Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 07, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2019 | |
Entity File Number | 0-15950 | |
Entity Registrant Name | FIRST BUSEY CORPORATION | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 37-1078406 | |
Entity Address, Address Line One | 100 W. University Ave. | |
Entity Address, City or Town | Champaign | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 61820 | |
City Area Code | 217 | |
Local Phone Number | 365-4544 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | BUSE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 55,386,636 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0000314489 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and due from banks | $ 113,346,000 | $ 128,838,000 |
Interest-bearing deposits | 306,861,000 | 111,135,000 |
Total cash and cash equivalents | 420,207,000 | 239,973,000 |
Debt securities available for sale | 1,848,073,000 | 697,685,000 |
Debt securities held to maturity (fair value 2019 $15,934; 2018 $603,360) | 15,708,000 | 608,660,000 |
Equity securities | 5,362,000 | 6,169,000 |
Loans held for sale, at fair value | 39,607,000 | 25,895,000 |
Portfolio loans (net of allowance for loan losses 2019 $51,375; 2018 $50,648) | 6,480,751,000 | 5,517,780,000 |
Premises and equipment, net | 149,726,000 | 117,672,000 |
Right of use asset | 10,426,000 | |
Goodwill | 314,343,000 | 267,685,000 |
Other intangible assets, net | 60,984,000 | 32,873,000 |
Cash surrender value of bank owned life insurance | 173,150,000 | 128,491,000 |
Other assets | 94,330,000 | 59,474,000 |
Total assets | 9,612,667,000 | 7,702,357,000 |
Deposits: | ||
Noninterest-bearing | 1,766,681,000 | 1,464,700,000 |
Interest-bearing | 6,066,541,000 | 4,784,621,000 |
Total deposits | 7,833,222,000 | 6,249,321,000 |
Securities sold under agreements to repurchase | 190,846,000 | 185,796,000 |
Short-term borrowings | 30,761,000 | |
Long-term debt | 86,772,000 | 50,000,000 |
Senior notes, net of unamortized issuance costs | 39,607,000 | 39,539,000 |
Subordinated notes, net of unamortized issuance costs | 59,197,000 | 59,147,000 |
Junior subordinated debt owed to unconsolidated trusts | 71,230,000 | 71,155,000 |
Lease liability | 10,531,000 | |
Other liabilities | 86,893,000 | 52,435,000 |
Total liabilities | 8,409,059,000 | 6,707,393,000 |
Outstanding commitments and contingent liabilities (see Note 10) | ||
Stockholders' Equity | ||
Common stock, $.001 par value, authorized 66,666,667 shares; 55,910,733 shares issued 2019 and 49,185,581 shares issued 2018 | 56,000 | 49,000 |
Additional paid-in capital | 1,246,160,000 | 1,080,084,000 |
Accumulated deficit | (44,878,000) | (72,167,000) |
Accumulated other comprehensive income (loss) | 14,627,000 | (6,812,000) |
Total stockholders' equity before treasury stock | 1,215,965,000 | 1,001,154,000 |
Treasury stock, at cost (2019 524,097 shares; 2018 310,745 shares) | (12,357,000) | (6,190,000) |
Total stockholders' equity | 1,203,608,000 | 994,964,000 |
Total liabilities and stockholders' equity | $ 9,612,667,000 | $ 7,702,357,000 |
Common shares outstanding at period end | 55,386,636 | 48,874,836 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Held to maturity, fair value | $ 15,934 | $ 603,360 |
Portfolio Loans, allowance for loan losses (in dollars) | $ 51,375 | $ 50,648 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 66,666,667 | 66,666,667 |
Common stock, shares issued | 55,910,733 | 49,185,581 |
Treasury Stock, Shares | 524,097 | 310,745 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Interest income: | ||||
Interest and fees on loans | $ 78,031,000 | $ 62,290,000 | $ 149,820,000 | $ 123,250,000 |
Interest and dividends on investment securities: | ||||
Taxable interest income | 11,152,000 | 6,323,000 | 21,336,000 | 12,313,000 |
Non-taxable interest income | 1,200,000 | 1,204,000 | 2,276,000 | 2,464,000 |
Other interest income | 1,083,000 | 508,000 | 2,315,000 | 931,000 |
Total interest income | 91,466,000 | 70,325,000 | 175,747,000 | 138,958,000 |
Interest expense: | ||||
Deposits | 14,154,000 | 6,904,000 | 26,654,000 | 12,891,000 |
Federal funds purchased and securities sold under agreements to repurchase | 627,000 | 372,000 | 1,210,000 | 713,000 |
Short-term borrowings | 494,000 | 457,000 | 685,000 | 933,000 |
Long-term debt | 741,000 | 213,000 | 1,320,000 | 377,000 |
Senior notes | 399,000 | 399,000 | 799,000 | 799,000 |
Subordinated notes | 731,000 | 794,000 | 1,462,000 | 1,587,000 |
Junior subordinated debt owed to unconsolidated trusts | 892,000 | 814,000 | 1,806,000 | 1,529,000 |
Total interest expense | 18,038,000 | 9,953,000 | 33,936,000 | 18,829,000 |
Net interest income | 73,428,000 | 60,372,000 | 141,811,000 | 120,129,000 |
Provision for loan losses | 2,517,000 | 2,258,000 | 4,628,000 | 3,266,000 |
Net interest income after provision for loan losses | 70,911,000 | 58,114,000 | 137,183,000 | 116,863,000 |
Non-interest income: | ||||
Mortgage revenue | 2,851,000 | 1,573,000 | 4,796,000 | 3,216,000 |
Net (losses) gains on sales of securities | (10,000) | 160,000 | (184,000) | 160,000 |
Unrealized (losses) gains recognized on equity securities | (1,016,000) | (800,000) | ||
Other income | 3,170,000 | 2,595,000 | 6,222,000 | 4,490,000 |
Total non-interest income | 27,896,000 | 22,802,000 | 53,841,000 | 45,288,000 |
Non-interest expense: | ||||
Salaries, wages and employee benefits | 34,268,000 | 25,472,000 | 66,609,000 | 54,291,000 |
Net occupancy expense of premises | 4,511,000 | 3,689,000 | 8,713,000 | 7,510,000 |
Furniture and equipment expenses | 2,352,000 | 1,790,000 | 4,447,000 | 3,703,000 |
Data processing | 5,616,000 | 4,030,000 | 10,017,000 | 8,375,000 |
Amortization of intangible assets | 2,412,000 | 1,490,000 | 4,506,000 | 3,005,000 |
Other expense | 18,861,000 | 10,834,000 | 30,891,000 | 21,461,000 |
Total non-interest expense | 68,020,000 | 47,305,000 | 125,183,000 | 98,345,000 |
Income before income taxes | 30,787,000 | 33,611,000 | 65,841,000 | 63,806,000 |
Income taxes | 6,702,000 | 8,749,000 | 16,287,000 | 17,027,000 |
Net income | $ 24,085,000 | $ 24,862,000 | $ 49,554,000 | $ 46,779,000 |
Basic earnings per common share (in dollars per share) | $ 0.43 | $ 0.51 | $ 0.91 | $ 0.96 |
Diluted earnings per common share (in dollars per share) | 0.43 | 0.51 | 0.90 | 0.95 |
Dividends declared per share of common stock (in dollars per share) | $ 0.21 | $ 0.20 | $ 0.42 | $ 0.40 |
Fees for customer services | ||||
Non-interest income: | ||||
Non-interest income | $ 9,696,000 | $ 7,290,000 | $ 17,793,000 | $ 14,236,000 |
Trust fees | ||||
Non-interest income: | ||||
Non-interest income | 8,318,000 | 6,735,000 | 16,433,000 | 14,249,000 |
Commissions and brokers fees, net | ||||
Non-interest income: | ||||
Non-interest income | 1,170,000 | 883,000 | 2,084,000 | 1,979,000 |
Remittance processing | ||||
Non-interest income: | ||||
Non-interest income | $ 3,717,000 | $ 3,566,000 | $ 7,497,000 | $ 6,958,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 24,085,000 | $ 24,862,000 | $ 49,554,000 | $ 46,779,000 |
Unrealized net gains/(losses) on securities: | ||||
Unrealized net holding gains (losses) arising during period | 18,214,000 | (1,666,000) | 25,014,000 | (10,420,000) |
Unrealized gains on investment securities transferred from held to maturity to available for sale | 4,780,000 | |||
Reclassification adjustment for losses (gains) included in net income | 10,000 | 193,000 | ||
Other comprehensive income (loss), before tax | 18,224,000 | (1,666,000) | 29,987,000 | (10,420,000) |
Income tax expense (benefit) related to items of other comprehensive income | 5,192,000 | (475,000) | 8,548,000 | (2,970,000) |
Other comprehensive income (loss), net of tax | 13,032,000 | (1,191,000) | 21,439,000 | (7,450,000) |
Comprehensive income | $ 37,117,000 | $ 23,671,000 | $ 70,993,000 | $ 39,329,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated (Deficit) | Accumulated Other Comprehensive Income (loss) | Treasury Stock | Total |
Beginning Balance at Dec. 31, 2017 | $ 49,000 | $ 1,084,889,000 | $ (132,122,000) | $ (2,810,000) | $ (15,003,000) | $ 935,003,000 |
Beginning Balance (in shares) at Dec. 31, 2017 | 48,684,943 | |||||
Increase (decrease) in shareholders' equity | ||||||
Net income | 46,779,000 | 46,779,000 | ||||
Other comprehensive income (loss) | (7,450,000) | (7,450,000) | ||||
Issuance of treasury stock for employee stock purchase plan | (328,000) | 666,000 | 338,000 | |||
Issuance of treasury stock for employee stock purchase plan (in shares) | 11,748 | |||||
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax | (1,875,000) | 1,803,000 | (72,000) | |||
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax (in shares) | 31,832 | |||||
Tax Cuts and Jobs Act of 2017 reclassification | 605,000 | (605,000) | ||||
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax | (2,367,000) | 2,713,000 | 346,000 | |||
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax (in shares) | 47,881 | |||||
Cash dividends common stock | (19,482,000) | (19,482,000) | ||||
Stock dividend equivalents restricted stock units | 282,000 | (284,000) | (2,000) | |||
Stock-based compensation | 1,722,000 | 1,722,000 | ||||
Ending Balance at Jun. 30, 2018 | $ 49,000 | 1,082,323,000 | (104,504,000) | (10,865,000) | (9,821,000) | 957,182,000 |
Ending Balance (in shares) at Jun. 30, 2018 | 48,776,404 | |||||
Beginning Balance at Mar. 31, 2018 | $ 49,000 | 1,084,411,000 | (119,467,000) | (9,674,000) | (13,173,000) | 942,146,000 |
Beginning Balance (in shares) at Mar. 31, 2018 | 48,717,239 | |||||
Increase (decrease) in shareholders' equity | ||||||
Net income | 24,862,000 | 24,862,000 | ||||
Other comprehensive income (loss) | (1,191,000) | (1,191,000) | ||||
Issuance of treasury stock for employee stock purchase plan | (80,000) | 172,000 | 92,000 | |||
Issuance of treasury stock for employee stock purchase plan (in shares) | 3,030 | |||||
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax | (1,875,000) | 1,803,000 | (72,000) | |||
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax (in shares) | 31,832 | |||||
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax | (1,161,000) | 1,377,000 | 216,000 | |||
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax (in shares) | 24,303 | |||||
Cash dividends common stock | (9,743,000) | (9,743,000) | ||||
Stock dividend equivalents restricted stock units | 154,000 | (156,000) | (2,000) | |||
Stock-based compensation | 874,000 | 874,000 | ||||
Ending Balance at Jun. 30, 2018 | $ 49,000 | 1,082,323,000 | (104,504,000) | (10,865,000) | (9,821,000) | 957,182,000 |
Ending Balance (in shares) at Jun. 30, 2018 | 48,776,404 | |||||
Beginning Balance at Dec. 31, 2018 | $ 49,000 | 1,080,084,000 | (72,167,000) | (6,812,000) | (6,190,000) | 994,964,000 |
Beginning Balance (in shares) at Dec. 31, 2018 | 48,874,836 | |||||
Increase (decrease) in shareholders' equity | ||||||
Net income | 49,554,000 | 49,554,000 | ||||
Other comprehensive income (loss) | 21,439,000 | 21,439,000 | ||||
Repurchase of stock | (8,433,000) | (8,433,000) | ||||
Repurchase of stock (in shares) | (333,334) | |||||
Stock issued in acquisition of Banc Ed, net of stock issuance costs | $ 7,000 | 166,274,000 | 166,281,000 | |||
Stock issued in acquisition of Banc Ed, net of stock issuance costs (in shares) | 6,725,152 | |||||
Issuance of treasury stock for employee stock purchase plan | 79,000 | 306,000 | 385,000 | |||
Issuance of treasury stock for employee stock purchase plan (in shares) | 16,150 | |||||
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax | (2,535,000) | 345,000 | (2,190,000) | |||
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax (in shares) | 91,032 | |||||
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax | (91,000) | 1,615,000 | 1,524,000 | |||
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax (in shares) | 12,800 | |||||
Cash dividends common stock | (21,947,000) | (21,947,000) | ||||
Stock dividend equivalents restricted stock units | 318,000 | (318,000) | ||||
Stock-based compensation | 2,031,000 | 2,031,000 | ||||
Ending Balance at Jun. 30, 2019 | $ 56,000 | 1,246,160,000 | (44,878,000) | 14,627,000 | (12,357,000) | 1,203,608,000 |
Ending Balance (in shares) at Jun. 30, 2019 | 55,386,636 | |||||
Beginning Balance at Mar. 31, 2019 | $ 56,000 | 1,247,340,000 | (57,125,000) | 1,595,000 | (5,725,000) | 1,186,141,000 |
Beginning Balance (in shares) at Mar. 31, 2019 | 55,624,627 | |||||
Increase (decrease) in shareholders' equity | ||||||
Net income | 24,085,000 | 24,085,000 | ||||
Other comprehensive income (loss) | 13,032,000 | 13,032,000 | ||||
Repurchase of stock | (8,433,000) | (8,433,000) | ||||
Repurchase of stock (in shares) | (333,334) | |||||
Issuance of treasury stock for employee stock purchase plan | 29,000 | 84,000 | 113,000 | |||
Issuance of treasury stock for employee stock purchase plan (in shares) | 4,419 | |||||
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax | (2,364,000) | 174,000 | (2,190,000) | |||
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax (in shares) | 81,962 | |||||
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax | (19,000) | 1,543,000 | 1,524,000 | |||
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax (in shares) | 8,962 | |||||
Cash dividends common stock | (11,681,000) | (11,681,000) | ||||
Stock dividend equivalents restricted stock units | 157,000 | (157,000) | ||||
Stock-based compensation | 1,017,000 | 1,017,000 | ||||
Ending Balance at Jun. 30, 2019 | $ 56,000 | $ 1,246,160,000 | $ (44,878,000) | $ 14,627,000 | $ (12,357,000) | $ 1,203,608,000 |
Ending Balance (in shares) at Jun. 30, 2019 | 55,386,636 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||||
Cash dividends, common stock (in dollars per share) | $ 0.21 | $ 0.20 | $ 0.42 | $ 0.40 |
Stock dividends, restricted stock units (in dollars per share) | $ 0.21 | $ 0.20 | $ 0.42 | $ 0.40 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash Flows from Operating Activities | ||
Net income | $ 49,554 | $ 46,779 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 4,628 | 3,266 |
Amortization of intangible assets (excluding Mortgage Servicing Rights ("MSR")) | 4,506 | 3,005 |
Amortization of mortgage servicing rights | 1,222 | 759 |
Depreciation and amortization of premises and equipment | 5,674 | 4,748 |
Net amortization (accretion) of premium (discount) on portfolio loans | (5,729) | (6,375) |
Net amortization (accretion) of premium (discount) on investment securities | 2,843 | 4,485 |
Net amortization (accretion) of premium (discount) on time deposits | (802) | (121) |
Net amortization (accretion) of premium (discount) on Federal Home Loan Bank ("FHLB") advances and | 125 | 72 |
Impairment of other real estate owned ("OREO") | 18 | |
Impairment of fixed assets held for sale | 817 | |
Impairment of MSR | 1,822 | |
Change in fair value of loans held for sale, net | (800) | |
Change in fair value of equity securities, net | 800 | (1,071) |
(Gain) loss on sales of securities, net | 184 | (160) |
(Gain) loss on sale of loans, net | (5,615) | (5,095) |
(Gain) loss on sale of OREO | (83) | |
(Gain) loss on sale of premises and equipment | 116 | 105 |
(Gain) loss life insurance proceeds | (1,016) | |
Provision for deferred income taxes | 3,816 | 3,601 |
Stock-based and non-cash compensation | 2,031 | 1,722 |
Decrease in deferred compensation | (3,339) | |
Increase in cash surrender value of bank owned life insurance | (1,970) | (1,228) |
Mortgage loans originated for sale | (244,781) | (219,252) |
Proceeds from sales of mortgage loans | 239,252 | 285,221 |
Net change in operating assets and liabilities: | ||
(Increase) decrease in other assets | 1,176 | 1,848 |
(Decrease) in other liabilities | (16,268) | (11,363) |
Net cash provided by operating activities | 37,364 | 111,763 |
Cash Flows from Investing Activities | ||
Purchases of debt securities held to maturity | (85,050) | |
Purchases of debt securities available for sale | (227,182) | (93,591) |
Purchase of FHLB stock | (3,700) | |
Proceeds from sales of equity securities | 958 | 920 |
Proceeds from sales of debt securities available for sale | 227,371 | |
Proceeds from paydowns and maturities of debt securities held to maturity | 13,922 | 18,033 |
Proceeds from paydowns and maturities of debt securities available for sale | 146,566 | 82,817 |
Proceeds from the redemption of FHLB stock | 3,720 | 2,114 |
Net cash (received) paid in acquisitions | (49,387) | |
Net change in loans | (89,642) | (36,080) |
Cash paid for premiums on bank-owned life insurance | (3) | |
Purchases of premises and equipment | (5,918) | (8,594) |
Proceeds from life insurance | 1,672 | |
Proceeds from disposition of premises and equipment | 3 | 2 |
Capitalized expenditures on OREO | (2) | |
Proceeds from sale of OREO | 1,119 | 722 |
Net cash provided by (used in) investing activities | 19,497 | (118,707) |
Cash Flows from Financing Activities | ||
Net change in deposits | 145,499 | 38,069 |
Net change in federal funds purchased and securities sold under agreements to repurchase | (45,549) | (64,457) |
Proceeds from other borrowings | 60,000 | |
Repayment of FHLB advances, net | (2,297) | |
Repayment of other borrowings | (3,000) | (70,000) |
Cash dividends paid | (21,947) | (19,482) |
Purchase of treasury stock | (8,433) | |
Cash paid for withholding taxes on share based payments | (835) | (74) |
Proceeds from stock options exercised | 169 | 346 |
Common stock issuance costs | (234) | |
Net cash provided by (used in) financing activities | 123,373 | (115,598) |
Net increase in cash and cash equivalents | 180,234 | (122,542) |
Cash and cash equivalents, beginning of period | 239,973 | 353,272 |
Cash and cash equivalents, ending of period | 420,207 | 230,730 |
Cash payments for: | ||
Interest | 33,122 | 17,212 |
Income taxes | 10,555 | 4,322 |
Non-cash Investing and Financing Activities: | ||
OREO acquired in settlement of loans | 1,396 | $ 3,125 |
Transfer of debt securities held to maturity to available for sale | $ 573,639 |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Significant Accounting Policies | |
Significant Accounting Policies | Note 1: Significant Accounting Policies Basis of Financial Statement Presentation When preparing these unaudited consolidated financial statements of First Busey Corporation and its subsidiaries (“First Busey,” “Company,” “we,” or “our”), a Nevada corporation, we have assumed that you have read the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Form 10-K”). These interim unaudited consolidated financial statements serve to update our 2018 Form 10-K and may not include all information and notes necessary to constitute a complete set of financial statements. We prepared these unaudited consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We have eliminated intercompany accounts and transactions. We have also reclassified certain prior year amounts to conform to the current period presentation. These reclassifications did not have a material impact on our consolidated financial condition or results of operations. In our opinion, the unaudited consolidated financial statements reflect all normal, recurring adjustments needed to present fairly our results for the interim periods. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. The Company has evaluated subsequent events for potential recognition and/or disclosure through the date the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q were issued. There were no significant subsequent events for the quarter ended June 30, 2019 through the issuance date of these unaudited consolidated financial statements that warranted adjustment to or disclosure in the unaudited consolidated financial statements. Use of Estimates In preparing the accompanying unaudited consolidated financial statements in conformity with GAAP, the Company’s management is required to make estimates and assumptions that affect the amounts reported in the financial statements and the disclosures provided. Actual results could differ from those estimates. Material estimates which are particularly susceptible to significant change in the near term relate to the fair value of investment securities, fair value of assets acquired and liabilities assumed in business combinations, goodwill, income taxes and the determination of the allowance for loan losses. Leases A determination is made at inception if an arrangement contains a lease. For arrangements that contain a lease, the Company recognizes the lease on the balance sheet as a right of use asset and corresponding lease liability. Lease-related assets, or right of use assets, are recognized on the lease commencement date at amounts equal to the respective lease liabilities, adjusted for prepaid lease payments, initial direct costs, and lease incentives received. Lease-related liabilities are recognized at the present value of the remaining contractual fixed lease payments, discounted using our incremental borrowing rate. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. If not readily determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For operating leases existing prior to January 1, 2019, the Company used a borrowing rate that corresponded to the remaining lease term. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. Impact of recently adopted accounting standards On January 1, 2019, the Company adopted ASU No. 2016-02 “Leases (Topic 842) and all subsequent ASUs that modified Topic 842. The Company made the following elections for all leases in connection with the adoption of this guidance: ● The Company elected the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs; ● The Company did not elect the hindsight practical expedient ; ● The Company elected the optional transition method that allows companies to use the effective date as the date of initial application on transition. As a result, the Company did not adjust comparative period financial information or make the newly required lease disclosures for periods before the effective date; ● The Company elected not to apply the above guidance to short-term leases; ● The Company elected to separate the lease components from the nonlease components and exclude the nonlease components from the right-of-use asset and lease liability; and ● The Company did not elect the land easement practical expedient. At the date of adoption, the Company recorded approximately $8.1 million on its Consolidated Balance Sheets to reflect the right of use asset and associated lease liability . The Company utilized its incremental borrowing rate, on a collateralized basis, for the remaining contractual lease term. ASU 2017-08, "Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities." ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium, requiring the premium to be amortized to the earliest call date. ASU 2017-08 does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This guidance was effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." ASU 2017-12 amends Topic 815 to reduce the cost and complexity of applying hedge accounting and expands the types of relationships that qualify for hedge accounting. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness, requires all items that affect earnings to be presented in the same income statement line as the hedged item, provides for applying hedge accounting to additional hedging strategies, provides for new approaches to measuring the hedged item in fair value hedges of interest rate risk, and eases the requirements for effective testing and hedge documentation. This guidance was effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. During the first quarter of 2019, t he Company adopted this guidance, reassessed classification of certain investments and transferred $573.6 million of securities from held to maturity to available for sale. ASU 2018-07, "Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting." ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. This guidance was effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. Recently issued accounting standards ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." ASU 2016-13 implements a change from the current impaired loss model to an expected credit loss model over the life of an instrument, including loans and securities held to maturity. The expected credit loss model is expected to result in earlier recognition of losses. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 including interim periods with those years. The Company has developed and is executing a project plan to implement this guidance. The project plan includes an assessment of data, development of CECL methodologies, model validation, and parallel runs to assess the impact of CECL calculations on its consolidated financial statements and evaluation of related disclosures. |
Acquisition
Acquisition | 6 Months Ended |
Jun. 30, 2019 | |
Acquisition | |
