Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 15, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | 1ST SOURCE CORP | |
Entity Central Index Key | 34,782 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 25,866,884 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and due from banks | $ 58,944 | $ 65,171 |
Federal funds sold and interest bearing deposits with other banks | 14,297 | 14,550 |
Investment securities available-for-sale | 814,258 | 791,727 |
Other investments | 21,973 | 21,973 |
Mortgages held for sale | 15,924 | 9,825 |
Loans and leases - net of unearned discount | ||
Loans and leases | 4,152,763 | 3,994,692 |
Reserve for loan and lease losses | (91,458) | (88,112) |
Net loans and leases | 4,061,305 | 3,906,580 |
Equipment owned under operating leases, net | 119,312 | 110,371 |
Net premises and equipment | 54,506 | 53,191 |
Goodwill and intangible assets | 84,386 | 84,676 |
Accrued income and other assets | 135,033 | 129,852 |
Total assets | 5,379,938 | 5,187,916 |
Deposits: | ||
Noninterest-bearing demand | 944,626 | 902,364 |
Interest-bearing demand | 1,391,823 | 1,350,417 |
Savings | 779,899 | 745,661 |
Time | 1,208,736 | 1,140,744 |
Total interest-bearing deposits | 3,380,458 | 3,236,822 |
Total deposits | 4,325,084 | 4,139,186 |
Short-term borrowings: | ||
Federal funds purchased and securities sold under agreements to repurchase | 161,826 | 130,662 |
Other short-term borrowings | 44,150 | 102,567 |
Total short-term borrowings | 205,976 | 233,229 |
Long-term debt and mandatorily redeemable securities | 64,738 | 57,379 |
Subordinated notes | 58,764 | 58,764 |
Accrued expenses and other liabilities | 63,620 | 55,305 |
Total liabilities | 4,718,182 | 4,543,863 |
SHAREHOLDERS' EQUITY | ||
Preferred stock; no par value Authorized 10,000,000 shares; none issued or outstanding | 0 | 0 |
Common stock; no par value Authorized 40,000,000 shares; issued 28,205,674 at June 30, 2016 and December 31, 2015 | 436,538 | 436,538 |
Retained earnings | 270,744 | 251,812 |
Cost of common stock in treasury (2,342,904 shares at June 30, 2016 and 2,178,090 shares at December 31, 2015) | (56,357) | (50,852) |
Accumulated other comprehensive income | 10,831 | 6,555 |
Total shareholders' equity | 661,756 | 644,053 |
Total liabilities and shareholders' equity | 5,379,938 | 5,187,916 |
Commercial and agricultural | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 759,175 | 744,749 |
Reserve for loan and lease losses | (14,835) | (15,456) |
Auto and light truck | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 457,586 | 425,236 |
Reserve for loan and lease losses | (11,667) | (9,269) |
Medium and heavy duty truck | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 273,674 | 278,254 |
Reserve for loan and lease losses | (4,350) | (4,699) |
Aircraft | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 822,842 | 778,012 |
Reserve for loan and lease losses | (34,661) | (32,373) |
Construction equipment | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 484,354 | 455,565 |
Reserve for loan and lease losses | (7,512) | (7,592) |
Commercial real estate | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 715,932 | 700,268 |
Reserve for loan and lease losses | (13,462) | (13,762) |
Residential real estate and home equity | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 482,979 | 464,129 |
Reserve for loan and lease losses | (3,377) | (3,382) |
Consumer | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 156,221 | 148,479 |
Reserve for loan and lease losses | $ (1,594) | $ (1,579) |
CONSOLIDATED STATEMENTS OF FIN3
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock; no par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, Authorized shares | 10,000,000 | 10,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock; no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, Authorized shares | 40,000,000 | 40,000,000 |
Common stock, issued shares | 28,205,674 | 28,205,674 |
Cost of common stock in treasury, shares | 2,342,904 | 2,178,090 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |||
Interest income: | ||||||
Loans and leases | $ 43,891 | $ 42,583 | $ 86,627 | $ 82,187 | ||
Investment securities, taxable | 3,040 | 2,648 | 6,120 | 5,652 | ||
Investment securities, tax-exempt | 697 | 754 | 1,389 | 1,523 | ||
Other | 309 | 229 | 600 | 484 | ||
Total interest income | 47,937 | 46,214 | 94,736 | 89,846 | ||
Interest expense: | ||||||
Deposits | 3,790 | 2,838 | 7,561 | 5,397 | ||
Short-term borrowings | 119 | 131 | 280 | 234 | ||
Subordinated notes | 1,055 | 1,055 | 2,110 | 2,110 | ||
Long-term debt and mandatorily redeemable securities | 680 | 525 | 1,203 | 1,004 | ||
Total interest expense | 5,644 | 4,549 | 11,154 | 8,745 | ||
Net interest income | 42,293 | 41,665 | 83,582 | 81,101 | ||
Provision for loan and lease losses | 2,049 | 811 | 3,024 | 1,168 | ||
Net interest income after provision for loan and lease losses | 40,244 | 40,854 | 80,558 | 79,933 | ||
Noninterest income: | ||||||
Trust fees | 5,108 | 5,247 | 9,731 | 9,804 | ||
Service charges on deposit accounts | 2,276 | 2,367 | 4,383 | 4,564 | ||
Debit card | 2,816 | 2,628 | 5,415 | 5,027 | ||
Mortgage banking | 1,115 | 1,239 | 2,161 | 2,490 | ||
Insurance commissions | 1,233 | 1,382 | 2,796 | 2,687 | ||
Equipment rental | 6,517 | 5,342 | 12,590 | 10,421 | ||
(Losses) gains on investment securities available-for-sale | (209) | 4 | (199) | 4 | ||
Other | 3,441 | 3,322 | 7,047 | 6,285 | ||
Total noninterest income | 22,297 | 21,531 | 43,924 | 41,282 | ||
Noninterest expense: | ||||||
Salaries and employee benefits | 21,194 | 20,794 | 42,545 | 41,719 | ||
Net occupancy | 2,307 | 2,345 | 4,808 | 4,806 | ||
Furniture and equipment | 4,811 | 4,531 | 9,601 | 8,867 | ||
Depreciation - leased equipment | 5,444 | 4,396 | 10,545 | 8,484 | ||
Professional fees | 1,190 | 1,108 | 2,409 | 1,978 | ||
Supplies and communication | 1,374 | 1,409 | 2,882 | 2,815 | ||
FDIC and other insurance | 911 | 847 | 1,790 | 1,696 | ||
Business development and marketing | 1,025 | 1,214 | 2,005 | 2,263 | ||
Loan and lease collection and repossession | 385 | (294) | 812 | 69 | ||
Other | 1,393 | 1,891 | 3,342 | 3,605 | ||
Total noninterest expense | 40,034 | 38,241 | 80,739 | 76,302 | ||
Income before income taxes | 22,507 | 24,144 | 43,743 | 44,913 | ||
Income tax expense | 8,028 | 8,514 | 15,446 | 15,772 | ||
Net income | $ 14,479 | $ 15,630 | $ 28,297 | $ 29,141 | ||
Per common share: | ||||||
Basic net income per common share (in dollars per share) | $ 0.56 | $ 0.59 | [1] | $ 1.08 | $ 1.10 | [1] |
Diluted net income per common share (in dollars per share) | 0.56 | 0.59 | [1] | 1.08 | 1.10 | [1] |
Cash dividends (in dollars per share) | $ 0.180 | $ 0.164 | [1] | $ 0.360 | $ 0.327 | [1] |
Basic weighted average common shares outstanding (in shares) | 25,853,537 | 26,212,999 | [1] | 25,888,534 | 26,235,511 | [1] |
Diluted weighted average common shares outstanding (in shares) | 25,853,537 | 26,212,999 | [1] | 25,888,534 | 26,235,511 | [1] |
[1] | *The computation of the three and six months ended June 30, 2015 per common share data and shares outstanding gives retrospective recognition to a 10% stock dividend declared on July 22, 2015 and issued on August 14, 2015. |
CONSOLIDATED STATEMENTS OF INC5
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) | Jul. 22, 2015 |
Income Statement [Abstract] | |
Common stock dividend rate | 10.00% |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 14,479 | $ 15,630 | $ 28,297 | $ 29,141 |
Other comprehensive income (loss): | ||||
Change in unrealized appreciation (depreciation) of available-for-sale securities | 2,244 | (4,727) | 6,647 | (1,781) |
Reclassification adjustment for realized losses (gains) included in net income | 209 | (4) | 199 | (4) |
Income tax effect | (921) | 1,776 | (2,570) | 670 |
Other comprehensive income (loss), net of tax | 1,532 | (2,955) | 4,276 | (1,115) |
Comprehensive income | $ 16,011 | $ 12,675 | $ 32,573 | $ 28,026 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Retained Earnings | Cost of Common Stock in Treasury | Accumulated Other Comprehensive Income (Loss), Net |
Balance at Dec. 31, 2014 | $ 614,473 | $ 346,535 | $ 302,242 | $ (43,711) | $ 9,407 |
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 29,141 | 29,141 | |||
Other comprehensive income (loss) | (1,115) | (1,115) | |||
Issuance of 104,853 and 112,483 common shares under stock based compensation awards, including related tax effects for the six months ended on June 30, 2016 and 2015, respectively | 2,446 | (237) | 2,683 | ||
Cost of 269,667 and 164,829 shares of common stock acquired for treasury for the six months ended on June 30, 2016 and 2015, respectively | (4,678) | (4,678) | |||
Common stock dividend ($0.360 and $0.327 per share for the six months ended on June 30, 2016 and 2015, respectively) | (8,636) | (8,636) | |||
10% common stock dividend | 90,003 | (90,003) | |||
Balance at Jun. 30, 2015 | 631,631 | 436,538 | 232,507 | (45,706) | 8,292 |
Balance at Dec. 31, 2015 | 644,053 | 436,538 | 251,812 | (50,852) | 6,555 |
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 28,297 | 28,297 | |||
Other comprehensive income (loss) | 4,276 | 4,276 | |||
Issuance of 104,853 and 112,483 common shares under stock based compensation awards, including related tax effects for the six months ended on June 30, 2016 and 2015, respectively | 2,504 | 4 | 2,500 | ||
Cost of 269,667 and 164,829 shares of common stock acquired for treasury for the six months ended on June 30, 2016 and 2015, respectively | (8,005) | (8,005) | |||
Common stock dividend ($0.360 and $0.327 per share for the six months ended on June 30, 2016 and 2015, respectively) | (9,369) | (9,369) | |||
Balance at Jun. 30, 2016 | $ 661,756 | $ 436,538 | $ 270,744 | $ (56,357) | $ 10,831 |
CONSOLIDATED STATEMENTS OF SHA8
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | ||
Statement of Stockholders' Equity [Abstract] | |||
Issuance of common shares under stock based compensation awards, including related tax effects | 104,853 | 112,483 | [1] |
Common stock acquired for treasury | 269,667 | 164,829 | [1] |
Common stock dividend (in dollars per share) | $ 0.360 | $ 0.327 | [2] |
[1] | *Share and per share data gives retrospective recognition to a 10% stock dividend declared on July 22, 2015 and issued on August 14, 2015. | ||
[2] | *The computation of the three and six months ended June 30, 2015 per common share data and shares outstanding gives retrospective recognition to a 10% stock dividend declared on July 22, 2015 and issued on August 14, 2015. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Operating activities: | ||
Net income | $ 28,297 | $ 29,141 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan and lease losses | 3,024 | 1,168 |
Depreciation of premises and equipment | 2,596 | 2,302 |
Depreciation of equipment owned and leased to others | 10,545 | 8,484 |
Stock-based compensation | 1,399 | 2,079 |
Amortization of investment security premiums and accretion of discounts, net | 2,553 | 2,597 |
Amortization of mortgage servicing rights | 716 | 778 |
Deferred income taxes | (742) | (2,159) |
Losses (gains) on investment securities available-for-sale | 199 | (4) |
Originations of loans held for sale, net of principal collected | (50,830) | (66,312) |
Proceeds from the sales of loans held for sale | 46,151 | 67,143 |
Net gain on sale of loans held for sale | (1,420) | (2,009) |
Net gain on sale of other real estate and repossessions | (135) | (772) |
Change in trading account securities | 0 | (6) |
Change in interest receivable | (173) | 117 |
Change in interest payable | 907 | 289 |
Change in other assets | (2,655) | 987 |
Change in other liabilities | 8,177 | (1,032) |
Other | (857) | 690 |
Net change in operating activities | 47,752 | 43,481 |
Investing activities: | ||
Proceeds from sales of investment securities | 3,956 | 1,299 |
Proceeds from maturities of investment securities | 108,215 | 47,314 |
Purchases of investment securities | (130,607) | (48,344) |
Net change in other investments | 0 | 58 |
Loans sold or participated to others | 0 | 1,962 |
Net change in loans and leases | (159,218) | (171,601) |
Net change in equipment owned under operating leases | (19,486) | (28,216) |
Purchases of premises and equipment | (3,991) | (2,934) |
Proceeds from sales of other real estate and repossessions | 714 | 6,536 |
Net change in investing activities | (200,417) | (193,926) |
Financing activities: | ||
Net change in demand deposits and savings accounts | 117,906 | 104,266 |
Net change in time deposits | 67,992 | 55,459 |
Net change in short-term borrowings | (27,253) | 16,365 |
Proceeds from issuance of long-term debt | 10,832 | 0 |
Payments on long-term debt | (5,703) | (743) |
Stock issued under stock purchase plans | 116 | 149 |
Acquisition of treasury stock | (8,005) | (4,678) |
Cash dividends paid on common stock | (9,700) | (8,865) |
Net change in financing activities | 146,185 | 161,953 |
Net change in cash and cash equivalents | (6,480) | 11,508 |
Cash and cash equivalents, beginning of year | 79,721 | 66,190 |
Cash and cash equivalents, end of period | 73,241 | 77,698 |
Non-cash transactions: | ||
Loans transferred to other real estate and repossessed assets | 1,469 | 5,866 |
Common stock matching contribution to Employee Stock Ownership and Profit Sharing Plan | $ 800 | $ 500 |
Accounting Policies
Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Accounting Policies | 1st Source Corporation is a bank holding company headquartered in South Bend, Indiana that provides, through its subsidiaries (collectively referred to as “1st Source” or “the Company”), a broad array of financial products and services. Basis of Presentation – The accompanying unaudited consolidated financial statements reflect all adjustments (all of which are normal and recurring in nature) which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position, the results of operations, changes in comprehensive income, changes in shareholders’ equity, and cash flows for the periods presented. These unaudited consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission (SEC) and, therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been omitted. The Notes to the Consolidated Financial Statements appearing in 1st Source Corporation’s Annual Report on Form 10-K (2015 Annual Report), which include descriptions of significant accounting policies, should be read in conjunction with these interim financial statements. The Consolidated Statement of Financial Condition at December 31, 2015 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the current year presentation. Use of Estimates in the Preparation of Financial Statements – Financial statements prepared in accordance with GAAP require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates. Loans and Leases – Loans are stated at the principal amount outstanding, net of unamortized deferred loan origination fees and costs and net of unearned income. Interest income is accrued as earned based on unpaid principal balances. Origination fees and direct loan and lease origination costs are deferred and the net amount amortized to interest income over the estimated life of the related loan or lease. Loan commitment fees are deferred and amortized into other income over the commitment period. Direct financing leases are carried at the aggregate of lease payments plus estimated residual value of the leased property, net of unamortized deferred lease origination fees and costs and unearned income. Interest income on direct financing leases is recognized over the term of the lease to achieve a constant periodic rate of return on the outstanding investment. The accrual of interest on loans and leases is discontinued when a loan or lease becomes contractually delinquent for 90 days, or when an individual analysis of a borrower’s credit worthiness indicates a credit should be placed on nonperforming status, except for residential mortgage loans and consumer loans that are well secured and in the process of collection. Residential mortgage loans are placed on nonaccrual at the time the loan is placed in foreclosure. When interest accruals are discontinued, interest credited to income in the current year is reversed and interest accrued in the prior year is charged to the reserve for loan and lease losses. However, in some cases, the Company may elect to continue the accrual of interest when the net realizable value of collateral is sufficient to cover the principal and accrued interest. When a loan or lease is classified as nonaccrual and the future collectibility of the recorded loan or lease balance is doubtful, collections on interest and principal are applied as a reduction to principal outstanding. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured, which is typically evidenced by a sustained repayment performance of at least six months . A loan or lease is considered impaired, based on current information and events, if it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan or lease agreement. Interest on impaired loans and leases, which are not classified as nonaccrual, is recognized on the accrual basis. The Company evaluates loans and leases exceeding $100,000 for impairment and establishes a specific reserve as a component of the reserve for loan and lease losses when it is probable all amounts due will not be collected pursuant to the contractual terms of the loan or lease and the recorded investment in the loan or lease exceeds its fair value. Loans and leases that have been modified and economic concessions have been granted to borrowers who have experienced financial difficulties are considered a troubled debt restructuring (TDR) and, by definition, are deemed an impaired loan. These concessions typically result from the Company’s loss mitigation activities and may include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructuring and typically are returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period of at least six months. When the Company modifies loans and leases in a TDR, it evaluates any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan or lease agreement, or uses the current fair value of the collateral, less selling costs for collateral dependent loans. If the Company determines that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through a reserve for loan and lease losses estimate or a charge-off to the reserve for loan and lease losses. In periods subsequent to modification, the Company evaluates all TDRs, including those that have payment defaults, for possible impairment and recognizes impairment through the reserve for loan and lease losses. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Measurement of Credit Losses on Financial Instruments: In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, “Financial Instruments-Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” The provisions of ASU 2016-13 were issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other commitments to extend credit held by a reporting entity at each reporting date. ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The amendments in ASU 2016-13 eliminate the probable incurred loss recognition in current GAAP and reflect an entity’s current estimate of all expected credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the financial assets. For purchased financial assets with a more-than-insignificant amount of credit deterioration since origination (“PCD assets”) that are measured at amortized cost, the initial allowance for credit losses is added to the purchase price rather than being reported as a credit loss expense. Subsequent changes in the allowance for credit losses on PCD assets are recognized through the statement of income as a credit loss expense. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down to the security. ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact of ASU 2016-13 on its accounting and disclosures. Share Based Payment Accounting: In March 2016, the FASB issued ASU No. 2016-09 “ Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also allows an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election for forfeitures as they occur. The guidance is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those years. Early adoption is permitted. The Company continues to assess ASU 2016-09 but does not expect a significant impact on its accounting and disclosures. Leases: In February 2016, the FASB issued ASU No. 2016-02 “ Leases (Topic 842).” ASU 2016-02 establishes a right of use model that requires a lessee to record a right of use asset and a lease liability for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. A lease will be treated as sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing. If the lessor doesn’t convey risks and rewards or control, an operating lease results. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public business entities. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements, with certain practical expedients available. Early adoption is permitted. The Company is assessing the impact of ASU 2016-02 on its accounting and disclosures. Recognition and Measurement of Financial Instruments: In January 2016, the FASB issued ASU No. 2016-01 “ Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 is intended to improve the recognition and measurement of financial instruments by requiring equity investments to be measured at fair value with changes in fair value recognized in net income; requiring public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; eliminating the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured and amortized at cost on the balance sheet; and requiring a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. ASU 2016-01 is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2017. The amendments should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) should be applied prospectively to equity investments that exist as of the date of adoption. The Company is assessing the impact of ASU 2016-01 on its accounting and disclosures. Short Duration Contracts: In May 2015, the FASB issued ASU No. 2015-09 “ Financial Services - Insurance (Topic 944) - Disclosures about Short Duration Contracts.” ASU 2015-09 includes amendments that require insurance entities to disclose for annual reporting periods information about the liability for unpaid claims and claim adjustment expenses as well as significant changes in methodologies and assumptions used to calculate the liability for unpaid claims and claim adjustment expenses. In addition, the amendments require a roll-forward of the liability for unpaid claims and claim adjustment expenses on an annual and interim basis. The amendments are effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016 and should be applied retrospectively. Early adoption is permitted. The Company has determined that ASU 2015-09 applies to certain insurance lines of business and is assessing the impact on its disclosures. Consolidations: In February 2015, the FASB issued ASU No. 2015-02 “ Consolidation (Topic 810) - Amendments to the Consolidation Analysis.” ASU 2015-02 includes amendments that are intended to improve targeted areas of consolidation for legal entities including reducing the number of consolidation models from four to two and simplifying the FASB Accounting Standards Codification. ASU 2015-02 is effective for annual and interim periods within those annual periods, beginning after December 15, 2015. The amendments may be applied retrospectively in previously issued financial statements for one or more years with a cumulative effect adjustment to retained earnings as of the beginning of the first year restated. Early adoption is permitted, including adoption in an interim period. The Company adopted ASU 2015-02 on January 1, 2016 and it did not have an impact on its accounting and disclosures. Revenue from Contracts with Customers: In May 2014, the FASB issued ASU No. 2014-09 “ Revenue from Contracts with Customers (Topic 606).” The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. On July 9, 2015, the FASB approved amendments deferring the effective date by one year. ASU 2014-09 is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted but not before the original public entity effective date, i.e ., annual periods beginning after December 15, 2016. In March 2016, the FASB issued final amendments (ASU No. 2016-08 and ASU No. 2016-10) to clarify the implementation guidance for principal versus agent considerations, identifying performance obligations and the accounting for licenses of intellectual property. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this Update recognized at the date of initial application. In May 2016, the FASB issued final amendments (ASU No. 2016-12 and ASU 2016-11) to address narrow-scope improvements to the guidance on collectibility, non-cash consideration, completed contracts at transition and to provide a practical expedient for contract modifications at transition and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. Additionally, the amendments included a rescission of SEC guidance because of ASU 2014-09 related to revenue and expense recognition for freight services in process, accounting for shipping and handling fees and costs, and accounting for consideration given by a vendor to a customer. These amendments are effective upon the adoption of ASU 2014-09. The Company continues to assess the impact of ASU 2014-09 on its accounting and disclosures. |
