þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
||
|
For the quarterly period ended June 30, 2018
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
||
|
For the transition period from to
|
|
Wisconsin
|
|
39-1098068
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
433 Main Street
Green Bay, Wisconsin
|
|
54301
|
(Address of principal executive offices)
|
|
(Zip Code)
|
ASSOCIATED BANC-CORP
|
|
Table of Contents
|
|
|
Page
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
(Unaudited)
|
|
(Audited)
|
||||
|
(In Thousands, except share and per share data)
|
||||||
Assets
|
|
|
|
||||
Cash and due from banks
|
$
|
396,761
|
|
|
$
|
483,666
|
|
Interest-bearing deposits in other financial institutions
|
71,462
|
|
|
199,702
|
|
||
Federal funds sold and securities purchased under agreements to resell
|
3,150
|
|
|
32,650
|
|
||
Investment securities held to maturity, at amortized cost
|
2,602,247
|
|
|
2,282,853
|
|
||
Investment securities available for sale, at fair value
|
4,261,651
|
|
|
4,043,446
|
|
||
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost
|
249,040
|
|
|
165,331
|
|
||
Residential loans held for sale
|
143,022
|
|
|
85,544
|
|
||
Loans
|
22,976,786
|
|
|
20,784,991
|
|
||
Allowance for loan losses
|
(252,601
|
)
|
|
(265,880
|
)
|
||
Loans, net
|
22,724,184
|
|
|
20,519,111
|
|
||
Bank and corporate owned life insurance
|
659,592
|
|
|
591,057
|
|
||
Tax credit and other investments
|
137,051
|
|
|
147,099
|
|
||
Trading assets
|
132,919
|
|
|
69,675
|
|
||
Premises and equipment, net
|
361,385
|
|
|
330,963
|
|
||
Goodwill
|
1,166,665
|
|
|
976,239
|
|
||
Mortgage servicing rights, net
|
66,980
|
|
|
58,384
|
|
||
Other intangible assets, net
|
80,346
|
|
|
15,580
|
|
||
Other assets
|
596,190
|
|
|
482,294
|
|
||
Total assets
|
$
|
33,652,647
|
|
|
$
|
30,483,594
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Noninterest-bearing demand deposits
|
$
|
5,341,361
|
|
|
$
|
5,478,416
|
|
Interest-bearing deposits
|
18,474,953
|
|
|
17,307,546
|
|
||
Total deposits
|
23,816,314
|
|
|
22,785,962
|
|
||
Federal funds purchased and securities sold under agreements to repurchase
|
203,733
|
|
|
324,815
|
|
||
Commercial paper
|
52,791
|
|
|
67,467
|
|
||
FHLB advances
|
4,797,857
|
|
|
3,184,168
|
|
||
Other long-term funding
|
497,619
|
|
|
497,282
|
|
||
Trading liabilities
|
131,612
|
|
|
67,660
|
|
||
Accrued expenses and other liabilities
|
382,476
|
|
|
318,797
|
|
||
Total liabilities
|
29,882,403
|
|
|
27,246,151
|
|
||
Stockholders’ Equity
|
|
|
|
||||
Preferred equity
|
159,401
|
|
|
159,929
|
|
||
Common equity
|
|
|
|
||||
Common stock
|
1,751
|
|
|
1,618
|
|
||
Surplus
|
1,828,965
|
|
|
1,454,188
|
|
||
Retained earnings
|
1,920,579
|
|
|
1,819,230
|
|
||
Accumulated other comprehensive income (loss)
|
(119,888
|
)
|
|
(62,758
|
)
|
||
Treasury stock, at cost
|
(20,564
|
)
|
|
(134,764
|
)
|
||
Total common equity
|
3,610,843
|
|
|
3,077,514
|
|
||
Total stockholders’ equity
|
3,770,244
|
|
|
3,237,443
|
|
||
Total liabilities and stockholders’ equity
|
$
|
33,652,647
|
|
|
$
|
30,483,594
|
|
Preferred shares issued
|
164,570
|
|
|
165,000
|
|
||
Preferred shares authorized (par value $1.00 per share)
|
750,000
|
|
|
750,000
|
|
||
Common shares issued
|
175,133,157
|
|
|
161,751,975
|
|
||
Common shares authorized (par value $0.01 per share)
|
250,000,000
|
|
|
250,000,000
|
|
||
Treasury shares of common stock
|
1,606,672
|
|
|
8,908,448
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In Thousands, except per share data)
|
||||||||||||||
Interest Income
|
|
||||||||||||||
Interest and fees on loans
|
$
|
246,646
|
|
|
$
|