Acquisition | Note 2: Acquisition The Banc Ed Corp. On January 31, 2019, the Company completed its acquisition of The Banc Ed Corp. (“Banc Ed”). TheBANK of Edwardsville (“TheBANK”), Banc Ed’s wholly-owned bank subsidiary, will be merged with and into First Busey’s bank subsidiary, Busey Bank, in the fourth quarter of 2019. At the time of the bank merger, TheBANK’s banking offices will become branches of Busey Bank. Under the terms of the Merger Agreement with Banc Ed, at the effective time of the acquisition, each share of Banc Ed common stock issued and outstanding was converted into the right to receive 8.2067 shares of the Company’s common stock, cash in lieu of fractional shares and $111.53 cash consideration per share. The market value of the 6.7 million shares of First Busey common stock issued at the effective time of the acquisition was approximately $166.5 million based on First Busey’s closing stock price of $24.76 on January 31, 2019. This transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged was recorded at estimated fair values on the date of acquisition. Fair values are considered provisional until final fair values are determined or the measurement period has passed, but no later than one year from the acquisition date. Reviews of third party valuations are still being performed by management. Therefore amounts are subject to change and could change materially from the provisional amounts disclosed below. First Busey incurred $4.0 million and $5.0 million in pre-tax expenses related to the acquisition of Banc Ed for the three and six months ended June 30, 2019, respectively, primarily for professional and legal fees and deconversion expenses, all of which are reported as a component of non-interest expense in the accompanying unaudited Consolidated Statements of Income. The following table presents the estimated fair value of Banc Ed’s assets acquired and liabilities assumed as of January 31, 2019 (dollars in thousands) : Estimated Fair Value Assets acquired: Cash and cash equivalents $ 42,013 Securities 692,684 Loans held for sale 2,157 Portfolio loans 873,336 Premises and equipment 31,929 Other intangible assets 32,617 Mortgage servicing rights 6,946 Other assets 57,296 Total assets acquired 1,738,978 Liabilities assumed: Deposits 1,439,203 Other borrowings 63,439 Other liabilities 25,079 Total liabilities assumed 1,527,721 Net assets acquired $ 211,257 Consideration paid: Cash $ 91,400 Common stock 166,515 Total consideration paid $ 257,915 Goodwill $ 46,658 The loans acquired in this transaction were recorded at fair value with no carryover of any existing allowance for loan losses. Loans that were not deemed to be credit-impaired at the acquisition date were accounted for under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 310-20, Receivables-Nonrefundable Fees and Other Costs , and were subsequently considered as part of the Company’s determination of the adequacy of the allowance for loan losses. Purchased credit impaired (“PCI”) loans were accounted for under ASC 310-30, Receivables — Loans and Debt Securities Acquired with Deteriorated Credit Quality . As of the acquisition date, the aggregate principal balance outstanding and aggregate fair value of the acquired performing loans were $889.3 and $871.0 million, respectively. The difference between the carrying value and aggregate fair value of $17.0 million will be accreted over the estimated remaining life of the respective loans in a manner that approximates the level yield method. As of the acquisition date, the aggregate principal balance outstanding of PCI loans totaled $3.9 million and the aggregate fair value of PCI loans totaled $2.3 million. The accretable discount of $0.2 million on PCI loans represents the amount by which the undiscounted expected cash flows on such loans exceed their carrying value. The amount by which the contractual payments exceeds the undiscounted expected cash flows represents the non-accretable difference. The difference between contractually required payments at the acquisition date and the cash flow expected to be collected is referred to as the non-accretable difference. Further, the excess of cash flows expected at acquisition over the fair value is referred to as the accretable yield. At June 30, 2019, the carrying value of PCI loans acquired from Banc Ed was $1.7 million. Since the acquisition date, Banc Ed earned total revenues of $33.0 million and net income of $7.1 million, which are included in the Company’s unaudited Consolidated Statements of Income for the six months ended June 30, 2019. The following table provides the unaudited pro forma information for the results of operations for the three and six months ended June 30, 2019 and 2018, as if the acquisition had occurred January 1, 2018. The pro forma results combine the historical results of Banc Ed into the Company’s unaudited Consolidated Statements of Income, including the impact of purchase accounting adjustments including loan discount accretion, intangible assets amortization, deposit accretion and premises accretion, net of taxes. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2018. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, expense efficiencies or asset dispositions ( dollars in thousands) : Pro Forma Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Total revenues (net interest income plus non- interest income) $ 101,324 $ 105,517 $ 201,976 $ 206,635 Net income 26,947 30,578 54,337 56,931 Diluted earnings per common share 0.48 0.55 0.97 1.02 |
Securities
Securities | 6 Months Ended |
Jun. 30, 2019 | |
Securities | |
Securities | Note 3: Securities The table below provides the amortized cost, unrealized gains and losses and fair values of debt securities summarized by major category (dollars in thousands) : Gross Gross Amortized Unrealized Unrealized Fair June 30, 2019: Cost Gains Losses Value Debt securities available for sale U.S. Treasury securities $ 58,308 $ 260 $ (33) $ 58,535 Obligations of U.S. government corporations and agencies 287,444 3,370 (48) 290,766 Obligations of states and political subdivisions 274,301 4,683 (54) 278,930 Commercial mortgage-backed securities 122,510 1,678 (33) 124,155 Residential mortgage-backed securities 951,998 10,394 (1,255) 961,137 Corporate debt securities 133,053 1,514 (17) 134,550 Total $ 1,827,614 $ 21,899 $ (1,440) $ 1,848,073 Debt securities held to maturity Obligations of states and political subdivisions (1) $ 15,708 $ 226 $ — $ 15,934 (1) Gross unrealized losses less than one thousand dollars. Gross Gross Amortized Unrealized Unrealized Fair December 31, 2018: Cost Gains Losses Value Debt securities available for sale U.S. Treasury securities $ 25,824 $ 1 $ (414) $ 25,411 Obligations of U.S. government corporations and agencies 53,096 7 (761) 52,342 Obligations of states and political subdivisions 171,131 484 (1,571) 170,044 Commercial mortgage-backed securities 2,003 — (61) 1,942 Residential mortgage-backed securities 322,646 245 (7,143) 315,748 Corporate debt securities 132,513 61 (376) 132,198 Total $ 707,213 $ 798 $ (10,326) $ 697,685 Debt securities held to maturity Obligations of states and political subdivisions $ 33,947 $ 68 $ (87) $ 33,928 Commercial mortgage-backed securities 59,054 11 (1,003) 58,062 Residential mortgage-backed securities 515,659 1,748 (6,037) 511,370 Total $ 608,660 $ 1,827 $ (7,127) $ 603,360 In adopting ASU 2017-12, the Company reassessed the classification of certain investments during the first quarter of 2019 and transferred $573.6 million of securities from held to maturity to available for sale. The transfer occurred at fair value and had a related unrealized loss of $4.8 million recorded in other comprehensive income. The amortized cost and fair value of debt securities, by contractual maturity or pre-refunded date, are shown below. Mortgages underlying mortgage-backed securities may be called or prepaid; therefore, actual maturities could differ from the contractual maturities. All mortgage-backed securities were issued by U.S. government agencies and corporations (dollars in thousands) . Debt securities available for sale Debt securities held to maturity Amortized Fair Amortized Fair June 30, 2019: Cost Value Cost Value Due in one year or less $ 220,023 $ 220,304 $ 2,724 $ 2,729 Due after one year through five years 418,649 424,241 11,861 12,035 Due after five years through ten years 263,388 267,989 1,123 1,170 Due after ten years 925,554 935,539 — — Total $ 1,827,614 $ 1,848,073 $ 15,708 $ 15,934 Realized gains and losses related to sales and calls of debt securities available for sale are summarized as follows (dollars in thousands) : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Gross security gains $ 391 $ — $ 391 $ — Gross security (losses) (401) — (584) — Net (losses) gains on sales of securities (1) $ (10) $ — $ (193) $ — (1) Net (losses) gains on sales of securities reported on the unaudited Consolidated Statements of Income includes sale of equity securities, excluded in this table. Debt securities with carrying amounts of $755.1 million and $498.3 million on June 30, 2019 and December 31, 2018, respectively, were pledged as collateral for public deposits, securities sold under agreements to repurchase and for other purposes as required or permitted by law. Information pertaining to debt securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows (dollars in thousands): For less than For greater 12 months, gross than 12 months, gross Total, gross Fair Unrealized Fair Unrealized Fair Unrealized June 30, 2019: Value Losses Value Losses Value Losses Debt securities available for sale U.S. Treasury securities $ — $ — $ 24,768 $ (33) $ 24,768 $ (33) Obligations of U.S. government corporations and agencies (1) 51 — 22,468 (48) 22,519 (48) Obligations of states and political subdivisions 1,394 (8) 24,192 (46) 25,586 (54) Commercial mortgage-backed securities — — 14,746 (33) 14,746 (33) Residential mortgage-backed securities 13,629 (8) 183,552 (1,247) 197,181 (1,255) Corporate debt securities 1,765 (7) 15,049 (10) 16,814 (17) Total temporarily impaired securities $ 16,839 $ (23) $ 284,775 $ (1,417) $ 301,614 $ (1,440) Debt securities held to maturity Obligations of states and political subdivisions (1) $ — $ — $ 500 $ — $ 500 $ — (1) Unrealized losses less than one thousand dollars. For less than For greater 12 months, gross than 12 months, gross Total, gross Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2018: Value Losses Value Losses Value Losses Debt securities available for sale U.S. Treasury securities $ 995 $ (4) $ 24,343 $ (410) $ 25,338 $ (414) Obligations of U.S. government corporations and agencies 749 (3) 50,744 (758) 51,493 (761) Obligations of states and political subdivisions 49,893 (460) 77,651 (1,111) 127,544 (1,571) Commercial mortgage-backed securities — — 1,942 (61) 1,942 (61) Residential mortgage-backed securities 48,387 (496) 247,573 (6,647) 295,960 (7,143) Corporate debt securities 90,713 (268) 15,083 (108) 105,796 (376) Total temporarily impaired securities $ 190,737 $ (1,231) $ 417,336 $ (9,095) $ 608,073 $ (10,326) Debt securities held to maturity Obligations of states and political subdivisions $ 9,531 $ (33) $ 9,538 $ (54) $ 19,069 $ (87) Commercial mortgage-backed securities 12,067 (212) 45,041 (791) 57,108 (1,003) Residential mortgage-backed securities 77,071 (974) 245,128 (5,063) 322,199 (6,037) Total temporarily impaired securities $ 98,669 $ (1,219) $ 299,707 $ (5,908) $ 398,376 $ (7,127) Debt securities are periodically evaluated for other-than-temporary impairment (“OTTI”). As of June 30, 2019, the Company’s debt security portfolio consisted of 1,273 securities. The total number of debt securities in the investment portfolio in an unrealized loss position as of June 30, 2019 was 126 and represented an unrealized loss of 0.47% of the aggregate amortized cost. The unrealized losses relate to changes in market interest rates and market conditions that do not represent credit-related impairments. Furthermore, the Company does not intend to sell such securities and it is more likely than not that the Company will recover the amortized cost prior to being required to sell the debt securities. Full collection of the amounts due according to the contractual terms of the debt securities is expected; therefore, the Company does not consider these investments to be OTTI at June 30, 2019. As of June 30, 2019, the Company did not hold general obligation bonds of any single issuer, the aggregate of which exceeded 10% of the Company’s stockholders’ equity. |
Portfolio loans
Portfolio loans | 6 Months Ended |
Jun. 30, 2019 | |
Portfolio loans | |
Portfolio loans | Note 4: Portfolio loans The distribution of portfolio loans is as follows (dollars in thousands) : June 30, December 31, 2019 2018 Commercial $ 1,668,098 $ 1,405,106 Commercial real estate 2,661,905 2,366,823 Real estate construction 429,326 288,197 Retail real estate 1,721,370 1,480,133 Retail other 51,427 28,169 Portfolio loans $ 6,532,126 $ 5,568,428 Allowance for loan losses (51,375) (50,648) Portfolio loans, net $ 6,480,751 $ 5,517,780 Net deferred loan origination costs included in the table above were $5.4 million as of June 30, 2019 and $5.6 million as of December 31, 2018. Net accretable purchase accounting adjustments included in the table above reduced loans by $25.0 million as of June 30, 2019 and $13.9 million as of December 31, 2018. The Company utilizes a loan grading scale to assign a risk grade to all of its loans. A description of the general characteristics of each grade is as follows: ● Pass - This category includes loans that are all considered strong credits, ranging from investment or near investment grade, to loans made to borrowers who exhibit credit fundamentals that exceed industry standards and loan policy guidelines and loans that exhibit acceptable credit fundamentals. ● Watch- This category includes loans on management’s “Watch List” and is intended to be utilized on a temporary basis for a pass grade borrower where a significant risk-modifying action is anticipated in the near future. ● Special mention- This category is for “Other Assets Specially Mentioned” loans that have potential weaknesses, which may, if not checked or corrected, weaken the asset or inadequately protect the Company’s credit position at some future date. ● Substandard- This category includes “Substandard” loans, determined in accordance with regulatory guidelines, for which the accrual of interest has not been stopped. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. ● Substandard Non-accrual- This category includes loans that have all the characteristics of a “Substandard” loan with additional factors that make collection in full highly questionable and improbable. Such loans are placed on non-accrual status and may be dependent on collateral with a value that is difficult to determine. All loans are graded at their inception. Most commercial lending relationships that are $1.0 million or less are processed through an expedited underwriting process. If the credit receives a pass grade, it is aggregated into a homogenous pool of either: $0.35 million or less, or $0.35 million to $1.0 million. These pools are monitored on a regular basis and reviewed annually. Most commercial loans greater than $1.0 million are included in a portfolio review at least annually. Commercial loans greater than $0.35 million that have a grading of special mention or worse are reviewed on a quarterly basis. Interim reviews may take place if circumstances of the borrower warrant a more timely review. The following table is a summary of risk grades segregated by category of portfolio loans (excluding accretable purchase accounting adjustments and clearings) (dollars in thousands) : June 30, 2019 Special Substandard Pass Watch Mention Substandard Non-accrual Commercial $ 1,378,041 $ 188,282 $ 48,181 $ 45,599 $ 10,647 Commercial real estate 2,367,741 178,859 85,837 29,926 12,780 Real estate construction 394,416 34,348 450 1,273 826 Retail real estate 1,674,105 16,038 6,317 9,235 8,529 Retail other 51,848 99 — — 34 Total $ 5,866,151 $ 417,626 $ 140,785 $ 86,033 $ 32,816 December 31, 2018 Special Substandard Pass Watch Mention Substandard Non-accrual Commercial $ 1,126,257 $ 172,449 $ 47,000 $ 42,532 $ 17,953 Commercial real estate 2,106,711 137,214 85,148 36,205 10,298 Real estate construction 268,069 14,562 3,899 1,888 18 Retail real estate 1,448,964 6,425 6,792 5,435 6,698 Retail other 26,707 — — — 30 Total $ 4,976,708 $ 330,650 $ 142,839 $ 86,060 $ 34,997 An analysis of portfolio loans that are past due and still accruing or on a non-accrual status is as follows (dollars in thousands) : June 30, 2019 Loans past due, still accruing Non-accrual 30-59 Days 60-89 Days 90+Days Loans Commercial $ 2,745 $ 593 $ — $ 10,647 Commercial real estate 4,519 608 38 12,780 Real estate construction 103 107 — 826 Retail real estate 8,140 987 220 8,529 Retail other 216 22 — 34 Total $ 15,723 $ 2,317 $ 258 $ 32,816 December 31, 2018 Loans past due, still accruing Non-accrual 30-59 Days 60-89 Days 90+Days Loans Commercial $ 158 $ 140 $ 775 $ 17,953 Commercial real estate 148 558 — 10,298 Real estate construction 121 — 58 18 Retail real estate 4,578 1,368 766 6,698 Retail other 48 2 2 30 Total $ 5,053 $ 2,068 $ 1,601 $ 34,997 The gross interest income that would have been recorded in the three months ended June 30, 2019 and 2018 if impaired loans had been current in accordance with their original terms was $0.4 million and $0.3 million, respectively. The gross interest income that would have been recorded in the six months ended June 30, 2019 and 2018 if impaired loans had been current in accordance with their original terms was $1.1 million and $0.7 million, respectively. The amount of interest collected on those loans and recognized on a cash basis that was included in interest income was insignificant for the three and six months ended June 30, 2019 and 2018. A summary of troubled debt restructurings (“TDR”) loans is as follows (dollars in thousands) : June 30, December 31, 2019 2018 In compliance with modified terms $ 8,288 $ 8,319 30 — 89 days past due 321 127 Included in non-performing loans 3,503 392 Total $ 12,112 $ 8,838 Loans classified as a TDR during the three and six months ended June 30, 2019, included one commercial loan for payment modification with a recorded investment of $0.6 million. Loans classified as a TDR during the three and six months ended June 30, 2018 included one retail real estate modification for short-term interest rate relief, with a recorded investment of $0.1 million. The gross interest income that would have been recorded in the three and six months ended June 30, 2019 and 2018 if TDRs had performed in accordance with their original terms compared with their modified terms was insignificant. One commercial real estate TDR, with a recorded investment of $3.2 million, that was entered into during the last twelve months, was subsequently classified as non-performing and had payment defaults (a default occurs when a loan is 90 days or more past due or transferred to non-accrual) during the three and six months ended June 30, 2019. There were no TDRs that were entered into during the prior twelve months that were subsequently classified as non-performing and had payment defaults during the three and six months ended June 30, 2018. At June 30, 2019, the Company had $2.6 million of residential real estate in the process of foreclosure. The following tables provide details of loans identified as impaired, segregated by category. The unpaid contractual principal balance represents the recorded balance prior to any partial charge-offs. The recorded investment represents customer balances net of any partial charge-offs recognized on the loan. The average recorded investment is calculated using the most recent four quarters (dollars in thousands) . June 30, 2019 Unpaid Recorded Contractual Investment Recorded Total Average Principal with No Investment Recorded Related Recorded Balance Allowance with Allowance Investment Allowance Investment Commercial $ 16,668 $ 7,511 $ 3,856 $ 11,367 $ 2,358 $ 15,425 Commercial real estate 19,784 10,498 7,686 18,184 1,367 17,730 Real estate construction 1,329 1,186 — 1,186 — 656 Retail real estate 15,322 13,367 474 13,841 474 13,685 Retail other 62 34 — 34 — 39 Total $ 53,165 $ 32,596 $ 12,016 $ 44,612 $ 4,199 $ 47,535 December 31, 2018 Unpaid Recorded Contractual Investment Recorded Total Average Principal with No Investment Recorded Related Recorded Balance Allowance with Allowance Investment Allowance Investment Commercial $ 21,442 $ 6,858 $ 12,001 $ 18,859 $ 4,319 $ 13,364 Commercial real estate 19,079 13,082 4,498 17,580 1,181 18,077 Real estate construction 478 453 — 453 — 712 Retail real estate 14,418 13,196 61 13,257 61 14,110 Retail other 117 33 — 33 — 40 Total $ 55,534 $ 33,622 $ 16,560 $ 50,182 $ 5,561 $ 46,303 Management's evaluation as to the ultimate collectability of loans includes estimates regarding future cash flows from operations and the value of property, real and personal, pledged as collateral. These estimates are affected by changing economic conditions and the economic prospects of borrowers. The Company holds acquired loans from business combinations with uncollected principal balances. These loans are carried net of a fair value adjustment for credit risk and interest rates and are only included in the allowance calculation to the extent that the reserve requirement exceeds the fair value adjustment. As the acquired loans renew, it is generally necessary to establish an allowance, which represents an amount that, in management’s opinion, will be adequate to absorb probable credit losses in such loans. The recorded investment of all acquired loans as of June 30, 2019 totaled approximately $1.8 billion. The following table details activity in the allowance for loan losses. Allocation of a portion of the allowance to one category does not preclude its availability to absorb losses in other categories (dollars in thousands) : As of and for the Three Months Ended June 30, 2019 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Beginning balance $ 17,998 $ 20,097 $ 2,807 $ 9,503 $ 510 $ 50,915 Provision for loan losses 1,161 (97) 411 941 101 2,517 Charged-off (2,563) — — (200) (178) (2,941) Recoveries 137 188 87 369 103 884 Ending balance $ 16,733 $ 20,188 $ 3,305 $ 10,613 $ 536 $ 51,375 As of and for the Six Months Ended June 30, 2019 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Beginning balance $ 17,829 $ 21,137 $ 2,723 $ 8,471 $ 488 $ 50,648 Provision for loan losses 2,954 (1,186) 413 2,298 149 4,628 Charged-off (4,370) (15) — (717) (308) (5,410) Recoveries 320 252 169 561 207 1,509 Ending balance $ 16,733 $ 20,188 $ 3,305 $ 10,613 $ 536 $ 51,375 As of and for the Three Months Ended June 30, 2018 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Beginning balance $ 17,577 $ 22,090 $ 2,799 $ 9,836 $ 347 $ 52,649 Provision for loan losses 1,720 909 35 (548) 142 2,258 Charged-off (1,916) (110) — (412) (115) (2,553) Recoveries 205 158 81 417 90 951 Ending balance $ 17,586 $ 23,047 $ 2,915 $ 9,293 $ 464 $ 53,305 As of and for the Six Months Ended June 30, 2018 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Beginning balance $ 14,779 $ 21,813 $ 2,861 $ 13,783 $ 346 $ 53,582 Provision for loan losses 4,723 2,445 37 (4,210) 271 3,266 Charged-off (2,697) (1,425) (97) (942) (322) (5,483) Recoveries 781 214 114 662 169 1,940 Ending balance $ 17,586 $ 23,047 $ 2,915 $ 9,293 $ 464 $ 53,305 The following table presents the allowance for loan losses and recorded investments in portfolio loans by category (dollars in thousands) : As of June 30, 2019 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Allowance for loan losses Ending balance attributed to: Loans individually evaluated for impairment $ 2,358 $ 1,367 $ — $ 474 $ — $ 4,199 Loans collectively evaluated for impairment 14,375 18,821 3,305 10,139 536 47,176 Ending balance $ 16,733 $ 20,188 $ 3,305 $ 10,613 $ 536 $ 51,375 Loans: Loans individually evaluated for impairment $ 11,336 $ 15,723 $ 751 $ 12,668 $ 34 $ 40,512 Loans collectively evaluated for impairment 1,656,731 2,643,721 428,140 1,707,529 51,393 6,487,514 PCI loans evaluated for impairment 31 2,461 435 1,173 — 4,100 Ending balance $ 1,668,098 $ 2,661,905 $ 429,326 $ 1,721,370 $ 51,427 $ 6,532,126 As of December 31, 2018 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Allowance for loan losses Ending balance attributed to: Loans individually evaluated for impairment $ 4,319 $ 1,181 $ — $ 61 $ — $ 5,561 Loans collectively evaluated for impairment 13,510 19,956 2,723 8,410 488 45,087 Ending balance $ 17,829 $ 21,137 $ 2,723 $ 8,471 $ 488 $ 50,648 Loans: Loans individually evaluated for impairment $ 18,441 $ 15,318 $ 453 $ 13,159 $ 33 $ 47,404 Loans collectively evaluated for impairment 1,386,247 2,349,243 287,744 1,466,876 28,136 5,518,246 PCI loans evaluated for impairment 418 2,262 — 98 — 2,778 Ending balance $ 1,405,106 $ 2,366,823 $ 288,197 $ 1,480,133 $ 28,169 $ 5,568,428 |
Deposits
Deposits | 6 Months Ended |
Jun. 30, 2019 | |
Deposits | |
Deposits | Note 5: Deposits The composition of deposits is as follows (dollars in thousands) : June 30, 2019 December 31, 2018 Demand deposits, noninterest-bearing $ 1,766,681 $ 1,464,700 Interest-bearing transaction deposits 1,926,502 1,435,574 Saving deposits and money market deposits 2,390,228 1,852,044 Time deposits 1,749,811 1,497,003 Total $ 7,833,222 $ 6,249,321 The Company held brokered saving deposits and money market deposits of $14.4 million and $17.5 million at June 30, 2019 and December 31, 2018, respectively. The aggregate amount of time deposits with a minimum denomination of $100,000 was approximately $934.5 million and $673.7 million at June 30, 2019 and December 31, 2018, respectively. The aggregate amount of time deposits with a minimum denomination that meets or exceeds the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250,000 was approximately $340.4 million and $264.1 million at June 30, 2019 and December 31, 2018, respectively. The Company held brokered time deposits of $108.8 million and $262.5 million at June 30, 2019 and December 31, 2018, respectively. As of June 30, 2019, the scheduled maturities of time deposits are as follows (dollars in thousands) : July 1, 2019 – June 30, 2020 $ 1,064,812 July 1, 2020 – June 30, 2021 389,392 July 1, 2021 – June 30, 2022 158,968 July 1, 2022 – June 30, 2023 63,863 July 1, 2023 – June 30, 2024 71,961 Thereafter 815 $ 1,749,811 |
