Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 07, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2020 | |
Entity File Number | 0-15950 | |
Entity Registrant Name | FIRST BUSEY CORPORATION | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 37-1078406 | |
Entity Address, Address Line One | 100 W. University Ave. | |
Entity Address, City or Town | Champaign | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 61820 | |
City Area Code | 217 | |
Local Phone Number | 365-4544 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | BUSE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 54,401,208 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000314489 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and due from banks | $ 133,695 | $ 136,546 |
Interest-bearing deposits | 209,153 | 392,742 |
Total cash and cash equivalents | 342,848 | 529,288 |
Debt securities available for sale | 1,765,945 | 1,648,257 |
Equity securities | 4,936 | 5,952 |
Loans held for sale, at fair value | 89,943 | 68,699 |
Portfolio loans (net of allowance for credit losses 2020 $84,384; 2019 $53,748) | 6,661,115 | 6,633,501 |
Premises and equipment, net | 149,772 | 151,267 |
Right of use asset | 9,074 | 9,490 |
Goodwill | 311,536 | 311,536 |
Other intangible assets, net | 59,036 | 61,593 |
Cash surrender value of bank owned life insurance | 174,495 | 173,595 |
Other assets | 152,705 | 102,551 |
Total assets | 9,721,405 | 9,695,729 |
Deposits: | ||
Noninterest-bearing | 1,910,673 | 1,832,619 |
Interest-bearing | 6,062,560 | 6,069,777 |
Total deposits | 7,973,233 | 7,902,396 |
Securities sold under agreements to repurchase | 167,250 | 205,491 |
Short-term borrowings | 21,358 | 8,551 |
Long-term debt | 35,595 | 83,600 |
Senior notes, net of unamortized issuance costs | 39,708 | 39,674 |
Subordinated notes, net of unamortized issuance costs | 59,273 | 59,248 |
Junior subordinated debt owed to unconsolidated trusts | 71,347 | 71,308 |
Lease liability | 9,150 | 9,552 |
Other liabilities | 126,906 | 95,475 |
Total liabilities | 8,503,820 | 8,475,295 |
Outstanding commitments and contingent liabilities (see Note 10) | ||
Stockholders' Equity | ||
Common stock, $.001 par value, authorized 66,666,667 shares; 55,910,733 shares issued | 56 | 56 |
Additional paid-in capital | 1,249,301 | 1,248,216 |
Accumulated deficit | (27,599) | (14,813) |
Accumulated other comprehensive income (loss) | 33,101 | 14,960 |
Total stockholders' equity before treasury stock | 1,254,859 | 1,248,419 |
Treasury stock at cost, 1,509,525 and 1,121,961 shares, respectively | (37,274) | (27,985) |
Total stockholders' equity | 1,217,585 | 1,220,434 |
Total liabilities and stockholders' equity | $ 9,721,405 | $ 9,695,729 |
Common shares outstanding at period end | 54,401,208 | 54,788,772 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS (Unaudited) | ||
Portfolio Loans, allowance for loan losses (in dollars) | $ 84,384 | $ 53,748 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 66,666,667 | 66,666,667 |
Common stock, shares issued | 55,910,733 | 55,910,733 |
Treasury Stock, Shares | 1,509,525 | 1,121,961 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Interest income: | ||
Interest and fees on loans | $ 72,536 | $ 71,789 |
Interest and dividends on investment securities: | ||
Taxable interest income | 9,508 | 10,184 |
Non-taxable interest income | 1,151 | 1,076 |
Other interest income | 1,238 | 1,232 |
Total interest income | 84,433 | 84,281 |
Interest expense: | ||
Deposits | 12,227 | 12,500 |
Federal funds purchased and securities sold under agreements to repurchase | 408 | 583 |
Short-term borrowings | 67 | 191 |
Long-term debt | 423 | 579 |
Senior notes | 400 | 400 |
Subordinated notes | 731 | 731 |
Junior subordinated debt owed to unconsolidated trusts | 744 | 914 |
Total interest expense | 15,000 | 15,898 |
Net interest income | 69,433 | 68,383 |
Provision for loan losses | 17,216 | 2,111 |
Net interest income after provision for loan losses | 52,217 | 66,272 |
Non-interest income: | ||
Mortgage revenue | 1,381 | 1,945 |
Income on bank owned life insurance | 1,057 | 978 |
Net gains on sales of securities | 1,574 | (174) |
Unrealized (losses) gains recognized on equity securities | (987) | 216 |
Other income | 823 | 2,074 |
Total non-interest income | 27,517 | 25,945 |
Non-interest expense: | ||
Salaries, wages and employee benefits | 34,003 | 32,341 |
Data processing | 4,395 | 4,401 |
Net occupancy expense of premises | 4,715 | 4,202 |
Furniture and equipment expenses | 2,449 | 2,095 |
Professional fees | 1,824 | 3,187 |
Amortization of intangible assets | 2,557 | 2,094 |
Other expense | 10,571 | 8,843 |
Total non-interest expense | 60,514 | 57,163 |
Income before income taxes | 19,220 | 35,054 |
Income taxes | 3,856 | 9,585 |
Net income | $ 15,364 | $ 25,469 |
Basic earnings per common share (in dollars per share) | $ 0.28 | $ 0.48 |
Diluted earnings per common share (in dollars per share) | 0.28 | 0.48 |
Dividends declared per share of common stock (in dollars per share) | $ 0.22 | $ 0.21 |
Wealth management fees | ||
Non-interest income: | ||
Non-interest income | $ 11,555 | $ 9,029 |
Fees for customer services | ||
Non-interest income: | ||
Non-interest income | 8,361 | 8,097 |
Remittance processing | ||
Non-interest income: | ||
Non-interest income | $ 3,753 | $ 3,780 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) | ||
Net income | $ 15,364 | $ 25,469 |
Unrealized gains (losses) on debt securities available for sale: | ||
Net unrealized holding gains (losses) on debt securities available for sale, net of taxes | 21,497 | 4,859 |
Net unrealized losses on debt securities transferred from held to maturity to available for sale, net of taxes | 3,416 | |
Reclassification adjustment for realized (gains) losses on debt securities | (1,108) | 132 |
Net change in unrealized gains (losses) on debt securities available for sale | 20,389 | 8,407 |
Unrealized gains (losses) on cash flow hedges: | ||
Net unrealized holding gains (losses) on cash flow hedges, net of taxes | (2,237) | |
Reclassification adjustment for realized losses (gains) on cash flow hedges | (11) | |
Net change in unrealized gains (losses) on derivative instruments | (2,248) | |
Net change in accumulated other comprehensive income (loss) | 18,141 | 8,407 |
Total comprehensive income | $ 33,505 | $ 33,876 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) | |||
Unrealized holding gains (losses) on debt securities available for sale, Tax Effect | $ (8,589) | $ (1,940) | |
Unrealized gains on debt securities transferred from held to maturity to available for sale, Tax Effect | (1,364) | ||
Amounts reclassified from accumulated other comprehensive income, Tax Effect | 448 | $ (52) | |
Tax expense on unrealized holding (losses) gains on cash flow hedges | 892 | ||
Tax expense on reclassification adjustment for realized losses (gains) on cash flow hedges included in net income | $ 4 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated (Deficit) | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total |
Beginning balance at Dec. 31, 2018 | $ 49 | $ 1,080,084 | $ (72,167) | $ (6,812) | $ (6,190) | $ 994,964 |
Beginning Balance (in shares) at Dec. 31, 2018 | 48,874,836 | |||||
Increase (decrease) in shareholders' equity | ||||||
Net income | 25,469 | 25,469 | ||||
Other comprehensive income (loss) | 8,407 | 8,407 | ||||
Issuance of treasury stock for employee stock purchase plan | 50 | 222 | 272 | |||
Issuance of treasury stock for employee stock purchase plan (in shares) | 11,731 | |||||
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax | (171) | 171 | ||||
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax (in shares) | 9,070 | |||||
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax | (72) | 72 | ||||
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax (in shares) | 3,838 | |||||
Cash dividends common stock | (10,266) | (10,266) | ||||
Stock dividend equivalents restricted stock units | 161 | (161) | ||||
Stock-based compensation | 1,014 | 1,014 | ||||
Stock issued in acquisition of Banc Ed, net of stock issuance costs | $ 7 | 166,274 | 166,281 | |||
Stock issued in acquisition of Banc Ed, net of stock issuance costs (in shares) | 6,725,152 | |||||
Ending balance at Mar. 31, 2019 | $ 56 | 1,247,340 | (57,125) | 1,595 | (5,725) | 1,186,141 |
Ending Balance (in shares) at Mar. 31, 2019 | 55,624,627 | |||||
Increase (decrease) in shareholders' equity | ||||||
Cumulative change in accounting principal | (15,922) | (15,922) | ||||
Beginning balance at Dec. 31, 2019 | $ 56 | 1,248,216 | (14,813) | 14,960 | (27,985) | 1,220,434 |
Beginning Balance (in shares) at Dec. 31, 2019 | 54,788,772 | |||||
Increase (decrease) in shareholders' equity | ||||||
Net income | 15,364 | 15,364 | ||||
Other comprehensive income (loss) | 18,141 | 18,141 | ||||
Repurchase of stock | (9,672) | (9,672) | ||||
Repurchase of stock (in shares) | (407,850) | |||||
Issuance of treasury stock for employee stock purchase plan | (38) | 269 | 231 | |||
Issuance of treasury stock for employee stock purchase plan (in shares) | 14,236 | |||||
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax | (179) | 104 | (75) | |||
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax (in shares) | 5,509 | |||||
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax | (10) | 10 | ||||
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax (in shares) | 541 | |||||
Cash dividends common stock | (12,055) | (12,055) | ||||
Stock dividend equivalents restricted stock units | 173 | (173) | ||||
Stock-based compensation | 1,139 | 1,139 | ||||
Ending balance at Mar. 31, 2020 | $ 56 | $ 1,249,301 | $ (27,599) | $ 33,101 | $ (37,274) | $ 1,217,585 |
Ending Balance (in shares) at Mar. 31, 2020 | 54,401,208 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) | ||
Cash dividends, common stock (in dollars per share) | $ 0.22 | $ 0.21 |
Stock dividends, restricted stock units (in dollars per share) | $ 0.22 | $ 0.21 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows from Operating Activities | ||
Net income | $ 15,364 | $ 25,469 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 17,216 | 2,111 |
Amortization of intangible assets | 2,557 | 2,094 |
Amortization of mortgage servicing rights | 1,276 | 536 |
Depreciation and amortization of premises and equipment | 3,165 | 2,684 |
Net amortization (accretion) of premium (discount) on portfolio loans | (2,487) | (2,694) |
Net amortization (accretion) of premium (discount) on investment securities | 1,869 | 1,355 |
Net amortization (accretion) of premium (discount) on time deposits | (374) | (333) |
Net amortization (accretion) of premium (discount) on FHLB advances and other borrowings | 93 | 34 |
Impairment of OREO | 36 | |
Impairment of mortgage servicing rights | 177 | |
(Gain) loss on sales of securities, net | (1,556) | 183 |
(Gain) loss on sale of loans, net | (3,900) | (2,141) |
(Gain) loss on sale of OREO | 1 | (3) |
(Gain) loss on sale of premises and equipment | 37 | 24 |
Realized (gain) loss on preferred stock and equity securities | (18) | (8) |
(Gain) loss on life insurance proceeds | (14) | |
Provision for deferred income taxes | 1,722 | 1,751 |
Stock-based and non-cash compensation | 1,139 | 1,014 |
Decrease in deferred compensation | (466) | |
Increase in cash surrender value of bank owned life insurance | (1,043) | (978) |
Mortgage loans originated for sale | (182,203) | (83,950) |
Proceeds from sales of mortgage loans | 165,008 | 93,463 |
Net change in operating assets and liabilities: | ||
Decrease in other assets | 991 | 2,228 |
(Decrease) increase in other liabilities | (1,194) | (5,943) |
Net cash (used in) provided by operating activities | 18,813 | 36,250 |
Cash Flows from Investing Activities | ||
Purchases of debt securities available for sale | (273,992) | (125,464) |
Proceeds from sales of equity securities | 29 | 958 |
Proceeds from sales of debt securities available for sale | 141,798 | |
Proceeds from paydowns and maturities of debt securities held to maturity | 13,822 | |
Proceeds from paydowns and maturities of debt securities available for sale | 158,536 | 43,435 |
Net cash (received) paid in acquisitions | (49,387) | |
Net change in loans | (64,338) | (72,655) |
Cash paid for premiums on bank-owned life insurance | (111) | |
Purchases of premises and equipment | (2,314) | (1,065) |
Proceeds from life insurance | 274 | |
Proceeds from disposition of premises and equipment | 607 | |
Proceeds from sale of OREO | 81 | 147 |
Net cash (used in) provided by investing activities | (181,228) | (48,411) |
Cash Flows from Financing Activities | ||
Net change in deposits | 71,211 | 75,034 |
Net change in federal funds purchased and securities sold under agreements to repurchase | (38,241) | (19,318) |
Proceeds from other borrowings | 20,000 | 60,000 |
Repayment of other borrowings | (54,000) | (1,500) |
Net change in short-term FHLB advances | (1,193) | (1,121) |
Cash dividends paid | (12,055) | (10,266) |
Purchase of treasury stock | (9,672) | |
Cash paid for withholding taxes on share-based payments | (75) | |
Common stock issuance costs | (234) | |
Net cash (used in) provided by financing activities | (24,025) | 102,595 |
Net (decrease) increase in cash and cash equivalents | (186,440) | 90,434 |
Cash and cash equivalents, beginning of period | 529,288 | 239,973 |
Cash and cash equivalents, ending of period | 342,848 | 330,407 |
Cash Payments for: | ||
Interest | 14,391 | 14,876 |
Income taxes | 500 | 690 |
Non-cash Investing and Financing Activities: | ||
OREO acquired in settlement of loans | $ 578 | 577 |
Transfer of debt securities held to maturity to available for sale | $ 573,639 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Significant Accounting Policies | |
Significant Accounting Policies | Note 1: Significant Accounting Policies Basis of Financial Statement Presentation When preparing these unaudited consolidated financial statements of First Busey Corporation and its subsidiaries (“First Busey,” “Company,” “we,” or “our”), a Nevada corporation, we have assumed that you have read the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Form 10-K”). These interim unaudited consolidated financial statements serve to update our 2019 Form 10-K and may not include all information and notes necessary to constitute a complete set of financial statements. We prepared these unaudited consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We have eliminated intercompany accounts and transactions. We have also reclassified certain prior year amounts to conform to the current period presentation. These reclassifications did not have a material impact on our consolidated financial condition or results of operations. In our opinion, the unaudited consolidated financial statements reflect all normal, recurring adjustments needed to present fairly our results for the interim periods. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. Impacts of COVID-19 First Busey is positioned to execute its mission as an essential community resource during these challenging times. The coronavirus disease 2019 (“COVID-19”) is not only impacting health and safety around the world, it is causing significant economic disruption for both individuals and businesses, making the Company’s promise of support even more important to customers. In the face of the challenges and risks posed by COVID-19, the Company remains resolute in its focus on protecting the strength and flexibility of its balance sheet. The progression of the COVID-19 pandemic in the United States began to negatively impact the Company’s results of operations during the quarter ended March 31, 2020. Going forward, COVID-19 can be expected to have a complex and significant adverse impact on the economy, the banking industry and First Busey in future fiscal periods, all subject to a high degree of uncertainty as it relates to both timing and severity. Primary areas of impact in the future for First Busey may include margin compression, increased provision expense, a deterioration in asset quality and decreased wealth management fees and fees for customer services. Subsequent Events The Company has evaluated subsequent events for potential recognition and/or disclosure through the date the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q were issued. There were no significant subsequent events for the quarter ended March 31, 2020 through the issuance date of these unaudited consolidated financial statements that warranted adjustment to or disclosure in the unaudited consolidated financial statements. Use of Estimates In preparing the accompanying unaudited consolidated financial statements in conformity with GAAP, the Company’s management is required to make estimates and assumptions that affect the amounts reported in the financial statements and the disclosures provided. Actual results could differ from those estimates. Material estimates which are particularly susceptible to significant change in the near term relate to the fair value of investment securities, fair value of assets acquired and liabilities assumed in business combinations, goodwill, income taxes and the determination of the allowance. Impact of recently adopted accounting standards On January 1, 2020, First Busey adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments – Credit Losses (“Topic 326”): Measurement of Credit Losses on Financial Instruments , as amended, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance-sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. In addition, Accounting Standards Codification (“ASC”) 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities management does not intend to sell or believes that it is more likely than not they will be required to sell. First Busey adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance-sheet credit exposures. Results for reporting periods beginning after January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP which includes a change in terminology from Allowance/Provision for Loan Losses to Allowance/Provision for Credit Losses. First Busey recorded a net decrease to retained earnings of $15.9 million as of January 1, 2020 for the cumulative effect of adopting ASC 326. This transition adjustment included $12.0 million in allowance for credit losses on loans and $3.9 million in reserve for off-balance-sheet credit exposures. First Busey adopted ASC 326 using the prospective transition approach for financial assets purchased with credit deterioration (“PCD”) that were previously classified as purchased credit impaired (“PCI”) and accounted for under ASC 310-30. In accordance with the standard, management did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. In accordance with ASC 326, the amortized cost basis of PCD assets were adjusted to reflect an allowance for credit losses for any remaining credit discount. Subsequent changes in expected cash flows will be adjusted through the allowance for credit losses. The noncredit discount will be accreted into interest income at the effective interest rate as of January 1, 2020. The following table illustrates the impact of ASC 326 (dollars in thousands) : January 1, 2020 Pre-tax Post ASC 326 Pre-ASC 326 impact of ASC 326 Adoption Adoption Adoption Assets: Allowance Commercial $ 19,006 $ 18,291 $ 715 Commercial real estate 30,496 21,190 9,306 Real estate construction 6,158 3,204 2,954 Retail real estate 13,787 10,495 3,292 Retail other 1,134 568 566 Total allowance for credit losses $ 70,581 $ 53,748 $ 16,833 Liabilities: Reserve for off-balance-sheet credit exposures $ 5,492 — 5,492 Allowance-debt securities available for sale Debt securities available for sale are not within the scope of CECL, however, the accounting for credit losses on these securities is affected by ASC 326-30. A debt security available for sale is impaired if the fair value of the security declines below its amortized cost basis. To determine the appropriate accounting, the Company must first determine if it intends to sell the security or if it is more likely than not that it will be required to sell the security before the fair value increases to at least the amortized cost basis. If either of those selling events is expected, the Company will write down the amortized cost basis of the security to its fair value. This is achieved by writing off any previously recorded allowance, if applicable, and recognizing any incremental impairment through earnings. If the Company does not intend to sell the security nor believes it more likely than not will be required to sell the security before the fair value recovers to the amortized cost basis, the Company must determine whether any of the decline in fair value has resulted from a credit loss, or if it is entirely the result of noncredit factors. The Company considers the following factors in assessing whether the decline is due to a credit loss: ● Extent to which the fair value is less than the amortized cost basis. ● Adverse conditions specifically related to the security, an industry, or a geographic area (for example, changes in the financial condition of the issuer of the security, or in the case of an asset-backed debt security, in the financial condition of the underlying loan obligors). ● Payment structure of the debt security and the likelihood of the issuer being able to make payments that increase in the future. ● Failure of the issuer of the security to make scheduled interest or principal payments. ● Any changes to the rating of the security by a rating agency. Impairment related to a credit loss must be measured using the discounted cash flow method. Credit loss recognition is limited to the fair value of the security. The impairment is recognized by establishing an allowance for credit losses through provision for credit losses. Impairment related to noncredit factors is recognized in accumulated other comprehensive income, net of applicable taxes. Accrued interest receivable for debt securities available for sale totaled $6.8 million at March 31, 2020 and is excluded from the estimate of credit losses. Accrued interest receivable is reported in Other Assets on the unaudited Consolidated Balance Sheets. Allowance – portfolio loans The allowance for credit losses is a significant estimate in the Company’s unaudited Consolidated Balance Sheet, affecting both earnings and capital. The allowance for credit losses is a valuation account that is deducted from the portfolio loans’ amortized cost bases to present the net amount expected to be collected on the portfolio loans. Portfolio loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Recoveries do not exceed the aggregate of amounts previously charged-off. The allowance for credit losses is established through provision for credit loss expense charged to income. A loan’s amortized cost basis is comprised of the unpaid principal balance of the loan, accrued interest receivable, purchase premiums or discounts, and net deferred origination fees or costs. The Company has estimated its allowance on the amortized cost basis, exclusive of accrued interest receivable. The Company writes-off uncollectible accrued interest receivable in a timely manner and has elected to not measure an allowance for accrued interest receivable. The Company presents the aggregate amount of accrued interest receivable for all financial instruments in other assets on the unaudited Consolidated Balance Sheets and the balance of accrued interest receivable is disclosed in “Note 14: Fair Value Measurements.” Its methodology influences, and is influenced by, the Company’s overall credit risk management processes. The allowance for credit losses is managed in accordance with GAAP to provide an adequate reserve for expected credit losses that is reflective of management’s best estimate of what is expected to be collected. The allowance for credit losses is measured on a collective pool basis when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated on an individual basis. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the amortized cost basis. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwiring standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions such as changes in unemployment rates, property values and other relevant factors. The calculation also contemplates that the Company may not be able to make or obtain such forecasts for the entire life of the financial assets and requires a reversion to historical credit loss information. At implementation, the Company selected an 8 quarter forecast period with an immediate reversion to historical loss rates as management felt this period could be reasonably forecasted and was consistent with forecast periods used in other areas of finance. During the first quarter of 2020, the Company reduced its reasonable and supportable forecast period from 8 quarters to 4 quarters. Due to rapidly changing forecasts around the impact of COVID-19, the Company does not believe it has the ability to incorporate reasonable and supportable forecasts into its CECL models extending beyond 4 quarters. Ongoing impacts of the CECL methodology will be dependent upon changes in economic conditions and forecasts, originated and acquired loan portfolio composition, credit performance trends, portfolio duration, and other factors. Reserve for Off-balance-sheet credit exposures In estimating expected credit losses for off-balance-sheet credit exposures, the Company is required to estimate expected credit losses over the contractual period in which it is exposed to credit risk via a present contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the issuer. To be considered unconditionally cancelable for accounting purposes, the Company must have the ability to, at any time, with or without cause, refuse to extend credit under the commitment. Off-balance-sheet credit exposure segments share the same risk characteristics as portfolio loans. The Company incorporates a probability of funding and utilizes the allowance for credit losses loss rates to calculate the reserve. The reserve for off-balance-sheet credit exposure is carried on the balance sheet in other liabilities rather than as a component of the allowance. The reserve for off-balance-sheet credit exposure is adjusted as a provision for off-balance-sheet credit exposure reported as a component of non-interest expense in the accompanying unaudited Consolidated Statement of Income. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2020 | |