184,246
|
|
|
$
|
466,680
|
|
|
$
|
357,895
|
|
Interest and dividends on investment securities:
|
|
|
|
|
|
|
|
||||||||
Taxable
|
30,623
|
|
|
23,658
|
|
|
60,727
|
|
|
47,133
|
|
||||
Tax-exempt
|
10,783
|
|
|
8,143
|
|
|
20,000
|
|
|
16,272
|
|
||||
Other interest
|
3,153
|
|
|
1,553
|
|
|
5,330
|
|
|
3,089
|
|
||||
Total interest income
|
291,205
|
|
|
217,600
|
|
|
552,737
|
|
|
424,389
|
|
||||
Interest Expense
|
|
|
|
|
|
|
|
||||||||
Interest on deposits
|
38,431
|
|
|
21,180
|
|
|
71,843
|
|
|
38,104
|
|
||||
Interest on Federal funds purchased and securities sold under agreements to repurchase
|
538
|
|
|
824
|
|
|
1,060
|
|
|
1,339
|
|
||||
Interest on other short-term funding
|
51
|
|
|
84
|
|
|
111
|
|
|
169
|
|
||||
Interest on FHLB advances
|
21,279
|
|
|
7,149
|
|
|
34,402
|
|
|
11,596
|
|
||||
Interest on long-term funding
|
4,544
|
|
|
4,544
|
|
|
9,088
|
|
|
9,088
|
|
||||
Total interest expense
|
64,843
|
|
|
33,781
|
|
|
116,504
|
|
|
60,296
|
|
||||
Net Interest Income
|
226,362
|
|
|
183,819
|
|
|
436,233
|
|
|
364,093
|
|
||||
Provision for credit losses
|
4,000
|
|
|
12,000
|
|
|
4,000
|
|
|
21,000
|
|
||||
Net interest income after provision for credit losses
|
222,362
|
|
|
171,819
|
|
|
432,233
|
|
|
343,093
|
|
||||
Noninterest Income
|
|
|
|
|
|
|
|
||||||||
Insurance commissions and fees
|
23,996
|
|
|
20,853
|
|
|
46,644
|
|
|
42,473
|
|
||||
Service charges on deposit account fees
|
16,390
|
|
|
16,030
|
|
|
32,810
|
|
|
32,386
|
|
||||
Card-based and loan fees
|
14,387
|
|
|
13,764
|
|
|
27,809
|
|
|
26,229
|
|
||||
Trust and asset management fees
|
13,437
|
|
|
12,346
|
|
|
26,806
|
|
|
24,281
|
|
||||
Brokerage commission and fees
|
6,896
|
|
|
4,346
|
|
|
14,169
|
|
|
8,679
|
|
||||
Mortgage banking, net
|
6,258
|
|
|
5,027
|
|
|
12,628
|
|
|
9,606
|
|
||||
Capital markets, net
|
4,783
|
|
|
4,042
|
|
|
10,089
|
|
|
7,925
|
|
||||
Bank and corporate owned life insurance
|
3,978
|
|
|
3,899
|
|
|
7,165
|
|
|
6,514
|
|
||||
Asset gains (losses), net
|
2,497
|
|
|
(466
|
)
|
|
2,390
|
|
|
(700
|
)
|
||||
Investment securities gains (losses), net
|
(2,015
|
)
|
|
356
|
|
|
(2,015
|
)
|
|
356
|
|
||||
Other
|
2,235
|
|
|
2,213
|
|
|
4,727
|
|
|
4,492
|
|
||||
Total noninterest income
|
92,842
|
|
|
82,410
|
|
|
183,222
|
|
|
162,241
|
|
||||
Noninterest Expense
|
|
|
|
|
|
|
|
||||||||
Personnel
|
123,980
|
|
|
107,066
|
|
|
241,665
|
|
|
213,848
|
|
||||
Occupancy
|
15,071
|
|
|
12,832
|
|
|
30,428
|
|
|
28,051
|
|
||||
Technology
|
19,452
|
|
|
15,473
|
|
|
37,167
|
|
|
29,893
|
|
||||
Equipment
|
5,953
|
|
|
5,234
|
|
|
11,509
|
|
|
10,719
|
|
||||
Business development and advertising
|
7,067
|
|
|
7,152
|
|
|
13,760
|
|
|
12,987
|
|
||||
Legal and professional
|
6,284
|
|
|
5,711
|
|
|
11,697
|
|
|
9,877
|
|
||||
Card issuance and loan costs
|
3,173
|
|
|
2,974
|
|
|
6,477
|
|
|
5,594
|
|
||||
Foreclosure / OREO expense, net
|
1,021
|
|
|
1,182
|
|
|
1,744
|
|
|
2,687
|
|
||||
FDIC assessment
|
8,250
|
|
|
8,000
|
|
|
16,500
|
|
|
16,000
|
|
||||
Other intangible amortization
|
2,168
|
|
|
496
|
|
|
3,693
|
|
|
1,009
|
|
||||
Acquisition related costs(a)
|
7,107
|
|
|
—
|
|
|
27,712
|
|
|
—
|
|
||||
Other
|
11,732
|
|
|
10,196
|
|
|
21,873
|
|
|
19,342
|
|
||||
Total noninterest expense
|
211,258
|
|
|
176,316
|
|
|
424,223
|
|
|
350,007
|
|
||||
Income before income taxes
|
103,947
|
|
|
77,913
|
|
|
191,232
|
|
|
155,327
|
|
||||
Income tax expense
|
14,754
|
|
|
19,930
|
|
|
32,583
|
|
|
41,074
|
|
||||
Net Income
|
89,192
|
|
|
57,983
|
|
|
158,648
|
|
|
114,253
|
|
||||
Preferred stock dividends
|
2,329
|
|
|
2,339
|
|
|
4,668
|
|
|
4,669
|
|
||||
