þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the quarterly period ended March 31, 2016 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the transition period from to |
Wisconsin | 39-1098068 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
433 Main Street Green Bay, Wisconsin | 54301 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer þ | Accelerated filer ¨ |
Non-accelerated filer ¨ | Smaller reporting company ¨ |
(Do not check if a smaller reporting company) |
Page | ||
PART I - FINANCIAL INFORMATION | |
ITEM 1. | Financial Statements: |
March 31, 2016 | December 31, 2015 | ||||||
(Unaudited) | (Audited) | ||||||
(In Thousands, except share and per share data) | |||||||
ASSETS | |||||||
Cash and due from banks | $ | 287,183 | $ | 374,921 | |||
Interest-bearing deposits in other financial institutions | 68,025 | 79,764 | |||||
Federal funds sold and securities purchased under agreements to resell | 20,200 | 19,000 | |||||
Investment securities held to maturity, at amortized cost | 1,176,821 | 1,168,230 | |||||
Investment securities available for sale, at fair value | 4,905,841 | 4,967,414 | |||||
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost | 181,853 | 147,240 | |||||
Loans held for sale | 128,339 | 124,915 | |||||
Loans | 19,227,240 | 18,714,343 | |||||
Allowance for loan losses | (277,370 | ) | (274,264 | ) | |||
Loans, net | 18,949,870 | 18,440,079 | |||||
Premises and equipment, net | 331,711 | 267,606 | |||||
Goodwill | 971,951 | 968,844 | |||||
Mortgage servicing rights, net | 59,414 | 61,341 | |||||
Other intangible assets | 16,966 | 16,458 | |||||
Trading assets | 53,087 | 32,192 | |||||
Other assets(1) | 1,027,606 | 1,043,831 | |||||
Total assets | $ | 28,178,867 | $ | 27,711,835 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Noninterest-bearing demand deposits | $ | 5,272,685 | $ | 5,562,466 | |||
Interest-bearing deposits | 15,412,775 | 15,445,199 | |||||
Total deposits | 20,685,460 | 21,007,665 | |||||
Federal funds purchased and securities sold under agreements to repurchase | 583,247 | 431,438 | |||||
Other short-term funding | 834,161 | 402,978 | |||||
Long-term funding(1) | 2,861,316 | 2,676,164 | |||||
Trading liabilities | 55,223 | 33,430 | |||||
Accrued expenses and other liabilities | 176,962 | 222,914 | |||||
Total liabilities | 25,196,369 | 24,774,589 | |||||
Stockholders’ equity | |||||||
Preferred equity | 120,347 | 121,379 | |||||
Common equity: | |||||||
Common stock | 1,630 | 1,642 | |||||
Surplus | 1,447,368 | 1,458,522 | |||||
Retained earnings | 1,599,835 | 1,593,239 | |||||
Accumulated other comprehensive income (loss) | 2,167 | (32,616 | ) | ||||
Treasury stock, at cost | (188,849 | ) | (204,920 | ) | |||
Total common equity | 2,862,151 | 2,815,867 | |||||
Total stockholders’ equity | 2,982,498 | 2,937,246 | |||||
Total liabilities and stockholders’ equity | $ | 28,178,867 | $ | 27,711,835 | |||
Preferred shares issued | 124,054 | 125,114 | |||||
Preferred shares authorized (par value $1.00 per share) | 750,000 | 750,000 | |||||
Common shares issued | 163,030,209 | 164,200,068 | |||||
Common shares authorized (par value $0.01 per share) | 250,000,000 | 250,000,000 | |||||
Treasury shares of common stock | 12,036,645 | 12,960,636 |
(1) | During the first quarter of 2016, the Corporation adopted a new accounting standard related to simplifying the presentation of debt issuance costs. Under this new accounting standard, debt issuance costs are still capitalized; however, they are reflected on the balance sheet with the related debt issued rather than within other assets. All prior periods have been restated to reflect this change in presentation. See Note 3 for additional information on this new accounting standard. |
Three months ended March 31, | |||||||
2016 | 2015 | ||||||
(In Thousands, except per share data) | |||||||
INTEREST INCOME | |||||||
Interest and fees on loans | $ | 159,656 | $ | 151,945 | |||
Interest and dividends on investment securities: | |||||||
Taxable | 25,516 | 25,092 | |||||
Tax-exempt | 7,830 | 7,887 | |||||
Other interest | 1,067 | 1,692 | |||||
Total interest income | 194,069 | 186,616 | |||||
INTEREST EXPENSE | |||||||
Interest on deposits | 11,766 | 7,619 | |||||
Interest on Federal funds purchased and securities sold under agreements to repurchase | 296 | 231 | |||||
Interest on other short-term funding | 515 | 81 | |||||
Interest on long-term funding | 9,505 | 10,872 | |||||
Total interest expense | 22,082 | 18,803 | |||||
NET INTEREST INCOME | 171,987 | 167,813 | |||||
Provision for credit losses | 20,000 | 4,500 | |||||
Net interest income after provision for credit losses | 151,987 | 163,313 | |||||
NONINTEREST INCOME | |||||||
Trust service fees | 11,447 | 12,087 | |||||
Service charges on deposit accounts | 16,273 | 15,806 | |||||
Card-based and other nondeposit fees | 11,991 | 12,416 | |||||
Insurance commissions | 21,382 | 19,728 | |||||
Brokerage and annuity commissions | 3,794 | 3,683 | |||||
Mortgage banking, net | 4,204 | 7,408 | |||||
Capital market fees, net | 3,538 | 2,467 | |||||
Bank owned life insurance income | 4,770 | 2,875 | |||||
Asset gains, net(1) | 524 | 833 | |||||
Investment securities gains, net | 3,098 | — | |||||
Other | 2,171 | 2,510 | |||||
Total noninterest income | 83,192 | 79,813 | |||||
NONINTEREST EXPENSE | |||||||
Personnel expense | 101,398 | 100,152 | |||||
Occupancy | 13,802 | 17,683 | |||||
Equipment | 5,446 | 5,772 | |||||
Technology | 14,264 | 15,558 | |||||
Business development and advertising | 8,211 | 5,327 | |||||
Other intangible amortization | 504 | 801 | |||||
Loan expense | 3,221 | 2,996 | |||||
Legal and professional fees | 5,025 | 4,538 | |||||
Foreclosure / OREO expense, net(1) | 1,877 | 1,162 | |||||
FDIC expense | 7,750 | 6,500 | |||||
Other | 12,473 | 13,503 | |||||
Total noninterest expense | 173,971 | 173,992 | |||||
Income before income taxes | 61,208 | 69,134 | |||||
Income tax expense | 18,674 | 22,462 | |||||
Net income | 42,534 | 46,672 | |||||
Preferred stock dividends | 2,198 | 1,228 | |||||
Net income available to common equity | $ | 40,336 | $ | 45,444 | |||
Earnings per common share: | |||||||
Basic | $ | 0.27 | $ | 0.30 | |||
Diluted | $ | 0.27 | $ | 0.30 | |||
Average common shares outstanding: | |||||||
Basic | 148,601 | 150,070 | |||||
Diluted | 149,454 | 151,164 |
(1) | During the first quarter of 2016, the consolidated statements of income were modified from prior periods' presentation to conform with the current period presentation, which reflect OREO gains/losses as a component of Foreclosure / OREO expense, net. In prior periods' presentation, OREO gains / losses were reported as a component of asset gains (losses), net. All prior periods have been restated to reflect this change in presentation. |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
($ in Thousands) | |||||||
Net income | $ | 42,534 | $ | 46,672 | |||
Other comprehensive income, net of tax: | |||||||
Investment securities available for sale: | |||||||
Net unrealized gains | 60,422 | 47,418 | |||||
Amortization of net unrealized gains on available for sale securities transferred to held to maturity securities | (1,572 | ) | — | ||||
Reclassification adjustment for net gains realized in net income | (3,098 | ) | — | ||||
Income tax expense | (21,275 | ) | (18,105 | ) | |||
Other comprehensive income on investment securities available for sale | 34,477 | 29,313 | |||||
Defined benefit pension and postretirement obligations: | |||||||
Amortization of prior service cost | 13 | 13 | |||||
Amortization of actuarial losses | 482 | 532 | |||||
Income tax expense | (189 | ) | (208 | ) | |||
Other comprehensive income on pension and postretirement obligations | 306 | 337 | |||||
Total other comprehensive income | 34,783 | 29,650 | |||||
Comprehensive income | $ | 77,317 | $ | 76,322 |
Preferred Equity | Common Stock | Surplus | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total | |||||||||||||||||||||
(In Thousands, except per share data) | |||||||||||||||||||||||||||
Balance, December 31, 2014 | $ | 59,727 | $ | 1,665 | $ | 1,484,933 | $ | 1,497,818 | $ | (4,850 | ) | $ | (239,042 | ) | $ | 2,800,251 | |||||||||||
Comprehensive income: | |||||||||||||||||||||||||||
Net income | — | — | — | 46,672 | — | — | 46,672 | ||||||||||||||||||||
Other comprehensive income | — | — | — | — | 29,650 | — | 29,650 | ||||||||||||||||||||
Comprehensive income | 76,322 | ||||||||||||||||||||||||||
Common stock issued: | |||||||||||||||||||||||||||
Stock-based compensation plans, net | — | — | 304 | (18,015 | ) | — | 23,947 | 6,236 | |||||||||||||||||||
Acquisition of Ahmann & Martin Co. | — | 26 | 43,504 | — | — | — | 43,530 | ||||||||||||||||||||
Purchase of common stock returned to authorized but unissued | — | (17 | ) | (29,983 | ) | — | — | — | (30,000 | ) | |||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | (4,105 | ) | (4,105 | ) | ||||||||||||||||||
Cash dividends: | |||||||||||||||||||||||||||
Common stock, $0.10 per share | — | — | — | (15,280 | ) | — | — | (15,280 | ) | ||||||||||||||||||
Preferred stock | — | — | — | (1,228 | ) | — | — | (1,228 | ) | ||||||||||||||||||
Stock-based compensation expense, net | — | — | 5,774 | — | — | — | 5,774 | ||||||||||||||||||||
Tax impact of stock-based compensation | — | — | 638 | — | — | — | 638 | ||||||||||||||||||||
Balance, March 31, 2015 | $ | 59,727 | $ | 1,674 | $ | 1,505,170 | $ | 1,509,967 | $ | 24,800 | $ | (219,200 | ) | $ | 2,882,138 | ||||||||||||
Balance, December 31, 2015 | $ | 121,379 | $ | 1,642 | $ | 1,458,522 | $ | 1,593,239 | $ | (32,616 | ) | $ | (204,920 | ) | $ | 2,937,246 | |||||||||||
Comprehensive income: | |||||||||||||||||||||||||||
Net income | — | — | — | 42,534 | — | — | 42,534 | ||||||||||||||||||||
Other comprehensive income | — | — | — | — | 34,783 | — | 34,783 | ||||||||||||||||||||
Comprehensive income | 77,317 | ||||||||||||||||||||||||||
Common stock issued: | |||||||||||||||||||||||||||
Stock-based compensation plans, net | — | — | 613 | (17,271 | ) | — | 18,863 | 2,205 | |||||||||||||||||||
Purchase of common stock returned to authorized but unissued | — | (12 | ) | (19,995 | ) | — | — | — | (20,007 | ) | |||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | (2,792 | ) | (2,792 | ) | ||||||||||||||||||
Cash dividends: | |||||||||||||||||||||||||||
Common stock, $0.11 per share | — | — | — | (16,409 | ) | — | — | (16,409 | ) | ||||||||||||||||||
Preferred stock | — | — | — | (2,198 | ) | — | — | (2,198 | ) | ||||||||||||||||||
Purchase of preferred stock | (1,032 | ) | — | — | (60 | ) | — | — | (1,092 | ) | |||||||||||||||||
Stock-based compensation expense, net | — | — | 8,066 | — | — | — | 8,066 | ||||||||||||||||||||
Tax benefit of stock-based compensation | — | — | 162 | — | — | — | 162 | ||||||||||||||||||||
Balance, March 31, 2016 | $ | 120,347 | $ | 1,630 | $ | 1,447,368 | $ | 1,599,835 | $ | 2,167 | $ | (188,849 | ) | $ | 2,982,498 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
($ in Thousands) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income | $ | 42,534 | $ | 46,672 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for credit losses | 20,000 | 4,500 | |||||
Depreciation and amortization | 11,060 | 12,268 | |||||
Addition to valuation allowance on mortgage servicing rights, net | 909 | 243 | |||||
Amortization of mortgage servicing rights | 2,874 | 3,179 | |||||
Amortization of other intangible assets | 504 | 801 | |||||
Amortization and accretion on earning assets, funding, and other, net | 10,692 | 9,863 | |||||
Tax impact of stock based compensation | 162 | 638 | |||||
Gain on sales of investment securities, net | (3,098 | ) | — | ||||
Gain on sales of assets and impairment write-downs, net | (524 | ) | (833 | ) | |||
Gain on mortgage banking activities, net | (3,106 | ) | (3,141 | ) | |||
Mortgage loans originated and acquired for sale | (193,849 | ) | (268,296 | ) | |||
Proceeds from sales of mortgage loans held for sale | 221,764 | 238,399 | |||||
Decrease in interest receivable | (5,180 | ) | (2,186 | ) | |||
Decrease in interest payable | (6,121 | ) | (948 | ) | |||
Commercial loans held for sale | (30,089 | ) | — | ||||
Net change in other assets and other liabilities | (46,160 | ) | (29,848 | ) | |||
Net cash provided by operating activities | 22,372 | 11,311 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Net increase in loans | (531,891 | ) | (368,794 | ) | |||
Purchases of: | |||||||
Available for sale securities | (182,895 | ) | (202,615 | ) | |||
Held to maturity securities | (28,570 | ) | (36,788 | ) | |||
Federal Home Loan Bank and Federal Reserve Bank stocks | (34,613 | ) | (115 | ) | |||
Premises, equipment, and software, net of disposals | (70,685 | ) | (13,944 | ) | |||
Other assets | (1,226 | ) | (1,207 | ) | |||
Proceeds from: | |||||||
Sales of available for sale securities | 119,379 | 289 | |||||
Prepayments, calls, and maturities of available for sale investment securities | 180,458 | 282,835 | |||||
Prepayments, calls, and maturities of held to maturity investment securities | 15,029 | 5,155 | |||||
Sales, prepayments, calls, and maturities of other assets | 9,566 | — | |||||
Net cash (paid) received in acquisition | (685 | ) | 1,202 | ||||
Net cash used in investing activities | (526,133 | ) | (333,982 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Net increase (decrease) in deposits | (322,205 | ) | 1,088,088 | ||||
Net increase (decrease) in short-term funding | 582,992 | (405,751 | ) | ||||
Repayment of long-term funding | (430,010 | ) | (500,009 | ) | |||
Proceeds from issuance of long-term funding | 615,000 | — | |||||
Proceeds from issuance of common stock for stock-based compensation plans | 2,205 | 6,236 | |||||
Purchase of preferred stock | (1,092 | ) | — | ||||
Purchase of common stock returned to authorized but unissued | (20,007 | ) | (30,000 | ) | |||
Purchase of treasury stock | (2,792 | ) | (4,105 | ) | |||
Cash dividends on common stock | (16,409 | ) | (15,280 | ) | |||
Cash dividends on preferred stock | (2,198 | ) | (1,228 | ) | |||
Net cash provided by financing activities | 405,484 | 137,951 | |||||
Net increase (decrease) in cash and cash equivalents | (98,277 | ) | (184,720 | ) | |||
Cash and cash equivalents at beginning of period | 473,685 | 1,032,067 | |||||
Cash and cash equivalents at end of period | $ | 375,408 | $ | 847,347 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid for interest | $ | 28,041 | $ | 19,643 | |||
Cash paid for income taxes | 1,167 | — | |||||
Loans and bank premises transferred to other real estate owned | 3,160 | 2,104 | |||||
Capitalized mortgage servicing rights | 1,856 | 3,010 | |||||
Acquisition: | |||||||
Fair value of assets acquired, including cash and cash equivalents | 522 | 5,160 | |||||
Fair value ascribed to goodwill and intangible assets | 4,119 | 51,221 | |||||
Fair value of liabilities assumed | 1,423 | 12,851 | |||||
Common stock issued in acquisition | — | 43,530 |
For the Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
(In thousands, except per share data) | |||||||
Net income | $ | 42,534 | $ | 46,672 | |||
Preferred stock dividends | (2,198 | ) | (1,228 | ) | |||
Net income available to common equity | $ | 40,336 | $ | 45,444 | |||
Common shareholder dividends | (16,203 | ) | (15,166 | ) | |||
Unvested share-based payment awards | (206 | ) | (114 | ) | |||
Undistributed earnings | $ | 23,927 | $ | 30,164 | |||
Undistributed earnings allocated to common shareholders | 23,686 | 29,886 | |||||
Undistributed earnings allocated to unvested share-based payment awards | 241 | 278 | |||||
Undistributed earnings | $ | 23,927 | $ | 30,164 | |||
Basic | |||||||
Distributed earnings to common shareholders | $ | 16,203 | $ | 15,166 | |||
Undistributed earnings allocated to common shareholders | 23,686 | 29,886 | |||||
Total common shareholders earnings, basic | $ | 39,889 | $ | 45,052 | |||
Diluted | |||||||
Distributed earnings to common shareholders | $ | 16,203 | $ | 15,166 | |||
Undistributed earnings allocated to common shareholders | 23,686 | 29,886 | |||||
Total common shareholders earnings, diluted | $ | 39,889 | $ | 45,052 | |||
Weighted average common shares outstanding | 148,601 | 150,070 | |||||
Effect of dilutive common stock awards | 853 | 1,094 | |||||
Diluted weighted average common shares outstanding | 149,454 | 151,164 | |||||
Basic earnings per common share | $ | 0.27 | $ | 0.30 | |||
Diluted earnings per common share | $ | 0.27 | $ | 0.30 |
2016 | 2015 | ||||
Dividend yield | 2.50 | % | 2.00 | % | |
Risk-free interest rate | 2.00 | % | 2.00 | % | |
Weighted average expected volatility | 25.00 | % | 20.00 | % | |
Weighted average expected life | 5.5 years | 6.0 years | |||
Weighted average per share fair value of options | $3.36 | $3.08 |
Stock Options | Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value (000s) | ||||||||
Outstanding at December 31, 2014 | 7,847,338 | $ | 18.34 | |||||||||
Granted | 1,348,504 | 17.95 | ||||||||||
Exercised | (1,351,646 | ) | 13.90 | |||||||||
Forfeited or expired | (1,215,053 | ) | 29.13 | |||||||||
Outstanding at December 31, 2015 | 6,629,143 | $ | 17.22 | 6.24 | $ | 18,730 | ||||||
Options Exercisable at December 31, 2015 | 4,190,245 | $ | 17.25 | 4.93 | $ | 14,873 | ||||||
Granted | 1,302,298 | $ | 17.45 | |||||||||
Exercised | (96,602 | ) | 13.60 | |||||||||
Forfeited or expired | (48,190 | ) | 17.75 | |||||||||
Outstanding at March 31, 2016 | 7,786,649 | $ | 17.30 | 6.61 | $ | 14,682 | ||||||
Options Exercisable at March 31, 2016 | 4,907,257 | $ | 17.22 | 5.18 | $ | 12,950 |
Nonvested Stock Options | Shares | Weighted Average Grant Date Fair Value | ||||
Nonvested at December 31, 2014 | 2,770,662 | $ | 3.74 | |||
Granted | 1,348,504 | 3.08 | ||||
Vested | (1,459,709 | ) | 4.19 | |||
Forfeited | (220,559 | ) | 3.28 | |||
Nonvested at December 31, 2015 | 2,438,898 | $ | 3.15 | |||
Granted | 1,302,298 | 3.36 | ||||
Vested | (813,614 | ) | 3.25 | |||
Forfeited | (48,190 | ) | 3.20 | |||
Nonvested at March 31, 2016 | 2,879,392 | $ | 3.21 |
Restricted Stock | Shares | Weighted Average Grant Date Fair Value | ||||
Outstanding at December 31, 2014 | 1,982,126 | $ | 15.79 | |||
Granted | 1,173,847 | 18.09 | ||||
Vested | (709,582 | ) | 15.62 | |||
Forfeited | (196,363 | ) | 16.87 | |||
Outstanding at December 31, 2015 | 2,250,028 | $ | 17.03 | |||
Granted | 1,041,985 | 16.37 | ||||
Vested | (732,553 | ) | 16.46 | |||
Forfeited | (34,299 | ) | 17.69 | |||
Outstanding at March 31, 2016 | 2,525,161 | $ | 16.91 |
March 31, 2016 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
($ in Thousands) | ||||||||||||||||
Investment securities available for sale: | ||||||||||||||||
U. S. Treasury securities | $ | 1,000 | $ | — | $ | — | $ | 1,000 | ||||||||
Residential mortgage-related securities: | ||||||||||||||||
FNMA / FHLMC | 1,268,929 | 35,321 | (846 | ) | 1,303,404 | |||||||||||
GNMA | 1,536,248 | 11,086 | (79 | ) | 1,547,255 | |||||||||||
Private-label | 1,535 | — | (23 | ) | 1,512 | |||||||||||
GNMA commercial mortgage-related securities | 2,053,540 | 5,855 | (11,530 | ) | 2,047,865 | |||||||||||
Other securities (debt and equity) | 4,718 | 87 | — | 4,805 | ||||||||||||
Total investment securities available for sale | $ | 4,865,970 | $ | 52,349 | $ | (12,478 | ) | $ | 4,905,841 | |||||||
Investment securities held to maturity: | ||||||||||||||||
Obligations of state and political subdivisions (municipal securities) | $ | 1,054,757 | $ | 25,972 | $ | (146 | ) | $ | 1,080,583 | |||||||
Residential mortgage-related securities: | ||||||||||||||||
FNMA / FHLMC | 40,404 | 797 | (180 | ) | 41,021 | |||||||||||
GNMA | 81,660 | 1,086 | (5 | ) | 82,741 | |||||||||||
Total investment securities held to maturity | $ | 1,176,821 | $ | 27,855 | $ | (331 | ) | $ | 1,204,345 |
December 31, 2015 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
($ in Thousands) | ||||||||||||||||
Investment securities available for sale: | ||||||||||||||||
U. S. Treasury securities | $ | 999 | $ | — | $ | (2 | ) | $ | 997 | |||||||
Residential mortgage-related securities: | ||||||||||||||||
FNMA / FHLMC | 1,388,995 | 33,791 | (8,160 | ) | 1,414,626 | |||||||||||
GNMA | 1,605,956 | 507 | (16,460 | ) | 1,590,003 | |||||||||||
Private-label | 1,722 | 1 | (14 | ) | 1,709 | |||||||||||
GNMA commercial mortgage-related securities | 1,982,477 | 1,334 | (28,501 | ) | 1,955,310 | |||||||||||
Other securities (debt and equity) | 4,718 | 51 | — | 4,769 | ||||||||||||
Total investment securities available for sale | $ | 4,984,867 | $ | 35,684 | $ | (53,137 | ) | $ | 4,967,414 | |||||||
Investment securities held to maturity: | ||||||||||||||||
Municipal securities | $ | 1,043,767 | $ | 16,803 | $ | (339 | ) | $ | 1,060,231 | |||||||
Residential mortgage-related securities: | ||||||||||||||||
FNMA / FHLMC | 41,469 | 513 | (645 | ) | 41,337 | |||||||||||
GNMA | 82,994 | 189 | (309 | ) | 82,874 | |||||||||||
Total investment securities held to maturity | $ | 1,168,230 | $ | 17,505 | $ | (1,293 | ) | $ | 1,184,442 |
Available for Sale | Held to Maturity | ||||||||||||||
($ in Thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||
Due in one year or less | $ | 2,500 | $ | 2,530 | $ | 46,749 | $ | 32,151 | |||||||
Due after one year through five years | 3,200 | 3,200 | 243,423 | 255,338 | |||||||||||
Due after five years through ten years | — | — | 245,683 | 255,755 | |||||||||||
Due after ten years | — | — | 518,902 | 537,339 | |||||||||||
Total debt securities | 5,700 | 5,730 | 1,054,757 | 1,080,583 | |||||||||||
Residential mortgage-related securities: | |||||||||||||||
FNMA / FHLMC | 1,268,929 | 1,303,404 | 40,404 | 41,021 | |||||||||||
GNMA | 1,536,248 | 1,547,255 | 81,660 | 82,741 | |||||||||||
Private-label | 1,535 | 1,512 | — | — | |||||||||||
GNMA commercial mortgage-related securities | 2,053,540 | 2,047,865 | — | — | |||||||||||
Equity securities | 18 | 75 | — | — | |||||||||||
Total investment securities | $ | 4,865,970 | $ | 4,905,841 | $ | 1,176,821 | $ | 1,204,345 | |||||||
Ratio of Fair Value to Amortized Cost | 100.8 | % | 102.3 | % |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
($ in Thousands) | |||||||
Gross gains | $ | 3,287 | $ | — | |||
Gross losses | (189 | ) | — | ||||
Investment securities gains, net | $ | 3,098 | $ | — | |||
Proceeds from sales of investment securities | $ | 119,379 | $ | 289 |
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||
March 31, 2016 | Number of Securities | Unrealized Losses | Fair Value | Number of Securities | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | |||||||||||||||||||||
($ in Thousands) | |||||||||||||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||||||||||||
Residential mortgage-related securities: | |||||||||||||||||||||||||||||
FNMA / FHLMC | — | $ | — | $ | — | 12 | $ | (846 | ) | $ | 258,670 | $ | (846 | ) | $ | 258,670 | |||||||||||||
GNMA | 2 | (79 | ) | 41,913 | — | — | — | (79 | ) | 41,913 | |||||||||||||||||||
Private-label | 1 | (1 | ) | 76 | 3 | (22 | ) | 1,382 | (23 | ) | 1,458 | ||||||||||||||||||
GNMA commercial mortgage-related securities | 20 | (1,390 | ) | 558,620 | 21 | (10,140 | ) | 448,861 | (11,530 | ) | 1,007,481 | ||||||||||||||||||
Total | 23 | $ | (1,470 | ) | $ | 600,609 | 36 | $ | (11,008 | ) | $ | 708,913 | $ | (12,478 | ) | $ | 1,309,522 | ||||||||||||
Investment securities held to maturity: | |||||||||||||||||||||||||||||
Municipal securities | 20 | $ | (75 | ) | $ | 10,029 | 17 | $ | (71 | ) | $ | 5,599 | $ | (146 | ) | $ | 15,628 | ||||||||||||
Residential mortgage-related securities: | |||||||||||||||||||||||||||||
FNMA / FHLMC | 1 | (3 | ) | 1,180 | 5 | (177 | ) | 13,587 | (180 | ) | 14,767 | ||||||||||||||||||
GNMA | — | — | — | 1 | (5 | ) | 1,548 | (5 | ) | 1,548 | |||||||||||||||||||
Total | 21 | $ | (78 | ) | $ | 11,209 | 23 | $ | (253 | ) | $ | 20,734 | $ | (331 | ) | $ | 31,943 |
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||
December 31, 2015 | Number of Securities | Unrealized Losses | Fair Value | Number of Securities | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | |||||||||||||||||||||
($ in Thousands) | |||||||||||||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||||||||||||
U.S. Treasury securities | 1 | $ | (2 | ) | $ | 997 | — | $ | — | $ | — | $ | (2 | ) | $ | 997 | |||||||||||||
Residential mortgage-related securities: | |||||||||||||||||||||||||||||
FNMA / FHLMC | 17 | (1,548 | ) | 220,852 | 14 | (6,612 | ) | 338,186 | (8,160 | ) | 559,038 | ||||||||||||||||||
GNMA | 46 | (16,460 | ) | 1,434,484 | — | — | — | (16,460 | ) | 1,434,484 | |||||||||||||||||||
Private-label | 1 | (1 | ) | 83 | 3 | (13 | ) | 1,565 | (14 | ) | 1,648 | ||||||||||||||||||
GNMA commercial mortgage-related securities | 40 | (9,610 | ) | 1,132,844 | 21 | (18,891 | ) | 448,218 | (28,501 | ) | 1,581,062 | ||||||||||||||||||
Total | 105 | $ | (27,621 | ) | $ | 2,789,260 | 38 | $ | (25,516 | ) | $ | 787,969 | $ | (53,137 | ) | $ | 3,577,229 | ||||||||||||
Investment securities held to maturity: | |||||||||||||||||||||||||||||
Municipal securities | 53 | $ | (146 | ) | $ | 23,137 | 24 | $ | (193 | ) | $ | 9,254 | $ | (339 | ) | $ | 32,391 | ||||||||||||
Residential mortgage-related securities: | |||||||||||||||||||||||||||||
FNMA / FHLMC | 10 | (177 | ) | 12,754 | 3 | (468 | ) | 11,106 | (645 | ) | 23,860 | ||||||||||||||||||
GNMA | 21 | (201 | ) | 45,499 | 3 | (108 | ) | 6,797 | (309 | ) | 52,296 | ||||||||||||||||||
Total | 84 | $ | (524 | ) | $ | 81,390 | 30 | $ | (769 | ) | $ | 27,157 | $ | (1,293 | ) | $ | 108,547 |
March 31, 2016 | December 31, 2015 | ||||||
($ in Thousands) | |||||||
Commercial and industrial | $ | 6,511,648 | $ | 6,190,683 | |||
Commercial real estate — owner occupied | 917,285 | 918,212 | |||||
Commercial and business lending | 7,428,933 | 7,108,895 | |||||
Commercial real estate — investor | 3,276,733 | 3,234,266 | |||||
Real estate construction | 1,184,398 | 1,162,145 | |||||
Commercial real estate lending | 4,461,131 | 4,396,411 | |||||
Total commercial | 11,890,064 | 11,505,306 | |||||
Residential mortgage | 5,944,457 | 5,783,267 | |||||
Home equity | 982,994 | 1,005,802 | |||||
Other consumer | 409,725 | 419,968 | |||||
Total consumer | 7,337,176 | 7,209,037 | |||||
Total loans | $ | 19,227,240 | $ | 18,714,343 |
Pass | Special Mention | Potential Problem | Nonaccrual | Total | |||||||||||||||
($ in Thousands) | |||||||||||||||||||
Commercial and industrial | $ | 5,713,979 | $ | 272,090 | $ | 328,464 | $ | 197,115 | $ | 6,511,648 | |||||||||
Commercial real estate - owner occupied | 834,879 | 31,856 | 41,107 | 9,443 | 917,285 | ||||||||||||||
Commercial and business lending | 6,548,858 | 303,946 | 369,571 | 206,558 | 7,428,933 | ||||||||||||||
Commercial real estate - investor | 3,208,338 | 30,680 | 25,385 | 12,330 | 3,276,733 | ||||||||||||||
