|
Jun. 30, 2016
USD ($)
loan
|
Jun. 30, 2017
USD ($)
loan
|
Jun. 30, 2016
USD ($)
loan
|
|
Financing Receivable, Modifications [Line Items] | ||||
Number of loans (in loan) | loan | 5 | 2 | 10 | 4 |
Principal balance | $ | $ 1,055 | $ 788 | $ 1,780 | $ 1,721 |
Commercial loan portfolio | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number of loans (in loan) | loan | 2 | 1 | 5 | 2 |
Principal balance | $ | $ 997 | $ 788 | $ 1,617 | $ 1,721 |
Consumer loan portfolio | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number of loans (in loan) | loan | 3 | 1 | 5 | 2 |
Principal balance | $ | $ 58 | $ 0 | $ 163 | $ 0 |
Other Real Estate Owned and Repossessed Assets - Rollforward Tables (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Changes in other real estate owned | ||
Balance at the beginning of the period | $ 16,812 | $ 9,716 |
Other additions | 3,776 | 2,155 |
Net payments received | (202) | (85) |
Disposals | (5,976) | (3,230) |
Write-downs | (773) | (230) |
Balance at the end of the period | 13,637 | 8,326 |
Changes in repossessed assets | ||
Balance at the beginning of the period | 375 | 219 |
Other additions | 2,556 | 1,215 |
Net payments received | 0 | (764) |
Disposals | (1,986) | (556) |
Write-downs | 0 | 0 |
Balance at the end of the period | $ 945 | $ 114 |
Other Real Estate Owned and Repossessed Assets - Textual (Details) - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Other Real Estate [Abstract] | ||
Other real estate owned and repossessed assets acquired in accordance with ASU 2014-04 | $ 0.9 | |
Residential mortgage loans in process of foreclosure | $ 4.6 | $ 7.3 |
Other Real Estate Owned and Repossessed Assets - Income and Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Income and expenses related to other real estate owned | ||||
Net gain (loss) on sale | $ 768 | $ 1,320 | $ 1,815 | $ 2,042 |
Write-downs | (504) | (63) | (773) | (230) |
Net operating expenses | (710) | (260) | (1,218) | (412) |
Total | (446) | 997 | (176) | 1,400 |
Income and expenses related to repossessed assets | ||||
Net gain (loss) on sale | (93) | 708 | (171) | 700 |
Write-downs | 0 | 0 | 0 | 0 |
Net operating expenses | (3) | 1 | (6) | (3) |
Total | $ (96) | $ 709 | $ (177) | $ 697 |
Goodwill (Details) - USD ($) |
6 Months Ended | ||
---|---|---|---|
Aug. 31, 2016 |
Jun. 30, 2017 |
Dec. 31, 2016 |
|
Goodwill [Line Items] | |||
Goodwill | $ 1,133,534,000 | $ 1,133,534,000 | |
Goodwill impairment | $ 0 | ||
Talmer | |||
Goodwill [Line Items] | |||
Goodwill acquired during period | $ 846,667,000 |
Loan Servicing Rights - Activity for Capitalized LSRs (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Activity for Capitalized LSRs | |||
Balance at beginning of period | $ 40,211 | ||
Amortization | (3,039) | $ (4,339) | |
Balance at end of period | $ 37,322 | ||
Loan servicing rights | |||
Activity for Capitalized LSRs | |||
Balance at beginning of period | $ 10,478 | 11,122 | |
Additions | 586 | 917 | |
Amortization | (975) | (1,950) | |
Change in valuation allowance | (412) | (412) | |
Balance at end of period | $ 9,677 | $ 9,677 |
Loan Servicing Rights - Assumptions Used in Determining Fair Value (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Dec. 31, 2016 |
|
Loan servicing rights | |||||
Loan servicing fee income | $ 4,500,000 | $ 1,300,000 | $ 9,100,000 | $ 2,600,000 | |
Mortgage | |||||
Loan servicing rights | |||||
Cost to service/per year | 65 | ||||
Ancillary income/per year | $ 31 | $ 28 | |||
WA float range | 1.20% | ||||
Mortgage | Weighted Average | |||||
Loan servicing rights | |||||
Discount rate | 10.10% | 10.10% | |||
WA float range | 1.00% | ||||
Mortgage | Minimum | |||||
Loan servicing rights | |||||
Prepayment speed | 0.00% | 0.00% | |||
Cost to service/per year | $ 65 | ||||
Mortgage | Maximum | |||||
Loan servicing rights | |||||
Prepayment speed | 35.70% | 99.80% | |||
Cost to service/per year | $ 90 |
Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Carrying amount, accumulated amortization and amortization expense of core deposit intangible assets | ||
Total intangible assets | $ 37,322 | $ 40,211 |
Core deposit intangible assets | ||
Carrying amount, accumulated amortization and amortization expense of core deposit intangible assets | ||
Gross original amount | 59,143 | 59,143 |
Accumulated amortization | 21,908 | 18,932 |
Total intangible assets | 37,235 | 40,211 |
Non-compete intangible assets | ||
Carrying amount, accumulated amortization and amortization expense of core deposit intangible assets | ||
Total intangible assets | $ 87 | $ 0 |
Other Intangible Assets - Textual (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ (3,039) | $ (4,339) | ||
Core deposit intangible assets | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ (1,500) | $ (1,100) | (3,000) | $ (2,200) |
