Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 16, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | 1ST SOURCE CORP | |
Entity Central Index Key | 34,782 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 26,082,147 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
ASSETS | ||
Cash and due from banks | $ 61,124 | $ 64,834 |
Federal funds sold and interest bearing deposits with other banks | 3,065 | 1,356 |
Investment securities available-for-sale (amortized cost of $769,053 and $776,057 at September 30, 2015 and December 31, 2014, respectively) | 784,585 | 791,118 |
Other investments | 21,728 | 20,801 |
Trading account securities | 0 | 205 |
Mortgages held for sale | 9,187 | 13,604 |
Loans and leases - net of unearned discount | ||
Loans and leases | 3,955,550 | 3,688,574 |
Reserve for loan and lease losses | (87,616) | (85,068) |
Net loans and leases | 3,867,934 | 3,603,506 |
Equipment owned under operating leases, net | 95,785 | 74,143 |
Net premises and equipment | 51,252 | 50,328 |
Goodwill and intangible assets | 84,822 | 85,371 |
Accrued income and other assets | 126,102 | 124,692 |
Total assets | 5,105,584 | 4,829,958 |
Deposits: | ||
Noninterest bearing | 914,152 | 796,241 |
Interest bearing | 3,105,004 | 3,006,619 |
Total deposits | 4,019,156 | 3,802,860 |
Short-term borrowings: | ||
Federal funds purchased and securities sold under agreements to repurchase | 139,414 | 138,843 |
Other short-term borrowings | 144,096 | 106,979 |
Total short-term borrowings | 283,510 | 245,822 |
Long-term debt and mandatorily redeemable securities | 57,577 | 56,232 |
Subordinated notes | 58,764 | 58,764 |
Accrued expenses and other liabilities | 47,356 | 51,807 |
Total liabilities | 4,466,363 | 4,215,485 |
SHAREHOLDERS' EQUITY | ||
Preferred stock; no par value Authorized 10,000,000 shares; none issued or outstanding | 0 | 0 |
Common stock; no par value Authorized 40,000,000 shares; issued 28,205,674 at September 30, 2015 and 28,206,076 at December 31, 2014 | 436,538 | 346,535 |
Retained earnings | 242,102 | 302,242 |
Cost of common stock in treasury (2,123,527 shares at September 30, 2015 and 1,957,386 shares at December 31, 2014) | (49,120) | (43,711) |
Accumulated other comprehensive income | 9,701 | 9,407 |
Total shareholders' equity | 639,221 | 614,473 |
Total liabilities and shareholders' equity | 5,105,584 | 4,829,958 |
Commercial and agricultural | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 750,780 | 710,758 |
Reserve for loan and lease losses | (14,039) | (11,760) |
Auto and light truck | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 423,147 | 397,902 |
Reserve for loan and lease losses | (9,378) | (10,326) |
Medium and heavy duty truck | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 264,784 | 247,153 |
Reserve for loan and lease losses | (4,444) | (4,500) |
Aircraft financing | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 794,129 | 727,665 |
Reserve for loan and lease losses | (34,041) | (32,234) |
Construction equipment financing | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 450,112 | 399,940 |
Reserve for loan and lease losses | (7,643) | (7,008) |
Commercial real estate | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 658,589 | 616,587 |
Reserve for loan and lease losses | (13,021) | (13,270) |
Residential real estate | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 463,824 | 445,759 |
Reserve for loan and lease losses | (3,399) | (4,102) |
Consumer | ||
Loans and leases - net of unearned discount | ||
Loans and leases | 150,185 | 142,810 |
Reserve for loan and lease losses | $ (1,651) | $ (1,868) |
CONSOLIDATED STATEMENTS OF FIN3
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Statement of Financial Position [Abstract] | |||
Investment securities available-for-sale, amortized cost (in dollars) | $ 769,053 | $ 776,057 | |
Preferred stock; no par value (in dollars per share) | $ 0 | $ 0 | |
Preferred stock, Authorized shares | 10,000,000 | 10,000,000 | |
Preferred stock, issued shares | 0 | 0 | |
Preferred stock, outstanding shares | 0 | 0 | |
Common stock; no par value (in dollars per share) | $ 0 | $ 0 | |
Common stock, Authorized shares | 40,000,000 | 40,000,000 | |
Common stock, issued shares | 28,205,674 | 28,206,076 | [1] |
Cost of common stock in treasury, shares | 2,123,527 | 1,957,386 | [1] |
[1] | *December 31, 2014 share data gives retrospective recognition to a 10% stock dividend declared on July 22, 2015 and issued on August 14, 2015. |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Interest income: | |||||
Loans and leases | $ 42,560 | $ 41,118 | $ 124,747 | $ 120,434 | |
Investment securities, taxable | 3,277 | 2,962 | 8,929 | 9,708 | |
Investment securities, tax-exempt | 738 | 831 | 2,261 | 2,466 | |
Other | 246 | 241 | 730 | 750 | |
Total interest income | 46,821 | 45,152 | 136,667 | 133,358 | |
Interest expense: | |||||
Deposits | 2,874 | 2,765 | 8,271 | 8,730 | |
Short-term borrowings | 147 | 134 | 381 | 440 | |
Subordinated notes | 1,055 | 1,055 | 3,165 | 3,165 | |
Long-term debt and mandatorily redeemable securities | 536 | 488 | 1,540 | 1,533 | |
Total interest expense | 4,612 | 4,442 | 13,357 | 13,868 | |
Net interest income | 42,209 | 40,710 | 123,310 | 119,490 | |
Provision for loan and lease losses | 992 | 1,206 | 2,160 | 4,553 | |
Net interest income after provision for loan and lease losses | 41,217 | 39,504 | 121,150 | 114,937 | |
Noninterest income: | |||||
Trust fees | 4,634 | 4,499 | 14,438 | 13,930 | |
Service charges on deposit accounts | 2,413 | 2,225 | 6,977 | 6,498 | |
Debit card income | 2,583 | 2,382 | 7,610 | 7,077 | |
Mortgage banking income | 969 | 1,446 | 3,459 | 3,961 | |
Insurance commissions | 1,460 | 1,317 | 4,147 | 4,168 | |
Equipment rental income | 5,881 | 4,361 | 16,302 | 12,541 | |
Gains on investment securities available-for-sale | 0 | 0 | 4 | 963 | |
Other income | 3,192 | 3,162 | 9,477 | 8,873 | |
Total noninterest income | 21,132 | 19,392 | 62,414 | 58,011 | |
Noninterest expense: | |||||
Salaries and employee benefits | 21,835 | 20,790 | 63,554 | 59,099 | |
Net occupancy expense | 2,496 | 2,252 | 7,302 | 6,924 | |
Furniture and equipment expense | 4,604 | 4,415 | 13,471 | 13,065 | |
Depreciation - leased equipment | 4,858 | 3,571 | 13,342 | 10,110 | |
Professional fees | 1,237 | 1,158 | 3,215 | 3,348 | |
Supplies and communication | 1,307 | 1,424 | 4,122 | 4,153 | |
FDIC and other insurance | 848 | 856 | 2,544 | 2,570 | |
Business development and marketing expense | 1,244 | 1,218 | 3,507 | 3,801 | |
Loan and lease collection and repossession expense | 416 | 652 | 485 | 140 | |
Other expense | 2,223 | 1,317 | 5,828 | 4,839 | |
Total noninterest expense | 41,068 | 37,653 | 117,370 | 108,049 | |
Income before income taxes | 21,281 | 21,243 | 66,194 | 64,899 | |
Income tax expense | 7,353 | 6,296 | 23,125 | 21,826 | |
Net income | $ 13,928 | $ 14,947 | $ 43,069 | $ 43,073 | |
Per common share: | |||||
Basic net income per common share (in dollars per share) | [1] | $ 0.53 | $ 0.56 | $ 1.63 | $ 1.61 |
Diluted net income per common share (in dollars per share) | [1] | 0.53 | 0.56 | 1.63 | 1.61 |
Cash dividends (in dollars per share) | [1] | $ 0.164 | $ 0.164 | $ 0.491 | $ 0.482 |
Basic weighted average common shares outstanding (in shares) | [1] | 26,164,646 | 26,262,864 | 26,211,630 | 26,497,500 |
Diluted weighted average common shares outstanding (in shares) | [1] | 26,164,646 | 26,262,864 | 26,211,630 | 26,497,500 |
[1] | *The computation of per common share data and shares outstanding gives retrospective recognition to a 10% stock dividend declared on July 22, 2015 and issued on August 14, 2015. |
CONSOLIDATED STATEMENTS OF INC5
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) | Jul. 22, 2015 |
Income Statement [Abstract] | |
Common stock dividend rate | 10.00% |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 13,928 | $ 14,947 | $ 43,069 | $ 43,073 |
Other comprehensive income (loss): | ||||
Change in unrealized appreciation (depreciation) of available-for-sale securities | 2,256 | (2,507) | 475 | 4,268 |
Reclassification adjustment for realized (gains) losses included in net income | 0 | 0 | (4) | (963) |
Income tax effect | (847) | 941 | (177) | (1,241) |
Other comprehensive income (loss), net of tax | 1,409 | (1,566) | 294 | 2,064 |
Comprehensive income | $ 15,337 | $ 13,381 | $ 43,363 | $ 45,137 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Retained Earnings | Cost of Common Stock in Treasury | Accumulated Other Comprehensive Income (Loss), Net |
Balance at Dec. 31, 2013 | $ 585,378 | $ 346,535 | $ 261,626 | $ (29,364) | $ 6,581 |
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 43,073 | 43,073 | |||
Other comprehensive income (loss) | 2,064 | 2,064 | |||
Issuance of 117,122 and 91,464 common shares under stock based compensation awards, including related tax effects for the nine months ended on September 30, 2015 and 2014, respectively | 1,746 | (244) | 1,990 | ||
Cost of 283,263 and 597,747 shares of common stock acquired for treasury for the nine months ended on September 30, 2015 and 2014, respectively | (16,342) | (16,342) | |||
Common stock dividend ($0.491 and $0.482 per share for the nine months ended on September 30, 2015 and 2014, respectively) | (12,886) | (12,886) | |||
Balance at Sep. 30, 2014 | 603,033 | 346,535 | 291,569 | (43,716) | 8,645 |
Balance at Dec. 31, 2014 | 614,473 | 346,535 | 302,242 | (43,711) | 9,407 |
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 43,069 | 43,069 | |||
Other comprehensive income (loss) | 294 | 294 | |||
Issuance of 117,122 and 91,464 common shares under stock based compensation awards, including related tax effects for the nine months ended on September 30, 2015 and 2014, respectively | 2,547 | (252) | 2,799 | ||
Cost of 283,263 and 597,747 shares of common stock acquired for treasury for the nine months ended on September 30, 2015 and 2014, respectively | (8,208) | (8,208) | |||
Common stock dividend ($0.491 and $0.482 per share for the nine months ended on September 30, 2015 and 2014, respectively) | (12,941) | (12,941) | |||
10% common stock dividend ($13 cash paid in lieu of fractional shares) | (13) | 90,003 | (90,016) | ||
Balance at Sep. 30, 2015 | $ 639,221 | $ 436,538 | $ 242,102 | $ (49,120) | $ 9,701 |
CONSOLIDATED STATEMENTS OF SHA8
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | ||
Statement of Stockholders' Equity [Abstract] | |||
Issuance of common shares under stock based compensation awards, including related tax effects | [1] | 117,122 | 91,464 |
Common stock acquired for treasury | [1] | 283,263 | 597,747 |
Common stock dividend (in dollars per share) | [2] | $ 0.491 | $ 0.482 |
Cash Paid in Lieu of Fractional Shares | $ 13 | ||
[1] | *Share and per share data gives retrospective recognition to a 10% stock dividend declared on July 22, 2015 and issued on August 14, 2015. | ||
[2] | *The computation of per common share data and shares outstanding gives retrospective recognition to a 10% stock dividend declared on July 22, 2015 and issued on August 14, 2015. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating activities: | ||
Net income | $ 43,069 | $ 43,073 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan and lease losses | 2,160 | 4,553 |
Depreciation of premises and equipment | 3,517 | 3,502 |
Depreciation of equipment owned and leased to others | 13,342 | 10,110 |
Stock-based compensation | 2,953 | 2,640 |
Amortization of investment security premiums and accretion of discounts, net | 3,433 | 3,411 |
Amortization of mortgage servicing rights | 1,117 | 930 |
Deferred income taxes | (3,914) | (1,629) |
Gains on investment securities available-for-sale | (4) | (963) |
Originations of loans held for sale, net of principal collected | (90,381) | (91,936) |
Proceeds from the sales of loans held for sale | 97,402 | 87,518 |
Net gain on sale of loans held for sale | (2,604) | (2,573) |
Net gain on sale of other real estate and repossessions | (818) | (1,510) |
Change in trading account securities | 205 | (4) |
Change in interest receivable | (666) | (945) |
Change in interest payable | 312 | (955) |
Change in other assets | (4,802) | (3,008) |
Change in other liabilities | 5,068 | (1,218) |
Other | 1,200 | 2,288 |
Net change in operating activities | 70,589 | 53,284 |
Investing activities: | ||
Proceeds from sales of investment securities | 1,299 | 1,236 |
Proceeds from maturities of investment securities | 78,033 | 138,316 |
Purchases of investment securities | (75,757) | (119,700) |
Net change in other investments | (927) | (617) |
Loans sold or participated to others | 1,962 | 15,363 |
Net change in loans and leases | (276,108) | (127,646) |
Net change in equipment owned under operating leases | (34,984) | (15,156) |
Purchases of premises and equipment | (4,612) | (4,254) |
Proceeds from sales of other real estate and repossessions | 6,788 | 9,522 |
Net change in investing activities | (304,306) | (102,936) |
Financing activities: | ||
Net change in demand deposits and savings accounts | 140,737 | 52,369 |
Net change in time deposits | 75,559 | 129,953 |
Net change in short-term borrowings | 37,688 | (97,409) |
Proceeds from issuance of long-term debt | 0 | 7,185 |
Payments on long-term debt | (924) | (11,433) |
Net proceeds from issuance of treasury stock | 149 | 197 |
Acquisition of treasury stock | (8,208) | (16,342) |
Cash dividends paid on common stock | (13,285) | (13,209) |
Net change in financing activities | 231,716 | 51,311 |
Net change in cash and cash equivalents | (2,001) | 1,659 |
Cash and cash equivalents, beginning of year | 66,190 | 80,052 |
Cash and cash equivalents, end of period | 64,189 | 81,711 |
Non-cash transactions: | ||
Loans transferred to other real estate and repossessed assets | 7,558 | 6,528 |
Common stock matching contribution to Employee Stock Ownership and Profit Sharing Plan | $ 500 | $ 0 |
Accounting Policies
Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Accounting Policies | 1st Source Corporation is a bank holding company headquartered in South Bend, Indiana that provides, through its subsidiaries (collectively referred to as “1st Source” or “the Company”), a broad array of financial products and services. Basis of Presentation – The accompanying unaudited consolidated financial statements reflect all adjustments (all of which are normal and recurring in nature) which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position, the results of operations, changes in comprehensive income, changes in shareholders’ equity, and cash flows for the periods presented. These unaudited consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission (SEC) and, therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been omitted. The Notes to the Consolidated Financial Statements appearing in 1st Source Corporation’s Annual Report on Form 10-K (2014 Annual Report), which include descriptions of significant accounting policies, should be read in conjunction with these interim financial statements. The Consolidated Statement of Financial Condition at December 31, 2014 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the current year presentation. Use of Estimates in the Preparation of Financial Statements – Financial statements prepared in accordance with GAAP require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates. Loans and Leases – Loans are stated at the principal amount outstanding, net of unamortized deferred loan origination fees and costs and net of unearned income. Interest income is accrued as earned based on unpaid principal balances. Origination fees and direct loan and lease origination costs are deferred and the net amount amortized to interest income over the estimated life of the related loan or lease. Loan commitment fees are deferred and amortized into other income over the commitment period. Direct financing leases are carried at the aggregate of lease payments plus estimated residual value of the leased property, net of unamortized deferred lease origination fees and costs and unearned income. Interest income on direct financing leases is recognized over the term of the lease to achieve a constant periodic rate of return on the outstanding investment. The accrual of interest on loans and leases is discontinued when a loan or lease becomes contractually delinquent for 90 days, or when an individual analysis of a borrower’s credit worthiness indicates a credit should be placed on nonperforming status, except for residential mortgage loans and consumer loans that are well secured and in the process of collection. Residential mortgage loans are placed on nonaccrual at the time the loan is placed in foreclosure. When interest accruals are discontinued, interest credited to income in the current year is reversed and interest accrued in the prior year is charged to the reserve for loan and lease losses. However, in some cases, the Company may elect to continue the accrual of interest when the net realizable value of collateral is sufficient to cover the principal and accrued interest. When a loan or lease is classified as nonaccrual and the future collectibility of the recorded loan or lease balance is doubtful, collections on interest and principal are applied as a reduction to principal outstanding. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured, which is typically evidenced by a sustained repayment performance of at least six months . A loan or lease is considered impaired, based on current information and events, if it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan or lease agreement. Interest on impaired loans and leases, which are not classified as nonaccrual, is recognized on the accrual basis. The Company evaluates loans and leases exceeding $100,000 for impairment and establishes a specific reserve as a component of the reserve for loan and lease losses when it is probable all amounts due will not be collected pursuant to the contractual terms of the loan or lease and the recorded investment in the loan or lease exceeds its fair value. Loans and leases that have been modified and economic concessions have been granted to borrowers who have experienced financial difficulties are considered a troubled debt restructuring (TDR) and, by definition, are deemed an impaired loan. These concessions typically result from the Company’s loss mitigation activities and may include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructuring and typically are returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period of at least six months. When the Company modifies loans and leases in a TDR, it evaluates any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan or lease agreement, or uses the current fair value of the collateral, less selling costs for collateral dependent loans. If the Company determines that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through a reserve for loan and lease losses estimate or a charge-off to the reserve for loan and lease losses. In periods subsequent to modification, the Company evaluates all TDRs, including those that have payment defaults, for possible impairment and recognizes impairment through the reserve for loan and lease losses. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Short Duration Contracts: In May 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-09 “ Financial Services - Insurance (Topic 944) - Disclosures about Short Duration Contracts.” ASU 2015-09 includes amendments that require insurance entities to disclose for annual reporting periods information about the liability for unpaid claims and claim adjustment expenses as well as significant changes in methodologies and assumptions used to calculate the liability for unpaid claims and claim adjustment expenses. In addition, the amendments require a roll-forward of the liability for unpaid claims and claim adjustment expenses on an annual and interim basis. The amendments are effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016 and should be applied retrospectively. Early adoption is permitted. The Company is assessing the impact of ASU 2015-09 on its disclosures. Consolidations: In February 2015, the FASB issued ASU No. 2015-02 “ Consolidation (Topic 810) - Amendments to the Consolidation Analysis.” ASU 2015-02 includes amendments that are intended to improve targeted areas of consolidation for legal entities including reducing the number of consolidation models from four to two and simplifying the FASB Accounting Standards Codification. ASU 2015-02 is effective for annual and interim periods within those annual periods, beginning after December 15, 2015. The amendments may be applied retrospectively in previously issued financial statements for one or more years with a cumulative effect adjustment to retained earnings as of the beginning of the first year restated. Early adoption is permitted, including adoption in an interim period. The Company is assessing the impact of ASU 2015-02 on its accounting and disclosures. Troubled Debt Restructurings by Creditors: In August 2014, the FASB issued ASU No. 2014-14 “ Receivables - Troubled Debt Restructurings by Creditors (Subtopic 310-40) - Classification of Certain Government Guaranteed Mortgage Loans upon Foreclosure.” ASU 2014-14 requires that a mortgage loan be derecognized and a separate other receivable be recognized upon foreclosure if certain conditions are met. Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. ASU 2014-14 is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2014. The amendments can be applied using either a prospective transition method or a modified retrospective transition method. Early adoption is permitted. The Company adopted ASU 2014-14 on January 1, 2015 and it did not have an impact on its accounting and disclosures. Share Based Payments: In June 2014, the FASB issued ASU No. 2014-12 “ Compensation - Stock Compensation (Topic 718) - Accounting for Share Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. ASU 2014-12 is effective for interim and annual periods beginning after December 15, 2015. The amendments can be applied prospectively to all awards granted or modified after the effective date or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented and to all new or modified awards thereafter. Early adoption is permitted. The Company has determined that ASU 2014-12 will not have an impact on its accounting and disclosures. Repurchase to Maturity Transactions, Repurchase Financings and Disclosures: In June 2014, the FASB issued ASU No. 2014-11 “ Transfers and Servicing (Topic 860) - Repurchase to Maturity Transactions, Repurchase Financings, and Disclosures.” ASU 2014-11 aligns the accounting for repurchase to maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other typical repurchase agreements. Going forward, these transactions would all be accounted for as secured borrowings. ASU 2014-11 is effective for the first interim or annual period beginning after December 15, 2014. In addition the disclosure of certain transactions accounted for as a sale is effective for the first interim or annual period beginning on or after December 15, 2014, and the disclosure for transactions accounted for as secured borrowings is required for annual periods beginning after December 15, 2014, and interim periods beginning after March 15, 2015. Early adoption is prohibited. The Company adopted ASU 2014-11 on January 1, 2015 and it did not have a material impact on its accounting and disclosures. Revenue from Contracts with Customers: In May 2014, the FASB issued ASU No. 2014-09 “ Revenue from Contracts with Customers (Topic 606).” The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. On July 9, 2015, the FASB approved amendments deferring the effective date by one year. ASU 2014-09 is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this Update recognized at the date of initial application. Early application is permitted but not before the original public entity effective date, i.e ., annual periods beginning after December 15, 2016. The Company is assessing the impact of ASU 2014-09 on its accounting and disclosures. Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans Upon Foreclosure: In January 2014, the FASB issued ASU No. 2014-04 “ Receivables - Troubled Debt Restructurings by Creditors (Subtopic 310-40) - Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans Upon Foreclosure.” ASU 2014-04 clarifies when an in substance repossession or foreclosure occurs and requires interim and annual disclosures of the amount of foreclosed residential real estate property and the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure. ASU 2014-04 is effective either on a modified retrospective transition method or a prospective transition method for interim and annual periods beginning after December 15, 2014. Early adoption is permitted. The Company adopted ASU 2014-04 on January 1, 2015 and it did not have a material impact on its disclosures. Accounting for Investments in Qualified Affordable Housing Projects: In January 2014, the FASB issued ASU No. 2014-01 “ Investments - Equity method and Joint Ventures (Topic 323) - Accounting for Investments in Qualified Affordable Housing Projects.” ASU 2014-01 allows investors to use the proportional amortization method to account for investments in limited liability entities that manage or invest in affordable housing projects that qualify for low-income housing tax credits if certain conditions are met. ASU 2014-01 is effective retrospectively for interim and annual periods in fiscal years that begin after December 15, 2014. Early adoption is permitted. The Company adopted ASU 2014-01 on January 1, 2015 and it did not have a material impact on its accounting and disclosures for affordable housing projects. |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment Securities The following table shows investment securities available-for-sale. (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value September 30, 2015 U.S. Treasury and Federal agencies securities $ 380,723 $ 3,570 $ (217 ) $ 384,076 U.S. States and political subdivisions securities 118,770 2,944 (122 ) 121,592 Mortgage-backed securities — Federal agencies 232,568 4,681 (841 ) 236,408 Corporate debt securities 34,299 324 (14 ) 34,609 Foreign government and other securities 800 11 — 811 Total debt securities 767,160 11,530 (1,194 ) 777,496 Marketable equity securities 1,893 5,357 (161 ) 7,089 Total investment securities available-for-sale $ 769,053 $ 16,887 $ (1,355 ) $ 784,585 December 31, 2014 U.S. Treasury and Federal agencies securities $ 371,878 $ 3,593 $ (1,968 ) $ 373,503 U.S. States and political subdivisions securities 121,510 3,392 (214 ) 124,688 Mortgage-backed securities — Federal agencies 248,299 5,490 (781 ) 253,008 Corporate debt securities 31,677 281 (26 ) 31,932 Foreign government and other securities 800 11 — 811 Total debt securities 774,164 12,767 (2,989 ) 783,942 Marketable equity securities 1,893 5,285 (2 ) 7,176 Total investment securities available-for-sale $ 776,057 $ 18,052 $ (2,991 ) $ 791,118 At September 30, 2015 and December 31, 2014 , the residential mortgage-backed securities held by the Company consisted primarily of GNMA, FNMA and FHLMC pass-through certificates which are guaranteed by those respective agencies of the United States government (Government Sponsored Enterprise, GSEs). The following table shows the contractual maturities of investments in securities available-for-sale at September 30, 2015 . Expected maturities will differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. (Dollars in thousands) Amortized Cost Fair Value Due in one year or less $ 107,463 $ 108,140 Due after one year through five years 409,967 415,432 Due after five years through ten years 17,162 17,516 Due after ten years — — Mortgage-backed securities 232,568 236,408 Total debt securities available-for-sale $ 767,160 $ 777,496 The following table shows the gross realized gains and losses on sale of securities from the securities available-for-sale portfolio, including marketable equity securities. Realized gains and losses on the sales of all securities are computed using the specific identification cost basis. The gross gains for the nine months ended September 30, 2014 reflect the sale of marketable equity securities. Three Months Ended Nine Months Ended (Dollars in thousands) 2015 2014 2015 2014 Gross realized gains $ — $ — $ 4 $ 963 Gross realized losses — — — — Net realized gains (losses) $ — $ — $ 4 $ 963 The following table summarizes gross unrealized losses and fair value by investment category and age. Less than 12 Months 12 months or Longer Total (Dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses September 30, 2015 U.S. Treasury and Federal agencies securities $ 16,881 $ (8 ) $ 74,746 $ (209 ) $ 91,627 $ (217 ) U.S. States and political subdivisions securities 13,288 (91 ) 2,325 (31 ) 15,613 (122 ) Mortgage-backed securities - Federal agencies 31,223 (226 ) 19,088 (615 ) 50,311 (841 ) Corporate debt securities 1,741 (14 ) — — 1,741 (14 ) Foreign government and other securities 100 — — — 100 — Total debt securities 63,233 (339 ) 96,159 (855 ) 159,392 (1,194 ) Marketable equity securities 487 (159 ) 3 (2 ) 490 (161 ) Total investment securities available-for-sale $ 63,720 $ (498 ) $ 96,162 $ (857 ) $ 159,882 $ (1,355 ) December 31, 2014 U.S. Treasury and Federal agencies securities $ 54,944 $ (148 ) $ 115,195 $ (1,820 ) $ 170,139 $ (1,968 ) U.S. States and political subdivisions securities 16,805 (112 ) 8,333 (102 ) 25,138 (214 ) Mortgage-backed securities - Federal agencies 21,754 (62 ) 32,781 (719 ) 54,535 (781 ) Corporate debt securities 3,072 (26 ) — — 3,072 (26 ) Foreign government and other securities — — — — — — Total debt securities 96,575 (348 ) 156,309 (2,641 ) 252,884 (2,989 ) Marketable equity securities — — 3 (2 ) 3 (2 ) Total investment securities available-for-sale $ 96,575 $ (348 ) $ 156,312 $ (2,643 ) $ 252,887 $ (2,991 ) The initial indication of other-than-temporary-impairment (OTTI) for both debt and equity securities is a decline in fair value below amortized cost. Quarterly, the impaired securities are analyzed on a qualitative and quantitative basis in determining OTTI. Declines in the fair value of available-for-sale debt securities below their cost that are deemed to be other-than-temporary are reflected in earnings as realized losses to the extent the impairment is related to credit losses. The amount of impairment related to other factors is recognized in other comprehensive income. In estimating OTTI impairment losses, the Company considers among other things, (i) the length of time and the extent to which fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) whether it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. There were no OTTI write-downs in 2015 or 2014 . At September 30, 2015 , the Company does not have the intent to sell any of the available-for-sale securities in the table above and believes that it is more likely than not, that it will not have to sell any such securities before an anticipated recovery of cost. Primarily the unrealized losses on debt securities are due to increases in market rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover on all debt securities as they approach their maturity date or re-pricing date or if market yields for such investments decline. The Company does not believe any of the securities are impaired due to reasons of credit quality. At September 30, 2015 and December 31, 2014 , investment securities with carrying values of $218.75 million and $231.50 million , respectively, were pledged as collateral for security repurchase agreements and for other purposes. |
Loan and Lease Financings
Loan and Lease Financings | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Loan and Lease Financings | Loan and Lease Financings The Company evaluates loans and leases for credit quality at least annually but more frequently if certain circumstances occur (such as material new information which becomes available and indicates a potential change in credit risk). The Company uses two methods to assess credit risk: loan or lease credit quality grades and credit risk classifications. The purpose of the loan or lease credit quality grade is to document the degree of risk associated with individual credits as well as inform management of the degree of risk in the portfolio taken as a whole. Credit risk classifications are used to categorize loans by degree of risk and to designate individual or committee approval authorities for higher risk credits at the time of origination. Credit risk classifications include categories for: Acceptable, Marginal, Special Attention, Special Risk, Restricted by Policy, Regulated and Prohibited by Law. All loans and leases, except residential real estate loans and consumer loans, are assigned credit quality grades on a scale from 1 to 12 with grade 1 representing superior credit quality. The criteria used to assign grades to extensions of credit that exhibit potential problems or well-defined weaknesses are primarily based upon the degree of risk and the likelihood of orderly repayment, and their effect on the Company’s safety and soundness. Loans or leases graded 7 or weaker are considered “special attention” credits and, as such, relationships in excess of $100,000 are reviewed quarterly as part of management’s evaluation of the appropriateness of the reserve for loan and lease losses. Grade 7 credits are defined as “watch” and contain greater than average credit risk and are monitored to limit the exposure to increased risk; grade 8 credits are “special mention” and, following regulatory guidelines, are defined as having potential weaknesses that deserve management’s close attention. Credits that exhibit well-defined weaknesses and a distinct possibility of loss are considered “classified” and are graded 9 through 12 corresponding to the regulatory definitions of “substandard” (grades 9 and 10) and the more severe “doubtful” (grade 11) and “loss” (grade 12). The following table shows the credit quality grades of the recorded investment in loans and leases, segregated by class. Credit Quality Grades (Dollars in thousands) 1-6 7-12 Total September 30, 2015 Commercial and agricultural $ 735,249 $ 15,531 $ 750,780 Auto and light truck 412,083 11,064 423,147 Medium and heavy duty truck 261,691 3,093 264,784 Aircraft financing 765,908 28,221 794,129 Construction equipment financing 442,876 7,236 450,112 Commercial real estate 640,751 17,838 658,589 Total $ 3,258,558 $ 82,983 $ 3,341,541 December 31, 2014 Commercial and agricultural $ 683,169 $ 27,589 $ 710,758 Auto and light truck 380,425 17,477 397,902 Medium and heavy duty truck 243,798 3,355 247,153 Aircraft financing 691,018 36,647 727,665 Construction equipment financing 393,965 5,975 399,940 Commercial real estate 592,787 23,800 616,587 Total $ 2,985,162 $ 114,843 $ 3,100,005 For residential real estate and consumer loans, credit quality is based on the aging status of the loan and by payment activity. The following table shows the recorded investment in residential real estate and consumer loans by performing or nonperforming status. Nonperforming loans are those loans which are on nonaccrual status or are 90 days or more past due. (Dollars in thousands) Performing Nonperforming Total September 30, 2015 Residential real estate $ 461,156 $ 2,668 $ 463,824 Consumer 149,845 340 150,185 Total $ 611,001 $ 3,008 $ 614,009 December 31, 2014 Residential real estate $ 442,918 $ 2,841 $ 445,759 Consumer 142,476 334 142,810 Total $ 585,394 $ 3,175 $ 588,569 The following table shows the recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status. (Dollars in thousands) Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due and Accruing Total Accruing Loans Nonaccrual Total Financing Receivables September 30, 2015 Commercial and agricultural $ 743,570 $ 67 $ — $ — $ 743,637 $ 7,143 $ 750,780 Auto and light truck 422,943 141 12 — 423,096 51 423,147 Medium and heavy duty truck 264,784 — — — 264,784 — 264,784 Aircraft financing 772,554 6,718 7,681 — 786,953 7,176 794,129 Construction equipment financing 448,996 461 — — 449,457 655 450,112 Commercial real estate 657,102 124 — — 657,226 1,363 658,589 Residential real estate 459,657 1,049 450 341 461,497 2,327 463,824 Consumer 148,876 834 135 70 149,915 270 150,185 Total $ 3,918,482 $ 9,394 $ 8,278 $ 411 $ 3,936,565 $ 18,985 $ 3,955,550 December 31, 2014 Commercial and agricultural $ 696,351 $ — $ 123 $ — $ 696,474 $ 14,284 $ 710,758 Auto and light truck 397,815 48 1 — 397,864 38 397,902 Medium and heavy duty truck 247,097 — — — 247,097 56 247,153 Aircraft financing 699,054 541 15,597 — 715,192 12,473 727,665 Construction equipment financing 396,821 999 1,369 — 399,189 751 399,940 Commercial real estate 611,780 — — — 611,780 4,807 616,587 Residential real estate 441,508 1,099 311 873 443,791 1,968 445,759 Consumer 141,577 676 223 109 142,585 225 142,810 Total $ 3,632,003 $ 3,363 $ 17,624 $ 982 $ 3,653,972 $ 34,602 $ 3,688,574 The following table shows impaired loans and leases, segregated by class, and the corresponding reserve for impaired loan and lease losses. (Dollars in thousands) Recorded Investment Unpaid Principal Balance Related Reserve September 30, 2015 With no related reserve recorded: Commercial and agricultural $ 752 $ 752 $ — Auto and light truck — — — Medium and heavy duty truck — — — Aircraft financing 4,687 4,687 — Construction equipment financing 655 655 — Commercial real estate 8,264 8,264 — Residential real estate — — — Consumer — — — Total with no related reserve recorded 14,358 14,358 — With a reserve recorded: Commercial and agricultural 5,919 5,919 2,710 Auto and light truck — — — Medium and heavy duty truck — — — Aircraft financing 2,460 2,460 617 Construction equipment financing — — — Commercial real estate 751 751 22 Residential real estate 368 370 150 Consumer — — — Total with a reserve recorded 9,498 9,500 3,499 Total impaired loans $ 23,856 $ 23,858 $ 3,499 December 31, 2014 With no related reserve recorded: Commercial and agricultural $ 14,468 $ 14,467 $ — Auto and light truck — — — Medium and heavy duty truck — — — Aircraft financing 12,740 12,741 — Construction equipment financing 746 746 — Commercial real estate 11,707 11,707 — Residential real estate — — — Consumer — — — Total with no related reserve recorded 39,661 39,661 — With a reserve recorded: Commercial and agricultural 74 74 5 Auto and light truck — — — Medium and heavy duty truck — — — Aircraft financing — — — Construction equipment financing — — — Commercial real estate 798 798 80 Residential real estate 373 376 156 Consumer — — — Total with a reserve recorded 1,245 1,248 241 Total impaired loans $ 40,906 $ 40,909 $ 241 The following table shows average recorded investment and interest income recognized on impaired loans and leases, segregated by class. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands) Average Recorded Investment Interest Income Average Recorded Investment Interest Income Average Recorded Investment Interest Income Average Recorded Investment Interest Income Commercial and agricultural $ 3,882 $ 11 $ 22,095 $ 9 $ 5,275 $ 27 $ 16,203 $ 34 Auto and light truck — — — — — — 542 — Medium and heavy duty truck — — — — — — — — Aircraft financing 7,422 1 1,157 3 7,945 6 3,212 16 Construction equipment financing 738 — 941 — 736 — 1,001 — Commercial real estate 9,762 108 13,415 148 10,800 392 13,263 442 Residential real estate 369 4 375 4 371 12 377 12 Consumer — — — — — — — — Total $ 22,173 $ 124 $ 37,983 $ 164 $ 25,127 $ 437 $ 34,598 $ 504 The following table shows the number of loans and leases classified as troubled debt restructuring (TDR) during the three and nine months ended September 30, 2015 and 2014 , segregated by class, as well as the recorded investment as of September 30. The classification between nonperforming and performing is shown at the time of modification. Modification programs focus on extending maturity dates or modifying payment patterns with most TDRs experiencing a combination of concessions. The modifications did not result in the contractual forgiveness of principal or interest. There were no modifications during 2015 and three modifications during 2014 that resulted in an interest rate reduction below market rate. Consequently, the financial impact of the modifications was immaterial. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands) Number of Modifications Recorded Investment Number of Modifications Recorded Investment Number of Modifications Recorded Investment Number of Modifications Recorded Investment Performing TDRs: Commercial and agricultural 2 $ 239 2 $ 346 2 $ 239 2 $ 346 Auto and light truck — — — — — — — — Medium and heavy duty truck — — — — — — — — Aircraft financing — — 1 337 — — 2 337 Construction equipment financing — — — — — — — — Commercial real estate — — — — — — — — Residential real estate — — — — — — — — Consumer — — — — — — — — Total performing TDR modifications 2 $ 239 3 $ 683 2 $ 239 4 $ 683 Nonperforming TDRs: Commercial and agricultural — $ — 4 $ 9,556 — $ — 4 $ 9,556 Auto and light truck — — — — — — — — Medium and heavy duty truck — — — — — — — — Aircraft financing — — — — — — — — Construction equipment financing — — — — — — — — Commercial real estate — — 1 820 — — 1 820 Residential real estate — — — — — — — — Consumer — — — — — — — — Total nonperforming TDR modifications — $ — 5 $ 10,376 — $ — 5 $ 10,376 Total TDR modifications 2 $ 239 8 $ 11,059 2 $ 239 9 $ 11,059 There were no TDRs which had payment defaults within the twelve months following modification during the three and nine months ended September 30, 2015 and 2014 . Default occurs when a loan or lease is 90 days or more past due under the modified terms or transferred to nonaccrual. The following table shows the recorded investment of loans and leases classified as troubled debt restructurings as of September 30, 2015 and December 31, 2014 . (Dollars in thousands) September 30, December 31, Performing TDRs $ 8,483 $ 9,118 Nonperforming TDRs 2,225 14,507 Total TDRs $ 10,708 $ 23,625 |
Reserve for Loan and Lease Loss
Reserve for Loan and Lease Losses | 9 Months Ended |
Sep. 30, 2015 | |
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract] | |
Reserve for Loan and Lease Losses | Reserve for Loan and Lease Losses The reserve for loan and lease loss methodology has been consistently applied for several years, with enhancements instituted periodically. Reserve ratios are reviewed quarterly and revised periodically to reflect recent loss history and to incorporate current risks and trends which may not be recognized in historical data. As the historical charge-off analysis is updated, the Company reviews the look-back periods for each business loan portfolio. Furthermore, a thorough analysis of charge-offs, non-performing asset levels, special attention outstandings and delinquency is performed in order to review portfolio trends and other factors, including specific industry risks and economic conditions, which may have an impact on the reserves and reserve ratios applied to various portfolios. The Company adjusts the calculated historical based ratio as a result of the analysis of environmental factors, principally economic risk and concentration risk. Key economic factors affecting the portfolios are growth in gross domestic product, unemployment rates, housing market trends, commodity prices, inflation and global economic and political issues. Concentration risk is impacted primarily by geographic concentration in Northern Indiana and Southwestern Lower Michigan in the business banking and commercial real estate portfolios and by collateral concentration in the specialty finance portfolios and exposure to foreign markets by geographic risk. The reserve for loan and lease losses is maintained at a level believed to be appropriate by the Company to absorb probable losses inherent in the loan and lease portfolio. The determination of the reserve requires significant judgment reflecting the Company’s best estimate of probable loan and lease losses related to specifically identified impaired loans and leases as well as probable losses in the remainder of the various loan and lease portfolios. For purposes of determining the reserve, the Company has segmented loans and leases into classes based on the associated risk within these segments. The Company has determined that eight classes exist within the loan and lease portfolio. The methodology for assessing the appropriateness of the reserve consists of several key elements, which include: specific reserves for impaired loans, formula reserves for each business lending division portfolio including percentage allocations for special attention loans and leases not deemed impaired, and reserves for pooled homogeneous loans and leases. The Company’s evaluation is based upon a continuing review of these portfolios, estimates of customer performance, collateral values and dispositions, and assessments of economic and geopolitical events, all of which are subject to judgment and will change. The following table shows the changes in the reserve for loan and lease losses, segregated by class, for the three months ended September 30, 2015 and 2014 . (Dollars in thousands) Commercial and agricultural Auto and light truck Medium and heavy duty truck Aircraft financing Construction financing Commercial real estate Residential real estate Consumer Total September 30, 2015 Reserve for loan and lease losses Balance, beginning of period $ 11,865 $ 11,445 $ 4,333 $ 32,840 $ 7,807 $ 13,226 $ 3,444 $ 1,628 $ 86,588 Charge-offs 88 — — 195 — — 39 310 632 Recoveries 80 64 10 279 112 39 2 82 668 Net charge-offs (recoveries) 8 (64 ) (10 ) (84 ) (112 ) (39 ) 37 228 (36 ) Provision (recovery of provision) 2,182 (2,131 ) 101 1,117 (276 ) (244 ) (8 ) 251 992 Balance, end of period $ 14,039 $ 9,378 $ 4,444 $ 34,041 $ 7,643 $ 13,021 $ 3,399 $ 1,651 $ 87,616 September 30, 2014 Reserve for loan and lease losses Balance, beginning of period $ 16,766 $ 10,427 $ 4,281 $ 33,087 $ 6,318 $ 12,353 $ 3,934 $ 1,610 $ 88,776 Charge-offs 3,000 10 — — 2 16 3 193 3,224 Recoveries 177 64 1 49 130 130 23 68 642 Net charge-offs (recoveries) 2,823 (54 ) (1 ) (49 ) (128 ) (114 ) (20 ) 125 2,582 Provision (recovery of provision) 1,295 516 173 (1,672 ) 11 485 58 340 1,206 Balance, end of period $ 15,238 $ 10,997 $ 4,455 $ 31,464 $ 6,457 $ 12,952 $ 4,012 $ 1,825 $ 87,400 The following table shows the changes in the reserve for loan and lease losses, segregated by class, for the nine months ended September 30, 2015 and 2014 . (Dollars in thousands) Commercial and agricultural loans Auto and light truck Medium and heavy duty truck Aircraft financing Construction financing Commercial real estate Residential real estate Consumer loans Total September 30, 2015 Reserve for loan and lease losses Balance, beginning of period $ 11,760 $ 10,326 $ 4,500 $ 32,234 $ 7,008 $ 13,270 $ 4,102 $ 1,868 $ 85,068 Charge-offs 1,053 22 — 244 — — 104 630 2,053 Recoveries 644 315 15 721 357 174 9 206 2,441 Net charge-offs (recoveries) 409 (293 ) (15 ) (477 ) (357 ) (174 ) 95 424 (388 ) Provision (recovery of provision) 2,688 (1,241 ) (71 ) 1,330 278 (423 ) (608 ) 207 2,160 Balance, end of period $ 14,039 $ 9,378 $ 4,444 $ 34,041 $ 7,643 $ 13,021 $ 3,399 $ 1,651 $ 87,616 September 30, 2014 Reserve for loan and lease losses Balance, beginning of period $ 11,515 $ 9,657 $ 4,212 $ 34,037 $ 5,972 $ 12,406 $ 4,093 $ 1,613 $ 83,505 Charge-offs 3,228 29 — — 4 17 46 582 3,906 Recoveries 863 1,119 137 161 356 285 93 234 3,248 Net charge-offs (recoveries) 2,365 (1,090 ) (137 ) (161 ) (352 ) (268 ) (47 ) 348 658 Provision (recovery of provision) 6,088 250 106 (2,734 ) 133 278 (128 ) 560 4,553 Balance, end of period $ 15,238 $ 10,997 $ 4,455 $ 31,464 $ 6,457 $ 12,952 $ 4,012 $ 1,825 $ 87,400 The following table shows the reserve for loan and lease losses and recorded investment in loans and leases, segregated by class, separated between individually and collectively evaluated for impairment as of September 30, 2015 and December 31, 2014 . (Dollars in thousands) Commercial and agricultural loans Auto and light truck Medium and heavy duty truck Aircraft financing Construction financing Commercial real estate Residential real estate Consumer loans Total September 30, 2015 Reserve for loan and lease losses Ending balance, individually evaluated for impairment $ 2,710 $ — $ — $ 617 $ — $ 22 $ 150 $ — $ 3,499 Ending balance, collectively evaluated for impairment 11,329 9,378 4,444 33,424 7,643 12,999 3,249 1,651 84,117 Total reserve for loan and lease losses $ 14,039 $ 9,378 $ 4,444 $ 34,041 $ 7,643 $ 13,021 $ 3,399 $ 1,651 $ 87,616 Recorded investment in loans Ending balance, individually evaluated for impairment $ 6,671 $ — $ — $ 7,147 $ 655 $ 9,015 $ 368 $ — $ 23,856 Ending balance, collectively evaluated for impairment 744,109 423,147 264,784 786,982 449,457 649,574 463,456 150,185 3,931,694 Total recorded investment in loans $ 750,780 $ 423,147 $ 264,784 $ 794,129 $ 450,112 $ 658,589 $ 463,824 $ 150,185 $ 3,955,550 December 31, 2014 Reserve for loan and lease losses Ending balance, individually evaluated for impairment $ 5 $ — $ — $ — $ — $ 80 $ 156 $ — $ 241 Ending balance, collectively evaluated for impairment 11,755 10,326 4,500 32,234 7,008 13,190 3,946 1,868 84,827 Total reserve for loan and lease losses $ 11,760 $ 10,326 $ 4,500 $ 32,234 $ 7,008 $ 13,270 $ 4,102 $ 1,868 $ 85,068 Recorded investment in loans Ending balance, individually evaluated for impairment $ 14,542 $ — $ — $ 12,740 $ 746 $ 12,505 $ 373 $ — $ 40,906 Ending balance, collectively evaluated for impairment 696,216 397,902 247,153 714,925 399,194 604,082 445,386 142,810 3,647,668 Total recorded investment in loans $ 710,758 $ 397,902 $ 247,153 $ 727,665 $ 399,940 $ 616,587 $ 445,759 $ 142,810 $ 3,688,574 |