Investment Securities
Investment Securities | 6 Months Ended |
Jun. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment Securities Available-For-Sale The following table shows investment securities available-for-sale. (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value June 30, 2016 U.S. Treasury and Federal agencies securities $ 396,740 $ 3,396 $ (5 ) $ 400,131 U.S. States and political subdivisions securities 125,917 3,364 (63 ) 129,218 Mortgage-backed securities — Federal agencies 239,829 4,982 (272 ) 244,539 Corporate debt securities 32,032 398 — 32,430 Foreign government and other securities 800 10 — 810 Total debt securities 795,318 12,150 (340 ) 807,128 Marketable equity securities 1,599 5,533 (2 ) 7,130 Total investment securities available-for-sale $ 796,917 $ 17,683 $ (342 ) $ 814,258 December 31, 2015 U.S. Treasury and Federal agencies securities $ 389,457 $ 1,718 $ (1,506 ) $ 389,669 U.S. States and political subdivisions securities 120,441 2,692 (143 ) 122,990 Mortgage-backed securities — Federal agencies 234,400 3,430 (1,533 ) 236,297 Corporate debt securities 34,241 199 (57 ) 34,383 Foreign government and other securities 800 10 (1 ) 809 Total debt securities 779,339 8,049 (3,240 ) 784,148 Marketable equity securities 1,893 5,906 (220 ) 7,579 Total investment securities available-for-sale $ 781,232 $ 13,955 $ (3,460 ) $ 791,727 At June 30, 2016 and December 31, 2015 , the residential mortgage-backed securities held by the Company consisted primarily of GNMA, FNMA and FHLMC pass-through certificates which are guaranteed by those respective agencies of the United States government (Government Sponsored Enterprise, GSEs). The following table shows the contractual maturities of investments in debt securities available-for-sale at June 30, 2016 . Expected maturities will differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. (Dollars in thousands) Amortized Cost Fair Value Due in one year or less $ 214,503 $ 215,323 Due after one year through five years 318,873 324,549 Due after five years through ten years 22,113 22,717 Due after ten years — — Mortgage-backed securities 239,829 244,539 Total debt securities available-for-sale $ 795,318 $ 807,128 The following table summarizes gross unrealized losses and fair value by investment category and age. Less than 12 Months 12 months or Longer Total (Dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses June 30, 2016 U.S. Treasury and Federal agencies securities $ 5,974 $ (5 ) $ — $ — $ 5,974 $ (5 ) U.S. States and political subdivisions securities 7,237 (22 ) 4,474 (41 ) 11,711 (63 ) Mortgage-backed securities - Federal agencies 23,770 (78 ) 15,147 (194 ) 38,917 (272 ) Corporate debt securities — — — — — — Foreign government and other securities — — — — — — Total debt securities 36,981 (105 ) 19,621 (235 ) 56,602 (340 ) Marketable equity securities 1 — 3 (2 ) 4 (2 ) Total investment securities available-for-sale $ 36,982 $ (105 ) $ 19,624 $ (237 ) $ 56,606 $ (342 ) December 31, 2015 U.S. Treasury and Federal agencies securities $ 151,581 $ (928 ) $ 43,372 $ (578 ) $ 194,953 $ (1,506 ) U.S. States and political subdivisions securities 17,040 (79 ) 3,795 (64 ) 20,835 (143 ) Mortgage-backed securities - Federal agencies 78,731 (777 ) 20,592 (756 ) 99,323 (1,533 ) Corporate debt securities 9,340 (57 ) — — 9,340 (57 ) Foreign government and other securities 99 (1 ) — — 99 (1 ) Total debt securities 256,791 (1,842 ) 67,759 (1,398 ) 324,550 (3,240 ) Marketable equity securities 427 (218 ) 3 (2 ) 430 (220 ) Total investment securities available-for-sale $ 257,218 $ (2,060 ) $ 67,762 $ (1,400 ) $ 324,980 $ (3,460 ) The initial indication of other-than-temporary-impairment (OTTI) for both debt and equity securities is a decline in fair value below amortized cost. Quarterly, the impaired securities are analyzed on a qualitative and quantitative basis in determining OTTI. Declines in the fair value of available-for-sale debt securities below their cost that are deemed to be other-than-temporary are reflected in earnings as realized losses to the extent the impairment is related to credit losses. The amount of impairment related to other factors is recognized in other comprehensive income. In estimating OTTI losses, the Company considers among other things, (i) the length of time and the extent to which fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) whether it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. At June 30, 2016 , the Company does not have the intent to sell any of the available-for-sale securities in the table above and believes that it is more likely than not, that it will not have to sell any such securities before an anticipated recovery of cost. Primarily the unrealized losses on debt securities are due to increases in market rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover on all debt securities as they approach their maturity date or re-pricing date or if market yields for such investments decline. The Company does not believe any of the securities are impaired due to reasons of credit quality. The following table shows the gross realized gains and losses from the securities available-for-sale portfolio, including marketable equity securities. Realized gains and losses of all securities are computed using the specific identification cost basis. Three Months Ended Six Months Ended (Dollars in thousands) 2016 2015 2016 2015 Gross realized gains $ 85 $ 4 $ 95 $ 4 Gross realized losses — — — — OTTI losses (294 ) — (294 ) — Net realized (losses) gains $ (209 ) $ 4 $ (199 ) $ 4 At June 30, 2016 and December 31, 2015 , investment securities available-for-sale with carrying values of $249.00 million and $233.14 million , respectively, were pledged as collateral for security repurchase agreements and for other purposes. |
Loan and Lease Financings
Loan and Lease Financings | 6 Months Ended |
Jun. 30, 2016 | |
Receivables [Abstract] | |
Loan and Lease Financings | Loan and Lease Financings The Company evaluates loans and leases for credit quality at least annually but more frequently if certain circumstances occur (such as material new information which becomes available and indicates a potential change in credit risk). The Company uses two methods to assess credit risk: loan or lease credit quality grades and credit risk classifications. The purpose of the loan or lease credit quality grade is to document the degree of risk associated with individual credits as well as inform management of the degree of risk in the portfolio taken as a whole. Credit risk classifications are used to categorize loans by degree of risk and to designate individual or committee approval authorities for higher risk credits at the time of origination. Credit risk classifications include categories for: Acceptable, Marginal, Special Attention, Special Risk, Restricted by Policy, Regulated and Prohibited by Law. All loans and leases, except residential real estate and home equity loans and consumer loans, are assigned credit quality grades on a scale from 1 to 12 with grade 1 representing superior credit quality. The criteria used to assign grades to extensions of credit that exhibit potential problems or well-defined weaknesses are primarily based upon the degree of risk and the likelihood of orderly repayment, and their effect on the Company’s safety and soundness. Loans or leases graded 7 or weaker are considered “special attention” credits and, as such, relationships in excess of $100,000 are reviewed quarterly as part of management’s evaluation of the appropriateness of the reserve for loan and lease losses. Grade 7 credits are defined as “watch” and contain greater than average credit risk and are monitored to limit the exposure to increased risk; grade 8 credits are “special mention” and, following regulatory guidelines, are defined as having potential weaknesses that deserve management’s close attention. Credits that exhibit well-defined weaknesses and a distinct possibility of loss are considered “classified” and are graded 9 through 12 corresponding to the regulatory definitions of “substandard” (grades 9 and 10) and the more severe “doubtful” (grade 11) and “loss” (grade 12). The following table shows the credit quality grades of the recorded investment in loans and leases, segregated by class. Credit Quality Grades (Dollars in thousands) 1-6 7-12 Total June 30, 2016 Commercial and agricultural $ 725,345 $ 33,830 $ 759,175 Auto and light truck 427,067 30,519 457,586 Medium and heavy duty truck 271,809 1,865 273,674 Aircraft 792,536 30,306 822,842 Construction equipment 479,698 4,656 484,354 Commercial real estate 704,188 11,744 715,932 Total $ 3,400,643 $ 112,920 $ 3,513,563 December 31, 2015 Commercial and agricultural $ 710,030 $ 34,719 $ 744,749 Auto and light truck 413,836 11,400 425,236 Medium and heavy duty truck 275,367 2,887 278,254 Aircraft 750,264 27,748 778,012 Construction equipment 448,683 6,882 455,565 Commercial real estate 680,304 19,964 700,268 Total $ 3,278,484 $ 103,600 $ 3,382,084 For residential real estate and home equity and consumer loans, credit quality is based on the aging status of the loan and by payment activity. The following table shows the recorded investment in residential real estate and home equity and consumer loans by performing or nonperforming status. Nonperforming loans are those loans which are on nonaccrual status or are 90 days or more past due. (Dollars in thousands) Performing Nonperforming Total June 30, 2016 Residential real estate and home equity $ 481,128 $ 1,851 $ 482,979 Consumer 155,533 688 156,221 Total $ 636,661 $ 2,539 $ 639,200 December 31, 2015 Residential real estate and home equity $ 462,236 $ 1,893 $ 464,129 Consumer 148,180 299 148,479 Total $ 610,416 $ 2,192 $ 612,608 The following table shows the recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status. (Dollars in thousands) Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due and Accruing Total Accruing Loans Nonaccrual Total Financing Receivables June 30, 2016 Commercial and agricultural $ 755,391 $ 175 $ 16 $ — $ 755,582 $ 3,593 $ 759,175 Auto and light truck 457,190 336 13 — 457,539 47 457,586 Medium and heavy duty truck 273,674 — — — 273,674 — 273,674 Aircraft 811,062 7,500 — — 818,562 4,280 822,842 Construction equipment 482,657 1,028 — — 483,685 669 484,354 Commercial real estate 713,651 554 — — 714,205 1,727 715,932 Residential real estate and home equity 479,970 769 389 234 481,362 1,617 482,979 Consumer 155,129 356 48 42 155,575 646 156,221 Total $ 4,128,724 $ 10,718 $ 466 $ 276 $ 4,140,184 $ 12,579 $ 4,152,763 December 31, 2015 Commercial and agricultural $ 740,335 $ 52 $ 79 $ — $ 740,466 $ 4,283 $ 744,749 Auto and light truck 424,997 170 23 — 425,190 46 425,236 Medium and heavy duty truck 278,254 — — — 278,254 — 278,254 Aircraft 764,074 9,442 108 — 773,624 4,388 778,012 Construction equipment 454,993 33 — — 455,026 539 455,565 Commercial real estate 698,514 362 — — 698,876 1,392 700,268 Residential real estate and home equity 460,771 1,038 427 71 462,307 1,822 464,129 Consumer 147,419 552 209 51 148,231 248 148,479 Total $ 3,969,357 $ 11,649 $ 846 $ 122 $ 3,981,974 $ 12,718 $ 3,994,692 The following table shows impaired loans and leases, segregated by class, and the corresponding reserve for impaired loan and lease losses. (Dollars in thousands) Recorded Investment Unpaid Principal Balance Related Reserve June 30, 2016 With no related reserve recorded: Commercial and agricultural $ 743 $ 743 $ — Auto and light truck — — — Medium and heavy duty truck — — — Aircraft 2,450 2,450 — Construction equipment 577 577 — Commercial real estate 1,541 1,541 — Residential real estate and home equity — — — Consumer — — — Total with no related reserve recorded 5,311 5,311 — With a reserve recorded: Commercial and agricultural 2,441 2,441 463 Auto and light truck — — — Medium and heavy duty truck — — — Aircraft 1,830 1,830 1,296 Construction equipment — — — Commercial real estate — — — Residential real estate and home equity 363 365 145 Consumer — — — Total with a reserve recorded 4,634 4,636 1,904 Total impaired loans $ 9,945 $ 9,947 $ 1,904 December 31, 2015 With no related reserve recorded: Commercial and agricultural $ 1,016 $ 1,016 $ — Auto and light truck — — — Medium and heavy duty truck — — — Aircraft 4,384 4,384 — Construction equipment 539 539 — Commercial real estate 8,494 8,494 — Residential real estate and home equity — — — Consumer — — — Total with no related reserve recorded 14,433 14,433 — With a reserve recorded: Commercial and agricultural 2,884 2,884 649 Auto and light truck — — — Medium and heavy duty truck — — — Aircraft — — — Construction equipment — — — Commercial real estate — — — Residential real estate and home equity 366 368 148 Consumer — — — Total with a reserve recorded 3,250 3,252 797 Total impaired loans $ 17,683 $ 17,685 $ 797 The following table shows average recorded investment and interest income recognized on impaired loans and leases, segregated by class. Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (Dollars in thousands) Average Recorded Investment Interest Income Average Recorded Investment Interest Income Average Recorded Investment Interest Income Average Recorded Investment Interest Income Commercial and agricultural $ 3,449 $ — $ 2,134 $ 6 $ 3,579 $ 4 $ 5,971 $ 16 Auto and light truck — — — — — — — — Medium and heavy duty truck — — — — — — — — Aircraft 4,341 — 7,269 — 4,184 — 8,207 6 Construction equipment 514 — 731 — 697 — 735 — Commercial real estate 6,100 — 10,735 142 7,251 123 11,319 284 Residential real estate and home equity 364 4 371 4 365 8 372 8 Consumer — — — — — — — — Total $ 14,768 $ 4 $ 21,240 $ 152 $ 16,076 $ 135 $ 26,604 $ 314 There were no loan and lease modifications classified as troubled debt restructurings (TDR) during the three and six months ended June 30, 2016 and 2015 . The classification between nonperforming and performing is determined at the time of modification. Modification programs focus on extending maturity dates or modifying payment patterns with most TDRs experiencing a combination of concessions. Modifications do not result in the contractual forgiveness of principal or interest. There were no TDRs which had payment defaults within the twelve months following modification during the three and six months ended June 30, 2016 and 2015 . Default occurs when a loan or lease is 90 days or more past due under the modified terms or transferred to nonaccrual. The following table shows the recorded investment of loans and leases classified as troubled debt restructurings as of June 30, 2016 and December 31, 2015 . (Dollars in thousands) June 30, December 31, Performing TDRs $ 363 $ 7,437 Nonperforming TDRs 1,844 1,926 Total TDRs $ 2,207 $ 9,363 |
Reserve for Loan and Lease Loss
Reserve for Loan and Lease Losses | 6 Months Ended |
Jun. 30, 2016 | |
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract] | |
Reserve for Loan and Lease Losses | Reserve for Loan and Lease Losses The reserve for loan and lease loss methodology has been consistently applied for several years, with enhancements instituted periodically. Reserve ratios are reviewed quarterly and revised periodically to reflect recent loss history and to incorporate current risks and trends which may not be recognized in historical data. As the historical charge-off analysis is updated, the Company reviews the look-back periods for each business loan portfolio. Furthermore, a thorough analysis of charge-offs, non-performing asset levels, special attention outstandings and delinquency is performed in order to review portfolio trends and other factors, including specific industry risks and economic conditions, which may have an impact on the reserves and reserve ratios applied to various portfolios. The Company adjusts the calculated historical based ratio as a result of the analysis of environmental factors, principally economic risk and concentration risk. Key economic factors affecting the portfolios are growth in gross domestic product, unemployment rates, housing market trends, commodity prices, inflation and global economic and political issues. Concentration risk is impacted primarily by geographic concentration in Northern Indiana and Southwestern Lower Michigan in the business banking and commercial real estate portfolios and by collateral concentration in the specialty finance portfolios and exposure to foreign markets by geographic risk. The reserve for loan and lease losses is maintained at a level believed to be appropriate by the Company to absorb probable losses inherent in the loan and lease portfolio. The determination of the reserve requires significant judgment reflecting the Company’s best estimate of probable loan and lease losses related to specifically identified impaired loans and leases as well as probable losses in the remainder of the various loan and lease portfolios. For purposes of determining the reserve, the Company has segmented loans and leases into classes based on the associated risk within these segments. The Company has determined that eight classes exist within the loan and lease portfolio. The methodology for assessing the appropriateness of the reserve consists of several key elements, which include: specific reserves for impaired loans, formula reserves for each business lending division portfolio including percentage allocations for special attention loans and leases not deemed impaired, and reserves for pooled homogeneous loans and leases. The Company’s evaluation is based upon a continuing review of these portfolios, estimates of customer performance, collateral values and dispositions, and assessments of economic and geopolitical events, all of which are subject to judgment and will change. The following table shows the changes in the reserve for loan and lease losses, segregated by class, for the three months ended June 30, 2016 and 2015 . (Dollars in thousands) Commercial and agricultural Auto and light truck Medium and heavy duty truck Aircraft Construction Commercial real estate Residential real estate and home equity Consumer Total June 30, 2016 Balance, beginning of period $ 14,735 $ 9,582 $ 4,511 $ 34,240 $ 7,462 $ 13,835 $ 3,379 $ 1,552 $ 89,296 Charge-offs 16 — — — — — 58 257 331 Recoveries 109 64 2 89 70 34 4 72 444 Net charge-offs (recoveries) (93 ) (64 ) (2 ) (89 ) (70 ) (34 ) 54 185 (113 ) Provision (recovery of provision) 7 2,021 (163 ) 332 (20 ) (407 ) 52 227 2,049 Balance, end of period $ 14,835 $ 11,667 $ 4,350 $ 34,661 $ 7,512 $ 13,462 $ 3,377 $ 1,594 $ 91,458 June 30, 2015 Balance, beginning of period $ 11,620 $ 10,793 $ 4,364 $ 31,301 $ 7,740 $ 13,186 $ 4,115 $ 1,979 $ 85,098 Charge-offs 22 — — — — — 25 173 220 Recoveries 86 191 2 398 123 38 5 56 899 Net charge-offs (recoveries) (64 ) (191 ) (2 ) (398 ) (123 ) (38 ) 20 117 (679 ) Provision (recovery of provision) 181 461 (33 ) 1,141 (56 ) 2 (651 ) (234 ) 811 Balance, end of period $ 11,865 $ 11,445 $ 4,333 $ 32,840 $ 7,807 $ 13,226 $ 3,444 $ 1,628 $ 86,588 The following table shows the changes in the reserve for loan and lease losses, segregated by class, for the six months ended June 30, 2016 and 2015 . (Dollars in thousands) Commercial and agricultural loans Auto and light truck Medium and heavy duty truck Aircraft Construction Commercial real estate Residential real estate and home equity Consumer loans Total June 30, 2016 Balance, beginning of period $ 15,456 $ 9,269 $ 4,699 $ 32,373 $ 7,592 $ 13,762 $ 3,382 $ 1,579 $ 88,112 Charge-offs 216 3 — — 92 1 81 502 895 Recoveries 200 126 10 227 148 339 6 161 1,217 Net charge-offs (recoveries) 16 (123 ) (10 ) (227 ) (56 ) (338 ) 75 341 (322 ) Provision (recovery of provision) (605 ) 2,275 (359 ) 2,061 (136 ) (638 ) 70 356 3,024 Balance, end of period $ 14,835 $ 11,667 $ 4,350 $ 34,661 $ 7,512 $ 13,462 $ 3,377 $ 1,594 $ 91,458 June 30, 2015 Balance, beginning of period $ 11,760 $ 10,326 $ 4,500 $ 32,234 $ 7,008 $ 13,270 $ 4,102 $ 1,868 $ 85,068 Charge-offs 965 22 — 49 — — 65 320 1,421 Recoveries 564 251 5 442 245 135 7 124 1,773 Net charge-offs (recoveries) 401 (229 ) (5 ) (393 ) (245 ) (135 ) 58 196 (352 ) Provision (recovery of provision) 506 890 (172 ) 213 554 (179 ) (600 ) (44 ) 1,168 Balance, end of period $ 11,865 $ 11,445 $ 4,333 $ 32,840 $ 7,807 $ 13,226 $ 3,444 $ 1,628 $ 86,588 The following table shows the reserve for loan and lease losses and recorded investment in loans and leases, segregated by class, separated between individually and collectively evaluated for impairment as of June 30, 2016 and December 31, 2015 . (Dollars in thousands) Commercial and agricultural loans Auto and light truck Medium and heavy duty truck Aircraft Construction Commercial real estate Residential real estate and home equity Consumer loans Total June 30, 2016 Reserve for loan and lease losses Ending balance, individually evaluated for impairment $ 463 $ — $ — $ 1,296 $ — $ — $ 145 $ — $ 1,904 Ending balance, collectively evaluated for impairment 14,372 11,667 4,350 33,365 7,512 13,462 3,232 1,594 89,554 Total reserve for loan and lease losses $ 14,835 $ 11,667 $ 4,350 $ 34,661 $ 7,512 $ 13,462 $ 3,377 $ 1,594 $ 91,458 Recorded investment in loans Ending balance, individually evaluated for impairment $ 3,184 $ — $ — $ 4,280 $ 577 $ 1,541 $ 363 $ — $ 9,945 Ending balance, collectively evaluated for impairment 755,991 457,586 273,674 818,562 483,777 714,391 482,616 156,221 4,142,818 Total recorded investment in loans $ 759,175 $ 457,586 $ 273,674 $ 822,842 $ 484,354 $ 715,932 $ 482,979 $ 156,221 $ 4,152,763 December 31, 2015 Reserve for loan and lease losses Ending balance, individually evaluated for impairment $ 649 $ — $ — $ — $ — $ — $ 148 $ — $ 797 Ending balance, collectively evaluated for impairment 14,807 9,269 4,699 32,373 7,592 13,762 3,234 1,579 87,315 Total reserve for loan and lease losses $ 15,456 $ 9,269 $ 4,699 $ 32,373 $ 7,592 $ 13,762 $ 3,382 $ 1,579 $ 88,112 Recorded investment in loans Ending balance, individually evaluated for impairment $ 3,900 $ — $ — $ 4,384 $ 539 $ 8,494 $ 366 $ — $ 17,683 Ending balance, collectively evaluated for impairment 740,849 425,236 278,254 773,628 455,026 691,774 463,763 148,479 3,977,009 Total recorded investment in loans $ 744,749 $ 425,236 $ 278,254 $ 778,012 $ 455,565 $ 700,268 $ 464,129 $ 148,479 $ 3,994,692 |