Estimated Future Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
Remainder of 2017 | 3,000 | 3,000 | ||
2018 | 5,700 | 5,700 | ||
2019 | 5,400 | 5,400 | ||
2020 | 4,900 | 4,900 | ||
2021 | 4,500 | 4,500 | ||
2022 and thereafter | $ 13,800 | $ 13,800 |
Derivative Instruments and Balance Sheet Offsetting - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2017 |
|
Derivatives designated as hedging instruments: | Interest rate swaps | ||
Derivative instruments | ||
Amount of gain (loss) recognized in other noninterest income (Ineffective portion) | $ 0 | $ 0 |
Derivative Instruments and Balance Sheet Offsetting - Notional Amount and Fair Value (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Derivative instruments | ||
Notional Amount | $ 1,783,085 | $ 853,594 |
Gross Derivative Assets | 13,536 | 8,215 |
Gross Derivative Liabilities | 11,496 | 6,359 |
Credit valuation adjustments for counterparty credit risk | 538 | 99 |
Derivatives designated as hedging instruments: | ||
Derivative instruments | ||
Notional Amount | 400,000 | 0 |
Gross Derivative Assets | 224 | 0 |
Gross Derivative Liabilities | 282 | 0 |
Derivatives designated as hedging instruments: | Interest rate swaps | ||
Derivative instruments | ||
Notional Amount | 400,000 | 0 |
Gross Derivative Assets | 224 | 0 |
Gross Derivative Liabilities | 282 | 0 |
Derivatives not designated as hedging | Total customer-initiated and mortgage banking derivatives | ||
Derivative instruments | ||
Notional Amount | 1,383,085 | 853,594 |
Gross Derivative Assets | 13,312 | 8,215 |
Gross Derivative Liabilities | 11,214 | 6,359 |
Derivatives not designated as hedging | Customer-initiated derivatives | ||
Derivative instruments | ||
Notional Amount | 1,055,917 | 600,598 |
Gross Derivative Assets | 8,636 | 4,406 |
Gross Derivative Liabilities | 9,152 | 4,141 |
Derivatives not designated as hedging | Forward contracts related to mortgage loans to be delivered for sale | ||
Derivative instruments | ||
Notional Amount | 168,533 | 140,155 |
Gross Derivative Assets | 617 | 635 |
Gross Derivative Liabilities | 0 | 0 |
Derivatives not designated as hedging | Interest rate lock commitments | ||
Derivative instruments | ||
Notional Amount | 120,095 | 76,034 |
Gross Derivative Assets | 1,997 | 956 |
Gross Derivative Liabilities | 0 | 0 |
Derivatives not designated as hedging | Power Equity CD | ||
Derivative instruments | ||
Notional Amount | 38,540 | 36,807 |
Gross Derivative Assets | 2,062 | 2,218 |
Gross Derivative Liabilities | $ 2,062 | $ 2,218 |
Derivative Instruments and Balance Sheet Offsetting - Net Gains (Losses) Related to Changes in Fair Value (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Derivative instruments | ||||
Total gain (loss) recognized in income | $ 227 | $ (84) | $ 242 | $ (156) |
Forward contracts related to mortgage loans to be delivered for sale | Net gain on sale of loans and other mortgage banking revenue | ||||
Derivative instruments | ||||
Total gain (loss) recognized in income | 959 | (409) | (18) | (642) |
Interest rate lock commitments | Net gain on sale of loans and other mortgage banking revenue | ||||
Derivative instruments | ||||
Total gain (loss) recognized in income | (181) | 325 | 1,041 | 486 |
Customer-initiated derivatives | Other noninterest income | ||||
Derivative instruments | ||||
Total gain (loss) recognized in income | $ (551) | $ 0 | $ (781) | $ 0 |
Derivative Instruments and Balance Sheet Offsetting - Net Gains (Losses) Recorded in Other Comprehensive Income and the Income Statement (Details) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2017
USD ($)
|
|
Derivative instruments | ||
Unrealized losses on interest rate swaps expected to be reclassified during next twelve months | $ 1,200 | $ 1,200 |
Interest rate swaps | Derivatives designated as hedging instruments: | ||
Derivative instruments | ||
Amount of gain (loss) recognized in other comprehensive income (Effective portion) | (57) | (57) |
Amount of gain (loss) reclassified from other comprehensive income to interest income or expense (Effective portion) | (409) | (409) |
Amount of gain (loss) recognized in other noninterest income (Ineffective portion) | $ 0 | $ 0 |
Derivative Instruments and Balance Sheet Offsetting - Balance Sheet Offsetting (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Offsetting derivative assets | ||
Gross amounts recognized | $ 13,536 | $ 8,215 |
Offsetting derivative liabilities | ||
Gross amounts recognized | 11,496 | 6,359 |
Interest rate swaps and customer-initiated derivatives | ||
Offsetting derivative assets | ||
Gross amounts recognized | 8,838 | 4,405 |
Gross amounts offset in the statements of financial condition | 0 | 0 |