Borrowings
Borrowings | 6 Months Ended |
Jun. 30, 2019 | |
Borrowings | |
Borrowings | Note 6: Borrowings Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature daily. Securities sold under agreements to repurchase are reflected at the amount of cash received in connection with the transaction. The underlying securities are held by the Company’s safekeeping agent. The Company may be required to provide additional collateral based on fluctuations in the fair value of the underlying securities. Short-term borrowings include FHLB advances which mature in less than one year from date of origination. On January 29, 2019, the Company entered into an Amended and Restated Credit Agreement providing for a $60.0 million term loan (the “Term Loan”) with a maturity date of November 30, 2023. The Term Loan has an annual interest rate of one-month LIBOR plus a spread of 1.50% . The proceeds of the Term Loan were used to fund the cash consideration related to the acquisition of Banc Ed. The Company had $57.0 million outstanding indebtedness on June 30, 2019, comprised of $6.0 million of short-term debt and $51.0 million of long-term debt. The Amended and Restated Credit Agreement also retained the Company’s $20.0 million revolving facility with a maturity date of April 30, 2019. On April 19, 2019, the Company entered into an amendment to the Amended and Restated Credit Agreement to extend the maturity of its revolving loan facility to April 30, 2020. The revolving facility incurs a non-usage fee based on the undrawn amount. The Company had no outstanding balance under the revolving facility on June 30, 2019 or December 31, 2018. Long-term debt is summarized as follows (dollars in thousands) : June 30, December 31, 2019 2018 Notes payable, FHLB, ranging in original maturity from nineteen months to ten years , collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock. $ 35,772 $ 50,000 Notes payable 51,000 — Total long-term borrowings $ 86,772 $ 50,000 As of June 30, 2019, long-term debt from the FHLB, consisted of variable-rate notes maturing through September 2024, with interest rates ranging from 2.15% to 3.04% . The weighted average rate on the long-term advances was 2.29% as of June 30, 2019. As of December 31, 2018, funds borrowed from the FHLB, listed above, consisted of variable-rate notes maturing through September 2024, with interest rates ranging from 2.20% to 2.41% . The weighted average rate on the long-term advances was 2.28% as of December 31, 2018. On May 25, 2017, the Company issued $40.0 million of 3.75% senior notes that mature on May 25, 2022. The senior notes are payable semi-annually on each May 25 and November 25, commencing on November 25, 2017. Additionally, on May 25, 2017, the Company issued $60.0 million of fixed-to-floating rate subordinated notes that mature on May 25, 2027. The subordinated notes, which qualify as Tier 2 capital for First Busey, are at an initial rate of 4.75% for five years and thereafter at an annual floating rate equal to three-month LIBOR plus a spread of 2.919% . The subordinated notes are payable semi-annually on each May 25 and November 25, commencing on November 25, 2017 during the five year fixed-term and thereafter on February 25, May 25, August 25 and November 25 of each year, commencing on August 25, 2022. The subordinated notes have an optional redemption in whole or in part on any interest payment date on or after May 25, 2022. The senior notes and subordinated notes are unsecured obligations of the Company. Unamortized debt issuance costs related to the senior notes and subordinated notes totaled $0.4 million and $0.8 million, respectively, at June 30, 2019. Unamortized debt issuance costs related to the senior notes and subordinated notes totaled $0.5 million and $0.9 million, respectively, at December 31, 2018. |
Junior Subordinated Debt Owed t
Junior Subordinated Debt Owed to Unconsolidated Trusts | 6 Months Ended |
Jun. 30, 2019 | |
Junior Subordinated Debt Owed to Unconsolidated Trusts | |
Junior Subordinated Debt Owed to Unconsolidated Trusts | Note 7: Junior Subordinated Debt Owed to Unconsolidated Trusts First Busey maintains statutory trusts for the sole purpose of issuing and servicing trust preferred securities and related trust common securities. The proceeds from such issuances were used by the trusts to purchase junior subordinated notes of the Company, which are the sole assets of each trust. Concurrent with the issuance of the trust preferred securities, the Company issued guarantees for the benefit of the holders of the trust preferred securities. The trust preferred securities are instruments that qualify, and are treated by the Company, as Tier 1 regulatory capital. The Company owns all of the common securities of each trust. The trust preferred securities issued by each trust rank equally with the common securities in right of payment, except that if an event of default under the indenture governing the notes has occurred and is continuing, the preferred securities will rank senior to the common securities in right of payment. In connection with the acquisition of Pulaski Financial Corp. (“Pulaski”) in 2016, the Company acquired similar statutory trusts maintained by Pulaski and the fair value adjustment is being accreted over the weighted average remaining life. The Company had $71.2 million of junior subordinated debt owed to unconsolidated trusts at June 30, 2019 and December 31, 2018. The trust preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the junior subordinated notes at par value at the stated maturity date or upon redemption. Each trust’s ability to pay amounts due on the trust preferred securities is solely dependent upon the Company making payment on the related junior subordinated notes. The Company’s obligations under the junior subordinated notes and other relevant trust agreements, in aggregate, constitute a full and unconditional guarantee by the Company of each trust’s obligations under the trust preferred securities issued by each trust. The Company has the right to defer payment of interest on the notes, in which case the distributions on the trust preferred securities will also be deferred, for up to five years , but not beyond the stated maturity date. Under current banking regulations, bank holding companies are allowed to include qualifying trust preferred securities in their Tier 1 Capital for regulatory capital purposes, subject to a 25% limitation to all core (Tier 1) capital elements, net of goodwill and other intangible assets less any associated deferred tax liability. As of June 30, 2019, 100% of the trust preferred securities qualified as Tier 1 capital under the final rule adopted in March 2005. The Dodd-Frank Act mandated the Federal Reserve to establish minimum capital levels for holding companies on a consolidated basis as stringent as those required for FDIC-insured institutions. A result of this change is that the proceeds of hybrid instruments, such as trust preferred securities, are excluded from capital over a phase-out period. However, if such securities were issued prior to May 19, 2010 by bank holding companies with less than $15.0 billion of assets, they may be retained, subject to certain restrictions. Because the Company has assets of less than $15.0 billion, it is able to maintain its trust preferred proceeds as capital, but the Company has to comply with new capital mandates in other respects and will not be able to raise capital in the future through the issuance of trust preferred securities. |
Earnings Per Common Share
Earnings Per Common Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Common Share | |
Earnings Per Common Share | Note 8: Earnings Per Common Share Earnings per common share have been computed as follows (in thousands, except per share data) : Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Net income $ 24,085 $ 24,862 $ 49,554 $ 46,779 Shares: Weighted average common shares outstanding 55,638 48,815 54,464 48,796 Dilutive effect of outstanding options, warrants and restricted stock units as determined by the application of the treasury stock method 303 409 300 407 Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation 55,941 49,224 54,764 49,203 Basic earnings per common share $ 0.43 $ 0.51 $ 0.91 $ 0.96 Diluted earnings per common share $ 0.43 $ 0.51 $ 0.90 $ 0.95 Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding, which include deferred stock units that are vested but not delivered. Diluted earnings per common share is computed using the treasury stock method and reflects the potential dilution that could occur if the Company’s outstanding stock options and warrants were exercised and restricted stock units were vested. At June 30, 2019, 169,258 outstanding restricted stock units, 48,107 outstanding stock options, and 191,278 warrants were anti-dilutive and excluded from the calculation of common stock equivalents. At June 30, 2018, 191,278 warrants were anti-dilutive and excluded from the calculation of common stock equivalents. |
Share-based Compensation
Share-based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Compensation | |
Share-based Compensation | Note 9: Share-based Compensation The Company currently grants share-based compensation in the form of restricted stock units (“RSUs”) and deferred stock units (“DSUs”). The Company grants RSUs to members of management periodically throughout the year. Each RSU is equivalent to one share of the Company’s common stock. These units have requisite service periods ranging from one to five years . The Company annually grants share-based awards in the form of DSUs, which are RSUs with a deferred settlement date, to its board of directors and advisory directors. Each DSU is equivalent to one share of the Company’s common stock. The DSUs vest over a twelve-month period following the grant date or on the date of the next Annual Meeting of Stockholders, whichever is earlier. These units generally are subject to the same terms as RSUs under the Company’s 2010 Equity Plan or the First Community 2016 Equity Plan, except that, following vesting, settlement occurs within 30 days following the earlier of separation from the board or a change in control of the Company. Subsequent to vesting and prior to delivery, these units will continue to earn dividend equivalents. The Company also has outstanding stock options granted prior to 2011 and stock options assumed from acquisitions. A description of the 2010 Equity Incentive Plan, which was amended in 2015, can be found in the Company’s Proxy Statement for the 2015 Annual Meeting of Stockholders. A description of the First Community 2016 Equity Incentive Plan can be found in the Proxy Statement of First Community Financial Partners, Inc. for the 2016 Annual Meeting of Stockholders. Stock Option Plan A summary of the status of and changes in the Company's stock option awards for the six months ended June 30, 2019 follows: Weighted- Weighted- Average Average Exercise Remaining Contractual Shares Price Term Outstanding at beginning of period 87,600 $ 20.58 Exercised (21,799) 17.71 Forfeited (2,271) 23.53 Expired (5,176) 18.13 Outstanding at end of period 58,354 $ 21.76 6.23 Exercisable at end of period 42,472 $ 21.09 5.80 The Company recorded an insignificant amount and $0.1 million in stock option compensation expense for the three and six months ended June 30, 2019, related to the converted options from First Community. The Company recorded an insignificant amount and $0.1 million in stock option compensation expense for the three and six months ended June 30, 2018, respectively. As of June 30, 2019, the Company had $0.1 million of unrecognized stock option expense. This cost is expected to be recognized in 2019. Restricted Stock Unit Plan A summary of the changes in the Company’s stock unit awards for the six months ended June 30, 2019, is as follows: Weighted- Director Weighted- Restricted Average Deferred Average Stock Grant Date Stock Grant Date Units Fair Value Units Fair Value Non-vested at beginning of period 690,495 $ 26.14 20,449 $ 27.93 Granted — — — — Dividend equivalents earned 11,359 25.56 1,269 25.56 Vested (104,760) 18.40 (20,195) 31.29 Forfeited (4,712) 30.47 (1,523) 31.62 Non-vested at end of period 592,382 $ 27.46 — $ — Outstanding at end of period 592,382 $ 27.46 68,153 $ 22.27 Recipients earn quarterly dividend equivalents on their respective units which entitle the recipients to additional units. Therefore, dividends earned each quarter compound based upon the updated unit balances. Upon vesting/delivery, shares are expected (though not required) to be issued from treasury. The Company recognized $1.0 million and $0.8 million of compensation expense related to both non-vested RSUs and DSUs for the three months ended June 30, 2019 and 2018, respectively. The Company recognized $1.9 million and $1.6 million of compensation expense related to both non-vested RSUs and DSUs for the six months ended June 30, 2019 and 2018, respectively. As of June 30, 2019, there was $8.8 million of total unrecognized compensation cost related to these non-vested stock awards. This cost is expected to be recognized over a period of 3.3 years. As of June 30, 2019, 766,824 shares remain available for issuance pursuant to the Company’s 2010 Equity Incentive Plan, 54,841 shares remain available for issuance pursuant to the Company’s Employee Stock Purchase Plan and 309,326 shares remain available for issuance pursuant to the First Community 2016 Equity Incentive Plan. |
Outstanding Commitments and Con
Outstanding Commitments and Contingent Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Outstanding Commitments and Contingent Liabilities | |
Outstanding Commitments and Contingent Liabilities | Note 10: Outstanding Commitments and Contingent Liabilities Legal Matters The Company is a party to legal actions which arise in the normal course of its business activities. In the opinion of management, the ultimate resolution of these matters is not expected to have a material effect on the financial position or the results of operations of the Company. Credit Commitments and Contingencies A summary of the contractual amount of the Company’s exposure to off-balance-sheet risk relating to the Company’s commitments to extend credit and standby letters of credit follows (dollars in thousands) : June 30, 2019 December 31, 2018 Financial instruments whose contract amounts represent credit risk: Commitments to extend credit $ 1,567,091 $ 1,398,483 Standby letters of credit 37,560 32,156 |
Regulatory Capital
Regulatory Capital | 6 Months Ended |
Jun. 30, 2019 | |
Regulatory Capital | |
Regulatory Capital | Note 11: Regulatory Capital The Company and the subsidiary banks are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory—and possibly additional discretionary—actions by regulators that, if undertaken, could have a direct material effect on the Company's consolidated financial statements. The capital amounts and classification also are subject to qualitative judgments by the regulators about components, risk weightings and other factors. Banking regulations identify five capital categories for insured depository institutions: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. As of June 30, 2019 and December 31, 2018, all capital ratios of the Company and the subsidiary banks exceeded the well capitalized levels under the applicable regulatory capital adequacy guidelines. Management believes that no events or changes have occurred subsequent to June 30, 2019 that would change this designation. The following tables summarize the applicable holding company and bank regulatory capital requirements (dollars in thousands) : Minimum Minimum To Be Well Actual Capital Requirement Capitalized Amount Ratio Amount Ratio Amount Ratio As of June 30, 2019: Total Capital (to Risk Weighted Assets) Consolidated $ 1,015,740 13.96 % $ 581,993 8.00 % $ 727,491 10.00 % Busey Bank $ 893,175 14.53 % $ 491,782 8.00 % $ 614,727 10.00 % TheBANK $ 194,755 17.34 % $ 89,849 8.00 % $ 112,312 10.00 % Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 904,365 12.43 % $ 436,495 6.00 % $ 581,993 8.00 % Busey Bank $ 842,312 13.70 % $ 368,837 6.00 % $ 491,782 8.00 % TheBANK $ 194,243 17.30 % $ 67,387 6.00 % $ 89,849 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 830,365 11.41 % $ 327,371 4.50 % $ 472,869 6.50 % Busey Bank $ 842,312 13.70 % $ 276,628 4.50 % $ 399,573 6.50 % TheBANK $ 194,243 17.30 % $ 50,540 4.50 % $ 73,003 6.50 % Tier 1 Capital (to Average Assets) Consolidated $ 904,365 9.87 % $ 366,386 4.00 % N/A N/A Busey Bank $ 842,312 11.40 % $ 295,539 4.00 % $ 369,424 5.00 % TheBANK $ 194,243 10.93 % $ 71,062 4.00 % $ 88,827 5.00 % Minimum Minimum To Be Well Actual Capital Requirement Capitalized Amount Ratio Amount Ratio Amount Ratio As of December 31, 2018: Total Capital (to Risk Weighted Assets) Consolidated $ 894,572 14.83 % $ 482,638 8.00 % $ 603,297 10.00 % Busey Bank $ 854,351 14.19 % $ 481,701 8.00 % $ 602,126 10.00 % Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 783,924 12.99 % $ 361,978 6.00 % $ 482,638 8.00 % Busey Bank $ 803,703 13.35 % $ 361,276 6.00 % $ 481,701 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 709,924 11.77 % $ 271,484 4.50 % $ 392,143 6.50 % Busey Bank $ 803,703 13.35 % $ 270,957 4.50 % $ 391,382 6.50 % Tier 1 Capital (to Average Assets) Consolidated $ 783,924 10.36 % $ 302,704 4.00 % N/A N/A Busey Bank $ 803,703 10.64 % $ 302,232 4.00 % $ 377,789 5.00 % In July 2013, the U.S. federal banking authorities approved the Basel III Rule for strengthening international capital standards. The Basel III Rule introduced a capital conservation buffer, composed entirely of Common Equity Tier 1 Capital (“CET1”), which is added to the minimum risk-weighted asset ratios. The capital conservation buffer is not a minimum capital requirement; however, banking institutions with a ratio of CET1 to risk-weighted assets below the capital conservation buffer will face constraints on dividends, equity repurchases and discretionary bonus payments based on the amount of the shortfall. In order to refrain from restrictions on dividends, equity repurchases and discretionary bonus payments, banking institutions must maintain minimum ratios of (i) CET1 to risk-weighted assets of at least 7.0%, (ii) Tier 1 capital to risk-weighted assets of at least 8.5%, and (iii) Total capital to risk-weighted assets of at least 10.5%. The ability of the Company to pay cash dividends to its stockholders and to service its debt is dependent on the receipt of cash dividends from its subsidiaries. Under applicable regulatory requirements, an Illinois state-chartered bank such as Busey Bank may not pay dividends in excess of its net profits. Because Busey Bank had been in an accumulated deficit position 2009 thru 2018, it was not able to pay dividends in prior years. With prior approval from its regulators, however, an Illinois state-chartered bank in that situation was able to reduce its capital stock by amending its charter to decrease the authorized number of shares, and then make a subsequent distribution to its holding company. Using this approach, and with the approval of its regulators, Busey Bank has distributed funds to the Company, the most recent of which was $40.0 million on October 12, 2018. Busey Bank returned to a positive retained earnings position in the second quarter of 2018 and, in 2019, returned to paying dividends. |
Operating Segments and Related
Operating Segments and Related Information | 6 Months Ended |
Jun. 30, 2019 | |
Operating Segments and Related Information | |
Operating Segments and Related Information | Note 12: Operating Segments and Related Information The Company has three reportable operating segments, Banking, Remittance Processing and Wealth Management. The Banking operating segment provides a full range of banking services to individual and corporate customers through its banking center network in Illinois, St. Louis, Missouri metropolitan area, southwest Florida and through its banking center in Indianapolis, Indiana. Banking services for Busey Bank and TheBANK are aggregated into the banking operating segment as they have similar operations and activities. The Remittance Processing operating segment provides for online bill payments, lockbox and walk-in payments. The Wealth Management operating segment provides a full range of asset management, investment and fiduciary services to individuals, businesses and foundations, tax preparation, philanthropic advisory services and farm and brokerage services. The Company’s three operating segments are strategic business units that are separately managed as they offer different products and services and have different marketing strategies. The “other” category consists of the Parent Company and the elimination of intercompany transactions. The segment financial information provided below has been derived from information used by management to monitor and manage the financial performance of the Company. The accounting policies of the three segments are the same as those described in the summary of significant accounting policies in the “Note 1. Significant Accounting Policies” to Form 10-K. The Company accounts for intersegment revenue and transfers at current market value. Following is a summary of selected financial information for the Company’s operating segments (dollars in thousands) : Goodwill Total Assets June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018 Banking $ 293,657 $ 246,999 $ 9,568,148 $ 7,656,709 Remittance Processing 8,992 8,992 42,083 39,278 Wealth Management 11,694 11,694 26,015 20,992 Other — — (23,579) (14,622) Totals $ 314,343 $ 267,685 $ 9,612,667 $ 7,702,357 Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net interest income: Banking $ 75,944 $ 62,109 $ 146,582 $ 123,525 Remittance Processing 18 16 36 32 Wealth Management — 100 — 194 Other (2,534) (1,853) (4,807) (3,622) Total net interest income $ 73,428 $ 60,372 $ 141,811 $ 120,129 Non-interest income: Banking $ 15,659 $ 11,734 $ 28,442 $ 22,631 Remittance Processing 4,117 3,987 8,298 7,770 Wealth Management 9,594 7,808 18,727 16,449 Other (1,474) (727) (1,626) (1,562) Total non-interest income $ 27,896 $ 22,802 $ 53,841 $ 45,288 Non-interest expense: Banking $ 56,895 $ 37,855 $ 102,066 $ 79,241 Remittance Processing 2,589 2,624 5,353 5,090 Wealth Management 5,749 4,703 11,313 9,614 Other 2,787 2,123 6,451 4,400 Total non-interest expense $ 68,020 $ 47,305 $ 125,183 $ 98,345 Income before income taxes: Banking $ 32,191 $ 33,730 $ 68,330 $ 63,649 Remittance Processing 1,546 1,379 2,981 2,712 Wealth Management 3,845 3,205 7,414 7,029 Other (6,795) (4,703) (12,884) (9,584) Total income before income taxes $ 30,787 $ 33,611 $ 65,841 $ 63,806 Net income: Banking $ 24,441 $ 24,904 $ 51,106 $ 46,749 Remittance Processing 1,105 986 2,130 1,939 Wealth Management 2,845 2,288 5,486 5,052 Other (4,306) (3,316) (9,168) (6,961) Total net income $ 24,085 $ 24,862 $ 49,554 $ 46,779 |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | Note 13: Derivative Financial Instruments The Company enters into derivative financial instruments, including interest rate lock commitments issued to residential loan customers for loans that will be held for sale, forward sales commitments to sell residential mortgage loans to loan investors and derivatives to customers for interest rate swaps. See “Note 14: Fair Value Measurements” for further discussion of the fair value measurement of such derivatives. Interest Rate Lock Commitments . At June 30, 2019 and December 31, 2018, the Company had issued $73.5 million and $27.2 million, respectively, of unexpired interest rate lock commitments to loan customers. Such interest rate lock commitments that meet the definition of derivative financial instruments under ASC Topic 815, Derivatives and Hedging, are carried at their fair values in other assets or other liabilities in the unaudited consolidated financial statements, with changes in the fair values of the corresponding derivative financial assets or liabilities recorded as either a charge or credit to current earnings during the period in which the changes occurred. Forward Sales Commitments . At June 30, 2019 and December 31, 2018, the Company had issued $107.5 million and $48.6 million, respectively, of unexpired forward sales commitments to mortgage loan investors. Typically, the Company economically hedges mortgage loans held for sale and interest rate lock commitments issued to its residential loan customers related to loans that will be held for sale by obtaining corresponding best-efforts forward sales commitments with an investor to sell the loans at an agreed-upon price at the time the interest rate locks are issued to the customers. Forward sales commitments that meet the definition of derivative financial instruments under ASC Topic 815, Derivatives and Hedging, are carried at their fair values in other assets or other liabilities in the unaudited consolidated financial statements. While such forward sales commitments generally served as an economic hedge to the mortgage loans held for sale and interest rate lock commitments, the Company did not designate them for hedge accounting treatment. Changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred. The fair values of derivative assets and liabilities related to interest rate lock commitments and forward sales commitments recorded in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands) : June 30, 2019 December 31, 2018 Fair value recorded in other assets $ 1,135 $ 624 Fair value recorded in other liabilities 1,949 1,205 The gross gains and losses on these derivative assets and liabilities related to interest rate lock commitments and forward sales commitments recorded in non-interest income and expense in the unaudited Consolidated Statements of Income are summarized as follows (dollars in thousands) : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Gross gains $ 1,929 $ 1,023 $ 3,007 $ 1,755 Gross (losses) (1,949) (1,054) (3,067) (2,108) Net gains (losses) $ (20) $ (31) $ (60) $ (353) The impact of the net gains or losses on derivative financial instruments related to interest rate lock commitments issued to residential loan customers for loans that will be held for sale and forward sales commitments to sell residential mortgage loans to loan investors are almost entirely offset by a corresponding change in the fair value of loans held for sale. Derivatives to Customers. The Company may offer derivative contracts to its customers in connection with their risk management needs. These derivatives are primarily interest rate swaps. The Company manages the risk associated with these contracts by entering into an equal and offsetting derivative with a third-party dealer. With notional values of $407.4 million and $243.7 million at June 30, 2019 and December 31, 2018, respectively, these contracts support variable rate, commercial loan relationships totaling $203.7 million and $121.8 million, respectively. These derivatives generally worked together as an economic interest rate hedge, but the Company did not designate them for hedge accounting treatment. Consequently, changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred. The fair values of derivative assets and liabilities related to derivatives for customers for interest rate swaps recorded in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands) : June 30, 2019 December 31, 2018 Fair value recorded in other assets $ 11,948 $ 1,438 Fair value recorded in other liabilities 11,948 1,438 The gross gains and losses on these derivative assets and liabilities recorded in non-interest income and non-interest expense in the unaudited Consolidated Statements of Income are summarized as follows (dollars in thousands) : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Gross gains $ 73 $ 489 $ 164 $ 1443 Gross losses (73) (489) (164) (1,443) Net gains (losses) $ — $ — $ — $ — The Company pledged $12.3 million in cash to secure its obligation under these contracts at June 30, 2019. The Company pledged $1.0 million in cash to secure its obligation under contracts at December 31, 2018. