Cover Page
Cover Page - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 23, 2023 | Jun. 30, 2022 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 0-17071 | ||
Entity Registrant Name | FIRST MERCHANTS CORPORATION | ||
Entity Incorporation, State or Country Code | IN | ||
Entity Tax Identification Number | 35-1544218 | ||
Entity Address, Address Line One | 200 East Jackson Street, | ||
Entity Address, City or Town | Muncie | ||
Entity Address, State or Province | IN | ||
Entity Address, Postal Zip Code | 47305-2814 | ||
City Area Code | 765 | ||
Local Phone Number | 747-1500 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,103,712 | ||
Entity Common Stock, Shares Outstanding | 59,640,348 | ||
Documents Incorporated by Reference | Documents Part of Form 10-K into which incorporated Portions of the Registrant’s Definitive Part III (Items 10 through 14) Proxy Statement for Annual Meeting of Shareholders to be held May 10, 2023 | ||
Entity Central Index Key | 0000712534 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Common Stock | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Common Stock, $0.125 stated value per share | ||
Trading Symbol | FRME | ||
Security Exchange Name | NASDAQ | ||
Depositary Shares, each representing a 1/100th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series A | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Depositary Shares, each representing a 1/100th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series A | ||
Trading Symbol | FRMEP | ||
Security Exchange Name | NASDAQ |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Auditor Information [Abstract] | |
Auditor Name | FORVIS, LLP |
Auditor Location | Indianapolis, IN |
Auditor Firm ID | 686 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and due from banks | $ 122,594 | $ 167,146 |
Interest-bearing deposits | 126,061 | 474,154 |
Investment securities available for sale | 1,976,661 | 2,344,551 |
Investment securities held to maturity, net of allowance for credit losses of $245 and $245 (fair value of $1,907,865 and $2,202,503) | 2,287,127 | 2,179,802 |
Loans held for sale | 9,094 | 11,187 |
Loans | 12,003,894 | 9,241,861 |
Less: Allowance for credit losses - loans | (223,277) | (195,397) |
Net loans | 11,780,617 | 9,046,464 |
Premises and equipment | 117,118 | 105,655 |
Federal Home Loan Bank stock | 38,525 | 28,736 |
Interest receivable | 85,070 | 57,187 |
Other intangibles | 35,842 | 25,475 |
Goodwill | 712,002 | 545,385 |
Cash surrender value of life insurance | 308,311 | 291,041 |
Other real estate owned | 6,431 | 558 |
Tax asset, deferred and receivable | 111,222 | 35,641 |
Other assets | 221,631 | 140,167 |
TOTAL ASSETS | 17,938,306 | 15,453,149 |
Deposits: | ||
Noninterest-bearing | 3,173,417 | 2,709,646 |
Interest-bearing | 11,209,328 | 10,022,931 |
Total deposits | 14,382,745 | 12,732,577 |
Borrowings: | ||
Federal funds purchased | 171,560 | 0 |
Securities sold under repurchase agreements | 167,413 | 181,577 |
Federal Home Loan Bank advances | 823,674 | 334,055 |
Subordinated debentures and other borrowings | 151,298 | 118,618 |
Total Borrowings | 1,313,945 | 634,250 |
Interest payable | 7,530 | 2,762 |
Other liabilities | 199,316 | 170,989 |
Total Liabilities | 15,903,536 | 13,540,578 |
COMMITMENTS AND CONTINGENT LIABILITIES | ||
STOCKHOLDERS' EQUITY | ||
Common Stock, $0.125 stated value: Authorized - 100,000,000 shares Issued and outstanding - 53,410,411 and 53,922,359 shares | 7,396 | 6,676 |
Additional paid-in capital | 1,228,626 | 985,818 |
Retained earnings | 1,012,774 | 864,839 |
Accumulated other comprehensive income (loss) | (239,151) | 55,113 |
Total Stockholders' Equity | 2,034,770 | 1,912,571 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 17,938,306 | 15,453,149 |
Cumulative Preferred Stock | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock value | 125 | 125 |
Series A Preferred Stock | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock value | $ 25,000 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Allowance for credit losses | $ 245 | $ 245 |
Investment securities held to maturity - fair value | $ 1,907,865 | $ 2,202,503 |
Common Stock, stated value (in dollars per share) | $ 0.125 | $ 0.125 |
Common Stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common Stock, issued (in shares) | 59,170,583 | 53,410,411 |
Common Stock, outstanding (in shares) | 59,170,583 | 53,410,411 |
Cumulative Preferred Stock | ||
Preferred Stock, par value (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred Stock, liquidation value per share (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred Stock, authorized (in shares) | 600 | 600 |
Preferred Stock, issued (in shares) | 125 | 125 |
Preferred Stock, outstanding (in shares) | 125 | 125 |
Series A Preferred Stock | ||
Preferred Stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred Stock, liquidation value per share (in dollars per share) | $ 2,500 | $ 2,500 |
Preferred Stock, authorized (in shares) | 10,000 | 10,000 |
Preferred Stock, issued (in shares) | 10,000 | 10,000 |
Preferred Stock, outstanding (in shares) | 10,000 | 10,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Loans receivable: | |||
Taxable | $ 470,468 | $ 338,009 | $ 358,264 |
Tax-exempt | 25,124 | 22,110 | 21,483 |
Investment securities: | |||
Taxable | 38,354 | 29,951 | 24,440 |
Tax-exempt | 67,381 | 55,331 | 42,341 |
Deposits with financial institutions | 2,503 | 634 | 938 |
Federal Home Loan Bank stock | 1,176 | 597 | 1,042 |
Total Interest Income | 605,006 | 446,632 | 448,508 |
INTEREST EXPENSE | |||
Deposits | 62,939 | 23,319 | 51,740 |
Federal funds purchased | 1,302 | 5 | 120 |
Securities sold under repurchase agreements | 1,136 | 314 | 604 |
Federal Home Loan Bank advances | 11,417 | 5,672 | 6,973 |
Subordinated debentures and other borrowings | 8,009 | 6,642 | 6,944 |
Total Interest Expense | 84,803 | 35,952 | 66,381 |
NET INTEREST INCOME | 520,203 | 410,680 | 382,127 |
Provision for credit losses - loans | 16,755 | 0 | 58,673 |
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 503,448 | 410,680 | 323,454 |
NON-INTEREST INCOME | |||
Net gains and fees on sales of loans | 10,055 | 19,689 | 18,271 |
Increase in cash surrender value of life insurance | 5,210 | 4,873 | 5,040 |
Gains on life insurance benefits | 5,964 | 2,187 | 100 |
Net realized gains on sales of available for sale securities | 1,194 | 5,674 | 11,895 |
Other income | 1,929 | 3,008 | 1,898 |
Total Non-Interest Income | 107,941 | 109,323 | 109,926 |
NON-INTEREST EXPENSES | |||
Salaries and employee benefits | 206,893 | 166,995 | 155,937 |
Net occupancy | 26,211 | 23,326 | 26,756 |
Equipment | 23,945 | 19,401 | 19,344 |
Marketing | 7,708 | 5,762 | 6,609 |
Outside data processing fees | 21,682 | 18,317 | 14,432 |
Printing and office supplies | 1,588 | 1,217 | 1,304 |
Intangible asset amortization | 8,275 | 5,747 | 5,987 |
FDIC assessments | 10,235 | 6,243 | 5,804 |
Other real estate owned and foreclosure expenses | 823 | 992 | 330 |
Professional and other outside services | 21,642 | 11,913 | 8,901 |
Other expenses | 26,713 | 19,300 | 18,001 |
Total Non-Interest Expenses | 355,715 | 279,213 | 263,405 |
INCOME BEFORE INCOME TAX | 255,674 | 240,790 | 169,975 |
Income tax expense | 33,585 | 35,259 | 21,375 |
NET INCOME | 222,089 | 205,531 | 148,600 |
Preferred stock dividends | 1,406 | 0 | 0 |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ 220,683 | $ 205,531 | $ 148,600 |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS PER SHARE DATA: | |||
Basic (in dollars per share) | $ 3.83 | $ 3.82 | $ 2.75 |
Diluted (in dollars per share) | $ 3.81 | $ 3.81 | $ 2.74 |
Service charges on deposit accounts | |||
NON-INTEREST INCOME | |||
Other income | $ 28,371 | $ 23,571 | $ 20,999 |
Fiduciary and wealth management fees | |||
NON-INTEREST INCOME | |||
Other income | 29,688 | 28,362 | 23,747 |
Card payment fees | |||
NON-INTEREST INCOME | |||
Other income | 20,207 | 16,619 | 19,502 |
Derivative hedge fees | |||
NON-INTEREST INCOME | |||
Other income | 3,388 | 3,850 | 6,977 |
Other customer fees | |||
NON-INTEREST INCOME | |||
Other income | $ 1,935 | $ 1,490 | $ 1,497 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 222,089 | $ 205,531 | $ 148,600 |
Unrealized gains/losses on securities available-for-sale: | |||
Unrealized holding gain (loss) arising during the period | (371,299) | (30,042) | 74,067 |
Reclassification adjustment for losses (gains) included in net income | (1,194) | (5,674) | (11,895) |
Tax effect | 78,224 | 7,502 | (13,056) |
Net of tax | (294,269) | (28,214) | 49,116 |
Unrealized gain/loss on cash flow hedges: | |||
Unrealized holding gain (loss) arising during the period | 479 | 138 | (1,480) |
Reclassification adjustment for losses (gains) included in net income | 521 | 1,044 | 906 |
Tax effect | (210) | (248) | 121 |
Net of tax | 790 | 934 | (453) |
Net gain (loss) arising during the period | |||
Net gain (loss) arising during the period | (1,076) | 9,482 | (2,237) |
Reclassification adjustment for amortization of prior service cost | 82 | 84 | 84 |
Tax effect | 209 | (2,009) | 452 |
Net of tax | (785) | 7,557 | (1,701) |
Total other comprehensive income (loss), net of tax | (294,264) | (19,723) | 46,962 |
Comprehensive income (loss) | $ (72,175) | $ 185,808 | $ 195,562 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Cumulative effect of ASC 326 adoption | Adjusted balance | Cumulative Preferred Stock | Preferred Stock Cumulative Preferred Stock | Preferred Stock Cumulative Preferred Stock Adjusted balance | Preferred Stock Noncumulative Preferred Stock | Preferred Stock Noncumulative Preferred Stock Adjusted balance | Common Stock | Common Stock Adjusted balance | Paid in Capital | Paid in Capital Adjusted balance | Retained Earnings | Retained Earnings Cumulative effect of ASC 326 adoption | Retained Earnings Adjusted balance | Comprehensive Income (Loss) | Comprehensive Income (Loss) Adjusted balance |
Beginning balance (in shares) at Dec. 31, 2019 | 125 | 0 | |||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 55,368,482 | ||||||||||||||||
Beginning balance at Dec. 31, 2019 | $ 1,786,437 | $ 125 | $ 0 | $ 6,921 | $ 1,054,997 | $ 696,520 | $ 27,874 | ||||||||||
Comprehensive income | |||||||||||||||||
Net income | 148,600 | 148,600 | |||||||||||||||
Other comprehensive income (loss), net of tax | 46,962 | 46,962 | |||||||||||||||
Cash dividends on common stock | (56,542) | (56,542) | |||||||||||||||
Repurchases of common stock (in shares) | (1,634,437) | ||||||||||||||||
Repurchases of common stock | (55,912) | $ (204) | (55,708) | ||||||||||||||
Share-based compensation (in shares) | 128,292 | ||||||||||||||||
Share-based compensation | 4,600 | $ 16 | 4,584 | ||||||||||||||
Stock issued under employee benefit plans (in shares) | 25,423 | ||||||||||||||||
Stock issued under employee benefit plans | 639 | $ 3 | 636 | ||||||||||||||
Stock issued under dividend reinvestment and stock purchase plan (in shares) | 60,806 | ||||||||||||||||
Stock issued under dividend reinvestment and stock purchase plan | 1,726 | $ 8 | 1,718 | ||||||||||||||
Stock options exercised (in shares) | 13,550 | ||||||||||||||||
Stock options exercised | 115 | $ 2 | 113 | ||||||||||||||
Restricted shares withheld for taxes (in shares) | (39,757) | ||||||||||||||||
Restricted shares withheld for taxes | (980) | $ (6) | (974) | ||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 125 | 125 | 0 | 0 | |||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 53,922,359 | 53,922,359 | |||||||||||||||
Ending balance at Dec. 31, 2020 | 1,875,645 | $ (68,040) | $ 1,807,605 | $ 125 | $ 125 | $ 0 | $ 0 | $ 6,740 | $ 6,740 | 1,005,366 | $ 1,005,366 | 788,578 | $ (68,040) | $ 720,538 | 74,836 | $ 74,836 | |
Comprehensive income | |||||||||||||||||
Net income | 205,531 | 205,531 | |||||||||||||||
Other comprehensive income (loss), net of tax | (19,723) | (19,723) | |||||||||||||||
Cash dividends on common stock | (61,230) | (61,230) | |||||||||||||||
Repurchases of common stock (in shares) | (646,102) | ||||||||||||||||
Repurchases of common stock | (25,444) | $ (81) | (25,363) | ||||||||||||||
Share-based compensation (in shares) | 94,510 | ||||||||||||||||
Share-based compensation | 4,762 | $ 12 | 4,750 | ||||||||||||||
Stock issued under employee benefit plans (in shares) | 16,507 | ||||||||||||||||
Stock issued under employee benefit plans | 605 | $ 2 | 603 | ||||||||||||||
Stock issued under dividend reinvestment and stock purchase plan (in shares) | 43,861 | ||||||||||||||||
Stock issued under dividend reinvestment and stock purchase plan | 1,880 | $ 5 | 1,875 | ||||||||||||||
Stock options exercised (in shares) | 17,300 | ||||||||||||||||
Stock options exercised | 198 | $ 2 | 196 | ||||||||||||||
Restricted shares withheld for taxes (in shares) | (38,024) | ||||||||||||||||
Restricted shares withheld for taxes | $ (1,613) | $ (4) | (1,609) | ||||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 125 | 125 | 0 | ||||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 53,410,411 | 53,410,411 | |||||||||||||||
Ending balance at Dec. 31, 2021 | $ 1,912,571 | $ 125 | $ 0 | $ 6,676 | 985,818 | 864,839 | 55,113 | ||||||||||
Comprehensive income | |||||||||||||||||
Net income | 222,089 | 222,089 | |||||||||||||||
Other comprehensive income (loss), net of tax | (294,264) | (294,264) | |||||||||||||||
Cash dividends on preferred stock | (1,406) | (1,406) | |||||||||||||||
Cash dividends on common stock | (72,748) | (72,748) | |||||||||||||||
Issuance of stock related to acquisition (in shares) | 10,000 | 5,588,962 | |||||||||||||||
Issuance of stock related to acquisition | 262,389 | $ 25,000 | $ 699 | 236,690 | |||||||||||||
Share-based compensation (in shares) | 118,046 | ||||||||||||||||
Share-based compensation | 4,652 | $ 15 | 4,637 | ||||||||||||||
Stock issued under employee benefit plans (in shares) | 20,267 | ||||||||||||||||
Stock issued under employee benefit plans | 706 | $ 3 | 703 | ||||||||||||||
Stock issued under dividend reinvestment and stock purchase plan (in shares) | 50,559 | ||||||||||||||||
Stock issued under dividend reinvestment and stock purchase plan | $ 2,056 | $ 6 | 2,050 | ||||||||||||||
Stock options exercised (in shares) | 22,000 | 22,000 | |||||||||||||||
Stock options exercised | $ 358 | $ 3 | 355 | ||||||||||||||
Restricted shares withheld for taxes (in shares) | (39,662) | ||||||||||||||||
Restricted shares withheld for taxes | $ (1,633) | $ (6) | (1,627) | ||||||||||||||
Ending balance (in shares) at Dec. 31, 2022 | 125 | 125 | 10,000 | ||||||||||||||
Ending balance (in shares) at Dec. 31, 2022 | 59,170,583 | 59,170,583 | |||||||||||||||
Ending balance at Dec. 31, 2022 | $ 2,034,770 | $ 125 | $ 25,000 | $ 7,396 | $ 1,228,626 | $ 1,012,774 | $ (239,151) |
CONSOLIDATED STATEMENT OF STO_2
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | |||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2016-13 [Member] | ||
Cash dividends on preferred stock (in dollars per share) | $ 140.64 | ||
Cash dividends on common stock (in dollars per share) | $ 1.25 | $ 1.13 | $ 1.04 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flow From Operating Activities: | |||
Net income | $ 222,089 | $ 205,531 | $ 148,600 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for credit losses - loans | 16,755 | 0 | 58,673 |
Depreciation and amortization | 11,815 | 10,701 | 11,009 |
Change in deferred taxes | 9,065 | 6,983 | (9,735) |
Share-based compensation | 4,652 | 4,762 | 4,600 |
Loans originated for sale | (251,306) | (548,742) | (591,057) |
Proceeds from sales of loans held for sale | 265,723 | 557,744 | 611,945 |
Gains on sales of loans held for sale | (4,373) | (16,223) | (15,817) |
Gains on sales of securities available for sale | (1,194) | (5,674) | (11,895) |
Increase in cash surrender of life insurance | (5,210) | (4,873) | (5,040) |
Gains on life insurance benefits | (5,964) | (2,187) | (100) |
Change in interest receivable | (20,695) | (3,239) | (5,047) |
Change in interest payable | 3,703 | (525) | (3,467) |
Other adjustments | 22,985 | 3,124 | 11,162 |
Net cash provided by operating activities | 268,045 | 207,382 | 203,831 |
Cash Flows from Investing Activities: | |||
Net change in interest-bearing deposits | 348,093 | (81,849) | (274,042) |
Purchases of: | |||
Securities available for sale | (451,203) | (931,368) | (613,117) |
Securities held to maturity | (292,493) | (1,156,621) | (699,095) |
Proceeds from sales of securities available for sale | 606,873 | 181,333 | 231,391 |
Proceeds from maturities of: | |||
Securities available for sale | 201,846 | 279,367 | 322,617 |
Securities held to maturity | 154,689 | 227,255 | 273,229 |
Change in Federal Home Loan Bank stock | 1,899 | 0 | 0 |
Net change in loans | (1,165,548) | (60,581) | (792,986) |
Net cash and cash equivalents received (paid) in acquisition | 137,780 | (2,933) | 0 |
Proceeds from the sale of other real estate owned | 496 | 706 | 8,655 |
Proceeds from life insurance benefits | 24,047 | 8,764 | 601 |
Proceeds from mortgage portfolio loan sale | 0 | 78,159 | 0 |
Other adjustments | (12,920) | (11,678) | (9,278) |
Net cash used in investing activities | (446,441) | (1,469,446) | (1,552,025) |
Net change in : | |||
Demand and savings deposits | (513,496) | 1,556,127 | 2,336,120 |
Certificates of deposit and other time deposits | 232,874 | (185,160) | (814,466) |
Borrowings | 1,818,389 | 45,542 | 573,757 |
Repayment of borrowings | (1,332,889) | (96,204) | (621,548) |
Cash dividends on preferred stock | (1,406) | 0 | 0 |
Cash dividends on common stock | (72,748) | (61,230) | (56,542) |
Stock issued under employee benefit plans | 706 | 605 | 639 |
Stock issued under dividend reinvestment and stock purchase plans | 2,056 | 1,880 | 1,726 |
Stock options exercised | 358 | 198 | 115 |
Repurchase of common stock | 0 | (25,444) | (55,912) |
Net cash provided by financing activities | 133,844 | 1,236,314 | 1,363,889 |
Net Change in Cash and Cash Equivalents | (44,552) | (25,750) | 15,695 |
Cash and Cash Equivalents, January 1 | 167,146 | 192,896 | 177,201 |
Cash and Cash Equivalents, December 31 | 122,594 | 167,146 | 192,896 |
Additional cash flow information: | |||
Interest paid | 80,035 | 36,477 | 69,848 |
Income tax paid | 13,819 | 31,168 | 33,201 |
Loans transferred to other real estate owned | 6,469 | 292 | 813 |
Fixed assets transferred to other real estate owned | 1,490 | 6,384 | 262 |
Non-cash investing activities using trade date accounting | 46,106 | 39,923 | 6,183 |
ROU assets obtained in exchange for new operating lease liabilities | 10,516 | 2,700 | 1,601 |
Fair value of assets acquired | 2,510,576 | 4,041 | 0 |
Cash paid in acquisition | (79,324) | (3,225) | 0 |
Liabilities assumed | 2,168,863 | 816 | 0 |
Common Stock | |||
Additional cash flow information: | |||
Less: common stock and preferred stock issued | 237,389 | 0 | 0 |
Preferred Stock | |||
Additional cash flow information: | |||
Less: common stock and preferred stock issued | $ 25,000 | $ 0 | $ 0 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FINANCIAL STATEMENT PREPARATION The accounting and reporting policies of the Corporation and the Bank, conform to accounting principles generally accepted in the United States of America and reporting practices followed by the banking industry. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses and fair value of financial instruments. Reclassifications have been made to prior financial statements to conform to the current financial statement presentation. The Corporation is a financial holding company whose principal activity is the ownership and management of the Bank and operates in a single significant business segment. The Bank provides full banking services under an Indiana state-charter. Additionally, the Bank operates as First Merchants Private Wealth Advisors (a division of First Merchants Bank). The Bank generates commercial, mortgage, and consumer loans and receives deposits from customers located primarily in central and northern Indiana, northeast Illinois, central Ohio and southeast Michigan counties. The Bank’s loans are generally secured by specific items of collateral, including real property, consumer assets and business assets. A brief description of current accounting practices and current valuation methodologies are presented below. CONSOLIDATION The consolidation of the Corporation's financial statements include the accounts of the Corporation and all its subsidiaries, after elimination of all material intercompany transactions. BUSINESS COMBINATIONS Business combinations are accounted for under the acquisition method of accounting. Under the acquisition method, assets and liabilities of the business acquired are recorded at their estimated fair values as of the date of acquisition with any excess of the cost of the acquisition over the fair value of the net tangible and intangible assets acquired recorded as goodwill. Results of operations of the acquired business are included in the income statement from the date of acquisition. Details of the Corporation's acquisitions are included in NOTE 2. ACQUISITIONS of these Notes to Consolidated Financial Statements. CASH AND CASH EQUIVALENTS Cash on hand, cash items in process of collection and non-interest bearing cash held at various banks are included in cash and cash equivalents and have a maturity of less than three months. The Corporation maintains deposits with other financial institutions in amounts that exceed federal deposit insurance coverage. Management regularly evaluates the credit risk associated with the counterparties to these transactions and believes there is not significant credit risk on cash and cash equivalents. INTEREST-BEARING DEPOSITS Interest-bearing cash held at various banks and the Federal Reserve Bank and federal funds sold are included in interest-bearing deposits and have a maturity of less than three months. The Corporation maintains deposits with other financial institutions in amounts that exceed federal deposit insurance coverage. Management regularly evaluates the credit risk associated with the counterparties to these transactions and believes there is not significant credit risk on interest-bearing deposits. INVESTMENT SECURITIES Held to maturity securities are carried at amortized cost when the Corporation has the positive intent and ability to hold them until maturity. Available for sale securities are recorded at fair value on a recurring basis with the unrealized gains and losses, net of applicable income taxes, recorded in other comprehensive income (loss). Realized gains and losses are recorded in earnings and the prior fair value adjustments are reclassified within stockholders' equity. Gains and losses on sales of securities are determined on the specific-identification method. Amortization of premiums and accretion of discounts are amortized to their earliest call date and are recorded as interest income from securities. Details of the Corporation's investment securities portfolio are included in NOTE 4. INVESTMENT SECURITIES of these Notes to Consolidated Financial Statements. ALLOWANCE FOR CREDIT LOSSES ON INVESTMENT SECURITIES AVAILABLE FOR SALE For investment securities available for sale in an unrealized loss position, the Corporation first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For investment securities available for sale that do not meet the aforementioned criteria, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Corporation considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded, limited by the amount that the fair value is less than the amortized cost basis. Unrealized losses that have not been recorded through an allowance for credit losses are recognized in other comprehensive income (loss). Adjustments to the allowance for credit losses are reported in the income statement as a component of the provision for credit loss. The Corporation has made the accounting policy election to exclude accrued interest receivable on investment securities available for sale from the estimate of credit losses. Investment securities available for sale are charged off against the allowance or, in the absence of any allowance, written down through the income statement when deemed uncollectible or when either of the aforementioned criteria regarding intent or requirement to sell is met. The Corporation did not record an allowance for credit losses on its investment securities available for sale as the unrealized losses were attributable to changes in interest rates, not credit quality. Details of the Corporation's allowance for credit losses on investment securities available for sale are included in NOTE 4. INVESTMENT SECURITIES of these Notes to Consolidated Financial Statements. ALLOWANCE FOR CREDIT LOSSES ON INVESTMENT SECURITIES HELD TO MATURITY ("ACL - INVESTMENTS") The ACL - Investments is a contra asset-valuation account that is deducted from the amortized cost basis of investment securities held to maturity to present the net amount expected to be collected. Investment securities held to maturity are charged off against the ACL - Investments when deemed uncollectible. Adjustments to the ACL - Investments are reported in the income statement as a component of the provision for credit loss. The Corporation measures expected credit losses on held to maturity debt securities on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The Corporation has made the accounting policy election to exclude accrued interest receivable on investment securities held to maturity from the estimate of credit losses. With regard to U.S. Government-sponsored agency and mortgage-backed securities, all these securities are issued by a U.S. government-sponsored entity and have an implicit or explicit government guarantee. With regard to securities issued by states and municipalities and other investment securities held to maturity, management considers (1) issuer bond ratings, (2) the financial condition of the issuer, (3) historical loss rates for given bond ratings, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. Historical loss rates associated with securities having similar grades as those in the Corporation's portfolio have generally not been significant. An allowance for credit losses of $245,000 was recorded on state and municipal securities classified as held to maturity based on applying the long-term historical credit loss rate, as published by Moody’s, for similarly rated securities. Details of the Corporation's ACL - Investments are included in NOTE 4. INVESTMENT SECURITIES of these Notes to Consolidated Financial Statements. LOANS HELD FOR SALE Loans originated and with an intent to sell are classified as held for sale and are carried at the principal amount outstanding. The carrying amount approximates fair value due to the short duration between origination and the date of sale. LOANS The Corporation’s loan portfolio is carried at the principal amount outstanding, net of unearned income and principal charge-offs. Loan origination fees, net of direct loan origination costs, and commitment fees are deferred and amortized as an adjustment to yield over the life of the loan, or over the commitment period, as applicable. Interest income is accrued on the principal balances of loans. The accrual of interest is discontinued on a loan when, in management’s opinion, the borrower may be unable to meet payments as they become due. When the interest accrual is discontinued, all unpaid accrued interest is reversed against earnings when considered uncollectible. Interest income accrued in the prior year, if any, is charged to the allowance for credit losses. Interest income is subsequently recognized only to the extent cash payments are received and the loan is returned to accruing status. The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) established the Paycheck Protection Program (“PPP”), which is administered by the Small Business Administration (“SBA”), to fund payroll and operational costs of eligible businesses, organizations and self-employed persons during the pandemic. The Bank actively participated in assisting its customers with PPP funding during all phases of the program. The vast majority of the Bank’s PPP loans made in 2020 have two-year maturities, while the loans made in 2021 have five-year maturities. Loans under the program earn interest at a fixed rate of 1 percent. As of December 31, 2022, the Corporation had $4.7 million of PPP loans compared to the December 31, 2021 balance of $106.6 million. The Corporation will continue to monitor legislative, regulatory, and supervisory developments related to the PPP. However, it anticipates that the majority of the Bank’s remaining PPP loans will be forgiven by the SBA in accordance with the terms of the program. Loan commitments and letters-of-credit generally have short-term, variable-rate features and contain clauses which limit the exposure to changes in customer credit quality. Accordingly, their carrying values, which are immaterial at the respective balance sheet dates, are reasonable estimates of fair value. Details of the Corporation's loan portfolio are included in NOTE 5. LOANS AND ALLOWANCE FOR CREDIT LOSSES of these Notes to Consolidated Financial Statements. PURCHASED CREDIT DETERIORATED ("PCD") LOANS The Corporation accounts for its acquisitions under ASC Topic 805, Business Combinations, which requires the use of the acquisition method of accounting. All identifiable assets acquired, including loans, are recorded at fair value. The fair value of acquired loans at the time of acquisition is based on a variety of factors including discounted expected cash flows, adjusted for estimated prepayments and credit losses. In accordance with ASC 326, Financial Instruments – Credit Losses, the fair value adjustment is recorded as a premium or discount to the unpaid principal balance of each acquired loan. Acquired loans are classified into two categories: loans with more than insignificant credit deterioration (“PCD”) since origination, and loans with insignificant credit deterioration (“non-PCD”) since origination. Factors considered when determining whether a loan has a more-than-insignificant deterioration since origination include, but are not limited to, the materiality of the credit, risk grade, delinquency, nonperforming status, bankruptcies, and other qualitative factors. The net premium or discount on PCD loans is adjusted by the Corporation’s allowance for credit losses on loans, which is recorded at the time of acquisition. The remaining net premium or discount is accreted or amortized into interest income over the remaining life of the loan using an effective yield method. The net premium or discount on non-PCD loans, that includes credit and non-credit components, is accreted or amortized into interest income over the remaining life of the loan using an effective yield method. Additionally, non-PCD loans have an allowance for credit loss established on acquisition date, which is recognized in the current period provision for credit loss expense. In the event of prepayment, unamortized discounts or premiums on PCD and non-PCD loans are recognized in interest income. ALLOWANCE FOR CREDIT LOSSES - LOANS ("ACL - Loans") The ACL - Loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on loans over the contractual term. Loans are charged off against the allowance when the uncollectibility of the loan is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged off and expected to be charged off. Adjustments to the ACL - Loans are reported in the income statement as a component of provision for credit loss. The Corporation has made the accounting policy election to exclude accrued interest receivable on loans from the estimate of credit losses. Further information regarding the policies and methodology used to estimate the ACL - Loans is detailed in NOTE 5. LOANS AND ALLOWANCE FOR CREDIT LOSSES of these Notes to Consolidated Financial Statements. PENSION The Corporation has defined-benefit pension plans, including non-qualified plans for certain employees, former employees and former non-employee directors. In 2005, the Board of Directors of the Corporation approved the curtailment of the accumulation of defined benefits for future services provided by certain participants in the First Merchants Corporation Retirement Plan. No additional pension benefits have been earned by any employees who had not met certain requirements as of March 1, 2005. The benefits are based primarily on years of service and employees’ pay near retirement. The Corporation's accounting policies related to pensions and other post retirement benefits reflect the guidance in ASC 715, Compensation – Retirement Benefits. The Corporation does not consolidate the assets and liabilities associated with the pension plan. Instead, the Corporation recognizes the funded status of the plan in the Consolidated Balance Sheets. The measurement of the funded status and the annual pension expense involves actuarial and economic assumptions. Various statistical and other factors, which attempt to anticipate future events, are used in calculating the expense and liabilities related to the plans. Key factors include assumptions on the expected rates of return on plan assets, discount rates and health care costs and trends. The Corporation considers market conditions, including changes in investment returns and interest rates in making these assumptions. The primary assumptions used in determining the Corporation’s pension and post retirement benefit obligations and related expenses are presented in NOTE 18. PENSION AND OTHER POST RETIREMENT BENEFIT PLANS of these Notes to Consolidated Financial Statements. PREMISES AND EQUIPMENT Premises and equipment is carried at cost net of accumulated depreciation. Depreciation is computed using the straight-line and declining balance methods based on the estimated useful lives of the assets ranging from three LEASES The Corporation leases certain land and premises from third parties and all are classified as operating leases. Operating leases are included in Other Assets and Other Liabilities on the Corporation's Consolidated Balance Sheets and lease expense for lease payments is recognized on a straight-line basis over the lease term. Right of Use ("ROU") assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the term. An ROU asset represents the right to use the underlying asset for the lease term and also includes any direct costs and payments made prior to lease commencement and excludes lease incentives. When an implicit rate is not available, an incremental borrowing rate based on the information available at commencement date is used in determining the present value of the lease payments. A lease term may include an option to extend or terminate the lease when it is reasonably certain the option will be exercised. Short-term leases of twelve months or less are excluded from accounting guidance; as a result, the lease payments are recognized on a straight-line basis over the lease term and the leases are not reflected on the Corporation's Consolidated Balance Sheets. Renewal and termination options are considered when determining short-term leases. Leases are accounted for at the individual level. Details of the Corporation's leases are included in NOTE 9. LEASES of these Notes to Consolidated Financial Statements. FEDERAL HOME LOAN BANK STOCK ("FHLB") FHLB stock is a required investment for institutions that are members of the FHLB. The Bank is a member of the FHLB of Indianapolis. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost and is classified as a restricted security. Both cash and stock dividends are reported as income. INTANGIBLE ASSETS Intangible assets are acquired assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or because the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset or liability. Intangible assets with definite useful lives are subject to amortization and relate to core deposits, customer relationships and non-compete agreements. These intangible assets are being amortized on both the straight-line and accelerated basis over two GOODWILL Goodwill is maintained by applying the provisions of ASC 350, Intangibles – Goodwill and Other . For acquisitions, assets acquired, including identified intangible assets, and the liabilities assumed are required to be recorded at their fair value. These often involve estimates based on third party valuations, such as appraisals, or internal valuations based on discounted cash flow analysis or other valuation techniques that may include estimates of attrition, inflation, asset growth rates, or other relevant factors. In addition, the determination of the useful lives over which the intangible asset will be amortized is subjective. Under ASC 350, the Corporation is required to evaluate goodwill for impairment on an annual basis, as well as on an interim basis, if events or changes indicate that the asset may be impaired, indicating that the carrying value may not be recoverable. The Corporation completed its most recent annual goodwill impairment test as of October 1, 2022 and concluded, based on current events and circumstances goodwill is not impaired. Details of the Corporation's goodwill are included in NOTE 7. GOODWILL of these Notes to Consolidated Financial Statements. BANK OWNED LIFE INSURANCE ("BOLI") BOLI policies have been purchased, as well as obtained through acquisitions, on certain current and former employees and directors of the Corporation to offset a portion of the employee benefit costs. The Corporation records the life insurance at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or amounts due that are probable at settlement. Changes in cash surrender values and death benefits received in excess of cash surrender values are reported in non-interest income. A corporate policy is in place with defined thresholds that limit the amount of credit, interest rate and liquidity risk inherent in a BOLI portfolio. The Corporation actively monitors the overall portfolio performance along with the credit quality of the insurance carriers and the credit quality and yield of the underlying investments. OTHER REAL ESTATE OWNED ("OREO") OREO consists of assets acquired through, or in lieu of, loan foreclosure and are held for sale. They are initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation are included in other real estate owned and foreclosure expenses. DERIVATIVE INSTRUMENTS Derivative instruments, which are recorded as assets or liabilities in the Consolidated Balance Sheets, are carried at fair value of the derivatives and reflects the estimated amounts that would have been received to terminate these contracts at the reporting date based upon pricing or valuation models applied to current market information. As part of the asset/liability management program, the Corporation will utilize, from time to time, interest rate floors, caps or swaps to reduce its sensitivity to interest rate fluctuations. Changes in the fair values of derivatives are reported in the consolidated statements of operations or AOCI depending on the use of the derivative and whether the instrument qualifies for hedge accounting. The key criterion for hedge accounting is that the hedged relationship must be highly effective in achieving offsetting changes in those cash flows that are attributable to the hedged risk, both at inception of the hedge and on an ongoing basis. Derivatives that qualify for the hedge accounting treatment are designated as either: (1) a hedge of the fair value of the recognized asset or liability, or of an unrecognized firm commitment (a fair value hedge); or (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (a cash flow hedge). To date, the Corporation has only entered into a cash flow hedge. For cash flow hedges, changes in the fair values of the derivative instruments are reported in AOCI to the extent the hedge is effective. The gains and losses on derivative instruments that are reported in AOCI are reflected in the Consolidated Statements of Income in the periods in which the results of operations are impacted by the variability of the cash flows of the hedged item. Generally, net interest income is increased or decreased by amounts receivable or payable with respect to the derivatives, which qualify for hedge accounting. At inception of the hedge, the Corporation establishes the method it uses for assessing the effectiveness of the hedging derivative and the measurement approach for determining the ineffective aspect of the hedge. The ineffective portion of the hedge, if any, is recognized in the Consolidated Statements of Income. The Corporation excludes the time value expiration of the hedge when measuring ineffectiveness. The Corporation offers interest rate derivative products (e.g. interest rate swaps) to certain of its high-quality commercial borrowers. This product allows customers to enter into an agreement with the Corporation to swap their variable rate loan to a fixed rate. These derivative products are designed to reduce, eliminate or modify the risk of changes in the borrower’s interest rate or market price risk. The extension of credit incurred through the execution of these derivative products is subject to the same approvals and rigorous underwriting standards as the related traditional credit product. The Corporation limits its risk exposure to these products by entering into a mirror-image, offsetting swap agreement with a separate, well-capitalized and rated counterparty previously approved by the Credit and Asset Liability Committee. By using these interest rate swap arrangements, the Corporation is also better insulated from the interest rate risk associated with underwriting fixed-rate loans. These derivative contracts are not designated against specific assets or liabilities under ASC 815, Derivatives and Hedging , and, therefore, do not qualify for hedge accounting. The derivatives are recorded on the balance sheet at fair value and changes in fair value of both the customer and the offsetting swap agreements are recorded (and essentially offset) in non-interest income. The fair value of the derivative instruments incorporates a consideration of credit risk (in accordance with ASC 820, Fair Value Measurements and Disclosures ), resulting in some volatility in earnings each period. Details of the Corporation's derivative instruments are included in NOTE 12. DERIVATIVE FINANCIAL INSTRUMENTS of these Notes to Consolidated Financial Statements. SECURITIES SOLD UNDER REPURCHASE AGREEMENTS Securities sold under repurchase agreements represent securities the Corporation routinely sells to certain treasury management customers and then repurchases these securities the next day. Securities sold under repurchase agreements are reflected as secured borrowings in the Corporation's Consolidated Balance Sheets at the amount of cash received in connection with each transaction. Details of the Corporation's repurchase agreements are included in NOTE 11. BORROWINGS of these Notes to Consolidated Financial Statements. ALLOWANCE FOR CREDIT LOSSES - OFF-BALANCE SHEET CREDIT EXPOSURES The allowance for credit losses on off-balance sheet credit exposures is a liability account representing expected credit losses over the contractual period for which the Corporation is exposed to credit risk resulting from a contractual obligation to extend credit. No allowance is recognized if the Corporation has the unconditional right to cancel the obligation. Off-balance sheet credit exposures primarily consist of amounts available under outstanding lines of credit and letters of credit. For the period of exposure, the estimate of expected credit losses considers both the likelihood that funding will occur and the amount expected to be funded over the estimated remaining life of the commitment or other off-balance sheet exposure. The likelihood and expected amount of funding are based on historical utilization rates. The amount of the allowance represents management’s best estimate of expected credit losses on commitments expected to be funded over the contractual life of the commitment. The allowance for off-balance sheet credit exposures is adjusted through the income statement as a component of provision for credit loss. Further information regarding the policies and methodology used to estimate the allowance for credit losses on off-balance sheet credit exposures is detailed in NOTE 5. LOANS AND ALLOWANCE FOR CREDIT LOSSES of these Notes to Consolidated Financial Statements. REVENUE RECOGNITION Revenue recognition guidance establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of the Corporation's revenue-generating transactions are not subject to ASU 2014-09, including revenue generated from financial instruments, such as loans, letters of credit, derivatives and investment securities, as well as revenue related to mortgage servicing activities, as these activities are subject to other GAAP discussed elsewhere within the disclosures. The Corporation has evaluated the nature of its contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the Consolidated Statements of Income was not necessary. Descriptions of revenue-generating activities that are within the scope of ASU 2014-09, which are presented in our income statements are as follows: Service charges on deposit accounts: The Corporation earns fees from its deposit customers for transaction-based, account maintenance and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering and ACH fees, are recognized at the time the transaction is executed, which is the point in time the Corporation fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are earned monthly, representing the period which the Corporation satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer's account balance. Fiduciary activities : This represents monthly fees due from wealth management customers as consideration for managing the customers' assets. Wealth management and trust services include custody of assets, investment management, fees for trust services and similar fiduciary activities. These fees are primarily earned over time as the Corporation provides the contracted monthly or quarterly services and are generally assessed based on the market value of assets under management at month-end. Fees that are transaction-based are recognized at the point in time that the transaction is executed. Investment Brokerage Fees : The Corporation earns fees from investment brokerage services provided to its customers by a third-party service provider. The Corporation receives commissions from the third-party provider on a monthly basis based upon customer activity for the month. The fees are paid to us by the third party on a monthly basis and are recognized when received. Interchange income : The Corporation earns interchange fees from debit and credit cardholder transactions conducted through the Visa and MasterCard payment networks. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized concurrent with the transaction processing services provided to the cardholder. Gains (Losses) on Sales of OREO : The Corporation records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Corporation finances the sale of OREO to the buyer, the Corporation assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Corporation adjusts the transaction price and related gain (loss) on sale if a significant financing component is present. TRANSFERS OF FINANCIAL ASSETS Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered, or in the case of a loan participation, a portion of the asset has been surrendered and meets the definition of a "participating interest." |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | ACQUISITIONS Level One Bancorp, Inc. On April 1, 2022, the Corporation acquired 100 percent of Level One Bancorp, Inc. ("Level One"). Level One, a Michigan corporation, merged with and into the Corporation (the "Merger"), whereupon the separate corporate existence of Level One ceased and the Corporation survived. Immediately following the Merger, Level One's wholly owned subsidiary, Level One Bank, merged with and into the Bank, with the Bank as the surviving bank. Level One was headquartered in Farmington Hills, Michigan and had 17 banking centers serving the Michigan market. Pursuant to the merger agreement, each common shareholder of Level One received, for each outstanding share of Level One common stock held, (a) a 0.7167 share of the Corporation's common stock, and (b) a cash payment of $10.17. The Corporation issued 5.6 million shares of the Corporation's common stock and paid $79.3 million in cash, in exchange for all outstanding shares of Level One common stock. Additionally, the Corporation issued 10,000 shares of newly created 7.5 percent non-cumulative perpetual preferred stock, with a liquidation preference of $2,500 per share, in exchange for the outstanding Level One Series B preferred stock. Likewise, each outstanding Level One depositary share representing a 1/100th interest in a share of the Level One Series B preferred stock was converted into a depositary share of the Corporation representing a 1/100th interest in a share of its newly issued preferred stock (Nasdaq: FRMEP). The Corporation engaged in this transaction with the expectation that it would be accretive to income and add to the existing market area in Michigan that has a demographic profile consistent with many of the current Midwest markets served by the Bank. Goodwill resulted from this transaction due to the expected synergies and economies of scale. Under the acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on preliminary valuations of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on assumptions that are subject to change based on the timing of the transaction, the purchase price for the Level One acquisition is detailed in the following table. If, prior to the end of the one-year measurement period for finalizing the purchase price allocation, information becomes available about facts and circumstances that existed as of the acquisition date, which would indicate adjustments are required to the purchase price allocation, such adjustments will be included in the purchase price allocation retrospectively. Fair Value Cash and due from banks $ 217,104 Investment securities available for sale 370,071 Investment securities held to maturity 587 Loans held for sale 7,951 Loans 1,627,423 Allowance for credit losses - loans (16,599) Premises and equipment 11,848 Federal Home Loan Bank stock 11,688 Interest receivable 7,188 Cash surrender value of life insurance 30,143 Tax asset, deferred and receivable 16,223 Other assets 41,690 Deposits (1,930,790) Securities sold under repurchase agreements (1,521) Federal Home Loan Bank advances (160,043) Subordinated debentures (32,631) Interest payable (1,065) Other liabilities (42,813) Net tangible assets acquired 156,454 Other intangibles 18,642 Goodwill 166,617 Purchase price $ 341,713 The Corporation performed an evaluation of the loan portfolio in which there were loans that, at acquisition, had more than an insignificant amount of credit quality deterioration and were classified as purchased credit deteriorated ("PCD"). Details of the PCD loans are included in NOTE 5. LOANS AND ALLOWANCE FOR CREDIT LOSSES of these Notes to Consolidated Financial Statements. Of the total purchase price, $18.6 million has been allocated to other intangible assets. Approximately $17.2 million was allocated to a core deposit intangible, which will be amortized over its estimated life of 10 years. Approximately $1.4 million was allocated to a non-compete intangible, which will be amortized over its estimated life of 2 years. The remaining purchase price has been allocated to goodwill, which is not deductible for tax purposes. Hoosier Trust Company On April 1, 2021, the Bank acquired 100 percent of Hoosier Trust Company ("Hoosier") through a merger of Hoosier with and into the Bank. The consideration paid to shareholders of Hoosier at closing was $3,225,000 in cash. Prior to the acquisition, Hoosier was an Indiana corporate trust company, headquartered in Indianapolis, Indiana, with approximately $290 million in assets under management. Hoosier’s sole office is now being operated by the Bank as a limited service trust office. Under the acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair value on the date of the acquisition. Based on the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on assumptions that are subject to change based on the timing of the transaction, the purchase price for the Hoosier acquisition is detailed in the following table. Fair Value Cash and due from banks $ 292 Other assets 35 Other liabilities (816) Net tangible assets acquired (489) Customer relationship intangible 2,247 Goodwill 1,467 Purchase price $ 3,225 Of the total purchase price, $2,247,000 was allocated to a customer relationship intangible, which will be amortized over its estimated life of 10 years. The remaining purchase price was allocated to goodwill, which is deductible for tax purposes. Pro Forma Financial Information The results of operations of Level One have been included in the Corporation's consolidated financial statements since the acquisition date. The following schedule includes pro forma results for the year ended December 31, 2022 and 2021 as if the Level One acquisition occurred as of the beginning of the periods presented. Pro forma financial information of the Hoosier acquisition is not included in the table below as it is deemed immaterial. Year Ended Year Ended Total revenue (net interest income plus other income) $ 654,313 $ 621,946 Net Income $ 221,631 $ 237,031 Net income available to common shareholders $ 219,756 $ 235,156 Earnings per share: Basic $ 3.72 $ 3.96 Diluted $ 3.70 $ 3.95 The pro forma information includes adjustments for interest income on loans and investment securities, interest expense on deposits and borrowings, premises expense for the banking centers acquired and amortization of intangibles arising from the transaction and the related income tax effects. The pro forma information includes operating revenue of $56.9 million from Level One since the date of acquisition, and $12.5 million, net of tax, of acquisition-related expenses. The pro forma information is presented for information purposes only and is not indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of January 1, 2022 and 2021, nor is it intended to be a projection of future results. |