Net amounts presented in the statements of financial position | 8,838 | 4,405 |
Gross amounts not offset in the statements of financial position | ||
Financial instruments | 0 | 0 |
Collateral (received)/posted | 0 | 0 |
Net Amount | 8,838 | 4,405 |
Offsetting derivative liabilities | ||
Gross amounts recognized | 9,434 | 4,141 |
Gross amounts offset in the statements of financial condition | 0 | 0 |
Net amounts presented in the statements of financial position | 9,434 | 4,141 |
Gross amounts not offset in the statements of financial position | ||
Financial instruments | 0 | 0 |
Collateral (received)/posted | 9,037 | 2,550 |
Net Amount | $ 397 | $ 1,591 |
Investments in Qualified Affordable Housing Projects, Federal Historic Projects and New Market Tax Credits (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Dec. 31, 2016 |
|
Equity Method Investments and Joint Ventures [Abstract] | |||||
Expense related to qualified affordable housing projects | $ 800,000 | $ 600,000 | $ 1,500,000 | $ 1,200,000 | |
Remaining investment in qualified affordable housing projects | 36,200,000 | 36,200,000 | $ 29,500,000 | ||
Equity method investments | 20,200,000 | 20,200,000 | 10,900,000 | ||
Remaining unfunded equity contributions | 31,600,000 | 31,600,000 | 16,000,000 | ||
Impairment on tax credit projects | $ 0 | $ 0 | $ 0 |
Commitments, Contingencies and Guarantees - Commitments (Details) - USD ($) |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Loss Contingencies [Line Items] | ||
Potential losses from standby letters of credit | $ 0 | $ 0 |
Undisbursed loan commitments | 606,700,000 | 578,200,000 |
Probable credit losses | 1,100,000 | 1,300,000 |
Financial and Performance Standby Letters of Credit | ||
Loss Contingencies [Line Items] | ||
Letters of credit outstanding | 139,000,000 | 118,900,000 |
Commitments to Extend Credit | ||
Loss Contingencies [Line Items] | ||
Loan commitments under financial guarantee | $ 2,930,000,000 | $ 2,700,000,000 |
Commitments, Contingencies and Guarantees - Contingencies and Guarantees (Details) - Performance Guarantee - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Loss Contingencies [Line Items] | ||
Recorded liability | $ 14.8 | $ 16.9 |
Maximum potential amount of undiscounted future payments | 14.2 | 16.1 |
Recourse liability | $ 0.2 | $ 0.2 |
Commitments, Contingencies and Guarantees - Warranties (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Dec. 31, 2016 |
|
Changes in the activity related to liability recorded in connection with representations and warranties | ||||||
Reserve balance at beginning of period | $ 5,689 | $ 3,825 | $ 6,459 | $ 4,048 | ||
Reserve reduction | (220) | 0 | (990) | (150) | ||
Charge-offs | 0 | 0 | 0 | (73) | ||
Ending reserve balance | 5,469 | 3,825 | 5,469 | 3,825 | ||
Reserve balance | ||||||
Liability for specific claims | $ 9 | $ 730 | ||||
General allowance | 5,460 | 5,729 | ||||
Total reserve balance | $ 5,689 | $ 3,825 | $ 6,459 | $ 4,048 | $ 5,469 | $ 6,459 |
Borrowings - Other Borrowings (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Dec. 31, 2016 |
|
Long-term borrowings: | ||
Amount | $ 435,852 | $ 597,847 |
Weighted Average Rate | 1.61% | 1.63% |
Total borrowings | $ 2,795,894 | $ 1,765,894 |
Total short-term and long-term borrowings, Weighted Average Rate | 1.03% | 0.89% |
FHLB advances: 0.96% - 1.40% fixed-rate notes | Minimum | ||
Long-term borrowings: | ||
Stated interest rate | 0.96% | |
FHLB advances: 0.96% - 1.40% fixed-rate notes | Maximum | ||
Long-term borrowings: | ||
Stated interest rate | 1.40% | |
FHLB Advances | FHLB advances: 0.92% - 7.44% fixed-rate notes due 2017 to 2020 | ||
Long-term borrowings: | ||
Amount | $ 351,324 | $ 438,538 |
Weighted Average Rate | 1.30% | 1.24% |
Advances payable from Federal Home Loan Banks | $ 350,900 | $ 437,800 |
Purchase accounting premiums | $ 500 | 700 |
FHLB Advances | FHLB advances: 0.92% - 7.44% fixed-rate notes due 2017 to 2020 | Minimum | ||
Long-term borrowings: | ||
Stated interest rate | 0.92% | |
FHLB Advances | FHLB advances: 0.92% - 7.44% fixed-rate notes due 2017 to 2020 | Maximum | ||
Long-term borrowings: | ||
Stated interest rate | 7.44% | |
Securities sold under agreements to repurchase | ||
Long-term borrowings: | ||
Amount | $ 9,000 | |
Securities sold under agreements to repurchase | Securities sold under agreements to repurchase: 1.48% - 2.75% fixed-rate notes due in 2017 | ||
Long-term borrowings: | ||
Amount | $ 9,048 | $ 19,144 |
Weighted Average Rate | 2.11% | 3.17% |
Purchase accounting premiums | $ 55 | $ 100 |
Advances payable | $ 9,000 | 19,000 |
Securities sold under agreements to repurchase | Securities sold under agreements to repurchase: 1.48% - 2.75% fixed-rate notes due in 2017 | Minimum | ||