Acquisitions | |
Acquisitions | Note 2: Acquisitions The Banc Ed Corp. On January 31, 2019, the Company completed its acquisition of The Banc Ed Corp. (“Banc Ed”). TheBANK of Edwardsville (“TheBANK”), Banc Ed’s wholly-owned bank subsidiary, was operated as a separate subsidiary from the completion of the acquisition until October 4, 2019 when it was merged with and into Busey Bank. At that time, TheBANK’s banking centers became banking centers of Busey Bank. Under the terms of the merger agreement with Banc Ed, at the effective time of the acquisition, each share of Banc Ed common stock issued and outstanding was converted into the right to receive 8.2067 shares of the Company’s common stock, cash in lieu of fractional shares and $111.53 in cash consideration per share. The market value of the 6.7 million shares of First Busey common stock issued at the effective time of the acquisition was approximately $166.5 million based on First Busey’s closing stock price of $24.76 on January 31, 2019. This transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged was recorded at estimated fair values on the date of acquisition. As the total consideration paid for Banc Ed exceeded the net assets acquired, goodwill of $41.4 million was recorded as a result of the acquisition. Goodwill recorded in the transaction, which reflected the synergies expected from the acquisition and expansion within the St. Louis MSA, is not tax deductible and was assigned to the Banking operating segment. First Busey did not incur any expenses related to the acquisition of Banc Ed for the three months ended March 31, 2020. First Busey incurred $1.0 million in pre-tax expenses related to the acquisition of Banc Ed for the three months ended March 31, 2019, primarily for professional and legal fees, all of which are reported as a component of non-interest expense in the accompanying unaudited Consolidated Statement of Income. The following table presents the estimated fair value of Banc Ed’s assets acquired and liabilities assumed as of January 31, 2019 (dollars in thousands) : Fair Value Assets acquired: Cash and cash equivalents $ 42,013 Securities 692,716 Loans held for sale 2,157 Portfolio loans 873,336 Premises and equipment 32,156 Other intangible assets 32,617 Mortgage servicing rights 6,946 Other assets 57,332 Total assets acquired 1,739,273 Liabilities assumed: Deposits 1,439,203 Other borrowings 63,439 Other liabilities 20,153 Total liabilities assumed 1,522,795 Net assets acquired $ 216,478 Consideration paid: Cash $ 91,400 Common stock 166,515 Total consideration paid $ 257,915 Goodwill $ 41,437 The following table provides the unaudited pro forma information for the results of operations for the three months ended March 31, 2019, as if the acquisition had occurred January 1, 2019. The pro forma results combine the historical results of Banc Ed into the Company’s unaudited Consolidated Statements of Income, including the impact of purchase accounting adjustments including loan discount accretion, intangible assets amortization, deposit accretion and premises accretion, net of taxes. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2019. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, expense efficiencies or asset dispositions ( dollars in thousands, except per share amounts) : Pro Forma Three Months Ended March 31, 2019 Total revenues (net interest income plus non-interest income) $ 100,652 Net income 27,390 Diluted earnings per common share 0.49 Investors’ Security Trust Company On August 31, 2019, the Company completed the previously announced acquisition by Busey Bank of Investors’ Security Trust Company (“IST”), a Fort Myers, Florida wealth management firm. While the partnership is expected to add to the Company’s wealth management offerings, it is not expected to have any immediate, material impact on the Company’s earnings or overall business. This transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged was recorded at estimated fair values on the date of acquisition. First Busey incurred $0.1 million in pre-tax expenses related to the acquisition of IST for the three months ended March 31, 2020, which is reported as a component of non-interest expense in the accompanying unaudited Consolidated Statements of Income. First Busey incurred $0.2 million in pre-tax expenses related to the acquisition of IST for the three months ended March 31, 2019, primarily for professional and legal fees, which are reported as a component of non-interest expense in the accompanying unaudited Consolidated Statements of Income. |
Securities
Securities | 3 Months Ended |
Mar. 31, 2020 | |
Securities | |
Securities | Note 3: Securities The table below provides the amortized cost, unrealized gains and losses and fair values of debt securities summarized by major category (dollars in thousands) : Gross Gross Allowance Amortized Unrealized Unrealized for Credit Fair March 31, 2020: Cost Gains Losses Losses Value Debt securities available for sale U.S. Treasury securities $ 44,545 $ 849 $ — $ — $ 45,394 Obligations of U.S. government corporations and agencies 87,787 2,829 (42) — 90,574 Obligations of states and political subdivisions 278,741 6,359 (353) — 284,747 Commercial mortgage-backed securities 239,284 6,139 (2) — 245,421 Residential mortgage-backed securities 966,805 34,071 (19) — 1,000,857 Corporate debt securities 99,061 528 (637) — 98,952 Total $ 1,716,223 $ 50,775 $ (1,053) $ — $ 1,765,945 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2019: Cost Gains Losses Value Debt securities available for sale U.S. Treasury securities $ 51,472 $ 265 $ — $ 51,737 Obligations of U.S. government corporations and agencies 160,364 2,684 (48) 163,000 Obligations of states and political subdivisions 262,492 5,810 (11) 268,291 Commercial mortgage-backed securities 137,733 1,700 (146) 139,287 Residential mortgage-backed securities 912,308 10,282 (624) 921,966 Corporate debt securities 102,696 1,280 — 103,976 Total $ 1,627,065 $ 22,021 $ (829) $ 1,648,257 The amortized cost and fair value of debt securities, by contractual maturity or pre-refunded date, are shown below. Mortgages underlying mortgage-backed securities may be called or prepaid; therefore, actual maturities could differ from the contractual maturities. All mortgage-backed securities were issued by U.S. government agencies and corporations (dollars in thousands) . Debt securities available for sale Amortized Fair March 31, 2020: Cost Value Due in one year or less $ 142,273 $ 142,758 Due after one year through five years 275,344 282,349 Due after five years through ten years 244,765 252,843 Due after ten years 1,053,841 1,087,995 Total $ 1,716,223 $ 1,765,945 Realized gains and losses related to sales and calls of debt securities available for sale are summarized as follows (dollars in thousands) : Three Months Ended March 31, 2020 2019 Gross security gains $ 1,561 $ — Gross security (losses) (5) (183) Net gains (losses) on sales of securities (1) $ 1,556 $ (183) (1) Net (losses) gains on sales of securities reported on the unaudited Consolidated Statements of Income includes sale of equity securities, excluded in this table. Debt securities with carrying amounts of $647.8 million and $704.4 million on March 31, 2020 and December 31, 2019, respectively, were pledged as collateral for public deposits, securities sold under agreements to repurchase and for other purposes as required or permitted by law. The following information pertains to debt securities with gross unrealized losses, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (dollars in thousands): Less than 12 months, gross 12 months or more, gross Total, gross Fair Unrealized Fair Unrealized Fair Unrealized March 31, 2020: Value Losses Value Losses Value Losses Debt securities available for sale U.S. Treasury securities $ — $ — $ — $ — $ — $ — Obligations of U.S. government corporations and agencies 6,006 (42) — — 6,006 (42) Obligations of states and political subdivisions 15,445 (353) — — 15,445 (353) Commercial mortgage-backed securities 8,522 (2) — — 8,522 (2) Residential mortgage-backed securities 626 (5) 1,417 (14) 2,043 (19) Corporate debt securities 41,117 (637) — — 41,117 (637) Total temporarily impaired securities $ 71,716 $ (1,039) $ 1,417 $ (14) $ 73,133 $ (1,053) Less than 12 months, gross 12 months or more, gross Total, gross Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2019: Value Losses Value Losses Value Losses Debt securities available for sale U.S. Treasury securities $ — $ — $ — $ — $ — $ — Obligations of U.S. government corporations and agencies 6,362 (48) — — 6,362 (48) Obligations of states and political subdivisions (1) 4,981 (11) 1,548 — 6,529 (11) Commercial mortgage-backed securities 33,322 (144) 2,044 (2) 35,366 (146) Residential mortgage-backed securities 78,326 (245) 50,259 (379) 128,585 (624) Corporate debt securities — — — — — — Total temporarily impaired securities $ 122,991 $ (448) $ 53,851 $ (381) $ 176,842 $ (829) (1) Unrealized losses for 12 months or more, gross, was less than one thousand dollars. Debt securities available for sale are not within the scope of CECL, however, the accounting for credit losses on these securities is affected by ASC 326-30. As of March 31, 2020, the Company’s debt security portfolio consisted of 1,143 securities. The total number of debt securities in the investment portfolio in an unrealized loss position as of March 31, 2020 was 45 and represented an unrealized loss of 1.42% of the aggregate fair value. The unrealized losses relate to changes in market interest rates and market conditions that do not represent credit-related impairments. Furthermore, the Company does not intend to sell such securities and it is more likely than not that the Company will recover the amortized cost prior to being required to sell the debt securities. Full collection of the amounts due according to the contractual terms of the debt securities is expected; therefore, the impairment related to noncredit factors is recognized in accumulated other comprehensive income, net of applicable taxes, at March 31, 2020. As of March 31, 2020, the Company did not hold general obligation bonds of any single issuer, the aggregate of which exceeded 10% of the Company’s stockholders’ equity. |
Portfolio loans
Portfolio loans | 3 Months Ended |
Mar. 31, 2020 | |
Portfolio loans | |
Portfolio loans | Note 4: Portfolio loans The distribution of portfolio loans is as follows (dollars in thousands) : March 31, 2020 December 31, 2019 Commercial $ 1,767,191 $ 1,748,368 Commercial real estate 2,825,003 2,793,417 Real estate construction 448,313 401,861 Retail real estate 1,656,628 1,693,769 Retail other 48,364 49,834 Portfolio loans $ 6,745,499 $ 6,687,249 Allowance (84,384) (53,748) Portfolio loans, net $ 6,661,115 $ 6,633,501 Net deferred loan origination costs included in the table above were $6.4 million as of March 31, 2020 and $6.2 million as of December 31, 2019. Net accretable purchase accounting adjustments included in the table above reduced loans by $17.7 million as of March 31, 2020 and $20.2 million as of December 31, 2019. During the first quarter of 2020, the Company purchased $43.9 million of retail real estate loans. The Company utilizes a loan grading scale to assign a risk grade to all of its loans. A description of the general characteristics of each grade is as follows: ● Pass - This category includes loans that are all considered acceptable credits, ranging from investment or near investment grade, to loans made to borrowers who exhibit credit fundamentals that meet or exceed industry standards. ● Watch- This category includes loans that warrant a higher than average level of monitoring to ensure that weaknesses do not cause the inability of the credit to perform as expected. These loans are not necessarily a problem due to other inherent strengths of the credit, such as guarantor strength, but have above average concern and monitoring. ● Special mention- This category is for “Other Assets Specially Mentioned” loans that have potential weaknesses, which may, if not checked or corrected, weaken the asset or inadequately protect the Company’s credit position at some future date. ● Substandard- This category includes “Substandard” loans, determined in accordance with regulatory guidelines, for which the accrual of interest has not been stopped. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. ● Substandard Non-accrual- This category includes loans that have all the characteristics of a “Substandard” loan with additional factors that make collection in full highly questionable and improbable. Such loans are placed on non-accrual status and may be dependent on collateral with a value that is difficult to determine. All loans are graded at their inception. Most commercial lending relationships that are $1.0 million or less are processed through an expedited underwriting process. Most commercial loans greater than $1.0 million are included in a portfolio review at least annually. Commercial loans greater than $0.35 million that have a grading of special mention or worse are reviewed on a quarterly basis. Interim reviews may take place if circumstances of the borrower warrant a more timely review. The following table is a summary of risk grades segregated by category of portfolio loans. March 31, 2020 includes purchase discounts and clearings in the pass rating. December 31, 2019 excludes purchase discounts and clearings. (dollars in thousands) : March 31, 2020 Special Substandard Pass Watch Mention Substandard Non-accrual Commercial $ 1,481,538 $ 150,303 $ 85,231 $ 42,727 $ 7,392 Commercial real estate 2,509,301 178,151 100,365 28,245 8,941 Real estate construction 415,302 28,808 3,222 699 282 Retail real estate 1,624,543 13,075 3,652 6,387 8,971 Retail other 48,273 — — 5 86 Total $ 6,078,957 $ 370,337 $ 192,470 $ 78,063 $ 25,672 December 31, 2019 Special Substandard Pass Watch Mention Substandard Non-accrual Commercial $ 1,458,416 $ 172,526 $ 66,337 $ 41,273 $ 9,096 Commercial real estate 2,477,398 186,963 105,487 26,204 9,178 Real estate construction 351,923 45,262 3,928 737 630 Retail real estate 1,661,691 9,125 5,355 7,001 8,935 Retail other 47,698 — — — 57 Total $ 5,997,126 $ 413,876 $ 181,107 $ 75,215 $ 27,896 Risk grades of portfolio loans, further sorted by origination year at March 31, 2020 is as follows (dollars in thousand) : Term Loans Amortized Cost Basis by Origination Year Revolving As of March 31, 2020 2020 2019 2018 2017 2016 Prior loans Total Commercial: Risk rating Pass $ 183,585 $ 217,732 $ 158,089 $ 136,995 $ 84,025 $ 129,623 $ 571,489 $ 1,481,538 Watch 11,686 29,396 17,424 10,367 4,617 12,958 63,855 150,303 Special Mention 12,010 5,723 1,918 7,316 7,148 15,166 35,950 85,231 Substandard 2,860 6,108 4,640 5,646 1,939 1,425 20,109 42,727 Substandard non-accrual — 3,245 1,871 541 997 738 — 7,392 Total commercial $ 210,141 $ 262,204 $ 183,942 $ 160,865 $ 98,726 $ 159,910 $ 691,403 $ 1,767,191 Commercial real estate: Risk rating Pass $ 154,317 $ 597,120 $ 485,314 $ 551,251 $ 262,300 $ 425,072 $ 33,927 $ 2,509,301 Watch 20,142 61,908 37,717 19,038 19,039 17,375 2,932 178,151 Special Mention 15,788 15,758 18,964 14,042 6,810 28,508 495 100,365 Substandard 2,802 12,855 3,741 6,211 1,884 637 115 28,245 Substandard non-accrual — 1,345 3,813 1,484 564 1,735 — 8,941 Total commercial real estate $ 193,049 $ 688,986 $ 549,549 $ 592,026 $ 290,597 $ 473,327 $ 37,469 $ 2,825,003 Real estate construction: Risk rating Pass $ 26,489 $ 204,437 $ 139,119 $ 20,465 $ 412 $ 1,534 $ 22,846 $ 415,302 Watch 10,936 12,936 2,582 2,140 214 28,808 Special Mention 2,367 703 — — 152 — — 3,222 Substandard — — 655 44 — — — 699 Substandard non-accrual — — 275 — — 7 — 282 Total real estate construction $ 39,792 $ 218,076 $ 142,631 $ 22,649 $ 778 $ 1,541 $ 22,846 $ 448,313 Retail real estate: Risk rating Pass $ 51,441 $ 201,517 $ 199,235 $ 204,376 $ 184,629 $ 381,085 $ 402,260 $ 1,624,543 Watch 296 3,599 1,893 441 1,034 736 5,076 13,075 Special Mention 108 — 180 — 2,001 1,363 — 3,652 Substandard — 1,285 447 537 761 2,904 453 6,387 Substandard non-accrual 100 209 863 486 254 5,541 1,518 8,971 Total retail real estate $ 51,945 $ 206,610 $ 202,618 $ 205,840 $ 188,679 $ 391,629 $ 409,307 $ 1,656,628 Retail other: Risk rating Pass $ 6,126 $ 13,896 $ 9,331 $ 4,942 $ 1,601 $ 1,419 $ 10,958 $ 48,273 Watch — — — — — — — — Special Mention — — — — — — — — Substandard — — — — — — 5 5 Substandard non-accrual 16 47 — 3 17 — 3 86 Total retail other $ 6,142 $ 13,943 $ 9,331 $ 4,945 $ 1,618 $ 1,419 $ 10,966 $ 48,364 An analysis of the amortized cost basis of portfolio loans that are past due and still accruing or on a non-accrual status is as follows (dollars in thousands) : March 31, 2020 Loans past due, still accruing Non-accrual 30-59 Days 60-89 Days 90+Days Loans Commercial $ 1,047 $ — $ — $ 7,392 Commercial real estate 690 387 159 8,941 Real estate construction — — — 282 Retail real estate 6,910 997 1,287 8,971 Retail other 107 12 94 86 Total $ 8,754 $ 1,396 $ 1,540 $ 25,672 December 31, 2019 Loans past due, still accruing Non-accrual 30-59 Days 60-89 Days 90+Days Loans Commercial $ 1,075 $ 1,014 $ 199 $ 9,096 Commercial real estate 2,653 3,121 584 9,178 Real estate construction 19 — — 630 Retail real estate 5,021 1,248 828 8,935 Retail other 52 68 — 57 Total $ 8,820 $ 5,451 $ 1,611 $ 27,896 The gross interest income that would have been recorded in the three months ended March 31, 2020 and 2019 if non-accrual loans and 90+ days past due loans had been current in accordance with their original terms was $0.5 million and $0.7 million, respectively. The amount of interest collected on those loans and recognized on a cash basis that was included in interest income was insignificant for the three months ended March 31, 2020 and 2019. A summary of troubled debt restructurings (“TDR”) loans is as follows (dollars in thousands) : March 31, December 31, 2020 2019 In compliance with modified terms $ 4,949 $ 5,005 30 — 89 days past due — — Included in non-performing loans 1,686 702 Total $ 6,635 $ 5,707 There were no loans newly classified as TDRs in compliance with modified terms during the three months ended March 31, 2020. Loans newly classified as a TDR in compliance with modified terms during the three months ended March 31, 2019 consisted of one commercial modification for short-term payment relief, with an amortized cost of $3.1 million. Commercial non-performing loans of $0.5 million and commercial real estate non-performing loans of $0.7 million were newly classified as TDRs included in non-performing loans for short-term payment relief during the three months ended March 31, 2020. The gross interest income that would have been recorded in the three months ended March 31, 2020 and 2019 if TDRs had performed in accordance with their original terms compared with their modified terms was insignificant. There were no TDRs that were entered into during the prior twelve months that were subsequently classified as non-performing and had payment defaults during the three months ended March 31, 2020 or 2019. At March 31, 2020, the Company had $1.3 million of residential real estate in the process of foreclosure. The following tables provide details of loans evaluated individually, segregated by category. With the adoption of CECL, the Company only evaluated loans with disparate risk characteristics on an individual basis. The unpaid contractual principal balance represents the customer outstanding balance excluding any partial charge-offs. The amortized cost represents customer balances net of any partial charge-offs recognized on the loan. The average amortized cost is calculated using the most recent four quarters (dollars in thousands) . March 31, 2020 Unpaid Amortized Contractual Cost Amortized Total Average Principal with No Cost Amortized Related Amortized Balance Allowance with Allowance Cost Allowance Cost Commercial $ 11,795 $ 3,751 $ 3,671 $ 7,422 $ 2,822 $ 11,493 Commercial real estate 11,992 9,111 1,206 10,317 642 15,226 Real estate construction 579 562 — 562 — 888 Retail real estate 7,642 6,597 474 7,071 474 12,767 Retail other — — — — — 34 Total $ 32,008 $ 20,021 $ 5,351 $ 25,372 $ 3,938 $ 40,408 December 31, 2019 Unpaid Amortized Contractual Cost Amortized Total Average Principal with No Cost Amortized Related Amortized Balance Allowance with Allowance Cost Allowance Cost Commercial $ 14,415 $ 4,727 $ 5,026 $ 9,753 $ 3,330 $ 13,774 Commercial real estate 14,487 9,883 2,039 11,922 1,049 16,678 Real estate construction 1,116 974 — 974 — 873 Retail real estate 15,581 13,898 474 14,372 474 14,003 Retail other 87 58 — 58 — 42 Total $ 45,686 $ 29,540 $ 7,539 $ 37,079 $ 4,853 $ 45,370 Management's evaluation as to the ultimate collectability of loans includes estimates regarding future cash flows from operations and the value of property, real and personal, pledged as collateral. These estimates are affected by changing economic conditions and the economic prospects of borrowers. Collateral dependent loans are loans in which repayment is expected to be provided solely by the underlying collateral and there are no other available and reliable sources of repayment. They are written down to the lower of cost or fair value of underlying collateral, less estimated costs to sell. As of March 31, 2020, there were $13.5 million of collateral dependent loans which are secured by real estate or business assets. Management estimates the allowance balance using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The cumulative loss rate used as the basis for the estimate of credit losses is comprised of the Company’s historical loss experience from 2010-2019. As of March 31, 2020, the Company expects the markets in which it operates to experience a decline in economic conditions and an increase in the unemployment rate and level of delinquencies over the next 12 months. Management adjusted the historical loss experience for these expectations with an immediate reversion to historical loss rate beyond this forecast period. The following table details activity in the allowance. Allocation of a portion of the allowance to one category does not preclude its availability to absorb losses in other categories (dollars in thousands) : As of and for the Three Months Ended March 31, 2020 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Beginning balance, prior to adoption of ASC 326 $ 18,291 $ 21,190 $ 3,204 $ 10,495 $ 568 $ 53,748 Adoption of ASC 326 715 9,306 2,954 3,292 566 16,833 Provision for credit losses 5,673 6,526 889 4,037 91 17,216 Charged-off (2,042) (1,099) — (708) (299) (4,148) Recoveries 88 44 146 338 119 735 Ending balance $ 22,725 $ 35,967 $ 7,193 $ 17,454 $ 1,045 $ 84,384 As of and for the Three Months Ended March 31, 2019 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Beginning balance $ 17,829 $ 21,137 $ 2,723 $ 8,471 $ 488 $ 50,648 Provision for loan losses 1,793 (1,089) 2 1,357 48 2,111 Charged-off (1,807) (15) — (517) (130) (2,469) Recoveries 183 64 82 192 104 625 Ending balance $ 17,998 $ 20,097 $ 2,807 $ 9,503 $ 510 $ 50,915 The following table presents the allowance and amortized cost of portfolio loans by category (dollars in thousands) : As of March 31, 2020 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Allowance Ending balance attributed to: Loans individually evaluated for impairment $ 2,822 $ 642 $ — $ 474 $ — $ 3,938 Loans collectively evaluated for impairment 19,903 35,325 7,193 16,980 1,045 80,446 Ending balance $ 22,725 $ 35,967 $ 7,193 $ 17,454 $ 1,045 $ 84,384 Loans: Loans individually evaluated for impairment $ 7,414 $ 8,452 $ 307 $ 6,618 $ — $ 22,791 Loans collectively evaluated for impairment 1,759,769 2,814,686 447,751 1,649,557 48,364 6,720,127 PCD loans evaluated for impairment 8 1,865 255 453 — 2,581 Ending balance $ 1,767,191 $ 2,825,003 $ 448,313 $ 1,656,628 $ 48,364 $ 6,745,499 As of December 31, 2019 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Allowance Ending balance attributed to: Loans individually evaluated for impairment $ 3,330 $ 1,049 $ — $ 474 $ — $ 4,853 Loans collectively evaluated for impairment 14,961 20,141 3,204 10,021 568 48,895 Ending balance $ 18,291 $ 21,190 $ 3,204 $ 10,495 $ 568 $ 53,748 Loans: Loans individually evaluated for impairment $ 9,740 $ 10,018 $ 539 $ 13,676 $ 58 $ 34,031 Loans collectively evaluated for impairment 1,738,615 2,781,495 400,887 1,679,397 49,776 6,650,170 PCI loans evaluated for impairment 13 1,904 435 696 — 3,048 Ending balance $ 1,748,368 $ 2,793,417 $ 401,861 $ 1,693,769 $ 49,834 $ 6,687,249 |