Net income available to common equity
|
$
|
86,863
|
|
|
$
|
55,644
|
|
|
$
|
153,980
|
|
|
$
|
109,584
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.51
|
|
|
$
|
0.36
|
|
|
$
|
0.92
|
|
|
$
|
0.72
|
|
Diluted
|
$
|
0.50
|
|
|
$
|
0.36
|
|
|
$
|
0.90
|
|
|
$
|
0.71
|
|
Average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
170,633
|
|
|
151,573
|
|
|
167,096
|
|
|
151,196
|
|
||||
Diluted
|
173,409
|
|
|
154,302
|
|
|
169,920
|
|
|
154,147
|
|
(a)
|
Includes Bank Mutual acquisition-related costs only.
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||
|
($ in Thousands)
|
|||||||||||
Net income
|
$
|
89,192
|
|
$
|
57,983
|
|
$
|
158,648
|
|
$
|
114,253
|
|
Other comprehensive income, net of tax
|
|
|
|
|
||||||||
Investment securities available for sale
|
|
|
|
|
||||||||
Net unrealized gains (losses)
|
(18,919
|
)
|
15,218
|
|
(60,754
|
)
|
18,370
|
|
||||
Net unrealized gain (loss) on available for sale securities transferred to held to maturity securities
|
—
|
|
(9,474
|
)
|
—
|
|
(14,738
|
)
|
||||
Amortization of net unrealized gain (loss) on available for sale securities transferred to held to maturity securities
|
(335
|
)
|
(1,548
|
)
|
(632
|
)
|
(2,575
|
)
|
||||
Reclassification adjustment for net losses (gains) realized in net income(1)
|
2,015
|
|
—
|
|
2,015
|
|
—
|
|
||||
Reclassification from OCI due to change in accounting principle
|
—
|
|
—
|
|
(84
|
)
|
—
|
|
||||
Reclassification of certain tax effects from OCI
|
—
|
|
—
|
|
(8,419
|
)
|
—
|
|
||||
Income tax (expense) benefit
|
4,705
|
|
(1,601
|
)
|
15,340
|
|
(406
|
)
|
||||
Other comprehensive income (loss) on investment securities available for sale
|
(12,533
|
)
|
2,595
|
|
(52,533
|
)
|
651
|
|
||||
Defined benefit pension and postretirement obligations
|
|
|
|
|
||||||||
Amortization of prior service cost
|
(38
|
)
|
(37
|
)
|
(76
|
)
|
(75
|
)
|
||||
Amortization of actuarial loss (gains)
|
465
|
|
487
|
|
929
|
|
975
|
|
||||
Reclassification of certain tax effects from OCI
|
—
|
|
—
|
|
(5,235
|
)
|
—
|
|
||||
Income tax (expense) benefit
|
(109
|
)
|
(171
|
)
|
(216
|
)
|
(342
|
)
|
||||
Other comprehensive income (loss) on pension and postretirement obligations
|
318
|
|
279
|
|
(4,597
|
)
|
558
|
|
||||
Total other comprehensive income (loss)
|
(12,215
|
)
|
2,874
|
|
(57,130
|
)
|
1,209
|
|
||||
Comprehensive income
|
$
|
76,977
|
|
$
|
60,857
|
|
$
|
101,518
|
|
$
|
115,462
|
|
|
Preferred Equity
|
Common Stock
|
Surplus
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Treasury Stock
|
Total
|
||||||||||||||
|
(In Thousands, except per share data)
|
||||||||||||||||||||
Balance, December 31, 2016
|
$
|
159,929
|
|
$
|
1,630
|
|
$
|
1,459,498
|
|
$
|
1,695,764
|
|
$
|
(54,679
|
)
|
$
|
(170,830
|
)
|
$
|
3,091,312
|
|
Comprehensive income
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
—
|
|
—
|
|
—
|
|
114,253
|
|
—
|
|
—
|
|
114,253
|
|
|||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
1,209
|
|
—
|
|
1,209
|
|
|||||||
Comprehensive income
|
|
|
|
|
|
|
115,462
|
|
|||||||||||||
Common stock issued
|
|
|
|
|
|
|
|
||||||||||||||
Stock-based compensation plans, net
|
—
|
|
—
|
|
1,102
|
|
(20,912
|
)
|
—
|
|
40,755
|
|
20,945
|
|
|||||||
Purchase of treasury stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(8,445
|
)
|
(8,445
|
)
|
|||||||
Cash dividends
|
|
|
|
|
|
|
|
||||||||||||||
Common stock, $0.24 per share
|
—
|
|
—
|
|
—
|
|
(36,804
|
)
|
—
|
|
—
|
|
(36,804
|
)
|
|||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(4,669
|
)
|
—
|
|
—
|
|
(4,669
|
)
|
|||||||
Stock-based compensation expense, net
|
—
|
|
—
|
|
12,667
|
|
—
|
|
—
|
|
—
|
|
