| ☒ | Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 |
| ☐ | Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 |
| Pennsylvania | 25-1255406 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
| One North Shore Center, 12 Federal Street, Pittsburgh, PA | 15212 | |
| (Address of principal executive offices) | (Zip Code) | |
| Large Accelerated Filer | ☒ | Accelerated Filer | ☐ | |||
| Non-accelerated Filer | ☐ | Smaller reporting company | ☐ | |||
| Emerging Growth Company | ☐ | |||||
Class | Outstanding at | April 30, | ||
| Common Stock, $0.01 Par Value | 323,851,407 | Shares | ||
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| PAGE | ||||||||
| PART I – FINANCIAL INFORMATION | ||||||||
| Item 1. | Financial Statements | |||||||
Item 2. | ||||||||
Item 3. | ||||||||
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Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
| Item 5. | ||||||||
| Item 6. | ||||||||
| Available for sale |
| Asset/Liability Committee |
| Accumulated other comprehensive income |
| ASC | Accounting Standards Codification |
| ASU | Accounting Standards Update |
Assets Cash and due from banks Interest bearing deposits with banks Cash and Cash Equivalents Securities available for sale Securities held to maturity (fair value of$2,886,897and $2,294,777) Loans held for sale (includes$11,121 and $0 measured at fair value) (1) Loans and leases, net of unearned income of$58,877 and $52,723 Allowance for credit losses Net Loans and Leases Premises and equipment, net Goodwill Core deposit and other intangible assets, net Bank owned life insurance Other assets Total Assets Liabilities Deposits: Non-interest-bearing demand Interest-bearing demand Savings Certificates and other time deposits Total Deposits Short-term borrowings Long-term borrowings Other liabilities Total Liabilities Stockholders’ Equity Preferred stock - $0.01 par value; liquidation preference of $1,000 per share Authorized – 20,000,000 shares Issued – 110,877 shares Common stock - $0.01 par value Authorized – 500,000,000 shares Issued –324,432,606 and 212,378,494 shares Additionalpaid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock –1,525,843 and 1,318,947 shares at cost Total Stockholders’ Equity Total Liabilities and Stockholders’ Equity BOLI Bank owned life insurance Basel III Basel III Capital Rules EVE Economic value of equity FDIC Federal Deposit Insurance Corporation FHLB Federal Home Loan Bank FNB F.N.B. Corporation FNBPA First National Bank of Pennsylvania FRB Board of Governors of the Federal Reserve System FTE Fully taxable equivalent FVO Fair value option GAAP U.S. generally accepted accounting principles HTM Held to maturity IRLC Interest rate lock commitments LCR Liquidity Coverage Ratio LIBOR London Inter-bank Offered Rate MCH Months of Cash on Hand MSR Mortgage servicing rights OCC Office of the Comptroller of the Currency OREO Other real estate owned OTTI Other-than-temporary impairment Regency Regency Finance Company SBA Small Business Administration SEC Securities and Exchange Commission TCJA Tax Cuts and Jobs Act of 2017 TDR Troubled debt restructuring TPS Trust preferred securities UST U.S. Department of the Treasury YDKN Yadkin Financial Corporation March 31,
2017 December 31,
2016 (Unaudited) $ 381,416 $ 303,526 68,967 67,881 450,383 371,407 2,638,815 2,231,987 2,922,152 2,337,342 75,270 11,908 20,177,650 14,896,943 (160,782 ) (158,059 ) 20,016,868 14,738,884 355,436 243,956 2,250,305 1,032,129 134,699 67,327 467,457 330,152 879,310 479,725 $ 30,190,695 $ 21,844,817 $ 5,537,679 $ 4,205,337 9,285,393 6,931,381 2,623,531 2,352,434 3,879,669 2,576,495 21,326,272 16,065,647 3,585,963 2,503,010 696,206 539,494 226,459 165,049 25,834,900 19,273,200 106,882 106,882 3,246 2,125 4,020,527 2,234,366 299,818 304,397 (56,969 ) (61,369 ) (17,709 ) (14,784 ) 4,355,795 2,571,617 $ 30,190,695 $ 21,844,817 March 31,
2018 December 31,
2017 (Unaudited) Assets Cash and due from banks $ 325,101 $ 408,718 Interest bearing deposits with banks 61,228 70,725 Cash and Cash Equivalents 386,329 479,443 Securities available for sale 2,927,463 2,764,562 3,224,000 3,242,268 37,982 92,891 21,262,397 20,998,766 Allowance for credit losses (179,247 ) (175,380 ) Net Loans and Leases 21,083,150 20,823,386 Premises and equipment, net 333,424 336,540 Goodwill 2,251,281 2,249,188 Core deposit and other intangible assets, net 87,858 92,075 Bank owned life insurance 529,843 526,818 Other assets 791,023 810,464 Total Assets $ 31,652,353 $ 31,417,635 Liabilities Deposits: Non-interest-bearing demand $ 5,748,568 $ 5,720,030 Interest-bearing demand 9,407,111 9,571,038 Savings 2,600,151 2,488,178 Certificates and other time deposits 4,741,259 4,620,479 Total Deposits 22,497,089 22,399,725 Short-term borrowings 3,802,480 3,678,337 Long-term borrowings 659,890 668,173 Other liabilities 259,441 262,206 Total Liabilities 27,218,900 27,008,441 Stockholders’ Equity Preferred stock - $0.01 par value; liquidation preference of $1,000 per share Authorized – 20,000,000 shares 106,882 106,882 Common stock - $0.01 par value Authorized – 500,000,000 shares 3,255 3,253 Additional paid-in capital 4,037,847 4,033,567 Retained earnings 413,340 367,658 Accumulated other comprehensive loss (108,724 ) (83,052 ) (19,147 ) (19,114 ) Total Stockholders’ Equity 4,433,453 4,409,194 Total Liabilities and Stockholders’ Equity $ 31,652,353 $ 31,417,635 (1) Amount represents loans for which we have elected the fair value option. See Note 17.18.
(unaudited)
| Three Months Ended March 31, | ||||||||
| 2017 | 2016 | |||||||
Interest Income | ||||||||
Loans and leases, including fees | $ | 168,629 | $ | 137,121 | ||||
Securities: | ||||||||
Taxable | 22,466 | 16,493 | ||||||
Tax-exempt | 3,401 | 2,018 | ||||||
Dividends | 9 | 5 | ||||||
Other | 188 | 117 | ||||||
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Total Interest Income | 194,693 | 155,754 | ||||||
Interest Expense | ||||||||
Deposits | 11,740 | 9,486 | ||||||
Short-term borrowings | 6,674 | 2,361 | ||||||
Long-term borrowings | 3,527 | 3,553 | ||||||
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Total Interest Expense | 21,941 | 15,400 | ||||||
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Net Interest Income | 172,752 | 140,354 | ||||||
Provision for credit losses | 10,850 | 11,768 | ||||||
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Net Interest Income After Provision for Credit Losses | 161,902 | 128,586 | ||||||
Non-Interest Income | ||||||||
Service charges | 24,807 | 21,134 | ||||||
Trust services | 5,747 | 5,282 | ||||||
Insurance commissions and fees | 5,141 | 4,921 | ||||||
Securities commissions and fees | 3,623 | 3,374 | ||||||
Capital markets income | 3,847 | 2,849 | ||||||
Mortgage banking operations | 3,790 | 1,595 | ||||||
Bank owned life insurance | 2,153 | 2,095 | ||||||
Net securities gains | 2,625 | 71 | ||||||
Other | 3,383 | 4,723 | ||||||
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TotalNon-Interest Income | 55,116 | 46,044 | ||||||
Non-Interest Expense | ||||||||
Salaries and employee benefits | 73,578 | 56,425 | ||||||
Net occupancy | 11,349 | 9,266 | ||||||
Equipment | 9,630 | 8,556 | ||||||
Amortization of intangibles | 3,098 | 2,649 | ||||||
Outside services | 13,043 | 9,303 | ||||||
FDIC insurance | 5,387 | 3,968 | ||||||
Supplies | 2,196 | 2,654 | ||||||
Bank shares and franchise taxes | 2,980 | 2,617 | ||||||
Merger-related | 52,724 | 24,940 | ||||||
Other | 13,570 | 16,270 | ||||||
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TotalNon-Interest Expense | 187,555 | 136,648 | ||||||
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Income Before Income Taxes | 29,463 | 37,982 | ||||||
Income taxes | 6,484 | 11,850 | ||||||
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Net Income | 22,979 | 26,132 | ||||||
Preferred stock dividends | 2,010 | 2,010 | ||||||
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Net Income Available to Common Stockholders | $ | 20,969 | $ | 24,122 | ||||
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Earnings per Common Share | ||||||||
Basic | $ | 0.09 | $ | 0.12 | ||||
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Diluted | $ | 0.09 | $ | 0.12 | ||||
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Cash Dividends per Common Share | $ | 0.12 | $ | 0.12 | ||||
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| Three Months Ended March 31, | |||||||
| 2018 | 2017 | ||||||
| Interest Income | |||||||
| Loans and leases, including fees | $ | 239,094 | $ | 168,629 | |||
| Securities: | |||||||
| Taxable | 26,879 | 22,466 | |||||
| Tax-exempt | 6,594 | 3,401 | |||||
| Dividends | — | 9 | |||||
| Other | 360 | 188 | |||||
| Total Interest Income | 272,927 | 194,693 | |||||
| Interest Expense | |||||||
| Deposits | 26,469 | 11,740 | |||||
| Short-term borrowings | 15,207 | 6,674 | |||||
| Long-term borrowings | 5,146 | 3,527 | |||||
| Total Interest Expense | 46,822 | 21,941 | |||||
| Net Interest Income | 226,105 | 172,752 | |||||
| Provision for credit losses | 14,495 | 10,850 | |||||
| Net Interest Income After Provision for Credit Losses | 211,610 | 161,902 | |||||
| Non-Interest Income | |||||||
| Service charges | 30,077 | 24,581 | |||||
| Trust services | 6,448 | 5,747 | |||||
| Insurance commissions and fees | 5,135 | 5,141 | |||||
| Securities commissions and fees | 4,319 | 3,623 | |||||
| Capital markets income | 5,214 | 3,847 | |||||
| Mortgage banking operations | 5,529 | 3,790 | |||||
| Bank owned life insurance | 3,285 | 2,153 | |||||
| Net securities gains | — | 2,625 | |||||
| Other | 7,496 | 3,609 | |||||
| Total Non-Interest Income | 67,503 | 55,116 | |||||
| Non-Interest Expense | |||||||
| Salaries and employee benefits | 89,326 | 73,578 | |||||
| Net occupancy | 15,568 | 11,349 | |||||
| Equipment | 14,465 | 9,630 | |||||
| Amortization of intangibles | 4,218 | 3,098 | |||||
| Outside services | 14,725 | 13,043 | |||||
| FDIC insurance | 8,834 | 5,387 | |||||
| Supplies | 1,684 | 2,196 | |||||
| Bank shares and franchise taxes | 3,452 | 2,980 | |||||
| Merger-related | — | 52,724 | |||||
| Other | 18,811 | 13,570 | |||||
| Total Non-Interest Expense | 171,083 | 187,555 | |||||
| Income Before Income Taxes | 108,030 | 29,463 | |||||
| Income taxes | 21,268 | 6,484 | |||||
| Net Income | 86,762 | 22,979 | |||||
| Preferred stock dividends | 2,010 | 2,010 | |||||
| Net Income Available to Common Stockholders | $ | 84,752 | $ | 20,969 | |||
| Earnings per Common Share | |||||||
| Basic | $ | 0.26 | $ | 0.09 | |||
| Diluted | $ | 0.26 | $ | 0.09 | |||
| Cash Dividends per Common Share | $ | 0.12 | $ | 0.12 | |||
(unaudited)
| Three Months Ended March 31, | ||||||||
| 2018 | 2017 | |||||||
| Net income | $ | 86,762 | $ | 22,979 | ||||
| Other comprehensive (loss) income: | ||||||||
| Securities available for sale: | ||||||||
Unrealized (losses) gains arising during the period, net of tax (benefit) expense of $(8,467) and $3,248 | (29,787 | ) | 6,032 | |||||
Reclassification adjustment for gains included in net income, net of tax expense of $0 and $424 | — | (787 | ) | |||||
| Derivative instruments: | ||||||||
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $1,082 and $(550) | 3,804 | (1,022 | ) | |||||
Reclassification adjustment for gains included in net income, net of tax expense of $49 and $125 | (173 | ) | (233 | ) | ||||
| Pension and postretirement benefit obligations: | ||||||||
Unrealized (losses) gains arising during the period, net of tax (benefit) expense of $136 and $221 | 484 | 410 | ||||||
| Other comprehensive (loss) income | (25,672 | ) | 4,400 | |||||
| Comprehensive income | $ | 61,090 | $ | 27,379 | ||||
| Three Months Ended March 31, | ||||||||
| (in thousands) | 2017 | 2016 | ||||||
Net income | $ | 22,979 | $ | 26,132 | ||||
Other comprehensive income (loss): | ||||||||
Securities available for sale: | ||||||||
Unrealized gains arising during the period, net of tax expense of$3,248and $7,719 | 6,032 | 14,335 | ||||||
Reclassification adjustment for gains included in net income, net of tax expense of$424and$25 | (787 | ) | (46 | ) | ||||
Derivative instruments: | ||||||||
Unrealized (losses) gains arising during the period, net of tax (benefit) expense of$(550)and $1,693 | (1,022 | ) | 3,145 | |||||
Reclassification adjustment for gains included in net income, net of tax expense of$125and$188 | (233 | ) | (349 | ) | ||||
Pension and postretirement benefit obligations: | ||||||||
Unrealized gains arising during the period, net of tax expense of$221and$214 | 410 | 397 | ||||||
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Other comprehensive income | 4,400 | 17,482 | ||||||
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Comprehensive income | $ | 27,379 | $ | 43,614 | ||||
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Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total | |||||||||||||||||||||
| Balance at January 1, 2017 | $ | 106,882 | $ | 2,125 | $ | 2,234,366 | $ | 304,397 | $ | (61,369 | ) | $ | (14,784 | ) | $ | 2,571,617 | |||||||||||
| Comprehensive income | 22,979 | 4,400 | 27,379 | ||||||||||||||||||||||||
| Dividends declared: | |||||||||||||||||||||||||||
| Preferred stock | (2,010 | ) | (2,010 | ) | |||||||||||||||||||||||
| Common stock: $0.12/share | (25,548 | ) | (25,548 | ) | |||||||||||||||||||||||
| Issuance of common stock | 5 | 2,117 | (2,925 | ) | (803 | ) | |||||||||||||||||||||
| Issuance of common stock - acquisitions | 1,116 | 1,780,891 | 1,782,007 | ||||||||||||||||||||||||
| Restricted stock compensation | 1,394 | 1,394 | |||||||||||||||||||||||||
| Tax benefit of stock-based compensation | 1,759 | 1,759 | |||||||||||||||||||||||||
| Balance at March 31, 2017 | $ | 106,882 | $ | 3,246 | $ | 4,020,527 | $ | 299,818 | $ | (56,969 | ) | $ | (17,709 | ) | $ | 4,355,795 | |||||||||||
| Balance at January 1, 2018 | $ | 106,882 | $ | 3,253 | $ | 4,033,567 | $ | 367,658 | $ | (83,052 | ) | $ | (19,114 | ) | $ | 4,409,194 | |||||||||||
| Comprehensive income | 86,762 | (25,672 | ) | 61,090 | |||||||||||||||||||||||
| Dividends declared: | |||||||||||||||||||||||||||
| Preferred stock | (2,010 | ) | (2,010 | ) | |||||||||||||||||||||||
| Common stock: $0.12/share | (39,070 | ) | (39,070 | ) | |||||||||||||||||||||||
| Issuance of common stock | 2 | 2,341 | (33 | ) | 2,310 | ||||||||||||||||||||||
| Restricted stock compensation | 1,939 | 1,939 | |||||||||||||||||||||||||
| Balance at March 31, 2018 | $ | 106,882 | $ | 3,255 | $ | 4,037,847 | $ | 413,340 | $ | (108,724 | ) | $ | (19,147 | ) | $ | 4,433,453 | |||||||||||
(unaudited)
CASH FLOWS
| Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total | ||||||||||||||||||||||
Balance at January 1, 2017 | $ | 106,882 | $ | 2,125 | $ | 2,234,366 | $ | 304,397 | $ | (61,369 | ) | $ | (14,784 | ) | $ | 2,571,617 | ||||||||||||
Comprehensive income | 22,979 | 4,400 | 27,379 | |||||||||||||||||||||||||
Dividends declared: | ||||||||||||||||||||||||||||
Preferred stock | (2,010 | ) | (2,010 | ) | ||||||||||||||||||||||||
Common stock: $0.12/share | (25,548 | ) | (25,548 | ) | ||||||||||||||||||||||||
Issuance of common stock | 5 | 2,117 | (2,925 | ) | (803 | ) | ||||||||||||||||||||||
Issuance of common stock - acquisitions | 1,116 | 1,780,891 | 1,782,007 | |||||||||||||||||||||||||
Assumption of warrant due to acquisition | 1,394 | 1,394 | ||||||||||||||||||||||||||
Restricted stock compensation | 1,759 | 1,759 | ||||||||||||||||||||||||||
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Balance at March 31, 2017 | $ | 106,882 | $ | 3,246 | $ | 4,020,527 | $ | 299,818 | $ | (56,969 | ) | $ | (17,709 | ) | $ | 4,355,795 | ||||||||||||
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Balance at January 1, 2016 | $ | 106,882 | $ | 1,766 | $ | 1,808,210 | $ | 243,217 | $ | (51,133 | ) | $ | (12,760 | ) | $ | 2,096,182 | ||||||||||||
Comprehensive income | 26,132 | 17,482 | 43,614 | |||||||||||||||||||||||||
Dividends declared: | ||||||||||||||||||||||||||||
Preferred stock | (2,010 | ) | (2,010 | ) | ||||||||||||||||||||||||
Common stock: $0.12/share | (25,294 | ) | (25,294 | ) | ||||||||||||||||||||||||
Issuance of common stock | 5 | 1,657 | (1,566 | ) | 96 | |||||||||||||||||||||||
Issuance of common stock - acquisitions | 341 | 403,679 | 404,020 | |||||||||||||||||||||||||
Restricted stock compensation | 1,136 | 1,136 | ||||||||||||||||||||||||||
Tax benefit of stock-based compensation | 277 | 277 | ||||||||||||||||||||||||||
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Balance at March 31, 2016 | $ | 106,882 | $ | 2,112 | $ | 2,214,959 | $ | 242,045 | $ | (33,651 | ) | $ | (14,326 | ) | $ | 2,518,021 | ||||||||||||
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| Three Months Ended March 31, | |||||||
| 2018 | 2017 | ||||||
| Operating Activities | |||||||
| Net income | $ | 86,762 | $ | 22,979 | |||
| Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||
| Depreciation, amortization and accretion | 23,676 | 17,276 | |||||
| Provision for credit losses | 14,495 | 10,850 | |||||
| Deferred tax expense | 1,864 | 11,224 | |||||
| Net securities gains | — | (2,625 | ) | ||||
| Tax benefit of stock-based compensation | (233 | ) | (720 | ) | |||
| Loans originated for sale | (208,990 | ) | (182,771 | ) | |||
| Loans sold | 269,235 | 135,405 | |||||
| Gain on sale of loans | (5,336 | ) | (3,344 | ) | |||
| Net change in: | |||||||
| Interest receivable | (828 | ) | (1,527 | ) | |||
| Interest payable | 282 | 444 | |||||
| Bank owned life insurance | (3,093 | ) | (1,962 | ) | |||
| Other, net | 32,559 | 13,403 | |||||
| Net cash flows provided by operating activities | 210,393 | 18,632 | |||||
| Investing Activities | |||||||
| Net change in loans and leases | (284,196 | ) | (208,958 | ) | |||
| Securities available for sale: | |||||||
| Purchases | (357,784 | ) | (492,227 | ) | |||
| Sales | — | 549,460 | |||||
| Maturities | 153,401 | 119,867 | |||||
| Debt securities held to maturity: | |||||||
| Purchases | (63,918 | ) | (531,560 | ) | |||
| Sales | — | 1,574 | |||||
| Maturities | 80,492 | 119,324 | |||||
| Increase in premises and equipment | (9,347 | ) | (23,186 | ) | |||
| Net cash received in business combinations | — | 197,682 | |||||
| Net cash flows used in investing activities | (481,352 | ) | (268,024 | ) | |||
| Financing Activities | |||||||
| Net change in: | |||||||
| Demand (non-interest bearing and interest bearing) and savings accounts | (23,416 | ) | 73,291 | ||||
| Time deposits | 122,040 | 11,421 | |||||
| Short-term borrowings | 124,143 | 286,765 | |||||
| Proceeds from issuance of long-term borrowings | 10,122 | 65,998 | |||||
| Repayment of long-term borrowings | (18,213 | ) | (82,506 | ) | |||
| Net proceeds from issuance of common stock | 4,249 | 957 | |||||
| Cash dividends paid: | |||||||
| Preferred stock | (2,010 | ) | (2,010 | ) | |||
| Common stock | (39,070 | ) | (25,548 | ) | |||
| Net cash flows provided by financing activities | 177,845 | 328,368 | |||||
| Net Increase (Decrease) in Cash and Cash Equivalents | (93,114 | ) | 78,976 | ||||
| Cash and cash equivalents at beginning of period | 479,443 | 371,407 | |||||
| Cash and Cash Equivalents at End of Period | $ | 386,329 | $ | 450,383 | |||
(unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in thousands
Unaudited
| Three Months Ended March 31, | ||||||||
| 2017 | 2016 | |||||||
Operating Activities | ||||||||
Net income | $ | 22,979 | $ | 26,132 | ||||
Adjustments to reconcile net income to net cash flows provided by operating activities: | ||||||||
Depreciation, amortization and accretion | 17,276 | 11,759 | ||||||
Provision for credit losses | 10,850 | 11,768 | ||||||
Deferred tax expense | 11,224 | 255 | ||||||
Net securities gains | (2,625 | ) | (71 | ) | ||||
Tax benefit of stock-based compensation | (720 | ) | (277 | ) | ||||
Loans originated for sale | (182,771 | ) | (95,503 | ) | ||||
Loans sold | 135,405 | 94,765 | ||||||
Gain on sale of loans | (3,344 | ) | (2,164 | ) | ||||
Net change in: | ||||||||
Interest receivable | (1,527 | ) | (109 | ) | ||||
Interest payable | 444 | 1,301 | ||||||
Bank owned life insurance | (1,962 | ) | (1,850 | ) | ||||
Other, net | 13,403 | 47,865 | ||||||
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Net cash flows provided by operating activities | 18,632 | 93,871 | ||||||
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Investing Activities | ||||||||
Net change in loans and leases | (208,958 | ) | (122,982 | ) | ||||
Securities available for sale: | ||||||||
Purchases | (492,227 | ) | (510,271 | ) | ||||
Sales | 549,460 | 615,199 | ||||||
Maturities | 119,867 | 170,266 | ||||||
Securities held to maturity: | ||||||||
Purchases | (531,560 | ) | (217,574 | ) | ||||
Sales | 1,574 | |||||||
Maturities | 119,324 | 77,369 | ||||||
Purchase of bank owned life insurance | — | (64 | ) | |||||
Increase in premises and equipment | (23,186 | ) | (13,878 | ) | ||||
Net cash received in business combinations | 197,682 | 46,854 | ||||||
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Net cash flows (used in ) provided by investing activities | (268,024 | ) | 44,919 | |||||
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Financing Activities | ||||||||
Net change in: | ||||||||
Demand(non-interest bearing and interest bearing) and savings accounts | 73,291 | 411,857 | ||||||
Time deposits | 11,421 | 28,558 | ||||||
Short-term borrowings | 286,765 | (687,409 | ) | |||||
Proceeds from issuance of long-term borrowings | 65,998 | 42,371 | ||||||
Repayment of long-term borrowings | (82,506 | ) | (51,546 | ) | ||||
Net proceeds from issuance of common stock | 957 | 1,232 | ||||||
Tax benefit of stock-based compensation | — | 277 | ||||||
Cash dividends paid: | ||||||||
Preferred stock | (2,010 | ) | (2,010 | ) | ||||
Common stock | (25,548 | ) | (25,294 | ) | ||||
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Net cash flows (used in) provided by financing activities | 328,368 | (281,964 | ) | |||||
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| |||||
Net Increase (Decrease) in Cash and Cash Equivalents | 78,976 | (143,174 | ) | |||||
Cash and cash equivalents at beginning of period | 371,407 | 489,119 | ||||||
|
|
|
| |||||
Cash and Cash Equivalents at End of Period | $ | 450,383 | $ | 345,945 | ||||
|
|
|
| |||||
See accompanying Notes to Consolidated Financial Statements
2018
The terms “FNB,” “the Corporation,” “we,” “us” and “our” throughout this Report mean F.N.B. Corporation and its subsidiaries, when appropriate.
2018.
Consolidated Financial Statements.
Commission.
Loans Helddeferred tax assets and litigation.
Certainis approved by both parties with identifiable contractual rights, payment terms, and the collectability of consideration is probable. Generally, we satisfy our performance obligations upon the completion of services at the amount to which we have the right to invoice or charge under contracts with an original expected duration of one year or less. We apply this guidance on a portfolio basis to contracts with similar characteristics and for which we believe the results would not differ materially from applying this guidance to individual contracts.
We routinely issue interest rate lock commitments for residential mortgage loans thatsell. If we intend to sell. These interest rate lock commitments are considered derivatives. We also enter into loan sale commitments to sell these loans when funded to mitigate the risk that the market value of residential mortgage loans may decline between the time the rate commitment is issued to the customer and the time we sell the loan. These loan sale commitments are also derivatives. Both types of derivatives are recorded at fair value on the consolidated balance sheets with changes in fair value recorded in mortgage banking operations income.
We also originate loans guaranteed by the Small Business Administration (SBA) for the purchase of businesses, business startups, business expansion, equipment, and working capital. All SBA loans are underwritten and documented as prescribed by the SBA. The portion of SBA loans originated that are guaranteed and intended for sale on the secondary market are classified as held for sale and are carried at the lower of costdebt security or fair value. At the time of the sale, we allocate the carrying value of the entire loan between the guaranteed portion sold and the unguaranteed portion retained based on their relative fair value which results in a discount recorded on the retained portion of the loan. The guaranteed portion is typically sold at a premium and the gain is recognized in other income for any net premium received in excess of the relative fair value of the portion of the loan transferred. The net carrying value of the retained portion of the loans is included in the appropriate loan classification for disclosure purposes, primarily commercial real estate or commercial and industrial.
Premises and Equipment
Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the asset’s estimated useful life. Leasehold improvements are expensed over the lesser of the asset’s estimated useful life or the term of the lease including renewal periods when reasonably assured. Useful lives are dependent upon the nature and condition of the asset and range from 3 to 40 years. Maintenance and repairs are charged to expense as incurred, while major improvements are capitalized and amortized to expense over the identified useful life.
Premises and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Assets to be disposed of are transferred to other assets and are reported at the lower of the carrying amount or fair value less costs to sell.
Goodwill and Other Intangible Assets
Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as core deposit intangibles, customer relationship intangibles and renewal lists, are amortized over their estimated useful lives and subject to periodic impairment testing. Core deposit intangibles are primarily amortized over ten years using accelerated methods. Customer renewal lists are amortized over their estimated useful lives which range from eight to thirteen years.
Goodwill and other intangibles are subject to impairment testing at the reporting unit level, which must be conducted at least annually. We perform impairment testing during the fourth quarter of each year, or more frequently if impairment indicators exist. We also continue to monitor other intangibles for impairment and to evaluate carrying amounts, as necessary.
We perform a quantitative assessment to determine whether it is more likely than not thatwe will be required to sell the security before recovery of its amortized cost basis, OTTI must be recognized in earnings equal to the entire difference between the investments’ amortized cost basis and its fair value of a reporting unitvalue. If we do not intend to sell the debt security and it is less than its carrying amount. Prior to 2017, if, after assessing updated quantitative factors, we determined it was not more likely than not that we will be required to sell the fair valuesecurity before recovery of its amortized cost basis, OTTI must be separated into the amount representing credit loss and the amount related to all other market factors. The amount related to credit loss will be recognized in earnings. The amount related to other market factors will be recognized in other comprehensive income, net of applicable taxes.
Determining the fair valueconsistent and systematic manner and include an evaluation of a reporting unit under the first stepall available evidence. This process considers factors such as length of time and anticipated recovery period of the goodwill impairment, test and determiningrecent events specific to the fair value of individual assets and liabilities of a reporting unit under the second step of the goodwill impairment test are judgmental and often involve the use of significant estimates and assumptions. Similarly, estimates and assumptions are used in determining the fair value of other intangible assets. Estimates of fair value are primarily determined using discounted cash flows, market comparisonsissuer and recent transactions. These approaches use significant estimatesexperience regarding principal and assumptions including projected future cash flows, discount rates reflecting the market rate of return, projected growth rates and determination and evaluation of appropriate market comparables. Based on the results of quantitative assessments of all reporting units, we concluded that no impairment existed at December 31, 2016. However, future events could cause us to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment loss. Any resulting impairment loss could have a material adverse impact on our financial condition and results of operations.
Beginning in 2017, as permitted under the early adoption provisions of ASU2017-04, we changed our impairment policy to record an impairment loss, if any, based on the excess of a reporting unit’s carrying amount over its fair value. This change in accounting principle will be applied prospectively. We believe this change in accounting policy is preferable as it reduces the cost and complexity of accounting for goodwill impairment.
Loan Servicing Rights
We have two primary classes of servicing rights, residential mortgage loan servicing andSBA-guaranteed loan servicing. We recognize the right to service residential mortgage loans andSBA-guaranteed loans for others as an asset whether we purchase the servicing rights or as a result from a sale of loans that we originate when the servicing is contractually separated from the underlying loan and retained by us.
We initially record servicing rights at fair value in core deposit and other intangible assets, net on the consolidated balance sheet. Subsequently, servicing rights are measured at the lower of cost or fair value. Servicing rights are amortized in proportion to, and over the period of, estimated net servicing income against servicing income during the period in mortgage banking operations income for residential mortgage loans and other income forSBA-guaranteed loans. The amount and timing of estimated future net cash flows are updated based on actual results and updated projections.
Mortgage servicing rights (MSRs) are separated into pools based on common risk characteristics of the underlying loans and evaluated for impairment at least quarterly.SBA-guaranteed servicing rights are evaluated for impairment at least quarterly on an aggregate basis. Impairment, if any, is recognized when carrying value exceeds the fair value as determined by calculating the present value of expected net future cash flows. If impairment exists at the pool level for residential mortgage loans or on an aggregate basis forSBA-guaranteed loans, the servicing right is written down through a valuation allowance and is charged against mortgage banking operations income or other income, respectively.
Bank-Owned Life Insurance (BOLI)
We have purchased life insurance policies on certain current and former directors, officers and employees for which the Corporation is the owner and beneficiary. These policies are recorded in other assets in the consolidated balance sheet at their cash surrender value, or the amount that could be realized by surrendering the policies.Tax-exempt income from death benefits and changes in the net cash surrender value are recorded in bank owned life insurance income.
interest payments.
Per Share Amounts
Earnings per common share is computed using net income available to common stockholders, which is net income adjusted for preferred stock dividends.
Basic earnings per common share is calculated by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding, net of unvested shares of restricted stock.
Diluted earnings per common share is calculated by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding, adjusted for the dilutive effect of potential common shares issuable for stock options, warrants Our unfunded commitments in LIHTCs were $60.1 million and restricted shares, as calculated using the treasury stock method. Adjustments to net income available to common stockholders$67.2 million at March 31, 2018 and the weighted average number of shares of common stock outstanding are made only when such adjustments dilute earnings per common share.
Beginning inDecember 31, 2017, the assumed proceeds from applying the treasury stock method when computing diluted earnings per share excludes the amount of excess tax benefits that would have been recognized in accumulatedpaid-in capital in accordance with newly adopted accounting guidance.
Stock Based Compensation
We account for our stock based compensation awards in accordance with ASC 718,Compensation - Stock Compensation, which requires the measurement and recognition of compensation expense, based on estimated fair values, for all stock-based awards, including stock options and restricted stock, made to employees and directors.
ASC 718 requires companies to estimate the fair value of stock-based awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense in our consolidated statements of comprehensive income over the shorter of requisite service periods or the period through the date that the employee first becomes eligible to retire. Some of our plans contain performance targets that affect vesting and can be achieved after the requisite service period and are accounted for as performance conditions. Beginning in 2016, the performance target is not reflected in the estimation of the award’s grant date fair value and compensation cost is recognized in the period in which it becomes probable that the performance condition will be achieved.
Because stock-based compensation expense is based on awards that are ultimately expected to vest, stock-based compensation expense has been reduced to account for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Beginning in 2017, with the adoption of ASU2016-09, we elected to change our accounting policy to account for forfeitures as they occur. The estimate for forfeitures prior to adoption of ASU2016-09 was immaterial to our consolidated financial statements. We believe this change in accounting policy reduces the cost and complexity of accounting for stock-based compensation and is preferable to estimating forfeitures at the time of grant.
respectively.