Deposits
Deposits | 3 Months Ended |
Mar. 31, 2020 | |
Deposits | |
Deposits | Note 5: Deposits The composition of deposits is as follows (dollars in thousands) : March 31, 2020 December 31, 2019 Demand deposits, noninterest-bearing $ 1,910,673 $ 1,832,619 Interest-bearing transaction deposits 1,982,137 1,989,854 Saving deposits and money market deposits 2,598,410 2,545,073 Time deposits 1,482,013 1,534,850 Total $ 7,973,233 $ 7,902,396 The Company held brokered saving deposits and money market deposits of $13.8 million and $12.5 million at March 31, 2020 and December 31, 2019, respectively. The aggregate amount of time deposits with a minimum denomination of $100,000 was approximately $833.8 million and $854.1 million at March 31, 2020 and December 31, 2019, respectively. The aggregate amount of time deposits with a minimum denomination that meets or exceeds the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250,000 was approximately $329.9 million and $297.4 million at March 31, 2020 and December 31, 2019, respectively. The Company held brokered time deposits of $5.2 million and $5.5 million at March 31, 2020 and December 31, 2019, respectively. As of March 31, 2020, the scheduled maturities of time deposits are as follows (dollars in thousands) : April 1, 2020 - March 31, 2021 $ 970,198 April 1, 2021 - March 31, 2022 300,817 April 1, 2022 - March 31, 2023 105,097 April 1, 2023 - March 31, 2024 76,896 April 1, 2024 - March 31, 2025 28,994 Thereafter 11 $ 1,482,013 |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2020 | |
Borrowings | |
Borrowings | Note 6: Borrowings Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature daily. Securities sold under agreements to repurchase are reflected at the amount of cash received in connection with the transaction. The underlying securities are held by the Company’s safekeeping agent. The Company may be required to provide additional collateral based on fluctuations in the fair value of the underlying securities. Short-term borrowings include FHLB advances which mature in less than one year from date of origination. On January 29, 2019, the Company entered into an Amended and Restated Credit Agreement providing for a $60.0 million term loan (the “Term Loan”) with a maturity date of November 30, 2023. The Term Loan had an annual interest rate of one-month LIBOR plus a spread of 1.50% . The proceeds of the Term Loan were used to fund the cash consideration related to the acquisition of Banc Ed. The Company, at its option, repaid the balance of the Term Loan during the first quarter of 2020. The Amended and Restated Credit Agreement also retained the Company’s $20.0 million revolving facility with a maturity date of April 30, 2019. On April 19, 2019, the Company entered into an amendment to the Amended and Restated Credit Agreement to extend the maturity of its revolving loan facility to April 30, 2020. Subsequent to quarter end on April 24, 2020, the revolving loan facility maturity was extended one year to April 30, 2021 with an annual interest rate of one-month LIBOR plus a spread of 1.75% . The revolving facility incurs a non-usage fee based on the undrawn amount. At March 31, 2020 the Company had $20.0 million outstanding under the revolving facility. The Company had no outstanding balance under the revolving facility on December 31, 2019. Long-term debt is summarized as follows (dollars in thousands) : March 31, December 31, 2020 2019 Notes payable, FHLB, ranging in original maturity from 5 to 10 years , collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock. $ 35,595 $ 35,600 Term Loan — 48,000 Total long-term borrowings $ 35,595 $ 83,600 As of March 31, 2020, long-term debt from the FHLB consisted of variable-rate notes maturing through September 2024, with interest rates ranging from 0.05% to 3.04% . The weighted average rate on the long-term advances was 0.52% as of March 31, 2020. As of December 31, 2019, funds borrowed from the FHLB, listed above, consisted of variable-rate notes maturing through September 2024, with interest rates ranging from 1.25% to 3.04% . The weighted average rate on the long-term advances was 1.53% as of December 31, 2019. On May 25, 2017, the Company issued $40.0 million of 3.75% senior notes that mature on May 25, 2022. The senior notes are payable semi-annually on each May 25 and November 25, commencing on November 25, 2017. The senior notes are not subject to optional redemption by the Company. Additionally, on May 25, 2017, the Company issued $60.0 million of fixed-to-floating rate subordinated notes that mature on May 25, 2027. The subordinated notes, which qualify as Tier 2 capital for First Busey, bear interest at an annual rate of 4.75% for the first five years after issuance and thereafter bear interest at a floating rate equal to three-month LIBOR plus a spread of 2.919% , as calculated on each applicable determination date. The subordinated notes are payable semi-annually on each May 25 and November 25, commencing on November 25, 2017 during the five year fixed-term and thereafter on February 25, May 25, August 25 and November 25 of each year, commencing on August 25, 2022. The subordinated notes have an optional redemption in whole or in part on any interest payment date on or after May 25, 2022. The senior notes and subordinated notes are unsecured obligations of the Company. Unamortized debt issuance costs related to the senior notes and subordinated notes totaled $0.3 million and $0.7 million, respectively, at March 31, 2020. Unamortized debt issuance costs related to the senior notes and subordinated notes totaled $0.3 million and $0.8 million, respectively, at December 31, 2019. |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Common Share | |
Earnings Per Common Share | Note 7: Earnings Per Common Share Earnings per common share have been computed as follows (in thousands, except per share data) : Three Months Ended March 31, 2020 2019 Net income $ 15,364 $ 25,469 Shares: Weighted average common shares outstanding 54,662 53,277 Dilutive effect of outstanding options, warrants and restricted stock units as determined by the application of the treasury stock method 251 301 Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation 54,913 53,578 Basic earnings per common share $ 0.28 $ 0.48 Diluted earnings per common share $ 0.28 $ 0.48 Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding, which include deferred stock units that are vested but not delivered. Diluted earnings per common share is computed using the treasury stock method and reflects the potential dilution that could occur if the Company’s outstanding stock options and warrants were exercised and restricted stock units were vested. At March 31, 2020, 204,277 outstanding restricted stock units, 39,965 outstanding stock options and 191,278 warrants were anti-dilutive and excluded from the calculation of common stock equivalents. At March 31, 2019, 172,571 outstanding restricted stock equivalents, 49,646 outstanding stock options and 191,278 warrants were anti-dilutive and excluded from the calculation of common stock equivalents. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss). | |
Accumulated Other Comprehensive Income (Loss). | Note 8: Accumulated Other Comprehensive Income (Loss) The following table represents changes in accumulated other comprehensive income (loss) by component, net of tax, for the periods below (dollars in thousands) : Three Months Ended March 31, 2020 2019 Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Unrealized gains (losses) on debt securities available for sale: Balance at beginning of period $ 21,192 $ (6,032) $ 15,160 $ (9,528) $ 2,716 $ (6,812) Unrealized holding gains (losses) on debt securities available for sale, net 30,086 (8,589) 21,497 6,799 (1,940) 4,859 Unrealized gains on debt securities transferred from held to maturity to available for sale — — — 4,780 (1,364) 3,416 Amounts reclassified from accumulated other comprehensive income, net (1,556) 448 (1,108) 184 (52) 132 Balance at end of period $ 49,722 $ (14,173) $ 35,549 $ 2,235 $ (640) $ 1,595 Unrealized gains (losses) on cash flow hedges: Balance at beginning of period (280) 80 (200) — — — Unrealized holding gains (losses) on cash flow hedges, net (3,129) 892 (2,237) — — — Amounts reclassified from accumulated other comprehensive income, net (15) 4 (11) — — — Balance at end of period $ (3,424) $ 976 $ (2,448) $ — $ — $ — Total accumulated other comprehensive income (loss) $ 46,298 $ (13,197) $ 33,101 $ 2,235 $ (640) $ 1,595 |
Share-based Compensation
Share-based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Compensation | |
Share-based Compensation | Note 9: Share-based Compensation The Company currently grants share-based compensation in the form of restricted stock units and deferred stock units. The Company grants restricted stock units to members of management periodically throughout the year. Each restricted stock unit is equivalent to one share of the Company’s common stock. These units have requisite service periods ranging from one to five years . The Company annually grants share-based awards in the form of deferred stock units, which are restricted stock units with a deferred settlement date, to its board of directors. Each deferred stock unit is equivalent to one share of the Company’s common stock. The deferred stock units vest over a 12 month period following the grant date or on the date of the next Annual Meeting of Stockholders, whichever is earlier. These units generally are subject to the same terms as restricted stock units under the Company’s 2010 Equity Plan or the First Community 2016 Equity Plan, except that, following vesting, settlement occurs within 30 days following the earlier of separation from the board or a change in control of the Company. Subsequent to vesting and prior to delivery, these units will continue to earn dividend equivalents. The Company also has outstanding stock options granted prior to 2011 and stock options assumed from acquisitions. A description of the 2010 Equity Incentive Plan, which was amended in 2015, can be found in the Company’s Proxy Statement for the 2015 Annual Meeting of Stockholders. A description of the First Community 2016 Equity Incentive Plan can be found in the Proxy Statement of First Community Financial Partners, Inc. for the 2016 Annual Meeting of Stockholders. As further described in the Company’s Proxy Statement for the 2020 Annual Meeting of Stockholders, dated April 9, 2020, the Company’s stockholders will consider adoption of the First Busey Corporation 2020 Equity Incentive Plan, which the Company’s board of directors approved on March 25, 2020, at the 2020 Annual Meeting. Stock Option Plan A summary of the status of and changes in the Company's stock option awards for the three months ended March 31, 2020 follows: Weighted- Weighted- Average Average Exercise Remaining Contractual Shares Price Term Outstanding at beginning of period 53,185 $ 22.00 Exercised (5,280) 23.26 Forfeited — — Expired (88) 17.05 Outstanding at end of period 47,817 $ 21.87 5.58 Exercisable at end of period 47,817 $ 21.87 5.58 The Company did not record any stock option compensation expense for the three months ended March 31, 2020. The Company recorded an insignificant amount of stock option compensation expense for the three months ended March 31, 2019. Restricted Stock Unit Plan A summary of the changes in the Company’s stock unit awards for the three months ended March 31, 2020, is as follows: Weighted- Director Weighted- Restricted Average Deferred Average Stock Grant Date Stock Grant Date Units Fair Value Units Fair Value Non-vested at beginning of period 778,317 $ 27.27 21,261 $ 23.18 Granted 3,808 26.26 — — Dividend equivalents earned 6,612 25.50 780 25.50 Vested (8,249) 29.50 — — Forfeited (9,559) 28.96 (597) 25.50 Non-vested at end of period 770,929 $ 27.21 21,444 $ 23.20 Outstanding at end of period 770,929 $ 27.21 91,278 $ 23.40 Recipients earn quarterly dividend equivalents on their respective units which entitle the recipients to additional units. Therefore, dividends earned each quarter compound based upon the updated unit balances. Upon vesting/delivery, shares are expected (though not required) to be issued from treasury. On February 5, 2020, under the terms of the 2010 Equity Incentive Plan, the Company granted 3,808 restricted stock units to a member of management. As the stock price on the grant date of February 5, 2020 was $26.26 , total compensation cost to be recognized is $0.1 million. This cost will be recognized over a period of three years . Subsequent to the requisite service period, the awards will become 100% vested. The Company recognized $1.1 million and $1.0 million of compensation expense related to both non-vested restricted stock units and deferred stock units for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, there was $10.9 million of total unrecognized compensation cost related to these non-vested stock awards. This cost is expected to be recognized over a period of 3.3 years. As of March 31, 2020, 552,157 shares remain available for issuance pursuant to the Company’s 2010 Equity Incentive Plan, 31,057 shares remain available for issuance pursuant to the Company’s Employee Stock Purchase Plan and 313,136 shares remain available for issuance pursuant to the First Community 2016 Equity Incentive Plan. |
Outstanding Commitments and Con
Outstanding Commitments and Contingent Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Outstanding Commitments and Contingent Liabilities | |
Outstanding Commitments and Contingent Liabilities | Note 10: Outstanding Commitments and Contingent Liabilities Legal Matters The Company is a party to legal actions which arise in the normal course of its business activities. In the opinion of management, the ultimate resolution of these matters is not expected to have a material effect on the financial position or the results of operations of the Company. Credit Commitments and Contingencies A summary of the contractual amount of the Company’s exposure to off-balance-sheet risk relating to the Company’s commitments to extend credit and standby letters of credit follows (dollars in thousands) : March 31, 2020 December 31, 2019 Financial instruments whose contract amounts represent credit risk: Commitments to extend credit $ 1,628,461 $ 1,649,565 Standby letters of credit 42,774 42,581 Upon adoption of CECL, the Company recorded a $5.5 million reserve for unfunded commitments. During the first quarter of 2020, the Company recorded additional provision of $1.0 million in other non-interest expense for a total unfunded reserve of $6.5 million as of March 31, 2020. |
Regulatory Capital
Regulatory Capital | 3 Months Ended |
Mar. 31, 2020 | |
Regulatory Capital | |
Regulatory Capital | Note 11: Regulatory Capital The Company and Busey Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory—and possibly additional discretionary—actions by regulators that, if undertaken, could have a direct material effect on the Company's consolidated financial statements. The capital amounts and classification also are subject to qualitative judgments by the regulators about components, risk weightings and other factors. Banking regulations identify five capital categories for insured depository institutions: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. As of March 31, 2020 and December 31, 2019, all capital ratios of the Company and Busey Bank exceeded the well capitalized levels under the applicable regulatory capital adequacy guidelines. Management believes that no events or changes have occurred subsequent to March 31, 2020 that would change this designation. On March 27, 2020, the FDIC and other federal banking agencies published an interim final rule that provides those banking organizations adopting CECL during 2020 with the option to delay for two years the estimated impact of CECL on regulatory capital and to phase in the aggregate impact of the deferral on regulatory capital over a subsequent three year period. Under this interim final rule, because the Company has elected to use the deferral option, the regulatory capital impact of our transition adjustments recorded on January 1, 2020 from the adoption of CECL will be deferred for two years. In addition, 25 percent of the ongoing impact of CECL on our allowance for loan losses, retained earnings, and average total consolidated assets from January 1, 2020 through the end of the two-year deferral period, each as reported for regulatory capital purposes, will be added to the deferred transition amounts (“adjusted transition amounts”) and deferred for the two-year period. At the conclusion of the two-year period (January 1, 2022), the adjusted transition amounts will be phased-in for regulatory capital purposes at a rate of 25 percent per year, with the phased-in amounts included in regulatory capital at the beginning of each year. The following tables summarize the applicable holding company and bank regulatory capital requirements (dollars in thousands) : Minimum Minimum To Be Well Actual Capital Requirement Capitalized Amount Ratio Amount Ratio Amount Ratio As of March 31, 2020: Total Capital (to Risk Weighted Assets) Consolidated $ 1,046,689 13.85 % $ 604,488 8.00 % $ 755,610 10.00 % Busey Bank $ 1,012,447 13.42 % $ 603,538 8.00 % $ 754,422 10.00 % Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 921,827 12.20 % $ 453,366 6.00 % $ 604,488 8.00 % Busey Bank $ 947,583 12.56 % $ 452,653 6.00 % $ 603,538 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 847,827 11.22 % $ 340,025 4.50 % $ 491,147 6.50 % Busey Bank $ 947,583 12.56 % $ 339,490 4.50 % $ 490,374 6.50 % Tier 1 Capital (to Average Assets) Consolidated $ 921,827 9.89 % $ 372,696 4.00 % N/A N/A Busey Bank $ 947,583 10.19 % $ 371,799 4.00 % $ 464,749 5.00 % Minimum Minimum To Be Well Actual Capital Requirement Capitalized Amount Ratio Amount Ratio Amount Ratio As of December 31, 2019: Total Capital (to Risk Weighted Assets) Consolidated $ 1,036,143 14.03 % $ 590,826 8.00 % $ 738,532 10.00 % Busey Bank $ 1,099,449 14.92 % $ 589,681 8.00 % $ 737,101 10.00 % Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 922,395 12.49 % $ 443,120 6.00 % $ 590,826 8.00 % Busey Bank $ 1,045,701 14.19 % $ 442,261 6.00 % $ 589,681 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 848,395 11.49 % $ 332,340 4.50 % $ 480,046 6.50 % Busey Bank $ 1,045,701 14.19 % $ 331,696 4.50 % $ 479,116 6.50 % Tier 1 Capital (to Average Assets) Consolidated $ 922,395 9.88 % $ 373,360 4.00 % N/A N/A Busey Bank $ 1,045,701 11.19 % $ 373,639 4.00 % $ 467,049 5.00 % In July 2013, the U.S. federal banking authorities approved the Basel III Rule for strengthening international capital standards. The Basel III Rule introduced a capital conservation buffer, composed entirely of Common Equity Tier 1 Capital (“CET1”), which is added to the minimum risk-weighted asset ratios. The capital conservation buffer is not a minimum capital requirement; however, banking institutions with a ratio of CET1 to risk-weighted assets below the capital conservation buffer will face constraints on dividends, equity repurchases and discretionary bonus payments based on the amount of the shortfall. In order to refrain from restrictions on dividends, equity repurchases and discretionary bonus payments, banking institutions must maintain minimum ratios of (i) CET1 to risk-weighted assets of at least 7.00%, (ii) Tier 1 capital to risk-weighted assets of at least 8.50%, and (iii) Total capital to risk-weighted assets of at least 10.50%. |
Operating Segments and Related
Operating Segments and Related Information | 3 Months Ended |
Mar. 31, 2020 | |
Operating Segments and Related Information | |
Operating Segments and Related Information | Note 12: Operating Segments and Related Information The Company has three reportable operating segments: Banking, Remittance Processing and Wealth Management. The Banking operating segment provides a full range of banking services to individual and corporate customers through its banking center network in Illinois, the St. Louis, Missouri metropolitan area, southwest Florida and through its banking center in Indianapolis, Indiana. The Remittance Processing operating segment provides for online bill payments, lockbox and walk-in payments. The Wealth Management operating segment provides a full range of asset management, investment and fiduciary services to individuals, businesses and foundations, tax preparation, philanthropic advisory services and farm and brokerage services. The Company’s three operating segments are strategic business units that are separately managed as they offer different products and services and have different marketing strategies. The “other” category consists of the Parent Company and the elimination of intercompany transactions. The segment financial information provided below has been derived from information used by management to monitor and manage the financial performance of the Company. The accounting policies of the three segments are the same as those described in the summary of significant accounting policies in the “Note 1. Significant Accounting Policies” to Form 10-K. The Company accounts for intersegment revenue and transfers at current market value. Following is a summary of selected financial information for the Company’s operating segments (dollars in thousands) : Goodwill Total Assets March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Banking $ 288,436 $ 288,436 $ 9,654,171 $ 9,632,368 Remittance Processing 8,992 8,992 44,744 44,209 Wealth Management 14,108 14,108 36,204 32,760 Other — — (13,714) (13,608) Totals $ 311,536 $ 311,536 $ 9,721,405 $ 9,695,729 Three Months Ended March 31, 2020 2019 Net interest income: Banking $ 71,573 $ 70,638 Remittance Processing 19 18 Wealth Management — — Other (2,159) (2,273) Total net interest income $ 69,433 $ 68,383 Non-interest income: Banking $ 13,168 $ 12,783 Remittance Processing 4,069 4,181 Wealth Management 11,709 9,133 Other (1,429) (152) Total non-interest income $ 27,517 $ 25,945 Non-interest expense: Banking $ 48,515 $ 45,171 Remittance Processing 2,903 2,764 Wealth Management 6,974 5,564 Other 2,122 3,664 Total non-interest expense $ 60,514 $ 57,163 Income before income taxes: Banking $ 19,010 $ 36,139 Remittance Processing 1,185 1,435 Wealth Management 4,735 3,569 Other (5,710) (6,089) Total income before income taxes $ 19,220 $ 35,054 Net income: Banking $ 14,924 $ 26,665 Remittance Processing 860 1,025 Wealth Management 3,599 2,641 Other (4,019) (4,862) Total net income $ 15,364 $ 25,469 |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | Note 13: Derivative Financial Instruments The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. Additionally, the Company enters into derivative financial instruments, including interest rate lock commitments issued to residential loan customers for loans that will be held for sale, forward sales commitments to sell residential mortgage loans to investors and interest rate swaps with customers and other third parties. See “Note 14: Fair Value Measurements” for further discussion of the fair value measurement of such derivatives. Interest Rate Swaps Designated as Cash Flow Hedges: Starting in the third quarter of 2019, the Company entered into derivative instruments designated as cash flow hedges. For derivative instruments that are designated and qualify as a cash flow hedge, the change in fair value of the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Change in fair value of components excluded from the assessment of effectiveness are recognized in current earnings. Interest rate swaps with notional amounts totaling $70.0 million as of March 31, 2020 and