Mortgage Servicing Rights
Mortgage Servicing Rights | 6 Months Ended |
Jun. 30, 2016 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Mortgage Servicing Rights | Mortgage Servicing Rights The Company recognizes the rights to service residential mortgage loans for others as separate assets, whether the servicing rights are acquired through a separate purchase or through the sale of originated loans with servicing rights retained. The Company allocates a portion of the total proceeds of a mortgage loan to servicing rights based on the relative fair value. The unpaid principal balance of residential mortgage loans serviced for third parties was $774.00 million and $798.51 million at June 30, 2016 and December 31, 2015 , respectively. Mortgage servicing rights (MSRs) are evaluated for impairment at each reporting date. For purposes of impairment measurement, MSRs are stratified based on the predominant risk characteristics of the underlying servicing, principally by loan type. If temporary impairment exists within a tranche, a valuation allowance is established through a charge to income equal to the amount by which the carrying value exceeds the fair value. If it is later determined all or a portion of the temporary impairment no longer exists for a particular tranche, the valuation allowance is reduced through a recovery of income. The following table shows changes in the carrying value of MSRs and the associated valuation allowance. Three Months Ended Six Months Ended (Dollars in thousands) 2016 2015 2016 2015 Mortgage servicing rights: Balance at beginning of period $ 4,481 $ 4,590 $ 4,608 $ 4,733 Additions 242 456 447 706 Amortization (384 ) (385 ) (716 ) (778 ) Sales — — — — Carrying value before valuation allowance at end of period 4,339 4,661 4,339 4,661 Valuation allowance: Balance at beginning of period — — — — Impairment recoveries — — — — Balance at end of period $ — $ — $ — $ — Net carrying value of mortgage servicing rights at end of period $ 4,339 $ 4,661 $ 4,339 $ 4,661 Fair value of mortgage servicing rights at end of period $ 5,553 $ 7,342 $ 5,553 $ 7,342 At June 30, 2016 and 2015 , the fair value of MSRs exceeded the carrying value reported in the Statements of Financial Condition by $1.21 million and $2.68 million , respectively. This difference represents increases in the fair value of certain MSRs that could not be recorded above cost basis. Mortgage loan contractual servicing fees, including late fees and ancillary income, were $0.66 million and $0.71 million for the three months ended June 30, 2016 and 2015 , respectively. Mortgage loan contractual servicing fees, including late fees and ancillary income, were $1.36 million and $1.43 million for the six months ended June 30, 2016 and 2015 , respectively. Mortgage loan contractual servicing fees are included in Mortgage Banking on the Statements of Income. |
Commitments and Financial Instr
Commitments and Financial Instruments with Off-Balance-Sheet Risk | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Financial Instruments with Off-Balance-Sheet Risk | Commitments and Financial Instruments with Off-Balance-Sheet Risk 1st Source and its subsidiaries are parties to financial instruments with off-balance-sheet risk in the normal course of business. These off-balance-sheet financial instruments include commitments to originate and sell loans and standby letters of credit. The instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Statements of Financial Condition. The exposure to credit loss in the event of nonperformance by the other party to the financial instruments for loan commitments and standby letters of credit is represented by the dollar amount of those instruments. The Company uses the same credit policies and collateral requirements in making commitments and conditional obligations as it does for on-balance-sheet instruments. The following table shows financial instruments whose contract amounts represent credit risk. (Dollars in thousands) June 30, 2016 December 31, 2015 Amounts of commitments: Loan commitments to extend credit $ 870,773 $ 829,509 Standby letters of credit $ 37,191 $ 37,984 Commercial and similar letters of credit $ 606 $ 741 1st Source Bank (Bank), a subsidiary of 1st Source Corporation, grants mortgage loan commitments to borrowers, subject to normal loan underwriting standards. The interest rate risk associated with these loan commitments is managed by entering into contracts for future deliveries of loans. Loan commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank issues standby letters of credit which are conditional commitments that guarantee the performance of a client to a third party. The credit risk involved in and collateral obtained when issuing standby letters of credit is essentially the same as that involved in extending loan commitments to clients. Standby letters of credit generally have terms ranging from six months to one year. Commercial letters of credit are issued specifically to facilitate commerce and typically result in the commitment being drawn on when the underlying transaction is consummated between the customer and the third party. Commercial letters of credit generally have terms ranging from three months to six months. The Bank has made investments directly in low income housing tax credit (LIHTC) operating partnerships formed by third parties. As a limited partner in these operating partnerships, we are allocated credits and deductions associated with the underlying properties. The Bank has determined that it is not the primary beneficiary of these investments because the general partners have the power to direct the activities that most significantly influence the economic performance of their respective partnerships. At June 30, 2016 and December 31, 2015 , investment balances, including all legally binding commitments to fund future investments totaled $9.14 million and $9.62 million , respectively. In addition, the Bank had a liability for all legally binding unfunded commitments of $3.35 million and $3.64 million at June 30, 2016 and December 31, 2015 , respectively. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans are considered derivative instruments. See Note 7 for further information. The Company has certain interest rate derivative positions that are not designated as hedging instruments. Derivative assets and liabilities are recorded at fair value on the balance sheet and do take into account the effects of master netting agreements. Master netting agreements allow the Company to settle all derivative contracts held with a single counterparty on a net basis, and to offset net derivative positions with related collateral, where applicable. These derivative positions relate to transactions in which the Company enters into an interest rate swap with a client while at the same time entering into an offsetting interest rate swap with another financial institution. In connection with each transaction, the Company agrees to pay interest to the client on a notional amount at a variable interest rate and receive interest from the client on the same notional amount at a fixed interest rate. At the same time, the Company agrees to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the client to effectively convert a variable rate loan to a fixed rate. Because the terms of the swaps with the customers and the other financial institutions offset each other, with the only difference being counterparty credit risk, changes in the fair value of the underlying derivative contracts are not materially different and do not significantly impact the Company’s results of operations. The following table shows the amounts of non-hedging derivative financial instruments. Asset derivatives Liability derivatives (Dollars in thousands) Notional or contractual amount Statement of Financial Condition classification Fair value Statement of Financial Condition classification Fair value June 30, 2016 Interest rate swap contracts $ 562,698 Other assets $ 17,012 Other liabilities $ 17,334 Loan commitments 13,349 Mortgages held for sale 168 N/A — Forward contracts - mortgage loan 25,078 N/A — Mortgages held for sale 307 Total $ 601,125 $ 17,180 $ 17,641 December 31, 2015 Interest rate swap contracts $ 554,083 Other assets $ 9,859 Other liabilities $ 10,044 Loan commitments 12,440 Mortgages held for sale 47 N/A — Forward contracts - mortgage loan 16,416 Mortgages held for sale 13 N/A — Total $ 582,939 $ 9,919 $ 10,044 The following table shows the amounts included in the Statements of Income for non-hedging derivative financial instruments. Gain (loss) Three Months Ended Six Months Ended (Dollars in thousands) Statement of Income classification 2016 2015 2016 2015 Interest rate swap contracts Other expense $ (43 ) $ 41 $ (136 ) $ 22 Interest rate swap contracts Other income 110 221 314 297 Loan commitments Mortgage banking 73 (52 ) 121 87 Forward contracts - mortgage loan Mortgage banking (175 ) 372 (320 ) 346 Total $ (35 ) $ 582 $ (21 ) $ 752 The following table shows the offsetting of financial assets and derivative assets. Gross Amounts Not Offset in the Statement of Financial Condition (Dollars in thousands) Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Condition Net Amounts of Assets Presented in the Statement of Financial Condition Financial Instruments Cash Collateral Received Net Amount June 30, 2016 Interest rate swaps $ 17,245 $ 233 $ 17,012 $ — $ — $ 17,012 December 31, 2015 Interest rate swaps $ 10,016 $ 157 $ 9,859 $ — $ — $ 9,859 The following table shows the offsetting of financial liabilities and derivative liabilities. Gross Amounts Not Offset in the Statement of Financial Condition (Dollars in thousands) Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Condition Net Amounts of Liabilities Presented in the Statement of Financial Condition Financial Instruments Cash Collateral Pledged Net Amount June 30, 2016 Interest rate swaps $ 17,567 $ 233 $ 17,334 $ — $ 17,334 $ — Repurchase agreements 161,826 — 161,826 161,826 — — Total $ 179,393 $ 233 $ 179,160 $ 161,826 $ 17,334 $ — December 31, 2015 Interest rate swaps $ 10,201 $ 157 $ 10,044 $ — $ 9,833 $ 211 Repurchase agreements 130,662 — 130,662 130,662 — — Total $ 140,863 $ 157 $ 140,706 $ 130,662 $ 9,833 $ 211 If a default in performance of any obligation of a repurchase agreement occurs, each party will set-off property held in respect of transactions against obligations owing in respect of any other transactions. At June 30, 2016 and December 31, 2015 , repurchase agreements had a remaining contractual maturity of $160.05 million and $128.88 million in overnight and $1.78 million and $1.78 million in up to 30 days, respectively and were collateralized by U.S. Treasury and Federal agencies securities. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Earnings per common share is computed using the two-class method. Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the applicable period, excluding outstanding participating securities. Participating securities include non-vested restricted stock awards. Non-vested restricted stock awards are considered participating securities to the extent the holders of these securities receive non-forfeitable dividends at the same rate as holders of common stock. Diluted earnings per common share is computed using the weighted-average number of shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method. Stock options, where the exercise price was greater than the average market price of the common shares, were excluded from the computation of diluted earnings per common share because the result would have been antidilutive. There were no stock options outstanding as of June 30, 2016 and 2015 . The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share. Three Months Ended Six Months Ended (Dollars in thousands - except per share amounts) 2016 2015 2016 2015 Distributed earnings allocated to common stock $ 4,653 $ 4,293 $ 9,339 $ 8,589 Undistributed earnings allocated to common stock 9,728 11,186 18,745 20,249 Net earnings allocated to common stock 14,381 15,479 28,084 28,838 Net earnings allocated to participating securities 98 151 213 303 Net income allocated to common stock and participating securities $ 14,479 $ 15,630 $ 28,297 $ 29,141 Weighted average shares outstanding for basic earnings per common share* 25,853,537 26,212,999 25,888,534 26,235,511 Dilutive effect of stock compensation — — — — Weighted average shares outstanding for diluted earnings per common share* 25,853,537 26,212,999 25,888,534 26,235,511 Basic earnings per common share* $ 0.56 $ 0.59 $ 1.08 $ 1.10 Diluted earnings per common share* $ 0.56 $ 0.59 $ 1.08 $ 1.10 *Three and six months ended June 30, 2015 outstanding shares and per common share figures have been adjusted for a 10% stock dividend declared July 22, 2015 and issued on August 14, 2015. |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | Stock Based Compensation As of June 30, 2016 , the Company had four active stock-based employee compensation plans, which are more fully described in Note 16 of the Consolidated Financial Statements in 1st Source’s Annual Report on Form 10-K for the year ended December 31, 2015 . These plans include three executive stock award plans, the Executive Incentive Plan, the Restricted Stock Award Plan, the Strategic Deployment Incentive Plan; and the Employee Stock Purchase Plan. The 2011 Stock Option Plan was approved by the shareholders on April 21, 2011 but the Company had not made any grants through June 30, 2016 . Stock-based compensation expense for all stock-based compensation awards granted is based on the grant-date fair value. For all awards except stock option awards, the grant date fair value is either the fair market value per share or book value per share (corresponding to the type of stock awarded) as of the grant date. For stock option awards, the grant date fair value is estimated using the Black-Scholes option pricing model. For all awards the Company recognizes these compensation costs only for those shares expected to vest on a straight-line basis over the requisite service period of the award, for which the Company uses the related vesting term. The Company estimates forfeiture rates based on historical employee option exercise and employee termination experience. The Company has identified separate groups of award recipients that exhibit similar option exercise behavior and employee termination experience and have considered them as separate groups in the valuation models and expense estimates. The stock-based compensation expense recognized in the Statements of Income for the three and six months ended June 30, 2016 and 2015 was based on awards ultimately expected to vest, and accordingly has been adjusted by the amount of estimated forfeitures. GAAP requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based partially on historical experience. Total fair value of options vested and expensed was zero for the six months ended June 30, 2016 and 2015 . As of June 30, 2016 and 2015 there were no outstanding stock options. There were no stock options exercised during the six months ended June 30, 2016 and 2015 . All shares issued in connection with stock option exercises are issued from available treasury stock. As of June 30, 2016 , there was $5.39 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements. That cost is expected to be recognized over a weighted-average period of 3.31 years. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 6 Months Ended |
Jun. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The following table presents reclassifications out of accumulated other comprehensive income related to unrealized gains and losses on available-for-sale securities. Three Months Ended Six Months Ended Affected Line Item in the Statements of Income (Dollars in thousands) 2016 2015 2016 2015 Realized (losses) gains included in net income $ (209 ) $ 4 $ (199 ) $ 4 (Losses) gains on investment securities available-for-sale (209 ) 4 (199 ) 4 Income before income taxes Tax effect 78 (2 ) 75 (2 ) Income tax expense Net of tax $ (131 ) $ 2 $ (124 ) $ 2 Net income |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The total amount of unrecognized tax benefits that would affect the effective tax rate if recognized was $0.37 million at June 30, 2016 and $0.25 million at December 31, 2015 . Interest and penalties were recognized through the income tax provision. For the six months ended June 30, 2016 and 2015 , the Company recognized $0.04 million and $0.00 million in interest or penalties, respectively. There were $0.04 million and $0.00 million in accrued interest and penalties at June 30, 2016 and December 31, 2015 , respectively. Tax years that remain open and subject to audit include the federal 2012-2015 years and the Indiana 2013-2015 years. The Company does not anticipate a significant change in the amount of uncertain tax positions within the next 12 months. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company records certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are also utilized to determine the initial value of certain assets and liabilities, to perform impairment assessments, and for disclosure purposes. The Company uses quoted market prices and observable inputs to the maximum extent possible when measuring fair value. In the absence of quoted market prices, various valuation techniques are utilized to measure fair value. When possible, observable market data for identical or similar financial instruments is used in the valuation. When market data is not available, fair value is determined using valuation models that incorporate management’s estimates of the assumptions a market participant would use in pricing the asset or liability. Fair value measurements are classified within one of three levels based on the observability of the inputs used to determine fair value, as follows: • Level 1 — The valuation is based on quoted prices in active markets for identical instruments. • Level 2 — The valuation is based on observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. • Level 3 — The valuation is based on unobservable inputs that are supported by minimal or no market activity and that are significant to the fair value of the instrument. Level 3 valuations are typically performed using pricing models, discounted cash flow methodologies, or similar techniques that incorporate management’s own estimates of assumptions that market participants would use in pricing the instrument, or valuations that require significant management judgment or estimation. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company elected fair value accounting for mortgages held for sale. The Company believes the election for mortgages held for sale (which are economically hedged with free standing derivatives) will reduce certain timing differences and better match changes in the value of these assets with changes in the value of derivatives used as economic hedges for these assets. At June 30, 2016 and December 31, 2015 , all mortgages held for sale were carried at fair value. The following table shows the differences between the fair value carrying amount of mortgages held for sale measured at fair value and the aggregate unpaid principal amount the Company is contractually entitled to receive at maturity. (Dollars in thousands) Fair value carrying amount Aggregate unpaid principal Excess of fair value carrying amount over (under) unpaid principal June 30, 2016 Mortgages held for sale reported at fair value $ 15,924 $ 15,671 $ 253 (1) December 31, 2015 Mortgages held for sale reported at fair value $ 9,825 $ 9,691 $ 134 (1) (1) The excess of fair value carrying amount over (under) unpaid principal is included in mortgage banking income and includes changes in fair value at and subsequent to funding and gains and losses on the related loan commitment prior to funding. Financial Instruments on Recurring Basis: The following is a description of the valuation methodologies used for financial instruments measured at fair value on a recurring basis: Investment securities available for sale are valued primarily by a third party pricing agent. Prices supplied by the independent pricing agent, as well as their pricing methodologies and assumptions, are reviewed by the Company for reasonableness and to ensure such prices are aligned with market levels. In general, the Company’s investment securities do not possess a complex structure that could introduce greater valuation risk. The portfolio mainly consists of traditional investments including U.S. Treasury and Federal agencies securities, federal agency mortgage pass-through securities, and general obligation and revenue municipal bonds. Pricing for such instruments is fairly generic and is easily obtained. On a quarterly basis, prices supplied by the pricing agent are validated by comparison to prices obtained from other third party sources for a material portion of the portfolio. The valuation policy and procedures for Level 3 fair value measurements of available for sale debt securities are decided through collaboration between management of the Corporate Accounting and Funds Management departments. The changes in fair value measurement for Level 3 securities are analyzed on a periodic basis under a collaborative framework with the aforementioned departments. The methodology and variables used for input are derived from the combination of observable and unobservable inputs. The unobservable inputs are determined through internal assumptions that may vary from period to period due to external factors, such as market movement and credit rating adjustments. Both the market and income valuation approaches are implemented using the following types of inputs: • U.S. treasuries are priced using the market approach and utilizing live data feeds from active market exchanges for identical securities. • Government-sponsored agency debt securities and corporate bonds are primarily priced using available market information through processes such as benchmark curves, market valuations of like securities, sector groupings and matrix pricing. • Other government-sponsored agency securities, mortgage-backed securities and some of the actively traded REMICs and CMOs, are primarily priced using available market information including benchmark yields, prepayment speeds, spreads and volatility of similar securities. • Other inactive government-sponsored agency securities are primarily priced using consensus pricing and dealer quotes. • State and political subdivisions are largely grouped by characteristics, i.e., geographical data and source of revenue in trade dissemination systems. Since some securities are not traded daily and due to other grouping limitations, active market quotes are often obtained using benchmarking for like securities. Local direct placement municipal securities, with very little market activity, are priced using an appropriate market yield curve, which includes a credit spread assumption. • Marketable equity (common) securities are primarily priced using the market approach and utilizing live data feeds from active market exchanges for identical securities. Mortgages held for sale and the related loan commitments and forward contracts (hedges) are valued using a market value approach and utilizing an appropriate current market yield and a loan commitment closing rate based on historical analysis. Interest rate swap positions, both assets and liabilities, are valued by a third party pricing agent using an income approach and utilizing models that use as their basis readily observable market parameters. This valuation process considers various factors including interest rate yield curves, time value and volatility factors. Validation of third party agent valuations is accomplished by comparing those values to the Company’s swap counterparty valuations. Management believes an adjustment is required to “mid-market” valuations for derivatives tied to its performing loan portfolio to recognize the imprecision and related exposure inherent in the process of estimating expected credit losses as well as velocity of deterioration evident with systemic risks embedded in these portfolios. The following table shows the balance of assets and liabilities measured at fair value on a recurring basis. (Dollars in thousands) Level 1 Level 2 Level 3 Total June 30, 2016 Assets: Investment securities available-for-sale: U.S. Treasury and Federal agencies securities $ 20,044 $ 380,087 $ — $ 400,131 U.S. States and political subdivisions securities — 124,557 4,661 129,218 Mortgage-backed securities — Federal agencies — 244,539 — 244,539 Corporate debt securities — 32,430 — 32,430 Foreign government and other securities — — 810 810 Total debt securities 20,044 781,613 5,471 807,128 Marketable equity securities 7,130 — — 7,130 Total investment securities available-for-sale 27,174 781,613 5,471 814,258 Mortgages held for sale — 15,924 — 15,924 Accrued income and other assets (interest rate swap agreements) — 17,012 — 17,012 Total $ 27,174 $ 814,549 $ 5,471 $ 847,194 Liabilities: Accrued expenses and other liabilities (interest rate swap agreements) $ — $ 17,334 $ — $ 17,334 Total $ — $ 17,334 $ — $ 17,334 December 31, 2015 Assets: Investment securities available-for-sale: U.S. Treasury and Federal agencies securities $ 19,879 $ 369,790 $ — $ 389,669 U.S. States and political subdivisions securities — 118,462 4,528 122,990 Mortgage-backed securities — Federal agencies — 236,297 — 236,297 Corporate debt securities — 34,383 — 34,383 Foreign government and other securities — — 809 809 Total debt securities 19,879 758,932 5,337 784,148 Marketable equity securities 7,579 — — 7,579 Total investment securities available-for-sale 27,458 758,932 5,337 791,727 Mortgages held for sale — 9,825 — 9,825 Accrued income and other assets (interest rate swap agreements) — 9,859 — 9,859 Total $ 27,458 $ 778,616 $ 5,337 $ 811,411 Liabilities: Accrued expenses and other liabilities (interest rate swap agreements) $ — $ 10,044 $ — $ 10,044 Total $ — $ 10,044 $ — $ 10,044 The following table shows changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the quarter ended June 30, 2016 and 2015 . (Dollars in thousands) U.S. States and political subdivisions securities Foreign government and other securities Investment securities available-for-sale Beginning balance April 1, 2016 $ 4,810 $ 809 $ 5,619 Total gains or losses (realized/unrealized): Included in earnings — — — Included in other comprehensive income (4 ) 1 (3 ) Purchases — — — Issuances — — — Sales — — — Settlements — — — Maturities (145 ) — (145 ) Transfers into Level 3 — — — Transfers out of Level 3 — — — Ending balance June 30, 2016 $ 4,661 $ 810 $ 5,471 Beginning balance April 1, 2015 $ 5,632 $ 808 $ 6,440 Total gains or losses (realized/unrealized): Included in earnings — — — Included in other comprehensive income (38 ) (1 ) (39 ) Purchases — — — Issuances — — — Sales — — — Settlements — — — Maturities (150 ) — (150 ) Transfers into Level 3 — — — Transfers out of Level 3 — — — Ending balance June 30, 2015 $ 5,444 $ 807 $ 6,251 There were no gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held at June 30, 2016 or 2015 . No transfers between levels occurred during the three months ended June 30, 2016 or 2015 . The following table shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring basis. (Dollars in thousands) Fair Value Valuation Methodology Unobservable Inputs Range of Inputs June 30, 2016 Investment securities available-for sale Direct placement municipal securities $ 4,661 Discounted cash flows Credit spread assumption 0.03% - 1.40% Foreign government $ 801 Discounted cash flows Market yield assumption 0.49% - 1.56% December 31, 2015 Investment securities available-for sale Direct placement municipal securities $ 4,528 Discounted cash flows Credit spread assumption 1.27% - 2.03% Foreign government $ 809 Discounted cash flows Market yield assumption 0.88% - 2.00% The sensitivity to changes in the unobservable inputs and their impact on the fair value measurement can be significant. The significant unobservable input for direct placement municipal securities are the credit spread assumptions used to determine the fair value measure. An increase (decrease) in the estimated spread assumption of the market will decrease (increase) the fair value measure of the securities. The significant unobservable input for foreign government securities are the market yield assumptions. The market yield assumption is negatively correlated to the fair value measure. An increase (decrease) in the determined market yield assumption will decrease (increase) the fair value measurement. Financial Instruments on Non-recurring Basis: The Company may be required, from time to time, to measure certain other financial assets at fair value on a non-recurring basis in accordance with GAAP. These adjustments to fair value usually result from application of lower of cost or market accounting or impairment charges of individual assets. The Credit Policy Committee (CPC), a management committee, is responsible for overseeing the valuation processes and procedures for Level 3 measurements of impaired loans, other real estate and repossessions. The CPC reviews these assets on a quarterly basis to determine the accuracy of the observable inputs, generally third party appraisals, auction values, values derived from trade publications and data submitted by the borrower, and the appropriateness of the unobservable inputs, generally discounts due to current market conditions and collection issues. The CPC establishes discounts based on asset type and valuation source; deviations from the standard are documented. The discounts are reviewed periodically, annually at a minimum, to determine they remain appropriate. Consideration is given to current trends in market values for the asset categories and gains and losses on sales of similar assets. The Loan and Funds Management Committee of the Board of Directors is responsible for overseeing the CPC. Discounts vary depending on the nature of the assets and the source of value. Aircraft are generally valued using quarterly trade publications adjusted for engine time, condition, maintenance programs, discounted by 10% . Likewise, autos are valued using current auction values, discounted by 10% ; medium and heavy duty trucks are valued using trade publications and auction values, discounted by 15% . Construction equipment is generally valued using trade publications and auction values, discounted by 20% . Real estate is valued based on appraisals or evaluations, discounted by 20% with higher discounts for property in poor condition or property with characteristics which may make it more difficult to market. Commercial loans subject to borrowing base certificates are generally discounted by 20% for receivables and 40% - 75% for inventory with higher discounts when monthly borrowing base certificates are not required or received. Impaired loans and related write-downs are based on the fair value of the underlying collateral if repayment is expected solely from the collateral. Collateral values are reviewed quarterly and estimated using customized discounting criteria, appraisals and dealer and trade magazine quotes which are used in a market valuation approach. In accordance with fair value measurements, only impaired loans for which a reserve for loan loss has been established based on the fair value of collateral require classification in the fair value hierarchy. As a result, only a portion of the Company’s impaired loans are classified in the fair value hierarchy. Partnership investments and the adjustments to fair value primarily result from application of lower of cost or fair value accounting. The partnership investments are priced using financial statements provided by the partnerships. Quantitative unobservable inputs are not reasonably available for reporting purposes. The Company has established MSRs valuation policies and procedures based on industry standards and to ensure valuation methodologies are consistent and verifiable. MSRs and related adjustments to fair value result from application of lower of cost or fair value accounting. For purposes of impairment, MSRs are stratified based on the predominant risk characteristics of the underlying servicing, principally by loan type. The fair value of each tranche of the servicing portfolio is estimated by calculating the present value of estimated future net servicing cash flows, taking into consideration actual and expected mortgage loan prepayment rates, discount rates, servicing costs, and other economic factors. Prepayment rates and discount rates are derived through a third party pricing agent. Changes in the most significant inputs, including prepayment rates and discount rates, are compared to the changes in the fair value measurements and appropriate resolution is made. A fair value analysis is also obtained from an independent third party agent and compared to the internal valuation for reasonableness. MSRs do not trade in an active, open market with readily observable prices and though sales of MSRs do occur, precise terms and conditions typically are not readily available and the characteristics of the Company’s servicing portfolio may differ from those of any servicing portfolios that do trade. Other real estate is based on the lower of cost or fair value of the underlying collateral less expected selling costs. Collateral values are estimated primarily using appraisals and reflect a market value approach. Fair values are reviewed quarterly and new appraisals are obtained annually. Repossessions are similarly valued. For assets measured at fair value on a nonrecurring basis the following represents impairment charges (recoveries) recognized on these assets during the quarter ended June 30, 2016 : impaired loans - $0.00 million ; partnership investments - $0.00 million ; mortgage servicing rights - $0.00 million ; repossessions - $0.19 million ; and other real estate - $0.00 million . The following table shows the carrying value of assets measured at fair value on a non-recurring basis. (Dollars in thousands) Level 1 Level 2 Level 3 Total June 30, 2016 Impaired loans - collateral based $ — $ — $ 915 $ 915 Accrued income and other assets (partnership investments) — — 24 24 Accrued income and other assets (mortgage servicing rights) — — 4,339 4,339 Accrued income and other assets (repossessions) — — 7,619 7,619 Accrued income and other assets (other real estate) — — 452 452 Total $ — $ — $ 13,349 $ 13,349 December 31, 2015 Impaired loans - collateral based $ — $ — $ 220 $ 220 Accrued income and other assets (partnership investments) — — 1,000 1,000 Accrued income and other assets (mortgage servicing rights) — — 4,608 4,608 Accrued income and other assets (repossessions) — — 6,927 6,927 Accrued income and other assets (other real estate) — — 736 736 Total $ — $ — $ 13,491 $ 13,491 The following table below shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a non-recurring basis. (Dollars in thousands) Carrying Value Fair Value Valuation Methodology Unobservable Inputs Range of Inputs June 30, 2016 Impaired loans $ 915 $ 915 Collateral based measurements including appraisals, trade publications, and auction values Discount for lack of marketability and current conditions 10% - 100% Mortgage servicing rights 4,339 5,553 Discounted cash flows Constant prepayment rate (CPR) 14.2% - 20.1% Discount rate 9.1% - 12.0% Repossessions 7,619 7,798 Appraisals, trade publications and auction values Discount for lack of marketability 0% - 3% Other real estate 452 481 Appraisals Discount for lack of marketability 0% - 14% December 31, 2015 Impaired loans $ 220 $ 220 Collateral based measurements including appraisals, trade publications, and auction values Discount for lack of marketability and current conditions 20% Mortgage servicing rights 4,608 7,246 Discounted cash flows Constant prepayment rate (CPR) 9.4% - 15.0% Discount rate 9.8% - 13.3% Repossessions 6,927 7,104 Appraisals, trade publications and auction values Discount for lack of marketability 2% - 3% Other real estate 736 851 Appraisals Discount for lack of marketability 8% - 35% GAAP requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring or non-recurring basis. The following table shows the fair values of the Company’s financial instruments. (Dollars in thousands) Carrying or Contract Value Fair Value Level 1 Level 2 Level 3 June 30, 2016 Assets: Cash and due from banks $ 58,944 $ 58,944 $ 58,944 $ — $ — Federal funds sold and interest bearing deposits with other banks 14,297 14,297 14,297 — — Investment securities, available-for-sale 814,258 814,258 27,174 781,613 5,471 Other investments 21,973 21,973 21,973 — — Mortgages held for sale 15,924 15,924 — 15,924 — Loans and leases, net of reserve for loan and lease losses 4,061,305 4,073,538 — — 4,073,538 Mortgage servicing rights 4,339 5,553 — — 5,553 Interest rate swaps 17,012 17,012 — 17,012 — Liabilities: Deposits $ 4,325,084 $ 4,333,142 $ 3,116,348 $ 1,216,794 $ — Short-term borrowings 205,976 205,976 163,246 42,730 — Long-term debt and mandatorily redeemable securities 64,738 64,796 — 64,796 — Subordinated notes 58,764 49,493 — 49,493 — Interest rate swaps 17,334 17,334 — 17,334 — Off-balance-sheet instruments * — 377 — 377 — December 31, 2015 Assets: Cash and due from banks $ 65,171 $ 65,171 $ 65,171 $ — $ — Federal funds sold and interest bearing deposits with other banks 14,550 14,550 14,550 — — Investment securities, available-for-sale 791,727 791,727 27,458 758,932 5,337 Other investments 21,973 21,973 21,973 — — Mortgages held for sale 9,825 9,825 — 9,825 — Loans and leases, net of reserve for loan and lease losses 3,906,580 3,927,967 — — 3,927,967 Mortgage servicing rights 4,608 7,246 — — 7,246 Interest rate swaps 9,859 9,859 — 9,859 — Liabilities: Deposits $ 4,139,186 $ 4,139,649 $ 2,998,443 $ 1,141,206 $ — Short-term borrowings 233,229 233,229 134,156 99,073 — Long-term debt and mandatorily redeemable securities 57,379 57,193 — 57,193 — Subordinated notes 58,764 48,304 — 48,304 — Interest rate swaps 10,044 10,044 — 10,044 — Off-balance-sheet instruments * — 375 — 375 — * Represents estimated cash outflows required to currently settle the obligations at current market rates. The methodologies for estimating fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. The estimated fair value approximates carrying value for cash and due from banks, federal funds sold and interest bearing deposits with other banks and other investments. The methodologies for other financial assets and financial liabilities are discussed below: Loans and Leases — For variable rate loans and leases that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair values of other loans and leases are estimated using discounted cash flow analyses which use interest rates currently being offered for loans and leases with similar terms to borrowers of similar credit quality. Deposits — The fair values for all deposits other than time deposits are equal to the amounts payable on demand (the carrying value). Fair values of variable rate time deposits are equal to their carrying values. Fair values for fixed rate time deposits are estimated using discounted cash flow analyses using interest rates currently being offered for deposits with similar remaining maturities. Short-Term Borrowings — The carrying values of Federal funds purchased, securities sold under repurchase agreements, and other short-term borrowings, including the liability related to mortgage loans available for repurchase under GNMA optional repurchase programs, approximate their fair values. Long-Term Debt and Mandatorily Redeemable Securities — The fair values of long-term debt are estimated using discounted cash flow analyses, based on the current estimated incremental borrowing rates for similar types of borrowing arrangements. The carrying values of mandatorily redeemable securities are based on the current estimated cost of redeeming these securities which approximate their fair values. Subordinated Notes — Fair values are estimated based on calculated market prices of comparable securities. Off-Balance-Sheet Instruments — Contract and fair values for certain off-balance-sheet financial instruments (guarantees) are estimated based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. Limitations — Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instruments. Because no market exists for a significant portion of the financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other such factors. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. These estimates are subjective in nature and require considerable judgment to interpret market data. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange, nor are they intended to represent the fair value of the Company as a whole. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The fair value estimates presented herein are based on pertinent information available to management as of the respective balance sheet date. Although the Company is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued since the presentation dates, and therefore, estimates of fair value after the balance sheet date may differ significantly from the amounts presented herein. Other significant assets, such as premises and equipment, other assets, and liabilities not defined as financial instruments, are not included in the above disclosures. Also, the fair value estimates for deposits do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market. |
Accounting Policies Accounting
Accounting Policies Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation – The accompanying unaudited consolidated financial statements reflect all adjustments (all of which are normal and recurring in nature) which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position, the results of operations, changes in comprehensive income, changes in shareholders’ equity, and cash flows for the periods presented. These unaudited consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission (SEC) and, therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been omitted. The Notes to the Consolidated Financial Statements appearing in 1st Source Corporation’s Annual Report on Form 10-K (2015 Annual Report), which include descriptions of significant accounting policies, should be read in conjunction with these interim financial statements. The Consolidated Statement of Financial Condition at December 31, 2015 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the current year presentation. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements – Financial statements prepared in accordance with GAAP require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates. |