Securities
Accounting Standards Update (ASU or Update)2017-08,Receivables-Nonrefundable Fees and Other Costs(Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities which shortens the amortization period for the premium on certain purchased callable securities to the earliest call date. The accounting for purchased callable debt securities held at a discount does not change. The Update is effective in the first quarter
| Standard | Description | Required Date of Adoption | Financial Statements Impact | |||
| Derivative and Hedging Activities | ||||||
ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities | This Update improves the financial reporting of hedging to better align with a company’s risk management activities. In addition, this Update makes certain targeted improvements to simplify the application of the current hedge accounting guidance. | January 1, 2019 Early adoption is permitted. | This Update is to be applied using a modified retrospective method. The presentation and disclosure guidance are applied prospectively. We are currently assessing the potential impact to our Consolidated Financial Statements. | |||
| Securities | ||||||
ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities | This Update shortens the amortization period for the premium on certain purchased callable securities to the earliest call date. The accounting for purchased callable debt securities held at a discount does not change. | January 1, 2019 Early adoption is permitted. | This Update is to be applied using a modified retrospective transition method. The adoption of this Update is not expected to have a material effect on our Consolidated Financial Statements. | |||
| Standard | Description | Required Date of Adoption | Financial Statements Impact | |||
| Retirement Benefits | ||||||
ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost | This Update requires that an employer disaggregate the service cost component from the other components of net benefit cost. The amendments also provide explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allows only the service cost component of net benefit cost to be eligible for capitalization. | January 1, 2018 | We adopted this Update in the first quarter of 2018 by a retrospective transition method. The adoption of this Update did not have a material effect on our Consolidated Financial Statements. | |||
| Statement of Cash Flows | ||||||
ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) | This Update adds or clarifies guidance on eight cash flow issues. | January 1, 2018 | We adopted this Update in the first quarter of 2018 by retrospective application. The adoption of this Update did not have a material effect on our Consolidated Financial Statements. | |||
| Credit Losses | ||||||
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments | This Update replaces the current incurred loss impairment methodology with a methodology that reflects current expected credit losses (commonly referred to as CECL) for most financial assets measured at amortized cost and certain other instruments, including loans, HTM debt securities, net investments in leases and off-balance sheet credit exposures. CECL requires loss estimates for the remaining life of the financial asset at the time the asset is originated or acquired, considering historical experience, current conditions and reasonable and supportable forecasts. In addition, the Update will require the use of a modified AFS debt security impairment model and eliminate the current accounting for purchased credit impaired loans and debt securities. | January 1, 2020 Early adoption is permitted for fiscal years beginning after December 15, 2018 | This Update is to be applied using a cumulative-effect adjustment to retained earnings. The CECL model is a significant change from existing GAAP and may result in a material change to our accounting for financial instruments. We are reviewing our business processes, information systems and controls to support recognition and disclosures under this Update. This review includes an assessment of our existing credit models and the financial statement disclosure requirements. The impact of this Update will be dependent on the portfolio composition, credit quality and economic conditions at the time of adoption. | |||
| Extinguishments of Liabilities | ||||||
ASU 2016-04, Liabilities - Extinguishments of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Products (a consensus of the Emerging Issues Task Force) | This Update requires entities that sell prepaid stored-value products redeemable for goods, services or cash at third-party merchants to recognize breakage. | January 1, 2018 | We adopted this Update in the first quarter of 2018. The adoption of this Update did not have a material effect on our Consolidated Financial Statements. | |||
| Standard | Description | Required Date of Adoption | Financial Statements Impact | |||
| Leases | ||||||
ASU 2016-02, Leases (Topic 842) | This Updaterequires lessees to put most leases on their balance sheets but recognize expenses in the income statement similar to current accounting. In addition, the Update changes the guidance for sale-leaseback transactions, initial direct costs and lease executory costs for most entities. All entities will classify leases to determine how to recognize lease related revenue and expense. | January 1, 2019 Early adoption is permitted. | This Update is to be applied using a modified retrospective application including a number of optional practical expedients. We are in the process of reviewing our existing lease portfolios, implementing a software solution and assessing the potential impact to our Consolidated Financial Statements. | |||
| Financial Instruments – Recognition and Measurement | ||||||
ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities | This Update amends the presentation and accounting for certain financial instruments, including liabilities measured at fair value under the FVO, and equity investments. The guidance also updates fair value presentation and disclosure requirements for financial instruments measured at amortized cost. | January 1, 2018 | We adopted this Update in the first quarter of 2018 by a cumulative-effect adjustment. The adoption of this Update did not have a material effect on our Consolidated Financial Statements. During the first quarter of 2018, we transferred marketable equity securities totaling $1.1 million from securities AFS to other assets. | |||
| Revenue Recognition | ||||||
ASU 2014-09, Revenue from Contracts with Customers (Topic 606) | This Update modifies the guidance used to recognize revenue from contracts with customers for transfers of goods and services and transfers of nonfinancial assets, unless those contracts are within the scope of other guidance. The guidance also requires new qualitative and quantitative disclosures about contract balances and performance obligations. | January 1, 2018 | We adopted this Update in the first quarter of 2018 under the modified retrospective method. The adoption of this Update did not have a material effect on our Consolidated Financial Statements. | |||
first quarter of 2017.
Based on the preliminary purchase price allocation, we recorded $1.2 billion in goodwill and $55.7 million in core deposit intangibles as a result of the acquisition. The core deposit intangible asset is being amortized over the estimated useful life of approximately ten years utilizing an accelerated method. Goodwill is not amortized, but is periodically evaluated for impairment. None of the goodwill is deductible for income tax purposes.
The following pro forma financial information for the periods presented reflects our estimated consolidated pro forma results of operations as if the YDKN acquisition occurred on January 1, 2016, unadjusted for potential cost savings and other business synergies we expect to receive as a result of the acquisition:
| (dollars in thousands, except per share data) | FNB | YDKN | Pro Forma Adjustments | Pro Forma Combined | ||||||||||||
Three Months Ended March 31, 2017 | ||||||||||||||||
Revenue (net interest income andnon-interest income) | $ | 206,969 | $ | 74,574 | $ | (781 | ) | $ | 280,762 | |||||||
Net income | 51,253 | 22,435 | (1,710 | ) | 71,978 | |||||||||||
Net income available to common stockholders | 49,243 | 22,435 | (1,710 | ) | 69,968 | |||||||||||
Earnings per common share – basic | 0.23 | 0.43 | — | 0.22 | ||||||||||||
Earnings per common share – diluted | 0.23 | 0.43 | — | 0.22 | ||||||||||||
Three Months Ended March 31, 2016 | ||||||||||||||||
Revenue (net interest income andnon-interest income) | 186,398 | 74,709 | (1,323 | ) | 259,784 | |||||||||||
Net income | 26,132 | 15,447 | (1,966 | ) | 39,613 | |||||||||||
Net income available to common stockholders | 24,122 | 15,447 | (1,966 | ) | 37,603 | |||||||||||
Earnings per common share – basic | 0.12 | 0.30 | — | 0.12 | ||||||||||||
Earnings per common share – diluted | 0.12 | 0.30 | — | 0.12 | ||||||||||||
The pro forma adjustments reflect amortization and associated taxes related to the preliminary purchase accounting adjustments made to record various acquired items at fair value.
In connection with the YDKN acquisition, we incurred expenses related to systems conversions and other costs of integrating and conforming acquired operations with and into FNB. These merger-related expenses, that were expensed as incurred, amounted to $52.3 million for the three months ended March 31, 2017. Contract terminations and severance costs comprised 30.8% and 26.6%, respectively, of the merger-related expenses, with the remainder consisting of othernon-interest expenses, including professional services, marketing and advertising, technology and communications, occupancy and equipment, and charitable contributions. We also incurred issuance costs of $0.5 million which were charged to additionalpaid-in capital.
Branch Purchase – Fifth Third Bank
On April 22, 2016, we completed our purchase of 17 branch-banking locations and certain consumer loans in the Pittsburgh, Pennsylvania metropolitan area from Fifth Third Bank (Fifth Third). The fair value of the acquired assets totaled $312.4 million, including $198.9 million in cash, $95.4 million in loans and $14.1 million in fixed and other assets. We also assumed $302.5 million in deposits, for which we paid a deposit premium of 1.97%, as part of the transaction. The assets and liabilities relating to these purchased branches were recorded on our balance sheet at their fair values as of April 22, 2016, and the related results of operations for these branches have been included in our consolidated income statement since that date. We recorded $14.1 million in goodwill and $4.1 million in core deposit intangibles as a result of the purchase transaction. The goodwill for this transaction is deductible for income tax purposes.
Metro Bancorp, Inc.
On February 13, 2016, we completed our acquisition of Metro Bancorp, Inc. (METR), a bank holding company based in Harrisburg, Pennsylvania. The acquisition enhanced our distribution and scale across Central Pennsylvania, strengthened our position as the largest Pennsylvania-based regional bank and allowed us to leverage the significant infrastructure investments made in connection with the expansion of our product offerings and risk management systems. On the acquisition date, the fair values of METR included $2.8 billion in assets, $1.9 billion in loans and $2.3 billion in deposits.
The acquisition was valued at $404.2 million and resulted in FNB issuing 34,041,181 shares of its common stock in exchange for 14,345,319 shares of METR common stock. We also acquired the fully vested outstanding stock options of METR. The assets and liabilities of METR were recorded on our consolidated balance sheet at their fair values as of the acquisition date and METR’s results of operations have been included in our consolidated income statement since that date. METR’s banking affiliate, Metro Bank, was merged into FNBPA on February 13, 2016. Based on the purchase price allocation, we recorded $185.1 million in goodwill and $24.2 million in core deposit intangibles as a result of the acquisition. None of the goodwill is deductible for income tax purposes as the acquisition is accounted for as atax-free exchange for tax purposes.
In connection with the METR acquisition, we incurred expenses related to systems conversions and other costs of integrating and conforming acquired operations with and into FNB. These merger-related charges, that were expensed as incurred, amounted to $0.4 million for the three months ended March 31, 2017 and $31.0 million for the year ended December 31, 2016. Severance costs comprised 39.9% of the merger-related expenses, with the remainder consisting of othernon-interest expenses, including professional services, marketing and advertising, technology and communications, occupancy and equipment, and charitable contributions. We also incurred issuance costs of $0.7 million which were charged to additionalpaid-in capital.
The following table summarizes the amounts recorded on the consolidated balance sheets as of each of the acquisition dates in conjunction with the acquisitions discussed above:
| (in thousands) | YDKN | Fifth Third Branches | METR | |||||||||
Fair value of consideration paid | $ | 1,783,366 | $ | — | $ | 404,242 | ||||||
Fair value of identifiable assets acquired: | ||||||||||||
Cash and cash equivalents | 197,682 | 198,872 | 46,890 | |||||||||
Securities | 940,634 | — | 722,980 | |||||||||
Loans | 5,116,497 | 95,354 | 1,862,447 | |||||||||
Core deposit and other intangible assets | 69,555 | 4,129 | 24,163 | |||||||||
Fixed and other assets | 460,752 | 14,069 | 127,185 | |||||||||
|
|
|
|
|
| |||||||
Total identifiable assets acquired | 6,785,120 | 312,424 | 2,783,665 | |||||||||
Fair value of liabilities assumed: | ||||||||||||
Deposits | 5,176,758 | 302,529 | 2,328,238 | |||||||||
Borrowings | 969,385 | — | 227,539 | |||||||||
Other liabilities | 73,652 | 24,041 | 8,700 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities assumed | 6,219,795 | 326,570 | 2,564,477 | |||||||||
Fair value of net identifiable assets acquired | 565,325 | (14,146 | ) | 219,188 | ||||||||
|
|
|
|
|
| |||||||
Goodwill recognized(1) | $ | 1,218,041 | $ | 14,146 | $ | 185,054 | ||||||
|
|
|
|
|
| |||||||
recorded.
| (in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
Securities Available for Sale (AFS): | ||||||||||||||||
March 31, 2017 | ||||||||||||||||
U.S. Treasury | $ | 29,908 | $ | 37 | $ | — | $ | 29,945 | ||||||||
U.S. government-sponsored entities | 397,634 | 676 | (3,104 | ) | 395,206 | |||||||||||
Residential mortgage-backed securities: | ||||||||||||||||
Agency mortgage-backed securities | 1,650,743 | 3,024 | (10,753 | ) | 1,643,014 | |||||||||||
Agency collateralized mortgage obligations | 514,232 | 347 | (10,616 | ) | 503,963 | |||||||||||
Non-agency collateralized mortgage obligations | 2 | — | — | 2 | ||||||||||||
Commercial mortgage-backed securities | 420 | — | (1 | ) | 419 | |||||||||||
States of the U.S. and political subdivisions | 34,763 | 69 | (154 | ) | 34,678 | |||||||||||
Other debt securities | 21,899 | 68 | (373 | ) | 21,594 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total debt securities | 2,649,601 | 4,221 | (25,001 | ) | 2,628,821 | |||||||||||
Equity securities | 9,479 | 612 | (97 | ) | 9,994 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total securities available for sale | $ | 2,659,080 | $ | 4,833 | $ | (25,098 | ) | $ | 2,638,815 | |||||||
|
|
|
|
|
|
|
| |||||||||
December 31, 2016 | ||||||||||||||||
U.S. Treasury | $ | 29,874 | $ | 79 | $ | — | $ | 29,953 | ||||||||
U.S. government-sponsored entities | 367,604 | 864 | (3,370 | ) | 365,098 | |||||||||||
Residential mortgage-backed securities: | ||||||||||||||||
Agency mortgage-backed securities | 1,267,535 | 2,257 | (16,994 | ) | 1,252,798 | |||||||||||
Agency collateralized mortgage obligations | 546,659 | 419 | (11,104 | ) | 535,974 | |||||||||||
Non-agency collateralized mortgage obligations | 891 | 6 | — | 897 | ||||||||||||
Commercial mortgage-backed securities | 1,292 | — | (1 | ) | 1,291 | |||||||||||
States of the U.S. and political subdivisions | 36,065 | 86 | (302 | ) | 35,849 | |||||||||||
Other debt securities | 9,828 | 94 | (435 | ) | 9,487 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total debt securities | 2,259,748 | 3,805 | (32,206 | ) | 2,231,347 | |||||||||||
Equity securities | 273 | 367 | — | 640 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total securities available for sale | $ | 2,260,021 | $ | 4,172 | $ | (32,206 | ) | $ | 2,231,987 | |||||||
|
|
|
|
|
|
|
| |||||||||
Securities Held to Maturity (HTM): | ||||||||||||||||
March 31, 2017 | ||||||||||||||||
U.S. Treasury | $ | 500 | $ | 139 | $ | — | $ | 639 | ||||||||
U.S. government-sponsored entities | 247,580 | 395 | (4,255 | ) | 243,720 | |||||||||||
Residential mortgage-backed securities: | ||||||||||||||||
Agency mortgage-backed securities | 1,243,947 | 7,382 | (6,795 | ) | 1,244,534 | |||||||||||
Agency collateralized mortgage obligations | 798,506 | 841 | (17,003 | ) | 782,344 | |||||||||||
Commercial mortgage-backed securities | 81,750 | 508 | (302 | ) | 81,956 | |||||||||||
States of the U.S. and political subdivisions | 549,869 | 2,686 | (18,851 | ) | 533,704 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total securities held to maturity | $ | 2,922,152 | $ | 11,951 | $ | (47,206 | ) | $ | 2,886,897 | |||||||
|
|
|
|
|
|
|
| |||||||||
December 31, 2016 | ||||||||||||||||
U.S. Treasury | $ | 500 | $ | 137 | $ | — | $ | 637 | ||||||||
U.S. government-sponsored entities | 272,645 | 348 | (4,475 | ) | 268,518 | |||||||||||
Residential mortgage-backed securities: | ||||||||||||||||
Agency mortgage-backed securities | 852,215 | 5,654 | (8,645 | ) | 849,224 | |||||||||||
Agency collateralized mortgage obligations | 743,148 | 447 | (17,801 | ) | 725,794 | |||||||||||
Non-agency collateralized mortgage obligations | 1,689 | 3 | (6 | ) | 1,686 | |||||||||||
Commercial mortgage-backed securities | 49,797 | 181 | (226 | ) | 49,752 | |||||||||||
States of the U.S. and political subdivisions | 417,348 | 1,456 | (19,638 | ) | 399,166 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total securities held to maturity | $ | 2,337,342 | $ | 8,226 | $ | (50,791 | ) | $ | 2,294,777 | |||||||
|
|
|
|
|
|
|
| |||||||||
| (in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
| Securities Available for Sale: | |||||||||||||||
| March 31, 2018 | |||||||||||||||
| U.S. government-sponsored entities | $ | 364,600 | $ | — | $ | (5,952 | ) | $ | 358,648 | ||||||
| Residential mortgage-backed securities: | |||||||||||||||
| Agency mortgage-backed securities | 1,713,036 | 458 | (41,921 | ) | 1,671,573 | ||||||||||
| Agency collateralized mortgage obligations | 860,902 | 28 | (28,580 | ) | 832,350 | ||||||||||
| Non-agency collateralized mortgage obligations | 1 | — | — | 1 | |||||||||||
| Commercial mortgage-backed securities | 39,183 | 30 | — | 39,213 | |||||||||||
| States of the U.S. and political subdivisions | 21,138 | 3 | (118 | ) | 21,023 | ||||||||||
| Other debt securities | 4,916 | — | (261 | ) | 4,655 | ||||||||||
| Total debt securities available for sale | $ | 3,003,776 | $ | 519 | $ | (76,832 | ) | $ | 2,927,463 | ||||||
| December 31, 2017 | |||||||||||||||
| U.S. government-sponsored entities | $ | 347,767 | $ | 52 | $ | (3,877 | ) | $ | 343,942 | ||||||
| Residential mortgage-backed securities: | |||||||||||||||
| Agency mortgage-backed securities | 1,615,168 | 1,225 | (17,519 | ) | 1,598,874 | ||||||||||
| Agency collateralized mortgage obligations | 813,034 | — | (18,077 | ) | 794,957 | ||||||||||
| Non-agency collateralized mortgage obligations | 1 | — | — | 1 | |||||||||||
| States of the U.S. and political subdivisions | 21,151 | 6 | (64 | ) | 21,093 | ||||||||||
| Other debt securities | 4,913 | — | (243 | ) | 4,670 | ||||||||||
| Total debt securities | 2,802,034 | 1,283 | (39,780 | ) | 2,763,537 | ||||||||||
| Equity securities | 587 | 438 | — | 1,025 | |||||||||||
| Total securities available for sale | $ | 2,802,621 | $ | 1,721 | $ | (39,780 | ) | $ | 2,764,562 | ||||||
| (in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
| Debt Securities Held to Maturity: | |||||||||||||||
| March 31, 2018 | |||||||||||||||
| U.S. Treasury | $ | 500 | $ | 114 | $ | — | $ | 614 | |||||||
| U.S. government-sponsored entities | 247,272 | 81 | (5,716 | ) | 241,637 | ||||||||||
| Residential mortgage-backed securities: | |||||||||||||||
| Agency mortgage-backed securities | 1,174,426 | 491 | (27,472 | ) | 1,147,445 | ||||||||||
| Agency collateralized mortgage obligations | 783,151 | 257 | (29,971 | ) | 753,437 | ||||||||||
| Commercial mortgage-backed securities | 79,476 | 32 | (1,245 | ) | 78,263 | ||||||||||
| States of the U.S. and political subdivisions | 939,175 | 2,483 | (31,090 | ) | 910,568 | ||||||||||
| Total debt securities held to maturity | $ | 3,224,000 | $ | 3,458 | $ | (95,494 | ) | $ | 3,131,964 | ||||||
| December 31, 2017 | |||||||||||||||
| U.S. Treasury | $ | 500 | $ | 134 | $ | — | $ | 634 | |||||||
| U.S. government-sponsored entities | 247,310 | 93 | (4,388 | ) | 243,015 | ||||||||||
| Residential mortgage-backed securities: | |||||||||||||||
| Agency mortgage-backed securities | 1,219,802 | 3,475 | (9,058 | ) | 1,214,219 | ||||||||||
| Agency collateralized mortgage obligations | 777,146 | 32 | (20,095 | ) | 757,083 | ||||||||||
| Commercial mortgage-backed securities | 80,786 | 414 | (575 | ) | 80,625 | ||||||||||
| States of the U.S. and political subdivisions | 916,724 | 13,209 | (7,130 | ) | 922,803 | ||||||||||
| Total debt securities held to maturity | $ | 3,242,268 | $ | 17,357 | $ | (41,246 | ) | $ | 3,218,379 | ||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (in thousands) | 2017 | 2016 | ||||||
Gross gains | $ | 3,400 | $ | 71 | ||||
Gross losses | (775 | ) | — | |||||
|
|
|
| |||||
Net gains | $ | 2,625 | $ | 71 | ||||
|
|
|
| |||||
| Three Months Ended March 31, | |||||||
| (in thousands) | 2018 | 2017 | |||||
| Gross gains | $ | — | $ | 3,400 | |||
| Gross losses | — | (775 | ) | ||||
| Net gains | $ | — | $ | 2,625 | |||
| Available for Sale | Held to Maturity | |||||||||||||||
| (in thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||
Due in one year or less | $ | 119,899 | $ | 120,041 | $ | 390 | $ | 396 | ||||||||
Due from one to five years | 330,197 | 327,741 | 253,707 | 249,830 | ||||||||||||
Due from five to ten years | 31,143 | 30,918 | 68,397 | 68,666 | ||||||||||||
Due after ten years | 2,965 | 2,723 | 475,455 | 459,171 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| 484,204 | 481,423 | 797,949 | 778,063 | |||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||
Agency mortgage-backed securities | 1,650,743 | 1,643,014 | 1,243,947 | 1,244,534 | ||||||||||||
Agency collateralized mortgage obligations | 514,232 | 503,963 | 798,506 | 782,344 | ||||||||||||
Non-agency collateralized mortgage obligations | 2 | 2 | — | — | ||||||||||||
Commercial mortgage-backed securities | 420 | 419 | 81,750 | 81,956 | ||||||||||||
Equity securities | 9,479 | 9,994 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total securities | $ | 2,659,080 | $ | 2,638,815 | $ | 2,922,152 | $ | 2,886,897 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Available for Sale | Held to Maturity | ||||||||||||||
| (in thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||
| Due in one year or less | $ | 65,814 | $ | 65,498 | $ | 45,461 | $ | 45,221 | |||||||
| Due from one to five years | 262,236 | 256,811 | 210,014 | 204,580 | |||||||||||
| Due from five to ten years | 7,876 | 7,725 | 94,022 | 93,225 | |||||||||||
| Due after ten years | 54,728 | 54,292 | 837,450 | 809,793 | |||||||||||
| 390,654 | 384,326 | 1,186,947 | 1,152,819 | ||||||||||||
| Residential mortgage-backed securities: | |||||||||||||||
| Agency mortgage-backed securities | 1,713,036 | 1,671,573 | 1,174,426 | 1,147,445 | |||||||||||
| Agency collateralized mortgage obligations | 860,902 | 832,350 | 783,151 | 753,437 | |||||||||||
| Non-agency collateralized mortgage obligations | 1 | 1 | — | — | |||||||||||
| Commercial mortgage-backed securities | 39,183 | 39,213 | 79,476 | 78,263 | |||||||||||
| Total debt securities | $ | 3,003,776 | $ | 2,927,463 | $ | 3,224,000 | $ | 3,131,964 | |||||||
| March 31, | December 31, | |||||||
| (dollars in thousands) | 2017 | 2016 | ||||||
Securities pledged (carrying value): | ||||||||
To secure public deposits, trust deposits and for other purposes as required by law | $ | 3,145,072 | $ | 2,779,335 | ||||
As collateral for short-term borrowings | 323,658 | 322,038 | ||||||
Securities pledged as a percent of total securities | 62.4 | % | 67.9 | % | ||||
| (dollars in thousands) | March 31, 2018 | December 31, 2017 | |||||
| Securities pledged (carrying value): | |||||||
| To secure public deposits, trust deposits and for other purposes as required by law | $ | 3,532,023 | $ | 3,491,634 | |||
| As collateral for short-term borrowings | 298,233 | 263,756 | |||||
| Securities pledged as a percent of total securities | 62.3 | % | 62.5 | % | |||
| Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||
| (dollars in thousands) | # | Fair Value | Unrealized Losses | # | Fair Value | Unrealized Losses | # | Fair Value | Unrealized Losses | |||||||||||||||||||||||||||
Securities Available for Sale | ||||||||||||||||||||||||||||||||||||
March 31, 2017 | ||||||||||||||||||||||||||||||||||||
U.S. government-sponsored entities | 13 | $ | 246,881 | $ | (3,104 | ) | — | $ | — | $ | — | 13 | $ | 246,881 | $ | (3,104 | ) | |||||||||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||||||||||||||||||||
Agency mortgage-backed securities | 56 | 1,176,464 | (10,753 | ) | — | — | — | 56 | 1,176,464 | (10,753 | ) | |||||||||||||||||||||||||
Agency collateralized mortgage obligations | 29 | 364,095 | (6,990 | ) | 9 | 84,869 | (3,626 | ) | 38 | 448,964 | (10,616 | ) | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 1 | 419 | (1 | ) | — | — | — | 1 | 419 | (1 | ) | |||||||||||||||||||||||||
States of the U.S. and political subdivisions | 11 | 17,762 | (72 | ) | 5 | 5,834 | (82 | ) | 16 | 23,596 | (154 | ) | ||||||||||||||||||||||||
Other debt securities | — | — | — | 3 | 4,534 | (373 | ) | 3 | 4,534 | (373 | ) | |||||||||||||||||||||||||
Equity securities | 5 | 703 | (97 | ) | — | — | — | 5 | 703 | (97 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total temporarily impaired securities AFS | 115 | $ | 1,806,324 | $ | (21,017 | ) | 17 | $ | 95,237 | $ | (4,081 | ) | 132 | $ | 1,901,561 | $ | (25,098 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
December 31, 2016 | ||||||||||||||||||||||||||||||||||||
U.S. government-sponsored entities | 11 | $ | 211,636 | $ | (3,370 | ) | — | $ | — | $ | — | 11 | $ | 211,636 | $ | (3,370 | ) | |||||||||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||||||||||||||||||||
Agency mortgage-backed securities | 55 | 1,056,731 | (16,994 | ) | — | — | — | 55 | 1,056,731 | (16,994 | ) | |||||||||||||||||||||||||
Agency collateralized mortgage obligations | 26 | 346,662 | (7,261 | ) | 9 | 89,040 | (3,843 | ) | 35 | 435,702 | (11,104 | ) | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 1 | 1,291 | (1 | ) | — | — | — | 1 | 1,291 | (1 | ) | |||||||||||||||||||||||||
States of the U.S. and political subdivisions | 20 | 28,631 | (302 | ) | — | — | — | 20 | 28,631 | (302 | ) | |||||||||||||||||||||||||
Other debt securities | — | — | — | 3 | 4,470 | (435 | ) | 3 | 4,470 | (435 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total temporarily impaired securities AFS | 113 | $ | 1,644,951 | $ | (27,928 | ) | 12 | $ | 93,510 | $ | (4,278 | ) | 125 | $ | 1,738,461 | $ | (32,206 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Securities Held to Maturity | ||||||||||||||||||||||||||||||||||||
March 31, 2017 | ||||||||||||||||||||||||||||||||||||
U.S. government-sponsored entities | 11 | $ | 200,745 | $ | (4,255 | ) | — | $ | — | $ | — | 11 | $ | 200,745 | $ | (4,255 | ) | |||||||||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||||||||||||||||||||
Agency mortgage-backed securities | 38 | 695,915 | (6,795 | ) | — | — | — | 38 | 695,915 | (6,795 | ) | |||||||||||||||||||||||||
Agency collateralized mortgage obligations | 29 | 498,743 | (13,236 | ) | 12 | 107,546 | (3,767 | ) | 41 | 606,289 | (17,003 | ) | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 3 | 14,875 | (67 | ) | 1 | 7,684 | (235 | ) | 4 | 22,559 | (302 | ) | ||||||||||||||||||||||||
States of the U.S. and political subdivisions | 103 | 279,356 | (18,851 | ) | — | — | — | 103 | 279,356 | (18,851 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total temporarily impaired securities HTM | 184 | $ | 1,689,634 | $ | (43,204 | ) | 13 | $ | 115,230 | $ | (4,002 | ) | 197 | $ | 1,804,864 | $ | (47,206 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
December 31, 2016 | ||||||||||||||||||||||||||||||||||||
U.S. government-sponsored entities | 10 | $ | 185,525 | $ | (4,475 | ) | — | $ | — | $ | — | 10 | $ | 185,525 | $ | (4,475 | ) | |||||||||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||||||||||||||||||||
Agency mortgage-backed securities | 36 | 551,404 | (8,645 | ) | — | — | — | 36 | 551,404 | (8,645 | ) | |||||||||||||||||||||||||
Agency collateralized mortgage obligations | 29 | 516,237 | (13,710 | ) | 12 | 112,690 | (4,091 | ) | 41 | 628,927 | (17,801 | ) | ||||||||||||||||||||||||
Non-agency collateralized mortgage obligations | 3 | 1,128 | (6 | ) | — | — | — | 3 | 1,128 | (6 | ) | |||||||||||||||||||||||||
Commercial mortgage-backed securities | 1 | 12,317 | (10 | ) | 1 | 8,267 | (216 | ) | 2 | 20,584 | (226 | ) | ||||||||||||||||||||||||
States of the U.S. and political subdivisions | 94 | 247,301 | (19,638 | ) | — | — | — | 94 | 247,301 | (19,638 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total temporarily impaired securities HTM | 173 | $ | 1,513,912 | $ | (46,484 | ) | 13 | $ | 120,957 | $ | (4,307 | ) | 186 | $ | 1,634,869 | $ | (50,791 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
| Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||
| (dollars in thousands) | # | Fair Value | Unrealized Losses | # | Fair Value | Unrealized Losses | # | Fair Value | Unrealized Losses | |||||||||||||||||||||||
| Debt Securities Available for Sale | ||||||||||||||||||||||||||||||||
| March 31, 2018 | ||||||||||||||||||||||||||||||||
| U.S. government-sponsored entities | 8 | $ | 158,212 | $ | (1,389 | ) | 10 | $ | 200,436 | $ | (4,563 | ) | 18 | $ | 358,648 | $ | (5,952 | ) | ||||||||||||||
| Residential mortgage-backed securities: | ||||||||||||||||||||||||||||||||
| Agency mortgage-backed securities | 59 | 1,212,767 | (25,545 | ) | 28 | 444,583 | (16,376 | ) | 87 | 1,657,350 | (41,921 | ) | ||||||||||||||||||||
| Agency collateralized mortgage obligations | 16 | 470,878 | (13,274 | ) | 33 | 312,687 | (15,306 | ) | 49 | 783,565 | (28,580 | ) | ||||||||||||||||||||
| States of the U.S. and political subdivisions | 7 | 11,434 | (108 | ) | 1 | 877 | (10 | ) | 8 | 12,311 | (118 | ) | ||||||||||||||||||||
| Other debt securities | — | — | — | 3 | 4,655 | (261 | ) | 3 | 4,655 | (261 | ) | |||||||||||||||||||||
| Total temporarily impaired debt securities AFS | 90 | $ | 1,853,291 | $ | (40,316 | ) | 75 | $ | 963,238 | $ | (36,516 | ) | 165 | $ | 2,816,529 | $ | (76,832 | ) | ||||||||||||||
| December 31, 2017 | ||||||||||||||||||||||||||||||||
| U.S. government-sponsored entities | 7 | $ | 106,809 | $ | (363 | ) | 10 | $ | 201,485 | $ | (3,514 | ) | 17 | $ | 308,294 | $ | (3,877 | ) | ||||||||||||||
| Residential mortgage-backed securities: | ||||||||||||||||||||||||||||||||
| Agency mortgage-backed securities | 43 | 976,738 | (7,723 | ) | 28 | 473,625 | (9,796 | ) | 71 | 1,450,363 | (17,519 | ) | ||||||||||||||||||||
| Agency collateralized mortgage obligations | 14 | 409,005 | (6,231 | ) | 33 | 335,452 | (11,846 | ) | 47 | 744,457 | (18,077 | ) | ||||||||||||||||||||
| States of the U.S. and political subdivisions | 7 | 11,254 | (55 | ) | 1 | 879 | (9 | ) | 8 | 12,133 | (64 | ) | ||||||||||||||||||||
| Other debt securities | — | — | — | 3 | 4,670 | (243 | ) | 3 | 4,670 | (243 | ) | |||||||||||||||||||||
| Total temporarily impaired debt securities AFS | 71 | $ | 1,503,806 | $ | (14,372 | ) | 75 | $ | 1,016,111 | $ | (25,408 | ) | 146 | $ | 2,519,917 | $ | (39,780 | ) | ||||||||||||||
| Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||
| (dollars in thousands) | # | Fair Value | Unrealized Losses | # | Fair Value | Unrealized Losses | # | Fair Value | Unrealized Losses | |||||||||||||||||||||||
| Debt Securities Held to Maturity | ||||||||||||||||||||||||||||||||
| March 31, 2018 | ||||||||||||||||||||||||||||||||
| U.S. government-sponsored entities | 4 | $ | 54,558 | $ | (465 | ) | 10 | $ | 184,750 | $ | (5,251 | ) | 14 | $ | 239,308 | $ | (5,716 | ) | ||||||||||||||
| Residential mortgage-backed securities: | ||||||||||||||||||||||||||||||||
| Agency mortgage-backed securities | 73 | 935,246 | (20,410 | ) | 11 | 173,759 | (7,062 | ) | 84 | 1,109,005 | (27,472 | ) | ||||||||||||||||||||
| Agency collateralized mortgage obligations | 16 | 267,299 | (5,862 | ) | 35 | 444,572 | (24,109 | ) | 51 | 711,871 | (29,971 | ) | ||||||||||||||||||||
| Commercial mortgage-backed securities | 6 | 48,737 | (637 | ) | 3 | 19,909 | (608 | ) | 9 | 68,646 | (1,245 | ) | ||||||||||||||||||||
| States of the U.S. and political subdivisions | 148 | 517,101 | (16,245 | ) | 37 | 112,879 | (14,845 | ) | 185 | 629,980 | (31,090 | ) | ||||||||||||||||||||
| Total temporarily impaired debt securities HTM | 247 | $ | 1,822,941 | $ | (43,619 | ) | 96 | $ | 935,869 | $ | (51,875 | ) | 343 | $ | 2,758,810 | $ | (95,494 | ) | ||||||||||||||
| December 31, 2017 | ||||||||||||||||||||||||||||||||
| U.S. government-sponsored entities | 4 | $ | 54,790 | $ | (239 | ) | 10 | $ | 185,851 | $ | (4,149 | ) | 14 | $ | 240,641 | $ | (4,388 | ) | ||||||||||||||
| Residential mortgage-backed securities: | ||||||||||||||||||||||||||||||||
| Agency mortgage-backed securities | 36 | 648,485 | (4,855 | ) | 11 | 183,989 | (4,203 | ) | 47 | 832,474 | (9,058 | ) | ||||||||||||||||||||
| Agency collateralized mortgage obligations | 14 | 275,290 | (1,701 | ) | 35 | 473,257 | (18,394 | ) | 49 | 748,547 | (20,095 | ) | ||||||||||||||||||||
| Commercial mortgage-backed securities | 3 | 26,399 | (123 | ) | 2 | 19,443 | (452 | ) | 5 | 45,842 | (575 | ) | ||||||||||||||||||||
| States of the U.S. and political subdivisions | 16 | 56,739 | (933 | ) | 37 | 121,536 | (6,197 | ) | 53 | 178,275 | (7,130 | ) | ||||||||||||||||||||
| Total temporarily impaired debt securities HTM | 73 | $ | 1,061,703 | $ | (7,851 | ) | 95 | $ | 984,076 | $ | (33,395 | ) | 168 | $ | 2,045,779 | $ | (41,246 | ) | ||||||||||||||
2017.