Cash and Cash Equivalents and I
Cash and Cash Equivalents and Interest-bearing Deposits | 12 Months Ended |
Dec. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents and Interest-bearing Deposits | CASH AND CASH EQUIVALENTS AND INTEREST-BEARING DEPOSITS At December 31, 2022, the Corporation’s non-interest bearing deposits, included in cash and cash equivalents, and interest-bearing deposits held at other institutions exceeded the $250,000 federally insured limits by approximately $54,029,000. Each correspondent bank’s financial performance and market rating are reviewed on a quarterly basis to ensure the Corporation has deposits only at institutions providing minimal risk for those exceeding the federally insured limits. Additionally, the Corporation had approximately $110,502,000 at the Federal Home Loan Bank and Federal Reserve Bank, which are government-sponsored entities not insured by the FDIC. The Corporation has historically been required to maintain reserve funds in cash and/or on deposit with the Federal Reserve Bank. However, the Federal Reserve announced on March 15, 2020 that in order to support the flow of credit to households and businesses during the COVID-19 pandemic, reserve requirement ratios would move to zero effective March 26, 2020. The reserve requirement ratios remained at zero as of December 31, 2022. |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | INVESTMENT SECURITIES The following table summarizes the amortized cost, gross unrealized gains and losses and approximate fair value of investment securities available for sale as of December 31, 2022 and December 31, 2021. Amortized Gross Unrealized Gross Unrealized Fair Available for sale at December 31, 2022 U.S. Treasury $ 2,501 $ — $ 42 $ 2,459 U.S. Government-sponsored agency securities 119,154 — 17,192 101,962 State and municipal 1,530,048 438 178,726 1,351,760 U.S. Government-sponsored mortgage-backed securities 608,630 1 100,358 508,273 Corporate obligations 13,014 — 807 12,207 Total available for sale $ 2,273,347 $ 439 $ 297,125 $ 1,976,661 Amortized Gross Unrealized Gross Unrealized Fair Available for sale at December 31, 2021 U.S. Treasury $ 1,000 $ — $ 1 $ 999 U.S. Government-sponsored agency securities 96,244 437 1,545 95,136 State and municipal 1,495,696 81,734 898 1,576,532 U.S. Government-sponsored mortgage-backed securities 671,684 7,109 11,188 667,605 Corporate obligations 4,031 256 8 4,279 Total available for sale $ 2,268,655 $ 89,536 $ 13,640 $ 2,344,551 The following table summarizes the amortized cost, gross unrealized gains and losses, approximate fair value and allowance for credit losses on investment securities held to maturity as of December 31, 2022 and December 31, 2021. Amortized Allowance for Credit Losses Net Carrying Amount Gross Unrealized Gross Unrealized Fair Held to maturity at December 31, 2022 U.S. Government-sponsored agency securities $ 392,246 $ — $ 392,246 $ — $ 69,147 $ 323,099 State and municipal 1,117,552 245 1,117,307 647 197,064 921,135 U.S. Government-sponsored mortgage-backed securities 776,074 — 776,074 — 113,915 662,159 Foreign investment 1,500 — 1,500 — 28 1,472 Total held to maturity $ 2,287,372 $ 245 $ 2,287,127 $ 647 $ 380,154 $ 1,907,865 Amortized Allowance for Credit Losses Net Carrying Amount Gross Unrealized Gross Unrealized Fair Held to maturity at December 31, 2021 U.S. Government-sponsored agency securities $ 371,457 $ — $ 371,457 $ 226 $ 7,268 $ 364,415 State and municipal 1,057,301 245 1,057,056 29,593 2,170 1,084,724 U.S. Government-sponsored mortgage-backed securities 749,789 — 749,789 7,957 5,881 751,865 Foreign investment 1,500 — 1,500 — 1 1,499 Total held to maturity $ 2,180,047 $ 245 $ 2,179,802 $ 37,776 $ 15,320 $ 2,202,503 Accrued interest on investment securities available for sale and held to maturity of $29.5 million and $26.8 million is included in the Interest Receivable line on the Corporation's Consolidated Balance Sheets as of December 31, 2022 and December 31, 2021, respectively. The total amount of accrued interest is excluded from the amortized cost of available for sale and held to maturity securities presented above. In determining the allowance for credit losses on investment securities available for sale that are in an unrealized loss position, the Corporation first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through the income statement. For investment securities available for sale that do not meet the aforementioned criteria, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Corporation considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Unrealized losses that have not been recorded through an allowance for credit losses is recognized in other comprehensive income. Adjustments to the allowance are reported in the income statement as a component of the provision for credit loss. The Corporation has made the accounting policy election to exclude accrued interest receivable on investment securities available for sale from the estimate of credit losses. Investment securities available for sale are charged off against the allowance or, in the absence of any allowance, written down through the income statement when deemed uncollectible or when either of the aforementioned criteria regarding intent or requirement to sell is met. The Corporation did not record an allowance for credit losses on its investment securities available for sale as the unrealized losses were attributable to changes in interest rates, not credit quality. The allowance for credit losses on investment securities held to maturity is a contra asset-valuation account that is deducted from the amortized cost basis of investment securities held to maturity to present the net amount expected to be collected. Investment securities held to maturity are charged off against the allowance when deemed uncollectible. Adjustments to the allowance are reported in the income statement as a component of the provision for credit loss. The Corporation measures expected credit losses on investment securities held to maturity on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The Corporation has made the accounting policy election to exclude accrued interest receivable on investment securities held to maturity from the estimate of credit losses. With regard to U.S. Government-sponsored agency and mortgage-backed securities, all these securities are issued by a U.S. government-sponsored entity and have an implicit or explicit government guarantee; therefore, no allowance for credit losses has been recorded for these securities. With regard to securities issued by states and municipalities and other investment securities held to maturity, management considers (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. Historical loss rates associated with securities having similar grades as those in the Corporation's portfolio have been insignificant. Furthermore, as of December 31, 2022, there were no past due principal and interest payments associated with these securities. At CECL adoption, an allowance for credit losses of $245,000 was recorded on the state and municipal securities classified as held to maturity based on applying the long-term historical credit loss rate, as published by Moody’s, for similarly rated securities. The balance of the allowance for credit losses on investment securities remained unchanged at $245,000 as of December 31, 2022. On a quarterly basis, the Corporation monitors the credit quality of investment securities held to maturity through the use of credit ratings. The following table summarizes the amortized cost of investment securities held to maturity at December 31, 2022, aggregated by credit quality indicator. Held to Maturity State and municipal Other Total Credit Rating: Aaa $ 101,076 $ 70,583 $ 171,659 Aa1 162,728 — 162,728 Aa2 185,394 — 185,394 Aa3 135,227 — 135,227 A1 131,417 — 131,417 A2 10,168 — 10,168 A3 10,117 — 10,117 Non-rated 381,425 1,099,237 1,480,662 Total $ 1,117,552 $ 1,169,820 $ 2,287,372 The following tables summarize, as of December 31, 2022 and December 31, 2021, investment securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and length of time in a continuous unrealized loss position. Less than 12 Months 12 Months or Longer Total Fair Gross Fair Gross Fair Gross Investment securities available for sale at December 31, 2022 U.S. Treasury $ 2,459 $ 42 $ — $ — $ 2,459 $ 42 U.S. Government-sponsored agency securities 48,940 4,973 53,022 12,219 101,962 17,192 State and municipal 1,177,104 150,096 108,652 28,630 1,285,756 178,726 U.S. Government-sponsored mortgage-backed securities 182,700 16,910 325,455 83,448 508,155 100,358 Corporate obligations 12,176 807 — — 12,176 807 Total investment securities available for sale $ 1,423,379 $ 172,828 $ 487,129 $ 124,297 $ 1,910,508 $ 297,125 Less than 12 Months 12 Months or Longer Total Fair Gross Fair Gross Fair Gross Investment securities available for sale at December 31, 2021 U.S. Treasury $ 999 $ 1 $ — $ — $ 999 $ 1 U.S. Government-sponsored agency securities 68,524 1,545 — — 68,524 1,545 State and municipal 138,187 894 505 4 138,692 898 U.S. Government-sponsored mortgage-backed securities 427,687 10,791 8,324 397 436,011 11,188 Corporate obligations 992 8 — — 992 8 Total investment securities available for sale $ 636,389 $ 13,239 $ 8,829 $ 401 $ 645,218 $ 13,640 The following table summarizes investment securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and the number of securities in the portfolio for the periods indicated. Gross Number of Securities Investment securities available for sale at December 31, 2022 U.S. Treasury $ 42 5 U.S. Government-sponsored agency securities 17,192 16 State and municipal 178,726 946 U.S. Government-sponsored mortgage-backed securities 100,358 177 Corporate obligations 807 10 Total investment securities available for sale $ 297,125 1,154 Gross Number of Securities Investment securities available for sale at December 31, 2021 U.S. Treasury $ 1 1 U.S. Government-sponsored agency securities 1,545 8 State and municipal 898 103 U.S. Government-sponsored mortgage-backed securities 11,188 48 Corporate obligations 8 1 Total investment securities available for sale $ 13,640 161 The unrealized losses in the Corporation’s investment portfolio were the result of changes in interest rates and not credit quality. As a result, the Corporation expects to recover the amortized cost basis over the term of the securities. The Corporation does not intend to sell the investments and it is not more likely than not that the Corporation will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. Certain investment securities available for sale are reported in the financial statements at an amount less than their historical cost as indicated in the table below. December 31, 2022 December 31, 2021 Investments available for sale reported at less than historical cost: Historical cost $ 2,207,633 $ 658,858 Fair value 1,910,508 645,218 Gross unrealized losses $ 297,125 $ 13,640 Percent of the Corporation's investments available for sale 96.7 % 27.5 % In determining the fair value of the investment securities portfolio, the Corporation utilizes a third party for portfolio accounting services, including market value input, for those securities classified as Level 1 and Level 2 in the fair value hierarchy. The Corporation has obtained an understanding of what inputs are being used by the vendor in pricing the portfolio and how the vendor classified these securities based upon these inputs. From these discussions, the Corporation’s management is comfortable that the classifications are proper. The Corporation has gained trust in the data for two reasons: (a) independent spot testing of the data is conducted by the Corporation through obtaining market quotes from various brokers on a periodic basis; and (b) actual gains or loss resulting from the sale of certain securities has proven the data to be accurate over time. Fair value of securities classified as Level 3 in the valuation hierarchy was determined using a discounted cash flow model that incorporated market estimates of interest rates and volatility in markets that have not been active. The amortized cost and fair value of investment securities available for sale and held to maturity at December 31, 2022 and December 31, 2021, by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity are shown separately. Available for Sale Held to Maturity Amortized Cost Fair Value Amortized Cost Fair Value Maturity Distribution at December 31, 2022 Due in one year or less $ 2,822 $ 2,809 $ 13,697 $ 13,749 Due after one through five years 11,694 11,265 80,697 76,453 Due after five through ten years 169,729 161,211 147,078 135,027 Due after ten years 1,480,472 1,293,103 1,269,826 1,020,477 1,664,717 1,468,388 1,511,298 1,245,706 U.S. Government-sponsored mortgage-backed securities 608,630 508,273 776,074 662,159 Total Investment Securities $ 2,273,347 $ 1,976,661 $ 2,287,372 $ 1,907,865 Available for Sale Held to Maturity Amortized Cost Fair Value Amortized Cost Fair Value Maturity Distribution at December 31, 2021 Due in one year or less $ 6,954 $ 6,965 $ 6,971 $ 6,995 Due after one through five years 5,097 5,309 30,272 31,946 Due after five through ten years 120,460 126,816 177,203 180,129 Due after ten years 1,464,460 1,537,856 1,215,812 1,231,568 1,596,971 1,676,946 1,430,258 1,450,638 U.S. Government-sponsored mortgage-backed securities 671,684 667,605 749,789 751,865 Total Investment Securities $ 2,268,655 $ 2,344,551 $ 2,180,047 $ 2,202,503 Securities with a carrying value of approximately $941.3 million and $873.2 million were pledged at December 31, 2022 and 2021, respectively, to secure certain deposits and securities sold under repurchase agreements, and for other purposes as permitted or required by law. The book value of securities sold under agreements to repurchase amounted to $196.7 million at December 31, 2022 and $175.1 million at December 31, 2021. Gross gains and losses on the sales and redemptions of available for sale securities for the years indicated are shown below. 2022 2021 2020 Sales and redemptions of investment securities available for sale: Gross gains $ 1,264 $ 6,502 $ 12,097 Gross losses 70 828 202 Net gains of sales and redemptions of investment securities available for sale $ 1,194 $ 5,674 $ 11,895 |
Loans and Allowance for Credit
Loans and Allowance for Credit Losses | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Loans and Allowance for Credit Losses | 90 Days or More Past Due Commercial and industrial loans $ 3,429,314 $ 4,904 $ 434 $ 2,474 $ 3,437,126 $ 1,147 Agricultural land, production and other loans to farmers 241,739 — — 54 241,793 — Real estate loans: Construction 832,716 2,436 418 12 835,582 — Commercial real estate, non-owner occupied 2,395,495 5,946 881 5,153 2,407,475 264 Commercial real estate, owner occupied 1,241,714 4,495 — 319 1,246,528 — Residential 2,079,959 8,607 2,278 5,811 2,096,655 — Home equity 624,543 2,206 1,782 2,101 630,632 326 Individuals' loans for household and other personal expenditures 174,629 343 142 97 175,211 — Public finance and other commercial loans 932,778 114 — — 932,892 — Loans $ 11,952,887 $ 29,051 $ 5,935 $ 16,021 $ 12,003,894 $ 1,737 December 31, 2021 Current 30-59 Days 60-89 Days 90 Days or More Past Due Total Loans > 90 Days or More Past Due Commercial and industrial loans $ 2,708,539 $ 2,602 $ 2,437 $ 987 $ 2,714,565 $ 675 Agricultural land, production and other loans to farmers 246,380 36 — 26 246,442 — Real estate loans: Construction 522,349 717 — — 523,066 — Commercial real estate, non-owner occupied 2,124,853 3,327 — 7,279 2,135,459 — Commercial real estate, owner occupied 985,785 643 — 292 986,720 — Residential 1,148,294 3,979 4,255 2,599 1,159,127 — Home equity 518,643 3,327 281 1,503 523,754 288 Individuals' loans for household and other personal expenditures 145,634 375 83 — 146,092 — Public finance and other commercial loans 806,636 — — — 806,636 — Loans $ 9,207,113 $ 15,006 $ 7,056 $ 12,686 $ 9,241,861 $ 963 Loans are reclassified to a non-accruing status when, in management’s judgment, the collateral value and financial condition of the borrower do not justify accruing interest. At the time the accrual is discontinued, all unpaid accrued interest is reversed against earnings. Interest income accrued in the prior year, if any, is charged to the allowance for credit losses. Payments subsequently received on non-accrual loans are applied to principal. A loan is returned to accrual status when principal and interest are no longer past due and collectability is probable, typically after a minimum of six consecutive months of performance. The following table summarizes the Corporation’s non-accrual loans by loan class for the periods indicated: December 31, 2022 December 31, 2021 Non-Accrual Loans Non-Accrual Loans with no Allowance for Credit Losses Non-Accrual Loans Non-Accrual Loans with no Allowance for Credit Losses Commercial and industrial loans $ 3,292 $ 481 $ 7,598 $ 263 Agricultural land, production and other loans to farmers 54 — 631 524 Real estate loans: Construction 12 — 685 — Commercial real estate, non-owner occupied 19,374 280 23,029 6,133 Commercial real estate, owner occupied 3,550 2,784 411 — Residential 13,685 702 9,153 2,160 Home equity 2,247 — 1,552 — Individuals' loans for household and other personal expenditures 110 — 3 — Loans $ 42,324 $ 4,247 $ 43,062 $ 9,080 Interest income on non-accrual loans is recognized only to the extent that cash payments are received in excess of principal due. There was no interest income recognized on non-accrual loans for the twelve months ended December 31, 2022 and 2021, respectively. Determining fair value for collateral dependent loans requires obtaining a current independent appraisal of the collateral and applying a discount factor, which includes selling costs if applicable, to the value. The fair value of real estate is generally based on appraisals by qualified licensed appraisers. The appraisers typically determine the value of the real estate by utilizing an income or market valuation approach. If an appraisal is not available, the fair value may be determined by using a cash flow analysis. Fair value on other collateral such as business assets is typically ascertained by assessing, either singularly or some combination of, asset appraisals, accounts receivable aging reports, inventory listings and or customer financial statements. Both appraised values and values based on borrower’s financial information are discounted as considered appropriate based on age and quality of the information and current market conditions. The following tables present the amortized cost basis of collateral dependent loans by loan class and their respective collateral type, which are individually evaluated to determine expected credit losses, for December 31, 2022 and 2021. The increase in collateral dependent loans of $38.8 million between 2022 and 2021, which is mostly in the commercial and industrial loan class, is primarily related to loans from the acquisition of Level One. December 31, 2022 Commercial Real Estate Residential Real Estate Other Total Allowance on Collateral Dependent Loans Commercial and industrial loans $ — $ — $ 42,101 $ 42,101 $ 8,367 Real estate loans: Construction — 10 — 10 1 Commercial real estate, non-owner occupied 26,534 — — 26,534 2,064 Commercial real estate, owner occupied 6,986 — — 6,986 776 Residential — 2,382 — 2,382 260 Home equity — 289 — 289 44 Loans $ 33,520 $ 2,681 $ 42,101 $ 78,302 $ 11,512 December 31, 2021 Commercial Real Estate Residential Real Estate Other Total Allowance on Collateral Dependent Loans Commercial and industrial loans $ — $ — $ 8,075 $ 8,075 $ 2,672 Agricultural land, production and other loans to farmers 524 — 251 775 — Real estate loans: Construction — 685 — 685 82 Commercial real estate, non-owner occupied 23,652 — — 23,652 5,510 Commercial real estate, owner occupied 1,044 — — 1,044 — Residential — 4,906 — 4,906 305 Home equity — 394 — 394 64 Loans $ 25,220 $ 5,985 $ 8,326 $ 39,531 $ 8,633 In certain loan restructuring situations, the Corporation may grant a concession to a debtor experiencing financial difficulty, resulting in a troubled debt restructuring. A concession is deemed to be granted when, as a result of the restructuring, the Corporation does not expect to collect all original amounts due, including interest accrued at the original contract rate. If the payment of principal at original maturity is primarily dependent on the value of collateral, the current value of the collateral is considered in determining whether the principal will be repaid. The following tables summarize troubled debt restructures in the Corporation's loan portfolio that occurred during the twelve months ended December 31, 2022 and 2021, respectively. Twelve Months Ended December 31, 2022 Pre- Modification Recorded Balance Term Modification Rate Modification Post - Modification Recorded Balance Number of Loans Commercial and industrial loans $ 61 $ 62 $ — $ 62 1 Real estate loans: Residential 53 — 56 56 1 Total $ 114 $ 62 $ 56 $ 118 2 Twelve Months Ended December 31, 2021 Pre- Modification Recorded Balance Term Modification Rate Modification Combination Post - Modification Recorded Balance Number of Loans Commercial and industrial loans $ 348 $ 348 $ — $ — $ 348 2 Real estate loans: Construction 16 — 16 — 16 1 Commercial real estate, non owner occupied 12,922 12,976 12,976 1 Commercial real estate, owner occupied 51 29 — 21 50 2 Residential 691 449 126 118 693 9 Total $ 14,028 $ 13,802 $ 142 $ 139 $ 14,083 15 Loans in the commercial and industrial and residential loan classes made up 52.5 percent and 47.5 percent, respectively, of the post-modification balances of the troubled debt restructured loans that occurred during the twelve months ending December 31, 2022. During the twelve months ended December 31, 2021, commercial real estate, non owner occupied made up 92.1 percent of the post-modification balance of the troubled debt restructured loans that occurred in the period. The following table summarizes troubled debt restructures that occurred during the twelve months ended December 31, 2021, that subsequently defaulted during the period indicated and remained in default at period end. For purposes of this schedule, a loan is considered in default if it is 30-days or more past due. None of the troubled debt restructures that occurred during the twelve months ended December 31, 2022 resulted in a subsequent default that remained in default at period end. Twelve Months Ended December 31, 2021 Number of Loans Recorded Balance Real estate loans: Residential 5 $ 475 Total 5 $ 475 Commercial troubled debt restructured loans risk graded special mention, substandard, doubtful and loss are individually evaluated for apparent loss and may result in a specific reserve allocation in the allowance for credit loss. Commercial troubled debt restructures that are not individually evaluated for a specific reserve are included in the calculation of allowance for credit losses through the loan segment loss analysis. For all consumer loan modifications, an evaluation to identify if a troubled debt restructure has occurred is performed prior to making the modification. Any subsequent deterioration is addressed through the charge-off process or through a specific reserve allocation included in the allowance for credit loss. Consumer troubled debt restructures that are not individually evaluated for a specific reserve are included in the calculation of the allowance for credit losses through the loan segment loss analysis. Consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $2.6 million and $4.2 million at December 31, 2022 and December 31, 2021, respectively. Purchased Credit Deteriorated Loans The Corporation acquired Level One on April 1, 2022 and performed an evaluation of the loan portfolio in which there were loans that, at acquisition, had more than an insignificant amount of credit quality deterioration. The carrying amount of those loans is shown in the table below: Level One Purchase price of loans at acquisition $ 41,347 CECL Day 1 PCD ACL 16,599 Par value of acquired loans at acquisition $ 57,946 Allowance for Credit Losses on Loans The Allowance for Credit Losses on Loans ("ACL - Loans") is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on loans over the contractual term. The ACL - Loans is adjusted by the provision for credit losses, which is reported in earnings, and reduced by charge offs for loans, net or recoveries. Provision for credit losses on loans reflects the totality of actions taken on all loans for a particular period including any necessary increases or decreases in the allowance related to changes in credit loss expectations associated with specific loans or pools of loans. Loans are charged off against the allowance when the uncollectibility of the loan is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged off and expected to be charged off. The allowance represents the Corporation’s best estimate of current expected credit losses on loans using relevant available information, from internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The current expected credit loss ("CECL") calculation is performed and evaluated quarterly and losses are estimated over the expected life of the loan. The level of the allowance for credit losses is believed to be adequate to absorb all expected future losses inherent in the loan portfolio at the measurement date. In calculating the allowance for credit losses, the loan portfolio was pooled into ten loan segments with similar risk characteristics. Common characteristics include the type or purpose of the loan, underlying collateral and historical/expected credit loss patterns. In developing the loan segments, the Corporation analyzed the degree of correlation in how loans within each portfolio respond when subjected to varying economic conditions and scenarios as well as other portfolio stress factors. The expected credit losses are measured over the life of each loan segment utilizing the Probability of Default / Loss Given Default methodology combined with economic forecast models to estimate the current expected credit loss inherent in the loan portfolio. This approach is also leveraged to estimate the expected credit losses associated with unfunded loan commitments incorporating expected utilization rates. The Corporation sub-segmented certain commercial portfolios by risk level and certain consumer portfolios by delinquency status where appropriate. The Corporation utilized a four-quarter reasonable and supportable economic forecast period followed by a six-quarter, straight-line reversion period to the historical macroeconomic mean for the remaining life of the loans. Econometric modeling was performed using historical default rates and a selection of economic forecast scenarios published by Moody’s to develop a range of estimated credit losses for which to determine the best credit loss estimate within. Macroeconomic factors utilized in the modeling process include the national unemployment rate, BBB US corporate index, CRE price index and the home price index. The Corporation qualitatively adjusts model results for risk factors that are not inherently considered in the quantitative modeling process, but are nonetheless relevant in assessing the expected credit losses within the loan portfolio. These adjustments may increase or decrease the estimate of expected credit losses based upon the assessed level of risk for each qualitative factor. The various risks that may be considered in making qualitative adjustments include, among other things, the impact of (i) changes in the nature and volume of the loan portfolio, (ii) changes in the existence, growth and effect of any concentrations in credit, (iii) changes in lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries, (iv) changes in the quality of the credit review function, (v) changes in the experience, ability and depth of lending management and staff, and (vi) other environmental factors of a borrower such as regulatory, legal and technological considerations, as well as competition. In some cases, management may determine that an individual loan exhibits unique risk characteristics which differentiate the loan from other loans within the loan segments. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. Specific reserve allocations of the allowance for credit losses are determined by analyzing the borrower’s ability to repay amounts owed, collateral deficiencies, the relative risk grade of the loan and economic conditions affecting the borrower’s industry, among other things. A loan is considered to be collateral dependent when, based upon management's assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. In such cases, expected credit losses are based on the fair value of the collateral at the measurement date, adjusted for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. The fair value of collateral supporting collateral dependent loans is evaluated on a quarterly basis. No allowance for credit losses has been recognized for PPP loans as such loans are fully guaranteed by the Small Business Administration ("SBA"). The risk characteristics of the Corporation’s portfolio segments are as follows: Commercial Commercial lending is primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the tangible assets being financed such as equipment or real estate or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee. Other loans may be unsecured, secured but under-collateralized or otherwise made on the basis of the enterprise value of an organization. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. Commercial real estate Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. The Corporation monitors commercial real estate loans based on collateral and risk grade criteria, as well as the levels of owner-occupied versus non-owner occupied loans. Construction Construction loans are underwritten utilizing a combination of tools and techniques including feasibility and market studies, independent appraisals and appraisal reviews, absorption and interest rate sensitivity analysis as well as the financial analysis of the developer and all guarantors. Construction loans are monitored by either in house or third party inspectors limiting advances to a percentage of costs or stabilized project value. These loans frequently involve the disbursement of significant funds with the repayment dependent upon the successful completion and, where necessary, the future stabilization of the project. The predominant inherent risk of this portfolio is associated with the borrower's ability to successfully complete a project on time, within budget and stabilize the projected as originally projected. Consumer and Residential With respect to residential loans that are secured by 1-4 family residences, which are typically owner occupied, the Corporation generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are secured by a subordinate interest in 1-4 family residences, and consumer loans are secured by consumer assets such as automobiles or recreational vehicles. Some consumer loans, such as small installment loans and certain lines of credit, are unsecured. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers and can also be impacted by changes in property values. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers. The allowance for credit losses increased $27.9 million during the twelve months ended December 31, 2022. The allowance increased primarily due to $16.6 million of allowance for credit losses on PCD loans acquired in the Level One acquisition established through accounting adjustments on the acquisition date. In addition, a provision of $14.0 million was recorded to establish an allowance for credit losses on non-PCD loans acquired in the Level One acquisition. The allowance also had net charge offs of $2.7 million for the twelve months ended December, 31 2022. The following tables summarize changes in the allowance for credit losses by loan segment for the twelve months ended December 31, 2022 and 2021: Twelve Months Ended December 31, 2022 Commercial Commercial Real Estate Construction Consumer & Residential Total Allowance for credit losses Balances, December 31, 2021 $ 69,935 $ 60,665 $ 20,206 $ 44,591 $ 195,397 Provision for credit losses 16,697 (20,425) 6,367 (2,639) — CECL Day 1 non-PCD provision for credit losses 2,957 5,539 871 4,588 13,955 CECL Day 1 PCD ACL 12,970 2,981 648 — 16,599 Recoveries on loans 872 1,096 863 1,096 3,927 Loans charged off (1,215) (3,017) — (2,369) (6,601) Balances. December 31, 2022 $ 102,216 $ 46,839 $ 28,955 $ 45,267 $ 223,277 Twelve Months Ended December 31, 2021 Commercial Commercial Real Estate Construction Consumer Residential Consumer & Residential Total Allowance for credit losses Balances, December 31, 2020 $ 47,115 $ 51,070 $ — $ 9,648 $ 22,815 $ — $ 130,648 Credit risk reclassifications (10,284) 10,284 (9,648) (22,815) 32,463 — Balances, December 31, 2020 after reclassifications 47,115 40,786 10,284 — — 32,463 130,648 Impact of adopting ASC 326 20,024 34,925 8,805 — — 10,301 74,055 Balances, Janua" id="sjs-B4">LOANS AND ALLOWANCE FOR CREDIT LOSSES The Corporation's primary lending focus is small business and middle market commercial, commercial real estate, public finance and residential real estate, which results in portfolio diversification. The following tables show the composition of the loan portfolio and credit quality characteristics by collateral classification, excluding loans held for sale. Loans held for sale at December 31, 2022 and December 31, 2021, were $9.1 million and $11.2 million, respectively. The following table illustrates the composition of the Corporation’s loan portfolio by loan class for the periods indicated: December 31, 2022 December 31, 2021 Commercial and industrial loans $ 3,437,126 $ 2,714,565 Agricultural land, production and other loans to farmers 241,793 246,442 Real estate loans: Construction 835,582 523,066 Commercial real estate, non-owner occupied 2,407,475 2,135,459 Commercial real estate, owner occupied 1,246,528 986,720 Residential 2,096,655 1,159,127 Home equity 630,632 523,754 Individuals' loans for household and other personal expenditures 175,211 146,092 Public finance and other commercial loans 932,892 806,636 Loans $ 12,003,894 $ 9,241,861 The Level One acquisition added $1.6 billion in loans at acquisition, which included $43.5 million of Paycheck Protection Program ("PPP") loans. Additional details of the Level One acquisition are included in NOTE 2. ACQUISITIONS of these Notes to Consolidated Financial Statements. As of December 31, 2022, the Corporation had $4.7 million of PPP loans compared to the December 31, 2021 balance of $106.6 million. Additional details of the PPP are included in NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES of these Notes to Consolidated Financial Statements. Credit Quality As part of the ongoing monitoring of the credit quality of the Corporation's loan portfolio, management tracks certain credit quality indicators including trends related to: (i) the level of criticized commercial loans, (ii) net charge-offs, (iii) non-performing loans, (iv) covenant failures and (v) the general national and local economic conditions. The Corporation utilizes a risk grading of pass, special mention, substandard, doubtful and loss to assess the overall credit quality of large commercial loans. All large commercial credit grades are reviewed at a minimum of once a year for pass grade loans. Loans with grades below pass are reviewed more frequently depending on the grade. A description of the general characteristics of these grades is as follows: • Pass - Loans that are considered to be of acceptable credit quality. • Special Mention - Loans which possess some credit deficiency or potential weakness, which deserves close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Corporation's credit position at some future date. Special mention assets are not adversely classified and do not expose the Corporation to sufficient risk to warrant adverse classification. • Substandard - A substandard loan is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified have a well-defined weakness that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. • Doubtful - Loans that have all of the weaknesses of those classified as Substandard. However, based on currently existing facts, conditions and values, these weaknesses make full collection of principal highly questionable and improbable. • Loss – Loans that are considered uncollectible and of such little value that continuing to carry them as an asset is not warranted. Loans will be classified as Loss when it is neither practical or desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future. The following tables summarize the risk grading of the Corporation’s loan portfolio by loan class and by year of origination for the years indicated. Consumer loans are not risk graded. For the purposes of this disclosure, the consumer loans are classified in the following manner: loans that are less than 30 days past due are Pass, loans 30-89 days past due are Special Mention and loans greater than 89 days past due are Substandard. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. Loans that evidenced deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected are included in the applicable categories below. Commercial and industrial loan balances as of December 31, 2022 include PPP loans with an origination year of 2021 and 2020 of $4.6 million and $102,000, respectively. Commercial and industrial loan balances as of December 31, 2021 include PPP loans with an origination year of 2021 and 2020 of $100.3 million and $6.3 million, respectively. December 31, 2022 Term Loans (amortized cost basis by origination year) 2022 2021 2020 2019 2018 Prior Revolving loans amortized cost basis Revolving loans converted to term Total Commercial and industrial loans Pass $ 1,064,687 $ 531,504 $ 141,985 $ 114,999 $ 43,136 $ 45,310 $ 1,302,562 $ 5,048 $ 3,249,231 Special Mention 2,164 18,005 11,900 5,727 1,012 2,181 27,702 150 68,841 Substandard 27,512 26,571 5,531 10,606 4,674 567 43,450 143 119,054 Total Commercial and industrial loans 1,094,363 576,080 159,416 131,332 48,822 48,058 1,373,714 5,341 3,437,126 Agricultural land, production and other loans to farmers Pass 44,446 36,299 35,791 15,296 3,752 28,910 73,402 — 237,896 Special Mention 286 784 — — 281 632 — — 1,983 Substandard 178 — 490 — 94 1,152 — — 1,914 Total Agricultural land, production and other loans to farmers 44,910 37,083 36,281 15,296 4,127 30,694 73,402 — 241,793 Real estate loans: Construction Pass 366,414 301,986 117,541 11,428 857 3,224 17,167 — 818,617 Special Mention 16,922 — — — — — — — 16,922 Substandard 31 — — — — 12 — — 43 Total Construction 383,367 301,986 117,541 11,428 857 3,236 17,167 — 835,582 Commercial real estate, non-owner occupied Pass 560,146 603,254 550,605 168,701 116,859 190,264 31,196 3,803 2,224,828 Special Mention 49,439 4,026 38,268 18,785 11,546 17,992 — — 140,056 Substandard 21,123 8,128 8,026 — 4,442 872 — — 42,591 Total Commercial real estate, non-owner occupied 630,708 615,408 596,899 187,486 132,847 209,128 31,196 3,803 2,407,475 Commercial real estate, owner occupied Pass 260,725 316,665 330,441 114,015 63,816 81,286 33,123 3,378 1,203,449 Special Mention 7,744 6,125 2,245 3,481 1,210 2,984 1,328 — 25,117 Substandard 3,124 1,214 2,376 1,608 2,920 6,720 — — 17,962 Total Commercial real estate, owner occupied 271,593 324,004 335,062 119,104 67,946 90,990 34,451 3,378 1,246,528 Residential Pass 758,161 489,301 401,353 114,420 77,768 229,812 5,365 46 2,076,226 Special Mention 2,839 2,924 1,972 513 396 2,588 34 — 11,266 Substandard 1,399 1,824 1,811 805 1,468 1,741 60 55 9,163 Total Residential 762,399 494,049 405,136 115,738 79,632 234,141 5,459 101 2,096,655 Home equity Pass 40,768 75,670 14,621 1,572 1,348 3,325 486,924 281 624,509 Special Mention — — — — 115 8 3,698 — 3,821 Substandard — 79 — — 65 60 2,098 — 2,302 Total Home Equity 40,768 75,749 14,621 1,572 1,528 3,393 492,720 281 630,632 Individuals' loans for household and other personal expenditures Pass 67,883 43,639 13,025 5,389 5,830 3,775 35,091 — 174,632 Special Mention 178 134 77 33 28 17 16 — 483 Substandard 1 — 3 — 84 8 — — 96 Total Individuals' loans for household and other personal expenditures 68,062 43,773 13,105 5,422 5,942 3,800 35,107 — 175,211 Public finance and other commercial loans Pass 187,125 212,702 165,019 98,687 43,760 204,719 20,880 — 932,892 Total Public finance and other commercial loans 187,125 212,702 165,019 98,687 43,760 204,719 20,880 — 932,892 Loans $ 3,483,295 $ 2,680,834 $ 1,843,080 $ 686,065 $ 385,461 $ 828,159 $ 2,084,096 $ 12,904 $ 12,003,894 December 31, 2021 Term Loans (amortized cost basis by origination year) 2021 2020 2019 2018 2017 Prior Revolving loans amortized cost basis Revolving loans converted to term Total Commercial and industrial loans Pass $ 1,019,757 $ 362,372 $ 144,520 $ 65,165 $ 21,575 $ 30,420 $ 990,335 $ — $ 2,634,144 Special Mention 10,559 11,088 190 730 1,930 1,825 15,026 — 41,348 Substandard 2,811 2,127 7,432 2,932 431 747 22,593 — 39,073 Total Commercial and industrial loans 1,033,127 375,587 152,142 68,827 23,936 32,992 1,027,954 — 2,714,565 Agricultural land, production and other loans to farmers Pass 50,251 45,164 22,195 7,689 6,153 36,074 74,871 — 242,397 Special Mention — 1,543 — — — 252 264 — 2,059 Substandard 524 506 108 371 — 27 450 — 1,986 Total Agricultural land, production and other loans to farmers 50,775 47,213 22,303 8,060 6,153 36,353 75,585 — 246,442 Real estate loans: Construction Pass 215,167 200,169 63,589 979 1,762 2,453 17,201 — 501,320 Special Mention 20,737 270 — — — 46 — — 21,053 Substandard — 693 — — — — — — 693 Total Construction 235,904 201,132 63,589 979 1,762 2,499 17,201 — 523,066 Commercial real estate, non-owner occupied Pass 589,296 688,406 227,332 111,971 103,400 126,837 26,779 — 1,874,021 Special Mention 68,279 149,480 — — — 1,723 — — 219,482 Substandard 19,314 14,912 178 1,118 6,156 278 — — 41,956 Total Commercial real estate, non-owner occupied 676,889 852,798 227,510 113,089 109,556 128,838 26,779 — 2,135,459 Commercial real estate, owner occupied Pass 299,186 392,383 92,338 43,252 46,044 48,571 33,998 — 955,772 Special Mention 5,665 5,953 738 1,532 902 1,301 149 — 16,240 Substandard 7,025 5,763 — 53 113 1,754 — — 14,708 Total Commercial real estate, owner occupied 311,876 404,099 93,076 44,837 47,059 51,626 34,147 — 986,720 Residential Pass 349,726 353,691 103,028 69,745 55,240 210,669 2,955 73 1,145,127 Special Mention 1,034 1,394 1,456 306 172 2,106 — — 6,468 Substandard 1,004 1,575 335 1,248 108 3,257 — 5 7,532 Total Residential 351,764 356,660 104,819 71,299 55,520 216,032 2,955 78 1,159,127 Home equity Pass 63,845 17,556 1,977 2,127 1,250 3,432 427,437 194 517,818 Special Mention — 85 48 — — 24 3,451 — 3,608 Substandard 520 — — 8 91 70 1,639 — 2,328 Total Home Equity 64,365 17,641 2,025 2,135 1,341 3,526 432,527 194 523,754 Individuals' loans for household and other personal expenditures Pass 67,749 23,452 11,893 11,197 2,008 4,928 24,406 — 145,633 Special Mention 79 85 50 33 20 58 134 — 459 Total Individuals' loans for household and other personal expenditures 67,828 23,537 11,943 11,230 2,028 4,986 24,540 — 146,092 Public finance and other commercial loans Pass 231,319 178,316 100,679 39,098 105,964 128,942 22,318 — 806,636 Total Public finance and other commercial loans 231,319 178,316 100,679 39,098 105,964 128,942 22,318 — 806,636 Loans $ 3,023,847 $ 2,456,983 $ 778,086 $ 359,554 $ 353,319 $ 605,794 $ 1,664,006 $ 272 $ 9,241,861 Total past due loans equaled $51.0 million as of December 31, 2022, a $16.3 million increase from the total of $34.7 million for December 31, 2021. At December 31, 2022, 30-59 Days Past Due loans totaled $29.1 million, an increase of $14.0 million from December 31, 2021. The primary increases were in commercial real estate owner and non-owner occupied and residential portfolios. At December 31, 2022, 60-89 Days Past Due loans totaled $5.9 million, a decrease of $1.1 million from December 31, 2021. The primary decreases were in commercial and industrial loans and residential portfolios, offset by an increase in the home equity portfolio. At December 31, 2022, 90 Days or More Past Due loans totaled $16.0 million, an increase of $3.3 million from December 31, 2021. The primary increases were in the commercial and industrial and residential portfolios, offset by a decrease in the non-owner occupied commercial real estate portfolio. The tables below show a past due aging of the Corporation’s loan portfolio, by loan class, for the years indicated: December 31, 2022 Current 30-59 Days 60-89 Days 90 Days or More Past Due Total Loans > 90 Days or More Past Due Commercial and industrial loans $ 3,429,314 $ 4,904 $ 434 $ 2,474 $ 3,437,126 $ 1,147 Agricultural land, production and other loans to farmers 241,739 — — 54 241,793 — Real estate loans: Construction 832,716 2,436 418 12 835,582 — Commercial real estate, non-owner occupied 2,395,495 5,946 881 5,153 2,407,475 264 Commercial real estate, owner occupied 1,241,714 4,495 — 319 1,246,528 — Residential 2,079,959 8,607 2,278 5,811 2,096,655 — Home equity 624,543 2,206 1,782 2,101 630,632 326 Individuals' loans for household and other personal expenditures 174,629 343 142 97 175,211 — Public finance and other commercial loans 932,778 114 — — 932,892 — Loans $ 11,952,887 $ 29,051 $ 5,935 $ 16,021 $ 12,003,894 $ 1,737 December 31, 2021 Current 30-59 Days 60-89 Days 90 Days or More Past Due Total Loans > 90 Days or More Past Due Commercial and industrial loans $ 2,708,539 $ 2,602 $ 2,437 $ 987 $ 2,714,565 $ 675 Agricultural land, production and other loans to farmers 246,380 36 — 26 246,442 — Real estate loans: Construction 522,349 717 — — 523,066 — Commercial real estate, non-owner occupied 2,124,853 3,327 — 7,279 2,135,459 — Commercial real estate, owner occupied 985,785 643 — 292 986,720 — Residential 1,148,294 3,979 4,255 2,599 1,159,127 — Home equity 518,643 3,327 281 1,503 523,754 288 Individuals' loans for household and other personal expenditures 145,634 375 83 — 146,092 — Public finance and other commercial loans 806,636 — — — 806,636 — Loans $ 9,207,113 $ 15,006 $ 7,056 $ 12,686 $ 9,241,861 $ 963 Loans are reclassified to a non-accruing status when, in management’s judgment, the collateral value and financial condition of the borrower do not justify accruing interest. At the time the accrual is discontinued, all unpaid accrued interest is reversed against earnings. Interest income accrued in the prior year, if any, is charged to the allowance for credit losses. Payments subsequently received on non-accrual loans are applied to principal. A loan is returned to accrual status when principal and interest are no longer past due and collectability is probable, typically after a minimum of six consecutive months of performance. The following table summarizes the Corporation’s non-accrual loans by loan class for the periods indicated: December 31, 2022 December 31, 2021 Non-Accrual Loans Non-Accrual Loans with no Allowance for Credit Losses Non-Accrual Loans Non-Accrual Loans with no Allowance for Credit Losses Commercial and industrial loans $ 3,292 $ 481 $ 7,598 $ 263 Agricultural land, production and other loans to farmers 54 — 631 524 Real estate loans: Construction 12 — 685 — Commercial real estate, non-owner occupied 19,374 280 23,029 6,133 Commercial real estate, owner occupied 3,550 2,784 411 — Residential 13,685 702 9,153 2,160 Home equity 2,247 — 1,552 — Individuals' loans for household and other personal expenditures 110 — 3 — Loans $ 42,324 $ 4,247 $ 43,062 $ 9,080 Interest income on non-accrual loans is recognized only to the extent that cash payments are received in excess of principal due. There was no interest income recognized on non-accrual loans for the twelve months ended December 31, 2022 and 2021, respectively. Determining fair value for collateral dependent loans requires obtaining a current independent appraisal of the collateral and applying a discount factor, which includes selling costs if applicable, to the value. The fair value of real estate is generally based on appraisals by qualified licensed appraisers. The appraisers typically determine the value of the real estate by utilizing an income or market valuation approach. If an appraisal is not available, the fair value may be determined by using a cash flow analysis. Fair value on other collateral such as business assets is typically ascertained by assessing, either singularly or some combination of, asset appraisals, accounts receivable aging reports, inventory listings and or customer financial statements. Both appraised values and values based on borrower’s financial information are discounted as considered appropriate based on age and quality of the information and current market conditions. The following tables present the amortized cost basis of collateral dependent loans by loan class and their respective collateral type, which are individually evaluated to determine expected credit losses, for December 31, 2022 and 2021. The increase in collateral dependent loans of $38.8 million between 2022 and 2021, which is mostly in the commercial and industrial loan class, is primarily related to loans from the acquisition of Level One. December 31, 2022 Commercial Real Estate Residential Real Estate Other Total Allowance on Collateral Dependent Loans Commercial and industrial loans $ — $ — $ 42,101 $ 42,101 $ 8,367 Real estate loans: Construction — 10 — 10 1 Commercial real estate, non-owner occupied 26,534 — — 26,534 2,064 Commercial real estate, owner occupied 6,986 — — 6,986 776 Residential — 2,382 — 2,382 260 Home equity — 289 — 289 44 Loans $ 33,520 $ 2,681 $ 42,101 $ 78,302 $ 11,512 December 31, 2021 Commercial Real Estate Residential Real Estate Other Total Allowance on Collateral Dependent Loans Commercial and industrial loans $ — $ — $ 8,075 $ 8,075 $ 2,672 Agricultural land, production and other loans to farmers 524 — 251 775 — Real estate loans: Construction — 685 — 685 82 Commercial real estate, non-owner occupied 23,652 — — 23,652 5,510 Commercial real estate, owner occupied 1,044 — — 1,044 — Residential — 4,906 — 4,906 305 Home equity — 394 — 394 64 Loans $ 25,220 $ 5,985 $ 8,326 $ 39,531 $ 8,633 In certain loan restructuring situations, the Corporation may grant a concession to a debtor experiencing financial difficulty, resulting in a troubled debt restructuring. A concession is deemed to be granted when, as a result of the restructuring, the Corporation does not expect to collect all original amounts due, including interest accrued at the original contract rate. If the payment of principal at original maturity is primarily dependent on the value of collateral, the current value of the collateral is considered in determining whether the principal will be repaid. The following tables summarize troubled debt restructures in the Corporation's loan portfolio that occurred during the twelve months ended December 31, 2022 and 2021, respectively. Twelve Months Ended December 31, 2022 Pre- Modification Recorded Balance Term Modification Rate Modification Post - Modification Recorded Balance Number of Loans Commercial and industrial loans $ 61 $ 62 $ — $ 62 1 Real estate loans: Residential 53 — 56 56 1 Total $ 114 $ 62 $ 56 $ 118 2 Twelve Months Ended December 31, 2021 Pre- Modification Recorded Balance Term Modification Rate Modification Combination Post - Modification Recorded Balance Number of Loans Commercial and industrial loans $ 348 $ 348 $ — $ — $ 348 2 Real estate loans: Construction 16 — 16 — 16 1 Commercial real estate, non owner occupied 12,922 12,976 12,976 1 Commercial real estate, owner occupied 51 29 — 21 50 2 Residential 691 449 126 118 693 9 Total $ 14,028 $ 13,802 $ 142 $ 139 $ 14,083 15 Loans in the commercial and industrial and residential loan classes made up 52.5 percent and 47.5 percent, respectively, of the post-modification balances of the troubled debt restructured loans that occurred during the twelve months ending December 31, 2022. During the twelve months ended December 31, 2021, commercial real estate, non owner occupied made up 92.1 percent of the post-modification balance of the troubled debt restructured loans that occurred in the period. The following table summarizes troubled debt restructures that occurred during the twelve months ended December 31, 2021, that subsequently defaulted during the period indicated and remained in default at period end. For purposes of this schedule, a loan is considered in default if it is 30-days or more past due. None of the troubled debt restructures that occurred during the twelve months ended December 31, 2022 resulted in a subsequent default that remained in default at period end. Twelve Months Ended December 31, 2021 Number of Loans Recorded Balance Real estate loans: Residential 5 $ 475 Total 5 $ 475 Commercial troubled debt restructured loans risk graded special mention, substandard, doubtful and loss are individually evaluated for apparent loss and may result in a specific reserve allocation in the allowance for credit loss. Commercial troubled debt restructures that are not individually evaluated for a specific reserve are included in the calculation of allowance for credit losses through the loan segment loss analysis. For all consumer loan modifications, an evaluation to identify if a troubled debt restructure has occurred is performed prior to making the modification. Any subsequent deterioration is addressed through the charge-off process or through a specific reserve allocation included in the allowance for credit loss. Consumer troubled debt restructures that are not individually evaluated for a specific reserve are included in the calculation of the allowance for credit losses through the loan segment loss analysis. Consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $2.6 million and $4.2 million at December 31, 2022 and December 31, 2021, respectively. Purchased Credit Deteriorated Loans The Corporation acquired Level One on April 1, 2022 and performed an evaluation of the loan portfolio in which there were loans that, at acquisition, had more than an insignificant amount of credit quality deterioration. The carrying amount of those loans is shown in the table below: Level One Purchase price of loans at acquisition $ 41,347 CECL Day 1 PCD ACL 16,599 Par value of acquired loans at acquisition $ 57,946 Allowance for Credit Losses on Loans The Allowance for Credit Losses on Loans ("ACL - Loans") is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on loans over the contractual term. The ACL - Loans is adjusted by the provision for credit losses, which is reported in earnings, and reduced by charge offs for loans, net or recoveries. Provision for credit losses on loans reflects the totality of actions taken on all loans for a particular period including any necessary increases or decreases in the allowance related to changes in credit loss expectations associated with specific loans or pools of loans. Loans are charged off against the allowance when the uncollectibility of the loan is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged off and expected to be charged off. The allowance represents the Corporation’s best estimate of current expected credit losses on loans using relevant available information, from internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The current expected credit loss ("CECL") calculation is performed and evaluated quarterly and losses are estimated over the expected life of the loan. The level of the allowance for credit losses is believed to be adequate to absorb all expected future losses inherent in the loan portfolio at the measurement date. In calculating the allowance for credit losses, the loan portfolio was pooled into ten loan segments with similar risk characteristics. Common characteristics include the type or purpose of the loan, underlying collateral and historical/expected credit loss patterns. In developing the loan segments, the Corporation analyzed the degree of correlation in how loans within each portfolio respond when subjected to varying economic conditions and scenarios as well as other portfolio stress factors. The expected credit losses are measured over the life of each loan segment utilizing the Probability of Default / Loss Given Default methodology combined with economic forecast models to estimate the current expected credit loss inherent in the loan portfolio. This approach is also leveraged to estimate the expected credit losses associated with unfunded loan commitments incorporating expected utilization rates. The Corporation sub-segmented certain commercial portfolios by risk level and certain consumer portfolios by delinquency status where appropriate. The Corporation utilized a four-quarter reasonable and supportable economic forecast period followed by a six-quarter, straight-line reversion period to the historical macroeconomic mean for the remaining life of the loans. Econometric modeling was performed using historical default rates and a selection of economic forecast scenarios published by Moody’s to develop a range of estimated credit losses for which to determine the best credit loss estimate within. Macroeconomic factors utilized in the modeling process include the national unemployment rate, BBB US corporate index, CRE price index and the home price index. The Corporation qualitatively adjusts model results for risk factors that are not inherently considered in the quantitative modeling process, but are nonetheless relevant in assessing the expected credit losses within the loan portfolio. These adjustments may increase or decrease the estimate of expected credit losses based upon the assessed level of risk for each qualitative factor. The various risks that may be considered in making qualitative adjustments include, among other things, the impact of (i) changes in the nature and volume of the loan portfolio, (ii) changes in the existence, growth and effect of any concentrations in credit, (iii) changes in lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries, (iv) changes in the quality of the credit review function, (v) changes in the experience, ability and depth of lending management and staff, and (vi) other environmental factors of a borrower such as regulatory, legal and technological considerations, as well as competition. In some cases, management may determine that an individual loan exhibits unique risk characteristics which differentiate the loan from other loans within the loan segments. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. Specific reserve allocations of the allowance for credit losses are determined by analyzing the borrower’s ability to repay amounts owed, collateral deficiencies, the relative risk grade of the loan and economic conditions affecting the borrower’s industry, among other things. A loan is considered to be collateral dependent when, based upon management's assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. In such cases, expected credit losses are based on the fair value of the collateral at the measurement date, adjusted for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. The fair value of collateral supporting collateral dependent loans is evaluated on a quarterly basis. No allowance for credit losses has been recognized for PPP loans as such loans are fully guaranteed by the Small Business Administration ("SBA"). The risk characteristics of the Corporation’s portfolio segments are as follows: Commercial Commercial lending is primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the tangible assets being financed such as equipment or real estate or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee. Other loans may be unsecured, secured but under-collateralized or otherwise made on the basis of the enterprise value of an organization. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. Commercial real estate Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. The Corporation monitors commercial real estate loans based on collateral and risk grade criteria, as well as the levels of owner-occupied versus non-owner occupied loans. Construction Construction loans are underwritten utilizing a combination of tools and techniques including feasibility and market studies, independent appraisals and appraisal reviews, absorption and interest rate sensitivity analysis as well as the financial analysis of the developer and all guarantors. Construction loans are monitored by either in house or third party inspectors limiting advances to a percentage of costs or stabilized project value. These loans frequently involve the disbursement of significant funds with the repayment dependent upon the successful completion and, where necessary, the future stabilization of the project. The predominant inherent risk of this portfolio is associated with the borrower's ability to successfully complete a project on time, within budget and stabilize the projected as originally projected. Consumer and Residential With respect to residential loans that are secured by 1-4 family residences, which are typically owner occupied, the Corporation generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are secured by a subordinate interest in 1-4 family residences, and consumer loans are secured by consumer assets such as automobiles or recreational vehicles. Some consumer loans, such as small installment loans and certain lines of credit, are unsecured. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers and can also be impacted by changes in property values. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers. The allowance for credit losses increased $27.9 million during the twelve months ended December 31, 2022. The allowance increased primarily due to $16.6 million of allowance for credit losses on PCD loans acquired in the Level One acquisition established through accounting adjustments on the acquisition date. In addition, a provision of $14.0 million was recorded to establish an allowance for credit losses on non-PCD loans acquired in the Level One acquisition. The allowance also had net charge offs of $2.7 million for the twelve months ended December, 31 2022. The following tables summarize changes in the allowance for credit losses by loan segment for the twelve months ended December 31, 2022 and 2021: Twelve Months Ended December 31, 2022 Commercial Commercial Real Estate Construction Consumer & Residential Total Allowance for credit losses Balances, December 31, 2021 $ 69,935 $ 60,665 $ 20,206 $ 44,591 $ 195,397 Provision for credit losses 16,697 (20,425) 6,367 (2,639) — CECL Day 1 non-PCD provision for credit losses 2,957 5,539 871 4,588 13,955 CECL Day 1 PCD ACL 12,970 2,981 648 — 16,599 Recoveries on loans 872 1,096 863 1,096 3,927 Loans charged off (1,215) (3,017) — (2,369) (6,601) Balances. December 31, 2022 $ 102,216 $ 46,839 $ 28,955 $ 45,267 $ 223,277 Twelve Months Ended December 31, 2021 Commercial Commercial Real Estate Construction Consumer Residential Consumer & Residential Total Allowance for credit losses Balances, December 31, 2020 $ 47,115 $ 51,070 $ — $ 9,648 $ 22,815 $ — $ 130,648 Credit risk reclassifications (10,284) 10,284 (9,648) (22,815) 32,463 — Balances, December 31, 2020 after reclassifications 47,115 40,786 10,284 — — 32,463 130,648 Impact of adopting ASC 326 20,024 34,925 8,805 — — 10,301 74,055 Balances, Janua |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | PREMISES AND EQUIPMENT The following table summarizes the Corporation's premises and equipment as of December 31, 2022 and 2021: 2022 2021 Cost at December 31: Land $ 25,299 $ 22,349 Buildings and Leasehold Improvements 174,895 160,410 Equipment 144,524 129,885 Total Cost 344,718 312,644 Accumulated Depreciation and Amortization (227,600) (206,989) Net $ 117,118 $ 105,655 The Level One acquisition on April 1, 2022 resulted in additions to premises and equipment of $11.8 million. Details regarding the acquisition are discussed in NOTE 2. ACQUISITIONS of these Notes to Consolidated Financial Statements. The Corporation is committed under various non-cancelable lease contracts for certain subsidiary office facilities and equipment. Details regarding the lease contracts are discussed in NOTE 9. LEASES of these Notes to Consolidated Financial Statements. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | GOODWILL Goodwill is recorded on the acquisition date of an entity. The Corporation has one year after the acquisition date, the measurement period, to record subsequent adjustments to goodwill for provisional amounts recorded at the acquisition date. The Level One acquisition on April 1, 2022 resulted in $166.6 million of goodwill. In addition, the Hoosier acquisition on April, 1, 2021 resulted in $1.5 million of goodwill. Details regarding the Level One and Hoosier acquisitions are discussed in NOTE 2. ACQUISITIONS of these Notes to Consolidated Financial Statements. As of October 1, 2022 and October 1, 2021, the Corporation performed its annual goodwill impairment testing and in each valuation, the fair value exceeded the Corporation's carrying value; therefore, it was concluded goodwill was not impaired as of either date. For additional details related to impairment testing, see the "GOODWILL" section of Management's Discussion and Analysis of Financial Condition and Results of Operations included as Item 7 of this Annual Report on Form 10-K. 2022 2021 Balance, January 1 $ 545,385 $ 543,918 Goodwill acquired 166,617 1,467 Balance, December 31 $ 712,002 $ 545,385 |
Other Intangibles
Other Intangibles | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangibles | OTHER INTANGIBLES Core deposit intangibles and other intangibles are recorded on the acquisition date of an entity. The Corporation has one year after the acquisition date, the measurement period, to record subsequent adjustments to these intangibles for provisional amounts recorded at the acquisition date. The Level One acquisition on April 1, 2022 resulted in a core deposit intangible of $17.2 million and other intangibles, consisting of non-compete intangibles, of $1.4 million. In addition, the Hoosier acquisition on April 1, 2021 resulted in a customer relationship intangible of $2.2 million. Details regarding the Level One and Hoosier acquisitions are discussed in NOTE 2. ACQUISITIONS of these Notes to Consolidated Financial Statements. The carrying basis and accumulated amortization of recognized core deposit and other intangibles are noted below. 2022 2021 Gross carrying amount $ 104,643 $ 102,396 Other intangibles acquired 18,642 2,247 Accumulated amortization (87,443) (79,168) Total core deposit and other intangibles $ 35,842 $ 25,475 The core deposit intangibles and other intangibles are being amortized primarily on an accelerated basis over their estimated useful lives, generally over a period of two Estimated future amortization expense is summarized as follows: Amortization Expense 2023 $ 8,742 2024 7,271 2025 6,028 2026 4,910 2027 3,603 After 2027 5,288 $ 35,842 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | LEASES The Corporation enters into leases for certain retail branches, office space, land and equipment. Operating leases are included in other assets other liabilities Right-of-use (ROU) assets represent the Corporation's right to use an underlying asset for the lease term and lease liabilities represent the Corporation's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Corporation uses its incremental borrowing rate at commencement date in determining the present value of lease payments when the rate implicit in a lease is not known. The Corporation's incremental borrowing rate is based on the FHLB amortizing advance rate, adjusted for the lease term and other factors. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Corporation's leases are generally for periods of five Supplemental balance sheet information related to leases is presented in the table below as of December 31, 2022 and 2021: 2022 2021 Operating lease assets $ 23,619 $ 17,818 Total lease assets $ 23,619 $ 17,818 Operating lease liabilities $ 25,316 $ 19,619 Total lease liabilities $ 25,316 $ 19,619 Weighted average remaining lease term (years) Operating leases 6.5 7.0 Weighted average discount rate Operating leases 3.1 % 3.1 % The table below presents the components of lease expense for the years ended December 31, 2022, 2021, and 2020: 2022 2021 2020 Lease Cost: Operating lease cost $ 5,233 $ 3,710 $ 3,724 Short-term lease cost 470 345 247 Variable lease cost 1,073 980 842 Sublease income $ (23) $ (33) $ (43) Total lease cost $ 6,753 $ 5,002 $ 4,770 Supplemental cash flow information related to leases is presented in the tables below. Maturity of lease liabilities Operating Leases 2023 $ 5,610 2024 5,056 2025 4,673 2026 3,265 2027 2,468 2028 and after 7,068 Total lease payments $ 28,140 Less: Present value discount 2,824 Present value of lease liabilities $ 25,316 Other Information Twelve Months Ended December 31, 2022 Twelve Months Ended December 31, 2021 Twelve Months Ended December 31, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 5,329 $ 3,773 $ 3,629 ROU assets obtained in exchange for new operating lease liabilities $ 10,516 $ 2,700 $ 1,601 |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2022 | |
Statistical Disclosure for Banks [Abstract] | |
Deposits | DEPOSITS The composition of the deposit portfolio is included in the table below for the years indicated: December 31, 2022 December 31, 2021 Demand deposits $ 8,448,797 $ 7,704,190 Savings deposits 4,657,140 4,334,802 Certificates and other time deposits of $100,000 or more 742,539 273,379 Other certificates and time deposits 468,712 389,752 Brokered deposits 65,557 30,454 Total deposits $ 14,382,745 $ 12,732,577 Deposits increased $1.7 billion from December 31, 2021. The Level One acquisition contributed $1.9 billion of deposits as of the acquisition date, resulting in an organic deposit decline of $280.6 million, or 2.2 percent. Details regarding the acquisition are discussed in NOTE 2. ACQUISITIONS of these Notes to Consolidated Financial Statements. The majority of the organic deposit decline was due to decreases in non-maturity deposits of $513.5 million, which was offset by increases in maturity deposits of $232.9 million when compared to December 31, 2021. Higher interest rates have resulted in customers migrating funds from non-maturity products into maturity time deposit products. At December 31, 2022 and 2021, deposits exceeding the FDIC's Standard Maximum Deposit Insurance Amount of $250,000 were $8.1 billion and $7.6 billion, respectively. At December 31, 2022, the contractual maturities of time deposits are summarized as follows: Certificates and Other Time Deposits 2023 $ 1,148,819 2024 96,897 2025 14,661 2026 9,819 2027 6,043 After 2027 569 $ 1,276,808 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS The following table summarizes the Corporation's borrowings as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 Federal funds purchased $ 171,560 $ — Securities sold under repurchase agreements $ 167,413 $ 181,577 Federal Home Loan Bank advances 823,674 334,055 Subordinated debentures and other borrowings 151,298 118,618 Total Borrowings $ 1,313,945 $ 634,250 The Level One acquisition contributed to the increase in borrowings due to the assumption of $160.0 million of Federal Home Loan Bank advances and $32.6 million of subordinated debentures. Additional details regarding the acquisition are discussed within NOTE 2. ACQUISITIONS of the these Notes to Consolidated Financial Statements. Securities sold under repurchase agreements consist of obligations of the Bank to other parties and are secured by U.S. Government-Sponsored Enterprise obligations. The maximum amount of outstanding agreements at any month-end during 2022 and 2021 totaled $218.9 million and $199.1 million, respectively, and the average of such agreements totaled $185.1 million and $173.8 million during 2022 and 2021, respectively. Transfers Accounted For As Secured Borrowings The collateral pledged for all repurchase agreements that are accounted for as secured borrowings as of December 31, 2022 and 2021 were: December 31, 2022 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 Days 30-90 Days Greater Than 90 Days Total U.S. Government-sponsored mortgage-backed securities $ 167,413 $ — $ — $ — $ 167,413 December 31, 2021 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 Days 30-90 Days Greater Than 90 Days Total U.S. Government-sponsored mortgage-backed securities $ 181,577 $ — $ — $ — $ 181,577 Contractual maturities of borrowings as of December 31, 2022, are as follows: Maturities in Years Ending December 31: Federal Funds Purchased Securities Sold Federal Home Subordinated 2023 $ 171,560 $ 167,413 $ 460,097 $ 1,183 2024 — — 60,097 — 2025 — — 25,097 — 2026 — — 97 — 2027 — — 200,096 — After 2027 — — 78,190 152,012 ASC 805 fair value adjustments at acquisition — — — (1,897) $ 171,560 $ 167,413 $ 823,674 $ 151,298 The terms of a security agreement with the FHLB require the Corporation to pledge, as collateral for advances, qualifying first mortgage loans, investment securities and multi-family loans in an amount equal to at least 145 percent of these advances depending on the type of collateral pledged. At December 31, 2022, the outstanding FHLB advances had interest rates from 0.35 to 4.92 percent and are subject to restrictions or penalties in the event of prepayment. The total available remaining borrowing capacity from the FHLB at December 31, 2022, was $617.6 million. As of December 31, 2022, the Corporation had $95.0 million of putable advances with the FHLB. Subordinated Debentures and Term Loans. As of December 31, 2022 and 2021, subordinated debentures and term loans totaled $151.3 million and $118.6 million, respectively. • First Merchants Capital Trust II ("FMC Trust II"). At December 31, 2022 and 2021, the Corporation had $41.7 million of subordinated debentures issued to FMC Trust II, a wholly-owned statutory business trust. FMC Trust II was formed in July 2007 for purposes of issuing trust preferred securities to investors. At that time, it simultaneously issued and sold its common securities to the Corporation, which constituted all of the issued and outstanding common securities of FMC Trust II. The subordinated debentures, which were purchased with the proceeds of the sale of the trust’s capital securities, are the sole assets of FMC Trust II and are fully and unconditionally guaranteed by the Corporation. The subordinated debentures and the trust preferred securities bear interest at a variable rate equal to three-month LIBOR plus 1.56 percent, with interest and dividend payments being made on a quarterly basis. The interest rate at December 31, 2022 and 2021 was 6.33 percent and 1.76 percent, respectively. The trust preferred securities are currently redeemable at par and without penalty, subject to the Corporation having first redeemed the related subordinated debentures, with the prior approval of the Federal Reserve if then required under applicable capital guidelines or policies. The trust preferred securities and the subordinated debentures of FMC Trust II will mature on September 15, 2037. The Corporation continues to hold all outstanding common securities of FMC Trust II. See “Replacement of LIBOR Benchmark” below for information relating to changes impacting the interest and dividends payable upon the trust preferred securities and subordinated debentures after June 30, 2023. • Ameriana Capital Trust I. At December 31, 2022 and 2021, the Corporation had $10.3 million of subordinated debentures issued to Ameriana Capital Trust I. On December 31, 2015, the Corporation acquired Ameriana Capital Trust I in conjunction with its acquisition of Ameriana Bancorp, Inc. With a trust preferred structure substantially similar to that described above for FMC Trust II, the subordinated debentures held by Ameriana Capital Trust I were purchased with the proceeds of the sale of the trust’s capital securities. The subordinated debentures and the trust preferred securities bear interest at a variable rate equal to three-month LIBOR plus 1.50 percent, with interest and dividend payments being made on a quarterly basis. The interest rate at December 31, 2022 and 2021 was 6.27 percent and 1.70 percent, respectively. The trust preferred securities of Ameriana Capital Trust I are currently redeemable at par and without penalty, subject to the Corporation having first redeemed the related subordinated debentures, with the prior approval of the Federal Reserve if then required under applicable capital guidelines or policies. The trust preferred securities and the subordinated debentures of Ameriana Capital Trust I will mature in March 2036. The Corporation continues to hold all of the outstanding common securities of Ameriana Capital Trust I. See “Replacement of LIBOR Benchmark” below for information relating to changes impacting the interest and dividends payable upon the trust preferred securities and subordinated debentures after June 30, 2023. • First Merchants Senior Notes and Subordinated Notes. On November 1, 2013, the Corporation completed the private issuance and sale to four institutional investors of an aggregate of $70 million of debt comprised of (a) 5.00 percent Fixed-to-Floating Rate Senior Notes due 2028 in the aggregate principal amount of $5 million (the "Senior Debt") and (b) 6.75 percent Fixed-to-Floating Rate Subordinated Notes due 2028 in the aggregate principal amount of $65 million (the "Subordinated Debt"). The interest rate on the Senior Debt and Subordinated Debt remains fixed for the first ten (10) years and will become floating thereafter. Once the rates convert to floating on October 30, 2023, the Senior Debt will have an annual floating rate equal to the three-month forward-looking term Secured Overnight Financing Rate, as administered by CME Group Benchmark Administration Limited (“CME Term SOFR”), adjusted by the relevant spread adjustment (which is 0.26161 percent for a three-month tenor), plus 2.345 percent. The Subordinated Debt will have an annual floating rate equal to the three-month CME Term SOFR, plus the 0.26161 percent spread adjustment, plus 4.095 percent. See “Replacement of LIBOR Benchmark” below for additional information relating to the transition from LIBOR to the Secured Overnight Financing Rate. The Corporation has an option to redeem the Subordinated Debt in whole or in part at a redemption price equal to 100 percent of the principal amount of the redeemed Subordinated Notes, plus accrued and unpaid interest to the date of the redemption. The option of redemption is subject to the approval of the Federal Reserve Board. The Corporation has an option to redeem the Senior Debt in whole or in part at a redemption price equal to 100 percent of the principal amount of the redeemed Senior Notes, plus accrued and unpaid interest to the date of the redemption; provided, however, that no Subordinated Notes (as defined in the Issuing and Paying Agency Agreement) may remain outstanding subsequent to any early redemption of Senior Notes. The Subordinated Debt and the Senior Debt options to redeem begin with the interest payment date on October 30, 2023, or on any scheduled interest payment date thereafter. The Senior Debt agreement contains certain customary representations and warranties and financial and negative covenants. As of December 31, 2022 and 2021 the Corporation was in compliance with these covenants. • Level One Subordinated Notes. On April 1, 2022, the Corporation assumed certain subordinated notes in conjunction with its acquisition of Level One. The $30.0 million of subordinated notes issued on December 18, 2019 bear a fixed interest rate of 4.75 percent per annum, payable semiannually through December 18, 2024. The notes will bear a floating interest rate equal to the of three-month CME Term SOFR plus 3.11 percent, payable quarterly, after December 18, 2024 through maturity. The notes mature on December 18, 2029, and the Corporation has the option to redeem any or all of the subordinated notes without premium or penalty any time after December 18, 2024 or upon the occurrence of a Tier 2 capital event or tax event. • Other Borrowings. On April 1, 2022, the Corporation acquired a secured borrowing in conjunction with its acquisition of Level One. The secured borrowing related to a certain loan participation sold by Level One that did not qualify for sales treatment. The secured borrowing bears a fixed rate of 1.00 percent and had a balance of $1.2 million as of December 31, 2022. Replacement of LIBOR Benchmark On March 15, 2022, the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) was signed into law in response to the U.K. Financial Conduct Authority, the authority regulating LIBOR, announcing that, among other things, the 1-month, 3-month, 6-month and 12-month U.S. dollar LIBOR settings would cease to exist after June 30, 2023. The LIBOR Act establishes a uniform national approach for replacing LIBOR in legacy contracts that do not provide for the use of a clearly defined replacement benchmark rate. As directed by the LIBOR Act, on December 16, 2022, the Federal Reserve issued a final rule setting forth regulations to implement the LIBOR Act, including establishing benchmark replacements based on the Secured Overnight Funding Rate (“SOFR”) for contracts governed by U.S. law that reference certain tenors of U.S. dollar LIBOR (the overnight and one-, three-, six-, and 12-month tenors) and that do not have terms that provide for the use of a clearly defined and practicable replacement benchmark rate (“fallback provisions”) following the first London banking day after June 30, 2023. As the subordinated debentures, the trust preferred securities, the Senior Notes and the Subordinated Notes discussed above do not have LIBOR fallback provisions, after June 30, 2023, the interest and dividends paid on those instruments will be based upon the CME Term SOFR, as the replacement benchmark, including a static spread adjustment for the appropriate tenor as provided by the LIBOR Act and related Federal Reserve regulations. The relevant spread adjustment for a three-month tenor is 0.26161 percent. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | DERIVATIVE FINANCIAL INSTRUMENTS Risk Management Objective of Using Derivatives The Corporation is exposed to certain risks arising from both its business operations and economic conditions. The Corporation principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Corporation manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and through the use of derivative financial instruments. Specifically, the Corporation enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Corporation’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Corporation’s known or expected cash payments principally related to certain variable-rate liabilities. The Corporation also has derivatives that are a result of a service the Corporation provides to certain qualifying customers, and, therefore, are not used to manage interest rate risk in the Corporation’s assets or liabilities. The Corporation manages a matched book with respect to its derivative instruments offered as a part of this service to its customers in order to minimize its net risk exposure resulting from such transactions. Derivatives Designated as Hedges The Corporation’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Corporation primarily uses interest rate swaps and interest rate caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the payment of fixed amounts to a counterparty in exchange for the Corporation receiving variable payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. As of December 31, 2022 the Corporation had one interest rate swap with a notional amount of $10.0 million that was designated as a cash flow hedge. As of December 31, 2021, the Corporation had four interest rate swaps with a notional amount of $60.0 million that were designated as cash flow hedges. A $24.0 million interest rate swap, which was used to hedge the variable cash outflows (Ameribor-based) associated with a brokered deposit, matured in the first quarter of 2022. Two interest rate swaps totaling $26.0 million, which were used to hedge the variable cash outflows (LIBOR-based) associated with existing trust preferred securities when the outflows converted from a fixed rate to variable rate in September 2012, matured in the third quarter of 2022. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2022, $10.0 million of interest rate swaps were used to hedge the variable cash outflows (LIBOR-based) associated with one Federal Home Loan Bank advance. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the twelve months ended December 31, 2022 and 2021, the Corporation did not recognize any ineffectiveness. Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Corporation's variable-rate liabilities. During the next twelve months, the Corporation expects to reclassify $164,000 from accumulated other comprehensive income (loss) to interest income. The following table summarizes the Corporation's derivatives designated as hedges: Asset Derivatives Liability Derivatives December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Balance Fair Balance Fair Balance Fair Balance Fair Cash flow hedges: Interest rate swaps on borrowings Other Assets $ 164 Other Assets $ — Other Liabilities $ — Other Liabilities $ 835 The amount of gain (loss) recognized in other comprehensive income is included in the table below for the periods indicated. Derivatives in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative 2022 2021 Interest rate products $ 479 $ 138 The amount of loss reclassified from other comprehensive income into income related to cash flow hedging relationships is included in the table below for the years ended December 31, 2022, 2021 and 2020. Derivatives Designated as Hedging Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Effective Portion) Amount of Gain (Loss) Reclassified from Other Comprehensive Income into Income (Effective Portion) 2022 2021 2020 Interest rate contracts Interest expense $ (521) $ (1,044) $ (906) Non-designated Hedges The Corporation does not use derivatives for trading or speculative purposes. Derivatives not designated as hedges are not speculative and result from a service the Corporation provides to certain customers. The Corporation executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Corporation executes with a third party, such that the Corporation minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. The notional amount of customer-facing swaps was approximately $1.2 billion and $1.0 billion as of December 31, 2022 and December 31, 2021, respectively. This amount is offset with third party counterparties, as described above. Commitments to fund certain mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of mortgage loans to third party investors are considered derivatives. It is the Corporation's practice to enter into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from its commitments to fund the loans. These mortgage banking derivatives are not designated in hedge relationships. Fair values were estimated based on changes in mortgage interest rates from the date of the commitments. Changes in the fair value of these mortgage banking derivatives are included in net gains and fees on sales of loans. The table below presents the fair value of the Corporation’s non-designated hedges, as well as their classification on the Balance Sheet, as of December 31, 2022, and December 31, 2021. December 31, 2022 December 31, 2021 Notional Amount Fair Value Notional Amount Fair Value Included in other assets: Interest rate swaps $ 1,184,866 $ 92,652 $ 1,038,947 $ 41,133 Forward contracts related to mortgage loans to be delivered for sale 14,406 188 — — Interest rate lock commitments 5,049 32 — — Included in other assets $ 1,204,321 $ 92,872 $ 1,038,947 $ 41,133 Included in other liabilities: Interest rate swaps $ 1,184,866 $ 92,652 $ 1,038,947 $ 41,133 Forward contracts related to mortgage loans to be delivered for sale 4,483 63 — — Interest rate lock commitments 7,549 55 — — Included in other liabilities $ 1,196,898 $ 92,770 $ 1,038,947 $ 41,133 In the normal course of business, the Corporation may decide to settle a forward contract rather than fulfill the contract. Cash received or paid in this settlement manner is included in "Net gains and fees on sales of loans" in the Consolidated Statements of Income and is considered a cost of executing a forward contract. The amount of gain (loss) recognized into income related to non-designated hedging instruments is included in the table below for the periods indicated. Derivatives Not Location of Gain Amount of Gain Recognized in Income on Derivative 2022 2021 2020 Forward contracts related to mortgage loans to be delivered for sale Net gains and fees on sales of loans $ 1,112 $ — $ — Interest rate lock commitments Net gains and fees on sales of loans 71 — — Total net gain recognized in income $ 1,183 $ — $ — The Corporation’s exposure to credit risk occurs because of nonperformance by its counterparties. The counterparties approved by the Corporation are usually financial institutions, which are well capitalized and have credit ratings through Moody’s and/or Standard & Poor’s at or above investment grade. The Corporation’s control of such risk is through quarterly financial reviews, comparing mark-to-market values with policy limitations, credit ratings and collateral pledging. Credit-risk-related Contingent Features The Corporation has agreements with certain of its derivative counterparties that contain a provision where if the Corporation fails to maintain its status as a well or adequately capitalized institution, then the Corporation could be required to terminate or fully collateralize all outstanding derivative contracts. Additionally, the Corporation has agreements with certain of its derivative counterparties that contain a provision where if the Corporation defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Corporation could also be declared in default on its derivative obligations. As of December 31, 2022, the termination value of derivatives in a net liability position related to these agreements was $572,000, which resulted in no collateral pledged to counterparties as of December 31, 2022. While the Corporation did not breach any of these provisions as of December 31, 2022, if it had, the Corporation could have been required to settle its obligations under the agreements at their termination value. |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Values of Financial Instruments | FAIR VALUES OF FINANCIAL INSTRUMENTS The Corporation used fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The accounting guidance defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 applies only when other guidance requires or permits assets or liabilities to be measured at fair value; it does not expand the use of fair value in any new circumstances. As defined in ASC 820, fair value is the price to sell an asset or transfer a liability in an orderly transaction between market participants. It represents an exit price at the measurement date. Market participants are buyers and sellers, who are independent, knowledgeable, and willing and able to transact in the principal (or most advantageous) market for the asset or liability being measured. Current market conditions, including imbalances between supply and demand, are considered in determining fair value. The Corporation values its assets and liabilities in the principal market where it sells the particular asset or transfers the liability with the greatest volume and level of activity. In the absence of a principal market, the valuation is based on the most advantageous market for the asset or liability (i.e., the market where the asset could be sold or the liability transferred at a price that maximizes the amount to be received for the asset or minimizes the amount to be paid to transfer the liability). Valuation inputs refer to the assumptions market participants would use in pricing a given asset or liability. Inputs can be observable or unobservable. Observable inputs are those assumptions which market participants would use in pricing the particular asset or liability. These inputs are based on market data and are obtained from a source independent of the Corporation. Unobservable inputs are assumptions based on the Corporation’s own information or estimate of assumptions used by market participants in pricing the asset or liability. Unobservable inputs are based on the best and most current information available on the measurement date. All inputs, whether observable or unobservable, are ranked in accordance with a prescribed fair value hierarchy which gives the highest ranking to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest ranking to unobservable inputs for which there is little or no market activity (Level 3). Fair values for assets or liabilities classified as Level 2 are based on one or a combination of the following factors: (i) quoted prices for similar assets; (ii) observable inputs for the asset or liability, such as interest rates or yield curves; or (iii) inputs derived principally from or corroborated by observable market data. The level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Corporation considers an input to be significant if it drives 10 percent or more of the total fair value of a particular asset or liability. RECURRING MEASUREMENTS Assets and liabilities are considered to be measured at fair value on a recurring basis if fair value is measured regularly (i.e., daily, weekly, monthly or quarterly). Recurring valuation occurs at a minimum on the measurement date. Assets and liabilities are considered to be measured at fair value on a nonrecurring basis if the fair value measurement of the instrument does not necessarily result in a change in the amount recorded on the balance sheet. Generally, nonrecurring valuation is the result of the application of other accounting pronouncements which require assets or liabilities to be assessed for impairment and recorded at the lower of cost or fair value. The fair value of assets or liabilities transferred in or out of Level 3 is measured on the transfer date, with any additional changes in fair value subsequent to the transfer considered to be realized or unrealized gains or losses. Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy. Investment Securities Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include U.S. Treasury securities. Where significant observable inputs, other than Level 1 quoted prices, are available, securities are classified within Level 2 of the valuation hierarchy. Level 2 securities include U.S. Government-sponsored agency and mortgage-backed securities, state and municipal securities and corporate obligations securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy and include state and municipal securities, U.S. Government-sponsored mortgage-backed securities and corporate obligations securities. Level 3 fair value for securities was determined using a discounted cash flow model that incorporated market estimates of interest rates and volatility in markets that have not been active. Third party vendors compile prices from various sources and may apply such techniques as matrix pricing to determine the value of identical or similar investment securities (Level 2). Matrix pricing is a mathematical technique widely used in the banking industry to value investment securities without relying exclusively on quoted prices for specific investment securities but rather relying on the investment securities’ relationship to other benchmark quoted investment securities. Any investment security not valued based upon the methods above are considered Level 3. Derivative Financial Agreements See information regarding the Corporation’s derivative financial agreements in NOTE 12. DERIVATIVE FINANCIAL INSTRUMENTS of these Notes to Consolidated Financial Statements. The following table presents the fair value measurements of assets and liabilities recognized in the accompanying balance sheets measured at fair value on a recurring basis and the level within the ASC 820-10 fair value hierarchy in which the fair value measurements fall at December 31, 2022 and 2021. Fair Value Measurements Using: Quoted Prices in Active Significant Other Observable Inputs Significant December 31, 2022 Fair Value (Level 1) (Level 2) (Level 3) Available for sale securities: U.S. Government-sponsored agency securities $ 101,962 $ — $ 101,962 $ — U.S. Treasury 2,459 2,459 — — State and municipal 1,351,760 — 1,348,356 3,404 U.S. Government-sponsored mortgage-backed securities 508,273 — 508,269 4 Corporate obligations 12,207 — 12,176 31 Derivative assets 93,036 — 93,036 — Derivative liabilities 92,770 — 92,770 — Fair Value Measurements Using: Quoted Prices in Active Significant Other Observable Inputs Significant December 31, 2021 Fair Value (Level 1) (Level 2) (Level 3) Available for sale securities: U.S. Government-sponsored agency securities $ 95,136 $ — $ 95,136 $ — U.S. Treasury 999 999 — — State and municipal 1,576,532 — 1,571,076 5,456 U.S. Government-sponsored mortgage-backed securities 667,605 — 667,601 4 Corporate obligations 4,279 — 4,248 31 Interest rate swap asset 41,133 — 41,133 — Interest rate swap liability 41,968 — 41,968 — LEVEL 3 RECONCILIATION The following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying balance sheets using significant unobservable Level 3 inputs for year ended December 31, 2022 and 2021. Available for Sale Securities For The Year Ended December 31, 2022 December 31, 2021 Beginning Balance $ 5,491 $ 2,479 Included in other comprehensive income (612) 227 Purchases, issuances, and settlements 5,111 3,241 Principal payments (6,551) (456) Ending balance $ 3,439 $ 5,491 There were no gains or losses included in earnings that were attributable to the changes in unrealized gains or losses related to assets or liabilities held at December 31, 2022 or 2021. TRANSFERS BETWEEN LEVELS There were no transfers in or out of Level 3 during 2022 or 2021. NONRECURRING MEASUREMENTS Following is a description of valuation methodologies used for instruments measured at fair value on a non-recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy for year ended December 31, 2022 and 2021. Fair Value Measurements Using Quoted Prices in Active Significant Other Observable Inputs Significant December 31, 2022 Fair Value (Level 1) (Level 2) (Level 3) Collateral dependent loans $ 55,290 — — $ 55,290 Fair Value Measurements Using Quoted Prices in Active Significant Other Observable Inputs Significant December 31, 2021 Fair Value (Level 1) (Level 2) (Level 3) Collateral dependent loans $ 24,491 — — $ 24,491 Other real estate owned $ 96 — — $ 96 Collateral Dependent Loans and Other Real Estate Owned Determining fair value for collateral dependent loans and other real estate requires obtaining a current independent appraisal of the collateral and applying a discount factor, which includes selling costs if applicable, to the value. The fair value of real estate is generally based on appraisals by qualified licensed appraisers. The appraisers typically determine the value of the real estate by utilizing an income or market valuation approach. If an appraisal is not available, the fair value may be determined by using a cash flow analysis. Fair value on other collateral such as business assets is typically ascertained by assessing, either singularly or some combination of, asset appraisals, accounts receivable aging reports, inventory listings and or customer financial statements. Both appraised values and values based on borrower’s financial information are discounted as considered appropriate based on age and quality of the information and current market conditions. UNOBSERVABLE (LEVEL 3) INPUTS The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements, other than goodwill, at December 31, 2022 and 2021. December 31, 2022 Fair Value Valuation Technique Unobservable Inputs Range (Weighted-Average) State and municipal securities $ 3,404 Discounted cash flow Maturity Call Date 1 month to 15 years A- to BBB 0.4% - 4% 3.4% Corporate obligations and U.S. Government-sponsored mortgage backed securities $ 35 Discounted cash flow Risk free rate 3 month LIBOR plus 200bps 0% Collateral dependent loans $ 55,290 Collateral based measurements Discount to reflect current market conditions and ultimate collectability 0% - 10% 1.1% December 31, 2021 Fair Value Valuation Technique Unobservable Inputs Range (Weighted-Average) State and municipal securities $ 5,456 Discounted cash flow Maturity Call Date 1 month to 15 years A- to BBB- 0.75% - 4% 3.7% Corporate obligations and U.S. Government-sponsored mortgage backed securities $ 35 Discounted cash flow Risk free rate 3 month LIBOR plus 200bps 0% Collateral dependent loans $ 24,491 Collateral based measurements Discount to reflect current market conditions and ultimate collectability 0% - 10% 5.5% Other real estate owned $ 96 Appraisals Discount to reflect current market conditions 0% - 44% 43.5% The following is a discussion of the sensitivity of significant unobservable inputs, the interrelationships between those inputs and other unobservable inputs used in recurring fair value measurement and how those inputs might magnify or mitigate the effect of changes in the unobservable inputs on the fair value measurement. State and Municipal Securities, Corporate Obligations, and U.S. Government-sponsored Mortgage Backed Securities The significant unobservable inputs used in the fair value measurement of the Corporation's state and municipal securities, corporate obligations and U.S. Government-sponsored mortgage backed securities are premiums for unrated securities and marketability discounts. Significant increases or decreases in either of those inputs in isolation would result in a significantly lower or higher fair value measurement. Generally, changes in either of those inputs will not affect the other input. FAIR VALUE OF FINANCIAL INSTRUMENTS The following table presents estimated fair values of the Corporation's financial instruments and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2022 and 2021. 2022 Carrying Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Assets at December 31: Cash and due from banks $ 122,594 $ 122,594 $ — $ — Interest-bearing deposits 126,061 126,061 — — Investment securities available for sale 1,976,661 2,459 1,970,763 3,439 Investment securities held to maturity 2,287,127 — 1,893,271 14,594 Loans held for sale 9,094 — 9,094 — Loans 11,780,617 — — 11,156,217 Federal Home Loan Bank stock 38,525 — 38,525 — Derivative assets 93,036 — 93,036 — Interest receivable 85,070 — 85,070 — Liabilities at December 31: Deposits $ 14,382,745 $ 13,105,936 $ 1,251,017 $ — Borrowings: Federal funds purchased 171,560 — 171,560 — Securities sold under repurchase agreements 167,413 — 167,396 — Federal Home Loan Bank advances 823,674 — 615,211 — Subordinated debentures and other borrowings 151,298 — 122,102 — Derivative liabilities 92,770 — 92,770 — Interest payable 7,530 — 7,530 — 2021 Carrying Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Assets at December 31: Cash and due from banks $ 167,146 $ 167,146 $ — $ — Interest-bearing deposits 474,154 474,154 — — Investment securities available for sale 2,344,551 999 2,338,061 5,491 Investment securities held to maturity 2,179,802 — 2,188,600 13,903 Loans held for sale 11,187 — 11,187 — Loans 9,046,464 — — 9,068,319 Federal Home Loan Bank stock 28,736 — 28,736 — Interest rate swap asset 41,133 — 41,133 — Interest receivable 57,187 — 57,187 — Liabilities at December 31: Deposits $ 12,732,577 $ 12,038,992 $ 690,089 $ — Borrowings: Securities sold under repurchase agreements 181,577 — 181,572 — Federal Home Loan Bank advances 334,055 — 337,005 — Subordinated debentures and other borrowings 118,618 — 107,892 — Interest rate swap liability 41,968 — 41,968 — Interest payable 2,762 — 2,762 — |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, as of December 31, 2022 and 2021: Accumulated Other Comprehensive Income (Loss) Unrealized Gains (Losses) on Securities Available for Sale Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Defined Benefit Plans Total Balance at December 31, 2021 $ 59,774 $ (660) $ (4,001) $ 55,113 Other comprehensive income before reclassifications (293,326) 378 (850) (293,798) Amounts reclassified from accumulated other comprehensive income (943) 412 65 (466) Period change (294,269) 790 (785) (294,264) Balance at December 31, 2022 $ (234,495) $ 130 $ (4,786) $ (239,151) Balance at December 31, 2020 $ 87,988 $ (1,594) $ (11,558) $ 74,836 Other comprehensive income before reclassifications (23,732) 109 7,491 (16,132) Amounts reclassified from accumulated other comprehensive income (4,482) 825 66 (3,591) Period change (28,214) 934 7,557 (19,723) Balance at December 31, 2021 $ 59,774 $ (660) $ (4,001) $ 55,113 The following table presents the reclassification adjustments out of accumulated other comprehensive income (loss) that were included in net income in the Consolidated Statements of Income for the years ended December 31, 2022, 2021 and 2020: Amount Reclassified from Accumulated Other Comprehensive Income (Loss) For the Year Ended December 31, Details about Accumulated Other Comprehensive Income (Loss) Components 2022 2021 2020 Affected Line Item in the Statements of Income Unrealized gains (losses) on available for sale securities (1) Realized securities gains reclassified into income $ 1,194 $ 5,674 $ 11,895 Other income - net realized gains on sales of available for sale securities Related income tax benefit (expense) (251) (1,192) (2,498) Income tax expense $ 943 $ 4,482 $ 9,397 Unrealized gains (losses) on cash flow hedges (2) Interest rate contracts $ (521) $ (1,044) $ (906) Interest expense - subordinated debentures and other borrowings Related income tax benefit (expense) 109 219 190 Income tax expense $ (412) $ (825) $ (716) Unrealized gains (losses) on defined benefit plans Amortization of net loss and prior service costs $ (82) $ (84) $ (84) Other expenses - salaries and employee benefits Related income tax benefit (expense) 17 18 18 Income tax expense $ (65) $ (66) $ (66) Total reclassifications for the period, net of tax $ 466 $ 3,591 $ 8,615 (1) For additional detail related to unrealized gains (losses) on available for sale securities and related amounts reclassified from accumulated other comprehensive income see NOTE 4. INVESTMENT SECURITIES of these Notes to Consolidated Financial Statements. (2) For additional detail related to unrealized gains (losses) on cash flow hedges and related amounts reclassified from accumulated other comprehensive income see NOTE 12. DERIVATIVE FINANCIAL INSTRUMENTS of these Notes to Consolidated Financial Statements. |
Regulatory Capital and Dividend
Regulatory Capital and Dividends | 12 Months Ended |
Dec. 31, 2022 | |
Banking and Thrift, Interest [Abstract] | |