December 31, 2019 were designated as cash flow hedges to hedge the risk of variability in cash flows (future interest payments) attributable to changes in the contractually specified 3 month LIBOR benchmark interest rate on the Company’s junior subordinated debt owed to unconsolidated trusts and were determined to be highly effective during the period. The gross aggregate fair value of the swaps of $3.4 million and $0.3 million is recorded in other liabilities in the unaudited consolidated financial statements at March 31, 2020 and December 31, 2019, respectively, with changes in fair value recorded net of tax in other comprehensive income (loss). The Company expects the hedges to remain highly effective during the remaining terms of the swaps. A summary of the interest-rate swaps designated as cash flow hedges is presented below (dollars in thousands) : March 31, 2020 December 31, 2019 Notional amount $ 70,000 $ 70,000 Weighted average fixed pay rates 1.80 % 1.80 % Weighted average variable 3 month LIBOR receive rates 0.77 % 1.90 % Weighted average maturity 3.61 yrs 3.86 yrs Unrealized gains (losses), net of tax $ (2,448) $ (200) Interest income (expense) recorded on these swap transactions were insignificant during the three months ended March 31, 2020. The Company expects $0.2 million of the unrealized loss to be reclassified from Other Comprehensive Income (Loss) (“OCI”) to interest expense during the next 12 months. This reclassified amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations and the addition of other hedges subsequent to March 31, 2020. The following table presents the net gains (losses) recorded in accumulated other comprehensive income and the unaudited Consolidated Statements of Income relating to cash flow derivative instruments for the period presented (dollars in thousands) : Three Months Ended March 31, 2020 Amount of (gain) loss recognized in OCI Amount of (gain) loss reclassified from OCI to interest income Interest rate contracts $ 2,237 $ (11) The Company pledged $3.3 million and $0.3 million in cash to secure its obligation under these contracts at March 31, 2020 and December 31, 2019, respectively. Interest Rate Lock Commitments . At March 31, 2020 and December 31, 2019, the Company had issued $268.7 million and $69.1 million, respectively, of unexpired interest rate lock commitments to loan customers. Such interest rate lock commitments that meet the definition of derivative financial instruments under ASC Topic 815, Derivatives and Hedging , are carried at their fair values in other assets or other liabilities in the unaudited consolidated financial statements, with changes in the fair values of the corresponding derivative financial assets or liabilities recorded as either a charge or credit to current earnings during the period in which the changes occurred. Forward Sales Commitments . At March 31, 2020 and December 31, 2019, the Company had issued $353.6 million and $135.3 million, respectively, of unexpired forward sales commitments to mortgage loan investors. Typically, the Company economically hedges mortgage loans held for sale and interest rate lock commitments issued to its residential loan customers related to loans that will be held for sale by obtaining corresponding best-efforts forward sales commitments with an investor to sell the loans at an agreed-upon price at the time the interest rate locks are issued to the customers. Forward sales commitments that meet the definition of derivative financial instruments under ASC Topic 815, Derivatives and Hedging , are carried at their fair values in other assets or other liabilities in the unaudited consolidated financial statements. While such forward sales commitments generally served as an economic hedge to the mortgage loans held for sale and interest rate lock commitments, the Company did not designate them for hedge accounting treatment. Changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred. The fair values of derivative assets and liabilities related to interest rate lock commitments and forward sales commitments recorded in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands) : March 31, 2020 December 31, 2019 Fair value recorded in other assets $ 5,146 $ 1,046 Fair value recorded in other liabilities 7,344 2,187 The gross gains and losses on these derivative assets and liabilities related to interest rate lock commitments and forward sales commitments recorded in non-interest income and expense in the unaudited Consolidated Statements of Income are summarized as follows (dollars in thousands) : Three Months Ended March 31, 2020 2019 Gross gains $ 6,670 $ 1,078 Gross (losses) (7,344) (1,118) Net gains (losses) $ (674) $ (40) The impact of the net gains or losses on derivative financial instruments related to interest rate lock commitments issued to residential loan customers for loans that will be held for sale and forward sales commitments to sell residential mortgage loans to loan investors are almost entirely offset by a corresponding change in the fair value of loans held for sale. Interest Rate Swaps Not Designated as Hedges. The Company may offer derivative contracts to its customers in connection with their risk management needs. The Company manages the risk associated with these contracts by entering into an equal and offsetting derivative with a third-party dealer. With notional values of $650.2 million and $580.8 million at March 31, 2020 and December 31, 2019, respectively, these contracts support variable rate, commercial loan relationships totaling $325.1 million and $290.4 million, respectively. These derivatives generally worked together as an economic interest rate hedge, but the Company did not designate them for hedge accounting treatment. Consequently, changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred. The fair values of derivative assets and liabilities related to derivatives for customers for interest rate swaps recorded in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands) : March 31, 2020 December 31, 2019 Fair value recorded in other assets $ 35,832 $ 12,354 Fair value recorded in other liabilities 35,832 12,354 The gross gains and losses on these derivative assets and liabilities recorded in non-interest income and non-interest expense in the unaudited Consolidated Statements of Income are summarized as follows (dollars in thousands) : Three Months Ended March 31, 2020 2019 Gross gains $ 23,478 $ 3,713 Gross losses (23,478) (3,713) Net gains (losses) $ — $ — The Company pledged $36.5 million and $18.1 million in cash to secure its obligation under these contracts at March 31, 2020 and December 31, 2019, respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | Note 14: Fair Value Measurements The fair value of an asset or liability is the price that would be received by selling that asset or paid in transferring that liability (exit price) in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. ASC Topic 820, Fair Value Measurement , establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 Inputs - Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to those Company assets and liabilities that are carried at fair value. In general, fair value is based upon quoted market prices, when available. If such quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable data. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect, among other things, counterparty credit quality and the company's creditworthiness as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. While management believes the Company's valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Debt securities Available for Sale. Debt securities classified as available for sale are reported at fair value utilizing level 2 measurements. The Company obtains fair value measurements from an independent pricing service. The independent pricing service utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information. Because many fixed income securities do not trade on a daily basis, the independent pricing service applies available information, focusing on observable market data such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing, to prepare evaluations. The independent pricing service uses model processes, such as the Option Adjusted Spread model, to assess interest rate impact and develop prepayment scenarios. The models and processes take into account market conventions. For each asset class, a team of evaluators gathers information from market sources and integrates relevant credit information, perceived market movements and sector news into the evaluated pricing applications and models. The market inputs that the independent pricing service normally seeks for evaluations of securities, listed in approximate order of priority, include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. The independent pricing service also monitors market indicators, industry and economic events. For certain security types, additional inputs may be used or some of the market inputs may not be applicable. Evaluators may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs listed are available for use in the evaluation process for each security evaluation on a given day. Because the data utilized was observable, the securities have been classified as level 2. Equity Securities. Equity securities are reported at fair value utilizing level 1 or level 2 measurements. For mutual funds, unadjusted quoted prices in active markets for identical assets are utilized to determine fair value at the measurement date and have been classified as level 1. For stock, quoted prices for identical or similar assets in markets that are not active are utilized and classified as level 2. Loans Held for Sale. Loans held for sale are reported at fair value utilizing level 2 measurements. The fair value of the mortgage loans held for sale are measured using observable quoted market or contract prices or market price equivalents and are classified as level 2. Derivative Assets and Derivative Liabilities . Derivative assets and derivative liabilities are reported at fair value utilizing level 2 measurements. The fair value of derivative assets and liabilities is determined based on prices that are obtained from a third-party which uses observable market inputs. Derivative assets and liabilities are classified as level 2. The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands) : Level 1 Level 2 Level 3 Total March 31, 2020 Inputs Inputs Inputs Fair Value Debt securities available for sale U.S. Treasury securities $ — $ 45,394 $ — $ 45,394 Obligations of U.S. government corporations and agencies — 90,574 — 90,574 Obligations of states and political subdivisions — 284,747 — 284,747 Commercial mortgage-backed securities — 245,421 — 245,421 Residential mortgage-backed securities — 1,000,857 — 1,000,857 Corporate debt securities — 98,952 — 98,952 Equity securities — 4,936 — 4,936 Loans held for sale — 89,943 — 89,943 Derivative assets — 40,978 — 40,978 Derivative liabilities — 46,600 — 46,600 Level 1 Level 2 Level 3 Total December 31, 2019 Inputs Inputs Inputs Fair Value Debt securities available for sale U.S. Treasury securities $ — $ 51,737 $ — $ 51,737 Obligations of U.S. government corporations and agencies — 163,000 — 163,000 Obligations of states and political subdivisions — 268,291 — 268,291 Commercial mortgage-backed securities — 139,287 — 139,287 Residential mortgage-backed securities — 921,966 — 921,966 Corporate debt securities — 103,976 — 103,976 Equity securities — 5,952 — 5,952 Loans held for sale — 68,699 — 68,699 Derivative assets — 13,400 — 13,400 Derivative liabilities — 14,821 — 14,821 Certain financial assets and financial liabilities are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Loans Evaluated Individually . The Company does not record portfolio loans at fair value on a recurring basis. However, periodically, a loan is evaluated individually and is reported at the fair value of the underlying collateral, less estimated costs to sell, if repayment is expected solely from the collateral. If the collateral value is not sufficient, a specific reserve is recorded. Collateral values are estimated using a combination of observable inputs, including recent appraisals, and unobservable inputs based on customized discounting criteria. Due to the significance of the unobservable inputs, the fair value of individually evaluated collateral dependent loans have been classified as level 3. OREO. Non-financial assets and non-financial liabilities measured at fair value include OREO (upon initial recognition or subsequent impairment). OREO properties are measured using a combination of observable inputs, including recent appraisals, and unobservable inputs. Due to the significance of the unobservable inputs, all OREO fair values have been classified as level 3. Bank Property Held for Sale. Bank property held for sale represents certain banking center office buildings which the Company has closed and consolidated with other existing banking centers. Bank property held for sale is measured at the lower of amortized cost or fair value less estimated costs to sell. The fair values were based upon discounted appraisals or real estate listing price. Due to the significance of the unobservable inputs, all bank property held for sale fair values have been classified as level 3. The following table summarizes assets and liabilities measured at fair value on a non-recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands) : Level 1 Level 2 Level 3 Total Inputs Inputs Inputs Fair Value March 31, 2020 Loans evaluated individually $ — $ — $ 1,413 $ 1,413 OREO — — 55 55 Bank property held for sale — — 3,413 3,413 December 31, 2019 Loans evaluated individually $ — $ — $ 2,686 $ 2,686 OREO — — 55 55 Bank property held for sale — — 4,004 4,004 The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized level 3 inputs to determine fair value (dollars in thousands) : Quantitative Information about Level 3 Fair Value Measurements Fair Value Valuation Unobservable Range Estimate Techniques Input (Weighted Average) March 31, 2020 Loans evaluated individually $ 1,413 Appraisal of collateral Appraisal adjustments -0.3% to -100% (-69.6)% OREO 55 Appraisal of collateral Appraisal adjustments -25.0% to -100% (-65.0)% Bank property held for sale 3,413 Appraisal of collateral or real estate listing price Appraisal adjustments -6.2% to -64.9% (-27.3)% December 31, 2019 Loans evaluated individually $ 2,686 Appraisal of collateral Appraisal adjustments -2.9% to -100% (-57.8)% OREO 55 Appraisal of collateral Appraisal adjustments -25.0% to -100% (-65.0)% Bank property held for sale 4,004 Appraisal of collateral or real estate listing price Appraisal adjustments -6.2% to -71.3% (-40.7)% The estimated fair values of financial instruments that are reported at amortized cost in the Company’s unaudited Consolidated Balance Sheets, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, were as follows (dollars in thousands) : March 31, 2020 December 31, 2019 Carrying Fair Carrying Fair Amount Value Amount Value Financial assets: Level 1 inputs: Cash and cash equivalents $ 342,848 $ 342,848 $ 529,288 $ 529,288 Level 2 inputs: Accrued interest receivable 27,310 27,310 27,109 27,109 Level 3 inputs: Portfolio loans, net 6,661,115 6,687,117 6,633,501 6,648,560 Mortgage servicing rights 11,776 13,968 12,326 18,193 Other servicing rights 1,070 1,632 1,071 1,740 Financial liabilities: Level 2 inputs: Time deposits $ 1,482,013 $ 1,490,835 $ 1,534,850 $ 1,538,597 Securities sold under agreements to repurchase 167,250 167,250 205,491 205,491 Short-term borrowings 21,358 21,364 8,551 8,552 Long-term debt 35,595 35,811 83,600 83,614 Junior subordinated debt owed to unconsolidated trusts 71,347 72,749 71,308 74,153 Accrued interest payable 5,609 5,609 5,000 5,000 Level 3 inputs: Senior notes, net of unamortized issuance costs 39,708 40,441 39,674 40,099 Subordinated notes, net of unamortized issuance costs 59,273 60,950 59,248 61,514 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases | |
Leases | Note 15: Leases The Company has operating leases consisting primarily of equipment leases and real estate leases. The Company leases real estate property for banking centers, ATM locations, and office space with terms extending through 2032. As of March 31, 2020, the Company reported $9.1 million of right-of-use asset and $9.2 million lease liability in its unaudited Consolidated Balance Sheets. The following tables represents lease costs and other lease information for the periods presented (dollars in thousands) : Three Months Ended March 31, Lease Costs 2020 2019 Operating lease costs $ 620 $ 533 Variable lease costs 171 111 Short-term lease costs 15 15 Sublease income - - Net lease cost $ 806 $ 659 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating lease cash flows – Fixed payments $ 611 $ 513 Operating lease cash flows – Liability reduction 530 463 Right of use assets obtained during the period in exchange for operating lease liabilities 128 — Weighted average lease term (in years) 6.51 8.33 Weighted average discount rate 3.05% 3.11% At March 31, 2020, the Company was obligated under noncancelable operating leases for office space and other commitments. Rent expense under operating leases, included in net occupancy and equipment expense, was $0.8 million and $0.7 million for the three months ended March 31, 2020 and 2019, respectively. Rent commitments were as follows (dollars in thousands) : Three Months Ended March 31, 2020 Remainder of 2020 $ 1,830 2021 1,814 2022 1,411 2023 1,254 2024 1,022 Thereafter 2,876 Amounts representing interest (1,057) Present value of net future minimum lease payments $ 9,150 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Significant Accounting Policies | |
Impacts of COVID-19 | Impacts of COVID-19 First Busey is positioned to execute its mission as an essential community resource during these challenging times. The coronavirus disease 2019 (“COVID-19”) is not only impacting health and safety around the world, it is causing significant economic disruption for both individuals and businesses, making the Company’s promise of support even more important to customers. In the face of the challenges and risks posed by COVID-19, the Company remains resolute in its focus on protecting the strength and flexibility of its balance sheet. The progression of the COVID-19 pandemic in the United States began to negatively impact the Company’s results of operations during the quarter ended March 31, 2020. Going forward, COVID-19 can be expected to have a complex and significant adverse impact on the economy, the banking industry and First Busey in future fiscal periods, all subject to a high degree of uncertainty as it relates to both timing and severity. Primary areas of impact in the future for First Busey may include margin compression, increased provision expense, a deterioration in asset quality and decreased wealth management fees and fees for customer services. |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events for potential recognition and/or disclosure through the date the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q were issued. There were no significant subsequent events for the quarter ended March 31, 2020 through the issuance date of these unaudited consolidated financial statements that warranted adjustment to or disclosure in the unaudited consolidated financial statements. |
Use of Estimates | Use of Estimates In preparing the accompanying unaudited consolidated financial statements in conformity with GAAP, the Company’s management is required to make estimates and assumptions that affect the amounts reported in the financial statements and the disclosures provided. Actual results could differ from those estimates. Material estimates which are particularly susceptible to significant change in the near term relate to the fair value of investment securities, fair value of assets acquired and liabilities assumed in business combinations, goodwill, income taxes and the determination of the allowance. |
Impact of recently adopted accounting standards | Impact of recently adopted accounting standards On January 1, 2020, First Busey adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments – Credit Losses (“Topic 326”): Measurement of Credit Losses on Financial Instruments , as amended, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance-sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. In addition, Accounting Standards Codification (“ASC”) 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities management does not intend to sell or believes that it is more likely than not they will be required to sell. First Busey adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance-sheet credit exposures. Results for reporting periods beginning after January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP which includes a change in terminology from Allowance/Provision for Loan Losses to Allowance/Provision for Credit Losses. First Busey recorded a net decrease to retained earnings of $15.9 million as of January 1, 2020 for the cumulative effect of adopting ASC 326. This transition adjustment included $12.0 million in allowance for credit losses on loans and $3.9 million in reserve for off-balance-sheet credit exposures. First Busey adopted ASC 326 using the prospective transition approach for financial assets purchased with credit deterioration (“PCD”) that were previously classified as purchased credit impaired (“PCI”) and accounted for under ASC 310-30. In accordance with the standard, management did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. In accordance with ASC 326, the amortized cost basis of PCD assets were adjusted to reflect an allowance for credit losses for any remaining credit discount. Subsequent changes in expected cash flows will be adjusted through the allowance for credit losses. The noncredit discount will be accreted into interest income at the effective interest rate as of January 1, 2020. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Significant Accounting Policies | |
Impact of ASC Topic 326 | The following table illustrates the impact of ASC 326 (dollars in thousands) : January 1, 2020 Pre-tax Post ASC 326 Pre-ASC 326 impact of ASC 326 Adoption Adoption Adoption Assets: Allowance Commercial $ 19,006 $ 18,291 $ 715 Commercial real estate 30,496 21,190 9,306 Real estate construction 6,158 3,204 2,954 Retail real estate 13,787 10,495 3,292 Retail other 1,134 568 566 Total allowance for credit losses $ 70,581 $ 53,748 $ 16,833 Liabilities: Reserve for off-balance-sheet credit exposures $ 5,492 — 5,492 |
Acquisitions (Tables)
Acquisitions (Tables) - Banc Ed | 3 Months Ended |
Mar. 31, 2020 | |
Schedule of fair value estimates of assets acquired and liabilities assumed | The following table presents the estimated fair value of Banc Ed’s assets acquired and liabilities assumed as of January 31, 2019 (dollars in thousands) : Fair Value Assets acquired: Cash and cash equivalents $ 42,013 Securities 692,716 Loans held for sale 2,157 Portfolio loans 873,336 Premises and equipment 32,156 Other intangible assets 32,617 Mortgage servicing rights 6,946 Other assets 57,332 Total assets acquired 1,739,273 Liabilities assumed: Deposits 1,439,203 Other borrowings 63,439 Other liabilities 20,153 Total liabilities assumed 1,522,795 Net assets acquired $ 216,478 Consideration paid: Cash $ 91,400 Common stock 166,515 Total consideration paid $ 257,915 Goodwill $ 41,437 |
Schedule of unaudited pro forma results of operations for the acquisition | Pro Forma Three Months Ended March 31, 2019 Total revenues (net interest income plus non-interest income) $ 100,652 Net income 27,390 Diluted earnings per common share 0.49 |
Securities (Tables)
Securities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Securities | |
Schedule of amortized cost, unrealized gains and losses and fair values of securities classified available for sale and held to maturity | The table below provides the amortized cost, unrealized gains and losses and fair values of debt securities summarized by major category (dollars in thousands) : Gross Gross Allowance Amortized Unrealized Unrealized for Credit Fair March 31, 2020: Cost Gains Losses Losses Value Debt securities available for sale U.S. Treasury securities $ 44,545 $ 849 $ — $ — $ 45,394 Obligations of U.S. government corporations and agencies 87,787 2,829 (42) — 90,574 Obligations of states and political subdivisions 278,741 6,359 (353) — 284,747 Commercial mortgage-backed securities 239,284 6,139 (2) — 245,421 Residential mortgage-backed securities 966,805 34,071 (19) — 1,000,857 Corporate debt securities 99,061 528 (637) — 98,952 Total $ 1,716,223 $ 50,775 $ (1,053) $ — $ 1,765,945 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2019: Cost Gains Losses Value Debt securities available for sale U.S. Treasury securities $ 51,472 $ 265 $ — $ 51,737 Obligations of U.S. government corporations and agencies 160,364 2,684 (48) 163,000 Obligations of states and political subdivisions 262,492 5,810 (11) 268,291 Commercial mortgage-backed securities 137,733 1,700 (146) 139,287 Residential mortgage-backed securities 912,308 10,282 (624) 921,966 Corporate debt securities 102,696 1,280 — 103,976 Total $ 1,627,065 $ 22,021 $ (829) $ 1,648,257 |