| (in thousands) | Originated Loans and Leases | Acquired Loans | Total Loans and Leases | |||||||||
March 31, 2017 | ||||||||||||
Commercial real estate | $ | 4,262,270 | $ | 4,506,087 | $ | 8,768,357 | ||||||
Commercial and industrial | 2,857,584 | 935,095 | 3,792,679 | |||||||||
Commercial leases | 197,071 | — | 197,071 | |||||||||
|
|
|
|
|
| |||||||
Total commercial loans and leases | 7,316,925 | 5,441,182 | 12,758,107 | |||||||||
Direct installment | 1,758,895 | 206,223 | 1,965,118 | |||||||||
Residential mortgages | 1,551,928 | 790,239 | 2,342,167 | |||||||||
Indirect installment | 1,259,770 | 177 | 1,259,947 | |||||||||
Consumer lines of credit | 1,100,695 | 705,301 | 1,805,996 | |||||||||
Other | 46,315 | — | 46,315 | |||||||||
|
|
|
|
|
| |||||||
Total loans and leases, net of unearned income | $ | 13,034,528 | $ | 7,143,122 | $ | 20,177,650 | ||||||
|
|
|
|
|
| |||||||
December 31, 2016 | ||||||||||||
Commercial real estate | $ | 4,095,817 | $ | 1,339,345 | $ | 5,435,162 | ||||||
Commercial and industrial | 2,711,886 | 330,895 | 3,042,781 | |||||||||
Commercial leases | 196,636 | — | 196,636 | |||||||||
|
|
|
|
|
| |||||||
Total commercial loans and leases | 7,004,339 | 1,670,240 | 8,674,579 | |||||||||
Direct installment | 1,765,257 | 79,142 | 1,844,399 | |||||||||
Residential mortgages | 1,446,776 | 397,798 | 1,844,574 | |||||||||
Indirect installment | 1,196,110 | 203 | 1,196,313 | |||||||||
Consumer lines of credit | 1,099,627 | 201,573 | 1,301,200 | |||||||||
Other | 35,878 | — | 35,878 | |||||||||
|
|
|
|
|
| |||||||
Total loans and leases, net of unearned income | $ | 12,547,987 | $ | 2,348,956 | $ | 14,896,943 | ||||||
|
|
|
|
|
| |||||||
| (in thousands) | Originated Loans and Leases | Acquired Loans | Total Loans and Leases | ||||||||
| March 31, 2018 | |||||||||||
| Commercial real estate | $ | 5,465,150 | $ | 3,346,325 | $ | 8,811,475 | |||||
| Commercial and industrial | 3,688,120 | 591,849 | 4,279,969 | ||||||||
| Commercial leases | 279,582 | — | 279,582 | ||||||||
| Other | 39,347 | — | 39,347 | ||||||||
| Total commercial loans and leases | 9,472,199 | 3,938,174 | 13,410,373 | ||||||||
| Direct installment | 1,737,242 | 134,397 | 1,871,639 | ||||||||
| Residential mortgages | 2,131,338 | 630,763 | 2,762,101 | ||||||||
| Indirect installment | 1,524,330 | 171 | 1,524,501 | ||||||||
| Consumer lines of credit | 1,135,488 | 558,295 | 1,693,783 | ||||||||
| Total consumer loans | 6,528,398 | 1,323,626 | 7,852,024 | ||||||||
| Total loans and leases, net of unearned income | $ | 16,000,597 | $ | 5,261,800 | $ | 21,262,397 | |||||
| December 31, 2017 | |||||||||||
| Commercial real estate | $ | 5,174,783 | $ | 3,567,081 | $ | 8,741,864 | |||||
| Commercial and industrial | 3,495,247 | 675,420 | 4,170,667 | ||||||||
| Commercial leases | 266,720 | — | 266,720 | ||||||||
| Other | 17,063 | — | 17,063 | ||||||||
| Total commercial loans and leases | 8,953,813 | 4,242,501 | 13,196,314 | ||||||||
| Direct installment | 1,755,713 | 149,822 | 1,905,535 | ||||||||
| Residential mortgages | 2,036,226 | 666,465 | 2,702,691 | ||||||||
| Indirect installment | 1,448,268 | 165 | 1,448,433 | ||||||||
| Consumer lines of credit | 1,151,470 | 594,323 | 1,745,793 | ||||||||
| Total consumer loans | 6,391,677 | 1,410,775 | 7,802,452 | ||||||||
| Total loans and leases, net of unearned income | $ | 15,345,490 | $ | 5,653,276 | $ | 20,998,766 | |||||
The loans and leases portfolio also contains Regency consumer finance loans to individuals in Pennsylvania, Ohio, Tennessee and Kentucky. Due to the relative size of the Regency consumer finance loan portfolio, these loans are not segregated from other consumer loans. The following table shows certain information relating to the Regency consumer finance loans:
| March 31, | December 31, | |||||||
| (dollars in thousands) | 2017 | 2016 | ||||||
Regency consumer finance loans | $ | 173,786 | $ | 184,687 | ||||
Percent of total loans and leases | 0.9 | % | 1.2 | % | ||||
| March 31, | December 31, | |||||||
| (dollars in thousands) | 2017 | 2016 | ||||||
Commercial construction loans | $ | 1,050,129 | $ | 459,995 | ||||
Percent of total loans and leases | 5.2 | % | 3.1 | % | ||||
Commercial real estate: | ||||||||
Percent owner-occupied | 37.4 | % | 36.2 | % | ||||
Percentnon-owner-occupied | 62.6 | % | 63.8 | % | ||||
| (dollars in thousands) | March 31, 2018 | December 31, 2017 | |||||
| Commercial construction, acquisition and development loans | $ | 1,167,699 | $ | 1,170,175 | |||
| Percent of total loans and leases | 5.5 | % | 5.6 | % | |||
| Commercial real estate: | |||||||
| Percent owner-occupied | 35.2 | % | 35.3 | % | |||
| Percent non-owner-occupied | 64.8 | % | 64.7 | % | |||
| (in thousands) | March 31, 2017 | December 31, 2016 | ||||||
Accounted for under ASC310-30: | ||||||||
Outstanding balance | $ | 7,205,696 | $ | 2,346,687 | ||||
Carrying amount | 6,644,633 | 2,015,904 | ||||||
Accounted for under ASC310-20: | ||||||||
Outstanding balance | 502,001 | 342,015 | ||||||
Carrying amount | 491,921 | 325,784 | ||||||
Total acquired loans: | ||||||||
Outstanding balance | 7,707,697 | 2,688,702 | ||||||
Carrying amount | 7,136,554 | 2,341,688 | ||||||
| (in thousands) | March 31, 2018 | December 31, 2017 | |||||
| Accounted for under ASC 310-30: | |||||||
| Outstanding balance | $ | 4,853,516 | $ | 5,176,015 | |||
| Carrying amount | 4,521,926 | 4,834,256 | |||||
| Accounted for under ASC 310-20: | |||||||
| Outstanding balance | 754,251 | 835,130 | |||||
| Carrying amount | 733,037 | 812,322 | |||||
| Total acquired loans: | |||||||
| Outstanding balance | 5,607,767 | 6,011,145 | |||||
| Carrying amount | 5,254,963 | 5,646,578 | |||||
The carrying amount of purchased credit impaired loans included in the table above totaled $11.8$1.7 million at March 31, 20172018 and $2.8$1.9 million at December 31, 2016,2017, representing less than 1%0.03% of the carrying amount of total acquired loans as of each date.
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (in thousands) | 2017 | 2016 | ||||||
Balance at beginning of period | $ | 467,070 | $ | 256,120 | ||||
Acquisitions | 443,261 | 284,092 | ||||||
Reduction due to unexpected early payoffs | (20,560 | ) | (9,375 | ) | ||||
Reclass fromnon-accretable difference | 23,106 | 10,494 | ||||||
Disposals/transfers | (36 | ) | (260 | ) | ||||
Accretion | (25,241 | ) | (13,204 | ) | ||||
|
|
|
| |||||
Balance at end of period | $ | 887,600 | $ | 527,867 | ||||
|
|
|
| |||||
| Three Months Ended March 31, | |||||||
| (in thousands) | 2018 | 2017 | |||||
| Balance at beginning of period | $ | 708,481 | $ | 467,070 | |||
| Acquisitions | — | 443,261 | |||||
| Reduction due to unexpected early payoffs | (25,833 | ) | (20,560 | ) | |||
| Reclass from non-accretable difference | 64,216 | 23,106 | |||||
| Disposals/transfers | (57 | ) | (36 | ) | |||
| Other | (403 | ) | — | ||||
| Accretion | (59,079 | ) | (25,241 | ) | |||
| Balance at end of period | $ | 687,325 | $ | 887,600 | |||
The following table reflects amounts at acquisition for all purchased loans subject to ASC310-30 (impaired andnon-impaired loans with deteriorated credit quality) acquired from YDKN in 2017 based on the preliminary estimate of fair value as described in Note 3.
| (in thousands) | Acquired Impaired Loans | Acquired Performing Loans | Total | |||||||||
Contractually required cash flows at acquisition | $ | 48,941 | $ | 5,084,475 | $ | 5,133,416 | ||||||
Non-accretable difference (expected losses and foregone interest) | (25,673 | ) | (406,802 | ) | (432,475 | ) | ||||||
|
|
|
|
|
| |||||||
Cash flows expected to be collected at acquisition | 23,268 | 4,677,673 | 4,700,941 | |||||||||
Accretable yield | (3,323 | ) | (439,938 | ) | (443,261 | ) | ||||||
|
|
|
|
|
| |||||||
Fair value of acquired loans at acquisition | $ | 19,945 | $ | 4,237,735 | $ | 4,257,680 | ||||||
|
|
|
|
|
| |||||||
In addition, loans purchased in the YDKN acquisition that were not subject to ASC310-30 had the following balances at the date of acquisition: fair value of $5.0 million; unpaid principal balance of $5.2 million; and contractual cash flows not expected to be collected of $6.2 million.
status until all delinquent principal and interest have been paid and the ultimate ability to collect the remaining principal and interest is reasonably assured. The majority of TDRs are loans in which we have granted a concession on the interest rate or the original repayment terms due to the borrower’s financial distress.
| (dollars in thousands) | March 31, 2017 | December 31, 2016 | ||||||
Non-accrual loans | $ | 81,390 | $ | 65,479 | ||||
Troubled debt restructurings | 23,988 | 20,428 | ||||||
|
|
|
| |||||
Totalnon-performing loans | 105,378 | 85,907 | ||||||
Other real estate owned (OREO) | 50,088 | 32,490 | ||||||
|
|
|
| |||||
Totalnon-performing assets | $ | 155,466 | $ | 118,397 | ||||
|
|
|
| |||||
Asset quality ratios: | ||||||||
Non-performing loans / total loans and leases | 0.52 | % | 0.58 | % | ||||
Non-performing loans + OREO / total loans and leases + OREO | 0.77 | % | 0.79 | % | ||||
Non-performing assets / of total assets | 0.51 | % | 0.54 | % | ||||
| (dollars in thousands) | March 31, 2018 | December 31, 2017 | |||||
| Non-accrual loans | $ | 77,684 | $ | 74,635 | |||
| Troubled debt restructurings | 24,452 | 23,481 | |||||
| Total non-performing loans | 102,136 | 98,116 | |||||
| Other real estate owned | 40,980 | 40,606 | |||||
| Total non-performing assets | $ | 143,116 | $ | 138,722 | |||
| Asset quality ratios: | |||||||
| Non-performing loans / total loans and leases | 0.48 | % | 0.47 | % | |||
| Non-performing loans + OREO / total loans and leases + OREO | 0.67 | % | 0.66 | % | |||
| Non-performing assets / total assets | 0.45 | % | 0.44 | % | |||
| (in thousands) | 30-89 Days Past Due | ³ 90 Days Past Due and Still Accruing | Non- Accrual | Total Past Due | Current | Total Loans and Leases | ||||||||||||||||||
Originated Loans and Leases |
| |||||||||||||||||||||||
March 31, 2017 | ||||||||||||||||||||||||
Commercial real estate | $ | 5,923 | $ | 1 | $ | 23,040 | $ | 28,964 | $ | 4,233,306 | $ | 4,262,270 | ||||||||||||
Commercial and industrial | 5,007 | 3 | 34,826 | 39,836 | 2,817,748 | 2,857,584 | ||||||||||||||||||
Commercial leases | 1,039 | — | 2,017 | 3,056 | 194,015 | 197,071 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total commercial loans and leases | 11,969 | 4 | 59,883 | 71,856 | 7,245,069 | 7,316,925 | ||||||||||||||||||
Direct installment | 7,973 | 4,092 | 7,675 | 19,740 | 1,739,155 | 1,758,895 | ||||||||||||||||||
Residential mortgages | 9,797 | 1,966 | 4,466 | 16,229 | 1,535,699 | 1,551,928 | ||||||||||||||||||
Indirect installment | 5,678 | 374 | 1,488 | 7,540 | 1,252,230 | 1,259,770 | ||||||||||||||||||
Consumer lines of credit | 2,739 | 375 | 1,782 | 4,896 | 1,095,799 | 1,100,695 | ||||||||||||||||||
Other | 242 | 121 | 1,000 | 1,363 | 44,952 | 46,315 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total originated loans and leases | $ | 38,398 | $ | 6,932 | $ | 76,294 | $ | 121,624 | $ | 12,912,904 | $ | 13,034,528 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
December 31, 2016 | ||||||||||||||||||||||||
Commercial real estate | $ | 8,452 | $ | 1 | $ | 20,114 | $ | 28,567 | $ | 4,067,250 | $ | 4,095,817 | ||||||||||||
Commercial and industrial | 16,019 | 3 | 24,141 | 40,163 | 2,671,723 | 2,711,886 | ||||||||||||||||||
Commercial leases | 973 | 1 | 3,429 | 4,403 | 192,233 | 196,636 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total commercial loans and leases | 25,444 | 5 | 47,684 | 73,133 | 6,931,206 | 7,004,339 | ||||||||||||||||||
Direct installment | 10,573 | 4,386 | 6,484 | 21,443 | 1,743,814 | 1,765,257 | ||||||||||||||||||
Residential mortgages | 10,594 | 3,014 | 3,316 | 16,924 | 1,429,852 | 1,446,776 | ||||||||||||||||||
Indirect installment | 9,312 | 513 | 1,983 | 11,808 | 1,184,302 | 1,196,110 | ||||||||||||||||||
Consumer lines of credit | 3,529 | 1,112 | 1,616 | 6,257 | 1,093,370 | 1,099,627 | ||||||||||||||||||
Other | 398 | 83 | 1,000 | 1,481 | 34,397 | 35,878 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total originated loans and leases | $ | 59,850 | $ | 9,113 | $ | 62,083 | $ | 131,046 | $ | 12,416,941 | $ | 12,547,987 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Acquired Loans March 31, 2017 Commercial real estate Commercial and industrial Total commercial loans Direct installment Residential mortgages Indirect installment Consumer lines of credit Total acquired loans December 31, 2016 Commercial real estate Commercial and industrial Total commercial loans Direct installment Residential mortgages Indirect installment Consumer lines of credit Total acquired loans (in thousands) 30-89
Days
Past Due ³ 90 Days
Past Due
and Still
Accruing Non-
Accrual Total
Past
Due (1) (2) Current Discount Total
Loans $ 41,450 $ 39,243 $ 1,414 $ 82,107 $ 4,630,159 $ (206,179 ) $ 4,506,087 7,587 7,736 2,854 18,177 977,012 (60,094 ) 935,095 49,037 46,979 4,268 100,284 5,607,171 (266,273 ) 5,441,182 5,669 2,183 81 7,933 196,563 1,727 206,223 19,069 14,075 — 33,144 800,460 (43,365 ) 790,239 — 2 — 2 75 100 177 11,395 5,974 747 18,116 703,422 (16,237 ) 705,301 $ 85,170 $ 69,213 $ 5,096 $ 159,479 $ 7,307,691 $ (324,048 ) $ 7,143,122 $ 9,501 $ 23,890 $ 949 $ 34,340 $ 1,384,752 $ (79,747 ) $ 1,339,345 1,789 2,942 2,111 6,842 353,494 (29,441 ) 330,895 11,290 26,832 3,060 41,182 1,738,246 (109,188 ) 1,670,240 2,317 1,344 — 3,661 73,479 2,002 79,142 8,428 10,816 — 19,244 416,561 (38,007 ) 397,798 19 4 — 23 96 84 203 2,156 1,528 336 4,020 201,958 (4,405 ) 201,573 $ 24,210 $ 40,524 $ 3,396 $ 68,130 $ 2,430,340 $ (149,514 ) $ 2,348,956
| (in thousands) | 30-89 Days Past Due | > 90 Days Past Due and Still Accruing | Non- Accrual | Total Past Due | Current | Total Loans and Leases | |||||||||||||||||
| Originated Loans and Leases | |||||||||||||||||||||||
| March 31, 2018 | |||||||||||||||||||||||
| Commercial real estate | $ | 8,345 | $ | 1 | $ | 27,349 | $ | 35,695 | $ | 5,429,455 | $ | 5,465,150 | |||||||||||
| Commercial and industrial | 6,793 | 3 | 19,705 | 26,501 | 3,661,619 | 3,688,120 | |||||||||||||||||
| Commercial leases | 692 | — | 1,399 | 2,091 | 277,491 | 279,582 | |||||||||||||||||
| Other | 183 | 73 | 1,000 | 1,256 | 38,091 | 39,347 | |||||||||||||||||
| Total commercial loans and leases | 16,013 | 77 | 49,453 | 65,543 | 9,406,656 | 9,472,199 | |||||||||||||||||
| Direct installment | 8,129 | 3,913 | 8,411 | 20,453 | 1,716,789 | 1,737,242 | |||||||||||||||||
| Residential mortgages | 14,870 | 1,982 | 5,254 | 22,106 | 2,109,232 | 2,131,338 | |||||||||||||||||
| Indirect installment | 6,850 | 511 | 2,234 | 9,595 | 1,514,735 | 1,524,330 | |||||||||||||||||
| Consumer lines of credit | 4,550 | 821 | 2,769 | 8,140 | 1,127,348 | 1,135,488 | |||||||||||||||||
| Total consumer loans | 34,399 | 7,227 | 18,668 | 60,294 | 6,468,104 | 6,528,398 | |||||||||||||||||
| Total originated loans and leases | $ | 50,412 | $ | 7,304 | $ | 68,121 | $ | 125,837 | $ | 15,874,760 | $ | 16,000,597 | |||||||||||
| December 31, 2017 | |||||||||||||||||||||||
| Commercial real estate | $ | 8,273 | $ | 1 | $ | 24,773 | $ | 33,047 | $ | 5,141,736 | $ | 5,174,783 | |||||||||||
| Commercial and industrial | 8,948 | 3 | 17,077 | 26,028 | 3,469,219 | 3,495,247 | |||||||||||||||||
| Commercial leases | 1,382 | 41 | 1,574 | 2,997 | 263,723 | 266,720 | |||||||||||||||||
| Other | 83 | 153 | 1,000 | 1,236 | 15,827 | 17,063 | |||||||||||||||||
| Total commercial loans and leases | 18,686 | 198 | 44,424 | 63,308 | 8,890,505 | 8,953,813 | |||||||||||||||||
| Direct installment | 13,192 | 4,466 | 8,896 | 26,554 | 1,729,159 | 1,755,713 | |||||||||||||||||
| Residential mortgages | 14,096 | 2,832 | 5,771 | 22,699 | 2,013,527 | 2,036,226 | |||||||||||||||||
| Indirect installment | 10,313 | 611 | 2,240 | 13,164 | 1,435,104 | 1,448,268 | |||||||||||||||||
| Consumer lines of credit | 5,859 | 1,014 | 2,313 | 9,186 | 1,142,284 | 1,151,470 | |||||||||||||||||
| Total consumer loans | 43,460 | 8,923 | 19,220 | 71,603 | 6,320,074 | 6,391,677 | |||||||||||||||||
| Total originated loans and leases | $ | 62,146 | $ | 9,121 | $ | 63,644 | $ | 134,911 | $ | 15,210,579 | $ | 15,345,490 | |||||||||||
| (in thousands) | 30-89 Days Past Due | > 90 Days Past Due and Still Accruing | Non- Accrual | Total Past Due (1) (2) | Current | (Discount) Premium | Total Loans | ||||||||||||||||||||
| Acquired Loans | |||||||||||||||||||||||||||
| March 31, 2018 | |||||||||||||||||||||||||||
| Commercial real estate | $ | 32,697 | $ | 64,550 | $ | 3,735 | $ | 100,982 | $ | 3,433,231 | $ | (187,888 | ) | $ | 3,346,325 | ||||||||||||
| Commercial and industrial | 5,135 | 4,617 | 4,652 | 14,404 | 612,354 | (34,909 | ) | 591,849 | |||||||||||||||||||
| Total commercial loans | 37,832 | 69,167 | 8,387 | 115,386 | 4,045,585 | (222,797 | ) | 3,938,174 | |||||||||||||||||||
| Direct installment | 2,826 | 1,746 | — | 4,572 | 128,754 | 1,071 | 134,397 | ||||||||||||||||||||
| Residential mortgages | 15,113 | 13,059 | — | 28,172 | 642,966 | (40,375 | ) | 630,763 | |||||||||||||||||||
| Indirect installment | — | 1 | — | 1 | 7 | 163 | 171 | ||||||||||||||||||||
| Consumer lines of credit | 5,357 | 2,139 | 1,176 | 8,672 | 561,906 | (12,283 | ) | 558,295 | |||||||||||||||||||
| Total consumer loans | 23,296 | 16,945 | 1,176 | 41,417 | 1,333,633 | (51,424 | ) | 1,323,626 | |||||||||||||||||||
| Total acquired loans | $ | 61,128 | $ | 86,112 | $ | 9,563 | $ | 156,803 | $ | 5,379,218 | $ | (274,221 | ) | $ | 5,261,800 | ||||||||||||
| December 31, 2017 | |||||||||||||||||||||||||||
| Commercial real estate | $ | 34,928 | $ | 63,092 | $ | 3,975 | $ | 101,995 | $ | 3,657,152 | $ | (192,066 | ) | $ | 3,567,081 | ||||||||||||
| Commercial and industrial | 3,187 | 6,452 | 5,663 | 15,302 | 698,265 | (38,147 | ) | 675,420 | |||||||||||||||||||
| Total commercial loans | 38,115 | 69,544 | 9,638 | 117,297 | 4,355,417 | (230,213 | ) | 4,242,501 | |||||||||||||||||||
| Direct installment | 5,267 | 2,013 | — | 7,280 | 141,386 | 1,156 | 149,822 | ||||||||||||||||||||
| Residential mortgages | 17,191 | 15,139 | — | 32,330 | 675,499 | (41,364 | ) | 666,465 | |||||||||||||||||||
| Indirect installment | — | 1 | — | 1 | 10 | 154 | 165 | ||||||||||||||||||||
| Consumer lines of credit | 6,353 | 3,253 | 1,353 | 10,959 | 596,298 | (12,934 | ) | 594,323 | |||||||||||||||||||
| Total consumer loans | 28,811 | 20,406 | 1,353 | 50,570 | 1,413,193 | (52,988 | ) | 1,410,775 | |||||||||||||||||||
| Total acquired loans | $ | 66,926 | $ | 89,950 | $ | 10,991 | $ | 167,867 | $ | 5,768,610 | $ | (283,201 | ) | $ | 5,653,276 | ||||||||||||
| (1) | Past due information for acquired loans is based on the contractual balance outstanding at March 31, |
| (2) | Acquired loans are considered performing upon acquisition, regardless of whether the customer is contractually delinquent, |
Rating Category | Definition | |
| Pass | in general, the condition of the borrower and the performance of the | |
| Special Mention | in general, the condition of the borrower has deteriorated, requiring an increased level of monitoring | |
| Substandard | in general, the condition | |
| Doubtful | in general, the condition of the borrower has significantly deteriorated and the collection in full of both principal and interest is highly questionable or improbable | |
| Commercial Loan and Lease Credit Quality Categories | ||||||||||||||||||||
| (in thousands) | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Originated Loans and Leases | ||||||||||||||||||||
March 31, 2017 | ||||||||||||||||||||
Commercial real estate | $ | 4,068,403 | $ | 132,700 | $ | 60,958 | $ | 209 | $ | 4,262,270 | ||||||||||
Commercial and industrial | 2,616,144 | 122,892 | 109,515 | 9,033 | 2,857,584 | |||||||||||||||
Commercial leases | 190,641 | 3,711 | 2,719 | — | 197,071 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total originated commercial loans and leases | $ | 6,875,188 | $ | 259,303 | $ | 173,192 | $ | 9,242 | $ | 7,316,925 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
December 31, 2016 | ||||||||||||||||||||
Commercial real estate | $ | 3,895,764 | $ | 130,452 | $ | 69,588 | $ | 13 | $ | 4,095,817 | ||||||||||
Commercial and industrial | 2,475,955 | 104,652 | 128,089 | 3,190 | 2,711,886 | |||||||||||||||
Commercial leases | 188,662 | 3,789 | 4,185 | — | 196,636 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total originated commercial loans and leases | $ | 6,560,381 | $ | 238,893 | $ | 201,862 | $ | 3,203 | $ | 7,004,339 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Acquired Loans | ||||||||||||||||||||
March 31, 2017 | ||||||||||||||||||||
Commercial real estate | $ | 3,699,904 | $ | 531,316 | $ | 274,506 | $ | 361 | $ | 4,506,087 | ||||||||||
Commercial and industrial | 786,808 | 77,961 | 70,171 | 155 | 935,095 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total acquired commercial loans | $ | 4,486,712 | $ | 609,277 | $ | 344,677 | $ | 516 | $ | 5,441,182 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
December 31, 2016 | ||||||||||||||||||||
Commercial real estate | $ | 1,144,676 | $ | 85,894 | $ | 108,128 | $ | 647 | $ | 1,339,345 | ||||||||||
Commercial and industrial | 274,819 | 20,593 | 34,967 | 516 | 330,895 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total acquired commercial loans | $ | 1,419,495 | $ | 106,487 | $ | 143,095 | $ | 1,163 | $ | 1,670,240 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
| Commercial Loan and Lease Credit Quality Categories | |||||||||||||||||||
| (in thousands) | Pass | Special Mention | Substandard | Doubtful | Total | ||||||||||||||
| Originated Loans and Leases | |||||||||||||||||||
| March 31, 2018 | |||||||||||||||||||
| Commercial real estate | $ | 5,195,183 | $ | 148,120 | $ | 121,542 | $ | 305 | $ | 5,465,150 | |||||||||
| Commercial and industrial | 3,412,745 | 191,627 | 80,803 | 2,945 | 3,688,120 | ||||||||||||||
| Commercial leases | 269,837 | 3,518 | 6,227 | — | 279,582 | ||||||||||||||
| Other | 38,231 | 43 | 1,073 | — | 39,347 | ||||||||||||||
| Total originated commercial loans and leases | $ | 8,915,996 | $ | 343,308 | $ | 209,645 | $ | 3,250 | $ | 9,472,199 | |||||||||
| December 31, 2017 | |||||||||||||||||||
| Commercial real estate | $ | 4,922,872 | $ | 152,744 | $ | 98,728 | $ | 439 | $ | 5,174,783 | |||||||||
| Commercial and industrial | 3,266,966 | 132,975 | 92,091 | 3,215 | 3,495,247 | ||||||||||||||
| Commercial leases | 260,235 | 4,425 | 2,060 | — | 266,720 | ||||||||||||||
| Other | 15,866 | 43 | 1,154 | — | 17,063 | ||||||||||||||
| Total originated commercial loans and leases | $ | 8,465,939 | $ | 290,187 | $ | 194,033 | $ | 3,654 | $ | 8,953,813 | |||||||||
| Acquired Loans | |||||||||||||||||||
| March 31, 2018 | |||||||||||||||||||
| Commercial real estate | $ | 2,877,345 | $ | 225,364 | $ | 243,402 | $ | 214 | $ | 3,346,325 | |||||||||
| Commercial and industrial | 520,361 | 28,166 | 43,314 | 8 | 591,849 | ||||||||||||||
| Total acquired commercial loans | $ | 3,397,706 | $ | 253,530 | $ | 286,716 | $ | 222 | $ | 3,938,174 | |||||||||
| December 31, 2017 | |||||||||||||||||||
| Commercial real estate | $ | 3,102,788 | $ | 250,987 | $ | 213,089 | $ | 217 | $ | 3,567,081 | |||||||||
| Commercial and industrial | 603,611 | 26,059 | 45,661 | 89 | 675,420 | ||||||||||||||
| Total acquired commercial loans | $ | 3,706,399 | $ | 277,046 | $ | 258,750 | $ | 306 | $ | 4,242,501 | |||||||||
2017.