Long-term borrowings: | ||
Stated interest rate | 1.48% | |
Securities sold under agreements to repurchase | Securities sold under agreements to repurchase: 1.48% - 2.75% fixed-rate notes due in 2017 | Maximum | ||
Long-term borrowings: | ||
Stated interest rate | 2.75% | |
Line of credit | ||
Long-term borrowings: | ||
Amount | $ 59,854 | $ 124,625 |
Weighted Average Rate | 2.80% | 2.52% |
Spread on variable rate | 1.75% | |
Subordinated debt obligations | Subordinated debt obligations: floating-rate based on three-month LIBOR plus 1.45% - 2.85% due 2034 to 2035 | ||
Long-term borrowings: | ||
Amount | $ 11,354 | $ 11,285 |
Weighted Average Rate | 3.42% | 3.14% |
Advances payable | $ 15,000 | $ 15,000 |
Purchase accounting discounts | $ 3,600 | 3,700 |
Subordinated debt obligations | Subordinated debt obligations: floating-rate based on three-month LIBOR plus 1.45% - 2.85% due 2034 to 2035 | Minimum | ||
Long-term borrowings: | ||
Spread on variable rate | 1.45% | |
Subordinated debt obligations | Subordinated debt obligations: floating-rate based on three-month LIBOR plus 1.45% - 2.85% due 2034 to 2035 | Maximum | ||
Long-term borrowings: | ||
Spread on variable rate | 2.85% | |
Subordinated debt obligations | Subordinated debt obligations: floating-rate based on three-month LIBOR plus 3.25% due in 2032 | ||
Long-term borrowings: | ||
Amount | $ 4,272 | $ 4,255 |
Weighted Average Rate | 4.40% | 4.25% |
Spread on variable rate | 3.25% | |
Advances payable | $ 5,000 | $ 5,000 |
Purchase accounting discounts | 700 | 700 |
Securities sold under agreements to repurchase | ||
Short-term borrowings: | ||
Amount | $ 310,042 | $ 343,047 |
Weighted Average Rate | 0.26% | 0.16% |
FHLB Advances | FHLB advances: 0.96% - 1.40% fixed-rate notes | ||
Short-term borrowings: | ||
Amount | $ 2,050,000 | $ 825,000 |
Weighted Average Rate | 1.02% | 0.65% |
Borrowings - Textual (Details) $ in Millions |
Jun. 30, 2017
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
FHLB advances | $ 7,280.0 |
Additional borrowing available through FHLB | $ 50.0 |
Borrowings - Securities Sold Under Agreements to Repurchase (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Total | $ 435,852 | $ 597,847 |
Amounts related to securities sold under agreements to repurchase not included in offsetting disclosure in Note 10 | 9,000 | |
Securities sold under agreements to repurchase | ||
Debt Instrument [Line Items] | ||
Overnight and continuous | 0 | |
Up to 30 Days | 0 | |
30-90 Days | 4,000 | |
Greater than 90 Days | 5,000 | |
Total | $ 9,000 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Amount | ||||
Tax at statutory rate | $ 26,268 | $ 12,707 | $ 47,219 | $ 24,384 |
Changes resulting from: | ||||
Tax-exempt interest income | (1,832) | (1,139) | (3,589) | (2,278) |
State taxes, net of federal benefit | 258 | 0 | 470 | 0 |
Change in valuation allowance | 38 | 0 | 49 | 0 |
Bank-owned life insurance adjustments | (335) | (287) | (679) | (355) |
Income tax credits, net | (1,102) | (834) | (1,797) | (1,631) |
Tax benefits in excess of compensation costs on share-based payments | (248) | (68) | (6,382) | (411) |
Other, net | (11) | 153 | 2 | 580 |
Income tax expense | $ 23,036 | $ 10,532 | $ 35,293 | $ 20,289 |
Rate | ||||
Tax at statutory rate | 35.00% | 35.00% | 35.00% | 35.00% |
Changes resulting from: | ||||
Tax-exempt interest income | (2.40%) | (3.10%) | (2.70%) | (3.30%) |
State taxes, net of federal benefit | 0.30% | 0.00% | 0.40% | 0.00% |
Change in valuation allowance | 0.00% | 0.00% | 0.00% | 0.00% |
Bank-owned life insurance adjustments | (0.40%) | (0.80%) | (0.50%) | (0.50%) |
Income tax credits, net | (1.50%) | (2.30%) | (1.30%) | (2.30%) |
Tax benefits in excess of compensation costs on share-based payments | (0.30%) | (0.20%) | (4.70%) | (0.60%) |
Other, net | 0.00% | 0.40% | 0.00% | 0.80% |
Effective federal income tax rate | 30.70% | 29.00% | 26.20% | 29.10% |
Share-Based Compensation - Textual (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2017
USD ($)
$ / shares
shares
|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2017
USD ($)
$ / shares
shares
|
Jun. 30, 2016
USD ($)
shares
|
Apr. 26, 2017
shares
|
|
Share-based Compensation Plans (Textual) | |||||
Share-based compensation expense | $ 3,200 | $ 1,000 | $ 7,000 | $ 1,800 | |
Excess tax benefit from share-based compensation | $ 248 | 68 | 6,400 | 411 | |
Cash received from option exercises | $ 1,000 | 700 | |||
Certain officers | |||||
Share-based Compensation Plans (Textual) | |||||
Corporation granted shares of common stock (in shares) | shares | 13,500 | ||||
Stock Incentive Plan of 2015 | |||||
Share-based Compensation Plans (Textual) | |||||
Common stock available for future grants under share-based compensation plans (in shares) | shares | 1,748,616 | 1,748,616 | |||