Real estate construction | 1,180,914 | 222 | 2,422 | 840 | 1,184,398 | ||||||||||||||
Commercial real estate lending | 4,389,252 | 30,902 | 27,807 | 13,170 | 4,461,131 | ||||||||||||||
Total commercial | 10,938,110 | 334,848 | 397,378 | 219,728 | 11,890,064 | ||||||||||||||
Residential mortgage | 5,883,743 | 5,014 | 3,488 | 52,212 | 5,944,457 | ||||||||||||||
Home equity | 967,267 | 1,446 | 209 | 14,072 | 982,994 | ||||||||||||||
Other consumer | 408,819 | 523 | — | 383 | 409,725 | ||||||||||||||
Total consumer | 7,259,829 | 6,983 | 3,697 | 66,667 | 7,337,176 | ||||||||||||||
Total | $ | 18,197,939 | $ | 341,831 | $ | 401,075 | $ | 286,395 | $ | 19,227,240 |
Pass | Special Mention | Potential Problem | Nonaccrual | Total | |||||||||||||||
($ in Thousands) | |||||||||||||||||||
Commercial and industrial | $ | 5,522,809 | $ | 341,169 | $ | 233,130 | $ | 93,575 | $ | 6,190,683 | |||||||||
Commercial real estate - owner occupied | 835,572 | 38,885 | 35,706 | 8,049 | 918,212 | ||||||||||||||
Commercial and business lending | 6,358,381 | 380,054 | 268,836 | 101,624 | 7,108,895 | ||||||||||||||
Commercial real estate - investor | 3,153,703 | 45,976 | 25,944 | 8,643 | 3,234,266 | ||||||||||||||
Real estate construction | 1,157,034 | 252 | 3,919 | 940 | 1,162,145 | ||||||||||||||
Commercial real estate lending | 4,310,737 | 46,228 | 29,863 | 9,583 | 4,396,411 | ||||||||||||||
Total commercial | 10,669,118 | 426,282 | 298,699 | 111,207 | 11,505,306 | ||||||||||||||
Residential mortgage | 5,727,437 | 1,552 | 2,796 | 51,482 | 5,783,267 | ||||||||||||||
Home equity | 988,574 | 1,762 | 222 | 15,244 | 1,005,802 | ||||||||||||||
Other consumer | 419,087 | 556 | — | 325 | 419,968 | ||||||||||||||
Total consumer | 7,135,098 | 3,870 | 3,018 | 67,051 | 7,209,037 | ||||||||||||||
Total | $ | 17,804,216 | $ | 430,152 | $ | 301,717 | $ | 178,258 | $ | 18,714,343 |
Current | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due (a) | Nonaccrual (b) | Total | ||||||||||||||||||
($ in Thousands) | |||||||||||||||||||||||
Commercial and industrial | $ | 6,311,415 | $ | 2,665 | $ | 236 | $ | 217 | $ | 197,115 | $ | 6,511,648 | |||||||||||
Commercial real estate - owner occupied | 907,322 | 520 | — | — | 9,443 | 917,285 | |||||||||||||||||
Commercial and business lending | 7,218,737 | 3,185 | 236 | 217 | 206,558 | 7,428,933 | |||||||||||||||||
Commercial real estate - investor | 3,263,331 | 748 | 324 | — | 12,330 | 3,276,733 | |||||||||||||||||
Real estate construction | 1,183,143 | 415 | — | — | 840 | 1,184,398 | |||||||||||||||||
Commercial real estate lending | 4,446,474 | 1,163 | 324 | — | 13,170 | 4,461,131 | |||||||||||||||||
Total commercial | 11,665,211 | 4,348 | 560 | 217 | 219,728 | 11,890,064 | |||||||||||||||||
Residential mortgage | 5,888,651 | 3,199 | 395 | — | 52,212 | 5,944,457 | |||||||||||||||||
Home equity | 963,118 | 4,410 | 1,394 | — | 14,072 | 982,994 | |||||||||||||||||
Other consumer | 406,248 | 1,020 | 662 | 1,412 | 383 | 409,725 | |||||||||||||||||
Total consumer | 7,258,017 | 8,629 | 2,451 | 1,412 | 66,667 | 7,337,176 | |||||||||||||||||
Total | $ | 18,923,228 | $ | 12,977 | $ | 3,011 | $ | 1,629 | $ | 286,395 | $ | 19,227,240 |
(a) | The recorded investment in loans past due 90 days or more and still accruing totaled $2 million at March 31, 2016 (the same as the reported balances for the accruing loans noted above). |
(b) | Of the total nonaccrual loans, $230 million or 80% were current with respect to payment at March 31, 2016. |
Current | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due (a) | Nonaccrual (b) | Total | ||||||||||||||||||
($ in Thousands) | |||||||||||||||||||||||
Commercial and industrial | $ | 6,095,848 | $ | 602 | $ | 409 | $ | 249 | $ | 93,575 | $ | 6,190,683 | |||||||||||
Commercial real estate - owner occupied | 903,021 | 7,142 | — | — | 8,049 | 918,212 | |||||||||||||||||
Commercial and business lending | 6,998,869 | 7,744 | 409 | 249 | 101,624 | 7,108,895 | |||||||||||||||||
Commercial real estate - investor | 3,225,332 | 291 | — | — | 8,643 | 3,234,266 | |||||||||||||||||
Real estate construction | 1,160,909 | 270 | 26 | — | 940 | 1,162,145 | |||||||||||||||||
Commercial real estate lending | 4,386,241 | 561 | 26 | — | 9,583 | 4,396,411 | |||||||||||||||||
Total commercial | 11,385,110 | 8,305 | 435 | 249 | 111,207 | 11,505,306 | |||||||||||||||||
Residential mortgage | 5,726,855 | 4,491 | 439 | — | 51,482 | 5,783,267 | |||||||||||||||||
Home equity | 982,639 | 6,190 | 1,729 | — | 15,244 | 1,005,802 | |||||||||||||||||
Other consumer | 416,374 | 1,195 | 675 | 1,399 | 325 | 419,968 | |||||||||||||||||
Total consumer | 7,125,868 | 11,876 | 2,843 | 1,399 | 67,051 | 7,209,037 | |||||||||||||||||
Total | $ | 18,510,978 | $ | 20,181 | $ | 3,278 | $ | 1,648 | $ | 178,258 | $ | 18,714,343 |
(a) | The recorded investment in loans past due 90 days or more and still accruing totaled $2 million at December 31, 2015 (the same as the reported balances for the accruing loans noted above). |
(b) | Of the total nonaccrual loans, $124 million or 69% were current with respect to payment at December 31, 2015. |
Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | |||||||||||||||
($ in Thousands) | |||||||||||||||||||
Loans with a related allowance | |||||||||||||||||||
Commercial and industrial | $ | 105,780 | $ | 106,837 | $ | 14,595 | $ | 106,280 | $ | 613 | |||||||||
Commercial real estate — owner occupied | 10,477 | 10,596 | 554 | 10,552 | 89 | ||||||||||||||
Commercial and business lending | 116,257 | 117,433 | 15,149 | 116,832 | 702 | ||||||||||||||
Commercial real estate — investor | 23,494 | 24,430 | 1,244 | 23,541 | 461 | ||||||||||||||
Real estate construction | 1,226 | 1,812 | 412 | 1,237 | 14 | ||||||||||||||
Commercial real estate lending | 24,720 | 26,242 | 1,656 | 24,778 | 475 | ||||||||||||||
Total commercial | 140,977 | 143,675 | 16,805 | 141,610 | 1,177 | ||||||||||||||
Residential mortgage | 65,281 | 70,624 | 12,351 | 65,819 | 548 | ||||||||||||||
Home equity | 20,337 | 22,451 | 9,732 | 20,504 | 248 | ||||||||||||||
Other consumer | 1,276 | 1,332 | 221 | 1,291 | 8 | ||||||||||||||
Total consumer | 86,894 | 94,407 | 22,304 | 87,614 | 804 | ||||||||||||||
Total loans(a) | $ | 227,871 | $ | 238,082 | $ | 39,109 | $ | 229,224 | $ | 1,981 | |||||||||
Loans with no related allowance | |||||||||||||||||||
Commercial and industrial | $ | 120,243 | $ | 130,935 | $ | — | $ | 120,399 | $ | 91 | |||||||||
Commercial real estate — owner occupied | 6,659 | 9,005 | — | 6,715 | — | ||||||||||||||
Commercial and business lending | 126,902 | 139,940 | — | 127,114 | 91 | ||||||||||||||
Commercial real estate — investor | 9,829 | 9,984 | — | 9,855 | — | ||||||||||||||
Real estate construction | — | — | — | — | — | ||||||||||||||
Commercial real estate lending | 9,829 | 9,984 | — | 9,855 | — | ||||||||||||||
Total commercial | 136,731 | 149,924 | — | 136,969 | 91 | ||||||||||||||
Residential mortgage | 6,738 | 7,020 | — | 6,841 | 35 | ||||||||||||||
Home equity | 652 | 652 | — | 653 | 10 | ||||||||||||||
Other consumer | — | — | — | — | — | ||||||||||||||
Total consumer | 7,390 | 7,672 | — | 7,494 | 45 | ||||||||||||||
Total loans(a) | $ | 144,121 | $ | 157,596 | $ | — | $ | 144,463 | $ | 136 | |||||||||
Total | |||||||||||||||||||
Commercial and industrial | $ | 226,023 | $ | 237,772 | $ | 14,595 | $ | 226,679 | $ | 704 | |||||||||
Commercial real estate — owner occupied | 17,136 | 19,601 | 554 | 17,267 | 89 | ||||||||||||||
Commercial and business lending | 243,159 | 257,373 | 15,149 | 243,946 | 793 | ||||||||||||||
Commercial real estate — investor | 33,323 | 34,414 | 1,244 | 33,396 | 461 | ||||||||||||||
Real estate construction | 1,226 | 1,812 | 412 | 1,237 | 14 | ||||||||||||||
Commercial real estate lending | 34,549 | 36,226 | 1,656 | 34,633 | 475 | ||||||||||||||
Total commercial | 277,708 | 293,599 | 16,805 | 278,579 | 1,268 | ||||||||||||||
Residential mortgage | 72,019 | 77,644 | 12,351 | 72,660 | 583 | ||||||||||||||
Home equity | 20,989 | 23,103 | 9,732 | 21,157 | 258 | ||||||||||||||
Other consumer | 1,276 | 1,332 | 221 | 1,291 | 8 | ||||||||||||||
Total consumer | 94,284 | 102,079 | 22,304 | 95,108 | 849 | ||||||||||||||
Total loans(a) | $ | 371,992 | $ | 395,678 | $ | 39,109 | $ | 373,687 | $ | 2,117 |
(a) | The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 84% of the unpaid principal balance at March 31, 2016. |
Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | |||||||||||||||
($ in Thousands) | |||||||||||||||||||
Loans with a related allowance | |||||||||||||||||||
Commercial and industrial | $ | 57,785 | $ | 59,409 | $ | 8,162 | $ | 46,833 | $ | 855 | |||||||||
Commercial real estate — owner occupied | 9,705 | 9,804 | 448 | 10,087 | 412 | ||||||||||||||
Commercial and business lending | 67,490 | 69,213 | 8,610 | 56,920 | 1,267 | ||||||||||||||
Commercial real estate — investor | 27,822 | 29,444 | 1,831 | 28,278 | 1,914 | ||||||||||||||
Real estate construction | 1,450 | 2,154 | 453 | 1,667 | 66 | ||||||||||||||
Commercial real estate lending | 29,272 | 31,598 | 2,284 | 29,945 | 1,980 | ||||||||||||||
Total commercial | 96,762 | 100,811 | 10,894 | 86,865 | 3,247 | ||||||||||||||
Residential mortgage | 66,590 | 71,084 | 12,462 | 68,183 | 2,374 | ||||||||||||||
Home equity | 21,769 | 23,989 | 10,118 | 22,624 | 1,147 | ||||||||||||||
Other consumer | 1,154 | 1,225 | 195 | 1,199 | 30 | ||||||||||||||
Total consumer | 89,513 | 96,298 | 22,775 | 92,006 | 3,551 | ||||||||||||||
Total loans(a) | $ | 186,275 | $ | 197,109 | $ | 33,669 | $ | 178,871 | $ | 6,798 | |||||||||
Loans with no related allowance | |||||||||||||||||||
Commercial and industrial | $ | 65,083 | $ | 72,259 | $ | — | $ | 79,573 | $ | 1,657 | |||||||||
Commercial real estate — owner occupied | 6,221 | 6,648 | — | 6,534 | 15 | ||||||||||||||
Commercial and business lending | 71,304 | 78,907 | — | 86,107 | 1,672 | ||||||||||||||
Commercial real estate — investor | 2,736 | 2,840 | — | 2,763 | 90 | ||||||||||||||
Real estate construction | — | — | — | — | — | ||||||||||||||
Commercial real estate lending | 2,736 | 2,840 | — | 2,763 | 90 | ||||||||||||||
Total commercial | 74,040 | 81,747 | — | 88,870 | 1,762 | ||||||||||||||
Residential mortgage | 4,762 | 5,033 | — | 4,726 | 126 | ||||||||||||||
Home equity | 544 | 544 | — | 544 | 30 | ||||||||||||||
Other consumer | — | — | — | — | — | ||||||||||||||
Total consumer | 5,306 | 5,577 | — | 5,270 | 156 | ||||||||||||||
Total loans(a) | $ | 79,346 | $ | 87,324 | $ | — | $ | 94,140 | $ | 1,918 | |||||||||
Total | |||||||||||||||||||
Commercial and industrial | $ | 122,868 | $ | 131,668 | $ | 8,162 | $ | 126,406 | $ | 2,512 | |||||||||
Commercial real estate — owner occupied | 15,926 | 16,452 | 448 | 16,621 | 427 | ||||||||||||||
Commercial and business lending | 138,794 | 148,120 | 8,610 | 143,027 | 2,939 | ||||||||||||||
Commercial real estate — investor | 30,558 | 32,284 | 1,831 | 31,041 | 2,004 | ||||||||||||||
Real estate construction | 1,450 | 2,154 | 453 | 1,667 | 66 | ||||||||||||||
Commercial real estate lending | 32,008 | 34,438 | 2,284 | 32,708 | 2,070 | ||||||||||||||
Total commercial | 170,802 | 182,558 | 10,894 | 175,735 | 5,009 | ||||||||||||||
Residential mortgage | 71,352 | 76,117 | 12,462 | 72,909 | 2,500 | ||||||||||||||
Home equity | 22,313 | 24,533 | 10,118 | 23,168 | 1,177 | ||||||||||||||
Other consumer | 1,154 | 1,225 | 195 | 1,199 | 30 | ||||||||||||||
Total consumer | 94,819 | 101,875 | 22,775 | 97,276 | 3,707 | ||||||||||||||
Total loans(a) | $ | 265,621 | $ | 284,433 | $ | 33,669 | $ | 273,011 | $ | 8,716 |
(a) | The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 82% of the unpaid principal balance at December 31, 2015. |
March 31, 2016 | December 31, 2015 | ||||||||||||||
Performing Restructured Loans | Nonaccrual Restructured Loans(a) | Performing Restructured Loans | Nonaccrual Restructured Loans(a) | ||||||||||||
($ in Thousands) | |||||||||||||||
Commercial and industrial | $ | 28,908 | $ | 2,711 | $ | 29,293 | $ | 1,714 | |||||||
Commercial real estate — owner occupied | 7,693 | 2,689 | 7,877 | 2,703 | |||||||||||
Commercial real estate — investor | 20,993 | 1,356 | 21,915 | 3,936 | |||||||||||
Real estate construction | 386 | 182 | 510 | 177 | |||||||||||
Residential mortgage | 19,807 | 23,845 | 19,870 | 24,592 | |||||||||||
Home equity | 6,917 | 4,416 | 7,069 | 4,522 | |||||||||||
Other consumer | 893 | 33 | 829 | 40 | |||||||||||
Total | $ | 85,597 | $ | 35,232 | $ | 87,363 | $ | 37,684 |
(a) | Nonaccrual restructured loans have been included within nonaccrual loans. |
Three Months Ended March 31, 2016 | Three Months Ended March 31, 2015 | ||||||||||||||||||||
Number of Loans | Recorded Investment(a) | Unpaid Principal Balance(b) | Number of Loans | Recorded Investment(a) | Unpaid Principal Balance(b) | ||||||||||||||||
($ in Thousands) | |||||||||||||||||||||
Commercial and industrial | 7 | $ | 1,483 | $ | 1,522 | 2 | $ | 196 | $ | 208 | |||||||||||
Commercial real estate — owner occupied | 1 | 125 | 130 | 5 | 3,585 | 3,641 | |||||||||||||||
Commercial real estate — investor | — | — | — | 4 | 3,030 | 3,042 | |||||||||||||||
Real estate construction | 1 | 10 | 55 | — | — | — | |||||||||||||||
Residential mortgage | 30 | 2,062 | 2,124 | 30 | 2,816 | 2,864 | |||||||||||||||
Home equity | 20 | 818 | 879 | 36 | 1,782 | 1,843 | |||||||||||||||
Total | 59 | $ | 4,498 | $ | 4,710 | 77 | $ | 11,409 | $ | 11,598 |
(a) | Represents post-modification outstanding recorded investment. |
(b) | Represents pre-modification outstanding recorded investment. |
Three Months Ended March 31, 2016 | Three Month Ended March 31, 2015 | ||||||||||||
Number of Loans | Recorded Investment | Number of Loans | Recorded Investment | ||||||||||
($ in Thousands) | |||||||||||||
Commercial real estate — owner occupied | — | $ | — | 1 | $ | 297 | |||||||
Real estate construction | 1 | 10 | — | — | |||||||||
Residential mortgage | 7 | 1,151 | 16 | 1,239 | |||||||||
Home equity | 8 | 153 | 24 | 855 | |||||||||
Total | 16 | $ | 1,314 | 41 | $ | 2,391 |
$ in Thousands | Commercial and industrial | Commercial real estate - owner occupied | Commercial real estate - investor | Real estate construction | Residential mortgage | Home equity | Other consumer | Total | |||||||||||||||||||||||
December 31, 2015 | $ | 129,959 | $ | 18,680 | $ | 43,018 | $ | 25,266 | $ | 28,261 | $ | 23,555 | $ | 5,525 | $ | 274,264 | |||||||||||||||
Charge offs | (16,894 | ) | (76 | ) | (176 | ) | (54 | ) | (1,390 | ) | (1,746 | ) | (909 | ) | (21,245 | ) | |||||||||||||||
Recoveries | 1,958 | 33 | 1,415 | 26 | 158 | 600 | 161 | 4,351 | |||||||||||||||||||||||
Net charge offs | (14,936 | ) | (43 | ) | 1,239 | (28 | ) | (1,232 | ) | (1,146 | ) | (748 | ) | (16,894 | ) | ||||||||||||||||
Provision for loan losses | 24,470 | (2,059 | ) | (2,233 | ) | (3,498 | ) | 2,030 | 721 | 569 | 20,000 | ||||||||||||||||||||
March 31, 2016 | $ | 139,493 | $ | 16,578 | $ | 42,024 | $ | 21,740 | $ | 29,059 | $ | 23,130 | $ | 5,346 | $ | 277,370 | |||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 14,005 | $ | 74 | $ | — | $ | — | $ | 14 | $ | — | $ | — | $ | 14,093 | |||||||||||||||
Collectively evaluated for impairment | 125,488 | 16,504 | 42,024 | 21,740 | 29,045 | 23,130 | 5,346 | 263,277 | |||||||||||||||||||||||
Total allowance for loan losses | $ | 139,493 | $ | 16,578 | $ | 42,024 | $ | 21,740 | $ | 29,059 | $ | 23,130 | $ | 5,346 | $ | 277,370 | |||||||||||||||
Loans: | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 195,341 | $ | 7,500 | $ | 9,829 | $ | — | $ | 7,472 | $ | 652 | $ | — | $ | 220,794 | |||||||||||||||
Collectively evaluated for impairment | 6,316,307 | 909,785 | 3,266,904 | 1,184,398 | 5,936,985 | 982,342 | 409,725 | 19,006,446 | |||||||||||||||||||||||
Total loans | $ | 6,511,648 | $ | 917,285 | $ | 3,276,733 | $ | 1,184,398 | $ | 5,944,457 | $ | 982,994 | $ | 409,725 | $ | 19,227,240 |
$ in Thousands | Commercial and industrial | Commercial real estate - owner occupied | Commercial real estate - investor | Real estate construction | Residential mortgage | Home equity | Other consumer | Total | |||||||||||||||||||||||
December 31, 2014 | $ | 117,635 | $ | 16,510 | $ | 46,333 | $ | 20,999 | $ | 31,926 | $ | 26,464 | $ | 6,435 | $ | 266,302 | |||||||||||||||
Charge offs | (27,687 | ) | (2,645 | ) | (4,645 | ) | (750 | ) | (5,636 | ) | (7,048 | ) | (3,869 | ) | (52,280 | ) | |||||||||||||||
Recoveries | 9,821 | 921 | 4,157 | 2,268 | 1,077 | 3,233 | 765 | 22,242 | |||||||||||||||||||||||
Net charge offs | (17,866 | ) | (1,724 | ) | (488 | ) | 1,518 | (4,559 | ) | (3,815 | ) | (3,104 | ) | (30,038 | ) | ||||||||||||||||
Provision for loan losses | 30,190 | 3,894 | (2,827 | ) | 2,749 | 894 | 906 | 2,194 | 38,000 | ||||||||||||||||||||||
December 31, 2015 | $ | 129,959 | $ | 18,680 | $ | 43,018 | $ | 25,266 | $ | 28,261 | $ | 23,555 | $ | 5,525 | $ | 274,264 | |||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 7,522 | $ | — | $ | 229 | $ | — | $ | 166 | $ | 46 | $ | — | $ | 7,963 | |||||||||||||||
Collectively evaluated for impairment | 122,437 | 18,680 | 42,789 | 25,266 | 28,095 | 23,509 | 5,525 | 266,301 | |||||||||||||||||||||||
Total allowance for loan losses | $ | 129,959 | $ | 18,680 | $ | 43,018 | $ | 25,266 | $ | 28,261 | $ | 23,555 | $ | 5,525 | $ | 274,264 | |||||||||||||||
Loans: | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 91,569 | $ | 6,221 | $ | 5,460 | $ | — | $ | 6,956 | $ | 1,281 | $ | — | $ | 111,487 | |||||||||||||||
Collectively evaluated for impairment | 6,099,114 | 911,991 | 3,228,806 | 1,162,145 | 5,776,311 | 1,004,521 | 419,968 | 18,602,856 | |||||||||||||||||||||||
Total loans | $ | 6,190,683 | $ | 918,212 | $ | 3,234,266 | $ | 1,162,145 | $ | 5,783,267 | $ | 1,005,802 | $ | 419,968 | $ | 18,714,343 |
Three Months Ended March 31, 2016 | Year Ended December 31, 2015 | ||||||
($ in Thousands) | |||||||
Allowance for Unfunded Commitments: | |||||||
Balance at beginning of period | $ | 24,400 | $ | 24,900 | |||
Provision for unfunded commitments | — | (500 | ) | ||||
Balance at end of period | $ | 24,400 | $ | 24,400 |
Three Months Ended March 31, 2016 | Year Ended December 31, 2015 | ||||||
($ in Thousands) | |||||||
Core deposit intangibles: | |||||||
Gross carrying amount | $ | 4,385 | $ | 19,545 | |||
Accumulated amortization | (4,062 | ) | (19,152 | ) | |||
Net book value | $ | 323 | $ | 393 | |||
Amortization during the year | $ | 70 | $ | 1,404 | |||
Other intangibles: | |||||||
Gross carrying amount | $ | 32,410 | $ | 31,398 | |||
Accumulated amortization | (15,767 | ) | (15,333 | ) | |||
Net book value | $ | 16,643 | $ | 16,065 | |||
Additions during the period | $ | 1,012 | $ | 12,115 | |||
Amortization during the year | $ | 434 | $ | 1,690 |
Three Months Ended March 31, 2016 | Year Ended December 31, 2015 | ||||||
($ in Thousands) | |||||||
Mortgage servicing rights | |||||||
Mortgage servicing rights at beginning of period | $ | 62,150 | $ | 61,379 | |||
Additions | 1,856 | 12,372 | |||||
Amortization | (2,874 | ) | (11,601 | ) | |||
Mortgage servicing rights at end of period | $ | 61,132 | $ | 62,150 | |||
Valuation allowance at beginning of period | (809 | ) | (1,234 | ) | |||
(Additions) recoveries, net | (909 | ) | 425 | ||||
Valuation allowance at end of period | (1,718 | ) | (809 | ) | |||
Mortgage servicing rights, net | $ | 59,414 | $ | 61,341 | |||
Fair value of mortgage servicing rights | $ | 61,410 | $ | 70,686 | |||
Portfolio of residential mortgage loans serviced for others (“servicing portfolio”) | $ | 7,876,888 | $ | 7,915,224 | |||
Mortgage servicing rights, net to servicing portfolio | 0.75 | % | 0.77 | % | |||
Mortgage servicing rights expense (1) | $ | 3,783 | $ | 11,176 |
(1) | Includes the amortization of mortgage servicing rights and additions / recoveries to the valuation allowance of mortgage servicing rights, and is a component of mortgage banking, net in the consolidated statements of income. |
Estimated Amortization Expense | Core Deposit Intangibles | Other Intangibles | Mortgage Servicing Rights | ||||||||
($ in Thousands) | |||||||||||
Nine months ending December 31, 2016 | $ | 211 | $ | 1,378 | $ | 8,850 | |||||
2017 | 112 | 1,786 | 9,674 | ||||||||
2018 | — | 1,756 | 7,761 | ||||||||
2019 | — | 1,457 | 6,313 | ||||||||
2020 | — | 1,340 | 5,169 | ||||||||
2021 | — | 1,316 | 4,265 | ||||||||
Beyond 2021 | — | 7,610 | 19,100 | ||||||||
Total Estimated Amortization Expense | $ | 323 | $ | 16,643 | $ | 61,132 |
March 31, 2016 | December 31, 2015 | ||||||
($ in Thousands) | |||||||
Short-Term Funding | |||||||
Federal funds purchased | $ | 74,985 | $ | 47,870 | |||
Securities sold under agreements to repurchase | 508,262 | 383,568 | |||||
Federal funds purchased and securities sold under agreements to repurchase | $ | 583,247 | $ | 431,438 | |||
FHLB advances | 770,000 | 335,000 | |||||
Commercial paper | 64,161 | 67,978 | |||||
Other short-term funding | 834,161 | 402,978 | |||||
Total short-term funding | $ | 1,417,408 | $ | 834,416 | |||
Long-Term Funding | |||||||
FHLB advances | $ | 2,365,216 | $ | 1,750,225 | |||
Senior notes, at par | 250,000 | 680,000 | |||||
Subordinated notes, at par | 250,000 | 250,000 | |||||
Other long-term funding and capitalized costs (1) | (3,900 | ) | (4,061 | ) | |||
Total long-term funding | 2,861,316 | 2,676,164 | |||||
Total short and long-term funding | $ | 4,278,724 | $ | 3,510,580 | |||
(1) Debt issuance costs are now reflected on the balance sheet with the related debt issued rather than within other assets. See Note 3 for additional information on this new accounting standard. |
Remaining Contractual Maturity of the Agreements | |||||||||||||||
March 31, 2016 | Overnight and Continuous | Up to 30 days | 30-90 days | Greater than 90 days | Total | ||||||||||
($ in Thousands) | |||||||||||||||
Repurchase agreements | |||||||||||||||
GSE securities | $ | 508,262 | $ | — | $ | — | $ | — | $ | 508,262 | |||||
Total | $ | 508,262 | $ | — | $ | — | $ | — | $ | 508,262 | |||||
December 31, 2015 | |||||||||||||||
Repurchase agreements | |||||||||||||||
GSE securities | $ | 383,568 | $ | — | $ | — | $ | — | $ | 383,568 | |||||
Total | $ | 383,568 | $ | — | $ | — | $ | — | $ | 383,568 |
March 31, 2016 | December 31, 2015 | ||||||||||||||||||
($ in Thousands) | Notional Amount | Fair Value | Balance Sheet Category | Notional Amount | Fair Value | Balance Sheet Category | |||||||||||||
Interest rate-related instruments — customer and mirror | $ | 1,806,688 | $ | 47,780 | Trading assets | $ | 1,665,965 | $ | 29,391 | Trading assets | |||||||||
Interest rate-related instruments — customer and mirror | 1,806,688 | (50,145 | ) | Trading liabilities | 1,665,965 | (30,886 | ) | Trading liabilities | |||||||||||
Interest rate lock commitments (mortgage) | 418,136 | 2,689 | Other assets | 271,530 | 958 | Other assets | |||||||||||||
Forward commitments (mortgage) | 249,866 | (1,732 | ) | Other liabilities | 231,798 | 403 | Other assets | ||||||||||||
Foreign currency exchange forwards | 124,617 | 4,203 | Trading assets | 72,976 | 1,532 | Trading assets | |||||||||||||
Foreign currency exchange forwards | 116,751 | (4,097 | ) | Trading liabilities | 65,649 | (1,398 | ) | Trading liabilities | |||||||||||
Commodity contracts | 43,646 | 1,104 | Trading assets | 44,380 | 1,269 | Trading assets | |||||||||||||
Commodity contracts | 43,770 | (981 | ) | Trading liabilities | 44,256 | (1,146 | ) | Trading liabilities | |||||||||||
Purchased options (time deposit) | 103,475 | 2,228 | Other assets | 104,582 | 2,715 | Other assets | |||||||||||||
Written options (time deposit) | 103,475 | (2,228 | ) | Other liabilities | 104,582 | (2,715 | ) | Other liabilities |
Income Statement Category of Gain / (Loss) Recognized in Income | For the Three Months Ended March 31, | |||||||
($ in Thousands) | 2016 | 2015 | ||||||
Derivative Instruments: | ||||||||
Interest rate-related instruments — customer and mirror, net | Capital market fees, net | $ | (870 | ) | $ | (294 | ) | |
Interest rate lock commitments (mortgage) | Mortgage banking, net | 1,731 | 1,738 | |||||
Forward commitments (mortgage) | Mortgage banking, net | (2,135 | ) | 640 | ||||
Foreign currency exchange forwards | Capital market fees, net | (28 | ) | 66 | ||||
Commodity contracts | Capital market fees, net | — | — |
Gross amounts recognized | Gross amounts not offset in the balance sheet | ||||||||||||||||||||||
Gross amounts offset in the balance sheet | Net amounts presented in the balance sheet | Financial instruments | Collateral | Net amount | |||||||||||||||||||
($ in Thousands) | |||||||||||||||||||||||
March 31, 2016 | |||||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||
Interest and commodity agreements | $ | 823 | $ | — | $ | 823 | $ | (823 | ) | $ | — | $ | — | ||||||||||
Derivative liabilities: | |||||||||||||||||||||||
Interest and commodity agreements | $ | 48,700 | $ | — | $ | 48,700 | $ | (823 | ) | $ | (47,877 | ) | $ | — | |||||||||
December 31, 2015 | |||||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||
Interest and commodity instruments | $ | 1,466 | $ | — | $ | 1,466 | $ | (1,466 | ) | $ | — | $ | — | ||||||||||
Derivative liabilities: | |||||||||||||||||||||||
Interest and commodity instruments | $ | 30,200 | $ | — | $ | 30,200 | $ | (1,466 | ) | $ | (28,734 | ) | $ | — |
March 31, 2016 | December 31, 2015 | ||||||
($ in Thousands) | |||||||
Commitments to extend credit, excluding commitments to originate residential mortgage loans held for sale(1)(2) | $ | 7,315,642 | $ | 7,402,518 | |||
Commercial letters of credit(1) | 7,782 | 9,945 | |||||
Standby letters of credit(3) | 278,740 | 296,508 |
1) | These off-balance sheet financial instruments are exercisable at the market rate prevailing at the date the underlying transaction will be completed and, thus, are deemed to have no current fair value, or the fair value is based on fees currently charged to enter into similar agreements and is not material at March 31, 2016 or December 31, 2015. |
2) | Interest rate lock commitments to originate residential mortgage loans held for sale are considered derivative instruments and are disclosed in Note 10. |
3) | The Corporation has established a liability of $3 million at both March 31, 2016 and December 31, 2015, as an estimate of the fair value of these financial instruments. |
For the Three Months Ended March 31, 2016 | For the Year Ended December 31, 2015 | ||||||
($ in Thousands) | |||||||
Balance at beginning of period | $ | 1,197 | $ | 3,258 | |||
Repurchase provision expense | 70 | 428 | |||||
Adjustments to provision expense | — | (2,450 | ) | ||||
Charge offs, net | (3 | ) | (39 | ) | |||
Balance at end of period | $ | 1,264 | $ | 1,197 |