Loans and Leases | Loans and Leases – Loans are stated at the principal amount outstanding, net of unamortized deferred loan origination fees and costs and net of unearned income. Interest income is accrued as earned based on unpaid principal balances. Origination fees and direct loan and lease origination costs are deferred and the net amount amortized to interest income over the estimated life of the related loan or lease. Loan commitment fees are deferred and amortized into other income over the commitment period. Direct financing leases are carried at the aggregate of lease payments plus estimated residual value of the leased property, net of unamortized deferred lease origination fees and costs and unearned income. Interest income on direct financing leases is recognized over the term of the lease to achieve a constant periodic rate of return on the outstanding investment. The accrual of interest on loans and leases is discontinued when a loan or lease becomes contractually delinquent for 90 days, or when an individual analysis of a borrower’s credit worthiness indicates a credit should be placed on nonperforming status, except for residential mortgage loans and consumer loans that are well secured and in the process of collection. Residential mortgage loans are placed on nonaccrual at the time the loan is placed in foreclosure. When interest accruals are discontinued, interest credited to income in the current year is reversed and interest accrued in the prior year is charged to the reserve for loan and lease losses. However, in some cases, the Company may elect to continue the accrual of interest when the net realizable value of collateral is sufficient to cover the principal and accrued interest. When a loan or lease is classified as nonaccrual and the future collectibility of the recorded loan or lease balance is doubtful, collections on interest and principal are applied as a reduction to principal outstanding. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured, which is typically evidenced by a sustained repayment performance of at least six months . A loan or lease is considered impaired, based on current information and events, if it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan or lease agreement. Interest on impaired loans and leases, which are not classified as nonaccrual, is recognized on the accrual basis. The Company evaluates loans and leases exceeding $100,000 for impairment and establishes a specific reserve as a component of the reserve for loan and lease losses when it is probable all amounts due will not be collected pursuant to the contractual terms of the loan or lease and the recorded investment in the loan or lease exceeds its fair value. Loans and leases that have been modified and economic concessions have been granted to borrowers who have experienced financial difficulties are considered a troubled debt restructuring (TDR) and, by definition, are deemed an impaired loan. These concessions typically result from the Company’s loss mitigation activities and may include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructuring and typically are returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period of at least six months. When the Company modifies loans and leases in a TDR, it evaluates any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan or lease agreement, or uses the current fair value of the collateral, less selling costs for collateral dependent loans. If the Company determines that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through a reserve for loan and lease losses estimate or a charge-off to the reserve for loan and lease losses. In periods subsequent to modification, the Company evaluates all TDRs, including those that have payment defaults, for possible impairment and recognizes impairment through the reserve for loan and lease losses. |
Investment Securities (Tables)
Investment Securities (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of investment securities available-for-sale | The following table shows investment securities available-for-sale. (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value June 30, 2016 U.S. Treasury and Federal agencies securities $ 396,740 $ 3,396 $ (5 ) $ 400,131 U.S. States and political subdivisions securities 125,917 3,364 (63 ) 129,218 Mortgage-backed securities — Federal agencies 239,829 4,982 (272 ) 244,539 Corporate debt securities 32,032 398 — 32,430 Foreign government and other securities 800 10 — 810 Total debt securities 795,318 12,150 (340 ) 807,128 Marketable equity securities 1,599 5,533 (2 ) 7,130 Total investment securities available-for-sale $ 796,917 $ 17,683 $ (342 ) $ 814,258 December 31, 2015 U.S. Treasury and Federal agencies securities $ 389,457 $ 1,718 $ (1,506 ) $ 389,669 U.S. States and political subdivisions securities 120,441 2,692 (143 ) 122,990 Mortgage-backed securities — Federal agencies 234,400 3,430 (1,533 ) 236,297 Corporate debt securities 34,241 199 (57 ) 34,383 Foreign government and other securities 800 10 (1 ) 809 Total debt securities 779,339 8,049 (3,240 ) 784,148 Marketable equity securities 1,893 5,906 (220 ) 7,579 Total investment securities available-for-sale $ 781,232 $ 13,955 $ (3,460 ) $ 791,727 |
Schedule of contractual maturities of investments in debt securities available-for-sale | The following table shows the contractual maturities of investments in debt securities available-for-sale at June 30, 2016 . Expected maturities will differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. (Dollars in thousands) Amortized Cost Fair Value Due in one year or less $ 214,503 $ 215,323 Due after one year through five years 318,873 324,549 Due after five years through ten years 22,113 22,717 Due after ten years — — Mortgage-backed securities 239,829 244,539 Total debt securities available-for-sale $ 795,318 $ 807,128 |
Schedule of gross unrealized losses and fair value by investment category and age | The following table summarizes gross unrealized losses and fair value by investment category and age. Less than 12 Months 12 months or Longer Total (Dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses June 30, 2016 U.S. Treasury and Federal agencies securities $ 5,974 $ (5 ) $ — $ — $ 5,974 $ (5 ) U.S. States and political subdivisions securities 7,237 (22 ) 4,474 (41 ) 11,711 (63 ) Mortgage-backed securities - Federal agencies 23,770 (78 ) 15,147 (194 ) 38,917 (272 ) Corporate debt securities — — — — — — Foreign government and other securities — — — — — — Total debt securities 36,981 (105 ) 19,621 (235 ) 56,602 (340 ) Marketable equity securities 1 — 3 (2 ) 4 (2 ) Total investment securities available-for-sale $ 36,982 $ (105 ) $ 19,624 $ (237 ) $ 56,606 $ (342 ) December 31, 2015 U.S. Treasury and Federal agencies securities $ 151,581 $ (928 ) $ 43,372 $ (578 ) $ 194,953 $ (1,506 ) U.S. States and political subdivisions securities 17,040 (79 ) 3,795 (64 ) 20,835 (143 ) Mortgage-backed securities - Federal agencies 78,731 (777 ) 20,592 (756 ) 99,323 (1,533 ) Corporate debt securities 9,340 (57 ) — — 9,340 (57 ) Foreign government and other securities 99 (1 ) — — 99 (1 ) Total debt securities 256,791 (1,842 ) 67,759 (1,398 ) 324,550 (3,240 ) Marketable equity securities 427 (218 ) 3 (2 ) 430 (220 ) Total investment securities available-for-sale $ 257,218 $ (2,060 ) $ 67,762 $ (1,400 ) $ 324,980 $ (3,460 ) |
Schedule of gross realized gains and losses from securities available-for-sale portfolio | The following table shows the gross realized gains and losses from the securities available-for-sale portfolio, including marketable equity securities. Realized gains and losses of all securities are computed using the specific identification cost basis. Three Months Ended Six Months Ended (Dollars in thousands) 2016 2015 2016 2015 Gross realized gains $ 85 $ 4 $ 95 $ 4 Gross realized losses — — — — OTTI losses (294 ) — (294 ) — Net realized (losses) gains $ (209 ) $ 4 $ (199 ) $ 4 |
Loan and Lease Financings (Tabl
Loan and Lease Financings (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Receivables [Abstract] | |
Schedule of credit quality grades of the recorded investment in loans and leases, segregated by class | The following table shows the credit quality grades of the recorded investment in loans and leases, segregated by class. Credit Quality Grades (Dollars in thousands) 1-6 7-12 Total June 30, 2016 Commercial and agricultural $ 725,345 $ 33,830 $ 759,175 Auto and light truck 427,067 30,519 457,586 Medium and heavy duty truck 271,809 1,865 273,674 Aircraft 792,536 30,306 822,842 Construction equipment 479,698 4,656 484,354 Commercial real estate 704,188 11,744 715,932 Total $ 3,400,643 $ 112,920 $ 3,513,563 December 31, 2015 Commercial and agricultural $ 710,030 $ 34,719 $ 744,749 Auto and light truck 413,836 11,400 425,236 Medium and heavy duty truck 275,367 2,887 278,254 Aircraft 750,264 27,748 778,012 Construction equipment 448,683 6,882 455,565 Commercial real estate 680,304 19,964 700,268 Total $ 3,278,484 $ 103,600 $ 3,382,084 |
Schedule of recorded investment in residential real estate and home equity and consumer loans by performing or nonperforming status | The following table shows the recorded investment in residential real estate and home equity and consumer loans by performing or nonperforming status. Nonperforming loans are those loans which are on nonaccrual status or are 90 days or more past due. (Dollars in thousands) Performing Nonperforming Total June 30, 2016 Residential real estate and home equity $ 481,128 $ 1,851 $ 482,979 Consumer 155,533 688 156,221 Total $ 636,661 $ 2,539 $ 639,200 December 31, 2015 Residential real estate and home equity $ 462,236 $ 1,893 $ 464,129 Consumer 148,180 299 148,479 Total $ 610,416 $ 2,192 $ 612,608 |
Schedule of recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | The following table shows the recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status. (Dollars in thousands) Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due and Accruing Total Accruing Loans Nonaccrual Total Financing Receivables June 30, 2016 Commercial and agricultural $ 755,391 $ 175 $ 16 $ — $ 755,582 $ 3,593 $ 759,175 Auto and light truck 457,190 336 13 — 457,539 47 457,586 Medium and heavy duty truck 273,674 — — — 273,674 — 273,674 Aircraft 811,062 7,500 — — 818,562 4,280 822,842 Construction equipment 482,657 1,028 — — 483,685 669 484,354 Commercial real estate 713,651 554 — — 714,205 1,727 715,932 Residential real estate and home equity 479,970 769 389 234 481,362 1,617 482,979 Consumer 155,129 356 48 42 155,575 646 156,221 Total $ 4,128,724 $ 10,718 $ 466 $ 276 $ 4,140,184 $ 12,579 $ 4,152,763 December 31, 2015 Commercial and agricultural $ 740,335 $ 52 $ 79 $ — $ 740,466 $ 4,283 $ 744,749 Auto and light truck 424,997 170 23 — 425,190 46 425,236 Medium and heavy duty truck 278,254 — — — 278,254 — 278,254 Aircraft 764,074 9,442 108 — 773,624 4,388 778,012 Construction equipment 454,993 33 — — 455,026 539 455,565 Commercial real estate 698,514 362 — — 698,876 1,392 700,268 Residential real estate and home equity 460,771 1,038 427 71 462,307 1,822 464,129 Consumer 147,419 552 209 51 148,231 248 148,479 Total $ 3,969,357 $ 11,649 $ 846 $ 122 $ 3,981,974 $ 12,718 $ 3,994,692 |
Schedule of impaired loans and leases, segregated by class, and the corresponding reserve for impaired loan and lease losses | The following table shows impaired loans and leases, segregated by class, and the corresponding reserve for impaired loan and lease losses. (Dollars in thousands) Recorded Investment Unpaid Principal Balance Related Reserve June 30, 2016 With no related reserve recorded: Commercial and agricultural $ 743 $ 743 $ — Auto and light truck — — — Medium and heavy duty truck — — — Aircraft 2,450 2,450 — Construction equipment 577 577 — Commercial real estate 1,541 1,541 — Residential real estate and home equity — — — Consumer — — — Total with no related reserve recorded 5,311 5,311 — With a reserve recorded: Commercial and agricultural 2,441 2,441 463 Auto and light truck — — — Medium and heavy duty truck — — — Aircraft 1,830 1,830 1,296 Construction equipment — — — Commercial real estate — — — Residential real estate and home equity 363 365 145 Consumer — — — Total with a reserve recorded 4,634 4,636 1,904 Total impaired loans $ 9,945 $ 9,947 $ 1,904 December 31, 2015 With no related reserve recorded: Commercial and agricultural $ 1,016 $ 1,016 $ — Auto and light truck — — — Medium and heavy duty truck — — — Aircraft 4,384 4,384 — Construction equipment 539 539 — Commercial real estate 8,494 8,494 — Residential real estate and home equity — — — Consumer — — — Total with no related reserve recorded 14,433 14,433 — With a reserve recorded: Commercial and agricultural 2,884 2,884 649 Auto and light truck — — — Medium and heavy duty truck — — — Aircraft — — — Construction equipment — — — Commercial real estate — — — Residential real estate and home equity 366 368 148 Consumer — — — Total with a reserve recorded 3,250 3,252 797 Total impaired loans $ 17,683 $ 17,685 $ 797 |
Schedule of average recorded investment and interest income recognized on impaired loans and leases, segregated by class | The following table shows average recorded investment and interest income recognized on impaired loans and leases, segregated by class. Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (Dollars in thousands) Average Recorded Investment Interest Income Average Recorded Investment Interest Income Average Recorded Investment Interest Income Average Recorded Investment Interest Income Commercial and agricultural $ 3,449 $ — $ 2,134 $ 6 $ 3,579 $ 4 $ 5,971 $ 16 Auto and light truck — — — — — — — — Medium and heavy duty truck — — — — — — — — Aircraft 4,341 — 7,269 — 4,184 — 8,207 6 Construction equipment 514 — 731 — 697 — 735 — Commercial real estate 6,100 — 10,735 142 7,251 123 11,319 284 Residential real estate and home equity 364 4 371 4 365 8 372 8 Consumer — — — — — — — — Total $ 14,768 $ 4 $ 21,240 $ 152 $ 16,076 $ 135 $ 26,604 $ 314 |
Schedule of recorded investment in loans and leases classified as troubled debt restructuring | The following table shows the recorded investment of loans and leases classified as troubled debt restructurings as of June 30, 2016 and December 31, 2015 . (Dollars in thousands) June 30, December 31, Performing TDRs $ 363 $ 7,437 Nonperforming TDRs 1,844 1,926 Total TDRs $ 2,207 $ 9,363 |
Reserve for Loan and Lease Lo26
Reserve for Loan and Lease Losses (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract] | |
Schedule of changes in reserve for loan and lease losses, segregated by class | The following table shows the changes in the reserve for loan and lease losses, segregated by class, for the three months ended June 30, 2016 and 2015 . (Dollars in thousands) Commercial and agricultural Auto and light truck Medium and heavy duty truck Aircraft Construction Commercial real estate Residential real estate and home equity Consumer Total June 30, 2016 Balance, beginning of period $ 14,735 $ 9,582 $ 4,511 $ 34,240 $ 7,462 $ 13,835 $ 3,379 $ 1,552 $ 89,296 Charge-offs 16 — — — — — 58 257 331 Recoveries 109 64 2 89 70 34 4 72 444 Net charge-offs (recoveries) (93 ) (64 ) (2 ) (89 ) (70 ) (34 ) 54 185 (113 ) Provision (recovery of provision) 7 2,021 (163 ) 332 (20 ) (407 ) 52 227 2,049 Balance, end of period $ 14,835 $ 11,667 $ 4,350 $ 34,661 $ 7,512 $ 13,462 $ 3,377 $ 1,594 $ 91,458 June 30, 2015 Balance, beginning of period $ 11,620 $ 10,793 $ 4,364 $ 31,301 $ 7,740 $ 13,186 $ 4,115 $ 1,979 $ 85,098 Charge-offs 22 — — — — — 25 173 220 Recoveries 86 191 2 398 123 38 5 56 899 Net charge-offs (recoveries) (64 ) (191 ) (2 ) (398 ) (123 ) (38 ) 20 117 (679 ) Provision (recovery of provision) 181 461 (33 ) 1,141 (56 ) 2 (651 ) (234 ) 811 Balance, end of period $ 11,865 $ 11,445 $ 4,333 $ 32,840 $ 7,807 $ 13,226 $ 3,444 $ 1,628 $ 86,588 The following table shows the changes in the reserve for loan and lease losses, segregated by class, for the six months ended June 30, 2016 and 2015 . (Dollars in thousands) Commercial and agricultural loans Auto and light truck Medium and heavy duty truck Aircraft Construction Commercial real estate Residential real estate and home equity Consumer loans Total June 30, 2016 Balance, beginning of period $ 15,456 $ 9,269 $ 4,699 $ 32,373 $ 7,592 $ 13,762 $ 3,382 $ 1,579 $ 88,112 Charge-offs 216 3 — — 92 1 81 502 895 Recoveries 200 126 10 227 148 339 6 161 1,217 Net charge-offs (recoveries) 16 (123 ) (10 ) (227 ) (56 ) (338 ) 75 341 (322 ) Provision (recovery of provision) (605 ) 2,275 (359 ) 2,061 (136 ) (638 ) 70 356 3,024 Balance, end of period $ 14,835 $ 11,667 $ 4,350 $ 34,661 $ 7,512 $ 13,462 $ 3,377 $ 1,594 $ 91,458 June 30, 2015 Balance, beginning of period $ 11,760 $ 10,326 $ 4,500 $ 32,234 $ 7,008 $ 13,270 $ 4,102 $ 1,868 $ 85,068 Charge-offs 965 22 — 49 — — 65 320 1,421 Recoveries 564 251 5 442 245 135 7 124 1,773 Net charge-offs (recoveries) 401 (229 ) (5 ) (393 ) (245 ) (135 ) 58 196 (352 ) Provision (recovery of provision) 506 890 (172 ) 213 554 (179 ) (600 ) (44 ) 1,168 Balance, end of period $ 11,865 $ 11,445 $ 4,333 $ 32,840 $ 7,807 $ 13,226 $ 3,444 $ 1,628 $ 86,588 The following table shows the reserve for loan and lease losses and recorded investment in loans and leases, segregated by class, separated between individually and collectively evaluated for impairment as of June 30, 2016 and December 31, 2015 . (Dollars in thousands) Commercial and agricultural loans Auto and light truck Medium and heavy duty truck Aircraft Construction Commercial real estate Residential real estate and home equity Consumer loans Total June 30, 2016 Reserve for loan and lease losses Ending balance, individually evaluated for impairment $ 463 $ — $ — $ 1,296 $ — $ — $ 145 $ — $ 1,904 Ending balance, collectively evaluated for impairment 14,372 11,667 4,350 33,365 7,512 13,462 3,232 1,594 89,554 Total reserve for loan and lease losses $ 14,835 $ 11,667 $ 4,350 $ 34,661 $ 7,512 $ 13,462 $ 3,377 $ 1,594 $ 91,458 Recorded investment in loans Ending balance, individually evaluated for impairment $ 3,184 $ — $ — $ 4,280 $ 577 $ 1,541 $ 363 $ — $ 9,945 Ending balance, collectively evaluated for impairment 755,991 457,586 273,674 818,562 483,777 714,391 482,616 156,221 4,142,818 Total recorded investment in loans $ 759,175 $ 457,586 $ 273,674 $ 822,842 $ 484,354 $ 715,932 $ 482,979 $ 156,221 $ 4,152,763 December 31, 2015 Reserve for loan and lease losses Ending balance, individually evaluated for impairment $ 649 $ — $ — $ — $ — $ — $ 148 $ — $ 797 Ending balance, collectively evaluated for impairment 14,807 9,269 4,699 32,373 7,592 13,762 3,234 1,579 87,315 Total reserve for loan and lease losses $ 15,456 $ 9,269 $ 4,699 $ 32,373 $ 7,592 $ 13,762 $ 3,382 $ 1,579 $ 88,112 Recorded investment in loans Ending balance, individually evaluated for impairment $ 3,900 $ — $ — $ 4,384 $ 539 $ 8,494 $ 366 $ — $ 17,683 Ending balance, collectively evaluated for impairment 740,849 425,236 278,254 773,628 455,026 691,774 463,763 148,479 3,977,009 Total recorded investment in loans $ 744,749 $ 425,236 $ 278,254 $ 778,012 $ 455,565 $ 700,268 $ 464,129 $ 148,479 $ 3,994,692 |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Schedule of changes in carrying value of mortgage servicing rights and associated valuation allowance | The following table shows changes in the carrying value of MSRs and the associated valuation allowance. Three Months Ended Six Months Ended (Dollars in thousands) 2016 2015 2016 2015 Mortgage servicing rights: Balance at beginning of period $ 4,481 $ 4,590 $ 4,608 $ 4,733 Additions 242 456 447 706 Amortization (384 ) (385 ) (716 ) (778 ) Sales — — — — Carrying value before valuation allowance at end of period 4,339 4,661 4,339 4,661 Valuation allowance: Balance at beginning of period — — — — Impairment recoveries — — — — Balance at end of period $ — $ — $ — $ — Net carrying value of mortgage servicing rights at end of period $ 4,339 $ 4,661 $ 4,339 $ 4,661 Fair value of mortgage servicing rights at end of period $ 5,553 $ 7,342 $ 5,553 $ 7,342 |
Commitments and Financial Ins28
Commitments and Financial Instruments with Off-Balance-Sheet Risk (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of financial instruments whose contract amounts represent credit risk | The following table shows financial instruments whose contract amounts represent credit risk. (Dollars in thousands) June 30, 2016 December 31, 2015 Amounts of commitments: Loan commitments to extend credit $ 870,773 $ 829,509 Standby letters of credit $ 37,191 $ 37,984 Commercial and similar letters of credit $ 606 $ 741 |
Derivative Financial Instrume29
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of amounts of non-hedging derivative financial instruments | The following table shows the amounts of non-hedging derivative financial instruments. Asset derivatives Liability derivatives (Dollars in thousands) Notional or contractual amount Statement of Financial Condition classification Fair value Statement of Financial Condition classification Fair value June 30, 2016 Interest rate swap contracts $ 562,698 Other assets $ 17,012 Other liabilities $ 17,334 Loan commitments 13,349 Mortgages held for sale 168 N/A — Forward contracts - mortgage loan 25,078 N/A — Mortgages held for sale 307 Total $ 601,125 $ 17,180 $ 17,641 December 31, 2015 Interest rate swap contracts $ 554,083 Other assets $ 9,859 Other liabilities $ 10,044 Loan commitments 12,440 Mortgages held for sale 47 N/A — Forward contracts - mortgage loan 16,416 Mortgages held for sale 13 N/A — Total $ 582,939 $ 9,919 $ 10,044 |
Schedule of amounts included in the consolidated statements of income for non-hedging derivative financial instruments | The following table shows the amounts included in the Statements of Income for non-hedging derivative financial instruments. Gain (loss) Three Months Ended Six Months Ended (Dollars in thousands) Statement of Income classification 2016 2015 2016 2015 Interest rate swap contracts Other expense $ (43 ) $ 41 $ (136 ) $ 22 Interest rate swap contracts Other income 110 221 314 297 Loan commitments Mortgage banking 73 (52 ) 121 87 Forward contracts - mortgage loan Mortgage banking (175 ) 372 (320 ) 346 Total $ (35 ) $ 582 $ (21 ) $ 752 |
Schedule of offsetting of financial assets and derivative assets | The following table shows the offsetting of financial assets and derivative assets. Gross Amounts Not Offset in the Statement of Financial Condition (Dollars in thousands) Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Condition Net Amounts of Assets Presented in the Statement of Financial Condition Financial Instruments Cash Collateral Received Net Amount June 30, 2016 Interest rate swaps $ 17,245 $ 233 $ 17,012 $ — $ — $ 17,012 December 31, 2015 Interest rate swaps $ 10,016 $ 157 $ 9,859 $ — $ — $ 9,859 |
Schedule of offsetting of financial liabilities and derivative liabilities | The following table shows the offsetting of financial liabilities and derivative liabilities. Gross Amounts Not Offset in the Statement of Financial Condition (Dollars in thousands) Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Condition Net Amounts of Liabilities Presented in the Statement of Financial Condition Financial Instruments Cash Collateral Pledged Net Amount June 30, 2016 Interest rate swaps $ 17,567 $ 233 $ 17,334 $ — $ 17,334 $ — Repurchase agreements 161,826 — 161,826 161,826 — — Total $ 179,393 $ 233 $ 179,160 $ 161,826 $ 17,334 $ — December 31, 2015 Interest rate swaps $ 10,201 $ 157 $ 10,044 $ — $ 9,833 $ 211 Repurchase agreements 130,662 — 130,662 130,662 — — Total $ 140,863 $ 157 $ 140,706 $ 130,662 $ 9,833 $ 211 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share | The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share. Three Months Ended Six Months Ended (Dollars in thousands - except per share amounts) 2016 2015 2016 2015 Distributed earnings allocated to common stock $ 4,653 $ 4,293 $ 9,339 $ 8,589 Undistributed earnings allocated to common stock 9,728 11,186 18,745 20,249 Net earnings allocated to common stock 14,381 15,479 28,084 28,838 Net earnings allocated to participating securities 98 151 213 303 Net income allocated to common stock and participating securities $ 14,479 $ 15,630 $ 28,297 $ 29,141 Weighted average shares outstanding for basic earnings per common share* 25,853,537 26,212,999 25,888,534 26,235,511 Dilutive effect of stock compensation — — — — Weighted average shares outstanding for diluted earnings per common share* 25,853,537 26,212,999 25,888,534 26,235,511 Basic earnings per common share* $ 0.56 $ 0.59 $ 1.08 $ 1.10 Diluted earnings per common share* $ 0.56 $ 0.59 $ 1.08 $ 1.10 *Three and six months ended June 30, 2015 outstanding shares and per common share figures have been adjusted for a 10% stock dividend declared July 22, 2015 and issued on August 14, 2015. |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Income (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of reclassifications out of accumulated other comprehensive income | The following table presents reclassifications out of accumulated other comprehensive income related to unrealized gains and losses on available-for-sale securities. Three Months Ended Six Months Ended Affected Line Item in the Statements of Income (Dollars in thousands) 2016 2015 2016 2015 Realized (losses) gains included in net income $ (209 ) $ 4 $ (199 ) $ 4 (Losses) gains on investment securities available-for-sale (209 ) 4 (199 ) 4 Income before income taxes Tax effect 78 (2 ) 75 (2 ) Income tax expense Net of tax $ (131 ) $ 2 $ (124 ) $ 2 Net income |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair value measurements | |