Schedule of amortized cost and fair value of debt securities available for sale and held to maturity by contractual maturity | The amortized cost and fair value of debt securities, by contractual maturity or pre-refunded date, are shown below. Mortgages underlying mortgage-backed securities may be called or prepaid; therefore, actual maturities could differ from the contractual maturities. All mortgage-backed securities were issued by U.S. government agencies and corporations (dollars in thousands) . Debt securities available for sale Amortized Fair March 31, 2020: Cost Value Due in one year or less $ 142,273 $ 142,758 Due after one year through five years 275,344 282,349 Due after five years through ten years 244,765 252,843 Due after ten years 1,053,841 1,087,995 Total $ 1,716,223 $ 1,765,945 |
Schedule of realized gains and losses related to sales of securities | Realized gains and losses related to sales and calls of debt securities available for sale are summarized as follows (dollars in thousands) : Three Months Ended March 31, 2020 2019 Gross security gains $ 1,561 $ — Gross security (losses) (5) (183) Net gains (losses) on sales of securities (1) $ 1,556 $ (183) (1) Net (losses) gains on sales of securities reported on the unaudited Consolidated Statements of Income includes sale of equity securities, excluded in this table. |
Schedule of securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position | The following information pertains to debt securities with gross unrealized losses, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (dollars in thousands): Less than 12 months, gross 12 months or more, gross Total, gross Fair Unrealized Fair Unrealized Fair Unrealized March 31, 2020: Value Losses Value Losses Value Losses Debt securities available for sale U.S. Treasury securities $ — $ — $ — $ — $ — $ — Obligations of U.S. government corporations and agencies 6,006 (42) — — 6,006 (42) Obligations of states and political subdivisions 15,445 (353) — — 15,445 (353) Commercial mortgage-backed securities 8,522 (2) — — 8,522 (2) Residential mortgage-backed securities 626 (5) 1,417 (14) 2,043 (19) Corporate debt securities 41,117 (637) — — 41,117 (637) Total temporarily impaired securities $ 71,716 $ (1,039) $ 1,417 $ (14) $ 73,133 $ (1,053) Less than 12 months, gross 12 months or more, gross Total, gross Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2019: Value Losses Value Losses Value Losses Debt securities available for sale U.S. Treasury securities $ — $ — $ — $ — $ — $ — Obligations of U.S. government corporations and agencies 6,362 (48) — — 6,362 (48) Obligations of states and political subdivisions (1) 4,981 (11) 1,548 — 6,529 (11) Commercial mortgage-backed securities 33,322 (144) 2,044 (2) 35,366 (146) Residential mortgage-backed securities 78,326 (245) 50,259 (379) 128,585 (624) Corporate debt securities — — — — — — Total temporarily impaired securities $ 122,991 $ (448) $ 53,851 $ (381) $ 176,842 $ (829) (1) Unrealized losses for 12 months or more, gross, was less than one thousand dollars. |
Portfolio loans (Tables)
Portfolio loans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Portfolio loans | |
Distribution of portfolio loans | The distribution of portfolio loans is as follows (dollars in thousands) : March 31, 2020 December 31, 2019 Commercial $ 1,767,191 $ 1,748,368 Commercial real estate 2,825,003 2,793,417 Real estate construction 448,313 401,861 Retail real estate 1,656,628 1,693,769 Retail other 48,364 49,834 Portfolio loans $ 6,745,499 $ 6,687,249 Allowance (84,384) (53,748) Portfolio loans, net $ 6,661,115 $ 6,633,501 |
Summary of risk grades segregated by category of portfolio loans (excluding accretable purchase accounting adjustments and clearings) | The following table is a summary of risk grades segregated by category of portfolio loans. March 31, 2020 includes purchase discounts and clearings in the pass rating. December 31, 2019 excludes purchase discounts and clearings. (dollars in thousands) : March 31, 2020 Special Substandard Pass Watch Mention Substandard Non-accrual Commercial $ 1,481,538 $ 150,303 $ 85,231 $ 42,727 $ 7,392 Commercial real estate 2,509,301 178,151 100,365 28,245 8,941 Real estate construction 415,302 28,808 3,222 699 282 Retail real estate 1,624,543 13,075 3,652 6,387 8,971 Retail other 48,273 — — 5 86 Total $ 6,078,957 $ 370,337 $ 192,470 $ 78,063 $ 25,672 December 31, 2019 Special Substandard Pass Watch Mention Substandard Non-accrual Commercial $ 1,458,416 $ 172,526 $ 66,337 $ 41,273 $ 9,096 Commercial real estate 2,477,398 186,963 105,487 26,204 9,178 Real estate construction 351,923 45,262 3,928 737 630 Retail real estate 1,661,691 9,125 5,355 7,001 8,935 Retail other 47,698 — — — 57 Total $ 5,997,126 $ 413,876 $ 181,107 $ 75,215 $ 27,896 |
Risk grades of portfolio loans, further sorted by origination | Risk grades of portfolio loans, further sorted by origination year at March 31, 2020 is as follows (dollars in thousand) : Term Loans Amortized Cost Basis by Origination Year Revolving As of March 31, 2020 2020 2019 2018 2017 2016 Prior loans Total Commercial: Risk rating Pass $ 183,585 $ 217,732 $ 158,089 $ 136,995 $ 84,025 $ 129,623 $ 571,489 $ 1,481,538 Watch 11,686 29,396 17,424 10,367 4,617 12,958 63,855 150,303 Special Mention 12,010 5,723 1,918 7,316 7,148 15,166 35,950 85,231 Substandard 2,860 6,108 4,640 5,646 1,939 1,425 20,109 42,727 Substandard non-accrual — 3,245 1,871 541 997 738 — 7,392 Total commercial $ 210,141 $ 262,204 $ 183,942 $ 160,865 $ 98,726 $ 159,910 $ 691,403 $ 1,767,191 Commercial real estate: Risk rating Pass $ 154,317 $ 597,120 $ 485,314 $ 551,251 $ 262,300 $ 425,072 $ 33,927 $ 2,509,301 Watch 20,142 61,908 37,717 19,038 19,039 17,375 2,932 178,151 Special Mention 15,788 15,758 18,964 14,042 6,810 28,508 495 100,365 Substandard 2,802 12,855 3,741 6,211 1,884 637 115 28,245 Substandard non-accrual — 1,345 3,813 1,484 564 1,735 — 8,941 Total commercial real estate $ 193,049 $ 688,986 $ 549,549 $ 592,026 $ 290,597 $ 473,327 $ 37,469 $ 2,825,003 Real estate construction: Risk rating Pass $ 26,489 $ 204,437 $ 139,119 $ 20,465 $ 412 $ 1,534 $ 22,846 $ 415,302 Watch 10,936 12,936 2,582 2,140 214 28,808 Special Mention 2,367 703 — — 152 — — 3,222 Substandard — — 655 44 — — — 699 Substandard non-accrual — — 275 — — 7 — 282 Total real estate construction $ 39,792 $ 218,076 $ 142,631 $ 22,649 $ 778 $ 1,541 $ 22,846 $ 448,313 Retail real estate: Risk rating Pass $ 51,441 $ 201,517 $ 199,235 $ 204,376 $ 184,629 $ 381,085 $ 402,260 $ 1,624,543 Watch 296 3,599 1,893 441 1,034 736 5,076 13,075 Special Mention 108 — 180 — 2,001 1,363 — 3,652 Substandard — 1,285 447 537 761 2,904 453 6,387 Substandard non-accrual 100 209 863 486 254 5,541 1,518 8,971 Total retail real estate $ 51,945 $ 206,610 $ 202,618 $ 205,840 $ 188,679 $ 391,629 $ 409,307 $ 1,656,628 Retail other: Risk rating Pass $ 6,126 $ 13,896 $ 9,331 $ 4,942 $ 1,601 $ 1,419 $ 10,958 $ 48,273 Watch — — — — — — — — Special Mention — — — — — — — — Substandard — — — — — — 5 5 Substandard non-accrual 16 47 — 3 17 — 3 86 Total retail other $ 6,142 $ 13,943 $ 9,331 $ 4,945 $ 1,618 $ 1,419 $ 10,966 $ 48,364 |
Summary of portfolio loans that are past due and still accruing or on a non-accrual status | Risk grades of portfolio loans, further sorted by origination year at March 31, 2020 is as follows (dollars in thousand) : Term Loans Amortized Cost Basis by Origination Year Revolving As of March 31, 2020 2020 2019 2018 2017 2016 Prior loans Total Commercial: Risk rating Pass $ 183,585 $ 217,732 $ 158,089 $ 136,995 $ 84,025 $ 129,623 $ 571,489 $ 1,481,538 Watch 11,686 29,396 17,424 10,367 4,617 12,958 63,855 150,303 Special Mention 12,010 5,723 1,918 7,316 7,148 15,166 35,950 85,231 Substandard 2,860 6,108 4,640 5,646 1,939 1,425 20,109 42,727 Substandard non-accrual — 3,245 1,871 541 997 738 — 7,392 Total commercial $ 210,141 $ 262,204 $ 183,942 $ 160,865 $ 98,726 $ 159,910 $ 691,403 $ 1,767,191 Commercial real estate: Risk rating Pass $ 154,317 $ 597,120 $ 485,314 $ 551,251 $ 262,300 $ 425,072 $ 33,927 $ 2,509,301 Watch 20,142 61,908 37,717 19,038 19,039 17,375 2,932 178,151 Special Mention 15,788 15,758 18,964 14,042 6,810 28,508 495 100,365 Substandard 2,802 12,855 3,741 6,211 1,884 637 115 28,245 Substandard non-accrual — 1,345 3,813 1,484 564 1,735 — 8,941 Total commercial real estate $ 193,049 $ 688,986 $ 549,549 $ 592,026 $ 290,597 $ 473,327 $ 37,469 $ 2,825,003 Real estate construction: Risk rating Pass $ 26,489 $ 204,437 $ 139,119 $ 20,465 $ 412 $ 1,534 $ 22,846 $ 415,302 Watch 10,936 12,936 2,582 2,140 214 28,808 Special Mention 2,367 703 — — 152 — — 3,222 Substandard — — 655 44 — — — 699 Substandard non-accrual — — 275 — — 7 — 282 Total real estate construction $ 39,792 $ 218,076 $ 142,631 $ 22,649 $ 778 $ 1,541 $ 22,846 $ 448,313 Retail real estate: Risk rating Pass $ 51,441 $ 201,517 $ 199,235 $ 204,376 $ 184,629 $ 381,085 $ 402,260 $ 1,624,543 Watch 296 3,599 1,893 441 1,034 736 5,076 13,075 Special Mention 108 — 180 — 2,001 1,363 — 3,652 Substandard — 1,285 447 537 761 2,904 453 6,387 Substandard non-accrual 100 209 863 486 254 5,541 1,518 8,971 Total retail real estate $ 51,945 $ 206,610 $ 202,618 $ 205,840 $ 188,679 $ 391,629 $ 409,307 $ 1,656,628 Retail other: Risk rating Pass $ 6,126 $ 13,896 $ 9,331 $ 4,942 $ 1,601 $ 1,419 $ 10,958 $ 48,273 Watch — — — — — — — — Special Mention — — — — — — — — Substandard — — — — — — 5 5 Substandard non-accrual 16 47 — 3 17 — 3 86 Total retail other $ 6,142 $ 13,943 $ 9,331 $ 4,945 $ 1,618 $ 1,419 $ 10,966 $ 48,364 |
Summary of restructured loans | A summary of troubled debt restructurings (“TDR”) loans is as follows (dollars in thousands) : March 31, December 31, 2020 2019 In compliance with modified terms $ 4,949 $ 5,005 30 — 89 days past due — — Included in non-performing loans 1,686 702 Total $ 6,635 $ 5,707 |
Schedule of details of impaired loans, segregated by category | March 31, 2020 Unpaid Amortized Contractual Cost Amortized Total Average Principal with No Cost Amortized Related Amortized Balance Allowance with Allowance Cost Allowance Cost Commercial $ 11,795 $ 3,751 $ 3,671 $ 7,422 $ 2,822 $ 11,493 Commercial real estate 11,992 9,111 1,206 10,317 642 15,226 Real estate construction 579 562 — 562 — 888 Retail real estate 7,642 6,597 474 7,071 474 12,767 Retail other — — — — — 34 Total $ 32,008 $ 20,021 $ 5,351 $ 25,372 $ 3,938 $ 40,408 December 31, 2019 Unpaid Amortized Contractual Cost Amortized Total Average Principal with No Cost Amortized Related Amortized Balance Allowance with Allowance Cost Allowance Cost Commercial $ 14,415 $ 4,727 $ 5,026 $ 9,753 $ 3,330 $ 13,774 Commercial real estate 14,487 9,883 2,039 11,922 1,049 16,678 Real estate construction 1,116 974 — 974 — 873 Retail real estate 15,581 13,898 474 14,372 474 14,003 Retail other 87 58 — 58 — 42 Total $ 45,686 $ 29,540 $ 7,539 $ 37,079 $ 4,853 $ 45,370 |
Schedule of activity on the allowance for loan losses | The following table details activity in the allowance. Allocation of a portion of the allowance to one category does not preclude its availability to absorb losses in other categories (dollars in thousands) : As of and for the Three Months Ended March 31, 2020 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Beginning balance, prior to adoption of ASC 326 $ 18,291 $ 21,190 $ 3,204 $ 10,495 $ 568 $ 53,748 Adoption of ASC 326 715 9,306 2,954 3,292 566 16,833 Provision for credit losses 5,673 6,526 889 4,037 91 17,216 Charged-off (2,042) (1,099) — (708) (299) (4,148) Recoveries 88 44 146 338 119 735 Ending balance $ 22,725 $ 35,967 $ 7,193 $ 17,454 $ 1,045 $ 84,384 As of and for the Three Months Ended March 31, 2019 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Beginning balance $ 17,829 $ 21,137 $ 2,723 $ 8,471 $ 488 $ 50,648 Provision for loan losses 1,793 (1,089) 2 1,357 48 2,111 Charged-off (1,807) (15) — (517) (130) (2,469) Recoveries 183 64 82 192 104 625 Ending balance $ 17,998 $ 20,097 $ 2,807 $ 9,503 $ 510 $ 50,915 |
Schedule of allowance for loan losses and recorded investments in portfolio loans, by category | The following table presents the allowance and amortized cost of portfolio loans by category (dollars in thousands) : As of March 31, 2020 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Allowance Ending balance attributed to: Loans individually evaluated for impairment $ 2,822 $ 642 $ — $ 474 $ — $ 3,938 Loans collectively evaluated for impairment 19,903 35,325 7,193 16,980 1,045 80,446 Ending balance $ 22,725 $ 35,967 $ 7,193 $ 17,454 $ 1,045 $ 84,384 Loans: Loans individually evaluated for impairment $ 7,414 $ 8,452 $ 307 $ 6,618 $ — $ 22,791 Loans collectively evaluated for impairment 1,759,769 2,814,686 447,751 1,649,557 48,364 6,720,127 PCD loans evaluated for impairment 8 1,865 255 453 — 2,581 Ending balance $ 1,767,191 $ 2,825,003 $ 448,313 $ 1,656,628 $ 48,364 $ 6,745,499 As of December 31, 2019 Commercial Real Estate Retail Real Commercial Real Estate Construction Estate Retail Other Total Allowance Ending balance attributed to: Loans individually evaluated for impairment $ 3,330 $ 1,049 $ — $ 474 $ — $ 4,853 Loans collectively evaluated for impairment 14,961 20,141 3,204 10,021 568 48,895 Ending balance $ 18,291 $ 21,190 $ 3,204 $ 10,495 $ 568 $ 53,748 Loans: Loans individually evaluated for impairment $ 9,740 $ 10,018 $ 539 $ 13,676 $ 58 $ 34,031 Loans collectively evaluated for impairment 1,738,615 2,781,495 400,887 1,679,397 49,776 6,650,170 PCI loans evaluated for impairment 13 1,904 435 696 — 3,048 Ending balance $ 1,748,368 $ 2,793,417 $ 401,861 $ 1,693,769 $ 49,834 $ 6,687,249 |
Deposits (Tables)
Deposits (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Deposits | |
Schedule of composition of deposits | The composition of deposits is as follows (dollars in thousands) : March 31, 2020 December 31, 2019 Demand deposits, noninterest-bearing $ 1,910,673 $ 1,832,619 Interest-bearing transaction deposits 1,982,137 1,989,854 Saving deposits and money market deposits 2,598,410 2,545,073 Time deposits 1,482,013 1,534,850 Total $ 7,973,233 $ 7,902,396 |
Schedule of maturities of time deposits | As of March 31, 2020, the scheduled maturities of time deposits are as follows (dollars in thousands) : April 1, 2020 - March 31, 2021 $ 970,198 April 1, 2021 - March 31, 2022 300,817 April 1, 2022 - March 31, 2023 105,097 April 1, 2023 - March 31, 2024 76,896 April 1, 2024 - March 31, 2025 28,994 Thereafter 11 $ 1,482,013 |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Borrowings | |
Summary of long-term debt | Long-term debt is summarized as follows (dollars in thousands) : March 31, December 31, 2020 2019 Notes payable, FHLB, ranging in original maturity from 5 to 10 years , collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock. $ 35,595 $ 35,600 Term Loan — 48,000 Total long-term borrowings $ 35,595 $ 83,600 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Common Share | |
Schedule of computation of earnings per common share | Earnings per common share have been computed as follows (in thousands, except per share data) : Three Months Ended March 31, 2020 2019 Net income $ 15,364 $ 25,469 Shares: Weighted average common shares outstanding 54,662 53,277 Dilutive effect of outstanding options, warrants and restricted stock units as determined by the application of the treasury stock method 251 301 Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation 54,913 53,578 Basic earnings per common share $ 0.28 $ 0.48 Diluted earnings per common share $ 0.28 $ 0.48 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss). | |
Accumulated Other Comprehensive Income (Loss) | The following table represents changes in accumulated other comprehensive income (loss) by component, net of tax, for the periods below (dollars in thousands) : Three Months Ended March 31, 2020 2019 Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Unrealized gains (losses) on debt securities available for sale: Balance at beginning of period $ 21,192 $ (6,032) $ 15,160 $ (9,528) $ 2,716 $ (6,812) Unrealized holding gains (losses) on debt securities available for sale, net 30,086 (8,589) 21,497 6,799 (1,940) 4,859 Unrealized gains on debt securities transferred from held to maturity to available for sale — — — 4,780 (1,364) 3,416 Amounts reclassified from accumulated other comprehensive income, net (1,556) 448 (1,108) 184 (52) 132 Balance at end of period $ 49,722 $ (14,173) $ 35,549 $ 2,235 $ (640) $ 1,595 Unrealized gains (losses) on cash flow hedges: Balance at beginning of period (280) 80 (200) — — — Unrealized holding gains (losses) on cash flow hedges, net (3,129) 892 (2,237) — — — Amounts reclassified from accumulated other comprehensive income, net (15) 4 (11) — — — Balance at end of period $ (3,424) $ 976 $ (2,448) $ — $ — $ — Total accumulated other comprehensive income (loss) $ 46,298 $ (13,197) $ 33,101 $ 2,235 $ (640) $ 1,595 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Compensation | |
Schedule of status of and changes in the Company's stock option awards | A summary of the status of and changes in the Company's stock option awards for the three months ended March 31, 2020 follows: Weighted- Weighted- Average Average Exercise Remaining Contractual Shares Price Term Outstanding at beginning of period 53,185 $ 22.00 Exercised (5,280) 23.26 Forfeited — — Expired (88) 17.05 Outstanding at end of period 47,817 $ 21.87 5.58 Exercisable at end of period 47,817 $ 21.87 5.58 |
Summary of the changes in company deferred stock units | A summary of the changes in the Company’s stock unit awards for the three months ended March 31, 2020, is as follows: Weighted- Director Weighted- Restricted Average Deferred Average Stock Grant Date Stock Grant Date Units Fair Value Units Fair Value Non-vested at beginning of period 778,317 $ 27.27 21,261 $ 23.18 Granted 3,808 26.26 — — Dividend equivalents earned 6,612 25.50 780 25.50 Vested (8,249) 29.50 — — Forfeited (9,559) 28.96 (597) 25.50 Non-vested at end of period 770,929 $ 27.21 21,444 $ 23.20 Outstanding at end of period 770,929 $ 27.21 91,278 $ 23.40 |
Outstanding Commitments and C_2
Outstanding Commitments and Contingent Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Outstanding Commitments and Contingent Liabilities | |
Schedule of contractual amount of exposure to off-balance-sheet risk | A summary of the contractual amount of the Company’s exposure to off-balance-sheet risk relating to the Company’s commitments to extend credit and standby letters of credit follows (dollars in thousands) : March 31, 2020 December 31, 2019 Financial instruments whose contract amounts represent credit risk: Commitments to extend credit $ 1,628,461 $ 1,649,565 Standby letters of credit 42,774 42,581 |
Regulatory Capital (Tables)
Regulatory Capital (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Regulatory Capital | |
Schedule of applicable holding company and bank regulatory capital requirements | The following tables summarize the applicable holding company and bank regulatory capital requirements (dollars in thousands) : Minimum Minimum To Be Well Actual Capital Requirement Capitalized Amount Ratio Amount Ratio Amount Ratio As of March 31, 2020: Total Capital (to Risk Weighted Assets) Consolidated $ 1,046,689 13.85 % $ 604,488 8.00 % $ 755,610 10.00 % Busey Bank $ 1,012,447 13.42 % $ 603,538 8.00 % $ 754,422 10.00 % Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 921,827 12.20 % $ 453,366 6.00 % $ 604,488 8.00 % Busey Bank $ 947,583 12.56 % $ 452,653 6.00 % $ 603,538 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 847,827 11.22 % $ 340,025 4.50 % $ 491,147 6.50 % Busey Bank $ 947,583 12.56 % $ 339,490 4.50 % $ 490,374 6.50 % Tier 1 Capital (to Average Assets) Consolidated $ 921,827 9.89 % $ 372,696 4.00 % N/A N/A Busey Bank $ 947,583 10.19 % $ 371,799 4.00 % $ 464,749 5.00 % Minimum Minimum To Be Well Actual Capital Requirement Capitalized Amount Ratio Amount Ratio Amount Ratio As of December 31, 2019: Total Capital (to Risk Weighted Assets) Consolidated $ 1,036,143 14.03 % $ 590,826 8.00 % $ 738,532 10.00 % Busey Bank $ 1,099,449 14.92 % $ 589,681 8.00 % $ 737,101 10.00 % Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 922,395 12.49 % $ 443,120 6.00 % $ 590,826 8.00 % Busey Bank $ 1,045,701 14.19 % $ 442,261 6.00 % $ 589,681 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) Consolidated $ 848,395 11.49 % $ 332,340 4.50 % $ 480,046 6.50 % Busey Bank $ 1,045,701 14.19 % $ 331,696 4.50 % $ 479,116 6.50 % Tier 1 Capital (to Average Assets) Consolidated $ 922,395 9.88 % $ 373,360 4.00 % N/A N/A Busey Bank $ 1,045,701 11.19 % $ 373,639 4.00 % $ 467,049 5.00 % |
Operating Segments and Relate_2
Operating Segments and Related Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Operating Segments and Related Information | |
Summary of information relating to operating segments | Following is a summary of selected financial information for the Company’s operating segments (dollars in thousands) : Goodwill Total Assets March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Banking $ 288,436 $ 288,436 $ 9,654,171 $ 9,632,368 Remittance Processing 8,992 8,992 44,744 44,209 Wealth Management 14,108 14,108 36,204 32,760 Other — — (13,714) (13,608) Totals $ 311,536 $ 311,536 $ 9,721,405 $ 9,695,729 Three Months Ended March 31, 2020 2019 Net interest income: Banking $ 71,573 $ 70,638 Remittance Processing 19 18 Wealth Management — — Other (2,159) (2,273) Total net interest income $ 69,433 $ 68,383 Non-interest income: Banking $ 13,168 $ 12,783 Remittance Processing 4,069 4,181 Wealth Management 11,709 9,133 Other (1,429) (152) Total non-interest income $ 27,517 $ 25,945 Non-interest expense: Banking $ 48,515 $ 45,171 Remittance Processing 2,903 2,764 Wealth Management 6,974 5,564 Other 2,122 3,664 Total non-interest expense $ 60,514 $ 57,163 Income before income taxes: Banking $ 19,010 $ 36,139 Remittance Processing 1,185 1,435 Wealth Management 4,735 3,569 Other (5,710) (6,089) Total income before income taxes $ 19,220 $ 35,054 Net income: Banking $ 14,924 $ 26,665 Remittance Processing 860 1,025 Wealth Management 3,599 2,641 Other (4,019) (4,862) Total net income $ 15,364 $ 25,469 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of the interest-rate swaps designated as cash flow hedges | A summary of the interest-rate swaps designated as cash flow hedges is presented below (dollars in thousands) : March 31, 2020 December 31, 2019 Notional amount $ 70,000 $ 70,000 Weighted average fixed pay rates 1.80 % 1.80 % Weighted average variable 3 month LIBOR receive rates 0.77 % 1.90 % Weighted average maturity 3.61 yrs 3.86 yrs Unrealized gains (losses), net of tax $ (2,448) $ (200) |
Interest rate swap | |
Summary of fair values of derivative assets and liabilities recorded in consolidated balance sheet | The fair values of derivative assets and liabilities related to derivatives for customers for interest rate swaps recorded in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands) : March 31, 2020 December 31, 2019 Fair value recorded in other assets $ 35,832 $ 12,354 Fair value recorded in other liabilities 35,832 12,354 |
Summary of gross gains and losses on derivative assets and liabilities recorded in non-interest income and expense in consolidated statements of income | The gross gains and losses on these derivative assets and liabilities recorded in non-interest income and non-interest expense in the unaudited Consolidated Statements of Income are summarized as follows (dollars in thousands) : Three Months Ended March 31, 2020 2019 Gross gains $ 23,478 $ 3,713 Gross losses (23,478) (3,713) Net gains (losses) $ — $ — |
Interest rate contract | |
Summary of gross gains and losses on derivative assets and liabilities recorded in non-interest income and expense in consolidated statements of income | The following table presents the net gains (losses) recorded in accumulated other comprehensive income and the unaudited Consolidated Statements of Income relating to cash flow derivative instruments for the period presented (dollars in thousands) : Three Months Ended March 31, 2020 Amount of (gain) loss recognized in OCI Amount of (gain) loss reclassified from OCI to interest income Interest rate contracts $ 2,237 $ (11) |
Interest rate lock commitments and forward sales commitments | |