Fair Value Hierarchy | March 31, 2016 | December 31, 2015 | |||||||
($ in Thousands) | |||||||||
Assets: | |||||||||
Investment securities available for sale: | |||||||||
U.S. Treasury securities | Level 1 | $ | 1,000 | $ | 997 | ||||
Residential mortgage-related securities: | |||||||||
FNMA / FHLMC | Level 2 | 1,303,404 | 1,414,626 | ||||||
GNMA | Level 2 | 1,547,255 | 1,590,003 | ||||||
Private-label | Level 2 | 1,512 | 1,709 | ||||||
GNMA commercial mortgage-related securities | Level 2 | 2,047,865 | 1,955,310 | ||||||
Other securities (debt and equity) | Level 1 | 1,605 | 1,569 | ||||||
Other securities (debt and equity) | Level 2 | 3,000 | 3,000 | ||||||
Other securities (debt and equity) | Level 3 | 200 | 200 | ||||||
Total investment securities available for sale | Level 1 | 2,605 | 2,566 | ||||||
Total investment securities available for sale | Level 2 | 4,903,036 | 4,964,648 | ||||||
Total investment securities available for sale | Level 3 | 200 | 200 | ||||||
Interest rate-related instruments | Level 2 | 47,780 | 29,391 | ||||||
Foreign currency exchange forwards | Level 2 | 4,203 | 1,532 | ||||||
Interest rate lock commitments to originate residential mortgage loans held for sale | Level 3 | 2,689 | 958 | ||||||
Forward commitments to sell residential mortgage loans | Level 3 | — | 403 | ||||||
Commodity contracts | Level 2 | 1,104 | 1,269 | ||||||
Purchased options (time deposit) | Level 2 | 2,228 | 2,715 | ||||||
Liabilities: | |||||||||
Interest rate-related instruments | Level 2 | 50,145 | 30,886 | ||||||
Foreign currency exchange forwards | Level 2 | 4,097 | 1,398 | ||||||
Forward commitments to sell residential mortgage loans | Level 3 | 1,732 | — | ||||||
Commodity contracts | Level 2 | 981 | 1,146 | ||||||
Written options (time deposit) | Level 2 | 2,228 | 2,715 |
Investment Securities Available for Sale | Derivative Financial Instruments | ||||||
($ in Thousands) | |||||||
Balance December 31, 2014 | $ | 200 | $ | (488 | ) | ||
Total net gains included in income: | |||||||
Mortgage derivative gain | — | 1,849 | |||||
Balance December 31, 2015 | $ | 200 | $ | 1,361 | |||
Total net losses included in income: | |||||||
Mortgage derivative loss | — | (404 | ) | ||||
Balance March 31, 2016 | $ | 200 | $ | 957 |
Income Statement Category of Adjustment Recognized in Income | Adjustment Recognized in Income | ||||||||
($ in Thousands) | Fair Value Hierarchy | Fair Value | |||||||
March 31, 2016 | |||||||||
Assets: | |||||||||
Loans held for sale (2) | Level 2 | $ | 129,398 | Mortgage banking, net | $ | — | |||
Impaired loans (1) | Level 3 | 84,664 | Provision for credit losses | (15,097 | ) | ||||
Mortgage servicing rights | Level 3 | 61,410 | Mortgage banking, net | (909 | ) | ||||
December 31, 2015 | |||||||||
Assets: | |||||||||
Loans held for sale | Level 2 | $ | 124,915 | Mortgage banking, net | $ | (155 | ) | ||
Impaired loans (1) | Level 3 | 41,891 | Provision for credit losses | (7,796 | ) | ||||
Mortgage servicing rights | Level 3 | 70,686 | Mortgage banking, net | 425 |
(1) | Represents individually evaluated impaired loans, net of the related allowance for loan losses. |
(2) | Loans held for sale are carried at the lower of cost or estimated fair value. At March 31, 2016, the estimated fair value exceeded the cost and therefore there was no adjustment recognized in Income. |
March 31, 2016 | December 31, 2015 | ||||||||||||||||
Fair Value Hierarchy Level | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
($ in Thousands) | |||||||||||||||||
Financial assets: | |||||||||||||||||
Cash and due from banks | Level 1 | $ | 287,183 | $ | 287,183 | $ | 374,921 | $ | 374,921 | ||||||||
Interest-bearing deposits in other financial institutions | Level 1 | 68,025 | 68,025 | 79,764 | 79,764 | ||||||||||||
Federal funds sold and securities purchased under agreements to resell | Level 1 | 20,200 | 20,200 | 19,000 | 19,000 | ||||||||||||
Investment securities held to maturity | Level 2 | 1,176,821 | 1,204,345 | 1,168,230 | 1,184,442 | ||||||||||||
Investment securities available for sale | Level 1 | 2,605 | 2,605 | 2,566 | 2,566 | ||||||||||||
Investment securities available for sale | Level 2 | 4,903,036 | 4,903,036 | 4,964,648 | 4,964,648 | ||||||||||||
Investment securities available for sale | Level 3 | 200 | 200 | 200 | 200 | ||||||||||||
FHLB and Federal Reserve Bank stocks | Level 2 | 181,853 | 181,853 | 147,240 | 147,240 | ||||||||||||
Loans held for sale | Level 2 | 128,339 | 129,398 | 124,915 | 124,915 | ||||||||||||
Loans, net | Level 3 | 18,949,870 | 19,025,680 | 18,440,079 | 18,389,832 | ||||||||||||
Bank owned life insurance | Level 2 | 580,583 | 580,583 | 583,019 | 583,019 | ||||||||||||
Derivatives (trading and other assets) | Level 2 | 55,315 | 55,315 | 34,907 | 34,907 | ||||||||||||
Derivatives (trading and other assets) | Level 3 | 2,689 | 2,689 | 1,361 | 1,361 | ||||||||||||
Financial liabilities: | |||||||||||||||||
Noninterest-bearing demand, savings, interest-bearing demand, and money market accounts | Level 3 | $ | 19,117,418 | $ | 19,117,418 | $ | 19,444,863 | $ | 19,444,863 | ||||||||
Brokered CDs and other time deposits | Level 2 | 1,568,042 | 1,576,714 | 1,562,802 | 1,564,464 | ||||||||||||
Short-term funding | Level 2 | 1,417,408 | 1,417,408 | 834,416 | 834,416 | ||||||||||||
Long-term funding | Level 2 | 2,861,316 | 2,925,447 | 2,676,164 | 2,728,112 | ||||||||||||
Standby letters of credit (1) | Level 2 | 2,746 | 2,746 | 2,954 | 2,954 | ||||||||||||
Derivatives (trading and other liabilities) | Level 2 | 57,451 | 57,451 | 36,145 | 36,145 | ||||||||||||
Derivatives (trading and other liabilities) | Level 3 | 1,732 | 1,732 | — | — |
(1) | The commitment on standby letters of credit was $279 million and $297 million at March 31, 2016 and December 31, 2015, respectively. See Note 12 for additional information on the standby letters of credit and for information on the fair value of lending-related commitments. |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
($ in Thousands) | |||||||
Components of Net Periodic Benefit Cost | |||||||
Pension Plan: | |||||||
Service cost | $ | 1,725 | $ | 3,063 | |||
Interest cost | 1,780 | 1,642 | |||||
Expected return on plan assets | (5,065 | ) | (5,350 | ) | |||
Amortization of prior service cost | 13 | 13 | |||||
Amortization of actuarial loss | 482 | 532 | |||||
Total net pension cost | $ | (1,065 | ) | $ | (100 | ) | |
Postretirement Plan: | |||||||
Interest cost | $ | 36 | $ | 35 | |||
Total net periodic benefit cost | $ | 36 | $ | 35 |
Segment Income Statement Data | |||||||||||||||
($ in Thousands) | Corporate and Commercial Specialty | Community, Consumer, and Business | Risk Management and Shared Services | Consolidated Total | |||||||||||
Three Months Ended March 31, 2016 | |||||||||||||||
Net interest income | $ | 79,164 | $ | 85,605 | $ | 7,218 | $ | 171,987 | |||||||
Noninterest income | 11,613 | 63,748 | 7,831 | 83,192 | |||||||||||
Total revenue | 90,777 | 149,353 | 15,049 | 255,179 | |||||||||||
Credit provision* | 12,739 | 6,142 | 1,119 | 20,000 | |||||||||||
Noninterest expense | 34,403 | 121,295 | 18,273 | 173,971 | |||||||||||
Income (loss) before income taxes | 43,635 | 21,916 | (4,343 | ) | 61,208 | ||||||||||
Income tax expense (benefit) | 14,579 | 7,670 | (3,575 | ) | 18,674 | ||||||||||
Net income (loss) | $ | 29,056 | $ | 14,246 | $ | (768 | ) | $ | 42,534 | ||||||
Return on average allocated capital (ROCET1)** | 11.3 | % | 9.1 | % | (5.0 | )% | 8.6 | % | |||||||
Three Months Ended March 31, 2015 | |||||||||||||||
Net interest income | $ | 75,691 | $ | 86,357 | $ | 5,765 | $ | 167,813 | |||||||
Noninterest income | 12,613 | 65,344 | 1,856 | 79,813 | |||||||||||
Total revenue | 88,304 | 151,701 | 7,621 | 247,626 | |||||||||||
Credit provision* | 9,526 | 7,071 | (12,097 | ) | 4,500 | ||||||||||
Noninterest expense | 34,460 | 118,373 | 21,159 | 173,992 | |||||||||||
Income (loss) before income taxes | 44,318 | 26,257 | (1,441 | ) | 69,134 | ||||||||||
Income tax expense (benefit) | 15,368 | 9,190 | (2,096 | ) | 22,462 | ||||||||||
Net income | $ | 28,950 | $ | 17,067 | $ | 655 | $ | 46,672 | |||||||
Return on average allocated capital (ROCET1)** | 12.5 | % | 10.7 | % | (1.1 | )% | 10.2 | % |
Segment Balance Sheet Data | |||||||||||||||
($ in Thousands) | Corporate and Commercial Specialty | Community, Consumer, and Business | Risk Management and Shared Services | Consolidated Total | |||||||||||
Three Months Ended March 31, 2016 | |||||||||||||||
Average earning assets | $ | 9,720,028 | $ | 9,120,319 | $ | 6,432,026 | $ | 25,272,373 | |||||||
Average loans | 9,711,221 | 9,119,020 | 92,589 | 18,922,830 | |||||||||||
Average deposits | 5,918,341 | 11,100,195 | 3,556,638 | 20,575,174 | |||||||||||
Average allocated capital (CET1)** | $ | 1,031,659 | $ | 627,211 | $ | 237,611 | $ | 1,896,481 | |||||||
Three Months Ended March 31, 2015 | |||||||||||||||
Average earning assets | $ | 9,218,844 | $ | 8,525,399 | $ | 6,403,783 | $ | 24,148,026 | |||||||
Average loans | 9,210,992 | 8,525,399 | 78,724 | 17,815,115 | |||||||||||
Average deposits | 5,421,541 | 10,522,618 | 3,111,037 | 19,055,196 | |||||||||||
Average allocated capital (CET1)** | $ | 942,764 | $ | 647,375 | $ | 214,078 | $ | 1,804,217 | |||||||
* The consolidated credit provision is equal to the actual reported provision for credit losses. | |||||||||||||||
** The Federal Reserve establishes capital adequacy requirements for the Corporation, including Tier 1 capital. Tier 1 capital is comprised of common capital and certain redeemable, non-cumulative preferred stock. Average allocated capital represents average common equity Tier 1 which is defined as average Tier 1 capital excluding qualifying perpetual preferred stock and qualifying trust preferred securities. This is a non-GAAP financial measure. For segment reporting purposes, the ROCET1 reflects return on average allocated common equity Tier 1 (“CET1”). The ROCET1 for the Risk Management and Shared Services segment and the Consolidated Total is inclusive of the annualized effect of the preferred stock dividends. |
($ in Thousands) | Investments Securities Available For Sale | Defined Benefit Pension and Post Retirement Obligations | Accumulated Other Comprehensive Income (Loss) | ||||||||
Balance January 1, 2016 | $ | 459 | $ | (33,075 | ) | $ | (32,616 | ) | |||
Other comprehensive income before reclassifications | 60,422 | — | 60,422 | ||||||||
Amounts reclassified from accumulated other comprehensive income (loss): | |||||||||||
Investment securities gain, net | (3,098 | ) | — | (3,098 | ) | ||||||
Personnel expense | — | 495 | 495 | ||||||||
Interest income (Amortization of net unrealized gains on available for sale securities transferred to held to maturity securities) | (1,572 | ) | — | (1,572 | ) | ||||||
Income tax expense | (21,275 | ) | (189 | ) | (21,464 | ) | |||||
Net other comprehensive income during period | 34,477 | 306 | 34,783 | ||||||||
Balance March 31, 2016 | $ | 34,936 | $ | (32,769 | ) | $ | 2,167 | ||||
Balance January 1, 2015 | $ | 18,512 | $ | (23,362 | ) | $ | (4,850 | ) | |||
Other comprehensive income before reclassifications | 47,418 | — | 47,418 | ||||||||
Amounts reclassified from accumulated other comprehensive income: | |||||||||||
Personnel expense | — | 545 | 545 | ||||||||
Income tax expense | (18,105 | ) | (208 | ) | (18,313 | ) | |||||
Net other comprehensive income during period | 29,313 | 337 | 29,650 | ||||||||
Balance March 31, 2015 | $ | 47,825 | $ | (23,025 | ) | $ | 24,800 |
ITEM 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
• | Average loans of $18.9 billion grew $380 million, or 2% from the fourth quarter, commercial lending accounted for 85% of average loan growth. Average deposits of $20.6 billion declined slightly from the fourth quarter. For the remainder of 2016, the Corporation expects high single digit annual average loan growth and to maintain the loan to deposit ratio under 100%. |
• | Net interest income of $172 million was slightly higher than the prior quarter, and up $4 million, or 2% from the year ago quarter. Net interest margin was 2.81% compared to 2.82% in the fourth quarter. In the absence of Federal Reserve action to raise rates, the Corporation expects the net interest margin to dip into the 2.75% to 2.80% range. |
• | Provision for credit losses of $20 million was flat to the fourth quarter. For the remainder of 2016, the Corporation expects the provision for loan losses will change based on loan growth and changes in risk grade or other indicators of credit quality. |
• | Noninterest income of $83 million was flat from the prior quarter. The Corporation expects noninterest income to be approximately flat to the prior year, excluding net investment securities gains. |
• | Noninterest expense of $174 million declined $2 million, or 1% from the prior quarter. The Corporation expects noninterest expense to be approximately flat to the prior year. |
1st Qtr 2016 | 4th Qtr 2015 | 3rd Qtr 2015 | 2nd Qtr 2015 | 1st Qtr 2015 | ||||||||||||||||
Net income | $ | 42,534 | $ | 42,791 | $ | 49,438 | $ | 49,400 | $ | 46,672 | ||||||||||
Net income available to common equity | 40,336 | 40,593 | 47,254 | 47,855 | 45,444 | |||||||||||||||
Earnings per common share - basic | 0.27 | 0.27 | 0.31 | 0.32 | 0.30 | |||||||||||||||
Earnings per common share - diluted | 0.27 | 0.27 | 0.31 | 0.31 | 0.30 | |||||||||||||||
Effective tax rate | 30.51 | % | 26.82 | % | 30.36 | % | 30.61 | % | 32.49 | % | ||||||||||
Reconciliation of Non-GAAP Measure | ||||||||||||||||||||
Federal Reserve efficiency ratio (a) | 69.01 | % | 70.49 | % | 68.85 | % | 70.23 | % | 70.26 | % | ||||||||||
Fully tax-equivalent adjustment | (1.37 | )% | (1.52 | )% | (1.38 | )% | (1.35 | )% | (1.41 | )% | ||||||||||
Other intangible amortization | (0.20 | )% | (0.21 | )% | (0.36 | )% | (0.35 | )% | (0.32 | )% | ||||||||||
Fully tax-equivalent efficiency ratio (b) | 67.44 | % | 68.76 | % | 67.11 | % | 68.53 | % | 68.53 | % |
Quarter ended | ||||||||||||||||||||||||||||||||
March 31, 2016 | December 31, 2015 | March 31, 2015 | ||||||||||||||||||||||||||||||
Average Balance | Interest Income / Expense | Average Yield / Rate | Average Balance | Interest Income / Expense | Average Yield / Rate | Average Balance | Interest Income / Expense | Average Yield / Rate | ||||||||||||||||||||||||
($ in Thousands) | ||||||||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||
Earning assets: | ||||||||||||||||||||||||||||||||
Loans:(1)(2)(3) | ||||||||||||||||||||||||||||||||
Commercial and business lending | $ | 7,121,061 | $ | 57,258 | 3.23 | % | $ | 6,892,162 | $ | 55,451 | 3.19 | % | $ | 6,993,169 | $ | 55,915 | 3.24 | % | ||||||||||||||
Commercial real estate lending | 4,469,531 | 38,989 | 3.51 | % | 4,373,460 | 37,587 | 3.41 | % | 4,102,733 | 36,403 | 3.60 | % | ||||||||||||||||||||
Total commercial | 11,590,592 | 96,247 | 3.34 | % | 11,265,622 | 93,038 | 3.28 | % | 11,095,902 | 92,318 | 3.37 | % | ||||||||||||||||||||
Residential mortgage | 5,920,280 | 47,748 | 3.23 | % | 5,845,557 | 47,305 | 3.24 | % | 5,231,698 | 43,472 | 3.33 | % | ||||||||||||||||||||
Retail | 1,411,958 | 16,640 | 4.72 | % | 1,431,509 | 16,673 | 4.65 | % | 1,487,515 | 17,081 | 4.62 | % | ||||||||||||||||||||
Total loans | 18,922,830 | 160,635 | 3.41 | % | 18,542,688 | 157,016 | 3.37 | % | 17,815,115 | 152,871 | 3.46 | % | ||||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||||||||
Taxable | 5,034,072 | 25,516 | 2.03 | % | 5,205,033 | 26,395 | 2.03 | % | 4,804,411 | 25,092 | 2.09 | % | ||||||||||||||||||||
Tax-exempt(1) | 1,045,210 | 11,980 | 4.58 | % | 1,016,329 | 11,909 | 4.69 | % | 950,336 | 12,067 | 5.08 | % | ||||||||||||||||||||
Other short-term investments | 270,261 | 1,067 | 1.59 | % | 259,053 | 1,639 | 2.53 | % | 578,164 | 1,692 | 1.18 | % | ||||||||||||||||||||
Investments and other | 6,349,543 | 38,563 | 2.43 | % | 6,480,415 | 39,943 | 2.47 | % | 6,332,911 | 38,851 | 2.45 | % | ||||||||||||||||||||
Total earning assets | 25,272,373 | $ | 199,198 | 3.16 | % | 25,023,103 | $ | 196,959 | 3.14 | % | 24,148,026 | $ | 191,722 | 3.20 | % | |||||||||||||||||
Other assets, net(4) | 2,426,475 | 2,434,297 | 2,454,664 | |||||||||||||||||||||||||||||
Total assets | $ | 27,698,848 | $ | 27,457,400 | $ | 26,602,690 | ||||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||||||||||
Savings | $ | 1,367,646 | $ | 236 | 0.07 | % | $ | 1,358,141 | $ | 249 | 0.07 | % | $ | 1,277,469 | $ | 238 | 0.08 | % | ||||||||||||||
Interest-bearing demand | 3,220,409 | 2,032 | 0.25 | % | 3,150,628 | 1,217 | 0.15 | % | 3,203,727 | 1,050 | 0.13 | % | ||||||||||||||||||||
Money market | 9,432,245 | 6,444 | 0.27 | % | 9,534,551 | 4,351 | 0.18 | % | 8,653,260 | 3,785 | 0.18 | % | ||||||||||||||||||||
Time | 1,558,278 | 3,054 | 0.79 | % | 1,604,864 | 3,027 | 0.75 | % | 1,594,183 | 2,546 | 0.65 | % | ||||||||||||||||||||
Total interest-bearing deposits | 15,578,578 | 11,766 | 0.30 | % | 15,648,184 | 8,844 | 0.22 | % | 14,728,639 | 7,619 | 0.21 | % | ||||||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 559,459 | 296 | 0.21 | % | 605,026 | 229 | 0.15 | % | 585,498 | 231 | 0.16 | % | ||||||||||||||||||||
Other short-term funding | 777,898 | 515 | 0.27 | % | 368,752 | 186 | 0.20 | % | 119,240 | 81 | 0.27 | % | ||||||||||||||||||||
Total short-term funding | 1,337,357 | 811 | 0.24 | % | 973,778 | 415 | 0.17 | % | 704,738 | 312 | 0.18 | % | ||||||||||||||||||||
Long-term funding(4) | 2,582,538 | 9,505 | 1.47 | % | 2,676,116 | 10,692 | 1.60 | % | 3,731,367 | 10,872 | 1.17 | % | ||||||||||||||||||||
Total short and long-term funding | 3,919,895 | 10,316 | 1.05 | % | 3,649,894 | 11,107 | 1.22 | % | 4,436,105 | 11,184 | 1.01 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 19,498,473 | $ | 22,082 | 0.45 | % | 19,298,078 | $ | 19,951 | 0.41 | % | 19,164,744 | $ | 18,803 | 0.40 | % | |||||||||||||||||
Noninterest-bearing demand deposits | 4,996,596 | 4,967,719 | 4,326,557 | |||||||||||||||||||||||||||||
Other liabilities | 233,029 | 250,957 | 266,660 | |||||||||||||||||||||||||||||
Stockholders’ equity | 2,970,750 | 2,940,646 | 2,844,729 | |||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 27,698,848 | $ | 27,457,400 | $ | 26,602,690 | ||||||||||||||||||||||||||
Interest rate spread | 2.71 | % | 2.73 | % | 2.80 | % | ||||||||||||||||||||||||||
Net free funds | 0.10 | % | 0.09 | % | 0.09 | % | ||||||||||||||||||||||||||
Fully tax-equivalent net interest income and net interest margin | $ | 177,116 | 2.81 | % | $ | 177,008 | 2.82 | % | $ | 172,919 | 2.89 | % | ||||||||||||||||||||
Fully tax-equivalent adjustment | 5,129 | 5,540 | 5,106 | |||||||||||||||||||||||||||||
Net interest income | $ | 171,987 | $ | 171,468 | $ | 167,813 |
(1) | The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 35% for all periods presented and is net of the effects of certain disallowed interest deductions. |
(2) | Nonaccrual loans and loans held for sale have been included in the average balances. |
(3) | Interest income includes net loan fees. |
(4) | During the first quarter of 2016, the Corporation adopted a new accounting standard related to simplifying the presentation of debt issuance costs. Under this new accounting standard, debt issuance costs are still capitalized; however, they are reflected on the balance sheet with the related debt issued rather than within other assets. All prior periods have been restated to reflect this change in presentation. |
• | Net interest income in the consolidated statements of income (which excludes the fully tax-equivalent adjustment) was $172 million for the first quarter of 2016 compared to $168 million for first quarter of 2015. See sections “Interest Rate Risk” and “Quantitative and Qualitative Disclosures about Market Risk,” for a discussion of interest rate risk and market risk. |
• | Fully tax-equivalent net interest income of $177 million for the first quarter of 2016 was $4 million higher than the first quarter of 2015. The increase in fully tax-equivalent net interest income was attributable to a favorable volume variance (as balance sheet changes in both volume and mix increased fully tax-equivalent net interest income by $11 million) and a $1 million day variance, partially offset by an unfavorable rate variance (as the impact of changes in the interest rate environment and product pricing decreased fully tax-equivalent net interest income by $8 million). |
• | Average earning assets of $25.3 billion for the first quarter of 2016 were $1.1 billion, or 5% higher than the first quarter of 2015. Average loans increased $1.1 billion, or 6%, primarily due to a $689 million increase in residential mortgage loans. Average securities and short-term investments were essentially flat. |
• | Average interest-bearing liabilities of $19.5 billion for the first quarter of 2016 were up $334 million, or 2% versus the first quarter of 2015. On average, interest-bearing deposits increased $850 million and noninterest-bearing demand deposits (a principal component of net free funds) increased by $670 million. On average, short and long-term funding decreased $516 million from first quarter of 2015, including a $1.1 billion decrease in long-term funding, partially offset by a $633 million increase in short-term funding. The Corporation redeemed $430 million of senior notes in February 2016. |
• | The net interest margin for the first quarter of 2016 was 2.81%, compared to 2.89% for the first quarter of 2015. The 8 basis points ("bp") decline in net interest margin was attributable to a 9 bp decrease in interest rate spread (the net of a 4 bp decrease in the yield on earning assets and a 5 bp increase in the cost of interest-bearing liabilities), partially offset by a 1 bp higher contribution from net free funds. |
• | For the first quarter of 2016, loan yields decreased 5 bp to 3.41%, due to competitive pricing pressures in this low interest rate environment. The yield on investment securities and other short-term investments decreased 2 bp to 2.43%, and was also impacted by the low interest rate environment and higher prepayment speeds of mortgage-related securities purchased at a premium. |
• | The average cost of interest-bearing deposits was 0.30% for the first quarter of 2016, 9 bp higher than the first quarter of 2015. The cost of short term funding was up 6 bp, while the cost of long-term funding increased 30 bp to 1.47% for the first quarter of 2016. |
• | At the end of the first quarter of 2016, the Federal funds rate was below 0.50% after a target rate increase in December 2015. If the Federal Reserve decides to increase rates later this year, the timing and magnitude of any such increases is uncertain and will likely depend on domestic and global economic conditions, among other factors. |
1Q16 Change vs | |||||||||||||||||||
($ in Thousands) | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 | 4Q15 | 1Q15 | ||||||||||||
Trust service fees | $ | 11,447 | $ | 11,965 | $ | 12,273 | $ | 12,515 | $ | 12,087 | (4 | )% | (5 | )% | |||||
Service charges on deposit accounts | 16,273 | 16,577 | 17,385 | 15,703 | 15,806 | (2 | )% | 3 | % | ||||||||||
Card-based and other nondeposit fees | 11,991 | 12,694 | 12,618 | 13,597 | 12,416 | (6 | )% | (3 | )% | ||||||||||
Insurance commissions | 21,382 | 17,997 | 17,561 | 20,077 | 19,728 | 19 | % | 8 | % | ||||||||||
Brokerage and annuity commissions | 3,794 | 3,694 | 3,809 | 4,192 | 3,683 | 3 | % | 3 | % | ||||||||||
Subtotal ("fee-based revenue") | 64,887 | 62,927 | 63,646 | 66,084 | 63,720 | 3 | % | 2 | % | ||||||||||
Mortgage banking income | 7,987 | 10,851 | 9,557 | 12,201 | 10,830 | (26 | )% | (26 | )% | ||||||||||
Mortgage servicing rights expense | (3,783 | ) | (2,580 | ) | (2,914 | ) | (2,260 | ) | (3,422 | ) | 47 | % | 11 | % | |||||
Mortgage banking, net | 4,204 | 8,271 | 6,643 | 9,941 | 7,408 | (49 | )% | (43 | )% | ||||||||||
Capital market fees, net | 3,538 | 3,423 | 2,170 | 2,692 | 2,467 | 3 | % | 43 | % | ||||||||||
Bank owned life insurance income | 4,770 | 2,092 | 2,448 | 2,381 | 2,875 | 128 | % | 66 | % | ||||||||||
Other | 2,171 | 2,580 | 2,118 | 2,288 | 2,510 | (16 | )% | (14 | )% | ||||||||||
Subtotal (“fee income”) | 14,683 | 16,366 | 13,379 | 17,302 | 15,260 | (10 | )% | (4 | )% | ||||||||||
Asset gains (losses), net | 524 | (391 | ) | 244 | 1,854 | 833 | (234 | )% | (37 | )% | |||||||||
Investment securities gains, net | 3,098 | 4,095 | 2,796 | 1,242 | — | (24 | )% | N/M | |||||||||||
Total noninterest income | $ | 83,192 | $ | 82,997 | $ | 80,065 | $ | 86,482 | $ | 79,813 | — | % | 4 | % | |||||
Mortgage loans originated for sale during period | $ | 193,849 | $ | 316,973 | $ | 291,931 | $ | 350,906 | $ | 268,296 | (39 | )% | (28 | )% | |||||
Trust assets under management, at market value | $ | 7,843,512 | $ | 7,729,131 | $ | 7,625,613 | $ | 8,068,241 | $ | 8,137,705 | 1 | % | (4 | )% | |||||
N/M = Not Meaningful |
• | Fee-based revenue was $65 million, an increase of $1 million (2%) compared to the first quarter of 2015. Insurance commissions were $21 million, an increase of $2 million (8%) compared to the first quarter of 2015. The increase was primarily attributable to increased property and casualty related commissions. |
• | Net mortgage banking income for the first quarter of 2016 was $4 million, down $3 million (43%) compared to the first quarter of 2015. Net mortgage banking consists of gross mortgage banking income less mortgage servicing rights expense. Gross mortgage banking income includes servicing fees, the gain or loss on sales of mortgage loans to the secondary market, changes to the mortgage repurchase reserve, and the fair value adjustments on the mortgage derivatives. Gross mortgage banking income decreased, primarily due to a $3 million unfavorable change in the fair value of mortgage derivatives. |
• | Net investment securities gains were $3 million for the first quarter of 2016, due to the ongoing restructuring of the Corporation's investment portfolio from FNMA and FHLMC mortgage-related securities into GNMA mortgage-related securities. See Note 6, "Investment Securities" of the notes to consolidated financial statements for additional information on the investment securities portfolio restructuring. |
• | Bank owned life insurance income ("BOLI") was $5 million, an increase of $2 million (66%) compared to the first quarter of 2015, primarily due to increased proceeds from BOLI policy redemptions during the first quarter of 2016. |
1Q16 Change vs | |||||||||||||||||||
($ in Thousands) | 1Q16 | 4Q15 | 3Q15 | 2Q15 | 1Q15 | 4Q15 | 1Q15 | ||||||||||||
Personnel expense | $ | 101,398 | $ | 100,469 | $ | 101,134 | $ | 102,986 | $ | 100,152 | 1 | % | 1 | % | |||||
Occupancy | 13,802 | 14,718 | 14,187 | 14,308 | 17,683 | (6 | )% | (22 | )% | ||||||||||