12,667
|
|
|||||||
Other
|
—
|
|
—
|
|
1,034
|
|
—
|
|
—
|
|
—
|
|
1,034
|
|
|||||||
Balance, June 30, 2017
|
$
|
159,929
|
|
$
|
1,630
|
|
$
|
1,474,301
|
|
$
|
1,747,632
|
|
$
|
(53,470
|
)
|
$
|
(138,520
|
)
|
$
|
3,191,502
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, December 31, 2017
|
$
|
159,929
|
|
$
|
1,618
|
|
$
|
1,454,188
|
|
$
|
1,819,230
|
|
$
|
(62,758
|
)
|
$
|
(134,764
|
)
|
$
|
3,237,443
|
|
Comprehensive income
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
—
|
|
—
|
|
—
|
|
158,648
|
|
—
|
|
—
|
|
158,648
|
|
|||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
(43,392
|
)
|
—
|
|
(43,392
|
)
|
|||||||
Adoption of new accounting standards
|
—
|
|
—
|
|
—
|
|
—
|
|
(13,738
|
)
|
—
|
|
(13,738
|
)
|
|||||||
Comprehensive income
|
|
|
|
|
|
|
101,518
|
|
|||||||||||||
Common stock issued
|
|
|
|
|
|
|
|
||||||||||||||
Stock-based compensation plans, net
|
—
|
|
—
|
|
2,702
|
|
(15,176
|
)
|
—
|
|
28,621
|
|
16,147
|
|
|||||||
Acquisitions
|
—
|
|
137
|
|
396,975
|
|
—
|
|
—
|
|
91,296
|
|
488,408
|
|
|||||||
Purchase of common stock returned to authorized but unissued
|
|
|
(14
|
)
|
(33,061
|
)
|
—
|
|
—
|
|
—
|
|
(33,075
|
)
|
|||||||
Purchase of treasury stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5,717
|
)
|
(5,717
|
)
|
|||||||
Cash dividends
|
|
|
|
|
|
|
|
||||||||||||||
Common stock, $0.30 per share
|
—
|
|
—
|
|
—
|
|
(51,817
|
)
|
—
|
|
—
|
|
(51,817
|
)
|
|||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(4,668
|
)
|
—
|
|
—
|
|
(4,668
|
)
|
|||||||
Redemption of preferred stock
|
(528
|
)
|
—
|
|
—
|
|
(118
|
)
|
—
|
|
—
|
|
(646
|
)
|
|||||||
Common stock warrants exercised
|
—
|
|
10
|
|
(10
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Stock-based compensation expense, net
|
—
|
|
—
|
|
8,172
|
|
—
|
|
—
|
|
—
|
|
8,172
|
|
|||||||
Tax Act reclassification
|
—
|
|
—
|
|
—
|
|
13,654
|
|
|
|
—
|
|
13,654
|
|
|||||||
Change in accounting principle
|
—
|
|
—
|
|
—
|
|
84
|
|
|
|
—
|
|
84
|
|
|||||||
Other
|
—
|
|
—
|
|
—
|
|
742
|
|
—
|
|
—
|
|
742
|
|
|||||||
Balance, June 30, 2018
|
$
|
159,401
|
|
$
|
1,751
|
|
$
|
1,828,965
|
|
$
|
1,920,579
|
|
$
|
(119,888
|
)
|
$
|
(20,564
|
)
|
$
|
3,770,244
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
($ in Thousands)
|
||||||
Cash Flow From Operating Activities
|
|
|
|
||||
Net income
|
$
|
158,648
|
|
|
$
|
114,253
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
||||
Provision for credit losses
|
4,000
|
|
|
21,000
|
|
||
Depreciation and amortization
|
24,249
|
|
|
23,241
|
|
||
Addition to (recovery of) valuation allowance on mortgage servicing rights, net
|
(607
|
)
|
|
275
|
|
||
Amortization of mortgage servicing rights
|
4,649
|
|
|
5,084
|
|
||
Amortization of other intangible assets
|
3,693
|
|
|
1,009
|
|
||
Amortization and accretion on earning assets, funding, and other, net
|
423
|
|
|
17,889
|
|
||
Net amortization of tax credit investments
|
9,770
|
|
|
5,165
|
|
||
Gain on sales of investment securities, net
|
2,015
|
|
|
(356
|
)
|
||
Asset (gains) losses, net
|
(2,390
|
)
|
|
700
|
|
||
(Gain) loss on mortgage banking activities, net
|
261
|
|
|
4,287
|
|
||
Mortgage loans originated and acquired for sale
|
(516,285
|
)
|
|
(220,284
|
)
|
||
Proceeds from sales of mortgage loans held for sale
|
482,080
|
|
|
364,128
|
|
||
Pension Contribution
|
(31,371
|
)
|
|
—
|
|
||
(Increase) decrease in interest receivable
|
(14,569
|
)
|
|
(757
|
)
|
||
Increase (decrease) in interest payable
|
3,775
|
|
|
2,653
|
|
||
Net change in other assets and other liabilities
|
(11,807
|
)
|
|
(18,849
|
)
|
||
Net cash provided by operating activities
|