Summary of fair values of derivative assets and liabilities recorded in consolidated balance sheet | The fair values of derivative assets and liabilities related to interest rate lock commitments and forward sales commitments recorded in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands) : March 31, 2020 December 31, 2019 Fair value recorded in other assets $ 5,146 $ 1,046 Fair value recorded in other liabilities 7,344 2,187 |
Summary of gross gains and losses on derivative assets and liabilities recorded in non-interest income and expense in consolidated statements of income | The gross gains and losses on these derivative assets and liabilities related to interest rate lock commitments and forward sales commitments recorded in non-interest income and expense in the unaudited Consolidated Statements of Income are summarized as follows (dollars in thousands) : Three Months Ended March 31, 2020 2019 Gross gains $ 6,670 $ 1,078 Gross (losses) (7,344) (1,118) Net gains (losses) $ (674) $ (40) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements | |
Schedule of financial assets and financial liabilities measured at fair value on a recurring basis | The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands) : Level 1 Level 2 Level 3 Total March 31, 2020 Inputs Inputs Inputs Fair Value Debt securities available for sale U.S. Treasury securities $ — $ 45,394 $ — $ 45,394 Obligations of U.S. government corporations and agencies — 90,574 — 90,574 Obligations of states and political subdivisions — 284,747 — 284,747 Commercial mortgage-backed securities — 245,421 — 245,421 Residential mortgage-backed securities — 1,000,857 — 1,000,857 Corporate debt securities — 98,952 — 98,952 Equity securities — 4,936 — 4,936 Loans held for sale — 89,943 — 89,943 Derivative assets — 40,978 — 40,978 Derivative liabilities — 46,600 — 46,600 Level 1 Level 2 Level 3 Total December 31, 2019 Inputs Inputs Inputs Fair Value Debt securities available for sale U.S. Treasury securities $ — $ 51,737 $ — $ 51,737 Obligations of U.S. government corporations and agencies — 163,000 — 163,000 Obligations of states and political subdivisions — 268,291 — 268,291 Commercial mortgage-backed securities — 139,287 — 139,287 Residential mortgage-backed securities — 921,966 — 921,966 Corporate debt securities — 103,976 — 103,976 Equity securities — 5,952 — 5,952 Loans held for sale — 68,699 — 68,699 Derivative assets — 13,400 — 13,400 Derivative liabilities — 14,821 — 14,821 |
Schedule of assets and liabilities measured at fair value on a non-recurring basis | The following table summarizes assets and liabilities measured at fair value on a non-recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands) : Level 1 Level 2 Level 3 Total Inputs Inputs Inputs Fair Value March 31, 2020 Loans evaluated individually $ — $ — $ 1,413 $ 1,413 OREO — — 55 55 Bank property held for sale — — 3,413 3,413 December 31, 2019 Loans evaluated individually $ — $ — $ 2,686 $ 2,686 OREO — — 55 55 Bank property held for sale — — 4,004 4,004 |
Schedule of quantitative information about Level 3 fair value measurements | The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized level 3 inputs to determine fair value (dollars in thousands) : Quantitative Information about Level 3 Fair Value Measurements Fair Value Valuation Unobservable Range Estimate Techniques Input (Weighted Average) March 31, 2020 Loans evaluated individually $ 1,413 Appraisal of collateral Appraisal adjustments -0.3% to -100% (-69.6)% OREO 55 Appraisal of collateral Appraisal adjustments -25.0% to -100% (-65.0)% Bank property held for sale 3,413 Appraisal of collateral or real estate listing price Appraisal adjustments -6.2% to -64.9% (-27.3)% December 31, 2019 Loans evaluated individually $ 2,686 Appraisal of collateral Appraisal adjustments -2.9% to -100% (-57.8)% OREO 55 Appraisal of collateral Appraisal adjustments -25.0% to -100% (-65.0)% Bank property held for sale 4,004 Appraisal of collateral or real estate listing price Appraisal adjustments -6.2% to -71.3% (-40.7)% |
Schedule of estimated fair values of financial instruments | Quantitative Information about Level 3 Fair Value Measurements Fair Value Valuation Unobservable Range Estimate Techniques Input (Weighted Average) March 31, 2020 Loans evaluated individually $ 1,413 Appraisal of collateral Appraisal adjustments -0.3% to -100% (-69.6)% OREO 55 Appraisal of collateral Appraisal adjustments -25.0% to -100% (-65.0)% Bank property held for sale 3,413 Appraisal of collateral or real estate listing price Appraisal adjustments -6.2% to -64.9% (-27.3)% December 31, 2019 Loans evaluated individually $ 2,686 Appraisal of collateral Appraisal adjustments -2.9% to -100% (-57.8)% OREO 55 Appraisal of collateral Appraisal adjustments -25.0% to -100% (-65.0)% Bank property held for sale 4,004 Appraisal of collateral or real estate listing price Appraisal adjustments -6.2% to -71.3% (-40.7)% |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases | |
Schedule of lease costs and other lease information | The following tables represents lease costs and other lease information for the periods presented (dollars in thousands) : Three Months Ended March 31, Lease Costs 2020 2019 Operating lease costs $ 620 $ 533 Variable lease costs 171 111 Short-term lease costs 15 15 Sublease income - - Net lease cost $ 806 $ 659 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating lease cash flows – Fixed payments $ 611 $ 513 Operating lease cash flows – Liability reduction 530 463 Right of use assets obtained during the period in exchange for operating lease liabilities 128 — Weighted average lease term (in years) 6.51 8.33 Weighted average discount rate 3.05% 3.11% |
Schedule of future rent commitments | Rent commitments were as follows (dollars in thousands) : Three Months Ended March 31, 2020 Remainder of 2020 $ 1,830 2021 1,814 2022 1,411 2023 1,254 2024 1,022 Thereafter 2,876 Amounts representing interest (1,057) Present value of net future minimum lease payments $ 9,150 |
Significant Accounting Polici_4
Significant Accounting Policies - Impact of new financial accounting standards (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
Recently Issued Accounting Standards | |||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ (15,922) | ||
Right of use asset | $ 9,074 | 9,490 | |
Lease liability | $ 9,150 | $ 9,552 | |
Allowance for credit losses on loans | |||
Recently Issued Accounting Standards | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 12,000 | ||
Post ASC 326 | |||
Recently Issued Accounting Standards | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | (15,900) | ||
Post ASC 326 | Reserve for off-balance-sheet credit exposures | |||
Recently Issued Accounting Standards | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 3,900 |
Significant Accounting Polici_5
Significant Accounting Policies - Impact of Topic 326 (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jan. 01, 2020 |
Allowance-debt securities available for sale | ||
Accrued interest receivable for debt securities available for sale debt | $ 6,800 | |
Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | $ 16,833 | |
Liabilities | ||
Reserve for off-balance-sheet credit exposures | 5,492 | |
Post ASC 326 | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 70,581 | |
Liabilities | ||
Reserve for off-balance-sheet credit exposures | 5,492 | |
Pre-ASC 326 | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 53,748 | |
Commercial Loans | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 715 | |
Commercial Loans | Post ASC 326 | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 19,006 | |
Commercial Loans | Pre-ASC 326 | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 18,291 | |
Commercial Real Estate Loans | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 9,306 | |
Commercial Real Estate Loans | Post ASC 326 | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 30,496 | |
Commercial Real Estate Loans | Pre-ASC 326 | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 21,190 | |
Real Estate Construction | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 2,954 | |
Real Estate Construction | Post ASC 326 | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 6,158 | |
Real Estate Construction | Pre-ASC 326 | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 3,204 | |
Retail Real Estate | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 3,292 | |
Retail Real Estate | Post ASC 326 | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 13,787 | |
Retail Real Estate | Pre-ASC 326 | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 10,495 | |
Retail Other | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 566 | |
Retail Other | Post ASC 326 | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | 1,134 | |
Retail Other | Pre-ASC 326 | Accounting Standards Update 2016-13 | ||
Assets | ||
Portfolio Loans, allowance for loan losses (in dollars) | $ 568 |
Acquisitions - The Banc Ed Corp
Acquisitions - The Banc Ed Corp. (Details) $ / shares in Units, shares in Millions | Aug. 21, 2019$ / shares | Jan. 31, 2019USD ($)$ / sharesshares | Mar. 31, 2020USD ($)$ / shares | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) |
Consideration paid | |||||
Goodwill | $ 311,536,000 | $ 311,536,000 | |||
Banc Ed | |||||
Merger agreement | |||||
Share consideration conversion ratio | 8.2067 | ||||
Per share cash consideration entitled (in dollars per share) | $ / shares | $ 111.53 | ||||
Number of common shares issued for acquisition | shares | 6.7 | ||||
Market value of common stock issued | $ 166,500,000 | ||||
Common stock | $ 166,515,000 | ||||
Share price | $ / shares | $ 24.76 | ||||
Goodwill acquired | $ 41,400,000 | ||||
Business acquisition expenses | 0 | $ 1,000,000 | |||
Assets acquired: | |||||
Cash and cash equivalents | 42,013,000 | ||||
Securities | 692,716,000 | ||||
Loans held for sale | 2,157,000 | ||||
Portfolio loans | 873,336,000 | ||||
Premises and equipment | 32,156,000 | ||||
Other intangible assets | 32,617,000 | ||||
Mortgage servicing rights | 6,946,000 | ||||
Other assets | 57,332,000 | ||||
Total assets acquired | 1,739,273,000 | ||||
Liabilities assumed: | |||||
Deposits | 1,439,203,000 | ||||
Other borrowings | 63,439,000 | ||||
Other liabilities | 20,153,000 | ||||
Total liabilities assumed | 1,522,795,000 | ||||
Net assets acquired | 216,478,000 | ||||
Consideration paid | |||||
Cash | 91,400,000 | ||||
Common stock | 166,515,000 | ||||
Total consideration paid | 257,915,000 | ||||
Goodwill | $ 41,437,000 | ||||
Banc Ed | Pro Forma | |||||
Consideration paid | |||||
Total revenues (net interest income plus non-interest income) | 100,652,000,000 | ||||
Net income | $ 27,390,000,000 | ||||
Diluted earnings per common share (in dollars per share) | $ / shares | $ 0.49 | ||||
IST | Non-interest expense | |||||
Merger agreement | |||||
Business acquisition expenses | $ 100,000 | $ 200,000 |
Securities - General Disclosure
Securities - General Disclosures (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Debt Securities | |||
Equity securities consisting of common stock and money market mutual funds, fair value | $ 4,936,000 | $ 5,952,000 | |
Unrealized (losses) gains recognized on equity securities | (987,000) | $ 216,000 | |
Debt securities available for sale | |||
Amortized Cost | 1,716,223,000 | 1,627,065,000 | |
Gross Unrealized Gains | 50,775,000 | 22,021,000 | |
Gross Unrealized Losses | (1,053,000) | (829,000) | |
Fair Value | 1,765,945,000 | 1,648,257,000 | |
Debt securities available for sale, Amortized Cost | |||
Due in one year or less | 142,273,000 | ||
Due after one year through five years | 275,344,000 | ||
Due after five years through ten years | 244,765,000 | ||
Due after ten years | 1,053,841,000 | ||
Amortized Cost | 1,716,223,000 | 1,627,065,000 | |
Debt securities available for sale, Fair Value | |||
Due in one year or less | 142,758,000 | ||
Due after one year through five years | 282,349,000 | ||
Due after five years through ten years | 252,843,000 | ||
Due after ten years | 1,087,995,000 | ||
Fair Value | 1,765,945,000 | 1,648,257,000 | |
Realized gains and losses related to sales and calls of securities AFS | |||
Gross security gains | 1,561,000 | ||
Gross security (losses) | (5,000) | (183,000) | |
Net gains (losses) on sales of securities | 1,556,000 | $ (183,000) | |
Debt securities available for sale, Fair Value | |||
Continuous unrealized losses existing for less than 12 months, gross | 71,716,000 | 122,991,000 | |
Continuous unrealized losses existing for greater than 12 months, gross | 1,417,000 | 53,851,000 | |
Total, gross | 73,133,000 | 176,842,000 | |
Debt securities available for sale, Unrealized Losses | |||
Continuous unrealized losses existing for less than 12 months, gross | (1,039,000) | (448,000) | |
Continuous unrealized losses existing greater than 12 months, gross | (14,000) | (381,000) | |
Total, gross | $ (1,053,000) | (829,000) | |
Security portfolio evaluated for other-than-temporary impairment | 1,143 | ||
Number of securities in unrealized loss position | 45 | ||
Securities in unrealized loss position as a percentage of aggregate carrying value of investments | 1.42% | ||
Collateral | |||
Realized gains and losses related to sales and calls of securities AFS | |||
Carrying amount of investment securities pledged as collateral | $ 647,800,000 | 704,400,000 | |
U.S. Treasury securities | |||
Debt securities available for sale | |||
Amortized Cost | 44,545,000 | 51,472,000 | |
Gross Unrealized Gains | 849,000 | 265,000 | |
Fair Value | 45,394,000 | 51,737,000 | |
Debt securities available for sale, Amortized Cost | |||
Amortized Cost | 44,545,000 | 51,472,000 | |
Debt securities available for sale, Fair Value | |||
Fair Value | 45,394,000 | 51,737,000 | |
Obligations of U.S. government corporations and agencies | |||
Debt securities available for sale | |||
Amortized Cost | 87,787,000 | 160,364,000 | |
Gross Unrealized Gains | 2,829,000 | 2,684,000 | |
Gross Unrealized Losses | (42,000) | (48,000) | |
Fair Value | 90,574,000 | 163,000,000 | |
Debt securities available for sale, Amortized Cost | |||
Amortized Cost | 87,787,000 | 160,364,000 | |
Debt securities available for sale, Fair Value | |||
Fair Value | 90,574,000 | 163,000,000 | |
Debt securities available for sale, Fair Value | |||
Continuous unrealized losses existing for less than 12 months, gross | 6,006,000 | 6,362,000 | |
Total, gross | 6,006,000 | 6,362,000 | |
Debt securities available for sale, Unrealized Losses | |||
Continuous unrealized losses existing for less than 12 months, gross | (42,000) | (48,000) | |
Total, gross | (42,000) | (48,000) | |
Obligations of states and political subdivisions | |||
Debt securities available for sale | |||
Amortized Cost | 278,741,000 | 262,492,000 | |
Gross Unrealized Gains | 6,359,000 | 5,810,000 | |
Gross Unrealized Losses | (353,000) | (11,000) | |
Fair Value | 284,747,000 | 268,291,000 | |
Debt securities available for sale, Amortized Cost | |||
Amortized Cost | 278,741,000 | 262,492,000 | |
Debt securities available for sale, Fair Value | |||
Fair Value | 284,747,000 | 268,291,000 | |
Debt securities available for sale, Fair Value | |||
Continuous unrealized losses existing for less than 12 months, gross | 15,445,000 | 4,981,000 | |
Continuous unrealized losses existing for greater than 12 months, gross | 1,548,000 | ||
Total, gross | 15,445,000 | 6,529,000 | |
Debt securities available for sale, Unrealized Losses | |||
Continuous unrealized losses existing for less than 12 months, gross | (353,000) | (11,000) | |
Total, gross | (353,000) | (11,000) | |
Commercial mortgage-backed securities | |||
Debt securities available for sale | |||
Amortized Cost | 239,284,000 | 137,733,000 | |
Gross Unrealized Gains | 6,139,000 | 1,700,000 | |
Gross Unrealized Losses | (2,000) | (146,000) | |
Fair Value | 245,421,000 | 139,287,000 | |
Debt securities available for sale, Amortized Cost | |||
Amortized Cost | 239,284,000 | 137,733,000 | |
Debt securities available for sale, Fair Value | |||
Fair Value | 245,421,000 | 139,287,000 | |
Debt securities available for sale, Fair Value | |||
Continuous unrealized losses existing for less than 12 months, gross | 8,522,000 | 33,322,000 | |
Continuous unrealized losses existing for greater than 12 months, gross | 2,044,000 | ||
Total, gross | 8,522,000 | 35,366,000 | |
Debt securities available for sale, Unrealized Losses | |||
Continuous unrealized losses existing for less than 12 months, gross | (2,000) | (144,000) | |
Continuous unrealized losses existing greater than 12 months, gross | (2,000) | ||
Total, gross | (2,000) | (146,000) | |
Residential mortgage-backed securities | |||
Debt securities available for sale | |||
Amortized Cost | 966,805,000 | 912,308,000 | |
Gross Unrealized Gains | 34,071,000 | 10,282,000 | |
Gross Unrealized Losses | (19,000) | (624,000) | |
Fair Value | 1,000,857,000 | 921,966,000 | |
Debt securities available for sale, Amortized Cost | |||
Amortized Cost | 966,805,000 | 912,308,000 | |
Debt securities available for sale, Fair Value | |||
Fair Value | 1,000,857,000 | 921,966,000 | |
Debt securities available for sale, Fair Value | |||
Continuous unrealized losses existing for less than 12 months, gross | 626,000 | 78,326,000 | |
Continuous unrealized losses existing for greater than 12 months, gross | 1,417,000 | 50,259,000 | |
Total, gross | 2,043,000 | 128,585,000 | |
Debt securities available for sale, Unrealized Losses | |||
Continuous unrealized losses existing for less than 12 months, gross | (5,000) | (245,000) | |
Continuous unrealized losses existing greater than 12 months, gross | (14,000) | (379,000) | |
Total, gross | (19,000) | (624,000) | |
Corporate debt securities | |||
Debt securities available for sale | |||
Amortized Cost | 99,061,000 | 102,696,000 | |
Gross Unrealized Gains | 528,000 | 1,280,000 | |
Gross Unrealized Losses | (637,000) | ||
Fair Value | 98,952,000 | 103,976,000 | |
Debt securities available for sale, Amortized Cost | |||
Amortized Cost | 99,061,000 | 102,696,000 | |
Debt securities available for sale, Fair Value | |||
Fair Value | 98,952,000 | $ 103,976,000 | |
Debt securities available for sale, Fair Value | |||
Continuous unrealized losses existing for less than 12 months, gross | 41,117,000 | ||
Total, gross | 41,117,000 | ||
Debt securities available for sale, Unrealized Losses | |||
Continuous unrealized losses existing for less than 12 months, gross | (637,000) | ||
Total, gross | $ (637,000) |
Portfolio loans and allowance f
Portfolio loans and allowance for loan losses - Distribution of portfolio loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Distributions of portfolio loans | ||||
Portfolio loans | $ 6,745,499 | $ 6,687,249 | ||
Allowance for loan losses | (84,384) | (53,748) | $ (50,915) | $ (50,648) |
Portfolio loans, net | 6,661,115 | 6,633,501 | ||
Net deferred loan origination costs | 6,400 | 6,200 | ||
Net accretable purchase accounting adjustments | 17,700 | 20,200 | ||
Commercial Loans | ||||
Distributions of portfolio loans | ||||
Portfolio loans | 1,767,191 | 1,748,368 | ||
Allowance for loan losses | (22,725) | (18,291) | (17,998) | (17,829) |
Commercial Real Estate Loans | ||||
Distributions of portfolio loans | ||||
Portfolio loans | 2,825,003 | 2,793,417 | ||
Allowance for loan losses | (35,967) | (21,190) | (20,097) | (21,137) |
Real Estate Construction | ||||
Distributions of portfolio loans | ||||
Portfolio loans | 448,313 | 401,861 | ||
Allowance for loan losses | (7,193) | (3,204) | (2,807) | (2,723) |
Retail Real Estate | ||||
Distributions of portfolio loans | ||||
Portfolio loans | 1,656,628 | 1,693,769 | ||
Allowance for loan losses | (17,454) | (10,495) | (9,503) | (8,471) |
Loans purchased | 43,900 | |||
Retail Other | ||||
Distributions of portfolio loans | ||||
Portfolio loans | 48,364 | 49,834 | ||
Allowance for loan losses | $ (1,045) | $ (568) | $ (510) | $ (488) |
Portfolio loans - Narrative (De
Portfolio loans - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2020USD ($)loan | Mar. 31, 2019USD ($)loan | |
Distributions of portfolio loans | ||
Gross interest income that would have been recorded if impaired loans had been current | $ 500,000 | $ 700,000 |
Loans classified as a TDR | $ 0 | |
TDRs subsequently classified as non-performing and had payment defaults | loan | 0 | 0 |
Commercial Loans | ||
Distributions of portfolio loans | ||
Loans classified as a TDR | $ 500,000 | |
Commercial Real Estate Loans | ||
Distributions of portfolio loans | ||
Loans classified as a TDR | 700,000 | |
Retail Real Estate | ||
Distributions of portfolio loans | ||
Loans classified as a TDR | $ 3,100,000 | |
Performing loans classified as TDRs | loan | 1 | |
Loans in the process of foreclosure | 1,300,000 | |
Maximum | Commercial Real Estate Loans | ||
Distributions of portfolio loans | ||
Limit where loans are processed through an expedited underwriting process | 1,000,000 | |
Watch | Commercial Loans | ||
Distributions of portfolio loans | ||
Limit above which loans are annually reviewed | 1,000,000 | |
Special Mention | ||
Distributions of portfolio loans | ||
Limit above which loans are annually reviewed | $ 350,000 |
Portfolio loans - Summary of ri
Portfolio loans - Summary of risk grades segregated by category (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Loans | ||
Portfolio loans | $ 6,745,499 | $ 6,687,249 |
Pass | ||
Loans | ||
Portfolio loans | 6,078,957 | 5,997,126 |
Watch | ||
Loans | ||
Portfolio loans | 370,337 | 413,876 |
Special Mention | ||
Loans | ||
Portfolio loans | 192,470 | 181,107 |
Substandard | ||
Loans | ||
Portfolio loans | 78,063 | 75,215 |
Substandard Non-accrual | ||
Loans | ||
Portfolio loans | 25,672 | 27,896 |
Commercial | ||
Loans | ||
Portfolio loans | 1,767,191 | |
Commercial | Pass | ||
Loans | ||
Portfolio loans | 1,481,538 | 1,458,416 |
Commercial | Watch | ||
Loans | ||
Portfolio loans | 150,303 | 172,526 |
Commercial | Special Mention | ||
Loans | ||
Portfolio loans | 85,231 | 66,337 |
Commercial | Substandard | ||
Loans | ||
Portfolio loans | 42,727 | 41,273 |
Commercial | Substandard Non-accrual | ||
Loans | ||
Portfolio loans | 7,392 | 9,096 |
Commercial real estate | ||
Loans | ||
Portfolio loans | 2,825,003 | |
Commercial real estate | Pass | ||
Loans | ||
Portfolio loans | 2,509,301 | 2,477,398 |
Commercial real estate | Watch | ||
Loans | ||
Portfolio loans | 178,151 | 186,963 |
Commercial real estate | Special Mention | ||
Loans | ||
Portfolio loans | 100,365 | 105,487 |
Commercial real estate | Substandard | ||
Loans | ||
Portfolio loans | 28,245 | 26,204 |
Commercial real estate | Substandard Non-accrual | ||
Loans | ||
Portfolio loans | 8,941 | 9,178 |
Real estate construction | ||
Loans | ||
Portfolio loans | 448,313 | |
Real estate construction | Pass | ||
Loans | ||
Portfolio loans | 415,302 | 351,923 |
Real estate construction | Watch | ||
Loans | ||
Portfolio loans | 28,808 | 45,262 |
Real estate construction | Special Mention | ||
Loans | ||
Portfolio loans | 3,222 | 3,928 |
Real estate construction | Substandard | ||
Loans | ||
Portfolio loans | 699 | 737 |
Real estate construction | Substandard Non-accrual | ||
Loans | ||
Portfolio loans | 282 | 630 |
Retail Real Estate | ||
Loans | ||
Portfolio loans | 1,656,628 | |
Retail Real Estate | Pass | ||
Loans | ||
Portfolio loans | 1,624,543 | 1,661,691 |
Retail Real Estate | Watch | ||
Loans | ||
Portfolio loans | 13,075 | 9,125 |
Retail Real Estate | Special Mention | ||
Loans | ||
Portfolio loans | 3,652 | 5,355 |
Retail Real Estate | Substandard | ||
Loans | ||
Portfolio loans | 6,387 | 7,001 |
Retail Real Estate | Substandard Non-accrual | ||
Loans | ||
Portfolio loans | 8,971 | 8,935 |
Retail Other | ||
Loans | ||
Portfolio loans | 48,364 | |
Retail Other | Pass | ||
Loans | ||
Portfolio loans | 48,273 | 47,698 |
Retail Other | Substandard | ||
Loans | ||
Portfolio loans | 5 | |
Retail Other | Substandard Non-accrual | ||
Loans | ||
Portfolio loans | 86 | 57 |
Commercial Loans | ||
Loans | ||
Portfolio loans | 1,767,191 | 1,748,368 |
Commercial Real Estate Loans | ||
Loans | ||
Portfolio loans | 2,825,003 | 2,793,417 |
Real Estate Construction | ||
Loans | ||
Portfolio loans | 448,313 | 401,861 |
Retail Real Estate | ||
Loans | ||
Portfolio loans | 1,656,628 | 1,693,769 |
Retail Other | ||
Loans | ||
Portfolio loans | $ 48,364 | $ 49,834 |
Portfolio loans - Risk grades o
Portfolio loans - Risk grades of portfolio loans by origination year (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Loans | ||
Ending balance | $ 6,745,499 | $ 6,687,249 |
Pass | ||
Loans | ||
Ending balance | 6,078,957 | 5,997,126 |
Watch | ||
Loans | ||
Ending balance | 370,337 | 413,876 |
Special Mention | ||
Loans | ||
Ending balance | 192,470 | 181,107 |
Substandard | ||
Loans | ||
Ending balance | 78,063 | 75,215 |
Substandard Non-accrual | ||
Loans | ||
Ending balance | 25,672 | 27,896 |
Commercial | ||
Loans | ||
2020 | 210,141 | |
2019 | 262,204 | |
2018 | 183,942 | |
2017 | 160,865 | |
2016 | 98,726 | |
Prior | 159,910 | |
Revolving loans | 691,403 | |
Ending balance | 1,767,191 | |
Commercial | Pass | ||