Equipment | 5,446 | 5,695 | 6,003 | 5,739 | 5,772 | (4 | )% | (6 | )% | ||||||||||
Technology | 14,264 | 13,953 | 14,748 | 16,354 | 15,558 | 2 | % | (8 | )% | ||||||||||
Business development and advertising | 8,211 | 7,652 | 5,964 | 6,829 | 5,327 | 7 | % | 54 | % | ||||||||||
Other intangible amortization | 504 | 520 | 885 | 888 | 801 | (3 | )% | (37 | )% | ||||||||||
Loan expense | 3,221 | 4,120 | 3,305 | 3,681 | 2,996 | (22 | )% | 8 | % | ||||||||||
Legal and professional fees | 5,025 | 3,963 | 4,207 | 4,344 | 4,538 | 27 | % | 11 | % | ||||||||||
Foreclosure / OREO expense | 1,877 | 2,371 | 645 | 1,264 | 1,162 | (21 | )% | 62 | % | ||||||||||
FDIC expense | 7,750 | 7,500 | 6,000 | 6,000 | 6,500 | 3 | % | 19 | % | ||||||||||
Other | 12,473 | 15,032 | 14,507 | 14,384 | 13,503 | (17 | )% | (8 | )% | ||||||||||
Total noninterest expense | $ | 173,971 | $ | 175,993 | $ | 171,585 | $ | 176,777 | $ | 173,992 | (1 | )% | — | % | |||||
Average full-time equivalent employees | 4,374 | 4,378 | 4,421 | 4,465 | 4,422 |
• | Personnel expense (which includes salary-related expenses and fringe benefit expenses) was $101 million for the first quarter of 2016, up $1 million from the first quarter of 2015. |
• | Nonpersonnel noninterest expenses on a combined basis were $73 million, down $1 million (2%) compared to the first quarter of 2015. Occupancy expense was down $4 million from the first quarter of 2015, primarily attributable to a $3 million lease termination charge incurred in the first quarter of 2015. Business development and advertising was up $3 million from the first quarter of 2015 due to timing of marketing campaigns. FDIC expense was $1 million (19%) higher compared to the first quarter of 2015 reflecting growth in risk-weighted assets. |
• | At March 31, 2016, total assets were $28.2 billion, up $467 million (2%) from December 31, 2015 and up $1.1 billion (4%) from March 31, 2015. |
• | Loans of $19.2 billion at March 31, 2016 were up $513 million (3%) from December 31, 2015 and were up $1.2 billion (7%) from March 31, 2015. See section "Loans" for additional information on loans. |
• | Investment securities were $6.1 billion at March 31, 2016, down slightly (1%) from year-end 2015 and up $286 million (5%) from March 31, 2015. |
• | Premises and equipment, net of $332 million increased $64 million (24%) from December 31, 2015 and increased $57 million (21%) from March 31, 2015, primarily due to the purchase of the Milwaukee Center. |
• | At March 31, 2016, total deposits of $20.7 billion were down $322 million (2%) from December 31, 2015 and were up $834 million (4%) from March 31, 2015. See section "Deposits and Customer Funding" for additional information on deposits. |
• | Short and long-term funding of $4.3 billion at March 31, 2016 increased $768 million (22%) since year-end 2015, primarily due to increases of $435 million and $615 million in short and long-term FHLB Advances, respectively. This was partially offset by the redemption of $430 million in senior notes. |
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||||||||||||||||
Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | |||||||||||||||||||||||||
($ in Thousands) | ||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 6,511,648 | 34 | % | $ | 6,190,683 | 33 | % | $ | 6,128,080 | 33 | % | $ | 6,255,092 | 34 | % | $ | 6,189,916 | 34 | % | ||||||||||||||
Commercial real estate — owner occupied | 917,285 | 5 | 918,212 | 5 | 966,689 | 5 | 978,183 | 5 | 1,003,885 | 6 | ||||||||||||||||||||||||
Commercial and business lending | 7,428,933 | 39 | 7,108,895 | 38 | 7,094,769 | 38 | 7,233,275 | 39 | 7,193,801 | 40 | ||||||||||||||||||||||||
Commercial real estate — investor | 3,276,733 | 17 | 3,234,266 | 17 | 3,183,352 | 17 | 3,126,440 | 17 | 3,086,980 | 17 | ||||||||||||||||||||||||
Real estate construction | 1,184,398 | 6 | 1,162,145 | 6 | 1,124,280 | 6 | 1,092,308 | 6 | 1,019,571 | 6 | ||||||||||||||||||||||||
Commercial real estate lending | 4,461,131 | 23 | 4,396,411 | 23 | 4,307,632 | 23 | 4,218,748 | 23 | 4,106,551 | 23 | ||||||||||||||||||||||||
Total commercial | 11,890,064 | 62 | 11,505,306 | 61 | 11,402,401 | 61 | 11,452,023 | 62 | 11,300,352 | 63 | ||||||||||||||||||||||||
Residential mortgage | 5,944,457 | 31 | 5,783,267 | 31 | 5,682,178 | 31 | 5,398,434 | 30 | 5,208,241 | 29 | ||||||||||||||||||||||||
Home equity revolving lines of credit | 867,860 | 4 | 883,759 | 5 | 883,573 | 5 | 880,628 | 5 | 879,827 | 5 | ||||||||||||||||||||||||
Home equity loans junior liens | 115,134 | 1 | 122,043 | 1 | 130,892 | 1 | 141,344 | 1 | 154,120 | 1 | ||||||||||||||||||||||||
Home equity | 982,994 | 5 | 1,005,802 | 6 | 1,014,465 | 6 | 1,021,972 | 6 | 1,033,947 | 6 | ||||||||||||||||||||||||
Other consumer | 409,725 | 2 | 419,968 | 2 | 425,729 | 2 | 430,823 | 2 | 436,492 | 2 | ||||||||||||||||||||||||
Total consumer | 7,337,176 | 38 | 7,209,037 | 39 | 7,122,372 | 39 | 6,851,229 | 38 | 6,678,680 | 37 | ||||||||||||||||||||||||
Total loans | $ | 19,227,240 | 100 | % | $ | 18,714,343 | 100 | % | $ | 18,524,773 | 100 | % | $ | 18,303,252 | 100 | % | $ | 17,979,032 | 100 | % | ||||||||||||||
Commercial real estate - investor and Real estate construction loan detail: | ||||||||||||||||||||||||||||||||||
Farmland | $ | 5,557 | — | % | $ | 7,135 | — | % | $ | 9,645 | — | % | $ | 9,590 | — | % | $ | 8,987 | — | % | ||||||||||||||
Multi-family | 974,051 | 30 | 932,360 | 29 | 921,456 | 29 | 902,680 | 29 | 926,640 | 30 | ||||||||||||||||||||||||
Non-owner occupied | 2,297,125 | 70 | 2,294,771 | 71 | 2,252,251 | 71 | 2,214,170 | 71 | 2,151,353 | 70 | ||||||||||||||||||||||||
Commercial real estate — investor | $ | 3,276,733 | 100 | % | $ | 3,234,266 | 100 | % | $ | 3,183,352 | 100 | % | $ | 3,126,440 | 100 | % | $ | 3,086,980 | 100 | % | ||||||||||||||
1-4 family construction | $ | 320,984 | 27 | % | $ | 309,396 | 27 | % | $ | 315,538 | 28 | % | $ | 318,222 | 29 | % | $ | 300,210 | 29 | % | ||||||||||||||
All other construction | 863,414 | 73 | 852,749 | 73 | 808,742 | 72 | 774,086 | 71 | 719,361 | 71 | ||||||||||||||||||||||||
Real estate construction | $ | 1,184,398 | 100 | % | $ | 1,162,145 | 100 | % | $ | 1,124,280 | 100 | % | $ | 1,092,308 | 100 | % | $ | 1,019,571 | 100 | % |
• | Commercial and business loans were $7.4 billion and represented 39% of total loans at March 31, 2016, an increase of $320 million (5%) from December 31, 2015 and an increase of $235 million (3%) from March 31, 2015. |
• | Commercial real estate lending totaled $4.5 billion at March 31, 2016 and represented 23% of total loans, an increase of $65 million (1%) from December 31, 2015 and an increase of $355 million (9%) from March 31, 2015. |
• | Consumer loans were $7.3 billion and represented 38% of total loans at March 31, 2016, an increase of $128 million (2%) from December 31, 2015 and an increase of $658 million (10%) from March 31, 2015. |
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||
($ in Millions) | |||||||||||||||||||
Pass | $ | 402 | $ | 522 | $ | 587 | $ | 658 | $ | 706 | |||||||||
Special mention | 75 | 86 | 74 | 28 | 35 | ||||||||||||||
Potential problem | 150 | 124 | 84 | 60 | 39 | ||||||||||||||
Nonaccrual | 129 | 20 | 13 | 11 | — | ||||||||||||||
Total Oil and gas related loans | $ | 756 | $ | 752 | $ | 758 | $ | 757 | $ | 780 | |||||||||
Oil and gas related allowance | $ | 49 | $ | 42 | $ | 29 | $ | 26 | $ | 27 | |||||||||
Oil and gas related allowance ratio | 6.5 | % | 5.6 | % | 3.8 | % | 3.4 | % | 3.5 | % |
Maturity (1) | ||||||||||||||||||
March 31, 2016 | Within 1 Year (2) | 1-5 Years | After 5 Years | Total | % of Total | |||||||||||||
($ in Thousands) | ||||||||||||||||||
Commercial and industrial | $ | 5,438,030 | $ | 798,554 | $ | 275,064 | $ | 6,511,648 | 55 | % | ||||||||
Commercial real estate — investor | 1,592,649 | 1,575,716 | 108,368 | 3,276,733 | 27 | % | ||||||||||||
Commercial real estate — owner occupied | 283,411 | 504,698 | 129,176 | 917,285 | 8 | % | ||||||||||||
Real estate construction | 840,903 | 324,823 | 18,672 | 1,184,398 | 10 | % | ||||||||||||
Total | $ | 8,154,993 | $ | 3,203,791 | $ | 531,280 | $ | 11,890,064 | 100 | % | ||||||||
Fixed rate | $ | 3,866,242 | $ | 942,019 | $ | 261,794 | $ | 5,070,055 | 43 | % | ||||||||
Floating or adjustable rate | 4,288,751 | 2,261,772 | 269,486 | 6,820,009 | 57 | % | ||||||||||||
Total | $ | 8,154,993 | $ | 3,203,791 | $ | 531,280 | $ | 11,890,064 | 100 | % | ||||||||
Percent by maturity distribution | 69 | % | 27 | % | 4 | % | 100 | % |
(1) | Based upon scheduled principal repayments. |
(2) | Demand loans, past due loans, and overdrafts are reported in the “Within 1 Year” category. |
$ in Thousands | % to Total | |||||
Less than 5 years | $ | 38,077 | 4 | % | ||
5 — 10 years | 205,868 | 24 | % | |||
Over 10 years | 623,915 | 72 | % | |||
Total home equity revolving lines of credit | $ | 867,860 | 100 | % |
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||
($ in Thousands) | |||||||||||||||||||
Nonperforming assets: | |||||||||||||||||||
Commercial and industrial | $ | 197,115 | $ | 93,575 | $ | 60,184 | $ | 66,394 | $ | 63,340 | |||||||||
Commercial real estate — owner occupied | 9,443 | 8,049 | 13,368 | 18,821 | 21,861 | ||||||||||||||
Commercial and business lending | 206,558 | 101,624 | 73,552 | 85,215 | 85,201 | ||||||||||||||
Commercial real estate — investor | 12,330 | 8,643 | 6,921 | 6,090 | 13,742 | ||||||||||||||
Real estate construction | 840 | 940 | 997 | 2,906 | 5,423 | ||||||||||||||
Commercial real estate lending | 13,170 | 9,583 | 7,918 | 8,996 | 19,165 | ||||||||||||||
Total commercial | 219,728 | 111,207 | 81,470 | 94,211 | 104,366 | ||||||||||||||
Residential mortgage | 52,212 | 51,482 | 51,957 | 51,920 | 54,149 | ||||||||||||||
Home equity revolving lines of credit | 8,822 | 9,917 | 8,060 | 8,420 | 9,171 | ||||||||||||||
Home equity loans junior liens | 5,250 | 5,327 | 5,581 | 5,356 | 6,145 | ||||||||||||||
Home equity | 14,072 | 15,244 | 13,641 | 13,776 | 15,316 | ||||||||||||||
Other consumer | 383 | 325 | 386 | 454 | 515 | ||||||||||||||
Total consumer | 66,667 | 67,051 | 65,984 | 66,150 | 69,980 | ||||||||||||||
Total nonaccrual loans | 286,395 | 178,258 | 147,454 | 160,361 | 174,346 | ||||||||||||||
Commercial real estate owned | 9,695 | 7,942 | 9,242 | 9,906 | 10,620 | ||||||||||||||
Residential real estate owned | 4,689 | 4,768 | 3,788 | 2,996 | 3,474 | ||||||||||||||
Bank properties real estate owned | 1,672 | 1,859 | 710 | 655 | 832 | ||||||||||||||
Other real estate owned (“OREO”) | 16,056 | 14,569 | 13,740 | 13,557 | 14,926 | ||||||||||||||
Total nonperforming assets (“NPAs”) | $ | 302,451 | $ | 192,827 | $ | 161,194 | $ | 173,918 | $ | 189,272 | |||||||||
Commercial real estate-investor & Real estate construction nonaccrual loans detail: | |||||||||||||||||||
Multi-family | $ | 415 | $ | 2 | $ | 2 | $ | 40 | $ | 423 | |||||||||
Non-owner occupied | 11,915 | 8,641 | 6,919 | 6,050 | 13,319 | ||||||||||||||
Commercial real estate — investor | $ | 12,330 | $ | 8,643 | $ | 6,921 | $ | 6,090 | $ | 13,742 | |||||||||
1-4 family construction | $ | 274 | $ | 314 | $ | 337 | $ | 682 | $ | 1,304 | |||||||||
All other construction | 566 | 626 | 660 | 2,224 | 4,119 | ||||||||||||||
Real estate construction | $ | 840 | $ | 940 | $ | 997 | $ | 2,906 | $ | 5,423 | |||||||||
Accruing loans past due 90 days or more: | |||||||||||||||||||
Commercial | $ | 217 | $ | 249 | $ | 178 | $ | 262 | $ | 197 | |||||||||
Consumer | 1,412 | 1,399 | 1,306 | 1,400 | 1,518 | ||||||||||||||
Total accruing loans past due 90 days or more | $ | 1,629 | $ | 1,648 | $ | 1,484 | $ | 1,662 | $ | 1,715 | |||||||||
Restructured loans (accruing): | |||||||||||||||||||
Commercial | $ | 57,980 | $ | 59,595 | $ | 55,006 | $ | 60,219 | $ | 59,738 | |||||||||
Consumer | 27,617 | 27,768 | 27,803 | 30,001 | 29,079 | ||||||||||||||
Total restructured loans (accruing) | $ | 85,597 | $ | 87,363 | $ | 82,809 | $ | 90,220 | $ | 88,817 | |||||||||
Nonaccrual restructured loans (included in nonaccrual loans) | $ | 35,232 | $ | 37,684 | $ | 36,583 | $ | 43,699 | $ | 53,553 | |||||||||
Ratios: | |||||||||||||||||||
Nonaccrual loans to total loans | 1.49 | % | 0.95 | % | 0.80 | % | 0.88 | % | 0.97 | % | |||||||||
NPAs to total loans plus OREO | 1.57 | % | 1.03 | % | 0.87 | % | 0.95 | % | 1.05 | % | |||||||||
NPAs to total assets | 1.07 | % | 0.70 | % | 0.59 | % | 0.64 | % | 0.70 | % | |||||||||
Allowance for loan losses to nonaccrual loans | 97 | % | 154 | % | 178 | % | 163 | % | 152 | % |
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||
($ in Thousands) | |||||||||||||||||||
Accruing loans 30-89 days past due: | |||||||||||||||||||
Commercial and industrial | $ | 2,901 | $ | 1,011 | $ | 3,296 | $ | 6,357 | $ | 1,717 | |||||||||
Commercial real estate — owner occupied | 520 | 7,142 | 2,018 | 1,090 | 1,849 | ||||||||||||||
Commercial and business lending | 3,421 | 8,153 | 5,314 | 7,447 | 3,566 | ||||||||||||||
Commercial real estate — investor | 1,072 | 291 | 1,218 | 19,843 | 2,215 | ||||||||||||||
Real estate construction | 415 | 296 | 373 | 312 | 317 | ||||||||||||||
Commercial real estate lending | 1,487 | 587 | 1,591 | 20,155 | 2,532 | ||||||||||||||
Total commercial | 4,908 | 8,740 | 6,905 | 27,602 | 6,098 | ||||||||||||||
Residential mortgage | 3,594 | 4,930 | 4,811 | 6,602 | 4,356 | ||||||||||||||
Home equity revolving lines of credit | 3,582 | 5,559 | 6,142 | 5,157 | 7,150 | ||||||||||||||
Home equity loans junior liens | 2,222 | 2,360 | 2,423 | 1,894 | 1,905 | ||||||||||||||
Home equity | 5,804 | 7,919 | 8,565 | 7,051 | 9,055 | ||||||||||||||
Other consumer | 1,682 | 1,870 | 1,723 | 1,655 | 1,818 | ||||||||||||||
Total consumer | 11,080 | 14,719 | 15,099 | 15,308 | 15,229 | ||||||||||||||
Total accruing loans 30-89 days past due | $ | 15,988 | $ | 23,459 | $ | 22,004 | $ | 42,910 | $ | 21,327 | |||||||||
Commercial real estate-investor & Real estate construction accruing loans 30-89 days past due detail: | |||||||||||||||||||
Farmland | $ | — | $ | — | $ | 66 | $ | — | $ | — | |||||||||
Multi-family | 324 | 108 | 114 | 541 | 849 | ||||||||||||||
Non-owner occupied | 748 | 183 | 1,038 | 19,302 | 1,366 | ||||||||||||||
Commercial real estate — investor | $ | 1,072 | $ | 291 | $ | 1,218 | $ | 19,843 | $ | 2,215 | |||||||||
1-4 family construction | $ | — | $ | 27 | $ | 28 | $ | 213 | $ | 317 | |||||||||
All other construction | 415 | 269 | 345 | 99 | — | ||||||||||||||
Real estate construction | $ | 415 | $ | 296 | $ | 373 | $ | 312 | $ | 317 | |||||||||
Potential problem loans: | |||||||||||||||||||
Commercial and industrial | $ | 328,464 | $ | 233,130 | $ | 192,174 | $ | 127,028 | $ | 140,412 | |||||||||
Commercial real estate — owner occupied | 41,107 | 35,706 | 41,466 | 41,997 | 43,114 | ||||||||||||||
Commercial and business lending | 369,571 | 268,836 | 233,640 | 169,025 | 183,526 | ||||||||||||||
Commercial real estate — investor | 25,385 | 25,944 | 23,633 | 23,543 | 26,026 | ||||||||||||||
Real estate construction | 2,422 | 3,919 | 2,354 | 1,327 | 1,487 | ||||||||||||||
Commercial real estate lending | 27,807 | 29,863 | 25,987 | 24,870 | 27,513 | ||||||||||||||
Total commercial | 397,378 | 298,699 | 259,627 | 193,895 | 211,039 | ||||||||||||||
Residential mortgage | 3,488 | 2,796 | 3,966 | 5,341 | 6,621 | ||||||||||||||
Home equity revolving lines of credit | 48 | 48 | 141 | 202 | 247 | ||||||||||||||
Home equity loans junior liens | 161 | 174 | 86 | 230 | 711 | ||||||||||||||
Home equity | 209 | 222 | 227 | 432 | 958 | ||||||||||||||
Total consumer | 3,697 | 3,018 | 4,193 | 5,773 | 7,579 | ||||||||||||||
Total potential problem loans | $ | 401,075 | $ | 301,717 | $ | 263,820 | $ | 199,668 | $ | 218,618 |
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||
($ in Thousands) | |||||||||||||||
Allowance for Loan Losses: | |||||||||||||||
Balance at beginning of period | $ | 274,264 | $ | 262,536 | $ | 261,538 | $ | 265,268 | $ | 266,302 | |||||
Provision for loan losses | 20,000 | 19,500 | 9,000 | 5,000 | 4,500 | ||||||||||
Charge offs | (21,245 | ) | (12,741 | ) | (11,732 | ) | (14,537 | ) | (13,270 | ) | |||||
Recoveries | 4,351 | 4,969 | 3,730 | 5,807 | 7,736 | ||||||||||
Net charge offs | (16,894 | ) | (7,772 | ) | (8,002 | ) | (8,730 | ) | (5,534 | ) | |||||
Balance at end of period | $ | 277,370 | $ | 274,264 | $ | 262,536 | $ | 261,538 | $ | 265,268 | |||||
Allowance for Unfunded Commitments: | |||||||||||||||
Balance at beginning of period | $ | 24,400 | $ | 23,900 | $ | 24,900 | $ | 24,900 | $ | 24,900 | |||||
Provision for unfunded commitments | — | 500 | (1,000 | ) | — | — | |||||||||
Balance at end of period | $ | 24,400 | $ | 24,400 | $ | 23,900 | $ | 24,900 | $ | 24,900 | |||||
Allowance for credit losses(A) | $ | 301,770 | $ | 298,664 | $ | 286,436 | $ | 286,438 | $ | 290,168 | |||||
Provision for credit losses(B) | $ | 20,000 | $ | 20,000 | $ | 8,000 | $ | 5,000 | $ | 4,500 | |||||
Net loan (charge offs) recoveries: | |||||||||||||||
Commercial and industrial | $ | (14,936 | ) | $ | (4,586 | ) | $ | (4,709 | ) | $ | (3,921 | ) | $ | (4,650 | ) |
Commercial real estate — owner occupied | (43 | ) | (291 | ) | 504 | (1,198 | ) | (739 | ) | ||||||
Commercial and business lending | (14,979 | ) | (4,877 | ) | (4,205 | ) | (5,119 | ) | (5,389 | ) | |||||
Commercial real estate — investor | 1,239 | (665 | ) | (496 | ) | (1,856 | ) | 2,529 | |||||||
Real estate construction | (28 | ) | 140 | (38 | ) | 673 | 743 | ||||||||
Commercial real estate lending | 1,211 | (525 | ) | (534 | ) | (1,183 | ) | 3,272 | |||||||
Total commercial | (13,768 | ) | (5,402 | ) | (4,739 | ) | (6,302 | ) | (2,117 | ) | |||||
Residential mortgage | (1,232 | ) | (714 | ) | (1,562 | ) | (1,278 | ) | (1,005 | ) | |||||
Home equity revolving lines of credit | (902 | ) | (294 | ) | (533 | ) | (246 | ) | (1,220 | ) | |||||
Home equity loans junior liens | (244 | ) | (623 | ) | (358 | ) | (118 | ) | (423 | ) | |||||
Home equity | (1,146 | ) | (917 | ) | (891 | ) | (364 | ) | (1,643 | ) | |||||
Other consumer | (748 | ) | (739 | ) | (810 | ) | (786 | ) | (769 | ) | |||||
Total consumer | (3,126 | ) | (2,370 | ) | (3,263 | ) | (2,428 | ) | (3,417 | ) | |||||
Total net charge offs | $ | (16,894 | ) | $ | (7,772 | ) | $ | (8,002 | ) | $ | (8,730 | ) | $ | (5,534 | ) |
Commercial real estate-investor and Real estate construction net charge off detail: | |||||||||||||||
Multi-family | $ | (2 | ) | $ | — | $ | (35 | ) | $ | — | $ | (4 | ) | ||
Non-owner occupied | 1,241 | (665 | ) | (461 | ) | (1,856 | ) | 2,533 | |||||||
Commercial real estate — investor | $ | 1,239 | $ | (665 | ) | $ | (496 | ) | $ | (1,856 | ) | $ | 2,529 | ||
1-4 family construction | $ | (49 | ) | $ | 235 | $ | 31 | $ | 280 | $ | 204 | ||||
All other construction | 21 | (95 | ) | (69 | ) | 393 | 539 | ||||||||
Real estate construction | $ | (28 | ) | $ | 140 | $ | (38 | ) | $ | 673 | $ | 743 | |||
Ratios: | |||||||||||||||
Allowance for loan losses to total loans | 1.44 | % | 1.47 | % | 1.42 | % | 1.43 | % | 1.48 | % | |||||
Allowance for loan losses to net charge offs (Annualized) | 4.1x | 8.9x | 8.3x | 7.5x | 11.8x |
(A) | Includes the allowance for loan losses and the allowance for unfunded commitments. |
(B) | Includes the provision for loan losses and the provision for unfunded commitments. |
(in basis points) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||
Net loan (charge offs) recoveries: | ||||||||||
Commercial and industrial | (97 | ) | (31 | ) | (31 | ) | (25 | ) | (31 | ) |
Commercial real estate — owner occupied | (2 | ) | (12 | ) | 21 | (48 | ) | (30 | ) | |
Commercial and business lending | (85 | ) | (28 | ) | (24 | ) | (29 | ) | (31 | ) |
Commercial real estate — investor | 15 | (8 | ) | (6 | ) | (24 | ) | 33 | ||
Real estate construction | (1 | ) | 5 | (1 | ) | 26 | 30 | |||
Commercial real estate lending | 11 | (5 | ) | (5 | ) | (11 | ) | 32 | ||
Total commercial | (48 | ) | (19 | ) | (17 | ) | (22 | ) | (8 | ) |
Residential mortgage | (8 | ) | (5 | ) | (11 | ) | (9 | ) | (8 | ) |
Home equity revolving lines of credit | (41 | ) | (13 | ) | (24 | ) | (11 | ) | (56 | ) |
Home equity loans junior liens | (83 | ) | (195 | ) | (104 | ) | (32 | ) | (108 | ) |
Home equity | (46 | ) | (36 | ) | (35 | ) | (14 | ) | (64 | ) |
Other consumer | (72 | ) | (69 | ) | (75 | ) | (73 | ) | (70 | ) |
Total consumer | (17 | ) | (13 | ) | (18 | ) | (14 | ) | (21 | ) |
Total net charge offs | (36 | ) | (17 | ) | (17 | ) | (19 | ) | (13 | ) |
Commercial real estate-investor and Real estate construction net charge off detail: | ||||||||||
Multi-family | N/M | N/M | (2 | ) | N/M | N/M | ||||
Non-owner occupied | 21 | (11 | ) | (8 | ) | (34 | ) | 48 | ||
Commercial real estate — investor | 15 | (8 | ) | (6 | ) | (24 | ) | 33 | ||
1-4 family construction | (6 | ) | 29 | 4 | 35 | 27 | ||||
All other construction | 1 | (5 | ) | (3 | ) | 22 | 32 | |||
Real estate construction | (1 | ) | 5 | (1 | ) | 26 | 30 |
(A) | Annualized ratio of net charge offs to average loans by loan type. |
• | Total loans increased $513 million (3%) during the first quarter of 2016, including a $320 million (5%) increase in commercial and business lending, a $65 million (1%) increase in commercial real estate lending, and a $128 million (2%) increase in total consumer. Compared to March 31, 2015, total loans increased $1.2 billion (7%), including a $235 million (3%) increase in commercial and business lending, a $355 million (9%) increase in commercial real estate lending, and a $658 million (10%) increase in total consumer. See section “Loans” for additional information on the changes in the loan portfolio and see section “Credit Risk” for discussion about credit risk management for each loan type. |
• | Total nonaccrual loans increased $108 million during the first quarter of 2016, primarily due to the risk migration of oil and gas related credits. Nonaccrual loans increased $112 million from March 31, 2015, also principally related to the risk migration within the oil and gas loan portfolio. See also Note 7, “Loans,” of the notes to consolidated financial statements and section “Nonaccrual Loans, Potential Problem Loans, and Other Real Estate Owned” for additional disclosures on the changes in asset quality. |
• | Potential problem loans increased $99 million from December 31, 2015 and increased $182 million from March 31, 2015, primarily due to the risk migration on general commercial and oil and gas related credits. See Table 9 for additional information on the changes in potential problem loans. |
• | Net charge offs increased $9 million from the fourth quarter of 2015 and increased $11 million from the first quarter of 2015, primarily due to the charge off of one large oil and gas related credit. See Tables 10 and 11 for additional information regarding the activity in the allowance for loan losses. |
• | The allowance for loan losses attributable to oil and gas related credits (included within the commercial and industrial allowance for loan losses) increased to $49 million at March 31, 2016, compared to $42 million at December 31, 2015 and $27 million at March 31, 2015. See also Oil and gas lending with the "Credit Risk" section for additional information. |
($ in Thousands) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||||||||||||||||
Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | |||||||||||||||||||||||||
Noninterest-bearing demand | $ | 5,272,685 | 26 | % | $ | 5,562,466 | 27 | % | $ | 4,657,261 | 23 | % | $ | 4,332,171 | 23 | % | $ | 4,570,872 | 23 | % | ||||||||||||||
Savings | 1,426,951 | 7 | 1,334,420 | 6 | 1,346,407 | 6 | 1,359,478 | 7 | 1,337,643 | 7 | ||||||||||||||||||||||||
Interest-bearing demand | 3,698,941 | 18 | 3,445,000 | 17 | 3,416,429 | 17 | 3,576,311 | 19 | 3,525,870 | 18 | ||||||||||||||||||||||||
Money market | 8,718,841 | 42 | 9,102,977 | 43 | 9,516,503 | 46 | 8,374,186 | 43 | 8,781,206 | 44 | ||||||||||||||||||||||||
Brokered CDs | 41,440 | — | 42,443 | — | 42,689 | — | 39,760 | — | 40,699 | — | ||||||||||||||||||||||||
Other time | 1,526,602 | 7 | 1,520,359 | 7 | 1,579,106 | 8 | 1,587,657 | 8 | 1,595,302 | 8 | ||||||||||||||||||||||||
Total deposits | $ | 20,685,460 | 100 | % | $ | 21,007,665 | 100 | % | $ | 20,558,395 | 100 | % | $ | 19,269,563 | 100 | % | $ | 19,851,592 | 100 | % | ||||||||||||||
Customer funding | 508,262 | 383,568 | 524,630 | 433,044 | 528,572 | |||||||||||||||||||||||||||||
Total deposits and customer funding | $ | 21,193,722 | $ | 21,391,233 | $ | 21,083,025 | $ | 19,702,607 | $ | 20,380,164 | ||||||||||||||||||||||||
Network transaction deposits (1) | $ | 3,399,054 | $ | 3,174,911 | $ | 3,207,867 | $ | 2,920,939 | $ | 2,900,325 | ||||||||||||||||||||||||
Total deposits and customer funding, excluding Brokered CDs and network transaction deposits | $ | 17,753,228 | $ | 18,173,879 | $ | 17,832,469 | $ | 16,741,908 | $ | 17,439,140 | ||||||||||||||||||||||||
Time deposits of $100,000 or more | $ | 480,469 | $ | 465,950 | $ | 511,070 | $ | 470,092 | $ | 510,977 | ||||||||||||||||||||||||
Time deposits of more than $250,000 | $ | 144,294 | $ | 127,120 | $ | 169,146 | $ | 185,273 | $ | 188,328 | ||||||||||||||||||||||||
(1) Included above in interest-bearing demand and money market. |
• | Deposits are the Corporation’s largest source of funds. |
• | Total deposits decreased $322 million (2%) from December 31, 2015, and increased $834 million (4%) from March 31, 2015, primarily in noninterest-bearing demand deposits. |
• | Non-maturity deposit accounts, comprised of savings, money market, and demand (both interest and non-interest bearing demand) accounts accounted for 93% of our total deposits at March 31, 2016. |
• | Included in the above amounts were $3.4 billion of network deposits, primarily sourced from other financial institutions and intermediaries. These represented 16% of our total deposits at March 31, 2016. |
• | Investment securities are an important tool to the Corporation’s liquidity objective, and can be pledged or sold to enhance liquidity, if necessary. See also Note 6, “Investment Securities,” of the notes to consolidated financial statements for additional information on the Corporation's investment securities portfolio, including investment securities pledged. |
• | The Bank pledges eligible loans to both the Federal Reserve Bank and the FHLB as collateral to establish lines of credit and borrow from these entities. Based on the amount of collateral pledged, the FHLB established a collateral value from which the Bank may draw advances against the collateral. Also, the collateral is used to enable the FHLB to issue letters of credit in favor of public fund depositors of the Bank. As of March 31, 2016, the Bank had $2.1 billion available for future advances. The Federal Reserve Bank also establishes a collateral value of assets to support borrowings from the discount window. As of March 31, 2016, the Bank had $1.7 billion available for discount window borrowings. |