Stock Incentive Plan of 2017 | |||||
Share-based Compensation Plans (Textual) | |||||
Number of shares authorized under stock incentive plan (in shares) | shares | 1,750,000 | ||||
Stock Incentive Plans After 2012 | |||||
Share-based Compensation Plans (Textual) | |||||
Vesting period | 5 years | ||||
Stock Incentive Plans Prior To 2013 | |||||
Share-based Compensation Plans (Textual) | |||||
Vesting period | 3 years | ||||
Stock options | |||||
Share-based Compensation Plans (Textual) | |||||
Stock options granted (in shares) | shares | 126,691 | ||||
Corporation granted options to purchase common stock (in shares) | shares | 126,691 | ||||
Stock option award vesting period | 10 years | ||||
Outstanding in-the-money stock options, intrinsic value | $ 11,200 | $ 11,200 | |||
Stock issued from exercises (in shares) | shares | 511,144 | 47,758 | |||
Restricted stock units | |||||
Share-based Compensation Plans (Textual) | |||||
Corporation granted options to purchase restricted stock performance units (in shares) | shares | 162,771 | ||||
Stock issued from exercises (in shares) | shares | 40,141 | ||||
Unrecognized compensation expense | $ 11,500 | $ 11,500 | |||
Unrecognized compensation expense, period for recognition | 3 years 2 months | ||||
Restricted stock units | Minimum | |||||
Share-based Compensation Plans (Textual) | |||||
Restricted stock performance units eligible to vest as a multiple of number of units granted | 0.5 | ||||
Restricted stock units | Maximum | |||||
Share-based Compensation Plans (Textual) | |||||
Restricted stock performance units eligible to vest as a multiple of number of units granted | 1.5 | ||||
Equity Option | |||||
Share-based Compensation Plans (Textual) | |||||
Weighted-average remaining contractual terms for outstanding stock options | 6 years 10 months | ||||
Weighted-average remaining contractual terms for exercisable stock options | 5 years 8 months | ||||
Outstanding in-the-money stock options, intrinsic value | 24,600 | $ 24,600 | |||
Exercisable in-the-money stock options, intrinsic value | $ 20,700 | $ 20,700 | |||
Closing price of common stock (dollars per share) | $ / shares | $ 48.41 | $ 48.41 | |||
Unrecognized compensation expense | $ 3,000 | $ 3,000 | |||
Unrecognized compensation expense, period for recognition | 4 years 1 month | ||||
Restricted stock awards | |||||
Share-based Compensation Plans (Textual) | |||||
Unrecognized compensation expense | $ 2,700 | $ 2,700 | |||
Unrecognized compensation expense, period for recognition | 1 year 15 days |
Share-Based Compensation - Stock Option Activity (Details) |
6 Months Ended |
---|---|
Jun. 30, 2017
$ / shares
shares
| |
Non-Vested Stock Options Outstanding, Weighted- Average Grant Date Fair Value Per Share | |
Granted (dollars per share) | $ 10.05 |
Stock Options | |
Non-Vested Stock Options Outstanding, Number of Options | |
Beginning balance (in shares) | shares | 407,939 |
Granted (in shares) | shares | 126,691 |
Vested (in shares) | shares | (81,584) |
Forfeited/expired (in shares) | shares | (10,337) |
Ending balance (in shares) | shares | 442,709 |
Non-Vested Stock Options Outstanding, Weighted- Average Grant Date Fair Value Per Share | |
Beginning balance (dollars per share) | $ 6.15 |
Granted (dollars per share) | 10.05 |
Vested (dollars per share) | 6.15 |
Forfeited/expired (dollars per share) | 7.42 |
Ending balance (dollars per share) | $ 7.24 |
Stock Options Outstanding, Number of Options | |
Beginning balance (in shares) | shares | 2,453,395 |
Granted (in shares) | shares | 126,691 |
Exercised (in shares) | shares | (1,256,355) |
Forfeited/expired (in shares) | shares | (10,337) |
Ending balance (in shares) | shares | 1,313,394 |
Weighted- Average Exercise Price Per Share | |
Beginning balance, Weighted Average Exercise Price (dollars per share) | $ 21.41 |
Granted, Weighted Average Exercise Price (dollars per share) | 53.72 |
Exercised, Weighted Average Exercise Price (dollars per share) | 16.19 |
Forfeited/expired, Weighted Average Exercise Price (dollars per share) | 39.59 |
Ending balance, Weighted Average Exercise Price (dollars per share) | $ 29.39 |
Exercisable/vested, Number of Options (in shares) | shares | 870,685 |
Exercisable/vested, Weighted Average Exercise Price (dollars per share) | $ 24.68 |
Stock Options | Non Vested | |
Weighted- Average Exercise Price Per Share | |
Beginning balance, Weighted Average Exercise Price (dollars per share) | 32.81 |
Granted, Weighted Average Exercise Price (dollars per share) | 53.72 |
Vested, Weighted Average Exercise Price (dollars per share) | 32.81 |
Forfeited/expired, Weighted Average Exercise Price (dollars per share) | 39.59 |