Loans | ||
2020 | 183,585 | |
2019 | 217,732 | |
2018 | 158,089 | |
2017 | 136,995 | |
2016 | 84,025 | |
Prior | 129,623 | |
Revolving loans | 571,489 | |
Ending balance | 1,481,538 | 1,458,416 |
Commercial | Watch | ||
Loans | ||
2020 | 11,686 | |
2019 | 29,396 | |
2018 | 17,424 | |
2017 | 10,367 | |
2016 | 4,617 | |
Prior | 12,958 | |
Revolving loans | 63,855 | |
Ending balance | 150,303 | 172,526 |
Commercial | Special Mention | ||
Loans | ||
2020 | 12,010 | |
2019 | 5,723 | |
2018 | 1,918 | |
2017 | 7,316 | |
2016 | 7,148 | |
Prior | 15,166 | |
Revolving loans | 35,950 | |
Ending balance | 85,231 | 66,337 |
Commercial | Substandard | ||
Loans | ||
2020 | 2,860 | |
2019 | 6,108 | |
2018 | 4,640 | |
2017 | 5,646 | |
2016 | 1,939 | |
Prior | 1,425 | |
Revolving loans | 20,109 | |
Ending balance | 42,727 | 41,273 |
Commercial | Substandard Non-accrual | ||
Loans | ||
2019 | 3,245 | |
2018 | 1,871 | |
2017 | 541 | |
2016 | 997 | |
Prior | 738 | |
Ending balance | 7,392 | 9,096 |
Commercial real estate | ||
Loans | ||
2020 | 193,049 | |
2019 | 688,986 | |
2018 | 549,549 | |
2017 | 592,026 | |
2016 | 290,597 | |
Prior | 473,327 | |
Revolving loans | 37,469 | |
Ending balance | 2,825,003 | |
Commercial real estate | Pass | ||
Loans | ||
2020 | 154,317 | |
2019 | 597,120 | |
2018 | 485,314 | |
2017 | 551,251 | |
2016 | 262,300 | |
Prior | 425,072 | |
Revolving loans | 33,927 | |
Ending balance | 2,509,301 | 2,477,398 |
Commercial real estate | Watch | ||
Loans | ||
2020 | 20,142 | |
2019 | 61,908 | |
2018 | 37,717 | |
2017 | 19,038 | |
2016 | 19,039 | |
Prior | 17,375 | |
Revolving loans | 2,932 | |
Ending balance | 178,151 | 186,963 |
Commercial real estate | Special Mention | ||
Loans | ||
2020 | 15,788 | |
2019 | 15,758 | |
2018 | 18,964 | |
2017 | 14,042 | |
2016 | 6,810 | |
Prior | 28,508 | |
Revolving loans | 495 | |
Ending balance | 100,365 | 105,487 |
Commercial real estate | Substandard | ||
Loans | ||
2020 | 2,802 | |
2019 | 12,855 | |
2018 | 3,741 | |
2017 | 6,211 | |
2016 | 1,884 | |
Prior | 637 | |
Revolving loans | 115 | |
Ending balance | 28,245 | 26,204 |
Commercial real estate | Substandard Non-accrual | ||
Loans | ||
2019 | 1,345 | |
2018 | 3,813 | |
2017 | 1,484 | |
2016 | 564 | |
Prior | 1,735 | |
Ending balance | 8,941 | 9,178 |
Real estate construction | ||
Loans | ||
2020 | 39,792 | |
2019 | 218,076 | |
2018 | 142,631 | |
2017 | 22,649 | |
2016 | 778 | |
Prior | 1,541 | |
Revolving loans | 22,846 | |
Ending balance | 448,313 | |
Real estate construction | Pass | ||
Loans | ||
2020 | 26,489 | |
2019 | 204,437 | |
2018 | 139,119 | |
2017 | 20,465 | |
2016 | 412 | |
Prior | 1,534 | |
Revolving loans | 22,846 | |
Ending balance | 415,302 | 351,923 |
Real estate construction | Watch | ||
Loans | ||
2020 | 10,936 | |
2019 | 12,936 | |
2018 | 2,582 | |
2017 | 2,140 | |
2016 | 214 | |
Ending balance | 28,808 | 45,262 |
Real estate construction | Special Mention | ||
Loans | ||
2020 | 2,367 | |
2019 | 703 | |
2016 | 152 | |
Ending balance | 3,222 | 3,928 |
Real estate construction | Substandard | ||
Loans | ||
2018 | 655 | |
2017 | 44 | |
Ending balance | 699 | 737 |
Real estate construction | Substandard Non-accrual | ||
Loans | ||
2018 | 275 | |
Prior | 7 | |
Ending balance | 282 | 630 |
Retail Real Estate | ||
Loans | ||
2020 | 51,945 | |
2019 | 206,610 | |
2018 | 202,618 | |
2017 | 205,840 | |
2016 | 188,679 | |
Prior | 391,629 | |
Revolving loans | 409,307 | |
Ending balance | 1,656,628 | |
Retail Real Estate | Pass | ||
Loans | ||
2020 | 51,441 | |
2019 | 201,517 | |
2018 | 199,235 | |
2017 | 204,376 | |
2016 | 184,629 | |
Prior | 381,085 | |
Revolving loans | 402,260 | |
Ending balance | 1,624,543 | 1,661,691 |
Retail Real Estate | Watch | ||
Loans | ||
2020 | 296 | |
2019 | 3,599 | |
2018 | 1,893 | |
2017 | 441 | |
2016 | 1,034 | |
Prior | 736 | |
Revolving loans | 5,076 | |
Ending balance | 13,075 | 9,125 |
Retail Real Estate | Special Mention | ||
Loans | ||
2020 | 108 | |
2018 | 180 | |
2016 | 2,001 | |
Prior | 1,363 | |
Ending balance | 3,652 | 5,355 |
Retail Real Estate | Substandard | ||
Loans | ||
2019 | 1,285 | |
2018 | 447 | |
2017 | 537 | |
2016 | 761 | |
Prior | 2,904 | |
Revolving loans | 453 | |
Ending balance | 6,387 | 7,001 |
Retail Real Estate | Substandard Non-accrual | ||
Loans | ||
2020 | 100 | |
2019 | 209 | |
2018 | 863 | |
2017 | 486 | |
2016 | 254 | |
Prior | 5,541 | |
Revolving loans | 1,518 | |
Ending balance | 8,971 | 8,935 |
Retail Other | ||
Loans | ||
2020 | 6,142 | |
2019 | 13,943 | |
2018 | 9,331 | |
2017 | 4,945 | |
2016 | 1,618 | |
Prior | 1,419 | |
Revolving loans | 10,966 | |
Ending balance | 48,364 | |
Retail Other | Pass | ||
Loans | ||
2020 | 6,126 | |
2019 | 13,896 | |
2018 | 9,331 | |
2017 | 4,942 | |
2016 | 1,601 | |
Prior | 1,419 | |
Revolving loans | 10,958 | |
Ending balance | 48,273 | 47,698 |
Retail Other | Substandard | ||
Loans | ||
Revolving loans | 5 | |
Ending balance | 5 | |
Retail Other | Substandard Non-accrual | ||
Loans | ||
2020 | 16 | |
2019 | 47 | |
2017 | 3 | |
2016 | 17 | |
Revolving loans | 3 | |
Ending balance | 86 | 57 |
Commercial Loans | ||
Loans | ||
Ending balance | 1,767,191 | 1,748,368 |
Commercial Real Estate Loans | ||
Loans | ||
Ending balance | 2,825,003 | 2,793,417 |
Real Estate Construction | ||
Loans | ||
Ending balance | 448,313 | 401,861 |
Retail Real Estate | ||
Loans | ||
Ending balance | 1,656,628 | 1,693,769 |
Retail Other | ||
Loans | ||
Ending balance | $ 48,364 | $ 49,834 |
Portfolio loans and allowance_2
Portfolio loans and allowance for loan losses - Analysis of loans past due and still accruing or non-accrual status (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Loans past due | ||
90+Days | $ 1,540 | $ 1,611 |
Non-accrual Loans | 25,672 | 27,896 |
30 to 59 Days | ||
Loans past due | ||
Loans past due, still accruing | 8,754 | 8,820 |
60 to 89 Days | ||
Loans past due | ||
Loans past due, still accruing | 1,396 | 5,451 |
Commercial | ||
Loans past due | ||
90+Days | 199 | |
Non-accrual Loans | 7,392 | 9,096 |
Commercial | 30 to 59 Days | ||
Loans past due | ||
Loans past due, still accruing | 1,047 | 1,075 |
Commercial | 60 to 89 Days | ||
Loans past due | ||
Loans past due, still accruing | 1,014 | |
Commercial real estate | ||
Loans past due | ||
90+Days | 159 | 584 |
Non-accrual Loans | 8,941 | 9,178 |
Commercial real estate | 30 to 59 Days | ||
Loans past due | ||
Loans past due, still accruing | 690 | 2,653 |
Commercial real estate | 60 to 89 Days | ||
Loans past due | ||
Loans past due, still accruing | 387 | 3,121 |
Real estate construction | ||
Loans past due | ||
Non-accrual Loans | 282 | 630 |
Real estate construction | 30 to 59 Days | ||
Loans past due | ||
Loans past due, still accruing | 19 | |
Retail Real Estate | ||
Loans past due | ||
90+Days | 1,287 | 828 |
Non-accrual Loans | 8,971 | 8,935 |
Retail Real Estate | 30 to 59 Days | ||
Loans past due | ||
Loans past due, still accruing | 6,910 | 5,021 |
Retail Real Estate | 60 to 89 Days | ||
Loans past due | ||
Loans past due, still accruing | 997 | 1,248 |
Retail Other | ||
Loans past due | ||
90+Days | 94 | |
Non-accrual Loans | 86 | 57 |
Retail Other | 30 to 59 Days | ||
Loans past due | ||
Loans past due, still accruing | 107 | 52 |
Retail Other | 60 to 89 Days | ||
Loans past due | ||
Loans past due, still accruing | $ 12 | $ 68 |
Portfolio loans - Summary of TD
Portfolio loans - Summary of TDR loans (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Restructured loans | ||
Total loans | $ 6,635 | $ 5,707 |
In compliance with modified terms | ||
Restructured loans | ||
Total loans | 4,949 | 5,005 |
Included in non-performing loans | ||
Restructured loans | ||
Total loans | $ 1,686 | $ 702 |
Portfolio loans - Loans identif
Portfolio loans - Loans identified as impaired, segregated by category (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Loans identified as impaired | ||
Unpaid Contractual Principal Balance | $ 32,008 | $ 45,686 |
Recorded Investment with No Allowance | 20,021 | 29,540 |
Recorded Investment with Allowance | 5,351 | 7,539 |
Total Recorded Investment | 25,372 | 37,079 |
Related Allowance | 3,938 | 4,853 |
Average Recorded Investment | 40,408 | 45,370 |
Collateral dependent loans secured by real estate or business assets | 13,500 | |
Commercial Loans | ||
Loans identified as impaired | ||
Unpaid Contractual Principal Balance | 11,795 | 14,415 |
Recorded Investment with No Allowance | 3,751 | 4,727 |
Recorded Investment with Allowance | 3,671 | 5,026 |
Total Recorded Investment | 7,422 | 9,753 |
Related Allowance | 2,822 | 3,330 |
Average Recorded Investment | 11,493 | 13,774 |
Commercial Real Estate Loans | ||
Loans identified as impaired | ||
Unpaid Contractual Principal Balance | 11,992 | 14,487 |
Recorded Investment with No Allowance | 9,111 | 9,883 |
Recorded Investment with Allowance | 1,206 | 2,039 |
Total Recorded Investment | 10,317 | 11,922 |
Related Allowance | 642 | 1,049 |
Average Recorded Investment | 15,226 | 16,678 |
Real Estate Construction | ||
Loans identified as impaired | ||
Unpaid Contractual Principal Balance | 579 | 1,116 |
Recorded Investment with No Allowance | 562 | 974 |
Total Recorded Investment | 562 | 974 |
Average Recorded Investment | 888 | 873 |
Retail Real Estate | ||
Loans identified as impaired | ||
Unpaid Contractual Principal Balance | 7,642 | 15,581 |
Recorded Investment with No Allowance | 6,597 | 13,898 |
Recorded Investment with Allowance | 474 | 474 |
Total Recorded Investment | 7,071 | 14,372 |
Related Allowance | 474 | 474 |
Average Recorded Investment | 12,767 | 14,003 |
Retail Other | ||
Loans identified as impaired | ||
Unpaid Contractual Principal Balance | 87 | |
Recorded Investment with No Allowance | 58 | |
Total Recorded Investment | 58 | |
Average Recorded Investment | $ 34 | $ 42 |
Portfolio loans - Activity in t
Portfolio loans - Activity in the allowance for loan losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | |
Activity in the allowance for loan losses | ||||
Beginning balance | $ 53,748 | $ 50,648 | ||
Provision for loan losses | 17,216 | 2,111 | ||
Charged-off | (4,148) | (2,469) | ||
Recoveries | 735 | 625 | ||
Ending balance | 84,384 | 50,915 | ||
Allowance for loan losses Ending balance attributed to: | ||||
Loans individually evaluated for impairment | $ 3,938 | $ 4,853 | ||
Loans collectively evaluated for impairment | 80,446 | 48,895 | ||
Ending balance | 53,748 | 50,915 | 84,384 | 53,748 |
Loans: | ||||
Loans individually evaluated for impairment | 22,791 | 34,031 | ||
Loans collectively evaluated for impairment | 6,720,127 | 6,650,170 | ||
PCI loans evaluated for impairment | 2,581 | 3,048 | ||
Ending balance | 6,745,499 | 6,687,249 | ||
Commercial Loans | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 18,291 | 17,829 | ||
Provision for loan losses | 5,673 | 1,793 | ||
Charged-off | (2,042) | (1,807) | ||
Recoveries | 88 | 183 | ||
Ending balance | 22,725 | 17,998 | ||
Allowance for loan losses Ending balance attributed to: | ||||
Loans individually evaluated for impairment | 2,822 | 3,330 | ||
Loans collectively evaluated for impairment | 19,903 | 14,961 | ||
Ending balance | 18,291 | 17,998 | 22,725 | 18,291 |
Loans: | ||||
Loans individually evaluated for impairment | 7,414 | 9,740 | ||
Loans collectively evaluated for impairment | 1,759,769 | 1,738,615 | ||
PCI loans evaluated for impairment | 8 | 13 | ||
Ending balance | 1,767,191 | 1,748,368 | ||
Commercial Real Estate Loans | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 21,190 | 21,137 | ||
Provision for loan losses | 6,526 | (1,089) | ||
Charged-off | (1,099) | (15) | ||
Recoveries | 44 | 64 | ||
Ending balance | 35,967 | 20,097 | ||
Allowance for loan losses Ending balance attributed to: | ||||
Loans individually evaluated for impairment | 642 | 1,049 | ||
Loans collectively evaluated for impairment | 35,325 | 20,141 | ||
Ending balance | 21,190 | 20,097 | 35,967 | 21,190 |
Loans: | ||||
Loans individually evaluated for impairment | 8,452 | 10,018 | ||
Loans collectively evaluated for impairment | 2,814,686 | 2,781,495 | ||
PCI loans evaluated for impairment | 1,865 | 1,904 | ||
Ending balance | 2,825,003 | 2,793,417 | ||
Real Estate Construction | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 3,204 | 2,723 | ||
Provision for loan losses | 889 | 2 | ||
Recoveries | 146 | 82 | ||
Ending balance | 7,193 | 2,807 | ||
Allowance for loan losses Ending balance attributed to: | ||||
Loans collectively evaluated for impairment | 7,193 | 3,204 | ||
Ending balance | 3,204 | 2,807 | 7,193 | 3,204 |
Loans: | ||||
Loans individually evaluated for impairment | 307 | 539 | ||
Loans collectively evaluated for impairment | 447,751 | 400,887 | ||
PCI loans evaluated for impairment | 255 | 435 | ||
Ending balance | 448,313 | 401,861 | ||
Retail Real Estate | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 10,495 | 8,471 | ||
Provision for loan losses | 4,037 | 1,357 | ||
Charged-off | (708) | (517) | ||
Recoveries | 338 | 192 | ||
Ending balance | 17,454 | 9,503 | ||
Allowance for loan losses Ending balance attributed to: | ||||
Loans individually evaluated for impairment | 474 | 474 | ||
Loans collectively evaluated for impairment | 16,980 | 10,021 | ||
Ending balance | 10,495 | 9,503 | 17,454 | 10,495 |
Loans: | ||||
Loans individually evaluated for impairment | 6,618 | 13,676 | ||
Loans collectively evaluated for impairment | 1,649,557 | 1,679,397 | ||
PCI loans evaluated for impairment | 453 | 696 | ||
Ending balance | 1,656,628 | 1,693,769 | ||
Retail Other | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 568 | 488 | ||
Provision for loan losses | 91 | 48 | ||
Charged-off | (299) | (130) | ||
Recoveries | 119 | 104 | ||
Ending balance | 1,045 | 510 | ||
Allowance for loan losses Ending balance attributed to: | ||||
Loans collectively evaluated for impairment | 1,045 | 568 | ||
Ending balance | 568 | $ 510 | 1,045 | 568 |
Loans: | ||||
Loans individually evaluated for impairment | 58 | |||
Loans collectively evaluated for impairment | 48,364 | 49,776 | ||
Ending balance | $ 48,364 | 49,834 | ||
Post ASC 326 | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 16,833 | |||
Allowance for loan losses Ending balance attributed to: | ||||
Ending balance | 16,833 | 16,833 | ||
Post ASC 326 | Commercial Loans | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 715 | |||
Allowance for loan losses Ending balance attributed to: | ||||
Ending balance | 715 | 715 | ||
Post ASC 326 | Commercial Real Estate Loans | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 9,306 | |||
Allowance for loan losses Ending balance attributed to: | ||||
Ending balance | 9,306 | 9,306 | ||
Post ASC 326 | Real Estate Construction | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 2,954 | |||
Allowance for loan losses Ending balance attributed to: | ||||
Ending balance | 2,954 | 2,954 | ||
Post ASC 326 | Retail Real Estate | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 3,292 | |||
Allowance for loan losses Ending balance attributed to: | ||||
Ending balance | 3,292 | 3,292 | ||
Post ASC 326 | Retail Other | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 566 | |||
Allowance for loan losses Ending balance attributed to: | ||||
Ending balance | 566 | 566 | ||
Pre-ASC 326 | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 53,748 | |||
Allowance for loan losses Ending balance attributed to: | ||||
Ending balance | 53,748 | 53,748 | ||
Pre-ASC 326 | Commercial Loans | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 18,291 | |||
Allowance for loan losses Ending balance attributed to: | ||||
Ending balance | 18,291 | 18,291 | ||
Pre-ASC 326 | Commercial Real Estate Loans | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 21,190 | |||
Allowance for loan losses Ending balance attributed to: | ||||
Ending balance | 21,190 | 21,190 | ||
Pre-ASC 326 | Real Estate Construction | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 3,204 | |||
Allowance for loan losses Ending balance attributed to: | ||||
Ending balance | 3,204 | 3,204 | ||
Pre-ASC 326 | Retail Real Estate | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 10,495 | |||
Allowance for loan losses Ending balance attributed to: | ||||
Ending balance | 10,495 | 10,495 | ||
Pre-ASC 326 | Retail Other | ||||
Activity in the allowance for loan losses | ||||
Beginning balance | 568 | |||
Allowance for loan losses Ending balance attributed to: | ||||
Ending balance | $ 568 | $ 568 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Deposits | ||
Demand deposits, noninterest-bearing | $ 1,910,673 | $ 1,832,619 |
Interest-bearing transaction deposits | 1,982,137 | 1,989,854 |
Saving deposits and money market deposits | 2,598,410 | 2,545,073 |
Time deposits | 1,482,013 | 1,534,850 |
Total deposits | 7,973,233 | 7,902,396 |
Brokered saving deposits and money market deposits | 13,800 | 12,500 |
Aggregate amount of time deposits (minimum denomination of $100,000) | 833,800 | 854,100 |
Time deposits minimum denomination of $250,000 or more | 329,900 | 297,400 |
Brokered deposits included in the balance of time deposits | 5,200 | 5,500 |
Deposits | ||
Total | 1,482,013 | $ 1,534,850 |
Maturities of time deposits | ||
April 1, 2020 - March 31, 2021 | 970,198 | |
April 1, 2021 - March 31, 2022 | 300,817 | |
April 1, 2022 - March 31, 2023 | 105,097 | |
April 1, 2023 - March 31, 2024 | 76,896 | |
April 1, 2024 - March 31, 2025 | 28,994 | |
Thereafter | $ 11 |
Borrowings - Maturity period (D
Borrowings - Maturity period (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Maturity period | |
Maximum maturity period of short-term debt | 1 year |
Borrowings - Amended and Restat
Borrowings - Amended and Restated Credit Agreement (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Jan. 29, 2019 |
Revolving loan facility | |||
Borrowings | |||
Maximum borrowing capacity | $ 20,000,000 | ||
Outstanding amounts | $ 20,000,000 | $ 0 | |
Interest rate (as a percent) | 1.75% | ||
Term Loan | |||
Borrowings | |||
Maximum borrowing capacity | $ 60,000,000 | ||
Interest rate (as a percent) | 1.50% |
Borrowings - Long-term Debt (De
Borrowings - Long-term Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Long-term debt | ||
Notes payable, FHLB, ranging in original maturity from 5 to 10 years, collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock | $ 35,595 | $ 35,600 |
Term Loan | 48,000 | |
Total long-term borrowings | $ 35,595 | $ 83,600 |
FHLB advances | ||
Long-term debt | ||
Weighted average rate (as a percent) | 0.52% | 1.53% |
FHLB advances | Minimum | ||
Long-term debt | ||
Notes payable original maturity term | 5 years | 5 years |
Interest rate (as a percent) | 0.05% | 1.25% |
FHLB advances | Maximum | ||
Long-term debt | ||
Notes payable original maturity term | 10 years | 10 years |
Interest rate (as a percent) | 3.04% | 3.04% |
Borrowings - Senior notes and S
Borrowings - Senior notes and Subordinate Notes (Details) - USD ($) $ in Millions | May 25, 2017 | Mar. 31, 2020 | Dec. 31, 2019 |
Senior notes | |||
Long-term debt | |||
Issuance of debt | $ 40 | ||
Interest rate (as a percent) | 3.75% | ||
Unamortized debt issuance cost | $ 0.3 | $ 0.3 | |
Subordinated debt | |||
Long-term debt | |||
Issuance of debt | $ 60 | ||
Interest rate (as a percent) | 4.75% | ||
Term of debt instrument | 5 years | ||
Unamortized debt issuance cost | $ 0.7 | $ 0.8 | |
Three-month LIBOR | Subordinated debt | |||
Long-term debt | |||
Floating interest rate margin (as a percent) | 2.919% |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net income per share calculations for basic and diluted methods | ||
Net income available to common stockholders | $ 15,364 | $ 25,469 |
Shares: | ||
Weighted average common shares outstanding | 54,662,000 | 53,277,000 |
Dilutive effect of outstanding options, warrants and restricted stock units as determined by the application of the treasury stock method (in shares) | 251,000 | 301,000 |
Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation | 54,913,000 | 53,578,000 |
Basic earnings per common share (in dollars per share) | $ 0.28 | $ 0.48 |
Diluted earnings per common share (in dollars per share) | $ 0.28 | $ 0.48 |
Stock options | ||
Anti-dilutive securities excluded from the calculation of common stock equivalents | ||
Number of anti-dilutive securities (in shares) | 39,965 | 49,646 |
Restricted stock unit | ||
Anti-dilutive securities excluded from the calculation of common stock equivalents | ||
Number of anti-dilutive securities (in shares) | 204,277 | 172,571 |
Warrants | ||
Anti-dilutive securities excluded from the calculation of common stock equivalents | ||
Number of anti-dilutive securities (in shares) | 191,278 | 191,278 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Changes in accumulated other comprehensive income (loss) by component, net of tax | |||
Beginning balance | $ 1,220,434 | $ 994,964 | $ 994,964 |
Unrealized gains (losses) on debt securities available for sale: | |||
Unrealized holding gains (losses) on debt securities available for sale, Tax Effect | (8,589) | (1,940) | |
Unrealized holding gains (losses) on debt securities available for sale, Net of Tax | 21,497 | 4,859 | |
Unrealized gains on debt securities transferred from held to maturity to available for sale, Tax Effect | 1,364 | ||
Unrealized gains on debt securities transferred from held to maturity to available for sale, Net of Tax | 3,416 | ||
Amounts reclassified from accumulated other comprehensive income, Tax Effect | 448 | (52) | |
Amounts reclassified from accumulated other comprehensive income, Net of Tax | 1,108 | (132) | |
Unrealized gains (losses) on cash flow hedges: | |||
Unrealized holding gains (losses) on cash flow hedges, Tax Effect | (892) | ||
Unrealized holding gains (losses) on cash flow hedges, Net of Tax | (2,237) | ||
Amounts reclassified from accumulated other comprehensive income, Tax Effect | (4) | ||
Reclassification adjustment for realized losses (gains) on cash flow hedges | (11) | ||
Ending balance | 1,217,585 | 1,186,141 | 1,220,434 |
Accumulated Other Comprehensive Income (Loss) | |||
Changes in accumulated other comprehensive income (loss) by component, net of tax | |||
Beginning balance | 14,960 | (6,812) | (6,812) |
Unrealized gains (losses) on cash flow hedges: | |||
Accumulated other comprehensive income (loss) ending balance period, Before Tax | 46,298 | 2,235 | |
Accumulated other comprehensive income (loss) ending balance period, Tax Effect | (13,197) | (640) | |
Ending balance | 33,101 | 1,595 | 14,960 |
Unrealized gains (losses) on debt securities available for sale | |||
Changes in accumulated other comprehensive income (loss) by component, net of tax | |||
Accumulated other comprehensive income (loss) beginning balance period, Before Tax | 21,192 | (9,528) | (9,528) |
Accumulated other comprehensive income (loss) beginning balance period, Tax Effect | (6,032) | 2,716 | 2,716 |
Beginning balance | 15,160 | (6,812) | (6,812) |
Unrealized gains (losses) on debt securities available for sale: | |||
Unrealized holding gains (losses) on debt securities available for sale, Before Tax | 30,086 | 6,799 | |
Unrealized holding gains (losses) on debt securities available for sale, Tax Effect | (8,589) | (1,940) | |
Unrealized holding gains (losses) on debt securities available for sale, Net of Tax | 21,497 | 4,859 | |
Unrealized gains on debt securities transferred from held to maturity to available for sale, Before Tax | 4,780 | ||
Unrealized gains on debt securities transferred from held to maturity to available for sale, Tax Effect | 1,364 | ||
Unrealized gains on debt securities transferred from held to maturity to available for sale, Net of Tax | 3,416 | ||
Amounts reclassified from accumulated other comprehensive income, Before Tax | 1,556 | (184) | |
Amounts reclassified from accumulated other comprehensive income, Tax Effect | 448 | (52) | |
Amounts reclassified from accumulated other comprehensive income, Net of Tax | 1,108 | (132) | |
Unrealized gains (losses) on cash flow hedges: | |||
Accumulated other comprehensive income (loss) ending balance period, Before Tax | 49,722 | 2,235 | 21,192 |
Accumulated other comprehensive income (loss) ending balance period, Tax Effect | (14,173) | (640) | (6,032) |
Ending balance | 35,549 | 1,595 | 15,160 |
Unrealized gains (losses) on cash flow hedges | |||
Changes in accumulated other comprehensive income (loss) by component, net of tax | |||
Accumulated other comprehensive income (loss) beginning balance period, Before Tax | (280) | ||
Accumulated other comprehensive income (loss) beginning balance period, Tax Effect | 80 | ||
Beginning balance | (200) | ||
Unrealized gains (losses) on cash flow hedges: | |||
Unrealized holding gains (losses) on cash flow hedges, Before Tax | (3,129) | ||
Unrealized holding gains (losses) on cash flow hedges, Tax Effect | 892 | ||
Unrealized holding gains (losses) on cash flow hedges, Net of Tax | (2,237) | ||