116,534
|
|
|
319,438
|
|
||
Cash Flow From Investing Activities
|
|
|
|
||||
Net increase in loans
|
(338,781
|
)
|
|
(819,198
|
)
|
||
Purchases of
|
|
|
|
||||
Available for sale securities
|
(655,949
|
)
|
|
(417,397
|
)
|
||
Held to maturity securities
|
(429,964
|
)
|
|
(70,969
|
)
|
||
Federal Home Loan Bank and Federal Reserve Bank stocks
|
(238,190
|
)
|
|
(166,869
|
)
|
||
Premises, equipment, and software, net of disposals
|
(23,932
|
)
|
|
(19,289
|
)
|
||
Proceeds from
|
|
|
|
||||
Sales of available for sale securities
|
493,060
|
|
|
—
|
|
||
Sales of held to maturity securities
|
—
|
|
|
16,059
|
|
||
Sale of Federal Home Loan Bank and Federal Reserve Bank stocks
|
174,506
|
|
|
125,690
|
|
||
Prepayments, calls, and maturities of available for sale investment securities
|
330,517
|
|
|
389,251
|
|
||
Prepayments, calls, and maturities of held to maturity investment securities
|
121,612
|
|
|
80,976
|
|
||
Sales, prepayments, calls, and maturities of other assets
|
9,640
|
|
|
5,840
|
|
||
Net change in tax credit investments
|
(18,842
|
)
|
|
(30,833
|
)
|
||
Net cash (paid) received in acquisition
|
59,472
|
|
|
(217
|
)
|
||
Net cash used in investing activities
|
(516,851
|
)
|
|
(906,956
|
)
|
||
Cash Flow From Financing Activities
|
|
|
|
||||
Net increase (decrease) in deposits
|
(810,598
|
)
|
|
(270,268
|
)
|
||
Net increase (decrease) in short-term funding
|
(481,920
|
)
|
|
95,447
|
|
||
Net increase (decrease) in FHLB advances
|
1,527,966
|
|
|
714,988
|
|
||
Proceeds from issuance of common stock for stock-based compensation plans
|
16,147
|
|
|
20,945
|
|
||
Redemption of preferred shares
|
(646
|
)
|
|
—
|
|
||
Purchase of common stock returned to authorized but unissued
|
(33,075
|
)
|
|
—
|
|
||
Purchase of treasury stock for tax withholding
|
(5,717
|
)
|
|
(8,445
|
)
|
||
Cash dividends on common stock
|
(51,817
|
)
|
|
(36,804
|
)
|
||
Cash dividends on preferred stock
|
(4,668
|
)
|
|
(4,669
|
)
|
||
Net cash provided by financing activities
|
155,672
|
|
|
511,194
|
|
||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
(244,645
|
)
|
|
(76,324
|
)
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
716,018
|
|
|
642,233
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
471,373
|
|
|
$
|
565,909
|
|
Supplemental disclosures of cash flow information
|
|
|
|
||||
Cash paid for interest
|
$
|
112,392
|
|
|
$
|
57,306
|
|
Cash paid for income taxes
|
12,674
|
|
|
27,461
|
|
||
Loans and bank premises transferred to other real estate owned
|
21,299
|
|
|
3,267
|
|
||
Capitalized mortgage servicing rights
|
4,502
|
|
|
3,278
|
|
||
Loans transferred into held for sale from portfolio, net
|
12,709
|
|
|
66,181
|
|
||
Unsettled trades to purchase securities
|
15,339
|
|
|
—
|
|
||
Acquisition
|
|
|
|
||||
Fair value of assets acquired, including cash and cash equivalents
|
2,569,700
|
|
|
—
|
|
||
Fair value ascribed to goodwill and intangible assets
|
258,885
|
|
|
217
|
|
||
Fair value of liabilities assumed
|
2,828,448
|
|
|
—
|
|
||
Common stock issued in acquisition
|
137
|
|
|
—
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
($ in Thousands)
|
||||||
Cash and cash equivalents
|
$
|
385,957
|
|
|
$
|
466,996
|
|
Restricted cash
|
85,416
|
|
|
98,913
|
|
||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows
|
$
|
471,373
|
|
|
$
|
565,909
|
|
|
Purchase Accounting Adjustments
|
February 1, 2018
|
||||
|
($ in Thousands)
|
|||||
Assets
|
|
|
||||
Cash and cash equivalents
|
$
|
—
|
|
$
|
78,052
|
|
Investment securities
|
(6,238
|
)
|
452,867
|
|
||
Federal Home Loan Bank stock, at cost
|
—
|
|
20,026
|
|
||
Loans
|
(48,043
|
)
|