Regulatory Capital and Dividends | REGULATORY CAPITAL AND DIVIDENDS Regulatory Capital Capital adequacy is an important indicator of financial stability and performance. The Corporation and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies and are assigned to a capital category. The assigned capital category is largely determined by four ratios that are calculated according to the regulations: total risk-based capital, tier 1 risk-based capital, CET1, and tier 1 leverage ratios. The ratios are intended to measure capital relative to assets and credit risk associated with those assets and off-balance sheet exposures of the entity. The capital category assigned to an entity can also be affected by qualitative judgments made by regulatory agencies about the risk inherent in the entity's activities that are not part of the calculated ratios. There are five capital categories defined in the regulations, ranging from “well capitalized” to “critically undercapitalized”. Classification of a bank in any of the undercapitalized categories can result in actions by regulators that could have a material effect on a bank's operations. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total risk-based capital, tier 1 capital and common equity tier 1 capital, in each case, to risk-weighted assets, and of tier 1 capital to average assets, or leverage ratio, all of which are calculated as defined in the regulations. Banks with lower capital levels are deemed to be “undercapitalized”, “significantly undercapitalized” or “critically undercapitalized”, depending on their actual levels. The appropriate federal regulatory agency may also downgrade a bank to the next lower capital category upon a determination that the bank is in an unsafe or unsound practice. Banks are required to monitor closely their capital levels and to notify their appropriate regulatory agency of any basis for a change in capital category. Basel III requires the Corporation and the Bank to maintain the minimum capital and leverage ratios as defined in the regulation and as illustrated in the following table, which capital to risk-weighted asset ratios include a 2.5 percent capital conservation buffer. Under Basel III, in order to avoid limitations on capital distributions, including dividends, the Corporation must hold a 2.5 percent capital conservation buffer above the adequately capitalized CET1 to risk-weighted assets ratio (which buffer is reflected in the required ratios below). Under Basel III, the Corporation and Bank elected to opt-out of including accumulated other comprehensive income in regulatory capital. As of December 31, 2022, the Bank met all capital adequacy requirements to be considered well capitalized under the fully phased-in Basel III capital rules. There is no threshold for well capitalized status for bank holding companies. As part of a March 27, 2020 joint statement of federal banking regulators, an interim final rule that allowed banking organizations to mitigate the effects of the CECL accounting standard on their regulatory capital was announced. Banking organizations could elect to mitigate the estimated cumulative regulatory capital effects of CECL for up to two years. This two-year delay was to be in addition to the three-year transition period that federal banking regulators had already made available. While the 2021 CAA provided for a further extension of the mandatory adoption of CECL until January 1, 2022, the federal banking regulators elected to not provide a similar extension to the two year mitigation period applicable to regulatory capital effects. Instead, the federal banking regulators require that, in order to utilize the additional two-year delay, banking organizations must have adopted the CECL standard no later than December 31, 2020, as required by the CARES Act. As a result, because implementation of the CECL standard was delayed by the Corporation until January 1, 2021, it began phasing in the cumulative effect of the adoption on its regulatory capital, at a rate of 25 percent per year, over a three-year transition period that began on January 1, 2021. Under that phase-in schedule, the cumulative effect of the adoption will be fully reflected in regulatory capital on January 1, 2024. Basel III permits banks with less than $15 billion in assets to continue to treat trust preferred securities as tier 1 capital. This treatment is permanently grandfathered as tier 1 capital even if the Corporation should ever exceed $15 billion in assets due to organic growth but not following certain mergers or acquisitions. As a result, while the Corporation’s total assets exceeded $15 billion as of December 31, 2021, the Corporation has continued to treat its trust preferred securities as tier 1 capital as of such date. However, under certain amendments to the “transition rules” of Basel III, if a bank holding company that held less than $15 billion of assets as of December 31, 2009 (which would include the Corporation) acquires a bank holding company with under $15 billion in assets at the time of acquisition (which would include Level One), and the resulting organization has total consolidated assets of $15 billion or more as reported on the resulting organization’s call report for the period in which the transaction occurred, the resulting organization must begin reflecting its trust preferred securities as tier 2 capital at such time. As a result, effective with the April 1, 2022 consummation of the Level One merger, the Corporation began reflecting all of its trust preferred securities as tier 2 capital. The Corporation's and Bank's actual and required capital ratios as of December 31, 2022 and December 31, 2021 were as follows: Prompt Corrective Action Thresholds Actual Basel III Minimum Capital Required Well Capitalized December 31, 2022 Amount Ratio Amount Ratio Amount Ratio Total risk-based capital to risk-weighted assets First Merchants Corporation $ 1,882,254 13.08 % $ 1,511,230 10.50 % N/A N/A First Merchants Bank 1,822,296 12.65 1,513,064 10.50 $ 1,441,014 10.00 % Tier 1 capital to risk-weighted assets First Merchants Corporation $ 1,558,281 10.83 % $ 1,223,377 8.50 % N/A N/A First Merchants Bank 1,641,210 11.39 1,224,862 8.50 $ 1,152,811 8.00 % Common equity tier 1 capital to risk-weighted assets First Merchants Corporation $ 1,533,281 10.65 % $ 1,007,487 7.00 % N/A N/A First Merchants Bank 1,641,210 11.39 1,008,710 7.00 $ 936,659 6.50 % Tier 1 capital to average assets First Merchants Corporation $ 1,558,281 9.10 % $ 684,758 4.00 % N/A N/A First Merchants Bank 1,641,210 9.60 683,680 4.00 $ 854,600 5.00 % Prompt Corrective Action Thresholds Actual Basel III Minimum Capital Required Well Capitalized December 31, 2021 Amount Ratio Amount Ratio Amount Ratio Total risk-based capital to risk-weighted assets First Merchants Corporation $ 1,582,481 13.92 % $ 1,193,840 10.50 % N/A N/A First Merchants Bank 1,453,358 12.74 1,197,515 10.50 $ 1,140,490 10.00 % Tier 1 capital to risk-weighted assets First Merchants Corporation $ 1,374,240 12.09 % $ 966,442 8.50 % N/A N/A First Merchants Bank 1,309,685 11.48 969,417 8.50 $ 912,392 8.00 % Common equity tier 1 capital to risk-weighted assets First Merchants Corporation $ 1,327,634 11.68 % $ 795,893 7.00 % N/A N/A First Merchants Bank 1,309,685 11.48 798,343 7.00 $ 741,319 6.50 % Tier 1 capital to average assets First Merchants Corporation $ 1,374,240 9.30 % $ 590,758 4.00 % N/A N/A First Merchants Bank 1,309,685 8.88 589,994 4.00 $ 737,493 5.00 % A reconciliation of certain non-GAAP amounts used in the determination of the above regulatory measures is detailed within the “Capital” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included as Item 7 of this Annual Report on Form 10-K. On April 9, 2020, federal banking regulators issued an interim final rule to modify the Basel III regulatory capital rules applicable to banking organizations to allow those organizations participating in the PPP to neutralize the regulatory capital effects of participating in the program. The interim final rule, which became effective April 13, 2020, clarified that PPP loans receive a zero percent risk weight for purposes of determining risk-weighted assets and the CET1, tier 1 and total risk-based capital ratios. At December 31, 2022 and 2021, risk-weighted assets included $4.7 million and $106.6 million, respectively, of PPP loans at a zero risk weight. Management believes that all of the above capital ratios are meaningful measurements for evaluating the safety and soundness of the Corporation. Traditionally, the banking regulators have assessed bank and bank holding company capital adequacy based on both the amount and the composition of capital, the calculation of which is prescribed in federal banking regulations. The Federal Reserve focuses its assessment of capital adequacy on a component of tier 1 capital known as CET1. Because the Federal Reserve has long indicated that voting common shareholders' equity (essentially tier 1 risk-based capital less preferred stock and non-controlling interest in subsidiaries) generally should be the dominant element in tier 1 risk-based capital, this focus on CET1 is consistent with existing capital adequacy categories. Tier I regulatory capital consists primarily of total stockholders’ equity and subordinated debentures issued to business trusts categorized as qualifying borrowings, less non-qualifying intangible assets and unrealized net securities gains or losses. Dividends The Corporation's principal source of funds for dividend payments to shareholders is dividends received from the Bank. Banking regulations limit the maximum amount of dividends that a bank may pay without requesting prior approval of regulatory agencies. Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the bank’s retained income (as defined under the regulations) for the current year plus those for the previous two years, subject to the capital requirements described above. As of December 31, 2022, the amount available for dividends from the Corporation’s subsidiaries (both banking and non-banking), without prior regulatory approval or notice, was $288.7 million. Additionally, the Corporation has a Dividend Reinvestment and Stock Purchase Plan, enabling stockholders to elect to have their cash dividends on all shares automatically reinvested in additional shares of the Corporation’s common stock. In addition, stockholders may elect to make optional cash payments up to an aggregate of $5,000 per quarter for the purchase of additional shares of common stock. The stock is credited to participant accounts at fair market value. Dividends are reinvested on a quarterly basis. Stockholders' Equity The Corporation adopted the current expected credit losses ("CECL") model for calculating the allowance for credit losses on January 1, 2021. CECL replaces the previous "incurred loss" model for measuring credit losses, which encompassed allowances for current known and inherent losses within the portfolio, with an "expected loss" model for measuring credit losses, which encompasses allowances for losses expected to be incurred over the life of the portfolio. As of the adoption and day one measurement date of January 1, 2021, the Corporation recorded a one-time cumulative-effect adjustment to retained earnings, net of income taxes, of $68.0 million. Preferred Stock As part of the Level One acquisition, the Corporation issued 10,000 shares of a newly created 7.5 percent non-cumulative perpetual preferred stock with a liquidation preference of $2,500 per share, in exchange for the outstanding Level One Series B preferred stock, and as part of that exchange, each outstanding Level One depositary share representing a 1/100th interest in a share of the Level One preferred stock was converted into a depositary share of the Corporation representing a 1/100th interest in a share of its newly issued preferred stock. As a result of the issuance, the Corporation had $25.0 million of outstanding preferred stock at December 31, 2022. During the period ended December 31, 2022, the Corporation declared and paid dividends of $46.88 per share (equivalent to $0.4688 per depositary share) equal to $1.4 million. The Series A preferred stock qualifies as Tier 1 capital for purposes of the regulatory capital calculations. Stock Repurchase Program On January 27, 2021, the Board of Directors of the Corporation approved a stock repurchase program of up to 3,333,000 shares of the Corporation's outstanding common stock; provided, however, that the total aggregate investment in shares repurchased under the program may not exceed $100,000,000. On a share basis, the amount of common stock subject to the repurchase program represents approximately 6 percent of the Corporation's outstanding shares at the time the program became effective. During 2022, the Corporation did not repurchase any shares of its common stock pursuant to the repurchase program. As of December 31, 2022, the Corporation had approximately 2.7 million shares at a maximum aggregate value of $74.5 million available to repurchase under the program. In August 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted. Among other things, the IRA imposes a new 1 percent excise tax on the fair market value of stock repurchased after December 31, 2022 by publicly traded U.S. corporations (like the Corporation). With certain exceptions, the value of stock repurchased is determined net of stock issued in the year, including shares issued pursuant to compensatory arrangements. |
Loan Servicing
Loan Servicing | 12 Months Ended |
Dec. 31, 2022 | |
Banking and Thrift, Other Disclosure [Abstract] | |
Loan Servicing | LOAN SERVICING Mortgage loans serviced for others are not included in the accompanying Consolidated Balance Sheets. The unpaid balances are as follows for December 31, 2022, 2021 and 2020. The amount of capitalized servicing assets is considered immaterial. 2022 2021 2020 Mortgage loan portfolios serviced for: Federal Home Loan Mortgage Corporation $ 794,222 $ 765,547 $ 514,539 Fannie Mae 54,934 60,839 69,072 Equity Bank 49,558 60,107 — Federal Home Loan Bank 27,127 32,558 51,479 Chevy Chase Mortgage Company — 85 134 Total $ 925,841 $ 919,136 $ 635,224 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION Stock options and RSAs have been issued to directors, officers and other management employees under the Corporation's 2009 Long-term Equity Incentive Plan, the 2019 Long-term Equity Incentive Plan, the Level One Bancorp, Inc. 2007 Stock Option Plan and the Equity Compensation Plan for Non-Employee Directors. The stock options, which have a ten-year life, become 100 percent vested based on time ranging from one year to two years and are fully exercisable when vested. Option exercise prices equal the Corporation's common stock closing price on Nasdaq on the date of grant. The RSAs issued to employees and non-employee directors provide for the issuance of shares of the Corporation's common stock at no cost to the holder and generally vest after three years. The RSAs vest only if the employee is actively employed by the Corporation on the vesting date and, therefore, any unvested shares are forfeited. For non-employee directors, the RSAs vest only if the non-employee director remains as an active board member on the vesting date and, therefore, any unvested shares are forfeited. The RSAs for employees and non-employee directors are either immediately vested at retirement, disability or death, or, continue to vest after retirement, disability or death, depending on the plan under which the shares were granted. The Corporation’s 2019 ESPP provides eligible employees of the Corporation and its subsidiaries an opportunity to purchase shares of common stock of the Corporation through quarterly offerings financed by payroll deductions. The price of the stock to be paid by the employees shall be equal to 85 percent of the average of the closing price of the Corporation’s common stock on each trading day during the offering period. However, in no event shall such purchase price be less than the lesser of an amount equal to 85 percent of the market price of the Corporation’s stock on the offering date or an amount equal to 85 percent of the market value on the date of purchase. Common stock purchases are made quarterly and are paid through advance payroll deductions up to a calendar year maximum of $25,000. Compensation expense related to unvested share-based awards is recorded by recognizing the unamortized grant date fair value of these awards over the remaining service periods of those awards, with no change in historical reported fair values and earnings. Awards are valued at fair value in accordance with provisions of share-based compensation guidance and are recognized on a straight-line basis over the service periods of each award. To complete the exercise of vested stock options, RSAs and ESPP options, the Corporation generally issues new shares from its authorized but unissued share pool. Share-based compensation for the years ended December 31, 2022, 2021, and 2020 was $4.7 million, $4.8 million, and $4.6 million, respectively, and has been recognized as a component of salaries and benefits expense in the accompanying Consolidated Statements of Income. Share-based compensation expense recognized in the Consolidated Statements of Income is based on awards ultimately expected to vest and is reduced for estimated forfeitures. Share-based compensation guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods, if actual forfeitures differ from those estimates. Pre-vesting forfeitures were estimated to be approximately 0.5 percent for the year ended December 31, 2022, based on historical experience. The following table summarizes the components of the Corporation's share-based compensation awards recorded as an expense and the income tax benefit of such awards. For the year ended 2022, RSAs vested at a stock price higher than the grant date stock price resulting in recognition of income tax benefit at vesting of $86,000. In 2021 and 2020, the Corporation had RSAs vest primarily at a stock price that was lower than the grant date stock price, which resulted in the recognition of income tax expense at vesting of $112,000 and $394,000, respectively. Years Ended December 31, 2022 2021 2020 Stock and ESPP Options Pre-tax compensation expense $ 95 $ 155 $ 96 Income tax benefit (74) (92) (29) Stock and ESPP option expense, net of income taxes $ 21 $ 63 $ 67 Restricted Stock Awards Pre-tax compensation expense $ 4,557 $ 4,607 $ 4,504 Income tax benefit (1,043) (855) (552) Restricted stock awards expense, net of income taxes $ 3,514 $ 3,752 $ 3,952 Total Share-Based Compensation: Pre-tax compensation expense $ 4,652 $ 4,762 $ 4,600 Income tax benefit (1,117) (947) (581) Total share-based compensation expense, net of income taxes $ 3,535 $ 3,815 $ 4,019 The grant date fair value of ESPP options was estimated to be approximately $31,000 at the beginning of the October 1, 2022 quarterly offering period. The ESPP options vested during the three months ending December 31, 2022, leaving no unrecognized compensation expense related to unvested ESPP options at December 31, 2022. Stock option activity under the Corporation's stock option plans, as of December 31, 2022, and changes during the year ended December 31, 2022, were as follows: Number of Weighted-Average Weighted Average Aggregate Outstanding at January 1, 2022 28,500 $ 17.14 Transferred Options from Level One 148,600 $ 18.84 Exercised (22,000) $ 16.28 Outstanding December 31, 2022 155,100 $ 18.89 2.47 $ 3,446,110 Vested and Expected to Vest at December 31, 2022 155,100 $ 18.89 2.47 $ 3,446,110 Exercisable at December 31, 2022 155,100 $ 18.89 2.47 $ 3,446,110 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Corporation's closing stock price on the last trading day of 2022 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their stock options on December 31, 2022. The amount of aggregate intrinsic value will change based on the fair market value of the Corporation's common stock. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2022 and 2021 was $533,000 and $559,000, respectively. Cash receipts of stock options exercised during 2022 and 2021 were $358,000 and $198,000, respectively. The following table summarizes information on unvested RSAs outstanding as of December 31, 2022: Number of Weighted-Average Unvested RSAs at January 1, 2022 411,259 $ 35.86 Granted 137,267 $ 40.66 Forfeited (13,775) $ 37.18 Vested (118,046) $ 37.35 Unvested RSAs at December 31, 2022 416,705 $ 36.97 As of December 31, 2022, unrecognized compensation expense related to RSAs was $8.9 million and is expected to be recognized over weighted-average period of 1.79 years. The Corporation did not have any unrecognized compensation expense related to stock options as of December 31, 2022. |
Pension and Other Post Retireme
Pension and Other Post Retirement Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Pension and Other Post Retirement Benefit Plans | PENSION AND OTHER POST RETIREMENT BENEFIT PLANS The Corporation’s defined-benefit pension plans, including non-qualified plans for certain employees, former employees and former non-employee directors, cover approximately 8 percent of the Corporation’s employees. In 2005, the Board of Directors of the Corporation approved the curtailment of the accumulation of defined benefits for future services provided by certain participants in the First Merchants Corporation Retirement Plan. No additional pension benefits have been earned by any employees who had not attained both the age of 55 and accrued at least 10 years of vesting service as of March 1, 2005. The benefits are based primarily on years of service and employees’ pay near retirement. Contributions are intended to provide not only for benefits attributed to service-to-date, but also for those expected to be earned in the future. The table below sets forth the plans’ funded status and amounts recognized in the Consolidated Balance Sheets at December 31, using measurement dates of December 31, 2022 and 2021. 2022 2021 Change in Benefit Obligation: Benefit obligation at beginning of year $ 74,274 $ 80,786 Service cost — — Interest cost 1,905 1,760 Actuarial (gain) loss (14,546) (2,919) Benefits paid (5,869) (5,353) Benefit obligation at end of year $ 55,764 $ 74,274 Change in Plan Assets: Fair value of plan assets at beginning of year $ 94,588 $ 88,512 Actual return on plan assets (11,799) 10,786 Employer contributions 614 643 Benefits paid (5,869) (5,353) End of year 77,534 94,588 Funded status at end of year $ 21,770 $ 20,314 Assets and Liabilities Recognized in the Balance Sheets: Deferred tax asset $ 1,955 $ 1,545 Assets $ 25,175 $ 24,750 Liabilities $ 3,405 $ 4,436 As of December 31, 2022, the funded status of the plans increased $1.5 million and the accumulated other comprehensive loss, net of tax, decreased $785,000 from December 31, 2021. A primary contributing factor to these changes was the discount rate increasing by 270 basis points from 2.7 percent to 5.4 percent, which decreased the liability by $14.8 million. This was offset by a $200,000 increase in the liability due to incorporation of new census data. The plans' assets experienced a loss of $11.8 million, as compared to an expected return of $4.5 million. The accumulated benefit obligation for all defined benefit plans was $55.8 million and $74.3 million at December 31, 2022 and 2021, respectively. Information for pension plans with an accumulated benefit obligation in excess of plan assets consists solely of the non-qualified plans for certain employees, former employees and former non-employee directors, and is included in the table below. December 31, 2022 December 31, 2021 Projected benefit obligation $ 3,405 $ 4,436 Accumulated benefit obligation $ 3,405 $ 4,436 Fair value of plan assets $ — $ — The Corporation recognized expense under these non-qualified plans of $122,000, $117,000 and $165,000 for 2022, 2021 and 2020, respectively. The following table shows the components of net periodic pension benefit cost: December 31, 2022 December 31, 2021 December 31, 2020 Service cost $ — $ — $ 16 Interest cost 1,905 1,760 2,343 Expected return on plan assets (4,544) (4,246) (4,086) Amortization of prior service cost 87 87 87 Amortization of net loss 13 305 221 Net periodic pension benefit cost $ (2,539) $ (2,094) $ (1,419) Other changes in plan assets and benefit obligations recognized in other comprehensive income: December 31, 2022 December 31, 2021 December 31, 2020 Net periodic pension benefit cost $ (2,539) $ (2,094) $ (1,419) Net gain (loss) (1,797) 9,460 (3,119) Amortization of net loss 13 305 221 Amortization of prior service cost 87 87 87 Total recognized in other comprehensive income (loss) (1,697) 9,852 (2,811) Total recognized in net periodic pension benefit cost and other comprehensive income (loss) $ 842 $ 11,946 $ (1,392) Significant assumptions include: December 31, 2022 December 31, 2021 December 31, 2020 Weighted-average Assumptions Used to Determine Benefit Obligation: Discount rate 5.40 % 2.70 % 2.30 % Rate of compensation increase for accruing active participants n/a n/a n/a Weighted-average Assumptions Used to Determine Cost: Discount rate 2.70 % 2.30 % 3.20 % Expected return on plan assets 5.00 % 5.00 % 5.00 % Rate of compensation increase for accruing active participants n/a n/a n/a At December 31, 2022 and 2021, the Corporation based its estimate of the expected long-term rate of return on analysis of the historical returns of the plans and current market information available. The plans’ investment strategies are to provide for preservation of capital with an emphasis on long-term growth without undue exposure to risk. The assets of the plans’ are invested in accordance with the plans’ Investment Policy Statement, subject to strict compliance with ERISA and any other applicable statutes. The plans’ risk management practices include semi-annual evaluations of investment managers, including reviews of compliance with investment manager guidelines and restrictions; ability to exceed performance objectives; adherence to the investment philosophy and style; and ability to exceed the performance of other investment managers. The evaluations are reviewed by management with appropriate follow-up and actions taken, as deemed necessary. The Investment Policy Statement generally allows investments in cash and cash equivalents, real estate, fixed income debt securities and equity securities, and specifically prohibits investments in derivatives, options, futures, private placements, short selling, non-marketable securities and purchases of individual non-investment grade bonds. At December 31, 2022, the maturities of the plans’ debt securities ranged from 15 days to 9.1 years, with a weighted average maturity of 3.9 years. At December 31, 2021, the maturities of the plans’ debt securities ranged from 40 days to 7.7 years, with a weighted average maturity of 3.5 years. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as of December 31, 2022. The minimum contribution required in 2023 will likely be zero, but the Corporation may decide to make a discretionary contribution during the year. 2023 $ 5,632 2024 5,431 2025 5,352 2026 5,176 2027 4,889 After 2027 21,143 $ 47,623 Plan assets are re-balanced quarterly. At December 31, 2022 and 2021, plan assets by category are as follows: December 31, 2022 December 31, 2021 Actual Target Actual Target Cash and cash equivalents 5.9 % 3.0 % 2.5 % 3.0 % Equity securities 51.5 50.0 56.4 53.0 Debt securities 40.4 45.0 38.6 42.0 Alternative investments 2.2 2.0 2.5 2.0 100.0 % 100.0 % 100.0 % 100.0 % The Savings Plan, a Section 401(k) qualified defined contribution plan, was amended on March 1, 2005 to provide enhanced retirement benefits, including employer and matching contributions, for eligible employees of the Corporation and its subsidiaries. The Corporation matches employees’ contributions at the rate of 100 percent for the first 3 percent of base salary contributed by participants and 50 percent of the next 3 percent of base salary contributed by participants. Beginning in 2005, employees who have completed 1000 hours of service and are an active employee on the last day of the year receive an additional retirement contribution after year-end. Employees hired after January 1, 2010 do not participate in the additional retirement contribution. Effective January 1, 2013, the additional retirement contribution was fixed at 2 percent. Full vesting occurs after five years of service. The Corporation’s expense for the Savings Plan, including the additional retirement contribution, was $6.5 million, $5.2 million and $5.1 million for 2022, 2021 and 2020, respectively. The Corporation also maintains a post retirement benefit plan that provides health insurance benefits for a closed group of participants that came to the Corporation through the 2019 MBT acquisition. To be eligible for the post retirement plan, the participants must (1) have been hired by MBT prior to January 1, 2007, (2) be a full-time employee of the Corporation and employed by MBT prior to the acquisition, and (3) be at least 55 years of age with 5 years of full-time service with MBT. The plan allowed retirees to be carried under the Corporation’s health insurance plan, generally from ages 55 to 65. The retirees' premiums are determined based on their retiree class (per historical MBT guidelines) and also determined by the plan type for which the retiree is enrolled. As of December 31, 2022 and 2021, the obligation payable under the post retirement plan was $2.4 million and $3.2 million, respectively. Post retirement plan expense totaled $53,000, $62,000 and $126,000 for 2022, 2021 and 2020, respectively. Pension Plan Assets Following is a description of the valuation methodologies used for pension plan assets measured at fair value on a recurring basis, as well as the general classification of pension plan assets pursuant to the valuation hierarchy. Where quoted market prices are available in an active market, plan assets are classified within Level 1 of the valuation hierarchy. Level 1 plan assets total $74.0 million and $92.0 million as of December 31, 2022 and 2021, respectively, and include cash and cash equivalents, common stocks, mutual funds and corporate bonds and notes. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of plan assets with similar characteristics or discounted cash flows. Level 2 plan assets total $3.5 million and $2.6 million as of December 31, 2022 and 2021, respectively, and include governmental agencies, taxable municipal bonds and notes, and certificates of deposit. In certain cases where Level 1 or Level 2 inputs are not available, plan assets are classified within Level 3 of the hierarchy. There are no assets classified within Level 3 of the hierarchy at December 31, 2022 and 2021. Fair Value Measurements Using Quoted Prices in Significant Other Observable Inputs Significant December 31, 2022 Fair Value (Level 1) (Level 2) (Level 3) Cash & Cash Equivalents $ 4,559 $ 4,559 $ — $ — Corporate Bonds and Notes 17,159 17,159 — — Government Agency and Municipal Bonds and Notes 3,010 — 3,010 — Certificates of Deposit 492 — 492 — Party-in-Interest Investments Common Stock 2,487 2,487 — — Mutual Funds Taxable Bond 10,686 10,686 — — Large Cap Equity 21,056 21,056 — — Mid Cap Equity 9,610 9,610 — — Small Cap Equity 4,419 4,419 — — International Equity 2,357 2,357 — — Specialty Alternative Equity 1,699 1,699 — — $ 77,534 $ 74,032 $ 3,502 $ — Fair Value Measurements Using Quoted Prices in Significant Other Observable Inputs Significant December 31, 2021 Fair Value (Level 1) (Level 2) (Level 3) Cash & Cash Equivalents $ 2,346 $ 2,346 $ — $ — Corporate Bonds and Notes 15,726 15,726 — — Government Agency and Municipal Bonds and Notes 1,302 — 1,302 — Certificates of Deposit 1,307 — 1,307 — Party-in-Interest Investments Common Stock 2,534 2,534 — — Mutual Funds Taxable Bond 18,184 18,184 — — Large Cap Equity 28,349 28,349 — — Mid Cap Equity 13,033 13,033 — — Small Cap Equity 5,815 5,815 — — International Equity 3,602 3,602 — — Specialty Alternative Equity 2,390 2,390 — — $ 94,588 $ 91,979 $ 2,609 $ — |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Tax | INCOME TAX The reconciliation between income tax expense expected at the U.S. federal statutory tax rate and the reported income tax expense is summarized in the following table for years ended December 31, 2022, 2021 and 2020: 2022 2021 2020 Reconciliation of Federal Statutory to Actual Tax Expense: Federal Statutory Income Tax at 21% $ 53,692 $ 50,566 $ 35,695 Tax-exempt Interest Income (19,349) (16,200) (13,273) Stock Compensation (214) (20) 338 Earnings on Life Insurance (2,344) (1,468) (1,079) Tax Credits (414) (354) (425) CARES Act - NOL carryback rate differential — — (1,178) State Tax 2,494 2,697 1,122 Other (280) 38 175 Income Tax Expense $ 33,585 $ 35,259 $ 21,375 Effective Tax Rate 13.1 % 14.6 % 12.6 % Income tax expense consists of the following components for the years ended December 31, 2022, 2021, 2020: 2022 2021 2020 Income Tax Expense for the Year Ended December 31: Currently Payable: Federal $ 21,824 $ 24,634 $ 28,463 State 2,696 1,473 2,647 Deferred: Federal 8,604 7,211 (8,508) State 461 1,941 (1,227) Income Tax Expense $ 33,585 $ 35,259 $ 21,375 Significant components of the net deferred tax assets and liabilities resulting from temporary differences were as follows at December 31, 2022 and 2021: 2022 2021 Deferred Tax Asset at December 31: Assets: Differences in Accounting for Loan Losses $ 61,484 $ 52,995 Differences in Accounting for Loan Fees 2,094 2,016 Deferred Compensation 3,922 4,172 Federal & State Income Tax Loss Carryforward and Credits 600 747 Net Unrealized Loss on Securities Available for Sale 62,323 — Other 2,883 3,585 Total Assets 133,306 63,515 Liabilities: Differences in Depreciation Methods 7,039 5,726 Differences in Accounting for Loans and Securities 1,058 3,078 Difference in Accounting for Pensions and Other Employee Benefits 3,687 4,586 State Income Tax 1,859 1,499 Net Unrealized Gain on Securities Available for Sale — 15,889 Gain on FDIC Modified Whole Bank Transaction 287 306 Other 9,919 8,108 Total Liabilities 23,849 39,192 Net Deferred Tax Asset $ 109,457 $ 24,323 As of December 31, 2022, the Corporation has approximately $12.2 million of state NOL carryforwards available to offset future state taxable income, which will expire beginning in 2024. These NOL carryforwards along with normal timing differences between book and tax result in total state deferred tax assets of $8.9 million. Management believes it is more likely than not that the benefit of these state NOL carryforwards and other state deferred tax assets will be fully realized. The Corporation has additional paid-in capital that is considered restricted resulting from the acquisitions of CFS and Ameriana of approximately $13.4 million and $11.9 million, respectively. CFS and Ameriana qualified as banks under provisions of the Internal Revenue Code which permitted them to deduct from taxable income an allowance for bad debts which differed from the provision for losses charged to income, for which no deferred federal income tax liability has been recognized. If in the future this portion of additional paid-in capital is distributed, or the Corporation no longer qualifies as a bank for income tax purposes, federal income taxes may be imposed at the then applicable tax rate. The unrecorded deferred tax liability at December 31, 2022, would have been approximately $5.3 million. The Corporation or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Corporation is generally no longer subject to U.S. federal, state and local income tax examinations by tax authorities for tax years before 2019. Additional details regarding the Corporation's policies related to income taxes are discussed in NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES of these Notes to Consolidated Financial Statements. |
Net Income Per Common Share
Net Income Per Common Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | NET INCOME PER COMMON SHARE Basic net income per common share is computed by dividing net income available to common stockholders by the weighted-average common shares outstanding during the reporting period. Diluted net income per common share is computed by dividing net income available to common stockholders by the combination of the weighted-average common shares outstanding during the reporting period and all potentially dilutive common shares. Potentially dilutive common shares include stock options and RSAs issued under the Corporation's share-based compensation plans. Potentially dilutive common shares are excluded from the computation of diluted earnings per common share in the periods where the effect would be antidilutive. The following table reconciles basic and diluted net income per common share for the years indicated: 2022 2021 2020 Net Weighted-Average Common Shares Per Net Weighted-Average Common Shares Per Net Weighted-Average Common Shares Per Net income available to common stockholders $ 220,683 57,692,018 $ 3.83 $ 205,531 53,783,632 $ 3.82 $ 148,600 54,058,471 $ 2.75 Effect of potentially dilutive stock options and restricted stock awards 258,239 200,597 161,913 Diluted net income per common share $ 220,683 57,950,257 $ 3.81 $ 205,531 53,984,229 $ 3.81 $ 148,600 54,220,384 $ 2.74 As of December 31, 2022, 2021 and 2020, there were no stock options with an option price greater than the average market price of the common shares. |
Condensed Financial Information
Condensed Financial Information (parent company only) | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Financial Information (parent company only) | CONDENSED FINANCIAL INFORMATION (parent company only) Presented below is condensed financial information as to financial position, results of operations, and cash flows of the Corporation. Condensed Balance Sheets December 31, 2022 December 31, 2021 Assets Cash and due from banks $ 56,739 $ 127,501 Investment in subsidiaries 2,124,104 1,900,787 Premises and equipment 119 274 Interest receivable 6 2 Goodwill 448 448 Cash surrender value of life insurance 736 716 Other assets 6,851 10,281 Total assets $ 2,189,003 $ 2,040,009 Liabilities Subordinated debentures and other borrowings $ 150,115 $ 118,618 Interest payable 979 864 Other liabilities 3,139 7,956 Total liabilities 154,233 127,438 Stockholders' equity 2,034,770 1,912,571 Total liabilities and stockholders' equity $ 2,189,003 $ 2,040,009 Condensed Statements of Income and Comprehensive Income (Loss) December 31, 2022 December 31, 2021 December 31, 2020 Income Dividends from subsidiaries $ 90,500 $ 161,825 $ 70,100 Other income (1,693) (50) (62) Total income 88,807 161,775 70,038 Expenses Interest expense 8,005 6,642 6,777 Salaries and employee benefits 3,786 3,917 3,426 Net occupancy and equipment expenses 46 825 745 Professional and other outside services 2,187 1,264 949 Other expenses 1,396 1,687 1,266 Total expenses 15,420 14,335 13,163 Income before income tax benefit and equity in undistributed income of subsidiaries 73,387 147,440 56,875 Income tax benefit 3,645 2,929 2,260 Income before equity in undistributed income of subsidiaries 77,032 150,369 59,135 Equity in undistributed income of subsidiaries 145,057 55,162 89,465 Net income 222,089 205,531 148,600 Preferred stock dividends 1,406 — — Net income available to common stockholders $ 220,683 $ 205,531 $ 148,600 Net income $ 222,089 $ 205,531 $ 148,600 Other comprehensive income (loss) (294,264) (19,723) 46,962 Comprehensive income (loss) $ (72,175) $ 185,808 $ 195,562 Condensed Statements of Cash Flows December 31, 2022 December 31, 2021 December 31, 2020 Cash Flow From Operating Activities: Net income $ 222,089 $ 205,531 $ 148,600 Adjustments to reconcile net income to net cash provided by operating activities Share-based compensation 1,659 1,563 1,502 Distributions in excess of (equity in undistributed) income of subsidiaries (145,057) (55,162) (89,465) Other adjustments (6,258) (1,173) 1,537 Investment in subsidiaries - operating activities 333 885 235 Net cash provided by operating activities 72,766 151,644 62,409 Cash Flow From Investing Activities: Net cash and cash equivalents paid in acquisition (72,494) — — Net cash used by investing activities (72,494) — — Cash Flow From Financing Activities: Cash dividends on common stock (72,748) (61,230) (56,542) Cash dividends on preferred stock (1,406) — — Repayment of borrowings — — (20,310) Stock issued under employee benefit plans 706 605 639 Stock issued under dividend reinvestment and stock purchase plan 2,056 1,880 1,726 Stock options exercised 358 198 115 Repurchases of common stock — (25,444) (55,912) Net cash used by financing activities (71,034) (83,991) (130,284) Net change in cash and cash equivalents (70,762) 67,653 (67,875) Cash and cash equivalents, beginning of the year 127,501 59,848 127,723 Cash and cash equivalents, end of year $ 56,739 $ 127,501 $ 59,848 |
General Litigation
General Litigation | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
General Litigation | GENERAL LITIGATION The Corporation is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations and cash flow of the Corporation. |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Financial Statement Preparation | FINANCIAL STATEMENT PREPARATIONThe accounting and reporting policies of the Corporation and the Bank, conform to accounting principles generally accepted in the United States of America and reporting practices followed by the banking industry. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses and fair value of financial instruments. |
Reclassifications | Reclassifications have been made to prior financial statements to conform to the current financial statement presentation. |
Consolidation | CONSOLIDATIONThe consolidation of the Corporation's financial statements include the accounts of the Corporation and all its subsidiaries, after elimination of all material intercompany transactions. |
Business Combinations | BUSINESS COMBINATIONS Business combinations are accounted for under the acquisition method of accounting. Under the acquisition method, assets and liabilities of the business acquired are recorded at their estimated fair values as of the date of acquisition with any excess of the cost of the acquisition over the fair value of the net tangible and intangible assets acquired recorded as goodwill. Results of operations of the acquired business are included in the income statement from the date of acquisition. Details of the Corporation's acquisitions are included in NOTE 2. ACQUISITIONS of these Notes to Consolidated Financial Statements. |
Cash and Cash Equivalents | CASH AND CASH EQUIVALENTS Cash on hand, cash items in process of collection and non-interest bearing cash held at various banks are included in cash and cash equivalents and have a maturity of less than three months. The Corporation maintains deposits with other financial institutions in amounts that exceed federal deposit insurance coverage. Management regularly evaluates the credit risk associated with the counterparties to these transactions and believes there is not significant credit risk on cash and cash equivalents. |
Interest-bearing Deposits | INTEREST-BEARING DEPOSITS Interest-bearing cash held at various banks and the Federal Reserve Bank and federal funds sold are included in interest-bearing deposits and have a maturity of less than three months. The Corporation maintains deposits with other financial institutions in amounts that exceed federal deposit insurance coverage. Management regularly evaluates the credit risk associated with the counterparties to these transactions and believes there is not significant credit risk on interest-bearing deposits. |
Investment Securities | INVESTMENT SECURITIESHeld to maturity securities are carried at amortized cost when the Corporation has the positive intent and ability to hold them until maturity. Available for sale securities are recorded at fair value on a recurring basis with the unrealized gains and losses, net of applicable income taxes, recorded in other comprehensive income (loss). Realized gains and losses are recorded in earnings and the prior fair value adjustments are reclassified within stockholders' equity. Gains and losses on sales of securities are determined on the specific-identification method. Amortization of premiums and accretion of discounts are amortized to their earliest call date and are recorded as interest income from securities. Details of the Corporation's investment securities portfolio are included in NOTE 4. INVESTMENT SECURITIES of these Notes to Consolidated Financial Statements. |
Allowances | ALLOWANCE FOR CREDIT LOSSES ON INVESTMENT SECURITIES AVAILABLE FOR SALE For investment securities available for sale in an unrealized loss position, the Corporation first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For investment securities available for sale that do not meet the aforementioned criteria, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Corporation considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded, limited by the amount that the fair value is less than the amortized cost basis. Unrealized losses that have not been recorded through an allowance for credit losses are recognized in other comprehensive income (loss). Adjustments to the allowance for credit losses are reported in the income statement as a component of the provision for credit loss. The Corporation has made the accounting policy election to exclude accrued interest receivable on investment securities available for sale from the estimate of credit losses. Investment securities available for sale are charged off against the allowance or, in the absence of any allowance, written down through the income statement when deemed uncollectible or when either of the aforementioned criteria regarding intent or requirement to sell is met. The Corporation did not record an allowance for credit losses on its investment securities available for sale as the unrealized losses were attributable to changes in interest rates, not credit quality. Details of the Corporation's allowance for credit losses on investment securities available for sale are included in NOTE 4. INVESTMENT SECURITIES of these Notes to Consolidated Financial Statements. ALLOWANCE FOR CREDIT LOSSES ON INVESTMENT SECURITIES HELD TO MATURITY ("ACL - INVESTMENTS") |
Loans Held for Sale | LOANS HELD FOR SALE Loans originated and with an intent to sell are classified as held for sale and are carried at the principal amount outstanding. The carrying amount approximates fair value due to the short duration between origination and the date of sale. |
Loans | LOANS The Corporation’s loan portfolio is carried at the principal amount outstanding, net of unearned income and principal charge-offs. Loan origination fees, net of direct loan origination costs, and commitment fees are deferred and amortized as an adjustment to yield over the life of the loan, or over the commitment period, as applicable. Interest income is accrued on the principal balances of loans. The accrual of interest is discontinued on a loan when, in management’s opinion, the borrower may be unable to meet payments as they become due. When the interest accrual is discontinued, all unpaid accrued interest is reversed against earnings when considered uncollectible. Interest income accrued in the prior year, if any, is charged to the allowance for credit losses. Interest income is subsequently recognized only to the extent cash payments are received and the loan is returned to accruing status. The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) established the Paycheck Protection Program (“PPP”), which is administered by the Small Business Administration (“SBA”), to fund payroll and operational costs of eligible businesses, organizations and self-employed persons during the pandemic. The Bank actively participated in assisting its customers with PPP funding during all phases of the program. The vast majority of the Bank’s PPP loans made in 2020 have two-year maturities, while the loans made in 2021 have five-year maturities. Loans under the program earn interest at a fixed rate of 1 percent. As of December 31, 2022, the Corporation had $4.7 million of PPP loans compared to the December 31, 2021 balance of $106.6 million. The Corporation will continue to monitor legislative, regulatory, and supervisory developments related to the PPP. However, it anticipates that the majority of the Bank’s remaining PPP loans will be forgiven by the SBA in accordance with the terms of the program. Loan commitments and letters-of-credit generally have short-term, variable-rate features and contain clauses which limit the exposure to changes in customer credit quality. Accordingly, their carrying values, which are immaterial at the respective balance sheet dates, are reasonable estimates of fair value. Details of the Corporation's loan portfolio are included in NOTE 5. LOANS AND ALLOWANCE FOR CREDIT LOSSES of these Notes to Consolidated Financial Statements. |
Purchased Credit Deteriorated ("PCD") Loans | PURCHASED CREDIT DETERIORATED ("PCD") LOANS The Corporation accounts for its acquisitions under ASC Topic 805, Business Combinations, which requires the use of the acquisition method of accounting. All identifiable assets acquired, including loans, are recorded at fair value. The fair value of acquired loans at the time of acquisition is based on a variety of factors including discounted expected cash flows, adjusted for estimated prepayments and credit losses. In accordance with ASC 326, Financial Instruments – Credit Losses, the fair value adjustment is recorded as a premium or discount to the unpaid principal balance of each acquired loan. Acquired loans are classified into two categories: loans with more than insignificant credit deterioration (“PCD”) since origination, and loans with insignificant credit deterioration (“non-PCD”) since origination. Factors considered when determining whether a loan has a more-than-insignificant deterioration since origination include, but are not limited to, the materiality of the credit, risk grade, delinquency, nonperforming status, bankruptcies, and other qualitative factors. The net premium or discount on PCD loans is adjusted by the Corporation’s allowance for credit losses on loans, which is recorded at the time of acquisition. The remaining net premium or discount is accreted or amortized into interest income over the remaining life of the loan using an effective yield method. The net premium or discount on non-PCD loans, that includes credit and non-credit components, is accreted or amortized into interest income over the remaining life of the loan using an effective yield method. Additionally, non-PCD loans have an allowance for credit loss established on acquisition date, which is recognized in the current period provision for credit loss expense. In the event of prepayment, unamortized discounts or premiums on PCD and non-PCD loans are recognized in interest income. |
Pension | PENSION The Corporation has defined-benefit pension plans, including non-qualified plans for certain employees, former employees and former non-employee directors. In 2005, the Board of Directors of the Corporation approved the curtailment of the accumulation of defined benefits for future services provided by certain participants in the First Merchants Corporation Retirement Plan. No additional pension benefits have been earned by any employees who had not met certain requirements as of March 1, 2005. The benefits are based primarily on years of service and employees’ pay near retirement. The Corporation's accounting policies related to pensions and other post retirement benefits reflect the guidance in ASC 715, Compensation – Retirement Benefits. The Corporation does not consolidate the assets and liabilities associated with the pension plan. Instead, the Corporation recognizes the funded status of the plan in the Consolidated Balance Sheets. The measurement of the funded status and the annual pension expense involves actuarial and economic assumptions. Various statistical and other factors, which attempt to anticipate future events, are used in calculating the expense and liabilities related to the plans. Key factors include assumptions on the expected rates of return on plan assets, discount rates and health care costs and trends. The Corporation considers market conditions, including changes in investment returns and interest rates in making these assumptions. The primary assumptions used in determining the Corporation’s pension and post retirement benefit obligations and related expenses are presented in NOTE 18. PENSION AND OTHER POST RETIREMENT BENEFIT PLANS of these Notes to Consolidated Financial Statements. |
Premises and Equipment | PREMISES AND EQUIPMENT Premises and equipment is carried at cost net of accumulated depreciation. Depreciation is computed using the straight-line and declining balance methods based on the estimated useful lives of the assets ranging from three |
Leases | LEASES The Corporation leases certain land and premises from third parties and all are classified as operating leases. Operating leases are included in Other Assets and Other Liabilities on the Corporation's Consolidated Balance Sheets and lease expense for lease payments is recognized on a straight-line basis over the lease term. Right of Use ("ROU") assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the term. An ROU asset represents the right to use the underlying asset for the lease term and also includes any direct costs and payments made prior to lease commencement and excludes lease incentives. When an implicit rate is not available, an incremental borrowing rate based on the information available at commencement date is used in determining the present value of the lease payments. A lease term may include an option to extend or terminate the lease when it is reasonably certain the option will be exercised. Short-term leases of twelve months or less are excluded from accounting guidance; as a result, the lease payments are recognized on a straight-line basis over the lease term and the leases are not reflected on the Corporation's Consolidated Balance Sheets. Renewal and termination options are considered when determining short-term leases. Leases are accounted for at the individual level. Details of the Corporation's leases are included in NOTE 9. LEASES of these Notes to Consolidated Financial Statements. |