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | Note 14: Fair Value Measurements The fair value of an asset or liability is the price that would be received by selling that asset or paid in transferring that liability (exit price) in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. ASC Topic 820, Fair Value Measurement, establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 Inputs - Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to those Company assets and liabilities that are carried at fair value. In general, fair value is based upon quoted market prices, when available. If such quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable data. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect, among other things, counterparty credit quality and the company's creditworthiness as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. While management believes the Company's valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Debt securities available for sale. Debt securities available for sale are reported at fair value utilizing level 2 measurements. The Company obtains fair value measurements from an independent pricing service. The independent pricing service utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information. Because many fixed income securities do not trade on a daily basis, the independent pricing service applies available information, focusing on observable market data such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing, to prepare evaluations. The independent pricing service uses model processes, such as the Option Adjusted Spread model, to assess interest rate impact and develop prepayment scenarios. The models and processes take into account market conventions. For each asset class, a team of evaluators gathers information from market sources and integrates relevant credit information, perceived market movements and sector news into the evaluated pricing applications and models. The market inputs that the independent pricing service normally seeks for evaluations of securities, listed in approximate order of priority, include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. The independent pricing service also monitors market indicators, industry and economic events. For certain security types, additional inputs may be used or some of the market inputs may not be applicable. Evaluators may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs listed are available for use in the evaluation process for each security evaluation on a given day. Because the data utilized was observable, the securities have been classified as level 2. Equity Securities. Equity securities are reported at fair value utilizing level 1 or level 2 measurements. For mutual funds, unadjusted quoted prices in active markets for identical assets are utilized to determine fair value at the measurement date and have been classified as level 1. For stock, quoted prices for identical or similar assets in markets that are not active are utilized and classified as level 2. Loans Held for Sale. Loans held for sale are reported at fair value utilizing level 2 measurements. The fair value of the mortgage loans held for sale are measured using observable quoted market or contract prices or market price equivalents and are classified as level 2. Derivative Assets and Derivative Liabilities . Derivative assets and derivative liabilities are reported at fair value utilizing level 2 measurements. The fair value of derivative assets and liabilities is determined based on prices that are obtained from a third-party which uses observable market inputs. Derivative assets and liabilities are classified as level 2. The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands) : Level 1 Level 2 Level 3 Total June 30, 2019 Inputs Inputs Inputs Fair Value Fair value adjusted through comprehensive income: Debt securities available for sale U.S. Treasury securities $ — $ 58,535 $ — $ 58,535 Obligations of U.S. government corporations and agencies — 290,766 — 290,766 Obligations of states and political subdivisions — 278,930 — 278,930 Commercial mortgage-backed securities — 124,155 — 124,155 Residential mortgage-backed securities — 961,137 — 961,137 Corporate debt securities — 134,550 — 134,550 Fair value adjusted through current period earnings: Equity securities — 5,362 — 5,362 Loans held for sale — 39,607 — 39,607 Derivative assets — 13,083 — 13,083 Derivative liabilities — 13,897 — 13,897 Level 1 Level 2 Level 3 Total December 31, 2018 Inputs Inputs Inputs Fair Value Debt securities available for sale U.S. Treasury securities $ — $ 25,411 $ — $ 25,411 Obligations of U.S. government corporations and agencies — 52,342 — 52,342 Obligations of states and political subdivisions — 170,044 — 170,044 Commercial mortgage-backed securities — 1,942 — 1,942 Residential mortgage-backed securities — 315,748 — 315,748 Corporate debt securities — 132,198 — 132,198 Fair value adjusted through period earnings: Equity securities 6,169 — — 6,169 Loans held for sale — 25,895 — 25,895 Derivative assets — 2,062 — 2,062 Derivative liabilities — 2,643 — 2,643 Certain financial assets and financial liabilities are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Impaired Loans . The Company does not record portfolio loans at fair value on a recurring basis. However, periodically, a loan is identified as impaired and is reported at the fair value of the underlying collateral, less estimated costs to sell, if repayment is expected solely from the collateral. Impaired loans measured at fair value typically consist of loans on non-accrual status and restructured loans in compliance with modified terms. Collateral values are estimated using a combination of observable inputs, including recent appraisals, and unobservable inputs based on customized discounting criteria. Due to the significance of the unobservable inputs, all impaired loan fair values have been classified as level 3. OREO. Non-financial assets and non-financial liabilities measured at fair value include OREO (upon initial recognition or subsequent impairment). OREO properties are measured using a combination of observable inputs, including recent appraisals, and unobservable inputs. Due to the significance of the unobservable inputs, all OREO fair values have been classified as level 3. Bank Property Held for Sale. Bank property held for sale represents certain banking center office buildings which the Company has closed and consolidated with other existing banking centers. Bank property held for sale is measured at the lower of amortized cost or fair value less estimated costs to sell. The fair values were based upon discounted appraisals or real estate listing price. Due to the significance of the unobservable inputs, all bank property held for sale fair values have been classified as level 3. The following table summarizes assets and liabilities measured at fair value on a non-recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands) : Level 1 Level 2 Level 3 Total Inputs Inputs Inputs Fair Value June 30, 2019 Impaired loans $ — $ — $ 7,817 $ 7,817 OREO — — 84 84 Bank property held for sale — — 1,832 1,832 December 31, 2018 Impaired loans $ — $ — $ 10,999 $ 10,999 OREO — — 55 55 Bank property held for sale — — 1,832 1,832 The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized level 3 inputs to determine fair value (dollars in thousands) : Quantitative Information about Level 3 Fair Value Measurements Fair Value Valuation Unobservable Range Estimate Techniques Input (Weighted Average) June 30, 2019 Impaired loans $ 7,817 Appraisal of collateral Appraisal adjustments - 3.4 % to - 100.0 % ( -29.4 )% OREO 84 Appraisal of collateral Appraisal adjustments - 25.0 % to - 100.0 % ( -61.8 )% Bank property held for sale 1,832 Appraisal of collateral or real estate listing price Appraisal adjustments - 0.0 % to - 35.1 % ( -28.3 )% December 31, 2018 Impaired loans $ 10,999 Appraisal of collateral Appraisal adjustments - 3.3 % to - 100.0 % ( -24.1 )% OREO 55 Appraisal of collateral Appraisal adjustments - 25.0 % to - 100.0 % ( -65.0 )% Bank property held for sale 1,832 Appraisal of collateral or real estate listing price Appraisal adjustments - 0.0 % to - 35.1 % ( -28.3 )% The estimated fair values of financial instruments that are reported at amortized cost in the Company’s Consolidated Balance Sheets, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, were as follows (dollars in thousands) : June 30, 2019 December 31, 2018 Carrying Fair Carrying Fair Amount Value Amount Value Financial assets: Level 1 inputs: Cash and cash equivalents $ 420,207 $ 420,207 $ 239,973 $ 239,973 Level 2 inputs: Debt securities held to maturity 15,708 15,934 608,660 603,360 Accrued interest receivable 28,614 28,614 22,314 22,314 Level 3 inputs: Portfolio loans, net 6,480,751 6,447,502 5,517,780 5,473,063 Mortgage servicing rights 8,692 12,772 3,315 11,051 Other servicing rights 845 1,434 781 1,443 Financial liabilities: Level 2 inputs: Time deposits $ 1,749,811 $ 1,747,766 $ 1,497,003 $ 1,482,301 Securities sold under agreements to repurchase 190,846 190,846 185,796 185,796 Short-term borrowings 30,761 30,748 — — Long-term debt 86,772 86,873 50,000 49,873 Junior subordinated debt owed to unconsolidated trusts 71,230 65,073 71,155 65,182 Accrued interest payable 7,380 7,380 6,568 6,568 Level 3 inputs: Senior notes, net of unamortized issuance costs 39,607 40,419 39,539 39,452 Subordinated notes, net of unamortized issuance costs 59,197 59,719 59,147 58,186 A detailed description of the valuation methodologies used in estimating the fair value of financial instruments is set forth in the Company’s 2018 Form 10-K. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases | |
Leases | Note 15: Leases The Company has operating leases consisting primarily of equipment leases and real estate leases. The Company leases real estate property for bank branches, ATM locations, and office space with terms extending through 2032. As of June 30, 2019, the Company reported $10.4 million of right-of-use asset and $10.5 million lease liability in its unaudited Consolidated Balance Sheets. The following tables represents lease costs and other lease information for the periods presented (dollars in thousands) : Three Months Ended Six Months Ended Lease Costs June 30, 2019 June 30, 2019 Operating lease costs $ 584 $ 1,117 Variable lease costs 119 230 Short-term lease costs 8 23 Sublease income - - Net lease cost $ 711 $ 1,370 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating lease cash flows – Fixed payments $ 570 $ 1,083 Operating lease cash flows – Liability reduction 490 953 Right of use assets obtained during the period in exchange for operating lease liabilities 764 764 Weighted average lease term (in years) 6.81 6.81 Weighted average discount rate 3.04% 3.04% At June 30, 2019, the Company was obligated under noncancelable operating leases for office space and other commitments. Rent expense under operating leases, included in net occupancy and equipment expense, was $0.7 million for the three months ended June 30, 2019 and 2018. Rent expense under operating leases, included in net occupancy and equipment expense, was $1.4 million for the six months ended June 30, 2019 and 2018. Rent commitments were as follows (dollars in thousands) : June 30, 2019 2019 $ 1,150 2020 2,342 2021 1,730 2022 1,375 2023 1,217 Thereafter 3,896 Amounts representing interest (1,179) Present value of net future minimum lease payments $ 10,531 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Significant Accounting Policies | |
Use of Estimates | Use of Estimates In preparing the accompanying unaudited consolidated financial statements in conformity with GAAP, the Company’s management is required to make estimates and assumptions that affect the amounts reported in the financial statements and the disclosures provided. Actual results could differ from those estimates. Material estimates which are particularly susceptible to significant change in the near term relate to the fair value of investment securities, fair value of assets acquired and liabilities assumed in business combinations, goodwill, income taxes and the determination of the allowance for loan losses. |
Leases | Leases A determination is made at inception if an arrangement contains a lease. For arrangements that contain a lease, the Company recognizes the lease on the balance sheet as a right of use asset and corresponding lease liability. Lease-related assets, or right of use assets, are recognized on the lease commencement date at amounts equal to the respective lease liabilities, adjusted for prepaid lease payments, initial direct costs, and lease incentives received. Lease-related liabilities are recognized at the present value of the remaining contractual fixed lease payments, discounted using our incremental borrowing rate. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. If not readily determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For operating leases existing prior to January 1, 2019, the Company used a borrowing rate that corresponded to the remaining lease term. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. |
Impact of recently adopted accounting standards | Impact of recently adopted accounting standards On January 1, 2019, the Company adopted ASU No. 2016-02 “Leases (Topic 842) and all subsequent ASUs that modified Topic 842. The Company made the following elections for all leases in connection with the adoption of this guidance: ● The Company elected the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs; ● The Company did not elect the hindsight practical expedient ; ● The Company elected the optional transition method that allows companies to use the effective date as the date of initial application on transition. As a result, the Company did not adjust comparative period financial information or make the newly required lease disclosures for periods before the effective date; ● The Company elected not to apply the above guidance to short-term leases; ● The Company elected to separate the lease components from the nonlease components and exclude the nonlease components from the right-of-use asset and lease liability; and ● The Company did not elect the land easement practical expedient. At the date of adoption, the Company recorded approximately $8.1 million on its Consolidated Balance Sheets to reflect the right of use asset and associated lease liability . The Company utilized its incremental borrowing rate, on a collateralized basis, for the remaining contractual lease term. ASU 2017-08, "Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities." ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium, requiring the premium to be amortized to the earliest call date. ASU 2017-08 does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This guidance was effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." ASU 2017-12 amends Topic 815 to reduce the cost and complexity of applying hedge accounting and expands the types of relationships that qualify for hedge accounting. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness, requires all items that affect earnings to be presented in the same income statement line as the hedged item, provides for applying hedge accounting to additional hedging strategies, provides for new approaches to measuring the hedged item in fair value hedges of interest rate risk, and eases the requirements for effective testing and hedge documentation. This guidance was effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. During the first quarter of 2019, t he Company adopted this guidance, reassessed classification of certain investments and transferred $573.6 million of securities from held to maturity to available for sale. ASU 2018-07, "Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting." ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. This guidance was effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. Recently issued accounting standards ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." ASU 2016-13 implements a change from the current impaired loss model to an expected credit loss model over the life of an instrument, including loans and securities held to maturity. The expected credit loss model is expected to result in earlier recognition of losses. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 including interim periods with those years. The Company has developed and is executing a project plan to implement this guidance. The project plan includes an assessment of data, development of CECL methodologies, model validation, and parallel runs to assess the impact of CECL calculations on its consolidated financial statements and evaluation of related disclosures. |
Acquisition (Tables)
Acquisition (Tables) - Banc Ed | 6 Months Ended |
Jun. 30, 2019 | |
Schedule of fair value estimates of assets acquired and liabilities assumed | The following table presents the estimated fair value of Banc Ed’s assets acquired and liabilities assumed as of January 31, 2019 (dollars in thousands) : Estimated Fair Value Assets acquired: Cash and cash equivalents $ 42,013 Securities 692,684 Loans held for sale 2,157 Portfolio loans 873,336 Premises and equipment 31,929 Other intangible assets 32,617 Mortgage servicing rights 6,946 Other assets 57,296 Total assets acquired 1,738,978 Liabilities assumed: Deposits 1,439,203 Other borrowings 63,439 Other liabilities 25,079 Total liabilities assumed 1,527,721 Net assets acquired $ 211,257 Consideration paid: Cash $ 91,400 Common stock 166,515 Total consideration paid $ 257,915 Goodwill $ 46,658 |
Schedule of unaudited pro forma results of operations for the acquisition | Pro Forma Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Total revenues (net interest income plus non- interest income) $ 101,324 $ 105,517 $ 201,976 $ 206,635 Net income 26,947 30,578 54,337 56,931 Diluted earnings per common share 0.48 0.55 0.97 1.02 |
Securities (Tables)
Securities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Securities | |
Schedule of amortized cost, unrealized gains and losses and fair values of securities classified available for sale and held to maturity | The table below provides the amortized cost, unrealized gains and losses and fair values of debt securities summarized by major category (dollars in thousands) : Gross Gross Amortized Unrealized Unrealized Fair June 30, 2019: Cost Gains Losses Value Debt securities available for sale U.S. Treasury securities $ 58,308 $ 260 $ (33) $ 58,535 Obligations of U.S. government corporations and agencies 287,444 3,370 (48) 290,766 Obligations of states and political subdivisions 274,301 4,683 (54) 278,930 Commercial mortgage-backed securities 122,510 1,678 (33) 124,155 Residential mortgage-backed securities 951,998 10,394 (1,255) 961,137 Corporate debt securities 133,053 1,514 (17) 134,550 Total $ 1,827,614 $ 21,899 $ (1,440) $ 1,848,073 Debt securities held to maturity Obligations of states and political subdivisions (1) $ 15,708 $ 226 $ — $ 15,934 (1) Gross unrealized losses less than one thousand dollars. Gross Gross Amortized Unrealized Unrealized Fair December 31, 2018: Cost Gains Losses Value Debt securities available for sale U.S. Treasury securities $ 25,824 $ 1 $ (414) $ 25,411 Obligations of U.S. government corporations and agencies 53,096 7 (761) 52,342 Obligations of states and political subdivisions 171,131 484 (1,571) 170,044 Commercial mortgage-backed securities 2,003 — (61) 1,942 Residential mortgage-backed securities 322,646 245 (7,143) 315,748 Corporate debt securities 132,513 61 (376) 132,198 Total $ 707,213 $ 798 $ (10,326) $ 697,685 Debt securities held to maturity Obligations of states and political subdivisions $ 33,947 $ 68 $ (87) $ 33,928 Commercial mortgage-backed securities 59,054 11 (1,003) 58,062 Residential mortgage-backed securities 515,659 1,748 (6,037) 511,370 Total $ 608,660 $ 1,827 $ (7,127) $ 603,360 |
Schedule of amortized cost and fair value of debt securities available for sale and held to maturity by contractual maturity | The amortized cost and fair value of debt securities, by contractual maturity or pre-refunded date, are shown below. Mortgages underlying mortgage-backed securities may be called or prepaid; therefore, actual maturities could differ from the contractual maturities. All mortgage-backed securities were issued by U.S. government agencies and corporations (dollars in thousands) . Debt securities available for sale Debt securities held to maturity Amortized Fair Amortized Fair June 30, 2019: Cost Value Cost Value Due in one year or less $ 220,023 $ 220,304 $ 2,724 $ 2,729 Due after one year through five years 418,649 424,241 11,861 12,035 Due after five years through ten years 263,388 267,989 1,123 1,170 Due after ten years 925,554 935,539 — — Total $ 1,827,614 $ 1,848,073 $ 15,708 $ 15,934 |
Schedule of realized gains and losses related to sales of securities | Realized gains and losses related to sales and calls of debt securities available for sale are summarized as follows (dollars in thousands) : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Gross security gains $ 391 $ — $ 391 $ — Gross security (losses) (401) — (584) — Net (losses) gains on sales of securities (1) $ (10) $ — $ (193) $ — (1) Net (losses) gains on sales of securities reported on the unaudited Consolidated Statements of Income includes sale of equity securities, excluded in this table. |