1,875,877
|
|
||
Premises and equipment, net
|
5,180
|
|
44,939
|
|
||
Bank owned life insurance
|
(24
|
)
|
65,390
|
|
||
Goodwill
|
|
|
173,243
|
|
||
Core deposit intangibles (included in other intangible assets, net on the face of the Consolidated Balance Sheet)
|
58,100
|
|
58,100
|
|
||
Other real estate owned (included in other assets on the face of the Consolidated Balance Sheet)
|
989
|
|
5,638
|
|
||
Others assets
|
$
|
6,153
|
|
$
|
46,257
|
|
Total assets
|
|
|
$
|
2,820,389
|
|
|
Liabilities
|
|
|
||||
Deposits
|
$
|
2,498
|
|
$
|
1,840,950
|
|
Other borrowings
|
1,875
|
|
431,886
|
|
||
Other liabilities
|
$
|
4,370
|
|
$
|
65,864
|
|
Total liabilities
|
|
|
$
|
2,338,701
|
|
|
|
|
|
||||
Total consideration paid
|
|
|
$
|
481,688
|
|
Standard
|
|
Description
|
|
Date of adoption
|
|
Effect on financial statements
|
ASU 2018-02 Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
|
|
The FASB issued an amendment to allow a reclassification from accumulated other comprehensive income to retained earnings for the stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of the update is permitted and should be applied in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate related to the Tax Cut and Jobs Act of 2017 is recognized.
|
|
1st Quarter 2018
|
|
The Corporation has elected to early adopt this amendment. During the quarter, the Corporation reclassified approximately $14 million from accumulated other comprehensive income to retained earnings as a result of the Tax Cuts and Jobs Act. No material impact on results of operations, financial position, or liquidity. See Consolidated Statements of Comprehensive Income and the Statement of Changes in Stockholders' Equity.
|
ASU 2017-12 Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities
|
|
The FASB issued an amendment to better align a company’s financial reporting for hedging activities with the economic objectives of those activities for both financial (e.g., interest rate) and commodity risks. The provisions create more transparency around how economic results are presented, both on the face of the financial statements and in the footnotes. It also contains targeted improvements to simplify the application of hedge accounting guidance. This amendment is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Entities should apply the amendment on a modified retrospective transition method in which the cumulative effect of the change will be recognized within equity in the consolidated balance sheet as of the date of adoption. Early adoption is permitted, including in an interim period. If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period.
|
|
1st Quarter 2018
|
|
The Corporation has elected to early adopt this amendment. No material impact on results of operations, financial position, or liquidity. See Note 10 for expanded disclosures.
|
ASU 2017-07 Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
|
|
The FASB issued an amendment to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost, including a requirement that employers disaggregate the service cost component from the other components of net benefit cost. In addition, the amendments provide explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allow only the service cost component of net benefit cost to be eligible for capitalization. This amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Entities should apply the amendment retrospectively to each period presented and prospectively only for the capitalization component. Early adoption is permitted, but should be within the first interim period if interim financial statements are issued.