Federal Home Loan Bank Stock ("FHLB") | FEDERAL HOME LOAN BANK STOCK ("FHLB") FHLB stock is a required investment for institutions that are members of the FHLB. The Bank is a member of the FHLB of Indianapolis. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost and is classified as a restricted security. Both cash and stock dividends are reported as income. |
Intangible Assets | INTANGIBLE ASSETS two |
Goodwill | GOODWILL Goodwill is maintained by applying the provisions of ASC 350, Intangibles – Goodwill and Other . For acquisitions, assets acquired, including identified intangible assets, and the liabilities assumed are required to be recorded at their fair value. These often involve estimates based on third party valuations, such as appraisals, or internal valuations based on discounted cash flow analysis or other valuation techniques that may include estimates of attrition, inflation, asset growth rates, or other relevant factors. In addition, the determination of the useful lives over which the intangible asset will be amortized is subjective. Under ASC 350, the Corporation is required to evaluate goodwill for impairment on an annual basis, as well as on an interim basis, if events or changes indicate that the asset may be impaired, indicating that the carrying value may not be recoverable. The Corporation completed its most recent annual goodwill impairment test as of October 1, 2022 and concluded, based on current events and circumstances goodwill is not impaired. Details of the Corporation's goodwill are included in NOTE 7. GOODWILL of these Notes to Consolidated Financial Statements. |
Bank Owned Life Insurance ("BOLI") | BANK OWNED LIFE INSURANCE ("BOLI")BOLI policies have been purchased, as well as obtained through acquisitions, on certain current and former employees and directors of the Corporation to offset a portion of the employee benefit costs. The Corporation records the life insurance at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or amounts due that are probable at settlement. Changes in cash surrender values and death benefits received in excess of cash surrender values are reported in non-interest income. A corporate policy is in place with defined thresholds that limit the amount of credit, interest rate and liquidity risk inherent in a BOLI portfolio. The Corporation actively monitors the overall portfolio performance along with the credit quality of the insurance carriers and the credit quality and yield of the underlying investments. |
Other Real Estate Owned ("OREO") | OTHER REAL ESTATE OWNED ("OREO")OREO consists of assets acquired through, or in lieu of, loan foreclosure and are held for sale. They are initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation are included in other real estate owned and foreclosure expenses. |
Derivative Instruments | DERIVATIVE INSTRUMENTS Derivative instruments, which are recorded as assets or liabilities in the Consolidated Balance Sheets, are carried at fair value of the derivatives and reflects the estimated amounts that would have been received to terminate these contracts at the reporting date based upon pricing or valuation models applied to current market information. As part of the asset/liability management program, the Corporation will utilize, from time to time, interest rate floors, caps or swaps to reduce its sensitivity to interest rate fluctuations. Changes in the fair values of derivatives are reported in the consolidated statements of operations or AOCI depending on the use of the derivative and whether the instrument qualifies for hedge accounting. The key criterion for hedge accounting is that the hedged relationship must be highly effective in achieving offsetting changes in those cash flows that are attributable to the hedged risk, both at inception of the hedge and on an ongoing basis. Derivatives that qualify for the hedge accounting treatment are designated as either: (1) a hedge of the fair value of the recognized asset or liability, or of an unrecognized firm commitment (a fair value hedge); or (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (a cash flow hedge). To date, the Corporation has only entered into a cash flow hedge. For cash flow hedges, changes in the fair values of the derivative instruments are reported in AOCI to the extent the hedge is effective. The gains and losses on derivative instruments that are reported in AOCI are reflected in the Consolidated Statements of Income in the periods in which the results of operations are impacted by the variability of the cash flows of the hedged item. Generally, net interest income is increased or decreased by amounts receivable or payable with respect to the derivatives, which qualify for hedge accounting. At inception of the hedge, the Corporation establishes the method it uses for assessing the effectiveness of the hedging derivative and the measurement approach for determining the ineffective aspect of the hedge. The ineffective portion of the hedge, if any, is recognized in the Consolidated Statements of Income. The Corporation excludes the time value expiration of the hedge when measuring ineffectiveness. The Corporation offers interest rate derivative products (e.g. interest rate swaps) to certain of its high-quality commercial borrowers. This product allows customers to enter into an agreement with the Corporation to swap their variable rate loan to a fixed rate. These derivative products are designed to reduce, eliminate or modify the risk of changes in the borrower’s interest rate or market price risk. The extension of credit incurred through the execution of these derivative products is subject to the same approvals and rigorous underwriting standards as the related traditional credit product. The Corporation limits its risk exposure to these products by entering into a mirror-image, offsetting swap agreement with a separate, well-capitalized and rated counterparty previously approved by the Credit and Asset Liability Committee. By using these interest rate swap arrangements, the Corporation is also better insulated from the interest rate risk associated with underwriting fixed-rate loans. These derivative contracts are not designated against specific assets or liabilities under ASC 815, Derivatives and Hedging , and, therefore, do not qualify for hedge accounting. The derivatives are recorded on the balance sheet at fair value and changes in fair value of both the customer and the offsetting swap agreements are recorded (and essentially offset) in non-interest income. The fair value of the derivative instruments incorporates a consideration of credit risk (in accordance with ASC 820, Fair Value Measurements and Disclosures ), resulting in some volatility in earnings each period. Details of the Corporation's derivative instruments are included in NOTE 12. DERIVATIVE FINANCIAL INSTRUMENTS of these Notes to Consolidated Financial Statements. |
Securities Sold Under Repurchase Agreements | SECURITIES SOLD UNDER REPURCHASE AGREEMENTS Securities sold under repurchase agreements represent securities the Corporation routinely sells to certain treasury management customers and then repurchases these securities the next day. Securities sold under repurchase agreements are reflected as secured borrowings in the Corporation's Consolidated Balance Sheets at the amount of cash received in connection with each transaction. Details of the Corporation's repurchase agreements are included in NOTE 11. BORROWINGS of these Notes to Consolidated Financial Statements. |
Allowance For Credit Losses - Off-balance Sheet Credit Exposures | ALLOWANCE FOR CREDIT LOSSES - OFF-BALANCE SHEET CREDIT EXPOSURESThe allowance for credit losses on off-balance sheet credit exposures is a liability account representing expected credit losses over the contractual period for which the Corporation is exposed to credit risk resulting from a contractual obligation to extend credit. No allowance is recognized if the Corporation has the unconditional right to cancel the obligation. Off-balance sheet credit exposures primarily consist of amounts available under outstanding lines of credit and letters of credit. For the period of exposure, the estimate of expected credit losses considers both the likelihood that funding will occur and the amount expected to be funded over the estimated remaining life of the commitment or other off-balance sheet exposure. The likelihood and expected amount of funding are based on historical utilization rates. The amount of the allowance represents management’s best estimate of expected credit losses on commitments expected to be funded over the contractual life of the commitment. The allowance for off-balance sheet credit exposures is adjusted through the income statement as a component of provision for credit loss. Further information regarding the policies and methodology used to estimate the allowance for credit losses on off-balance sheet credit exposures is detailed in NOTE 5. LOANS AND ALLOWANCE FOR CREDIT LOSSES of these Notes to Consolidated Financial Statements. |
Revenue Recognition | REVENUE RECOGNITION Revenue recognition guidance establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of the Corporation's revenue-generating transactions are not subject to ASU 2014-09, including revenue generated from financial instruments, such as loans, letters of credit, derivatives and investment securities, as well as revenue related to mortgage servicing activities, as these activities are subject to other GAAP discussed elsewhere within the disclosures. The Corporation has evaluated the nature of its contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the Consolidated Statements of Income was not necessary. Descriptions of revenue-generating activities that are within the scope of ASU 2014-09, which are presented in our income statements are as follows: Service charges on deposit accounts: The Corporation earns fees from its deposit customers for transaction-based, account maintenance and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering and ACH fees, are recognized at the time the transaction is executed, which is the point in time the Corporation fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are earned monthly, representing the period which the Corporation satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer's account balance. Fiduciary activities : This represents monthly fees due from wealth management customers as consideration for managing the customers' assets. Wealth management and trust services include custody of assets, investment management, fees for trust services and similar fiduciary activities. These fees are primarily earned over time as the Corporation provides the contracted monthly or quarterly services and are generally assessed based on the market value of assets under management at month-end. Fees that are transaction-based are recognized at the point in time that the transaction is executed. Investment Brokerage Fees : The Corporation earns fees from investment brokerage services provided to its customers by a third-party service provider. The Corporation receives commissions from the third-party provider on a monthly basis based upon customer activity for the month. The fees are paid to us by the third party on a monthly basis and are recognized when received. Interchange income : The Corporation earns interchange fees from debit and credit cardholder transactions conducted through the Visa and MasterCard payment networks. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized concurrent with the transaction processing services provided to the cardholder. Gains (Losses) on Sales of OREO : The Corporation records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Corporation finances the sale of OREO to the buyer, the Corporation assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Corporation adjusts the transaction price and related gain (loss) on sale if a significant financing component is present. |
Transfers of Financial Assets | TRANSFERS OF FINANCIAL ASSETS Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered, or in the case of a loan participation, a portion of the asset has been surrendered and meets the definition of a "participating interest." Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Corporation and put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and (3) the Corporation does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets. |
Share-Based Compensation | SHARE-BASED COMPENSATIONStock option and restricted stock award plans are maintained by the Corporation. The compensation costs are recognized for stock options and restricted stock awards issued to employees and directors based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options. The market price of the Corporation’s common stock at the date of grant is used for restricted stock awards. Compensation expense is recognized over the appropriate service period, which is generally two |
Income Tax | INCOME TAX Income tax expense in the Consolidated Statements of Income is the total of the current year income tax due or refundable and changes in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts from the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. The Corporation files consolidated income tax returns with its subsidiaries. The Corporation is generally no longer subject to U.S. federal, state and local income tax examinations by tax authorities for tax years before 2019. The Corporation accounts for income taxes under the provisions of ASC 740, Income Taxes , which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Per the guidance in ASC 740, the Corporation has not identified any uncertain tax positions that it believes should be recognized in the financial statements. The Corporation reviews income tax expense and the carrying value of deferred tax assets and liabilities quarterly; as new information becomes available, the balances are adjusted, if applicable. The Corporation's policy is to recognize interest and penalties related to unrecognized tax benefits, if any, as a component of income tax expense. Details of the Corporation's income taxes are included in NOTE 19. INCOME TAX of these Notes to Consolidated Financial Statements. |
Net Income Per Common Share | NET INCOME PER COMMON SHARE Basic net income per share is computed by dividing net income available to common shareholders by the weighted-average number of shares of common stock outstanding. Diluted net income per share is computed by dividing net income available to common shareholders by the weighted-average number of shares of common stock outstanding, plus the dilutive effect of outstanding stock options and non-vested restricted stock awards. Potentially dilutive common shares are excluded from the computation of diluted earnings per share in the periods where the effect would be antidilutive. Details of the Corporation's net income per share are included in NOTE 20. NET INCOME PER COMMON SHARE of these Notes to Consolidated Financial Statements. |
Recent Accounting Changes Adopted and New Accounting Pronouncements Not Yet Adopted | RECENT ACCOUNTING CHANGES ADOPTED IN 2022 FASB Accounting Standards Updates - No. 2022-06 - Reference Rate Reform (Topic 848) - Deferral of the Sunset Date of Topic 848 Summary - The FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 , that extended the period of time preparers can utilize the reference rate reform relief guidance. The amendments in ASU No. 2022-06 were effective for all entities upon issuance. In 2020, the FASB issued Accounting Standards Update No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The objective of the guidance in Topic 848 is to provide relief during the temporary transition period, so the FASB included a sunset provision within Topic 848 based on expectations of when the London Interbank Offered Rate (LIBOR) would cease being published. In 2021, the UK Financial Conduct Authority (FCA) delayed the intended cessation date of certain tenors of USD LIBOR to June 30, 2023. To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, the ASU defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED The Corporation continually monitors potential accounting pronouncement and SEC release changes. The following pronouncements and releases have been deemed to have the most applicability to the Corporation's financial statements and will be adopted after December 31, 2022: FASB Accounting Standards Updates - No. 2020-04 - Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting Summary - The FASB issued ASU No. 2020-04 to provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. LIBOR and other interbank offered rates are widely used benchmarks or reference rates in the United States and globally. Trillions of dollars in loans, derivatives, and other financial contracts reference LIBOR, the benchmark interest rate banks use to make short-term loans to each other. With global capital markets expected to move away from LIBOR and other interbank offered rates and move toward rates that are more observable or transaction based and less susceptible to manipulation, the FASB launched a broad project in late 2018 to address potential accounting challenges expected to arise from the transition. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period. Originally, an entity could apply this ASU as of the beginning of an interim period that includes the March 12, 2020 issuance date of the ASU, through December 31, 2022. With the issuance of ASU 2022-06 - Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 , the sunset date for adoption of ASU 2020-04 was extended from December 31, 2022 to December 31, 2024. The Corporation expects to adopt the practical expedients included in this ASU in 2023 as it transitions its loans and other financial instruments to another reference rate. FASB Accounting Standards Updates - No. 2021-01 - Reference Rate Reform (Topic 848): Scope Summary - The FASB has published ASU 2021-01, Reference Rate Reform. ASU 2021-01 clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. An entity may elect to apply the amendments in this Update on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final Update, up to the date that financial statements are available to be issued. If an entity elects to apply any of the amendments in this Update for an eligible hedging relationship, any adjustments as a result of those elections must be reflected as of the date the entity applies the election. Originally, the amendments in this Update did not apply to contract modifications made after December 31, 2022, new hedging relationships entered into after December 31, 2022, and existing hedging relationships evaluated for effectiveness in periods after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship (including periods after December 31, 2022). With the issuance of ASU 2022-06 - Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 , the sunset date for adoption of ASU 2021-01 was extended from December 31, 2022 to December 31, 2024. The Corporation expects to adopt the practical expedients included in this ASU in 2023 as it transitions its loans and other financial instruments to another reference rate. FASB Accounting Standards Updates - No. 2021-08 - Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Summary - The FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , that addresses diversity in practice related to the accounting for revenue contracts with customers acquired in a business combination. Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers and other similar contracts that are accounted for in accordance with Topic 606 , Revenue from Contracts with Customers , at fair value on the acquisition date. The FASB indicates that some stakeholders indicated that it is unclear how an acquirer should evaluate whether to recognize a contract liability from a revenue contract with a customer acquired in a business combination after Topic 606 is adopted. Furthermore, it was identified that under current practice, the timing of payment (payment terms) of a revenue contract may subsequently affect the post-acquisition revenue recognized by the acquirer. To address this, the ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. Finally, the amendments in the ASU improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. For public business entities, the amendments are effective for fiscal years beginning after December 31, 2022, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 31, 2023, including interim periods within those fiscal years. The amendments in this Update should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption of the amendments is permitted, including adoption in an interim period. An entity that early adopts in an interim period should apply the amendments (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period or early application, and (2) prospectively to all business combinations that occur on or after the date of initial application. The Corporation adopted this guidance on January 1, 2023, but adoption of the standard did not have a significant impact on the Corporation's financial statements or disclosures. FASB Accounting Standards Updates - No. 2022-02 —Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures Summary - The FASB issued ASU No. 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures , to improve the usefulness of information provided to investors about certain loan refinancings, restructurings, and writeoffs. Troubled Debt Restructurings ("TDR") by Creditors That Have Adopted CECL During the FASB’s post-implementation review of the credit losses standard, including a May 2021 roundtable, investors and other stakeholders questioned the relevance of the TDR designation and the usefulness of disclosures about those modifications. Some noted that measurement of expected losses under the CECL model already incorporates losses realized from restructurings that are TDRs and that relevant information for investors would be better conveyed through enhanced disclosures about certain modifications. The amendments in the new ASU eliminate the accounting guidance for TDRs by creditors that have adopted CECL while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors made to borrowers experiencing financial difficulty. Vintage Disclosures - Gross Writeoffs The disclosure of gross writeoff information by year of origination was cited by numerous investors as an essential input to their analysis. To address this feedback, the amendments in the new ASU require that a public business entity disclose current-period gross writeoffs by year of origination for financing receivables and net investment in leases. For entities that have adopted the amendments in ASU 2016-13, the amendments in this Update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Corporation adopted this Update on January 1, 2023. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Preliminary Valuations of the Fair Value of Assets Acquired and Liabilities Assumed | Under the acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on preliminary valuations of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on assumptions that are subject to change based on the timing of the transaction, the purchase price for the Level One acquisition is detailed in the following table. If, prior to the end of the one-year measurement period for finalizing the purchase price allocation, information becomes available about facts and circumstances that existed as of the acquisition date, which would indicate adjustments are required to the purchase price allocation, such adjustments will be included in the purchase price allocation retrospectively. Fair Value Cash and due from banks $ 217,104 Investment securities available for sale 370,071 Investment securities held to maturity 587 Loans held for sale 7,951 Loans 1,627,423 Allowance for credit losses - loans (16,599) Premises and equipment 11,848 Federal Home Loan Bank stock 11,688 Interest receivable 7,188 Cash surrender value of life insurance 30,143 Tax asset, deferred and receivable 16,223 Other assets 41,690 Deposits (1,930,790) Securities sold under repurchase agreements (1,521) Federal Home Loan Bank advances (160,043) Subordinated debentures (32,631) Interest payable (1,065) Other liabilities (42,813) Net tangible assets acquired 156,454 Other intangibles 18,642 Goodwill 166,617 Purchase price $ 341,713 Under the acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair value on the date of the acquisition. Based on the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on assumptions that are subject to change based on the timing of the transaction, the purchase price for the Hoosier acquisition is detailed in the following table. Fair Value Cash and due from banks $ 292 Other assets 35 Other liabilities (816) Net tangible assets acquired (489) Customer relationship intangible 2,247 Goodwill 1,467 Purchase price $ 3,225 |
Schedule of Pro Forma Financial Information | The results of operations of Level One have been included in the Corporation's consolidated financial statements since the acquisition date. The following schedule includes pro forma results for the year ended December 31, 2022 and 2021 as if the Level One acquisition occurred as of the beginning of the periods presented. Pro forma financial information of the Hoosier acquisition is not included in the table below as it is deemed immaterial. Year Ended Year Ended Total revenue (net interest income plus other income) $ 654,313 $ 621,946 Net Income $ 221,631 $ 237,031 Net income available to common shareholders $ 219,756 $ 235,156 Earnings per share: Basic $ 3.72 $ 3.96 Diluted $ 3.70 $ 3.95 |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Amortized Cost, Gross Unrealized Gains, Gross Unrealized Losses and Approximate Fair Value of Investment Securities | The following table summarizes the amortized cost, gross unrealized gains and losses and approximate fair value of investment securities available for sale as of December 31, 2022 and December 31, 2021. Amortized Gross Unrealized Gross Unrealized Fair Available for sale at December 31, 2022 U.S. Treasury $ 2,501 $ — $ 42 $ 2,459 U.S. Government-sponsored agency securities 119,154 — 17,192 101,962 State and municipal 1,530,048 438 178,726 1,351,760 U.S. Government-sponsored mortgage-backed securities 608,630 1 100,358 508,273 Corporate obligations 13,014 — 807 12,207 Total available for sale $ 2,273,347 $ 439 $ 297,125 $ 1,976,661 Amortized Gross Unrealized Gross Unrealized Fair Available for sale at December 31, 2021 U.S. Treasury $ 1,000 $ — $ 1 $ 999 U.S. Government-sponsored agency securities 96,244 437 1,545 95,136 State and municipal 1,495,696 81,734 898 1,576,532 U.S. Government-sponsored mortgage-backed securities 671,684 7,109 11,188 667,605 Corporate obligations 4,031 256 8 4,279 Total available for sale $ 2,268,655 $ 89,536 $ 13,640 $ 2,344,551 The following table summarizes the amortized cost, gross unrealized gains and losses, approximate fair value and allowance for credit losses on investment securities held to maturity as of December 31, 2022 and December 31, 2021. Amortized Allowance for Credit Losses Net Carrying Amount Gross Unrealized Gross Unrealized Fair Held to maturity at December 31, 2022 U.S. Government-sponsored agency securities $ 392,246 $ — $ 392,246 $ — $ 69,147 $ 323,099 State and municipal 1,117,552 245 1,117,307 647 197,064 921,135 U.S. Government-sponsored mortgage-backed securities 776,074 — 776,074 — 113,915 662,159 Foreign investment 1,500 — 1,500 — 28 1,472 Total held to maturity $ 2,287,372 $ 245 $ 2,287,127 $ 647 $ 380,154 $ 1,907,865 Amortized Allowance for Credit Losses Net Carrying Amount Gross Unrealized Gross Unrealized Fair Held to maturity at December 31, 2021 U.S. Government-sponsored agency securities $ 371,457 $ — $ 371,457 $ 226 $ 7,268 $ 364,415 State and municipal 1,057,301 245 1,057,056 29,593 2,170 1,084,724 U.S. Government-sponsored mortgage-backed securities 749,789 — 749,789 7,957 5,881 751,865 Foreign investment 1,500 — 1,500 — 1 1,499 Total held to maturity $ 2,180,047 $ 245 $ 2,179,802 $ 37,776 $ 15,320 $ 2,202,503 |
Schedule of Amortized Cost of Investment Securities Held to Maturity Aggregated by Credit Quality Indicator | On a quarterly basis, the Corporation monitors the credit quality of investment securities held to maturity through the use of credit ratings. The following table summarizes the amortized cost of investment securities held to maturity at December 31, 2022, aggregated by credit quality indicator. Held to Maturity State and municipal Other Total Credit Rating: Aaa $ 101,076 $ 70,583 $ 171,659 Aa1 162,728 — 162,728 Aa2 185,394 — 185,394 Aa3 135,227 — 135,227 A1 131,417 — 131,417 A2 10,168 — 10,168 A3 10,117 — 10,117 Non-rated 381,425 1,099,237 1,480,662 Total $ 1,117,552 $ 1,169,820 $ 2,287,372 |
Schedule of Investment Securities in a Continuous Unrealized Loss Position | The following tables summarize, as of December 31, 2022 and December 31, 2021, investment securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and length of time in a continuous unrealized loss position. Less than 12 Months 12 Months or Longer Total Fair Gross Fair Gross Fair Gross Investment securities available for sale at December 31, 2022 U.S. Treasury $ 2,459 $ 42 $ — $ — $ 2,459 $ 42 U.S. Government-sponsored agency securities 48,940 4,973 53,022 12,219 101,962 17,192 State and municipal 1,177,104 150,096 108,652 28,630 1,285,756 178,726 U.S. Government-sponsored mortgage-backed securities 182,700 16,910 325,455 83,448 508,155 100,358 Corporate obligations 12,176 807 — — 12,176 807 Total investment securities available for sale $ 1,423,379 $ 172,828 $ 487,129 $ 124,297 $ 1,910,508 $ 297,125 Less than 12 Months 12 Months or Longer Total Fair Gross Fair Gross Fair Gross Investment securities available for sale at December 31, 2021 U.S. Treasury $ 999 $ 1 $ — $ — $ 999 $ 1 U.S. Government-sponsored agency securities 68,524 1,545 — — 68,524 1,545 State and municipal 138,187 894 505 4 138,692 898 U.S. Government-sponsored mortgage-backed securities 427,687 10,791 8,324 397 436,011 11,188 Corporate obligations 992 8 — — 992 8 Total investment securities available for sale $ 636,389 $ 13,239 $ 8,829 $ 401 $ 645,218 $ 13,640 The following table summarizes investment securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and the number of securities in the portfolio for the periods indicated. Gross Number of Securities Investment securities available for sale at December 31, 2022 U.S. Treasury $ 42 5 U.S. Government-sponsored agency securities 17,192 16 State and municipal 178,726 946 U.S. Government-sponsored mortgage-backed securities 100,358 177 Corporate obligations 807 10 Total investment securities available for sale $ 297,125 1,154 Gross Number of Securities Investment securities available for sale at December 31, 2021 U.S. Treasury $ 1 1 U.S. Government-sponsored agency securities 1,545 8 State and municipal 898 103 U.S. Government-sponsored mortgage-backed securities 11,188 48 Corporate obligations 8 1 Total investment securities available for sale $ 13,640 161 |
Schedule of Investments in Debt and Equity Securities Reported in the Financial Statements at an Amount Less Than Their Historical Cost | Certain investment securities available for sale are reported in the financial statements at an amount less than their historical cost as indicated in the table below. December 31, 2022 December 31, 2021 Investments available for sale reported at less than historical cost: Historical cost $ 2,207,633 $ 658,858 Fair value 1,910,508 645,218 Gross unrealized losses $ 297,125 $ 13,640 Percent of the Corporation's investments available for sale 96.7 % 27.5 % |
Amortized Cost and Fair Value of Available for Sale Securities and Held to Maturity Securities by Contractual Maturity | The amortized cost and fair value of investment securities available for sale and held to maturity at December 31, 2022 and December 31, 2021, by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity are shown separately. Available for Sale Held to Maturity Amortized Cost Fair Value Amortized Cost Fair Value Maturity Distribution at December 31, 2022 Due in one year or less $ 2,822 $ 2,809 $ 13,697 $ 13,749 Due after one through five years 11,694 11,265 80,697 76,453 Due after five through ten years 169,729 161,211 147,078 135,027 Due after ten years 1,480,472 1,293,103 1,269,826 1,020,477 1,664,717 1,468,388 1,511,298 1,245,706 U.S. Government-sponsored mortgage-backed securities 608,630 508,273 776,074 662,159 Total Investment Securities $ 2,273,347 $ 1,976,661 $ 2,287,372 $ 1,907,865 Available for Sale Held to Maturity Amortized Cost Fair Value Amortized Cost Fair Value Maturity Distribution at December 31, 2021 Due in one year or less $ 6,954 $ 6,965 $ 6,971 $ 6,995 Due after one through five years 5,097 5,309 30,272 31,946 Due after five through ten years 120,460 126,816 177,203 180,129 Due after ten years 1,464,460 1,537,856 1,215,812 1,231,568 1,596,971 1,676,946 1,430,258 1,450,638 U.S. Government-sponsored mortgage-backed securities 671,684 667,605 749,789 751,865 Total Investment Securities $ 2,268,655 $ 2,344,551 $ 2,180,047 $ 2,202,503 |
Schedule of Gross Gains on Sales and Redemptions of Available for Sale Securities | Gross gains and losses on the sales and redemptions of available for sale securities for the years indicated are shown below. 2022 2021 2020 Sales and redemptions of investment securities available for sale: Gross gains $ 1,264 $ 6,502 $ 12,097 Gross losses 70 828 202 Net gains of sales and redemptions of investment securities available for sale $ 1,194 $ 5,674 $ 11,895 |
Loans and Allowance for Credi_2
Loans and Allowance for Credit Losses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Composition of Loan Portfolio by Loan Class | The following table illustrates the composition of the Corporation’s loan portfolio by loan class for the periods indicated: December 31, 2022 December 31, 2021 Commercial and industrial loans $ 3,437,126 $ 2,714,565 Agricultural land, production and other loans to farmers 241,793 246,442 Real estate loans: Construction 835,582 523,066 Commercial real estate, non-owner occupied 2,407,475 2,135,459 Commercial real estate, owner occupied 1,246,528 986,720 Residential 2,096,655 1,159,127 Home equity 630,632 523,754 Individuals' loans for household and other personal expenditures 175,211 146,092 Public finance and other commercial loans 932,892 806,636 Loans $ 12,003,894 $ 9,241,861 |
Schedule of Credit Quality of Loan Portfolio by Loan Class | The following tables summarize the risk grading of the Corporation’s loan portfolio by loan class and by year of origination for the years indicated. Consumer loans are not risk graded. For the purposes of this disclosure, the consumer loans are classified in the following manner: loans that are less than 30 days past due are Pass, loans 30-89 days past due are Special Mention and loans greater than 89 days past due are Substandard. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. Loans that evidenced deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected are included in the applicable categories below. Commercial and industrial loan balances as of December 31, 2022 include PPP loans with an origination year of 2021 and 2020 of $4.6 million and $102,000, respectively. Commercial and industrial loan balances as of December 31, 2021 include PPP loans with an origination year of 2021 and 2020 of $100.3 million and $6.3 million, respectively. December 31, 2022 Term Loans (amortized cost basis by origination year) 2022 2021 2020 2019 2018 Prior Revolving loans amortized cost basis Revolving loans converted to term Total Commercial and industrial loans Pass $ 1,064,687 $ 531,504 $ 141,985 $ 114,999 $ 43,136 $ 45,310 $ 1,302,562 $ 5,048 $ 3,249,231 Special Mention 2,164 18,005 11,900 5,727 1,012 2,181 27,702 150 68,841 Substandard 27,512 26,571 5,531 10,606 4,674 567 43,450 143 119,054 Total Commercial and industrial loans 1,094,363 576,080 159,416 131,332 48,822 48,058 1,373,714 5,341 3,437,126 Agricultural land, production and other loans to farmers Pass 44,446 36,299 35,791 15,296 3,752 28,910 73,402 — 237,896 Special Mention 286 784 — — 281 632 — — 1,983 Substandard 178 — 490 — 94 1,152 — — 1,914 Total Agricultural land, production and other loans to farmers 44,910 37,083 36,281 15,296 4,127 30,694 73,402 — 241,793 Real estate loans: Construction Pass 366,414 301,986 117,541 11,428 857 3,224 17,167 — 818,617 Special Mention 16,922 — — — — — — — 16,922 Substandard 31 — — — — 12 — — 43 Total Construction 383,367 301,986 117,541 11,428 857 3,236 17,167 — 835,582 Commercial real estate, non-owner occupied Pass 560,146 603,254 550,605 168,701 116,859 190,264 31,196 3,803 2,224,828 Special Mention 49,439 4,026 38,268 18,785 11,546 17,992 — — 140,056 Substandard 21,123 8,128 8,026 — 4,442 872 — — 42,591 Total Commercial real estate, non-owner occupied 630,708 615,408 596,899 187,486 132,847 209,128 31,196 3,803 2,407,475 Commercial real estate, owner occupied Pass 260,725 316,665 330,441 114,015 63,816 81,286 33,123 3,378 1,203,449 Special Mention 7,744 6,125 2,245 3,481 1,210 2,984 1,328 — 25,117 Substandard 3,124 1,214 2,376 1,608 2,920 6,720 — — 17,962 Total Commercial real estate, owner occupied 271,593 324,004 335,062 119,104 67,946 90,990 34,451 3,378 1,246,528 Residential Pass 758,161 489,301 401,353 114,420 77,768 229,812 5,365 46 2,076,226 Special Mention 2,839 2,924 1,972 513 396 2,588 34 — 11,266 Substandard 1,399 1,824 1,811 805 1,468 1,741 60 55 9,163 Total Residential 762,399 494,049 405,136 115,738 79,632 234,141 5,459 101 2,096,655 Home equity Pass 40,768 75,670 14,621 1,572 1,348 3,325 486,924 281 624,509 Special Mention — — — — 115 8 3,698 — 3,821 Substandard — 79 — — 65 60 2,098 — 2,302 Total Home Equity 40,768 75,749 14,621 1,572 1,528 3,393 492,720 281 630,632 Individuals' loans for household and other personal expenditures Pass 67,883 43,639 13,025 5,389 5,830 3,775 35,091 — 174,632 Special Mention 178 134 77 33 28 17 16 — 483 Substandard 1 — 3 — 84 8 — — 96 Total Individuals' loans for household and other personal expenditures 68,062 43,773 13,105 5,422 5,942 3,800 35,107 — 175,211 Public finance and other commercial loans Pass 187,125 212,702 165,019 98,687 43,760 204,719 20,880 — 932,892 Total Public finance and other commercial loans 187,125 212,702 165,019 98,687 43,760 204,719 20,880 — 932,892 Loans $ 3,483,295 $ 2,680,834 $ 1,843,080 $ 686,065 $ 385,461 $ 828,159 $ 2,084,096 $ 12,904 $ 12,003,894 December 31, 2021 Term Loans (amortized cost basis by origination year) 2021 2020 2019 2018 2017 Prior Revolving loans amortized cost basis Revolving loans converted to term Total Commercial and industrial loans Pass $ 1,019,757 $ 362,372 $ 144,520 $ 65,165 $ 21,575 $ 30,420 $ 990,335 $ — $ 2,634,144 Special Mention 10,559 11,088 190 730 1,930 1,825 15,026 — 41,348 Substandard 2,811 2,127 7,432 2,932 431 747 22,593 — 39,073 Total Commercial and industrial loans 1,033,127 375,587 152,142 68,827 23,936 32,992 1,027,954 — 2,714,565 Agricultural land, production and other loans to farmers Pass 50,251 45,164 22,195 7,689 6,153 36,074 74,871 — 242,397 Special Mention — 1,543 — — — 252 264 — 2,059 Substandard 524 506 108 371 — 27 450 — 1,986 Total Agricultural land, production and other loans to farmers 50,775 47,213 22,303 8,060 6,153 36,353 75,585 — 246,442 Real estate loans: Construction Pass 215,167 200,169 63,589 979 1,762 2,453 17,201 — 501,320 Special Mention 20,737 270 — — — 46 — — 21,053 Substandard — 693 — — — — — — 693 Total Construction 235,904 201,132 63,589 979 1,762 2,499 17,201 — 523,066 Commercial real estate, non-owner occupied Pass 589,296 688,406 227,332 111,971 103,400 126,837 26,779 — 1,874,021 Special Mention 68,279 149,480 — — — 1,723 — — 219,482 Substandard 19,314 14,912 178 1,118 6,156 278 — — 41,956 Total Commercial real estate, non-owner occupied 676,889 852,798 227,510 113,089 109,556 128,838 26,779 — 2,135,459 Commercial real estate, owner occupied Pass 299,186 392,383 92,338 43,252 46,044 48,571 33,998 — 955,772 Special Mention 5,665 5,953 738 1,532 902 1,301 149 — 16,240 Substandard 7,025 5,763 — 53 113 1,754 — — 14,708 Total Commercial real estate, owner occupied 311,876 404,099 93,076 44,837 47,059 51,626 34,147 — 986,720 Residential Pass 349,726 353,691 103,028 69,745 55,240 210,669 2,955 73 1,145,127 Special Mention 1,034 1,394 1,456 306 172 2,106 — — 6,468 Substandard 1,004 1,575 335 1,248 108 3,257 — 5 7,532 Total Residential 351,764 356,660 104,819 71,299 55,520 216,032 2,955 78 1,159,127 Home equity Pass 63,845 17,556 1,977 2,127 1,250 3,432 427,437 194 517,818 Special Mention — 85 48 — — 24 3,451 — 3,608 Substandard 520 — — 8 91 70 1,639 — 2,328 Total Home Equity 64,365 17,641 2,025 2,135 1,341 3,526 432,527 194 523,754 Individuals' loans for household and other personal expenditures Pass 67,749 23,452 11,893 11,197 2,008 4,928 24,406 — 145,633 Special Mention 79 85 50 33 20 58 134 — 459 Total Individuals' loans for household and other personal expenditures 67,828 23,537 11,943 11,230 2,028 4,986 24,540 — 146,092 Public finance and other commercial loans Pass 231,319 178,316 100,679 39,098 105,964 128,942 22,318 — 806,636 Total Public finance and other commercial loans 231,319 178,316 100,679 39,098 105,964 128,942 22,318 — 806,636 Loans $ 3,023,847 $ 2,456,983 $ 778,086 $ 359,554 $ 353,319 $ 605,794 $ 1,664,006 $ 272 $ 9,241,861 The following tables present the amortized cost basis of collateral dependent loans by loan class and their respective collateral type, which are individually evaluated to determine expected credit losses, for December 31, 2022 and 2021. The increase in collateral dependent loans of $38.8 million between 2022 and 2021, which is mostly in the commercial and industrial loan class, is primarily related to loans from the acquisition of Level One. December 31, 2022 Commercial Real Estate Residential Real Estate Other Total Allowance on Collateral Dependent Loans Commercial and industrial loans $ — $ — $ 42,101 $ 42,101 $ 8,367 Real estate loans: Construction — 10 — 10 1 Commercial real estate, non-owner occupied 26,534 — — 26,534 2,064 Commercial real estate, owner occupied 6,986 — — 6,986 776 Residential — 2,382 — 2,382 260 Home equity — 289 — 289 44 Loans $ 33,520 $ 2,681 $ 42,101 $ 78,302 $ 11,512 December 31, 2021 Commercial Real Estate Residential Real Estate Other Total Allowance on Collateral Dependent Loans Commercial and industrial loans $ — $ — $ 8,075 $ 8,075 $ 2,672 Agricultural land, production and other loans to farmers 524 — 251 775 — Real estate loans: Construction — 685 — 685 82 Commercial real estate, non-owner occupied 23,652 — — 23,652 5,510 Commercial real estate, owner occupied 1,044 — — 1,044 — Residential — 4,906 — 4,906 305 Home equity — 394 — 394 64 Loans $ 25,220 $ 5,985 $ 8,326 $ 39,531 $ 8,633 |
Schedule of Past Due Aging of Loan Portfolio by Loan Class | The tables below show a past due aging of the Corporation’s loan portfolio, by loan class, for the years indicated: December 31, 2022 Current 30-59 Days 60-89 Days 90 Days or More Past Due Total Loans > 90 Days or More Past Due Commercial and industrial loans $ 3,429,314 $ 4,904 $ 434 $ 2,474 $ 3,437,126 $ 1,147 Agricultural land, production and other loans to farmers 241,739 — — 54 241,793 — Real estate loans: Construction 832,716 2,436 418 12 835,582 — Commercial real estate, non-owner occupied 2,395,495 5,946 881 5,153 2,407,475 264 Commercial real estate, owner occupied 1,241,714 4,495 — 319 1,246,528 — Residential 2,079,959 8,607 2,278 5,811 2,096,655 — Home equity 624,543 2,206 1,782 2,101 630,632 326 Individuals' loans for household and other personal expenditures 174,629 343 142 97 175,211 — Public finance and other commercial loans 932,778 114 — — 932,892 — Loans $ 11,952,887 $ 29,051 $ 5,935 $ 16,021 $ 12,003,894 $ 1,737 December 31, 2021 Current 30-59 Days 60-89 Days 90 Days or More Past Due Total Loans > 90 Days or More Past Due Commercial and industrial loans $ 2,708,539 $ 2,602 $ 2,437 $ 987 $ 2,714,565 $ 675 Agricultural land, production and other loans to farmers 246,380 36 — 26 246,442 — Real estate loans: Construction 522,349 717 — — 523,066 — Commercial real estate, non-owner occupied 2,124,853 3,327 — 7,279 2,135,459 — Commercial real estate, owner occupied 985,785 643 — 292 986,720 — Residential 1,148,294 3,979 4,255 2,599 1,159,127 — Home equity 518,643 3,327 281 1,503 523,754 288 Individuals' loans for household and other personal expenditures 145,634 375 83 — 146,092 — Public finance and other commercial loans 806,636 — — — 806,636 — Loans $ 9,207,113 $ 15,006 $ 7,056 $ 12,686 $ 9,241,861 $ 963 |
Schedule of Non-Accrual Loans by Loan class | The following table summarizes the Corporation’s non-accrual loans by loan class for the periods indicated: December 31, 2022 December 31, 2021 Non-Accrual Loans Non-Accrual Loans with no Allowance for Credit Losses Non-Accrual Loans Non-Accrual Loans with no Allowance for Credit Losses Commercial and industrial loans $ 3,292 $ 481 $ 7,598 $ 263 Agricultural land, production and other loans to farmers 54 — 631 524 Real estate loans: Construction 12 — 685 — Commercial real estate, non-owner occupied 19,374 280 23,029 6,133 Commercial real estate, owner occupied 3,550 2,784 411 — Residential 13,685 702 9,153 2,160 Home equity 2,247 — 1,552 — Individuals' loans for household and other personal expenditures 110 — 3 — Loans $ 42,324 $ 4,247 $ 43,062 $ 9,080 |
Schedule of Troubled Debt Restructuring | The following tables summarize troubled debt restructures in the Corporation's loan portfolio that occurred during the twelve months ended December 31, 2022 and 2021, respectively. Twelve Months Ended December 31, 2022 Pre- Modification Recorded Balance Term Modification Rate Modification Post - Modification Recorded Balance Number of Loans Commercial and industrial loans $ 61 $ 62 $ — $ 62 1 Real estate loans: Residential 53 — 56 56 1 Total $ 114 $ 62 $ 56 $ 118 2 Twelve Months Ended December 31, 2021 Pre- Modification Recorded Balance Term Modification Rate Modification Combination Post - Modification Recorded Balance Number of Loans Commercial and industrial loans $ 348 $ 348 $ — $ — $ 348 2 Real estate loans: Construction 16 — 16 — 16 1 Commercial real estate, non owner occupied 12,922 12,976 12,976 1 Commercial real estate, owner occupied 51 29 — 21 50 2 Residential 691 449 126 118 693 9 Total $ 14,028 $ 13,802 $ 142 $ 139 $ 14,083 15 The following table summarizes troubled debt restructures that occurred during the twelve months ended December 31, 2021, that subsequently defaulted during the period indicated and remained in default at period end. For purposes of this schedule, a loan is considered in default if it is 30-days or more past due. None of the troubled debt restructures that occurred during the twelve months ended December 31, 2022 resulted in a subsequent default that remained in default at period end. Twelve Months Ended December 31, 2021 Number of Loans Recorded Balance Real estate loans: Residential 5 $ 475 Total 5 $ 475 |
Schedule of Purchased Credit Deteriorated Loans | The Corporation acquired Level One on April 1, 2022 and performed an evaluation of the loan portfolio in which there were loans that, at acquisition, had more than an insignificant amount of credit quality deterioration. The carrying amount of those loans is shown in the table below: Level One Purchase price of loans at acquisition $ 41,347 CECL Day 1 PCD ACL 16,599 Par value of acquired loans at acquisition $ 57,946 |
Schedule of Changes in Allowance for Loan Losses | The following tables summarize changes in the allowance for credit losses by loan segment for the twelve months ended December 31, 2022 and 2021: Twelve Months Ended December 31, 2022 Commercial Commercial Real Estate Construction Consumer & Residential Total Allowance for credit losses Balances, December 31, 2021 $ 69,935 $ 60,665 $ 20,206 $ 44,591 $ 195,397 Provision for credit losses 16,697 (20,425) 6,367 (2,639) — CECL Day 1 non-PCD provision for credit losses 2,957 5,539 871 4,588 13,955 CECL Day 1 PCD ACL 12,970 2,981 648 — 16,599 Recoveries on loans 872 1,096 863 1,096 3,927 Loans charged off (1,215) (3,017) — (2,369) (6,601) Balances. December 31, 2022 $ 102,216 $ 46,839 $ 28,955 $ 45,267 $ 223,277 Twelve Months Ended December 31, 2021 Commercial Commercial Real Estate Construction Consumer Residential Consumer & Residential Total Allowance for credit losses Balances, December 31, 2020 $ 47,115 $ 51,070 $ — $ 9,648 $ 22,815 $ — $ 130,648 Credit risk reclassifications (10,284) 10,284 (9,648) (22,815) 32,463 — Balances, December 31, 2020 after reclassifications 47,115 40,786 10,284 — — 32,463 130,648 Impact of adopting ASC 326 20,024 34,925 8,805 — — 10,301 74,055 Balances, January 1, 2021 Post-ASC 326 adoption 67,139 75,711 19,089 — — 42,764 204,703 Provision for credit losses 7,921 (11,093) 1,122 — — 2,050 — Recoveries on loans 724 580 1 — — 1,273 2,578 Loans charged off (5,849) (4,533) (6) — — (1,496) (11,884) Balances. December 31, 2021 $ 69,935 $ 60,665 $ 20,206 $ — $ — $ 44,591 $ 195,397 Allowance for Loan Losses under prior GAAP ("Incurred Loss Model") Prior to the adoption of ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments on January 1, 2021, the Corporation maintained an allowance for loan losses in accordance with the incurred loss model as disclosed in the Corporation's 2020 Annual Report on Form 10-K. The following table summarizes changes in the allowance for loan losses by loan segment for the twelve months ended December 31, 2020: Twelve Months Ended December 31, 2020 Commercial Commercial Consumer Residential Total Allowance for loan losses: Balances, December 31, 2019 $ 32,902 $ 28,778 $ 4,035 $ 14,569 $ 80,284 Provision for losses 21,930 22,174 5,996 8,573 58,673 Recoveries on loans 819 431 260 666 2,176 Loans charged off (8,536) (313) (643) (993) (10,485) Balances, December 31, 2020 $ 47,115 $ 51,070 $ 9,648 $ 22,815 $ 130,648 |
Schedule of Composition of Impaired Loans by Loan Class | Twelve Months Ended December 31, 2020 Average Interest Impaired loans with no related allowance: Commercial and industrial loans $ 991 $ — Real estate Loans: Commercial real estate, non-owner occupied 4,850 145 Commercial real estate, owner occupied 1,429 — Residential 840 3 Individuals' loans for household and other personal expenditures 3 — Total $ 8,113 $ 148 Impaired loans with related allowance: Commercial and industrial loans $ 267 $ — Agricultural land, production and other loans to farmers 589 — Real estate Loans: Commercial real estate, non-owner occupied 44,119 — Commercial real estate, owner occupied 1,447 — Residential 2,108 70 Home equity 473 14 Total $ 49,003 $ 84 Total Impaired Loans $ 57,116 $ 232 |
Schedule of Financial Instruments with Off-balance Sheet Risk | Financial instruments with off-balance sheet risk were as follows: December 31, 2022 December 31, 2021 Amounts of commitments: Loan commitments to extend credit $ 4,950,724 $ 3,917,215 Standby letters of credit $ 40,784 $ 34,613 |
Schedule of Allowance for Credit Losses, Off-balance Sheet | The following table details activity in the allowance for credit losses on off-balance sheet commitments: 2022 2021 Balance, January 1 $ 20,500 $ 20,500 CECL Day 1 unfunded commitments provision for credit losses 2,800 — Balance, December 31 $ 23,300 $ 20,500 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment | The following table summarizes the Corporation's premises and equipment as of December 31, 2022 and 2021: 2022 2021 Cost at December 31: Land $ 25,299 $ 22,349 Buildings and Leasehold Improvements 174,895 160,410 Equipment 144,524 129,885 Total Cost 344,718 312,644 Accumulated Depreciation and Amortization (227,600) (206,989) Net $ 117,118 $ 105,655 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | 2022 2021 Balance, January 1 $ 545,385 $ 543,918 Goodwill acquired 166,617 1,467 Balance, December 31 $ 712,002 $ 545,385 |
Other Intangibles (Tables)
Other Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Core Deposit and Other Intangibles | The carrying basis and accumulated amortization of recognized core deposit and other intangibles are noted below. 2022 2021 Gross carrying amount $ 104,643 $ 102,396 Other intangibles acquired 18,642 2,247 Accumulated amortization (87,443) (79,168) Total core deposit and other intangibles $ 35,842 $ 25,475 |
Schedule of Estimated Future Amortization Expense | Estimated future amortization expense is summarized as follows: Amortization Expense 2023 $ 8,742 2024 7,271 2025 6,028 2026 4,910 2027 3,603 After 2027 5,288 $ 35,842 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases is presented in the table below as of December 31, 2022 and 2021: 2022 2021 Operating lease assets $ 23,619 $ 17,818 Total lease assets $ 23,619 $ 17,818 Operating lease liabilities $ 25,316 $ 19,619 Total lease liabilities $ 25,316 $ 19,619 Weighted average remaining lease term (years) Operating leases 6.5 7.0 Weighted average discount rate Operating leases 3.1 % 3.1 % |
Schedule of Components of Lease Expense | The table below presents the components of lease expense for the years ended December 31, 2022, 2021, and 2020: 2022 2021 2020 Lease Cost: Operating lease cost $ 5,233 $ 3,710 $ 3,724 Short-term lease cost 470 345 247 Variable lease cost 1,073 980 842 Sublease income $ (23) $ (33) $ (43) Total lease cost $ 6,753 $ 5,002 $ 4,770 |
Schedule of Supplemental Cash Flow Information | Supplemental cash flow information related to leases is presented in the tables below. Maturity of lease liabilities Operating Leases 2023 $ 5,610 2024 5,056 2025 4,673 2026 3,265 2027 2,468 2028 and after 7,068 Total lease payments $ 28,140 Less: Present value discount 2,824 Present value of lease liabilities $ 25,316 Other Information Twelve Months Ended December 31, 2022 Twelve Months Ended December 31, 2021 Twelve Months Ended December 31, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 5,329 $ 3,773 $ 3,629 ROU assets obtained in exchange for new operating lease liabilities $ 10,516 $ 2,700 $ 1,601 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Statistical Disclosure for Banks [Abstract] | |