| Consumer Loan Credit Quality by Payment Status | ||||||||||||
| (in thousands) | Performing | Non- Performing | Total | |||||||||
Originated loans | ||||||||||||
March 31, 2017 | ||||||||||||
Direct installment | $ | 1,742,702 | $ | 16,193 | $ | 1,758,895 | ||||||
Residential mortgages | 1,537,779 | 14,149 | 1,551,928 | |||||||||
Indirect installment | 1,258,084 | 1,686 | 1,259,770 | |||||||||
Consumer lines of credit | 1,097,781 | 2,914 | 1,100,695 | |||||||||
|
|
|
|
|
| |||||||
Total originated consumer loans | $ | 5,636,346 | $ | 34,942 | $ | 5,671,288 | ||||||
|
|
|
|
|
| |||||||
December 31, 2016 | ||||||||||||
Direct installment | $ | 1,750,305 | $ | 14,952 | $ | 1,765,257 | ||||||
Residential mortgages | 1,433,409 | 13,367 | 1,446,776 | |||||||||
Indirect installment | 1,193,930 | 2,180 | 1,196,110 | |||||||||
Consumer lines of credit | 1,096,642 | 2,985 | 1,099,627 | |||||||||
|
|
|
|
|
| |||||||
Total originated consumer loans | $ | 5,474,286 | $ | 33,484 | $ | 5,507,770 | ||||||
|
|
|
|
|
| |||||||
Acquired loans | ||||||||||||
March 31, 2017 | ||||||||||||
Direct installment | $ | 206,138 | $ | 85 | $ | 206,223 | ||||||
Residential mortgages | 788,656 | 1,583 | 790,239 | |||||||||
Indirect installment | 177 | — | 177 | |||||||||
Consumer lines of credit | 703,972 | 1,329 | 705,301 | |||||||||
|
|
|
|
|
| |||||||
Total acquired consumer loans | $ | 1,698,943 | $ | 2,997 | $ | 1,701,940 | ||||||
|
|
|
|
|
| |||||||
December 31, 2016 | ||||||||||||
Direct installment | $ | 79,142 | $ | — | $ | 79,142 | ||||||
Residential mortgages | 397,798 | — | 397,798 | |||||||||
Indirect installment | 203 | — | 203 | |||||||||
Consumer lines of credit | 201,061 | 512 | 201,573 | |||||||||
|
|
|
|
|
| |||||||
Total acquired consumer loans | $ | 678,204 | $ | 512 | $ | 678,716 | ||||||
|
|
|
|
|
| |||||||
Consumer Loan Credit Quality by Payment Status | |||||||||||
| (in thousands) | Performing | Non- Performing | Total | ||||||||
| Originated loans | |||||||||||
| March 31, 2018 | |||||||||||
| Direct installment | $ | 1,721,589 | $ | 15,653 | $ | 1,737,242 | |||||
| Residential mortgages | 2,115,204 | 16,134 | 2,131,338 | ||||||||
| Indirect installment | 1,521,906 | 2,424 | 1,524,330 | ||||||||
| Consumer lines of credit | 1,130,978 | 4,510 | 1,135,488 | ||||||||
| Total originated consumer loans | $ | 6,489,677 | $ | 38,721 | $ | 6,528,398 | |||||
| December 31, 2017 | |||||||||||
| Direct installment | $ | 1,739,060 | $ | 16,653 | $ | 1,755,713 | |||||
| Residential mortgages | 2,019,816 | 16,410 | 2,036,226 | ||||||||
| Indirect installment | 1,445,833 | 2,435 | 1,448,268 | ||||||||
| Consumer lines of credit | 1,147,576 | 3,894 | 1,151,470 | ||||||||
| Total originated consumer loans | $ | 6,352,285 | $ | 39,392 | $ | 6,391,677 | |||||
| Acquired loans | |||||||||||
| March 31, 2018 | |||||||||||
| Direct installment | $ | 134,327 | $ | 70 | $ | 134,397 | |||||
| Residential mortgages | 630,763 | — | 630,763 | ||||||||
| Indirect installment | 171 | — | 171 | ||||||||
| Consumer lines of credit | 556,633 | 1,662 | 558,295 | ||||||||
| Total acquired consumer loans | $ | 1,321,894 | $ | 1,732 | $ | 1,323,626 | |||||
| December 31, 2017 | |||||||||||
| Direct installment | $ | 149,751 | $ | 71 | $ | 149,822 | |||||
| Residential mortgages | 666,465 | — | 666,465 | ||||||||
| Indirect installment | 165 | — | 165 | ||||||||
| Consumer lines of credit | 592,384 | 1,939 | 594,323 | ||||||||
| Total acquired consumer loans | $ | 1,408,765 | $ | 2,010 | $ | 1,410,775 | |||||
| (in thousands) | Unpaid Contractual Principal Balance | Recorded Investment With No Specific Reserve | Recorded Investment With Specific Reserve | Total Recorded Investment | Specific Reserve | Average Recorded Investment | ||||||||||||||||||
At or for the Three Months Ended March 31, 2017 |
| |||||||||||||||||||||||
Commercial real estate | $ | 27,470 | $ | 21,266 | $ | 1,795 | $ | 23,061 | $ | 209 | $ | 21,612 | ||||||||||||
Commercial and industrial | 36,889 | 12,055 | 22,299 | 34,354 | 9,038 | 29,065 | ||||||||||||||||||
Commercial leases | 2,017 | 2,017 | — | 2,017 | — | 2,723 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total commercial loans and leases | 66,376 | 35,338 | 24,094 | 59,432 | 9,247 | 53,400 | ||||||||||||||||||
Direct installment | 18,062 | 16,193 | — | 16,193 | — | 15,572 | ||||||||||||||||||
Residential mortgages | 15,151 | 14,149 | — | 14,149 | — | 13,758 | ||||||||||||||||||
Indirect installment | 4,168 | 1,686 | — | 1,686 | — | 1,933 | ||||||||||||||||||
Consumer lines of credit | 3,831 | 2,914 | — | 2,914 | — | 2,950 | ||||||||||||||||||
Other | 1,000 | 1,000 | — | 1,000 | — | 1,000 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 108,588 | $ | 71,280 | $ | 24,094 | $ | 95,374 | $ | 9,247 | $ | 88,613 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
At or for the Year Ended December 31, 2016 |
| |||||||||||||||||||||||
Commercial real estate | $ | 23,771 | $ | 19,699 | $ | 464 | $ | 20,163 | $ | 13 | $ | 19,217 | ||||||||||||
Commercial and industrial | 25,719 | 14,781 | 8,996 | 23,777 | 3,190 | 29,730 | ||||||||||||||||||
Commercial leases | 3,429 | 3,429 | — | 3,429 | — | 3,394 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total commercial loans and leases | 52,919 | 37,909 | 9,460 | 47,369 | 3,203 | 52,341 | ||||||||||||||||||
Direct installment | 16,440 | 14,952 | — | 14,952 | — | 14,997 | ||||||||||||||||||
Residential mortgages | 14,090 | 13,367 | — | 13,367 | — | 13,200 | ||||||||||||||||||
Indirect installment | 5,172 | 2,180 | — | 2,180 | — | 2,037 | ||||||||||||||||||
Consumer lines of credit | 3,858 | 2,985 | — | 2,985 | — | 2,813 | ||||||||||||||||||
Other | 1,000 | 1,000 | — | 1,000 | — | 1,000 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 93,479 | $ | 72,393 | $ | 9,460 | $ | 81,853 | $ | 3,203 | $ | 86,388 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| (in thousands) | Unpaid Contractual Principal Balance | Recorded Investment With No Specific Reserve | Recorded Investment With Specific Reserve | Total Recorded Investment | Specific Reserve | Average Recorded Investment | |||||||||||||||||
| At or for the Three Months Ended March 31, 2018 | |||||||||||||||||||||||
| Commercial real estate | $ | 30,584 | $ | 25,478 | $ | 1,751 | $ | 27,229 | $ | 305 | $ | 25,988 | |||||||||||
| Commercial and industrial | 26,034 | 15,859 | 5,007 | 20,866 | 2,945 | 20,479 | |||||||||||||||||
| Commercial leases | 1,399 | 1,399 | — | 1,399 | — | 1,486 | |||||||||||||||||
| Other | — | — | — | — | — | — | |||||||||||||||||
| Total commercial loans and leases | 58,017 | 42,736 | 6,758 | 49,494 | 3,250 | 47,953 | |||||||||||||||||
| Direct installment | 18,623 | 15,653 | — | 15,653 | — | 16,153 | |||||||||||||||||
| Residential mortgages | 17,448 | 16,134 | — | 16,134 | — | 16,272 | |||||||||||||||||
| Indirect installment | 4,648 | 2,424 | — | 2,424 | — | 2,429 | |||||||||||||||||
| Consumer lines of credit | 5,698 | 4,510 | — | 4,510 | — | 4,202 | |||||||||||||||||
| Total consumer loans | 46,417 | 38,721 | — | 38,721 | — | 39,056 | |||||||||||||||||
| Total | $ | 104,434 | $ | 81,457 | $ | 6,758 | $ | 88,215 | $ | 3,250 | $ | 87,009 | |||||||||||
| At or for the Year Ended December 31, 2017 | |||||||||||||||||||||||
| Commercial real estate | $ | 27,718 | $ | 21,748 | $ | 2,906 | $ | 24,654 | $ | 439 | $ | 24,413 | |||||||||||
| Commercial and industrial | 29,307 | 11,595 | 4,457 | 16,052 | 3,215 | 23,907 | |||||||||||||||||
| Commercial leases | 1,574 | 1,574 | — | 1,574 | — | 1,386 | |||||||||||||||||
| Other | — | — | — | — | — | — | |||||||||||||||||
| Total commercial loans and leases | 58,599 | 34,917 | 7,363 | 42,280 | 3,654 | 49,706 | |||||||||||||||||
| Direct installment | 19,375 | 16,653 | — | 16,653 | — | 16,852 | |||||||||||||||||
| Residential mortgages | 17,754 | 16,410 | — | 16,410 | — | 15,984 | |||||||||||||||||
| Indirect installment | 5,709 | 2,435 | — | 2,435 | — | 2,279 | |||||||||||||||||
| Consumer lines of credit | 5,039 | 3,894 | — | 3,894 | — | 3,815 | |||||||||||||||||
| Total consumer loans | 47,877 | 39,392 | — | 39,392 | — | 38,930 | |||||||||||||||||
| Total | $ | 106,476 | $ | 74,309 | $ | 7,363 | $ | 81,672 | $ | 3,654 | $ | 88,636 | |||||||||||
The above tables do not reflect the additional allowance for credit losses relating to acquired loans. Following is a summary of the allowance for credit losses required for acquired loans due to changes in credit quality subsequent to the following pools and categories:
| (in thousands) | March 31, 2017 | December 31, 2016 | ||||||
Commercial real estate | $ | 3,734 | $ | 4,538 | ||||
Commercial and industrial | 127 | 500 | ||||||
|
|
|
| |||||
Total commercial loans | 3,861 | 5,038 | ||||||
Direct installment | 994 | 1,005 | ||||||
Residential mortgages | 795 | 632 | ||||||
Indirect installment | 221 | 221 | ||||||
Consumer lines of credit | 697 | 372 | ||||||
|
|
|
| |||||
Total allowance on acquired loans | $ | 6,568 | $ | 7,268 | ||||
|
|
|
| |||||
acquisition date:
| (in thousands) | March 31, 2018 | December 31, 2017 | |||||
| Commercial real estate | $ | 2,732 | $ | 4,976 | |||
| Commercial and industrial | 1,785 | (415 | ) | ||||
| Total commercial loans | 4,517 | 4,561 | |||||
| Direct installment | 1,804 | 1,553 | |||||
| Residential mortgages | 518 | 484 | |||||
| Indirect installment | 240 | 177 | |||||
| Consumer lines of credit | (242 | ) | (77 | ) | |||
| Total consumer loans | 2,320 | 2,137 | |||||
| Total allowance on acquired loans | $ | 6,837 | $ | 6,698 | |||
| (in thousands) | Originated | Acquired | Total | |||||||||
March 31, 2017 | ||||||||||||
Accruing: | ||||||||||||
Performing | $ | 17,552 | $ | 272 | $ | 17,824 | ||||||
Non-performing | 19,659 | 4,329 | 23,988 | |||||||||
Non-accrual | 8,862 | 562 | 9,424 | |||||||||
|
|
|
|
|
| |||||||
Total TDRs | $ | 46,073 | $ | 5,163 | $ | 51,236 | ||||||
|
|
|
|
|
| |||||||
December 31, 2016 | ||||||||||||
Accruing: | ||||||||||||
Performing | $ | 17,105 | $ | 365 | $ | 17,470 | ||||||
Non-performing | 20,252 | 176 | 20,428 | |||||||||
Non-accrual | 9,035 | — | 9,035 | |||||||||
|
|
|
|
|
| |||||||
Total TDRs | $ | 46,392 | $ | 541 | $ | 46,933 | ||||||
|
|
|
|
|
| |||||||
| (in thousands) | Originated | Acquired | Total | ||||||||
| March 31, 2018 | |||||||||||
| Accruing: | |||||||||||
| Performing | $ | 19,525 | $ | 249 | $ | 19,774 | |||||
| Non-performing | 21,283 | 3,169 | 24,452 | ||||||||
| Non-accrual | 10,668 | 357 | 11,025 | ||||||||
| Total TDRs | $ | 51,476 | $ | 3,775 | $ | 55,251 | |||||
| December 31, 2017 | |||||||||||
| Accruing: | |||||||||||
| Performing | $ | 19,538 | $ | 266 | $ | 19,804 | |||||
| Non-performing | 20,173 | 3,308 | 23,481 | ||||||||
| Non-accrual | 10,472 | 234 | 10,706 | ||||||||
| Total TDRs | $ | 50,183 | $ | 3,808 | $ | 53,991 | |||||
| (in thousands) | March 31, 2017 | December 31, 2016 | ||||||
Specific reserves for commercial TDRs | $ | 253 | $ | 291 | ||||
Pooled reserves for individual loans under $500 | 234 | 276 | ||||||
| (in thousands) | March 31, 2018 | December 31, 2017 | |||||
| Specific reserves for commercial TDRs | $ | 726 | $ | 95 | |||
| Pooled reserves for individual commercial loans | 519 | 469 | |||||
The majority of TDRs are the result of interest rate concessions for a limited period of time.
| Three Months Ended March 31, 2017 | Three Months Ended March 31, 2016 | |||||||||||||||||||||||
| (dollars in thousands) | Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | ||||||||||||||||||
Commercial real estate | 1 | $ | 114 | $ | 109 | 4 | $ | 778 | $ | 760 | ||||||||||||||
Commercial and industrial | — | — | — | 2 | 5,565 | 3,279 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total commercial loans | 1 | 114 | 109 | 6 | 6,343 | 4,039 | ||||||||||||||||||
Direct installment | 171 | 1,488 | 1,412 | 145 | 1,991 | 1,961 | ||||||||||||||||||
Residential mortgages | 8 | 163 | 176 | 18 | 968 | 951 | ||||||||||||||||||
Indirect installment | 5 | 17 | 14 | 3 | 11 | 12 | ||||||||||||||||||
Consumer lines of credit | 22 | 742 | 729 | 20 | 243 | 238 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | 207 | $ | 2,524 | $ | 2,440 | 192 | $ | 9,556 | $ | 7,201 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
class:
| Three Months Ended March 31, 2018 | ||||||||||
| (dollars in thousands) | Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | |||||||
| Commercial real estate | 1 | $ | 328 | $ | 328 | |||||
| Commercial and industrial | 1 | 1,687 | 1,230 | |||||||
| Total commercial loans | 2 | 2,015 | 1,558 | |||||||
| Direct installment | 182 | 1,135 | 1,056 | |||||||
| Residential mortgages | 11 | 501 | 504 | |||||||
| Indirect installment | 9 | 13 | 12 | |||||||
| Consumer lines of credit | 21 | 352 | 287 | |||||||
| Total consumer loans | 223 | 2,001 | 1,859 | |||||||
| Total | 225 | $ | 4,016 | $ | 3,417 | |||||
| Three Months Ended March 31, 2017 | ||||||||||
| (dollars in thousands) | Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | |||||||
| Commercial real estate | 1 | $ | 114 | $ | 109 | |||||
| Commercial and industrial | — | — | — | |||||||
| Total commercial loans | 1 | 114 | 109 | |||||||
| Direct installment | 171 | 1,488 | 1,412 | |||||||
| Residential mortgages | 8 | 163 | 176 | |||||||
| Indirect installment | 5 | 17 | 14 | |||||||
| Consumer lines of credit | 22 | 742 | 729 | |||||||
| Total consumer loans | 206 | 2,410 | 2,331 | |||||||
| Total | 207 | $ | 2,524 | $ | 2,440 | |||||
| Three Months Ended March 31, 2017 | Three Months Ended March 31, 2016 | |||||||||||||||
| (dollars in thousands) | Number of Contracts | Recorded Investment | Number of Contracts | Recorded Investment | ||||||||||||
Commercial real estate | — | $ | — | — | $ | — | ||||||||||
Commercial and industrial | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total commercial loans | — | — | — | — | ||||||||||||
Direct installment | 29 | 82 | 28 | 175 | ||||||||||||
Residential mortgages | 2 | 224 | 1 | 50 | ||||||||||||
Indirect installment | 6 | 10 | 4 | 5 | ||||||||||||
Consumer lines of credit | 1 | 34 | 1 | 10 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 38 | $ | 350 | 34 | $ | 240 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
| Three Months Ended March 31, 2018 | ||||||
| (dollars in thousands) | Number of Contracts | Recorded Investment | ||||
| Direct installment | 45 | $ | 130 | |||
| Residential mortgages | 4 | 190 | ||||
| Indirect installment | 5 | 10 | ||||
| Consumer lines of credit | 1 | 196 | ||||
| Total consumer loans | 55 | 526 | ||||
| Total | 55 | $ | 526 | |||
| Three Months Ended March 31, 2017 | ||||||
| (dollars in thousands) | Number of Contracts | Recorded Investment | ||||
| Direct installment | 29 | $ | 82 | |||
| Residential mortgages | 2 | 224 | ||||
| Indirect installment | 6 | 10 | ||||
| Consumer lines of credit | 1 | 34 | ||||
| Total consumer loans | 38 | 350 | ||||
| Total | 38 | $ | 350 | |||
| (in thousands) | Balance at Beginning of Period | Charge- Offs | Recoveries | Net Charge- Offs | Provision for Credit Losses | Balance at End of Period | ||||||||||||||||||
Three Months Ended March 31, 2017 |
| |||||||||||||||||||||||
Commercial real estate | $ | 46,635 | $ | (988 | ) | $ | 361 | $ | (627 | ) | $ | 381 | $ | 46,389 | ||||||||||
Commercial and industrial | 47,991 | (2,463 | ) | 474 | (1,989 | ) | 7,568 | 53,570 | ||||||||||||||||
Commercial leases | 3,280 | (506 | ) | 1 | (505 | ) | 738 | 3,513 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total commercial loans and leases | 97,906 | (3,957 | ) | 836 | (3,121 | ) | 8,687 | 103,472 | ||||||||||||||||
Direct installment | 21,391 | (2,874 | ) | 628 | (2,246 | ) | 1,065 | 20,210 | ||||||||||||||||
Residential mortgages | 10,082 | (180 | ) | 161 | (19 | ) | 147 | 10,210 | ||||||||||||||||
Indirect installment | 10,564 | (2,370 | ) | 781 | (1,589 | ) | 655 | 9,630 | ||||||||||||||||
Consumer lines of credit | 9,456 | (458 | ) | 165 | (293 | ) | (280 | ) | 8,883 | |||||||||||||||
Other | 1,392 | (973 | ) | 327 | (646 | ) | 1,063 | 1,809 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total allowance on originated loans and leases | 150,791 | (10,812 | ) | 2,898 | (7,914 | ) | 11,337 | 154,214 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Purchased credit-impaired loans | 572 | — | — | — | 88 | 660 | ||||||||||||||||||
Other acquired loans | 6,696 | (482 | ) | 269 | (213 | ) | (575 | ) | 5,908 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total allowance on acquired loans | 7,268 | (482 | ) | 269 | (213 | ) | (487 | ) | 6,568 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total allowance | $ | 158,059 | $ | (11,294 | ) | $ | 3,167 | $ | (8,127 | ) | $ | 10,850 | $ | 160,782 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Three Months Ended March 31, 2016 |
| |||||||||||||||||||||||
Commercial real estate | $ | 41,741 | $ | (1,369 | ) | $ | 597 | $ | (772 | ) | $ | 2,929 | $ | 43,898 | ||||||||||
Commercial and industrial | 41,023 | (298 | ) | 190 | (108 | ) | 6,948 | 47,863 | ||||||||||||||||
Commercial leases | 2,541 | (114 | ) | 14 | (100 | ) | 377 | 2,818 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total commercial loans and leases | 85,305 | (1,781 | ) | 801 | (980 | ) | 10,254 | 94,579 | ||||||||||||||||
Direct installment | 21,587 | (2,667 | ) | 454 | (2,213 | ) | 1,351 | 20,725 | ||||||||||||||||
Residential mortgages | 7,909 | (85 | ) | 19 | (66 | ) | (33 | ) | 7,810 | |||||||||||||||
Indirect installment | 9,889 | (1,942 | ) | 262 | (1,680 | ) | 856 | 9,065 | ||||||||||||||||
Consumer lines of credit | 9,582 | (474 | ) | 56 | (418 | ) | (197 | ) | 8,967 | |||||||||||||||
Other | 1,013 | (554 | ) | 6 | (548 | ) | 609 | 1,074 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total allowance on originated loans and leases | 135,285 | (7,503 | ) | 1,598 | (5,905 | ) | 12,840 | 142,220 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Purchased credit-impaired loans | 834 | (160 | ) | — | (160 | ) | 30 | 704 | ||||||||||||||||
Other acquired loans | 5,893 | (221 | ) | 306 | 85 | (1,102 | ) | 4,876 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total allowance on acquired loans | 6,727 | (381 | ) | 306 | (75 | ) | (1,072 | ) | 5,580 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total allowance | $ | 142,012 | $ | (7,884 | ) | $ | 1,904 | $ | (5,980 | ) | $ | 11,768 | $ | 147,800 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| (in thousands) | Balance at Beginning of Period | Charge- Offs | Recoveries | Net Charge- Offs | Provision for Credit Losses | Balance at End of Period | |||||||||||||||||
| Three Months Ended March 31, 2018 | |||||||||||||||||||||||
| Commercial real estate | $ | 50,281 | $ | (225 | ) | $ | 337 | $ | 112 | $ | 3,123 | $ | 53,516 | ||||||||||
| Commercial and industrial | 51,963 | (5,920 | ) | 369 | (5,551 | ) | 6,601 | 53,013 | |||||||||||||||
| Commercial leases | 5,646 | (171 | ) | 10 | (161 | ) | 630 | 6,115 | |||||||||||||||
| Other | 1,843 | (797 | ) | 297 | (500 | ) | 652 | 1,995 | |||||||||||||||
| Total commercial loans and leases | 109,733 | (7,113 | ) | 1,013 | (6,100 | ) | 11,006 | 114,639 | |||||||||||||||
| Direct installment | 20,936 | (3,470 | ) | 440 | (3,030 | ) | 2,222 | 20,128 | |||||||||||||||
| Residential mortgages | 15,507 | (79 | ) | 91 | 12 | (239 | ) | 15,280 | |||||||||||||||
| Indirect installment | 11,967 | (2,409 | ) | 895 | (1,514 | ) | 1,502 | 11,955 | |||||||||||||||
| Consumer lines of credit | 10,539 | (531 | ) | 121 | (410 | ) | 279 | 10,408 | |||||||||||||||
| Total consumer loans | 58,949 | (6,489 | ) | 1,547 | (4,942 | ) | 3,764 | 57,771 | |||||||||||||||
| Total allowance on originated loans and leases | 168,682 | (13,602 | ) | 2,560 | (11,042 | ) | 14,770 | 172,410 | |||||||||||||||
| Purchased credit-impaired loans | 635 | — | — | — | (13 | ) | 622 | ||||||||||||||||
| Other acquired loans | 6,063 | (309 | ) | 723 | 414 | (262 | ) | 6,215 | |||||||||||||||
| Total allowance on acquired loans | 6,698 | (309 | ) | 723 | 414 | (275 | ) | 6,837 | |||||||||||||||
| Total allowance for credit losses | $ | 175,380 | $ | (13,911 | ) | $ | 3,283 | $ | (10,628 | ) | $ | 14,495 | $ | 179,247 | |||||||||
| (in thousands) | Balance at Beginning of Period | Charge- Offs | Recoveries | Net Charge- Offs | Provision for Credit Losses | Balance at End of Period | |||||||||||||||||
| Three Months Ended March 31, 2017 | |||||||||||||||||||||||
| Commercial real estate | $ | 46,635 | $ | (988 | ) | $ | 361 | $ | (627 | ) | $ | 381 | $ | 46,389 | |||||||||
| Commercial and industrial | 47,991 | (2,463 | ) | 474 | (1,989 | ) | 7,568 | 53,570 | |||||||||||||||
| Commercial leases | 3,280 | (506 | ) | 1 | (505 | ) | 738 | 3,513 | |||||||||||||||
| Other | 1,392 | (973 | ) | 327 | (646 | ) | 1,063 | 1,809 | |||||||||||||||
| Total commercial loans and leases | 99,298 | (4,930 | ) | 1,163 | (3,767 | ) | 9,750 | 105,281 | |||||||||||||||
| Direct installment | 21,391 | (2,874 | ) | 628 | (2,246 | ) | 1,065 | 20,210 | |||||||||||||||
| Residential mortgages | 10,082 | (180 | ) | 161 | (19 | ) | 147 | 10,210 | |||||||||||||||
| Indirect installment | 10,564 | (2,370 | ) | 781 | (1,589 | ) | 655 | 9,630 | |||||||||||||||
| Consumer lines of credit | 9,456 | (458 | ) | 165 | (293 | ) | (280 | ) | 8,883 | ||||||||||||||
| Total consumer loans | 51,493 | (5,882 | ) | 1,735 | (4,147 | ) | 1,587 | 48,933 | |||||||||||||||
| Total allowance on originated loans and leases | 150,791 | (10,812 | ) | 2,898 | (7,914 | ) | 11,337 | 154,214 | |||||||||||||||
| Purchased credit-impaired loans | 572 | — | — | — | 88 | 660 | |||||||||||||||||
| Other acquired loans | 6,696 | (482 | ) | 269 | (213 | ) | (575 | ) | 5,908 | ||||||||||||||
| Total allowance on acquired loans | 7,268 | (482 | ) | 269 | (213 | ) | (487 | ) | 6,568 | ||||||||||||||
| Total allowance for credit losses | $ | 158,059 | $ | (11,294 | ) | $ | 3,167 | $ | (8,127 | ) | $ | 10,850 | $ | 160,782 | |||||||||
| Originated Allowance | Originated Loans and Leases Outstanding | |||||||||||||||||||
| (in thousands) | Individually Evaluated for Impairment | Collectively Evaluated for Impairment | Loans and Leases | Individually Evaluated for Impairment | Collectively Evaluated for Impairment | |||||||||||||||
March 31, 2017 | ||||||||||||||||||||
Commercial real estate | $ | 209 | $ | 46,180 | $ | 4,262,270 | $ | 14,989 | $ | 4,247,281 | ||||||||||
Commercial and industrial | 9,038 | 44,532 | 2,857,584 | 32,157 | 2,825,427 | |||||||||||||||
Commercial leases | — | 3,513 | 197,071 | — | 197,071 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total commercial loans and leases | 9,247 | 94,225 | 7,316,925 | 47,146 | 7,269,779 | |||||||||||||||
Direct installment | — | 20,210 | 1,758,895 | — | 1,758,895 | |||||||||||||||
Residential mortgages | — | 10,210 | 1,551,928 | — | 1,551,928 | |||||||||||||||
Indirect installment | — | 9,630 | 1,259,770 | — | 1,259,770 | |||||||||||||||
Consumer lines of credit | — | 8,883 | 1,100,695 | — | 1,100,695 | |||||||||||||||
Other | — | 1,809 | 46,315 | — | 46,315 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 9,247 | $ | 144,967 | $ | 13,034,528 | $ | 47,146 | $ | 12,987,382 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
December 31, 2016 | ||||||||||||||||||||
Commercial real estate | $ | 13 | $ | 46,622 | $ | 4,095,817 | $ | 12,973 | $ | 4,082,844 | ||||||||||
Commercial and industrial | 3,190 | 44,801 | 2,711,886 | 21,746 | 2,690,140 | |||||||||||||||
Commercial leases | — | 3,280 | 196,636 | — | 196,636 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total commercial loans and leases | 3,203 | 94,703 | 7,004,339 | 34,719 | 6,969,620 | |||||||||||||||
Direct installment | — | 21,391 | 1,765,257 | — | 1,765,257 | |||||||||||||||
Residential mortgages | — | 10,082 | 1,446,776 | — | 1,446,776 | |||||||||||||||
Indirect installment | — | 10,564 | 1,196,110 | — | 1,196,110 | |||||||||||||||
Consumer lines of credit | — | 9,456 | 1,099,627 | — | 1,099,627 | |||||||||||||||
Other | — | 1,392 | 35,878 | — | 35,878 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 3,203 | $ | 147,588 | $ | 12,547,987 | $ | 34,719 | $ | 12,513,268 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
| Originated Allowance | Originated Loans and Leases Outstanding | ||||||||||||||||||
| (in thousands) | Individually Evaluated for Impairment | Collectively Evaluated for Impairment | Loans and Leases | Individually Evaluated for Impairment | Collectively Evaluated for Impairment | ||||||||||||||
| March 31, 2018 | |||||||||||||||||||
| Commercial real estate | $ | 305 | $ | 53,211 | $ | 5,465,150 | $ | 12,292 | $ | 5,452,858 | |||||||||
| Commercial and industrial | 2,945 | 50,068 | 3,688,120 | 10,880 | 3,677,240 | ||||||||||||||
| Commercial leases | — | 6,115 | 279,582 | — | 279,582 | ||||||||||||||
| Other | — | 1,995 | 39,347 | — | 39,347 | ||||||||||||||
| Total commercial loans and leases | 3,250 | 111,389 | 9,472,199 | 23,172 | 9,449,027 | ||||||||||||||
| Direct installment | — | 20,128 | 1,737,242 | — | 1,737,242 | ||||||||||||||
| Residential mortgages | — | 15,280 | 2,131,338 | — | 2,131,338 | ||||||||||||||
| Indirect installment | — | 11,955 | 1,524,330 | — | 1,524,330 | ||||||||||||||
| Consumer lines of credit | — | 10,408 | 1,135,488 | — | 1,135,488 | ||||||||||||||
| Total consumer loans | — | 57,771 | 6,528,398 | — | 6,528,398 | ||||||||||||||
| Total | $ | 3,250 | $ | 169,160 | $ | 16,000,597 | $ | 23,172 | $ | 15,977,425 | |||||||||
| December 31, 2017 | |||||||||||||||||||
| Commercial real estate | $ | 439 | $ | 49,842 | $ | 5,174,783 | $ | 11,114 | $ | 5,163,669 | |||||||||
| Commercial and industrial | 3,215 | 48,748 | 3,495,247 | 9,872 | 3,485,375 | ||||||||||||||
| Commercial leases | — | 5,646 | 266,720 | — | 266,720 | ||||||||||||||
| Other | — | 1,843 | 17,063 | — | 17,063 | ||||||||||||||
| Total commercial loans and leases | 3,654 | 106,079 | 8,953,813 | 20,986 | 8,932,827 | ||||||||||||||
| Direct installment | — | 20,936 | 1,755,713 | — | 1,755,713 | ||||||||||||||
| Residential mortgages | — | 15,507 | 2,036,226 | — | 2,036,226 | ||||||||||||||
| Indirect installment | — | 11,967 | 1,448,268 | — | 1,448,268 | ||||||||||||||
| Consumer lines of credit | — | 10,539 | 1,151,470 | — | 1,151,470 | ||||||||||||||
| Total consumer loans | — | 58,949 | 6,391,677 | — | 6,391,677 | ||||||||||||||
| Total | $ | 3,654 | $ | 165,028 | $ | 15,345,490 | $ | 20,986 | $ | 15,324,504 | |||||||||
Mortgage2017, is listed below:
| (in thousands) | March 31, 2018 | December 31, 2017 | |||||
| Mortgage loans sold with servicing retained | $ | 3,417,642 | $ | 3,256,548 | |||
| Three Months Ended March 31, | |||||||
| (in thousands) | 2018 | 2017 | |||||
| Mortgage loans sold with servicing retained | $ | 236,893 | $ | 129,843 | |||
Pretax gains resulting from above loan sales (1) | 3,798 | 3,638 | |||||
Mortgage servicing fees (1) | 2,174 | 1,603 | |||||
operations.
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (in thousands) | 2017 | 2016 | ||||||
Balance at beginning of period | $ | 13,521 | $ | 8,921 | ||||
Fair value of MSRs acquired | 8,553 | — | ||||||
Additions | 1,454 | 884 | ||||||
Payoffs and curtailments | (139 | ) | (98 | ) | ||||
Amortization | (523 | ) | (467 | ) | ||||
|
|
|
| |||||
Balance at end of period | $ | 22,866 | $ | 9,240 | ||||
|
|
|
| |||||
Fair value, beginning of period | $ | 17,546 | $ | 11,503 | ||||
Fair value, end of period | 26,962 | 11,538 | ||||||
| Three Months Ended March 31, | |||||||
| (in thousands) | 2018 | 2017 | |||||
| Balance at beginning of period | $ | 29,053 | $ | 13,521 | |||
| Fair value of MSRs acquired | — | 8,553 | |||||
| Additions | 2,710 | 1,454 | |||||
| Payoffs and curtailments | (405 | ) | (139 | ) | |||
| Amortization | (567 | ) | (523 | ) | |||
| Balance at end of period | $ | 30,791 | $ | 22,866 | |||
| Fair value, beginning of period | $ | 32,419 | $ | 17,546 | |||
| Fair value, end of period | 36,445 | 26,962 | |||||
| (dollars in thousands) | March 31, 2017 | December 31, 2016 | ||||||
Weighted average life (months) | 82.2 | 79.0 | ||||||
Constant prepayment rate (annualized) | 9.4 | % | 9.9 | % | ||||
Discount rate | 9.7 | % | 9.8 | % | ||||
Effect on fair value due to change in interest rates: | ||||||||
+ 0.25% | $ | 1,229 | $ | 692 | ||||
+ 0.50% | 2,298 | 1,288 | ||||||
- 0.25% | (1,370 | ) | (789 | ) | ||||
- 0.50% | (2,839 | ) | (1,680 | ) | ||||
| (dollars in thousands) | March 31, 2018 | December 31, 2017 | |||||
| Weighted average life (months) | 84.5 | 80.4 | |||||
| Constant prepayment rate (annualized) | 9.1 | % | 9.9 | % | |||
| Discount rate | 9.9 | % | 9.9 | % | |||
| Effect on fair value due to change in interest rates: | |||||||
| +0.25% | $ | 1,179 | $ | 1,737 | |||
| +0.50% | 2,131 | 3,220 | |||||
| -0.25% | (1,476 | ) | (1,937 | ) | |||
| -0.50% | (3,237 | ) | (4,007 | ) | |||
| (in thousands) | March 31, 2018 | December 31, 2017 | |||||
| SBA loans sold to investors with servicing retained | $ | 300,857 | $ | 305,977 | |||
| Three Months Ended March 31, | |||||||
| (in thousands) | 2018 | 2017 | |||||
| SBA loans sold with servicing retained | $ | 12,288 | $ | — | |||
Pretax gains resulting from above loan sales (1) | 1,101 | — | |||||
SBA servicing fees (1) | 750 | 115 | |||||
non-interest income.
| Three Months ended March 31, 2017 | ||||
| (in thousands) | ||||
Balance at beginning of period | $ | — | ||
Fair value of servicing rights acquired | 5,399 | |||
Additions | — | |||
Amortization | (60 | ) | ||
|
| |||
Balance at end of period | $ | 5,339 | ||
|
| |||
rights:
| Three Months Ended March 31, | |||||||
| (in thousands) | 2017 | 2017 | |||||
| Balance at beginning of period | $ | 5,058 | $ | — | |||
| Fair value of servicing rights acquired | — | 5,399 | |||||
| Additions | 388 | — | |||||
| Impairment (charge) / recovery | (90 | ) | — | ||||
| Amortization | (294 | ) | (60 | ) | |||
| Balance at end of period | $ | 5,062 | $ | 5,339 | |||
| Fair value, beginning of period | $ | 5,058 | $ | — | |||
| Fair value, end of period | 5,062 | 5,339 | |||||
| March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||||||||||||||||
| Decline in fair value due to | Decline in fair value due to | ||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Actual | 10% adverse change | 20% adverse change | 1% adverse change | 2% adverse change | Actual | 10% adverse change | 20% adverse change | 1% adverse change | 2% adverse change | |||||||||||||||||||||||||||
| Weighted-average life (months) | 61.0 | 63.5 | |||||||||||||||||||||||||||||||||||
| Constant prepayment rate (annualized) | 10.01 | % | $ | (158 | ) | $ | (309 | ) | $ | — | $ | — | 9.29 | % | $ | (145 | ) | $ | (284 | ) | $ | — | $ | — | |||||||||||||
| Discount rate | 14.76 | — | — | (148 | ) | (287 | ) | 14.87 | — | — | (147 | ) | (286 | ) | |||||||||||||||||||||||
2018.
| (in thousands) | March 31, 2017 | December 31, 2016 | ||||||
Securities sold under repurchase agreements | $ | 310,751 | $ | 313,062 | ||||
Federal Home Loan Bank advances | 1,960,000 | 1,025,000 | ||||||
Federal funds purchased | 1,185,000 | 1,037,000 | ||||||
Subordinated notes | 130,212 | 127,948 | ||||||
|
|
|
| |||||
Total short-term borrowings | $ | 3,585,963 | $ | 2,503,010 | ||||
|
|
|
| |||||
| (in thousands) | March 31, 2018 | December 31, 2017 | |||||
| Securities sold under repurchase agreements | $ | 280,492 | $ | 256,017 | |||
| Federal Home Loan Bank advances | 1,555,000 | 2,285,000 | |||||
| Federal funds purchased | 1,830,000 | 1,000,000 | |||||
| Subordinated notes | 136,988 | 137,320 | |||||
| Total short-term borrowings | $ | 3,802,480 | $ | 3,678,337 | |||
| (in thousands) | March 31, 2017 | December 31, 2016 | ||||||
Federal Home Loan Bank advances | $ | 330,098 | $ | 305,110 | ||||
Subordinated notes | 87,558 | 87,147 | ||||||
Junior subordinated debt | 109,987 | 48,600 | ||||||
Other subordinated debt | 168,563 | 98,637 | ||||||
|
|
|
| |||||
Total long-term borrowings | $ | 696,206 | $ | 539,494 | ||||
|
|
|
| |||||
| (in thousands) | March 31, 2018 | December 31, 2017 | |||||
| Federal Home Loan Bank advances | $ | 300,053 | $ | 310,061 | |||
| Subordinated notes | 89,523 | 87,614 | |||||
| Junior subordinated debt | 110,466 | 110,347 | |||||
| Other subordinated debt | 159,848 | 160,151 | |||||
| Total long-term borrowings | $ | 659,890 | $ | 668,173 | |||
On May 1, 2017, we repaid $7.5 million in other subordinated debt that we acquired from YDKN.
2017.