Mortgage Servicing Rights
Mortgage Servicing Rights | 9 Months Ended |
Sep. 30, 2015 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Mortgage Servicing Rights | Mortgage Servicing Rights The Company recognizes the rights to service residential mortgage loans for others as separate assets, whether the servicing rights are acquired through a separate purchase or through the sale of originated loans with servicing rights retained. The Company allocates a portion of the total proceeds of a mortgage loan to servicing rights based on the relative fair value. The unpaid principal balance of residential mortgage loans serviced for third parties was $806.45 million and $825.17 million at September 30, 2015 and December 31, 2014 , respectively. Mortgage servicing rights (MSRs) are evaluated for impairment at each reporting date. For purposes of impairment measurement, MSRs are stratified based on the predominant risk characteristics of the underlying servicing, principally by loan type. If temporary impairment exists within a tranche, a valuation allowance is established through a charge to income equal to the amount by which the carrying value exceeds the fair value. If it is later determined all or a portion of the temporary impairment no longer exists for a particular tranche, the valuation allowance is reduced through a recovery of income. The following table shows changes in the carrying value of MSRs and the associated valuation allowance. Three Months Ended Nine Months Ended (Dollars in thousands) 2015 2014 2015 2014 Mortgage servicing rights: Balance at beginning of period $ 4,661 $ 4,695 $ 4,733 $ 4,844 Additions 342 443 1,048 890 Amortization (339 ) (334 ) (1,117 ) (930 ) Sales — — — — Carrying value before valuation allowance at end of period 4,664 4,804 4,664 4,804 Valuation allowance: Balance at beginning of period — — — — Impairment (charges) recoveries — — — — Balance at end of period $ — $ — $ — $ — Net carrying value of mortgage servicing rights at end of period $ 4,664 $ 4,804 $ 4,664 $ 4,804 Fair value of mortgage servicing rights at end of period $ 6,945 $ 7,791 $ 6,945 $ 7,791 At September 30, 2015 and 2014 , the fair value of MSRs exceeded the carrying value reported in the Statements of Financial Condition by $2.28 million and $2.99 million , respectively. This difference represents increases in the fair value of certain MSRs that could not be recorded above cost basis. Mortgage loan contractual servicing fees, including late fees and ancillary income, were $0.71 million and $0.74 million for the three months ended September 30, 2015 and 2014 , respectively. Mortgage loan contractual servicing fees, including late fees and ancillary income, were $2.14 million and $2.28 million for the nine months ended September 30, 2015 and 2014 , respectively. Mortgage loan contractual servicing fees are included in Mortgage Banking Income on the Statements of Income. |
Commitments and Financial Instr
Commitments and Financial Instruments with Off-Balance-Sheet Risk | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Financial Instruments with Off-Balance-Sheet Risk | Commitments and Financial Instruments with Off-Balance-Sheet Risk 1st Source and its subsidiaries are parties to financial instruments with off-balance-sheet risk in the normal course of business. These off-balance-sheet financial instruments include commitments to originate and sell loans and standby letters of credit. The instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Statements of Financial Condition. The exposure to credit loss in the event of nonperformance by the other party to the financial instruments for loan commitments and standby letters of credit is represented by the dollar amount of those instruments. The Company uses the same credit policies and collateral requirements in making commitments and conditional obligations as it does for on-balance-sheet instruments. 1st Source Bank (Bank), a subsidiary of 1st Source Corporation, grants mortgage loan commitments to borrowers, subject to normal loan underwriting standards. The interest rate risk associated with these loan commitments is managed by entering into contracts for future deliveries of loans. Loan commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank issues standby letters of credit which are conditional commitments that guarantee the performance of a client to a third party. The credit risk involved in and collateral obtained when issuing standby letters of credit is essentially the same as that involved in extending loan commitments to clients. Standby letters of credit totaled $29.10 million and $26.94 million at September 30, 2015 and December 31, 2014 , respectively. Standby letters of credit generally have terms ranging from six months to one year. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans are considered derivative instruments. See Note 7 for further information. The Company has certain interest rate derivative positions that are not designated as hedging instruments. Derivative assets and liabilities are recorded at fair value on the balance sheet and do take into account the effects of master netting agreements. Master netting agreements allow the Company to settle all derivative contracts held with a single counterparty on a net basis, and to offset net derivative positions with related collateral, where applicable. These derivative positions relate to transactions in which the Company enters into an interest rate swap with a client while at the same time entering into an offsetting interest rate swap with another financial institution. In connection with each transaction, the Company agrees to pay interest to the client on a notional amount at a variable interest rate and receive interest from the client on the same notional amount at a fixed interest rate. At the same time, the Company agrees to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the client to effectively convert a variable rate loan to a fixed rate. Because the terms of the swaps with the customers and the other financial institutions offset each other, with the only difference being counterparty credit risk, changes in the fair value of the underlying derivative contracts are not materially different and do not significantly impact the Company’s results of operations. The following table shows the amounts of non-hedging derivative financial instruments. Asset derivatives Liability derivatives (Dollars in thousands) Notional or contractual amount Statement of Financial Condition classification Fair value Statement of Financial Condition classification Fair value September 30, 2015 Interest rate swap contracts $ 507,513 Other assets $ 11,583 Other liabilities $ 11,806 Loan commitments 16,181 Mortgages held for sale 32 N/A — Forward contracts - mortgage loan 19,102 N/A — Mortgages held for sale 153 Total $ 542,796 $ 11,615 $ 11,959 December 31, 2014 Interest rate swap contracts $ 459,508 Other assets $ 9,125 Other liabilities $ 9,302 Loan commitments 11,109 Mortgages held for sale 2 N/A — Forward contracts - mortgage loan 19,800 N/A — Mortgages held for sale 142 Total $ 490,417 $ 9,127 $ 9,444 The following table shows the amounts included in the Statements of Income for non-hedging derivative financial instruments. Gain (loss) Three Months Ended Nine Months Ended (Dollars in thousands) Statement of Income classification 2015 2014 2015 2014 Interest rate swap contracts Other expense $ (67 ) $ 30 $ (45 ) $ 29 Interest rate swap contracts Other income 427 11 724 206 Loan commitments Mortgage banking income (57 ) (42 ) 30 (15 ) Forward contracts - mortgage loan Mortgage banking income (357 ) 213 (11 ) (173 ) Forward contracts - foreign exchange Other income — 82 — 78 Total $ (54 ) $ 294 $ 698 $ 125 The following table shows the offsetting of financial assets and derivative assets. Gross Amounts Not Offset in the Statement of Financial Condition (Dollars in thousands) Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Condition Net Amounts of Assets Presented in the Statement of Financial Condition Financial Instruments Cash Collateral Received Net Amount September 30, 2015 Interest rate swaps $ 11,870 $ 287 $ 11,583 $ — $ — $ 11,583 December 31, 2014 Interest rate swaps $ 9,492 $ 367 $ 9,125 $ — $ — $ 9,125 The following table shows the offsetting of financial liabilities and derivative liabilities. Gross Amounts Not Offset in the Statement of Financial Condition (Dollars in thousands) Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Condition Net Amounts of Liabilities Presented in the Statement of Financial Condition Financial Instruments Cash Collateral Pledged Net Amount September 30, 2015 Interest rate swaps $ 12,093 $ 287 $ 11,806 $ — $ 11,215 $ 591 Repurchase agreements 115,414 — 115,414 115,414 — — Total $ 127,507 $ 287 $ 127,220 $ 115,414 $ 11,215 $ 591 December 31, 2014 Interest rate swaps $ 9,669 $ 367 $ 9,302 $ — $ 9,018 $ 284 Repurchase agreements 128,343 — 128,343 128,343 — — Total $ 138,012 $ 367 $ 137,645 $ 128,343 $ 9,018 $ 284 If a default in performance of any obligation of a repurchase agreement occurs, each party will set-off property held in respect of transactions against obligations owing in respect of any other transactions. At September 30, 2015 and December 31, 2014 , repurchase agreements had a remaining contractual maturity of $114.20 million and $107.63 million in overnight, $0.68 million and $20.71 million in up to 30 days and $0.53 million and $0.00 million in greater than 90 days, respectively and were collateralized by U.S. Treasury and Federal agencies securities. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Earnings per common share is computed using the two-class method. Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the applicable period, excluding outstanding participating securities. Participating securities include non-vested restricted stock awards. Non-vested restricted stock awards are considered participating securities to the extent the holders of these securities receive non-forfeitable dividends at the same rate as holders of common stock. Diluted earnings per common share is computed using the weighted-average number of shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method. Stock options, where the exercise price was greater than the average market price of the common shares, were excluded from the computation of diluted earnings per common share because the result would have been antidilutive. There were no stock options outstanding as of September 30, 2015 and 2014 . The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share. Three Months Ended Nine Months Ended (Dollars in thousands - except per share amounts) 2015 2014 2015 2014 Distributed earnings allocated to common stock $ 4,299 $ 4,299 $ 12,888 $ 12,796 Undistributed earnings allocated to common stock 9,499 10,466 29,748 29,733 Net earnings allocated to common stock 13,798 14,765 42,636 42,529 Net earnings allocated to participating securities 130 182 433 544 Net income allocated to common stock and participating securities $ 13,928 $ 14,947 $ 43,069 $ 43,073 Weighted average shares outstanding for basic earnings per common share* 26,164,646 26,262,864 26,211,630 26,497,500 Dilutive effect of stock compensation — — — — Weighted average shares outstanding for diluted earnings per common share* 26,164,646 26,262,864 26,211,630 26,497,500 Basic earnings per common share* $ 0.53 $ 0.56 $ 1.63 $ 1.61 Diluted earnings per common share* $ 0.53 $ 0.56 $ 1.63 $ 1.61 *Outstanding shares and per common share figures have been adjusted for 10% stock dividend declared July 22, 2015 and issued on August 14, 2015. |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | Stock Based Compensation As of September 30, 2015 , the Company had four active stock-based employee compensation plans, which are more fully described in Note 16 of the Consolidated Financial Statements in 1st Source’s Annual Report on Form 10-K for the year ended December 31, 2014 . These plans include three executive stock award plans, the Executive Incentive Plan, the Restricted Stock Award Plan, the Strategic Deployment Incentive Plan (formerly known as the 1998 Performance Compensation Plan); and the Employee Stock Purchase Plan. The 2011 Stock Option Plan was approved by the shareholders on April 21, 2011 but the Company had not made any grants through September 30, 2015 . Stock-based compensation expense for all stock-based compensation awards granted is based on the grant-date fair value. For all awards except stock option awards, the grant date fair value is either the fair market value per share or book value per share (corresponding to the type of stock awarded) as of the grant date. For stock option awards, the grant date fair value is estimated using the Black-Scholes option pricing model. For all awards the Company recognizes these compensation costs only for those shares expected to vest on a straight-line basis over the requisite service period of the award, for which the Company uses the related vesting term. The Company estimates forfeiture rates based on historical employee option exercise and employee termination experience. The Company has identified separate groups of award recipients that exhibit similar option exercise behavior and employee termination experience and have considered them as separate groups in the valuation models and expense estimates. The stock-based compensation expense recognized in the Statements of Income for the three and nine months ended September 30, 2015 and 2014 was based on awards ultimately expected to vest, and accordingly has been adjusted by the amount of estimated forfeitures. GAAP requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based partially on historical experience. Total fair value of options vested and expensed was zero for the nine months ended September 30, 2015 and 2014 . As of September 30, 2015 and 2014 there were no outstanding stock options. There were no stock options exercised during the nine months ended September 30, 2015 and 2014 . All shares issued in connection with stock option exercises are issued from available treasury stock. As of September 30, 2015 , there was $5.82 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements. That cost is expected to be recognized over a weighted-average period of 3.49 years. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The following table presents reclassifications out of accumulated other comprehensive income related to unrealized gains and losses on available-for-sale securities. Three Months Ended Nine Months Ended Affected Line Item in the Statements of Income (Dollars in thousands) 2015 2014 2015 2014 Realized gains included in net income $ — $ — $ 4 $ 963 Gains on investment securities available-for-sale — — 4 963 Income before income taxes Tax effect — — (2 ) (361 ) Income tax expense Net of tax $ — $ — $ 2 $ 602 Net income |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The total amount of unrecognized tax benefits that would affect the effective tax rate if recognized was $0.17 million at September 30, 2015 and there were no unrecognized tax benefits that would affect the effective tax rate at December 31, 2014 . Interest and penalties were recognized through the income tax provision. For the nine months ended September 30, 2015 , the Company recognized no interest or penalties. For the nine months ended September 30, 2014 , the Company recognized approximately $(0.13) million in interest, net of tax effect, and penalties. There were no accrued interest and penalties at September 30, 2015 and December 31, 2014 , respectively. Tax years that remain open and subject to audit include the federal 2012-2014 years and the Indiana 2013-2014 years. The Company does not anticipate a significant change in the amount of uncertain tax positions within the next 12 months. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company records certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are also utilized to determine the initial value of certain assets and liabilities, to perform impairment assessments, and for disclosure purposes. The Company uses quoted market prices and observable inputs to the maximum extent possible when measuring fair value. In the absence of quoted market prices, various valuation techniques are utilized to measure fair value. When possible, observable market data for identical or similar financial instruments is used in the valuation. When market data is not available, fair value is determined using valuation models that incorporate management’s estimates of the assumptions a market participant would use in pricing the asset or liability. Fair value measurements are classified within one of three levels based on the observability of the inputs used to determine fair value, as follows: • Level 1 — The valuation is based on quoted prices in active markets for identical instruments. • Level 2 — The valuation is based on observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. • Level 3 — The valuation is based on unobservable inputs that are supported by minimal or no market activity and that are significant to the fair value of the instrument. Level 3 valuations are typically performed using pricing models, discounted cash flow methodologies, or similar techniques that incorporate management’s own estimates of assumptions that market participants would use in pricing the instrument, or valuations that require significant management judgment or estimation. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company elected fair value accounting for mortgages held for sale. The Company believes the election for mortgages held for sale (which are economically hedged with free standing derivatives) will reduce certain timing differences and better match changes in the value of these assets with changes in the value of derivatives used as economic hedges for these assets. At September 30, 2015 and December 31, 2014 , all mortgages held for sale were carried at fair value. The following table shows the differences between the fair value carrying amount of mortgages held for sale measured at fair value and the aggregate unpaid principal amount the Company is contractually entitled to receive at maturity. (Dollars in thousands) Fair value carrying amount Aggregate unpaid principal Excess of fair value carrying amount over (under) unpaid principal September 30, 2015 Mortgages held for sale reported at fair value $ 9,187 $ 9,130 $ 57 (1) December 31, 2014 Mortgages held for sale reported at fair value $ 13,604 $ 13,526 $ 78 (1) (1) The excess of fair value carrying amount over (under) unpaid principal is included in mortgage banking income and includes changes in fair value at and subsequent to funding and gains and losses on the related loan commitment prior to funding. Financial Instruments on Recurring Basis: The following is a description of the valuation methodologies used for financial instruments measured at fair value on a recurring basis: Investment securities available for sale are valued primarily by a third party pricing agent. Prices supplied by the independent pricing agent, as well as their pricing methodologies and assumptions, are reviewed by the Company for reasonableness and to ensure such prices are aligned with market levels. In general, the Company’s investment securities do not possess a complex structure that could introduce greater valuation risk. The portfolio mainly consists of traditional investments including U.S. Treasury and Federal agencies securities, federal agency mortgage pass-through securities, and general obligation and revenue municipal bonds. Pricing for such instruments is fairly generic and is easily obtained. On a quarterly basis, prices supplied by the pricing agent are validated by comparison to prices obtained from other third party sources for a material portion of the portfolio. The valuation policy and procedures for Level 3 fair value measurements of available for sale debt securities are decided through collaboration between management of the Corporate Accounting and Funds Management departments. The changes in fair value measurement for Level 3 securities are analyzed on a periodic basis under a collaborative framework with the aforementioned departments. The methodology and variables used for input are derived from the combination of observable and unobservable inputs. The unobservable inputs are determined through internal assumptions that may vary from period to period due to external factors, such as market movement and credit rating adjustments. Both the market and income valuation approaches are implemented using the following types of inputs: • U.S. treasuries are priced using the market approach and utilizing live data feeds from active market exchanges for identical securities. • Government-sponsored agency debt securities and corporate bonds are primarily priced using available market information through processes such as benchmark curves, market valuations of like securities, sector groupings and matrix pricing. • Other government-sponsored agency securities, mortgage-backed securities and some of the actively traded REMICs and CMOs, are primarily priced using available market information including benchmark yields, prepayment speeds, spreads and volatility of similar securities. • Other inactive government-sponsored agency securities are primarily priced using consensus pricing and dealer quotes. • State and political subdivisions are largely grouped by characteristics, i.e., geographical data and source of revenue in trade dissemination systems. Since some securities are not traded daily and due to other grouping limitations, active