Schedule of differences between the fair value carrying amount of mortgages held for sale measured at fair value and the aggregate unpaid principal amount | The following table shows the differences between the fair value carrying amount of mortgages held for sale measured at fair value and the aggregate unpaid principal amount the Company is contractually entitled to receive at maturity. (Dollars in thousands) Fair value carrying amount Aggregate unpaid principal Excess of fair value carrying amount over (under) unpaid principal June 30, 2016 Mortgages held for sale reported at fair value $ 15,924 $ 15,671 $ 253 (1) December 31, 2015 Mortgages held for sale reported at fair value $ 9,825 $ 9,691 $ 134 (1) (1) The excess of fair value carrying amount over (under) unpaid principal is included in mortgage banking income and includes changes in fair value at and subsequent to funding and gains and losses on the related loan commitment prior to funding. |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following table shows the balance of assets and liabilities measured at fair value on a recurring basis. (Dollars in thousands) Level 1 Level 2 Level 3 Total June 30, 2016 Assets: Investment securities available-for-sale: U.S. Treasury and Federal agencies securities $ 20,044 $ 380,087 $ — $ 400,131 U.S. States and political subdivisions securities — 124,557 4,661 129,218 Mortgage-backed securities — Federal agencies — 244,539 — 244,539 Corporate debt securities — 32,430 — 32,430 Foreign government and other securities — — 810 810 Total debt securities 20,044 781,613 5,471 807,128 Marketable equity securities 7,130 — — 7,130 Total investment securities available-for-sale 27,174 781,613 5,471 814,258 Mortgages held for sale — 15,924 — 15,924 Accrued income and other assets (interest rate swap agreements) — 17,012 — 17,012 Total $ 27,174 $ 814,549 $ 5,471 $ 847,194 Liabilities: Accrued expenses and other liabilities (interest rate swap agreements) $ — $ 17,334 $ — $ 17,334 Total $ — $ 17,334 $ — $ 17,334 December 31, 2015 Assets: Investment securities available-for-sale: U.S. Treasury and Federal agencies securities $ 19,879 $ 369,790 $ — $ 389,669 U.S. States and political subdivisions securities — 118,462 4,528 122,990 Mortgage-backed securities — Federal agencies — 236,297 — 236,297 Corporate debt securities — 34,383 — 34,383 Foreign government and other securities — — 809 809 Total debt securities 19,879 758,932 5,337 784,148 Marketable equity securities 7,579 — — 7,579 Total investment securities available-for-sale 27,458 758,932 5,337 791,727 Mortgages held for sale — 9,825 — 9,825 Accrued income and other assets (interest rate swap agreements) — 9,859 — 9,859 Total $ 27,458 $ 778,616 $ 5,337 $ 811,411 Liabilities: Accrued expenses and other liabilities (interest rate swap agreements) $ — $ 10,044 $ — $ 10,044 Total $ — $ 10,044 $ — $ 10,044 |
Schedule of changes in investment securities available-for-sale Level 3 assets measured at fair value on a recurring basis | The following table shows changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the quarter ended June 30, 2016 and 2015 . (Dollars in thousands) U.S. States and political subdivisions securities Foreign government and other securities Investment securities available-for-sale Beginning balance April 1, 2016 $ 4,810 $ 809 $ 5,619 Total gains or losses (realized/unrealized): Included in earnings — — — Included in other comprehensive income (4 ) 1 (3 ) Purchases — — — Issuances — — — Sales — — — Settlements — — — Maturities (145 ) — (145 ) Transfers into Level 3 — — — Transfers out of Level 3 — — — Ending balance June 30, 2016 $ 4,661 $ 810 $ 5,471 Beginning balance April 1, 2015 $ 5,632 $ 808 $ 6,440 Total gains or losses (realized/unrealized): Included in earnings — — — Included in other comprehensive income (38 ) (1 ) (39 ) Purchases — — — Issuances — — — Sales — — — Settlements — — — Maturities (150 ) — (150 ) Transfers into Level 3 — — — Transfers out of Level 3 — — — Ending balance June 30, 2015 $ 5,444 $ 807 $ 6,251 |
Schedule of carrying value of assets measured at fair value on a non-recurring basis | The following table shows the carrying value of assets measured at fair value on a non-recurring basis. (Dollars in thousands) Level 1 Level 2 Level 3 Total June 30, 2016 Impaired loans - collateral based $ — $ — $ 915 $ 915 Accrued income and other assets (partnership investments) — — 24 24 Accrued income and other assets (mortgage servicing rights) — — 4,339 4,339 Accrued income and other assets (repossessions) — — 7,619 7,619 Accrued income and other assets (other real estate) — — 452 452 Total $ — $ — $ 13,349 $ 13,349 December 31, 2015 Impaired loans - collateral based $ — $ — $ 220 $ 220 Accrued income and other assets (partnership investments) — — 1,000 1,000 Accrued income and other assets (mortgage servicing rights) — — 4,608 4,608 Accrued income and other assets (repossessions) — — 6,927 6,927 Accrued income and other assets (other real estate) — — 736 736 Total $ — $ — $ 13,491 $ 13,491 |
Schedule of fair values of financial instruments | The following table shows the fair values of the Company’s financial instruments. (Dollars in thousands) Carrying or Contract Value Fair Value Level 1 Level 2 Level 3 June 30, 2016 Assets: Cash and due from banks $ 58,944 $ 58,944 $ 58,944 $ — $ — Federal funds sold and interest bearing deposits with other banks 14,297 14,297 14,297 — — Investment securities, available-for-sale 814,258 814,258 27,174 781,613 5,471 Other investments 21,973 21,973 21,973 — — Mortgages held for sale 15,924 15,924 — 15,924 — Loans and leases, net of reserve for loan and lease losses 4,061,305 4,073,538 — — 4,073,538 Mortgage servicing rights 4,339 5,553 — — 5,553 Interest rate swaps 17,012 17,012 — 17,012 — Liabilities: Deposits $ 4,325,084 $ 4,333,142 $ 3,116,348 $ 1,216,794 $ — Short-term borrowings 205,976 205,976 163,246 42,730 — Long-term debt and mandatorily redeemable securities 64,738 64,796 — 64,796 — Subordinated notes 58,764 49,493 — 49,493 — Interest rate swaps 17,334 17,334 — 17,334 — Off-balance-sheet instruments * — 377 — 377 — December 31, 2015 Assets: Cash and due from banks $ 65,171 $ 65,171 $ 65,171 $ — $ — Federal funds sold and interest bearing deposits with other banks 14,550 14,550 14,550 — — Investment securities, available-for-sale 791,727 791,727 27,458 758,932 5,337 Other investments 21,973 21,973 21,973 — — Mortgages held for sale 9,825 9,825 — 9,825 — Loans and leases, net of reserve for loan and lease losses 3,906,580 3,927,967 — — 3,927,967 Mortgage servicing rights 4,608 7,246 — — 7,246 Interest rate swaps 9,859 9,859 — 9,859 — Liabilities: Deposits $ 4,139,186 $ 4,139,649 $ 2,998,443 $ 1,141,206 $ — Short-term borrowings 233,229 233,229 134,156 99,073 — Long-term debt and mandatorily redeemable securities 57,379 57,193 — 57,193 — Subordinated notes 58,764 48,304 — 48,304 — Interest rate swaps 10,044 10,044 — 10,044 — Off-balance-sheet instruments * — 375 — 375 — * Represents estimated cash outflows required to currently settle the obligations at current market rates. |
Recurring | |
Fair value measurements | |
Schedule of valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring and non-recurring basis | The following table shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring basis. (Dollars in thousands) Fair Value Valuation Methodology Unobservable Inputs Range of Inputs June 30, 2016 Investment securities available-for sale Direct placement municipal securities $ 4,661 Discounted cash flows Credit spread assumption 0.03% - 1.40% Foreign government $ 801 Discounted cash flows Market yield assumption 0.49% - 1.56% December 31, 2015 Investment securities available-for sale Direct placement municipal securities $ 4,528 Discounted cash flows Credit spread assumption 1.27% - 2.03% Foreign government $ 809 Discounted cash flows Market yield assumption 0.88% - 2.00% |
Non-recurring | |
Fair value measurements | |
Schedule of valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring and non-recurring basis | The following table below shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a non-recurring basis. (Dollars in thousands) Carrying Value Fair Value Valuation Methodology Unobservable Inputs Range of Inputs June 30, 2016 Impaired loans $ 915 $ 915 Collateral based measurements including appraisals, trade publications, and auction values Discount for lack of marketability and current conditions 10% - 100% Mortgage servicing rights 4,339 5,553 Discounted cash flows Constant prepayment rate (CPR) 14.2% - 20.1% Discount rate 9.1% - 12.0% Repossessions 7,619 7,798 Appraisals, trade publications and auction values Discount for lack of marketability 0% - 3% Other real estate 452 481 Appraisals Discount for lack of marketability 0% - 14% December 31, 2015 Impaired loans $ 220 $ 220 Collateral based measurements including appraisals, trade publications, and auction values Discount for lack of marketability and current conditions 20% Mortgage servicing rights 4,608 7,246 Discounted cash flows Constant prepayment rate (CPR) 9.4% - 15.0% Discount rate 9.8% - 13.3% Repossessions 6,927 7,104 Appraisals, trade publications and auction values Discount for lack of marketability 2% - 3% Other real estate 736 851 Appraisals Discount for lack of marketability 8% - 35% |
Accounting Policies Accountin33
Accounting Policies Accounting Policies (Details) - Minimum | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Summary of Significant Accounting Policies [Line Items] | |
Period of sustained performance required to change from non-performing to performing status | 6 months |
Amount necessary for impairment evaluation | $ 100,000 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Investment Securities | ||
Total investment securities available-for-sale, Amortized Cost | $ 796,917 | $ 781,232 |
Gross Unrealized Gains | 17,683 | 13,955 |
Gross Unrealized Losses | (342) | (3,460) |
Investment securities, available-for-sale | 814,258 | 791,727 |
Contractual maturities of investments in debt securities available-for-sale, Amortized Cost | ||
Due in one year or less | 214,503 | |
Due after one year through five years | 318,873 | |
Due after five years through ten years | 22,113 | |
Due after ten years | 0 | |
Mortgage-backed securities | 239,829 | |
Total debt securities available-for-sale | 795,318 | |
Contractual maturities of investments in debt securities available-for-sale, Fair Value | ||
Due in one year or less | 215,323 | |
Due after one year through five years | 324,549 | |
Due after five years through ten years | 22,717 | |
Due after ten years | 0 | |
Mortgage-backed securities | 244,539 | |
Total debt securities available-for-sale | 807,128 | |
U.S. Treasury and Federal agencies securities | ||
Investment Securities | ||
Total investment securities available-for-sale, Amortized Cost | 396,740 | 389,457 |
Gross Unrealized Gains | 3,396 | 1,718 |
Gross Unrealized Losses | (5) | (1,506) |
Investment securities, available-for-sale | 400,131 | 389,669 |
U.S. States and political subdivisions securities | ||
Investment Securities | ||
Total investment securities available-for-sale, Amortized Cost | 125,917 | 120,441 |
Gross Unrealized Gains | 3,364 | 2,692 |
Gross Unrealized Losses | (63) | (143) |
Investment securities, available-for-sale | 129,218 | 122,990 |
Mortgage-backed securities - Federal agencies | ||
Investment Securities | ||
Total investment securities available-for-sale, Amortized Cost | 239,829 | 234,400 |
Gross Unrealized Gains | 4,982 | 3,430 |
Gross Unrealized Losses | (272) | (1,533) |
Investment securities, available-for-sale | 244,539 | 236,297 |
Corporate debt securities | ||
Investment Securities | ||
Total investment securities available-for-sale, Amortized Cost | 32,032 | 34,241 |
Gross Unrealized Gains | 398 | 199 |
Gross Unrealized Losses | 0 | (57) |
Investment securities, available-for-sale | 32,430 | 34,383 |
Foreign government and other securities | ||
Investment Securities | ||
Total investment securities available-for-sale, Amortized Cost | 800 | 800 |
Gross Unrealized Gains | 10 | 10 |
Gross Unrealized Losses | 0 | (1) |
Investment securities, available-for-sale | 810 | 809 |
Total debt securities | ||
Investment Securities | ||
Total investment securities available-for-sale, Amortized Cost | 795,318 | 779,339 |
Gross Unrealized Gains | 12,150 | 8,049 |
Gross Unrealized Losses | (340) | (3,240) |
Investment securities, available-for-sale | 807,128 | 784,148 |
Marketable equity securities | ||
Investment Securities | ||
Total investment securities available-for-sale, Amortized Cost | 1,599 | 1,893 |
Gross Unrealized Gains | 5,533 | 5,906 |
Gross Unrealized Losses | (2) | (220) |
Investment securities, available-for-sale | $ 7,130 | $ 7,579 |
Investment Securities (Details
Investment Securities (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Fair Value | |||||
Less than 12 Months | $ 36,982 | $ 36,982 | $ 257,218 | ||
12 months or Longer | 19,624 | 19,624 | 67,762 | ||
Total fair value | 56,606 | 56,606 | 324,980 | ||
Unrealized Losses | |||||
Less than 12 Months | (105) | (105) | (2,060) | ||
12 months or Longer | (237) | (237) | (1,400) | ||
Total unrealized losses | (342) | (342) | (3,460) | ||
Gross realized gains and losses | |||||
Gross realized gains | 85 | $ 4 | 95 | $ 4 | |
Gross realized losses | 0 | 0 | 0 | 0 | |
OTTI losses | (294) | 0 | (294) | 0 | |
Net realized gains (losses) | (209) | $ 4 | (199) | $ 4 | |
Investment securities pledged as collateral | 249,000 | 249,000 | 233,140 | ||
U.S. Treasury and Federal agencies securities | |||||
Fair Value | |||||
Less than 12 Months | 5,974 | 5,974 | 151,581 | ||
12 months or Longer | 0 | 0 | 43,372 | ||
Total fair value | 5,974 | 5,974 | 194,953 | ||
Unrealized Losses | |||||
Less than 12 Months | (5) | (5) | (928) | ||
12 months or Longer | 0 | 0 | (578) | ||
Total unrealized losses | (5) | (5) | (1,506) | ||
U.S. States and political subdivisions securities | |||||
Fair Value | |||||
Less than 12 Months | 7,237 | 7,237 | 17,040 | ||
12 months or Longer | 4,474 | 4,474 | 3,795 | ||
Total fair value | 11,711 | 11,711 | 20,835 | ||
Unrealized Losses | |||||
Less than 12 Months | (22) | (22) | (79) | ||
12 months or Longer | (41) | (41) | (64) | ||
Total unrealized losses | (63) | (63) | (143) | ||
Mortgage-backed securities - Federal agencies | |||||
Fair Value | |||||
Less than 12 Months | 23,770 | 23,770 | 78,731 | ||
12 months or Longer | 15,147 | 15,147 | 20,592 | ||
Total fair value | 38,917 | 38,917 | 99,323 | ||
Unrealized Losses | |||||
Less than 12 Months | (78) | (78) | (777) | ||
12 months or Longer | (194) | (194) | (756) | ||
Total unrealized losses | (272) | (272) | (1,533) | ||
Corporate debt securities | |||||
Fair Value | |||||
Less than 12 Months | 0 | 0 | 9,340 | ||
12 months or Longer | 0 | 0 | 0 | ||
Total fair value | 0 | 0 | 9,340 | ||
Unrealized Losses | |||||
Less than 12 Months | 0 | 0 | (57) | ||
12 months or Longer | 0 | 0 | 0 | ||
Total unrealized losses | 0 | 0 | (57) | ||
Foreign government and other securities | |||||
Fair Value | |||||
Less than 12 Months | 0 | 0 | 99 | ||
12 months or Longer | 0 | 0 | 0 | ||
Total fair value | 0 | 0 | 99 | ||
Unrealized Losses | |||||
Less than 12 Months | 0 | 0 | (1) | ||
12 months or Longer | 0 | 0 | 0 | ||
Total unrealized losses | 0 | 0 | (1) | ||
Total debt securities | |||||
Fair Value | |||||
Less than 12 Months | 36,981 | 36,981 | 256,791 | ||
12 months or Longer | 19,621 | 19,621 | 67,759 | ||
Total fair value | 56,602 | 56,602 | 324,550 | ||
Unrealized Losses | |||||
Less than 12 Months | (105) | (105) | (1,842) | ||
12 months or Longer | (235) | (235) | (1,398) | ||
Total unrealized losses | (340) | (340) | (3,240) | ||
Marketable equity securities | |||||
Fair Value | |||||
Less than 12 Months | 1 | 1 | 427 | ||
12 months or Longer | 3 | 3 | 3 | ||
Total fair value | 4 | 4 | 430 | ||
Unrealized Losses | |||||
Less than 12 Months | 0 | 0 | (218) | ||
12 months or Longer | (2) | (2) | (2) | ||
Total unrealized losses | $ (2) | $ (2) | $ (220) |
Loan and Lease Financings (Deta
Loan and Lease Financings (Details) | 6 Months Ended | |
Jun. 30, 2016USD ($)item | Dec. 31, 2015USD ($) | |
Receivables [Abstract] | ||
Number of methods to assess credit risk | item | 2 | |
Loan and Lease Financings | ||
Recorded investment in loans and leases | $ 4,152,763,000 | $ 3,994,692,000 |
Loan and lease financings excluding residential real estate and consumer loans | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 3,513,563,000 | 3,382,084,000 |
Commercial and agricultural | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 759,175,000 | 744,749,000 |
Auto and light truck | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 457,586,000 | 425,236,000 |
Medium and heavy duty truck | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 273,674,000 | 278,254,000 |
Aircraft | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 822,842,000 | 778,012,000 |
Construction equipment | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 484,354,000 | 455,565,000 |
Commercial real estate | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 715,932,000 | 700,268,000 |
Credit Quality Grades 1-6 | Loan and lease financings excluding residential real estate and consumer loans | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 3,400,643,000 | 3,278,484,000 |
Credit Quality Grades 1-6 | Commercial and agricultural | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 725,345,000 | 710,030,000 |
Credit Quality Grades 1-6 | Auto and light truck | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 427,067,000 | 413,836,000 |
Credit Quality Grades 1-6 | Medium and heavy duty truck | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 271,809,000 | 275,367,000 |
Credit Quality Grades 1-6 | Aircraft | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 792,536,000 | 750,264,000 |
Credit Quality Grades 1-6 | Construction equipment | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 479,698,000 | 448,683,000 |
Credit Quality Grades 1-6 | Commercial real estate | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 704,188,000 | 680,304,000 |
Credit Quality Grades 7-12 | ||
Loan and Lease Financings | ||
Relationships reviewed quarterly as part of management's evaluation of the appropriateness of the reserve for loan and lease losses | 100,000 | |
Credit Quality Grades 7-12 | Loan and lease financings excluding residential real estate and consumer loans | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 112,920,000 | 103,600,000 |
Credit Quality Grades 7-12 | Commercial and agricultural | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 33,830,000 | 34,719,000 |
Credit Quality Grades 7-12 | Auto and light truck | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 30,519,000 | 11,400,000 |
Credit Quality Grades 7-12 | Medium and heavy duty truck | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 1,865,000 | 2,887,000 |
Credit Quality Grades 7-12 | Aircraft | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 30,306,000 | 27,748,000 |
Credit Quality Grades 7-12 | Construction equipment | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 4,656,000 | 6,882,000 |
Credit Quality Grades 7-12 | Commercial real estate | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | $ 11,744,000 | $ 19,964,000 |
Loan and Lease Financings (De37
Loan and Lease Financings (Details 2) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Loan and Lease Financings | ||
Recorded investment in loans and leases | $ 4,152,763 | $ 3,994,692 |
Residential real estate and home equity and consumer loans | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 639,200 | 612,608 |
Residential real estate and home equity | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 482,979 | 464,129 |
Consumer | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 156,221 | 148,479 |
Performing | Residential real estate and home equity and consumer loans | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 636,661 | 610,416 |
Performing | Residential real estate and home equity | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 481,128 | 462,236 |
Performing | Consumer | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | $ 155,533 | 148,180 |
Nonperforming | ||
Loan and Lease Financings | ||
Classification of nonperforming loans, threshold period past due | 90 days | |
Nonperforming | Residential real estate and home equity and consumer loans | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | $ 2,539 | 2,192 |
Nonperforming | Residential real estate and home equity | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 1,851 | 1,893 |
Nonperforming | Consumer | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | $ 688 | $ 299 |
Loan and Lease Financings (De38
Loan and Lease Financings (Details 3) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | $ 4,128,724 | $ 3,969,357 |
90 Days or More Past Due and Accruing | 276 | 122 |
Total Accruing Loans | 4,140,184 | 3,981,974 |
Nonaccrual | 12,579 | 12,718 |
Total loans and leases | 4,152,763 | 3,994,692 |
30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 10,718 | 11,649 |
60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 466 | 846 |
Commercial and agricultural | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 755,391 | 740,335 |
Total Accruing Loans | 755,582 | 740,466 |
Nonaccrual | 3,593 | 4,283 |
Total loans and leases | 759,175 | 744,749 |
Commercial and agricultural | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 175 | 52 |
Commercial and agricultural | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 16 | 79 |
Auto and light truck | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 457,190 | 424,997 |