We record the distributions on the junior subordinated debt issued to the Trusts as interest expense. The TPS are subject to mandatory redemption, in whole or in part, upon repayment
| (dollars in thousands) | Trust Preferred Securities | Common Securities | Junior Subordinated Debt | Stated Maturity Date | Interest Rate and Rate Reset Factor | |||||||||||||||||
F.N.B. Statutory Trust II | $ | 21,500 | $ | 665 | $ | 22,165 | 6/15/36 | 2.78 | % | LIBOR + 165 basis points (bps) | ||||||||||||
Omega Financial Capital Trust I | 26,000 | 1,114 | 26,445 | 10/18/34 | 3.21 | % | LIBOR + 219 bps | |||||||||||||||
Yadkin Valley Statutory Trust I | 25,000 | 774 | 20,677 | 12/15/37 | 2.45 | % | LIBOR + 132 bps | |||||||||||||||
FNB Financial Services Capital Trust I | 25,000 | 774 | 21,635 | 9/30/35 | 2.59 | % | LIBOR + 146 bps | |||||||||||||||
American Community Capital Trust II | 10,000 | 310 | 10,455 | 12/15/33 | 3.80 | % | LIBOR + 280 bps | |||||||||||||||
Crescent Financial Capital Trust I | 8,000 | 248 | 8,610 | 10/07/33 | 4.12 | % | LIBOR + 310 bps | |||||||||||||||
|
|
|
|
|
| |||||||||||||||||
Total | $ | 115,500 | $ | 3,885 | $ | 109,987 | ||||||||||||||||
|
|
|
|
|
| |||||||||||||||||
2018:
| (dollars in thousands) | Trust Preferred Securities | Common Securities | Junior Subordinated Debt | Stated Maturity Date | Interest Rate | Rate Reset Factor | ||||||||||||
| F.N.B. Statutory Trust II | $ | 21,500 | $ | 665 | $ | 22,165 | 6/15/2036 | 3.77 | % | LIBOR + 165 basis points (bps) | ||||||||
| Omega Financial Capital Trust I | 26,000 | 1,114 | 26,483 | 10/18/2034 | 3.92 | % | LIBOR + 219 bps | |||||||||||
| Yadkin Valley Statutory Trust I | 25,000 | 774 | 20,925 | 12/15/2037 | 3.44 | % | LIBOR + 132 bps | |||||||||||
| FNB Financial Services Capital Trust I | 25,000 | 774 | 21,859 | 9/30/2035 | 3.79 | % | LIBOR + 146 bps | |||||||||||
| American Community Capital Trust II | 10,000 | 310 | 10,446 | 12/15/2033 | 5.11 | % | LIBOR + 280 bps | |||||||||||
| Crescent Financial Capital Trust I | 8,000 | 248 | 8,588 | 10/7/2033 | 4.82 | % | LIBOR + 310 bps | |||||||||||
| Total | $ | 115,500 | $ | 3,885 | $ | 110,466 | ||||||||||||
| March 31, 2017 | December 31, 2016 | |||||||||||||||||||||||
| Notional | Fair Value | Notional | Fair Value | |||||||||||||||||||||
| (in thousands) | Amount | Asset | Liability | Amount | Asset | Liability | ||||||||||||||||||
Gross Derivatives | ||||||||||||||||||||||||
Subject to master netting arrangements: | ||||||||||||||||||||||||
Interest rate contracts – designated | $ | 655,000 | $ | 603 | $ | 1,494 | $ | 450,000 | $ | 9,256 | $ | 1,171 | ||||||||||||
Interest rate swaps – not designated | 1,825,706 | 792 | 13,966 | 1,689,157 | 12,720 | 34,046 | ||||||||||||||||||
Equity contracts – not designated | 1,180 | 46 | — | 1,180 | 61 | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total subject to master netting arrangements | 2,481,886 | 1,441 | 15,460 | 2,140,337 | 22,037 | 35,217 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Not subject to master netting arrangements: | ||||||||||||||||||||||||
Interest rate swaps – not designated | 1,825,706 | 30,263 | 13,820 | 1,689,157 | 32,170 | 11,866 | ||||||||||||||||||
Interest rate lock commitments – not designated | 76,087 | 1,252 | 26 | — | — | — | ||||||||||||||||||
Forward delivery commitments – not designated | 85,065 | 20 | 376 | — | — | — | ||||||||||||||||||
Credit risk contracts – not designated | 186,037 | 15 | 106 | 174,538 | 13 | 123 | ||||||||||||||||||
Equity contracts – not designated | 1,180 | — | 46 | 1,180 | — | 61 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total not subject to master netting arrangements | 2,174,075 | 31,550 | 14,374 | 1,864,875 | 32,183 | 12,050 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 4,655,961 | $ | 32,991 | $ | 29,834 | $ | 4,005,212 | $ | 54,220 | $ | 47,267 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
On January 3,liabilities which are not offset in the balance sheet.
| March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||
| Notional | Fair Value | Notional | Fair Value | ||||||||||||||||||||
| (in thousands) | Amount | Asset | Liability | Amount | Asset | Liability | |||||||||||||||||
| Gross Derivatives | |||||||||||||||||||||||
| Subject to master netting arrangements: | |||||||||||||||||||||||
| Interest rate contracts – designated | $ | 705,000 | $ | — | $ | 3,662 | $ | 705,000 | $ | 228 | $ | 1,982 | |||||||||||
| Interest rate swaps – not designated | 2,422,236 | 3,481 | 9,117 | 2,245,442 | 1,169 | 11,599 | |||||||||||||||||
| Equity contracts – not designated | 1,180 | 26 | — | 1,180 | 51 | — | |||||||||||||||||
| Total subject to master netting arrangements | 3,128,416 | 3,507 | 12,779 | 2,951,622 | 1,448 | 13,581 | |||||||||||||||||
| Not subject to master netting arrangements: | |||||||||||||||||||||||
| Interest rate swaps – not designated | 2,422,236 | 15,176 | 38,787 | 2,245,442 | 27,233 | 15,303 | |||||||||||||||||
| Interest rate lock commitments – not designated | 78,368 | 1,380 | 5 | 88,107 | 1,594 | 5 | |||||||||||||||||
| Forward delivery commitments – not designated | 94,996 | 209 | 231 | 106,572 | 233 | 148 | |||||||||||||||||
| Credit risk contracts – not designated | 206,747 | 20 | 64 | 235,196 | 39 | 109 | |||||||||||||||||
| Equity contracts – not designated | 1,180 | — | 26 | 1,180 | — | 51 | |||||||||||||||||
| Total not subject to master netting arrangements | 2,803,527 | 16,785 | 39,113 | 2,676,497 | 29,099 | 15,616 | |||||||||||||||||
| Total | $ | 5,931,943 | $ | 20,292 | $ | 51,892 | $ | 5,628,119 | $ | 30,547 | $ | 29,197 | |||||||||||
| (in thousands) | March 31, 2017 | December 31, 2016 | ||||||
Notional amount | $ | 655,000 | $ | 450,000 | ||||
Fair value included in other assets | 603 | 9,256 | ||||||
Fair value included in other liabilities | 1,494 | 1,171 | ||||||
| (in thousands) | March 31, 2018 | December 31, 2017 | |||||
| Notional amount | $ | 705,000 | $ | 705,000 | |||
| Fair value included in other assets | — | 228 | |||||
| Fair value included in other liabilities | 3,662 | 1,982 | |||||
| (in thousands) | Total | Net of Tax | ||||||
Reclassified from AOCI to interest income | $ | 506 | $ | 329 | ||||
Reclassified from AOCI to interest expense | 148 | 96 | ||||||
2018:
| (in thousands) | Total | Net of Tax | |||||
| Reclassified from AOCI to interest income | $ | 93 | $ | 73 | |||
| Reclassified from AOCI to interest expense | (129 | ) | (102 | ) | |||
2018.
| (in thousands) | March 31, 2017 | December 31, 2016 | ||||||
Notional amount | $ | 3,651,412 | $ | 3,378,314 | ||||
Fair value included in other assets | 31,055 | 44,890 | ||||||
Fair value included in other liabilities | 27,786 | 45,912 | ||||||
| (in thousands) | March 31, 2018 | December 31, 2017 | |||||
| Notional amount | $ | 4,844,472 | $ | 4,490,884 | |||
| Fair value included in other assets | 18,657 | 28,402 | |||||
| Fair value included in other liabilities | 47,904 | 26,902 | |||||
2018 and $0.04 million and $(0.1) million, respectively at December 31, 2017.
The following table presents information about derivative assets and derivative liabilities that are subject to enforceable master netting arrangements as well as those not subject to enforceable master netting arrangements:
| (in thousands) | Gross Amount | Gross Amounts Offset in the Balance Sheet | Net Amount Presented in the Balance Sheet | |||||||||
March 31, 2017 | ||||||||||||
Derivative Assets | ||||||||||||
Subject to master netting arrangements: | ||||||||||||
Interest rate contracts | ||||||||||||
Designated | $ | 603 | — | $ | 603 | |||||||
Not designated | 792 | — | 792 | |||||||||
Equity contracts – not designated | 46 | — | 46 | |||||||||
Not subject to master netting arrangements: | ||||||||||||
Interest rate contracts – not designated | 30,263 | — | 30,263 | |||||||||
Interest rate lock commitments – not designated | 1,252 | — | 1,252 | |||||||||
Forward delivery commitments – not designated | 20 | — | 20 | |||||||||
Credit risk contracts – not designated | 15 | — | 15 | |||||||||
|
|
|
|
|
| |||||||
Total derivative assets | $ | 32,991 | — | $ | 32,991 | |||||||
|
|
|
|
|
| |||||||
Derivative Liabilities | ||||||||||||
Subject to master netting arrangements: | ||||||||||||
Interest rate contracts | ||||||||||||
Designated | $ | 1,494 | — | $ | 1,494 | |||||||
Not designated | 13,966 | — | 13,966 | |||||||||
Not subject to master netting arrangements: | ||||||||||||
Interest rate contracts – not designated | 13,820 | — | 13,820 | |||||||||
Interest rate lock commitments – not designated | 26 | — | 26 | |||||||||
Forward delivery commitments – not designated | 376 | — | 376 | |||||||||
Credit risk contracts – not designated | 106 | — | 106 | |||||||||
Equity contracts – not designated | 46 | — | 46 | |||||||||
|
|
|
|
|
| |||||||
Total derivative liabilities | $ | 29,834 | — | $ | 29,834 | |||||||
|
|
|
|
|
| |||||||
December 31, 2016 Derivative Assets Subject to master netting arrangements: Interest rate contracts Designated Not designated Equity contracts – not designated Not subject to master netting arrangements: Interest rate contracts – not designated Credit contracts – not designated Total derivative assets Derivative Liabilities Subject to master netting arrangements: Interest rate contracts Designated Not designated Not subject to master netting arrangements: Interest rate contracts – not designated Credit contracts – not designated Equity contracts – not designated Total derivative liabilities (in thousands) Gross
Amount Gross
Amounts
Offset in the
Balance
Sheet Net Amount
Presented in
the Balance
Sheet $ 9,256 — $ 9,256 12,720 — 12,720 61 — 61 32,170 — 32,170 13 — 13 $ 54,220 — $ 54,220 $ 1,171 — $ 1,171 34,046 — 34,046 11,866 — 11,866 123 — 123 61 — 61 $ 47,267 — $ 47,267
| Amount Not Offset in the Balance Sheet | ||||||||||||||||
| (in thousands) | Net Amount Presented in the Balance Sheet | Financial Instruments | Cash Collateral | Net Amount | ||||||||||||
March 31, 2017 | ||||||||||||||||
Derivative Assets | ||||||||||||||||
Interest rate contracts: | ||||||||||||||||
Designated | $ | 603 | $ | 603 | — | $ | — | |||||||||
Not designated | 792 | 680 | — | 112 | ||||||||||||
Equity contracts – not designated | 46 | 46 | �� | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,441 | $ | 1,329 | — | $ | 112 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative Liabilities | ||||||||||||||||
Interest rate contracts: | ||||||||||||||||
Designated | $ | 1,494 | $ | 1,494 | — | $ | — | |||||||||
Not designated | 13,966 | 13,208 | — | 758 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 15,460 | $ | 14,702 | — | $ | 758 | |||||||||
|
|
|
|
|
|
|
| |||||||||
December 31, 2016 | ||||||||||||||||
Derivative Assets | ||||||||||||||||
Interest rate contracts: | ||||||||||||||||
Designated | $ | 9,256 | $ | 843 | $ | 8,413 | $ | — | ||||||||
Not designated | 12,720 | 474 | 12,132 | 114 | ||||||||||||
Equity contracts – not designated | 61 | 61 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 22,037 | $ | 1,378 | $ | 20,545 | $ | 114 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative Liabilities | ||||||||||||||||
Interest rate contracts: | ||||||||||||||||
Designated | $ | 1,171 | $ | 1,171 | $ | — | $ | — | ||||||||
Not designated | 34,046 | 15,490 | 17,651 | 905 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 35,217 | $ | 16,661 | $ | 17,651 | $ | 905 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Amount Not Offset in the Balance Sheet | |||||||||||||||
| (in thousands) | Net Amount Presented in the Balance Sheet | Financial Instruments | Cash Collateral | Net Amount | |||||||||||
| March 31, 2018 | |||||||||||||||
| Derivative Assets | |||||||||||||||
| Interest rate contracts: | |||||||||||||||
| Designated | $ | — | $ | — | $ | — | $ | — | |||||||
| Not designated | 3,481 | 3,451 | — | 30 | |||||||||||
| Equity contracts – not designated | 26 | 26 | — | — | |||||||||||
| Total | $ | 3,507 | $ | 3,477 | $ | — | $ | 30 | |||||||
| Derivative Liabilities | |||||||||||||||
| Interest rate contracts: | |||||||||||||||
| Designated | $ | 3,662 | $ | 3,662 | $ | — | $ | — | |||||||
| Not designated | 9,117 | 8,592 | — | 525 | |||||||||||
| Total | $ | 12,779 | $ | 12,254 | $ | — | $ | 525 | |||||||
| December 31, 2017 | |||||||||||||||
| Derivative Assets | |||||||||||||||
| Interest rate contracts: | |||||||||||||||
| Designated | $ | 228 | $ | 228 | $ | — | $ | — | |||||||
| Not designated | 1,169 | 1,169 | — | — | |||||||||||
| Equity contracts – not designated | 51 | 51 | — | — | |||||||||||
| Total | $ | 1,448 | $ | 1,448 | $ | — | $ | — | |||||||
| Derivative Liabilities | |||||||||||||||
| Interest rate contracts: | |||||||||||||||
| Designated | $ | 1,982 | $ | 1,982 | $ | — | $ | — | |||||||
| Not designated | 11,599 | 10,940 | — | 659 | |||||||||||
| Total | $ | 13,581 | $ | 12,922 | $ | — | $ | 659 | |||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| (in thousands) | Income Statement Location | 2017 | 2016 | |||||||
Interest Rate Contracts | Interest income - loans and leases | $ | 506 | $ | 687 | |||||
Interest Rate Contracts | Interest expense – short-term borrowings | 148 | 150 | |||||||
Interest Rate Swaps | Other income | (219 | ) | (41 | ) | |||||
Credit Risk Contracts | Other income | 19 | (71 | ) | ||||||
| Three Months Ended March 31, | |||||||||
| (in thousands) | Income Statement Location | 2018 | 2017 | ||||||
| Interest Rate Contracts | Interest income - loans and leases | $ | 93 | $ | 506 | ||||
| Interest Rate Contracts | Interest expense – short-term borrowings | (129 | ) | 148 | |||||
| Interest Rate Swaps | Other income | (160 | ) | (219 | ) | ||||
| Credit Risk Contracts | Other income | 27 | 19 | ||||||
| (in thousands) | March 31, 2017 | December 31, 2016 | ||||||
Commitments to extend credit | $ | 6,278,542 | $ | 4,424,834 | ||||
Standby letters of credit | 135,120 | 117,732 | ||||||
| (in thousands) | March 31, 2018 | December 31, 2017 | |||||
| Commitments to extend credit | $ | 7,097,958 | $ | 6,957,822 | |||
| Standby letters of credit | 136,661 | 132,904 | |||||
We did not issue any performance-based restricted The assumptions used for this valuation include stock units during the first three months of 2017 or 2016. price volatility, risk-free interest rate and dividend yield.
Prior to 2014, more than halfissued, regardless of the restricted stock awards granted to management were earned if we met or exceeded certain financial performance results when compared to our peers. These performance-related awards were expensed ratably from the date that the likelihood of meeting the performance measure was probable through the end of a four-yearactual vesting period. The service-based awards were expensed ratably over a three-year vesting period. We also issued discretionary service-based awards to certain employees that vested over five years.
percentages.
| Three Months Ended March 31, | ||||||||||||||||
| 2017 | 2016 | |||||||||||||||
| Awards | Weighted Average Grant Price | Awards | Weighted Average Grant Price | |||||||||||||
Unvested awards outstanding at beginning of period | 1,836,363 | $ | 12.97 | 1,548,444 | $ | 12.85 | ||||||||||
Vested | (243,982 | ) | 11.83 | (363,799 | ) | 12.07 | ||||||||||
Forfeited | (2,950 | ) | 13.00 | (6,368 | ) | 12.79 | ||||||||||
Dividend reinvestment | 12,253 | 14.54 | 10,870 | 11.50 | ||||||||||||
|
|
|
| |||||||||||||
Unvested awards outstanding at end of period | 1,601,684 | 13.16 | 1,189,147 | 13.08 | ||||||||||||
|
|
|
| |||||||||||||
| Three Months Ended March 31, | |||||||||||||
| 2018 | 2017 | ||||||||||||
| Awards | Weighted Average Grant Price per Share | Awards | Weighted Average Grant Price per Share | ||||||||||
| Unvested awards outstanding at beginning of period | 1,975,862 | $ | 13.64 | 1,836,363 | $ | 12.97 | |||||||
| Vested | (7,631 | ) | 12.83 | (243,982 | ) | 11.83 | |||||||
| Forfeited/expired | (19,893 | ) | 14.02 | (2,950 | ) | 13.00 | |||||||
| Dividend reinvestment | 16,373 | 14.37 | 12,253 | 14.54 | |||||||||
| Unvested awards outstanding at end of period | 1,964,711 | 13.65 | 1,601,684 | 13.16 | |||||||||
| (in thousands) | Three Months Ended March 31, | |||||||
| 2017 | 2016 | |||||||
Stock-based compensation expense | $ | 1,760 | $ | 1,136 | ||||
Tax benefit related to stock-based compensation expense | 616 | 398 | ||||||
Fair value of awards vested | 3,802 | 4,424 | ||||||
| (in thousands) | Three Months Ended March 31, | ||||||
| 2018 | 2017 | ||||||
| Stock-based compensation expense | $ | 1,939 | $ | 1,760 | |||
| Tax benefit related to stock-based compensation expense | 407 | 616 | |||||
| Fair value of awards vested | 110 | 3,802 | |||||
| (dollars in thousands) | Service- Based Awards | Performance- Based Awards | Total | |||||||||
Unvested restricted stock awards | 830,140 | 771,544 | 1,601,684 | |||||||||
Unrecognized compensation expense | $ | 3,784 | $ | 4,494 | $ | 8,278 | ||||||
Intrinsic value | $ | 12,344 | $ | 11,473 | $ | 23,817 | ||||||
Weighted average remaining life (in years) | 1.72 | 1.77 | 1.75 | |||||||||
| (dollars in thousands) | Service- Based Awards | Performance- Based Awards | Total | ||||||||
| Unvested restricted stock awards | 1,050,062 | 914,649 | 1,964,711 | ||||||||
| Unrecognized compensation expense | $ | 5,691 | $ | 4,061 | $ | 9,752 | |||||
| Intrinsic value | $ | 14,123 | $ | 12,302 | $ | 26,425 | |||||
| Weighted average remaining life (in years) | 1.76 | 1.50 | 1.64 | ||||||||
| Three Months Ended March 31, | ||||||||||||||||
| 2017 | 2016 | |||||||||||||||
| Shares | Weighted Average Exercise Price | Shares | Weighted Average Exercise Price | |||||||||||||
Options outstanding at beginning of period | 892,532 | $ | 8.95 | 435,340 | $ | 8.86 | ||||||||||
Assumed from acquisitions | 207,645 | 8.92 | 1,707,036 | 7.83 | ||||||||||||
Exercised | (131,792 | ) | 9.44 | (24,806 | ) | 6.38 | ||||||||||
Forfeited | (49,281 | ) | 10.91 | (92,650 | ) | 6.69 | ||||||||||
|
|
|
| |||||||||||||
Options outstanding and exercisable at end of period | 919,104 | 8.77 | 2,024,920 | 8.12 | ||||||||||||
|
|
|
| |||||||||||||
| Three Months Ended March 31, | |||||||||||||
| 2018 | 2017 | ||||||||||||
| Shares | Weighted Average Exercise Price per Share | Shares | Weighted Average Exercise Price per Share | ||||||||||
| Options outstanding at beginning of period | 722,650 | $ | 7.96 | 892,532 | $ | 8.95 | |||||||
| Assumed from acquisitions | — | — | 207,645 | 8.92 | |||||||||
| Exercised | (163,035 | ) | 7.79 | (131,792 | ) | 9.44 | |||||||
| Forfeited/expired | (237 | ) | 10.72 | (49,281 | ) | 10.91 | |||||||
| Options outstanding and exercisable at end of period | 559,378 | 8.03 | 919,104 | 8.77 | |||||||||
Warrants
In conjunction with our participation in The aggregate intrinsic value represents the UST’s CPP, we issued toamount by which the UST a warrant to purchase up to 1,302,083 shares of our common stock. Pursuant to Section 13(H) of the Warrant to Purchase Common Stock, the number of shares of common stock issuable upon exercise of the warrant was reduced in half to 651,042 shares on June 16, 2009, the date we completed a public offering. The warrant, which expires in 2019, was sold at auction by the UST and has an exercise price of $11.52 per share.
In conjunction with the Annapolis Bancorp, Inc. (ANNB) acquisition on April 6, 2013, the warrant issued by ANNB to the UST under the CPP has been converted into a warrant to purchase up to 342,564 shares of our common stock at an exercise price of $3.57 per share. Subsequent adjustments related to actual dividends paid by us have increased the share amount of these warrants to 392,475, with a resulting lower exercise price of $3.12 per share as of March 31, 2017. The warrant, which was recorded at its fair value on April 6, 2013, was sold at auction byof underlying stock exceeds the UST and expires in 2019.
In conjunction with the YDKN acquisition on March 11, 2017, the warrant issued by YDKN to the UST under the CPP has been converted into a warrant to purchase up to 207,320 shares of our common stock at anoption exercise price of $9.63 per share. The warrant, which was recorded at its fair value on March 11, 2017, was sold at auction by the UST and expires in 2019.
price.
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (in thousands) | 2017 | 2016 | ||||||
401(k) contribution expense | $ | 2,767 | $ | 2,462 | ||||
FNB
| Three Months Ended March 31, | |||||||
| (in thousands) | 2018 | 2017 | |||||
| 401(k) contribution expense | $ | 3,610 | $ | 2,767 | |||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (in thousands) | 2017 | 2016 | ||||||
Service cost | $ | (4 | ) | $ | (4 | ) | ||
Interest cost | 1,477 | 1,544 | ||||||
Expected return on plan assets | (2,427 | ) | (2,353 | ) | ||||
Amortization: | ||||||||
Unrecognized prior service cost | 2 | 2 | ||||||
Unrecognized loss | 628 | 608 | ||||||
|
|
|
| |||||
Net periodic pension credit | $ | (324 | ) | $ | (203 | ) | ||
|
|
|
| |||||
| Three Months Ended March 31, | |||||||
| (in thousands) | 2018 | 2017 | |||||
| Service cost | $ | (4 | ) | $ | (4 | ) | |
| Interest cost | 1,560 | 1,477 | |||||
| Expected return on plan assets | (2,895 | ) | (2,427 | ) | |||
| Amortization: | |||||||
| Unrecognized prior service cost | — | 2 | |||||
| Unrecognized loss | 623 | 628 | |||||
| Net periodic pension credit | $ | (716 | ) | $ | (324 | ) | |
| Three Months Ended March 31, | |||||||
| (in thousands) | 2018 | 2017 | |||||
| Current income taxes: | |||||||
| Federal taxes | $ | 17,700 | $ | 6,688 | |||
| State taxes | 1,704 | 499 | |||||
| Total current income taxes | 19,404 | 7,187 | |||||
| Deferred income taxes: | |||||||
| Federal taxes | 1,902 | 1,690 | |||||
| State taxes | (38 | ) | (2,393 | ) | |||
| Total deferred income taxes | 1,864 | (703 | ) | ||||
| Total income taxes | $ | 21,268 | $ | 6,484 | |||
| Statutory tax rate | 21.0 | % | 35.0 | % | |||
| Effective tax rate | 19.7 | % | 22.0 | % | |||
| (in thousands) | Unrealized Net Gains (Losses) on Securities Available for Sale | Unrealized Net Gains (Losses) on Derivative Instruments | Unrecognized Pension and Postretirement Obligations | Total | ||||||||||||
Three Months Ended March 31, 2017 | ||||||||||||||||
Balance at beginning of period | $ | (18,222 | ) | $ | 5,254 | $ | (48,401 | ) | $ | (61,369 | ) | |||||
Other comprehensive income before reclassifications | 6,032 | (1,022 | ) | 410 | 5,420 | |||||||||||
Amounts reclassified from AOCI | (787 | ) | (233 | ) | — | (1,020 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net current period other comprehensive income | 5,245 | (1,255 | ) | 410 | 4,400 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Balance at end of period | $ | (12,977 | ) | $ | 3,999 | $ | (47,991 | ) | $ | (56,969 | ) | |||||
|
|
|
|
|
|
|
| |||||||||
| (in thousands) | Unrealized Net Losses on Debt Securities Available for Sale | Unrealized Net Gains (Losses) on Derivative Instruments | Unrecognized Pension and Postretirement Obligations | Total | |||||||||||
| Three Months Ended March 31, 2018 | |||||||||||||||
| Balance at beginning of period | $ | (29,626 | ) | $ | 5,407 | $ | (58,833 | ) | $ | (83,052 | ) | ||||
| Other comprehensive (loss) income before reclassifications | (29,787 | ) | 3,804 | 484 | (25,499 | ) | |||||||||
| Amounts reclassified from AOCI | — | (173 | ) | — | (173 | ) | |||||||||
| Net current period other comprehensive (loss) income | (29,787 | ) | 3,631 | 484 | (25,672 | ) | |||||||||
| Balance at end of period | $ | (59,413 | ) | $ | 9,038 | $ | (58,349 | ) | $ | (108,724 | ) | ||||
Consolidated Income Statements.
Income.
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (dollars in thousands, except per share data) | 2017 | 2016 | ||||||
Net income | $ | 22,979 | $ | 26,132 | ||||
Less: Preferred stock dividends | 2,010 | 2,010 | ||||||
|
|
|
| |||||
Net income available to common stockholders | $ | 20,969 | $ | 24,122 | ||||
|
|
|
| |||||
Basic weighted average common shares outstanding | 237,379,260 | 193,585,702 | ||||||
Net effect of dilutive stock options, warrants and restricted stock | 1,875,389 | 1,292,220 | ||||||
|
|
|
| |||||
Diluted weighted average common shares outstanding | 239,254,649 | 194,877,922 | ||||||
|
|
|
| |||||
Earnings per common share: | ||||||||
Basic | $ | 0.09 | $ | 0.12 | ||||
|
|
|
| |||||
Diluted | $ | 0.09 | $ | 0.12 | ||||
|
|
|
| |||||
| Three Months Ended March 31, | |||||||
(dollars in thousands, except per share data) | 2018 | 2017 | |||||
| Net income | $ | 86,762 | $ | 22,979 | |||
| Less: Preferred stock dividends | 2,010 | 2,010 | |||||
| Net income available to common stockholders | $ | 84,752 | $ | 20,969 | |||
| Basic weighted average common shares outstanding | 323,740,956 | 237,379,260 | |||||
| Net effect of dilutive stock options, warrants and restricted stock | 2,026,012 | 1,882,423 | |||||
| Diluted weighted average common shares outstanding | 325,766,968 | 239,261,683 | |||||
| Earnings per common share: | |||||||
| Basic | $ | 0.26 | $ | 0.09 | |||
| Diluted | $ | 0.26 | $ | 0.09 | |||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2017 | 2016 | |||||||
Average shares excluded from the diluted earnings per common share calculation | 81,755 | 15,501 | ||||||
| Three Months Ended March 31, | |||||
| 2018 | 2017 | ||||
| Average shares excluded from the diluted earnings per common share calculation | 21 | 81,755 | |||
| Three Months Ended March 31, | ||||||||
| 2017 | 2016 | |||||||
| (in thousands) | ||||||||
Interest paid on deposits and other borrowings | $ | 18,606 | $ | 13,794 | ||||
Income taxes paid | — | — | ||||||
Transfers of loans to other real estate owned | 20,517 | 8,049 | ||||||
Financing of other real estate owned sold | — | 62 | ||||||
| Three Months Ended March 31, | |||||||
| 2018 | 2017 | ||||||
| (in thousands) | |||||||
| Interest paid on deposits and other borrowings | $ | 46,540 | $ | 18,606 | |||
| Transfers of loans to other real estate owned | 3,954 | 20,517 | |||||
|
| (in thousands) | Community Banking | Wealth Management | Insurance | Consumer Finance | Parent and Other | Consolidated | ||||||||||||||||||
At or for the Three Months Ended March 31, 2017 | ||||||||||||||||||||||||
Interest income | $ | 182,358 | $ | — | $ | 20 | $ | 9,902 | $ | 2,413 | $ | 194,693 | ||||||||||||
Interest expense | 18,865 | — | — | 922 | 2,154 | 21,941 | ||||||||||||||||||
Net interest income | 163,493 | — | 20 | 8,980 | 259 | 172,752 | ||||||||||||||||||
Provision for credit losses | 8,198 | — | — | 1,786 | 866 | 10,850 | ||||||||||||||||||
Non-interest income | 41,384 | 9,549 | 4,325 | 710 | (852 | ) | 55,116 | |||||||||||||||||
Non-interest expense (1) | 167,393 | 7,540 | 3,315 | 5,231 | 978 | 184,457 | ||||||||||||||||||
Amortization of intangibles | 2,982 | 61 | 55 | — | — | 3,098 | ||||||||||||||||||
Income tax expense (benefit) | 6,148 | 711 | 347 | 1,067 | (1,789 | ) | 6,484 | |||||||||||||||||
Net income (loss) | 20,156 | 1,237 | 628 | 1,606 | (648 | ) | 22,979 | |||||||||||||||||
Total assets | 30,007,404 | 22,130 | 20,514 | 184,006 | (43,359 | ) | 30,190,695 | |||||||||||||||||
Total intangibles | 2,360,557 | 10,353 | 12,285 | 1,809 | — | 2,385,004 | ||||||||||||||||||
At or for the Three Months Ended March 31, 2016 | ||||||||||||||||||||||||
Interest income | $ | 143,978 | $ | — | $ | 22 | $ | 9,785 | $ | 1,969 | $ | 155,754 | ||||||||||||
Interest expense | 12,594 | — | — | 941 | 1,865 | 15,400 | ||||||||||||||||||
Net interest income | 131,384 | — | 22 | 8,844 | 104 | 140,354 | ||||||||||||||||||
Provision for credit losses | 9,917 | — | — | 1,526 | 325 | 11,768 | ||||||||||||||||||
Non-interest income | 31,233 | 8,816 | 4,194 | 716 | 1,085 | 46,044 | ||||||||||||||||||
Non-interest expense (1) | 118,048 | 7,089 | 3,301 | 5,204 | 357 | 133,999 | ||||||||||||||||||
Amortization of intangibles | 2,441 | 65 | 143 | — | — | 2,649 | ||||||||||||||||||
Income tax expense (benefit) | 10,117 | 605 | 275 | 1,112 | (259 | ) | 11,850 | |||||||||||||||||
Net income | 22,094 | 1,057 | 497 | 1,718 | 766 | 26,132 | ||||||||||||||||||
Total assets | 20,151,815 | 20,540 | 21,680 | 188,547 | (58,058 | ) | 20,324,524 | |||||||||||||||||
Total intangibles | 1,062,079 | 10,383 | 12,779 | 1,809 | — | 1,087,050 | ||||||||||||||||||
We use fair value measurementsConsolidated Financial Statements.
| (in thousands) | Community Banking | Wealth Management | Insurance | Consumer Finance | Parent and Other | Consolidated | |||||||||||||||||
| At or for the Three Months Ended March 31, 2018 | |||||||||||||||||||||||
| Interest income | $ | 263,587 | $ | — | $ | 20 | $ | 9,294 | $ | 26 | $ | 272,927 | |||||||||||
| Interest expense | 42,360 | — | — | 910 | 3,552 | 46,822 | |||||||||||||||||
| Net interest income | 221,227 | — | 20 | 8,384 | (3,526 | ) | 226,105 | ||||||||||||||||
| Provision for credit losses | 12,412 | — | — | 2,083 | — | 14,495 | |||||||||||||||||
| Non-interest income | 53,312 | 11,002 | 4,303 | 638 | (1,752 | ) | 67,503 | ||||||||||||||||
Non-interest expense (1) | 148,667 | 8,278 | 3,711 | 5,230 | 979 | 166,865 | |||||||||||||||||
| Amortization of intangibles | 4,105 | 61 | 52 | — | — | 4,218 | |||||||||||||||||
| Income tax expense (benefit) | 21,720 | 589 | 124 | 474 | (1,639 | ) | 21,268 | ||||||||||||||||
| Net income (loss) | 87,635 | 2,074 | 436 | 1,235 | (4,618 | ) | 86,762 | ||||||||||||||||
| Total assets | 31,424,150 | 25,129 | 20,529 | 169,737 | 12,808 | 31,652,353 | |||||||||||||||||
| Total intangibles | 2,315,127 | 10,128 | 12,075 | 1,809 | — | 2,339,139 | |||||||||||||||||
| At or for the Three Months Ended March 31, 2017 | |||||||||||||||||||||||
| Interest income | $ | 185,381 | $ | — | $ | 20 | $ | 9,902 | $ | (610 | ) | $ | 194,693 | ||||||||||
| Interest expense | 18,865 | — | — | 922 | 2,154 | 21,941 | |||||||||||||||||
| Net interest income | 166,516 | — | 20 | 8,980 | (2,764 | ) | 172,752 | ||||||||||||||||
| Provision for credit losses | 9,064 | — | — | 1,786 | — | 10,850 | |||||||||||||||||
| Non-interest income | 40,716 | 9,549 | 4,325 | 710 | (184 | ) | 55,116 | ||||||||||||||||
Non-interest expense (1) | 168,283 | 7,540 | 3,315 | 5,231 | 88 | 184,457 | |||||||||||||||||
| Amortization of intangibles | 2,982 | 61 | 55 | — | — | 3,098 | |||||||||||||||||
| Income tax expense (benefit) | 6,311 | 711 | 347 | 1,067 | (1,952 | ) | 6,484 | ||||||||||||||||
| Net income (loss) | 20,592 | 1,237 | 628 | 1,606 | (1,084 | ) | 22,979 | ||||||||||||||||
| Total assets | 29,978,061 | 22,130 | 20,514 | 184,006 | (14,016 | ) | 30,190,695 | ||||||||||||||||
| Total intangibles | 2,332,352 | 10,353 | 12,285 | 1,809 | — | 2,356,799 | |||||||||||||||||
Fair value is defined as an exit price, representing the price that would be received to sell an asset or paid torarely transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are not adjusted for transaction costs. Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure.
In determining fair value, we use various valuation approaches, including market, income and cost approaches. ASC 820,Fair Value Measurements and Disclosures, establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability, which are developed based on market data obtained from sources independent of FNB. Unobservable inputs reflect our assumptions about the assumptions that market participants would use in pricing an asset or liability, which are developed based on the best information available in the circumstances.
The fair value hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The fair value hierarchy is broken down into three levels based on the reliability of inputs as follows:
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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.