market quotes are often obtained using benchmarking for like securities. Local direct placement municipal securities, with very little market activity, are priced using an appropriate market yield curve, which includes a credit spread assumption. • Marketable equity (common) securities are primarily priced using the market approach and utilizing live data feeds from active market exchanges for identical securities. Trading account securities are priced using the market approach and utilizing live data feeds from active market exchanges for identical securities. Mortgages held for sale and the related loan commitments and forward contracts (hedges) are valued using a market value approach and utilizing an appropriate current market yield and a loan commitment closing rate based on historical analysis. Interest rate swap positions, both assets and liabilities, are valued by a third party pricing agent using an income approach and utilizing models that use as their basis readily observable market parameters. This valuation process considers various factors including interest rate yield curves, time value and volatility factors. Validation of third party agent valuations is accomplished by comparing those values to the Company’s swap counterparty valuations. Management believes an adjustment is required to “mid-market” valuations for derivatives tied to its performing loan portfolio to recognize the imprecision and related exposure inherent in the process of estimating expected credit losses as well as velocity of deterioration evident with systemic risks embedded in these portfolios. The following table shows the balance of assets and liabilities measured at fair value on a recurring basis. (Dollars in thousands) Level 1 Level 2 Level 3 Total September 30, 2015 Assets: Investment securities available-for-sale: U.S. Treasury and Federal agencies securities $ 20,017 $ 364,059 $ — $ 384,076 U.S. States and political subdivisions securities — 116,913 4,679 121,592 Mortgage-backed securities — Federal agencies — 236,408 — 236,408 Corporate debt securities — 34,609 — 34,609 Foreign government and other securities — — 811 811 Total debt securities 20,017 751,989 5,490 777,496 Marketable equity securities 7,089 — — 7,089 Total investment securities available-for-sale 27,106 751,989 5,490 784,585 Trading account securities — — — — Mortgages held for sale — 9,187 — 9,187 Accrued income and other assets (interest rate swap agreements) — 11,583 — 11,583 Total $ 27,106 $ 772,759 $ 5,490 $ 805,355 Liabilities: Accrued expenses and other liabilities (interest rate swap agreements) $ — $ 11,806 $ — $ 11,806 Total $ — $ 11,806 $ — $ 11,806 December 31, 2014 Assets: Investment securities available-for-sale: U.S. Treasury and Federal agencies securities $ 19,808 $ 353,695 $ — $ 373,503 U.S. States and political subdivisions securities — 118,222 6,466 124,688 Mortgage-backed securities — Federal agencies — 253,008 — 253,008 Corporate debt securities — 31,932 — 31,932 Foreign government and other securities — — 811 811 Total debt securities 19,808 756,857 7,277 783,942 Marketable equity securities 7,176 — — 7,176 Total investment securities available-for-sale 26,984 756,857 7,277 791,118 Trading account securities 205 — — 205 Mortgages held for sale — 13,604 — 13,604 Accrued income and other assets (interest rate swap agreements) — 9,125 — 9,125 Total $ 27,189 $ 779,586 $ 7,277 $ 814,052 Liabilities: Accrued expenses and other liabilities (interest rate swap agreements) $ — $ 9,302 $ — $ 9,302 Total $ — $ 9,302 $ — $ 9,302 The following table shows changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the quarter ended September 30, 2015 and 2014 . (Dollars in thousands) U.S. States and political subdivisions securities Foreign government and other securities Investment securities available-for-sale Beginning balance July 1, 2015 $ 5,444 $ 807 $ 6,251 Total gains or losses (realized/unrealized): Included in earnings — — — Included in other comprehensive income 15 4 19 Purchases — — — Issuances — — — Sales — — — Settlements — — — Maturities (780 ) — (780 ) Transfers into Level 3 — — — Transfers out of Level 3 — — — Ending balance September 30, 2015 $ 4,679 $ 811 $ 5,490 Beginning balance July 1, 2014 $ 4,699 $ 905 $ 5,604 Total gains or losses (realized/unrealized): Included in earnings — — — Included in other comprehensive income (14 ) 3 (11 ) Purchases — — — Issuances — — — Sales — — — Settlements — — — Maturities (763 ) (100 ) (863 ) Transfers into Level 3 — — — Transfers out of Level 3 — — — Ending balance September 30, 2014 $ 3,922 $ 808 $ 4,730 There were no gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held at September 30, 2015 or 2014 . No transfers between levels occurred during the three months ended September 30, 2015 or 2014 . The following table shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring basis. (Dollars in thousands) Fair Value Valuation Methodology Unobservable Inputs Range of Inputs September 30, 2015 Investment securities available-for sale Direct placement municipal securities $ 4,679 Discounted cash flows Credit spread assumption 0.77% - 2.53% Foreign government $ 811 Discounted cash flows Market yield assumption 0.94% - 1.81% December 31, 2014 Investment securities available-for sale Direct placement municipal securities $ 6,466 Discounted cash flows Credit spread assumption 0.99% - 2.08% Foreign government $ 811 Discounted cash flows Market yield assumption 0.25% - 1.31% The sensitivity to changes in the unobservable inputs and their impact on the fair value measurement can be significant. The significant unobservable input for direct placement municipal securities are the credit spread assumptions used to determine the fair value measure. An increase (decrease) in the estimated spread assumption of the market will decrease (increase) the fair value measure of the securities. The significant unobservable input for foreign government securities are the market yield assumptions. The market yield assumption is negatively correlated to the fair value measure. An increase (decrease) in the determined market yield assumption will decrease (increase) the fair value measurement. Financial Instruments on Non-recurring Basis: The Company may be required, from time to time, to measure certain other financial assets at fair value on a non-recurring basis in accordance with GAAP. These adjustments to fair value usually result from application of lower of cost or market accounting or impairment charges of individual assets. The Credit Policy Committee (CPC), a management committee, is responsible for overseeing the valuation processes and procedures for Level 3 measurements of impaired loans, other real estate and repossessions. The CPC reviews these assets on a quarterly basis to determine the accuracy of the observable inputs, generally third party appraisals, auction values, values derived from trade publications and data submitted by the borrower, and the appropriateness of the unobservable inputs, generally discounts due to current market conditions and collection issues. The CPC establishes discounts based on asset type and valuation source; deviations from the standard are documented. The discounts are reviewed periodically, annually at a minimum, to determine they remain appropriate. Consideration is given to current trends in market values for the asset categories and gains and losses on sales of similar assets. The Loan and Funds Management Committee of the Board of Directors is responsible for overseeing the CPC. Discounts vary depending on the nature of the assets and the source of value. Aircraft are generally valued using quarterly trade publications adjusted for engine time, condition, maintenance programs, discounted by 10% . Likewise, autos are valued using current auction values, discounted by 10% ; medium and heavy duty trucks are valued using trade publications and auction values, discounted by 15% . Construction equipment is generally valued using trade publications and auction values, discounted by 20% . Real estate is valued based on appraisals or evaluations, discounted by 20% at a minimum with higher discounts for property in poor condition or property with characteristics which may make it more difficult to market. Commercial loans subject to borrowing base certificates are generally discounted by 20% for receivables and 40% - 75% for inventory with higher discounts when monthly borrowing base certificates are not required or received. Impaired loans and related write-downs are based on the fair value of the underlying collateral if repayment is expected solely from the collateral. Collateral values are reviewed quarterly and estimated using customized discounting criteria, appraisals and dealer and trade magazine quotes which are used in a market valuation approach. In accordance with fair value measurements, only impaired loans for which a reserve for loan loss has been established based on the fair value of collateral require classification in the fair value hierarchy. As a result, only a portion of the Company’s impaired loans are classified in the fair value hierarchy. Partnership investments and the adjustments to fair value primarily result from application of lower of cost or fair value accounting. The partnership investments are priced using financial statements provided by the partnerships. Quantitative unobservable inputs are not reasonably available for reporting purposes. The Company has established MSRs valuation policies and procedures based on industry standards and to ensure valuation methodologies are consistent and verifiable. MSRs and related adjustments to fair value result from application of lower of cost or fair value accounting. For purposes of impairment, MSRs are stratified based on the predominant risk characteristics of the underlying servicing, principally by loan type. The fair value of each tranche of the servicing portfolio is estimated by calculating the present value of estimated future net servicing cash flows, taking into consideration actual and expected mortgage loan prepayment rates, discount rates, servicing costs, and other economic factors. Prepayment rates and discount rates are derived through a third party pricing agent. Changes in the most significant inputs, including prepayment rates and discount rates, are compared to the changes in the fair value measurements and appropriate resolution is made. A fair value analysis is also obtained from an independent third party agent and compared to the internal valuation for reasonableness. MSRs do not trade in an active, open market with readily observable prices and though sales of MSRs do occur, precise terms and conditions typically are not readily available and the characteristics of the Company’s servicing portfolio may differ from those of any servicing portfolios that do trade. Other real estate is based on the lower of cost or fair value of the underlying collateral less expected selling costs. Collateral values are estimated primarily using appraisals and reflect a market value approach. Fair values are reviewed quarterly and new appraisals are obtained annually. Repossessions are similarly valued. For assets measured at fair value on a nonrecurring basis the following represents impairment charges (recoveries) recognized on these assets during the quarter ended September 30, 2015 : impaired loans - $0.00 million ; partnership investments - $0.00 million ; mortgage servicing rights - $0.00 million ; repossessions - $0.39 million ; and other real estate - $0.00 million . The following table shows the carrying value of assets measured at fair value on a non-recurring basis. (Dollars in thousands) Level 1 Level 2 Level 3 Total September 30, 2015 Impaired loans - collateral based $ — $ — $ 3,724 $ 3,724 Accrued income and other assets (partnership investments) — — 1,010 1,010 Accrued income and other assets (mortgage servicing rights) — — 4,664 4,664 Accrued income and other assets (repossessions) — — 6,602 6,602 Accrued income and other assets (other real estate) — — 747 747 Total $ — $ — $ 16,747 $ 16,747 December 31, 2014 Impaired loans - collateral based $ — $ — $ 1,007 $ 1,007 Accrued income and other assets (partnership investments) — — 1,343 1,343 Accrued income and other assets (mortgage servicing rights) — — 4,733 4,733 Accrued income and other assets (repossessions) — — 5,156 5,156 Accrued income and other assets (other real estate) — — 1,735 1,735 Total $ — $ — $ 13,974 $ 13,974 The following table below shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a non-recurring basis. (Dollars in thousands) Carrying Value Fair Value Valuation Methodology Unobservable Inputs Range of Inputs September 30, 2015 Impaired loans $ 3,724 $ 3,724 Collateral based measurements including appraisals, trade publications, and auction values Discount for lack of marketability and current conditions 10% - 100% Mortgage servicing rights 4,664 6,945 Discounted cash flows Constant prepayment rate (CPR) 11.3% - 18.8% Discount rate 9.5% - 13.0% Repossessions 6,602 6,806 Appraisals, trade publications and auction values Discount for lack of marketability 3% - 6% Other real estate 747 880 Appraisals Discount for lack of marketability 7% - 49% December 31, 2014 Impaired loans $ 1,007 $ 1,007 Collateral based measurements including appraisals, trade publications, and auction values Discount for lack of marketability and current conditions 20% - 25% Mortgage servicing rights 4,733 6,979 Discounted cash flows Constant prepayment rate (CPR) 10.2% - 16.3% Discount rate 9.5% - 13.0% Repossessions 5,156 5,307 Appraisals, trade publications and auction values Discount for lack of marketability 0% - 3% Other real estate 1,735 1,953 Appraisals Discount for lack of marketability 5% - 38% GAAP requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring or non-recurring basis. The following table shows the fair values of the Company’s financial instruments. (Dollars in thousands) Carrying or Contract Value Fair Value Level 1 Level 2 Level 3 September 30, 2015 Assets: Cash and due from banks $ 61,124 $ 61,124 $ 61,124 $ — $ — Federal funds sold and interest bearing deposits with other banks 3,065 3,065 3,065 — — Investment securities, available-for-sale 784,585 784,585 27,106 751,989 5,490 Other investments and trading account securities 21,728 21,728 21,728 — — Mortgages held for sale 9,187 9,187 — 9,187 — Loans and leases, net of reserve for loan and lease losses 3,867,934 3,892,210 — — 3,892,210 Mortgage servicing rights 4,664 6,945 — — 6,945 Interest rate swaps 11,583 11,583 — 11,583 — Liabilities: Deposits $ 4,019,156 $ 4,023,046 $ 2,965,672 $ 1,057,374 $ — Short-term borrowings 283,510 283,510 142,986 140,524 — Long-term debt and mandatorily redeemable securities 57,577 57,608 — 57,608 — Subordinated notes 58,764 45,249 — 45,249 — Interest rate swaps 11,806 11,806 — 11,806 — Off-balance-sheet instruments * — 301 — 301 — December 31, 2014 Assets: Cash and due from banks $ 64,834 $ 64,834 $ 64,834 $ — $ — Federal funds sold and interest bearing deposits with other banks 1,356 1,356 1,356 — — Investment securities, available-for-sale 791,118 791,118 26,984 756,857 7,277 Other investments and trading account securities 21,006 21,006 21,006 — — Mortgages held for sale 13,604 13,604 — 13,604 — Loans and leases, net of reserve for loan and lease losses 3,603,506 3,626,682 — — 3,626,682 Mortgage servicing rights 4,733 6,979 — — 6,979 Interest rate swaps 9,125 9,125 — 9,125 — Liabilities: Deposits $ 3,802,860 $ 3,803,958 $ 2,824,935 $ 979,023 $ — Short-term borrowings 245,822 245,822 123,337 122,485 — Long-term debt and mandatorily redeemable securities 56,232 56,044 — 56,044 — Subordinated notes 58,764 59,427 — 59,427 — Interest rate swaps 9,302 9,302 — 9,302 — Off-balance-sheet instruments * — 305 — 305 — * Represents estimated cash outflows required to currently settle the obligations at current market rates. The methodologies for estimating fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. The estimated fair value approximates carrying value for cash and due from banks, federal funds sold and interest bearing deposits with other banks, other investments, and cash surrender value of life insurance policies. The methodologies for other financial assets and financial liabilities are discussed below: Loans and Leases — For variable rate loans and leases that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair values of other loans and leases are estimated using discounted cash flow analyses which use interest rates currently being offered for loans and leases with similar terms to borrowers of similar credit quality. Deposits — The fair values for all deposits other than time deposits are equal to the amounts payable on demand (the carrying value). Fair values of variable rate time deposits are equal to their carrying values. Fair values for fixed rate time deposits are estimated using discounted cash flow analyses using interest rates currently being offered for deposits with similar remaining maturities. Short-Term Borrowings — The carrying values of Federal funds purchased, securities sold under repurchase agreements, and other short-term borrowings, including the liability related to mortgage loans available for repurchase under GNMA optional repurchase programs, approximate their fair values. Long-Term Debt and Mandatorily Redeemable Securities — The fair values of long-term debt are estimated using discounted cash flow analyses, based on the current estimated incremental borrowing rates for similar types of borrowing arrangements. The carrying values of mandatorily redeemable securities are based on the current estimated cost of redeeming these securities which approximate their fair values. Subordinated Notes — Fair values are estimated based on calculated market prices of comparable securities. Off-Balance-Sheet Instruments — Contract and fair values for certain off-balance-sheet financial instruments (guarantees) are estimated based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. Limitations — Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instruments. Because no market exists for a significant portion of the financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other such factors. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. These estimates are subjective in nature and require considerable judgment to interpret market data. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange, nor are they intended to represent the fair value of the Company as a whole. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The fair value estimates presented herein are based on pertinent information available to management as of the respective balance sheet date. Although the Company is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued since the presentation dates, and therefore, estimates of fair value after the balance sheet date may differ significantly from the amounts presented herein. Other significant assets, such as premises and equipment, other assets, and liabilities not defined as financial instruments, are not included in the above disclosures. Also, the fair value estimates for deposits do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market. |
Accounting Policies Accounting
Accounting Policies Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation – The accompanying unaudited consolidated financial statements reflect all adjustments (all of which are normal and recurring in nature) which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position, the results of operations, changes in comprehensive income, changes in shareholders’ equity, and cash flows for the periods presented. These unaudited consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission (SEC) and, therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been omitted. The Notes to the Consolidated Financial Statements appearing in 1st Source Corporation’s Annual Report on Form 10-K (2014 Annual Report), which include descriptions of significant accounting policies, should be read in conjunction with these interim financial statements. The Consolidated Statement of Financial Condition at December 31, 2014 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the current year presentation. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements – Financial statements prepared in accordance with GAAP require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates. |
Loans and Leases | Loans and Leases – Loans are stated at the principal amount outstanding, net of unamortized deferred loan origination fees and costs and net of unearned income. Interest income is accrued as earned based on unpaid principal balances. Origination fees and direct loan and lease origination costs are deferred and the net amount amortized to interest income over the estimated life of the related loan or lease. Loan commitment fees are deferred and amortized into other income over the commitment period. Direct financing leases are carried at the aggregate of lease payments plus estimated residual value of the leased property, net of unamortized deferred lease origination fees and costs and unearned income. Interest income on direct financing leases is recognized over the term of the lease to achieve a constant periodic rate of return on the outstanding investment. The accrual of interest on loans and leases is discontinued when a loan or lease becomes contractually delinquent for 90 days, or when an individual analysis of a borrower’s credit worthiness indicates a credit should be placed on nonperforming status, except for residential mortgage loans and consumer loans that are well secured and in the process of collection. Residential mortgage loans are placed on nonaccrual at the time the loan is placed in foreclosure. When interest accruals are discontinued, interest credited to income in the current year is reversed and interest accrued in the prior year is charged to the reserve for loan and lease losses. However, in some cases, the Company may elect to continue the accrual of interest when the net realizable value of collateral is sufficient to cover the principal and accrued interest. When a loan or lease is classified as nonaccrual and the future collectibility of the recorded loan or lease balance is doubtful, collections on interest and principal are applied as a reduction to principal outstanding. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured, which is typically evidenced by a sustained repayment performance of at least six months . A loan or lease is considered impaired, based on current information and events, if it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan or lease agreement. Interest on impaired loans and leases, which are not classified as nonaccrual, is recognized on the accrual basis. The Company evaluates loans and leases exceeding $100,000 for impairment and establishes a specific reserve as a component of the reserve for loan and lease losses when it is probable all amounts due will not be collected pursuant to the contractual terms of the loan or lease and the recorded investment in the loan or lease exceeds its fair value. Loans and leases that have been modified and economic concessions have been granted to borrowers who have experienced financial difficulties are considered a troubled debt restructuring (TDR) and, by definition, are deemed an impaired loan. These concessions typically result from the Company’s loss mitigation activities and may include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructuring and typically are returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period of at least six months. When the Company modifies loans and leases in a TDR, it evaluates any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan or lease agreement, or uses the current fair value of the collateral, less selling costs for collateral dependent loans. If the Company determines that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through a reserve for loan and lease losses estimate or a charge-off to the reserve for loan and lease losses. In periods subsequent to modification, the Company evaluates all TDRs, including those that have payment defaults, for possible impairment and recognizes impairment through the reserve for loan and lease losses. |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of investment securities available-for-sale | The following table shows investment securities available-for-sale. (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value September 30, 2015 U.S. Treasury and Federal agencies securities $ 380,723 $ 3,570 $ (217 ) $ 384,076 U.S. States and political subdivisions securities 118,770 2,944 (122 ) 121,592 Mortgage-backed securities — Federal agencies 232,568 4,681 (841 ) 236,408 Corporate debt securities 34,299 324 (14 ) 34,609 Foreign government and other securities 800 11 — 811 Total debt securities 767,160 11,530 (1,194 ) 777,496 Marketable equity securities 1,893 5,357 (161 ) 7,089 Total investment securities available-for-sale $ 769,053 $ 16,887 $ (1,355 ) $ 784,585 December 31, 2014 U.S. Treasury and Federal agencies securities $ 371,878 $ 3,593 $ (1,968 ) $ 373,503 U.S. States and political subdivisions securities 121,510 3,392 (214 ) 124,688 Mortgage-backed securities — Federal agencies 248,299 5,490 (781 ) 253,008 Corporate debt securities 31,677 281 (26 ) 31,932 Foreign government and other securities 800 11 — 811 Total debt securities 774,164 12,767 (2,989 ) 783,942 Marketable equity securities 1,893 5,285 (2 ) 7,176 Total investment securities available-for-sale $ 776,057 $ 18,052 $ (2,991 ) $ 791,118 |