Schedule of Deposits | The composition of the deposit portfolio is included in the table below for the years indicated: December 31, 2022 December 31, 2021 Demand deposits $ 8,448,797 $ 7,704,190 Savings deposits 4,657,140 4,334,802 Certificates and other time deposits of $100,000 or more 742,539 273,379 Other certificates and time deposits 468,712 389,752 Brokered deposits 65,557 30,454 Total deposits $ 14,382,745 $ 12,732,577 |
Summary of Contractual Maturities of Time Deposits | At December 31, 2022, the contractual maturities of time deposits are summarized as follows: Certificates and Other Time Deposits 2023 $ 1,148,819 2024 96,897 2025 14,661 2026 9,819 2027 6,043 After 2027 569 $ 1,276,808 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table summarizes the Corporation's borrowings as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 Federal funds purchased $ 171,560 $ — Securities sold under repurchase agreements $ 167,413 $ 181,577 Federal Home Loan Bank advances 823,674 334,055 Subordinated debentures and other borrowings 151,298 118,618 Total Borrowings $ 1,313,945 $ 634,250 |
Schedule of Collateral Pledged for all Repurchase Agreements Accounted for as Secured Borrowings | The collateral pledged for all repurchase agreements that are accounted for as secured borrowings as of December 31, 2022 and 2021 were: December 31, 2022 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 Days 30-90 Days Greater Than 90 Days Total U.S. Government-sponsored mortgage-backed securities $ 167,413 $ — $ — $ — $ 167,413 December 31, 2021 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 Days 30-90 Days Greater Than 90 Days Total U.S. Government-sponsored mortgage-backed securities $ 181,577 $ — $ — $ — $ 181,577 |
Schedule of Maturities of Long-term Debt | Contractual maturities of borrowings as of December 31, 2022, are as follows: Maturities in Years Ending December 31: Federal Funds Purchased Securities Sold Federal Home Subordinated 2023 $ 171,560 $ 167,413 $ 460,097 $ 1,183 2024 — — 60,097 — 2025 — — 25,097 — 2026 — — 97 — 2027 — — 200,096 — After 2027 — — 78,190 152,012 ASC 805 fair value adjustments at acquisition — — — (1,897) $ 171,560 $ 167,413 $ 823,674 $ 151,298 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Fair Value of Derivative Financial Instruments and Classification on the Balance Sheet | The following table summarizes the Corporation's derivatives designated as hedges: Asset Derivatives Liability Derivatives December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Balance Fair Balance Fair Balance Fair Balance Fair Cash flow hedges: Interest rate swaps on borrowings Other Assets $ 164 Other Assets $ — Other Liabilities $ — Other Liabilities $ 835 The table below presents the fair value of the Corporation’s non-designated hedges, as well as their classification on the Balance Sheet, as of December 31, 2022, and December 31, 2021. December 31, 2022 December 31, 2021 Notional Amount Fair Value Notional Amount Fair Value Included in other assets: Interest rate swaps $ 1,184,866 $ 92,652 $ 1,038,947 $ 41,133 Forward contracts related to mortgage loans to be delivered for sale 14,406 188 — — Interest rate lock commitments 5,049 32 — — Included in other assets $ 1,204,321 $ 92,872 $ 1,038,947 $ 41,133 Included in other liabilities: Interest rate swaps $ 1,184,866 $ 92,652 $ 1,038,947 $ 41,133 Forward contracts related to mortgage loans to be delivered for sale 4,483 63 — — Interest rate lock commitments 7,549 55 — — Included in other liabilities $ 1,196,898 $ 92,770 $ 1,038,947 $ 41,133 |
Summary of Amount of Loss Recognized in Other Comprehensive Income | The amount of gain (loss) recognized in other comprehensive income is included in the table below for the periods indicated. Derivatives in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative 2022 2021 Interest rate products $ 479 $ 138 |
Summary of Effect of Derivative Financial Instruments on the Income Statement | The amount of loss reclassified from other comprehensive income into income related to cash flow hedging relationships is included in the table below for the years ended December 31, 2022, 2021 and 2020. Derivatives Designated as Hedging Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Effective Portion) Amount of Gain (Loss) Reclassified from Other Comprehensive Income into Income (Effective Portion) 2022 2021 2020 Interest rate contracts Interest expense $ (521) $ (1,044) $ (906) Derivatives Not Location of Gain Amount of Gain Recognized in Income on Derivative 2022 2021 2020 Forward contracts related to mortgage loans to be delivered for sale Net gains and fees on sales of loans $ 1,112 $ — $ — Interest rate lock commitments Net gains and fees on sales of loans 71 — — Total net gain recognized in income $ 1,183 $ — $ — |
Fair Values of Financial Inst_2
Fair Values of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements of Assets and Liabilities Recognized in the Balance Sheets Measured at Fair Value on Recurring Basis | The following table presents the fair value measurements of assets and liabilities recognized in the accompanying balance sheets measured at fair value on a recurring basis and the level within the ASC 820-10 fair value hierarchy in which the fair value measurements fall at December 31, 2022 and 2021. Fair Value Measurements Using: Quoted Prices in Active Significant Other Observable Inputs Significant December 31, 2022 Fair Value (Level 1) (Level 2) (Level 3) Available for sale securities: U.S. Government-sponsored agency securities $ 101,962 $ — $ 101,962 $ — U.S. Treasury 2,459 2,459 — — State and municipal 1,351,760 — 1,348,356 3,404 U.S. Government-sponsored mortgage-backed securities 508,273 — 508,269 4 Corporate obligations 12,207 — 12,176 31 Derivative assets 93,036 — 93,036 — Derivative liabilities 92,770 — 92,770 — Fair Value Measurements Using: Quoted Prices in Active Significant Other Observable Inputs Significant December 31, 2021 Fair Value (Level 1) (Level 2) (Level 3) Available for sale securities: U.S. Government-sponsored agency securities $ 95,136 $ — $ 95,136 $ — U.S. Treasury 999 999 — — State and municipal 1,576,532 — 1,571,076 5,456 U.S. Government-sponsored mortgage-backed securities 667,605 — 667,601 4 Corporate obligations 4,279 — 4,248 31 Interest rate swap asset 41,133 — 41,133 — Interest rate swap liability 41,968 — 41,968 — |
Schedule of Reconciliation of Beginning and Ending Balances of Recurring Fair Value Measurements Recognized in the Balance Sheets using Significant Unobservable Level 3 Inputs | The following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying balance sheets using significant unobservable Level 3 inputs for year ended December 31, 2022 and 2021. Available for Sale Securities For The Year Ended December 31, 2022 December 31, 2021 Beginning Balance $ 5,491 $ 2,479 Included in other comprehensive income (612) 227 Purchases, issuances, and settlements 5,111 3,241 Principal payments (6,551) (456) Ending balance $ 3,439 $ 5,491 |
Schedule of Description of Valuation Methodologies Used for Instruments Measured at Fair Value on a Non-Recurring Basis and Recognized in the Balance Sheets | Following is a description of valuation methodologies used for instruments measured at fair value on a non-recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy for year ended December 31, 2022 and 2021. Fair Value Measurements Using Quoted Prices in Active Significant Other Observable Inputs Significant December 31, 2022 Fair Value (Level 1) (Level 2) (Level 3) Collateral dependent loans $ 55,290 — — $ 55,290 Fair Value Measurements Using Quoted Prices in Active Significant Other Observable Inputs Significant December 31, 2021 Fair Value (Level 1) (Level 2) (Level 3) Collateral dependent loans $ 24,491 — — $ 24,491 Other real estate owned $ 96 — — $ 96 |
Schedule of Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements Other than Goodwill | The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements, other than goodwill, at December 31, 2022 and 2021. December 31, 2022 Fair Value Valuation Technique Unobservable Inputs Range (Weighted-Average) State and municipal securities $ 3,404 Discounted cash flow Maturity Call Date 1 month to 15 years A- to BBB 0.4% - 4% 3.4% Corporate obligations and U.S. Government-sponsored mortgage backed securities $ 35 Discounted cash flow Risk free rate 3 month LIBOR plus 200bps 0% Collateral dependent loans $ 55,290 Collateral based measurements Discount to reflect current market conditions and ultimate collectability 0% - 10% 1.1% December 31, 2021 Fair Value Valuation Technique Unobservable Inputs Range (Weighted-Average) State and municipal securities $ 5,456 Discounted cash flow Maturity Call Date 1 month to 15 years A- to BBB- 0.75% - 4% 3.7% Corporate obligations and U.S. Government-sponsored mortgage backed securities $ 35 Discounted cash flow Risk free rate 3 month LIBOR plus 200bps 0% Collateral dependent loans $ 24,491 Collateral based measurements Discount to reflect current market conditions and ultimate collectability 0% - 10% 5.5% Other real estate owned $ 96 Appraisals Discount to reflect current market conditions 0% - 44% 43.5% |
Schedule of Estimated Fair Values of Financial Instruments | The following table presents estimated fair values of the Corporation's financial instruments and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2022 and 2021. 2022 Carrying Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Assets at December 31: Cash and due from banks $ 122,594 $ 122,594 $ — $ — Interest-bearing deposits 126,061 126,061 — — Investment securities available for sale 1,976,661 2,459 1,970,763 3,439 Investment securities held to maturity 2,287,127 — 1,893,271 14,594 Loans held for sale 9,094 — 9,094 — Loans 11,780,617 — — 11,156,217 Federal Home Loan Bank stock 38,525 — 38,525 — Derivative assets 93,036 — 93,036 — Interest receivable 85,070 — 85,070 — Liabilities at December 31: Deposits $ 14,382,745 $ 13,105,936 $ 1,251,017 $ — Borrowings: Federal funds purchased 171,560 — 171,560 — Securities sold under repurchase agreements 167,413 — 167,396 — Federal Home Loan Bank advances 823,674 — 615,211 — Subordinated debentures and other borrowings 151,298 — 122,102 — Derivative liabilities 92,770 — 92,770 — Interest payable 7,530 — 7,530 — 2021 Carrying Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Assets at December 31: Cash and due from banks $ 167,146 $ 167,146 $ — $ — Interest-bearing deposits 474,154 474,154 — — Investment securities available for sale 2,344,551 999 2,338,061 5,491 Investment securities held to maturity 2,179,802 — 2,188,600 13,903 Loans held for sale 11,187 — 11,187 — Loans 9,046,464 — — 9,068,319 Federal Home Loan Bank stock 28,736 — 28,736 — Interest rate swap asset 41,133 — 41,133 — Interest receivable 57,187 — 57,187 — Liabilities at December 31: Deposits $ 12,732,577 $ 12,038,992 $ 690,089 $ — Borrowings: Securities sold under repurchase agreements 181,577 — 181,572 — Federal Home Loan Bank advances 334,055 — 337,005 — Subordinated debentures and other borrowings 118,618 — 107,892 — Interest rate swap liability 41,968 — 41,968 — Interest payable 2,762 — 2,762 — |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, as of December 31, 2022 and 2021: Accumulated Other Comprehensive Income (Loss) Unrealized Gains (Losses) on Securities Available for Sale Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Defined Benefit Plans Total Balance at December 31, 2021 $ 59,774 $ (660) $ (4,001) $ 55,113 Other comprehensive income before reclassifications (293,326) 378 (850) (293,798) Amounts reclassified from accumulated other comprehensive income (943) 412 65 (466) Period change (294,269) 790 (785) (294,264) Balance at December 31, 2022 $ (234,495) $ 130 $ (4,786) $ (239,151) Balance at December 31, 2020 $ 87,988 $ (1,594) $ (11,558) $ 74,836 Other comprehensive income before reclassifications (23,732) 109 7,491 (16,132) Amounts reclassified from accumulated other comprehensive income (4,482) 825 66 (3,591) Period change (28,214) 934 7,557 (19,723) Balance at December 31, 2021 $ 59,774 $ (660) $ (4,001) $ 55,113 |
Summary of Reclassification out of Accumulated Other Comprehensive Income (Loss) | The following table presents the reclassification adjustments out of accumulated other comprehensive income (loss) that were included in net income in the Consolidated Statements of Income for the years ended December 31, 2022, 2021 and 2020: Amount Reclassified from Accumulated Other Comprehensive Income (Loss) For the Year Ended December 31, Details about Accumulated Other Comprehensive Income (Loss) Components 2022 2021 2020 Affected Line Item in the Statements of Income Unrealized gains (losses) on available for sale securities (1) Realized securities gains reclassified into income $ 1,194 $ 5,674 $ 11,895 Other income - net realized gains on sales of available for sale securities Related income tax benefit (expense) (251) (1,192) (2,498) Income tax expense $ 943 $ 4,482 $ 9,397 Unrealized gains (losses) on cash flow hedges (2) Interest rate contracts $ (521) $ (1,044) $ (906) Interest expense - subordinated debentures and other borrowings Related income tax benefit (expense) 109 219 190 Income tax expense $ (412) $ (825) $ (716) Unrealized gains (losses) on defined benefit plans Amortization of net loss and prior service costs $ (82) $ (84) $ (84) Other expenses - salaries and employee benefits Related income tax benefit (expense) 17 18 18 Income tax expense $ (65) $ (66) $ (66) Total reclassifications for the period, net of tax $ 466 $ 3,591 $ 8,615 (1) For additional detail related to unrealized gains (losses) on available for sale securities and related amounts reclassified from accumulated other comprehensive income see NOTE 4. INVESTMENT SECURITIES of these Notes to Consolidated Financial Statements. (2) For additional detail related to unrealized gains (losses) on cash flow hedges and related amounts reclassified from accumulated other comprehensive income see NOTE 12. DERIVATIVE FINANCIAL INSTRUMENTS of these Notes to Consolidated Financial Statements. |
Regulatory Capital and Divide_2
Regulatory Capital and Dividends (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Banking and Thrift, Interest [Abstract] | |
Schedule of Actual and Required Capital Amounts and Ratios | The Corporation's and Bank's actual and required capital ratios as of December 31, 2022 and December 31, 2021 were as follows: Prompt Corrective Action Thresholds Actual Basel III Minimum Capital Required Well Capitalized December 31, 2022 Amount Ratio Amount Ratio Amount Ratio Total risk-based capital to risk-weighted assets First Merchants Corporation $ 1,882,254 13.08 % $ 1,511,230 10.50 % N/A N/A First Merchants Bank 1,822,296 12.65 1,513,064 10.50 $ 1,441,014 10.00 % Tier 1 capital to risk-weighted assets First Merchants Corporation $ 1,558,281 10.83 % $ 1,223,377 8.50 % N/A N/A First Merchants Bank 1,641,210 11.39 1,224,862 8.50 $ 1,152,811 8.00 % Common equity tier 1 capital to risk-weighted assets First Merchants Corporation $ 1,533,281 10.65 % $ 1,007,487 7.00 % N/A N/A First Merchants Bank 1,641,210 11.39 1,008,710 7.00 $ 936,659 6.50 % Tier 1 capital to average assets First Merchants Corporation $ 1,558,281 9.10 % $ 684,758 4.00 % N/A N/A First Merchants Bank 1,641,210 9.60 683,680 4.00 $ 854,600 5.00 % Prompt Corrective Action Thresholds Actual Basel III Minimum Capital Required Well Capitalized December 31, 2021 Amount Ratio Amount Ratio Amount Ratio Total risk-based capital to risk-weighted assets First Merchants Corporation $ 1,582,481 13.92 % $ 1,193,840 10.50 % N/A N/A First Merchants Bank 1,453,358 12.74 1,197,515 10.50 $ 1,140,490 10.00 % Tier 1 capital to risk-weighted assets First Merchants Corporation $ 1,374,240 12.09 % $ 966,442 8.50 % N/A N/A First Merchants Bank 1,309,685 11.48 969,417 8.50 $ 912,392 8.00 % Common equity tier 1 capital to risk-weighted assets First Merchants Corporation $ 1,327,634 11.68 % $ 795,893 7.00 % N/A N/A First Merchants Bank 1,309,685 11.48 798,343 7.00 $ 741,319 6.50 % Tier 1 capital to average assets First Merchants Corporation $ 1,374,240 9.30 % $ 590,758 4.00 % N/A N/A First Merchants Bank 1,309,685 8.88 589,994 4.00 $ 737,493 5.00 % |
Loan Servicing (Tables)
Loan Servicing (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Banking and Thrift, Other Disclosure [Abstract] | |
Schedule Of Unpaid Balance Of Loan Service | The unpaid balances are as follows for December 31, 2022, 2021 and 2020. The amount of capitalized servicing assets is considered immaterial. 2022 2021 2020 Mortgage loan portfolios serviced for: Federal Home Loan Mortgage Corporation $ 794,222 $ 765,547 $ 514,539 Fannie Mae 54,934 60,839 69,072 Equity Bank 49,558 60,107 — Federal Home Loan Bank 27,127 32,558 51,479 Chevy Chase Mortgage Company — 85 134 Total $ 925,841 $ 919,136 $ 635,224 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Components of Share Based Compensation Awards | The following table summarizes the components of the Corporation's share-based compensation awards recorded as an expense and the income tax benefit of such awards. For the year ended 2022, RSAs vested at a stock price higher than the grant date stock price resulting in recognition of income tax benefit at vesting of $86,000. In 2021 and 2020, the Corporation had RSAs vest primarily at a stock price that was lower than the grant date stock price, which resulted in the recognition of income tax expense at vesting of $112,000 and $394,000, respectively. Years Ended December 31, 2022 2021 2020 Stock and ESPP Options Pre-tax compensation expense $ 95 $ 155 $ 96 Income tax benefit (74) (92) (29) Stock and ESPP option expense, net of income taxes $ 21 $ 63 $ 67 Restricted Stock Awards Pre-tax compensation expense $ 4,557 $ 4,607 $ 4,504 Income tax benefit (1,043) (855) (552) Restricted stock awards expense, net of income taxes $ 3,514 $ 3,752 $ 3,952 Total Share-Based Compensation: Pre-tax compensation expense $ 4,652 $ 4,762 $ 4,600 Income tax benefit (1,117) (947) (581) Total share-based compensation expense, net of income taxes $ 3,535 $ 3,815 $ 4,019 |
Summary of Stock Option Activity Under Stock Option Plans | Stock option activity under the Corporation's stock option plans, as of December 31, 2022, and changes during the year ended December 31, 2022, were as follows: Number of Weighted-Average Weighted Average Aggregate Outstanding at January 1, 2022 28,500 $ 17.14 Transferred Options from Level One 148,600 $ 18.84 Exercised (22,000) $ 16.28 Outstanding December 31, 2022 155,100 $ 18.89 2.47 $ 3,446,110 Vested and Expected to Vest at December 31, 2022 155,100 $ 18.89 2.47 $ 3,446,110 Exercisable at December 31, 2022 155,100 $ 18.89 2.47 $ 3,446,110 |
Summary of Unvested RSAs Outstanding | The following table summarizes information on unvested RSAs outstanding as of December 31, 2022: Number of Weighted-Average Unvested RSAs at January 1, 2022 411,259 $ 35.86 Granted 137,267 $ 40.66 Forfeited (13,775) $ 37.18 Vested (118,046) $ 37.35 Unvested RSAs at December 31, 2022 416,705 $ 36.97 |
Pension and Other Post Retire_2
Pension and Other Post Retirement Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Plans' Funded Status and Amounts Recognized in the Balance Sheets | The table below sets forth the plans’ funded status and amounts recognized in the Consolidated Balance Sheets at December 31, using measurement dates of December 31, 2022 and 2021. 2022 2021 Change in Benefit Obligation: Benefit obligation at beginning of year $ 74,274 $ 80,786 Service cost — — Interest cost 1,905 1,760 Actuarial (gain) loss (14,546) (2,919) Benefits paid (5,869) (5,353) Benefit obligation at end of year $ 55,764 $ 74,274 Change in Plan Assets: Fair value of plan assets at beginning of year $ 94,588 $ 88,512 Actual return on plan assets (11,799) 10,786 Employer contributions 614 643 Benefits paid (5,869) (5,353) End of year 77,534 94,588 Funded status at end of year $ 21,770 $ 20,314 Assets and Liabilities Recognized in the Balance Sheets: Deferred tax asset $ 1,955 $ 1,545 Assets $ 25,175 $ 24,750 Liabilities $ 3,405 $ 4,436 |
Schedule of Accumulated Benefit Obligation in Excess of Plan Assets | Information for pension plans with an accumulated benefit obligation in excess of plan assets consists solely of the non-qualified plans for certain employees, former employees and former non-employee directors, and is included in the table below. December 31, 2022 December 31, 2021 Projected benefit obligation $ 3,405 $ 4,436 Accumulated benefit obligation $ 3,405 $ 4,436 Fair value of plan assets $ — $ — |
Schedule of Net Periodic Pension Costs | The following table shows the components of net periodic pension benefit cost: December 31, 2022 December 31, 2021 December 31, 2020 Service cost $ — $ — $ 16 Interest cost 1,905 1,760 2,343 Expected return on plan assets (4,544) (4,246) (4,086) Amortization of prior service cost 87 87 87 Amortization of net loss 13 305 221 Net periodic pension benefit cost $ (2,539) $ (2,094) $ (1,419) |
Schedule of Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) | Other changes in plan assets and benefit obligations recognized in other comprehensive income: December 31, 2022 December 31, 2021 December 31, 2020 Net periodic pension benefit cost $ (2,539) $ (2,094) $ (1,419) Net gain (loss) (1,797) 9,460 (3,119) Amortization of net loss 13 305 221 Amortization of prior service cost 87 87 87 Total recognized in other comprehensive income (loss) (1,697) 9,852 (2,811) Total recognized in net periodic pension benefit cost and other comprehensive income (loss) $ 842 $ 11,946 $ (1,392) |
Schedule of Assumptions Used | Significant assumptions include: December 31, 2022 December 31, 2021 December 31, 2020 Weighted-average Assumptions Used to Determine Benefit Obligation: Discount rate 5.40 % 2.70 % 2.30 % Rate of compensation increase for accruing active participants n/a n/a n/a Weighted-average Assumptions Used to Determine Cost: Discount rate 2.70 % 2.30 % 3.20 % Expected return on plan assets 5.00 % 5.00 % 5.00 % Rate of compensation increase for accruing active participants n/a n/a n/a |
Schedule of Expected Benefit Payments | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as of December 31, 2022. The minimum contribution required in 2023 will likely be zero, but the Corporation may decide to make a discretionary contribution during the year. 2023 $ 5,632 2024 5,431 2025 5,352 2026 5,176 2027 4,889 After 2027 21,143 $ 47,623 |
Schedule of Allocation of Plan Assets | Plan assets are re-balanced quarterly. At December 31, 2022 and 2021, plan assets by category are as follows: December 31, 2022 December 31, 2021 Actual Target Actual Target Cash and cash equivalents 5.9 % 3.0 % 2.5 % 3.0 % Equity securities 51.5 50.0 56.4 53.0 Debt securities 40.4 45.0 38.6 42.0 Alternative investments 2.2 2.0 2.5 2.0 100.0 % 100.0 % 100.0 % 100.0 % Following is a description of the valuation methodologies used for pension plan assets measured at fair value on a recurring basis, as well as the general classification of pension plan assets pursuant to the valuation hierarchy. Where quoted market prices are available in an active market, plan assets are classified within Level 1 of the valuation hierarchy. Level 1 plan assets total $74.0 million and $92.0 million as of December 31, 2022 and 2021, respectively, and include cash and cash equivalents, common stocks, mutual funds and corporate bonds and notes. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of plan assets with similar characteristics or discounted cash flows. Level 2 plan assets total $3.5 million and $2.6 million as of December 31, 2022 and 2021, respectively, and include governmental agencies, taxable municipal bonds and notes, and certificates of deposit. In certain cases where Level 1 or Level 2 inputs are not available, plan assets are classified within Level 3 of the hierarchy. There are no assets classified within Level 3 of the hierarchy at December 31, 2022 and 2021. Fair Value Measurements Using Quoted Prices in Significant Other Observable Inputs Significant December 31, 2022 Fair Value (Level 1) (Level 2) (Level 3) Cash & Cash Equivalents $ 4,559 $ 4,559 $ — $ — Corporate Bonds and Notes 17,159 17,159 — — Government Agency and Municipal Bonds and Notes 3,010 — 3,010 — Certificates of Deposit 492 — 492 — Party-in-Interest Investments Common Stock 2,487 2,487 — — Mutual Funds Taxable Bond 10,686 10,686 — — Large Cap Equity 21,056 21,056 — — Mid Cap Equity 9,610 9,610 — — Small Cap Equity 4,419 4,419 — — International Equity 2,357 2,357 — — Specialty Alternative Equity 1,699 1,699 — — $ 77,534 $ 74,032 $ 3,502 $ — Fair Value Measurements Using Quoted Prices in Significant Other Observable Inputs Significant December 31, 2021 Fair Value (Level 1) (Level 2) (Level 3) Cash & Cash Equivalents $ 2,346 $ 2,346 $ — $ — Corporate Bonds and Notes 15,726 15,726 — — Government Agency and Municipal Bonds and Notes 1,302 — 1,302 — Certificates of Deposit 1,307 — 1,307 — Party-in-Interest Investments Common Stock 2,534 2,534 — — Mutual Funds Taxable Bond 18,184 18,184 — — Large Cap Equity 28,349 28,349 — — Mid Cap Equity 13,033 13,033 — — Small Cap Equity 5,815 5,815 — — International Equity 3,602 3,602 — — Specialty Alternative Equity 2,390 2,390 — — $ 94,588 $ 91,979 $ 2,609 $ — |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of Federal Statutory to Actual Tax Expense | The reconciliation between income tax expense expected at the U.S. federal statutory tax rate and the reported income tax expense is summarized in the following table for years ended December 31, 2022, 2021 and 2020: 2022 2021 2020 Reconciliation of Federal Statutory to Actual Tax Expense: Federal Statutory Income Tax at 21% $ 53,692 $ 50,566 $ 35,695 Tax-exempt Interest Income (19,349) (16,200) (13,273) Stock Compensation (214) (20) 338 Earnings on Life Insurance (2,344) (1,468) (1,079) Tax Credits (414) (354) (425) CARES Act - NOL carryback rate differential — — (1,178) State Tax 2,494 2,697 1,122 Other (280) 38 175 Income Tax Expense $ 33,585 $ 35,259 $ 21,375 Effective Tax Rate 13.1 % 14.6 % 12.6 % |
Components of Income Tax Expense (Benefit) | Income tax expense consists of the following components for the years ended December 31, 2022, 2021, 2020: 2022 2021 2020 Income Tax Expense for the Year Ended December 31: Currently Payable: Federal $ 21,824 $ 24,634 $ 28,463 State 2,696 1,473 2,647 Deferred: Federal 8,604 7,211 (8,508) State 461 1,941 (1,227) Income Tax Expense $ 33,585 $ 35,259 $ 21,375 |
Deferred Tax Assets and Liabilities | Significant components of the net deferred tax assets and liabilities resulting from temporary differences were as follows at December 31, 2022 and 2021: 2022 2021 Deferred Tax Asset at December 31: Assets: Differences in Accounting for Loan Losses $ 61,484 $ 52,995 Differences in Accounting for Loan Fees 2,094 2,016 Deferred Compensation 3,922 4,172 Federal & State Income Tax Loss Carryforward and Credits 600 747 Net Unrealized Loss on Securities Available for Sale 62,323 — Other 2,883 3,585 Total Assets 133,306 63,515 Liabilities: Differences in Depreciation Methods 7,039 5,726 Differences in Accounting for Loans and Securities 1,058 3,078 Difference in Accounting for Pensions and Other Employee Benefits 3,687 4,586 State Income Tax 1,859 1,499 Net Unrealized Gain on Securities Available for Sale — 15,889 Gain on FDIC Modified Whole Bank Transaction 287 306 Other 9,919 8,108 Total Liabilities 23,849 39,192 Net Deferred Tax Asset $ 109,457 $ 24,323 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Summary of Reconciliation of Basic and Diluted Net Income Per Common Share | The following table reconciles basic and diluted net income per common share for the years indicated: 2022 2021 2020 Net Weighted-Average Common Shares Per Net Weighted-Average Common Shares Per Net Weighted-Average Common Shares Per Net income available to common stockholders $ 220,683 57,692,018 $ 3.83 $ 205,531 53,783,632 $ 3.82 $ 148,600 54,058,471 $ 2.75 Effect of potentially dilutive stock options and restricted stock awards 258,239 200,597 161,913 Diluted net income per common share $ 220,683 57,950,257 $ 3.81 $ 205,531 53,984,229 $ 3.81 $ 148,600 54,220,384 $ 2.74 |
Condensed Financial Informati_2
Condensed Financial Information (parent company only) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Balance Sheets | Condensed Balance Sheets December 31, 2022 December 31, 2021 Assets Cash and due from banks $ 56,739 $ 127,501 Investment in subsidiaries 2,124,104 1,900,787 Premises and equipment 119 274 Interest receivable 6 2 Goodwill 448 448 Cash surrender value of life insurance 736 716 Other assets 6,851 10,281 Total assets $ 2,189,003 $ 2,040,009 Liabilities Subordinated debentures and other borrowings $ 150,115 $ 118,618 Interest payable 979 864 Other liabilities 3,139 7,956 Total liabilities 154,233 127,438 Stockholders' equity 2,034,770 1,912,571 Total liabilities and stockholders' equity $ 2,189,003 $ 2,040,009 |
Condensed Statements of Income and Comprehensive Income (Loss) | Condensed Statements of Income and Comprehensive Income (Loss) December 31, 2022 December 31, 2021 December 31, 2020 Income Dividends from subsidiaries $ 90,500 $ 161,825 $ 70,100 Other income (1,693) (50) (62) Total income 88,807 161,775 70,038 Expenses Interest expense 8,005 6,642 6,777 Salaries and employee benefits 3,786 3,917 3,426 Net occupancy and equipment expenses 46 825 745 Professional and other outside services 2,187 1,264 949 Other expenses 1,396 1,687 1,266 Total expenses 15,420 14,335 13,163 Income before income tax benefit and equity in undistributed income of subsidiaries 73,387 147,440 56,875 Income tax benefit 3,645 2,929 2,260 Income before equity in undistributed income of subsidiaries 77,032 150,369 59,135 Equity in undistributed income of subsidiaries 145,057 55,162 89,465 Net income 222,089 205,531 148,600 Preferred stock dividends 1,406 — — Net income available to common stockholders $ 220,683 $ 205,531 $ 148,600 Net income $ 222,089 $ 205,531 $ 148,600 Other comprehensive income (loss) (294,264) (19,723) 46,962 Comprehensive income (loss) $ (72,175) $ 185,808 $ 195,562 |
Condensed Statement of Cash Flows | Condensed Statements of Cash Flows December 31, 2022 December 31, 2021 December 31, 2020 Cash Flow From Operating Activities: Net income $ 222,089 $ 205,531 $ 148,600 Adjustments to reconcile net income to net cash provided by operating activities Share-based compensation 1,659 1,563 1,502 Distributions in excess of (equity in undistributed) income of subsidiaries (145,057) (55,162) (89,465) Other adjustments (6,258) (1,173) 1,537 Investment in subsidiaries - operating activities 333 885 235 Net cash provided by operating activities 72,766 151,644 62,409 Cash Flow From Investing Activities: Net cash and cash equivalents paid in acquisition (72,494) — — Net cash used by investing activities (72,494) — — Cash Flow From Financing Activities: Cash dividends on common stock (72,748) (61,230) (56,542) Cash dividends on preferred stock (1,406) — — Repayment of borrowings — — (20,310) Stock issued under employee benefit plans 706 605 639 Stock issued under dividend reinvestment and stock purchase plan 2,056 1,880 1,726 Stock options exercised 358 198 115 Repurchases of common stock — (25,444) (55,912) Net cash used by financing activities (71,034) (83,991) (130,284) Net change in cash and cash equivalents (70,762) 67,653 (67,875) Cash and cash equivalents, beginning of the year 127,501 59,848 127,723 Cash and cash equivalents, end of year $ 56,739 $ 127,501 $ 59,848 |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies - Allowance for Credit Losses and Loans Held for Sale (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Allowance for Credit Losses | $ 245 | $ 245 | |
Loans | 12,003,894 | 9,241,861 | |
PPP, CARES Act | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Loans | 4,700 | 106,600 | |
State and municipal | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Allowance for Credit Losses | $ 245 | $ 245 | |
Cumulative effect of ASC 326 adoption | State and municipal | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Allowance for Credit Losses | $ 245 |
Nature of Operations and Summ_4
Nature of Operations and Summary of Significant Accounting Policies - Premises and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Minimum | |
Premises and Equipment [Line Items] | |
Estimated useful lives of assets | 3 years |
Maximum | |
Premises and Equipment [Line Items] | |
Estimated useful lives of assets | 40 years |
Nature of Operations and Summ_5
Nature of Operations and Summary of Significant Accounting Policies - Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Minimum | |
Intangible Assets [Abstract] | |
Estimated useful lives of intangible assets | 2 years |
Maximum | |
Intangible Assets [Abstract] | |
Estimated useful lives of intangible assets | 10 years |
Nature of Operations and Summ_6
Nature of Operations and Summary of Significant Accounting Policies - Share Based Compensation (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Minimum | |
Schedule of Stock Options and Restricted Stock Award Plans [Line Items] | |
Requisite service period | 2 years |
Maximum | |
Schedule of Stock Options and Restricted Stock Award Plans [Line Items] | |
Requisite service period | 5 years |
Nature of Operations and Summ_7
Nature of Operations and Summary of Significant Accounting Policies - Impact Of Covid-19 (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Apr. 01, 2022 | Dec. 31, 2021 | Apr. 01, 2021 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Loans | $ 12,003,894 | $ 9,241,861 | ||
PPP, CARES Act | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Loans | $ 4,700 | $ 106,600 | ||
Level One | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Loans at acquisition | $ 1,627,423 | $ 1,600,000 | ||
Level One | PPP, CARES Act | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Loans at acquisition | $ 43,500 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Apr. 01, 2022 USD ($) banking_center $ / shares shares | Apr. 01, 2021 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) | Mar. 31, 2022 | |
Business Acquisition [Line Items] | ||||||
Cash paid in acquisition | $ 79,324 | $ 3,225 | $ 0 | |||
Series A Preferred Stock | ||||||
Business Acquisition [Line Items] | ||||||
Preferred Stock, issued (in shares) | shares | 10,000 | 10,000 | ||||
Liquidation value per share (in dollars per share) | $ / shares | $ 2,500 | $ 2,500 | ||||
Entity listing, depository receipt ratio | 0.01 | |||||
Preferred Class B | ||||||
Business Acquisition [Line Items] | ||||||
Entity listing, depository receipt ratio | 0.01 | |||||
Preferred Class B | Level One | ||||||
Business Acquisition [Line Items] | ||||||
Entity listing, depository receipt ratio | 0.01 | |||||
Level One | ||||||
Business Acquisition [Line Items] | ||||||
Acquired interest | 100% | |||||
Number of banking centers | banking_center | 17 | |||||
Exchange ratio | 0.7167 | |||||
Cash payment per share (in dollars per share) | $ / shares | $ 10.17 | |||||
Cash paid in acquisition | $ 79,300 | |||||
Customer relationship intangible | $ 18,642 | |||||
Operating revenue | $ 56,900 | |||||
Acquisition-related expenses, net of tax | $ 12,500 | |||||
Level One | Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Issuance of common stock related to acquisitions (in shares) | shares | 5,600,000 | |||||
Level One | Series A Preferred Stock | ||||||
Business Acquisition [Line Items] | ||||||
Preferred Stock, issued (in shares) | shares | 10,000 | |||||
Dividend rate, percentage | 7.50% | |||||
Liquidation value per share (in dollars per share) | $ / shares | $ 2,500 | |||||
Level One | Other Intangible Assets | ||||||
Business Acquisition [Line Items] | ||||||
Customer relationship intangible | $ 18,600 | |||||
Level One | Core deposit intangible acquired | ||||||
Business Acquisition [Line Items] | ||||||
Customer relationship intangible | $ 17,200 | |||||
Estimated life | 10 years | |||||
Level One | Noncompete Agreements | ||||||
Business Acquisition [Line Items] | ||||||
Customer relationship intangible | $ 1,400 | |||||
Estimated life | 2 years | |||||
Hoosier | ||||||
Business Acquisition [Line Items] | ||||||
Acquired interest | 100% | |||||
Cash paid in acquisition | $ 3,225 | |||||
Customer relationship intangible | 2,247 | |||||
Assets under management | 290,000 | |||||
Hoosier | Customer relationship intangible | ||||||
Business Acquisition [Line Items] | ||||||
Customer relationship intangible | $ 2,247 | |||||
Estimated life | 10 years |
Acquisitions - Assets Acquired
Acquisitions - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Apr. 01, 2022 | Dec. 31, 2021 | Apr. 01, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 712,002 | $ 545,385 | $ 543,918 | ||
Level One | |||||
Business Acquisition [Line Items] | |||||
Cash and due from banks | $ 217,104 | ||||
Investment securities available for sale | 370,071 | ||||
Investment securities held to maturity | 587 | ||||
Loans held for sale | 7,951 | ||||
Loans | 1,627,423 | $ 1,600,000 | |||
Allowance for credit losses - loans | (16,599) | ||||
Premises and equipment | 11,848 | ||||
Federal Home Loan Bank stock | 11,688 | ||||
Interest receivable | 7,188 | ||||
Cash surrender value of life insurance | 30,143 | ||||
Cash surrender value of life insurance | 16,223 | ||||
Other assets | 41,690 | ||||
Deposits | (1,930,790) | ||||
Securities sold under repurchase agreements | (1,521) | ||||
Federal Home Loan Bank advances | (160,043) | ||||
Subordinated debentures | (32,631) | ||||
Interest payable | (1,065) | ||||
Other liabilities | (42,813) | ||||
Net tangible assets acquired | 156,454 | ||||
Customer relationship intangible | 18,642 | ||||
Goodwill | 166,617 | ||||
Purchase price | $ 341,713 | ||||
Hoosier | |||||
Business Acquisition [Line Items] | |||||
Cash and due from banks | 292 | ||||
Other assets | 35 | ||||
Other liabilities | (816) | ||||
Net tangible assets acquired | (489) | ||||
Customer relationship intangible | 2,247 | ||||
Goodwill | 1,467 | ||||
Purchase price | $ 3,225 |
Acquisition - Pro Forma Informa
Acquisition - Pro Forma Information (Details) - Level One - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||
Total revenue (net interest income plus other income) | $ 654,313 | $ 621,946 |
Net Income | 221,631 | 237,031 |
Net income available to common shareholders | $ 219,756 | $ 235,156 |
Earnings per share: | ||
Basic (in dollars per share) | $ 3.72 | $ 3.96 |
Diluted (in dollars per share) | $ 3.70 | $ 3.95 |
Cash and Cash Equivalents and_2
Cash and Cash Equivalents and Interest-bearing Deposits (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Cash and Cash Equivalents [Abstract] | |
Cash amount that exceeded federally insured limits | $ 54,029 |
Federal Home Loan Bank and Federal Reserve Bank balance | $ 110,502 |
Investment Securities - Amortiz
Investment Securities - Amortized Cost and Approximate Fair Values of Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Available for sale securities | ||
Amortized Cost | $ 2,273,347 | $ 2,268,655 |
Gross Unrealized Gains | 439 | 89,536 |
Gross Unrealized Losses | 297,125 | 13,640 |
Fair Value | 1,976,661 | 2,344,551 |
Held to maturity securities | ||
Amortized Cost | 2,287,372 | 2,180,047 |
Allowance for Credit Losses | 245 | 245 |
Net Carrying Amount | 2,287,127 | 2,179,802 |
Gross Unrealized Gains | 647 | 37,776 |
Gross Unrealized Losses | 380,154 | 15,320 |
Fair Value | 1,907,865 | 2,202,503 |
U.S. Treasury | ||
Available for sale securities | ||
Amortized Cost | 2,501 | 1,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 42 | 1 |
Fair Value | 2,459 | 999 |
U.S. Government-sponsored agency securities | ||
Available for sale securities | ||
Amortized Cost | 119,154 | 96,244 |
Gross Unrealized Gains | 0 | 437 |
Gross Unrealized Losses | 17,192 | 1,545 |
Fair Value | 101,962 | 95,136 |
Held to maturity securities | ||
Amortized Cost | 392,246 | 371,457 |
Allowance for Credit Losses | 0 | 0 |
Net Carrying Amount | 392,246 | 371,457 |
Gross Unrealized Gains | 0 | 226 |
Gross Unrealized Losses | 69,147 | 7,268 |
Fair Value | 323,099 | 364,415 |
State and municipal | ||
Available for sale securities | ||
Amortized Cost | 1,530,048 | 1,495,696 |
Gross Unrealized Gains | 438 | 81,734 |
Gross Unrealized Losses | 178,726 | 898 |
Fair Value | 1,351,760 | 1,576,532 |
Held to maturity securities | ||
Amortized Cost | 1,117,552 | 1,057,301 |
Allowance for Credit Losses | 245 | 245 |
Net Carrying Amount | 1,117,307 | 1,057,056 |
Gross Unrealized Gains | 647 | 29,593 |
Gross Unrealized Losses | 197,064 | 2,170 |
Fair Value | 921,135 | 1,084,724 |
U.S. Government-sponsored mortgage-backed securities | ||
Available for sale securities | ||
Amortized Cost | 608,630 | 671,684 |
Gross Unrealized Gains | 1 | 7,109 |
Gross Unrealized Losses | 100,358 | 11,188 |
Fair Value | 508,273 | 667,605 |
Held to maturity securities | ||
Amortized Cost | 776,074 | 749,789 |
Allowance for Credit Losses | 0 | 0 |
Net Carrying Amount | 776,074 | 749,789 |
Gross Unrealized Gains | 0 | 7,957 |
Gross Unrealized Losses | 113,915 | 5,881 |
Fair Value | 662,159 | 751,865 |
Corporate obligations | ||
Available for sale securities | ||
Amortized Cost | 13,014 | 4,031 |
Gross Unrealized Gains | 0 | 256 |
Gross Unrealized Losses | 807 | 8 |
Fair Value | 12,207 | 4,279 |
Foreign investment | ||
Held to maturity securities | ||
Amortized Cost | 1,500 | 1,500 |
Allowance for Credit Losses | 0 | 0 |
Net Carrying Amount | 1,500 | 1,500 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 28 | 1 |
Fair Value | $ 1,472 | $ 1,499 |
Investment Securities - Narrati
Investment Securities - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 |
Schedule of Available for sale Securities and Held to maturity Securities [Line Items] | |||
Accrued interest on investment securities | $ 29,500 | $ 26,800 | |
Allowance for credit losses | 245 | 245 | |
Carrying value of securities pledged as collateral | 941,300 | 873,200 | |
Securities sold under repurchase agreements | 196,700 | 175,100 | |
State and municipal | |||
Schedule of Available for sale Securities and Held to maturity Securities [Line Items] | |||
Allowance for credit losses | $ 245 | $ 245 | |
Cumulative effect of ASC 326 adoption | State and municipal | |||
Schedule of Available for sale Securities and Held to maturity Securities [Line Items] | |||
Allowance for credit losses | $ 245 |
Investment Securities - Amort_2
Investment Securities - Amortized Cost of Investment Securities Held to Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 2,287,372 | $ 2,180,047 |
Aaa | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 171,659 | |
Aa1 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 162,728 | |
Aa2 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 185,394 | |
Aa3 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 135,227 | |
A1 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 131,417 | |
A2 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 10,168 | |
A3 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 10,117 | |
Non-rated | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 1,480,662 | |
State and municipal | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 1,117,552 | $ 1,057,301 |
State and municipal | Aaa | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 101,076 | |
State and municipal | Aa1 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 162,728 | |
State and municipal | Aa2 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 185,394 | |
State and municipal | Aa3 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 135,227 | |
State and municipal | A1 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 131,417 | |
State and municipal | A2 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 10,168 | |
State and municipal | A3 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 10,117 | |
State and municipal | Non-rated | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 381,425 | |
Other | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 1,169,820 | |
Other | Aaa | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 70,583 | |
Other | Aa1 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 0 | |
Other | Aa2 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 0 | |
Other | Aa3 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 0 | |
Other | A1 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 0 | |
Other | A2 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 0 | |
Other | A3 | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 0 | |
Other | Non-rated | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 1,099,237 |
Investment Securities - Schedul
Investment Securities - Schedule of Investment Securities in a Continuous Unrealized Loss Position (Details) $ in Thousands | Dec. 31, 2022 USD ($) security | Dec. 31, 2021 USD ($) security |
Fair Value | ||
Less than 12 Months | $ 1,423,379 | $ 636,389 |
12 Months or Longer | 487,129 | 8,829 |
Total | 1,910,508 | 645,218 |
Gross Unrealized Losses | ||
Less than 12 Months | 172,828 | 13,239 |
12 Months or Longer | 124,297 | 401 |
Total | $ 297,125 | $ 13,640 |
Number of Securities | security | 1,154 | 161 |
U.S. Treasury | ||
Fair Value | ||
Less than 12 Months | $ 2,459 | $ 999 |
12 Months or Longer | 0 | 0 |
Total | 2,459 | 999 |
Gross Unrealized Losses | ||
Less than 12 Months | 42 | 1 |
12 Months or Longer | 0 | 0 |
Total | $ 42 | $ 1 |
Number of Securities | security | 5 | 1 |
U.S. Government-sponsored agency securities | ||
Fair Value | ||
Less than 12 Months | $ 48,940 | $ 68,524 |
12 Months or Longer | 53,022 | 0 |
Total | 101,962 | 68,524 |
Gross Unrealized Losses | ||
Less than 12 Months | 4,973 | 1,545 |
12 Months or Longer | 12,219 | 0 |
Total | $ 17,192 | $ 1,545 |
Number of Securities | security | 16 | 8 |
State and municipal | ||
Fair Value | ||
Less than 12 Months | $ 1,177,104 | $ 138,187 |
12 Months or Longer | 108,652 | 505 |
Total | 1,285,756 | 138,692 |
Gross Unrealized Losses | ||
Less than 12 Months | 150,096 | 894 |
12 Months or Longer | 28,630 | 4 |
Total | $ 178,726 | $ 898 |
Number of Securities | security | 946 | 103 |
U.S. Government-sponsored mortgage-backed securities | ||
Fair Value | ||
Less than 12 Months | $ 182,700 | $ 427,687 |
12 Months or Longer | 325,455 | 8,324 |
Total | 508,155 | 436,011 |
Gross Unrealized Losses | ||
Less than 12 Months | 16,910 | 10,791 |
12 Months or Longer | 83,448 | 397 |
Total | $ 100,358 | $ 11,188 |
Number of Securities | security | 177 | 48 |
Corporate obligations | ||
Fair Value | ||
Less than 12 Months | $ 12,176 | $ 992 |
12 Months or Longer | 0 | 0 |
Total | 12,176 | 992 |
Gross Unrealized Losses | ||
Less than 12 Months | 807 | 8 |
12 Months or Longer | 0 | 0 |
Total | $ 807 | $ 8 |
Number of Securities | security | 10 | 1 |
Investment Securities - Investm
Investment Securities - Investments in Debt and Equity Securities Reported Less than Historical Cost (Details) - Investments reported at less than historical cost - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Investments [Line Items] | ||
Historical cost | $ 2,207,633 | $ 658,858 |
Fair value | 1,910,508 | 645,218 |
Gross unrealized losses | $ 297,125 | $ 13,640 |
Percent of the Corporation's investments available for sale | 96.70% | 27.50% |
Investment Securities - Amort_3
Investment Securities - Amortized Cost and Fair Value of Available for Sale Securities and Held to Maturity Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
Due in one year or less | $ 2,822 | $ 6,954 |
Due after one through five years | 11,694 | 5,097 |
Due after five through ten years | 169,729 | 120,460 |
Due after ten years | 1,480,472 | 1,464,460 |
Total debt securities with a single maturity date | 1,664,717 | 1,596,971 |
Amortized Cost | 2,273,347 | 2,268,655 |
Fair Value | ||
Due in one year or less | 2,809 | 6,965 |
Due after one through five years | 11,265 | 5,309 |
Due after five through ten years | 161,211 | 126,816 |
Due after ten years | 1,293,103 | 1,537,856 |
Total debt securities with a single maturity date | 1,468,388 | 1,676,946 |
Total Investment Securities | 1,976,661 | 2,344,551 |
Amortized Cost | ||
Due in one year or less | 13,697 | 6,971 |
Due after one through five years | 80,697 | 30,272 |
Due after five through ten years | 147,078 | 177,203 |
Due after ten years | 1,269,826 | 1,215,812 |
Total debt securities with a single maturity date | 1,511,298 | 1,430,258 |
Amortized Cost | 2,287,372 | 2,180,047 |
Fair Value | ||
Due in one year or less | 13,749 | 6,995 |
Due after one through five years | 76,453 | 31,946 |
Due after five through ten years | 135,027 | 180,129 |
Due after ten years | 1,020,477 | 1,231,568 |
Total debt securities with a single maturity date | 1,245,706 | 1,450,638 |
Total Investment Securities | 1,907,865 | 2,202,503 |
U.S. Government-sponsored mortgage-backed securities | ||
Amortized Cost | ||
Without single maturity date | 608,630 | 671,684 |
Amortized Cost | 608,630 | 671,684 |
Fair Value | ||
Without single maturity date | 508,273 | 667,605 |
Total Investment Securities | 508,273 | 667,605 |
Amortized Cost | ||
Without single maturity date | 776,074 | 749,789 |
Amortized Cost | 776,074 | 749,789 |
Fair Value | ||
Without single maturity date | 662,159 | 751,865 |
Total Investment Securities | $ 662,159 | $ 751,865 |
Investment Securities - Gross G
Investment Securities - Gross Gains on Sales and Redemptions of Available for Sale Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |||
Gross gains | $ 1,264 | $ 6,502 | $ 12,097 |
Gross losses | 70 | 828 | 202 |
Net gains of sales and redemptions of investment securities available for sale | $ 1,194 | $ 5,674 | $ 11,895 |
Loans and Allowance for Credi_3
Loans and Allowance for Credit Losses - Narrative (Details) | 12 Months Ended | |||||
Apr. 01, 2022 USD ($) | Dec. 31, 2022 USD ($) loan_segment | Dec. 31, 2021 USD ($) | Apr. 01, 2021 USD ($) | Jan. 01, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Receivables [Abstract] | ||||||
Loans held for sale | $ 9,094,000 | $ 11,187,000 | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans held for sale | 9,094,000 | 11,187,000 | ||||
Loans | 12,003,894,000 | 9,241,861,000 | ||||
Year 2 | 2,680,834,000 | 2,456,983,000 | ||||
Year 3 | 1,843,080,000 | 778,086,000 | ||||
Interest income recognized on non-accrual loans | $ 0 | 0 | ||||
Number of portfolio loan segments | loan_segment | 10 | |||||
Increase in allowance for credit losses | $ 27,900,000 | |||||
CECL Day 1 PCD ACL | 16,599,000 | |||||
CECL Day 1 non-PCD provision for credit losses | 13,955,000 | |||||
Net charges offs | $ 2,700,000 | |||||
Standby letters of credit usual term | 2 years | |||||
Accrual for off-balance sheet commitments | $ 23,300,000 | 20,500,000 | $ 20,500,000 | |||
CECL Day 1 unfunded commitments provision for credit losses | 2,800,000 | 0 | ||||
Allowance on Collateral Dependent Loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Increase in individually evaluated for impairment | 38,800,000 | |||||
Level One | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans at acquisition | $ 1,627,423,000 | $ 1,600,000,000 | ||||
CECL Day 1 PCD ACL | 16,600,000 | |||||
CECL Day 1 non-PCD provision for credit losses | 14,000,000 | |||||
CECL Day 1 unfunded commitments provision for credit losses | $ 2,800,000 | |||||
PPP, CARES Act | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 4,700,000 | 106,600,000 | ||||
Year 2 | 4,600,000 | 100,300,000 | ||||
Year 3 | 102,000 | 6,300,000 | ||||
PPP, CARES Act | Level One | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans at acquisition | $ 43,500,000 | |||||
Commercial and industrial loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 3,437,126,000 | 2,714,565,000 | ||||
Year 2 | 576,080,000 | 375,587,000 | ||||
Year 3 | $ 159,416,000 | 152,142,000 | ||||
Percentage of troubled debt restructured loans | 52.50% | |||||
Residential Real Estate | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | $ 2,096,655,000 | 1,159,127,000 | ||||
Year 2 | 494,049,000 | 356,660,000 | ||||
Year 3 | $ 405,136,000 | 104,819,000 | ||||
Percentage of troubled debt restructured loans | 47.50% | |||||
Mortgage loans with formal foreclosure proceedings | $ 2,600,000 | 4,200,000 | ||||
Commercial real estate, non-owner occupied | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 2,407,475,000 | 2,135,459,000 | ||||
Year 2 | 615,408,000 | 852,798,000 | ||||
Year 3 | 596,899,000 | $ 227,510,000 | ||||
Percentage of troubled debt restructured loans | 92.10% | |||||
Cumulative effect of ASC 326 adoption | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Accrual for off-balance sheet commitments | $ 20,500,000 | |||||
Past Due | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 51,000,000 | $ 34,700,000 | ||||
Increase (decrease) in past due loans | 16,300,000 | |||||
30-59 Days Past Due | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 29,051,000 | 15,006,000 | ||||
Increase (decrease) in past due loans | (14,000,000) | |||||
30-59 Days Past Due | Commercial and industrial loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 4,904,000 | 2,602,000 | ||||
30-59 Days Past Due | Residential Real Estate | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 8,607,000 | 3,979,000 | ||||
30-59 Days Past Due | Commercial real estate, non-owner occupied | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 5,946,000 | 3,327,000 | ||||
60-89 Days Past Due | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 5,935,000 | 7,056,000 | ||||
Increase (decrease) in past due loans | (1,100,000) | |||||
60-89 Days Past Due | Commercial and industrial loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 434,000 | 2,437,000 | ||||
60-89 Days Past Due | Residential Real Estate | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 2,278,000 | 4,255,000 | ||||
60-89 Days Past Due | Commercial real estate, non-owner occupied | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 881,000 | 0 | ||||
90 Days or More Past Due | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 16,021,000 | 12,686,000 | ||||