Schedule of securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position | Information pertaining to debt securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows (dollars in thousands): For less than For greater 12 months, gross than 12 months, gross Total, gross Fair Unrealized Fair Unrealized Fair Unrealized June 30, 2019: Value Losses Value Losses Value Losses Debt securities available for sale U.S. Treasury securities $ — $ — $ 24,768 $ (33) $ 24,768 $ (33) Obligations of U.S. government corporations and agencies (1) 51 — 22,468 (48) 22,519 (48) Obligations of states and political subdivisions 1,394 (8) 24,192 (46) 25,586 (54) Commercial mortgage-backed securities — — 14,746 (33) 14,746 (33) Residential mortgage-backed securities 13,629 (8) 183,552 (1,247) 197,181 (1,255) Corporate debt securities 1,765 (7) 15,049 (10) 16,814 (17) Total temporarily impaired securities $ 16,839 $ (23) $ 284,775 $ (1,417) $ 301,614 $ (1,440) Debt securities held to maturity Obligations of states and political subdivisions (1) $ — $ — $ 500 $ — $ 500 $ — (1) Unrealized losses less than one thousand dollars. For less than For greater 12 months, gross than 12 months, gross Total, gross Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2018: Value Losses Value Losses Value Losses Debt securities available for sale U.S. Treasury securities $ 995 $ (4) $ 24,343 $ (410) $ 25,338 $ (414) Obligations of U.S. government corporations and agencies 749 (3) 50,744 (758) 51,493 (761) Obligations of states and political subdivisions 49,893 (460) 77,651 (1,111) 127,544 (1,571) Commercial mortgage-backed securities — — 1,942 (61) 1,942 (61) Residential mortgage-backed securities 48,387 (496) 247,573 (6,647) 295,960 (7,143) Corporate debt securities 90,713 (268) 15,083 (108) 105,796 (376) Total temporarily impaired securities $ 190,737 $ (1,231) $ 417,336 $ (9,095) $ 608,073 $ (10,326) Debt securities held to maturity Obligations of states and political subdivisions $ 9,531 $ (33) $ 9,538 $ (54) $ 19,069 $ (87) Commercial mortgage-backed securities 12,067 (212) 45,041 (791) 57,108 (1,003) Residential mortgage-backed securities 77,071 (974) 245,128 (5,063) 322,199 (6,037) Total temporarily impaired securities $ 98,669 $ (1,219) $ 299,707 $ (5,908) $ 398,376 $ (7,127) |
Portfolio loans (Tables)
Portfolio loans (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Portfolio loans | |
Schedule of distribution of portfolio loans | The distribution of portfolio loans is as follows (dollars in thousands) : June 30, December 31, 2019 2018 Commercial $ 1,668,098 $ 1,405,106 Commercial real estate 2,661,905 2,366,823 Real estate construction 429,326 288,197 Retail real estate 1,721,370 1,480,133 Retail other 51,427 28,169 Portfolio loans $ 6,532,126 $ 5,568,428 Allowance for loan losses (51,375) (50,648) Portfolio loans, net $ 6,480,751 $ 5,517,780 |
Summary of risk grades segregated by category of portfolio loans (excluding accretable purchase accounting adjustments and clearings) | The following table is a summary of risk grades segregated by category of portfolio loans (excluding accretable purchase accounting adjustments and clearings) (dollars in thousands) : June 30, 2019 Special Substandard Pass Watch Mention Substandard Non-accrual Commercial $ 1,378,041 $ 188,282 $ 48,181 $ 45,599 $ 10,647 Commercial real estate 2,367,741 178,859 85,837 29,926 12,780 Real estate construction 394,416 34,348 450 1,273 826 Retail real estate 1,674,105 16,038 6,317 9,235 8,529 Retail other 51,848 99 — — 34 Total $ 5,866,151 $ 417,626 $ 140,785 $ 86,033 $ 32,816 December 31, 2018 Special Substandard Pass Watch Mention Substandard Non-accrual Commercial $ 1,126,257 $ 172,449 $ 47,000 $ 42,532 $ 17,953 Commercial real estate 2,106,711 137,214 85,148 36,205 10,298 Real estate construction 268,069 14,562 3,899 1,888 18 Retail real estate 1,448,964 6,425 6,792 5,435 6,698 Retail other 26,707 — — — 30 Total $ 4,976,708 $ 330,650 $ 142,839 $ 86,060 $ 34,997 |
Summary of portfolio loans that are past due and still accruing or on a non-accrual status | An analysis of portfolio loans that are past due and still accruing or on a non-accrual status is as follows (dollars in thousands) : June 30, 2019 Loans past due, still accruing Non-accrual 30-59 Days 60-89 Days 90+Days Loans Commercial $ 2,745 $ 593 $ — $ 10,647 Commercial real estate 4,519 608 38 12,780 Real estate construction 103 107 — 826 Retail real estate 8,140 987 220 8,529 Retail other 216 22 — 34 Total $ 15,723 $ 2,317 $ 258 $ 32,816 December 31, 2018 Loans past due, still accruing Non-accrual 30-59 Days 60-89 Days 90+Days Loans Commercial $ 158 $ 140 $ 775 $ 17,953 Commercial real estate 148 558 — 10,298 Real estate construction 121 — 58 18 Retail real estate 4,578 1,368 766 6,698 Retail other 48 2 2 30 Total $ 5,053 $ 2,068 $ 1,601 $ 34,997 |
Summary of restructured loans | A summary of troubled debt restructurings (“TDR”) loans is as follows (dollars in thousands) : June 30, December 31, 2019 2018 In compliance with modified terms $ 8,288 $ 8,319 30 — 89 days past due 321 127 Included in non-performing loans 3,503 392 Total $ 12,112 $ 8,838 |
Schedule of details of impaired loans, segregated by category | June 30, 2019 Unpaid Recorded Contractual Investment Recorded Total Average Principal with No Investment Recorded Related Recorded Balance Allowance with Allowance Investment Allowance Investment Commercial $ 16,668 $ 7,511 $ 3,856 $ 11,367 $ 2,358 $ 15,425 Commercial real estate 19,784 10,498 7,686 18,184 1,367 17,730 Real estate construction 1,329 1,186 — 1,186 — 656 Retail real estate 15,322 13,367 474 13,841 474 13,685 Retail other 62 34 — 34 — 39 Total $ 53,165 $ 32,596 $ 12,016 $ 44,612 $ 4,199 $ 47,535 December 31, 2018 Unpaid Recorded Contractual Investment Recorded Total Average Principal with No Investment Recorded Related Recorded Balance Allowance with Allowance Investment Allowance Investment Commercial $ 21,442 $ 6,858 $ 12,001 $ 18,859 $ 4,319 $ 13,364 Commercial real estate 19,079 13,082 4,498 17,580 1,181 18,077 Real estate construction 478 453 — 453 — 712 Retail real estate 14,418 13,196 61 13,257 61 14,110 Retail other 117 33 — 33 — 40 Total $ 55,534 $ 33,622 $ 16,560 $ 50,182 $ 5,561 $ 46,303 |
Schedule of activity on the allowance for loan losses | The following table details activity in the allowance for loan losses. Allocation of a portion of the allowance to one category does not preclude its availability to absorb losses in other categories (dollars in thousands) : As of and for the Three Months Ended June 30, 2019 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Beginning balance $ 17,998 $ 20,097 $ 2,807 $ 9,503 $ 510 $ 50,915 Provision for loan losses 1,161 (97) 411 941 101 2,517 Charged-off (2,563) — — (200) (178) (2,941) Recoveries 137 188 87 369 103 884 Ending balance $ 16,733 $ 20,188 $ 3,305 $ 10,613 $ 536 $ 51,375 As of and for the Six Months Ended June 30, 2019 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Beginning balance $ 17,829 $ 21,137 $ 2,723 $ 8,471 $ 488 $ 50,648 Provision for loan losses 2,954 (1,186) 413 2,298 149 4,628 Charged-off (4,370) (15) — (717) (308) (5,410) Recoveries 320 252 169 561 207 1,509 Ending balance $ 16,733 $ 20,188 $ 3,305 $ 10,613 $ 536 $ 51,375 As of and for the Three Months Ended June 30, 2018 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Beginning balance $ 17,577 $ 22,090 $ 2,799 $ 9,836 $ 347 $ 52,649 Provision for loan losses 1,720 909 35 (548) 142 2,258 Charged-off (1,916) (110) — (412) (115) (2,553) Recoveries 205 158 81 417 90 951 Ending balance $ 17,586 $ 23,047 $ 2,915 $ 9,293 $ 464 $ 53,305 As of and for the Six Months Ended June 30, 2018 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Beginning balance $ 14,779 $ 21,813 $ 2,861 $ 13,783 $ 346 $ 53,582 Provision for loan losses 4,723 2,445 37 (4,210) 271 3,266 Charged-off (2,697) (1,425) (97) (942) (322) (5,483) Recoveries 781 214 114 662 169 1,940 Ending balance $ 17,586 $ 23,047 $ 2,915 $ 9,293 $ 464 $ 53,305 |
Schedule of allowance for loan losses and recorded investments in portfolio loans, by category | The following table presents the allowance for loan losses and recorded investments in portfolio loans by category (dollars in thousands) : As of June 30, 2019 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Allowance for loan losses Ending balance attributed to: Loans individually evaluated for impairment $ 2,358 $ 1,367 $ — $ 474 $ — $ 4,199 Loans collectively evaluated for impairment 14,375 18,821 3,305 10,139 536 47,176 Ending balance $ 16,733 $ 20,188 $ 3,305 $ 10,613 $ 536 $ 51,375 Loans: Loans individually evaluated for impairment $ 11,336 $ 15,723 $ 751 $ 12,668 $ 34 $ 40,512 Loans collectively evaluated for impairment 1,656,731 2,643,721 428,140 1,707,529 51,393 6,487,514 PCI loans evaluated for impairment 31 2,461 435 1,173 — 4,100 Ending balance $ 1,668,098 $ 2,661,905 $ 429,326 $ 1,721,370 $ 51,427 $ 6,532,126 As of December 31, 2018 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Allowance for loan losses Ending balance attributed to: Loans individually evaluated for impairment $ 4,319 $ 1,181 $ — $ 61 $ — $ 5,561 Loans collectively evaluated for impairment 13,510 19,956 2,723 8,410 488 45,087 Ending balance $ 17,829 $ 21,137 $ 2,723 $ 8,471 $ 488 $ 50,648 Loans: Loans individually evaluated for impairment $ 18,441 $ 15,318 $ 453 $ 13,159 $ 33 $ 47,404 Loans collectively evaluated for impairment 1,386,247 2,349,243 287,744 1,466,876 28,136 5,518,246 PCI loans evaluated for impairment 418 2,262 — 98 — 2,778 Ending balance $ 1,405,106 $ 2,366,823 $ 288,197 $ 1,480,133 $ 28,169 $ 5,568,428 |
Deposits (Tables)
Deposits (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Deposits | |
Schedule of composition of deposits | The composition of deposits is as follows (dollars in thousands) : June 30, 2019 December 31, 2018 Demand deposits, noninterest-bearing $ 1,766,681 $ 1,464,700 Interest-bearing transaction deposits 1,926,502 1,435,574 Saving deposits and money market deposits 2,390,228 1,852,044 Time deposits 1,749,811 1,497,003 Total $ 7,833,222 $ 6,249,321 |
Schedule of maturities of time deposits | As of June 30, 2019, the scheduled maturities of time deposits are as follows (dollars in thousands) : July 1, 2019 – June 30, 2020 $ 1,064,812 July 1, 2020 – June 30, 2021 389,392 July 1, 2021 – June 30, 2022 158,968 July 1, 2022 – June 30, 2023 63,863 July 1, 2023 – June 30, 2024 71,961 Thereafter 815 $ 1,749,811 |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Borrowings | |
Summary of long-term debt | Long-term debt is summarized as follows (dollars in thousands) : June 30, December 31, 2019 2018 Notes payable, FHLB, ranging in original maturity from nineteen months to ten years , collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock. $ 35,772 $ 50,000 Notes payable 51,000 — Total long-term borrowings $ 86,772 $ 50,000 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Common Share | |
Schedule of computation of earnings per common share | Earnings per common share have been computed as follows (in thousands, except per share data) : Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Net income $ 24,085 $ 24,862 $ 49,554 $ 46,779 Shares: Weighted average common shares outstanding 55,638 48,815 54,464 48,796 Dilutive effect of outstanding options, warrants and restricted stock units as determined by the application of the treasury stock method 303 409 300 407 Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation 55,941 49,224 54,764 49,203 Basic earnings per common share $ 0.43 $ 0.51 $ 0.91 $ 0.96 Diluted earnings per common share $ 0.43 $ 0.51 $ 0.90 $ 0.95 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Compensation | |
Schedule of status of and changes in the Company's stock option awards | A summary of the status of and changes in the Company's stock option awards for the six months ended June 30, 2019 follows: Weighted- Weighted- Average Average Exercise Remaining Contractual Shares Price Term Outstanding at beginning of period 87,600 $ 20.58 Exercised (21,799) 17.71 Forfeited (2,271) 23.53 Expired (5,176) 18.13 Outstanding at end of period 58,354 $ 21.76 6.23 Exercisable at end of period 42,472 $ 21.09 5.80 |
Summary of the changes in the Company's stock unit awards | A summary of the changes in the Company’s stock unit awards for the six months ended June 30, 2019, is as follows: Weighted- Director Weighted- Restricted Average Deferred Average Stock Grant Date Stock Grant Date Units Fair Value Units Fair Value Non-vested at beginning of period 690,495 $ 26.14 20,449 $ 27.93 Granted — — — — Dividend equivalents earned 11,359 25.56 1,269 25.56 Vested (104,760) 18.40 (20,195) 31.29 Forfeited (4,712) 30.47 (1,523) 31.62 Non-vested at end of period 592,382 $ 27.46 — $ — Outstanding at end of period 592,382 $ 27.46 68,153 $ 22.27 |
Outstanding Commitments and C_2
Outstanding Commitments and Contingent Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Outstanding Commitments and Contingent Liabilities | |
Schedule of contractual amount of exposure to off-balance-sheet risk | A summary of the contractual amount of the Company’s exposure to off-balance-sheet risk relating to the Company’s commitments to extend credit and standby letters of credit follows (dollars in thousands) : June 30, 2019 December 31, 2018 Financial instruments whose contract amounts represent credit risk: Commitments to extend credit $ 1,567,091 $ 1,398,483 Standby letters of credit 37,560 32,156 |
Regulatory Capital (Tables)
Regulatory Capital (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Regulatory Capital | |
Schedule of applicable holding company and bank regulatory capital requirements | The following tables summarize the applicable holding company and bank regulatory capital requirements (dollars in thousands) : Minimum Minimum To Be Well Actual Capital Requirement Capitalized Amount Ratio Amount Ratio Amount Ratio As of June 30, 2019: Total Capital (to Risk Weighted Assets) Consolidated $ 1,015,740 13.96 % $ 581,993 8.00 % $ 727,491 10.00 % Busey Bank $ 893,175 14.53 % $ 491,782 8.00 % $ 614,727 10.00 % TheBANK $ 194,755 17.34 % $ 89,849 8.00 % $ 112,312 10.00 % Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 904,365 12.43 % $ 436,495 6.00 % $ 581,993 8.00 % Busey Bank $ 842,312 13.70 % $ 368,837 6.00 % $ 491,782 8.00 % TheBANK $ 194,243 17.30 % $ 67,387 6.00 % $ 89,849 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 830,365 11.41 % $ 327,371 4.50 % $ 472,869 6.50 % Busey Bank $ 842,312 13.70 % $ 276,628 4.50 % $ 399,573 6.50 % TheBANK $ 194,243 17.30 % $ 50,540 4.50 % $ 73,003 6.50 % Tier 1 Capital (to Average Assets) Consolidated $ 904,365 9.87 % $ 366,386 4.00 % N/A N/A Busey Bank $ 842,312 11.40 % $ 295,539 4.00 % $ 369,424 5.00 % TheBANK $ 194,243 10.93 % $ 71,062 4.00 % $ 88,827 5.00 % Minimum Minimum To Be Well Actual Capital Requirement Capitalized Amount Ratio Amount Ratio Amount Ratio As of December 31, 2018: Total Capital (to Risk Weighted Assets) Consolidated $ 894,572 14.83 % $ 482,638 8.00 % $ 603,297 10.00 % Busey Bank $ 854,351 14.19 % $ 481,701 8.00 % $ 602,126 10.00 % Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 783,924 12.99 % $ 361,978 6.00 % $ 482,638 8.00 % Busey Bank $ 803,703 13.35 % $ 361,276 6.00 % $ 481,701 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 709,924 11.77 % $ 271,484 4.50 % $ 392,143 6.50 % Busey Bank $ 803,703 13.35 % $ 270,957 4.50 % $ 391,382 6.50 % Tier 1 Capital (to Average Assets) Consolidated $ 783,924 10.36 % $ 302,704 4.00 % N/A N/A Busey Bank $ 803,703 10.64 % $ 302,232 4.00 % $ 377,789 5.00 % |
Operating Segments and Relate_2
Operating Segments and Related Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Operating Segments and Related Information | |
Summary of information relating to operating segments | Following is a summary of selected financial information for the Company’s operating segments (dollars in thousands) : Goodwill Total Assets June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018 Banking $ 293,657 $ 246,999 $ 9,568,148 $ 7,656,709 Remittance Processing 8,992 8,992 42,083 39,278 Wealth Management 11,694 11,694 26,015 20,992 Other — — (23,579) (14,622) Totals $ 314,343 $ 267,685 $ 9,612,667 $ 7,702,357 Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net interest income: Banking $ 75,944 $ 62,109 $ 146,582 $ 123,525 Remittance Processing 18 16 36 32 Wealth Management — 100 — 194 Other (2,534) (1,853) (4,807) (3,622) Total net interest income $ 73,428 $ 60,372 $ 141,811 $ 120,129 Non-interest income: Banking $ 15,659 $ 11,734 $ 28,442 $ 22,631 Remittance Processing 4,117 3,987 8,298 7,770 Wealth Management 9,594 7,808 18,727 16,449 Other (1,474) (727) (1,626) (1,562) Total non-interest income $ 27,896 $ 22,802 $ 53,841 $ 45,288 Non-interest expense: Banking $ 56,895 $ 37,855 $ 102,066 $ 79,241 Remittance Processing 2,589 2,624 5,353 5,090 Wealth Management 5,749 4,703 11,313 9,614 Other 2,787 2,123 6,451 4,400 Total non-interest expense $ 68,020 $ 47,305 $ 125,183 $ 98,345 Income before income taxes: Banking $ 32,191 $ 33,730 $ 68,330 $ 63,649 Remittance Processing 1,546 1,379 2,981 2,712 Wealth Management 3,845 3,205 7,414 7,029 Other (6,795) (4,703) (12,884) (9,584) Total income before income taxes $ 30,787 $ 33,611 $ 65,841 $ 63,806 Net income: Banking $ 24,441 $ 24,904 $ 51,106 $ 46,749 Remittance Processing 1,105 986 2,130 1,939 Wealth Management 2,845 2,288 5,486 5,052 Other (4,306) (3,316) (9,168) (6,961) Total net income $ 24,085 $ 24,862 $ 49,554 $ 46,779 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Interest rate lock commitments and forward sales commitments | |
Summary of fair values of derivative assets and liabilities recorded in consolidated balance sheet | The fair values of derivative assets and liabilities related to interest rate lock commitments and forward sales commitments recorded in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands) : June 30, 2019 December 31, 2018 Fair value recorded in other assets $ 1,135 $ 624 Fair value recorded in other liabilities 1,949 1,205 |
Summary of gross gains and losses on derivative assets and liabilities recorded in non-interest income and expense in consolidated statements of income | The gross gains and losses on these derivative assets and liabilities related to interest rate lock commitments and forward sales commitments recorded in non-interest income and expense in the unaudited Consolidated Statements of Income are summarized as follows (dollars in thousands) : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Gross gains $ 1,929 $ 1,023 $ 3,007 $ 1,755 Gross (losses) (1,949) (1,054) (3,067) (2,108) Net gains (losses) $ (20) $ (31) $ (60) $ (353) |
Interest rate swap | |
Summary of fair values of derivative assets and liabilities recorded in consolidated balance sheet | The fair values of derivative assets and liabilities related to derivatives for customers for interest rate swaps recorded in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands) : June 30, 2019 December 31, 2018 Fair value recorded in other assets $ 11,948 $ 1,438 Fair value recorded in other liabilities 11,948 1,438 |
Summary of gross gains and losses on derivative assets and liabilities recorded in non-interest income and expense in consolidated statements of income | The gross gains and losses on these derivative assets and liabilities recorded in non-interest income and non-interest expense in the unaudited Consolidated Statements of Income are summarized as follows (dollars in thousands) : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Gross gains $ 73 $ 489 $ 164 $ 1443 Gross losses (73) (489) (164) (1,443) Net gains (losses) $ — $ — $ — $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Measurements | |
Schedule of financial assets and financial liabilities measured at fair value on a recurring basis | The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands) : Level 1 Level 2 Level 3 Total June 30, 2019 Inputs Inputs Inputs Fair Value Fair value adjusted through comprehensive income: Debt securities available for sale U.S. Treasury securities $ — $ 58,535 $ — $ 58,535 Obligations of U.S. government corporations and agencies — 290,766 — 290,766 Obligations of states and political subdivisions — 278,930 — 278,930 Commercial mortgage-backed securities — 124,155 — 124,155 Residential mortgage-backed securities — 961,137 — 961,137 Corporate debt securities — 134,550 — 134,550 Fair value adjusted through current period earnings: Equity securities — 5,362 — 5,362 Loans held for sale — 39,607 — 39,607 Derivative assets — 13,083 — 13,083 Derivative liabilities — 13,897 — 13,897 Level 1 Level 2 Level 3 Total December 31, 2018 Inputs Inputs Inputs Fair Value Debt securities available for sale U.S. Treasury securities $ — $ 25,411 $ — $ 25,411 Obligations of U.S. government corporations and agencies — 52,342 — 52,342 Obligations of states and political subdivisions — 170,044 — 170,044 Commercial mortgage-backed securities — 1,942 — 1,942 Residential mortgage-backed securities — 315,748 — 315,748 Corporate debt securities — 132,198 — 132,198 Fair value adjusted through period earnings: Equity securities 6,169 — — 6,169 Loans held for sale — 25,895 — 25,895 Derivative assets — 2,062 — 2,062 Derivative liabilities — 2,643 — 2,643 |
Schedule of assets and liabilities measured at fair value on a non-recurring basis | The following table summarizes assets and liabilities measured at fair value on a non-recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands) : Level 1 Level 2 Level 3 Total Inputs Inputs Inputs Fair Value June 30, 2019 Impaired loans $ — $ — $ 7,817 $ 7,817 OREO — — 84 84 Bank property held for sale — — 1,832 1,832 December 31, 2018 Impaired loans $ — $ — $ 10,999 $ 10,999 OREO — — 55 55 Bank property held for sale — — 1,832 1,832 |
Schedule of quantitative information about Level 3 fair value measurements | The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized level 3 inputs to determine fair value (dollars in thousands) : Quantitative Information about Level 3 Fair Value Measurements Fair Value Valuation Unobservable Range Estimate Techniques Input (Weighted Average) June 30, 2019 Impaired loans $ 7,817 Appraisal of collateral Appraisal adjustments - 3.4 % to - 100.0 % ( -29.4 )% OREO 84 Appraisal of collateral Appraisal adjustments - 25.0 % to - 100.0 % ( -61.8 )% Bank property held for sale 1,832 Appraisal of collateral or real estate listing price Appraisal adjustments - 0.0 % to - 35.1 % ( -28.3 )% December 31, 2018 Impaired loans $ 10,999 Appraisal of collateral Appraisal adjustments - 3.3 % to - 100.0 % ( -24.1 )% OREO 55 Appraisal of collateral Appraisal adjustments - 25.0 % to - 100.0 % ( -65.0 )% Bank property held for sale 1,832 Appraisal of collateral or real estate listing price Appraisal adjustments - 0.0 % to - 35.1 % ( -28.3 )% |
Schedule of estimated fair values of financial instruments | The estimated fair values of financial instruments that are reported at amortized cost in the Company’s Consolidated Balance Sheets, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, were as follows (dollars in thousands) : June 30, 2019 December 31, 2018 Carrying Fair Carrying Fair Amount Value Amount Value Financial assets: Level 1 inputs: Cash and cash equivalents $ 420,207 $ 420,207 $ 239,973 $ 239,973 Level 2 inputs: Debt securities held to maturity 15,708 15,934 608,660 603,360 Accrued interest receivable 28,614 28,614 22,314 22,314 Level 3 inputs: Portfolio loans, net 6,480,751 6,447,502 5,517,780 5,473,063 Mortgage servicing rights 8,692 12,772 3,315 11,051 Other servicing rights 845 1,434 781 1,443 Financial liabilities: Level 2 inputs: Time deposits $ 1,749,811 $ 1,747,766 $ 1,497,003 $ 1,482,301 Securities sold under agreements to repurchase 190,846 190,846 185,796 185,796 Short-term borrowings 30,761 30,748 — — Long-term debt 86,772 86,873 50,000 49,873 Junior subordinated debt owed to unconsolidated trusts 71,230 65,073 71,155 65,182 Accrued interest payable 7,380 7,380 6,568 6,568 Level 3 inputs: Senior notes, net of unamortized issuance costs 39,607 40,419 39,539 39,452 Subordinated notes, net of unamortized issuance costs 59,197 59,719 59,147 58,186 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases | |
Schedule of lease costs and other lease information | The following tables represents lease costs and other lease information for the periods presented (dollars in thousands) : Three Months Ended Six Months Ended Lease Costs June 30, 2019 June 30, 2019 Operating lease costs $ 584 $ 1,117 Variable lease costs 119 230 Short-term lease costs 8 23 Sublease income - - Net lease cost $ 711 $ 1,370 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating lease cash flows – Fixed payments $ 570 $ 1,083 Operating lease cash flows – Liability reduction 490 953 Right of use assets obtained during the period in exchange for operating lease liabilities 764 764 Weighted average lease term (in years) 6.81 6.81 Weighted average discount rate 3.04% 3.04% |
Schedule of future rent commitments | Rent commitments were as follows (dollars in thousands) : June 30, 2019 2019 $ 1,150 2020 2,342 2021 1,730 2022 1,375 2023 1,217 Thereafter 3,896 Amounts representing interest (1,179) Present value of net future minimum lease payments $ 10,531 |
Significant Accounting Polici_3
Significant Accounting Policies - Impact of new financial accounting standards (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2019 | Jun. 30, 2019 | Jan. 01, 2019 | |
Recently Issued Accounting Standards | |||
Lease, Practical Expedients, Package [true false] | true | ||
Lease, Practical Expedient, Use of Hindsight [true false] | false | ||
Right of use asset | $ 10,426 | ||
Lease liability | $ 10,531 | ||
Accounting Standards Update 2017-12 | |||
Recently Issued Accounting Standards | |||
Transferred securities from held to maturity to available-for-sale | $ 573,600 | ||
Accounting Standards Update 2016-02 | Restatement | |||
Recently Issued Accounting Standards | |||
Right of use asset | $ 8,100 | ||
Lease liability | $ 8,100 |
Acquisition - The Banc Ed Corp.