Schedule of contractual maturities of investments in debt securities available-for-sale | The following table shows the contractual maturities of investments in securities available-for-sale at September 30, 2015 . Expected maturities will differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. (Dollars in thousands) Amortized Cost Fair Value Due in one year or less $ 107,463 $ 108,140 Due after one year through five years 409,967 415,432 Due after five years through ten years 17,162 17,516 Due after ten years — — Mortgage-backed securities 232,568 236,408 Total debt securities available-for-sale $ 767,160 $ 777,496 |
Schedule of gross realized gains and losses on sale of securities from securities available-for-sale portfolio | The following table shows the gross realized gains and losses on sale of securities from the securities available-for-sale portfolio, including marketable equity securities. Realized gains and losses on the sales of all securities are computed using the specific identification cost basis. The gross gains for the nine months ended September 30, 2014 reflect the sale of marketable equity securities. Three Months Ended Nine Months Ended (Dollars in thousands) 2015 2014 2015 2014 Gross realized gains $ — $ — $ 4 $ 963 Gross realized losses — — — — Net realized gains (losses) $ — $ — $ 4 $ 963 |
Schedule of gross unrealized losses and fair value by investment category and age | The following table summarizes gross unrealized losses and fair value by investment category and age. Less than 12 Months 12 months or Longer Total (Dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses September 30, 2015 U.S. Treasury and Federal agencies securities $ 16,881 $ (8 ) $ 74,746 $ (209 ) $ 91,627 $ (217 ) U.S. States and political subdivisions securities 13,288 (91 ) 2,325 (31 ) 15,613 (122 ) Mortgage-backed securities - Federal agencies 31,223 (226 ) 19,088 (615 ) 50,311 (841 ) Corporate debt securities 1,741 (14 ) — — 1,741 (14 ) Foreign government and other securities 100 — — — 100 — Total debt securities 63,233 (339 ) 96,159 (855 ) 159,392 (1,194 ) Marketable equity securities 487 (159 ) 3 (2 ) 490 (161 ) Total investment securities available-for-sale $ 63,720 $ (498 ) $ 96,162 $ (857 ) $ 159,882 $ (1,355 ) December 31, 2014 U.S. Treasury and Federal agencies securities $ 54,944 $ (148 ) $ 115,195 $ (1,820 ) $ 170,139 $ (1,968 ) U.S. States and political subdivisions securities 16,805 (112 ) 8,333 (102 ) 25,138 (214 ) Mortgage-backed securities - Federal agencies 21,754 (62 ) 32,781 (719 ) 54,535 (781 ) Corporate debt securities 3,072 (26 ) — — 3,072 (26 ) Foreign government and other securities — — — — — — Total debt securities 96,575 (348 ) 156,309 (2,641 ) 252,884 (2,989 ) Marketable equity securities — — 3 (2 ) 3 (2 ) Total investment securities available-for-sale $ 96,575 $ (348 ) $ 156,312 $ (2,643 ) $ 252,887 $ (2,991 ) |
Loan and Lease Financings (Tabl
Loan and Lease Financings (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Schedule of credit quality grades of the recorded investment in loans and leases, segregated by class | The following table shows the credit quality grades of the recorded investment in loans and leases, segregated by class. Credit Quality Grades (Dollars in thousands) 1-6 7-12 Total September 30, 2015 Commercial and agricultural $ 735,249 $ 15,531 $ 750,780 Auto and light truck 412,083 11,064 423,147 Medium and heavy duty truck 261,691 3,093 264,784 Aircraft financing 765,908 28,221 794,129 Construction equipment financing 442,876 7,236 450,112 Commercial real estate 640,751 17,838 658,589 Total $ 3,258,558 $ 82,983 $ 3,341,541 December 31, 2014 Commercial and agricultural $ 683,169 $ 27,589 $ 710,758 Auto and light truck 380,425 17,477 397,902 Medium and heavy duty truck 243,798 3,355 247,153 Aircraft financing 691,018 36,647 727,665 Construction equipment financing 393,965 5,975 399,940 Commercial real estate 592,787 23,800 616,587 Total $ 2,985,162 $ 114,843 $ 3,100,005 |
Schedule of recorded investment in residential real estate and consumer loans by performing or nonperforming status | The following table shows the recorded investment in residential real estate and consumer loans by performing or nonperforming status. Nonperforming loans are those loans which are on nonaccrual status or are 90 days or more past due. (Dollars in thousands) Performing Nonperforming Total September 30, 2015 Residential real estate $ 461,156 $ 2,668 $ 463,824 Consumer 149,845 340 150,185 Total $ 611,001 $ 3,008 $ 614,009 December 31, 2014 Residential real estate $ 442,918 $ 2,841 $ 445,759 Consumer 142,476 334 142,810 Total $ 585,394 $ 3,175 $ 588,569 |
Schedule of recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | The following table shows the recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status. (Dollars in thousands) Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due and Accruing Total Accruing Loans Nonaccrual Total Financing Receivables September 30, 2015 Commercial and agricultural $ 743,570 $ 67 $ — $ — $ 743,637 $ 7,143 $ 750,780 Auto and light truck 422,943 141 12 — 423,096 51 423,147 Medium and heavy duty truck 264,784 — — — 264,784 — 264,784 Aircraft financing 772,554 6,718 7,681 — 786,953 7,176 794,129 Construction equipment financing 448,996 461 — — 449,457 655 450,112 Commercial real estate 657,102 124 — — 657,226 1,363 658,589 Residential real estate 459,657 1,049 450 341 461,497 2,327 463,824 Consumer 148,876 834 135 70 149,915 270 150,185 Total $ 3,918,482 $ 9,394 $ 8,278 $ 411 $ 3,936,565 $ 18,985 $ 3,955,550 December 31, 2014 Commercial and agricultural $ 696,351 $ — $ 123 $ — $ 696,474 $ 14,284 $ 710,758 Auto and light truck 397,815 48 1 — 397,864 38 397,902 Medium and heavy duty truck 247,097 — — — 247,097 56 247,153 Aircraft financing 699,054 541 15,597 — 715,192 12,473 727,665 Construction equipment financing 396,821 999 1,369 — 399,189 751 399,940 Commercial real estate 611,780 — — — 611,780 4,807 616,587 Residential real estate 441,508 1,099 311 873 443,791 1,968 445,759 Consumer 141,577 676 223 109 142,585 225 142,810 Total $ 3,632,003 $ 3,363 $ 17,624 $ 982 $ 3,653,972 $ 34,602 $ 3,688,574 |
Schedule of impaired loans and leases, segregated by class, and the corresponding reserve for impaired loan and lease losses | The following table shows impaired loans and leases, segregated by class, and the corresponding reserve for impaired loan and lease losses. (Dollars in thousands) Recorded Investment Unpaid Principal Balance Related Reserve September 30, 2015 With no related reserve recorded: Commercial and agricultural $ 752 $ 752 $ — Auto and light truck — — — Medium and heavy duty truck — — — Aircraft financing 4,687 4,687 — Construction equipment financing 655 655 — Commercial real estate 8,264 8,264 — Residential real estate — — — Consumer — — — Total with no related reserve recorded 14,358 14,358 — With a reserve recorded: Commercial and agricultural 5,919 5,919 2,710 Auto and light truck — — — Medium and heavy duty truck — — — Aircraft financing 2,460 2,460 617 Construction equipment financing — — — Commercial real estate 751 751 22 Residential real estate 368 370 150 Consumer — — — Total with a reserve recorded 9,498 9,500 3,499 Total impaired loans $ 23,856 $ 23,858 $ 3,499 December 31, 2014 With no related reserve recorded: Commercial and agricultural $ 14,468 $ 14,467 $ — Auto and light truck — — — Medium and heavy duty truck — — — Aircraft financing 12,740 12,741 — Construction equipment financing 746 746 — Commercial real estate 11,707 11,707 — Residential real estate — — — Consumer — — — Total with no related reserve recorded 39,661 39,661 — With a reserve recorded: Commercial and agricultural 74 74 5 Auto and light truck — — — Medium and heavy duty truck — — — Aircraft financing — — — Construction equipment financing — — — Commercial real estate 798 798 80 Residential real estate 373 376 156 Consumer — — — Total with a reserve recorded 1,245 1,248 241 Total impaired loans $ 40,906 $ 40,909 $ 241 |
Schedule of average recorded investment and interest income recognized on impaired loans and leases, segregated by class | The following table shows average recorded investment and interest income recognized on impaired loans and leases, segregated by class. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands) Average Recorded Investment Interest Income Average Recorded Investment Interest Income Average Recorded Investment Interest Income Average Recorded Investment Interest Income Commercial and agricultural $ 3,882 $ 11 $ 22,095 $ 9 $ 5,275 $ 27 $ 16,203 $ 34 Auto and light truck — — — — — — 542 — Medium and heavy duty truck — — — — — — — — Aircraft financing 7,422 1 1,157 3 7,945 6 3,212 16 Construction equipment financing 738 — 941 — 736 — 1,001 — Commercial real estate 9,762 108 13,415 148 10,800 392 13,263 442 Residential real estate 369 4 375 4 371 12 377 12 Consumer — — — — — — — — Total $ 22,173 $ 124 $ 37,983 $ 164 $ 25,127 $ 437 $ 34,598 $ 504 |
Schedule of loans and leases classified as troubled debt restructuring and number of modifications | The following table shows the number of loans and leases classified as troubled debt restructuring (TDR) during the three and nine months ended September 30, 2015 and 2014 , segregated by class, as well as the recorded investment as of September 30. The classification between nonperforming and performing is shown at the time of modification. Modification programs focus on extending maturity dates or modifying payment patterns with most TDRs experiencing a combination of concessions. The modifications did not result in the contractual forgiveness of principal or interest. There were no modifications during 2015 and three modifications during 2014 that resulted in an interest rate reduction below market rate. Consequently, the financial impact of the modifications was immaterial. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands) Number of Modifications Recorded Investment Number of Modifications Recorded Investment Number of Modifications Recorded Investment Number of Modifications Recorded Investment Performing TDRs: Commercial and agricultural 2 $ 239 2 $ 346 2 $ 239 2 $ 346 Auto and light truck — — — — — — — — Medium and heavy duty truck — — — — — — — — Aircraft financing — — 1 337 — — 2 337 Construction equipment financing — — — — — — — — Commercial real estate — — — — — — — — Residential real estate — — — — — — — — Consumer — — — — — — — — Total performing TDR modifications 2 $ 239 3 $ 683 2 $ 239 4 $ 683 Nonperforming TDRs: Commercial and agricultural — $ — 4 $ 9,556 — $ — 4 $ 9,556 Auto and light truck — — — — — — — — Medium and heavy duty truck — — — — — — — — Aircraft financing — — — — — — — — Construction equipment financing — — — — — — — — Commercial real estate — — 1 820 — — 1 820 Residential real estate — — — — — — — — Consumer — — — — — — — — Total nonperforming TDR modifications — $ — 5 $ 10,376 — $ — 5 $ 10,376 Total TDR modifications 2 $ 239 8 $ 11,059 2 $ 239 9 $ 11,059 |
Schedule of recorded investment in loans and leases classified as troubled debt restructuring | The following table shows the recorded investment of loans and leases classified as troubled debt restructurings as of September 30, 2015 and December 31, 2014 . (Dollars in thousands) September 30, December 31, Performing TDRs $ 8,483 $ 9,118 Nonperforming TDRs 2,225 14,507 Total TDRs $ 10,708 $ 23,625 |
Reserve for Loan and Lease Lo26
Reserve for Loan and Lease Losses (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract] | |
Schedule of changes in reserve for loan and lease losses, segregated by class | The following table shows the changes in the reserve for loan and lease losses, segregated by class, for the three months ended September 30, 2015 and 2014 . (Dollars in thousands) Commercial and agricultural Auto and light truck Medium and heavy duty truck Aircraft financing Construction financing Commercial real estate Residential real estate Consumer Total September 30, 2015 Reserve for loan and lease losses Balance, beginning of period $ 11,865 $ 11,445 $ 4,333 $ 32,840 $ 7,807 $ 13,226 $ 3,444 $ 1,628 $ 86,588 Charge-offs 88 — — 195 — — 39 310 632 Recoveries 80 64 10 279 112 39 2 82 668 Net charge-offs (recoveries) 8 (64 ) (10 ) (84 ) (112 ) (39 ) 37 228 (36 ) Provision (recovery of provision) 2,182 (2,131 ) 101 1,117 (276 ) (244 ) (8 ) 251 992 Balance, end of period $ 14,039 $ 9,378 $ 4,444 $ 34,041 $ 7,643 $ 13,021 $ 3,399 $ 1,651 $ 87,616 September 30, 2014 Reserve for loan and lease losses Balance, beginning of period $ 16,766 $ 10,427 $ 4,281 $ 33,087 $ 6,318 $ 12,353 $ 3,934 $ 1,610 $ 88,776 Charge-offs 3,000 10 — — 2 16 3 193 3,224 Recoveries 177 64 1 49 130 130 23 68 642 Net charge-offs (recoveries) 2,823 (54 ) (1 ) (49 ) (128 ) (114 ) (20 ) 125 2,582 Provision (recovery of provision) 1,295 516 173 (1,672 ) 11 485 58 340 1,206 Balance, end of period $ 15,238 $ 10,997 $ 4,455 $ 31,464 $ 6,457 $ 12,952 $ 4,012 $ 1,825 $ 87,400 The following table shows the changes in the reserve for loan and lease losses, segregated by class, for the nine months ended September 30, 2015 and 2014 . (Dollars in thousands) Commercial and agricultural loans Auto and light truck Medium and heavy duty truck Aircraft financing Construction financing Commercial real estate Residential real estate Consumer loans Total September 30, 2015 Reserve for loan and lease losses Balance, beginning of period $ 11,760 $ 10,326 $ 4,500 $ 32,234 $ 7,008 $ 13,270 $ 4,102 $ 1,868 $ 85,068 Charge-offs 1,053 22 — 244 — — 104 630 2,053 Recoveries 644 315 15 721 357 174 9 206 2,441 Net charge-offs (recoveries) 409 (293 ) (15 ) (477 ) (357 ) (174 ) 95 424 (388 ) Provision (recovery of provision) 2,688 (1,241 ) (71 ) 1,330 278 (423 ) (608 ) 207 2,160 Balance, end of period $ 14,039 $ 9,378 $ 4,444 $ 34,041 $ 7,643 $ 13,021 $ 3,399 $ 1,651 $ 87,616 September 30, 2014 Reserve for loan and lease losses Balance, beginning of period $ 11,515 $ 9,657 $ 4,212 $ 34,037 $ 5,972 $ 12,406 $ 4,093 $ 1,613 $ 83,505 Charge-offs 3,228 29 — — 4 17 46 582 3,906 Recoveries 863 1,119 137 161 356 285 93 234 3,248 Net charge-offs (recoveries) 2,365 (1,090 ) (137 ) (161 ) (352 ) (268 ) (47 ) 348 658 Provision (recovery of provision) 6,088 250 106 (2,734 ) 133 278 (128 ) 560 4,553 Balance, end of period $ 15,238 $ 10,997 $ 4,455 $ 31,464 $ 6,457 $ 12,952 $ 4,012 $ 1,825 $ 87,400 The following table shows the reserve for loan and lease losses and recorded investment in loans and leases, segregated by class, separated between individually and collectively evaluated for impairment as of September 30, 2015 and December 31, 2014 . (Dollars in thousands) Commercial and agricultural loans Auto and light truck Medium and heavy duty truck Aircraft financing Construction financing Commercial real estate Residential real estate Consumer loans Total September 30, 2015 Reserve for loan and lease losses Ending balance, individually evaluated for impairment $ 2,710 $ — $ — $ 617 $ — $ 22 $ 150 $ — $ 3,499 Ending balance, collectively evaluated for impairment 11,329 9,378 4,444 33,424 7,643 12,999 3,249 1,651 84,117 Total reserve for loan and lease losses $ 14,039 $ 9,378 $ 4,444 $ 34,041 $ 7,643 $ 13,021 $ 3,399 $ 1,651 $ 87,616 Recorded investment in loans Ending balance, individually evaluated for impairment $ 6,671 $ — $ — $ 7,147 $ 655 $ 9,015 $ 368 $ — $ 23,856 Ending balance, collectively evaluated for impairment 744,109 423,147 264,784 786,982 449,457 649,574 463,456 150,185 3,931,694 Total recorded investment in loans $ 750,780 $ 423,147 $ 264,784 $ 794,129 $ 450,112 $ 658,589 $ 463,824 $ 150,185 $ 3,955,550 December 31, 2014 Reserve for loan and lease losses Ending balance, individually evaluated for impairment $ 5 $ — $ — $ — $ — $ 80 $ 156 $ — $ 241 Ending balance, collectively evaluated for impairment 11,755 10,326 4,500 32,234 7,008 13,190 3,946 1,868 84,827 Total reserve for loan and lease losses $ 11,760 $ 10,326 $ 4,500 $ 32,234 $ 7,008 $ 13,270 $ 4,102 $ 1,868 $ 85,068 Recorded investment in loans Ending balance, individually evaluated for impairment $ 14,542 $ — $ — $ 12,740 $ 746 $ 12,505 $ 373 $ — $ 40,906 Ending balance, collectively evaluated for impairment 696,216 397,902 247,153 714,925 399,194 604,082 445,386 142,810 3,647,668 Total recorded investment in loans $ 710,758 $ 397,902 $ 247,153 $ 727,665 $ 399,940 $ 616,587 $ 445,759 $ 142,810 $ 3,688,574 |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Schedule of changes in carrying value of mortgage servicing rights and associated valuation allowance | The following table shows changes in the carrying value of MSRs and the associated valuation allowance. Three Months Ended Nine Months Ended (Dollars in thousands) 2015 2014 2015 2014 Mortgage servicing rights: Balance at beginning of period $ 4,661 $ 4,695 $ 4,733 $ 4,844 Additions 342 443 1,048 890 Amortization (339 ) (334 ) (1,117 ) (930 ) Sales — — — — Carrying value before valuation allowance at end of period 4,664 4,804 4,664 4,804 Valuation allowance: Balance at beginning of period — — — — Impairment (charges) recoveries — — — — Balance at end of period $ — $ — $ — $ — Net carrying value of mortgage servicing rights at end of period $ 4,664 $ 4,804 $ 4,664 $ 4,804 Fair value of mortgage servicing rights at end of period $ 6,945 $ 7,791 $ 6,945 $ 7,791 |
Derivative Financial Instrume28
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of amounts of non-hedging derivative financial instruments | The following table shows the amounts of non-hedging derivative financial instruments. Asset derivatives Liability derivatives (Dollars in thousands) Notional or contractual amount Statement of Financial Condition classification Fair value Statement of Financial Condition classification Fair value September 30, 2015 Interest rate swap contracts $ 507,513 Other assets $ 11,583 Other liabilities $ 11,806 Loan commitments 16,181 Mortgages held for sale 32 N/A — Forward contracts - mortgage loan 19,102 N/A — Mortgages held for sale 153 Total $ 542,796 $ 11,615 $ 11,959 December 31, 2014 Interest rate swap contracts $ 459,508 Other assets $ 9,125 Other liabilities $ 9,302 Loan commitments 11,109 Mortgages held for sale 2 N/A — Forward contracts - mortgage loan 19,800 N/A — Mortgages held for sale 142 Total $ 490,417 $ 9,127 $ 9,444 |
Schedule of amounts included in the consolidated statements of income for non-hedging derivative financial instruments | The following table shows the amounts included in the Statements of Income for non-hedging derivative financial instruments. Gain (loss) Three Months Ended Nine Months Ended (Dollars in thousands) Statement of Income classification 2015 2014 2015 2014 Interest rate swap contracts Other expense $ (67 ) $ 30 $ (45 ) $ 29 Interest rate swap contracts Other income 427 11 724 206 Loan commitments Mortgage banking income (57 ) (42 ) 30 (15 ) Forward contracts - mortgage loan Mortgage banking income (357 ) 213 (11 ) (173 ) Forward contracts - foreign exchange Other income — 82 — 78 Total $ (54 ) $ 294 $ 698 $ 125 |
Schedule of offsetting of financial assets and derivative assets | The following table shows the offsetting of financial assets and derivative assets. Gross Amounts Not Offset in the Statement of Financial Condition (Dollars in thousands) Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Condition Net Amounts of Assets Presented in the Statement of Financial Condition Financial Instruments Cash Collateral Received Net Amount September 30, 2015 Interest rate swaps $ 11,870 $ 287 $ 11,583 $ — $ — $ 11,583 December 31, 2014 Interest rate swaps $ 9,492 $ 367 $ 9,125 $ — $ — $ 9,125 |
Schedule of offsetting of financial liabilities and derivative liabilities | The following table shows the offsetting of financial liabilities and derivative liabilities. Gross Amounts Not Offset in the Statement of Financial Condition (Dollars in thousands) Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Condition Net Amounts of Liabilities Presented in the Statement of Financial Condition Financial Instruments Cash Collateral Pledged Net Amount September 30, 2015 Interest rate swaps $ 12,093 $ 287 $ 11,806 $ — $ 11,215 $ 591 Repurchase agreements 115,414 — 115,414 115,414 — — Total $ 127,507 $ 287 $ 127,220 $ 115,414 $ 11,215 $ 591 December 31, 2014 Interest rate swaps $ 9,669 $ 367 $ 9,302 $ — $ 9,018 $ 284 Repurchase agreements 128,343 — 128,343 128,343 — — Total $ 138,012 $ 367 $ 137,645 $ 128,343 $ 9,018 $ 284 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share | The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share. Three Months Ended Nine Months Ended (Dollars in thousands - except per share amounts) 2015 2014 2015 2014 Distributed earnings allocated to common stock $ 4,299 $ 4,299 $ 12,888 $ 12,796 Undistributed earnings allocated to common stock 9,499 10,466 29,748 29,733 Net earnings allocated to common stock 13,798 14,765 42,636 42,529 Net earnings allocated to participating securities 130 182 433 544 Net income allocated to common stock and participating securities $ 13,928 $ 14,947 $ 43,069 $ 43,073 Weighted average shares outstanding for basic earnings per common share* 26,164,646 26,262,864 26,211,630 26,497,500 Dilutive effect of stock compensation — — — — Weighted average shares outstanding for diluted earnings per common share* 26,164,646 26,262,864 26,211,630 26,497,500 Basic earnings per common share* $ 0.53 $ 0.56 $ 1.63 $ 1.61 Diluted earnings per common share* $ 0.53 $ 0.56 $ 1.63 $ 1.61 *Outstanding shares and per common share figures have been adjusted for 10% stock dividend declared July 22, 2015 and issued on August 14, 2015. |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of reclassifications out of accumulated other comprehensive income | The following table presents reclassifications out of accumulated other comprehensive income related to unrealized gains and losses on available-for-sale securities. Three Months Ended Nine Months Ended Affected Line Item in the Statements of Income (Dollars in thousands) 2015 2014 2015 2014 Realized gains included in net income $ — $ — $ 4 $ 963 Gains on investment securities available-for-sale — — 4 963 Income before income taxes Tax effect — — (2 ) (361 ) Income tax expense Net of tax $ — $ — $ 2 $ 602 Net income |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair value measurements | |