Increase (decrease) in past due loans | (3,300,000) | |||||
90 Days or More Past Due | Commercial and industrial loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 2,474,000 | 987,000 | ||||
90 Days or More Past Due | Residential Real Estate | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 5,811,000 | 2,599,000 | ||||
90 Days or More Past Due | Commercial real estate, non-owner occupied | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | $ 5,153,000 | $ 7,279,000 |
Loans and Allowance for Credi_4
Loans and Allowance for Credit Losses - Composition of Loan Portfolio by Loan Class (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | $ 12,003,894 | $ 9,241,861 |
Commercial and industrial loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 3,437,126 | 2,714,565 |
Agricultural land, production and other loans to farmers | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 241,793 | 246,442 |
Construction | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 835,582 | 523,066 |
Commercial real estate, non-owner occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 2,407,475 | 2,135,459 |
Commercial real estate, owner occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 1,246,528 | 986,720 |
Residential | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 2,096,655 | 1,159,127 |
Home equity | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 630,632 | 523,754 |
Individuals' loans for household and other personal expenditures | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 175,211 | 146,092 |
Public finance and other commercial loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | $ 932,892 | $ 806,636 |
Loans and Allowance for Credi_5
Loans and Allowance for Credit Losses - Credit Quality of Loan Portfolio by Loan Class (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | $ 3,483,295 | $ 3,023,847 |
Year 2 | 2,680,834 | 2,456,983 |
Year 3 | 1,843,080 | 778,086 |
Year 4 | 686,065 | 359,554 |
Year 5 | 385,461 | 353,319 |
Prior | 828,159 | 605,794 |
Revolving loans amortized cost basis | 2,084,096 | 1,664,006 |
Revolving loans converted to term | 12,904 | 272 |
Loans | 12,003,894 | 9,241,861 |
Commercial and industrial loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 1,094,363 | 1,033,127 |
Year 2 | 576,080 | 375,587 |
Year 3 | 159,416 | 152,142 |
Year 4 | 131,332 | 68,827 |
Year 5 | 48,822 | 23,936 |
Prior | 48,058 | 32,992 |
Revolving loans amortized cost basis | 1,373,714 | 1,027,954 |
Revolving loans converted to term | 5,341 | 0 |
Loans | 3,437,126 | 2,714,565 |
Commercial and industrial loans | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 1,064,687 | 1,019,757 |
Year 2 | 531,504 | 362,372 |
Year 3 | 141,985 | 144,520 |
Year 4 | 114,999 | 65,165 |
Year 5 | 43,136 | 21,575 |
Prior | 45,310 | 30,420 |
Revolving loans amortized cost basis | 1,302,562 | 990,335 |
Revolving loans converted to term | 5,048 | 0 |
Loans | 3,249,231 | 2,634,144 |
Commercial and industrial loans | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 2,164 | 10,559 |
Year 2 | 18,005 | 11,088 |
Year 3 | 11,900 | 190 |
Year 4 | 5,727 | 730 |
Year 5 | 1,012 | 1,930 |
Prior | 2,181 | 1,825 |
Revolving loans amortized cost basis | 27,702 | 15,026 |
Revolving loans converted to term | 150 | 0 |
Loans | 68,841 | 41,348 |
Commercial and industrial loans | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 27,512 | 2,811 |
Year 2 | 26,571 | 2,127 |
Year 3 | 5,531 | 7,432 |
Year 4 | 10,606 | 2,932 |
Year 5 | 4,674 | 431 |
Prior | 567 | 747 |
Revolving loans amortized cost basis | 43,450 | 22,593 |
Revolving loans converted to term | 143 | 0 |
Loans | 119,054 | 39,073 |
Agricultural land, production and other loans to farmers | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 44,910 | 50,775 |
Year 2 | 37,083 | 47,213 |
Year 3 | 36,281 | 22,303 |
Year 4 | 15,296 | 8,060 |
Year 5 | 4,127 | 6,153 |
Prior | 30,694 | 36,353 |
Revolving loans amortized cost basis | 73,402 | 75,585 |
Revolving loans converted to term | 0 | 0 |
Loans | 241,793 | 246,442 |
Agricultural land, production and other loans to farmers | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 44,446 | 50,251 |
Year 2 | 36,299 | 45,164 |
Year 3 | 35,791 | 22,195 |
Year 4 | 15,296 | 7,689 |
Year 5 | 3,752 | 6,153 |
Prior | 28,910 | 36,074 |
Revolving loans amortized cost basis | 73,402 | 74,871 |
Revolving loans converted to term | 0 | 0 |
Loans | 237,896 | 242,397 |
Agricultural land, production and other loans to farmers | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 286 | 0 |
Year 2 | 784 | 1,543 |
Year 3 | 0 | 0 |
Year 4 | 0 | 0 |
Year 5 | 281 | 0 |
Prior | 632 | 252 |
Revolving loans amortized cost basis | 0 | 264 |
Revolving loans converted to term | 0 | 0 |
Loans | 1,983 | 2,059 |
Agricultural land, production and other loans to farmers | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 178 | 524 |
Year 2 | 0 | 506 |
Year 3 | 490 | 108 |
Year 4 | 0 | 371 |
Year 5 | 94 | 0 |
Prior | 1,152 | 27 |
Revolving loans amortized cost basis | 0 | 450 |
Revolving loans converted to term | 0 | 0 |
Loans | 1,914 | 1,986 |
Construction | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 383,367 | 235,904 |
Year 2 | 301,986 | 201,132 |
Year 3 | 117,541 | 63,589 |
Year 4 | 11,428 | 979 |
Year 5 | 857 | 1,762 |
Prior | 3,236 | 2,499 |
Revolving loans amortized cost basis | 17,167 | 17,201 |
Revolving loans converted to term | 0 | 0 |
Loans | 835,582 | 523,066 |
Construction | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 366,414 | 215,167 |
Year 2 | 301,986 | 200,169 |
Year 3 | 117,541 | 63,589 |
Year 4 | 11,428 | 979 |
Year 5 | 857 | 1,762 |
Prior | 3,224 | 2,453 |
Revolving loans amortized cost basis | 17,167 | 17,201 |
Revolving loans converted to term | 0 | 0 |
Loans | 818,617 | 501,320 |
Construction | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 16,922 | 20,737 |
Year 2 | 0 | 270 |
Year 3 | 0 | 0 |
Year 4 | 0 | 0 |
Year 5 | 0 | 0 |
Prior | 0 | 46 |
Revolving loans amortized cost basis | 0 | 0 |
Revolving loans converted to term | 0 | 0 |
Loans | 16,922 | 21,053 |
Construction | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 31 | 0 |
Year 2 | 0 | 693 |
Year 3 | 0 | 0 |
Year 4 | 0 | 0 |
Year 5 | 0 | 0 |
Prior | 12 | 0 |
Revolving loans amortized cost basis | 0 | 0 |
Revolving loans converted to term | 0 | 0 |
Loans | 43 | 693 |
Commercial real estate, non-owner occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 630,708 | 676,889 |
Year 2 | 615,408 | 852,798 |
Year 3 | 596,899 | 227,510 |
Year 4 | 187,486 | 113,089 |
Year 5 | 132,847 | 109,556 |
Prior | 209,128 | 128,838 |
Revolving loans amortized cost basis | 31,196 | 26,779 |
Revolving loans converted to term | 3,803 | 0 |
Loans | 2,407,475 | 2,135,459 |
Commercial real estate, non-owner occupied | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 560,146 | 589,296 |
Year 2 | 603,254 | 688,406 |
Year 3 | 550,605 | 227,332 |
Year 4 | 168,701 | 111,971 |
Year 5 | 116,859 | 103,400 |
Prior | 190,264 | 126,837 |
Revolving loans amortized cost basis | 31,196 | 26,779 |
Revolving loans converted to term | 3,803 | 0 |
Loans | 2,224,828 | 1,874,021 |
Commercial real estate, non-owner occupied | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 49,439 | 68,279 |
Year 2 | 4,026 | 149,480 |
Year 3 | 38,268 | 0 |
Year 4 | 18,785 | 0 |
Year 5 | 11,546 | 0 |
Prior | 17,992 | 1,723 |
Revolving loans amortized cost basis | 0 | 0 |
Revolving loans converted to term | 0 | 0 |
Loans | 140,056 | 219,482 |
Commercial real estate, non-owner occupied | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 21,123 | 19,314 |
Year 2 | 8,128 | 14,912 |
Year 3 | 8,026 | 178 |
Year 4 | 0 | 1,118 |
Year 5 | 4,442 | 6,156 |
Prior | 872 | 278 |
Revolving loans amortized cost basis | 0 | 0 |
Revolving loans converted to term | 0 | 0 |
Loans | 42,591 | 41,956 |
Commercial real estate, owner occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 271,593 | 311,876 |
Year 2 | 324,004 | 404,099 |
Year 3 | 335,062 | 93,076 |
Year 4 | 119,104 | 44,837 |
Year 5 | 67,946 | 47,059 |
Prior | 90,990 | 51,626 |
Revolving loans amortized cost basis | 34,451 | 34,147 |
Revolving loans converted to term | 3,378 | 0 |
Loans | 1,246,528 | 986,720 |
Commercial real estate, owner occupied | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 260,725 | 299,186 |
Year 2 | 316,665 | 392,383 |
Year 3 | 330,441 | 92,338 |
Year 4 | 114,015 | 43,252 |
Year 5 | 63,816 | 46,044 |
Prior | 81,286 | 48,571 |
Revolving loans amortized cost basis | 33,123 | 33,998 |
Revolving loans converted to term | 3,378 | 0 |
Loans | 1,203,449 | 955,772 |
Commercial real estate, owner occupied | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 7,744 | 5,665 |
Year 2 | 6,125 | 5,953 |
Year 3 | 2,245 | 738 |
Year 4 | 3,481 | 1,532 |
Year 5 | 1,210 | 902 |
Prior | 2,984 | 1,301 |
Revolving loans amortized cost basis | 1,328 | 149 |
Revolving loans converted to term | 0 | 0 |
Loans | 25,117 | 16,240 |
Commercial real estate, owner occupied | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 3,124 | 7,025 |
Year 2 | 1,214 | 5,763 |
Year 3 | 2,376 | 0 |
Year 4 | 1,608 | 53 |
Year 5 | 2,920 | 113 |
Prior | 6,720 | 1,754 |
Revolving loans amortized cost basis | 0 | 0 |
Revolving loans converted to term | 0 | 0 |
Loans | 17,962 | 14,708 |
Residential | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 762,399 | 351,764 |
Year 2 | 494,049 | 356,660 |
Year 3 | 405,136 | 104,819 |
Year 4 | 115,738 | 71,299 |
Year 5 | 79,632 | 55,520 |
Prior | 234,141 | 216,032 |
Revolving loans amortized cost basis | 5,459 | 2,955 |
Revolving loans converted to term | 101 | 78 |
Loans | 2,096,655 | 1,159,127 |
Residential | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 758,161 | 349,726 |
Year 2 | 489,301 | 353,691 |
Year 3 | 401,353 | 103,028 |
Year 4 | 114,420 | 69,745 |
Year 5 | 77,768 | 55,240 |
Prior | 229,812 | 210,669 |
Revolving loans amortized cost basis | 5,365 | 2,955 |
Revolving loans converted to term | 46 | 73 |
Loans | 2,076,226 | 1,145,127 |
Residential | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 2,839 | 1,034 |
Year 2 | 2,924 | 1,394 |
Year 3 | 1,972 | 1,456 |
Year 4 | 513 | 306 |
Year 5 | 396 | 172 |
Prior | 2,588 | 2,106 |
Revolving loans amortized cost basis | 34 | 0 |
Revolving loans converted to term | 0 | 0 |
Loans | 11,266 | 6,468 |
Residential | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 1,399 | 1,004 |
Year 2 | 1,824 | 1,575 |
Year 3 | 1,811 | 335 |
Year 4 | 805 | 1,248 |
Year 5 | 1,468 | 108 |
Prior | 1,741 | 3,257 |
Revolving loans amortized cost basis | 60 | 0 |
Revolving loans converted to term | 55 | 5 |
Loans | 9,163 | 7,532 |
Home equity | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 40,768 | 64,365 |
Year 2 | 75,749 | 17,641 |
Year 3 | 14,621 | 2,025 |
Year 4 | 1,572 | 2,135 |
Year 5 | 1,528 | 1,341 |
Prior | 3,393 | 3,526 |
Revolving loans amortized cost basis | 492,720 | 432,527 |
Revolving loans converted to term | 281 | 194 |
Loans | 630,632 | 523,754 |
Home equity | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 40,768 | 63,845 |
Year 2 | 75,670 | 17,556 |
Year 3 | 14,621 | 1,977 |
Year 4 | 1,572 | 2,127 |
Year 5 | 1,348 | 1,250 |
Prior | 3,325 | 3,432 |
Revolving loans amortized cost basis | 486,924 | 427,437 |
Revolving loans converted to term | 281 | 194 |
Loans | 624,509 | 517,818 |
Home equity | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 0 | 0 |
Year 2 | 0 | 85 |
Year 3 | 0 | 48 |
Year 4 | 0 | 0 |
Year 5 | 115 | 0 |
Prior | 8 | 24 |
Revolving loans amortized cost basis | 3,698 | 3,451 |
Revolving loans converted to term | 0 | 0 |
Loans | 3,821 | 3,608 |
Home equity | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 0 | 520 |
Year 2 | 79 | 0 |
Year 3 | 0 | 0 |
Year 4 | 0 | 8 |
Year 5 | 65 | 91 |
Prior | 60 | 70 |
Revolving loans amortized cost basis | 2,098 | 1,639 |
Revolving loans converted to term | 0 | 0 |
Loans | 2,302 | 2,328 |
Individuals' loans for household and other personal expenditures | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 68,062 | |
Year 2 | 43,773 | |
Year 3 | 13,105 | |
Year 4 | 5,422 | |
Year 5 | 5,942 | |
Prior | 3,800 | |
Revolving loans amortized cost basis | 35,107 | |
Revolving loans converted to term | 0 | |
Loans | 175,211 | 146,092 |
Individuals' loans for household and other personal expenditures | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 67,883 | 67,749 |
Year 2 | 43,639 | 23,452 |
Year 3 | 13,025 | 11,893 |
Year 4 | 5,389 | 11,197 |
Year 5 | 5,830 | 2,008 |
Prior | 3,775 | 4,928 |
Revolving loans amortized cost basis | 35,091 | 24,406 |
Revolving loans converted to term | 0 | 0 |
Loans | 174,632 | 145,633 |
Individuals' loans for household and other personal expenditures | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 178 | 79 |
Year 2 | 134 | 85 |
Year 3 | 77 | 50 |
Year 4 | 33 | 33 |
Year 5 | 28 | 20 |
Prior | 17 | 58 |
Revolving loans amortized cost basis | 16 | 134 |
Revolving loans converted to term | 0 | 0 |
Loans | 483 | 459 |
Individuals' loans for household and other personal expenditures | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 1 | 67,828 |
Year 2 | 0 | 23,537 |
Year 3 | 3 | 11,943 |
Year 4 | 0 | 11,230 |
Year 5 | 84 | 2,028 |
Prior | 8 | 4,986 |
Revolving loans amortized cost basis | 0 | 24,540 |
Revolving loans converted to term | 0 | 0 |
Loans | 96 | 146,092 |
Public finance and other commercial loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 187,125 | 231,319 |
Year 2 | 212,702 | 178,316 |
Year 3 | 165,019 | 100,679 |
Year 4 | 98,687 | 39,098 |
Year 5 | 43,760 | 105,964 |
Prior | 204,719 | 128,942 |
Revolving loans amortized cost basis | 20,880 | 22,318 |
Revolving loans converted to term | 0 | 0 |
Loans | 932,892 | 806,636 |
Public finance and other commercial loans | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Year 1 | 187,125 | 231,319 |
Year 2 | 212,702 | 178,316 |
Year 3 | 165,019 | 100,679 |
Year 4 | 98,687 | 39,098 |
Year 5 | 43,760 | 105,964 |
Prior | 204,719 | 128,942 |
Revolving loans amortized cost basis | 20,880 | 22,318 |
Revolving loans converted to term | 0 | 0 |
Loans | $ 932,892 | $ 806,636 |
Loans and Allowance for Credi_6
Loans and Allowance for Credit Losses - Past Due Aging of Loan Portfolio by Loan Class (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Past Due [Line Items] | ||
Loans | $ 12,003,894 | $ 9,241,861 |
Loans > 90 Days or More Past Due And Accruing | 1,737 | 963 |
Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 11,952,887 | 9,207,113 |
30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 29,051 | 15,006 |
60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 5,935 | 7,056 |
90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 16,021 | 12,686 |
Commercial and industrial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 3,437,126 | 2,714,565 |
Loans > 90 Days or More Past Due And Accruing | 1,147 | 675 |
Commercial and industrial loans | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 3,429,314 | 2,708,539 |
Commercial and industrial loans | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 4,904 | 2,602 |
Commercial and industrial loans | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 434 | 2,437 |
Commercial and industrial loans | 90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 2,474 | 987 |
Agricultural land, production and other loans to farmers | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 241,793 | 246,442 |
Loans > 90 Days or More Past Due And Accruing | 0 | 0 |
Agricultural land, production and other loans to farmers | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 241,739 | 246,380 |
Agricultural land, production and other loans to farmers | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 0 | 36 |
Agricultural land, production and other loans to farmers | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 0 | 0 |
Agricultural land, production and other loans to farmers | 90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 54 | 26 |
Construction | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 835,582 | 523,066 |
Loans > 90 Days or More Past Due And Accruing | 0 | 0 |
Construction | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 832,716 | 522,349 |
Construction | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 2,436 | 717 |
Construction | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 418 | 0 |
Construction | 90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 12 | 0 |
Commercial real estate, non-owner occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 2,407,475 | 2,135,459 |
Loans > 90 Days or More Past Due And Accruing | 264 | 0 |
Commercial real estate, non-owner occupied | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 2,395,495 | 2,124,853 |
Commercial real estate, non-owner occupied | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 5,946 | 3,327 |
Commercial real estate, non-owner occupied | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 881 | 0 |
Commercial real estate, non-owner occupied | 90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 5,153 | 7,279 |
Commercial real estate, owner occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 1,246,528 | 986,720 |
Loans > 90 Days or More Past Due And Accruing | 0 | 0 |
Commercial real estate, owner occupied | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 1,241,714 | 985,785 |
Commercial real estate, owner occupied | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 4,495 | 643 |
Commercial real estate, owner occupied | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 0 | 0 |
Commercial real estate, owner occupied | 90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 319 | 292 |
Residential | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 2,096,655 | 1,159,127 |
Loans > 90 Days or More Past Due And Accruing | 0 | 0 |
Residential | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 2,079,959 | 1,148,294 |
Residential | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 8,607 | 3,979 |
Residential | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 2,278 | 4,255 |
Residential | 90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 5,811 | 2,599 |
Home equity | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 630,632 | 523,754 |
Loans > 90 Days or More Past Due And Accruing | 326 | 288 |
Home equity | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 624,543 | 518,643 |
Home equity | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 2,206 | 3,327 |
Home equity | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 1,782 | 281 |
Home equity | 90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 2,101 | 1,503 |
Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 175,211 | 146,092 |
Loans > 90 Days or More Past Due And Accruing | 0 | 0 |
Consumer | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 174,629 | 145,634 |
Consumer | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 343 | 375 |
Consumer | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 142 | 83 |
Consumer | 90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 97 | 0 |
Public finance and other commercial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 932,892 | 806,636 |
Loans > 90 Days or More Past Due And Accruing | 0 | 0 |
Public finance and other commercial loans | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 932,778 | 806,636 |
Public finance and other commercial loans | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 114 | 0 |
Public finance and other commercial loans | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 0 | 0 |
Public finance and other commercial loans | 90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | $ 0 | $ 0 |
Loans and Allowance for Credi_7
Loans and Allowance for Credit Losses - Summary of Non-Accrual Loans by Loan Class (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-Accrual Loans | $ 42,324 | $ 43,062 |
Non-Accrual Loans with no Allowance for Credit Losses | 4,247 | 9,080 |
Commercial and industrial loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-Accrual Loans | 3,292 | 7,598 |
Non-Accrual Loans with no Allowance for Credit Losses | 481 | 263 |
Agricultural land, production and other loans to farmers | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-Accrual Loans | 54 | 631 |
Non-Accrual Loans with no Allowance for Credit Losses | 0 | 524 |
Construction | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-Accrual Loans | 12 | 685 |
Non-Accrual Loans with no Allowance for Credit Losses | 0 | 0 |
Commercial real estate, non-owner occupied | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-Accrual Loans | 19,374 | 23,029 |
Non-Accrual Loans with no Allowance for Credit Losses | 280 | 6,133 |
Commercial real estate, owner occupied | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-Accrual Loans | 3,550 | 411 |
Non-Accrual Loans with no Allowance for Credit Losses | 2,784 | 0 |
Residential | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-Accrual Loans | 13,685 | 9,153 |
Non-Accrual Loans with no Allowance for Credit Losses | 702 | 2,160 |
Home equity | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-Accrual Loans | 2,247 | 1,552 |
Non-Accrual Loans with no Allowance for Credit Losses | 0 | 0 |
Individuals' loans for household and other personal expenditures | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-Accrual Loans | 110 | 3 |
Non-Accrual Loans with no Allowance for Credit Losses | $ 0 | $ 0 |
Loans and Allowance for Credi_8
Loans and Allowance for Credit Losses - Amortized Cost Basis Of Collateral Dependent Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | $ 78,302 | $ 39,531 | |
Allowance on Collateral Dependent Loans | 223,277 | 195,397 | $ 130,648 |
Commercial and industrial loans | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 42,101 | 8,075 | |
Agricultural land, production and other loans to farmers | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 775 | ||
Construction | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 10 | 685 | |
Commercial real estate, non-owner occupied | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 26,534 | 23,652 | |
Commercial real estate, owner occupied | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 6,986 | 1,044 | |
Residential | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 2,382 | 4,906 | |
Home equity | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 289 | 394 | |
Commercial Real Estate | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 33,520 | 25,220 | |
Commercial Real Estate | Commercial and industrial loans | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 0 | 0 | |
Commercial Real Estate | Agricultural land, production and other loans to farmers | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 524 | ||
Commercial Real Estate | Construction | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 0 | 0 | |
Commercial Real Estate | Commercial real estate, non-owner occupied | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 26,534 | 23,652 | |
Commercial Real Estate | Commercial real estate, owner occupied | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 6,986 | 1,044 | |
Commercial Real Estate | Residential | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 0 | 0 | |
Commercial Real Estate | Home equity | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 0 | 0 | |
Residential Real Estate | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 2,681 | 5,985 | |
Residential Real Estate | Commercial and industrial loans | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 0 | 0 | |
Residential Real Estate | Agricultural land, production and other loans to farmers | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 0 | ||
Residential Real Estate | Construction | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 10 | 685 | |
Residential Real Estate | Commercial real estate, non-owner occupied | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 0 | 0 | |
Residential Real Estate | Commercial real estate, owner occupied | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 0 | 0 | |
Residential Real Estate | Residential | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 2,382 | 4,906 | |
Residential Real Estate | Home equity | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 289 | 394 | |
Other | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 42,101 | 8,326 | |
Other | Commercial and industrial loans | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 42,101 | 8,075 | |
Other | Agricultural land, production and other loans to farmers | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 251 | ||
Other | Construction | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 0 | 0 | |
Other | Commercial real estate, non-owner occupied | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 0 | 0 | |
Other | Commercial real estate, owner occupied | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 0 | 0 | |
Other | Residential | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 0 | 0 | |
Other | Home equity | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Individually evaluated for impairment | 0 | 0 | |
Allowance on Collateral Dependent Loans | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowance on Collateral Dependent Loans | 11,512 | 8,633 | |
Allowance on Collateral Dependent Loans | Commercial and industrial loans | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowance on Collateral Dependent Loans | 8,367 | 2,672 | |
Allowance on Collateral Dependent Loans | Agricultural land, production and other loans to farmers | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowance on Collateral Dependent Loans | 0 | ||
Allowance on Collateral Dependent Loans | Construction | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowance on Collateral Dependent Loans | 1 | 82 | |
Allowance on Collateral Dependent Loans | Commercial real estate, non-owner occupied | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowance on Collateral Dependent Loans | 2,064 | 5,510 | |
Allowance on Collateral Dependent Loans | Commercial real estate, owner occupied | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowance on Collateral Dependent Loans | 776 | 0 | |
Allowance on Collateral Dependent Loans | Residential | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowance on Collateral Dependent Loans | 260 | 305 | |
Allowance on Collateral Dependent Loans | Home equity | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowance on Collateral Dependent Loans | $ 44 | $ 64 |
Loans and Allowance for Credi_9
Loans and Allowance for Credit Losses - Summary of Troubled Debt Restructurings by Modification (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) loan | Dec. 31, 2021 USD ($) loan | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Pre- Modification Recorded Balance | $ 114 | $ 14,028 |
Post - Modification Recorded Balance | $ 118 | $ 14,083 |
Number of Loans | loan | 2 | 15 |
Term Modification | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | $ 62 | $ 13,802 |
Rate Modification | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | 56 | 142 |
Combination | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | 139 | |
Commercial and industrial loans | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Pre- Modification Recorded Balance | 61 | 348 |
Post - Modification Recorded Balance | $ 62 | $ 348 |
Number of Loans | loan | 1 | 2 |
Commercial and industrial loans | Term Modification | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | $ 62 | $ 348 |
Commercial and industrial loans | Rate Modification | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | 0 | 0 |
Commercial and industrial loans | Combination | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | 0 | |
Construction | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Pre- Modification Recorded Balance | 16 | |
Post - Modification Recorded Balance | $ 16 | |
Number of Loans | loan | 1 | |
Construction | Term Modification | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | $ 0 | |
Construction | Rate Modification | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | 16 | |
Construction | Combination | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | 0 | |
Commercial real estate, non-owner occupied | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Pre- Modification Recorded Balance | 12,922 | |
Post - Modification Recorded Balance | $ 12,976 | |
Number of Loans | loan | 1 | |
Commercial real estate, non-owner occupied | Term Modification | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | $ 12,976 | |
Commercial real estate, non-owner occupied | Rate Modification | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | ||
Commercial real estate, non-owner occupied | Combination | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | ||
Commercial real estate, owner occupied | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Pre- Modification Recorded Balance | 51 | |
Post - Modification Recorded Balance | $ 50 | |
Number of Loans | loan | 2 | |
Commercial real estate, owner occupied | Term Modification | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | $ 29 | |
Commercial real estate, owner occupied | Rate Modification | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | 0 | |
Commercial real estate, owner occupied | Combination | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | 21 | |
Residential | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Pre- Modification Recorded Balance | 53 | 691 |
Post - Modification Recorded Balance | $ 56 | $ 693 |
Number of Loans | loan | 1 | 9 |
Residential | Term Modification | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | $ 0 | $ 449 |
Residential | Rate Modification | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | $ 56 | 126 |
Residential | Combination | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Post - Modification Recorded Balance | $ 118 |
Loans and Allowance for Cred_10
Loans and Allowance for Credit Losses - Schedule of Modified Loans (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) loan | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |
Number of Loans | loan | 5 |
Recorded Balance | $ | $ 475 |
Residential | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |
Number of Loans | loan | 5 |
Recorded Balance | $ | $ 475 |
Loans and Allowance for Cred_11
Loans and Allowance for Credit Losses - Purchased With Credit Deterioration (Details) $ in Thousands | Apr. 01, 2022 USD ($) |
Receivables [Abstract] | |
Purchase price of loans at acquisition | $ 41,347 |
CECL Day 1 PCD ACL | 16,599 |
Par value of acquired loans at acquisition | $ 57,946 |
Loans and Allowance for Cred_12
Loans and Allowance for Credit Losses - Changes in Allowance for Loan Losses by Loan Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Allowance for loan losses: | |||
Beginning balance | $ 195,397 | $ 130,648 | |
Provision for credit losses | 0 | 0 | |
CECL Day 1 non-PCD provision for credit losses | 13,955 | ||
CECL Day 1 PCD ACL | 16,599 | ||
Recoveries on loans | 3,927 | 2,578 | |
Loans charged off | (6,601) | (11,884) | |
Ending balance | 223,277 | 195,397 | $ 130,648 |
Beginning balance | 130,648 | 80,284 | |
Provision for credit losses - loans | 16,755 | 0 | 58,673 |
Recoveries on loans | 2,176 | ||
Loans charged off | (10,485) | ||
Ending balance | 130,648 | ||
Impact of adopting ASC 326 | |||
Allowance for loan losses: | |||
Beginning balance | 74,055 | ||
Ending balance | 74,055 | ||
Balances, January 1, 2021 Post-ASC 326 adoption | |||
Allowance for loan losses: | |||
Beginning balance | 204,703 | ||
Ending balance | 204,703 | ||
Previously Reported | |||
Allowance for loan losses: | |||
Beginning balance | 195,397 | 130,648 | |
Ending balance | 195,397 | 130,648 | |
Credit risk reclassifications | |||
Allowance for loan losses: | |||
Beginning balance | 0 | ||
Ending balance | 0 | ||
Commercial | |||
Allowance for loan losses: | |||
Beginning balance | 47,115 | ||
Provision for credit losses | 16,697 | 7,921 | |
CECL Day 1 non-PCD provision for credit losses | 2,957 | ||
CECL Day 1 PCD ACL | 12,970 | ||
Recoveries on loans | 872 | 724 | |
Loans charged off | (1,215) | (5,849) | |
Ending balance | 102,216 | 47,115 | |
Beginning balance | 47,115 | 32,902 | |
Provision for credit losses - loans | 21,930 | ||
Recoveries on loans | 819 | ||
Loans charged off | (8,536) | ||
Ending balance | 47,115 | ||
Commercial | Impact of adopting ASC 326 | |||
Allowance for loan losses: | |||
Beginning balance | 20,024 | ||
Ending balance | 20,024 | ||
Commercial | Balances, January 1, 2021 Post-ASC 326 adoption | |||
Allowance for loan losses: | |||
Beginning balance | 67,139 | ||
Ending balance | 67,139 | ||
Commercial | Previously Reported | |||
Allowance for loan losses: | |||
Beginning balance | 69,935 | 47,115 | |
Ending balance | 69,935 | 47,115 | |
Commercial | Credit risk reclassifications | |||
Allowance for loan losses: | |||
Beginning balance | |||
Ending balance | |||
Commercial Real Estate | |||
Allowance for loan losses: | |||
Beginning balance | 40,786 | ||
Provision for credit losses | (20,425) | (11,093) | |
CECL Day 1 non-PCD provision for credit losses | 5,539 | ||
CECL Day 1 PCD ACL | 2,981 | ||
Recoveries on loans | 1,096 | 580 | |
Loans charged off | (3,017) | (4,533) | |
Ending balance | 46,839 | 40,786 | |
Beginning balance | 51,070 | 28,778 | |
Provision for credit losses - loans | 22,174 | ||
Recoveries on loans | 431 | ||
Loans charged off | (313) | ||
Ending balance | 51,070 | ||
Commercial Real Estate | Impact of adopting ASC 326 | |||
Allowance for loan losses: | |||
Beginning balance | 34,925 | ||
Ending balance | 34,925 | ||
Commercial Real Estate | Balances, January 1, 2021 Post-ASC 326 adoption | |||
Allowance for loan losses: | |||
Beginning balance | 75,711 | ||
Ending balance | 75,711 | ||
Commercial Real Estate | Previously Reported | |||
Allowance for loan losses: | |||
Beginning balance | 60,665 | 51,070 | |
Ending balance | 60,665 | 51,070 | |
Commercial Real Estate | Credit risk reclassifications | |||
Allowance for loan losses: | |||
Beginning balance | (10,284) | ||
Ending balance | (10,284) | ||
Construction | |||
Allowance for loan losses: | |||
Beginning balance | 10,284 | ||
Provision for credit losses | 6,367 | 1,122 | |
CECL Day 1 non-PCD provision for credit losses | 871 | ||
CECL Day 1 PCD ACL | 648 | ||
Recoveries on loans | 863 | 1 | |
Loans charged off | 0 | (6) | |
Ending balance | 28,955 | 10,284 | |
Construction | Impact of adopting ASC 326 | |||
Allowance for loan losses: | |||
Beginning balance | 8,805 | ||
Ending balance | 8,805 | ||
Construction | Balances, January 1, 2021 Post-ASC 326 adoption | |||
Allowance for loan losses: | |||
Beginning balance | 19,089 | ||
Ending balance | 19,089 | ||
Construction | Previously Reported | |||
Allowance for loan losses: | |||
Beginning balance | 20,206 | 0 | |
Ending balance | 20,206 | 0 | |
Construction | Credit risk reclassifications | |||
Allowance for loan losses: | |||
Beginning balance | 10,284 | ||
Ending balance | 10,284 | ||
Consumer | |||
Allowance for loan losses: | |||
Beginning balance | 0 | ||
Provision for credit losses | 0 | ||
Recoveries on loans | 0 | ||
Loans charged off | 0 | ||
Ending balance | 0 | ||
Beginning balance | 9,648 | 4,035 | |
Provision for credit losses - loans | 5,996 | ||
Recoveries on loans | 260 | ||
Loans charged off | (643) | ||
Ending balance | 9,648 | ||
Consumer | Impact of adopting ASC 326 | |||
Allowance for loan losses: | |||
Beginning balance | 0 | ||
Ending balance | 0 | ||
Consumer | Balances, January 1, 2021 Post-ASC 326 adoption | |||
Allowance for loan losses: | |||
Beginning balance | 0 | ||
Ending balance | 0 | ||
Consumer | Previously Reported | |||
Allowance for loan losses: | |||
Beginning balance | 0 | 9,648 | |
Ending balance | 0 | 9,648 | |
Consumer | Credit risk reclassifications | |||
Allowance for loan losses: | |||
Beginning balance | (9,648) | ||
Ending balance | (9,648) | ||
Residential | |||
Allowance for loan losses: | |||
Beginning balance | 0 | ||
Provision for credit losses | 0 | ||
Recoveries on loans | 0 | ||
Loans charged off | 0 | ||
Ending balance | 0 | ||
Beginning balance | 22,815 | 14,569 | |
Provision for credit losses - loans | 8,573 | ||
Recoveries on loans | 666 | ||
Loans charged off | (993) | ||
Ending balance | 22,815 | ||
Residential | Impact of adopting ASC 326 | |||
Allowance for loan losses: | |||
Beginning balance | 0 | ||
Ending balance | 0 | ||
Residential | Balances, January 1, 2021 Post-ASC 326 adoption | |||
Allowance for loan losses: | |||
Beginning balance | 0 | ||
Ending balance | 0 | ||
Residential | Previously Reported | |||
Allowance for loan losses: | |||
Beginning balance | 0 | 22,815 | |
Ending balance | 0 | 22,815 | |
Residential | Credit risk reclassifications | |||
Allowance for loan losses: | |||
Beginning balance | (22,815) | ||
Ending balance | (22,815) | ||
Consumer & Residential | |||
Allowance for loan losses: | |||
Beginning balance | 32,463 | ||
Provision for credit losses | (2,639) | 2,050 | |
CECL Day 1 non-PCD provision for credit losses | 4,588 | ||
CECL Day 1 PCD ACL | 0 | ||
Recoveries on loans | 1,096 | 1,273 | |
Loans charged off | (2,369) | (1,496) | |
Ending balance | 45,267 | 32,463 | |
Consumer & Residential | Impact of adopting ASC 326 | |||
Allowance for loan losses: | |||
Beginning balance | 10,301 | ||
Ending balance | 10,301 | ||
Consumer & Residential | Balances, January 1, 2021 Post-ASC 326 adoption | |||
Allowance for loan losses: | |||
Beginning balance | 42,764 | ||
Ending balance | 42,764 | ||
Consumer & Residential | Previously Reported | |||
Allowance for loan losses: | |||
Beginning balance | $ 44,591 | 0 | |
Ending balance | 44,591 | 0 | |
Consumer & Residential | Credit risk reclassifications | |||
Allowance for loan losses: | |||
Beginning balance | $ 32,463 | ||
Ending balance | $ 32,463 |
Loans and Allowance for Cred_13
Loans and Allowance for Credit Losses - Composition of Impaired Loans by Loan Class (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020 USD ($) | |
Average Recorded Investment | |
Impaired loans with no related allowance | $ 8,113 |
Impaired loans with related allowance | 49,003 |
Total Impaired Loans | 57,116 |
Interest Income Recognized | |
Impaired loans with no related allowance | 148 |
Impaired loans with related allowance | 84 |
Total Impaired Loans | 232 |
Commercial and industrial loans | |
Average Recorded Investment | |
Impaired loans with no related allowance | 991 |
Impaired loans with related allowance | 267 |
Interest Income Recognized | |
Impaired loans with no related allowance | 0 |
Impaired loans with related allowance | 0 |
Agricultural land, production and other loans to farmers | |
Average Recorded Investment | |
Impaired loans with related allowance | 589 |
Interest Income Recognized | |
Impaired loans with related allowance | 0 |
Commercial real estate, non-owner occupied | |
Average Recorded Investment | |
Impaired loans with no related allowance | 4,850 |
Impaired loans with related allowance | 44,119 |
Interest Income Recognized | |
Impaired loans with no related allowance | 145 |
Impaired loans with related allowance | 0 |
Commercial real estate, owner occupied | |
Average Recorded Investment | |
Impaired loans with no related allowance | 1,429 |
Impaired loans with related allowance | 1,447 |
Interest Income Recognized | |
Impaired loans with no related allowance | 0 |
Impaired loans with related allowance | 0 |
Residential | |
Average Recorded Investment | |
Impaired loans with no related allowance | 840 |
Impaired loans with related allowance | 2,108 |
Interest Income Recognized | |
Impaired loans with no related allowance | 3 |
Impaired loans with related allowance | 70 |
Individuals' loans for household and other personal expenditures | |
Average Recorded Investment | |
Impaired loans with no related allowance | 3 |
Interest Income Recognized | |
Impaired loans with no related allowance | 0 |
Home equity | |
Average Recorded Investment | |
Impaired loans with related allowance | 473 |
Interest Income Recognized | |
Impaired loans with related allowance | $ 14 |
Loans and Allowance for Cred_14
Loans and Allowance for Credit Losses - Amounts of Commitments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Loan commitments to extend credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Amounts of commitments | $ 4,950,724 | $ 3,917,215 |
Standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Amounts of commitments | $ 40,784 | $ 34,613 |
Loans and Allowance for Cred_15
Loans and Allowance for Credit Losses - Allowance for Credit Losses, Off-balance Sheet (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||
Balance, January 1 | $ 20,500 | $ 20,500 |
CECL Day 1 unfunded commitments provision for credit losses | 2,800 | 0 |
Balance, December 31 | $ 23,300 | $ 20,500 |
Premises and Equipment - Summar
Premises and Equipment - Summary of Premises and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Premises and Equipment [Line Items] | ||
Total Cost | $ 344,718 | $ 312,644 |
Accumulated Depreciation and Amortization | (227,600) | (206,989) |
Net | 117,118 | 105,655 |
Land | ||
Premises and Equipment [Line Items] | ||
Total Cost | 25,299 | 22,349 |
Buildings and Leasehold Improvements | ||
Premises and Equipment [Line Items] | ||
Total Cost | 174,895 | 160,410 |
Equipment | ||
Premises and Equipment [Line Items] | ||
Total Cost | $ 144,524 | $ 129,885 |
Premises and Equipment - Narrat
Premises and Equipment - Narrative (Details) $ in Thousands | Apr. 01, 2022 USD ($) |
Level One | |
Premises and Equipment [Line Items] | |
Premises and equipment acquired | $ 11,848 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Apr. 01, 2022 | Dec. 31, 2021 | Apr. 01, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 712,002 | $ 545,385 | $ 543,918 | ||
Level One | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 166,617 | ||||
Hoosier | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 1,467 |
Goodwill - Rollforward (Details
Goodwill - Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 545,385 | $ 543,918 |
Goodwill acquired | 166,617 | 1,467 |
Ending balance | $ 712,002 | $ 545,385 |
Other Intangibles - Narrative (
Other Intangibles - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 01, 2022 | Apr. 01, 2021 | |
Business Acquisition [Line Items] | |||||
Intangible asset amortization | $ 8,275 | $ 5,747 | $ 5,987 | ||
Minimum | |||||
Business Acquisition [Line Items] | |||||
Useful life of core deposit intangibles and other intangibles | 2 years | ||||
Maximum | |||||
Business Acquisition [Line Items] | |||||
Useful life of core deposit intangibles and other intangibles | 10 years | ||||
Level One | |||||
Business Acquisition [Line Items] | |||||
Customer relationship intangible | $ 18,642 | ||||
Level One | Core deposit intangible acquired | |||||
Business Acquisition [Line Items] | |||||
Customer relationship intangible | 17,200 | ||||
Level One | Noncompete Agreements | |||||
Business Acquisition [Line Items] | |||||
Customer relationship intangible | $ 1,400 | ||||
Hoosier | |||||
Business Acquisition [Line Items] | |||||
Customer relationship intangible | $ 2,247 | ||||
Hoosier | Customer Relationships | |||||
Business Acquisition [Line Items] | |||||
Customer relationship intangible | $ 2,200 |
Other Intangibles - Schedule of
Other Intangibles - Schedule of Core Deposit and Other Intangibles (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross carrying amount | $ 104,643 | $ 102,396 |
Other intangibles acquired | 18,642 | 2,247 |
Accumulated amortization | (87,443) | (79,168) |
Total other intangibles | $ 35,842 | $ 25,475 |
Other Intangibles - Schedule _2
Other Intangibles - Schedule of Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Amortization Expense | ||
2023 | $ 8,742 | |
2024 | 7,271 | |
2025 | 6,028 | |
2026 | 4,910 | |
2027 | 3,603 | |
After 2027 | 5,288 | |
Total other intangibles | $ 35,842 | $ 25,475 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other liabilities | Other liabilities |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Renewal term | 5 years | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Renewal term | 20 years |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Total lease assets | $ 23,619 | $ 17,818 |
Total lease liabilities | $ 25,316 | $ 19,619 |
Weighted average remaining lease term (years) | ||
Operating leases | 6 years 6 months | 7 years |
Weighted average discount rate | ||
Operating leases | 3.10% | 3.10% |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lease Cost: | |||
Operating lease cost | $ 5,233 | $ 3,710 | $ 3,724 |
Short-term lease cost | 470 | 345 | 247 |
Variable lease cost | 1,073 | 980 | 842 |
Sublease income | (23) | (33) | (43) |
Total lease cost | $ 6,753 | $ 5,002 | $ 4,770 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Maturity of lease liabilities | |||
2023 | $ 5,610 | ||
2024 | 5,056 | ||
2025 | 4,673 | ||
2026 | 3,265 | ||
2027 | 2,468 | ||
2028 and after | 7,068 | ||
Total lease payments | 28,140 | ||
Less: Present value discount | 2,824 | ||
Present value of lease liabilities | 25,316 | $ 19,619 | |
Cash paid for amounts included in the measurement of lease liabilities | |||
Operating cash flows from operating leases | 5,329 | 3,773 | $ 3,629 |
ROU assets obtained in exchange for new operating lease liabilities | $ 10,516 | $ 2,700 | $ 1,601 |
Deposits - Schedule of Deposits
Deposits - Schedule of Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Statistical Disclosure for Banks [Abstract] | ||
Demand deposits | $ 8,448,797 | $ 7,704,190 |
Savings deposits | 4,657,140 | 4,334,802 |
Certificates and other time deposits of $100,000 or more | 742,539 | 273,379 |
Other certificates and time deposits | 468,712 | 389,752 |
Brokered deposits | 65,557 | 30,454 |
Total deposits | $ 14,382,745 | $ 12,732,577 |
Deposits - Narrative (Details)
Deposits - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Apr. 01, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||
Demand and savings deposits | $ 1,700 | ||
Organic deposit decline | $ 280.6 | ||
Organic deposit decline percent | 2.20% | ||
Non-maturity deposits decline | $ 513.5 | ||
Maturity deposits decline | 232.9 | ||
Deposits exceeding FDIC amount | $ 8,100 | $ 7,600 | |
Level One | |||
Business Acquisition [Line Items] | |||
Demand and savings deposits | $ 1,900 |
Deposits - Schedule of Contract
Deposits - Schedule of Contractual Maturities of Time Deposits (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Certificates and Other Time Deposits | |
2023 | $ 1,148,819 |
2024 | 96,897 |
2025 | 14,661 |
2026 | 9,819 |
2027 | 6,043 |
After 2027 | 569 |
Total | $ 1,276,808 |
Borrowings - Schedule of Debt (
Borrowings - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Federal funds purchased | $ 171,560 | $ 0 |
Securities sold under repurchase agreements | 167,413 | 181,577 |
Federal Home Loan Bank advances | 823,674 | 334,055 |
Subordinated debentures and term loans | 151,298 | 118,618 |
Total Borrowings | $ 1,313,945 | $ 634,250 |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) | 12 Months Ended | ||||||
Dec. 18, 2024 | Oct. 30, 2023 | Nov. 01, 2013 USD ($) investor | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Apr. 01, 2022 USD ($) | Dec. 18, 2019 USD ($) | |
Debt Instrument [Line Items] | |||||||
Required value of assets pledged as collateral as a percentage to outstanding advances (at least) | 145% | ||||||
Total available remaining borrowing capacity from FHLB | $ 617,600,000 | ||||||
Putable advances with the FHLB | 823,674,000 | $ 334,055,000 | |||||
Debt face amount | $ 70,000,000 | ||||||
Private debt issuance, number of institutional investors | investor | 4 | ||||||
Level One | |||||||
Debt Instrument [Line Items] | |||||||
Federal Home Loan Bank advances | $ 160,043,000 | ||||||
Subordinated debentures | $ 32,631,000 | ||||||
Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Fixed interest rate term | 10 years | ||||||
5.00% Senior Notes Due 2028 | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price (percent) | 100% | ||||||
Putable Advances | |||||||
Debt Instrument [Line Items] | |||||||
Putable advances with the FHLB | $ 95,000,000 | ||||||
Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, minimum (as a percent) | 0.35% | ||||||
Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, minimum (as a percent) | 4.92% | ||||||
Securities Sold Under Repurchase Agreements | |||||||
Debt Instrument [Line Items] | |||||||
Maximum amount of outstanding agreements | $ 218,900,000 | 199,100,000 | |||||
Total of average agreements | 185,100,000 | 173,800,000 | |||||
Debt outstanding | 167,413,000 | ||||||
Subordinated Debentures and Term Loans | |||||||
Debt Instrument [Line Items] | |||||||
Debt outstanding | 151,298,000 | 118,600,000 | |||||
Subordinated Debenture | 6.75% Subordinated Notes Due 2028 | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | $ 65,000,000 | ||||||
Interest rate on notes (as a percent) | 6.75% | ||||||
Redemption price (percent) | 100% | ||||||
Subordinated Debenture | Acquired Subordinated Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | $ 30,000,000 | ||||||
Interest rate on notes (as a percent) | 4.75% | ||||||
Subordinated Debenture | Three-Month SOFR | 6.75% Subordinated Notes Due 2028 | Forecast | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 0.26161% | ||||||
Subordinated Debenture | SOFR | 6.75% Subordinated Notes Due 2028 | Forecast | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 4.095% | ||||||
Subordinated Debenture | SOFR | Acquired Subordinated Notes | Forecast | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 3.11% | ||||||
Subordinated Debenture | First Merchant Capital Trust II | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | $ 41,700,000 | $ 41,700,000 | |||||
Interest rate during the period | 6.33% | 1.76% | |||||
Subordinated Debenture | First Merchant Capital Trust II | Three-Month LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 1.56% | ||||||
Subordinated Debenture | Ameriana Capital Trust I | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | $ 10,300,000 | $ 10,300,000 | |||||
Interest rate during the period | 6.27% | 1.70% | |||||
Subordinated Debenture | Ameriana Capital Trust I | Three-Month LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 1.50% | ||||||
Senior Notes | 5.00% Senior Notes Due 2028 | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | $ 5,000,000 | ||||||
Interest rate on notes (as a percent) | 5% | ||||||
Senior Notes | Three-Month SOFR | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 0.26161% | ||||||
Senior Notes | Three-Month SOFR | 5.00% Senior Notes Due 2028 | Forecast | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 0.26161% | ||||||
Senior Notes | SOFR | 5.00% Senior Notes Due 2028 | Forecast | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 2.345% | ||||||
Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt outstanding | $ 1,200,000 | ||||||
Interest rate on notes (as a percent) | 1% |
Borrowings - Schedule of Collat
Borrowings - Schedule of Collateral Pledged for all Repurchase Agreements Accounted for as Secured Borrowings (Details) - U.S. Government-sponsored mortgage-backed securities - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets Sold under Agreements to Repurchase [Line Items] | ||
Collateral pledged for all repurchase agreements accounted for as secured borrowings | $ 167,413 | $ 181,577 |
Overnight and Continuous | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Collateral pledged for all repurchase agreements accounted for as secured borrowings | 167,413 | 181,577 |
Up to 30 Days | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Collateral pledged for all repurchase agreements accounted for as secured borrowings | 0 | 0 |
30-90 Days | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Collateral pledged for all repurchase agreements accounted for as secured borrowings | 0 | 0 |
Greater Than 90 Days | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Collateral pledged for all repurchase agreements accounted for as secured borrowings | $ 0 | $ 0 |
Borrowings - Schedule of Maturi
Borrowings - Schedule of Maturities of Long Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Federal Funds Purchased | ||
Maturities in Years Ending December 31: | ||
2022 | $ 171,560 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
After 2026 | 0 | |
ASC 805 fair value adjustments at acquisition | 0 | |
Total | 171,560 | |
Securities Sold Under Repurchase Agreements | ||
Maturities in Years Ending December 31: | ||
2022 | 167,413 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
After 2026 | 0 | |
ASC 805 fair value adjustments at acquisition | 0 | |
Total | 167,413 | |
Federal Home Loan Bank Advances | ||
Maturities in Years Ending December 31: | ||
2022 | 460,097 | |
2023 | 60,097 | |
2024 | 25,097 | |
2025 | 97 | |
2026 | 200,096 | |
After 2026 | 78,190 | |
ASC 805 fair value adjustments at acquisition | 0 | |
Total | 823,674 | |
Subordinated Debentures and Term Loans | ||
Maturities in Years Ending December 31: | ||
2022 | 1,183 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
After 2026 | 152,012 | |
ASC 805 fair value adjustments at acquisition | (1,897) | |
Total | $ 151,298 | $ 118,600 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2022 USD ($) loan derivative | Sep. 30, 2022 USD ($) derivative | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) derivative | |
Derivative [Line Items] | ||||
Termination value of derivatives in a net liability position | $ 572,000 | |||
Derivative collateral posted | 0 | |||
Not Designated as Hedging Instruments | ||||
Derivative [Line Items] | ||||
Notional amount of interest rate derivatives | 1,200,000,000 | $ 1,000,000,000 | ||
Cash Flow Hedging | Derivatives Designated as Hedging Instruments | ||||
Derivative [Line Items] | ||||
Estimated reclassification | $ 164,000 | |||
Cash Flow Hedging | Interest Rate Swap | Derivatives Designated as Hedging Instruments | ||||
Derivative [Line Items] | ||||
Number of interest rate derivatives held | derivative | 1 | 2 | 4 | |