Acquisition - The Banc Ed Corp. (Details) $ / shares in Units, $ in Thousands, shares in Millions | Aug. 21, 2019$ / shares | Jan. 31, 2019USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / shares | Jun. 30, 2018USD ($)$ / shares | Jun. 30, 2019USD ($)$ / shares | Jun. 30, 2018USD ($)$ / shares | Dec. 31, 2018USD ($) |
Consideration paid | |||||||
Goodwill | $ 314,343 | $ 314,343 | $ 267,685 | ||||
Banc Ed | |||||||
Merger agreement | |||||||
Share consideration conversion ratio | 8.2067 | ||||||
Per share cash consideration entitled (in dollars per share) | $ / shares | $ 111.53 | ||||||
Number of common shares issued for acquisition | shares | 6.7 | ||||||
Market value of common stock issued | $ 166,500 | ||||||
Common stock | $ 166,515 | ||||||
Share price | $ / shares | $ 24.76 | ||||||
Assets acquired: | |||||||
Cash and cash equivalents | $ 42,013 | ||||||
Securities | 692,684 | ||||||
Loans held for sale | 2,157 | ||||||
Portfolio loans | 873,336 | ||||||
Premises and equipment | 31,929 | ||||||
Other intangible assets | 32,617 | ||||||
Mortgage servicing rights | 6,946 | ||||||
Other assets | 57,296 | ||||||
Total assets acquired | 1,738,978 | ||||||
Liabilities assumed: | |||||||
Deposits | 1,439,203 | ||||||
Other borrowings | 63,439 | ||||||
Other liabilities | 25,079 | ||||||
Total liabilities assumed | 1,527,721 | ||||||
Net assets acquired | 211,257 | ||||||
Consideration paid | |||||||
Cash | 91,400 | ||||||
Common stock | 166,515 | ||||||
Total consideration paid | 257,915 | ||||||
Goodwill | 46,658 | ||||||
Aggregate principal outstanding | 889,300 | ||||||
Fair value of performing loans, including loans held for sale | 871,000 | ||||||
Amount expected to be accreted, gross | 17,000 | ||||||
Contractual amount of PCI loans | 3,900 | ||||||
Accretable discount on PCI loans | 200 | ||||||
Fair value of credit-impaired loans | $ 2,300 | 1,700 | 1,700 | ||||
Total revenues (net interest income plus non-interest income) | 33,000 | ||||||
Net income | 7,100 | ||||||
Banc Ed | Pro Forma | |||||||
Consideration paid | |||||||
Total revenues (net interest income plus non-interest income) | 101,324,000 | $ 105,517,000 | 201,976,000 | $ 206,635,000 | |||
Net income | $ 26,947,000 | $ 30,578,000 | $ 54,337,000 | $ 56,931,000 | |||
Diluted earnings per common share (in dollars per share) | $ / shares | $ 0.48 | $ 0.55 | $ 0.97 | $ 1.02 | |||
Banc Ed | Non-interest expense | |||||||
Merger agreement | |||||||
Business acquisition expenses | $ 4,000 | $ 5,000 |
Securities - General Disclosure
Securities - General Disclosures (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |||
Securities | ||||||
Equity securities consisting of common stock and money market mutual funds, fair value | $ 5,362,000 | $ 5,362,000 | $ 6,169,000 | |||
Unrealized (losses) gains recognized on equity securities | (1,016,000) | (800,000) | ||||
Debt securities available for sale | ||||||
Amortized Cost | 1,827,614,000 | 1,827,614,000 | 707,213,000 | |||
Gross Unrealized Gains | 21,899,000 | 21,899,000 | 798,000 | |||
Gross Unrealized Losses | (1,440,000) | (1,440,000) | (10,326,000) | |||
Fair Value | 1,848,073,000 | 1,848,073,000 | 697,685,000 | |||
Debt securities held to maturity | ||||||
Amortized Cost | 15,708,000 | 15,708,000 | 608,660,000 | |||
Gross Unrealized Gains | 1,827,000 | |||||
Gross Unrealized Losses | (7,127,000) | |||||
Fair Value | 15,934,000 | 15,934,000 | 603,360,000 | |||
Debt securities available for sale, Amortized Cost | ||||||
Due in one year or less | 220,023,000 | 220,023,000 | ||||
Due after one year through five years | 418,649,000 | 418,649,000 | ||||
Due after five years through ten years | 263,388,000 | 263,388,000 | ||||
Due after ten years | 925,554,000 | 925,554,000 | ||||
Amortized Cost | 1,827,614,000 | 1,827,614,000 | 707,213,000 | |||
Debt securities available for sale, Fair Value | ||||||
Due in one year or less | 220,304,000 | 220,304,000 | ||||
Due after one year through five years | 424,241,000 | 424,241,000 | ||||
Due after five years through ten years | 267,989,000 | 267,989,000 | ||||
Due after ten years | 935,539,000 | 935,539,000 | ||||
Fair Value | 1,848,073,000 | 1,848,073,000 | 697,685,000 | |||
Debt securities held to maturity, Amortized Cost | ||||||
Due in one year or less | 2,724,000 | 2,724,000 | ||||
Due after one year through five years | 11,861,000 | 11,861,000 | ||||
Due after five years through ten years | 1,123,000 | 1,123,000 | ||||
Amortized Cost | 15,708,000 | 15,708,000 | 608,660,000 | |||
Debt securities held to maturity, Fair Value | ||||||
Due in one year or less | 2,729,000 | 2,729,000 | ||||
Due after one year through five years | 12,035,000 | 12,035,000 | ||||
Due after five years through ten years | 1,170,000 | 1,170,000 | ||||
Fair Value | 15,934,000 | 15,934,000 | 603,360,000 | |||
Realized gains and losses related to sales and calls of securities AFS | ||||||
Gross security gains | 391,000 | 391,000 | ||||
Gross security (losses) | (401,000) | (584,000) | ||||
Security gains (losses), net | (10,000) | (193,000) | ||||
Debt securities available for sale, Fair Value | ||||||
Continuous unrealized losses existing for less than 12 months, gross | 16,839,000 | 16,839,000 | 190,737,000 | |||
Continuous unrealized losses existing for greater than 12 months, gross | 284,775,000 | 284,775,000 | 417,336,000 | |||
Total, gross | 301,614,000 | 301,614,000 | 608,073,000 | |||
Debt securities available for sale, Unrealized Losses | ||||||
Continuous unrealized losses existing for less than 12 months, gross | (23,000) | (23,000) | (1,231,000) | |||
Continuous unrealized losses existing greater than 12 months, gross | (1,417,000) | (1,417,000) | (9,095,000) | |||
Total, gross | $ (1,440,000) | $ (1,440,000) | (10,326,000) | |||
Debt securities held to maturity, Fair Value | ||||||
Continuous unrealized losses existing for less than 12 months, gross | 98,669,000 | |||||
Continuous unrealized losses existing for greater than 12 months, gross | 299,707,000 | |||||
Total, gross | 398,376,000 | |||||
Debt securities held to maturity, Unrealized Losses | ||||||
Continuous unrealized losses existing for less than 12 months, gross | (1,219,000) | |||||
Continuous unrealized losses existing for greater than 12 months, gross | (5,908,000) | |||||
Total, gross | (7,127,000) | |||||
Security portfolio evaluated for other-than-temporary impairment | 1,273 | 1,273 | ||||
Number of securities in unrealized loss position | 126 | 126 | ||||
Securities in unrealized loss position as a percentage of aggregate carrying value of investments | 0.47% | 0.47% | ||||
Collateral | ||||||
Realized gains and losses related to sales and calls of securities AFS | ||||||
Carrying amount of investment securities pledged as collateral | $ 755,100,000 | $ 755,100,000 | 498,300,000 | |||
U.S. Treasury securities | ||||||
Debt securities available for sale | ||||||
Amortized Cost | 58,308,000 | 58,308,000 | 25,824,000 | |||
Gross Unrealized Gains | 260,000 | 260,000 | 1,000 | |||
Gross Unrealized Losses | (33,000) | (33,000) | (414,000) | |||
Fair Value | 58,535,000 | 58,535,000 | 25,411,000 | |||
Debt securities available for sale, Amortized Cost | ||||||
Amortized Cost | 58,308,000 | 58,308,000 | 25,824,000 | |||
Debt securities available for sale, Fair Value | ||||||
Fair Value | 58,535,000 | 58,535,000 | 25,411,000 | |||
Debt securities available for sale, Fair Value | ||||||
Continuous unrealized losses existing for less than 12 months, gross | 995,000 | |||||
Continuous unrealized losses existing for greater than 12 months, gross | 24,768,000 | 24,768,000 | 24,343,000 | |||
Total, gross | 24,768,000 | 24,768,000 | 25,338,000 | |||
Debt securities available for sale, Unrealized Losses | ||||||
Continuous unrealized losses existing for less than 12 months, gross | (4,000) | |||||
Continuous unrealized losses existing greater than 12 months, gross | (33,000) | (33,000) | (410,000) | |||
Total, gross | (33,000) | (33,000) | (414,000) | |||
Obligations of U.S. government corporations and agencies | ||||||
Debt securities available for sale | ||||||
Amortized Cost | 287,444,000 | 287,444,000 | 53,096,000 | |||
Gross Unrealized Gains | 3,370,000 | 3,370,000 | 7,000 | |||
Gross Unrealized Losses | (48,000) | (48,000) | (761,000) | |||
Fair Value | 290,766,000 | 290,766,000 | 52,342,000 | |||
Debt securities available for sale, Amortized Cost | ||||||
Amortized Cost | 287,444,000 | 287,444,000 | 53,096,000 | |||
Debt securities available for sale, Fair Value | ||||||
Fair Value | 290,766,000 | 290,766,000 | 52,342,000 | |||
Debt securities available for sale, Fair Value | ||||||
Continuous unrealized losses existing for less than 12 months, gross | 51,000 | 51,000 | 749,000 | |||
Continuous unrealized losses existing for greater than 12 months, gross | 22,468,000 | 22,468,000 | 50,744,000 | |||
Total, gross | 22,519,000 | 22,519,000 | 51,493,000 | |||
Debt securities available for sale, Unrealized Losses | ||||||
Continuous unrealized losses existing for less than 12 months, gross | (3,000) | |||||
Continuous unrealized losses existing greater than 12 months, gross | (48,000) | (48,000) | (758,000) | |||
Total, gross | (48,000) | (48,000) | (761,000) | |||
Obligations of states and political subdivisions | ||||||
Debt securities available for sale | ||||||
Amortized Cost | 274,301,000 | 274,301,000 | 171,131,000 | |||
Gross Unrealized Gains | 4,683,000 | 4,683,000 | 484,000 | |||
Gross Unrealized Losses | (54,000) | (54,000) | (1,571,000) | |||
Fair Value | 278,930,000 | 278,930,000 | 170,044,000 | |||
Debt securities held to maturity | ||||||
Amortized Cost | 15,708,000 | [1] | 15,708,000 | [1] | 33,947,000 | |
Gross Unrealized Gains | 226,000 | [1] | 226,000 | [1] | 68,000 | |
Gross Unrealized Losses | (87,000) | |||||
Fair Value | 15,934,000 | [1] | 15,934,000 | [1] | 33,928,000 | |
Debt securities available for sale, Amortized Cost | ||||||
Amortized Cost | 274,301,000 | 274,301,000 | 171,131,000 | |||
Debt securities available for sale, Fair Value | ||||||
Fair Value | 278,930,000 | 278,930,000 | 170,044,000 | |||
Debt securities held to maturity, Amortized Cost | ||||||
Amortized Cost | 15,708,000 | [1] | 15,708,000 | [1] | 33,947,000 | |
Debt securities held to maturity, Fair Value | ||||||
Fair Value | 15,934,000 | [1] | 15,934,000 | [1] | 33,928,000 | |
Debt securities available for sale, Fair Value | ||||||
Continuous unrealized losses existing for less than 12 months, gross | 1,394,000 | 1,394,000 | 49,893,000 | |||
Continuous unrealized losses existing for greater than 12 months, gross | 24,192,000 | 24,192,000 | 77,651,000 | |||
Total, gross | 25,586,000 | 25,586,000 | 127,544,000 | |||
Debt securities available for sale, Unrealized Losses | ||||||
Continuous unrealized losses existing for less than 12 months, gross | (8,000) | (8,000) | (460,000) | |||
Continuous unrealized losses existing greater than 12 months, gross | (46,000) | (46,000) | (1,111,000) | |||
Total, gross | (54,000) | (54,000) | (1,571,000) | |||
Debt securities held to maturity, Fair Value | ||||||
Continuous unrealized losses existing for less than 12 months, gross | 9,531,000 | |||||
Continuous unrealized losses existing for greater than 12 months, gross | 500,000 | 500,000 | 9,538,000 | |||
Total, gross | 500,000 | 500,000 | 19,069,000 | |||
Debt securities held to maturity, Unrealized Losses | ||||||
Continuous unrealized losses existing for less than 12 months, gross | (33,000) | |||||
Continuous unrealized losses existing for greater than 12 months, gross | (54,000) | |||||
Total, gross | (87,000) | |||||
Commercial mortgage-backed securities | ||||||
Debt securities available for sale | ||||||
Amortized Cost | 122,510,000 | 122,510,000 | 2,003,000 | |||
Gross Unrealized Gains | 1,678,000 | 1,678,000 | ||||
Gross Unrealized Losses | (33,000) | (33,000) | (61,000) | |||
Fair Value | 124,155,000 | 124,155,000 | 1,942,000 | |||
Debt securities held to maturity | ||||||
Amortized Cost | 59,054,000 | |||||
Gross Unrealized Gains | 11,000 | |||||
Gross Unrealized Losses | (1,003,000) | |||||
Fair Value | 58,062,000 | |||||
Debt securities available for sale, Amortized Cost | ||||||
Amortized Cost | 122,510,000 | 122,510,000 | 2,003,000 | |||
Debt securities available for sale, Fair Value | ||||||
Fair Value | 124,155,000 | 124,155,000 | 1,942,000 | |||
Debt securities held to maturity, Amortized Cost | ||||||
Amortized Cost | 59,054,000 | |||||
Debt securities held to maturity, Fair Value | ||||||
Fair Value | 58,062,000 | |||||
Debt securities available for sale, Fair Value | ||||||
Continuous unrealized losses existing for greater than 12 months, gross | 14,746,000 | 14,746,000 | 1,942,000 | |||
Total, gross | 14,746,000 | 14,746,000 | 1,942,000 | |||
Debt securities available for sale, Unrealized Losses | ||||||
Continuous unrealized losses existing greater than 12 months, gross | (33,000) | (33,000) | (61,000) | |||
Total, gross | (33,000) | (33,000) | (61,000) | |||
Debt securities held to maturity, Fair Value | ||||||
Continuous unrealized losses existing for less than 12 months, gross | 12,067,000 | |||||
Continuous unrealized losses existing for greater than 12 months, gross | 45,041,000 | |||||
Total, gross | 57,108,000 | |||||
Debt securities held to maturity, Unrealized Losses | ||||||
Continuous unrealized losses existing for less than 12 months, gross | (212,000) | |||||
Continuous unrealized losses existing for greater than 12 months, gross | (791,000) | |||||
Total, gross | (1,003,000) | |||||
Residential mortgage-backed securities | ||||||
Debt securities available for sale | ||||||
Amortized Cost | 951,998,000 | 951,998,000 | 322,646,000 | |||
Gross Unrealized Gains | 10,394,000 | 10,394,000 | 245,000 | |||
Gross Unrealized Losses | (1,255,000) | (1,255,000) | (7,143,000) | |||
Fair Value | 961,137,000 | 961,137,000 | 315,748,000 | |||
Debt securities held to maturity | ||||||
Amortized Cost | 515,659,000 | |||||
Gross Unrealized Gains | 1,748,000 | |||||
Gross Unrealized Losses | (6,037,000) | |||||
Fair Value | 511,370,000 | |||||
Debt securities available for sale, Amortized Cost | ||||||
Amortized Cost | 951,998,000 | 951,998,000 | 322,646,000 | |||
Debt securities available for sale, Fair Value | ||||||
Fair Value | 961,137,000 | 961,137,000 | 315,748,000 | |||
Debt securities held to maturity, Amortized Cost | ||||||
Amortized Cost | 515,659,000 | |||||
Debt securities held to maturity, Fair Value | ||||||
Fair Value | 511,370,000 | |||||
Debt securities available for sale, Fair Value | ||||||
Continuous unrealized losses existing for less than 12 months, gross | 13,629,000 | 13,629,000 | 48,387,000 | |||
Continuous unrealized losses existing for greater than 12 months, gross | 183,552,000 | 183,552,000 | 247,573,000 | |||
Total, gross | 197,181,000 | 197,181,000 | 295,960,000 | |||
Debt securities available for sale, Unrealized Losses | ||||||
Continuous unrealized losses existing for less than 12 months, gross | (8,000) | (8,000) | (496,000) | |||
Continuous unrealized losses existing greater than 12 months, gross | (1,247,000) | (1,247,000) | (6,647,000) | |||
Total, gross | (1,255,000) | (1,255,000) | (7,143,000) | |||
Debt securities held to maturity, Fair Value | ||||||
Continuous unrealized losses existing for less than 12 months, gross | 77,071,000 | |||||
Continuous unrealized losses existing for greater than 12 months, gross | 245,128,000 | |||||
Total, gross | 322,199,000 | |||||
Debt securities held to maturity, Unrealized Losses | ||||||
Continuous unrealized losses existing for less than 12 months, gross | (974,000) | |||||
Continuous unrealized losses existing for greater than 12 months, gross | (5,063,000) | |||||
Total, gross | (6,037,000) | |||||
Corporate debt securities | ||||||
Debt securities available for sale | ||||||
Amortized Cost | 133,053,000 | 133,053,000 | 132,513,000 | |||
Gross Unrealized Gains | 1,514,000 | 1,514,000 | 61,000 | |||
Gross Unrealized Losses | (17,000) | (17,000) | (376,000) | |||
Fair Value | 134,550,000 | 134,550,000 | 132,198,000 | |||
Debt securities available for sale, Amortized Cost | ||||||
Amortized Cost | 133,053,000 | 133,053,000 | 132,513,000 | |||
Debt securities available for sale, Fair Value | ||||||
Fair Value | 134,550,000 | 134,550,000 | 132,198,000 | |||
Debt securities available for sale, Fair Value | ||||||
Continuous unrealized losses existing for less than 12 months, gross | 1,765,000 | 1,765,000 | 90,713,000 | |||
Continuous unrealized losses existing for greater than 12 months, gross | 15,049,000 | 15,049,000 | 15,083,000 | |||
Total, gross | 16,814,000 | 16,814,000 | 105,796,000 | |||
Debt securities available for sale, Unrealized Losses | ||||||
Continuous unrealized losses existing for less than 12 months, gross | (7,000) | (7,000) | (268,000) | |||
Continuous unrealized losses existing greater than 12 months, gross | (10,000) | (10,000) | (108,000) | |||
Total, gross | $ (17,000) | $ (17,000) | $ (376,000) | |||
Accounting Standards Update 2017-12 | ||||||
Realized gains and losses related to sales and calls of securities AFS | ||||||
Transferred securities from held to maturity to available-for-sale | $ 573,600,000 | |||||
Unrealized loss related to transfer of securities from held to maturity to AFS | $ 4,800,000 | |||||
[1] | Gross unrealized losses less than one thousand dollars. |
Portfolio loans - Distribution
Portfolio loans - Distribution (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Portfolio Loans | ||||||
Portfolio loans | $ 6,532,126 | $ 5,568,428 | ||||
Allowance for loan losses | (51,375) | $ (50,915) | (50,648) | $ (53,305) | $ (52,649) | $ (53,582) |
Portfolio loans, net | 6,480,751 | 5,517,780 | ||||
Net deferred loan origination costs | 5,400 | 5,600 | ||||
Amount of loan reduction due to net accretable purchase accounting adjustments | 25,000 | 13,900 | ||||
Commercial | ||||||
Portfolio Loans | ||||||
Portfolio loans | 1,668,098 | 1,405,106 | ||||
Allowance for loan losses | (16,733) | (17,998) | (17,829) | (17,586) | (17,577) | (14,779) |
Commercial real estate | ||||||
Portfolio Loans | ||||||
Portfolio loans | 2,661,905 | 2,366,823 | ||||
Allowance for loan losses | (20,188) | (20,097) | (21,137) | (23,047) | (22,090) | (21,813) |
Real estate construction | ||||||
Portfolio Loans | ||||||
Portfolio loans | 429,326 | 288,197 | ||||
Allowance for loan losses | (3,305) | (2,807) | (2,723) | (2,915) | (2,799) | (2,861) |
Retail real estate | ||||||
Portfolio Loans | ||||||
Portfolio loans | 1,721,370 | 1,480,133 | ||||
Allowance for loan losses | (10,613) | (9,503) | (8,471) | (9,293) | (9,836) | (13,783) |
Retail other | ||||||
Portfolio Loans | ||||||
Portfolio loans | 51,427 | 28,169 | ||||
Allowance for loan losses | $ (536) | $ (510) | $ (488) | $ (464) | $ (347) | $ (346) |
Portfolio loans - Narrative (De
Portfolio loans - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019USD ($)loan | Jun. 30, 2018USD ($)loan | Jun. 30, 2019USD ($)loancontract | Jun. 30, 2018USD ($)loan | Dec. 31, 2018USD ($) | |
Portfolio Loans | |||||
Net deferred loan origination costs | $ 5,400 | $ 5,400 | $ 5,600 | ||
Amount of loan reduction due to net accretable purchase accounting adjustments | 25,000 | 25,000 | $ 13,900 | ||
Gross interest income that would have been recorded if impaired loans had been current | 400 | $ 300 | $ 1,100 | $ 700 | |
TDRs subsequently classified as non-performing and had payment defaults | 0 | 1 | 0 | ||
Minimum days past due for TDR loans to be classified as non-performing | 90 days | ||||
Balance of all acquired loans | 1,800,000 | $ 1,800,000 | |||
Commercial | |||||
Portfolio Loans | |||||
Loans classified as a TDR | $ 600 | $ 600 | |||
Performing loans classified as TDRs | loan | 1 | 1 | |||
Commercial real estate | |||||
Portfolio Loans | |||||
Loans classified as a TDR | $ 3,200 | $ 3,200 | |||
Retail real estate | |||||
Portfolio Loans | |||||
Loans classified as a TDR | $ 100 | $ 100 | |||
Performing loans classified as TDRs | loan | 1 | 1 | |||
Loans in the process of foreclosure | 2,600 | ||||
Maximum | Commercial real estate | |||||
Portfolio Loans | |||||
Limit where loans are processed through an expedited underwriting process | 1,000 | ||||
Pass and watch | Commercial | |||||
Portfolio Loans | |||||
Limit where loans are processed through an expedited underwriting process | 350 | ||||
Pass and watch | Minimum | Commercial | |||||
Portfolio Loans | |||||
Limit where loans are processed through an expedited underwriting process | 350 | ||||
Pass and watch | Maximum | Commercial | |||||
Portfolio Loans | |||||
Limit where loans are processed through an expedited underwriting process | 1,000 | ||||
Watch | Commercial | |||||
Portfolio Loans | |||||
Limit above which loans are annually reviewed | 1,000 | ||||
Special Mention | |||||
Portfolio Loans | |||||
Limit above which loans are annually reviewed | $ 350 |
Portfolio loans - Risk Grades (
Portfolio loans - Risk Grades (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Pass | ||
Loans | ||
Portfolio loans receivable | $ 5,866,151 | $ 4,976,708 |
Watch | ||
Loans | ||
Portfolio loans receivable | 417,626 | 330,650 |
Special Mention | ||
Loans | ||
Portfolio loans receivable | 140,785 | 142,839 |
Substandard | ||
Loans | ||
Portfolio loans receivable | 86,033 | 86,060 |
Substandard Non-accrual | ||
Loans | ||
Portfolio loans receivable | 32,816 | 34,997 |
Commercial | Pass | ||
Loans | ||
Portfolio loans receivable | 1,378,041 | 1,126,257 |
Commercial | Watch | ||
Loans | ||
Portfolio loans receivable | 188,282 | 172,449 |
Commercial | Special Mention | ||
Loans | ||
Portfolio loans receivable | 48,181 | 47,000 |
Commercial | Substandard | ||
Loans | ||
Portfolio loans receivable | 45,599 | 42,532 |
Commercial | Substandard Non-accrual | ||
Loans | ||