|
|
1st Quarter 2018
|
|
No impact on results of operations, financial position, or liquidity. The Update required retrospective restatement. For the full year 2017, the Corporation reclassified approximately $9 million from personnel expense to other noninterest expense for the non-service cost components of net periodic pension cost and net periodic postretirement benefit cost. See Note 14 for expanded disclosure.
|
ASU 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business
|
|
The FASB issued amendments to clarify the definition of a business in order to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets versus businesses. The new standard narrows the definition of a business by adding three principal clarifications if: (1) substantially all the fair value of the gross assets in the asset group is concentrated in either a single identifiable asset or group of similar identifiable assets the transaction does not involve a business, (2) the asset group does not include a minimum of an input and a substantive process, it does not represent a business, and (3) the integrated set of activities (including its inputs and processes) does not create, or have the ability to create, goods or services to customers, investment income (e,g. dividends or interest) or other revenues, then it is not a business. The overall intention is to provide consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable.
|
|
1st Quarter 2018
|
|
No material impact on results of operations, financial position, or liquidity.
|
ASU 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash
|
|
The FASB issued an amendment to improve GAAP by providing guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flows, in order to reduce diversity in practice. The amendment requires that a statement of cash flow explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included in cash and cash equivalents when reconciling the beginning and end of period total amounts shown on the statement of cash flow. This amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Entities should apply the amendment retrospectively to each period presented. Early adoption is permitted, including in an interim period.
|
|
1st Quarter 2018
|
|
No impact on results of operations, financial position, or liquidity. See Consolidated Statements of Cash Flows.
|
Standard
|
|
Description
|
|
Date of adoption
|
|
Effect on financial statements
|
ASU 2016-16 Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory
|
|
The FASB issued an amendment requiring an entity to recognize income tax consequences on an intra-entity transfer of an asset other than inventory at the time the transaction occurs. This amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Entities should apply the amendment by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Early adoption is permitted for all entities in the first interim period if an entity issues interim financial statements.
|
|
1st Quarter 2018
|
|
No material impact on results of operations, financial position, or liquidity.
|
ASU 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments
|
|
The FASB issued an amendment to provide clarification on where to classify cash flows involving certain cash receipts and cash payments. Under the new guidance, cash payments for debt prepayment or debt extinguishment costs should be classified as cash outflows from financing activities. The new guidance also details the specific classification of contingent consideration cash payments made after a business combination depending on the timing of payments. Lastly, cash proceeds received from corporate owned life insurance policies (including bank owned life insurance) should be classified as cash inflows from investing, while the cash payments for the premiums may be classified as cash outflows from investing, operating, or a combination of both. This amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Entities should apply the amendment retrospectively to each period presented. Early adoption is permitted, including in an interim period; however, all of the amendments must be adopted in the same period.
|
|
1st Quarter 2018
|
|
No material impact on results of operations, financial position, or liquidity.
|
ASU 2016-01 Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities
|
|
The FASB issued an amendment to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This amendment supersedes the guidance to classify equity securities with readily determinable fair values into different categories, requires equity securities to be measured at fair value with changes in the fair value recognized through net income, and simplifies the impairment assessment of equity investments without readily determinable fair values. The amendment requires public business entities that are required to disclose the fair value of financial instruments measured at amortized cost on the balance sheet to measure that fair value using the exit price notion. The amendment requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option. The amendment requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. The amendment reduces diversity in current practice by clarifying that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the entity’s other deferred tax assets. This amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Entities are required to apply the amendment by means of a cumulative-effect adjustment as of the beginning of the fiscal year of adoption, with the exception of the amendment related to equity securities without readily determinable fair values, which should be applied prospectively to equity investments that exist as of the date of adoption.
|
|
1st Quarter 2018
|
|
The Corporation has adopted this amendment and is using the cumulative-effect adjustment as of the beginning of the fiscal year of adoption. No material impact on the result of operations, financial position or liquidity. In 2008, the Corporation received Visa Class B restricted shares as part of Visa’s initial public offering. Based on the existing transfer restriction and the uncertainty of the covered litigation, the approximately 119 thousand Class B shares remaining that the Corporation owned as of June 30, 2018 are carried at a zero cost basis. See Consolidated Statements of Comprehensive Income and Note 13 Fair Value Measurements.
|
ASU 2014-09 Revenue from Contracts with Customers (Topic 606)
|
|
The FASB issued an amendment to clarify the principles for recognizing revenue and to develop a common revenue standard. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” In applying the revenue model to contracts within its scope, an entity should apply the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The standard applies to all contracts with customers except those that are within the scope of other topics in the FASB Codification. The standard also requires significantly expanded disclosures about revenue recognition. The FASB continues to release new accounting guidance related to the adoption of this standard, which could impact the Corporation's preliminary materiality analysis and may change the conclusions reached as to the application of this new guidance. The amendment was originally to be effective for annual reporting periods beginning after December 15, 2016 (including interim reporting periods within those periods); however, in July 2015, the FASB approved a one year deferral of the effective date to December 31, 2017.
|
|
1st Quarter 2018
|
|
The Corporation chose to adopt this amendment using the modified retrospective approach with no material impact on the Corporation's results of operations, financial position, or liquidity. See Note 17 for expanded disclosure requirements.