Notional amount of interest rate derivatives | $ 10,000,000 | $ 60,000,000 | ||
Cash Flow Hedging | Interest Rate Swap | Derivatives Designated as Hedging Instruments | Brokered Deposit | ||||
Derivative [Line Items] | ||||
Notional amount of interest rate derivatives | $ 24,000,000 | |||
Cash Flow Hedging | Interest Rate Swap | Derivatives Designated as Hedging Instruments | Trust Preferred Securities | ||||
Derivative [Line Items] | ||||
Notional amount of interest rate derivatives | $ 26,000,000 | |||
Cash Flow Hedging | Interest Rate Swap | Derivatives Designated as Hedging Instruments | Federal Home Loan Bank Advances | ||||
Derivative [Line Items] | ||||
Number of interest rate derivatives held | loan | 1 | |||
Notional amount of interest rate derivatives | $ 10,000,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Fair Value of Derivative Financial Instruments and Their Classification on Balance Sheet (Details) - Interest rate contracts - Derivatives Designated as Hedging Instruments - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Other Assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | $ 164 | $ 0 |
Other Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | $ 0 | $ 835 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Amount of Loss Recognized in Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives (Effective Portion) | $ 479 | $ 138 | $ (1,480) |
Interest rate contracts | Cash Flow Hedging | Derivatives Designated as Hedging Instruments | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives (Effective Portion) | $ 479 | $ 138 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Effect of Derivative Financial Instruments on Income Statement (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative [Line Items] | |||
Amount of Gain (Loss) Reclassified from Other Comprehensive Income into Income (Effective Portion) | $ (521) | $ (1,044) | $ (906) |
Derivatives Designated as Hedging Instruments | Interest rate contracts | Interest expense | |||
Derivative [Line Items] | |||
Amount of Gain (Loss) Reclassified from Other Comprehensive Income into Income (Effective Portion) | $ (521) | $ (1,044) | $ (906) |
Derivative Financial Instrume_7
Derivative Financial Instruments - Fair Value of Derivative Financial Instruments and Their Classification on Balance Sheet (Details) - Not Designated as Hedging Instruments - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Other Assets | ||
Notional Amount | ||
Included in other assets | $ 1,204,321 | $ 1,038,947 |
Fair Value | ||
Asset Derivatives | 92,872 | 41,133 |
Other Assets | Interest Rate Swap | ||
Notional Amount | ||
Included in other assets | 1,184,866 | 1,038,947 |
Fair Value | ||
Asset Derivatives | 92,652 | 41,133 |
Other Assets | Forward Contracts | ||
Notional Amount | ||
Included in other assets | 14,406 | 0 |
Fair Value | ||
Asset Derivatives | 188 | 0 |
Other Assets | Interest Rate Lock Commitments | ||
Notional Amount | ||
Included in other assets | 5,049 | 0 |
Fair Value | ||
Asset Derivatives | 32 | 0 |
Other Liabilities | ||
Notional Amount | ||
Included in other liabilities | 1,196,898 | 1,038,947 |
Fair Value | ||
Liability Derivatives | 92,770 | 41,133 |
Other Liabilities | Interest Rate Swap | ||
Notional Amount | ||
Included in other liabilities | 1,184,866 | 1,038,947 |
Fair Value | ||
Liability Derivatives | 92,652 | 41,133 |
Other Liabilities | Forward Contracts | ||
Notional Amount | ||
Included in other liabilities | 4,483 | 0 |
Fair Value | ||
Liability Derivatives | 63 | 0 |
Other Liabilities | Interest Rate Lock Commitments | ||
Notional Amount | ||
Included in other liabilities | 7,549 | 0 |
Fair Value | ||
Liability Derivatives | $ 55 | $ 0 |
Derivative Financial Instrume_8
Derivative Financial Instruments - Gain (Loss) Recognized Into Income Related to Non-designated Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Amount of Gain Recognized in Income on Derivative | $ 1,183 | $ 0 | $ 0 |
Forward Contracts | Gain (Loss) on Sales of Loans, Net | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Amount of Gain Recognized in Income on Derivative | 1,112 | 0 | 0 |
Interest Rate Lock Commitments | Gain (Loss) on Sales of Loans, Net | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Amount of Gain Recognized in Income on Derivative | $ 71 | $ 0 | $ 0 |
Fair Values of Financial Inst_3
Fair Values of Financial Instruments - Fair Value Measurements of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | $ 2,459 | $ 999 |
Derivative assets | 0 | 0 |
Interest rate swap liability | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 1,970,763 | 2,338,061 |
Derivative assets | 93,036 | 41,133 |
Interest rate swap liability | 92,770 | 41,968 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 3,439 | 5,491 |
Derivative assets | 0 | 0 |
Interest rate swap liability | 0 | 0 |
Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 93,036 | |
Interest rate swap liability | 92,770 | |
Recurring | Derivative liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swap liability | 41,968 | |
Recurring | U.S. Government-sponsored agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 101,962 | 95,136 |
Recurring | U.S. Treasury | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 2,459 | 999 |
Recurring | State and municipal | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 1,351,760 | 1,576,532 |
Recurring | U.S. Government-sponsored mortgage-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 508,273 | 667,605 |
Recurring | Corporate obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 12,207 | 4,279 |
Recurring | Derivative assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 41,133 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | |
Interest rate swap liability | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Derivative liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swap liability | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Government-sponsored agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 2,459 | 999 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | State and municipal | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Government-sponsored mortgage-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Derivative assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 93,036 | |
Interest rate swap liability | 92,770 | |
Recurring | Significant Other Observable Inputs (Level 2) | Derivative liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swap liability | 41,968 | |
Recurring | Significant Other Observable Inputs (Level 2) | U.S. Government-sponsored agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 101,962 | 95,136 |
Recurring | Significant Other Observable Inputs (Level 2) | U.S. Treasury | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | State and municipal | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 1,348,356 | 1,571,076 |
Recurring | Significant Other Observable Inputs (Level 2) | U.S. Government-sponsored mortgage-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 508,269 | 667,601 |
Recurring | Significant Other Observable Inputs (Level 2) | Corporate obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 12,176 | 4,248 |
Recurring | Significant Other Observable Inputs (Level 2) | Derivative assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 41,133 | |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | |
Interest rate swap liability | 0 | |
Recurring | Significant Unobservable Inputs (Level 3) | Derivative liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swap liability | 0 | |
Recurring | Significant Unobservable Inputs (Level 3) | U.S. Government-sponsored agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | U.S. Treasury | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | State and municipal | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 3,404 | 5,456 |
Recurring | Significant Unobservable Inputs (Level 3) | U.S. Government-sponsored mortgage-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | 4 | 4 |
Recurring | Significant Unobservable Inputs (Level 3) | Corporate obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment securities available for sale | $ 31 | 31 |
Recurring | Significant Unobservable Inputs (Level 3) | Derivative assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | $ 0 |
Fair Values of Financial Inst_4
Fair Values of Financial Instruments - Reconciliation of Beginning and Ending Balances of Recurring Fair Value Measurements using Significant Unobservable Level 3 Inputs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Available for Sale Securities | ||
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Asset, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Other Comprehensive Income (Loss), Net of Tax | Other Comprehensive Income (Loss), Net of Tax |
Recurring | ||
Available for Sale Securities | ||
Beginning Balance | $ 5,491 | $ 2,479 |
Included in other comprehensive income | (612) | 227 |
Purchases, issuances, and settlements | 5,111 | 3,241 |
Principal payments | (6,551) | (456) |
Ending balance | $ 3,439 | $ 5,491 |
Fair Values of Financial Inst_5
Fair Values of Financial Instruments - Valuation Methodologies Used for Instruments Measured at Fair Value on Non-Recurring Basis (Details) - Non-recurring - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Collateral dependent loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset fair value | $ 0 | $ 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other real estate owned | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset fair value | 0 | |
Significant Other Observable Inputs (Level 2) | Collateral dependent loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset fair value | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Other real estate owned | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset fair value | 0 | |
Significant Unobservable Inputs (Level 3) | Collateral dependent loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset fair value | 55,290 | 24,491 |
Significant Unobservable Inputs (Level 3) | Other real estate owned | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset fair value | 96 | |
Fair Value | Collateral dependent loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset fair value | $ 55,290 | 24,491 |
Fair Value | Other real estate owned | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset fair value | $ 96 |
Fair Values of Financial Inst_6
Fair Values of Financial Instruments - Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements Other Than Goodwill (Details) - Significant Unobservable Inputs (Level 3) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Discounted cash flow | State and municipal securities | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 3,404 | $ 5,456 |
Discounted cash flow | State and municipal securities | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Maturity Call Date | 1 month | 1 month |
US Muni BQ curve | A- | A- |
Discounted cash flow | State and municipal securities | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Maturity Call Date | 15 years | 15 years |
US Muni BQ curve | BBB | BBB- |
Discounted cash flow | State and municipal securities | Discounted cash flow | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 0.004 | 0.0075 |
Discounted cash flow | State and municipal securities | Discounted cash flow | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 0.04 | 0.04 |
Discounted cash flow | State and municipal securities | Weighted-average coupon | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 0.034 | 0.037 |
Discounted cash flow | Corporate obligations and U.S. Government-sponsored mortgage backed securities | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 35 | $ 35 |
Discounted cash flow | Corporate obligations and U.S. Government-sponsored mortgage backed securities | Risk free rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Risk free rate | 3 month LIBOR | 3 month LIBOR |
Discounted cash flow | Corporate obligations and U.S. Government-sponsored mortgage backed securities | Premium for illiquidity | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 0.02 | 0.02 |
Discounted cash flow | Corporate obligations and U.S. Government-sponsored mortgage backed securities | Weighted-average coupon | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 0 | 0 |
Collateral based measurements | Collateral dependent loans | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 55,290 | $ 24,491 |
Collateral based measurements | Collateral dependent loans | Collateral based measurements | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount to reflect current market conditions and ultimate collectability | 0 | 0 |
Collateral based measurements | Collateral dependent loans | Collateral based measurements | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount to reflect current market conditions and ultimate collectability | 0.10 | 0.10 |
Collateral based measurements | Collateral dependent loans | Collateral based measurements | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount to reflect current market conditions and ultimate collectability | 0.011 | 0.055 |
Appraisals | Other real estate owned | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 96 | |
Appraisals | Other real estate owned | Appraisals | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Other real estate owned | 0 | |
Appraisals | Other real estate owned | Appraisals | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Other real estate owned | 0.44 | |
Appraisals | Other real estate owned | Appraisals | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Other real estate owned | 0.435 |
Fair Values of Financial Inst_7
Fair Values of Financial Instruments - Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Cash and due from banks | $ 122,594 | $ 167,146 |
Investment securities held to maturity | 1,907,865 | 2,202,503 |
Loans held for sale | 9,094 | 11,187 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Cash and due from banks | 122,594 | 167,146 |
Interest-bearing deposits | 126,061 | 474,154 |
Investment securities available for sale | 2,459 | 999 |
Investment securities held to maturity | 0 | 0 |
Loans held for sale | 0 | 0 |
Loans | 0 | 0 |
Federal Home Loan Bank stock | 0 | 0 |
Derivative assets | 0 | 0 |
Interest receivable | 0 | 0 |
Liabilities at December 31: | ||
Deposits | 13,105,936 | 12,038,992 |
Borrowings: | ||
Federal funds purchased | 0 | |
Securities sold under repurchase agreements | 0 | 0 |
Federal Home Loan Bank advances | 0 | 0 |
Subordinated debentures and other borrowings | 0 | 0 |
Interest rate swap liability | 0 | 0 |
Interest payable | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Cash and due from banks | 0 | 0 |
Interest-bearing deposits | 0 | 0 |
Investment securities available for sale | 1,970,763 | 2,338,061 |
Investment securities held to maturity | 1,893,271 | 2,188,600 |
Loans held for sale | 9,094 | 11,187 |
Loans | 0 | 0 |
Federal Home Loan Bank stock | 38,525 | 28,736 |
Derivative assets | 93,036 | 41,133 |
Interest receivable | 85,070 | 57,187 |
Liabilities at December 31: | ||
Deposits | 1,251,017 | 690,089 |
Borrowings: | ||
Federal funds purchased | 171,560 | |
Securities sold under repurchase agreements | 167,396 | 181,572 |
Federal Home Loan Bank advances | 615,211 | 337,005 |
Subordinated debentures and other borrowings | 122,102 | 107,892 |
Interest rate swap liability | 92,770 | 41,968 |
Interest payable | 7,530 | 2,762 |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Cash and due from banks | 0 | 0 |
Interest-bearing deposits | 0 | 0 |
Investment securities available for sale | 3,439 | 5,491 |
Investment securities held to maturity | 14,594 | 13,903 |
Loans held for sale | 0 | 0 |
Loans | 11,156,217 | 9,068,319 |
Federal Home Loan Bank stock | 0 | 0 |
Derivative assets | 0 | 0 |
Interest receivable | 0 | 0 |
Liabilities at December 31: | ||
Deposits | 0 | 0 |
Borrowings: | ||
Federal funds purchased | 0 | |
Securities sold under repurchase agreements | 0 | 0 |
Federal Home Loan Bank advances | 0 | 0 |
Subordinated debentures and other borrowings | 0 | 0 |
Interest rate swap liability | 0 | 0 |
Interest payable | 0 | 0 |
Carrying Amount | ||
Assets: | ||
Cash and due from banks | 122,594 | 167,146 |
Interest-bearing deposits | 126,061 | 474,154 |
Investment securities available for sale | 1,976,661 | 2,344,551 |
Investment securities held to maturity | 2,287,127 | 2,179,802 |
Loans held for sale | 9,094 | 11,187 |
Loans | 11,780,617 | 9,046,464 |
Federal Home Loan Bank stock | 38,525 | 28,736 |
Derivative assets | 93,036 | 41,133 |
Interest receivable | 85,070 | 57,187 |
Liabilities at December 31: | ||
Deposits | 14,382,745 | 12,732,577 |
Borrowings: | ||
Federal funds purchased | 171,560 | |
Securities sold under repurchase agreements | 167,413 | 181,577 |
Federal Home Loan Bank advances | 823,674 | 334,055 |
Subordinated debentures and other borrowings | 151,298 | 118,618 |
Interest rate swap liability | 92,770 | 41,968 |
Interest payable | $ 7,530 | $ 2,762 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of Changes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning balance | $ 1,912,571 | $ 1,875,645 | $ 1,786,437 |
Other comprehensive income before reclassifications | (293,798) | (16,132) | |
Amounts reclassified from accumulated other comprehensive income | (466) | (3,591) | |
Period change | (294,264) | (19,723) | 46,962 |
Ending balance | 2,034,770 | 1,912,571 | 1,875,645 |
Total | |||
Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning balance | 55,113 | 74,836 | 27,874 |
Period change | (294,264) | (19,723) | 46,962 |
Ending balance | (239,151) | 55,113 | 74,836 |
Unrealized Gains (Losses) on Securities Available for Sale | |||
Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning balance | 59,774 | 87,988 | |
Other comprehensive income before reclassifications | (293,326) | (23,732) | |
Amounts reclassified from accumulated other comprehensive income | (943) | (4,482) | |
Period change | (294,269) | (28,214) | |
Ending balance | (234,495) | 59,774 | 87,988 |
Unrealized Gains (Losses) on Cash Flow Hedges | |||
Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning balance | (660) | (1,594) | |
Other comprehensive income before reclassifications | 378 | 109 | |
Amounts reclassified from accumulated other comprehensive income | 412 | 825 | |
Period change | 790 | 934 | |
Ending balance | 130 | (660) | (1,594) |
Unrealized Gains (Losses) on Defined Benefit Plans | |||
Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning balance | (4,001) | (11,558) | |
Other comprehensive income before reclassifications | (850) | 7,491 | |
Amounts reclassified from accumulated other comprehensive income | 65 | 66 | |
Period change | (785) | 7,557 | |
Ending balance | $ (4,786) | $ (4,001) | $ (11,558) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Reclassifications (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reclassification Adjustments out of Accumulated Other Comprehensive Income [Line Items] | |||
Net realized gains on sales of available for sale securities | $ 1,194 | $ 5,674 | $ 11,895 |
Income tax expense | (33,585) | (35,259) | (21,375) |
Subordinated debentures and other borrowings | 8,009 | 6,642 | 6,944 |
Salaries and employee benefits | 206,893 | 166,995 | 155,937 |
Net income | 222,089 | 205,531 | 148,600 |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | |||
Reclassification Adjustments out of Accumulated Other Comprehensive Income [Line Items] | |||
Net income | 466 | 3,591 | 8,615 |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Unrealized gains (losses) on available for sale securities | |||
Reclassification Adjustments out of Accumulated Other Comprehensive Income [Line Items] | |||
Net realized gains on sales of available for sale securities | 1,194 | 5,674 | 11,895 |
Income tax expense | (251) | (1,192) | (2,498) |
Net income | 943 | 4,482 | 9,397 |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Unrealized gains (losses) on cash flow hedges | |||
Reclassification Adjustments out of Accumulated Other Comprehensive Income [Line Items] | |||
Income tax expense | 109 | 219 | 190 |
Net income | (412) | (825) | (716) |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Unrealized gains (losses) on cash flow hedges | Interest rate contracts | |||
Reclassification Adjustments out of Accumulated Other Comprehensive Income [Line Items] | |||
Subordinated debentures and other borrowings | (521) | (1,044) | (906) |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Unrealized gains (losses) on defined benefit plans | |||
Reclassification Adjustments out of Accumulated Other Comprehensive Income [Line Items] | |||
Income tax expense | 17 | 18 | 18 |
Salaries and employee benefits | (82) | (84) | (84) |
Net income | $ (65) | $ (66) | $ (66) |
Regulatory Capital and Divide_3
Regulatory Capital and Dividends - Narrative (Details) | 12 Months Ended | |||||
Apr. 01, 2022 $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Mar. 31, 2022 | Dec. 31, 2021 USD ($) $ / shares shares | Jan. 27, 2021 USD ($) shares | Jan. 01, 2021 USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||||
Actual | $ 1,558,281,000 | $ 1,374,240,000 | ||||
Actual | 0.0910 | 0.0930 | ||||
Dividends available | $ 288,700,000 | |||||
Dividend reinvestment and stock purchase plan, stockholder's maximum amount of cash payments per quarter in purchase of common stock | 5,000 | |||||
Retained earnings | $ (1,012,774,000) | $ (864,839,000) | ||||
Cash dividends on preferred stock (in dollars per share) | $ / shares | $ 140.64 | |||||
Cash dividends on preferred stock | $ 1,406,000 | |||||
Stock Repurchase Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Stock authorized to be repurchased (in shares) | shares | 3,333,000 | |||||
Stock authorized to be repurchased (in shares) | $ 100,000,000 | |||||
Percent of outstanding shares | 6% | |||||
Available to repurchase (in shares) | shares | 2,700,000 | |||||
Available to repurchase | $ 74,500,000 | |||||
Series A Preferred Stock | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Preferred Stock, issued (in shares) | shares | 10,000 | 10,000 | ||||
Liquidation value per share (in dollars per share) | $ / shares | $ 2,500 | $ 2,500 | ||||
Cash dividends on preferred stock (in dollars per share) | $ / shares | $ 46.88 | |||||
Depository share dividends (in dollars per share) | 0.4688 | |||||
Entity listing, depository receipt ratio | 0.01 | |||||
Cash dividends on preferred stock | $ 1,400,000 | |||||
Series A Preferred Stock | Level One | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Preferred Stock, issued (in shares) | shares | 10,000 | |||||
Dividend rate, percentage | 7.50% | |||||
Liquidation value per share (in dollars per share) | $ / shares | $ 2,500 | |||||
Outstanding preferred stock | 25,000,000 | |||||
Preferred Class B | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Entity listing, depository receipt ratio | 0.01 | |||||
Preferred Class B | Level One | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Entity listing, depository receipt ratio | 0.01 | |||||
Cumulative effect of ASC 326 adoption | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Retained earnings | $ 68,000,000 | |||||
PPP | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Actual | $ 4,700,000 | $ 106,600,000 | ||||
Actual | 0 | 0 |
Regulatory Capital and Divide_4
Regulatory Capital and Dividends - Schedule of Actual and Required Capital (Details) $ in Thousands | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Total risk-based capital to risk-weighted assets | ||
Actual | $ 1,882,254 | $ 1,582,481 |
Basel III Minimum Capital Required | 1,511,230 | 1,193,840 |
Tier 1 capital to risk-weighted assets | ||
Actual | 1,558,281 | 1,374,240 |
Basel III Minimum Capital Required | 1,223,377 | 966,442 |
Common equity tier 1 capital to risk-weighted assets | ||
Actual | 1,533,281 | 1,327,634 |
Prompt Corrective Action Thresholds | 1,007,487 | 795,893 |
Tier I Capital to Average Assets, Amount | ||
Actual | 1,558,281 | 1,374,240 |
Basel III Minimum Capital Required | $ 684,758 | $ 590,758 |
Ratio | ||
Total risk-based capital to risk-weighted assets, Actual | 0.1308 | 0.1392 |
Total risk-based capital to risk-weighted assets, Basel III Minimum Capital Required | 10.50% | 10.50% |
Tier 1 capital to risk-weighted assets, Actual | 0.1083 | 0.1209 |
Tier 1 capital to risk-weighted assets, Basel III Minimum Capital Required | 8.50% | 8.50% |
Common equity tier 1 capital to risk-weighted assets, Actual | 0.1065 | 0.1168 |
Common equity tier 1 capital to risk-weighted assets, Basel III Minimum Capital Required | 7% | 7% |
Leverage Ratios | ||
Actual | 0.0910 | 0.0930 |
Basel III Minimum Capital Required | 4% | 4% |
First Merchants Bank | ||
Total risk-based capital to risk-weighted assets | ||
Actual | $ 1,822,296 | $ 1,453,358 |
Basel III Minimum Capital Required | 1,513,064 | 1,197,515 |
Well Capitalized | 1,441,014 | 1,140,490 |
Tier 1 capital to risk-weighted assets | ||
Actual | 1,641,210 | 1,309,685 |
Basel III Minimum Capital Required | 1,224,862 | 969,417 |
Prompt Corrective Action Thresholds, Well Capitalized | 1,152,811 | 912,392 |
Common equity tier 1 capital to risk-weighted assets | ||
Actual | 1,641,210 | 1,309,685 |
Prompt Corrective Action Thresholds | 1,008,710 | 798,343 |
Prompt Corrective Action Thresholds, Well Capitalized | 936,659 | 741,319 |
Tier I Capital to Average Assets, Amount | ||
Actual | 1,641,210 | 1,309,685 |
Basel III Minimum Capital Required | 683,680 | 589,994 |
Well Capitalized | $ 854,600 | $ 737,493 |
Ratio | ||
Total risk-based capital to risk-weighted assets, Actual | 0.1265 | 0.1274 |
Total risk-based capital to risk-weighted assets, Basel III Minimum Capital Required | 10.50% | 10.50% |
Total risk-based capital to risk-weighted assets, Well Capitalized | 0.1000 | 0.1000 |
Tier 1 capital to risk-weighted assets, Actual | 0.1139 | 0.1148 |
Tier 1 capital to risk-weighted assets, Basel III Minimum Capital Required | 8.50% | 8.50% |
Tier 1 capital to risk-weighted assets, Well Capitalized | 0.0800 | 0.0800 |
Common equity tier 1 capital to risk-weighted assets, Actual | 0.1139 | 0.1148 |
Common equity tier 1 capital to risk-weighted assets, Basel III Minimum Capital Required | 7% | 7% |
Common equity tier 1 capital to risk-weighted assets, Well Capitalized | 0.0650 | 0.0650 |
Leverage Ratios | ||
Actual | 0.0960 | 0.0888 |
Basel III Minimum Capital Required | 4% | 4% |
Well Capitalized | 0.0500 | 0.0500 |
Loan Servicing (Details)
Loan Servicing (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | |||
Unpaid balance of loans serviced for others | $ 925,841 | $ 919,136 | $ 635,224 |
Federal Home Loan Mortgage Corporation | |||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | |||
Unpaid balance of loans serviced for others | 794,222 | 765,547 | 514,539 |
Fannie Mae | |||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | |||
Unpaid balance of loans serviced for others | 54,934 | 60,839 | 69,072 |
Equity Bank | |||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | |||
Unpaid balance of loans serviced for others | 49,558 | 60,107 | 0 |
Federal Home Loan Bank | |||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | |||
Unpaid balance of loans serviced for others | 27,127 | 32,558 | 51,479 |
Chevy Chase Mortgage Company | |||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | |||
Unpaid balance of loans serviced for others | $ 0 | $ 85 | $ 134 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) | 12 Months Ended | |||
Oct. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 4,652,000 | $ 4,762,000 | $ 4,600,000 | |
Estimated pre-vesting forfeiture rate (as a percent) | 0.50% | |||
Income tax benefit (expense) at vesting | $ 1,117,000 | 947,000 | 581,000 | |
Aggregate intrinsic value of stock options exercised | 533,000 | 559,000 | ||
Stock options exercised | $ 358,000 | 198,000 | 115,000 | |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option term | 10 years | |||
Stock options vesting percentage | 100% | |||
Unrecognized compensation expense | $ 0 | |||
RSAs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested period | 3 years | |||
Income tax benefit (expense) at vesting | $ 86,000 | $ (112,000) | $ (394,000) | |
Unrecognized compensation expense | $ 8,900,000 | |||
Unrecognized compensation expense expected recognition period | 1 year 9 months 14 days | |||
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of average closing price to be paid by employees | 85% | |||
Grant date fair value of ESPP options | $ 31,000 | |||
Unrecognized compensation expense | $ 0 | |||
Minimum | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested period | 1 year | |||
Maximum | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested period | 2 years |
Share-Based Compensation - Comp
Share-Based Compensation - Components of Awards (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Pre-tax compensation expense | $ 4,652 | $ 4,762 | $ 4,600 |
Income tax benefit | (1,117) | (947) | (581) |
Total share-based compensation expense, net of income taxes | 3,535 | 3,815 | 4,019 |
Stock and ESPP Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Pre-tax compensation expense | 95 | 155 | 96 |
Income tax benefit | (74) | (92) | (29) |
Total share-based compensation expense, net of income taxes | 21 | 63 | 67 |
Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Pre-tax compensation expense | 4,557 | 4,607 | 4,504 |
Income tax benefit | (1,043) | (855) | (552) |
Total share-based compensation expense, net of income taxes | $ 3,514 | $ 3,752 | $ 3,952 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Activity (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Number of Shares | |
Beginning balance (in shares) | shares | 28,500 |
Transferred Options from Level One (in shares) | shares | 148,600 |
Exercised (in shares) | shares | (22,000) |
Ending balance (in shares) | shares | 155,100 |
Vested and expected to vest, number of shares (in shares) | shares | 155,100 |
Exercisable, number of shares (in shares) | shares | 155,100 |
Weighted-Average Exercise Price | |
Beginning balance (in dollars per share) | $ / shares | $ 17.14 |
Transferred Options from Level One (in dollars per share) | $ / shares | 18.84 |
Exercised (in dollars per share) | $ / shares | 16.28 |
Ending balance (in dollars per share) | $ / shares | 18.89 |
Vested and expected to vest, weighted-average exercise price (in dollars per share) | $ / shares | 18.89 |
Exercisable, weighted-average exercise price (in dollars per share) | $ / shares | $ 18.89 |
Weighted Average Remaining Contractual Term (in Years) | |
Outstanding | 2 years 5 months 19 days |
Vested and expected to vest | 2 years 5 months 19 days |
Exercisable | 2 years 5 months 19 days |
Aggregate Intrinsic Value | |
Outstanding | $ | $ 3,446,110 |
Vested and expected to vest | $ | 3,446,110 |
Exercisable | $ | $ 3,446,110 |
Share-Based Compensation - Unve
Share-Based Compensation - Unvested RSAs Outstanding (Details) - RSAs | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Number of Shares | |
Unvested RSAs, Beginning Balance (in shares) | shares | 411,259 |
Granted (in shares) | shares | 137,267 |
Forfeited (in shares) | shares | (13,775) |
Vested (in shares) | shares | (118,046) |
Unvested RSAs, Ending Balance (in shares) | shares | 416,705 |
Weighted-Average Grant Date Fair Value | |
Unvested RSAs, Beginning Balance (in dollars per share) | $ / shares | $ 35.86 |
Granted (in dollars per share) | $ / shares | 40.66 |
Forfeited (in dollars per share) | $ / shares | 37.18 |
Vested (in dollars per share) | $ / shares | 37.35 |
Unvested RSAs, Ending Balance (in dollars per share) | $ / shares | $ 36.97 |
Pension and Other Post Retire_3
Pension and Other Post Retirement Benefit Plans - Narrative (Details) - USD ($) | 12 Months Ended | |||
Mar. 01, 2005 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Percentage of employees covered by plan | 8% | |||
Minimum participant attained age | 55 years | |||
Requisite service period (at least) | 10 years | |||
Decrease in funded status | $ 1,500,000 | |||
Accumulated other comprehensive loss, net of tax | $ 785,000 | |||
Decrease in discount rate | 2.70% | |||
Discount rate | 5.40% | 2.70% | 2.30% | |
Increase in liability | $ 14,800,000 | |||
Liability reduction for mortality table updates | 200,000 | |||
Actual return on plan assets | 11,799,000 | $ (10,786,000) | ||
Expected return | 4,500,000 | |||
Accumulated benefit obligation | 55,800,000 | 74,300,000 | ||
Net periodic pension benefit cost | (2,539,000) | (2,094,000) | $ (1,419,000) | |
Minimum required contribution in next fiscal year | $ 0 | |||
Requisite service period | 1000 hours | |||
Employer percentage contribution | 2% | |||
Vesting period | 5 years | |||
Expense recognized in the period | $ 6,500,000 | 5,200,000 | 5,100,000 | |
Fair value of plan assets | 77,534,000 | 94,588,000 | 88,512,000 | |
Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 74,032,000 | 91,979,000 | ||
Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | $ 3,502,000 | 2,609,000 | ||
MBT | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Requisite service period (at least) | 5 years | |||
Defined benefit plan, benefit obligation | $ 2,400,000 | 3,200,000 | ||
Post retirement plan expense | $ 53,000 | $ 62,000 | 126,000 | |
Contribution for first 3% | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Amount of discretionary contributions made by employer to defined contribution plan, percent | 100% | |||
Maximum annual contribution percentage per employee | 3% | |||
Contribution after first 3% | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Amount of discretionary contributions made by employer to defined contribution plan, percent | 50% | |||
Maximum annual contribution percentage per employee | 3% | |||
Minimum | MBT | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Age of plan participants | 55 years | |||
Minimum | Debt securities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Maturities of debt securities | 15 days | 40 days | ||
Maximum | MBT | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Age of plan participants | 65 years | |||
Maximum | Debt securities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Maturities of debt securities | 9 years 1 month 6 days | 7 years 8 months 12 days | ||
Weighted Average | Debt securities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Maturities of debt securities | 3 years 10 months 24 days | 3 years 6 months | ||
Non-qualified plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net periodic pension benefit cost | $ 122,000 | $ 117,000 | $ 165,000 |
Pension and Other Post Retire_4
Pension and Other Post Retirement Benefit Plans - Schedule of Changes in Benefit Obligation, and Plan Assets, Funded Status of the Plan, Assets and Liabilities Recognized in the Balance Sheets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Change in Benefit Obligation: | |||
Benefit obligation at beginning of year | $ 74,274 | $ 80,786 | |
Service cost | 0 | 0 | $ 16 |
Interest cost | 1,905 | 1,760 | 2,343 |
Actuarial (gain) loss | (14,546) | (2,919) | |
Benefits paid | (5,869) | (5,353) | |
Benefit obligation at end of year | 55,764 | 74,274 | 80,786 |
Change in Plan Assets: | |||
Fair value of plan assets at beginning of year | 94,588 | 88,512 | |
Actual return on plan assets | (11,799) | 10,786 | |
Employer contributions | 614 | 643 | |
Benefits paid | (5,869) | (5,353) | |
End of year | 77,534 | 94,588 | $ 88,512 |
Funded status at end of year | 21,770 | 20,314 | |
Assets and Liabilities Recognized in the Balance Sheets: | |||
Deferred tax asset | 1,955 | 1,545 | |
Assets | 25,175 | 24,750 | |
Liabilities | $ 3,405 | $ 4,436 |
Pension and Other Post Retire_5
Pension and Other Post Retirement Benefit Plans - Schedule of Accumulated Benefit Obligation in Excess of Plan Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Retirement Benefits [Abstract] | ||
Projected benefit obligation | $ 3,405 | $ 4,436 |
Accumulated benefit obligation | 3,405 | 4,436 |
Fair value of plan assets | $ 0 | $ 0 |
Pension and Other Post Retire_6
Pension and Other Post Retirement Benefit Plans - Schedule of Net Periodic Benefit Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Service cost | $ 0 | $ 0 | $ 16 |
Interest cost | 1,905 | 1,760 | 2,343 |
Expected return on plan assets | (4,544) | (4,246) | (4,086) |
Amortization of prior service cost | 87 | 87 | 87 |
Amortization of net loss | 13 | 305 | 221 |
Net periodic pension benefit cost | $ (2,539) | $ (2,094) | $ (1,419) |
Defined Benefit Plan Net Periodic Benefit Cost Credit Interest Cost Statement Of Income Or Comprehensive Income Extensible List Not Disclosed Flag | Interest cost | Interest cost | Interest cost |
Defined Benefit Plan Net Periodic Benefit Cost Credit Expected Return Loss Statement Of Income Or Comprehensive Income Extensible List Not Disclosed Flag | Expected return on plan assets | Expected return on plan assets | Expected return on plan assets |
Defined Benefit Plan Net Periodic Benefit Cost Credit Amortization Of Prior Service Cost Credit Statement Of Income Or Comprehensive Income Extensible List Not Disclosed Flag | Amortization of prior service cost | Amortization of prior service cost | Amortization of prior service cost |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Amortization of net loss | Amortization of net loss | Amortization of net loss |
Pension and Other Post Retire_7
Pension and Other Post Retirement Benefit Plans - Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Net periodic pension benefit cost | $ (2,539) | $ (2,094) | $ (1,419) |
Net gain (loss) | (1,797) | 9,460 | (3,119) |
Amortization of net loss | 13 | 305 | 221 |
Amortization of prior service cost | 87 | 87 | 87 |
Total recognized in other comprehensive income (loss) | (1,697) | 9,852 | (2,811) |
Total recognized in net periodic pension benefit cost and other comprehensive income (loss) | $ 842 | $ 11,946 | $ (1,392) |
Pension and Other Post Retire_8
Pension and Other Post Retirement Benefit Plans - Schedule of Weighted Average Assumptions Used to Determine Benefit Obligation and Benefit Cost (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted-average Assumptions Used to Determine Benefit Obligation: | |||
Discount rate | 5.40% | 2.70% | 2.30% |
Weighted-average Assumptions Used to Determine Cost: | |||
Discount rate | 2.70% | 2.30% | 3.20% |
Expected return on plan assets | 5% | 5% | 5% |
Pension and Other Post Retire_9
Pension and Other Post Retirement Benefit Plans - Schedule of Expected Future Benefit Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Retirement Benefits [Abstract] | |
2023 | $ 5,632 |
2024 | 5,431 |
2025 | 5,352 |
2026 | 5,176 |
2027 | 4,889 |
After 2027 | 21,143 |
Total | $ 47,623 |
Pension and Other Post Retir_10
Pension and Other Post Retirement Benefit Plans - Schedule of Plan Assets by Category (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Defined Benefit Plan Disclosure [Line Items] | ||
Actual | 100% | 100% |
Target | 100% | 100% |
Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Actual | 5.90% | 2.50% |
Target | 3% | 3% |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Actual | 51.50% | 56.40% |
Target | 50% | 53% |
Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Actual | 40.40% | 38.60% |
Target | 45% | 42% |
Alternative investments | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Actual | 2.20% | 2.50% |
Target | 2% | 2% |
Pension and Other Post Retir_11
Pension and Other Post Retirement Benefit Plans - Schedule of Plan Assets by Level (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | $ 77,534 | $ 94,588 | $ 88,512 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 74,032 | 91,979 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Cash & Cash Equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 4,559 | 2,346 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate Bonds and Notes | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 17,159 | 15,726 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Government Agency and Municipal Bonds and Notes | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Certificates of Deposit | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Common Stock | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 2,487 | 2,534 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Taxable Bond | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 10,686 | 18,184 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Large Cap Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 21,056 | 28,349 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Mid Cap Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 9,610 | 13,033 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Small Cap Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 4,419 | 5,815 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | International Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 2,357 | 3,602 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Specialty Alternative Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 1,699 | 2,390 | |
Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 3,502 | 2,609 | |
Significant Other Observable Inputs (Level 2) | Cash & Cash Equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Corporate Bonds and Notes | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Government Agency and Municipal Bonds and Notes | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 3,010 | 1,302 | |
Significant Other Observable Inputs (Level 2) | Certificates of Deposit | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 492 | 1,307 | |
Significant Other Observable Inputs (Level 2) | Common Stock | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Taxable Bond | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Large Cap Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Mid Cap Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Small Cap Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | International Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Specialty Alternative Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Cash & Cash Equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Corporate Bonds and Notes | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Government Agency and Municipal Bonds and Notes | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Certificates of Deposit | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Common Stock | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Taxable Bond | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Large Cap Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Mid Cap Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Small Cap Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | International Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Specialty Alternative Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 0 | 0 | |
Fair Value | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 77,534 | 94,588 | |
Fair Value | Cash & Cash Equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 4,559 | 2,346 | |
Fair Value | Corporate Bonds and Notes | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 17,159 | 15,726 | |
Fair Value | Government Agency and Municipal Bonds and Notes | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 3,010 | 1,302 | |
Fair Value | Certificates of Deposit | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 492 | 1,307 | |
Fair Value | Common Stock | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 2,487 | 2,534 | |
Fair Value | Taxable Bond | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 10,686 | 18,184 | |
Fair Value | Large Cap Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 21,056 | 28,349 | |
Fair Value | Mid Cap Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 9,610 | 13,033 | |
Fair Value | Small Cap Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 4,419 | 5,815 | |
Fair Value | International Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | 2,357 | 3,602 | |
Fair Value | Specialty Alternative Equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Plan Assets | $ 1,699 | $ 2,390 |
Income Tax - Reconciliation of
Income Tax - Reconciliation of Federal Statutory to Actual Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Federal Statutory to Actual Tax Expense: | |||
Federal Statutory Income Tax at 21% | $ 53,692 | $ 50,566 | $ 35,695 |
Tax-exempt Interest Income | (19,349) | (16,200) | (13,273) |
Stock Compensation | (214) | (20) | 338 |
Earnings on Life Insurance | (2,344) | (1,468) | (1,079) |
Tax Credits | (414) | (354) | (425) |
CARES Act - NOL carryback rate differential | 0 | 0 | (1,178) |
State Tax | 2,494 | 2,697 | 1,122 |
Other | (280) | 38 | 175 |
Income Tax Expense | $ 33,585 | $ 35,259 | $ 21,375 |
Effective Tax Rate | 13.10% | 14.60% | 12.60% |
Income Tax - Components of Inco
Income Tax - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Currently Payable: | |||
Federal | $ 21,824 | $ 24,634 | $ 28,463 |
State | 2,696 | 1,473 | 2,647 |
Deferred: | |||
Federal | 8,604 | 7,211 | (8,508) |
State | 461 | 1,941 | (1,227) |
Income Tax Expense | $ 33,585 | $ 35,259 | $ 21,375 |
Income Tax - Deferred Tax Asset
Income Tax - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Differences in Accounting for Loan Losses | $ 61,484 | $ 52,995 |
Differences in Accounting for Loan Fees | 2,094 | 2,016 |
Deferred Compensation | 3,922 | 4,172 |
Federal & State Income Tax Loss Carryforward and Credits | 600 | 747 |
Net Unrealized Loss on Securities Available for Sale | 62,323 | 0 |
Other | 2,883 | 3,585 |
Total Assets | 133,306 | 63,515 |
Liabilities: | ||
Differences in Depreciation Methods | 7,039 | 5,726 |
Differences in Accounting for Loans and Securities | 1,058 | 3,078 |
Difference in Accounting for Pensions and Other Employee Benefits | 3,687 | 4,586 |
State Income Tax | 1,859 | 1,499 |
Net Unrealized Gain on Securities Available for Sale | 0 | 15,889 |
Gain on FDIC Modified Whole Bank Transaction | 287 | 306 |
Other | 9,919 | 8,108 |
Total Liabilities | 23,849 | 39,192 |
Net Deferred Tax Asset | $ 109,457 | $ 24,323 |
Income Tax - Narrative (Details
Income Tax - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Valuation Allowance [Line Items] | ||
Additional paid-in capital | $ 1,228,626 | $ 985,818 |
Unrecorded deferred tax liability | 5,300 | |
CFS | ||
Valuation Allowance [Line Items] | ||
Additional paid-in capital | 13,400 | |
Ameriana | ||
Valuation Allowance [Line Items] | ||
Additional paid-in capital | 11,900 | |
State and Local Jurisdiction | ||
Valuation Allowance [Line Items] | ||
State tax loss carryforward | 12,200 | |
State deferred tax assets | $ 8,900 |
Net Income Per Common Share - S
Net Income Per Common Share - Summary of Reconciliation of Basic and Diluted Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Net income available to common stockholders | $ 220,683 | $ 205,531 | $ 148,600 |
Diluted net income per common share | $ 220,683 | $ 205,531 | $ 148,600 |
Weighted-Average Common Shares | |||
Net income available to common stockholders (in shares) | 57,692,018 | 53,783,632 | 54,058,471 |
Effect of potentially dilutive stock options and restricted stock awards (in shares) | 258,239 | 200,597 | 161,913 |
Diluted net income per common share (in shares) | 57,950,257 | 53,984,229 | 54,220,384 |
Per Share Amount | |||
Net income available to common stockholders (in dollars per share) | $ 3.83 | $ 3.82 | $ 2.75 |
Diluted net income per common share (in dollars per share) | $ 3.81 | $ 3.81 | $ 2.74 |
Net Income Per Common Share - N
Net Income Per Common Share - Narrative (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Stock options not included in the earnings per share calculation (in shares) | 0 | 0 | 0 |
Condensed Financial Informati_3
Condensed Financial Information (parent company only) - Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||||
Cash and due from banks | $ 122,594 | $ 167,146 | ||
Premises and equipment | 117,118 | 105,655 | ||
Interest receivable | 85,070 | 57,187 | ||
Goodwill | 712,002 | 545,385 | $ 543,918 | |
Cash surrender value of life insurance | 308,311 | 291,041 | ||
Other assets | 221,631 | 140,167 | ||
TOTAL ASSETS | 17,938,306 | 15,453,149 | ||
Liabilities [Abstract] | ||||
Subordinated debentures and other borrowings | 1,313,945 | 634,250 | ||
Interest payable | 7,530 | 2,762 | ||
Other liabilities | 199,316 | 170,989 | ||
Total Liabilities | 15,903,536 | 13,540,578 | ||
Stockholders' equity | 2,034,770 | 1,912,571 | $ 1,875,645 | $ 1,786,437 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 17,938,306 | 15,453,149 | ||
Parent | ||||
Assets | ||||
Cash and due from banks | 56,739 | 127,501 | ||
Investment in subsidiaries | 2,124,104 | 1,900,787 | ||
Premises and equipment | 119 | 274 | ||
Interest receivable | 6 | 2 | ||
Goodwill | 448 | 448 | ||
Cash surrender value of life insurance | 736 | 716 | ||
Other assets | 6,851 | 10,281 | ||
TOTAL ASSETS | 2,189,003 | 2,040,009 | ||
Liabilities [Abstract] | ||||
Subordinated debentures and other borrowings | 150,115 | 118,618 | ||
Interest payable | 979 | 864 | ||
Other liabilities | 3,139 | 7,956 | ||
Total Liabilities | 154,233 | 127,438 | ||
Stockholders' equity | 2,034,770 | 1,912,571 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,189,003 | $ 2,040,009 |
Condensed Financial Informati_4
Condensed Financial Information (parent company only) - Condensed Statements of Income and Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income | |||
Other income | $ 1,929 | $ 3,008 | $ 1,898 |
Expenses | |||
Interest expense | 84,803 | 35,952 | 66,381 |
Salaries and employee benefits | 206,893 | 166,995 | 155,937 |
Other expenses | 26,713 | 19,300 | 18,001 |
Income tax benefit | (33,585) | (35,259) | (21,375) |
NET INCOME | 222,089 | 205,531 | 148,600 |
Preferred stock dividends | 1,406 | 0 | 0 |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | 220,683 | 205,531 | 148,600 |
Other comprehensive income (loss) | (294,264) | (19,723) | 46,962 |
Comprehensive income (loss) | (72,175) | 185,808 | 195,562 |
Parent | |||
Income | |||
Dividends from subsidiaries | 90,500 | 161,825 | 70,100 |
Other income | (1,693) | (50) | (62) |
Total income | 88,807 | 161,775 | 70,038 |
Expenses | |||
Interest expense | 8,005 | 6,642 | 6,777 |
Salaries and employee benefits | 3,786 | 3,917 | 3,426 |
Net occupancy and equipment expenses | 46 | 825 | 745 |
Professional and other outside services | 2,187 | 1,264 | 949 |
Other expenses | 1,396 | 1,687 | 1,266 |
Total expenses | 15,420 | 14,335 | 13,163 |
Income before income tax benefit and equity in undistributed income of subsidiaries | 73,387 | 147,440 | 56,875 |
Income tax benefit | 3,645 | 2,929 | 2,260 |
Income before equity in undistributed income of subsidiaries | 77,032 | 150,369 | 59,135 |
Equity in undistributed income of subsidiaries | 145,057 | 55,162 | 89,465 |
NET INCOME | 222,089 | 205,531 | 148,600 |
Preferred stock dividends | 1,406 | 0 | 0 |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | 220,683 | 205,531 | 148,600 |
Other comprehensive income (loss) | (294,264) | (19,723) | 46,962 |
Comprehensive income (loss) | $ (72,175) | $ 185,808 | $ 195,562 |
Condensed Financial Informati_5
Condensed Financial Information (parent company only) - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flow From Operating Activities: | |||
Net income | $ 222,089 | $ 205,531 | $ 148,600 |
Adjustments to reconcile net income to net cash provided by operating activities | |||
Share-based compensation | 4,652 | 4,762 | 4,600 |
Net cash provided by operating activities | 268,045 | 207,382 | 203,831 |
Cash Flow From Investing Activities: | |||
Cash paid in acquisition | (79,324) | (3,225) | 0 |
Net cash used in investing activities | (446,441) | (1,469,446) | (1,552,025) |
Cash Flows from Financing Activities: | |||
Cash dividends on common stock | (72,748) | (61,230) | (56,542) |
Cash dividends on preferred stock | (1,406) | 0 | 0 |
Repayment of borrowings | (1,332,889) | (96,204) | (621,548) |
Stock issued under employee benefit plans | 706 | 605 | 639 |
Stock issued under dividend reinvestment and stock purchase plan | 2,056 | 1,880 | 1,726 |
Stock options exercised | 358 | 198 | 115 |
Repurchase of common stock | 0 | (25,444) | (55,912) |
Net cash provided by financing activities | 133,844 | 1,236,314 | 1,363,889 |
Net Change in Cash and Cash Equivalents | (44,552) | (25,750) | 15,695 |
Cash and Cash Equivalents, January 1 | 167,146 | 192,896 | 177,201 |
Cash and Cash Equivalents, December 31 | 122,594 | 167,146 | 192,896 |
Parent | |||
Cash Flow From Operating Activities: | |||
Net income | 222,089 | 205,531 | 148,600 |
Adjustments to reconcile net income to net cash provided by operating activities | |||
Share-based compensation | 1,659 | 1,563 | 1,502 |
Distributions in excess of (equity in undistributed) income of subsidiaries | (145,057) | (55,162) | (89,465) |
Other adjustments | (6,258) | (1,173) | 1,537 |
Investment in subsidiaries - operating activities | 333 | 885 | 235 |
Net cash provided by operating activities | 72,766 | 151,644 | 62,409 |
Cash Flow From Investing Activities: | |||
Cash paid in acquisition | (72,494) | 0 | 0 |
Net cash used in investing activities | (72,494) | 0 | 0 |
Cash Flows from Financing Activities: | |||
Cash dividends on common stock | (72,748) | (61,230) | (56,542) |
Cash dividends on preferred stock | (1,406) | 0 | 0 |
Repayment of borrowings | 0 | 0 | (20,310) |
Stock issued under employee benefit plans | 706 | 605 | 639 |
Stock issued under dividend reinvestment and stock purchase plan | 2,056 | 1,880 | 1,726 |
Stock options exercised | 358 | 198 | 115 |
Repurchase of common stock | 0 | (25,444) | (55,912) |
Net cash provided by financing activities | (71,034) | (83,991) | (130,284) |
Net Change in Cash and Cash Equivalents | (70,762) | 67,653 | (67,875) |
Cash and Cash Equivalents, January 1 | 127,501 | 59,848 | 127,723 |
Cash and Cash Equivalents, December 31 | $ 56,739 | $ 127,501 | $ 59,848 |