Portfolio loans receivable | 10,647 | 17,953 |
Commercial real estate | Pass | ||
Loans | ||
Portfolio loans receivable | 2,367,741 | 2,106,711 |
Commercial real estate | Watch | ||
Loans | ||
Portfolio loans receivable | 178,859 | 137,214 |
Commercial real estate | Special Mention | ||
Loans | ||
Portfolio loans receivable | 85,837 | 85,148 |
Commercial real estate | Substandard | ||
Loans | ||
Portfolio loans receivable | 29,926 | 36,205 |
Commercial real estate | Substandard Non-accrual | ||
Loans | ||
Portfolio loans receivable | 12,780 | 10,298 |
Real estate construction | Pass | ||
Loans | ||
Portfolio loans receivable | 394,416 | 268,069 |
Real estate construction | Watch | ||
Loans | ||
Portfolio loans receivable | 34,348 | 14,562 |
Real estate construction | Special Mention | ||
Loans | ||
Portfolio loans receivable | 450 | 3,899 |
Real estate construction | Substandard | ||
Loans | ||
Portfolio loans receivable | 1,273 | 1,888 |
Real estate construction | Substandard Non-accrual | ||
Loans | ||
Portfolio loans receivable | 826 | 18 |
Retail real estate | Pass | ||
Loans | ||
Portfolio loans receivable | 1,674,105 | 1,448,964 |
Retail real estate | Watch | ||
Loans | ||
Portfolio loans receivable | 16,038 | 6,425 |
Retail real estate | Special Mention | ||
Loans | ||
Portfolio loans receivable | 6,317 | 6,792 |
Retail real estate | Substandard | ||
Loans | ||
Portfolio loans receivable | 9,235 | 5,435 |
Retail real estate | Substandard Non-accrual | ||
Loans | ||
Portfolio loans receivable | 8,529 | 6,698 |
Retail other | Pass | ||
Loans | ||
Portfolio loans receivable | 51,848 | 26,707 |
Retail other | Watch | ||
Loans | ||
Portfolio loans receivable | 99 | |
Retail other | Substandard Non-accrual | ||
Loans | ||
Portfolio loans receivable | $ 34 | $ 30 |
Portfolio loans - Past Due and
Portfolio loans - Past Due and Still Accruing or on a Non-accrual Status Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Loans past due | ||
Loans past due, still accruing | $ 1,601 | |
90+Days | $ 258 | |
Non-accrual Loans | 32,816 | 34,997 |
30 to 59 Days | ||
Loans past due | ||
Loans past due, still accruing | 15,723 | 5,053 |
60 to 89 Days | ||
Loans past due | ||
Loans past due, still accruing | 2,317 | 2,068 |
Commercial | ||
Loans past due | ||
Loans past due, still accruing | 775 | |
Non-accrual Loans | 10,647 | 17,953 |
Commercial | 30 to 59 Days | ||
Loans past due | ||
Loans past due, still accruing | 2,745 | 158 |
Commercial | 60 to 89 Days | ||
Loans past due | ||
Loans past due, still accruing | 593 | 140 |
Commercial real estate | ||
Loans past due | ||
90+Days | 38 | |
Non-accrual Loans | 12,780 | 10,298 |
Commercial real estate | 30 to 59 Days | ||
Loans past due | ||
Loans past due, still accruing | 4,519 | 148 |
Commercial real estate | 60 to 89 Days | ||
Loans past due | ||
Loans past due, still accruing | 608 | 558 |
Real estate construction | ||
Loans past due | ||
Loans past due, still accruing | 58 | |
Non-accrual Loans | 826 | 18 |
Real estate construction | 30 to 59 Days | ||
Loans past due | ||
Loans past due, still accruing | 103 | 121 |
Real estate construction | 60 to 89 Days | ||
Loans past due | ||
Loans past due, still accruing | 107 | |
Retail real estate | ||
Loans past due | ||
Loans past due, still accruing | 766 | |
90+Days | 220 | |
Non-accrual Loans | 8,529 | 6,698 |
Retail real estate | 30 to 59 Days | ||
Loans past due | ||
Loans past due, still accruing | 8,140 | 4,578 |
Retail real estate | 60 to 89 Days | ||
Loans past due | ||
Loans past due, still accruing | 987 | 1,368 |
Retail other | ||
Loans past due | ||
Loans past due, still accruing | 2 | |
Non-accrual Loans | 34 | 30 |
Retail other | 30 to 59 Days | ||
Loans past due | ||
Loans past due, still accruing | 216 | 48 |
Retail other | 60 to 89 Days | ||
Loans past due | ||
Loans past due, still accruing | $ 22 | $ 2 |
Portfolio loans - Summary of Re
Portfolio loans - Summary of Restructured Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Restructured loans | ||
Total loans | $ 12,112 | $ 8,838 |
In compliance with modified terms | ||
Restructured loans | ||
Total loans | 8,288 | 8,319 |
30-89 days past due | ||
Restructured loans | ||
Total loans | 321 | 127 |
Included in non-performing loans | ||
Restructured loans | ||
Total loans | $ 3,503 | $ 392 |
Portfolio loans - Loans Identif
Portfolio loans - Loans Identified as Impaired, Segregated by Category (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Loans identified as impaired | ||
Unpaid Contractual Principal Balance | $ 53,165 | $ 55,534 |
Recorded Investment with No Allowance | 32,596 | 33,622 |
Recorded Investment with Allowance | 12,016 | 16,560 |
Total Recorded Investment | 44,612 | 50,182 |
Related Allowance | 4,199 | 5,561 |
Average Recorded Investment | 47,535 | 46,303 |
Commercial | ||
Loans identified as impaired | ||
Unpaid Contractual Principal Balance | 16,668 | 21,442 |
Recorded Investment with No Allowance | 7,511 | 6,858 |
Recorded Investment with Allowance | 3,856 | 12,001 |
Total Recorded Investment | 11,367 | 18,859 |
Related Allowance | 2,358 | 4,319 |
Average Recorded Investment | 15,425 | 13,364 |
Commercial real estate | ||
Loans identified as impaired | ||
Unpaid Contractual Principal Balance | 19,784 | 19,079 |
Recorded Investment with No Allowance | 10,498 | 13,082 |
Recorded Investment with Allowance | 7,686 | 4,498 |
Total Recorded Investment | 18,184 | 17,580 |
Related Allowance | 1,367 | 1,181 |
Average Recorded Investment | 17,730 | 18,077 |
Real estate construction | ||
Loans identified as impaired | ||
Unpaid Contractual Principal Balance | 1,329 | 478 |
Recorded Investment with No Allowance | 1,186 | 453 |
Total Recorded Investment | 1,186 | 453 |
Average Recorded Investment | 656 | 712 |
Retail real estate | ||
Loans identified as impaired | ||
Unpaid Contractual Principal Balance | 15,322 | 14,418 |
Recorded Investment with No Allowance | 13,367 | 13,196 |
Recorded Investment with Allowance | 474 | 61 |
Total Recorded Investment | 13,841 | 13,257 |
Related Allowance | 474 | 61 |
Average Recorded Investment | 13,685 | 14,110 |
Retail other | ||
Loans identified as impaired | ||
Unpaid Contractual Principal Balance | 62 | 117 |
Recorded Investment with No Allowance | 34 | 33 |
Total Recorded Investment | 34 | 33 |
Average Recorded Investment | $ 39 | $ 40 |
Portfolio loans - Allowance for
Portfolio loans - Allowance for Loan Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | |
Changes in allowance for loan losses | ||||||
Beginning balance | $ 50,915 | $ 52,649 | $ 50,648 | $ 53,582 | ||
Provision for loan loss | 2,517 | 2,258 | 4,628 | 3,266 | ||
Charged-off | (2,941) | (2,553) | (5,410) | (5,483) | ||
Recoveries | 884 | 951 | 1,509 | 1,940 | ||
Ending balance | 51,375 | 53,305 | 51,375 | 53,305 | ||
Allowance for loan losses Ending balance attributed to: | ||||||
Loans individually evaluated for impairment | $ 4,199 | $ 5,561 | ||||
Loans collectively evaluated for impairment | 47,176 | 45,087 | ||||
Ending balance | 51,375 | 52,649 | 51,375 | 53,582 | 51,375 | 50,648 |
Allowance for loan losses and recorded investments in portfolio loans by category | ||||||
Loans individually evaluated for impairment | 40,512 | 47,404 | ||||
Loans collectively evaluated for impairment | 6,487,514 | 5,518,246 | ||||
PCI loans evaluated for impairment | 4,100 | 2,778 | ||||
Ending balance | 6,532,126 | 5,568,428 | ||||
Commercial | ||||||
Changes in allowance for loan losses | ||||||
Beginning balance | 17,998 | 17,577 | 17,829 | 14,779 | ||
Provision for loan loss | 1,161 | 1,720 | 2,954 | 4,723 | ||
Charged-off | (2,563) | (1,916) | (4,370) | (2,697) | ||
Recoveries | 137 | 205 | 320 | 781 | ||
Ending balance | 16,733 | 17,586 | 16,733 | 17,586 | ||
Allowance for loan losses Ending balance attributed to: | ||||||
Loans individually evaluated for impairment | 2,358 | 4,319 | ||||
Loans collectively evaluated for impairment | 14,375 | 13,510 | ||||
Ending balance | 17,998 | 17,577 | 17,829 | 14,779 | 16,733 | 17,829 |
Allowance for loan losses and recorded investments in portfolio loans by category | ||||||
Loans individually evaluated for impairment | 11,336 | 18,441 | ||||
Loans collectively evaluated for impairment | 1,656,731 | 1,386,247 | ||||
PCI loans evaluated for impairment | 31 | 418 | ||||
Ending balance | 1,668,098 | 1,405,106 | ||||
Commercial real estate | ||||||
Changes in allowance for loan losses | ||||||
Beginning balance | 20,097 | 22,090 | 21,137 | 21,813 | ||
Provision for loan loss | (97) | 909 | (1,186) | 2,445 | ||
Charged-off | (110) | (15) | (1,425) | |||
Recoveries | 188 | 158 | 252 | 214 | ||
Ending balance | 20,188 | 23,047 | 20,188 | 23,047 | ||
Allowance for loan losses Ending balance attributed to: | ||||||
Loans individually evaluated for impairment | 1,367 | 1,181 | ||||
Loans collectively evaluated for impairment | 18,821 | 19,956 | ||||
Ending balance | 20,097 | 22,090 | 21,137 | 21,813 | 20,188 | 21,137 |
Allowance for loan losses and recorded investments in portfolio loans by category | ||||||
Loans individually evaluated for impairment | 15,723 | 15,318 | ||||
Loans collectively evaluated for impairment | 2,643,721 | 2,349,243 | ||||
PCI loans evaluated for impairment | 2,461 | 2,262 | ||||
Ending balance | 2,661,905 | 2,366,823 | ||||
Real estate construction | ||||||
Changes in allowance for loan losses | ||||||
Beginning balance | 2,807 | 2,799 | 2,723 | 2,861 | ||
Provision for loan loss | 411 | 35 | 413 | 37 | ||
Charged-off | (97) | |||||
Recoveries | 87 | 81 | 169 | 114 | ||
Ending balance | 3,305 | 2,915 | 3,305 | 2,915 | ||
Allowance for loan losses Ending balance attributed to: | ||||||
Loans collectively evaluated for impairment | 3,305 | 2,723 | ||||
Ending balance | 2,807 | 2,799 | 2,723 | 2,915 | 3,305 | 2,723 |
Allowance for loan losses and recorded investments in portfolio loans by category | ||||||
Loans individually evaluated for impairment | 751 | 453 | ||||
Loans collectively evaluated for impairment | 428,140 | 287,744 | ||||
PCI loans evaluated for impairment | 435 | |||||
Ending balance | 429,326 | 288,197 | ||||
Retail real estate | ||||||
Changes in allowance for loan losses | ||||||
Beginning balance | 9,503 | 9,836 | 8,471 | 13,783 | ||
Provision for loan loss | 941 | (548) | 2,298 | (4,210) | ||
Charged-off | (200) | (412) | (717) | (942) | ||
Recoveries | 369 | 417 | 561 | 662 | ||
Ending balance | 10,613 | 9,293 | 10,613 | 9,293 | ||
Allowance for loan losses Ending balance attributed to: | ||||||
Loans individually evaluated for impairment | 474 | 61 | ||||
Loans collectively evaluated for impairment | 10,139 | 8,410 | ||||
Ending balance | 9,503 | 9,836 | 10,613 | 9,293 | 10,613 | 8,471 |
Allowance for loan losses and recorded investments in portfolio loans by category | ||||||
Loans individually evaluated for impairment | 12,668 | 13,159 | ||||
Loans collectively evaluated for impairment | 1,707,529 | 1,466,876 | ||||
PCI loans evaluated for impairment | 1,173 | 98 | ||||
Ending balance | 1,721,370 | 1,480,133 | ||||
Retail other | ||||||
Changes in allowance for loan losses | ||||||
Beginning balance | 510 | 347 | 488 | 346 | ||
Provision for loan loss | 101 | 142 | 149 | 271 | ||
Charged-off | (178) | (115) | (308) | (322) | ||
Recoveries | 103 | 90 | 207 | 169 | ||
Ending balance | 536 | 464 | 536 | 464 | ||
Allowance for loan losses Ending balance attributed to: | ||||||
Loans collectively evaluated for impairment | 536 | 488 | ||||
Ending balance | $ 510 | $ 347 | $ 536 | $ 464 | 536 | 488 |
Allowance for loan losses and recorded investments in portfolio loans by category | ||||||
Loans individually evaluated for impairment | 34 | 33 | ||||
Loans collectively evaluated for impairment | 51,393 | 28,136 | ||||
Ending balance | $ 51,427 | $ 28,169 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Deposits | ||
Demand deposits, noninterest-bearing | $ 1,766,681 | $ 1,464,700 |
Interest-bearing transaction deposits | 1,926,502 | 1,435,574 |
Saving deposits and money market deposits | 2,390,228 | 1,852,044 |
Time deposits | 1,749,811 | 1,497,003 |
Total deposits | 7,833,222 | 6,249,321 |
Reciprocal brokered transaction deposits included in savings deposits and money market funds | 14,400 | 17,500 |
Time deposits minimum denomination of $100,000 or more | 934,500 | 673,700 |
Time deposits minimum denomination of $250,000 or more | 340,400 | 264,100 |
Brokered deposits included in the balance of time deposits | 108,800 | 262,500 |
Deposits | ||
April 1, 2019 - March 31, 2020 | 1,064,812 | |
April 1, 2020 - March 31, 2021 | 389,392 | |
April 1, 2021 - March 31, 2022 | 158,968 | |
April 1, 2022 - March 31, 2023 | 63,863 | |
April 1, 2023 - March 31, 2024 | 71,961 | |
Thereafter | 815 | |
Total | $ 1,749,811 | $ 1,497,003 |
Borrowings - Maturity period (D
Borrowings - Maturity period (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Maturity period | |
Maximum maturity period of short-term debt | 1 year |
Borrowings - Amended and Restat
Borrowings - Amended and Restated Credit Agreement (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2019 | Jan. 29, 2019 | Dec. 31, 2018 | |
Revolving loan facility | |||
Borrowings | |||
Maximum borrowing capacity | $ 20,000,000 | ||
Outstanding amounts | $ 0 | $ 0 | |
Term Loan | |||
Borrowings | |||
Maximum borrowing capacity | $ 60,000,000 | ||
Outstanding amounts | 57,000,000 | ||
Short-term outstanding balance for the period ending | 6,000,000 | ||
Long-term outstanding balance for the period ending | $ 51,000,000 | ||
Interest rate (as a percent) | 1.50% |
Borrowings - Long-term Debt (De
Borrowings - Long-term Debt (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Long-term debt | ||
Notes payable, FHLB, ranging in original maturity from nineteen months to ten years, collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock. | $ 35,772 | $ 50,000 |
Notes Payable | 51,000 | |
Total long-term borrowings | $ 86,772 | $ 50,000 |
FHLB advances | ||
Long-term debt | ||
Weighted average rate (as a percent) | 2.29% | 2.28% |
FHLB advances | Minimum | ||
Long-term debt | ||
Notes payable original maturity term | 19 months | 19 months |
Interest rate (as a percent) | 2.15% | 2.20% |
FHLB advances | Maximum | ||
Long-term debt | ||
Notes payable original maturity term | 10 years | 10 years |
Interest rate (as a percent) | 3.04% | 2.41% |
Borrowings - Senior notes and S
Borrowings - Senior notes and Subordinate Notes (Details) - USD ($) $ in Millions | May 25, 2017 | Jun. 30, 2019 | Dec. 31, 2018 |
Long-term debt | |||
Unamortized debt issuance cost | $ 5.4 | $ 5.6 | |
Senior notes | |||
Long-term debt | |||
Issuance of debt | $ 40 | ||
Interest rate (as a percent) | 3.75% | ||
Unamortized debt issuance cost | 0.4 | 0.5 | |
Subordinated debt | |||
Long-term debt | |||
Issuance of debt | $ 60 | ||
Interest rate (as a percent) | 4.75% | ||
Term of debt instrument | 5 years | ||
Unamortized debt issuance cost | $ 0.8 | $ 0.9 | |
Three-month LIBOR | Subordinated debt | |||
Long-term debt | |||
Floating interest rate margin (as a percent) | 2.919% |
Junior Subordinated Debt Owed_2
Junior Subordinated Debt Owed to Unconsolidated Trusts (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Junior subordinated debt owed to unconsolidated trusts | ||
Junior subordinated debt owed to unconsolidated trusts | $ 71,230 | $ 71,155 |
Trust Preferred Securities | ||
Junior subordinated debt owed to unconsolidated trusts | ||
Percentage limit on inclusion of qualifying trust preferred securities in Tier I Capital | 25.00% | |
Trust preferred securities qualified as Tier I capital (as a percent) | 100.00% | |
Maximum of holding companies assets retained | $ 15,000,000 | |
Junior Subordinated Notes | Trust Preferred Securities | ||
Junior subordinated debt owed to unconsolidated trusts | ||
Maximum period to defer payment of interest on the notes and, therefore, distributions on the trust preferred securities | 5 years | |
Parent | Reportable legal entities | ||
Junior subordinated debt owed to unconsolidated trusts | ||
Junior subordinated debt owed to unconsolidated trusts | $ 71,200 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net income per share calculations for basic and diluted methods | ||||
Net income available to common stockholders | $ 24,085 | $ 24,862 | $ 49,554 | $ 46,779 |
Shares: | ||||
Weighted average common shares outstanding | 55,638,000 | 48,815,000 | 54,464,000 | 48,796,000 |
Dilutive effect of outstanding options, warrants and restricted stock units as determined by the application of the treasury stock method (in shares) | 303,000 | 409,000 | 300,000 | 407,000 |
Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation | 55,941,000 | 49,224,000 | 54,764,000 | 49,203,000 |
Basic earnings per common share (in dollars per share) | $ 0.43 | $ 0.51 | $ 0.91 | $ 0.96 |
Diluted earnings per common share (in dollars per share) | $ 0.43 | $ 0.51 | $ 0.90 | $ 0.95 |
Stock options | ||||
Anti-dilutive securities excluded from the calculation of common stock equivalents | ||||
Number of anti-dilutive securities (in shares) | 48,107 | |||
RSU | ||||
Anti-dilutive securities excluded from the calculation of common stock equivalents | ||||
Number of anti-dilutive securities (in shares) | 169,258 | |||
Warrants | ||||
Anti-dilutive securities excluded from the calculation of common stock equivalents | ||||
Number of anti-dilutive securities (in shares) | 191,278 | 191,278 |
Share-based Compensation (Detai
Share-based Compensation (Details) - shares | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Share-based Compensation | ||
Number of shares held in treasury | 524,097 | 310,745 |
RSU | ||
Share-based Compensation | ||
Number of shares of common stock per award | 1 | |
Minimum | RSU | ||
Share-based Compensation | ||
Requisite service periods | 1 year | |
Maximum | RSU | ||
Share-based Compensation | ||
Requisite service periods | 5 years | |
Board of directors and advisory directors | DSUs | ||
Share-based Compensation | ||
Number of shares of common stock per award | 1 | |
Settlement period | 30 days |
Share-based Compensation - Awar
Share-based Compensation - Award Status (Details) - Stock option awards | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Shares | |
Outstanding at beginning of year (in shares) | shares | 87,600 |
Exercised (in shares) | shares | (21,799) |
Forfeited (in shares) | shares | (2,271) |
Expired (in shares) | shares | (5,176) |
Outstanding at end of year (in shares) | shares | 58,354 |
Exercisable at end of year (in shares) | shares | 42,472 |
Weighted-Average Exercise Price | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 20.58 |
Exercised (in dollars per share) | $ / shares | 17.71 |
Forfeited (in dollars per share) | $ / shares | 23.53 |
Expired (in dollars per share) | $ / shares | 18.13 |
Outstanding at end of year (in dollars per share) | $ / shares | 21.76 |
Exercisable at end of year (in dollars per share) | $ / shares | $ 21.09 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 5 years 9 months 18 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 6 years 2 months 23 days |
Share-based Compensation - Rest
Share-based Compensation - Restricted and Deferred Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
RSU | ||||
Shares | ||||
Non-vested at beginning of year (in shares) | 690,495 | |||
Dividend equivalents earned (in shares) | 11,359 | |||
Vested (in shares) | (104,760) | |||
Forfeited (in shares) | (4,712) | |||
Non-vested at end of year (in shares) | 592,382 | 592,382 | ||
Outstanding at end of year (in shares) | 592,382 | 592,382 | ||
Weighted-Average Grant Date Fair Value | ||||
Non-vested at beginning of year (in dollars per share) | $ 26.14 | |||
Dividend equivalents earned (in dollars per share) | 25.56 | |||
Vested (in dollars per share) | 18.40 | |||
Forfeited (in dollars per share) | 30.47 | |||
Non-vested at end of year (in dollars per share) | $ 27.46 | 27.46 | ||
Outstanding at end of year (in dollars per share) | $ 27.46 | $ 27.46 | ||
DSUs | ||||
Shares | ||||
Non-vested at beginning of year (in shares) | 20,449 | |||
Dividend equivalents earned (in shares) | 1,269 | |||
Vested (in shares) | (20,195) | |||
Forfeited (in shares) | (1,523) | |||
Outstanding at end of year (in shares) | 68,153 | 68,153 | ||
Weighted-Average Grant Date Fair Value | ||||
Non-vested at beginning of year (in dollars per share) | $ 27.93 | |||
Dividend equivalents earned (in dollars per share) | 25.56 | |||
Vested (in dollars per share) | 31.29 | |||
Forfeited (in dollars per share) | 31.62 | |||
Outstanding at end of year (in dollars per share) | $ 22.27 | $ 22.27 | ||
RSUs and DSUs | ||||
Additional disclosures | ||||
Compensation expense recognized | $ 1 | $ 0.8 | $ 1.9 | $ 1.6 |
Amount of compensation cost to be recognized | $ 8.8 | $ 8.8 | ||
Period over which cost will be recognized | 3 years 3 months 18 days | |||
Employee stock purchase plan | ||||
Additional disclosures | ||||
Remaining shares available for issuance | 54,841 | 54,841 | ||
Stock option awards | ||||
Additional disclosures | ||||
Compensation expense recognized | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
Unrecognized stock option expense | $ 0.1 | $ 0.1 | ||
First Community 2016 Equity Incentive Plan | ||||
Additional disclosures | ||||
Remaining shares available for issuance | 309,326 | 309,326 | ||
2010 Equity Incentive Plan | ||||
Additional disclosures | ||||
Remaining shares available for issuance | 766,824 | 766,824 |
Outstanding Commitments and C_3
Outstanding Commitments and Contingent Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Commitments to extend credit | ||
Credit Commitments and Contingencies | ||
Financial instruments whose contract amounts represent credit risk | $ 1,567,091 | $ 1,398,483 |
Standby letters of credit | ||