Ending balance, Weighted Average Exercise Price (dollars per share) | $ 38.64 |
Share-Based Compensation - Black-Scholes Pricing Model Assumptions (Details) |
6 Months Ended |
---|---|
Jun. 30, 2017
$ / shares
| |
Assumptions of Black-Scholes option pricing model | |
Expected dividend yield | 3.32% |
Risk-free interest rate | 2.06% |
Expected stock price volatility | 26.90% |
Expected life of options – in years | 6 years |
Weighted average fair value of options granted | $ 10.05 |
Share-Based Compensation - Restricted Stock Unit and Award Activity (Details) |
6 Months Ended |
---|---|
Jun. 30, 2017
$ / shares
shares
| |
Restricted Stock Units | |
Number of Units/Awards | |
Beginning balance (in shares) | shares | 298,357 |
Granted (in shares) | shares | 162,771 |
Converted into shares of common stock (in shares) | shares | (40,141) |
Forfeited/expired (in shares) | shares | (3,529) |
Ending balance (in shares) | shares | 417,458 |
Weighted-average grant-date fair value | |
Beginning balance (dollars per share) | $ / shares | $ 32.81 |
Granted (dollars per share) | $ / shares | 52.10 |
Converted into shares of common stock (dollars per share) | $ / shares | 26.86 |
Forfeited (dollars per share) | $ / shares | 47.27 |
Ending balance (dollars per share) | $ / shares | $ 40.79 |
Restricted Stock Awards | |
Number of Units/Awards | |
Beginning balance (in shares) | shares | 365,891 |
Vested (in shares) | shares | (61,049) |
Forfeited/expired (in shares) | shares | (3,657) |
Ending balance (in shares) | shares | 301,185 |
Weighted-average grant-date fair value | |
Beginning balance (dollars per share) | $ / shares | $ 46.23 |
Vested (dollars per share) | $ / shares | 46.23 |
Forfeited (dollars per share) | $ / shares | 46.23 |
Ending balance (dollars per share) | $ / shares | $ 46.23 |
Pension and Other Postretirement Benefit Plans - Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Defined Benefit Pension Plans | ||||
Components of net periodic benefit cost (income) for the Corporation's qualified and nonqualified pension plans and nonqualified postretirement benefits plan | ||||
Service cost | $ 234 | $ 277 | $ 467 | $ 554 |
Interest cost | 1,301 | 1,358 | 2,603 | 2,716 |
Expected return on plan assets | (2,217) | (2,140) | (4,434) | (4,281) |
Amortization of unrecognized net (gain) loss | 579 | 572 | 1,157 | 1,144 |
Net periodic benefit cost (income) | (103) | 67 | (207) | 133 |
Postretirement Benefit Plan | ||||
Components of net periodic benefit cost (income) for the Corporation's qualified and nonqualified pension plans and nonqualified postretirement benefits plan | ||||
Service cost | 1 | 2 | 2 | 4 |
Interest cost | 23 | 33 | 47 | 66 |
Amortization of prior service cost | 0 | 29 | 0 | 58 |
Amortization of unrecognized net (gain) loss | (40) | (25) | (81) | (49) |
Net periodic benefit cost (income) | $ (16) | $ 39 | $ (32) | $ 79 |
Pension and Other Postretirement Benefit Plans - Textual (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Percentage of eligible pay contribution to certain employees | 4.00% | |||
Employer total contribution amount | $ 2,400,000 | $ 1,400,000 | $ 5,000,000 | |
Corporation match as a percentage of the participants' elective deferrals | 50.00% | |||
Maximum percent of participants' base compensation matched | 4.00% | |||
Employer contributions to Pentegra DB Plan | 0 | 0 | $ 0 | |
Defined Benefit Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Contribution to defined benefit pension plan | $ 0 | $ 0 | $ 0 | $ 0 |
Defined Benefit Pension Plans | Qualified Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Discount rate for pension plan expense | 4.22% | |||
Defined Benefit Pension Plans | Nonqualified Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Discount rate for pension plan expense | 3.63% | |||
Postretirement Benefit Plan | Nonqualified Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Discount rate for pension plan expense | 3.79% | |||
Corporation | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer total contribution amount | $ 2,700,000 |
Regulatory Capital (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jul. 19, 2017 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Dec. 31, 2016 |
|
Leverage Ratio | ||||||
Cash dividends declared per common share (dollars per share) | $ 0.27 | $ 0.26 | $ 0.54 | $ 0.52 | ||
Subsequent Event | ||||||
Leverage Ratio | ||||||
Cash dividends declared per common share (dollars per share) | $ 0.28 | |||||
Chemical Bank | ||||||
Regulatory Capital | ||||||
Risk weighted assets | $ 14,300,000 | $ 14,300,000 | $ 13,360,000 | |||
Total Capital to Risk-Weighted Assets | ||||||
Actual Amount | $ 1,608,525 | $ 1,608,525 | $ 1,608,980 | |||
Actual Ratio | 11.20% | 11.20% | 12.00% | |||