Total Accruing Loans | 457,539 | 425,190 |
Nonaccrual | 47 | 46 |
Total loans and leases | 457,586 | 425,236 |
Auto and light truck | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 336 | 170 |
Auto and light truck | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 13 | 23 |
Medium and heavy duty truck | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 273,674 | 278,254 |
Total Accruing Loans | 273,674 | 278,254 |
Nonaccrual | 0 | 0 |
Total loans and leases | 273,674 | 278,254 |
Medium and heavy duty truck | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 0 | 0 |
Medium and heavy duty truck | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 0 | 0 |
Aircraft | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 811,062 | 764,074 |
Total Accruing Loans | 818,562 | 773,624 |
Nonaccrual | 4,280 | 4,388 |
Total loans and leases | 822,842 | 778,012 |
Aircraft | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 7,500 | 9,442 |
Aircraft | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 0 | 108 |
Construction equipment | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 482,657 | 454,993 |
Total Accruing Loans | 483,685 | 455,026 |
Nonaccrual | 669 | 539 |
Total loans and leases | 484,354 | 455,565 |
Construction equipment | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 1,028 | 33 |
Construction equipment | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 0 | 0 |
Commercial real estate | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 713,651 | 698,514 |
Total Accruing Loans | 714,205 | 698,876 |
Nonaccrual | 1,727 | 1,392 |
Total loans and leases | 715,932 | 700,268 |
Commercial real estate | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 554 | 362 |
Commercial real estate | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 0 | 0 |
Residential real estate and home equity | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 479,970 | 460,771 |
90 Days or More Past Due and Accruing | 234 | 71 |
Total Accruing Loans | 481,362 | 462,307 |
Nonaccrual | 1,617 | 1,822 |
Total loans and leases | 482,979 | 464,129 |
Residential real estate and home equity | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 769 | 1,038 |
Residential real estate and home equity | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 389 | 427 |
Consumer | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 155,129 | 147,419 |
90 Days or More Past Due and Accruing | 42 | 51 |
Total Accruing Loans | 155,575 | 148,231 |
Nonaccrual | 646 | 248 |
Total loans and leases | 156,221 | 148,479 |
Consumer | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 356 | 552 |
Consumer | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | $ 48 | $ 209 |
Loan and Lease Financings (De39
Loan and Lease Financings (Details 4) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | $ 5,311 | $ 5,311 | $ 14,433 | ||
Unpaid Principal Balance, With no related allowance recorded | 5,311 | 5,311 | 14,433 | ||
Recorded Investment, With an allowance recorded | 4,634 | 4,634 | 3,250 | ||
Unpaid Principal Balance, With an allowance recorded | 4,636 | 4,636 | 3,252 | ||
Total Recorded Investment | 9,945 | 9,945 | 17,683 | ||
Total Unpaid Principal Balance | 9,947 | 9,947 | 17,685 | ||
Total Related Allowance | 1,904 | 1,904 | 797 | ||
Average Recorded Investment | 14,768 | $ 21,240 | 16,076 | $ 26,604 | |
Interest Income | 4 | 152 | 135 | 314 | |
Commercial and agricultural | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 743 | 743 | 1,016 | ||
Unpaid Principal Balance, With no related allowance recorded | 743 | 743 | 1,016 | ||
Recorded Investment, With an allowance recorded | 2,441 | 2,441 | 2,884 | ||
Unpaid Principal Balance, With an allowance recorded | 2,441 | 2,441 | 2,884 | ||
Total Related Allowance | 463 | 463 | 649 | ||
Average Recorded Investment | 3,449 | 2,134 | 3,579 | 5,971 | |
Interest Income | 0 | 6 | 4 | 16 | |
Auto and light truck | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With no related allowance recorded | 0 | 0 | 0 | ||
Recorded Investment, With an allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With an allowance recorded | 0 | 0 | 0 | ||
Total Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 0 | 0 | 0 | 0 | |
Interest Income | 0 | 0 | 0 | 0 | |
Medium and heavy duty truck | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With no related allowance recorded | 0 | 0 | 0 | ||
Recorded Investment, With an allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With an allowance recorded | 0 | 0 | 0 | ||
Total Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 0 | 0 | 0 | 0 | |
Interest Income | 0 | 0 | 0 | 0 | |
Aircraft | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 2,450 | 2,450 | 4,384 | ||
Unpaid Principal Balance, With no related allowance recorded | 2,450 | 2,450 | 4,384 | ||
Recorded Investment, With an allowance recorded | 1,830 | 1,830 | 0 | ||
Unpaid Principal Balance, With an allowance recorded | 1,830 | 1,830 | 0 | ||
Total Related Allowance | 1,296 | 1,296 | 0 | ||
Average Recorded Investment | 4,341 | 7,269 | 4,184 | 8,207 | |
Interest Income | 0 | 0 | 0 | 6 | |
Construction equipment | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 577 | 577 | 539 | ||
Unpaid Principal Balance, With no related allowance recorded | 577 | 577 | 539 | ||
Recorded Investment, With an allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With an allowance recorded | 0 | 0 | 0 | ||
Total Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 514 | 731 | 697 | 735 | |
Interest Income | 0 | 0 | 0 | 0 | |
Commercial real estate | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 1,541 | 1,541 | 8,494 | ||
Unpaid Principal Balance, With no related allowance recorded | 1,541 | 1,541 | 8,494 | ||
Recorded Investment, With an allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With an allowance recorded | 0 | 0 | 0 | ||
Total Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 6,100 | 10,735 | 7,251 | 11,319 | |
Interest Income | 0 | 142 | 123 | 284 | |
Residential real estate and home equity | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With no related allowance recorded | 0 | 0 | 0 | ||
Recorded Investment, With an allowance recorded | 363 | 363 | 366 | ||
Unpaid Principal Balance, With an allowance recorded | 365 | 365 | 368 | ||
Total Related Allowance | 145 | 145 | 148 | ||
Average Recorded Investment | 364 | 371 | 365 | 372 | |
Interest Income | 4 | 4 | 8 | 8 | |
Consumer | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With no related allowance recorded | 0 | 0 | 0 | ||
Recorded Investment, With an allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With an allowance recorded | 0 | 0 | 0 | ||
Total Related Allowance | 0 | 0 | $ 0 | ||
Average Recorded Investment | 0 | 0 | 0 | 0 | |
Interest Income | $ 0 | $ 0 | $ 0 | $ 0 |
Loan and Lease Financings (De40
Loan and Lease Financings (Details 5) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016USD ($)item | Jun. 30, 2015item | Jun. 30, 2016USD ($)item | Jun. 30, 2015item | Dec. 31, 2015USD ($) | |
Loans and leases classified as TDR | |||||
Number of Modifications | item | 0 | 0 | 0 | 0 | |
Number of Defaults | item | 0 | 0 | 0 | 0 | |
Loans and leases classified as troubled debt restructuring | $ 2,207 | $ 2,207 | $ 9,363 | ||
Troubled debt restructured loans and leases which had payment defaults within twelve months following modification | |||||
Default threshold | 90 days | ||||
Performing | |||||
Loans and leases classified as TDR | |||||
Loans and leases classified as troubled debt restructuring | 363 | $ 363 | 7,437 | ||
Nonperforming | |||||
Loans and leases classified as TDR | |||||
Loans and leases classified as troubled debt restructuring | $ 1,844 | $ 1,844 | $ 1,926 |
Reserve for Loan and Lease Lo41
Reserve for Loan and Lease Losses (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)item | Dec. 31, 2015USD ($) | |
Reserve for loan and lease losses | ||||||
Number of classes existing in loan and lease portfolio | item | 8 | |||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | $ 89,296 | $ 85,098 | $ 88,112 | $ 85,068 | ||
Charge-offs | 331 | 220 | 895 | 1,421 | ||
Recoveries | 444 | 899 | 1,217 | 1,773 | ||
Net charge-offs (recoveries) | (113) | (679) | (322) | (352) | ||
Provision (recovery of provision) | 2,049 | 811 | 3,024 | 1,168 | ||
Balance at the end of the period | 91,458 | 86,588 | 91,458 | 86,588 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | $ 1,904 | $ 797 | ||||
Ending balance, collectively evaluated for impairment | 89,554 | 87,315 | ||||
Total reserve for loan and lease losses | 89,296 | 85,098 | 88,112 | 85,068 | 91,458 | 88,112 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 9,945 | 17,683 | ||||
Ending balance, collectively evaluated for impairment | 4,142,818 | 3,977,009 | ||||
Total loans and leases | 4,152,763 | 3,994,692 | ||||
Commercial and agricultural | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 14,735 | 11,620 | 15,456 | 11,760 | ||
Charge-offs | 16 | 22 | 216 | 965 | ||
Recoveries | 109 | 86 | 200 | 564 | ||
Net charge-offs (recoveries) | (93) | (64) | 16 | 401 | ||
Provision (recovery of provision) | 7 | 181 | (605) | 506 | ||
Balance at the end of the period | 14,835 | 11,865 | 14,835 | 11,865 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 463 | 649 | ||||
Ending balance, collectively evaluated for impairment | 14,372 | 14,807 | ||||
Total reserve for loan and lease losses | 14,735 | 11,620 | 15,456 | 11,760 | 14,835 | 15,456 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 3,184 | 3,900 | ||||
Ending balance, collectively evaluated for impairment | 755,991 | 740,849 | ||||
Total loans and leases | 759,175 | 744,749 | ||||
Auto and light truck | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 9,582 | 10,793 | 9,269 | 10,326 | ||
Charge-offs | 0 | 0 | 3 | 22 | ||
Recoveries | 64 | 191 | 126 | 251 | ||
Net charge-offs (recoveries) | (64) | (191) | (123) | (229) | ||
Provision (recovery of provision) | 2,021 | 461 | 2,275 | 890 | ||
Balance at the end of the period | 11,667 | 11,445 | 11,667 | 11,445 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 0 | 0 | ||||
Ending balance, collectively evaluated for impairment | 11,667 | 9,269 | ||||
Total reserve for loan and lease losses | 9,582 | 10,793 | 9,269 | 10,326 | 11,667 | 9,269 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 0 | 0 | ||||
Ending balance, collectively evaluated for impairment | 457,586 | 425,236 | ||||
Total loans and leases | 457,586 | 425,236 | ||||
Medium and heavy duty truck | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 4,511 | 4,364 | 4,699 | 4,500 | ||
Charge-offs | 0 | 0 | 0 | 0 | ||
Recoveries | 2 | 2 | 10 | 5 | ||
Net charge-offs (recoveries) | (2) | (2) | (10) | (5) | ||
Provision (recovery of provision) | (163) | (33) | (359) | (172) | ||
Balance at the end of the period | 4,350 | 4,333 | 4,350 | 4,333 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 0 | 0 | ||||
Ending balance, collectively evaluated for impairment | 4,350 | 4,699 | ||||
Total reserve for loan and lease losses | 4,511 | 4,364 | 4,699 | 4,500 | 4,350 | 4,699 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 0 | 0 | ||||
Ending balance, collectively evaluated for impairment | 273,674 | 278,254 | ||||
Total loans and leases | 273,674 | 278,254 | ||||
Aircraft | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 34,240 | 31,301 | 32,373 | 32,234 | ||
Charge-offs | 0 | 0 | 0 | 49 | ||
Recoveries | 89 | 398 | 227 | 442 | ||
Net charge-offs (recoveries) | (89) | (398) | (227) | (393) | ||
Provision (recovery of provision) | 332 | 1,141 | 2,061 | 213 | ||
Balance at the end of the period | 34,661 | 32,840 | 34,661 | 32,840 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 1,296 | 0 | ||||
Ending balance, collectively evaluated for impairment | 33,365 | 32,373 | ||||
Total reserve for loan and lease losses | 34,240 | 31,301 | 32,373 | 32,234 | 34,661 | 32,373 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 4,280 | 4,384 | ||||
Ending balance, collectively evaluated for impairment | 818,562 | 773,628 | ||||
Total loans and leases | 822,842 | 778,012 | ||||
Construction equipment | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 7,462 | 7,740 | 7,592 | 7,008 | ||
Charge-offs | 0 | 0 | 92 | 0 | ||
Recoveries | 70 | 123 | 148 | 245 | ||
Net charge-offs (recoveries) | (70) | (123) | (56) | (245) | ||
Provision (recovery of provision) | (20) | (56) | (136) | 554 | ||
Balance at the end of the period | 7,512 | 7,807 | 7,512 | 7,807 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 0 | 0 | ||||
Ending balance, collectively evaluated for impairment | 7,512 | 7,592 | ||||
Total reserve for loan and lease losses | 7,462 | 7,740 | 7,592 | 7,008 | 7,512 | 7,592 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 577 | 539 | ||||
Ending balance, collectively evaluated for impairment | 483,777 | 455,026 | ||||
Total loans and leases | 484,354 | 455,565 | ||||
Commercial real estate | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 13,835 | 13,186 | 13,762 | 13,270 | ||
Charge-offs | 0 | 0 | 1 | 0 | ||
Recoveries | 34 | 38 | 339 | 135 | ||
Net charge-offs (recoveries) | (34) | (38) | (338) | (135) | ||
Provision (recovery of provision) | (407) | 2 | (638) | (179) | ||
Balance at the end of the period | 13,462 | 13,226 | 13,462 | 13,226 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 0 | 0 | ||||
Ending balance, collectively evaluated for impairment | 13,462 | 13,762 | ||||
Total reserve for loan and lease losses | 13,835 | 13,186 | 13,762 | 13,270 | 13,462 | 13,762 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 1,541 | 8,494 | ||||
Ending balance, collectively evaluated for impairment | 714,391 | 691,774 | ||||
Total loans and leases | 715,932 | 700,268 | ||||
Residential real estate and home equity | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 3,379 | 4,115 | 3,382 | 4,102 | ||
Charge-offs | 58 | 25 | 81 | 65 | ||
Recoveries | 4 | 5 | 6 | 7 | ||
Net charge-offs (recoveries) | 54 | 20 | 75 | 58 | ||
Provision (recovery of provision) | 52 | (651) | 70 | (600) | ||
Balance at the end of the period | 3,377 | 3,444 | 3,377 | 3,444 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 145 | 148 | ||||
Ending balance, collectively evaluated for impairment | 3,232 | 3,234 | ||||
Total reserve for loan and lease losses | 3,379 | 4,115 | 3,382 | 4,102 | 3,377 | 3,382 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 363 | 366 | ||||
Ending balance, collectively evaluated for impairment | 482,616 | 463,763 | ||||
Total loans and leases | 482,979 | 464,129 | ||||
Consumer | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 1,552 | 1,979 | 1,579 | 1,868 | ||
Charge-offs | 257 | 173 | 502 | 320 | ||
Recoveries | 72 | 56 | 161 | 124 | ||
Net charge-offs (recoveries) | 185 | 117 | 341 | 196 | ||
Provision (recovery of provision) | 227 | (234) | 356 | (44) | ||
Balance at the end of the period | 1,594 | 1,628 | 1,594 | 1,628 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 0 | 0 | ||||
Ending balance, collectively evaluated for impairment | 1,594 | 1,579 | ||||
Total reserve for loan and lease losses | $ 1,552 | $ 1,979 | $ 1,579 | $ 1,868 | 1,594 | 1,579 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 0 | 0 | ||||
Ending balance, collectively evaluated for impairment | 156,221 | 148,479 | ||||
Total loans and leases | $ 156,221 | $ 148,479 |
Mortgage Servicing Rights (Deta
Mortgage Servicing Rights (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Residential mortgage loans | ||
Mortgage Servicing Rights | ||
Unpaid principal balance | $ 774,000 | $ 798,510 |
Mortgage Servicing Rights (De43
Mortgage Servicing Rights (Details 2) - Residential mortgage loans - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Changes in mortgage servicing assets | ||||
Balance at the beginning of the period | $ 4,481 | $ 4,590 | $ 4,608 | $ 4,733 |
Additions | 242 | 456 | 447 | 706 |
Amortization | (384) | (385) | (716) | (778) |
Sales | 0 | 0 | 0 | 0 |
Carrying value before valuation allowance at end of period | 4,339 | 4,661 | 4,339 | 4,661 |
Changes in valuation allowance | ||||
Balance at the beginning of the period | 0 | 0 | 0 | 0 |
Impairment recoveries | 0 | 0 | 0 | 0 |
Balance at the end of the period | 0 | 0 | 0 | 0 |
Net carrying value of mortgage servicing rights at end of period | 4,339 | 4,661 | 4,339 | 4,661 |
Fair value of mortgage servicing rights at end of period | 5,553 | 7,342 | 5,553 | 7,342 |
Fair value of mortgage servicing rights exceeding the carrying value | 1,210 | 2,680 | 1,210 | 2,680 |
Mortgage loan contractual servicing fees, including late fees and ancillary income | $ 660 | $ 710 | $ 1,360 | $ 1,430 |
Commitments and Financial Ins44
Commitments and Financial Instruments with Off-Balance-Sheet Risk (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Loan commitments to extend credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance-sheet instruments | $ 870,773 | $ 829,509 |
Standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance-sheet instruments | $ 37,191 | 37,984 |
Standby letters of credit | Minimum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Letter of credit term | 6 months | |
Standby letters of credit | Maximum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Letter of credit term | 1 year | |
Commercial and similar letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance-sheet instruments | $ 606 | $ 741 |
Commercial and similar letters of credit | Minimum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Letter of credit term | 3 months | |
Commercial and similar letters of credit | Maximum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Letter of credit term | 6 months |
Commitments and Financial Ins45
Commitments and Financial Instruments with Off-Balance-Sheet Risk (Details 2) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Commitments and Contingencies Disclosure [Abstract] | ||
Low income housing tax credit operating partnership investments | $ 9,140 | $ 9,620 |
Low income housing tax credit liability for all legally binding unfunded commitments | $ 3,350 | $ 3,640 |
Derivative Financial Instrume46
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Non-hedging derivative financial instruments | ||
Derivative Financial Instruments | ||
Notional or contractual amount | $ 601,125 | $ 582,939 |
Asset derivatives, Fair value | 17,180 | 9,919 |
Liability derivatives, Fair value | 17,641 | 10,044 |
Interest rate swap contracts | ||
Derivative Financial Instruments | ||
Asset derivatives, Fair value | 17,245 | 10,016 |
Interest rate swap contracts | Non-hedging derivative financial instruments | ||
Derivative Financial Instruments | ||
Notional or contractual amount | 562,698 | 554,083 |
Asset derivatives, Fair value | 17,012 | 9,859 |
Liability derivatives, Fair value | 17,334 | 10,044 |
Loan commitments | Non-hedging derivative financial instruments | ||
Derivative Financial Instruments | ||
Notional or contractual amount | 13,349 | 12,440 |
Asset derivatives, Fair value | 168 | 47 |
Liability derivatives, Fair value | 0 | 0 |
Forward contracts - mortgage loan | Non-hedging derivative financial instruments | ||
Derivative Financial Instruments | ||
Notional or contractual amount | 25,078 | 16,416 |
Asset derivatives, Fair value | 0 | 13 |
Liability derivatives, Fair value | $ 307 | $ 0 |
Derivative Financial Instrume47
Derivative Financial Instruments (Details 2) - Non-hedging derivative financial instruments - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Derivative Financial Instruments | ||||
Gain (loss) | $ (35) | $ 582 | $ (21) | $ 752 |
Interest rate swap contracts | Other expense | ||||
Derivative Financial Instruments | ||||
Gain (loss) | (43) | 41 | (136) | 22 |
Interest rate swap contracts | Other income | ||||
Derivative Financial Instruments | ||||
Gain (loss) | 110 | 221 | 314 | 297 |
Loan commitments | Mortgage banking income | ||||
Derivative Financial Instruments | ||||
Gain (loss) | 73 | (52) | 121 | 87 |
Forward contracts - mortgage loan | Mortgage banking income | ||||
Derivative Financial Instruments | ||||
Gain (loss) | $ (175) | $ 372 | $ (320) | $ 346 |
Derivative Financial Instrume48
Derivative Financial Instruments (Details 3) - Interest rate swaps - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Offsetting of financial assets and derivative assets | ||
Gross Amounts of Recognized Assets | $ 17,245 | $ 10,016 |
Gross Amounts Offset in the Statement of Financial Position | 233 | 157 |
Net Amounts of Assets Presented in the Statement of Financial Position | 17,012 | 9,859 |
Net Amount | $ 17,012 | $ 9,859 |
Derivative Financial Instrume49
Derivative Financial Instruments (Details 4) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Offsetting of financial liabilities and derivative liabilities | ||
Gross Amounts of Recognized Liabilities | $ 179,393 | $ 140,863 |
Gross Amounts Offset in the Statement of Financial Position | 233 | 157 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 179,160 | 140,706 |
Gross amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | 161,826 | 130,662 |
Cash Collateral Pledged | 17,334 | 9,833 |
Net Amount | 0 | 211 |
Interest rate swaps | ||
Offsetting of financial liabilities and derivative liabilities | ||
Gross Amounts of Recognized Liabilities | 17,567 | 10,201 |
Gross Amounts Offset in the Statement of Financial Position | 233 | 157 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 17,334 | 10,044 |
Gross amounts Not Offset in the Statement of Financial Position | ||
Cash Collateral Pledged | 17,334 | 9,833 |
Net Amount | 0 | 211 |
Repurchase agreements | ||
Offsetting of financial liabilities and derivative liabilities | ||
Gross Amounts of Recognized Liabilities | 161,826 | 130,662 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 161,826 | 130,662 |
Gross amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | $ 161,826 | $ 130,662 |
Derivative Financial Instrume50
Derivative Financial Instruments (Details 5) - U.S. Treasury and Federal agencies securities - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements | $ 160,050 | $ 128,880 |
Up to 30 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements | $ 1,780 | $ 1,780 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |||
Earnings Per Share [Abstract] | ||||||
Outstanding stock options (in shares) | 0 | 0 | 0 | 0 | ||
Distributed earnings allocated to common stock | $ 4,653 | $ 4,293 | $ 9,339 | $ 8,589 | ||
Undistributed earnings allocated to common stock | 9,728 | 11,186 | 18,745 | 20,249 | ||
Net earnings allocated to common stock | 14,381 | 15,479 | 28,084 | 28,838 | ||
Net earnings allocated to participating securities | 98 | 151 | 213 | 303 | ||
Net income allocated to common stock and participating securities | $ 14,479 | $ 15,630 | $ 28,297 | $ 29,141 | ||
Weighted average shares outstanding for basic earnings per common share | 25,853,537 | 26,212,999 | [1] | 25,888,534 | 26,235,511 | [1] |
Dilutive effect of stock compensation (in shares) | 0 | 0 | 0 | 0 | ||