Following is a description of the valuation methodologies we use for financial instruments recorded at fair value on either a recurring ornon-recurring basis:
Securities Available For Sale
Securities available for sale consist of both debt and equity securities. These securities are recorded at fair value on a recurring basis. At March 31, 2017, 99.5% of these securities used valuation methodologies involving market-based or market-derived information, collectively Level 1 and Level 2 measurements, to measure fair value. The remaining 0.5% of these securitiesmeasurements. There were measured using model-based techniques, with primarily unobservable (Level 3) inputs.
We closely monitor market conditions involving assets that have become less actively traded. Ifno such transfers during the fair value measurement is based upon recent observable market activity of such assets or comparable assets (other than forced or distressed transactions) that occur in sufficient volume, and do not require significant adjustment using unobservable inputs, those assets are classified as Level 1 or Level 2; if not, they are classified as Level 3. Making this assessment requires significant judgment.
We use prices from independent pricing services and, to a lesser extent, indicative(non-binding) quotes from independent brokers, to measure the fair value of investment securities. We validate prices received from pricing services or brokers using a variety of methods, including, but not limited to, comparison to secondary pricing services, corroboration of pricing by reference to other independent market data such as secondary broker quotes and relevant benchmark indices, and review of pricing information by corporate personnel familiar with market liquidity and other market-related conditions.
Derivative Financial Instruments
We determine fair value for derivatives using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects contractual terms of the derivative, including the period to maturity and uses observable market based inputs, including interest rate curves and implied volatilities.
We incorporate credit valuation adjustments to appropriately reflect both our ownnon-performance risk and the respective counterparty’snon-performance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect ofnon-performance risk, we consider the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.
Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives and IRLCs utilize Level 3 inputs. Credit valuation estimates of current credit spreads are used to evaluate the likelihood of our default and the default of our counterparties. However, as ofthree-month periods ended March 31, 2017, we have assessed the significance2018 and 2017.
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
March 31, 2017 | ||||||||||||||||
Assets Measured at Fair Value | ||||||||||||||||
Debt securities available for sale: | ||||||||||||||||
U.S. Treasury | $ | — | $ | 29,945 | $ | — | $ | 29,945 | ||||||||
U.S. government-sponsored entities | — | 395,206 | — | 395,206 | ||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||
Agency mortgage-backed securities | — | 1,643,014 | — | 1,643,014 | ||||||||||||
Agency collateralized mortgage obligations | — | 503,963 | — | 503,963 | ||||||||||||
Non-agency collateralized mortgage obligations | — | 2 | — | 2 | ||||||||||||
Commercial mortgage-backed securities | — | 419 | — | 419 | ||||||||||||
States of the U.S. and political subdivisions | — | 34,678 | — | 34,678 | ||||||||||||
Other debt securities | — | 9,547 | 12,047 | 21,594 | ||||||||||||
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Total debt securities available for sale | — | 2,616,774 | 12,047 | 2,628,821 | ||||||||||||
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Equity securities available for sale: | ||||||||||||||||
Fixed income mutual fund | 3,723 | 5,353 | — | 9,076 | ||||||||||||
Financial services industry | — | 760 | — | 760 | ||||||||||||
Insurance services industry | 158 | — | — | 158 | ||||||||||||
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Total equity securities available for sale | 3,881 | 6,113 | — | 9,994 | ||||||||||||
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Total securities available for sale | 3,881 | 2,622,887 | 12,047 | 2,638,815 | ||||||||||||
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Loans held for sale | — | 11,121 | — | 11,121 | ||||||||||||
Derivative financial instruments: | ||||||||||||||||
Trading | — | 31,101 | — | 31,101 | ||||||||||||
Not for trading | — | 638 | 1,252 | 1,890 | ||||||||||||
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Total derivative financial instruments | — | 31,739 | 1,252 | 32,991 | ||||||||||||
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Total assets measured at fair value on a recurring basis | $ | 3,881 | $ | 2,665,747 | $ | 13,299 | $ | 2,682,927 | ||||||||
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Liabilities Measured at Fair Value | ||||||||||||||||
Derivative financial instruments: | ||||||||||||||||
Trading | — | $ | 27,832 | — | $ | 27,832 | ||||||||||
Not for trading | — | 2,002 | — | 2,002 | ||||||||||||
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Total derivative financial instruments | — | 29,834 | — | 29,834 | ||||||||||||
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Total liabilities measured at fair value on a recurring basis | — | $ | 29,834 | — | $ | 29,834 | ||||||||||
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December 31, 2016 Assets Measured at Fair Value Debt securities available for sale: U.S. Treasury U.S. government-sponsored entities Residential mortgage-backed securities: Agency mortgage-backed securities Agency collateralized mortgage obligations Non-agency collateralized mortgage obligations Commercial mortgage-backed securities States of the U.S. and political subdivisions Other debt securities Total debt securities available for sale Equity securities available for sale: Financial services industry Insurance services industry Total equity securities available for sale Total securities available for sale Derivative financial instruments: Trading Not for trading Total derivative financial instruments Total assets measured at fair value on a recurring basis Liabilities Measured at Fair Value Derivative financial instruments: Trading Not for trading Total derivative financial instruments Total liabilities measured at fair value on a recurring basis (in thousands) Level 1 Level 2 Level 3 Total $ — $ 29,953 $ — $ 29,953 — 365,098 — 365,098 — 1,252,798 — 1,252,798 — 535,974 — 535,974 — 3 894 897 — 1,291 — 1,291 — 35,849 — 35,849 — 9,487 — 9,487 — 2,230,453 894 2,231,347 — — 492 492 148 — — 148 148 — 492 640 148 2,230,453 1,386 2,231,987 — 44,951 — 44,951 — 9,269 — 9,269 — 54,220 — 54,220 $ 148 $ 2,284,673 $ 1,386 $ 2,286,207 — $ 45,973 — $ 45,973 — 1,294 — 1,294 — 47,267 — 47,267 — $ 47,267 — $ 47,267
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
| March 31, 2018 | |||||||||||||||
| Assets Measured at Fair Value | |||||||||||||||
| Debt securities available for sale | |||||||||||||||
| U.S. government-sponsored entities | $ | — | $ | 358,648 | $ | — | $ | 358,648 | |||||||
| Residential mortgage-backed securities: | |||||||||||||||
| Agency mortgage-backed securities | — | 1,671,573 | — | 1,671,573 | |||||||||||
| Agency collateralized mortgage obligations | — | 832,350 | — | 832,350 | |||||||||||
| Non-agency collateralized mortgage obligations | — | 1 | — | 1 | |||||||||||
| Commercial mortgage-backed securities | — | 39,213 | — | 39,213 | |||||||||||
| States of the U.S. and political subdivisions | — | 21,023 | — | 21,023 | |||||||||||
| Other debt securities | — | 4,655 | — | 4,655 | |||||||||||
| Total debt securities available for sale | — | 2,927,463 | — | 2,927,463 | |||||||||||
| Loans held for sale | — | 21,610 | — | 21,610 | |||||||||||
| Marketable equity securities | |||||||||||||||
| Fixed income mutual fund | 177 | — | — | 177 | |||||||||||
| Financial services industry | — | 944 | — | 944 | |||||||||||
| Total marketable equity securities | 177 | 944 | — | 1,121 | |||||||||||
| Derivative financial instruments | |||||||||||||||
| Trading | — | 18,683 | — | 18,683 | |||||||||||
| Not for trading | — | 229 | 1,380 | 1,609 | |||||||||||
| Total derivative financial instruments | — | 18,912 | 1,380 | 20,292 | |||||||||||
| Total assets measured at fair value on a recurring basis | $ | 177 | $ | 2,968,929 | $ | 1,380 | $ | 2,970,486 | |||||||
| Liabilities Measured at Fair Value | |||||||||||||||
| Derivative financial instruments | |||||||||||||||
| Trading | $ | — | $ | 47,930 | $ | — | $ | 47,930 | |||||||
| Not for trading | — | 3,957 | 5 | 3,962 | |||||||||||
| Total derivative financial instruments | — | 51,887 | 5 | 51,892 | |||||||||||
| Total liabilities measured at fair value on a recurring basis | $ | — | $ | 51,887 | $ | 5 | $ | 51,892 | |||||||
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
| December 31, 2017 | |||||||||||||||
| Assets Measured at Fair Value | |||||||||||||||
| Debt securities available for sale | |||||||||||||||
| U.S. government-sponsored entities | $ | — | $ | 343,942 | $ | — | $ | 343,942 | |||||||
| Residential mortgage-backed securities: | |||||||||||||||
| Agency mortgage-backed securities | — | 1,598,874 | — | 1,598,874 | |||||||||||
| Agency collateralized mortgage obligations | — | 794,957 | — | 794,957 | |||||||||||
| Non-agency collateralized mortgage obligations | — | 1 | — | 1 | |||||||||||
| States of the U.S. and political subdivisions | — | 21,093 | — | 21,093 | |||||||||||
| Other debt securities | — | 4,670 | — | 4,670 | |||||||||||
| Total debt securities available for sale | — | 2,763,537 | — | 2,763,537 | |||||||||||
| Equity securities available for sale | |||||||||||||||
| Fixed income mutual fund | 161 | — | — | 161 | |||||||||||
| Financial services industry | — | 864 | — | 864 | |||||||||||
| Total equity securities available for sale | 161 | 864 | — | 1,025 | |||||||||||
| Total securities available for sale | 161 | 2,764,401 | — | 2,764,562 | |||||||||||
| Loans held for sale | — | 56,458 | — | 56,458 | |||||||||||
| Derivative financial instruments | |||||||||||||||
| Trading | — | 28,453 | — | 28,453 | |||||||||||
| Not for trading | — | 500 | 1,594 | 2,094 | |||||||||||
| Total derivative financial instruments | — | 28,953 | 1,594 | 30,547 | |||||||||||
| Total assets measured at fair value on a recurring basis | $ | 161 | $ | 2,849,812 | $ | 1,594 | $ | 2,851,567 | |||||||
| Liabilities Measured at Fair Value | |||||||||||||||
| Derivative financial instruments | |||||||||||||||
| Trading | $ | — | $ | 26,953 | $ | — | $ | 26,953 | |||||||
| Not for trading | — | 2,239 | 5 | 2,244 | |||||||||||
| Total derivative financial instruments | — | 29,192 | 5 | 29,197 | |||||||||||
| Total liabilities measured at fair value on a recurring basis | $ | — | $ | 29,192 | $ | 5 | $ | 29,197 | |||||||
| (in thousands) | Other Debt Securities | Equity Securities | Residential Non-Agency Collateralized Mortgage Obligations | Interest Rate Lock Commitments | Total | |||||||||||||||
Three Months Ended March 31, 2017 | ||||||||||||||||||||
Balance at beginning of period | $ | — | $ | 492 | $ | 894 | $ | — | $ | 1,386 | ||||||||||
Total gains (losses) – realized/unrealized: | ||||||||||||||||||||
Included in earnings | — | — | 4 | — | 4 | |||||||||||||||
Included in other comprehensive income | — | 86 | (6 | ) | — | 80 | ||||||||||||||
Accretion included in earnings | (1 | ) | — | 1 | — | — | ||||||||||||||
Purchases, issuances, sales and settlements: | ||||||||||||||||||||
Purchases | 12,048 | — | — | — | 12,048 | |||||||||||||||
Issuances | — | — | — | — | — | |||||||||||||||
Sales/redemptions | — | — | (874 | ) | — | (874 | ) | |||||||||||||
Settlements | — | — | (19 | ) | — | (19 | ) | |||||||||||||
Transfers from Level 3 | — | (578 | ) | — | — | (578 | ) | |||||||||||||
Transfers into Level 3 | — | — | — | 1,252 | 1,252 | |||||||||||||||
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Balance at end of period | $ | 12,047 | $ | — | $ | — | $ | 1,252 | $ | 13,299 | ||||||||||
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Year Ended December 31, 2016 | ||||||||||||||||||||
Balance at beginning of period | $ | — | $ | 439 | $ | 1,184 | $ | — | $ | 1,623 | ||||||||||
Total gains (losses) – realized/unrealized: | ||||||||||||||||||||
Included in earnings | — | — | — | — | — | |||||||||||||||
Included in other comprehensive income | — | 53 | (7 | ) | — | 46 | ||||||||||||||
Accretion included in earnings | — | — | 6 | — | 6 | |||||||||||||||
Purchases, issuances, sales and settlements: | ||||||||||||||||||||
Purchases | — | — | — | — | — | |||||||||||||||
Issuances | — | — | — | — | — | |||||||||||||||
Sales/redemptions | — | — | — | — | — | |||||||||||||||
Settlements | — | — | (289 | ) | — | (289 | ) | |||||||||||||
Transfers from Level 3 | — | — | — | — | — | |||||||||||||||
Transfers into Level 3 | — | — | — | — | — | |||||||||||||||
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Balance at end of period | $ | — | $ | 492 | $ | 894 | $ | — | $ | 1,386 | ||||||||||
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| (in thousands) | Other Debt Securities | Equity Securities | Residential Non-Agency Collateralized Mortgage Obligations | Interest Rate Lock Commitments | Total | ||||||||||||||
| Three Months Ended March 31, 2018 | |||||||||||||||||||
| Balance at beginning of period | $ | — | $ | — | $ | — | $ | 1,594 | $ | 1,594 | |||||||||
| Purchases, issuances, sales and settlements: | |||||||||||||||||||
| Purchases | — | — | — | 1,380 | 1,380 | ||||||||||||||
| Settlements | — | — | — | (1,594 | ) | (1,594 | ) | ||||||||||||
| Balance at end of period | $ | — | $ | — | $ | — | $ | 1,380 | $ | 1,380 | |||||||||
| Year Ended December 31, 2017 | |||||||||||||||||||
| Balance at beginning of period | $ | — | $ | 492 | $ | 894 | $ | — | $ | 1,386 | |||||||||
| Total gains (losses) – realized/unrealized: | |||||||||||||||||||
| Included in earnings | — | — | 4 | — | 4 | ||||||||||||||
| Included in other comprehensive income | — | 86 | (6 | ) | — | 80 | |||||||||||||
| Accretion included in earnings | (1 | ) | — | 1 | — | — | |||||||||||||
| Purchases, issuances, sales and settlements: | |||||||||||||||||||
| Purchases | 12,048 | — | — | 1,594 | 13,642 | ||||||||||||||
| Sales/redemptions | (12,047 | ) | — | (874 | ) | — | (12,921 | ) | |||||||||||
| Settlements | — | — | (19 | ) | (4,569 | ) | (4,588 | ) | |||||||||||
| Transfers from Level 3 | — | (578 | ) | — | — | (578 | ) | ||||||||||||
| Transfers into Level 3 | — | — | — | 4,569 | 4,569 | ||||||||||||||
| Balance at end of period | $ | — | $ | — | $ | — | $ | 1,594 | $ | 1,594 | |||||||||
unrealized gains relating to the adoption of ASU 2016-01 and market value adjustments on marketable equity securities. These unrealized gains included in earnings are in the other non-interest income line item in the consolidated statement of income. For the three months ended March 31, 2017, and 2016, there were no gains or losses included in earnings attributable to the change in unrealized gains or losses relating to assets still held as of those dates. The total (losses)realized net securities gains included in earnings are in the net securities (losses) gains line item in the consolidated statementsConsolidated Statements of income.
Income.
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
March 31, 2017 | ||||||||||||||||
Impaired loans | — | $ | 1,812 | $ | 6,953 | $ | 8,765 | |||||||||
Other real estate owned | — | 643 | 1,199 | 1,842 | ||||||||||||
December 31, 2016 | ||||||||||||||||
Impaired loans | — | $ | 500 | $ | 5,883 | $ | 6,383 | |||||||||
Other real estate owned | — | 11,017 | 3,181 | 14,198 | ||||||||||||
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
| March 31, 2018 | |||||||||||||||
| Impaired loans | $ | — | $ | 2,032 | $ | 1,475 | $ | 3,507 | |||||||
| Other real estate owned | — | — | 1,621 | 1,621 | |||||||||||
| Other assets - SBA servicing asset | — | — | 5,062 | 5,062 | |||||||||||
| December 31, 2017 | |||||||||||||||
| Impaired loans | $ | — | $ | 2,813 | $ | 1,297 | $ | 4,110 | |||||||
| Other real estate owned | — | 10,513 | 10,823 | 21,336 | |||||||||||
| Loans held for sale - SBA | — | — | 36,432 | 36,432 | |||||||||||
| Other assets - SBA servicing asset | — | — | 5,058 | 5,058 | |||||||||||
2018.
2018.
Statements of the Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 28, 2018 for a description of valuation methodologies for derivative assets and liabilities measured at fair value.
| Fair Value Measurements | ||||||||||||||||||||
| (in thousands) | Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||
March 31, 2017 | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 450,383 | $ | 450,383 | $ | 450,383 | $ | — | $ | — | ||||||||||
Securities available for sale | 2,638,815 | 2,638,815 | 3,881 | 2,622,887 | 12,047 | |||||||||||||||
Securities held to maturity | 2,922,152 | 2,886,897 | — | 2,886,897 | — | |||||||||||||||
Net loans and leases (1) | 20,092,138 | 19,823,712 | — | 11,121 | 19,812,591 | |||||||||||||||
Loan servicing rights | 28,205 | 32,301 | — | — | 32,301 | |||||||||||||||
Derivative assets | 32,991 | 32,991 | — | 31,739 | 1,252 | |||||||||||||||
Accrued interest receivable | 77,638 | 77,638 | 77,638 | — | — | |||||||||||||||
Financial Liabilities | ||||||||||||||||||||
Deposits | 21,326,272 | 21,298,707 | 17,446,603 | 3,852,104 | — | |||||||||||||||
Short-term borrowings | 3,585,963 | 3,586,486 | 3,586,486 | — | — | |||||||||||||||
Long-term borrowings | 696,206 | 688,209 | — | — | 688,209 | |||||||||||||||
Derivative liabilities | 29,834 | 29,834 | — | 29,834 | — | |||||||||||||||
Accrued interest payable | 10,947 | 10,947 | 10,947 | — | — | |||||||||||||||
December 31, 2016 | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 371,407 | $ | 371,407 | $ | 371,407 | $ | — | $ | — | ||||||||||
Securities available for sale | 2,231,987 | 2,231,987 | 148 | 2,230,453 | 1,386 | |||||||||||||||
Securities held to maturity | 2,337,342 | 2,294,777 | — | 2,293,091 | 1,686 | |||||||||||||||
Net loans and leases (1) | 14,750,792 | 14,446,274 | — | — | 14,464,274 | |||||||||||||||
Loan servicing rights | 13,521 | 17,546 | — | — | 17,546 | |||||||||||||||
Derivative assets | 54,220 | 54,220 | — | 54,220 | — | |||||||||||||||
Accrued interest receivable | 58,712 | 58,712 | 58,712 | — | — | |||||||||||||||
Financial Liabilities | ||||||||||||||||||||
Deposits | 16,065,647 | 16,045,323 | 13,489,152 | 2,556,171 | — | |||||||||||||||
Short-term borrowings | 2,503,010 | 2,503,277 | 2,503,277 | — | — | |||||||||||||||
Long-term borrowings | 539,494 | 536,088 | — | — | 536,088 | |||||||||||||||
Derivative liabilities | 47,267 | 47,267 | — | 47,267 | — | |||||||||||||||
Accrued interest payable | 7,612 | 7,612 | 7,612 | — | — | |||||||||||||||
| Fair Value Measurements | |||||||||||||||||||
| (in thousands) | Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||
| March 31, 2018 | |||||||||||||||||||
| Financial Assets | |||||||||||||||||||
| Cash and cash equivalents | $ | 386,329 | $ | 386,329 | $ | 386,329 | $ | — | $ | — | |||||||||
| Debt securities available for sale | 2,927,463 | 2,927,463 | — | 2,927,463 | — | ||||||||||||||
| Debt securities held to maturity | 3,224,000 | 3,131,964 | — | 3,131,964 | — | ||||||||||||||
| Net loans and leases, including loans held for sale | 21,121,132 | 20,900,639 | — | 21,610 | 20,879,029 | ||||||||||||||
| Loan servicing rights | 35,853 | 41,878 | — | — | 41,878 | ||||||||||||||
| Marketable equity securities | 1,121 | 1,121 | 177 | 944 | — | ||||||||||||||
| Derivative assets | 20,292 | 20,292 | — | 18,912 | 1,380 | ||||||||||||||
| Accrued interest receivable | 95,082 | 95,082 | 95,082 | — | — | ||||||||||||||
| Financial Liabilities | |||||||||||||||||||
| Deposits | 22,497,089 | 22,441,017 | 17,755,830 | 4,685,187 | — | ||||||||||||||
| Short-term borrowings | 3,802,480 | 3,802,988 | 3,802,988 | — | — | ||||||||||||||
| Long-term borrowings | 659,890 | 663,085 | — | — | 663,085 | ||||||||||||||
| Derivative liabilities | 51,892 | 51,892 | — | 51,887 | 5 | ||||||||||||||
| Accrued interest payable | 12,762 | 12,762 | 12,762 | — | — | ||||||||||||||
| December 31, 2017 | |||||||||||||||||||
| Financial Assets | |||||||||||||||||||
| Cash and cash equivalents | $ | 479,443 | $ | 479,443 | $ | 479,443 | $ | — | $ | — | |||||||||
| Securities available for sale | 2,764,562 | 2,764,562 | 161 | 2,764,401 | — | ||||||||||||||
| Debt securities held to maturity | 3,242,268 | 3,218,379 | — | 3,218,379 | — | ||||||||||||||
| Net loans and leases, including loans held for sale | 20,916,277 | 20,661,196 | — | 56,458 | 20,604,738 | ||||||||||||||
| Loan servicing rights | 34,111 | 37,758 | — | — | 37,758 | ||||||||||||||
| Derivative assets | 30,547 | 30,547 | — | 28,953 | 1,594 | ||||||||||||||
| Accrued interest receivable | 94,254 | 94,254 | 94,254 | — | — | ||||||||||||||
| Financial Liabilities | |||||||||||||||||||
| Deposits | 22,399,725 | 22,359,182 | 17,779,246 | 4,579,936 | — | ||||||||||||||
| Short-term borrowings | 3,678,337 | 3,678,723 | 3,678,723 | — | — | ||||||||||||||
| Long-term borrowings | 668,173 | 675,489 | — | — | 675,489 | ||||||||||||||
| Derivative liabilities | 29,197 | 29,197 | — | 29,192 | 5 | ||||||||||||||
| Accrued interest payable | 12,480 | 12,480 | 12,480 | — | — | ||||||||||||||
IMPORTANT
This
In addition1995 including our expectations relative to factors previously disclosed inbusiness and financial metrics, our reports filed with the SEC, the following risk factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: changes inoutlook regarding revenues, expenses, earnings. liquidity, asset quality and credit risk; changes in general economic, political or industry conditions; uncertainty in U.S. fiscal policy and monetary policy, including interest rate policies of the Federal Reserve Board (FRB); the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer acceptance of our products and services; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures;statements regarding the impact extentof technology enhancements and timing of technological changes, capital management activities, competitive pressures on product pricingcustomer and services; ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; success, impact and timing of our business strategies, including market acceptance of any new products or services; and implementing our banking philosophy and strategies. Additional risks include the nature, extent, timing and results of governmental and regulatory actions, examinations, reviews, reforms, regulations and interpretations, including those related to the Dodd-Frank Wall Street Reform Act and Consumer Protection Act (Dodd-Frank Act) and Basel III regulatory or capital reforms (including Dodd-Frank Act stress testing protocols (DFAST)), as well as those involving the Office of the Comptroller of the Currency (OCC), FRB, Federal Deposit Insurance Corporation (FDIC), Financial Stability Oversight Council and Consumer Financial Protection Board; and other factors that may affect our future results. There is no assurance that any of the risks, uncertainties or risk factors identified herein is complete and actual results or events may differ materially from those expressed or implied in the forward-looking statements contained in this document.
Additional factors that could cause results to differ materially from those described above can be found in our Annual Report onForm 10-K for the year ended December 31, 2016, which is on file with the SEC and available in the “Investor Relations & Shareholder Services” section of our website,http://www.fnbcorporation.com, under the heading “Reports and Filings” and in other documents we file with the SEC.
process improvements.
may be expressed in a variety of ways, including the use of future and present tense language expressing expectations or predictions of future financial or business performance or conditions based on current performance and trends. Forward-looking statements are typically identified by words such as, "believe," "plan," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "will," "should," "project," "goal," and other similar words and expressions. These forward-looking statements involve certain risks and uncertainties. In addition to factors previously disclosed in our reports filed with the SEC, the following factors among others, could cause actual results to differ materially from forward-looking statements or historical performance: changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; potential difficulties encountered in expanding into a new and remote geographic market; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business and technology initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with acquisitions and divestitures; inability to originate and re-sell mortgage loans in accordance with business plans; economic conditions; interruption in or breach of security of our information systems; integrity and functioning of products, information systems and services provided by third party external vendors; changes in tax rules and regulations or interpretations including, but not limited to, the recently enacted Tax Cuts and Jobs Act;
changes in accounting policies, standards and interpretations; liquidity risk; changes in asset valuations;and the impact, extent and timing of technological changes, capital management activities, and other actions of the OCC, the FRB, the Consumer Financial Protection Bureau, the FDIC and legislative and regulatory actions and reforms.2017.
We
Non-GAAP
We continue to grow organically and through our successful acquisition of YDKN, which closed on March 11, 2017. On the acquisition date, the estimated fair values of the acquired assets and assumed liabilities included $6.8 billion in assets, $5.1 billion in loans, and $5.2 billion in deposits. The acquisition was valued at $1.8 billion based on the acquisition date FNB common stock closing price of $15.97. Under the terms of the merger agreement, shareholders of YDKN received 2.16 shares of FNB common stock for each share of YDKN common stock.
Commercial loan growthperformances in several key areas during the first quarter of 2017 was largely driven2018. Our operating net income available to common stockholders and earnings per common share increased 56% and 13%, respectively, compared to the prior year, led by activitysolid growth in the Pittsburgh, Baltimoreloans and Cleveland metro markets. Potential commercial lending opportunities were strong, commensurate with the expanded geographicin our fee-based businesses. We are well-positioned across our footprint including new opportunities provided by the aforementioned YDKN acquisition.
to build on those trends and continue to improve our key operating metrics, as we maintain our focus on delivering earnings per share growth and improved profitability.
(March(period-end balances, March 31, 20172018 compared to December 31, 2016,2017, unless otherwise indicated)$30.2$31.7 billion, compared to $21.8$31.4 billion.
2017
Financial highlightsmajor categories of the income statement and their respective impact to the increase (decrease) in net income are summarized below:
presented in the following table:
| Three Months Ended | ||||||||||||||||
| March 31, | Dollar | Percent | ||||||||||||||
| (in thousands, except per share data) | 2017 | 2016 | Change | Change | ||||||||||||
Net interest income | $ | 172,752 | $ | 140,354 | $ | 32,398 | 23.1 | % | ||||||||
Provision for credit losses | 10,850 | 11,768 | (918 | ) | (7.8 | )% | ||||||||||
Non-interest income | 55,116 | 46,044 | 9,072 | 19.7 | % | |||||||||||
Non-interest expense | 187,555 | 136,648 | 50,907 | 37.3 | % | |||||||||||
Income taxes | 6,484 | 11,850 | (5,366 | ) | (45.3 | )% | ||||||||||
|
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|
|
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| |||||||||
Net income | 22,979 | 26,132 | (3,153 | ) | (12.1 | )% | ||||||||||
Less: Preferred stock dividends | 2,010 | 2,010 | — | — | ||||||||||||
|
|
|
|
|
|
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| |||||||||
Net income available to common stockholders | $ | 20,969 | $ | 24,122 | $ | (3,153 | ) | (13.1 | )% | |||||||
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Earnings per common share – Basic | $ | 0.09 | $ | 0.12 | $ | (0.03 | ) | (25.0 | )% | |||||||
Earnings per common share – Diluted | 0.09 | 0.12 | (0.03 | ) | (25.0 | )% | ||||||||||
Cash dividends per common share | 0.12 | 0.12 | — | — | ||||||||||||
| Three Months Ended March 31, | $ | % | ||||||||||||
| (in thousands, except per share data) | 2018 | 2017 | Change | Change | ||||||||||
| Net interest income | $ | 226,105 | $ | 172,752 | $ | 53,353 | 30.9 | % | ||||||
| Provision for credit losses | 14,495 | 10,850 | 3,645 | 33.6 | ||||||||||
| Non-interest income | 67,503 | 55,116 | 12,387 | 22.5 | ||||||||||
| Non-interest expense | 171,083 | 187,555 | (16,472 | ) | (8.8 | ) | ||||||||
| Income taxes | 21,268 | 6,484 | 14,784 | 228.0 | ||||||||||
| Net income | 86,762 | 22,979 | 63,783 | 277.6 | ||||||||||
| Less: Preferred stock dividends | 2,010 | 2,010 | — | — | ||||||||||
| Net income available to common stockholders | $ | 84,752 | $ | 20,969 | $ | 63,783 | 304.2 | % | ||||||
| Earnings per common share – Basic | $ | 0.26 | $ | 0.09 | $ | 0.17 | 188.9 | % | ||||||
| Earnings per common share – Diluted | 0.26 | 0.09 | 0.17 | 188.9 | ||||||||||
| Cash dividends per common share | 0.12 | 0.12 | — | — | ||||||||||
ratios and other relevant data used to analyze our performance:
| Three Months Ended March 31, | ||||||||
| 2017 | 2016 | |||||||
Return on average equity | 3.10 | % | 4.51 | % | ||||
Return on average tangible common equity(non-GAAP) | 6.14 | % | 8.27 | % | ||||
Return on average assets | 0.39 | % | 0.56 | % | ||||
Return on average tangible assets(non-GAAP) | 0.45 | % | 0.62 | % | ||||
| Three Months Ended March 31, | |||||||
| 2018 | 2017 | ||||||
| Return on average equity | 7.94 | % | 3.10 | % | |||
Return on average tangible common equity (2) | 18.01 | % | 6.14 | % | |||
| Return on average assets | 1.12 | % | 0.39 | % | |||
Return on average tangible assets (2) | 1.25 | % | 0.45 | % | |||
Book value per common share (1) | $ | 13.37 | $ | 13.16 | |||
Tangible book value per common share (1) (2) | $ | 6.14 | $ | 5.86 | |||
Equity to assets (1) | 14.01 | % | 14.43 | % | |||
Tangible equity to tangible assets (1) (2) | 7.14 | % | 7.18 | % | |||
Common equity to assets (1) | 13.67 | % | 14.07 | % | |||
Tangible common equity to tangible assets (1) (2) | 6.78 | % | 6.80 | % | |||
| Dividend payout ratio | 46.10 | % | 121.83 | % | |||
| Average equity to average assets | 14.07 | % | 12.50 | % | |||
| Three Months Ended March 31, | ||||||||||||||||||||||||
| 2017 | 2016 | |||||||||||||||||||||||
| (dollars in thousands) | Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Interest-bearing deposits with banks | $ | 85,663 | $ | 180 | 0.85 | % | $ | 123,445 | $ | 117 | 0.38 | % | ||||||||||||
Federal funds sold | 4,579 | 8 | 0.72 | — | — | — | ||||||||||||||||||
Taxable investment securities (1) | 4,479,439 | 22,479 | 2.01 | 3,254,474 | 16,493 | 2.03 | ||||||||||||||||||
Tax-exempt investment securities (1)(2) | 500,206 | 5,190 | 4.15 | 271,724 | 3,092 | 4.55 | ||||||||||||||||||
Loans held for sale | 12,358 | 163 | 5.61 | 6,128 | 77 | 5.06 | ||||||||||||||||||
Loans and leases (2) (3) | 16,190,470 | 170,195 | 4.26 | 13,242,792 | 138,438 | 4.20 | ||||||||||||||||||
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Total interest-earning assets (2) | 21,272,715 | 198,215 | 3.77 | 16,898,563 | 158,217 | 3.76 | ||||||||||||||||||
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Cash and due from banks | 294,739 | 248,949 | ||||||||||||||||||||||
Allowance for credit losses | (161,371 | ) | (142,943 | ) | ||||||||||||||||||||
Premises and equipment | 273,908 | 191,543 | ||||||||||||||||||||||
Other assets | 2,382,108 | 1,720,527 | ||||||||||||||||||||||
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Total assets | $ | 24,062,099 | $ | 18,916,639 | ||||||||||||||||||||
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Liabilities | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Interest-bearing demand | $ | 7,416,346 | 4,831 | 0.26 | $ | 6,116,380 | 3,456 | 0.23 | ||||||||||||||||
Savings | 2,412,798 | 521 | 0.09 | 2,053,764 | 364 | 0.07 | ||||||||||||||||||
Certificates and other time | 2,889,129 | 6,388 | 0.90 | 2,576,387 | 5,666 | 0.88 | ||||||||||||||||||
Short-term borrowings | 3,202,033 | 6,674 | 0.84 | 1,559,504 | 2,361 | 0.60 | ||||||||||||||||||
Long-term borrowings | 534,762 | 3,527 | 2.68 | 648,490 | 3,553 | 2.20 | ||||||||||||||||||
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|
|
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| |||||||||||||||||
Total interest-bearing liabilities | 16,455,068 | 21,941 | 0.54 | 12,954,525 | 15,400 | 0.48 | ||||||||||||||||||
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Non-interest-bearing demand | 4,414,354 | 3,449,230 | ||||||||||||||||||||||
Other liabilities | 184,824 | 183,169 | ||||||||||||||||||||||
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| |||||||||||||||||||||
Total liabilities | 21,054,246 | 16,586,924 | ||||||||||||||||||||||
Stockholders’ equity | 3,007,853 | 2,329,715 | ||||||||||||||||||||||
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| |||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 24,062,099 | $ | 18,916,639 | ||||||||||||||||||||
|
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Excess of interest-earning assets over interest-bearing liabilities | $ | 4,817,647 | $ | 3,944,038 | ||||||||||||||||||||
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| |||||||||||||||||||||
Net interest income FTE (2) | 176,274 | 142,817 | ||||||||||||||||||||||
Tax-equivalent adjustment | (3,522 | ) | (2,463 | ) | ||||||||||||||||||||
|
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| |||||||||||||||||||||
Net interest income | $ | 172,752 | $ | 140,354 | ||||||||||||||||||||
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Net interest spread | 3.23 | % | 3.28 | % | ||||||||||||||||||||
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Net interest margin (2) | 3.35 | % | 3.40 | % | ||||||||||||||||||||
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| Three Months Ended March 31, | |||||||||||||||||||||
| 2018 | 2017 | ||||||||||||||||||||
| (dollars in thousands) | Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | |||||||||||||||
| Assets | |||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||
| Interest-bearing deposits with banks | $ | 103,904 | $ | 360 | 1.40 | % | $ | 85,663 | $ | 180 | 0.85 | % | |||||||||
| Federal funds sold | — | — | — | 4,579 | 8 | 0.72 | |||||||||||||||
Taxable investment securities (1) | 5,046,294 | 26,879 | 2.13 | 4,479,439 | 22,479 | 2.01 | |||||||||||||||
Tax-exempt investment securities (1)(2) | 951,021 | 8,278 | 3.48 | 500,206 | 5,190 | 4.15 | |||||||||||||||
| Loans held for sale | 65,897 | 911 | 5.56 | 12,358 | 163 | 5.61 | |||||||||||||||
Loans and leases (2) (3) | 21,155,619 | 239,602 | 4.58 | 16,190,470 | 170,195 | 4.26 | |||||||||||||||
Total interest-earning assets (2) | 27,322,735 | 276,030 | 4.08 | 21,272,715 | 198,215 | 3.77 | |||||||||||||||
| Cash and due from banks | 358,717 | 294,739 | |||||||||||||||||||
| Allowance for credit losses | (180,478 | ) | (161,371 | ) | |||||||||||||||||
| Premises and equipment | 336,816 | 273,908 | |||||||||||||||||||
| Other assets | 3,656,716 | 2,382,108 | |||||||||||||||||||
| Total assets | $ | 31,494,506 | $ | 24,062,099 | |||||||||||||||||
| Liabilities | |||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| Deposits: | |||||||||||||||||||||
| Interest-bearing demand | $ | 9,388,774 | 11,454 | 0.49 | $ | 7,416,346 | 4,831 | 0.26 | |||||||||||||
| Savings | 2,536,439 | 1,031 | 0.17 | 2,412,798 | 521 | 0.09 | |||||||||||||||
| Certificates and other time | 4,637,032 | 13,984 | 1.20 | 2,889,129 | 6,388 | 0.90 | |||||||||||||||
| Short-term borrowings | 3,985,254 | 15,207 | 1.54 | 3,202,033 | 6,674 | 0.84 | |||||||||||||||
| Long-term borrowings | 660,970 | 5,146 | 3.16 | 534,762 | 3,527 | 2.68 | |||||||||||||||
| Total interest-bearing liabilities | 21,208,469 | 46,822 | 0.89 | 16,455,068 | 21,941 | 0.54 | |||||||||||||||
| Non-interest-bearing demand | 5,607,640 | 4,414,354 | |||||||||||||||||||
| Other liabilities | 248,128 | 184,824 | |||||||||||||||||||
| Total liabilities | 27,064,237 | 21,054,246 | |||||||||||||||||||
| Stockholders’ equity | 4,430,269 | 3,007,853 | |||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 31,494,506 | $ | 24,062,099 | |||||||||||||||||
| Excess of interest-earning assets over interest-bearing liabilities | $ | 6,114,266 | $ | 4,817,647 | |||||||||||||||||
Net interest income (FTE) (2) | 229,208 | 176,274 | |||||||||||||||||||
| Tax-equivalent adjustment | (3,103 | ) | (3,522 | ) | |||||||||||||||||
| Net interest income | $ | 226,105 | $ | 172,752 | |||||||||||||||||
| Net interest spread | 3.19 | % | 3.23 | % | |||||||||||||||||
Net interest margin (2) | 3.39 | % | 3.35 | % | |||||||||||||||||
| (1) | The average balances and yields earned on securities are based on historical cost. |
| (2) | The interest income amounts are reflected on |
| (3) | Average balances includenon-accrual loans. Loans and leases consist of average total loans less average unearned income. |
2017: Interest Income Interest-bearing deposits with banks Federal funds sold Securities (2) Loans held for sale Loans and leases (2) Total interest income (2) Interest Expense Deposits: Interest-bearing demand Savings Certificates and other time Short-term borrowings Long-term borrowings Total interest expense Net change (2) Net interest income, which is our principal source of revenue, is the difference between interest income from interest-earning assets and interest expense paid on interest-bearing liabilities. 2017,2018, net interest income, which comprised 75.8%77.0% of revenue (net interest income plusnon-interest income) compared to 75.3%75.8% for the same period in 2016,2017, was affected by the general level of interest rates, changes in interest rates, the timing of repricing of assets and liabilities, the shape of the yield curve, the level ofnon-accrual loans and changes in the amount and mix of interest-earning assets and interest-bearing liabilities.aan FTE basis(non-GAAP) increased $33.5$52.9 million or 23.4%30.0% from $142.8 million for the first quarter of 2016 to $176.3 million for the first quarterthree months of 2017.2017 to $229.2 million for the first three months of 2018. Average interest earninginterest-earning assets of $21.3$27.3 billion increased $4.4$6.1 billion or 25.9%28.4% and average interest-bearing liabilities of $16.5$21.2 billion increased $3.5$4.8 billion or 27.0%28.9% from 2016the first quarter of 2017 due to the acquisitions of YDKNYadkin acquisition and METR and Fifth Third branches, combined with organic growth in loans and deposits. Our net interest margin FTE (non-GAAP) was 3.35%3.39% for the first quarterthree months of 2017,2018, compared to 3.40%3.35% for the same period of 2016,2017, due to an extended lowa higher interest rate environment, and competitive landscape for earning assets, partially offset by theas well as higher purchase accounting impacts.accretion. Thetax-equivalent adjustments(non-GAAP) to net interest income from amounts reported on our financial statements are shown in the preceding table.aan FTE basis(non-GAAP) attributable to changes in the average volumes and yields earned on interest-earning assets and the average volume and rates paid for interest-bearing liabilities for the three months ended March 31, 2017,2018, compared to the three months ended March 31, 2016:(in thousands) Volume Rate Net $ (45 ) $ 108 $ 63 8 — 8 8,781 (697 ) 8,084 77 9 86 30,028 1,729 31,757 38,849 1,149 39,998 765 610 1,375 138 19 157 639 83 722 3,464 849 4,313 (693 ) 667 (26 ) 4,313 2,228 6,541 $ 34,536 $ (1,079 ) $ 33,457 (in thousands) Volume Rate Net Interest Income Interest-bearing deposits with banks $ 44 $ 136 $ 180 Federal funds sold (4 ) (4 ) (8 ) 7,001 487 7,488 Loans held for sale 736 9 745 55,292 14,118 69,410 63,069 14,746 77,815 Interest Expense Deposits: Interest-bearing demand 1,761 4,862 6,623 Savings 17 493 510 Certificates and other time 4,735 2,861 7,596 Short-term borrowings 2,114 6,419 8,533 Long-term borrowings 988 631 1,619 Total interest expense 9,615 15,266 24,881 $ 53,454 $ (520 ) $ 52,934 (1) The amount of change not solely due to rate or volume changes was allocated between the change due to rate and the change due to volume based on the net size of the rate and volume changes. (2) Interest income amounts are reflected on an FTE basis(non-GAAP) which adjusts for the tax benefit of income on certaintax-exempt loans and investments using the federal statutory tax rate of 21% in 2018 and 35% for each period presented.in 2017. We believe this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable andnon-taxable amounts.