Schedule of differences between the fair value carrying amount of mortgages held for sale measured at fair value and the aggregate unpaid principal amount | The following table shows the differences between the fair value carrying amount of mortgages held for sale measured at fair value and the aggregate unpaid principal amount the Company is contractually entitled to receive at maturity. (Dollars in thousands) Fair value carrying amount Aggregate unpaid principal Excess of fair value carrying amount over (under) unpaid principal September 30, 2015 Mortgages held for sale reported at fair value $ 9,187 $ 9,130 $ 57 (1) December 31, 2014 Mortgages held for sale reported at fair value $ 13,604 $ 13,526 $ 78 (1) (1) The excess of fair value carrying amount over (under) unpaid principal is included in mortgage banking income and includes changes in fair value at and subsequent to funding and gains and losses on the related loan commitment prior to funding. |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following table shows the balance of assets and liabilities measured at fair value on a recurring basis. (Dollars in thousands) Level 1 Level 2 Level 3 Total September 30, 2015 Assets: Investment securities available-for-sale: U.S. Treasury and Federal agencies securities $ 20,017 $ 364,059 $ — $ 384,076 U.S. States and political subdivisions securities — 116,913 4,679 121,592 Mortgage-backed securities — Federal agencies — 236,408 — 236,408 Corporate debt securities — 34,609 — 34,609 Foreign government and other securities — — 811 811 Total debt securities 20,017 751,989 5,490 777,496 Marketable equity securities 7,089 — — 7,089 Total investment securities available-for-sale 27,106 751,989 5,490 784,585 Trading account securities — — — — Mortgages held for sale — 9,187 — 9,187 Accrued income and other assets (interest rate swap agreements) — 11,583 — 11,583 Total $ 27,106 $ 772,759 $ 5,490 $ 805,355 Liabilities: Accrued expenses and other liabilities (interest rate swap agreements) $ — $ 11,806 $ — $ 11,806 Total $ — $ 11,806 $ — $ 11,806 December 31, 2014 Assets: Investment securities available-for-sale: U.S. Treasury and Federal agencies securities $ 19,808 $ 353,695 $ — $ 373,503 U.S. States and political subdivisions securities — 118,222 6,466 124,688 Mortgage-backed securities — Federal agencies — 253,008 — 253,008 Corporate debt securities — 31,932 — 31,932 Foreign government and other securities — — 811 811 Total debt securities 19,808 756,857 7,277 783,942 Marketable equity securities 7,176 — — 7,176 Total investment securities available-for-sale 26,984 756,857 7,277 791,118 Trading account securities 205 — — 205 Mortgages held for sale — 13,604 — 13,604 Accrued income and other assets (interest rate swap agreements) — 9,125 — 9,125 Total $ 27,189 $ 779,586 $ 7,277 $ 814,052 Liabilities: Accrued expenses and other liabilities (interest rate swap agreements) $ — $ 9,302 $ — $ 9,302 Total $ — $ 9,302 $ — $ 9,302 |
Schedule of changes in investment securities available-for-sale Level 3 assets measured at fair value on a recurring basis | The following table shows changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the quarter ended September 30, 2015 and 2014 . (Dollars in thousands) U.S. States and political subdivisions securities Foreign government and other securities Investment securities available-for-sale Beginning balance July 1, 2015 $ 5,444 $ 807 $ 6,251 Total gains or losses (realized/unrealized): Included in earnings — — — Included in other comprehensive income 15 4 19 Purchases — — — Issuances — — — Sales — — — Settlements — — — Maturities (780 ) — (780 ) Transfers into Level 3 — — — Transfers out of Level 3 — — — Ending balance September 30, 2015 $ 4,679 $ 811 $ 5,490 Beginning balance July 1, 2014 $ 4,699 $ 905 $ 5,604 Total gains or losses (realized/unrealized): Included in earnings — — — Included in other comprehensive income (14 ) 3 (11 ) Purchases — — — Issuances — — — Sales — — — Settlements — — — Maturities (763 ) (100 ) (863 ) Transfers into Level 3 — — — Transfers out of Level 3 — — — Ending balance September 30, 2014 $ 3,922 $ 808 $ 4,730 |
Schedule of carrying value of assets measured at fair value on a non-recurring basis | The following table shows the carrying value of assets measured at fair value on a non-recurring basis. (Dollars in thousands) Level 1 Level 2 Level 3 Total September 30, 2015 Impaired loans - collateral based $ — $ — $ 3,724 $ 3,724 Accrued income and other assets (partnership investments) — — 1,010 1,010 Accrued income and other assets (mortgage servicing rights) — — 4,664 4,664 Accrued income and other assets (repossessions) — — 6,602 6,602 Accrued income and other assets (other real estate) — — 747 747 Total $ — $ — $ 16,747 $ 16,747 December 31, 2014 Impaired loans - collateral based $ — $ — $ 1,007 $ 1,007 Accrued income and other assets (partnership investments) — — 1,343 1,343 Accrued income and other assets (mortgage servicing rights) — — 4,733 4,733 Accrued income and other assets (repossessions) — — 5,156 5,156 Accrued income and other assets (other real estate) — — 1,735 1,735 Total $ — $ — $ 13,974 $ 13,974 |
Schedule of fair values of financial instruments | The following table shows the fair values of the Company’s financial instruments. (Dollars in thousands) Carrying or Contract Value Fair Value Level 1 Level 2 Level 3 September 30, 2015 Assets: Cash and due from banks $ 61,124 $ 61,124 $ 61,124 $ — $ — Federal funds sold and interest bearing deposits with other banks 3,065 3,065 3,065 — — Investment securities, available-for-sale 784,585 784,585 27,106 751,989 5,490 Other investments and trading account securities 21,728 21,728 21,728 — — Mortgages held for sale 9,187 9,187 — 9,187 — Loans and leases, net of reserve for loan and lease losses 3,867,934 3,892,210 — — 3,892,210 Mortgage servicing rights 4,664 6,945 — — 6,945 Interest rate swaps 11,583 11,583 — 11,583 — Liabilities: Deposits $ 4,019,156 $ 4,023,046 $ 2,965,672 $ 1,057,374 $ — Short-term borrowings 283,510 283,510 142,986 140,524 — Long-term debt and mandatorily redeemable securities 57,577 57,608 — 57,608 — Subordinated notes 58,764 45,249 — 45,249 — Interest rate swaps 11,806 11,806 — 11,806 — Off-balance-sheet instruments * — 301 — 301 — December 31, 2014 Assets: Cash and due from banks $ 64,834 $ 64,834 $ 64,834 $ — $ — Federal funds sold and interest bearing deposits with other banks 1,356 1,356 1,356 — — Investment securities, available-for-sale 791,118 791,118 26,984 756,857 7,277 Other investments and trading account securities 21,006 21,006 21,006 — — Mortgages held for sale 13,604 13,604 — 13,604 — Loans and leases, net of reserve for loan and lease losses 3,603,506 3,626,682 — — 3,626,682 Mortgage servicing rights 4,733 6,979 — — 6,979 Interest rate swaps 9,125 9,125 — 9,125 — Liabilities: Deposits $ 3,802,860 $ 3,803,958 $ 2,824,935 $ 979,023 $ — Short-term borrowings 245,822 245,822 123,337 122,485 — Long-term debt and mandatorily redeemable securities 56,232 56,044 — 56,044 — Subordinated notes 58,764 59,427 — 59,427 — Interest rate swaps 9,302 9,302 — 9,302 — Off-balance-sheet instruments * — 305 — 305 — * Represents estimated cash outflows required to currently settle the obligations at current market rates. |
Recurring | |
Fair value measurements | |
Schedule of valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring and non-recurring basis | The following table shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring basis. (Dollars in thousands) Fair Value Valuation Methodology Unobservable Inputs Range of Inputs September 30, 2015 Investment securities available-for sale Direct placement municipal securities $ 4,679 Discounted cash flows Credit spread assumption 0.77% - 2.53% Foreign government $ 811 Discounted cash flows Market yield assumption 0.94% - 1.81% December 31, 2014 Investment securities available-for sale Direct placement municipal securities $ 6,466 Discounted cash flows Credit spread assumption 0.99% - 2.08% Foreign government $ 811 Discounted cash flows Market yield assumption 0.25% - 1.31% |
Non-recurring | |
Fair value measurements | |
Schedule of valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring and non-recurring basis | The following table below shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a non-recurring basis. (Dollars in thousands) Carrying Value Fair Value Valuation Methodology Unobservable Inputs Range of Inputs September 30, 2015 Impaired loans $ 3,724 $ 3,724 Collateral based measurements including appraisals, trade publications, and auction values Discount for lack of marketability and current conditions 10% - 100% Mortgage servicing rights 4,664 6,945 Discounted cash flows Constant prepayment rate (CPR) 11.3% - 18.8% Discount rate 9.5% - 13.0% Repossessions 6,602 6,806 Appraisals, trade publications and auction values Discount for lack of marketability 3% - 6% Other real estate 747 880 Appraisals Discount for lack of marketability 7% - 49% December 31, 2014 Impaired loans $ 1,007 $ 1,007 Collateral based measurements including appraisals, trade publications, and auction values Discount for lack of marketability and current conditions 20% - 25% Mortgage servicing rights 4,733 6,979 Discounted cash flows Constant prepayment rate (CPR) 10.2% - 16.3% Discount rate 9.5% - 13.0% Repossessions 5,156 5,307 Appraisals, trade publications and auction values Discount for lack of marketability 0% - 3% Other real estate 1,735 1,953 Appraisals Discount for lack of marketability 5% - 38% |
Accounting Policies Accountin32
Accounting Policies Accounting Policies (Details) - Minimum | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Summary of Significant Accounting Policies [Line Items] | |
Period of sustained performance required to change from non-performing to performing status | 6 months |
Amount necessary for impairment evaluation | $ 100,000 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Investment Securities | |||||
Total investment securities available-for-sale, Amortized Cost | $ 769,053 | $ 769,053 | $ 776,057 | ||
Gross Unrealized Gains | 16,887 | 16,887 | 18,052 | ||
Gross Unrealized Losses | (1,355) | (1,355) | (2,991) | ||
Investment securities, available-for-sale | 784,585 | 784,585 | 791,118 | ||
Contractual maturities of investments in debt securities available-for-sale, Amortized Cost | |||||
Due in one year or less | 107,463 | 107,463 | |||
Due after one year through five years | 409,967 | 409,967 | |||
Due after five years through ten years | 17,162 | 17,162 | |||
Due after ten years | 0 | 0 | |||
Mortgage-backed securities | 232,568 | 232,568 | |||
Total debt securities available-for-sale | 767,160 | 767,160 | |||
Contractual maturities of investments in debt securities available-for-sale, Fair Value | |||||
Due in one year or less | 108,140 | 108,140 | |||
Due after one year through five years | 415,432 | 415,432 | |||
Due after five years through ten years | 17,516 | 17,516 | |||
Due after ten years | 0 | 0 | |||
Mortgage-backed securities | 236,408 | 236,408 | |||
Total debt securities available-for-sale | 777,496 | 777,496 | |||
Other-than-temporary-impairment (OTTI) write-downs | 0 | $ 0 | |||
Gross realized gains and losses | |||||
Gross realized gains | 0 | $ 0 | 4 | 963 | |
Gross realized losses | 0 | 0 | 0 | 0 | |
Net realized gains (losses) | 0 | $ 0 | 4 | $ 963 | |
U.S. Treasury and Federal agencies securities | |||||
Investment Securities | |||||
Total investment securities available-for-sale, Amortized Cost | 380,723 | 380,723 | 371,878 | ||
Gross Unrealized Gains | 3,570 | 3,570 | 3,593 | ||
Gross Unrealized Losses | (217) | (217) | (1,968) | ||
Investment securities, available-for-sale | 384,076 | 384,076 | 373,503 | ||
U.S. States and political subdivisions securities | |||||
Investment Securities | |||||
Total investment securities available-for-sale, Amortized Cost | 118,770 | 118,770 | 121,510 | ||
Gross Unrealized Gains | 2,944 | 2,944 | 3,392 | ||
Gross Unrealized Losses | (122) | (122) | (214) | ||
Investment securities, available-for-sale | 121,592 | 121,592 | 124,688 | ||
Mortgage-backed securities - Federal agencies | |||||
Investment Securities | |||||
Total investment securities available-for-sale, Amortized Cost | 232,568 | 232,568 | 248,299 | ||
Gross Unrealized Gains | 4,681 | 4,681 | 5,490 | ||
Gross Unrealized Losses | (841) | (841) | (781) | ||
Investment securities, available-for-sale | 236,408 | 236,408 | 253,008 | ||
Corporate debt securities | |||||
Investment Securities | |||||
Total investment securities available-for-sale, Amortized Cost | 34,299 | 34,299 | 31,677 | ||
Gross Unrealized Gains | 324 | 324 | 281 | ||
Gross Unrealized Losses | (14) | (14) | (26) | ||
Investment securities, available-for-sale | 34,609 | 34,609 | 31,932 | ||
Foreign government and other securities | |||||
Investment Securities | |||||
Total investment securities available-for-sale, Amortized Cost | 800 | 800 | 800 | ||
Gross Unrealized Gains | 11 | 11 | 11 | ||
Gross Unrealized Losses | 0 | 0 | 0 | ||
Investment securities, available-for-sale | 811 | 811 | 811 | ||
Total debt securities | |||||
Investment Securities | |||||
Total investment securities available-for-sale, Amortized Cost | 767,160 | 767,160 | 774,164 | ||
Gross Unrealized Gains | 11,530 | 11,530 | 12,767 | ||
Gross Unrealized Losses | (1,194) | (1,194) | (2,989) | ||
Investment securities, available-for-sale | 777,496 | 777,496 | 783,942 | ||
Marketable equity securities | |||||
Investment Securities | |||||
Total investment securities available-for-sale, Amortized Cost | 1,893 | 1,893 | 1,893 | ||
Gross Unrealized Gains | 5,357 | 5,357 | 5,285 | ||
Gross Unrealized Losses | (161) | (161) | (2) | ||
Investment securities, available-for-sale | $ 7,089 | $ 7,089 | $ 7,176 |
Investment Securities (Details
Investment Securities (Details 2) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value | ||
Less than 12 Months | $ 63,720 | $ 96,575 |
12 months or Longer | 96,162 | 156,312 |
Total fair value | 159,882 | 252,887 |
Unrealized Losses | ||
Less than 12 Months | (498) | (348) |
12 months or Longer | (857) | (2,643) |
Total unrealized losses | (1,355) | (2,991) |
Investment securities pledged as collateral | 218,750 | 231,500 |
U.S. Treasury and Federal agencies securities | ||
Fair Value | ||
Less than 12 Months | 16,881 | 54,944 |
12 months or Longer | 74,746 | 115,195 |
Total fair value | 91,627 | 170,139 |
Unrealized Losses | ||
Less than 12 Months | (8) | (148) |
12 months or Longer | (209) | (1,820) |
Total unrealized losses | (217) | (1,968) |
U.S. States and political subdivisions securities | ||
Fair Value | ||
Less than 12 Months | 13,288 | 16,805 |
12 months or Longer | 2,325 | 8,333 |
Total fair value | 15,613 | 25,138 |
Unrealized Losses | ||
Less than 12 Months | (91) | (112) |
12 months or Longer | (31) | (102) |
Total unrealized losses | (122) | (214) |
Mortgage-backed securities - Federal agencies | ||
Fair Value | ||
Less than 12 Months | 31,223 | 21,754 |
12 months or Longer | 19,088 | 32,781 |
Total fair value | 50,311 | 54,535 |
Unrealized Losses | ||
Less than 12 Months | (226) | (62) |
12 months or Longer | (615) | (719) |
Total unrealized losses | (841) | (781) |
Corporate debt securities | ||
Fair Value | ||
Less than 12 Months | 1,741 | 3,072 |
12 months or Longer | 0 | 0 |
Total fair value | 1,741 | 3,072 |
Unrealized Losses | ||
Less than 12 Months | (14) | (26) |
12 months or Longer | 0 | 0 |
Total unrealized losses | (14) | (26) |
Foreign government and other securities | ||
Fair Value | ||
Less than 12 Months | 100 | 0 |
12 months or Longer | 0 | 0 |
Total fair value | 100 | 0 |
Unrealized Losses | ||
Less than 12 Months | 0 | 0 |
12 months or Longer | 0 | 0 |
Total unrealized losses | 0 | 0 |
Total debt securities | ||
Fair Value | ||
Less than 12 Months | 63,233 | 96,575 |
12 months or Longer | 96,159 | 156,309 |
Total fair value | 159,392 | 252,884 |
Unrealized Losses | ||
Less than 12 Months | (339) | (348) |
12 months or Longer | (855) | (2,641) |
Total unrealized losses | (1,194) | (2,989) |
Marketable equity securities | ||
Fair Value | ||
Less than 12 Months | 487 | 0 |
12 months or Longer | 3 | 3 |
Total fair value | 490 | 3 |
Unrealized Losses | ||
Less than 12 Months | (159) | 0 |
12 months or Longer | (2) | (2) |
Total unrealized losses | $ (161) | $ (2) |
Loan and Lease Financings (Deta
Loan and Lease Financings (Details) | 9 Months Ended | |
Sep. 30, 2015USD ($)item | Dec. 31, 2014USD ($) | |
Receivables [Abstract] | ||
Number of methods to assess credit risk | item | 2 | |
Loan and Lease Financings | ||
Recorded investment in loans and leases | $ 3,955,550,000 | $ 3,688,574,000 |
Loan and lease financings excluding residential real estate and consumer loans | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 3,341,541,000 | 3,100,005,000 |
Commercial and agricultural | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 750,780,000 | 710,758,000 |
Auto and light truck | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 423,147,000 | 397,902,000 |
Medium and heavy duty truck | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 264,784,000 | 247,153,000 |
Aircraft financing | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 794,129,000 | 727,665,000 |
Construction equipment financing | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 450,112,000 | 399,940,000 |
Commercial real estate | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 658,589,000 | 616,587,000 |
Credit Quality Grades 1-6 | Loan and lease financings excluding residential real estate and consumer loans | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 3,258,558,000 | 2,985,162,000 |
Credit Quality Grades 1-6 | Commercial and agricultural | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 735,249,000 | 683,169,000 |
Credit Quality Grades 1-6 | Auto and light truck | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 412,083,000 | 380,425,000 |
Credit Quality Grades 1-6 | Medium and heavy duty truck | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 261,691,000 | 243,798,000 |
Credit Quality Grades 1-6 | Aircraft financing | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 765,908,000 | 691,018,000 |
Credit Quality Grades 1-6 | Construction equipment financing | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 442,876,000 | 393,965,000 |
Credit Quality Grades 1-6 | Commercial real estate | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 640,751,000 | 592,787,000 |
Credit Quality Grades 7-12 | ||
Loan and Lease Financings | ||
Relationships reviewed quarterly as part of management's evaluation of the appropriateness of the reserve for loan and lease losses | 100,000 | |
Credit Quality Grades 7-12 | Loan and lease financings excluding residential real estate and consumer loans | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 82,983,000 | 114,843,000 |
Credit Quality Grades 7-12 | Commercial and agricultural | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 15,531,000 | 27,589,000 |
Credit Quality Grades 7-12 | Auto and light truck | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 11,064,000 | 17,477,000 |
Credit Quality Grades 7-12 | Medium and heavy duty truck | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 3,093,000 | 3,355,000 |
Credit Quality Grades 7-12 | Aircraft financing | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 28,221,000 | 36,647,000 |
Credit Quality Grades 7-12 | Construction equipment financing | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 7,236,000 | 5,975,000 |
Credit Quality Grades 7-12 | Commercial real estate | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | $ 17,838,000 | $ 23,800,000 |
Loan and Lease Financings (De36
Loan and Lease Financings (Details 2) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Loan and Lease Financings | ||
Recorded investment in loans and leases | $ 3,955,550 | $ 3,688,574 |
Residential real estate and consumer loans | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 614,009 | 588,569 |
Residential real estate | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 463,824 | 445,759 |
Consumer | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 150,185 | 142,810 |
Performing | Residential real estate and consumer loans | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 611,001 | 585,394 |
Performing | Residential real estate | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 461,156 | 442,918 |
Performing | Consumer | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | $ 149,845 | 142,476 |
Nonperforming | ||
Loan and Lease Financings | ||
Classification of nonperforming loans, threshold period past due | 90 days | |
Nonperforming | Residential real estate and consumer loans | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | $ 3,008 | 3,175 |
Nonperforming | Residential real estate | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | 2,668 | 2,841 |
Nonperforming | Consumer | ||
Loan and Lease Financings | ||
Recorded investment in loans and leases | $ 340 | $ 334 |
Loan and Lease Financings (De37
Loan and Lease Financings (Details 3) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | $ 3,918,482 | $ 3,632,003 |
90 Days or More Past Due and Accruing | 411 | 982 |
Total Accruing Loans | 3,936,565 | 3,653,972 |
Nonaccrual | 18,985 | 34,602 |
Total loans and leases | 3,955,550 | 3,688,574 |
30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 9,394 | 3,363 |
60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 8,278 | 17,624 |
Commercial and agricultural | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 743,570 | 696,351 |
Total Accruing Loans | 743,637 | 696,474 |
Nonaccrual | 7,143 | 14,284 |
Total loans and leases | 750,780 | 710,758 |
Commercial and agricultural | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 67 | 0 |
Commercial and agricultural | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 0 | 123 |
Auto and light truck | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 422,943 | 397,815 |
Total Accruing Loans | 423,096 | 397,864 |
Nonaccrual | 51 | 38 |
Total loans and leases | 423,147 | 397,902 |
Auto and light truck | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 141 | 48 |
Auto and light truck | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 12 | 1 |
Medium and heavy duty truck | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 264,784 | 247,097 |
Total Accruing Loans | 264,784 | 247,097 |
Nonaccrual | 0 | 56 |
Total loans and leases | 264,784 | 247,153 |
Medium and heavy duty truck | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 0 | 0 |
Medium and heavy duty truck | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 0 | 0 |
Aircraft financing | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 772,554 | 699,054 |
Total Accruing Loans | 786,953 | 715,192 |
Nonaccrual | 7,176 | 12,473 |
Total loans and leases | 794,129 | 727,665 |
Aircraft financing | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 6,718 | 541 |
Aircraft financing | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 7,681 | 15,597 |
Construction equipment financing | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 448,996 | 396,821 |
Total Accruing Loans | 449,457 | 399,189 |
Nonaccrual | 655 | 751 |
Total loans and leases | 450,112 | 399,940 |
Construction equipment financing | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 461 | 999 |
Construction equipment financing | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 0 | 1,369 |