For Capital Adequacy Purposes Amount | $ 1,144,292 | $ 1,144,292 | $ 1,068,560 | |||
For Capital Adequacy Purposes Ratio | 8.00% | 8.00% | 8.00% | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Amount | $ 1,323,088 | $ 1,323,088 | $ 1,152,041 | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Ratio | 9.30% | 9.30% | 8.60% | |||
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 1,430,365 | $ 1,430,365 | $ 1,335,700 | |||
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio | 10.00% | 10.00% | 10.00% | |||
Tier 1 Capital to Risk-Weighted Assets | ||||||
Actual Amount | $ 1,517,972 | $ 1,517,972 | $ 1,522,711 | |||
Actual Ratio | 10.60% | 10.60% | 11.40% | |||
For Capital Adequacy Purposes Amount | $ 858,219 | $ 858,219 | $ 801,420 | |||
For Capital Adequacy Purposes Ratio | 6.00% | 6.00% | 6.00% | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Amount | $ 1,037,015 | $ 1,037,015 | $ 884,901 | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Ratio | 7.30% | 7.30% | 6.60% | |||
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 1,144,292 | $ 1,144,292 | $ 1,068,560 | |||
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio | 8.00% | 8.00% | 8.00% | |||
Common Equity Tier 1 Capital to Risk-Weighted Assets | ||||||
Actual Amount | $ 1,517,972 | $ 1,517,972 | $ 1,522,711 | |||
Actual Ratio | 10.60% | 10.60% | 11.40% | |||
For Capital Adequacy Purposes Amount | $ 643,664 | $ 643,664 | $ 601,065 | |||
For Capital Adequacy Purposes Ratio | 4.50% | 4.50% | 4.50% | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Amount | $ 822,460 | $ 822,460 | $ 684,546 | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Ratio | 5.80% | 5.80% | 5.10% | |||
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 929,737 | $ 929,737 | $ 868,205 | |||
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio | 6.50% | 6.50% | 6.50% | |||
Leverage Ratio | ||||||
Actual Amount | $ 1,517,972 | $ 1,517,972 | $ 1,522,711 | |||
Actual Ratio | 8.90% | 8.90% | 9.50% | |||
For Capital Adequacy Purposes Amount | $ 682,224 | $ 682,224 | $ 641,457 | |||
For Capital Adequacy Purposes Ratio | 4.00% | 4.00% | 4.00% | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Amount | $ 682,224 | $ 682,224 | $ 641,457 | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Ratio | 4.00% | 4.00% | 4.00% | |||
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 852,780 | $ 852,780 | $ 801,822 | |||
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio | 5.00% | 5.00% | 5.00% | |||
Corporation | ||||||
Regulatory Capital | ||||||
Risk weighted assets | $ 14,350,000 | $ 14,350,000 | $ 13,420,000 | |||
Total Capital to Risk-Weighted Assets | ||||||
Actual Amount | $ 1,598,217 | $ 1,598,217 | $ 1,543,018 | |||
Actual Ratio | 11.10% | 11.10% | 11.50% | |||
For Capital Adequacy Purposes Amount | $ 1,147,806 | $ 1,147,806 | $ 1,073,431 | |||
For Capital Adequacy Purposes Ratio | 8.00% | 8.00% | 8.00% | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Amount | $ 1,327,151 | $ 1,327,151 | $ 1,157,293 | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Ratio | 9.30% | 9.30% | 8.60% | |||
Tier 1 Capital to Risk-Weighted Assets | ||||||
Actual Amount | $ 1,492,038 | $ 1,492,038 | $ 1,441,209 | |||
Actual Ratio | 10.40% | 10.40% | 10.70% | |||
For Capital Adequacy Purposes Amount | $ 860,855 | $ 860,855 | $ 805,073 | |||
For Capital Adequacy Purposes Ratio | 6.00% | 6.00% | 6.00% | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Amount | $ 1,040,199 | $ 1,040,199 | $ 888,935 | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Ratio | 7.30% | 7.30% | 6.60% | |||
Common Equity Tier 1 Capital to Risk-Weighted Assets | ||||||
Actual Amount | $ 1,492,038 | $ 1,492,038 | $ 1,441,209 | |||
Actual Ratio | 10.40% | 10.40% | 10.70% | |||
For Capital Adequacy Purposes Amount | $ 645,641 | $ 645,641 | $ 603,805 | |||
For Capital Adequacy Purposes Ratio | 4.50% | 4.50% | 4.50% | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Amount | $ 824,986 | $ 824,986 | $ 687,667 | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Ratio | 5.80% | 5.80% | 5.10% | |||
Leverage Ratio | ||||||
Actual Amount | $ 1,492,038 | $ 1,492,038 | $ 1,441,209 | |||
Actual Ratio | 8.70% | 8.70% | 9.00% | |||
For Capital Adequacy Purposes Amount | $ 683,677 | $ 683,677 | $ 643,603 | |||
For Capital Adequacy Purposes Ratio | 4.00% | 4.00% | 4.00% | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Amount | $ 683,677 | $ 683,677 | $ 643,603 | |||
For Capital Adequacy Purposes Plus Capital Conservation Buffer Ratio | 4.00% | 4.00% | 4.00% |
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Earnings Per Share [Abstract] | ||||
Net income | $ 52,014 | $ 25,775 | $ 99,618 | $ 49,380 |
Net income allocated to participating securities | 219 | 0 | 446 | 0 |