increased $1.2$1.0 billion or 37.6%20.4%, primarily as a result of replacing the securities portfolio acquired from YDKN with new securities.and the subsequent repositioning of that portfolio. The yield on average interest-earning assets(non-GAAP) increased 131 basis point points
2018. The 31 basis points increase in earning asset yield was driven by an increase in yields in both investments and loans.
mix.
| Three Months Ended | ||||||||||||||||
| March 31, | Dollar | Percent | ||||||||||||||
| (dollars in thousands) | 2017 | 2016 | Change | Change | ||||||||||||
Provision for credit losses: | ||||||||||||||||
Originated | $ | 11,336 | $ | 12,840 | $ | (1,504 | ) | (11.7 | )% | |||||||
Acquired | (486 | ) | (1,072 | ) | 586 | (54.7 | )% | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total provision for credit losses | $ | 10,850 | $ | 11,768 | $ | (918 | ) | (7.8 | )% | |||||||
|
|
|
|
|
|
|
| |||||||||
Net loan charge-offs: | ||||||||||||||||
Originated | $ | 7,914 | $ | 5,905 | $ | 2,009 | 34.0 | % | ||||||||
Acquired | 213 | 75 | 138 | 184.0 | % | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total net loan charge-offs | $ | 8,127 | $ | 5,980 | $ | 2,147 | 35.9 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net loan charge-offs (annualized) / total average loans and leases | 0.20 | % | 0.18 | % | ||||||||||||
Net originated loan charge-offs (annualized) / total average originated loans and leases | 0.25 | % | 0.21 | % | ||||||||||||
| Three Months Ended March 31, | $ | % | ||||||||||||
| (dollars in thousands) | 2018 | 2017 | Change | Change | ||||||||||
| Provision for credit losses: | ||||||||||||||
| Originated | $ | 14,770 | $ | 11,337 | $ | 3,433 | 30.3 | % | ||||||
| Acquired | (275 | ) | (487 | ) | 212 | (43.5 | ) | |||||||
| Total provision for credit losses | $ | 14,495 | $ | 10,850 | $ | 3,645 | 33.6 | % | ||||||
| Net loan charge-offs: | ||||||||||||||
| Originated | $ | 11,042 | $ | 7,914 | $ | 3,128 | 39.5 | % | ||||||
| Acquired | (414 | ) | 213 | (627 | ) | (294.4 | ) | |||||||
| Total net loan charge-offs | $ | 10,628 | $ | 8,127 | $ | 2,501 | 30.8 | % | ||||||
| Net loan charge-offs (annualized) / total average loans and leases | 0.20 | % | 0.20 | % | ||||||||||
| Net originated loan charge-offs (annualized) / total average originated loans and leases | 0.29 | % | 0.25 | % | ||||||||||
| Three Months Ended | ||||||||||||||||
| March 31, | Dollar | Percent | ||||||||||||||
| (in thousands) | 2017 | 2016 | Change | Change | ||||||||||||
Service charges | $ | 24,807 | $ | 21,134 | $ | 3,673 | 17.4 | % | ||||||||
Trust services | 5,747 | 5,282 | 465 | 8.8 | % | |||||||||||
Insurance commissions and fees | 5,141 | 4,921 | 220 | 4.5 | % | |||||||||||
Securities commissions and fees | 3,623 | 3,374 | 249 | 7.4 | % | |||||||||||
Capital markets income | 3,847 | 2,849 | 998 | 35.0 | % | |||||||||||
Mortgage banking operations | 3,790 | 1,595 | 2,195 | 137.5 | % | |||||||||||
Bank owned life insurance | 2,153 | 2,095 | 58 | 2.8 | % | |||||||||||
Net securities gains | 2,625 | 71 | 2,554 | n/m | �� | |||||||||||
Other | 3,383 | 4,723 | (1,340 | ) | (28.4 | )% | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Totalnon-interest income | $ | 55,116 | $ | 46,044 | $ | 9,072 | 19.7 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
n/m – not meaningful
| Three Months Ended March 31, | $ | % | ||||||||||||
| (dollars in thousands) | 2018 | 2017 | Change | Change | ||||||||||
| Service charges | $ | 30,077 | $ | 24,581 | $ | 5,496 | 22.4 | % | ||||||
| Trust services | 6,448 | 5,747 | 701 | 12.2 | ||||||||||
| Insurance commissions and fees | 5,135 | 5,141 | (6 | ) | (0.1 | ) | ||||||||
| Securities commissions and fees | 4,319 | 3,623 | 696 | 19.2 | ||||||||||
| Capital markets income | 5,214 | 3,847 | 1,367 | 35.5 | ||||||||||
| Mortgage banking operations | 5,529 | 3,790 | 1,739 | 45.9 | ||||||||||
| Bank owned life insurance | 3,285 | 2,153 | 1,132 | 52.6 | ||||||||||
| Net securities gains | — | 2,625 | (2,625 | ) | (100.0 | ) | ||||||||
| Other | 7,496 | 3,609 | 3,887 | 107.7 | ||||||||||
| Total non-interest income | $ | 67,503 | $ | 55,116 | $ | 12,387 | 22.5 | % | ||||||
accounts.
Capital markets income2018.
2017. However, sold loan margins have been lower in both retail and correspondent loans due to competitive pressure.
acquisition. We did not record any securities gains for the first three months of 2018.
| Three Months Ended | ||||||||||||||||
| March 31, | Dollar | Percent | ||||||||||||||
| (in thousands) | 2017 | 2016 | Change | Change | ||||||||||||
Salaries and employee benefits | $ | 73,578 | $ | 56,425 | $ | 17,153 | 30.4 | % | ||||||||
Net occupancy | 11,349 | 9,266 | 2,083 | 22.5 | % | |||||||||||
Equipment | 9,630 | 8,556 | 1,074 | 12.5 | % | |||||||||||
Amortization of intangibles | 3,098 | 2,649 | 449 | 16.9 | % | |||||||||||
Outside services | 13,043 | 9,303 | 3,740 | 40.2 | % | |||||||||||
FDIC insurance | 5,387 | 3,968 | 1,419 | 37.5 | % | |||||||||||
Supplies | 2,196 | 2,654 | (458 | ) | (17.3 | )% | ||||||||||
Bank shares and franchise taxes | 2,980 | 2,617 | 363 | 13.9 | % | |||||||||||
Merger-related | 52,724 | 24,940 | 27,784 | n/m | ||||||||||||
Other | 13,570 | 16,270 | (2,700 | ) | (16.6 | )% | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Totalnon-interest expense | $ | 187,555 | $ | 136,648 | $ | 50,907 | 37.3 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Three Months Ended March 31, | $ | % | ||||||||||||
| (dollars in thousands) | 2018 | 2017 | Change | Change | ||||||||||
| Salaries and employee benefits | $ | 89,326 | $ | 73,578 | $ | 15,748 | 21.4 | % | ||||||
| Net occupancy | 15,568 | 11,349 | 4,219 | 37.2 | ||||||||||
| Equipment | 14,465 | 9,630 | 4,835 | 50.2 | ||||||||||
| Amortization of intangibles | 4,218 | 3,098 | 1,120 | 36.2 | ||||||||||
| Outside services | 14,725 | 13,043 | 1,682 | 12.9 | ||||||||||
| FDIC insurance | 8,834 | 5,387 | 3,447 | 64.0 | ||||||||||
| Supplies | 1,684 | 2,196 | (512 | ) | (23.3 | ) | ||||||||
| Bank shares and franchise taxes | 3,452 | 2,980 | 472 | 15.8 | ||||||||||
| Merger-related | — | 52,724 | (52,724 | ) | (100.0 | ) | ||||||||
| Other | 18,811 | 13,570 | 5,241 | 38.6 | ||||||||||
| Total non-interest expense | $ | 171,083 | $ | 187,555 | $ | (16,472 | ) | (8.8 | )% | |||||
year-ago quarter.
benefit costs.
YDKN.
YDKN acquisition.
Supplies expense of $2.2$18.8 million and $13.6 million for the first quarter of 2017 decreased $0.5 million or 17.3% from the same period of 2016, primarily as a result of equipment related supplies now being reflected in equipment expense on the consolidated statements of income.
Bank shares and franchise taxes of $3.0 million for the first quarter of 2017 increased $0.4 million or 13.9% from the same period of 2016, primarily due to a higher assessment base resulting from enhanced capital levels at FNBPA in conjunction with the recent acquisitions.
During the first quarter of 2017, we recorded $52.7 million in merger-related expense, primarily associated with the YDKN acquisition. During the same period of 2016, we recorded $24.9 million in merger-related expense, primarily associated with the acquisitions of METR and Fifth Third branches. These expenses are specific to each individual transaction, and may vary significantly based on the size and complexity of the transaction.
The following table summarizes the composition of the merger-related expense for the three months ended March 31,of 2018 and 2017, and 2016:
TABLE 8
| Three Months Ended March 31, | ||||||||
| (in thousands) | 2017 | 2016 | ||||||
Professional services | $ | 25,564 | $ | 7,126 | ||||
Severance and other employee benefit costs | 17,105 | 14,155 | ||||||
Charitable contributions | 5,600 | — | ||||||
Data processing conversion costs | 2,669 | 1,259 | ||||||
Marketing costs | 1,000 | 930 | ||||||
Other expenses | 786 | 1,470 | ||||||
|
|
|
| |||||
Total merger-related expense | $ | 52,724 | $ | 24,940 | ||||
|
|
|
| |||||
Othernon-interest expense was $13.6 million and $16.3 million for the first quarter of 2017 and 2016, respectively. During the first quarterthree months of 2017, we recorded $0.62018, business development costs increased by $1.0 million, moremiscellaneous losses increased by $0.9 million, historic and other tax credit investments expense increased by $0.8 million and marketing expense increased by $0.8 million. These increases were primarily related to the expanded operations in expense relating to low income housing tax credits, $0.4 million less OREO expenseNorth and $0.5 million less loan-related expense. Additionally, during the first quarterSouth Carolina.
| Three Months Ended March 31, | ||||||||
| (dollars in thousands) | 2017 | 2016 | ||||||
Income tax expense | $ | 6,484 | $ | 11,850 | ||||
Effective tax rate | 22.0 | % | 31.2 | % | ||||
Statutory tax rate | 35.0 | % | 35.0 | % | ||||
8
| Three Months Ended March 31, | |||||||
| (dollars in thousands) | 2018 | 2017 | |||||
| Income tax expense | $ | 21,268 | $ | 6,484 | |||
| Effective tax rate | 19.7 | % | 22.0 | % | |||
| Statutory tax rate | 21.0 | % | 35.0 | % | |||
was impacted by the TCJA-enacted 21% federal statutory rate while the year-ago quarter was impacted by merger-related expenses.
Consolidated Balance Sheets:
| (dollars in thousands) | March 31, 2017 | December 31, 2016 | Dollar Change | Percent Change | ||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 450,383 | $ | 371,407 | $ | 78,976 | 21.3 | % | ||||||||
Securities | 5,560,967 | 4,569,329 | 991,638 | 21.7 | % | |||||||||||
Loans held for sale | 75,270 | 11,908 | 63,362 | 532.1 | % | |||||||||||
Loans and leases, net | 20,016,868 | 14,738,884 | 5,277,984 | 35.8 | % | |||||||||||
Goodwill and other intangibles | 2,385,004 | 1,099,456 | 1,285,548 | 116.9 | % | |||||||||||
Other assets | 1,702,203 | 1,053,833 | 648,370 | 61.5 | % | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Assets | $ | 30,190,695 | $ | 21,844,817 | $ | 8,345,878 | 38.2 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||
Deposits | $ | 21,326,272 | $ | 16,065,647 | $ | 5,260,625 | 32.7 | % | ||||||||
Borrowings | 4,282,169 | 3,042,504 | 1,239,665 | 40.7 | % | |||||||||||
Other liabilities | 226,459 | 165,049 | 61,410 | 37.2 | % | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total liabilities | 25,834,900 | 19,273,200 | 6,561,700 | 34.0 | % | |||||||||||
Stockholders’ equity | 4,355,795 | 2,571,617 | 1,784,178 | 69.4 | % | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Liabilities and Stockholders’ Equity | $ | 30,190,695 | $ | 21,844,817 | $ | 8,345,878 | 38.2 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
The March 31, 2017 balance sheet includes the YDKN acquisition mentioned previously.
9
| (dollars in thousands) | March 31, 2018 | December 31, 2017 | $ Change | % Change | ||||||||||
| Assets | ||||||||||||||
| Cash and cash equivalents | $ | 386,329 | $ | 479,443 | $ | (93,114 | ) | (19.4 | )% | |||||
| Securities | 6,151,463 | 6,006,830 | 144,633 | 2.4 | ||||||||||
| Loans held for sale | 37,982 | 92,891 | (54,909 | ) | (59.1 | ) | ||||||||
| Loans and leases, net | 21,083,150 | 20,823,386 | 259,764 | 1.2 | ||||||||||
| Goodwill and other intangibles | 2,339,139 | 2,341,263 | (2,124 | ) | (0.1 | ) | ||||||||
| Other assets | 1,654,290 | 1,673,822 | (19,532 | ) | (1.2 | ) | ||||||||
| Total Assets | $ | 31,652,353 | $ | 31,417,635 | $ | 234,718 | 0.7 | % | ||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||
| Deposits | $ | 22,497,089 | $ | 22,399,725 | $ | 97,364 | 0.4 | % | ||||||
| Borrowings | 4,462,370 | 4,346,510 | 115,860 | 2.7 | ||||||||||
| Other liabilities | 259,441 | 262,206 | (2,765 | ) | (1.1 | ) | ||||||||
| Total liabilities | 27,218,900 | 27,008,441 | 210,459 | 0.8 | ||||||||||
| Stockholders’ equity | 4,433,453 | 4,409,194 | 24,259 | 0.6 | ||||||||||
| Total Liabilities and Stockholders’ Equity | $ | 31,652,353 | $ | 31,417,635 | $ | 234,718 | 0.7 | % | ||||||
were sold during this same period.
| (in thousands) | March 31, 2017 | December 31, 2016 | Dollar Change | Percent Change | ||||||||||||
Commercial real estate | $ | 26,558 | $ | 21,225 | $ | 5,333 | 25.1 | % | ||||||||
Commercial and industrial | 37,864 | 26,256 | 11,608 | 44.2 | % | |||||||||||
Commercial leases | 2,017 | 3,429 | (1,412 | ) | (41.2 | )% | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total commercial loans and leases | 66,439 | 50,910 | 15,529 | 30.5 | % | |||||||||||
Direct installment | 16,279 | 14,952 | 1,327 | 8.9 | % | |||||||||||
Residential mortgages | 15,731 | 13,367 | 2,364 | 17.7 | % | |||||||||||
Indirect installment | 1,686 | 2,181 | (495 | ) | (22.7 | )% | ||||||||||
Consumer lines of credit | 4,243 | 3,497 | 746 | 21.3 | % | |||||||||||
Other | 1,000 | 1,000 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Totalnon-performing loans and leases | $ | 105,378 | $ | 85,907 | $ | 19,471 | 22.7 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
10
| (in thousands) | March 31, 2018 | December 31, 2017 | $ Change | % Change | ||||||||||
| Commercial real estate | $ | 33,697 | $ | 31,399 | $ | 2,298 | 7.3 | % | ||||||
| Commercial and industrial | 25,587 | 22,740 | 2,847 | 12.5 | ||||||||||
| Commercial leases | 1,399 | 1,574 | (175 | ) | (11.1 | ) | ||||||||
| Other | 1,000 | 1,000 | — | — | ||||||||||
| Total commercial loans and leases | 61,683 | 56,713 | 4,970 | 8.8 | ||||||||||
| Direct installment | 15,722 | 16,725 | (1,003 | ) | (6.0 | ) | ||||||||
| Residential mortgages | 16,135 | 16,409 | (274 | ) | (1.7 | ) | ||||||||
| Indirect installment | 2,424 | 2,435 | (11 | ) | (0.5 | ) | ||||||||
| Consumer lines of credit | 6,172 | 5,834 | 338 | 5.8 | ||||||||||
| Total consumer loans | 40,453 | 41,403 | (950 | ) | (2.3 | ) | ||||||||
| Total non-performing loans and leases | $ | 102,136 | $ | 98,116 | $ | 4,020 | 4.1 | % | ||||||
| (in thousands) | Performing | Non- Performing | Non- Accrual | Total | ||||||||||||
Originated | ||||||||||||||||
March 31, 2017 | ||||||||||||||||
Commercial real estate | $ | 109 | $ | 127 | $ | 3,593 | $ | 3,829 | ||||||||
Commercial and industrial | — | 1 | 896 | 897 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total commercial loans | 109 | 128 | 4,489 | 4,726 | ||||||||||||
Direct installment | 10,851 | 8,518 | 2,017 | 21,386 | ||||||||||||
Residential mortgages | 4,530 | 9,683 | 1,426 | 15,639 | ||||||||||||
Indirect installment | — | 198 | — | 198 | ||||||||||||
Consumer lines of credit | 2,062 | 1,132 | 930 | 4,124 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total TDRs | $ | 17,552 | $ | 19,659 | $ | 8,862 | $ | 46,073 | ||||||||
|
|
|
|
|
|
|
| |||||||||
December 31, 2016 | ||||||||||||||||
Commercial real estate | $ | — | $ | 162 | $ | 3,857 | $ | 4,019 | ||||||||
Commercial and industrial | — | 4 | 2,113 | 2,117 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total commercial loans | — | 166 | 5,970 | 6,136 | ||||||||||||
Direct installment | 10,414 | 8,468 | 1,597 | 20,479 | ||||||||||||
Residential mortgages | 4,730 | 10,051 | 1,128 | 15,909 | ||||||||||||
Indirect installment | — | 198 | 2 | 200 | ||||||||||||
Consumer lines of credit | 1,961 | 1,369 | 338 | 3,668 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total TDRs | $ | 17,105 | $ | 20,252 | $ | 9,035 | $ | 46,392 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Acquired | ||||||||||||||||
March 31, 2017 | ||||||||||||||||
Commercial real estate | $ | — | $ | 1,976 | $ | 481 | $ | 2,457 | ||||||||
Commercial and industrial | — | 183 | — | 183 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total commercial loans | — | 2,159 | 481 | 2,640 | ||||||||||||
Direct installment | — | 4 | 81 | 85 | ||||||||||||
Residential mortgages | — | 1,583 | — | 1,583 | ||||||||||||
Indirect installment | — | — | — | — | ||||||||||||
Consumer lines of credit | 272 | 583 | — | 855 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total TDRs | $ | 272 | $ | 4,329 | $ | 562 | $ | 5,163 | ||||||||
|
|
|
|
|
|
|
| |||||||||
December 31, 2016 | ||||||||||||||||
Commercial real estate | $ | — | $ | — | — | $ | — | |||||||||
Commercial and industrial | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total commercial loans | — | — | — | — | ||||||||||||
Direct installment | — | — | — | — | ||||||||||||
Residential mortgages | — | — | — | — | ||||||||||||
Indirect installment | — | — | — | — | ||||||||||||
Consumer lines of credit | 365 | 176 | — | 541 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total TDRs | $ | 365 | $ | 176 | — | $ | 541 | |||||||||
|
|
|
|
|
|
|
| |||||||||
11
| (in thousands) | Performing | Non- Performing | Non- Accrual | Total | |||||||||||
| Originated | |||||||||||||||
| March 31, 2018 | |||||||||||||||
| Commercial real estate | $ | 86 | $ | — | $ | 3,929 | $ | 4,015 | |||||||
| Commercial and industrial | 2,750 | 1,230 | 587 | 4,567 | |||||||||||
| Total commercial loans | 2,836 | 1,230 | 4,516 | 8,582 | |||||||||||
| Direct installment | 11,092 | 7,241 | 3,546 | 21,879 | |||||||||||
| Residential mortgages | 3,716 | 10,881 | 2,011 | 16,608 | |||||||||||
| Indirect installment | — | 190 | 12 | 202 | |||||||||||
| Consumer lines of credit | 1,881 | 1,741 | 583 | 4,205 | |||||||||||
| Total consumer loans | 16,689 | 20,053 | 6,152 | 42,894 | |||||||||||
| Total TDRs | $ | 19,525 | $ | 21,283 | $ | 10,668 | $ | 51,476 | |||||||
| December 31, 2017 | |||||||||||||||
| Commercial real estate | $ | 92 | $ | — | $ | 3,870 | $ | 3,962 | |||||||
| Commercial and industrial | 3,085 | — | 601 | 3,686 | |||||||||||
| Total commercial loans | 3,177 | — | 4,471 | 7,648 | |||||||||||
| Direct installment | 10,890 | 7,758 | 3,197 | 21,845 | |||||||||||
| Residential mortgages | 3,659 | 10,638 | 2,161 | 16,458 | |||||||||||
| Indirect installment | — | 195 | 14 | 209 | |||||||||||
| Consumer lines of credit | 1,812 | 1,582 | 629 | 4,023 | |||||||||||
| Total consumer loans | 16,361 | 20,173 | 6,001 | 42,535 | |||||||||||
| Total TDRs | $ | 19,538 | $ | 20,173 | $ | 10,472 | $ | 50,183 | |||||||
| Acquired | |||||||||||||||
| March 31, 2018 | |||||||||||||||
| Commercial real estate | $ | — | $ | 2,613 | $ | — | $ | 2,613 | |||||||
| Commercial and industrial | — | — | — | — | |||||||||||
| Total commercial loans | — | 2,613 | — | 2,613 | |||||||||||
| Direct installment | — | 70 | — | 70 | |||||||||||
| Residential mortgages | — | — | — | — | |||||||||||
| Indirect installment | — | — | — | — | |||||||||||
| Consumer lines of credit | 249 | 486 | 357 | 1,092 | |||||||||||
| Total consumer loans | 249 | 556 | 357 | 1,162 | |||||||||||
| Total TDRs | $ | 249 | $ | 3,169 | $ | 357 | $ | 3,775 | |||||||
| December 31, 2017 | |||||||||||||||
| Commercial real estate | $ | — | $ | 2,651 | $ | — | $ | 2,651 | |||||||
| Commercial and industrial | — | — | — | — | |||||||||||
| Total commercial loans | — | 2,651 | — | 2,651 | |||||||||||
| Direct installment | 15 | 71 | — | 86 | |||||||||||
| Residential mortgages | — | — | — | — | |||||||||||
| Indirect installment | — | — | — | — | |||||||||||
| Consumer lines of credit | 251 | 586 | 234 | 1,071 | |||||||||||
| Total consumer loans | 266 | 657 | 234 | 1,157 | |||||||||||
| Total TDRs | $ | 266 | $ | 3,308 | $ | 234 | $ | 3,808 | |||||||
Also see Note 5, Loans and Leases, of the Notes to Consolidated Financial Statements (Unaudited).
| At or For the Three Months Ended | ||||||||||||
| March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||||
Non-performing loans / total originated loans and leases | 0.77 | % | 0.66 | % | 0.74 | % | ||||||
Non-performing loans + OREO / total originated loans and leases + OREO | 1.12 | % | 0.91 | % | 1.18 | % | ||||||
Allowance for credit losses (originated loans) / total originated loans and leases | 1.19 | % | 1.20 | % | 1.26 | % | ||||||
Net charge-offs on originated loans and leases (annualized) / total average originated loans and leases | 0.25 | % | 0.38 | % | 0.21 | % | ||||||
12
| At or For the Three Months Ended | ||||||||
| March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||
| Non-performing loans / total originated loans and leases | 0.58 | % | 0.57 | % | 0.77 | % | ||
| Non-performing loans + OREO / total originated loans and leases + OREO | 0.81 | % | 0.81 | % | 1.12 | % | ||
| Allowance for credit losses (originated loans) / total originated loans and leases | 1.08 | % | 1.10 | % | 1.19 | % | ||
| Net charge-offs on originated loans and leases (annualized) / total average originated loans and leases | 0.29 | % | 0.35 | % | 0.25 | % | ||
| (in thousands) | March 31, 2017 | December 31, 2016 | Dollar Change | Percent Change | ||||||||||||
Non-interest-bearing demand | $ | 5,537,679 | $ | 4,205,337 | $ | 1,332,342 | 31.7 | % | ||||||||
Interest-bearing demand | 9,285,393 | 6,931,381 | 2,354,012 | 34.0 | % | |||||||||||
Savings | 2,623,531 | 2,352,434 | 271,097 | 11.5 | % | |||||||||||
Certificates and other time deposits | 3,879,669 | 2,576,495 | 1,303,174 | 50.6 | % | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total deposits | $ | 21,326,272 | $ | 16,065,647 | $ | 5,260,625 | 32.7 | % | ||||||||
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| |||||||||
13
| (in thousands) | March 31, 2018 | December 31, 2017 | $ Change | % Change | ||||||||||
| Non-interest-bearing demand | $ | 5,748,568 | $ | 5,720,030 | $ | 28,538 | 0.5 | % | ||||||
| Interest-bearing demand | 9,407,111 | 9,571,038 | (163,927 | ) | (1.7 | ) | ||||||||
| Savings | 2,600,151 | 2,488,178 | 111,973 | 4.5 | ||||||||||
| Certificates and other time deposits | 4,741,259 | 4,620,479 | 120,780 | 2.6 | ||||||||||
| Total deposits | $ | 22,497,089 | $ | 22,399,725 | $ | 97,364 | 0.4 | % | ||||||
Our management believes that, as of March 31, 2017 and December 31, 2016, FNB and FNBPA met all “well-capitalized” requirements to which each of them was subject.