• | The Parent Company has a $200 million commercial paper program, of which, $64 million was outstanding as of March 31, 2016. |
• | Dividends and service fees from subsidiaries, as well as the proceeds from issuance of capital are also funding sources for the Parent Company. |
• | The Parent Company has filed a shelf registration statement with the SEC under which the Parent Company may, from time to time, offer shares of the Corporation’s common stock in connection with acquisitions of businesses, assets or securities of other companies. |
• | The Parent Company also has filed a universal shelf registration statement with the SEC, under which the Parent Company may offer the following securities, either separately or in units: debt securities, preferred stock, depositary shares, common stock, and warrants. |
• | The Bank may also issue institutional certificates of deposit, network transaction deposits, and brokered certificates of deposit. |
Moody’s | S&P* | ||
Bank short-term deposits | P1 | - | |
Bank long-term | A1 | BBB+ | |
Corporation short-term | P2 | - | |
Corporation long-term | Baa1 | BBB | |
Outlook | Negative | Stable | |
* - Standard and Poor's |
Estimated % Change in Rate Sensitive Earnings at Risk (EAR) Over 12 Months | |||||||||||
Dynamic Forecast March 31, 2016 | Static Forecast March 31, 2016 | Dynamic Forecast December 31, 2015 | Static Forecast December 31, 2015 | ||||||||
Instantaneous Rate Change | |||||||||||
100 bp increase in interest rates | 0.7 | % | 0.6 | % | 1.6 | % | 2.1 | % | |||
200 bp increase in interest rates | 1.4 | % | 1.3 | % | 3.0 | % | 4.4 | % |
March 31, 2016 | December 31, 2015 | ||||
Instantaneous Rate Change | |||||
100 bp increase in interest rates | (2.6 | )% | (1.7 | )% | |
200 bp increase in interest rates | (5.7 | )% | (3.7 | )% |
March 31, 2016 | One Year or Less | One to Three Years | Three to Five Years | Over Five Years | Total | ||||||||||||||
($ in Thousands) | |||||||||||||||||||
Time deposits | $ | 874,467 | $ | 426,834 | $ | 260,563 | $ | 6,178 | $ | 1,568,042 | |||||||||
Short-term funding | 1,417,408 | — | — | — | 1,417,408 | ||||||||||||||
Long-term funding | 22 | 2,115,000 | 498,828 | 247,466 | 2,861,316 | ||||||||||||||
Operating leases | 10,417 | 18,635 | 15,931 | 17,968 | 62,951 | ||||||||||||||
Commitments to extend credit | 3,909,904 | 2,269,872 | 1,432,370 | 121,632 | 7,733,778 | ||||||||||||||
Total | $ | 6,212,218 | $ | 4,830,341 | $ | 2,207,692 | $ | 393,244 | $ | 13,643,495 |
Quarter Ended | |||||||||||||||||||
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||
(In Thousands, except per share data) | |||||||||||||||||||
Tangible stockholders’ equity (1) | $ | 1,993,581 | $ | 1,951,944 | $ | 1,967,975 | $ | 1,917,683 | $ | 1,895,112 | |||||||||
Tangible assets (1) | 27,189,950 | 26,726,533 | 26,477,944 | 26,194,670 | 26,077,655 | ||||||||||||||
Risk-based Capital (2) | |||||||||||||||||||
Tier 1 capital | 2,021,125 | 2,016,861 | 1,983,612 | 1,941,694 | 1,897,390 | ||||||||||||||
Total capital | 2,526,653 | 2,515,861 | 2,481,661 | 2,436,594 | 2,391,797 | ||||||||||||||
Total risk-weighted assets | 20,453,744 | 19,929,963 | 19,866,379 | 19,610,281 | 19,574,457 | ||||||||||||||
Common equity Tier 1 capital ratio | 9.30 | % | 9.52 | % | 9.39 | % | 9.31 | % | 9.39 | % | |||||||||
Tier 1 capital ratio | 9.88 | 10.12 | 9.98 | 9.90 | 9.69 | ||||||||||||||
Total capital ratio | 12.35 | 12.62 | 12.49 | 12.43 | 12.22 | ||||||||||||||
Tier 1 leverage ratio | 7.55 | 7.60 | 7.53 | 7.53 | 7.39 | ||||||||||||||
Selected Equity and Performance Ratios (1) (2) | |||||||||||||||||||
Total stockholders’ equity / assets | 10.58 | % | 10.60 | % | 10.76 | % | 10.69 | % | 10.65 | % | |||||||||
Tangible common equity / tangible assets | 6.89 | 6.85 | 6.97 | 6.86 | 7.04 | ||||||||||||||
Tangible stockholders’ equity / tangible assets | 7.33 | 7.30 | 7.43 | 7.32 | 7.27 | ||||||||||||||
Return on average equity | 5.76 | 5.86 | 6.81 | 6.93 | 6.65 | ||||||||||||||
Return on average tangible common equity | 8.72 | 8.78 | 10.35 | 10.62 | 10.16 | ||||||||||||||
Return on average Common equity Tier 1 | 8.55 | 8.60 | 10.20 | 10.55 | 10.22 | ||||||||||||||
Return on average assets | 0.62 | 0.62 | 0.72 | 0.74 | 0.71 | ||||||||||||||
Tangible Common Equity and Common Equity Tier 1 Reconciliation (1) (2) | |||||||||||||||||||
Common equity | $ | 2,862,151 | $ | 2,815,867 | $ | 2,832,418 | $ | 2,782,376 | $ | 2,822,411 | |||||||||
Goodwill and other intangible assets | (988,917 | ) | (985,302 | ) | (985,822 | ) | (986,707 | ) | (987,025 | ) | |||||||||
Tangible common equity | 1,873,234 | 1,830,565 | 1,846,596 | 1,795,669 | 1,835,386 | ||||||||||||||
Less: Accumulated other comprehensive income (loss) | (2,167 | ) | 32,616 | (15,376 | ) | (2,594 | ) | (24,800 | ) | ||||||||||
Less: Deferred tax assets/deferred tax liabilities, net | 31,526 | 34,763 | 34,069 | 32,403 | 27,077 | ||||||||||||||
Common equity Tier 1 | $ | 1,902,593 | $ | 1,897,944 | $ | 1,865,289 | $ | 1,825,478 | $ | 1,837,663 | |||||||||
Average Tangible Common Equity and Common Equity Tier 1 Reconciliation (1) (2) | |||||||||||||||||||
Common equity | $ | 2,849,382 | $ | 2,819,267 | $ | 2,797,630 | $ | 2,794,341 | $ | 2,785,004 | |||||||||
Goodwill and other intangible assets | (989,127 | ) | (985,605 | ) | (986,360 | ) | (987,071 | ) | (970,572 | ) | |||||||||
Tangible common equity | 1,860,255 | 1,833,662 | 1,811,270 | 1,807,270 | 1,814,432 | ||||||||||||||
Less: Accumulated other comprehensive income (loss) | 3,320 | 4,266 | (6,601 | ) | (16,305 | ) | (17,867 | ) | |||||||||||
Less: Deferred tax assets/deferred tax liabilities, net | 32,906 | 34,199 | 32,767 | 28,854 | 7,652 | ||||||||||||||
Average common equity Tier 1 | $ | 1,896,481 | $ | 1,872,127 | $ | 1,837,436 | $ | 1,819,819 | $ | 1,804,217 |
(1) | The ratios tangible common equity to tangible assets and tangible equity to tangible stockholders' assets exclude goodwill and other intangible assets, which is a non-GAAP financial measure. These financial measures have been included as they are considered to be critical metrics with which to analyze and evaluate financial condition and capital strength. See Note 8 for additional information on goodwill, core deposit intangibles, and other intangibles. |
(2) | The Federal Reserve establishes regulatory capital adequacy requirements, including well-capitalized standards for the Corporation. The regulatory capital requirements effective for the Corporation follow Basel III, subject to certain transition provisions. These non-GAAP regulatory capital measurements are used by management, regulators, investors, and analysts to assess, monitor and compare the quality and composition of our capital with the capital of other financial services companies. |
ITEM 3. | QUANTITATIVEAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
PART II - | OTHER INFORMATION |
ITEM 1. | Legal Proceedings |
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Common Stock Purchases: | ||||||||||||
Total Number of Shares Purchased(a) | 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 the Plans or Programs(b) | |||||||||
Period | ||||||||||||
January 1, 2016 - January 31, 2016 | 1,089,112 | $ | 17.11 | 1,089,112 | — | |||||||
February 1, 2016 - February 29, 2016 | 80,747 | 16.93 | 80,747 | — | ||||||||
March 1, 2016 - March 31, 2016 | — | — | — | — | ||||||||
Total | 1,169,859 | $ | 17.10 | 1,169,859 | 4,899,421 |
(a) | During the first quarter of 2016, the Corporation repurchased approximately 168,000 common shares for minimum tax withholding settlements on equity compensation. These purchases do not count against the maximum number of shares that may yet be purchased under the Board of Directors’ authorization. |
(b) | On April 21, 2015, the Board of Directors authorized the repurchase of up to $125 million of the Corporation's common stock, of which approximately $88 million remained available to repurchase as of March 31, 2016. Using the closing stock price on March 31, 2016 of $17.94, a total of approximately 4.9 million shares of common stock remained available to be repurchased under the previously approved Board authorizations as of March 31, 2016. |
Series B Preferred Stock Depositary Share Purchases: | ||||||||||||
Total Number of Shares Purchased | 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 the Plans or Programs(a) | |||||||||
Period | ||||||||||||
January 1, 2016 - January 31, 2016 | — | $ | — | — | — | |||||||
February 1, 2016 - February 29, 2016 | — | — | — | — | ||||||||
March 1, 2016 - March 31, 2016 | 42,405 | 25.74 | 42,405 | — | ||||||||
Total | 42,405 | $ | 25.74 | 42,405 | 135,209 |
(a) | In 2011, the Corporation issued 2,600,000 depositary shares, each representing a 1/40th interest in a share of the Corporation’s 8.00% Non-Cumulative Perpetual Preferred Stock, Series B (the “Series B Preferred Stock”). During 2013, the Board of Directors authorized the repurchase of up to $10 million of the Series B Preferred Stock. As of March 31, 2016, approximately $3.5 million remained available under this repurchase authorization. Using the closing price on March 31, 2016 of $25.85, a total of approximately 135,000 shares remained available to be repurchased under the previously approved Board authorization as of March 31, 2016. |
Series C Preferred Stock Depositary Share Purchases: | ||||||||||||
Total Number of Shares Purchased | 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 the Plans or Programs(a) | |||||||||
Period | ||||||||||||
January 1, 2016 - January 31, 2016 | — | $ | — | — | — | |||||||
February 1, 2016 - February 29, 2016 | — | — | — | — | ||||||||
March 1, 2016 - March 31, 2016 | — | — | — | — | ||||||||
Total | — | $ | — | — | — |
(a) | In June 2015, the Corporation issued 2,600,000 depositary shares, each representing a 1/40th interest in a share of the Corporation’s 6.125% Non-Cumulative Perpetual Preferred Stock, Series C (the “Series C Preferred Stock”). On August 28, 2015, the Board of Directors authorized the repurchase of up to $10 million of the Series C Preferred Stock. As of March 31, 2016, $10 million remained available under this repurchase authorization as the Corporation has not yet repurchased any of the Series C Preferred Stock under this authorization. Using the closing price on March 31, 2016 of $25.60, a total of approximately 391,000 shares remained available to be repurchased under the previously approved Board authorization as of March 31, 2016. |
ITEM 6. | Exhibits |
ASSOCIATED BANC-CORP | ||
(Registrant) | ||
Date: April 28, 2016 | /s/ Philip B. Flynn | |
Philip B. Flynn | ||
President and Chief Executive Officer | ||
Date: April 28, 2016 | /s/ Christopher J. Del Moral-Niles | |
Christopher J. Del Moral-Niles | ||
Chief Financial Officer and Principal Accounting Officer |
Date: April 28, 2016 | /s/ Philip B. Flynn | |
Philip B. Flynn | ||
President and Chief Executive Officer |
Date: April 28, 2016 | /s/ Christopher J. Del Moral-Niles | |
Christopher J. Del Moral-Niles | ||
Chief Financial Officer |
/s/ Philip B. Flynn | |
Philip B. Flynn | |
Chief Executive Officer | |
April 28, 2016 |
/s/ Christopher J. Del Moral-Niles | |
Christopher J. Del Moral-Niles | |
Chief Financial Officer | |
April 28, 2016 |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Apr. 27, 2016 |
|
Document And Entity Information [Abstract] | ||
Trading Symbol | ASB | |
Entity Registrant Name | ASSOCIATED BANC-CORP | |
Entity Central Index Key | 0000007789 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 150,136,403 |
Consolidated Balance Sheets - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
|||
---|---|---|---|---|---|
ASSETS | |||||
Cash and due from banks | $ 287,183 | $ 374,921 | |||
Interest-bearing deposits in other financial institutions | 68,025 | 79,764 | |||
Federal funds sold and securities purchased under agreements to resell | 20,200 | 19,000 | |||
Investment securities held to maturity, at amortized cost | 1,176,821 | 1,168,230 | |||
Investment securities available for sale, at fair value | 4,905,841 | 4,967,414 | |||
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost | 181,853 | 147,240 | |||
Loans held for sale | 128,339 | 124,915 | |||
Loans | 19,227,240 | 18,714,343 | |||
Allowance for loan losses | (277,370) | (274,264) | |||
Loans, net | 18,949,870 | 18,440,079 | |||
Premises and equipment, net | 331,711 | 267,606 | |||
Goodwill | 971,951 | 968,844 | |||
Mortgage servicing rights | 59,414 | 61,341 | |||
Other intangible assets | 16,966 | 16,458 | |||
Trading assets | 53,087 | 32,192 | |||
Other assets | [1] | 1,027,606 | 1,043,831 | ||
Total assets | 28,178,867 | 27,711,835 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
Noninterest-bearing demand deposits | 5,272,685 | 5,562,466 | |||
Interest-bearing deposits | 15,412,775 | 15,445,199 | |||
Total deposits | 20,685,460 | 21,007,665 | |||
Federal funds purchased and securities sold under agreements to repurchase | 583,247 | 431,438 | |||
Other short-term funding | 834,161 | 402,978 | |||
Long-term funding | [1] | 2,861,316 | 2,676,164 | ||
Trading liabilities | 55,223 | 33,430 | |||
Accrued expenses and other liabilities | 176,962 | 222,914 | |||
Total liabilities | 25,196,369 | 24,774,589 | |||
Stockholders’ equity | |||||
Preferred equity | 120,347 | 121,379 | |||
Common stock | 1,630 | 1,642 | |||
Surplus | 1,447,368 | 1,458,522 | |||
Retained earnings | 1,599,835 | 1,593,239 | |||
Accumulated other comprehensive loss | 2,167 | (32,616) | |||
Treasury stock, at cost | (188,849) | (204,920) | |||
Total common equity | 2,862,151 | 2,815,867 | |||
Total stockholders’ equity | 2,982,498 | 2,937,246 | |||
Total liabilities and stockholders’ equity | $ 28,178,867 | $ 27,711,835 | |||
Preferred shares issued (in shares) | 124,054 | 125,114 | |||
Preferred shares authorized (par value $1.00 per share) (in shares) | 750,000 | 750,000 | |||
Common shares issued (in shares) | 163,030,209 | 164,200,068 | |||
Common shares authorized (par value $0.01 per share) (in shares) | 250,000,000 | 250,000,000 | |||
Treasury shares of common stock (in shares) | 12,036,645 | 12,960,636 | |||
|
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred shares, par value | $ 1.00 | $ 1.00 |
Common shares, par value | $ 0.01 | $ 0.01 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 42,534 | $ 46,672 |
Investment securities available for sale: | ||
Net unrealized gains (losses) | 60,422 | 47,418 |
Amortization of net unrealized gains on available for sale securities transferred to held to maturity securities | (1,572) | 0 |
Reclassification adjustment for net gains realized in net income | (3,098) | 0 |
Income tax (expense) benefit | (21,275) | (18,105) |
Other comprehensive income (loss) on investment securities available for sale | 34,477 | 29,313 |
Defined benefit pension and postretirement obligations: | ||
Prior service cost, net of amortization | 13 | 13 |
Amortization of actuarial losses | 482 | 532 |
Income tax (expense) benefit | (189) | (208) |
Other comprehensive income (loss) on pension and postretirement obligations | 306 | 337 |
Comprehensive income | 77,317 | 76,322 |
Total other comprehensive income (loss) | $ 34,783 | $ 29,650 |
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands |
Total |
Preferred Equity [Member] |
Common Stock [Member] |
Surplus [Member] |
Retained Earnings [Member] |
Accumulated Other Comprehensive Income (Loss) [Member] |
Treasury Stock [Member] |
---|---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2014 | $ 2,800,251 | $ 59,727 | $ 1,665 | $ 1,484,933 | $ 1,497,818 | $ (4,850) | $ (239,042) |
Comprehensive income: | |||||||
Net income | 46,672 | 0 | 0 | 0 | 46,672 | 0 | 0 |
Other comprehensive income | 29,650 | 0 | 0 | 0 | 0 | 29,650 | 0 |
Comprehensive income | 76,322 | ||||||
Common stock issued: | |||||||
Stock-based compensation plans, net | 6,236 | 0 | 0 | 304 | (18,015) | 0 | 23,947 |
Acquisition of Ahmann & Martin Co. | 43,530 | 0 | 26 | 43,504 | 0 | 0 | 0 |
Purchase of treasury stock | (4,105) | 0 | 0 | 0 | 0 | 0 | (4,105) |
Cash dividends: | |||||||
Common stock dividends ($0.10 per share in 2015 and $0.11 per share in 2016) | (15,280) | 0 | 0 | 0 | (15,280) | 0 | 0 |
Preferred stock dividends | (1,228) | 0 | 0 | 0 | (1,228) | 0 | 0 |
Stock-based compensation expense, net | 5,774 | 0 | 0 | 5,774 | 0 | 0 | 0 |
Tax impact of stock-based compensation | 638 | 0 | 0 | 638 | 0 | 0 | 0 |
Purchase of common stock returned to authorized but unissued | (30,000) | 0 | (17) | (29,983) | 0 | 0 | 0 |
Ending balance at Mar. 31, 2015 | 2,882,138 | 59,727 | 1,674 | 1,505,170 | 1,509,967 | 24,800 | (219,200) |
Beginning balance at Dec. 31, 2015 | 2,937,246 | 121,379 | 1,642 | 1,458,522 | 1,593,239 | (32,616) | (204,920) |
Comprehensive income: | |||||||
Net income | 42,534 | 0 | 0 | 0 | 42,534 | 0 | 0 |
Other comprehensive income | 34,783 | 0 | 0 | 0 | 0 | 34,783 | 0 |
Comprehensive income | 77,317 | ||||||
Common stock issued: | |||||||
Stock-based compensation plans, net | 2,205 | 0 | 0 | 613 | (17,271) | 0 | 18,863 |
Purchase of treasury stock | (2,792) | 0 | 0 | 0 | 0 | 0 | (2,792) |
Cash dividends: | |||||||
Common stock dividends ($0.10 per share in 2015 and $0.11 per share in 2016) | (16,409) | 0 | 0 | 0 | (16,409) | 0 | 0 |
Preferred stock dividends | (2,198) | 0 | 0 | 0 | (2,198) | 0 | 0 |
Purchase of preferred stock | (1,092) | (1,032) | 0 | 0 | (60) | 0 | 0 |
Stock-based compensation expense, net | 8,066 | 0 | 0 | 8,066 | 0 | 0 | 0 |
Tax impact of stock-based compensation | 162 | 0 | 0 | 162 | 0 | 0 | 0 |
Purchase of common stock returned to authorized but unissued | (20,007) | 0 | (12) | (19,995) | 0 | 0 | 0 |
Ending balance at Mar. 31, 2016 | $ 2,982,498 | $ 120,347 | $ 1,630 | $ 1,447,368 | $ 1,599,835 | $ 2,167 | $ (188,849) |
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Common Stock [Member] | ||
Cash dividends: | ||
Common stock, per share | $ 0.11 | $ 0.10 |
Basis of Presentation |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position, results of operations and comprehensive income, changes in stockholders’ equity, and cash flows of Associated Banc-Corp (individually referred to herein as the “Parent Company,” and together with all of its subsidiaries and affiliates, collectively referred to herein as the “Corporation”) for the periods presented, and all such adjustments are of a normal recurring nature. The consolidated financial statements include the accounts of all subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates. Estimates that are particularly susceptible to significant change include the determination of the allowance for loan losses, goodwill impairment assessment, mortgage servicing rights valuation, and income taxes. Management has evaluated subsequent events for potential recognition or disclosure. During the first quarter of 2016, the consolidated statements of income were modified from prior periods' presentation to conform with the current period presentation, which reflects OREO gains / losses as a component of Foreclosure / OREO expense, net. In prior periods' presentation, OREO gains/losses were reported as a component of asset gains (losses), net. All prior periods have been restated to reflect this change. During the first quarter of 2016, the Corporation combined the lease financing portfolio with the commercial and industrial portfolio for disclosure purposes. All prior periods have been restated to reflect this change in presentation. |
Acquisitions |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions On February 17, 2015, the Corporation acquired Ahmann & Martin Co., a risk and employee benefits consulting firm based in Minnesota. The firm merged into Associated Financial Group, LLC, the Corporation's insurance brokerage subsidiary. The Corporation's acquisition of Ahmann & Martin Co. enhances the Corporation's ability to offer clients unique, comprehensive solutions to meet their insurance and financial risk management needs. The transaction was valued at approximately $48 million with the opportunity to increase the consideration by $8 million should certain contingencies be met over a defined period. The transaction was accounted for using the acquisition method of accounting and as such, assets acquired, liabilities assumed and consideration exchanged were recorded at their estimated fair value on the acquisition date. Goodwill from the acquisition represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and is not deductible for tax purposes. As a result of the acquisition, the Corporation recorded goodwill of approximately $40 million and other intangible assets of approximately $12 million. Goodwill was assigned to the Corporation's Community, Consumer, and Business segment. See Note 8 for additional information on goodwill and other intangible assets. During the first quarter of 2016, the Corporation completed two small insurance acquisitions to complement its existing insurance and benefits related products and services provided by Associated Financial Group, LLC. The Corporation recorded goodwill of $3 million and other intangibles of $1 million related to these insurance acquisitions. |
New Accounting Pronouncements Adopted |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements Adopted | New Accounting Pronouncements Adopted In September 2015, the FASB issued an amendment to simplify the accounting for measurement adjustments to prior business combinations. The amendment requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The acquirer must record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendment also requires an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This amendment was effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The Corporation adopted the accounting standard during the first quarter of 2016, as required, and with no material impact on its results of operations, financial position, or liquidity. In May 2015, the FASB issued an amendment to eliminate the requirement to categorize investments measured using the net asset value per share ("NAV") practical expedient in the fair value hierarchy table. Entities will be required to disclose the fair value of investments measured using the NAV practical expedient so that financial statement users can reconcile amounts reported in the fair value hierarchy table to amounts reported on the balance sheet. The Corporation adopted the accounting standard during the first quarter of 2016, as required, with no material impact on its results of operations, financial position, or liquidity. In April 2015, the FASB issued an amendment to provide guidance to customers about whether a cloud computing arrangement included a software license. If the cloud computing arrangement includes a software license, then the customer should account for the software license element consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This amendment was effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The Corporation adopted the accounting standard on a prospective basis during the first quarter of 2016, as required, and with no material impact on its results of operations, financial position, or liquidity. In April 2015, the FASB issued an amendment to simplify the presentation of debt issuance costs. This amendment requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB expanded this amendment to include SEC staff views related to debt issuance costs associated with line-of-credit arrangements. The SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. This amendment required retrospective application and was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The Corporation adopted the accounting standard during the first quarter of 2016. All prior periods have been restated to reflect this change in presentation, resulting in a $3 million reduction to other assets and a corresponding $3 million reduction to long-term funding on the balance sheet compared to the amounts originally reported at December 31, 2015. See "Consolidated Balance Sheets" and Note 9 for additional information on the reclassification of debt issuance costs. In February 2015, the FASB issued an amendment to modify existing consolidation guidance for reporting companies that are required to evaluate whether they should consolidate legal entities. The new standard will place more emphasis on risk of loss when determining a controlling financial interest. Frequency in the application of related-party guidance for determining a controlling financial interest will be reduced. Also, consolidation conclusions for public and private companies among several industries that make use of limited partnerships or VIEs will be changed. This amendment was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The Corporation adopted the accounting standard during the first quarter of 2016, as required, and with no material impact on its results of operations, financial position, or liquidity. In January 2015, the FASB issued an amendment to eliminate from U.S. GAAP the concept of extraordinary items. Presently, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item. If an event or transaction meets the criteria for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. This amended guidance will prohibit separate disclosure of extraordinary items in the income statement. This amendment was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The Corporation adopted the accounting standard during the first quarter of 2016, as required, with no material impact. In June 2014, the FASB issued an amendment to the stock compensation accounting guidance to clarify that a performance target that affects vesting of a share-based payment and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. This amendment was effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2015. The Corporation adopted the accounting standard on a prospective basis during the first quarter of 2016, as required, with no material impact on its results of operations, financial position, or liquidity. |
Earnings Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share | Earnings Per Common Share Earnings per common share are calculated utilizing the two-class method. Basic earnings per common share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per common share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding adjusted for the dilutive effect of common stock awards (outstanding stock options, unvested restricted stock awards, and outstanding common stock warrants). Presented below are the calculations for basic and diluted earnings per common share.