Net income allocated to common shareholders | $ 51,795 | $ 25,775 | $ 99,172 | $ 49,380 |
Weighted average common shares - issued (in shares) | 71,122,000 | 38,258,000 | 71,046,000 | 38,228,000 |
Average unvested restricted share awards (in shares) | (303,000) | 0 | (321,000) | 0 |
Weighted average common shares outstanding - basic (in shares) | 70,819,000 | 38,258,000 | 70,725,000 | 38,228,000 |
Effect of dilutive securities | ||||
Weighted average common stock equivalents (in shares) | 624,000 | 342,000 | 704,000 | 332,000 |
Weighted average common shares outstanding - diluted (in shares) | 71,443,000 | 38,600,000 | 71,429,000 | 38,560,000 |
EPS available to common shareholders | ||||
Basic earnings per common share (dollars per share) | $ 0.73 | $ 0.67 | $ 1.41 | $ 1.29 |
Diluted earnings per common share (dollars per share) | 0.73 | 0.67 | 1.39 | 1.28 |
Average stock valuation (dollars per share) | $ 47.78 | $ 37.80 | $ 49.78 | $ 35.55 |
Stock Option | ||||
Schedule Of Earnings Per Share By Common Class [Line Items] | ||||
Average number of exercisable employee stock option awards that were not included in the computation of diluted earnings per common share (in shares) | 125,782 | 0 | 90,537 | 0 |
Accumulated Other Comprehensive Loss - Changes in AOCI (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Components of accumulated other comprehensive income (loss), net of related tax benefit/expense | ||||
Beginning balance | $ 2,581,526 | $ 1,015,974 | ||
Other comprehensive income before reclassifications | $ 3,127 | $ 1,379 | 4,908 | 4,108 |
Amounts reclassified from accumulated other comprehensive income | 709 | (387) | 999 | (774) |
Other comprehensive income, net of tax | 3,836 | 992 | 5,907 | 3,334 |
Ending balance | 2,639,442 | 1,050,299 | 2,639,442 | 1,050,299 |
Unrealized gains (losses) on securities available-for-sale, net of tax | ||||
Components of accumulated other comprehensive income (loss), net of related tax benefit/expense | ||||
Beginning balance | (12,420) | 829 | (14,142) | (1,888) |
Other comprehensive income before reclassifications | 3,593 | 1,379 | 5,374 | 4,108 |
Amounts reclassified from accumulated other comprehensive income | (50) | (12) | (109) | (24) |
Other comprehensive income, net of tax | 3,543 | 1,367 | 5,265 | 4,084 |
Ending balance | (8,877) | 2,196 | (8,877) | 2,196 |
Defined Benefit Pension Plans | ||||
Components of accumulated other comprehensive income (loss), net of related tax benefit/expense | ||||
Beginning balance | (25,545) | (27,519) | (25,894) | (27,144) |
Other comprehensive income before reclassifications | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income | 350 | (375) | 699 | (750) |
Other comprehensive income, net of tax | 350 | (375) | 699 | (750) |
Ending balance | (25,195) | (27,894) | (25,195) | (27,894) |
Unrealized gains (losses) on cash flow hedges, net of tax | ||||
Components of accumulated other comprehensive income (loss), net of related tax benefit/expense | ||||
Beginning balance | 0 | 0 | 0 | 0 |
Other comprehensive income before reclassifications | (466) | 0 | (466) | 0 |
Amounts reclassified from accumulated other comprehensive income | 409 | 0 | 409 | 0 |
Other comprehensive income, net of tax | (57) | 0 | (57) | 0 |
Ending balance | (57) | 0 | (57) | 0 |
Total | ||||
Components of accumulated other comprehensive income (loss), net of related tax benefit/expense | ||||
Beginning balance | (37,965) | (26,690) | (40,036) | (29,032) |
Ending balance | $ (34,129) | $ (25,698) | $ (34,129) | $ (25,698) |
Accumulated Other Comprehensive Loss - Reclassifications (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Gain on sale of investment securities | $ 77 | $ 18 | $ 167 | $ 37 |
Income tax (expense)/benefit | (23,036) | (10,532) | (35,293) | (20,289) |
Net income | 52,014 | 25,775 | 99,618 | 49,380 |
Interest on short-term borrowings (interest expense) | 4,659 | 226 | 6,317 | 326 |
Gains and losses on available-for-sale securities | Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Gain on sale of investment securities | 77 | 18 | 167 | 37 |
Income tax (expense)/benefit | (27) | (6) | (58) | (13) |
Net income | 50 | 12 | 109 | 24 |
Amortization of defined benefit pension plan items | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Salaries, wages and employee benefits (operating expenses) | (539) | 577 | (1,076) | 1,154 |
Income tax (expense)/benefit | 189 | (202) | 377 | (404) |
Net Income (loss) | (350) | 375 | (699) | 750 |
Gains and losses on cash flow hedges | Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net income | (409) | 0 | (409) | 0 |
Interest on short-term borrowings (interest expense) | $ 409 | $ 0 | $ 409 | $ 0 |
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