Credit Commitments and Contingencies | ||
Financial instruments whose contract amounts represent credit risk | $ 37,560 | $ 32,156 |
Regulatory Capital (Details)
Regulatory Capital (Details) - USD ($) $ in Thousands | Oct. 12, 2018 | Jun. 30, 2019 | Dec. 31, 2018 |
Total Capital (to Risk Weighted Assets), Amount | |||
Actual, Amount | $ 1,015,740 | $ 894,572 | |
Minimum Capital Requirement, Amount | 581,993 | 482,638 | |
Minimum To Be Well Capitalized, Amount | $ 727,491 | $ 603,297 | |
Total Capital (to Risk Weighted Assets), Ratio | |||
Actual, Ratio (as a percent) | 13.96% | 14.83% | |
Minimum Capital Requirement, Ratio (as a percent) | 8.00% | 8.00% | |
Minimum To Be Well Capitalized, Ratio (as a percent) | 10.00% | 10.00% | |
Tier 1 Capital (to Risk Weighted Assets), Amount | |||
Actual, Amount | $ 904,365 | $ 783,924 | |
Minimum Capital Requirement, Amount | 436,495 | 361,978 | |
Minimum To Be Well Capitalized, Amount | $ 581,993 | $ 482,638 | |
Tier 1 Capital (to Risk Weighted Assets), Ratio | |||
Actual, Ratio (as a percent) | 12.43% | 12.99% | |
Minimum Capital Requirement, Ratio (as a percent) | 6.00% | 6.00% | |
Minimum To Be Well Capitalized, Ratio (as a percent) | 8.00% | 8.00% | |
Common Equity Tier 1 Capital (to Risk Weighted Assets), Amount | |||
Actual, Amount | $ 830,365 | $ 709,924 | |
Minimum Capital Requirement, Amount | 327,371 | 271,484 | |
Minimum To Be Well Capitalized, Amount | $ 472,869 | $ 392,143 | |
Common Equity Tier 1 Capital (to Risk Weighted Assets), Ratio | |||
Actual, Ratio (as a percent) | 11.41% | 11.77% | |
Minimum Capital Requirement, Ratio (as a percent) | 4.50% | 4.50% | |
Minimum To Be Well Capitalized, Ratio (as a percent) | 6.50% | 6.50% | |
Tier 1 Capital (to Average Assets), Amount | |||
Actual, Amount | $ 904,365 | $ 783,924 | |
Minimum Capital Requirement, Amount | $ 366,386 | $ 302,704 | |
Tier 1 Capital (to Average Assets), Ratio | |||
Actual, Ratio (as a percent) | 9.87% | 10.36% | |
Minimum Capital Requirement, Ratio (as a percent) | 4.00% | 4.00% | |
Busey Bank | |||
Total Capital (to Risk Weighted Assets), Amount | |||
Actual, Amount | $ 893,175 | $ 854,351 | |
Minimum Capital Requirement, Amount | 491,782 | 481,701 | |
Minimum To Be Well Capitalized, Amount | $ 614,727 | $ 602,126 | |
Total Capital (to Risk Weighted Assets), Ratio | |||
Actual, Ratio (as a percent) | 14.53% | 14.19% | |
Minimum Capital Requirement, Ratio (as a percent) | 8.00% | 8.00% | |
Minimum To Be Well Capitalized, Ratio (as a percent) | 10.00% | 10.00% | |
Tier 1 Capital (to Risk Weighted Assets), Amount | |||
Actual, Amount | $ 842,312 | $ 803,703 | |
Minimum Capital Requirement, Amount | 368,837 | 361,276 | |
Minimum To Be Well Capitalized, Amount | $ 491,782 | $ 481,701 | |
Tier 1 Capital (to Risk Weighted Assets), Ratio | |||
Actual, Ratio (as a percent) | 13.70% | 13.35% | |
Minimum Capital Requirement, Ratio (as a percent) | 6.00% | 6.00% | |
Minimum To Be Well Capitalized, Ratio (as a percent) | 8.00% | 8.00% | |
Common Equity Tier 1 Capital (to Risk Weighted Assets), Amount | |||
Actual, Amount | $ 842,312 | $ 803,703 | |
Minimum Capital Requirement, Amount | 276,628 | 270,957 | |
Minimum To Be Well Capitalized, Amount | $ 399,573 | $ 391,382 | |
Common Equity Tier 1 Capital (to Risk Weighted Assets), Ratio | |||
Actual, Ratio (as a percent) | 13.70% | 13.35% | |
Minimum Capital Requirement, Ratio (as a percent) | 4.50% | 4.50% | |
Minimum To Be Well Capitalized, Ratio (as a percent) | 6.50% | 6.50% | |
Tier 1 Capital (to Average Assets), Amount | |||
Actual, Amount | $ 842,312 | $ 803,703 | |
Minimum Capital Requirement, Amount | 295,539 | 302,232 | |
Minimum To Be Well Capitalized, Amount | $ 369,424 | $ 377,789 | |
Tier 1 Capital (to Average Assets), Ratio | |||
Actual, Ratio (as a percent) | 11.40% | 10.64% | |
Minimum Capital Requirement, Ratio (as a percent) | 4.00% | 4.00% | |
Minimum To Be Well Capitalized, Ratio (as a percent) | 5.00% | 5.00% | |
Banc Ed | |||
Total Capital (to Risk Weighted Assets), Amount | |||
Actual, Amount | $ 194,755 | ||
Minimum Capital Requirement, Amount | 89,849 | ||
Minimum To Be Well Capitalized, Amount | $ 112,312 | ||
Total Capital (to Risk Weighted Assets), Ratio | |||
Actual, Ratio (as a percent) | 17.34% | ||
Minimum Capital Requirement, Ratio (as a percent) | 8.00% | ||
Minimum To Be Well Capitalized, Ratio (as a percent) | 10.00% | ||
Tier 1 Capital (to Risk Weighted Assets), Amount | |||
Actual, Amount | $ 194,243 | ||
Minimum Capital Requirement, Amount | 67,387 | ||
Minimum To Be Well Capitalized, Amount | $ 89,849 | ||
Tier 1 Capital (to Risk Weighted Assets), Ratio | |||
Actual, Ratio (as a percent) | 17.30% | ||
Minimum Capital Requirement, Ratio (as a percent) | 6.00% | ||
Minimum To Be Well Capitalized, Ratio (as a percent) | 8.00% | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Amount | |||
Actual, Amount | $ 194,243 | ||
Minimum Capital Requirement, Amount | 50,540 | ||
Minimum To Be Well Capitalized, Amount | $ 73,003 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Ratio | |||
Actual, Ratio (as a percent) | 17.30% | ||
Minimum Capital Requirement, Ratio (as a percent) | 4.50% | ||
Minimum To Be Well Capitalized, Ratio (as a percent) | 6.50% | ||
Tier 1 Capital (to Average Assets), Amount | |||
Actual, Amount | $ 194,243 | ||
Minimum Capital Requirement, Amount | 71,062 | ||
Minimum To Be Well Capitalized, Amount | $ 88,827 | ||
Tier 1 Capital (to Average Assets), Ratio | |||
Actual, Ratio (as a percent) | 10.93% | ||
Minimum Capital Requirement, Ratio (as a percent) | 4.00% | ||
Minimum To Be Well Capitalized, Ratio (as a percent) | 5.00% | ||
Busey Bank | |||
Regulatory Capital | |||
Distribution received through chartered amendment | $ 40,000 |
Operating Segments and Relate_3
Operating Segments and Related Information (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)segment | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Operating Segments and Related Information | |||||
Number of reportable segments | segment | 3 | ||||
Number of operating segments | segment | 3 | ||||
Goodwill | $ 314,343,000 | $ 314,343,000 | $ 267,685,000 | ||
Total Assets | 9,612,667,000 | 9,612,667,000 | 7,702,357,000 | ||
Net interest income | 73,428,000 | $ 60,372,000 | 141,811,000 | $ 120,129,000 | |
Non-interest income: | 27,896,000 | 22,802,000 | 53,841,000 | 45,288,000 | |
Non-interest expense: | 68,020,000 | 47,305,000 | 125,183,000 | 98,345,000 | |
Income before income taxes | 30,787,000 | 33,611,000 | 65,841,000 | 63,806,000 | |
Net income: | 24,085,000 | 24,862,000 | 49,554,000 | 46,779,000 | |
Operating segments | Banking | |||||
Operating Segments and Related Information | |||||
Goodwill | 293,657,000 | 293,657,000 | 246,999,000 | ||
Total Assets | 9,568,148,000 | 9,568,148,000 | 7,656,709,000 | ||
Net interest income | 75,944,000 | 62,109,000 | 146,582,000 | 123,525,000 | |
Non-interest income: | 15,659,000 | 11,734,000 | 28,442,000 | 22,631,000 | |
Non-interest expense: | 56,895,000 | 37,855,000 | 102,066,000 | 79,241,000 | |
Income before income taxes | 32,191,000 | 33,730,000 | 68,330,000 | 63,649,000 | |
Net income: | 24,441,000 | 24,904,000 | 51,106,000 | 46,749,000 | |
Operating segments | Remittance Processing | |||||
Operating Segments and Related Information | |||||
Goodwill | 8,992,000 | 8,992,000 | 8,992,000 | ||
Total Assets | 42,083,000 | 42,083,000 | 39,278,000 | ||
Net interest income | 18,000 | 16,000 | 36,000 | 32,000 | |
Non-interest income: | 4,117,000 | 3,987,000 | 8,298,000 | 7,770,000 | |
Non-interest expense: | 2,589,000 | 2,624,000 | 5,353,000 | 5,090,000 | |
Income before income taxes | 1,546,000 | 1,379,000 | 2,981,000 | 2,712,000 | |
Net income: | 1,105,000 | 986,000 | 2,130,000 | 1,939,000 | |
Operating segments | Wealth Management | |||||
Operating Segments and Related Information | |||||
Goodwill | 11,694,000 | 11,694,000 | 11,694,000 | ||
Total Assets | 26,015,000 | 26,015,000 | 20,992,000 | ||
Net interest income | 100,000 | 194,000 | |||
Non-interest income: | 9,594,000 | 7,808,000 | 18,727,000 | 16,449,000 | |
Non-interest expense: | 5,749,000 | 4,703,000 | 11,313,000 | 9,614,000 | |
Income before income taxes | 3,845,000 | 3,205,000 | 7,414,000 | 7,029,000 | |
Net income: | 2,845,000 | 2,288,000 | 5,486,000 | 5,052,000 | |
Other | |||||
Operating Segments and Related Information | |||||
Total Assets | (23,579,000) | (23,579,000) | $ (14,622,000) | ||
Net interest income | (2,534,000) | (1,853,000) | (4,807,000) | (3,622,000) | |
Non-interest income: | (1,474,000) | (727,000) | (1,626,000) | (1,562,000) | |
Non-interest expense: | 2,787,000 | 2,123,000 | 6,451,000 | 4,400,000 | |
Income before income taxes | (6,795,000) | (4,703,000) | (12,884,000) | (9,584,000) | |
Net income: | $ (4,306,000) | $ (3,316,000) | $ (9,168,000) | $ (6,961,000) |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Interest Rate Lock Commitments | |||||
Derivative Financial Instruments | |||||
Aggregate notional amount | $ 73,500 | $ 73,500 | $ 27,200 | ||
Forward Sales Commitments | |||||
Derivative Financial Instruments | |||||
Aggregate notional amount | 107,500 | 107,500 | 48,600 | ||
Interest rate lock commitments and forward sales commitments | |||||
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income | |||||
Net gains (losses) | (20) | $ (31) | (60) | $ (353) | |
Interest rate lock commitments and forward sales commitments | Non-interest income | |||||
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income | |||||
Gross gains | 1,929 | 1,023 | 3,007 | 1,755 | |
Interest rate lock commitments and forward sales commitments | Non-interest expense | |||||
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income | |||||
Gross (losses) | (1,949) | (1,054) | (3,067) | (2,108) | |
Interest rate lock commitments and forward sales commitments | Other assets | |||||
Fair values of derivative assets and liabilities recorded in consolidated balance sheets | |||||
Fair value recorded in other assets | 1,135 | 1,135 | 624 | ||
Interest rate lock commitments and forward sales commitments | Other liabilities | |||||
Fair values of derivative assets and liabilities recorded in consolidated balance sheets | |||||
Fair value recorded in other liabilities | 1,949 | 1,949 | 1,205 | ||
Interest rate swap | |||||
Derivative Financial Instruments | |||||
Aggregate notional amount | 407,400 | 407,400 | 243,700 | ||
Variable rate, commercial loans that are supported by the interest rate swap contracts | 203,700 | 203,700 | 121,800 | ||
Derivative cash pledged | 1,000 | ||||
Derivative securities pledged | 12,300 | 12,300 | |||
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income | |||||
Net gains (losses) | 0 | 0 | 0 | 0 | |
Interest rate swap | Non-interest income | |||||
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income | |||||
Gross gains | 73 | 489 | 164 | 1,443 | |
Interest rate swap | Non-interest expense | |||||
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income | |||||
Gross (losses) | (73) | $ (489) | (164) | $ (1,443) | |
Interest rate swap | Other assets | |||||
Fair values of derivative assets and liabilities recorded in consolidated balance sheets | |||||
Fair value recorded in other assets | 11,948 | 11,948 | 1,438 | ||
Interest rate swap | Other liabilities | |||||
Fair values of derivative assets and liabilities recorded in consolidated balance sheets | |||||
Fair value recorded in other liabilities | $ 11,948 | $ 11,948 | $ 1,438 |
Fair Value Measurements - Gener
Fair Value Measurements - General Disclosures (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | $ 1,848,073 | $ 697,685 |
Equity securities | 5,362 | 6,169 |
Loans held for sale, at fair value | 39,607 | 25,895 |
U.S. Treasury securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 58,535 | 25,411 |
Obligations of U.S. government corporations and agencies | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 290,766 | 52,342 |
Obligations of states and political subdivisions | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 278,930 | 170,044 |
Commercial mortgage-backed securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 124,155 | 1,942 |
Residential mortgage-backed securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 961,137 | 315,748 |
Corporate debt securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 134,550 | 132,198 |
Recurring basis | ||
Financial assets and financial liabilities measured at fair value | ||
Equity securities | 5,362 | 6,169 |
Loans held for sale, at fair value | 39,607 | 25,895 |
Recurring basis | Derivative assets | ||
Financial assets and financial liabilities measured at fair value | ||
Fair value recorded in other assets | 13,083 | 2,062 |
Recurring basis | Derivative liabilities | ||
Financial assets and financial liabilities measured at fair value | ||
Fair value recorded in other liabilities | 13,897 | 2,643 |
Recurring basis | U.S. Treasury securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 58,535 | 25,411 |
Recurring basis | Obligations of U.S. government corporations and agencies | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 290,766 | 52,342 |
Recurring basis | Obligations of states and political subdivisions | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 278,930 | 170,044 |
Recurring basis | Commercial mortgage-backed securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 124,155 | 1,942 |
Recurring basis | Residential mortgage-backed securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 961,137 | 315,748 |
Recurring basis | Corporate debt securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 134,550 | 132,198 |
Recurring basis | Level 1 | ||
Financial assets and financial liabilities measured at fair value | ||
Equity securities | 6,169 | |
Recurring basis | Level 2 | ||
Financial assets and financial liabilities measured at fair value | ||
Equity securities | 5,362 | |
Loans held for sale, at fair value | 39,607 | 25,895 |
Recurring basis | Level 2 | Derivative assets | ||
Financial assets and financial liabilities measured at fair value | ||
Fair value recorded in other assets | 13,083 | 2,062 |
Recurring basis | Level 2 | Derivative liabilities | ||
Financial assets and financial liabilities measured at fair value | ||
Fair value recorded in other liabilities | 13,897 | 2,643 |
Recurring basis | Level 2 | U.S. Treasury securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 58,535 | 25,411 |
Recurring basis | Level 2 | Obligations of U.S. government corporations and agencies | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 290,766 | 52,342 |
Recurring basis | Level 2 | Obligations of states and political subdivisions | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 278,930 | 170,044 |
Recurring basis | Level 2 | Commercial mortgage-backed securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 124,155 | 1,942 |
Recurring basis | Level 2 | Residential mortgage-backed securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 961,137 | 315,748 |
Recurring basis | Level 2 | Corporate debt securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | $ 134,550 | $ 132,198 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Quantitative Information (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | $ 44,612,000 | $ 50,182,000 |
Non-recurring basis | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | 7,817,000 | 10,999,000 |
OREO | 84,000 | 55,000 |
Bank property held for sale | 1,832,000 | 1,832,000 |
Non-recurring basis | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | 7,817,000 | 10,999,000 |
OREO | 84,000 | 55,000 |
Bank property held for sale | 1,832,000 | 1,832,000 |
Non-recurring basis | Level 3 | Appraisal of collateral | Impaired loans | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | 7,817,000 | 10,999,000 |
Non-recurring basis | Level 3 | Appraisal of collateral | OREO | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
OREO | 84,000 | 55,000 |
Non-recurring basis | Level 3 | Appraisal of collateral or real estate listing price | Bank property held for sale | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Bank property held for sale | $ 1,832,000 | $ 1,832,000 |
Appraisal adjustments | Non-recurring basis | Level 3 | Appraisal of collateral | Impaired loans | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans (percent) | (3.4) | (3.3) |
Appraisal adjustments | Non-recurring basis | Level 3 | Appraisal of collateral | Impaired loans | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans (percent) | (100) | (100) |
Appraisal adjustments | Non-recurring basis | Level 3 | Appraisal of collateral | Impaired loans | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | $ (24.1) | |
Impaired loans (percent) | (29.4) | |
Appraisal adjustments | Non-recurring basis | Level 3 | Appraisal of collateral | OREO | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
OREO (percent) | (25) | (25) |
Appraisal adjustments | Non-recurring basis | Level 3 | Appraisal of collateral | OREO | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
OREO (percent) | (100) | (100) |
Appraisal adjustments | Non-recurring basis | Level 3 | Appraisal of collateral | OREO | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
OREO (percent) | (61.8) | (65) |
Appraisal adjustments | Non-recurring basis | Level 3 | Appraisal of collateral or real estate listing price | Bank property held for sale | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Bank property held for sale | $ 0 | |
Bank property held for sale (percent) | 0 | |
Appraisal adjustments | Non-recurring basis | Level 3 | Appraisal of collateral or real estate listing price | Bank property held for sale | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Bank property held for sale | $ (35.1) | |
Bank property held for sale (percent) | (35.1) | |
Appraisal adjustments | Non-recurring basis | Level 3 | Appraisal of collateral or real estate listing price | Bank property held for sale | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Bank property held for sale (percent) | (28.3) | (28.3) |
Fair Value Measurements - Segre
Fair Value Measurements - Segregated by Level of Valuation Inputs (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Financial assets: | ||
Cash and cash equivalents | $ 420,207 | $ 239,973 |
Securities held to maturity | 15,934 | 603,360 |
Portfolio loans, net | 6,480,751 | 5,517,780 |
Financial liabilities: | ||
Short-term borrowings | 30,761 | |
Junior subordinated debt owed to unconsolidated trusts | 71,230 | 71,155 |
Level 1 | Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 420,207 | 239,973 |
Level 1 | Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 420,207 | 239,973 |
Level 2 | Carrying Amount | ||
Financial assets: | ||
Securities held to maturity | 15,708 | 608,660 |
Accrued interest receivable | 28,614 | 22,314 |
Financial liabilities: | ||
Time deposits | 1,749,811 | 1,497,003 |
Securities sold under agreements to repurchase | 190,846 | 185,796 |
Short-term borrowings | 30,761 | |
Long-term debt | 86,772 | 50,000 |
Junior subordinated debt owed to unconsolidated trusts | 71,230 | 71,155 |
Accrued interest payable | 7,380 | 6,568 |
Level 2 | Fair Value | ||
Financial assets: | ||
Securities held to maturity | 15,934 | 603,360 |
Accrued interest receivable | 28,614 | 22,314 |
Financial liabilities: | ||
Time deposits | 1,747,766 | 1,482,301 |
Securities sold under agreements to repurchase | 190,846 | 185,796 |
Short-term borrowings | 30,748 | |
Long-term debt | 86,873 | 49,873 |
Junior subordinated debt owed to unconsolidated trusts | 65,073 | 65,182 |
Accrued interest payable | 7,380 | 6,568 |
Level 3 | Carrying Amount | ||
Financial assets: | ||
Portfolio loans, net | 6,480,751 | 5,517,780 |
Mortgage servicing rights | 8,692 | 3,315 |
Other servicing rights | 845 | 781 |
Level 3 | Fair Value | ||
Financial assets: | ||
Portfolio loans, net | 6,447,502 | 5,473,063 |
Mortgage servicing rights | 12,772 | 11,051 |
Other servicing rights | 1,434 | 1,443 |
Level 3 | Senior notes | Carrying Amount | ||
Financial liabilities: | ||
Long-term debt | 39,607 | 39,539 |
Level 3 | Senior notes | Fair Value | ||
Financial liabilities: | ||
Long-term debt | 40,419 | 39,452 |
Level 3 | Subordinated debt | Carrying Amount | ||
Financial liabilities: | ||
Long-term debt | 59,197 | 59,147 |
Level 3 | Subordinated debt | Fair Value | ||
Financial liabilities: | ||
Long-term debt | $ 59,719 | $ 58,186 |
Leases (Details)
Leases (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Leases | |
Right of use asset | $ 10,426 |
Lease liability | $ 10,531 |
Leases - Lease cost and other l
Leases - Lease cost and other lease information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Lease Costs | ||||
Operating lease costs | $ 584 | $ 1,117 | ||
Variable lease costs | 119 | 230 | ||
Short-term lease costs | 8 | 23 | ||
Net lease cost | 711 | $ 700 | 1,370 | $ 1,400 |
Cash paid for amounts included in the measurement of lease liabilities | ||||
Operating lease cash flows - Fixed payments | 570 | 1,083 | ||
Operating lease cash flows - Liability reduction | 490 | 953 | ||
Right of use assets obtained during the period in exchange for operating lease liabilities | $ 764 | $ 764 | ||
Weighted average lease term (in years) | 6 years 9 months 21 days | 6 years 9 months 21 days | ||
Weighted average discount rate (in percent) | 3.04% | 3.04% |
Leases - Future rent commitment
Leases - Future rent commitments (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Projected minimum rental payments under the terms of leases | |
2019 | $ 1,150 |
2020 | 2,342 |
2021 | 1,730 |
2022 | 1,375 |
2023 | 1,217 |
Thereafter | 3,896 |
Amounts representing interest | (1,179) |
Present value of net future minimum lease payments | $ 10,531 |