Options to purchase approximately 3 million and 2 million shares were outstanding for the three months ended March 31, 2016 and 2015, respectively, but excluded from the calculation of diluted earnings per common share as the effect would have been anti-dilutive. Warrants to purchase approximately 4 million shares were outstanding for both three months ended March 31, 2016 and 2015, but excluded from the calculation of diluted earnings per common shares as the effect would have been anti-dilutive. |
Stock-Based Compensation |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Stock-Based Compensation Plan: In March 2013, the Board of Directors, with subsequent approval of the Corporation’s shareholders, approved the adoption of the 2013 Incentive Compensation Plan (“2013 Plan”). Under the 2013 Plan, options are generally exercisable up to 10 years from the date of grant, have an exercise price that is equal to the closing price of the Corporation’s stock on the grant date, and vest ratably over four years, while service-based restricted stock awards vest ratably over four years and performance-based restricted stock awards vest over the three year performance period. The Corporation issues restricted common stock and restricted common stock units to certain key employees (collectively referred to as “restricted stock awards”) under this plan. The shares of restricted stock are restricted as to transfer, but are not restricted as to dividend payment or voting rights. Restricted stock units receive dividend equivalents but do not have voting rights. The transfer restrictions lapse over three or four years, depending upon whether the awards are service-based or performance-based. Service-based awards are contingent upon continued employment or meeting the requirements for retirement, and performance-based awards are based on earnings per share performance goals, relative total shareholder return, and continued employment or meeting the requirements for retirement. The plan provides that restricted stock awards and stock options will immediately become fully vested upon retirement from the Corporation of those colleagues whose retirement meets the early retirement or normal retirement definitions under the plan (“retirement eligible colleagues”). Accounting for Stock-Based Compensation: The fair value of stock options granted is estimated on the date of grant using a Black-Scholes option pricing model, while the fair value of restricted stock awards is their fair market value on the date of grant. The fair values of stock options and restricted stock awards are amortized as compensation expense on a straight-line basis over the vesting period of the grants. For retirement eligible colleagues, expenses related to stock options and restricted stock awards are fully recognized on the date the colleague meets the definition of normal or early retirement. Compensation expense recognized is included in personnel expense in the consolidated statements of income. Assumptions are used in estimating the fair value of stock options granted. The weighted average expected life of the stock option represents the period of time that stock options are expected to be outstanding and is estimated using historical data of stock option exercises and forfeitures. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility is based on the implied volatility of the Corporation’s stock. The following assumptions were used in estimating the fair value for options granted in the first three months of 2016 and full year 2015.
The Corporation is required to estimate potential forfeitures of stock grants and adjust compensation expense recorded accordingly. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized in the period of change and will also impact the amount of stock-based compensation expense to be recognized in future periods. A summary of the Corporation’s stock option activity for the year ended December 31, 2015, and the three month ended March 31, 2016 is presented below.
The following table summarizes information about the Corporation’s nonvested stock option activity for the year ended December 31, 2015, and for the three months ended March 31, 2016.
Intrinsic value represents the amount by which the fair market value of the underlying stock exceeds the exercise price of the stock option. For the three months ended March 31, 2016, the intrinsic value of stock options exercised was approximately $420,000. For the year ended December 31, 2015 the intrinsic value of the stock options exercised was $7 million. The total fair value of stock options that vested were $3 million and $6 million, respectively, for the three months ended March 31, 2016 and for the year ended December 31, 2015. The Corporation recognized compensation expense for the vesting of stock options of over $1 million and $4 million for the three month ended March 31, 2016 and year ended December 31, 2015, respectively. Included in compensation expense for 2016 was approximately $857,000 of expense for the accelerated vesting of stock options granted to retirement eligible colleagues. At March 31, 2016, the Corporation had $8 million of unrecognized compensation expense related to stock options that is expected to be recognized over the remaining requisite service periods that extend predominantly through the fourth quarter 2019. The following table summarizes information about the Corporation’s restricted stock activity for the year ended December 31, 2015, and for the three months ended March 31, 2016.
The Corporation amortizes the expense related to restricted stock awards as compensation expense over the vesting period specified in the grant. Performance-based restricted stock awards granted during 2015 and 2016 will vest ratably over a three year period, while service-based restricted stock awards granted during 2015 and 2016 will vest ratably over a four year period. Expense for restricted stock awards of approximately $7 million and $15 million was recorded for the three months ended March 31, 2016 and year ended December 31, 2015, respectively. Included in compensation expense for 2016 was approximately $2 million of expense for the accelerated vesting of restricted stock awards granted to retirement eligible colleagues. The Corporation had $33 million of unrecognized compensation costs related to restricted stock awards at March 31, 2016, that is expected to be recognized over the remaining requisite service periods that extend predominantly through fourth quarter 2019. The Corporation has the ability to issue shares from treasury or new shares upon the exercise of stock options or the granting of restricted stock awards. The Board of Directors has authorized management to repurchase shares of the Corporation’s common stock each quarter in the market, to be made available for issuance in connection with the Corporation’s employee incentive plans and for other corporate purposes. The repurchase of shares will be based on market and investment opportunities, capital levels, growth prospects, and regulatory constraints. Such repurchases may occur from time to time in open market purchases, block transactions, private transactions, accelerated share repurchase programs, or similar facilities. |
Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Investment Securities Investment securities are generally classified as available for sale or held to maturity at the time of purchase. The majority of the Corporation's investment securities are mortgage-related securities issued by the Government National Mortgage Association (“GNMA”) or government-sponsored enterprises ("GSE") such as the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”). The amortized cost and fair values of securities available for sale and held to maturity were as follows.
The amortized cost and fair values of investment securities available for sale and held to maturity at March 31, 2016, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
During the first three months of 2016, the Corporation continued to restructure its investment securities portfolio and sold approximately $119 million of FNMA and FHLMC mortgage-related securities and reinvested into GNMA mortgage-related securities, generating a $3 million net gain on sale. This restructuring lowered risk weighted assets and related capital requirements.
Pledged securities with a carrying value of approximately $2.7 billion and $3.2 billion at March 31, 2016, and December 31, 2015, respectively, were pledged to secure certain deposits or for other purposes as required or permitted by law. The following represents gross unrealized losses and the related fair value of investment securities available for sale and held to maturity, aggregated by investment category and length of time individual securities have been in a continuous unrealized loss position, at March 31, 2016.
For comparative purposes, the following represents gross unrealized losses and the related fair value of investment securities available for sale and held to maturity, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2015.
The Corporation reviews the investment securities portfolio on a quarterly basis to monitor its exposure to other-than-temporary impairment. A determination as to whether a security’s decline in fair value is other-than-temporary takes into consideration numerous factors and the relative significance of any single factor can vary by security. Some factors the Corporation may consider in the other-than-temporary impairment analysis include, the length of time and extent to which the security has been in an unrealized loss position, changes in security ratings, financial condition and near-term prospects of the issuer, as well as security and industry specific economic conditions. Based on the Corporation’s evaluation, management does not believe any unrealized loss at March 31, 2016, represents an other-than-temporary impairment as these unrealized losses are primarily attributable to changes in interest rates and the current market conditions, and not credit deterioration. The unrealized losses reported for municipal securities relate to various state and local political subdivisions and school districts. The Corporation currently does not intend to sell nor does it believe that it will be required to sell the securities contained in the above unrealized losses table before recovery of their amortized cost basis. The reduction in unrealized losses at March 31, 2016 is due to the reduction in overall interest rates. The U.S. Treasury 3-year and 5-year rates dropped by 44 basis points ("bp") and 55 bp, respectively, from December 31, 2015. Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank Stocks: The Corporation is required to maintain Federal Reserve stock and FHLB stock as a member of both the Federal Reserve System and the FHLB, and in amounts as required by these institutions. These equity securities are “restricted” in that they can only be sold back to the respective institutions or another member institution at par. Therefore, they are less liquid than other marketable equity securities and their fair value is equal to amortized cost. At March 31, 2016, and December 31, 2015, the Corporation had FHLB stock of $108 million and $74 million, respectively, reflecting the overall increase in FHLB short-term and long-term funding. The Corporation had Federal Reserve Bank stock of $73 million at both March 31, 2016 and December 31, 2015, respectively. |
Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Loans The period end loan composition was as follows.
The following table presents commercial and consumer loans by credit quality indicator at March 31, 2016.
The following table presents commercial and consumer loans by credit quality indicator at December 31, 2015.
Factors that are important to managing overall credit quality are sound loan underwriting and administration, systematic monitoring of existing loans and commitments, effective loan review on an ongoing basis, early identification of potential problems, and appropriate allowance for loan losses, allowance for unfunded commitments, nonaccrual, and charge off policies. For commercial loans, management has determined the pass credit quality indicator to include credits that exhibit acceptable financial statements, cash flow, and leverage. If any risk exists, it is mitigated by the loan structure, collateral, monitoring, or control. For consumer loans, performing loans include credits that are performing in accordance with the original contractual terms. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Special mention credits have potential weaknesses that deserve management’s attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the credit. Potential problem loans are considered inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged. These loans generally have a well-defined weakness, or weaknesses, that may jeopardize liquidation of the debt and are characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Lastly, management considers a loan to be impaired when it is probable that the Corporation will be unable to collect all amounts due according to the original contractual terms of the note agreement, including both principal and interest. Management has determined that commercial and consumer loan relationships that have nonaccrual status or have had their terms restructured in a troubled debt restructuring meet this impaired loan definition. Commercial loans classified as special mention, potential problem, and nonaccrual loans are reviewed at a minimum on a quarterly basis, while pass and performing rated credits are reviewed on an annual basis or more frequently if the loan renewal is less than one year or if otherwise warranted. The following table presents loans by past due status at March 31, 2016.
The following table presents loans by past due status at December 31, 2015.
The following table presents impaired loans at March 31, 2016.
The following table presents impaired loans at December 31, 2015.
Troubled Debt Restructurings (“Restructured Loans”): Loans are considered restructured loans if concessions have been granted to borrowers that are experiencing financial difficulty. See Note 1 “Summary of Significant Accounting Policies," in the Corporation’s 2015 Annual Report on Form 10-K for the Corporation's accounting policy for troubled debt restructurings. The Corporation had a recorded investment of over $4 million in loans modified in troubled debt restructurings for the three months ended March 31, 2016, of which approximately $470,000 was in accrual status and $4 million was in nonaccrual pending a sustained period of repayment. The following table presents nonaccrual and performing restructured loans by loan portfolio.
The following table provides the number of loans modified in a troubled debt restructuring by loan portfolio during the three months ended March 31, 2016 and 2015, respectively, and the recorded investment and unpaid principal balance as of March 31, 2016 and 2015 respectively.
Restructured loan modifications may include payment schedule modifications, interest rate concessions, maturity date extensions, modification of note structure (A/B Note), non-reaffirmed Chapter 7 bankruptcies, principal reduction, or some combination of these concessions. During the three months ended March 31, 2016, restructured loan modifications of commercial and industrial, commercial real estate, and real estate construction loans primarily included maturity date extensions and payment schedule modifications. Restructured loan modifications of home equity and residential mortgage loans primarily included maturity date extensions, interest rate concessions, non-reaffirmed Chapter 7 bankruptcies, or a combination of these concessions for the three months ended March 31, 2016. The following table provides the number of loans modified in a troubled debt restructuring during the previous twelve months which subsequently defaulted during the three months ended March 31, 2016 and 2015, respectively, as well as the recorded investment in these restructured loans as of March 31, 2016 and 2015 respectively.
All loans modified in a troubled debt restructuring are evaluated for impairment. The nature and extent of the impairment of restructured loans, including those which have experienced a subsequent payment default, is considered in the determination of an appropriate level of the allowance for loan losses. A summary of the changes in the allowance for loan losses by portfolio segment for the three months ended March 31, 2016, was as follows.
The allowance for credit losses is comprised of the allowance for loan losses and the allowance for unfunded commitments. The level of the allowance for loan losses represents management’s estimate of an amount appropriate to provide for probable credit losses in the loan portfolio at the balance sheet date. The allowance for unfunded commitments is maintained at a level believed by management to be sufficient to absorb estimated probable losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit) and is included in accrued expenses and other liabilities on the consolidated balance sheets. See Note 12 for additional information on the allowance for unfunded commitments. For comparison purposes, a summary of the changes in the allowance for loan losses by portfolio segment for the year ended December 31, 2015, was as follows.
A summary of the changes in the allowance for unfunded commitments was as follows.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Other Intangible Assets Goodwill: Goodwill is not amortized but, instead, is subject to impairment tests on at least an annual basis, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The impairment testing process is conducted by assigning net assets and goodwill to each reporting unit. An initial qualitative evaluation is made to assess the likelihood of impairment and determine whether further quantitative testing to calculate the fair value is necessary. When the qualitative evaluation indicates that impairment is more likely than not, quantitative testing is required whereby the fair value of each reporting unit is calculated and compared to the recorded book value, “step one.” If the calculated fair value of the reporting unit exceeds its carrying value, goodwill is not considered impaired and “step two” is not considered necessary. If the carrying value of a reporting unit exceeds its calculated fair value, the impairment test continues (“step two”) by comparing the carrying value of the reporting unit’s goodwill to the implied fair value of goodwill. The implied fair value is computed by adjusting all assets and liabilities of the reporting unit to current fair value with the offset adjustment to goodwill. The adjusted goodwill balance is the implied fair value of the goodwill. An impairment charge is recognized if the carrying value of goodwill exceeds the implied fair value of goodwill. The Corporation conducted its most recent annual impairment testing in May 2015, utilizing a qualitative assessment. Factors that management considered in this assessment included macroeconomic conditions, industry and market considerations, overall financial performance of the Corporation and each reporting unit (both current and projected), changes in management strategy, and changes in the composition or carrying amount of net assets. In addition, management considered the changes in both the Corporation’s common stock price and in the overall bank common stock index (based on the S&P 400 Regional Bank Sub-Industry Index), as well as the Corporation’s earnings per common share trend over the past year. Based on these assessments, management concluded that the 2015 annual qualitative impairment assessment indicated that it is more likely than not that the estimated fair value exceeded the carrying value (including goodwill) for each reporting unit. Therefore, a step one quantitative analysis was not required. There were no events since the May 2015 impairment testing that have changed the Corporation's impairment assessment conclusion. There were no impairment charges recorded in 2015 or the first three months of 2016. At March 31, 2016, the Corporation had goodwill of $972 million, compared to $969 million at December 31, 2015. Goodwill increased by approximately $3 million during the first quarter of 2016 as a result of two small insurance acquisitions. See Note 2 for additional information on the Corporation's acquisitions. Other Intangible Assets: The Corporation has other intangible assets that are amortized, consisting of core deposit intangibles, other intangibles (primarily related to customer relationships acquired in connection with the Corporation’s insurance agency acquisitions), and mortgage servicing rights. Core deposit intangibles of approximately $15 million were fully amortized in 2015 and have been removed from both the gross carrying amount and the accumulated amortization for 2016. Other intangibles increased by approximately $1 million during the first quarter of 2016 for the customer relationships associated with two small insurance acquisitions. See Note 2 for additional information on the Corporation's acquisitions. For core deposit intangibles and other intangibles, changes in the gross carrying amount, accumulated amortization, and net book value were as follows.
The Corporation sells residential mortgage loans in the secondary market and typically retains the right to service the loans sold. Mortgage servicing rights are amortized in proportion to and over the period of estimated net servicing income, and assessed for impairment at each reporting date. The Corporation periodically evaluates its mortgage servicing rights asset for impairment. Impairment is assessed based on fair value at each reporting date using estimated prepayment speeds of the underlying mortgage loans serviced and stratifications based on the risk characteristics of the underlying loans (predominantly loan type and note interest rate). As mortgage interest rates fall, prepayment speeds are usually faster and the value of the mortgage servicing rights asset generally decreases, requiring additional valuation reserve. Conversely, as mortgage interest rates rise, prepayment speeds are usually slower and the value of the mortgage servicing rights asset generally increases, requiring less valuation reserve. A valuation allowance is established, through a charge to earnings, to the extent the amortized cost of the mortgage servicing rights exceeds the estimated fair value by stratification. If it is later determined that all or a portion of the temporary impairment no longer exists for a stratification, the valuation is reduced through a recovery to earnings. An other-than-temporary impairment (i.e., recoverability is considered remote when considering interest rates and loan pay off activity) is recognized as a write-down of the mortgage servicing rights asset and the related valuation allowance (to the extent a valuation allowance is available) and then against earnings. A direct write-down permanently reduces the carrying value of the mortgage servicing rights asset and valuation allowance, precluding subsequent recoveries. See Note 12 for a discussion of the recourse provisions on sold residential mortgage loans. See Note 13 which further discusses fair value measurement relative to the mortgage servicing rights asset. A summary of changes in the balance of the mortgage servicing rights asset and the mortgage servicing rights valuation allowance was as follows.
The following table shows the estimated future amortization expense for amortizing intangible assets. The projections of amortization expense are based on existing asset balances, the current interest rate environment, and prepayment speeds as of March 31, 2016. The actual amortization expense the Corporation recognizes in any given period may be significantly different depending upon acquisition or sale activities, changes in interest rates, prepayment speeds, market conditions, regulatory requirements, and events or circumstances that indicate the carrying amount of an asset may not be recoverable.
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Short and Long-Term Funding |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short and Long-Term Funding | Short and Long-Term Funding The components of short-term funding (funding with original contractual maturities of one year or less) and long-term funding (funding with original contractual maturities greater than one year) were as follows.
Securities sold under agreements to repurchase ("repurchase agreements") The Corporation enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities. Under these arrangements, the Corporation may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Corporation to repurchase the assets. The obligation to repurchase the securities is reflected as a liability on the Corporation’s consolidated balance sheets, while the securities underlying the repurchase agreements remain in the respective investment securities asset accounts (i.e., there is no offsetting or netting of the investment securities assets with the repurchase agreement liabilities). See Note 11 for additional disclosures on balance sheet offsetting. The Corporation utilizes securities sold under agreements to repurchase to facilitate the needs of its customers. As of March 31, 2016, the Corporation pledged GSE mortgage-related securities with a fair value of $643 million as collateral for the repurchase agreements. Securities pledged as collateral under repurchase agreements are maintained with the Corporation's safekeeping agents and are monitored on a daily basis due to the market risk of fair value changes in the underlying securities. The Corporation generally pledges excess securities to ensure there is sufficient collateral to satisfy short-term fluctuations in both the repurchase agreement balances and the fair value of the underlying securities. The remaining contractual maturity of the securities sold under agreements to repurchase in the consolidated balance sheets as of March 31, 2016 and December 31, 2015 are presented in the following table.
Long-term funding: FHLB advances: At March 31, 2016, the long-term FHLB advances had a weighted average interest rate of 0.29%, compared to 0.24% at December 31, 2015. The FHLB advances are indexed to the FHLB discount note and re-price at varying intervals. The advances offer flexible, low cost, long-term funding that improves the Corporation’s liquidity profile. 2011 Senior Notes: In March 2011, the Corporation issued $300 million of senior notes due March 2016, and callable February 2016, with a 5.125% fixed coupon at a discount. In September 2011, the Corporation “re-opened” the offering and issued an additional $130 million of the same notes at a premium. All notes were redeemed in February 2016 at par. 2014 Senior Notes: In November 2014, the Corporation issued $250 million of senior notes, due November 2019, and callable October 2019. The senior notes have a fixed coupon interest rate of 2.75% and were issued at a discount. 2014 Subordinated Notes: In November 2014, the Corporation issued $250 million of 10-year subordinated notes, due January 2025, and callable October 2024. The subordinated notes have a fixed coupon interest rate of 4.25% and were issued at a discount. |
Derivative and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative and Hedging Activities | Derivative and Hedging Activities The Corporation facilitates customer borrowing activity by providing various interest rate risk management, commodity hedging, and foreign currency exchange solutions through its capital markets area. To date, all of the notional amounts of customer transactions have been matched with a mirror hedge with another counterparty. The Corporation has used, and may use again in the future, derivative instruments to hedge the variability in interest payments or protect the value of certain assets and liabilities recorded on its consolidated balance sheets from changes in interest rates. The predominant derivative and hedging activities include interest rate-related instruments (swaps and caps), foreign currency exchange forwards, commodity contracts, written options, purchased options, and certain mortgage banking activities. The contract or notional amount of a derivative is used to determine, along with the other terms of the derivative, the amounts to be exchanged between the counterparties. The Corporation is exposed to credit risk in the event of nonperformance by counterparties to financial instruments. To mitigate the counterparty risk, interest rate and commodity-related instruments generally contain language outlining collateral pledging requirements for each counterparty. Collateral must be posted when the market value exceeds certain mutually agreed upon threshold limits. The Corporation was required to pledge $28 million of investment securities as collateral at March 31, 2016, and pledged $9 million of investment securities as collateral at December 31, 2015. Federal regulations require the Corporation to clear all LIBOR interest rate swaps through a clearing house if it can be cleared. As such, the Corporation is required to pledge cash collateral for the margin. At March 31, 2016, the Corporation posted cash collateral for the margin of $31 million, compared to $22 million at December 31, 2015. The Corporation’s derivative and hedging instruments are recorded at fair value on the consolidated balance sheets. The fair value of the Corporation’s interest rate-related instruments is determined using discounted cash flow analysis on the expected cash flows of each derivative and also includes a nonperformance / credit risk component (credit valuation adjustment). See Note 13 for additional fair value information and disclosures. The table below identifies the balance sheet category and fair values of the Corporation’s free standing derivative instruments, which are not designated as hedging instruments.
The table below identifies the income statement category of the gains and losses recognized in income on the Corporation’s derivative instruments not designated as hedging instruments.
Free Standing Derivatives The Corporation enters into various derivative contracts which are designated as free standing derivative contracts. Free standing derivative products are entered into primarily for the benefit of commercial customers seeking to manage their exposures to interest rate risk, foreign currency, and commodity prices. These derivative contracts are not designated against specific assets and liabilities on the balance sheet or forecasted transactions and, therefore, do not qualify for hedge accounting treatment. Such derivative contracts are carried at fair value on the consolidated balance sheets with changes in the fair value recorded as a component of Capital market fees, net, and typically include interest rate-related instruments (swaps and caps), foreign currency exchange forwards, and commodity contracts. See Note 11 for additional information and disclosures on balance sheet offsetting. Interest rate-related instruments: The Corporation provides interest rate risk management services to commercial customers, primarily forward interest rate swaps and caps. The Corporation’s market risk from unfavorable movements in interest rates related to these derivative contracts is generally economically hedged by concurrently entering into offsetting derivative contracts. The offsetting derivative contracts have identical notional values, terms and indices. Foreign currency exchange forwards: The Corporation provides foreign currency exchange services to customers, primarily forward contracts. Our customers enter into a foreign currency exchange forward with the Corporation as a means for them to mitigate exchange rate risk. The Corporation mitigates its risk by then entering into an offsetting foreign currency exchange derivative contract. Such foreign currency exchange contracts are carried at fair value on the consolidated balance sheets with changes in fair value recorded as a component of Capital market fees, net. Commodity contracts: Commodity contracts are entered into primarily for the benefit of commercial customers seeking to manage their exposure to fluctuating commodity prices. The Corporation mitigates its risk by then entering into an offsetting commodity derivative contract. Commodity contracts are carried at fair value on the consolidated balance sheets with changes in fair value recorded as a component of Capital market fees, net. Mortgage derivatives Interest rate lock commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans are considered derivative instruments, and the fair value of these commitments is recorded on the consolidated balance sheets with the changes in fair value recorded as a component of mortgage banking, net. Written and purchased options (time deposit) Historically, the Corporation had entered into written and purchased option derivative instruments to facilitate an equity linked time deposit product (the “Power CD”), which the Corporation ceased offering in September 2013. The Power CD was a time deposit that provided the purchaser a guaranteed return of principal at maturity plus a potential equity return (a written option), while the Corporation received 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 balance sheets. |
Balance Sheet Offsetting |
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Offsetting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Offsetting | Balance Sheet Offsetting Interest Rate-Related Instruments and Commodity Contracts (“Interest and Commodity Agreements”) The Corporation enters into interest rate-related instruments to facilitate the interest rate risk management strategies of commercial customers. The Corporation also enters into commodity contracts to manage commercial customers' exposure to fluctuating commodity prices. The Corporation mitigates these risks by entering into equal and offsetting interest and commodity agreements with highly rated third party financial institutions. The Corporation is party to master netting arrangements with its financial institution counterparties that creates a single net settlement of all legal claims or obligations to pay or receive the net amount of settlement of the individual interest and commodity agreements. Collateral, usually in the form of investment securities and cash, is posted by the counterparty with net liability positions in accordance with contract thresholds. The Corporation does not offset assets and liabilities under these arrangements for financial statement presentation purposes. See Note 10 for additional information on the Corporation’s derivative and hedging activities. Securities Sold Under Agreements to Repurchase (“Repurchase Agreements”) The Corporation enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities. These repurchase agreements are accounted for as collateralized financing arrangements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities (i.e., there is no offsetting or netting of the investment securities assets with the repurchase agreement liabilities). The right of set-off for a repurchase agreement resembles a secured borrowing, whereby the collateral would be used to settle the fair value of the repurchase agreement should the Corporation be in default (e.g., fails to make an interest payment to the counterparty). In addition, the Corporation does not enter into reverse repurchase agreements; therefore, there is no such offsetting to be done with the repurchase agreements. See Note 9 for additional disclosures on repurchase agreements. The following table presents the assets and liabilities subject to an enforceable master netting arrangement. The interest and commodity agreements we have with our commercial customers are not subject to an enforceable master netting arrangement, and therefore, are excluded from this table.
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Commitments, Off-Balance Sheet Arrangements, and Legal Proceedings |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments, Off-Balance Sheet Arrangements, and Legal Proceedings | Commitments, Off-Balance Sheet Arrangements, and Legal Proceedings The Corporation utilizes a variety of financial instruments in the normal course of business to meet the financial needs of its customers and to manage its own exposure to fluctuations in interest rates. These financial instruments include lending-related and other commitments (see below) as well as derivative instruments (see Note 10). The following is a summary of lending-related commitments.