Amounts reclassified from accumulated other comprehensive income, Before Tax | (15) | ||
Amounts reclassified from accumulated other comprehensive income, Tax Effect | 4 | ||
Reclassification adjustment for realized losses (gains) on cash flow hedges | (11) | ||
Accumulated other comprehensive income (loss) ending balance period, Before Tax | (3,424) | (280) | |
Accumulated other comprehensive income (loss) ending balance period, Tax Effect | 976 | 80 | |
Ending balance | $ (2,448) | $ (200) |
Share-based Compensation (Detai
Share-based Compensation (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation | ||
Number of shares held in treasury | 1,509,525 | 1,121,961 |
Restricted stock unit | ||
Share-based Compensation | ||
Number of shares of common stock per award | 1 | |
Deferred stock units | ||
Share-based Compensation | ||
Number of shares of common stock per award | 1 | |
Minimum | Restricted stock unit | ||
Share-based Compensation | ||
Requisite service periods | 1 year | |
Maximum | Restricted stock unit | ||
Share-based Compensation | ||
Requisite service periods | 5 years |
Share-based Compensation - Awar
Share-based Compensation - Award Status (Details) - Stock option awards | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Shares | |
Outstanding at beginning of year (in shares) | shares | 53,185 |
Exercised (in shares) | shares | (5,280) |
Expired (in shares) | shares | (88) |
Outstanding at end of year (in shares) | shares | 47,817 |
Exercisable at end of year (in shares) | shares | 47,817 |
Weighted-Average Exercise Price | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 22 |
Exercised (in dollars per share) | $ / shares | 23.26 |
Expired (in dollars per share) | $ / shares | 17.05 |
Outstanding at end of year (in dollars per share) | $ / shares | 21.87 |
Exercisable at end of year (in dollars per share) | $ / shares | $ 21.87 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 5 years 6 months 29 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 5 years 6 months 29 days |
Share-based Compensation - Opti
Share-based Compensation - Options Outstanding (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Stock option awards | ||
Additional disclosures | ||
Compensation expense recognized | $ 0 |
Share-based Compensation - Rest
Share-based Compensation - Restricted and Deferred Stock Units (Details) - USD ($) | Feb. 05, 2020 | Jul. 05, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Restricted stock unit | ||||
Shares | ||||
Non-vested at beginning of year (in shares) | 778,317 | |||
Granted (in shares) | 3,808 | |||
Dividend equivalents earned (in shares) | 6,612 | |||
Vested (in shares) | (8,249) | |||
Forfeited (in shares) | (9,559) | |||
Non-vested at end of year (in shares) | 770,929 | |||
Outstanding at end of year (in shares) | 770,929 | |||
Weighted-Average Grant Date Fair Value | ||||
Non-vested at beginning of year (in dollars per share) | $ 27.27 | |||
Granted (in dollars per share) | 26.26 | |||
Dividend equivalents earned (in dollars per share) | 25.50 | |||
Vested (in dollars per share) | 29.50 | |||
Forfeited (in dollars per share) | 28.96 | |||
Non-vested at end of year (in dollars per share) | 27.21 | |||
Outstanding at end of year (in dollars per share) | $ 27.21 | |||
Additional disclosures | ||||
Period over which cost will be recognized | 3 years | |||
Restricted stock unit | Members of management | ||||
Shares | ||||
Stock price (in dollars per share) | $ 26.26 | |||
Additional disclosures | ||||
Compensation expense recognized | $ 100,000 | |||
Vesting percentage (as a percent) | 100.00% | |||
Deferred stock units | ||||
Shares | ||||
Non-vested at beginning of year (in shares) | 21,261 | |||
Dividend equivalents earned (in shares) | 780 | |||
Forfeited (in shares) | (597) | |||
Non-vested at end of year (in shares) | 21,444 | |||
Outstanding at end of year (in shares) | 91,278 | |||
Weighted-Average Grant Date Fair Value | ||||
Non-vested at beginning of year (in dollars per share) | $ 23.18 | |||
Dividend equivalents earned (in dollars per share) | 25.50 | |||
Forfeited (in dollars per share) | 25.50 | |||
Non-vested at end of year (in dollars per share) | 23.20 | |||
Outstanding at end of year (in dollars per share) | $ 23.40 | |||
RSUs and DSUs | ||||
Additional disclosures | ||||
Compensation expense recognized | $ 1,100,000 | $ 1,000,000 | ||
Amount of compensation cost to be recognized | $ 10,900,000 | |||
Period over which cost will be recognized | 3 years 3 months 18 days | |||
Employee stock purchase plan | ||||
Additional disclosures | ||||
Remaining shares available for issuance | 31,057 | |||
Stock option awards | ||||
Additional disclosures | ||||
Compensation expense recognized | $ 0 | |||
First Community 2016 Equity Incentive Plan | ||||
Additional disclosures | ||||
Remaining shares available for issuance | 313,136 | |||
2010 Equity Incentive Plan | ||||
Additional disclosures | ||||
Remaining shares available for issuance | 552,157 | |||
2010 Equity Incentive Plan | Restricted stock unit | Members of management | ||||
Shares | ||||
Granted (in shares) | 3,808 |
Outstanding Commitments and C_3
Outstanding Commitments and Contingent Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | |
Credit Commitments and Contingencies | |||
Adoption of CECL, reserve for unfunded commitments | $ 6,500 | $ 5,500 | |
Adoption of CECL, additional provision | 1,000 | ||
Commitments to extend credit | |||
Credit Commitments and Contingencies | |||
Financial instruments whose contract amounts represent credit risk: | 1,628,461 | $ 1,649,565 | |
Standby letters of credit | |||
Credit Commitments and Contingencies | |||
Financial instruments whose contract amounts represent credit risk: | $ 42,774 | $ 42,581 |
Regulatory Capital (Details)
Regulatory Capital (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Total Capital (to Risk Weighted Assets), Amount | ||
Actual, Amount | $ 1,046,689 | $ 1,036,143 |
Minimum Capital Requirement, Amount | 604,488 | 590,826 |
Minimum To Be Well Capitalized, Amount | $ 755,610 | $ 738,532 |
Total Capital (to Risk Weighted Assets), Ratio | ||
Actual, Ratio (as a percent) | 13.85% | 14.03% |
Minimum Capital Requirement, Ratio (as a percent) | 8.00% | 8.00% |
Minimum To Be Well Capitalized, Ratio (as a percent) | 10.00% | 10.00% |
Tier 1 Capital (to Risk Weighted Assets), Amount | ||
Actual, Amount | $ 921,827 | $ 922,395 |
Minimum Capital Requirement, Amount | 453,366 | 443,120 |
Minimum To Be Well Capitalized, Amount | $ 604,488 | $ 590,826 |
Tier 1 Capital (to Risk Weighted Assets), Ratio | ||
Actual, Ratio (as a percent) | 12.20% | 12.49% |
Minimum Capital Requirement, Ratio (as a percent) | 6.00% | 6.00% |
Minimum To Be Well Capitalized, Ratio (as a percent) | 8.00% | 8.00% |
Common Equity Tier 1 Capital (to Risk Weighted Assets), Amount | ||
Actual, Amount | $ 847,827 | $ 848,395 |
Minimum Capital Requirement, Amount | 340,025 | 332,340 |
Minimum To Be Well Capitalized, Amount | $ 491,147 | $ 480,046 |
Common Equity Tier 1 Capital (to Risk Weighted Assets), Ratio | ||
Actual, Ratio (as a percent) | 11.22% | 11.49% |
Minimum Capital Requirement, Ratio (as a percent) | 4.50% | 4.50% |
Minimum To Be Well Capitalized, Ratio (as a percent) | 6.50% | 6.50% |
Tier 1 Capital (to Average Assets), Amount | ||
Actual, Amount | $ 921,827 | $ 922,395 |
Minimum Capital Requirement, Amount | $ 372,696 | $ 373,360 |
Tier 1 Capital (to Average Assets), Ratio | ||
Actual, Ratio (as a percent) | 9.89% | 9.88% |
Minimum Capital Requirement, Ratio (as a percent) | 4.00% | 4.00% |
Busey Bank | ||
Total Capital (to Risk Weighted Assets), Amount | ||
Actual, Amount | $ 1,012,447 | $ 1,099,449 |
Minimum Capital Requirement, Amount | 603,538 | 589,681 |
Minimum To Be Well Capitalized, Amount | $ 754,422 | $ 737,101 |
Total Capital (to Risk Weighted Assets), Ratio | ||
Actual, Ratio (as a percent) | 13.42% | 14.92% |
Minimum Capital Requirement, Ratio (as a percent) | 8.00% | 8.00% |
Minimum To Be Well Capitalized, Ratio (as a percent) | 10.00% | 10.00% |
Tier 1 Capital (to Risk Weighted Assets), Amount | ||
Actual, Amount | $ 947,583 | $ 1,045,701 |
Minimum Capital Requirement, Amount | 452,653 | 442,261 |
Minimum To Be Well Capitalized, Amount | $ 603,538 | $ 589,681 |
Tier 1 Capital (to Risk Weighted Assets), Ratio | ||
Actual, Ratio (as a percent) | 12.56% | 14.19% |
Minimum Capital Requirement, Ratio (as a percent) | 6.00% | 6.00% |
Minimum To Be Well Capitalized, Ratio (as a percent) | 8.00% | 8.00% |
Common Equity Tier 1 Capital (to Risk Weighted Assets), Amount | ||
Actual, Amount | $ 947,583 | $ 1,045,701 |
Minimum Capital Requirement, Amount | 339,490 | 331,696 |
Minimum To Be Well Capitalized, Amount | $ 490,374 | $ 479,116 |
Common Equity Tier 1 Capital (to Risk Weighted Assets), Ratio | ||
Actual, Ratio (as a percent) | 12.56% | 14.19% |
Minimum Capital Requirement, Ratio (as a percent) | 4.50% | 4.50% |
Minimum To Be Well Capitalized, Ratio (as a percent) | 6.50% | 6.50% |
Tier 1 Capital (to Average Assets), Amount | ||
Actual, Amount | $ 947,583 | $ 1,045,701 |
Minimum Capital Requirement, Amount | 371,799 | 373,639 |
Minimum To Be Well Capitalized, Amount | $ 464,749 | $ 467,049 |
Tier 1 Capital (to Average Assets), Ratio | ||
Actual, Ratio (as a percent) | 10.19% | 11.19% |
Minimum Capital Requirement, Ratio (as a percent) | 4.00% | 4.00% |
Minimum To Be Well Capitalized, Ratio (as a percent) | 5.00% | 5.00% |
Operating Segments and Relate_3
Operating Segments and Related Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Operating Segments and Related Information | |||
Number of reportable segments | segment | 3 | ||
Number of operating segments | segment | 3 | ||
Goodwill | $ 311,536 | $ 311,536 | |
Total Assets | 9,721,405 | 9,695,729 | |
Net interest income | 69,433 | $ 68,383 | |
Non-interest income: | 27,517 | 25,945 | |
Non-interest expense: | 60,514 | 57,163 | |
Income before income taxes | 19,220 | 35,054 | |
Net income: | 15,364 | 25,469 | |
Operating segments | Banking | |||
Operating Segments and Related Information | |||
Goodwill | 288,436 | 288,436 | |
Total Assets | 9,654,171 | 9,632,368 | |
Net interest income | 71,573 | 70,638 | |
Non-interest income: | 13,168 | 12,783 | |
Non-interest expense: | 48,515 | 45,171 | |
Income before income taxes | 19,010 | 36,139 | |
Net income: | 14,924 | 26,665 | |
Operating segments | Remittance Processing | |||
Operating Segments and Related Information | |||
Goodwill | 8,992 | 8,992 | |
Total Assets | 44,744 | 44,209 | |
Net interest income | 19 | 18 | |
Non-interest income: | 4,069 | 4,181 | |
Non-interest expense: | 2,903 | 2,764 | |
Income before income taxes | 1,185 | 1,435 | |
Net income: | 860 | 1,025 | |
Operating segments | Wealth Management | |||
Operating Segments and Related Information | |||
Goodwill | 14,108 | 14,108 | |
Total Assets | 36,204 | 32,760 | |
Non-interest income: | 11,709 | 9,133 | |
Non-interest expense: | 6,974 | 5,564 | |
Income before income taxes | 4,735 | 3,569 | |
Net income: | 3,599 | 2,641 | |
Other | |||
Operating Segments and Related Information | |||
Total Assets | (13,714) | $ (13,608) | |
Net interest income | (2,159) | (2,273) | |
Non-interest income: | (1,429) | (152) | |
Non-interest expense: | 2,122 | 3,664 | |
Income before income taxes | (5,710) | (6,089) | |
Net income: | $ (4,019) | $ (4,862) |
Derivative Financial Instrume_3
Derivative Financial Instruments - Interest Rate Swaps Designated as Cash Flow Hedges (Details) - Interest rate swap - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Derivative [Line Items] | |||
Unrealized gains (losses), net of tax | $ 0 | $ 0 | |
Cash Flow Hedging | |||
Derivative [Line Items] | |||
Notional amount | $ 70,000 | $ 70,000 | |
Weighted average fixed pay rates | 1.80% | 1.80% | |
Weighted average variable 3 month LIBOR receive rates | 0.77% | 1.90% | |
Weighted average maturity | 3 years 7 months 9 days | 3 years 10 months 9 days | |
Unrealized gains (losses), net of tax | $ (2,448) | $ (200) | |
Unrealized gain to be reclassified from OCI to interest expense during next twelve months | 200 | ||
Other liabilities | |||
Derivative [Line Items] | |||
Derivative Liability | 35,832 | 12,354 | |
Other liabilities | Cash Flow Hedging | |||
Derivative [Line Items] | |||
Fair value recorded in other liabilities | $ 3,400 | $ 300 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Net Gains (Losses) Relating to the Cash Flow Derivative Instruments (Details) - Interest rate contract - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Derivative [Line Items] | ||
Derivative cash pledged | $ 3,300 | $ 300 |
Cash Flow Hedging | ||
Derivative [Line Items] | ||
Amount of (gain) loss recognized in OCI | 2,237 | |
Amount of (gain) loss reclassified from OCI to interest expense | $ (11) |
Derivative Financial Instrume_5
Derivative Financial Instruments - Interest Rate Lock Commitments (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Interest Rate Lock Commitments | ||
Derivative Financial Instruments | ||
Notional amount | $ 268.7 | $ 69.1 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Forward Sales Commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Forward sales commitments | |||
Derivative Financial Instruments | |||
Notional amount | $ 353,600 | $ 135,300 | |
Interest rate lock commitments and forward sales commitments | |||
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income | |||
Net gains (losses) | (674) | $ (40) | |
Interest rate lock commitments and forward sales commitments | Other assets | |||
Fair values of derivative assets and liabilities recorded in consolidated balance sheets | |||
Fair value recorded in other assets | 5,146 | 1,046 | |
Interest rate lock commitments and forward sales commitments | Other liabilities | |||
Fair values of derivative assets and liabilities recorded in consolidated balance sheets | |||
Fair value recorded in other liabilities | 7,344 | $ 2,187 | |
Non-interest income | Interest rate lock commitments and forward sales commitments | |||
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income | |||
Gross gains | 6,670 | 1,078 | |
Non-interest expense | Interest rate lock commitments and forward sales commitments | |||
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income | |||
Gross (losses) | $ (7,344) | $ (1,118) |
Derivative Financial Instrume_7
Derivative Financial Instruments - Interest Rate Swaps Not Designated as Hedges (Details) - Interest rate swap - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income | |||
Net gains (losses) | $ 0 | $ 0 | |
Derivative cash pledged | 36,500 | $ 18,100 | |
Not designated as hedging | |||
Derivative Financial Instruments | |||
Notional amount | 650,200 | 580,800 | |
Variable rate, commercial loans that are supported by the interest rate swap contracts | 325,100 | 290,400 | |
Non-interest income | |||
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income | |||
Gross gains | 23,478 | 3,713 | |
Non-interest expense | |||
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income | |||
Gross (losses) | (23,478) | $ (3,713) | |
Other assets | |||
Fair values of derivative assets and liabilities recorded in consolidated balance sheets | |||
Fair value recorded in other assets | 35,832 | 12,354 | |
Other liabilities | |||
Fair values of derivative assets and liabilities recorded in consolidated balance sheets | |||
Fair value recorded in other liabilities | $ 35,832 | $ 12,354 |
Fair Value Measurements - Gener
Fair Value Measurements - General Disclosures (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | $ 1,765,945 | $ 1,648,257 |
Equity securities | 4,936 | 5,952 |
Loans held for sale, at fair value | 89,943 | 68,699 |
U.S. Treasury securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 45,394 | 51,737 |
Obligations of U.S. government corporations and agencies | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 90,574 | 163,000 |
Obligations of states and political subdivisions | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 284,747 | 268,291 |
Commercial mortgage-backed securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 245,421 | 139,287 |
Residential mortgage-backed securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 1,000,857 | 921,966 |
Corporate debt securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 98,952 | 103,976 |
Recurring basis | ||
Financial assets and financial liabilities measured at fair value | ||
Equity securities | 4,936 | 5,952 |
Loans held for sale, at fair value | 89,943 | 68,699 |
Recurring basis | Derivative assets | ||
Financial assets and financial liabilities measured at fair value | ||
Fair value recorded in other assets | 40,978 | 13,400 |
Recurring basis | Derivative liabilities | ||
Financial assets and financial liabilities measured at fair value | ||
Fair value recorded in other liabilities | 46,600 | 14,821 |
Recurring basis | U.S. Treasury securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 45,394 | 51,737 |
Recurring basis | Obligations of U.S. government corporations and agencies | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 90,574 | 163,000 |
Recurring basis | Obligations of states and political subdivisions | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 284,747 | 268,291 |
Recurring basis | Commercial mortgage-backed securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 245,421 | 139,287 |
Recurring basis | Residential mortgage-backed securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 1,000,857 | 921,966 |
Recurring basis | Corporate debt securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 98,952 | 103,976 |
Recurring basis | Level 2 | ||
Financial assets and financial liabilities measured at fair value | ||
Equity securities | 4,936 | 5,952 |
Loans held for sale, at fair value | 89,943 | 68,699 |
Recurring basis | Level 2 | Derivative assets | ||
Financial assets and financial liabilities measured at fair value | ||
Fair value recorded in other assets | 40,978 | 13,400 |
Recurring basis | Level 2 | Derivative liabilities | ||
Financial assets and financial liabilities measured at fair value | ||
Fair value recorded in other liabilities | 46,600 | 14,821 |
Recurring basis | Level 2 | U.S. Treasury securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 45,394 | 51,737 |
Recurring basis | Level 2 | Obligations of U.S. government corporations and agencies | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 90,574 | 163,000 |
Recurring basis | Level 2 | Obligations of states and political subdivisions | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 284,747 | 268,291 |
Recurring basis | Level 2 | Commercial mortgage-backed securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 245,421 | 139,287 |
Recurring basis | Level 2 | Residential mortgage-backed securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | 1,000,857 | 921,966 |
Recurring basis | Level 2 | Corporate debt securities | ||
Financial assets and financial liabilities measured at fair value | ||
Debt securities available for sale | $ 98,952 | $ 103,976 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Quantitative Information (Details) $ in Thousands | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | $ 25,372 | $ 37,079 |
Collateral dependent loans | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Collateral dependent loans (percent) | (2.9) | |
Collateral dependent loans | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Collateral dependent loans (percent) | (100) | |
Collateral dependent loans | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Collateral dependent loans (percent) | (57.8) | |
Level 3 | Appraisal of collateral | OREO | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
OREO (percent) | (25) | (25) |
Level 3 | Appraisal of collateral | OREO | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
OREO (percent) | (100) | (100) |
Level 3 | Appraisal of collateral | OREO | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
OREO (percent) | (65) | (65) |
Level 3 | Appraisal of collateral or real estate listing price | Bank property held for sale | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Bank property held for sale (percent) | (6.2) | (6.2) |
Level 3 | Appraisal of collateral or real estate listing price | Bank property held for sale | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Bank property held for sale (percent) | (64.9) | (71.3) |
Level 3 | Appraisal of collateral or real estate listing price | Bank property held for sale | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Bank property held for sale (percent) | (27.3) | (40.7) |
Non-recurring basis | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | $ 1,413 | $ 2,686 |
OREO | 55 | 55 |
Bank property held for sale | 3,413 | 4,004 |
Non-recurring basis | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | 1,413 | 2,686 |
OREO | 55 | 55 |
Bank property held for sale | 3,413 | 4,004 |
Non-recurring basis | Level 3 | Appraisal of collateral | Collateral dependent loans | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | 1,413 | 2,686 |
Non-recurring basis | Level 3 | Appraisal of collateral | OREO | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
OREO | 55 | 55 |
Non-recurring basis | Level 3 | Appraisal of collateral or real estate listing price | Bank property held for sale | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Bank property held for sale | $ 3,413 | $ 4,004 |
Fair Value Measurements - Segre
Fair Value Measurements - Segregated by Level of Valuation Inputs (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Financial assets: | ||
Portfolio loans, net | $ 6,661,115 | $ 6,633,501 |
Financial liabilities: | ||
Short-term borrowings | 21,358 | 8,551 |
Junior subordinated debt owed to unconsolidated trusts | 71,347 | 71,308 |
Level 1 | Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 342,848 | 529,288 |
Level 1 | Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 342,848 | 529,288 |
Level 2 | Carrying Amount | ||
Financial assets: | ||
Accrued interest receivable | 27,310 | 27,109 |
Financial liabilities: | ||
Time deposits | 1,482,013 | 1,534,850 |
Securities sold under agreements to repurchase | 167,250 | 205,491 |
Short-term borrowings | 21,358 | 8,551 |
Long-term debt | 35,595 | 83,600 |
Junior subordinated debt owed to unconsolidated trusts | 71,347 | 71,308 |
Accrued interest payable | 5,609 | 5,000 |
Level 2 | Fair Value | ||
Financial assets: | ||
Accrued interest receivable | 27,310 | 27,109 |
Financial liabilities: | ||
Time deposits | 1,490,835 | 1,538,597 |
Securities sold under agreements to repurchase | 167,250 | 205,491 |
Short-term borrowings | 21,364 | 8,552 |
Long-term debt | 35,811 | 83,614 |
Junior subordinated debt owed to unconsolidated trusts | 72,749 | 74,153 |
Accrued interest payable | 5,609 | 5,000 |
Level 3 | Carrying Amount | ||
Financial assets: | ||
Portfolio loans, net | 6,661,115 | 6,633,501 |
Mortgage servicing rights | 11,776 | 12,326 |
Other servicing rights | 1,070 | 1,071 |
Level 3 | Fair Value | ||
Financial assets: | ||
Portfolio loans, net | 6,687,117 | 6,648,560 |
Mortgage servicing rights | 13,968 | 18,193 |
Other servicing rights | 1,632 | 1,740 |
Level 3 | Senior notes | Carrying Amount | ||
Financial liabilities: | ||
Long-term debt | 39,708 | 39,674 |
Level 3 | Senior notes | Fair Value | ||
Financial liabilities: | ||
Long-term debt | 40,441 | 40,099 |
Level 3 | Subordinated debt | Carrying Amount | ||
Financial liabilities: | ||
Long-term debt | 59,273 | 59,248 |
Level 3 | Subordinated debt | Fair Value | ||
Financial liabilities: | ||
Long-term debt | $ 60,950 | $ 61,514 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Leases | |||
Right of use asset | $ 9,074 | $ 9,490 | |
Lease liability | 9,150 | $ 9,552 | |
Rent expense under operating leases, included in net occupancy and equipment expense | $ 806 | $ 659 |
Leases - Lease Cost and Other L
Leases - Lease Cost and Other Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lease Costs | ||
Operating lease costs | $ 620 | $ 533 |
Variable lease costs | 171 | 111 |
Short-term lease costs | 15 | 15 |
Net lease cost | 806 | 659 |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating lease cash flows - Fixed payments | 611 | 513 |
Operating lease cash flows - Liability reduction | 530 | $ 463 |
Right of use assets obtained during the period in exchange for operating lease liabilities | $ 128 | |
Weighted average lease term (in years) | 8 years 3 months 29 days | |
Weighted average discount rate (in percent) | 3.05% | 3.11% |
Leases - Future Rent Commitment
Leases - Future Rent Commitments (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Projected minimum rental payments under the terms of leases | |
Remainder of 2020 | $ 1,830 |
2021 | 1,814 |
2022 | 1,411 |
2023 | 1,254 |
2024 | 1,022 |
Thereafter | 2,876 |
Amounts representing interest | (1,057) |
Present value of net future minimum lease payments | $ 9,150 |