Commercial real estate | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 657,102 | 611,780 |
Total Accruing Loans | 657,226 | 611,780 |
Nonaccrual | 1,363 | 4,807 |
Total loans and leases | 658,589 | 616,587 |
Commercial real estate | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 124 | 0 |
Commercial real estate | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 0 | 0 |
Residential real estate | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 459,657 | 441,508 |
90 Days or More Past Due and Accruing | 341 | 873 |
Total Accruing Loans | 461,497 | 443,791 |
Nonaccrual | 2,327 | 1,968 |
Total loans and leases | 463,824 | 445,759 |
Residential real estate | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 1,049 | 1,099 |
Residential real estate | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 450 | 311 |
Consumer | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Current | 148,876 | 141,577 |
90 Days or More Past Due and Accruing | 70 | 109 |
Total Accruing Loans | 149,915 | 142,585 |
Nonaccrual | 270 | 225 |
Total loans and leases | 150,185 | 142,810 |
Consumer | 30 to 59 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | 834 | 676 |
Consumer | 60 to 89 Days Past Due | ||
Recorded investment of loans and leases, segregated by class, with delinquency aging and nonaccrual status | ||
Past Due | $ 135 | $ 223 |
Loan and Lease Financings (De38
Loan and Lease Financings (Details 4) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | $ 14,358 | $ 14,358 | $ 39,661 | ||
Unpaid Principal Balance, With no related allowance recorded | 14,358 | 14,358 | 39,661 | ||
Recorded Investment, With an allowance recorded | 9,498 | 9,498 | 1,245 | ||
Unpaid Principal Balance, With an allowance recorded | 9,500 | 9,500 | 1,248 | ||
Total Recorded Investment | 23,856 | 23,856 | 40,906 | ||
Total Unpaid Principal Balance | 23,858 | 23,858 | 40,909 | ||
Total Related Allowance | 3,499 | 3,499 | 241 | ||
Average Recorded Investment | 22,173 | $ 37,983 | 25,127 | $ 34,598 | |
Interest Income | 124 | 164 | 437 | 504 | |
Commercial and agricultural | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 752 | 752 | 14,468 | ||
Unpaid Principal Balance, With no related allowance recorded | 752 | 752 | 14,467 | ||
Recorded Investment, With an allowance recorded | 5,919 | 5,919 | 74 | ||
Unpaid Principal Balance, With an allowance recorded | 5,919 | 5,919 | 74 | ||
Total Related Allowance | 2,710 | 2,710 | 5 | ||
Average Recorded Investment | 3,882 | 22,095 | 5,275 | 16,203 | |
Interest Income | 11 | 9 | 27 | 34 | |
Auto and light truck | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With no related allowance recorded | 0 | 0 | 0 | ||
Recorded Investment, With an allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With an allowance recorded | 0 | 0 | 0 | ||
Total Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 0 | 0 | 0 | 542 | |
Interest Income | 0 | 0 | 0 | 0 | |
Medium and heavy duty truck | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With no related allowance recorded | 0 | 0 | 0 | ||
Recorded Investment, With an allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With an allowance recorded | 0 | 0 | 0 | ||
Total Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 0 | 0 | 0 | 0 | |
Interest Income | 0 | 0 | 0 | 0 | |
Aircraft financing | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 4,687 | 4,687 | 12,740 | ||
Unpaid Principal Balance, With no related allowance recorded | 4,687 | 4,687 | 12,741 | ||
Recorded Investment, With an allowance recorded | 2,460 | 2,460 | 0 | ||
Unpaid Principal Balance, With an allowance recorded | 2,460 | 2,460 | 0 | ||
Total Related Allowance | 617 | 617 | 0 | ||
Average Recorded Investment | 7,422 | 1,157 | 7,945 | 3,212 | |
Interest Income | 1 | 3 | 6 | 16 | |
Construction equipment financing | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 655 | 655 | 746 | ||
Unpaid Principal Balance, With no related allowance recorded | 655 | 655 | 746 | ||
Recorded Investment, With an allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With an allowance recorded | 0 | 0 | 0 | ||
Total Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 738 | 941 | 736 | 1,001 | |
Interest Income | 0 | 0 | 0 | 0 | |
Commercial real estate | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 8,264 | 8,264 | 11,707 | ||
Unpaid Principal Balance, With no related allowance recorded | 8,264 | 8,264 | 11,707 | ||
Recorded Investment, With an allowance recorded | 751 | 751 | 798 | ||
Unpaid Principal Balance, With an allowance recorded | 751 | 751 | 798 | ||
Total Related Allowance | 22 | 22 | 80 | ||
Average Recorded Investment | 9,762 | 13,415 | 10,800 | 13,263 | |
Interest Income | 108 | 148 | 392 | 442 | |
Residential real estate | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With no related allowance recorded | 0 | 0 | 0 | ||
Recorded Investment, With an allowance recorded | 368 | 368 | 373 | ||
Unpaid Principal Balance, With an allowance recorded | 370 | 370 | 376 | ||
Total Related Allowance | 150 | 150 | 156 | ||
Average Recorded Investment | 369 | 375 | 371 | 377 | |
Interest Income | 4 | 4 | 12 | 12 | |
Consumer | |||||
Impaired loans and leases | |||||
Recorded Investment, With no related allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With no related allowance recorded | 0 | 0 | 0 | ||
Recorded Investment, With an allowance recorded | 0 | 0 | 0 | ||
Unpaid Principal Balance, With an allowance recorded | 0 | 0 | 0 | ||
Total Related Allowance | 0 | 0 | $ 0 | ||
Average Recorded Investment | 0 | 0 | 0 | 0 | |
Interest Income | $ 0 | $ 0 | $ 0 | $ 0 |
Loan and Lease Financings (De39
Loan and Lease Financings (Details 5) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)modificationitem | Sep. 30, 2014USD ($)modificationitem | Sep. 30, 2015USD ($)modificationitem | Sep. 30, 2014USD ($)modificationitem | Dec. 31, 2014USD ($) | |
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 2 | 8 | 2 | 9 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 239 | $ 11,059 | $ 239 | $ 11,059 | |
Number of Defaults | item | 0 | 0 | 0 | 0 | |
Loans and leases classified as troubled debt restructuring | $ 10,708 | $ 10,708 | $ 23,625 | ||
Troubled debt restructured loans and leases which had payment defaults within twelve months following modification | |||||
Default threshold | 90 days | ||||
Interest Rate Below Market Reduction | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 3 | |||
Performing | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 2 | 3 | 2 | 4 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 239 | $ 683 | $ 239 | $ 683 | |
Loans and leases classified as troubled debt restructuring | $ 8,483 | $ 8,483 | 9,118 | ||
Performing | Commercial and agricultural | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 2 | 2 | 2 | 2 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 239 | $ 346 | $ 239 | $ 346 | |
Performing | Auto and light truck | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 0 | 0 | 0 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Performing | Medium and heavy duty truck | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 0 | 0 | 0 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Performing | Aircraft financing | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 1 | 0 | 2 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 337 | $ 0 | $ 337 | |
Performing | Construction equipment financing | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 0 | 0 | 0 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Performing | Commercial real estate | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 0 | 0 | 0 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Performing | Residential real estate | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 0 | 0 | 0 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Performing | Consumer | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 0 | 0 | 0 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Nonperforming | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 5 | 0 | 5 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 10,376 | $ 0 | $ 10,376 | |
Loans and leases classified as troubled debt restructuring | $ 2,225 | $ 2,225 | $ 14,507 | ||
Nonperforming | Commercial and agricultural | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 4 | 0 | 4 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 9,556 | $ 0 | $ 9,556 | |
Nonperforming | Auto and light truck | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 0 | 0 | 0 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Nonperforming | Medium and heavy duty truck | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 0 | 0 | 0 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Nonperforming | Aircraft financing | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 0 | 0 | 0 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Nonperforming | Construction equipment financing | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 0 | 0 | 0 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Nonperforming | Commercial real estate | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 1 | 0 | 1 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 820 | $ 0 | $ 820 | |
Nonperforming | Residential real estate | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 0 | 0 | 0 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Nonperforming | Consumer | |||||
Loans and leases classified as TDR | |||||
Number of Modifications | modification | 0 | 0 | 0 | 0 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 |
Reserve for Loan and Lease Lo40
Reserve for Loan and Lease Losses (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)item | Dec. 31, 2014USD ($) | |
Reserve for loan and lease losses | ||||||
Number of classes existing in loan and lease portfolio | item | 8 | |||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | $ 86,588 | $ 88,776 | $ 85,068 | $ 83,505 | ||
Charge-offs | 632 | 3,224 | 2,053 | 3,906 | ||
Recoveries | 668 | 642 | 2,441 | 3,248 | ||
Net charge-offs (recoveries) | (36) | 2,582 | (388) | 658 | ||
Provision (recovery of provision) | 992 | 1,206 | 2,160 | 4,553 | ||
Balance at the end of the period | 87,616 | 87,400 | 87,616 | 87,400 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | $ 3,499 | $ 241 | ||||
Ending balance, collectively evaluated for impairment | 84,117 | 84,827 | ||||
Total reserve for loan and lease losses | 86,588 | 88,776 | 85,068 | 83,505 | 87,616 | 85,068 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 23,856 | 40,906 | ||||
Ending balance, collectively evaluated for impairment | 3,931,694 | 3,647,668 | ||||
Total loans and leases | 3,955,550 | 3,688,574 | ||||
Commercial and agricultural | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 11,865 | 16,766 | 11,760 | 11,515 | ||
Charge-offs | 88 | 3,000 | 1,053 | 3,228 | ||
Recoveries | 80 | 177 | 644 | 863 | ||
Net charge-offs (recoveries) | 8 | 2,823 | 409 | 2,365 | ||
Provision (recovery of provision) | 2,182 | 1,295 | 2,688 | 6,088 | ||
Balance at the end of the period | 14,039 | 15,238 | 14,039 | 15,238 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 2,710 | 5 | ||||
Ending balance, collectively evaluated for impairment | 11,329 | 11,755 | ||||
Total reserve for loan and lease losses | 11,865 | 16,766 | 11,760 | 11,515 | 14,039 | 11,760 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 6,671 | 14,542 | ||||
Ending balance, collectively evaluated for impairment | 744,109 | 696,216 | ||||
Total loans and leases | 750,780 | 710,758 | ||||
Auto and light truck | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 11,445 | 10,427 | 10,326 | 9,657 | ||
Charge-offs | 0 | 10 | 22 | 29 | ||
Recoveries | 64 | 64 | 315 | 1,119 | ||
Net charge-offs (recoveries) | (64) | (54) | (293) | (1,090) | ||
Provision (recovery of provision) | (2,131) | 516 | (1,241) | 250 | ||
Balance at the end of the period | 9,378 | 10,997 | 9,378 | 10,997 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 0 | 0 | ||||
Ending balance, collectively evaluated for impairment | 9,378 | 10,326 | ||||
Total reserve for loan and lease losses | 11,445 | 10,427 | 10,326 | 9,657 | 9,378 | 10,326 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 0 | 0 | ||||
Ending balance, collectively evaluated for impairment | 423,147 | 397,902 | ||||
Total loans and leases | 423,147 | 397,902 | ||||
Medium and heavy duty truck | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 4,333 | 4,281 | 4,500 | 4,212 | ||
Charge-offs | 0 | 0 | 0 | 0 | ||
Recoveries | 10 | 1 | 15 | 137 | ||
Net charge-offs (recoveries) | (10) | (1) | (15) | (137) | ||
Provision (recovery of provision) | 101 | 173 | (71) | 106 | ||
Balance at the end of the period | 4,444 | 4,455 | 4,444 | 4,455 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 0 | 0 | ||||
Ending balance, collectively evaluated for impairment | 4,444 | 4,500 | ||||
Total reserve for loan and lease losses | 4,333 | 4,281 | 4,500 | 4,212 | 4,444 | 4,500 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 0 | 0 | ||||
Ending balance, collectively evaluated for impairment | 264,784 | 247,153 | ||||
Total loans and leases | 264,784 | 247,153 | ||||
Aircraft financing | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 32,840 | 33,087 | 32,234 | 34,037 | ||
Charge-offs | 195 | 0 | 244 | 0 | ||
Recoveries | 279 | 49 | 721 | 161 | ||
Net charge-offs (recoveries) | (84) | (49) | (477) | (161) | ||
Provision (recovery of provision) | 1,117 | (1,672) | 1,330 | (2,734) | ||
Balance at the end of the period | 34,041 | 31,464 | 34,041 | 31,464 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 617 | 0 | ||||
Ending balance, collectively evaluated for impairment | 33,424 | 32,234 | ||||
Total reserve for loan and lease losses | 32,840 | 33,087 | 32,234 | 34,037 | 34,041 | 32,234 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 7,147 | 12,740 | ||||
Ending balance, collectively evaluated for impairment | 786,982 | 714,925 | ||||
Total loans and leases | 794,129 | 727,665 | ||||
Construction equipment financing | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 7,807 | 6,318 | 7,008 | 5,972 | ||
Charge-offs | 0 | 2 | 0 | 4 | ||
Recoveries | 112 | 130 | 357 | 356 | ||
Net charge-offs (recoveries) | (112) | (128) | (357) | (352) | ||
Provision (recovery of provision) | (276) | 11 | 278 | 133 | ||
Balance at the end of the period | 7,643 | 6,457 | 7,643 | 6,457 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 0 | 0 | ||||
Ending balance, collectively evaluated for impairment | 7,643 | 7,008 | ||||
Total reserve for loan and lease losses | 7,807 | 6,318 | 7,008 | 5,972 | 7,643 | 7,008 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 655 | 746 | ||||
Ending balance, collectively evaluated for impairment | 449,457 | 399,194 | ||||
Total loans and leases | 450,112 | 399,940 | ||||
Commercial real estate | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 13,226 | 12,353 | 13,270 | 12,406 | ||
Charge-offs | 0 | 16 | 0 | 17 | ||
Recoveries | 39 | 130 | 174 | 285 | ||
Net charge-offs (recoveries) | (39) | (114) | (174) | (268) | ||
Provision (recovery of provision) | (244) | 485 | (423) | 278 | ||
Balance at the end of the period | 13,021 | 12,952 | 13,021 | 12,952 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 22 | 80 | ||||
Ending balance, collectively evaluated for impairment | 12,999 | 13,190 | ||||
Total reserve for loan and lease losses | 13,226 | 12,353 | 13,270 | 12,406 | 13,021 | 13,270 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 9,015 | 12,505 | ||||
Ending balance, collectively evaluated for impairment | 649,574 | 604,082 | ||||
Total loans and leases | 658,589 | 616,587 | ||||
Residential real estate | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 3,444 | 3,934 | 4,102 | 4,093 | ||
Charge-offs | 39 | 3 | 104 | 46 | ||
Recoveries | 2 | 23 | 9 | 93 | ||
Net charge-offs (recoveries) | 37 | (20) | 95 | (47) | ||
Provision (recovery of provision) | (8) | 58 | (608) | (128) | ||
Balance at the end of the period | 3,399 | 4,012 | 3,399 | 4,012 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 150 | 156 | ||||
Ending balance, collectively evaluated for impairment | 3,249 | 3,946 | ||||
Total reserve for loan and lease losses | 3,444 | 3,934 | 4,102 | 4,093 | 3,399 | 4,102 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 368 | 373 | ||||
Ending balance, collectively evaluated for impairment | 463,456 | 445,386 | ||||
Total loans and leases | 463,824 | 445,759 | ||||
Consumer | ||||||
Changes in reserve for loan and lease losses | ||||||
Balance at the beginning of the period | 1,628 | 1,610 | 1,868 | 1,613 | ||
Charge-offs | 310 | 193 | 630 | 582 | ||
Recoveries | 82 | 68 | 206 | 234 | ||
Net charge-offs (recoveries) | 228 | 125 | 424 | 348 | ||
Provision (recovery of provision) | 251 | 340 | 207 | 560 | ||
Balance at the end of the period | 1,651 | 1,825 | 1,651 | 1,825 | ||
Reserve for loan and lease losses | ||||||
Ending balance, individually evaluated for impairment | 0 | 0 | ||||
Ending balance, collectively evaluated for impairment | 1,651 | 1,868 | ||||
Total reserve for loan and lease losses | $ 1,628 | $ 1,610 | $ 1,868 | $ 1,613 | 1,651 | 1,868 |
Recorded investment in loans | ||||||
Ending balance, individually evaluated for impairment | 0 | 0 | ||||
Ending balance, collectively evaluated for impairment | 150,185 | 142,810 | ||||
Total loans and leases | $ 150,185 | $ 142,810 |
Mortgage Servicing Rights (Deta
Mortgage Servicing Rights (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Residential mortgage loans | ||
Mortgage Servicing Rights | ||
Unpaid principal balance | $ 806,450 | $ 825,170 |
Mortgage Servicing Rights (De42
Mortgage Servicing Rights (Details 2) - Residential mortgage loans - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Changes in mortgage servicing assets | ||||
Balance at the beginning of the period | $ 4,661 | $ 4,695 | $ 4,733 | $ 4,844 |
Additions | 342 | 443 | 1,048 | 890 |
Amortization | (339) | (334) | (1,117) | (930) |
Sales | 0 | 0 | 0 | 0 |
Carrying value before valuation allowance at end of period | 4,664 | 4,804 | 4,664 | 4,804 |
Changes in valuation allowance | ||||
Balance at the beginning of the period | 0 | 0 | 0 | 0 |
Impairment (charges) recoveries | 0 | 0 | 0 | 0 |
Balance at the end of the period | 0 | 0 | 0 | 0 |
Net carrying value of mortgage servicing rights at end of period | 4,664 | 4,804 | 4,664 | 4,804 |
Fair value of mortgage servicing rights at end of period | 6,945 | 7,791 | 6,945 | 7,791 |
Fair value of mortgage servicing rights exceeding the carrying value | 2,280 | 2,990 | 2,280 | 2,990 |
Mortgage loan contractual servicing fees, including late fees and ancillary income | $ 710 | $ 740 | $ 2,140 | $ 2,280 |
Commitments and Financial Ins43
Commitments and Financial Instruments with Off-Balance-Sheet Risk (Details) - Standby letters of credit - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Commitments and Financial Instruments with Off-Balance-Sheet Risk | ||
Standby letter of credit outstanding | $ 29,100 | $ 26,940 |
Minimum | ||
Commitments and Financial Instruments with Off-Balance-Sheet Risk | ||
Term of standby letter of credit | 6 months | |
Maximum | ||
Commitments and Financial Instruments with Off-Balance-Sheet Risk | ||
Term of standby letter of credit | 1 year |
Derivative Financial Instrume44
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Non-hedging derivative financial instruments | ||
Derivative Financial Instruments | ||
Notional or contractual amount | $ 542,796 | $ 490,417 |
Asset derivatives, Fair value | 11,615 | 9,127 |
Liability derivatives, Fair value | 11,959 | 9,444 |
Interest rate swap contracts | ||
Derivative Financial Instruments | ||
Asset derivatives, Fair value | 11,870 | 9,492 |
Interest rate swap contracts | Non-hedging derivative financial instruments | ||
Derivative Financial Instruments | ||
Notional or contractual amount | 507,513 | 459,508 |
Asset derivatives, Fair value | 11,583 | 9,125 |
Liability derivatives, Fair value | 11,806 | 9,302 |
Loan commitments | Non-hedging derivative financial instruments | ||
Derivative Financial Instruments | ||
Notional or contractual amount | 16,181 | 11,109 |
Asset derivatives, Fair value | 32 | 2 |
Liability derivatives, Fair value | 0 | 0 |
Forward contracts - mortgage loan | Non-hedging derivative financial instruments | ||
Derivative Financial Instruments | ||
Notional or contractual amount | 19,102 | 19,800 |
Asset derivatives, Fair value | 0 | 0 |
Liability derivatives, Fair value | $ 153 | $ 142 |
Derivative Financial Instrume45
Derivative Financial Instruments (Details 2) - Non-hedging derivative financial instruments - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative Financial Instruments | ||||
Gain (loss) | $ (54) | $ 294 | $ 698 | $ 125 |
Interest rate swap contracts | Other expense | ||||
Derivative Financial Instruments | ||||
Gain (loss) | (67) | 30 | (45) | 29 |
Interest rate swap contracts | Other income | ||||
Derivative Financial Instruments | ||||
Gain (loss) | 427 | 11 | 724 | 206 |
Loan commitments | Mortgage banking income | ||||
Derivative Financial Instruments | ||||
Gain (loss) | (57) | (42) | 30 | (15) |
Forward contracts - mortgage loan | Mortgage banking income | ||||
Derivative Financial Instruments | ||||
Gain (loss) | (357) | 213 | (11) | (173) |
Forward contracts - foreign exchange | Other income | ||||
Derivative Financial Instruments | ||||
Gain (loss) | $ 0 | $ 82 | $ 0 | $ 78 |
Derivative Financial Instrume46
Derivative Financial Instruments (Details 3) - Interest rate swaps - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Offsetting of financial assets and derivative assets | ||
Gross Amounts of Recognized Assets | $ 11,870 | $ 9,492 |
Gross Amounts Offset in the Statement of Financial Position | 287 | 367 |
Net Amounts of Assets Presented in the Statement of Financial Position | 11,583 | 9,125 |
Net Amount | $ 11,583 | $ 9,125 |
Derivative Financial Instrume47
Derivative Financial Instruments (Details 4) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Offsetting of financial liabilities and derivative liabilities | ||
Gross Amounts of Recognized Liabilities | $ 127,507 | $ 138,012 |
Gross Amounts Offset in the Statement of Financial Position | 287 | 367 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 127,220 | 137,645 |
Gross amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | 115,414 | 128,343 |
Cash Collateral Pledged | 11,215 | 9,018 |
Net Amount | 591 | 284 |
Interest rate swaps | ||
Offsetting of financial liabilities and derivative liabilities | ||
Gross Amounts of Recognized Liabilities | 12,093 | 9,669 |
Gross Amounts Offset in the Statement of Financial Position | 287 | 367 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 11,806 | 9,302 |
Gross amounts Not Offset in the Statement of Financial Position | ||
Cash Collateral Pledged | 11,215 | 9,018 |
Net Amount | 591 | 284 |
Repurchase agreements | ||
Offsetting of financial liabilities and derivative liabilities | ||
Gross Amounts of Recognized Liabilities | 115,414 | 128,343 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 115,414 | 128,343 |
Gross amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | $ 115,414 | $ 128,343 |
Derivative Financial Instrume48
Derivative Financial Instruments (Details 5) - U.S. Treasury and Federal agencies securities - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements | $ 114,200 | $ 107,630 |
Up to 30 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements | 680 | 20,710 |
Greater than 90 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements | $ 530 | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Earnings Per Share [Abstract] | |||||
Outstanding stock options (in shares) | 0 | 0 | 0 | 0 | |
Distributed earnings allocated to common stock | $ 4,299 | $ 4,299 | $ 12,888 | $ 12,796 | |