Lending-related Commitments As a financial services provider, the Corporation routinely enters into commitments to extend credit. Such commitments are subject to the same credit policies and approval process accorded to loans made by the Corporation, with each customer’s creditworthiness evaluated on a case-by-case basis. The commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. The Corporation’s exposure to credit loss in the event of nonperformance by the other party to these financial instruments is represented by the contractual amount of those instruments. The amount of collateral obtained, if deemed necessary by the Corporation upon extension of credit, is based on management’s credit evaluation of the customer. Since a significant portion of commitments to extend credit are subject to specific restrictive loan covenants or may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements. An allowance for unfunded commitments is maintained at a level believed by management to be sufficient to absorb estimated probable losses related to unfunded commitments (including unfunded loan commitments and letters of credit). The allowance for unfunded commitments totaled $24 million at both March 31, 2016 and December 31, 2015, and is included in accrued expenses and other liabilities on the consolidated balance sheets. Lending-related commitments include commitments to extend credit, commitments to originate residential mortgage loans held for sale, commercial letters of credit, and standby letters of credit. Commitments to extend credit are legally binding agreements to lend to customers at predetermined interest rates, as long as there is no violation of any condition established in the contracts. Interest rate lock commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans are considered derivative instruments, and the fair value of these commitments is recorded on the consolidated balance sheets. The Corporation’s derivative and hedging activity is further described in Note 10. Commercial and standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Commercial letters of credit are issued specifically to facilitate commerce and typically result in the commitment being drawn on when the underlying transaction is consummated between the customer and the third party, while standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party. Other Commitments The Corporation has principal investment commitments to provide capital-based financing to private and public companies through either direct investments in specific companies or through investment funds and partnerships. The timing of future cash requirements to fund such commitments is generally dependent on the investment cycle, whereby privately held companies are funded by private equity investors and ultimately sold, merged, or taken public through an initial offering, which can vary based on overall market conditions, as well as the nature and type of industry in which the companies operate. The Corporation also invests in unconsolidated projects including low-income housing, new market tax credit projects, and historic tax credit projects to promote the revitalization of primarily low-to-moderate-income neighborhoods throughout the local communities of its bank subsidiary. As a limited partner in these unconsolidated projects, the Corporation is allocated tax credits and deductions associated with the underlying projects. The aggregate carrying value of these investments at March 31, 2016, was $53 million, compared to $52 million at December 31, 2015, included in other assets on the consolidated balance sheets. Related to these investments, the Corporation had remaining commitments to fund of $62 million at March 31, 2016, and $61 million at December 31, 2015. Legal Proceedings The Corporation is party to various pending and threatened claims and legal proceedings arising in the normal course of business activities, some of which involve claims for substantial amounts. Although there can be no assurance as to the ultimate outcomes, the Corporation believes it has meritorious defenses to the claims asserted against it in its currently outstanding matters, including the matters described below, and with respect to such legal proceedings, intends to continue to defend itself vigorously. The Corporation will consider settlement of cases when, in management’s judgment, it is in the best interests of both the Corporation and its shareholders. On at least a quarterly basis, the Corporation assesses its liabilities and contingencies in connection with all pending or threatened claims and litigation, utilizing the most recent information available. On a matter by matter basis, an accrual for loss is established for those matters which the Corporation believes it is probable that a loss may be incurred and that the amount of such loss can be reasonably estimated. Once established, each accrual is adjusted as appropriate to reflect any subsequent developments. Accordingly, management’s estimate will change from time to time, and actual losses may be more or less than the current estimate. For matters where a loss is not probable, or the amount of the loss cannot be estimated, no accrual is established. Resolution of legal claims is inherently unpredictable, and in many legal proceedings various factors exacerbate this inherent unpredictability, including where the damages sought are unsubstantiated or indeterminate, it is unclear whether a case brought as a class action will be allowed to proceed on that basis, discovery is not complete, the proceeding is not yet in its final stages, the matters present legal uncertainties, there are significant facts in dispute, there are a large number of parties (including where it is uncertain how liability, if any, will be shared among multiple defendants), or there is a wide range of potential results. A lawsuit, R.J. ZAYED v. Associated Bank, N.A., was filed in the United States District Court for the District of Minnesota on January 29, 2013. The lawsuit relates to a Ponzi scheme perpetrated by Oxford Global Partners and related entities (“Oxford”) and individuals and was brought by the receiver for Oxford. Oxford was a depository customer of Associated Bank (the "Bank"). The lawsuit claims that the Bank is liable for failing to uncover the Oxford Ponzi scheme, and specifically alleges the Bank aided and abetted (1) the fraudulent scheme; (2) a breach of fiduciary duty; (3) conversion; and (4) false representations and omissions. The lawsuit seeks unspecified consequential and punitive damages. The District Court granted the Bank’s motion to dismiss the complaint on September 30, 2013. On March 2, 2015, the U.S. Court of Appeals for the Eighth Circuit reversed the District Court and remanded the case back to the District Court for further proceedings. It is not possible for management to assess the probability of a material adverse outcome or reasonably estimate the amount of any potential loss at this time. A lawsuit by investors in the same Ponzi scheme, Herman Grad, et al v. Associated Bank, N.A., brought in Brown County, Wisconsin in October 2009 was dismissed by the circuit court, and the dismissal was affirmed by the Wisconsin Court of Appeals in June 2011 in an unpublished opinion. On May 22, 2015, the Bank entered into a Conciliation Agreement ("Conciliation Agreement") with the U.S. Department of Housing and Urban Development ("HUD") which resolved the HUD investigation into the Bank's lending practices during the years 2008-2010. The Bank's commitments under the Conciliation Agreement are spread over a three-year period and include commitments to do the following in minority communities: make mortgage loans of approximately $196 million; open one branch and four loan production offices; establish special financing programs; make affordable home repair grants; engage in affirmative marketing outreach; provide financial education programs; and make grants to support community reinvestment training and education. The cost of these commitments will be spread over four calendar years and is not expected to have a material impact on the Corporation's financial condition or results of operation. Beginning in late 2013, the Corporation began reviewing a variety of legacy products provided by third parties, including debt protection and identity protection products. In connection with this review, the Corporation has made, and plans to make, remediation payments to affected customers and former customers, and has reserved accordingly. A variety of consumer products, including the legacy debt protection and identity protection products referred to above, and mortgage and deposit products, and certain fees and charges related to such products, have come under increased regulatory scrutiny. It is possible that regulatory authorities could bring enforcement actions, including civil money penalties, or take other actions against the Corporation and the Bank in regard to these consumer products. The Bank could also determine of its own accord, or be required by regulators, to refund or otherwise make remediation payments to customers in connection with these products. It is not possible at this time for management to assess the probability of a material adverse outcome or reasonably estimate the amount of any potential loss related to such matters. Two complaints were filed against the Bank on January 11, 2016 in the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division in connection with the In re: World Marketing Chicago, LLC, et al Chapter 11 bankruptcy proceeding. In the first complaint, The Official Committee of Unsecured Creditors of World Marketing Chicago, LLC, et al v. Associated Bank, N.A., the plaintiff seeks to avoid guarantees and pledges of collateral given by the debtors to secure a revolving financing commitment of $6 million to the debtors’ parent company from the Bank. The plaintiff alleges a variety of legal theories under federal and state law, including fraudulent conveyance, preferential transfer and conversion, in support of its position. The plaintiff seeks return of approximately $4 million paid to the Bank and the avoidance of the security interest in the collateral securing the remaining approximately $1 million of indebtedness to the Bank. The Bank intends to vigorously defend this lawsuit. In the second complaint, American Funds Service Company v. Associated Bank, N.A., the plaintiff alleges that approximately $600,000 of funds it had advanced to the World Marketing entities to apply towards future postage fees was swept by the Bank from World Marketing’s bank accounts. Plaintiff seeks the return of such funds from the Bank under several theories, including Sec. 541(d) of the Bankruptcy Code, the creation of a resulting trust, and unjust enrichment. The Bank intends to vigorously defend this lawsuit. It is not possible for management to assess the probability of a material adverse outcome or reasonably estimate the amount of any potential loss at this time with respect to these two lawsuits. Mortgage Repurchase Reserve The Corporation sells residential mortgage loans to investors in the normal course of business. Residential mortgage loans sold to others are predominantly conventional residential first lien mortgages originated under our usual underwriting procedures, and are most often sold on a nonrecourse basis, primarily to the GSEs. The Corporation’s agreements to sell residential mortgage loans in the normal course of business usually require certain representations and warranties on the underlying loans sold, related to credit information, loan documentation, collateral, and insurability. Subsequent to being sold, if a material underwriting deficiency or documentation defect is discovered, the Corporation may be obligated to repurchase the loan or reimburse the GSEs for losses incurred (collectively, “make whole requests”). The make whole requests and any related risk of loss under the representations and warranties are largely driven by borrower performance. As a result of make whole requests, the Corporation has repurchased loans with principal balances of approximately $126,000 and $3 million during the three months ended March 31, 2016 and the year ended December 31, 2015, respectively, and paid loss reimbursement or settlement claims of approximately $3,000 and $133,000 for the three months ended March 31, 2016 and the year ended December 31, 2015, respectively. Make whole requests during 2015 and the first three months of 2016 generally arose from loans sold during the period of January 1, 2012 to March 31, 2016, which total $7.9 billion at the time of sale, and consisted primarily of loans sold to GSEs. As of March 31, 2016, approximately $5.7 billion of these sold loans remain outstanding. The balance in the mortgage repurchase reserve at the balance sheet date reflects the estimated amount of potential loss the Corporation could incur from repurchasing a loan, as well as loss reimbursements, indemnifications, and other settlement resolutions. The following summarizes the changes in the mortgage repurchase reserve.
The Corporation may also sell residential mortgage loans with limited recourse (limited in that the recourse period ends prior to the loan’s maturity, usually after certain time and / or loan paydown criteria have been met), whereby repurchase could be required if the loan had defined delinquency issues during the limited recourse periods. At March 31, 2016, and December 31, 2015, there were approximately $60 million and $68 million, respectively, of residential mortgage loans sold with such recourse risk. There have been limited instances and immaterial historical losses on repurchases for recourse under the limited recourse criteria. The Corporation has a subordinate position to the FHLB in the credit risk on residential mortgage loans it sold to the FHLB in exchange for a monthly credit enhancement fee. The Corporation has not sold loans to the FHLB with such credit risk retention since February 2005. At March 31, 2016 and December 31, 2015, there were $122 million and $132 million, respectively, of such residential mortgage loans with credit risk recourse, upon which there have been negligible historical losses to the Corporation. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value represents the estimated price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date under current market conditions (i.e., an exit price concept). Following is a description of the valuation methodologies used for the Corporation’s more significant instruments measured on a recurring basis at fair value, including the general classification of such instruments pursuant to the valuation hierarchy. Investment securities available for sale: Where quoted prices are available in an active market, investment securities are classified in Level 1 of the fair value hierarchy. If quoted market prices are not available for the specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows, with consideration given to the nature of the quote and the relationship of recently evidenced market activity to the fair value estimate, and are classified in Level 2 of the fair value hierarchy. Lastly, in certain cases where there is limited activity or less transparency around inputs to the estimated fair value, securities are classified within Level 3 of the fair value hierarchy. To validate the fair value estimates, assumptions, and controls, the Corporation looks to transactions for similar instruments and utilizes independent pricing provided by third party vendors or brokers and relevant market indices. While none of these sources are solely indicative of fair value, they serve as directional indicators for the appropriateness of the Corporation’s fair value estimates. The Corporation has determined that the fair value measures of its investment securities are classified predominantly within Level 1 or 2 of the fair value hierarchy. See Note 6 for additional disclosure regarding the Corporation’s investment securities. Derivative financial instruments (interest rate-related instruments): The Corporation has used, and may use again in the future, interest rate swaps to manage its interest rate risk. In addition, the Corporation offers customer interest rate-related instruments (swaps and caps) to service our customers’ needs, for which the Corporation simultaneously enters into offsetting derivative financial instruments (i.e., mirror interest rate-related instruments) with third parties to manage its interest rate risk associated with these financial instruments. The valuation of the Corporation’s derivative financial instruments is determined using discounted cash flow analysis on the expected cash flows of each derivative and, also includes a nonperformance / credit risk component (credit valuation adjustment). See Note 10 for additional disclosure regarding the Corporation’s interest rate-related instruments. The discounted cash flow analysis component in the fair value measurements reflects the contractual terms of the derivative financial instruments, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. More specifically, the fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments), with the variable cash payments (or receipts) based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. Likewise, the fair values of interest rate options (i.e., interest rate caps) are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates fall below (or rise above) the strike rate of the floors (or caps), with the variable interest rates used in the calculation of projected receipts on the floor (or cap) based on an expectation of future interest rates derived from observable market interest rate curves and volatilities. The Corporation also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative financial instruments for the effect of nonperformance risk, the Corporation has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. While the Corporation has determined that the majority of the inputs used to value its derivative financial instruments fall within Level 2 of the fair value hierarchy, the credit valuation adjustments utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. The Corporation has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions as of March 31, 2016, and December 31, 2015, and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivative financial instruments. Therefore, the Corporation has determined that the fair value measures of its derivative financial instruments in their entirety are classified within Level 2 of the fair value hierarchy. Derivative financial instruments (foreign currency exchange forwards): The Corporation provides foreign currency exchange services to customers. In addition, the Corporation may enter into a foreign currency exchange forward to mitigate the exchange rate risk attached to the cash flows of a loan or as an offsetting contract to a forward entered into as a service to our customer. The valuation of the Corporation’s foreign currency exchange forwards is determined using quoted prices of foreign currency exchange forwards with similar characteristics, with consideration given to the nature of the quote and the relationship of recently evidenced market activity to the fair value estimate, and are classified in Level 2 of the fair value hierarchy. See Note 10 for additional disclosures regarding the Corporation’s foreign currency exchange forwards. Derivative financial instruments (commodity contracts): The Corporation enters into commodity contracts to manage commercial customers' exposure to fluctuating commodity prices, for which the Corporation simultaneously enters into offsetting derivative financial instruments (i.e., mirror commodity contracts) with third parties to manage its risk associated with these financial instruments. The valuation of the Corporation’s commodity contracts is determined using quoted prices of the underlying instrument, and are classified in Level 2 of the fair value hierarchy. See Note 10 for additional disclosures regarding the Corporation’s commodity contracts. Derivative financial instruments (mortgage derivatives): Mortgage derivatives include interest rate lock commitments to originate residential mortgage loans held for sale to individual customers and forward commitments to sell residential mortgage loans to various investors. The Corporation relies on an internal valuation model to estimate the fair value of its interest rate lock commitments to originate residential mortgage loans held for sale, which includes grouping the interest rate lock commitments by interest rate and terms, applying an estimated pull-through rate based on historical experience, and then multiplying by quoted investor prices determined to be reasonably applicable to the loan commitment groups based on interest rate, terms, and rate lock expiration dates of the loan commitment groups. The Corporation also relies on an internal valuation model to estimate the fair value of its forward commitments to sell residential mortgage loans (i.e., an estimate of what the Corporation would receive or pay to terminate the forward delivery contract based on market prices for similar financial instruments), which includes matching specific terms and maturities of the forward commitments against applicable investor pricing available. While there are Level 2 and 3 inputs used in the valuation models, the Corporation has determined that the majority of the inputs significant in the valuation of both of the mortgage derivatives fall within Level 3 of the fair value hierarchy. See Note 10 for additional disclosure regarding the Corporation’s mortgage derivatives. Following is a description of the valuation methodologies used for the Corporation’s more significant instruments measured on a nonrecurring basis at the lower of amortized cost or estimated fair value, including the general classification of such instruments pursuant to the valuation hierarchy. Loans Held for Sale: Loans held for sale, which consist generally of current production of certain fixed-rate, first-lien residential mortgage loans, are carried at the lower of cost or estimated fair value. The estimated fair value was based on what secondary markets are currently offering for portfolios with similar characteristics, which the Corporation classifies as a Level 2 nonrecurring fair value measurement. Impaired Loans: The Corporation considers a loan impaired when it is probable that the Corporation will be unable to collect all amounts due according to the original contractual terms of the note agreement, including both principal and interest. Management has determined that commercial and consumer loan relationships that have nonaccrual status or have had their terms restructured in a troubled debt restructuring meet this impaired loan definition. For individually evaluated impaired loans, the amount of impairment is based upon the present value of expected future cash flows discounted at the loan’s effective interest rate, the estimated fair value of the underlying collateral for collateral-dependent loans, or the estimated liquidity of the note. See Note 7 for additional information regarding the Corporation’s impaired loans. Mortgage servicing rights: Mortgage servicing rights do not trade in an active, open market with readily observable prices. While sales of mortgage servicing rights do occur, the precise terms and conditions typically are not readily available to allow for a “quoted price for similar assets” comparison. Accordingly, the Corporation utilizes an independent valuation from a third party which uses a discounted cash flow model to estimate the fair value of its mortgage servicing rights. The valuation model incorporates prepayment assumptions to project mortgage servicing rights cash flows based on the current interest rate scenario, which is then discounted to estimate an expected fair value of the mortgage servicing rights. The valuation model considers portfolio characteristics of the underlying mortgages, contractually specified servicing fees, prepayment assumptions, discount rate assumptions, delinquency rates, late charges, other ancillary revenue, costs to service, and other economic factors. The Corporation periodically reviews and assesses the underlying inputs and assumptions used in the model. In addition, the Corporation compares its fair value estimates and assumptions to observable market data for mortgage servicing rights, where available, and to recent market activity and actual portfolio experience. Due to the nature of the valuation inputs, mortgage servicing rights are classified within Level 3 of the fair value hierarchy. The Corporation uses the amortization method (i.e., lower of amortized cost or estimated fair value measured on a nonrecurring basis), not fair value measurement accounting, for its mortgage servicing rights assets. See Note 8 for additional disclosure regarding the Corporation’s mortgage servicing rights. The table below presents the Corporation’s investment securities available for sale and derivative financial instruments measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015, aggregated by the level in the fair value hierarchy within which those measurements fall. Assets and Liabilities Measured at Fair Value on a Recurring Basis
The table below presents a rollforward of the balance sheet amounts for the three months ended March 31, 2016 and the year ended December 31, 2015, for financial instruments measured on a recurring basis and classified within Level 3 of the fair value hierarchy.
For Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis as of March 31, 2016, the Corporation utilized the following valuation techniques and significant unobservable inputs. Derivative financial instruments (mortgage derivative — interest rate lock commitments to originate residential mortgage loans held for sale): The significant unobservable input used in the fair value measurement of the Corporation’s mortgage derivative interest rate lock commitments is the closing ratio, which represents the percentage of loans currently in a lock position which management estimates will ultimately close. The closing ratio calculation takes into consideration historical data and loan-level data, particularly the change in the current interest rates from the time of initial rate lock. The closing ratio is periodically reviewed for reasonableness and reported to the Associated Mortgage Group Risk Committee. At March 31, 2016, the closing ratio was 89%. Impaired loans: For individually evaluated impaired loans, the amount of impairment is based upon the present value of expected future cash flows discounted at the loan’s effective interest rate, the estimated fair value of the underlying collateral for collateral-dependent loans, or the estimated liquidity of the note, resulting in an average discount of 10% to 15%. Mortgage servicing rights: The discounted cash flow analyses that generate expected market prices utilize the observable characteristics of the mortgage servicing rights portfolio, as well as certain unobservable valuation parameters. The significant unobservable inputs used in the fair value measurement of the Corporation’s mortgage servicing rights are the weighted average constant prepayment rate and weighted average discount rate, which were 15.2% and 9.6% at March 31, 2016, respectively. Significant increases (decreases) in any of those inputs in isolation could result in a significantly lower (higher) fair value measurement. These parameter assumptions fall within a range that the Corporation, in consultation with an independent third party, believes purchasers of servicing would apply to such portfolios sold into the current secondary servicing market. Discussions are held with members from Treasury and Consumer Banking to reconcile the fair value estimates and the key assumptions used by the respective parties in arriving at those estimates. The Associated Mortgage Group Risk Committee is responsible for providing control over the valuation methodology and key assumptions. To assess the reasonableness of the fair value measurement, the Corporation also compares the fair value and constant prepayment rate to a value calculated by an independent third party on an annual basis. The table below presents the Corporation’s loans held for sale, impaired loans, and mortgage servicing rights measured at fair value on a nonrecurring basis as of March 31, 2016 and December 31, 2015, aggregated by the level in the fair value hierarchy within which those measurements fall. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Certain nonfinancial assets measured at fair value on a nonrecurring basis include other real estate owned (upon initial recognition or subsequent impairment), nonfinancial assets and nonfinancial liabilities measured at fair value in the second step of a goodwill impairment test, and intangible assets and other nonfinancial long-lived assets measured at fair value for impairment assessment. During the first three months of 2016 and the full year 2015, certain other real estate owned, upon initial recognition, was re-measured and reported at fair value through a charge off to the allowance for loan losses based upon the estimated fair value of the other real estate owned, less estimated selling costs. The fair value of other real estate owned, upon initial recognition or subsequent impairment, was estimated using appraised values, which the Corporation classifies as a Level 2 nonrecurring fair value measurement. Other real estate owned measured at fair value upon initial recognition totaled approximately $3 million for the first three months of 2016 and $11 million for the year ended December 31, 2015, respectively. In addition to other real estate owned measured at fair value upon initial recognition, the Corporation also recorded write-downs to the balance of other real estate owned for subsequent impairment of less than $1 million and $3 million to foreclosure / OREO expense, net for the three months ended 2016 and the year ended December 31, 2015, respectively. Fair Value of Financial Instruments: The Corporation is required to disclose estimated fair values for its financial instruments. Fair value estimates, methods, and assumptions are set forth below for the Corporation’s financial instruments. The estimated fair values of the Corporation’s financial instruments were as follows.
Cash and due from banks, interest-bearing deposits in other financial institutions, and federal funds sold and securities purchased under agreements to resell—For these short-term instruments, the carrying amount is a reasonable estimate of fair value. Investment securities (held to maturity and available for sale)—The fair value of investment securities is based on quoted prices in active markets, or if quoted prices are not available for a specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. FHLB and Federal Reserve Bank stocks—The carrying amount is a reasonable fair value estimate for the Federal Reserve Bank and Federal Home Loan Bank stocks given their “restricted” nature (i.e., the stock can only be sold back to the respective institutions (Federal Home Loan Bank or Federal Reserve Bank) or another member institution at par). Loans held for sale—The fair value estimation process for the loans held for sale portfolio is segregated by loan type. The estimated fair value was based on what secondary markets are currently offering for portfolios with similar characteristics. Loans, net—The fair value estimation process for the loan portfolio uses an exit price concept and reflects discounts the Corporation believes are consistent with liquidity discounts in the market place. Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as commercial and industrial, real estate construction, commercial real estate (owner occupied and investor), residential mortgage, home equity, and other consumer. The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for similar maturities. The fair value analysis also included other assumptions to estimate fair value, intended to approximate those a market participant would use in an orderly transaction, with adjustments for discount rates, interest rates, liquidity, and credit spreads, as appropriate. Bank owned life insurance—The fair value of bank owned life insurance approximates the carrying amount, because upon liquidation of these investments, the Corporation would receive the cash surrender value which equals the carrying amount. Deposits—The fair value of deposits with no stated maturity such as noninterest-bearing demand, savings, interest-bearing demand, and money market accounts, is equal to the amount payable on demand as of the balance sheet date. The fair value of Brokered CDs and other time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. However, if the estimated fair value of Brokered CDs and other time deposits is less than the carrying value, the carrying value is reported as the fair value. Short-term funding—The carrying amount is a reasonable estimate of fair value for existing short-term funding. Long-term funding—Rates currently available to the Corporation for debt with similar terms and remaining maturities are used to estimate the fair value of existing long-term funding. Standby letters of credit—The fair value of standby letters of credit represents deferred fees arising from the related off-balance sheet financial instruments. These deferred fees approximate the fair value of these instruments and are based on several factors, including the remaining terms of the agreement and the credit standing of the customer. Derivatives (trading and other) Interest rate-related instruments—The fair value of interest rate-related instruments is determined using discounted cash flow analysis on the expected cash flows of each derivative. The Corporation also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. Foreign currency exchange forwards—The fair value of the Corporation’s foreign currency exchange forwards is determined using quoted prices of foreign currency exchange forwards with similar characteristics, with consideration given to the nature of the quote and the relationship of recently evidenced market activity to the fair value estimate. Purchased and written options—The fair value of the Corporation’s purchased and written options is determined using quoted prices of the underlying stocks. Commodity contracts—The fair value of the Corporation’s commodity contracts is determined using quoted prices of the underlying instruments. Interest rate lock commitments to originate residential mortgage loans held for sale—The Corporation relies on an internal valuation model to estimate the fair value of its interest rate lock commitments to originate residential mortgage loans held for sale, which includes grouping the interest rate lock commitments by interest rate and terms, applying an estimated pull-through rate based on historical experience, and then multiplying by quoted investor prices determined to be reasonably applicable to the loan commitment groups based on interest rate, terms, and rate lock expiration dates of the loan commitment groups. Forward commitments to sell residential mortgage loans—The Corporation relies on an internal valuation model to estimate the fair value of its forward commitments to sell residential mortgage loans (i.e., an estimate of what the Corporation would receive or pay to terminate the forward delivery contract based on market prices for similar financial instruments), which includes matching specific terms and maturities of the forward commitments against applicable investor pricing available. Limitations—Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Corporation’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Corporation’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. |
Retirement Plans |
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Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Plans | Retirement Plans The Corporation has a noncontributory defined benefit retirement plan (the Retirement Account Plan (“RAP”)) covering substantially all full-time employees. The benefits are based primarily on years of service and the employee’s compensation paid. Employees of acquired entities generally participate in the RAP after consummation of the business combinations. Any retirement plans of acquired entities are typically merged into the RAP after completion of the mergers, and credit is usually given to employees for years of service at the acquired institution for vesting and eligibility purposes. The Corporation also provides healthcare access for eligible retired employees in its Postretirement Plan (the “Postretirement Plan”). Retirees who are at least 55 years of age with 5 years of service are eligible to participate in the Postretirement Plan. The Corporation has no plan assets attributable to the Postretirement Plan. The Corporation reserves the right to terminate or make changes to the Postretirement Plan at any time. The components of net periodic benefit cost for the RAP and Postretirement Plans for three months ended March 31, 2016 and 2015 were as follows.
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Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting The Corporation utilizes a risk-based internal profitability measurement system to provide strategic business unit reporting. The profitability measurement system is based on internal management methodologies designed to produce consistent results and reflect the underlying economics of the units. Certain strategic business units have been combined for segment information reporting purposes where the nature of the products and services, the type of customer and the distribution of those products and services are similar. The three reportable segments are Corporate and Commercial Specialty; Community, Consumer, and Business; and Risk Management and Shared Services. The financial information of the Corporation’s segments has been compiled utilizing the accounting policies described in the Corporation’s 2015 Annual Report on Form 10-K, with certain exceptions. The more significant of these exceptions are described herein. The Corporation allocates net interest income using an internal funds transfer pricing ("FTP") methodology that charges users of funds (assets) and credits providers of funds (liabilities, primarily deposits) based on the maturity, prepayment and / or repricing characteristics of the assets and liabilities. The net effect of this allocation is recorded in the Risk Management and Shared Services segment. During 2015, the Corporation adopted enhanced FTP methodology utilizing, new, more granular deposit information which incorporated the additional dimension of vintage (based on time from when the deposit account was opened) for determining the funds credit for non-maturity deposits. The new deposit information demonstrated that deposit accounts with the Corporation for a longer period of time had a lower attrition rate, warranting a higher crediting rate (based on a longer-term segment of the yield curve) to reflect the long-term value such deposits provide to the Corporation. A credit provision is allocated to segments based on the expected long-term annual net charge off rates attributable to the credit risk of loans managed by the segment during the period. In contrast, the level of the consolidated provision for credit losses is determined based on an incurred loss model using the methodologies described in the Corporation’s 2015 Annual Report on Form 10-K to assess the overall appropriateness of the allowance for loan losses. The net effect of the credit provision is recorded in Risk Management and Shared Services. Indirect expenses incurred by certain centralized support areas are allocated to segments based on actual usage (for example, volume measurements) and other criteria. Certain types of administrative expense and bank-wide expense accruals (including amortization of core deposit and other intangible assets associated with acquisitions) are generally not allocated to segments. Income taxes are allocated to segments based on the Corporation’s estimated effective tax rate, with certain segments adjusted for any tax-exempt income or non-deductible expenses. Equity is allocated to the segments based on regulatory capital requirements and in proportion to an assessment of the inherent risks associated with the business of the segment (including interest, credit and operating risk). The management accounting policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to U.S. generally accepted accounting principles. As a result, reported segments and the financial information of the reported segments are not necessarily comparable with similar information reported by other financial institutions. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in previously reported segment financial data. A brief description of each business segment is presented below. A more in-depth discussion of these segments can be found in the Segment Reporting footnote in the Corporation’s 2015 Annual Report on Form 10-K. There have been no changes in the Corporation's segments since December 31, 2015. The Corporate and Commercial Specialty segment serves a wide range of customers including larger businesses, developers, not-for-profits, municipalities, and financial institutions. The Community, Consumer, and Business segment serves individuals, as well as small and mid-sized businesses. The Risk Management and Shared Services segment includes key shared operational functions and also includes residual revenue and expenses, representing the difference between actual amounts incurred and the amounts allocated to operating segments, including interest rate risk residuals (FTP mismatches) and credit risk and provision residuals (long-term credit charge mismatches). Information about the Corporation’s segments is presented below.
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Accumulated Other Comprehensive Income (Loss) |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table summarizes the components of accumulated other comprehensive income (loss) at March 31, 2016 and 2015, changes during the three month periods then ended, and reclassifications out of accumulated other comprehensive income (loss) during the three month periods ended March 31, 2016 and 2015, respectively.
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New Accounting Pronouncements Adopted (Policies) |
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Mar. 31, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements Adopted | In September 2015, the FASB issued an amendment to simplify the accounting for measurement adjustments to prior business combinations. The amendment requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The acquirer must record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendment also requires an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This amendment was effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The Corporation adopted the accounting standard during the first quarter of 2016, as required, and with no material impact on its results of operations, financial position, or liquidity. In May 2015, the FASB issued an amendment to eliminate the requirement to categorize investments measured using the net asset value per share ("NAV") practical expedient in the fair value hierarchy table. Entities will be required to disclose the fair value of investments measured using the NAV practical expedient so that financial statement users can reconcile amounts reported in the fair value hierarchy table to amounts reported on the balance sheet. The Corporation adopted the accounting standard during the first quarter of 2016, as required, with no material impact on its results of operations, financial position, or liquidity. In April 2015, the FASB issued an amendment to provide guidance to customers about whether a cloud computing arrangement included a software license. If the cloud computing arrangement includes a software license, then the customer should account for the software license element consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This amendment was effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The Corporation adopted the accounting standard on a prospective basis during the first quarter of 2016, as required, and with no material impact on its results of operations, financial position, or liquidity. In April 2015, the FASB issued an amendment to simplify the presentation of debt issuance costs. This amendment requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB expanded this amendment to include SEC staff views related to debt issuance costs associated with line-of-credit arrangements. The SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. This amendment required retrospective application and was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The Corporation adopted the accounting standard during the first quarter of 2016. All prior periods have been restated to reflect this change in presentation, resulting in a $3 million reduction to other assets and a corresponding $3 million reduction to long-term funding on the balance sheet compared to the amounts originally reported at December 31, 2015. See "Consolidated Balance Sheets" and Note 9 for additional information on the reclassification of debt issuance costs. In February 2015, the FASB issued an amendment to modify existing consolidation guidance for reporting companies that are required to evaluate whether they should consolidate legal entities. The new standard will place more emphasis on risk of loss when determining a controlling financial interest. Frequency in the application of related-party guidance for determining a controlling financial interest will be reduced. Also, consolidation conclusions for public and private companies among several industries that make use of limited partnerships or VIEs will be changed. This amendment was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The Corporation adopted the accounting standard during the first quarter of 2016, as required, and with no material impact on its results of operations, financial position, or liquidity. In January 2015, the FASB issued an amendment to eliminate from U.S. GAAP the concept of extraordinary items. Presently, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item. If an event or transaction meets the criteria for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. This amended guidance will prohibit separate disclosure of extraordinary items in the income statement. This amendment was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The Corporation adopted the accounting standard during the first quarter of 2016, as required, with no material impact. In June 2014, the FASB issued an amendment to the stock compensation accounting guidance to clarify that a performance target that affects vesting of a share-based payment and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. This amendment was effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2015. The Corporation adopted the accounting standard on a prospective basis during the first quarter of 2016, as required, with no material impact on its results of operations, financial position, or liquidity. |
Earnings Per Common Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculations for basic and diluted earnings per common share | Presented below are the calculations for basic and diluted earnings per common share.