Weighted average shares outstanding for diluted earnings per common share | 25,853,537 | 26,212,999 | [1] | 25,888,534 | 26,235,511 | [1] |
Basic earnings per common share (in dollars per share) | $ 0.56 | $ 0.59 | [1] | $ 1.08 | $ 1.10 | [1] |
Diluted earnings per common share (in dollars per share) | $ 0.56 | $ 0.59 | [1] | $ 1.08 | $ 1.10 | [1] |
[1] | *The computation of the three and six months ended June 30, 2015 per common share data and shares outstanding gives retrospective recognition to a 10% stock dividend declared on July 22, 2015 and issued on August 14, 2015. |
Stock Based Compensation (Detai
Stock Based Compensation (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016USD ($)itemshares | Jun. 30, 2015USD ($)shares | |
Stock-based compensation | ||
Number of stock-based employee compensation plans | item | 4 | |
Number of executive stock award plans | item | 3 | |
Outstanding stock options (in shares) | 0 | 0 |
Total unrecognized compensation cost related to non-vested share-based compensation arrangements | $ | $ 5,390 | |
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 3 years 3 months 23 days | |
Stock options | ||
Stock-based compensation | ||
Total fair value of options vested and expensed | $ | $ 0 | $ 0 |
Outstanding stock options (in shares) | 0 | 0 |
Stock options exercised (in shares) | 0 | 0 |
Accumulated Other Comprehensi53
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Reclassifications out of accumulated other comprehensive income | ||||
(Losses) gains on investment securities available-for-sale | $ (209) | $ 4 | $ (199) | $ 4 |
Income before income taxes | 22,507 | 24,144 | 43,743 | 44,913 |
Income tax expense | (8,028) | (8,514) | (15,446) | (15,772) |
Net income | 14,479 | 15,630 | 28,297 | 29,141 |
Unrealized gains and losses on available-for-sale securities | Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Reclassifications out of accumulated other comprehensive income | ||||
(Losses) gains on investment securities available-for-sale | (209) | 4 | (199) | 4 |
Income before income taxes | (209) | 4 | (199) | 4 |
Income tax expense | 78 | (2) | 75 | (2) |
Net income | $ (131) | $ 2 | $ (124) | $ 2 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefits that would affect the effective tax rate if recognized | $ 370 | $ 250 | |
Interest and penalties net of tax recognized | 40 | $ 0 | |
Accrued interest and penalties | $ 40 | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | |
Fair value measurements | |||
Fair value carrying amount | $ 15,924 | $ 9,825 | |
Mortgages held for sale reported at fair value | |||
Fair value measurements | |||
Fair value carrying amount | 15,924 | 9,825 | |
Aggregate unpaid principal | 15,671 | 9,691 | |
Excess of fair value carrying amount over (under) unpaid principal | [1] | $ 253 | $ 134 |
[1] | The excess of fair value carrying amount over (under) unpaid principal is included in mortgage banking income and includes changes in fair value at and subsequent to funding and gains and losses on the related loan commitment prior to funding. |
Fair Value Measurements (Deta56
Fair Value Measurements (Details 2) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Assets: | ||
Investment securities, available-for-sale | $ 814,258 | $ 791,727 |
Mortgages held for sale | 15,924 | 9,825 |
U.S. Treasury and Federal agencies securities | ||
Assets: | ||
Investment securities, available-for-sale | 400,131 | 389,669 |
U.S. States and political subdivisions securities | ||
Assets: | ||
Investment securities, available-for-sale | 129,218 | 122,990 |
Mortgage-backed securities - Federal agencies | ||
Assets: | ||
Investment securities, available-for-sale | 244,539 | 236,297 |
Corporate debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 32,430 | 34,383 |
Foreign government and other securities | ||
Assets: | ||
Investment securities, available-for-sale | 810 | 809 |
Total debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 807,128 | 784,148 |
Marketable equity securities | ||
Assets: | ||
Investment securities, available-for-sale | 7,130 | 7,579 |
Total | ||
Assets: | ||
Investment securities, available-for-sale | 814,258 | 791,727 |
Mortgages held for sale | 15,924 | 9,825 |
Level 1 | ||
Assets: | ||
Investment securities, available-for-sale | 27,174 | 27,458 |
Mortgages held for sale | 0 | 0 |
Level 2 | ||
Assets: | ||
Investment securities, available-for-sale | 781,613 | 758,932 |
Mortgages held for sale | 15,924 | 9,825 |
Level 3 | ||
Assets: | ||
Investment securities, available-for-sale | 5,471 | 5,337 |
Mortgages held for sale | 0 | 0 |
Recurring basis | Total | ||
Assets: | ||
Investment securities, available-for-sale | 814,258 | 791,727 |
Mortgages held for sale | 15,924 | 9,825 |
Total | 847,194 | 811,411 |
Liabilities: | ||
Total | 17,334 | 10,044 |
Recurring basis | Total | Interest rate swap contracts | ||
Assets: | ||
Accrued income and other assets | 17,012 | 9,859 |
Liabilities: | ||
Accrued expenses and other liabilities | 17,334 | 10,044 |
Recurring basis | Total | U.S. Treasury and Federal agencies securities | ||
Assets: | ||
Investment securities, available-for-sale | 400,131 | 389,669 |
Recurring basis | Total | U.S. States and political subdivisions securities | ||
Assets: | ||
Investment securities, available-for-sale | 129,218 | 122,990 |
Recurring basis | Total | Mortgage-backed securities - Federal agencies | ||
Assets: | ||
Investment securities, available-for-sale | 244,539 | 236,297 |
Recurring basis | Total | Corporate debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 32,430 | 34,383 |
Recurring basis | Total | Foreign government and other securities | ||
Assets: | ||
Investment securities, available-for-sale | 810 | 809 |
Recurring basis | Total | Total debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 807,128 | 784,148 |
Recurring basis | Total | Marketable equity securities | ||
Assets: | ||
Investment securities, available-for-sale | 7,130 | 7,579 |
Recurring basis | Level 1 | ||
Assets: | ||
Investment securities, available-for-sale | 27,174 | 27,458 |
Mortgages held for sale | 0 | 0 |
Total | 27,174 | 27,458 |
Liabilities: | ||
Total | 0 | 0 |
Recurring basis | Level 1 | Interest rate swap contracts | ||
Assets: | ||
Accrued income and other assets | 0 | 0 |
Liabilities: | ||
Accrued expenses and other liabilities | 0 | 0 |
Recurring basis | Level 1 | U.S. Treasury and Federal agencies securities | ||
Assets: | ||
Investment securities, available-for-sale | 20,044 | 19,879 |
Recurring basis | Level 1 | U.S. States and political subdivisions securities | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 1 | Mortgage-backed securities - Federal agencies | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 1 | Corporate debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 1 | Foreign government and other securities | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 1 | Total debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 20,044 | 19,879 |
Recurring basis | Level 1 | Marketable equity securities | ||
Assets: | ||
Investment securities, available-for-sale | 7,130 | 7,579 |
Recurring basis | Level 2 | ||
Assets: | ||
Investment securities, available-for-sale | 781,613 | 758,932 |
Mortgages held for sale | 15,924 | 9,825 |
Total | 814,549 | 778,616 |
Liabilities: | ||
Total | 17,334 | 10,044 |
Recurring basis | Level 2 | Interest rate swap contracts | ||
Assets: | ||
Accrued income and other assets | 17,012 | 9,859 |
Liabilities: | ||
Accrued expenses and other liabilities | 17,334 | 10,044 |
Recurring basis | Level 2 | U.S. Treasury and Federal agencies securities | ||
Assets: | ||
Investment securities, available-for-sale | 380,087 | 369,790 |
Recurring basis | Level 2 | U.S. States and political subdivisions securities | ||
Assets: | ||
Investment securities, available-for-sale | 124,557 | 118,462 |
Recurring basis | Level 2 | Mortgage-backed securities - Federal agencies | ||
Assets: | ||
Investment securities, available-for-sale | 244,539 | 236,297 |
Recurring basis | Level 2 | Corporate debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 32,430 | 34,383 |
Recurring basis | Level 2 | Foreign government and other securities | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 2 | Total debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 781,613 | 758,932 |
Recurring basis | Level 2 | Marketable equity securities | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 3 | ||
Assets: | ||
Investment securities, available-for-sale | 5,471 | 5,337 |
Mortgages held for sale | 0 | 0 |
Total | 5,471 | 5,337 |
Liabilities: | ||
Total | 0 | 0 |
Recurring basis | Level 3 | Interest rate swap contracts | ||
Assets: | ||
Accrued income and other assets | 0 | 0 |
Liabilities: | ||
Accrued expenses and other liabilities | 0 | 0 |
Recurring basis | Level 3 | U.S. Treasury and Federal agencies securities | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 3 | U.S. States and political subdivisions securities | ||
Assets: | ||
Investment securities, available-for-sale | 4,661 | 4,528 |
Recurring basis | Level 3 | Mortgage-backed securities - Federal agencies | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 3 | Corporate debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 3 | Foreign government and other securities | ||
Assets: | ||
Investment securities, available-for-sale | 810 | 809 |
Recurring basis | Level 3 | Total debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 5,471 | 5,337 |
Recurring basis | Level 3 | Marketable equity securities | ||
Assets: | ||
Investment securities, available-for-sale | $ 0 | $ 0 |
Fair Value Measurements (Deta57
Fair Value Measurements (Details 3) $ in Thousands | 3 Months Ended | |
Jun. 30, 2016USD ($)item | Jun. 30, 2015USD ($)item | |
Changes in the fair value of Level 3 assets measured on a recurring basis | ||
Total gains or losses (unrealized): included in earnings | $ 0 | $ 0 |
Number of transfers between levels | item | 0 | 0 |
U.S. States and political subdivisions securities | ||
Changes in the fair value of Level 3 assets measured on a recurring basis | ||
Balance at the beginning of the period | $ 4,810 | $ 5,632 |
Total gains or losses (realized/unrealized): included in earnings | 0 | 0 |
Total gains or losses (realized/unrealized): included in other comprehensive income | (4) | (38) |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Maturities | (145) | (150) |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Balance at the end of the period | 4,661 | 5,444 |
Foreign government and other securities | ||
Changes in the fair value of Level 3 assets measured on a recurring basis | ||
Balance at the beginning of the period | 809 | 808 |
Total gains or losses (realized/unrealized): included in earnings | 0 | 0 |
Total gains or losses (realized/unrealized): included in other comprehensive income | 1 | (1) |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Maturities | 0 | 0 |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Balance at the end of the period | 810 | 807 |
Investment securities available-for-sale | ||
Changes in the fair value of Level 3 assets measured on a recurring basis | ||
Balance at the beginning of the period | 5,619 | 6,440 |
Total gains or losses (realized/unrealized): included in earnings | 0 | 0 |
Total gains or losses (realized/unrealized): included in other comprehensive income | (3) | (39) |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Maturities | (145) | (150) |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Balance at the end of the period | $ 5,471 | $ 6,251 |
Fair Value Measurements (Deta58
Fair Value Measurements (Details 4) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Valuation Methodology | ||
Investment securities, available-for-sale | $ 814,258 | $ 791,727 |
Level 3 | ||
Valuation Methodology | ||
Investment securities, available-for-sale | 5,471 | 5,337 |
Recurring | Level 3 | ||
Valuation Methodology | ||
Investment securities, available-for-sale | 5,471 | 5,337 |
Recurring | Level 3 | Discounted cash flows | Direct placement municipal securities | ||
Valuation Methodology | ||
Investment securities, available-for-sale | $ 4,661 | $ 4,528 |
Recurring | Level 3 | Discounted cash flows | Direct placement municipal securities | Minimum | ||
Unobservable Inputs | ||
Credit spread assumption (as a percent) | 0.03% | 1.27% |
Recurring | Level 3 | Discounted cash flows | Direct placement municipal securities | Maximum | ||
Unobservable Inputs | ||
Credit spread assumption (as a percent) | 1.40% | 2.03% |
Recurring | Level 3 | Discounted cash flows | Foreign government | ||
Valuation Methodology | ||
Investment securities, available-for-sale | $ 801 | $ 809 |
Recurring | Level 3 | Discounted cash flows | Foreign government | Minimum | ||
Unobservable Inputs | ||
Market yield assumption (as a percent) | 0.49% | 0.88% |
Recurring | Level 3 | Discounted cash flows | Foreign government | Maximum | ||
Unobservable Inputs | ||
Market yield assumption (as a percent) | 1.56% | 2.00% |
Non-recurring | Level 3 | Commercial loans | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 20.00% | |
Non-recurring | Level 3 | Minimum | Commercial loans | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 40.00% | |
Non-recurring | Level 3 | Maximum | Commercial loans | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 75.00% | |
Non-recurring | Level 3 | Trade publications | Aircraft | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 10.00% | |
Non-recurring | Level 3 | Auction values | Autos | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 10.00% | |
Non-recurring | Level 3 | Trade publications and auction values | Medium and heavy duty trucks | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 15.00% | |
Non-recurring | Level 3 | Trade publications and auction values | Construction equipment | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 20.00% | |
Non-recurring | Level 3 | Appraisals | Real estate | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 20.00% |
Fair Value Measurements (Deta59
Fair Value Measurements (Details 5) - Non-recurring - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Impaired loans | ||
Fair value measurements | ||
Impairment charges (recoveries) | $ 0 | |
Partnership investments | ||
Fair value measurements | ||
Impairment charges (recoveries) | 0 | |
Mortgage servicing rights | ||
Fair value measurements | ||
Impairment charges (recoveries) | 0 | |
Repossessions | ||
Fair value measurements | ||
Impairment charges (recoveries) | 190 | |
Other real estate | ||
Fair value measurements | ||
Impairment charges (recoveries) | 0 | |
Total | ||
Fair value measurements | ||
Impaired loans - collateral based | 915 | $ 220 |
Assets measured at fair value | 13,349 | 13,491 |
Total | Partnership investments | ||
Fair value measurements | ||
Accrued income and other assets | 24 | 1,000 |
Total | Mortgage servicing rights | ||
Fair value measurements | ||
Accrued income and other assets | 4,339 | 4,608 |
Total | Repossessions | ||
Fair value measurements | ||
Accrued income and other assets | 7,619 | 6,927 |
Total | Other real estate | ||
Fair value measurements | ||
Accrued income and other assets | 452 | 736 |
Level 3 | ||
Fair value measurements | ||
Impaired loans - collateral based | 915 | 220 |
Assets measured at fair value | 13,349 | 13,491 |
Level 3 | Partnership investments | ||
Fair value measurements | ||
Accrued income and other assets | 24 | 1,000 |
Level 3 | Mortgage servicing rights | ||
Fair value measurements | ||
Accrued income and other assets | 4,339 | 4,608 |
Level 3 | Repossessions | ||
Fair value measurements | ||
Accrued income and other assets | 7,619 | 6,927 |
Level 3 | Other real estate | ||
Fair value measurements | ||
Accrued income and other assets | $ 452 | $ 736 |
Fair Value Measurements (Deta60
Fair Value Measurements (Details 6) - Non-recurring - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Level 3 | ||
Valuation Methodology | ||
Assets measured at fair value | $ 13,349 | $ 13,491 |
Level 3 | Collateral based measurements | Impaired loans | Minimum | ||
Unobservable Inputs | ||
Discount for lack of marketability and current conditions (as a percent) | 10.00% | 0.00% |
Level 3 | Collateral based measurements | Impaired loans | Maximum | ||
Unobservable Inputs | ||
Discount for lack of marketability and current conditions (as a percent) | 100.00% | 20.00% |
Level 3 | Discounted cash flows | Mortgage servicing rights | Minimum | ||
Unobservable Inputs | ||
Constant prepayment rate (CPR) (as a percent) | 14.20% | 9.40% |
Discount rate (as a percent) | 9.10% | 9.80% |
Level 3 | Discounted cash flows | Mortgage servicing rights | Maximum | ||
Unobservable Inputs | ||
Constant prepayment rate (CPR) (as a percent) | 20.10% | 15.00% |
Discount rate (as a percent) | 12.00% | 13.30% |
Level 3 | Appraisals trade publications and auction values | Repossessions | Minimum | ||
Unobservable Inputs | ||
Discount for lack of marketability (as a percent) | 0.00% | 2.00% |
Level 3 | Appraisals trade publications and auction values | Repossessions | Maximum | ||
Unobservable Inputs | ||
Discount for lack of marketability (as a percent) | 3.00% | 3.00% |
Level 3 | Appraisals | Other real estate | Minimum | ||
Unobservable Inputs | ||
Discount for lack of marketability (as a percent) | 0.00% | 8.00% |
Level 3 | Appraisals | Other real estate | Maximum | ||
Unobservable Inputs | ||
Discount for lack of marketability (as a percent) | 14.00% | 35.00% |
Carrying Value | Level 3 | Collateral based measurements | Impaired loans | ||
Valuation Methodology | ||
Assets measured at fair value | $ 915 | $ 220 |
Carrying Value | Level 3 | Discounted cash flows | Mortgage servicing rights | ||
Valuation Methodology | ||
Assets measured at fair value | 4,339 | 4,608 |
Carrying Value | Level 3 | Appraisals trade publications and auction values | Repossessions | ||
Valuation Methodology | ||
Assets measured at fair value | 7,619 | 6,927 |
Carrying Value | Level 3 | Appraisals | Other real estate | ||
Valuation Methodology | ||
Assets measured at fair value | 452 | 736 |
Fair Value | ||
Valuation Methodology | ||
Assets measured at fair value | 13,349 | 13,491 |
Fair Value | Level 3 | Collateral based measurements | Impaired loans | ||
Valuation Methodology | ||
Assets measured at fair value | 915 | 220 |
Fair Value | Level 3 | Discounted cash flows | Mortgage servicing rights | ||
Valuation Methodology | ||
Assets measured at fair value | 5,553 | 7,246 |
Fair Value | Level 3 | Appraisals trade publications and auction values | Repossessions | ||
Valuation Methodology | ||
Assets measured at fair value | 7,798 | 7,104 |
Fair Value | Level 3 | Appraisals | Other real estate | ||
Valuation Methodology | ||
Assets measured at fair value | $ 481 | $ 851 |
Fair Value Measurements (Deta61
Fair Value Measurements (Details 7) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Assets: | ||
Cash and due from banks | $ 58,944 | $ 65,171 |
Federal funds sold and interest bearing deposits with other banks | 14,297 | 14,550 |
Investment securities, available-for-sale | 814,258 | 791,727 |
Other investments | 21,973 | 21,973 |
Mortgages held for sale | 15,924 | 9,825 |
Loans and leases, net of reserve for loan and lease losses | 4,061,305 | 3,906,580 |
Liabilities: | ||
Long-term debt and mandatorily redeemable securities | 64,738 | 57,379 |
Subordinated notes | 58,764 | 58,764 |
Carrying or Contract Value | ||
Assets: | ||
Cash and due from banks | 58,944 | 65,171 |
Federal funds sold and interest bearing deposits with other banks | 14,297 | 14,550 |
Investment securities, available-for-sale | 814,258 | 791,727 |
Other investments | 21,973 | 21,973 |
Mortgages held for sale | 15,924 | 9,825 |
Loans and leases, net of reserve for loan and lease losses | 4,061,305 | 3,906,580 |
Mortgage servicing rights | 4,339 | 4,608 |
Interest rate swaps | 17,012 | 9,859 |
Liabilities: | ||
Deposits | 4,325,084 | 4,139,186 |
Short-term borrowings | 205,976 | 233,229 |
Long-term debt and mandatorily redeemable securities | 64,738 | 57,379 |
Subordinated notes | 58,764 | 58,764 |
Interest rate swaps | 17,334 | 10,044 |
Off-balance-sheet instruments | 0 | 0 |
Fair Value | ||
Assets: | ||
Cash and due from banks | 58,944 | 65,171 |
Federal funds sold and interest bearing deposits with other banks | 14,297 | 14,550 |
Investment securities, available-for-sale | 814,258 | 791,727 |
Other investments | 21,973 | 21,973 |
Mortgages held for sale | 15,924 | 9,825 |
Loans and leases, net of reserve for loan and lease losses | 4,073,538 | 3,927,967 |
Mortgage servicing rights | 5,553 | 7,246 |
Interest rate swaps | 17,012 | 9,859 |
Liabilities: | ||
Deposits | 4,333,142 | 4,139,649 |
Short-term borrowings | 205,976 | 233,229 |
Long-term debt and mandatorily redeemable securities | 64,796 | 57,193 |
Subordinated notes | 49,493 | 48,304 |
Interest rate swaps | 17,334 | 10,044 |
Off-balance-sheet instruments | 377 | 375 |
Level 1 | ||
Assets: | ||
Cash and due from banks | 58,944 | 65,171 |
Federal funds sold and interest bearing deposits with other banks | 14,297 | 14,550 |
Investment securities, available-for-sale | 27,174 | 27,458 |
Other investments | 21,973 | 21,973 |
Mortgages held for sale | 0 | 0 |
Loans and leases, net of reserve for loan and lease losses | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Interest rate swaps | 0 | 0 |
Liabilities: | ||
Deposits | 3,116,348 | 2,998,443 |
Short-term borrowings | 163,246 | 134,156 |
Long-term debt and mandatorily redeemable securities | 0 | 0 |
Subordinated notes | 0 | 0 |
Interest rate swaps | 0 | 0 |
Off-balance-sheet instruments | 0 | 0 |
Level 2 | ||
Assets: | ||
Cash and due from banks | 0 | 0 |
Federal funds sold and interest bearing deposits with other banks | 0 | 0 |
Investment securities, available-for-sale | 781,613 | 758,932 |
Other investments | 0 | 0 |
Mortgages held for sale | 15,924 | 9,825 |
Loans and leases, net of reserve for loan and lease losses | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Interest rate swaps | 17,012 | 9,859 |
Liabilities: | ||
Deposits | 1,216,794 | 1,141,206 |
Short-term borrowings | 42,730 | 99,073 |
Long-term debt and mandatorily redeemable securities | 64,796 | 57,193 |
Subordinated notes | 49,493 | 48,304 |
Interest rate swaps | 17,334 | 10,044 |
Off-balance-sheet instruments | 377 | 375 |
Level 3 | ||
Assets: | ||
Cash and due from banks | 0 | 0 |
Federal funds sold and interest bearing deposits with other banks | 0 | 0 |
Investment securities, available-for-sale | 5,471 | 5,337 |
Other investments | 0 | 0 |
Mortgages held for sale | 0 | 0 |
Loans and leases, net of reserve for loan and lease losses | 4,073,538 | 3,927,967 |
Mortgage servicing rights | 5,553 | 7,246 |
Interest rate swaps | 0 | 0 |
Liabilities: | ||
Deposits | 0 | 0 |
Short-term borrowings | 0 | 0 |
Long-term debt and mandatorily redeemable securities | 0 | 0 |
Subordinated notes | 0 | 0 |
Interest rate swaps | 0 | 0 |
Off-balance-sheet instruments | $ 0 | $ 0 |