Our management believes that, as of March 31, 2018 and December 31, 2017, FNB and FNBPA met all “well-capitalized” requirements to which each of them was subject.
| Actual | Well-Capitalized Requirements | Minimum Capital Requirements | ||||||||||||||||||||||
| (dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||
March 31, 2017 | ||||||||||||||||||||||||
F.N.B. Corporation | ||||||||||||||||||||||||
Total capital | $ | 2,571,515 | 11.5 | % | $ | 2,240,678 | 10.0 | % | $ | 2,072,627 | 9.3 | % | ||||||||||||
Tier 1 capital | 2,098,821 | 9.4 | 1,792,543 | 8.0 | 1,624,492 | 7.3 | ||||||||||||||||||
Common equity tier 1 | 1,993,140 | 8.9 | 1,456,441 | 6.5 | 1,288,390 | 5.8 | ||||||||||||||||||
Leverage | 2,098,821 | 9.6 | 1,088,557 | 5.0 | 870,845 | 4.0 | ||||||||||||||||||
Risk-weighted assets | 22,406,783 | |||||||||||||||||||||||
FNBPA | ||||||||||||||||||||||||
Total capital | 2,418,927 | 10.8 | 2,231,844 | 10.0 | 2,064,456 | 9.3 | ||||||||||||||||||
Tier 1 capital | 2,258,291 | 10.1 | 1,785,475 | 8.0 | 1,618,087 | 7.3 | ||||||||||||||||||
Common equity tier 1 | 2,178,911 | 9.8 | 1,450,699 | 6.5 | 1,283,310 | 5.8 | ||||||||||||||||||
Leverage | 2,258,291 | 10.5 | 1,079,694 | 5.0 | 863,755 | 4.0 | ||||||||||||||||||
Risk-weighted assets | 22,318,442 | |||||||||||||||||||||||
December 31, 2016 | ||||||||||||||||||||||||
F.N.B. Corporation | ||||||||||||||||||||||||
Total capital | $ | 1,917,386 | 12.0 | % | $ | 1,597,951 | 10.0 | % | $ | 1,378,232 | 8.6 | % | ||||||||||||
Tier 1 capital | 1,582,251 | 9.9 | 1,278,360 | 8.0 | 1,058,642 | 6.6 | ||||||||||||||||||
Common equity tier 1 | 1,475,369 | 9.2 | 1,038,668 | 6.5 | 818,950 | 5.1 | ||||||||||||||||||
Leverage | 1,582,251 | 7.7 | 1,027,831 | 5.0 | 822,265 | 4.0 | ||||||||||||||||||
Risk-weighted assets | 15,979,505 | |||||||||||||||||||||||
FNBPA | ||||||||||||||||||||||||
Total capital | 1,768,561 | 11.1 | 1,588,989 | 10.0 | 1,370,503 | 8.6 | ||||||||||||||||||
Tier 1 capital | 1,614,167 | 10.2 | 1,271,191 | 8.0 | 1,052,705 | 6.6 | ||||||||||||||||||
Common equity tier 1 | 1,534,167 | 9.7 | 1,032,843 | 6.5 | 814,357 | 5.1 | ||||||||||||||||||
Leverage | 1,614,167 | 7.9 | 1,019,034 | 5.0 | 815,227 | 4.0 | ||||||||||||||||||
Risk-weighted assets | 15,889,893 | |||||||||||||||||||||||
14
| Actual | Well-Capitalized Requirements | Minimum Capital Requirements plus Capital Conservation Buffer | ||||||||||||||||||
| (dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||
| As of March 31, 2018 | ||||||||||||||||||||
| F.N.B. Corporation | ||||||||||||||||||||
| Total capital | $ | 2,707,398 | 11.5 | % | $ | 2,362,790 | 10.0 | % | $ | 2,333,255 | 9.9 | % | ||||||||
| Tier 1 capital | 2,219,884 | 9.4 | 1,890,232 | 8.0 | 1,860,697 | 7.9 | ||||||||||||||
| Common equity tier 1 | 2,113,002 | 8.9 | 1,535,813 | 6.5 | 1,506,278 | 6.4 | ||||||||||||||
| Leverage | 2,219,884 | 7.6 | 1,462,494 | 5.0 | 1,169,995 | 4.0 | ||||||||||||||
| Risk-weighted assets | 23,627,896 | |||||||||||||||||||
| FNBPA | ||||||||||||||||||||
| Total capital | 2,543,802 | 10.8 | % | 2,354,540 | 10.0 | % | 2,325,108 | 9.9 | % | |||||||||||
| Tier 1 capital | 2,368,177 | 10.1 | 1,883,632 | 8.0 | 1,854,200 | 7.9 | ||||||||||||||
| Common equity tier 1 | 2,288,177 | 9.7 | 1,530,451 | 6.5 | 1,501,019 | 6.4 | ||||||||||||||
| Leverage | 2,368,177 | 8.2 | 1,453,002 | 5.0 | 1,162,401 | 4.0 | ||||||||||||||
| Risk-weighted assets | 23,545,397 | |||||||||||||||||||
| As of December 31, 2017 | ||||||||||||||||||||
| F.N.B. Corporation | ||||||||||||||||||||
| Total capital | $ | 2,666,272 | 11.4 | % | $ | 2,340,362 | 10.0 | % | $ | 2,164,835 | 9.3 | % | ||||||||
| Tier 1 capital | 2,184,571 | 9.3 | 1,872,290 | 8.0 | 1,696,763 | 7.3 | ||||||||||||||
| Common equity tier 1 | 2,077,689 | 8.9 | 1,521,235 | 6.5 | 1,345,708 | 5.8 | ||||||||||||||
| Leverage | 2,184,571 | 7.6 | 1,440,797 | 5.0 | 1,152,638 | 4.0 | ||||||||||||||
| Risk-weighted assets | 23,403,622 | |||||||||||||||||||
| FNBPA | ||||||||||||||||||||
| Total capital | 2,504,191 | 10.7 | % | 2,332,593 | 10.0 | % | 2,157,649 | 9.3 | % | |||||||||||
| Tier 1 capital | 2,332,892 | 10.0 | 1,866,075 | 8.0 | 1,691,130 | 7.3 | ||||||||||||||
| Common equity tier 1 | 2,252,892 | 9.7 | 1,516,186 | 6.5 | 1,341,241 | 5.8 | ||||||||||||||
| Leverage | 2,332,892 | 8.1 | 1,432,604 | 5.0 | 1,146,084 | 4.0 | ||||||||||||||
| Risk-weighted assets | 23,325,934 | |||||||||||||||||||
FNB and FNBPA will continue to meet all “well-capitalized” requirements after Basel III is completely phased-in.
of 2010 (Dodd-Frank Act)
Enhanced Regulatory Capital Standards
Regulatory capital reform initiatives continue to be updated and released which may impose additional conditions and restrictions on our current business practices and capital strategies.
In July 2013, the FRB published the Basel III Capital Rules (Basel III) establishing a new comprehensive capital framework for U.S. banking organizations. The rules implement the Basel Committee’s December 2010 framework for strengthening international capital standards as well as certain provisions
The final rule, which became effective for us on January 1, 2015, includes aphase-in period through January 1, 2019 for several provisions of the rule, including the new minimum capital ratio requirements and the capital conservation buffer.
As required by the Dodd-Frank Act, the FRB and OCC published final rules regarding DFAST rules. The DFAST rules require institutions, such as FNB and FNBPA, with average total consolidated assets greater than $10 billion, to conduct an annualcompany-run stress test of capital, consolidated earnings and losses under one base and at least two stress scenarios provided by the federal bank regulators. Implementation of the DFAST rules for covered institutions with total consolidated assets between $10 billion and $50 billion began in 2013. The DFAST rules and guidance require increased involvement by boards of directors in the stress testing process and public disclosure of the results. Public disclosure of summary stress test results under the severely adverse scenario began in June 2015 for stress tests commencing in 2014. The public disclosure of FNB’s stress testing results using data as of December 31, 2015 was in October 2016. Our capital ratios reflected in these stress test calculations exceeded the well-capitalized levels, even under the severely adverse scenario. This is an important factor considered by the FRB and OCC in evaluating the capital adequacy of FNB and FNBPA and whether the appropriateness of any proposed payments of dividends or stock repurchases may be an unsafe or unsound practice. In reviewing FNB’s and FNBPA’s stress test results, the FRB and OCC will consider both quantitative and qualitative factors.
LIQUIDITY
Our goal in liquidity management is to satisfy the cash flow requirements of customers and the operating cash needs of FNB with cost-effective funding. TheOur Board of Directors has established an Asset/Liability Management Policy in order to guide management in achieving and maintaining earnings performance consistent with long-term goals, while maintaining acceptable levels of interest rate risk, a “well-capitalized” balance sheet and adequate levels of liquidity. Our Board of Directors has also established a Contingency Funding Policy to guide management in addressing stressed liquidity conditions. These policies designate our Asset/Liability Committee (ALCO) as the body responsible for meeting these objectives. The ALCO, which is comprised of members of executive management, reviews liquidity on a continuous basis and approves significant changes in strategies that affect balance sheet or cash flow positions. Liquidity is centrally managed on a daily basis by our Treasury Department.
one-time payouts related to the YDKN acquisition.
| (dollars in thousands) | March 31, | December 31, | Internal limit | ||||||||
Liquidity coverage ratio | 1.8 times | > 1 time | |||||||||
Months of cash on hand | 10.1 months | 10.2 months | > 12 months | ||||||||
interest checking balances.
| (dollars in thousands) | March 31, 2017 | December 31, 2016 | ||||||
Unused wholesale credit availability | $ | 6,558,336 | $ | 6,343,433 | ||||
Unused wholesale credit availability as a % of FNBPA assets | 21.9 | % | 29.3 | % | ||||
Salable unpledged government and agency securities | $ | 2,069,574 | $ | 1,451,157 | ||||
Salable unpledged government and agency securities as a % of FNBPA assets | 6.9 | % | 6.7 | % | ||||
16
| (dollars in thousands) | March 31, 2018 | December 31, 2017 | |||||
| Unused wholesale credit availability | $ | 8,227,214 | $ | 8,189,379 | |||
| Unused wholesale credit availability as a % of FNBPA assets | 26.2 | % | 26.3 | % | |||
| Salable unpledged government and agency securities | $ | 2,290,999 | $ | 2,231,812 | |||
| Salable unpledged government and agency securities as a % of FNBPA assets | 7.3 | % | 7.2 | % | |||
Management calculates this ratio at least quarterly and it is reviewed monthly by ALCO.
| (dollars in thousands) | Within 1 Month | 2-3 Months | 4-6 Months | 7-12 Months | Total 1 Year | |||||||||||||||
Assets | ||||||||||||||||||||
Loans | $ | 528,112 | $ | 1,030,131 | $ | 1,197,696 | $ | 2,318,299 | $ | 5,074,238 | ||||||||||
Investments | 134,661 | 145,676 | 244,997 | 529,396 | 1,054,730 | |||||||||||||||
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| 662,773 | 1,175,807 | 1,442,693 | 2,847,695 | 6,128,968 | ||||||||||||||||
Liabilities | ||||||||||||||||||||
Non-maturity deposits | 170,376 | 340,752 | 511,131 | 1,022,261 | 2,044,520 | |||||||||||||||
Time deposits | 233,641 | 519,682 | 582,606 | 728,786 | 2,064,715 | |||||||||||||||
Borrowings | 2,456,848 | 49,448 | 32,833 | 153,103 | 2,692,232 | |||||||||||||||
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| |||||||||||
| 2,860,865 | 909,882 | 1,126,570 | 1,904,150 | 6,801,467 | ||||||||||||||||
Period Gap (Assets - Liabilities) | $ | (2,198,092 | ) | $ | 265,925 | $ | 316,123 | $ | 943,545 | $ | (672,499 | ) | ||||||||
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Cumulative Gap | $ | (2,198,092 | ) | $ | (1,932,167 | ) | $ | (1,616,044 | ) | $ | (672,499 | ) | ||||||||
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| |||||||||||||
Cumulative Gap to Total Assets | (7.3 | )% | (6.4 | )% | (5.4 | )% | (2.2 | )% | ||||||||||||
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17
| (dollars in thousands) | Within 1 Month | 2-3 Months | 4-6 Months | 7-12 Months | Total 1 Year | ||||||||||||||
| Assets | |||||||||||||||||||
| Loans | $ | 465,764 | $ | 1,001,045 | $ | 1,245,511 | $ | 2,252,490 | $ | 4,964,810 | |||||||||
| Investments | 167,647 | 134,319 | 218,091 | 499,488 | 1,019,545 | ||||||||||||||
| 633,411 | 1,135,364 | 1,463,602 | 2,751,978 | 5,984,355 | |||||||||||||||
| Liabilities | |||||||||||||||||||
| Non-maturity deposits | 174,473 | 348,947 | 523,424 | 1,046,848 | 2,093,692 | ||||||||||||||
| Time deposits | 168,590 | 510,938 | 670,023 | 1,596,382 | 2,945,933 | ||||||||||||||
| Borrowings | 2,889,614 | 47,775 | 27,887 | 200,723 | 3,165,999 | ||||||||||||||
| 3,232,677 | 907,660 | 1,221,334 | 2,843,953 | 8,205,624 | |||||||||||||||
| Period Gap (Assets - Liabilities) | $ | (2,599,266 | ) | $ | 227,704 | $ | 242,268 | $ | (91,975 | ) | $ | (2,221,269 | ) | ||||||
| Cumulative Gap | $ | (2,599,266 | ) | $ | (2,371,562 | ) | $ | (2,129,294 | ) | $ | (2,221,269 | ) | |||||||
| Cumulative Gap to Total Assets | (8.2 | )% | (7.5 | )% | (6.7 | )% | (7.0 | )% | |||||||||||
Gap analysis and EVE are static measures that do not incorporate assumptions regarding future business. Gap analysis, while a helpful diagnostic tool, displays cash flows for only a single rate environment. EVE’s long-term horizon helps identify changes in optionality and longer-term positions. However, EVE’s liquidation perspective does not translate into the earnings-based measures that are the focus of managing and valuing a going concern. Net interest income simulations explicitly measure the exposure to earnings from changes in market rates of interest. In these simulations, our current financial position is combined with assumptions regarding future business to calculate net interest income under various hypothetical rate scenarios. The ALCO reviews earnings simulations over multiple years under various interest rate scenarios on a periodic basis. Reviewing these various measures provides us with a comprehensive view of our interest rate risk profile.
| (dollars in thousands) | Within 1 Month | 2-3 Months | 4-6 Months | 7-12 Months | Total 1 Year | |||||||||||||||
Assets | ||||||||||||||||||||
Loans | $ | 8,340,126 | $ | 1,103,797 | $ | 836,972 | $ | 1,562,431 | $ | 11,843,326 | ||||||||||
Investments | 137,906 | 164,308 | 247,640 | 546,151 | 1,096,005 | |||||||||||||||
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| |||||||||||
| 8,478,032 | 1,268,105 | 1,084,612 | 2,108,582 | 12,939,331 | ||||||||||||||||
Liabilities | ||||||||||||||||||||
Non-maturity deposits | 6,012,816 | — | — | — | 6,012,816 | |||||||||||||||
Time deposits | 334,413 | 521,101 | 579,825 | 722,512 | 2,157,851 | |||||||||||||||
Borrowings | 2,934,414 | 473,549 | 14,236 | 115,908 | 3,538,107 | |||||||||||||||
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| |||||||||||
| 9,281,643 | 994,650 | 594,061 | 838,420 | 11,708,774 | ||||||||||||||||
Off-balance sheet | (100,000 | ) | 355,000 | — | — | 255,000 | ||||||||||||||
Period Gap (assets – liabilities +off-balance sheet) | $ | (903,611 | ) | $ | 628,455 | $ | 490,551 | $ | 1,270,162 | $ | 1,485,557 | |||||||||
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Cumulative Gap | $ | (903,611 | ) | $ | (275,156 | ) | $ | 215,395 | $ | 1,485,557 | ||||||||||
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Cumulative Gap to Assets | (3.5 | )% | (1.1 | )% | (0.8 | )% | 5.7 | % | ||||||||||||
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18
| (dollars in thousands) | Within 1 Month | 2-3 Months | 4-6 Months | 7-12 Months | Total 1 Year | ||||||||||||||
| Assets | |||||||||||||||||||
| Loans | $ | 9,265,689 | $ | 855,440 | $ | 862,637 | $ | 1,551,167 | $ | 12,534,933 | |||||||||
| Investments | 167,647 | 139,319 | 270,398 | 508,833 | 1,086,197 | ||||||||||||||
| 9,433,336 | 994,759 | 1,133,035 | 2,060,000 | 13,621,130 | |||||||||||||||
| Liabilities | |||||||||||||||||||
| Non-maturity deposits | 6,134,551 | — | — | — | 6,134,551 | ||||||||||||||
| Time deposits | 268,562 | 511,290 | 668,221 | 1,591,924 | 3,039,997 | ||||||||||||||
| Borrowings | 3,382,956 | 522,775 | 10,638 | 166,225 | 4,082,594 | ||||||||||||||
| 9,786,069 | 1,034,065 | 678,859 | 1,758,149 | 13,257,142 | |||||||||||||||
| Off-balance sheet | (100,000 | ) | 405,000 | — | — | 305,000 | |||||||||||||
| Period Gap (assets – liabilities + off-balance sheet) | $ | (452,733 | ) | $ | 365,694 | $ | 454,176 | $ | 301,851 | $ | 668,988 | ||||||||
| Cumulative Gap | $ | (452,733 | ) | $ | (87,039 | ) | $ | 367,137 | $ | 668,988 | |||||||||
| Cumulative Gap to Assets | (1.6 | )% | (0.3 | )% | 1.3 | % | 2.4 | % | |||||||||||
2018. Using a static balance sheet structure, the measures do not reflect all of management's potential counteractions.
| March 31, 2017 | December 31, 2016 | ALCO Limits | ||||||||||
Net interest income change (12 months): | ||||||||||||
+ 300 basis points | 4.8 | % | 3.9 | % | n/a | |||||||
+ 200 basis points | 3.5 | % | 2.8 | % | (5.0 | )% | ||||||
+ 100 basis points | 1.8 | % | 1.5 | % | (5.0 | )% | ||||||
- 100 basis points | (3.1 | )% | (4.0 | )% | (5.0 | )% | ||||||
Economic value of equity: | ||||||||||||
+ 300 basis points | (2.9 | )% | (3.8 | )% | (25.0 | )% | ||||||
+ 200 basis points | (1.6 | )% | (2.4 | )% | (15.0 | )% | ||||||
+ 100 basis points | (0.3 | )% | (0.6 | )% | (10.0 | )% | ||||||
- 100 basis points | (3.7 | )% | (4.3 | )% | (10.0 | )% | ||||||
19
| March 31, 2018 | December 31, 2017 | ALCO Limits | ||||||
| Net interest income change (12 months): | ||||||||
| + 300 basis points | 3.3 | % | 3.0 | % | n/a | |||
| + 200 basis points | 2.4 | % | 2.3 | % | (5.0 | )% | ||
| + 100 basis points | 1.4 | % | 1.3 | % | (5.0 | )% | ||
| - 100 basis points | (3.4 | )% | (3.9 | )% | (5.0 | )% | ||
| Economic value of equity: | ||||||||
| + 300 basis points | (6.4 | )% | (5.9 | )% | (25.0 | )% | ||
| + 200 basis points | (4.0 | )% | (3.7 | )% | (15.0 | )% | ||
| + 100 basis points | (1.5 | )% | (1.2 | )% | (10.0 | )% | ||
| - 100 basis points | (1.5 | )% | (2.6 | )% | (10.0 | )% | ||
2017.
earlier.
Risk appetite is an integral element of our business and capital planning processes through our Board Risk Committee and Risk Management Council. We use our risk appetite processes to promote appropriate alignment of risk, capital and performance tactics, while also considering risk capacity and appetite constraints from both financial and non-financial risks. Our top-down risk appetite process serves as a limit for undue risk-taking for bottom-up planning from our various business functions. Our Board Risk Committee, in collaboration with our Risk Management Council, approves our risk appetite on an annual basis, or more frequently, as needed to reflect changes in the risk environment, with the goal of ensuring that our risk appetite remains consistent with our strategic plans and business operations, regulatory environment and our shareholders' expectations. Reports relating to our risk appetite and strategic plans, and our ongoing monitoring thereof, are regularly presented to our various management level risk oversight and planning committees and periodically reported up through our Board Risk Committee.
20 Net income available to common stockholders Merger-related expense Tax benefit of merger-related expense Merger-related net securities gains Tax expense of merger-related net securities gains Operating net income available to common stockholders(non-GAAP) 21 Net income per diluted common share Merger-related expense Tax benefit of merger-related expense Merger-related net securities gains Tax expense of merger-related net securities gains Operating earnings per diluted common share(non-GAAP) 22 Net income available to common stockholders (annualized) Amortization of intangibles, net of tax (annualized) Tangible net income available to common stockholders (annualized) Average total stockholders’ equity Less: Average preferred stockholder equity Less: Average intangibles (1) Average tangible common equity Return on average tangible common equity(non-GAAP) 23 Net income (annualized) Amortization of intangibles, net of tax (annualized) Tangible net income (annualized) Average total assets Less: Average intangibles (1) Average tangible assets Return on average tangible assets(non-GAAP) 24 Total stockholders’ equity Less: Preferred stockholders’ equity Less: Intangibles (1) Tangible common equity Ending common shares outstanding Tangible book value per common share(non-GAAP) We use certain TO GAAP financial information operating measures and key performance measures to provide information useful to investorsindicators discussed in understanding our operating performance, efficiency and trends, and to facilitate comparisons with our peers. Thenon-GAAP financial measures we use may differ from thenon-GAAP financial measures other financial institutions use to measure their results of operations.Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP.Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. Althoughnon-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, these measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP. Accordingly, we encourage readers to consider our Consolidated Financial Statements in their entirety and not to rely on any single financial measure.Reconciliations ofnon-GAAP operating measuresthis Report to the most directly comparable GAAP financial measures are included in the following tables.21 Three Months Ended March 31, Percent (dollars in thousands) 2017 2016 Variance $ 20,969 $ 24,122 (13.1 )% 52,724 24,940 n/m (17,579 ) (8,411 ) n/m (2,609 ) — n/m 913 — n/m $ 54,418 $ 40,651 33.9 % n/m - not meaningful Three Months Ended
March 31,(dollars in thousands) 2018 2017 Net income available to common stockholders $ 84,752 $ 20,969 Merger-related expense — 52,724 Tax benefit of merger-related expense — (17,579 ) Merger-related net securities gains — (2,609 ) Tax expense of merger-related net securities gains — 913 Operating net income available to common stockholders (non-GAAP) $ 84,752 $ 54,418 inand recent tax reform on reported results. We use operating net income available to common stockholders to better understand business performance and the underlying trends produced by core business activities. We believe merger, acquisition and severance costsmerger-related expenses are not organic costs to run our operations and facilities. These charges represent expenses to satisfy contractual obligations of an acquired entity without any useful benefit to us and to convert and consolidate the entity’s records onto our platforms. These costs are specific to each individual transaction, and may vary significantly based on the size and complexity of the transaction.22 Three Months Ended March 31, Percent 2017 2016 Variance $ 0.09 $ 0.12 (25.0 )% 0.22 0.13 n/m (0.07 ) (0.04 ) n/m (0.01 ) — n/m 0.00 — n/m $ 0.23 $ 0.21 9.5 % n/m - not meaningful Three Months Ended
March 31, 2018 2017 Net income per diluted common share $ 0.26 $ 0.09 Merger-related expense — 0.22 Tax benefit of merger-related expense — (0.07 ) Merger-related net securities gains — (0.01 ) Operating earnings per diluted common share (non-GAAP) $ 0.26 $ 0.23 23 Three Months Ended
March 31, (dollars in thousands) 2017 2016 $ 85,042 $ 97,020 8,166 6,926 $ 93,208 $ 103,946 $ 3,007,853 $ 2,329,715 (106,882 ) (106,882 ) (1,381,712 ) (965,595 ) $ 1,519,259 $ 1,257,238 6.14 % 8.27 % (1)Excludes loan servicing rights. Three Months Ended
March 31,(dollars in thousands) 2018 2017 Net income available to common stockholders (annualized) $ 343,716 $ 85,042 Amortization of intangibles, net of tax (annualized) 13,513 8,166 Tangible net income available to common stockholders (annualized) (non-GAAP) $ 357,229 $ 93,208 Average total stockholders’ equity $ 4,430,269 $ 3,007,853 Less: Average preferred stockholders' equity (106,882 ) (106,882 ) (2,339,783 ) (1,381,712 ) Average tangible common equity (non-GAAP) $ 1,983,604 $ 1,519,259 Return on average tangible common equity (non-GAAP) 18.01 % 6.14 % 24 Three Months Ended
March 31, (dollars in thousands) 2017 2016 $ 93,191 $ 105,101 8,166 6,926 $ 101,357 $ 112,027 $ 24,062,099 $ 18,916,639 (1,381,712 ) (965,595 ) $ 22,680,387 $ 17,951,044 0.45 % 0.62 % (1)Excludes loan servicing rights. Three Months Ended
March 31,(dollars in thousands) 2018 2017 Net income (annualized) $ 351,867 $ 93,191 Amortization of intangibles, net of tax (annualized) 13,513 8,166 Tangible net income (annualized) (non-GAAP) $ 365,380 $ 101,357 Average total assets $ 31,494,506 $ 24,062,099 (2,339,783 ) (1,381,712 ) Average tangible assets (non-GAAP) $ 29,154,723 $ 22,680,387 Return on average tangible assets (non-GAAP) 1.25 % 0.45 % 25 March 31, (in thousands, except per share data) 2017 2016 $ 4,355,795 $ 2,518,021 (106,882 ) (106,882 ) (2,356,800 ) (1,077,809 ) $ 1,892,113 $ 1,333,330 322,906,763 209,733,291 $ 5.86 $ 6.36 Three Months Ended
March 31,(in thousands, except per share data) 2018 2017 Total stockholders’ equity $ 4,433,453 $ 4,355,795 Less: Preferred stockholders’ equity (106,882 ) (106,882 ) (2,339,139 ) (2,356,800 ) Tangible common equity (non-GAAP) $ 1,987,432 $ 1,892,113 Ending common shares outstanding 323,686,993 322,906,763 Tangible book value per common share (non-GAAP) $ 6.14 $ 5.86 Three Months Ended
March 31,(dollars in thousands) 2018 2017 Total stockholders' equity $ 4,433,453 $ 4,355,795 (2,339,139 ) (2,356,800 ) Tangible equity (non-GAAP) $ 2,094,314 $ 1,998,995 Total assets $ 31,652,353 $ 30,190,695 (2,339,139 ) (2,356,800 ) Tangible assets (non-GAAP) $ 29,313,214 $ 27,833,895 Tangible equity / tangible assets (period-end) (non-GAAP) 7.14 % 7.18 % Three Months Ended
March 31,(dollars in thousands) 2018 2017 Total stockholders' equity $ 4,433,453 $ 4,355,795 Less: Preferred stockholders' equity (106,882 ) (106,882 ) (2,339,139 ) (2,356,800 ) Tangible common equity (non-GAAP) $ 1,987,432 $ 1,892,113 Total assets $ 31,652,353 $ 30,190,695 (2,339,139 ) (2,356,800 ) Tangible assets (non-GAAP) $ 29,313,214 $ 27,833,895 Tangible common equity / tangible assets (period-end) (non-GAAP) 6.78 % 6.80 % Three Months Ended
March 31,(dollars in thousands) 2018 2017 Non-interest expense $ 171,083 $ 187,555 Less: Amortization of intangibles (4,218 ) (3,098 ) Less: OREO expense (1,367 ) (983 ) Less: Merger-related expense — (52,724 ) Adjusted non-interest expense $ 165,498 $ 130,750 Net interest income $ 226,105 $ 172,752 Taxable equivalent adjustment 3,103 3,522 Non-interest income 67,503 55,116 Less: Net securities gains — (2,625 ) Adjusted net interest income (FTE) + non-interest income $ 296,711 $ 228,765 Efficiency ratio (FTE) (non-GAAP) 55.78 % 57.15 % (1)Excludes loan servicing rights.
TABLE 26
Net Interest Margin, excluding purchase accounting impact
| Three Months Ended March 31, | ||||||||
| 2017 | 2016 | |||||||
Net interest margin (FTE)(non-GAAP) | 3.35 | % | 3.40 | % | ||||
Purchase accounting impact | (0.07 | )% | (0.07 | )% | ||||
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| |||||
Net interest margin, excluding purchase accounting impact (FTE)(non-GAAP) | 3.28 | % | 3.33 | % | ||||
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TABLE 27
Efficiency Ratio
| Three Months Ended March 31, | ||||||||
| (dollars in thousands) | 2017 | 2016 | ||||||
Non-interest expense | $ | 187,555 | $ | 136,648 | ||||
Less: Amortization of intangibles | (3,098 | ) | (2,649 | ) | ||||
Less: OREO expense | (983 | ) | (1,409 | ) | ||||
Less: Merger-related expense | (52,724 | ) | (24,940 | ) | ||||
Less: Impairment charge on other assets | — | (2,585 | ) | |||||
|
|
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| |||||
Adjustednon-interest expense | $ | 130,750 | $ | 105,065 | ||||
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| |||||
Net interest income | $ | 172,752 | $ | 140,354 | ||||
Taxable equivalent adjustment | 3,522 | 2,463 | ||||||
Non-interest income | 55,116 | 46,044 | ||||||
Less: Net securities gains | (2,625 | ) | (71 | ) | ||||
Less: Gain on redemption of TPS | — | (2,422 | ) | |||||
|
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|
| |||||
Adjusted net interest income (FTE) +non-interest income | $ | 228,765 | $ | 186,368 | ||||
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Efficiency ratio (FTE)(non-GAAP) | 57.15 | % | 56.38 | % | ||||
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| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
| ITEM 4. | CONTROLS AND PROCEDURES |
no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within FNB have been detected. These inherent limitations include the realities that judgments in decision-makingdecision making can be faulty, and that breakdowns can occur because of simple error or mistake. In addition, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls.
| ITEM 1. | LEGAL PROCEEDINGS |
| ITEM 1A. | RISK FACTORS |
Additionally, the risk factors below relate to the recently completed acquisition
Our loan portfolio could be affected by theon-going correction in the North Carolina and South Carolina real estate markets, including reduced levels of home sales and declines in the performance of loans.
There continues to be a general real estate slowdown in some of YDKN’s former market areas, reflecting declining prices and excess inventories. As a result, home builders and commercial developers have shown signs of financial deterioration for prolonged periods before recovery. A soft residential housing market, increased delinquency rates, and a weakened secondary credit market have affected the overall mortgage industry and have impacted in the past and could in the future adversely affect the builder finance division acquired from YDKN. We make credit and reserve decisions based on the current conditions of borrowers or projects combined with our expectations for the future. If conditions are worse than forecasted, we could experience higher charge-offs and delinquencies beyond that which is provided for in the allowance for loan losses. As such, our earnings could be adversely affected through higher than anticipated provisions for loan losses.
The SBA lending program is dependent upon the federal government, and we will have specific risks associated with originating SBA loans.
We are a SBA Preferred Lender, and as a result of the YDKN acquisition, we increased our participation in the SBA lending program, which is dependent upon the federal government. SBA Preferred Lenders enable their clients to obtain SBA loans without being subject to the potentially lengthy SBA approval process necessary for lenders that are not SBA Preferred Lenders. The SBA periodically reviews the lending operations of participating lenders to assess, among other things, whether the lender exhibits prudent risk management. When weaknesses are identified, the SBA may request corrective actions or impose enforcement actions, including revocation of the lender’s Preferred Lender status. If we lose our status as a Preferred Lender, we may lose our customers to lenders who are SBA Preferred Lenders, and as a result we could experience a material adverse effect to our financial results. Any changes to the SBA program, including changes to the level of guarantee provided by the federal government on SBA loans, may also have an adverse effect on our business.
We plan to continue YDKN’s practice of selling the guaranteed portion of our SBA 7(a) loans in the secondary market. Those sales may earn premium income and/or create a stream of future servicing income. We have not previously operated a SBA lending program similar to YDKN’s. There can be no assurance that we will be able to continue originating these loans, that a secondary market will exist or that we will continue to realize premiums upon the sale of the guaranteed portion of these loans. When the guaranteed portion of our SBA 7(a) loans is sold, we will incur credit risk on thenon-guaranteed portion of the loans. We also will sharepro-ratafiled with the SBA in any recoveries. If the SBA establishes that a lossSEC on an SBA guaranteed loan is attributable to significant technical deficiencies in the manner in which the loan was originated, funded or serviced by us, the SBA may seek recovery of the principal loss related to the deficiency from us, which could materially adversely affect our results of operations. In certain situations, we may elect to repurchase previously sold portions of SBA 7(a) loans that are delinquent, which may result in higher levels of nonperforming loans.
Our decisions regarding the credit risk associated with YDKN’s loan portfolio could be incorrect and our credit mark may be inadequate, which may adversely affect our financial condition and results of operations.
Prior to the acquisition, we conducted extensive due diligence on a significant portion of the YDKN loan portfolio; however, our review did not encompass each and every loan in the YDKN loan portfolio. In accordance with customary industry practices, we evaluated the YDKN loan portfolio based on various factors including, among other things, historical loss experience, economic risks associated with each loan category, volume and types of loans, trends in classification, volume and trends in delinquencies and nonaccruals, and general economic conditions, both local and national. In this process, our management made various assumptions and judgments about the collectability of the loan portfolio, including the creditworthiness and financial condition of the borrowers, the value of the real estate, which is obtained from independent appraisers, other assets serving as collateral for the repayment of the loans, the existence of any guarantees and indemnifications and the economic environment in which the borrowers operate. In addition, the effects of probable decreases in expected principal cash flows on the YDKN loans were considered as part of our evaluation. If our assumptions and judgments turn out to be incorrect, including as a result of the fact that our due diligence review did not cover each individual loan, our estimated credit mark against the YDKN loan portfolio in total may be insufficient to cover actual loan losses after the merger is completed, and adjustments may be necessary to allow for different economic conditions or adverse developments in the YDKN loan portfolio. Additionally, deterioration in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans and other factors, both within and outside our control, may require an increase in the provision for loan losses. Material additions to the credit mark and/or allowance for loan losses would materially decrease our net income and would result in extra regulatory scrutiny and possibly supervisory action.
We may not be able to compete successfully in our new North Carolina and South Carolina markets.
We have no prior operating experience in the North Carolina and South Carolina markets, which is a more competitive market environment than our primary markets in Pennsylvania, Maryland and Ohio. Our success in these new markets will depend on a variety of factors, including our ability to successfully integrate the YDKN businesses with ours; our ability to retain and attract experienced personnel, build brand awareness, and retain existing customers as well as acquire new customers; the continued availability of desirable business opportunities and locations; and the competitive responses from other financial institutions in the new market areas. Unlike our previous acquisitions, the North Carolina and South Carolina markets are not geographically contiguous with our current market area, which could increase the difficulty of integrating the YDKN businesses with ours. Failure to compete successfully in these new market areas could have a material adverse effect on our business, financial condition and results of operations.
Hurricanes, excessive rainfall, droughts or other adverse weather events could negatively affect the local economies in the North Carolina and South Carolina markets, or disrupt our operations in those markets, which could have an adverse effect on our business or results of operations.
The economy of the coastal regions of North Carolina and South Carolina are affected, from time to time, by adverse weather events, particularly hurricanes. Upon completion of the YDKN acquisition, our market area will include the Outer Banks and other portions of coastal North Carolina. Agricultural interests are highly sensitive to excessive rainfall or droughts. We cannot predict whether, or to what extent damage caused by further weather conditions will affect our operations, customers or the economies in its North Carolina and South Carolina markets. Weather events could cause a disruption in ourday-to-day business activities in branches located in coastal communities, a decline in loan originations, destruction or decline in the value of properties securing our loans, or an increase in the risks of delinquencies, foreclosures, and loan losses. Even if a hurricane does not cause any physical damage in our North Carolina and South Carolina market areas, a turbulent hurricane season could significantly affect the market value of all coastal property.
February 28, 2018.
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
| ITEM 4. | MINE SAFETY DISCLOSURES |
| ITEM 5. | OTHER INFORMATION |
Exhibit Index
| 10.1 | ||
| | ||
| 10.2 | ||
| 31.1. | ||
| | ||
| 31.2. | ||
| | ||
| 32.1. | ||
| | ||
| 32.2. | ||
| 101 | The following materials from F.N.B. Corporation’s Quarterly Report on Form10-Q for the period ended March 31, | |
| F.N.B. Corporation | ||||||||
| Dated: | May | /s/ Vincent J. Delie, Jr. | ||||||
| Vincent J. Delie, Jr. | ||||||||
| Chairman, President and Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
| Dated: | May | /s/ Vincent J. Calabrese, Jr. | ||||||
| Vincent J. Calabrese, Jr. | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
| Dated: | May | /s/ James L. Dutey | ||||||
| James L. Dutey | ||||||||
| Corporate Controller | ||||||||
| (Principal Accounting Officer) | ||||||||
80