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Stock-Based Compensation (Tables) |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value assumptions of stock options | The following assumptions were used in estimating the fair value for options granted in the first three months of 2016 and full year 2015.
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Summary of Company's Stock Option Activities | A summary of the Corporation’s stock option activity for the year ended December 31, 2015, and the three month ended March 31, 2016 is presented below.
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Summary of Company's Nonvested Stock Option Activities | The following table summarizes information about the Corporation’s nonvested stock option activity for the year ended December 31, 2015, and for the three months ended March 31, 2016.
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Summary of Restricted Stock Awards Activity (Excluding Salary Shares) | The following table summarizes information about the Corporation’s restricted stock activity for the year ended December 31, 2015, and for the three months ended March 31, 2016.
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Investment Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment securities available for sale | The amortized cost and fair values of securities available for sale and held to maturity were as follows.
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Investment securities held to maturity | The amortized cost and fair values of securities available for sale and held to maturity were as follows.
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Amortized cost and fair values of investment securities available for sale by contractual maturity | The amortized cost and fair values of investment securities available for sale and held to maturity at March 31, 2016, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
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Realized gains and losses and proceeds from sale | During the first three months of 2016, the Corporation continued to restructure its investment securities portfolio and sold approximately $119 million of FNMA and FHLMC mortgage-related securities and reinvested into GNMA mortgage-related securities, generating a $3 million net gain on sale. This restructuring lowered risk weighted assets and related capital requirements.
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Unrealized losses and fair value of available for sale and held to maturity securities, by investment category and time length | The following represents gross unrealized losses and the related fair value of investment securities available for sale and held to maturity, aggregated by investment category and length of time individual securities have been in a continuous unrealized loss position, at March 31, 2016.
For comparative purposes, the following represents gross unrealized losses and the related fair value of investment securities available for sale and held to maturity, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2015.
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Loans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan composition | The period end loan composition was as follows.
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Commercial and Consumer loans by credit quality indicator | The following table presents commercial and consumer loans by credit quality indicator at March 31, 2016.
The following table presents commercial and consumer loans by credit quality indicator at December 31, 2015.
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Summarized details of Loans | The following table presents loans by past due status at March 31, 2016.
The following table presents loans by past due status at December 31, 2015.
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Summarized details of impaired Loans | The following table presents impaired loans at March 31, 2016.
The following table presents impaired loans at December 31, 2015.
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Nonaccrual and Performing Restructured Loans | The following table presents nonaccrual and performing restructured loans by loan portfolio.
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Summary of Restructured Loans | The following table provides the number of loans modified in a troubled debt restructuring by loan portfolio during the three months ended March 31, 2016 and 2015, respectively, and the recorded investment and unpaid principal balance as of March 31, 2016 and 2015 respectively.
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Troubled debt restructurings subsequent redefault | The following table provides the number of loans modified in a troubled debt restructuring during the previous twelve months which subsequently defaulted during the three months ended March 31, 2016 and 2015, respectively, as well as the recorded investment in these restructured loans as of March 31, 2016 and 2015 respectively.
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Changes in the allowance for loan losses by portfolio segment | A summary of the changes in the allowance for loan losses by portfolio segment for the three months ended March 31, 2016, was as follows.
For comparison purposes, a summary of the changes in the allowance for loan losses by portfolio segment for the year ended December 31, 2015, was as follows.
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Changes in the allowance for unfunded commitments | A summary of the changes in the allowance for unfunded commitments was as follows.
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Goodwill and Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Text Block] | Goodwill and Other Intangible Assets Goodwill: Goodwill is not amortized but, instead, is subject to impairment tests on at least an annual basis, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The impairment testing process is conducted by assigning net assets and goodwill to each reporting unit. An initial qualitative evaluation is made to assess the likelihood of impairment and determine whether further quantitative testing to calculate the fair value is necessary. When the qualitative evaluation indicates that impairment is more likely than not, quantitative testing is required whereby the fair value of each reporting unit is calculated and compared to the recorded book value, “step one.” If the calculated fair value of the reporting unit exceeds its carrying value, goodwill is not considered impaired and “step two” is not considered necessary. If the carrying value of a reporting unit exceeds its calculated fair value, the impairment test continues (“step two”) by comparing the carrying value of the reporting unit’s goodwill to the implied fair value of goodwill. The implied fair value is computed by adjusting all assets and liabilities of the reporting unit to current fair value with the offset adjustment to goodwill. The adjusted goodwill balance is the implied fair value of the goodwill. An impairment charge is recognized if the carrying value of goodwill exceeds the implied fair value of goodwill. The Corporation conducted its most recent annual impairment testing in May 2015, utilizing a qualitative assessment. Factors that management considered in this assessment included macroeconomic conditions, industry and market considerations, overall financial performance of the Corporation and each reporting unit (both current and projected), changes in management strategy, and changes in the composition or carrying amount of net assets. In addition, management considered the changes in both the Corporation’s common stock price and in the overall bank common stock index (based on the S&P 400 Regional Bank Sub-Industry Index), as well as the Corporation’s earnings per common share trend over the past year. Based on these assessments, management concluded that the 2015 annual qualitative impairment assessment indicated that it is more likely than not that the estimated fair value exceeded the carrying value (including goodwill) for each reporting unit. Therefore, a step one quantitative analysis was not required. There were no events since the May 2015 impairment testing that have changed the Corporation's impairment assessment conclusion. There were no impairment charges recorded in 2015 or the first three months of 2016. At March 31, 2016, the Corporation had goodwill of $972 million, compared to $969 million at December 31, 2015. Goodwill increased by approximately $3 million during the first quarter of 2016 as a result of two small insurance acquisitions. See Note 2 for additional information on the Corporation's acquisitions. Other Intangible Assets: The Corporation has other intangible assets that are amortized, consisting of core deposit intangibles, other intangibles (primarily related to customer relationships acquired in connection with the Corporation’s insurance agency acquisitions), and mortgage servicing rights. Core deposit intangibles of approximately $15 million were fully amortized in 2015 and have been removed from both the gross carrying amount and the accumulated amortization for 2016. Other intangibles increased by approximately $1 million during the first quarter of 2016 for the customer relationships associated with two small insurance acquisitions. See Note 2 for additional information on the Corporation's acquisitions. For core deposit intangibles and other intangibles, changes in the gross carrying amount, accumulated amortization, and net book value were as follows.
The Corporation sells residential mortgage loans in the secondary market and typically retains the right to service the loans sold. Mortgage servicing rights are amortized in proportion to and over the period of estimated net servicing income, and assessed for impairment at each reporting date. The Corporation periodically evaluates its mortgage servicing rights asset for impairment. Impairment is assessed based on fair value at each reporting date using estimated prepayment speeds of the underlying mortgage loans serviced and stratifications based on the risk characteristics of the underlying loans (predominantly loan type and note interest rate). As mortgage interest rates fall, prepayment speeds are usually faster and the value of the mortgage servicing rights asset generally decreases, requiring additional valuation reserve. Conversely, as mortgage interest rates rise, prepayment speeds are usually slower and the value of the mortgage servicing rights asset generally increases, requiring less valuation reserve. A valuation allowance is established, through a charge to earnings, to the extent the amortized cost of the mortgage servicing rights exceeds the estimated fair value by stratification. If it is later determined that all or a portion of the temporary impairment no longer exists for a stratification, the valuation is reduced through a recovery to earnings. An other-than-temporary impairment (i.e., recoverability is considered remote when considering interest rates and loan pay off activity) is recognized as a write-down of the mortgage servicing rights asset and the related valuation allowance (to the extent a valuation allowance is available) and then against earnings. A direct write-down permanently reduces the carrying value of the mortgage servicing rights asset and valuation allowance, precluding subsequent recoveries. See Note 12 for a discussion of the recourse provisions on sold residential mortgage loans. See Note 13 which further discusses fair value measurement relative to the mortgage servicing rights asset. A summary of changes in the balance of the mortgage servicing rights asset and the mortgage servicing rights valuation allowance was as follows.
The following table shows the estimated future amortization expense for amortizing intangible assets. The projections of amortization expense are based on existing asset balances, the current interest rate environment, and prepayment speeds as of March 31, 2016. The actual amortization expense the Corporation recognizes in any given period may be significantly different depending upon acquisition or sale activities, changes in interest rates, prepayment speeds, market conditions, regulatory requirements, and events or circumstances that indicate the carrying amount of an asset may not be recoverable.
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Summary of core deposit intangibles and other intangibles | For core deposit intangibles and other intangibles, changes in the gross carrying amount, accumulated amortization, and net book value were as follows.
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Summary of changes in balance of mortgage servicing rights asset and mortgage servicing rights valuation allowance | A summary of changes in the balance of the mortgage servicing rights asset and the mortgage servicing rights valuation allowance was as follows.
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Summary of estimated future amortization expense | The following table shows the estimated future amortization expense for amortizing intangible assets. The projections of amortization expense are based on existing asset balances, the current interest rate environment, and prepayment speeds as of March 31, 2016. The actual amortization expense the Corporation recognizes in any given period may be significantly different depending upon acquisition or sale activities, changes in interest rates, prepayment speeds, market conditions, regulatory requirements, and events or circumstances that indicate the carrying amount of an asset may not be recoverable.
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Short and Long-Term Funding (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Breakdown of short & long-term debt balances | The components of short-term funding (funding with original contractual maturities of one year or less) and long-term funding (funding with original contractual maturities greater than one year) were as follows.
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Remaining contractual maturity of securities sold under agreements to repurchase |
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Derivative and Hedging Activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance sheet category and fair values of derivative instruments not designated as hedging instruments | The table below identifies the balance sheet category and fair values of the Corporation’s free standing derivative instruments, which are not designated as hedging instruments.
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Gain (loss) on derivative instruments not designated as hedging instruments | The table below identifies the income statement category of the gains and losses recognized in income on the Corporation’s derivative instruments not designated as hedging instruments.
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Balance Sheet Offsetting (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Offsetting of Derivative Assets and Liabilities | The following table presents the assets and liabilities subject to an enforceable master netting arrangement. The interest and commodity agreements we have with our commercial customers are not subject to an enforceable master netting arrangement, and therefore, are excluded from this table.
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Commitments, Off-Balance Sheet Arrangements, and Legal Proceedings (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of lending-related and other commitments | The following is a summary of lending-related commitments.
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Summary of changes in the residential mortgage repurchase reserve | The following summarizes the changes in the mortgage repurchase reserve.
|
Fair Value Measurements (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured on Recurring Basis at Fair Value | Assets and Liabilities Measured at Fair Value on a Recurring Basis
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Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) | The table below presents a rollforward of the balance sheet amounts for the three months ended March 31, 2016 and the year ended December 31, 2015, for financial instruments measured on a recurring basis and classified within Level 3 of the fair value hierarchy.
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Assets and Liabilities Measured on Nonrecurring Basis at Fair Value | The table below presents the Corporation’s loans held for sale, impaired loans, and mortgage servicing rights measured at fair value on a nonrecurring basis as of March 31, 2016 and December 31, 2015, aggregated by the level in the fair value hierarchy within which those measurements fall. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
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Estimated fair values of financial instruments | The estimated fair values of the Corporation’s financial instruments were as follows.
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Retirement Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net period benefit cost for the pension and postretirement plans | The components of net periodic benefit cost for the RAP and Postretirement Plans for three months ended March 31, 2016 and 2015 were as follows.
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Segment Reporting (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected segment information | Information about the Corporation’s segments is presented below.
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Accumulated Other Comprehensive Income (Loss) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of activity in accumulated other comprehensive income (loss) | The following table summarizes the components of accumulated other comprehensive income (loss) at March 31, 2016 and 2015, changes during the three month periods then ended, and reclassifications out of accumulated other comprehensive income (loss) during the three month periods ended March 31, 2016 and 2015, respectively.
|
Acquisitions (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Feb. 17, 2015 |
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Business Acquisition [Line Items] | ||||
Common stock issued in acquisition | $ 0 | $ 43,530 | ||
Goodwill acquired during period | 3,000 | |||
Additions to finite-lived intangible assets | 1,000 | $ 12,000 | ||
Ahmann and Martin Company [Member] | ||||
Business Acquisition [Line Items] | ||||
Common stock issued in acquisition | $ 48,000 | |||
Maximum contingent consideration | $ 8,000 | |||
Goodwill acquired during period | 40,000 | |||
Other Intangible Assets [Member] | ||||
Business Acquisition [Line Items] | ||||
Additions to finite-lived intangible assets | $ 1,012 | $ 12,115 |
New Accounting Pronouncements Adopted (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Other Assets [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ (3) |
Long-term Debt [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ (3) |
Investment Securities, Gains, Losses, and Proceeds (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract] | ||
Gross gains | $ 3,287 | $ 0 |
Gross losses | (189) | 0 |
Total investment securities gains, net | 3,098 | 0 |
Proceeds from sales of securities | $ 119,379 | $ 289 |
Investment Securities (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Schedule of Available-for-sale Securities [Line Items] | |||
Proceeds from sales of securities | $ 119,379 | $ 289 | |
Marketable Securities, Gain (Loss) | 3,098 | $ 0 | |
Investment Securities (Textuals) [Abstract] | |||
Securities pledged as collateral | 2,700,000 | $ 3,200,000 | |
Federal Home Loan Bank Stock | 108,000 | 74,000 | |
Federal Reserve Bank Stock | $ 73,000 | $ 73,000 |
Loans, Troubled Debt Restructurings Subsequent Default (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016
USD ($)
loan
|
Mar. 31, 2015
USD ($)
loan
|
|
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 16 | 41 |
Recorded Investment | $ | $ 1,314 | $ 2,391 |
Commercial real estate — owner occupied | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 0 | 1 |
Recorded Investment | $ | $ 0 | $ 297 |
Real estate construction | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 1 | 0 |
Recorded Investment | $ | $ 10 | $ 0 |
Residential Portfolio Segment [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 7 | 16 |
Recorded Investment | $ | $ 1,151 | $ 1,239 |
Home Equity Portfolio Segments [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 8 | 24 |
Recorded Investment | $ | $ 153 | $ 855 |
Loans, Changes in the Allowance for Loan Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Change in the allowance for unfunded commitments | ||
Balance at beginning of year | $ 24,000 | |
Balance at end of year | 24,000 | $ 24,000 |
Reserve for Off-balance Sheet Activities [Member] | ||
Change in the allowance for unfunded commitments | ||
Balance at beginning of year | 24,400 | 24,900 |
Provision for unfunded commitments | 0 | (500) |
Balance at end of year | $ 24,400 | $ 24,400 |
Loans (Details Textuals) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Receivables [Abstract] | ||
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 4,498 | $ 11,409 |
Restructured Loans Subsequently Accruing | 470 | |
Ytd Restructured Loans Still On Nonaccrual | $ 4,000 |
Goodwill and Intangible Assets (Details Textuals) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Business Acquisition [Line Items] | ||
Goodwill acquired during period | $ 3,000 | |
Additions to finite-lived intangible assets | 1,000 | $ 12,000 |
Goodwill | 971,951 | 968,844 |
Fully amortized core deposits intangibles | $ 15,000 | |
Ahmann and Martin Company [Member] | ||
Business Acquisition [Line Items] | ||
Goodwill acquired during period | $ 40,000 |
Goodwill and Intangible Assets, Summary of Core Deposit and Other Intangibles (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Summary of core deposit intangibles and other intangibles | |||
Additions during the period | $ 1,000 | $ 12,000 | |
Amortization of other intangible assets | 504 | $ 801 | |
Core Deposit Intangibles [Member] | |||
Summary of core deposit intangibles and other intangibles | |||
Gross carrying amount | 4,385 | 19,545 | |
Accumulated amortization | (4,062) | (19,152) | |
Total Estimated Amortization Expense | 323 | 393 | |
Amortization of other intangible assets | 70 | 1,404 | |
Other Intangible Assets [Member] | |||
Summary of core deposit intangibles and other intangibles | |||
Gross carrying amount | 32,410 | 31,398 | |
Accumulated amortization | (15,767) | (15,333) | |
Total Estimated Amortization Expense | 16,643 | 16,065 | |
Additions during the period | 1,012 | 12,115 | |
Amortization of other intangible assets | $ 434 | $ 1,690 |
Goodwill and Intangible Assets, Mortgage Servicing Rights Roll-Forward (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Mortgage servicing rights: | ||
Mortgage servicing rights at beginning of year | $ 62,150 | $ 61,379 |
Additions | 1,856 | 12,372 |
Amortization | (2,874) | (11,601) |
Mortgage servicing rights at end of year | 61,132 | 62,150 |
Valuation Allowance for Impairment of Recognized Servicing Assets [Roll Forward] | ||
Valuation allowance at beginning of year | (809) | (1,234) |
(Additions) recoveries, net | (909) | 425 |
Valuation allowance at end of year | (1,718) | (809) |
Mortgage servicing rights, net | 59,414 | 61,341 |
Fair value of mortgage servicing rights | 61,410 | 70,686 |
Portfolio of residential mortgage loans serviced for others (“servicing portfolio”) | $ 7,876,888 | $ 7,915,224 |
Mortgage servicing rights, net to servicing portfolio | 0.75% | 0.77% |
Mortgage servicing rights expense | $ 3,783 | $ 11,176 |
Short and Long-Term Funding (Components of Short-term and Long-term Funding) (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
||
---|---|---|---|---|
Short-term Funding [Abstract] | ||||
Federal funds purchased | $ 74,985 | $ 47,870 | ||
Securities sold under agreements to repurchase | 508,262 | 383,568 | ||
Federal funds purchased and securities sold under agreements to repurchase | 583,247 | 431,438 | ||
FHLB advances | 770,000 | 335,000 | ||
Commercial paper | 64,161 | 67,978 | ||
Other short-term funding | 834,161 | 402,978 | ||
Total short-term funding | 1,417,408 | 834,416 | ||
Long-term Funding | ||||
FHLB advances | 2,365,216 | 1,750,225 | ||
Senior notes, at par | 250,000 | 680,000 | ||
Subordinated notes, at par | 250,000 | 250,000 | ||
Other long-term funding and capitalized costs (1) | (3,900) | (4,061) | ||
Total long-term funding | [1] | 2,861,316 | 2,676,164 | |
Total short and long-term funding | $ 4,278,724 | $ 3,510,580 | ||
|
Short and Long-Term Funding (Long-term Funding Narrative) (Details) - USD ($) $ in Millions |
1 Months Ended | ||||
---|---|---|---|---|---|
Nov. 30, 2014 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2011 |
Mar. 31, 2011 |
|
Subordinated Borrowing [Line Items] | |||||
Carrying Value of Federal Funds Purchased, Securities Sold under Agreements to Repurchase, and Deposits Received for Securities Loaned | $ 643 | ||||
Federal Home Loan Bank, Advances, Weighted Average Interest Rate | 0.29% | 0.24% | |||
Two Thousand Eleven Senior Notes [Member] | |||||
Subordinated Borrowing [Line Items] | |||||
New Senior Debt Issued | $ 130 | $ 300 | |||
Debt Instrument, Interest Rate, Stated Percentage | 5.125% | ||||
Two Thousand Fourteen Senior Notes [Member] | |||||
Subordinated Borrowing [Line Items] | |||||
New Senior Debt Issued | $ 250 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 2.75% | ||||
Two Thousand Fourteen Subordinated Notes [Member] | |||||
Subordinated Borrowing [Line Items] | |||||
Junior Subordinated Debentures Issued | $ 250 | ||||
Debt Instrument, Term | 10 years | ||||
Subordinated Borrowing, Interest Rate | 4.25% |
Derivative and Hedging Activities (Details Textuals) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Investment securities and cash equivalents pledged as collateral | $ 28 | $ 9 |
Derivative collateral right to reclaim cash | $ 31 | $ 22 |
Balance Sheet Offsetting (Details) - Interest Rate Contract [Member] - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Offsetting Derivative Assets [Abstract] | ||
Gross amounts recognized | $ 823 | $ 1,466 |
Gross amounts offset in the balance sheet | 0 | 0 |
Net amounts presented in the balance sheet | 823 | 1,466 |
Financial instruments | (823) | (1,466) |
Collateral | 0 | 0 |
Net amount | 0 | 0 |
Offsetting Derivative Liabilities [Abstract] | ||
Gross amounts recognized | 48,700 | 30,200 |
Gross amounts offset in the balance sheet | 0 | 0 |
Net amounts presented in the balance sheet | 48,700 | 30,200 |
Financial instruments | (823) | (1,466) |
Collateral | (47,877) | (28,734) |
Net amount | $ 0 | $ 0 |
Commitments, Off-Balance Sheet Arrangements, and Legal Proceedings (Summary of Lending Related and Other Commitments) (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Commitments to extend credit, excluding commitments to originate residential mortgage loans held for sale [Member] | ||
Summary of lending-related and other commitments | ||
Lending related commitments | $ 7,315,642 | $ 7,402,518 |
Commercial Letters Of Credit [Member] | ||
Summary of lending-related and other commitments | ||
Lending related commitments | 7,782 | 9,945 |
Standby Letters of Credit [Member] | ||
Summary of lending-related and other commitments | ||
Lending related commitments | 278,740 | 296,508 |
Standby letters of credit, fair value | $ 3,000 | $ 3,000 |
Commitments, Off-Balance Sheet Arrangements, and Legal Proceedings (Residential Mortgage Repurchase Reserve) (Details) - USD ($) |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Summary of changes in the residential mortgage repurchase reserve [Line Items] | ||
Loans Repurchased Under Make Whole Requests | $ 126,000 | $ 3,000,000 |
Residential mortgage repurchase reserve | ||
Balance at beginning of year | 24,000,000 | |
Balance at end of year | 24,000,000 | 24,000,000 |
Loss Reimbursement Claims Under Make Whole Requests | 3,000 | 133,000 |
Loans Sold To Outside Investors Original Amount | 7,900,000,000 | |
Loans Sold To Outside Investors Remaining Outstanding Amount | 5,700,000,000 | |
Mortgage Repurchase Reserve [Member] | ||
Residential mortgage repurchase reserve | ||
Balance at beginning of year | 1,197,000 | 3,258,000 |
Repurchase provision expense | 70,000 | 428,000 |
Adjustments to provision expense | 0 | (2,450,000) |
Charge offs, net | (3,000) | (39,000) |
Balance at end of year | $ 1,264,000 | $ 1,197,000 |
Fair Value Measurements (Details Textuals) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Fair Value Measurements (Textuals) [Abstract] | ||
Other real estate owned measured at fair value | $ 3 | $ 11 |
Write down of Other Real Estate Owned | 1 | 3 |
Commitment on standby letters of credit | $ 279 | $ 297 |
Fair Value of Assets and Liabilities [Line Items] | ||
Closing ratio | 89.00% | |
Weighted average discount rate | 9.60% | |
Weighted average constant prepayment rate | 15.20% | |
Maximum [Member] | ||
Fair Value of Assets and Liabilities [Line Items] | ||
Weighted average discount rate | 15.00% | |
Minimum [Member] | ||
Fair Value of Assets and Liabilities [Line Items] | ||
Weighted average discount rate | 10.00% |
Retirement Plans, Components of Net Periodic Benefit Cost for the Pension and Postretirement Tables (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Retirement Plans Textuals [Abstract] | ||
Defined Benefit Plan, Age of Eligibility of Plan | 55 years | |
Defined Benefit Plan, Service Period for Eligibility in Plan | 5 years | |
Pension Plan [Member] | ||
Net period benefit cost for the pension and postretirement plans | ||
Service cost | $ 1,725 | $ 3,063 |
Interest cost | 1,780 | 1,642 |
Expected return on plan assets | (5,065) | (5,350) |
Prior service cost | 13 | 13 |
Actuarial (gain) loss | 482 | 532 |
Total net pension cost | (1,065) | (100) |
Other Postretirement Benefit Plan [Member] | ||
Net period benefit cost for the pension and postretirement plans | ||
Interest cost | 36 | 35 |
Total net pension cost | $ 36 | $ 35 |
Segment Reporting (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Segment Income Statement Data Abstract | ||
Net interest income | $ 171,987 | $ 167,813 |
Noninterest income | 83,192 | 79,813 |
Total income | 255,179 | 247,626 |
Provision for credit losses | 20,000 | 4,500 |
Noninterest expense | 173,971 | 173,992 |
Income before income taxes | 61,208 | 69,134 |
Income tax expense | 18,674 | 22,462 |
Net income | $ 42,534 | $ 46,672 |
Return on average allocated capital (ROCET1) | 8.60% | 10.20% |
Segment Balance Sheet Data | ||
Average earning assets | $ 25,272,373 | $ 24,148,026 |
Average loans | 18,922,830 | 17,815,115 |
Average deposits | 20,575,174 | 19,055,196 |
Average allocated capital (CET1) | 1,896,481 | 1,804,217 |
Operating Segments [Member] | Corporate and Commercial Specialty | ||
Segment Income Statement Data Abstract | ||
Net interest income | 79,164 | 75,691 |
Noninterest income | 11,613 | 12,613 |
Total income | 90,777 | 88,304 |
Provision for credit losses | 12,739 | 9,526 |
Noninterest expense | 34,403 | 34,460 |
Income before income taxes | 43,635 | 44,318 |
Income tax expense | 14,579 | 15,368 |
Net income | $ 29,056 | $ 28,950 |
Return on average allocated capital (ROCET1) | 11.30% | 12.50% |
Segment Balance Sheet Data | ||
Average earning assets | $ 9,720,028 | $ 9,218,844 |
Average loans | 9,711,221 | 9,210,992 |
Average deposits | 5,918,341 | 5,421,541 |
Average allocated capital (CET1) | 1,031,659 | 942,764 |
Operating Segments [Member] | Community, Consumer, and Business | ||
Segment Income Statement Data Abstract | ||
Net interest income | 85,605 | 86,357 |
Noninterest income | 63,748 | 65,344 |
Total income | 149,353 | 151,701 |
Provision for credit losses | 6,142 | 7,071 |
Noninterest expense | 121,295 | 118,373 |
Income before income taxes | 21,916 | 26,257 |
Income tax expense | 7,670 | 9,190 |
Net income | $ 14,246 | $ 17,067 |
Return on average allocated capital (ROCET1) | 9.10% | 10.70% |
Segment Balance Sheet Data | ||
Average earning assets | $ 9,120,319 | $ 8,525,399 |
Average loans | 9,119,020 | 8,525,399 |
Average deposits | 11,100,195 | 10,522,618 |
Average allocated capital (CET1) | 627,211 | 647,375 |
Operating Segments [Member] | Risk Management and Shared Services | ||
Segment Income Statement Data Abstract | ||
Net interest income | 7,218 | 5,765 |
Noninterest income | 7,831 | 1,856 |
Total income | 15,049 | 7,621 |
Provision for credit losses | 1,119 | (12,097) |
Noninterest expense | 18,273 | 21,159 |
Income before income taxes | (4,343) | (1,441) |
Income tax expense | (3,575) | (2,096) |
Net income | $ (768) | $ 655 |
Return on average allocated capital (ROCET1) | (5.00%) | (1.10%) |
Segment Balance Sheet Data | ||
Average earning assets | $ 6,432,026 | $ 6,403,783 |
Average loans | 92,589 | 78,724 |
Average deposits | 3,556,638 | 3,111,037 |
Average allocated capital (CET1) | $ 237,611 | $ 214,078 |
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | $ (32,616) | |
Personnel expense | (101,398) | $ (100,152) |
Interest income (Amortization of net unrealized gains on available for sale securities transferred to held to maturity securities) | (1,572) | 0 |
Total other comprehensive income (loss) | 34,783 | 29,650 |
Ending Balance | 2,167 | |
Accumulated Other Comprehensive Income (Loss) [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | (32,616) | (4,850) |
Other comprehensive income (loss) before reclassifications | 60,422 | 47,418 |
Investment securities gain, net | (3,098) | |
Personnel expense | 495 | 545 |
Interest income (Amortization of net unrealized gains on available for sale securities transferred to held to maturity securities) | (1,572) | |
Income tax (expense) benefit | (21,464) | (18,313) |
Total other comprehensive income (loss) | 34,783 | 29,650 |
Ending Balance | 2,167 | 24,800 |
Investment Securities Available For Sale [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | 459 | 18,512 |
Other comprehensive income (loss) before reclassifications | 60,422 | 47,418 |
Investment securities gain, net | (3,098) | |
Personnel expense | 0 | 0 |
Interest income (Amortization of net unrealized gains on available for sale securities transferred to held to maturity securities) | (1,572) | |
Income tax (expense) benefit | (21,275) | (18,105) |
Total other comprehensive income (loss) | 34,477 | 29,313 |
Ending Balance | 34,936 | 47,825 |
Defined Benefit Plans [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | (33,075) | (23,362) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Investment securities gain, net | 0 | |
Personnel expense | 495 | 545 |
Interest income (Amortization of net unrealized gains on available for sale securities transferred to held to maturity securities) | 0 | |
Income tax (expense) benefit | (189) | (208) |
Total other comprehensive income (loss) | 306 | 337 |
Ending Balance | $ (32,769) | $ (23,025) |
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