Undistributed earnings allocated to common stock | 9,499 | 10,466 | 29,748 | 29,733 | |
Net earnings allocated to common stock | 13,798 | 14,765 | 42,636 | 42,529 | |
Net earnings allocated to participating securities | 130 | 182 | 433 | 544 | |
Net income allocated to common stock and participating securities | $ 13,928 | $ 14,947 | $ 43,069 | $ 43,073 | |
Weighted average shares outstanding for basic earnings per common share | [1] | 26,164,646 | 26,262,864 | 26,211,630 | 26,497,500 |
Dilutive effect of stock compensation (in shares) | 0 | 0 | 0 | 0 | |
Weighted average shares outstanding for diluted earnings per common share | [1] | 26,164,646 | 26,262,864 | 26,211,630 | 26,497,500 |
Basic earnings per common share (in dollars per share) | [1] | $ 0.53 | $ 0.56 | $ 1.63 | $ 1.61 |
Diluted earnings per common share (in dollars per share) | [1] | $ 0.53 | $ 0.56 | $ 1.63 | $ 1.61 |
[1] | *The computation of per common share data and shares outstanding gives retrospective recognition to a 10% stock dividend declared on July 22, 2015 and issued on August 14, 2015. |
Stock Based Compensation (Detai
Stock Based Compensation (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015USD ($)itemshares | Sep. 30, 2014USD ($)shares | |
Stock-based compensation | ||
Number of stock-based employee compensation plans | item | 4 | |
Number of executive stock award plans | item | 3 | |
Outstanding stock options (in shares) | 0 | 0 |
Total unrecognized compensation cost related to non-vested share-based compensation arrangements | $ | $ 5,820 | |
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 3 years 5 months 28 days | |
Stock options | ||
Stock-based compensation | ||
Total fair value of options vested and expensed | $ | $ 0 | $ 0 |
Outstanding stock options (in shares) | 0 | 0 |
Stock options exercised (in shares) | 0 | 0 |
Accumulated Other Comprehensi51
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Reclassifications out of accumulated other comprehensive income | ||||
Gains on investment securities available-for-sale | $ 0 | $ 0 | $ 4 | $ 963 |
Income before income taxes | 21,281 | 21,243 | 66,194 | 64,899 |
Income tax expense | (7,353) | (6,296) | (23,125) | (21,826) |
Net income | 13,928 | 14,947 | 43,069 | 43,073 |
Unrealized gains and losses on available-for-sale securities | Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Reclassifications out of accumulated other comprehensive income | ||||
Gains on investment securities available-for-sale | 0 | 0 | 4 | 963 |
Income before income taxes | 0 | 0 | 4 | 963 |
Income tax expense | 0 | 0 | (2) | (361) |
Net income | $ 0 | $ 0 | $ 2 | $ 602 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefits that would affect the effective tax rate if recognized | $ 170 | $ 0 | |
Interest and penalties net of tax recognized | 0 | $ (130) | |
Accrued interest and penalties | $ 0 | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Fair value measurements | |||
Fair value carrying amount | $ 9,187 | $ 13,604 | |
Mortgages held for sale reported at fair value | |||
Fair value measurements | |||
Fair value carrying amount | 9,187 | 13,604 | |
Aggregate unpaid principal | 9,130 | 13,526 | |
Excess of fair value carrying amount over (under) unpaid principal | [1] | $ 57 | $ 78 |
[1] | The excess of fair value carrying amount over (under) unpaid principal is included in mortgage banking income and includes changes in fair value at and subsequent to funding and gains and losses on the related loan commitment prior to funding. |
Fair Value Measurements (Deta54
Fair Value Measurements (Details 2) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Assets: | ||
Investment securities, available-for-sale | $ 784,585 | $ 791,118 |
Trading account securities | 0 | 205 |
Mortgages held for sale | 9,187 | 13,604 |
U.S. Treasury and Federal agencies securities | ||
Assets: | ||
Investment securities, available-for-sale | 384,076 | 373,503 |
U.S. States and political subdivisions securities | ||
Assets: | ||
Investment securities, available-for-sale | 121,592 | 124,688 |
Mortgage-backed securities - Federal agencies | ||
Assets: | ||
Investment securities, available-for-sale | 236,408 | 253,008 |
Corporate debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 34,609 | 31,932 |
Foreign government and other securities | ||
Assets: | ||
Investment securities, available-for-sale | 811 | 811 |
Total debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 777,496 | 783,942 |
Marketable equity securities | ||
Assets: | ||
Investment securities, available-for-sale | 7,089 | 7,176 |
Total | ||
Assets: | ||
Investment securities, available-for-sale | 784,585 | 791,118 |
Mortgages held for sale | 9,187 | 13,604 |
Level 1 | ||
Assets: | ||
Investment securities, available-for-sale | 27,106 | 26,984 |
Mortgages held for sale | 0 | 0 |
Level 2 | ||
Assets: | ||
Investment securities, available-for-sale | 751,989 | 756,857 |
Mortgages held for sale | 9,187 | 13,604 |
Level 3 | ||
Assets: | ||
Investment securities, available-for-sale | 5,490 | 7,277 |
Mortgages held for sale | 0 | 0 |
Recurring basis | Total | ||
Assets: | ||
Investment securities, available-for-sale | 784,585 | 791,118 |
Trading account securities | 0 | 205 |
Mortgages held for sale | 9,187 | 13,604 |
Total | 805,355 | 814,052 |
Liabilities: | ||
Total | 11,806 | 9,302 |
Recurring basis | Total | Interest rate swap contracts | ||
Assets: | ||
Accrued income and other assets | 11,583 | 9,125 |
Liabilities: | ||
Accrued expenses and other liabilities | 11,806 | 9,302 |
Recurring basis | Total | U.S. Treasury and Federal agencies securities | ||
Assets: | ||
Investment securities, available-for-sale | 384,076 | 373,503 |
Recurring basis | Total | U.S. States and political subdivisions securities | ||
Assets: | ||
Investment securities, available-for-sale | 121,592 | 124,688 |
Recurring basis | Total | Mortgage-backed securities - Federal agencies | ||
Assets: | ||
Investment securities, available-for-sale | 236,408 | 253,008 |
Recurring basis | Total | Corporate debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 34,609 | 31,932 |
Recurring basis | Total | Foreign government and other securities | ||
Assets: | ||
Investment securities, available-for-sale | 811 | 811 |
Recurring basis | Total | Total debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 777,496 | 783,942 |
Recurring basis | Total | Marketable equity securities | ||
Assets: | ||
Investment securities, available-for-sale | 7,089 | 7,176 |
Recurring basis | Level 1 | ||
Assets: | ||
Investment securities, available-for-sale | 27,106 | 26,984 |
Trading account securities | 0 | 205 |
Mortgages held for sale | 0 | 0 |
Total | 27,106 | 27,189 |
Liabilities: | ||
Total | 0 | 0 |
Recurring basis | Level 1 | Interest rate swap contracts | ||
Assets: | ||
Accrued income and other assets | 0 | 0 |
Liabilities: | ||
Accrued expenses and other liabilities | 0 | 0 |
Recurring basis | Level 1 | U.S. Treasury and Federal agencies securities | ||
Assets: | ||
Investment securities, available-for-sale | 20,017 | 19,808 |
Recurring basis | Level 1 | U.S. States and political subdivisions securities | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 1 | Mortgage-backed securities - Federal agencies | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 1 | Corporate debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 1 | Foreign government and other securities | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 1 | Total debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 20,017 | 19,808 |
Recurring basis | Level 1 | Marketable equity securities | ||
Assets: | ||
Investment securities, available-for-sale | 7,089 | 7,176 |
Recurring basis | Level 2 | ||
Assets: | ||
Investment securities, available-for-sale | 751,989 | 756,857 |
Trading account securities | 0 | 0 |
Mortgages held for sale | 9,187 | 13,604 |
Total | 772,759 | 779,586 |
Liabilities: | ||
Total | 11,806 | 9,302 |
Recurring basis | Level 2 | Interest rate swap contracts | ||
Assets: | ||
Accrued income and other assets | 11,583 | 9,125 |
Liabilities: | ||
Accrued expenses and other liabilities | 11,806 | 9,302 |
Recurring basis | Level 2 | U.S. Treasury and Federal agencies securities | ||
Assets: | ||
Investment securities, available-for-sale | 364,059 | 353,695 |
Recurring basis | Level 2 | U.S. States and political subdivisions securities | ||
Assets: | ||
Investment securities, available-for-sale | 116,913 | 118,222 |
Recurring basis | Level 2 | Mortgage-backed securities - Federal agencies | ||
Assets: | ||
Investment securities, available-for-sale | 236,408 | 253,008 |
Recurring basis | Level 2 | Corporate debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 34,609 | 31,932 |
Recurring basis | Level 2 | Foreign government and other securities | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 2 | Total debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 751,989 | 756,857 |
Recurring basis | Level 2 | Marketable equity securities | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 3 | ||
Assets: | ||
Investment securities, available-for-sale | 5,490 | 7,277 |
Trading account securities | 0 | 0 |
Mortgages held for sale | 0 | 0 |
Total | 5,490 | 7,277 |
Liabilities: | ||
Total | 0 | 0 |
Recurring basis | Level 3 | Interest rate swap contracts | ||
Assets: | ||
Accrued income and other assets | 0 | 0 |
Liabilities: | ||
Accrued expenses and other liabilities | 0 | 0 |
Recurring basis | Level 3 | U.S. Treasury and Federal agencies securities | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 3 | U.S. States and political subdivisions securities | ||
Assets: | ||
Investment securities, available-for-sale | 4,679 | 6,466 |
Recurring basis | Level 3 | Mortgage-backed securities - Federal agencies | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 3 | Corporate debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 0 | 0 |
Recurring basis | Level 3 | Foreign government and other securities | ||
Assets: | ||
Investment securities, available-for-sale | 811 | 811 |
Recurring basis | Level 3 | Total debt securities | ||
Assets: | ||
Investment securities, available-for-sale | 5,490 | 7,277 |
Recurring basis | Level 3 | Marketable equity securities | ||
Assets: | ||
Investment securities, available-for-sale | $ 0 | $ 0 |
Fair Value Measurements (Deta55
Fair Value Measurements (Details 3) $ in Thousands | 3 Months Ended | |
Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($)item | |
Changes in the fair value of Level 3 assets measured on a recurring basis | ||
Total gains or losses (unrealized): included in earnings | $ 0 | $ 0 |
Number of transfers between levels | item | 0 | 0 |
U.S. States and political subdivisions securities | ||
Changes in the fair value of Level 3 assets measured on a recurring basis | ||
Balance at the beginning of the period | $ 5,444 | $ 4,699 |
Total gains or losses (realized/unrealized): included in earnings | 0 | 0 |
Total gains or losses (realized/unrealized): included in other comprehensive income | 15 | (14) |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Maturities | (780) | (763) |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Balance at the end of the period | 4,679 | 3,922 |
Foreign government and other securities | ||
Changes in the fair value of Level 3 assets measured on a recurring basis | ||
Balance at the beginning of the period | 807 | 905 |
Total gains or losses (realized/unrealized): included in earnings | 0 | 0 |
Total gains or losses (realized/unrealized): included in other comprehensive income | 4 | 3 |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Maturities | 0 | (100) |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Balance at the end of the period | 811 | 808 |
Investment securities available-for-sale | ||
Changes in the fair value of Level 3 assets measured on a recurring basis | ||
Balance at the beginning of the period | 6,251 | 5,604 |
Total gains or losses (realized/unrealized): included in earnings | 0 | 0 |
Total gains or losses (realized/unrealized): included in other comprehensive income | 19 | (11) |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Maturities | (780) | (863) |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Balance at the end of the period | $ 5,490 | $ 4,730 |
Fair Value Measurements (Deta56
Fair Value Measurements (Details 4) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Valuation Methodology | ||
Investment securities, available-for-sale | $ 784,585 | $ 791,118 |
Level 3 | ||
Valuation Methodology | ||
Investment securities, available-for-sale | 5,490 | 7,277 |
Recurring | Level 3 | ||
Valuation Methodology | ||
Investment securities, available-for-sale | 5,490 | 7,277 |
Recurring | Level 3 | Discounted cash flows | Direct placement municipal securities | ||
Valuation Methodology | ||
Investment securities, available-for-sale | $ 4,679 | $ 6,466 |
Recurring | Level 3 | Discounted cash flows | Direct placement municipal securities | Minimum | ||
Unobservable Inputs | ||
Credit spread assumption (as a percent) | 0.77% | 0.99% |
Recurring | Level 3 | Discounted cash flows | Direct placement municipal securities | Maximum | ||
Unobservable Inputs | ||
Credit spread assumption (as a percent) | 2.53% | 2.08% |
Recurring | Level 3 | Discounted cash flows | Foreign government | ||
Valuation Methodology | ||
Investment securities, available-for-sale | $ 811 | $ 811 |
Recurring | Level 3 | Discounted cash flows | Foreign government | Minimum | ||
Unobservable Inputs | ||
Market yield assumption (as a percent) | 0.94% | 0.25% |
Recurring | Level 3 | Discounted cash flows | Foreign government | Maximum | ||
Unobservable Inputs | ||
Market yield assumption (as a percent) | 1.81% | 1.31% |
Non-recurring | Level 3 | Commercial loans | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 20.00% | |
Non-recurring | Level 3 | Minimum | Commercial loans | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 40.00% | |
Non-recurring | Level 3 | Maximum | Commercial loans | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 75.00% | |
Non-recurring | Level 3 | Trade publications | Aircraft | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 10.00% | |
Non-recurring | Level 3 | Auction values | Autos | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 10.00% | |
Non-recurring | Level 3 | Trade publications and auction values | Medium and heavy duty trucks | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 15.00% | |
Non-recurring | Level 3 | Trade publications and auction values | Construction equipment financing | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 20.00% | |
Non-recurring | Level 3 | Appraisals | Minimum | Real estate | ||
Unobservable Inputs | ||
Discount rate (as a percent) | 20.00% |
Fair Value Measurements (Deta57
Fair Value Measurements (Details 5) - Non-recurring - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Impaired loans | ||
Fair value measurements | ||
Impairment charges (recoveries) | $ 0 | |
Partnership investments | ||
Fair value measurements | ||
Impairment charges (recoveries) | 0 | |
Mortgage servicing rights | ||
Fair value measurements | ||
Impairment charges (recoveries) | 0 | |
Repossessions | ||
Fair value measurements | ||
Impairment charges (recoveries) | 390 | |
Other real estate | ||
Fair value measurements | ||
Impairment charges (recoveries) | 0 | |
Total | ||
Fair value measurements | ||
Impaired loans - collateral based | 3,724 | $ 1,007 |
Assets measured at fair value | 16,747 | 13,974 |
Total | Partnership investments | ||
Fair value measurements | ||
Accrued income and other assets | 1,010 | 1,343 |
Total | Mortgage servicing rights | ||
Fair value measurements | ||
Accrued income and other assets | 4,664 | 4,733 |
Total | Repossessions | ||
Fair value measurements | ||
Accrued income and other assets | 6,602 | 5,156 |
Total | Other real estate | ||
Fair value measurements | ||
Accrued income and other assets | 747 | 1,735 |
Level 3 | ||
Fair value measurements | ||
Impaired loans - collateral based | 3,724 | 1,007 |
Assets measured at fair value | 16,747 | 13,974 |
Level 3 | Partnership investments | ||
Fair value measurements | ||
Accrued income and other assets | 1,010 | 1,343 |
Level 3 | Mortgage servicing rights | ||
Fair value measurements | ||
Accrued income and other assets | 4,664 | 4,733 |
Level 3 | Repossessions | ||
Fair value measurements | ||
Accrued income and other assets | 6,602 | 5,156 |
Level 3 | Other real estate | ||
Fair value measurements | ||
Accrued income and other assets | $ 747 | $ 1,735 |
Fair Value Measurements (Deta58
Fair Value Measurements (Details 6) - Non-recurring - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Level 3 | ||
Valuation Methodology | ||
Assets measured at fair value | $ 16,747 | $ 13,974 |
Level 3 | Collateral based measurements | Impaired loans | Minimum | ||
Unobservable Inputs | ||
Discount for lack of marketability and current conditions (as a percent) | 10.00% | 20.00% |
Level 3 | Collateral based measurements | Impaired loans | Maximum | ||
Unobservable Inputs | ||
Discount for lack of marketability and current conditions (as a percent) | 100.00% | 25.00% |
Level 3 | Discounted cash flows | Mortgage servicing rights | Minimum | ||
Unobservable Inputs | ||
Constant prepayment rate (CPR) (as a percent) | 11.30% | 10.20% |
Discount rate (as a percent) | 9.50% | 9.50% |
Level 3 | Discounted cash flows | Mortgage servicing rights | Maximum | ||
Unobservable Inputs | ||
Constant prepayment rate (CPR) (as a percent) | 18.80% | 16.30% |
Discount rate (as a percent) | 13.00% | 13.00% |
Level 3 | Appraisals trade publications and auction values | Repossessions | Minimum | ||
Unobservable Inputs | ||
Discount for lack of marketability (as a percent) | 3.00% | 0.00% |
Level 3 | Appraisals trade publications and auction values | Repossessions | Maximum | ||
Unobservable Inputs | ||
Discount for lack of marketability (as a percent) | 6.00% | 3.00% |
Level 3 | Appraisals | Other real estate | Minimum | ||
Unobservable Inputs | ||
Discount for lack of marketability (as a percent) | 7.00% | 5.00% |
Level 3 | Appraisals | Other real estate | Maximum | ||
Unobservable Inputs | ||
Discount for lack of marketability (as a percent) | 49.00% | 38.00% |
Carrying Value | Level 3 | Collateral based measurements | Impaired loans | ||
Valuation Methodology | ||
Assets measured at fair value | $ 3,724 | $ 1,007 |
Carrying Value | Level 3 | Discounted cash flows | Mortgage servicing rights | ||
Valuation Methodology | ||
Assets measured at fair value | 4,664 | 4,733 |
Carrying Value | Level 3 | Appraisals trade publications and auction values | Repossessions | ||
Valuation Methodology | ||
Assets measured at fair value | 6,602 | 5,156 |
Carrying Value | Level 3 | Appraisals | Other real estate | ||
Valuation Methodology | ||
Assets measured at fair value | 747 | 1,735 |
Fair Value | ||
Valuation Methodology | ||
Assets measured at fair value | 16,747 | 13,974 |
Fair Value | Level 3 | Collateral based measurements | Impaired loans | ||
Valuation Methodology | ||
Assets measured at fair value | 3,724 | 1,007 |
Fair Value | Level 3 | Discounted cash flows | Mortgage servicing rights | ||
Valuation Methodology | ||
Assets measured at fair value | 6,945 | 6,979 |
Fair Value | Level 3 | Appraisals trade publications and auction values | Repossessions | ||
Valuation Methodology | ||
Assets measured at fair value | 6,806 | 5,307 |
Fair Value | Level 3 | Appraisals | Other real estate | ||
Valuation Methodology | ||
Assets measured at fair value | $ 880 | $ 1,953 |
Fair Value Measurements (Deta59
Fair Value Measurements (Details 7) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Assets: | ||
Cash and due from banks | $ 61,124 | $ 64,834 |
Federal funds sold and interest bearing deposits with other banks | 3,065 | 1,356 |
Investment securities, available-for-sale | 784,585 | 791,118 |
Mortgages held for sale | 9,187 | 13,604 |
Loans and leases, net of reserve for loan and lease losses | 3,867,934 | 3,603,506 |
Liabilities: | ||
Long-term debt and mandatorily redeemable securities | 57,577 | 56,232 |
Subordinated notes | 58,764 | 58,764 |
Carrying or Contract Value | ||
Assets: | ||
Cash and due from banks | 61,124 | 64,834 |
Federal funds sold and interest bearing deposits with other banks | 3,065 | 1,356 |
Investment securities, available-for-sale | 784,585 | 791,118 |
Other investments and trading account securities | 21,728 | 21,006 |
Mortgages held for sale | 9,187 | 13,604 |
Loans and leases, net of reserve for loan and lease losses | 3,867,934 | 3,603,506 |
Mortgage servicing rights | 4,664 | 4,733 |
Interest rate swaps | 11,583 | 9,125 |
Liabilities: | ||
Deposits | 4,019,156 | 3,802,860 |
Short-term borrowings | 283,510 | 245,822 |
Long-term debt and mandatorily redeemable securities | 57,577 | 56,232 |
Subordinated notes | 58,764 | 58,764 |
Interest rate swaps | 11,806 | 9,302 |
Off-balance-sheet instruments | 0 | 0 |
Fair Value | ||
Assets: | ||
Cash and due from banks | 61,124 | 64,834 |
Federal funds sold and interest bearing deposits with other banks | 3,065 | 1,356 |
Investment securities, available-for-sale | 784,585 | 791,118 |
Other investments and trading account securities | 21,728 | 21,006 |
Mortgages held for sale | 9,187 | 13,604 |
Loans and leases, net of reserve for loan and lease losses | 3,892,210 | 3,626,682 |
Mortgage servicing rights | 6,945 | 6,979 |
Interest rate swaps | 11,583 | 9,125 |
Liabilities: | ||
Deposits | 4,023,046 | 3,803,958 |
Short-term borrowings | 283,510 | 245,822 |
Long-term debt and mandatorily redeemable securities | 57,608 | 56,044 |
Subordinated notes | 45,249 | 59,427 |
Interest rate swaps | 11,806 | 9,302 |
Off-balance-sheet instruments | 301 | 305 |
Level 1 | ||
Assets: | ||
Cash and due from banks | 61,124 | 64,834 |
Federal funds sold and interest bearing deposits with other banks | 3,065 | 1,356 |
Investment securities, available-for-sale | 27,106 | 26,984 |
Other investments and trading account securities | 21,728 | 21,006 |
Mortgages held for sale | 0 | 0 |
Loans and leases, net of reserve for loan and lease losses | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Interest rate swaps | 0 | 0 |
Liabilities: | ||
Deposits | 2,965,672 | 2,824,935 |
Short-term borrowings | 142,986 | 123,337 |
Long-term debt and mandatorily redeemable securities | 0 | 0 |
Subordinated notes | 0 | 0 |
Interest rate swaps | 0 | 0 |
Off-balance-sheet instruments | 0 | 0 |
Level 2 | ||
Assets: | ||
Cash and due from banks | 0 | 0 |
Federal funds sold and interest bearing deposits with other banks | 0 | 0 |
Investment securities, available-for-sale | 751,989 | 756,857 |
Other investments and trading account securities | 0 | 0 |
Mortgages held for sale | 9,187 | 13,604 |
Loans and leases, net of reserve for loan and lease losses | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Interest rate swaps | 11,583 | 9,125 |
Liabilities: | ||
Deposits | 1,057,374 | 979,023 |
Short-term borrowings | 140,524 | 122,485 |
Long-term debt and mandatorily redeemable securities | 57,608 | 56,044 |
Subordinated notes | 45,249 | 59,427 |
Interest rate swaps | 11,806 | 9,302 |
Off-balance-sheet instruments | 301 | 305 |
Level 3 | ||
Assets: | ||
Cash and due from banks | 0 | 0 |
Federal funds sold and interest bearing deposits with other banks | 0 | 0 |
Investment securities, available-for-sale | 5,490 | 7,277 |
Other investments and trading account securities | 0 | 0 |
Mortgages held for sale | 0 | 0 |
Loans and leases, net of reserve for loan and lease losses | 3,892,210 | 3,626,682 |
Mortgage servicing rights | 6,945 | 6,979 |
Interest rate swaps | 0 | 0 |
Liabilities: | ||
Deposits | 0 | 0 |
Short-term borrowings | 0 | 0 |
Long-term debt and mandatorily redeemable securities | 0 | 0 |
Subordinated notes | 0 | 0 |
Interest rate swaps | 0 | 0 |
Off-balance-sheet instruments | $ 0 | $ 0 |