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In Thousands, except per share data)
|
||||||||||||||
Net income
|
$
|
89,192
|
|
|
$
|
57,983
|
|
|
$
|
158,648
|
|
|
$
|
114,253
|
|
Preferred stock dividends
|
(2,329
|
)
|
|
(2,339
|
)
|
|
(4,668
|
)
|
|
(4,669
|
)
|
||||
Net income available to common equity
|
$
|
86,863
|
|
|
$
|
55,644
|
|
|
$
|
153,980
|
|
|
$
|
109,584
|
|
Common shareholder dividends
|
(25,977
|
)
|
|
(18,326
|
)
|
|
(51,549
|
)
|
|
(36,577
|
)
|
||||
Unvested share-based payment awards
|
(130
|
)
|
|
(110
|
)
|
|
(269
|
)
|
|
(227
|
)
|
||||
Undistributed earnings
|
$
|
60,756
|
|
|
$
|
37,208
|
|
|
$
|
102,162
|
|
|
$
|
72,780
|
|
Undistributed earnings allocated to common shareholders
|
60,446
|
|
|
36,980
|
|
|
101,677
|
|
|
72,273
|
|
||||
Undistributed earnings allocated to unvested share-based payment awards
|
310
|
|
|
228
|
|
|
485
|
|
|
507
|
|
||||
Undistributed earnings
|
$
|
60,756
|
|
|
$
|
37,208
|
|
|
$
|
102,162
|
|
|
$
|
72,780
|
|
Basic
|
|
|
|
|
|
|
|
||||||||
Distributed earnings to common shareholders
|
$
|
25,977
|
|
|
$
|
18,326
|
|
|
$
|
51,549
|
|
|
$
|
36,577
|
|
Undistributed earnings allocated to common shareholders
|
60,446
|
|
|
36,980
|
|
|
101,677
|
|
|
72,273
|
|
||||
Total common shareholders earnings, basic
|
$
|
86,423
|
|
|
$
|
55,306
|
|
|
$
|
153,226
|
|
|
$
|
108,850
|
|
Diluted
|
|
|
|
|
|
|
|
||||||||
Distributed earnings to common shareholders
|
$
|
25,977
|
|
|
$
|
18,326
|
|
|
$
|
51,549
|
|
|
$
|
36,577
|
|
Undistributed earnings allocated to common shareholders
|
60,446
|
|
|
36,980
|
|
|
101,677
|
|
|
72,273
|
|
||||
Total common shareholders earnings, diluted
|
$
|
86,423
|
|
|
$
|
55,306
|
|
|
$
|
153,226
|
|
|
$
|
108,850
|
|
Weighted average common shares outstanding
|
170,633
|
|
|
151,573
|
|
|
167,096
|
|
|
151,196
|
|
||||
Effect of dilutive common stock awards
|
2,146
|
|
|
1,958
|
|
|
2,080
|
|
|
2,155
|
|
||||
Effect of dilutive common stock warrants
|
630
|
|
|
771
|
|
|
744
|
|
|
796
|
|
||||
Diluted weighted average common shares outstanding
|
173,409
|
|
|
154,302
|
|
|
169,920
|
|
|
154,147
|
|
||||
Basic earnings per common share
|
$
|
0.51
|
|
|
$
|
0.36
|
|
|
$
|
0.92
|
|
|
$
|
0.72
|
|
Diluted earnings per common share
|
$
|
0.50
|
|
|
$
|
0.36
|
|
|
$
|
0.90
|
|
|
$
|
0.71
|
|
|
2018
|
|
2017
|
||
Dividend yield
|
2.50
|
%
|
|
2.00
|
%
|
Risk-free interest rate
|
2.60
|
%
|
|
2.00
|
%
|
Weighted average expected volatility
|
22.00
|
%
|
|
25.00
|
%
|
Weighted average expected life
|
5.75 years
|
|
|
5.5 years
|
|
Weighted average per share fair value of options
|
$4.47
|
|
$5.30
|
Stock Options
|
Shares
|
Weighted Average
Exercise Price
|
Weighted Average Remaining Contractual Term
|
Aggregate Intrinsic Value(a)
|
|||||
Outstanding at December 31, 2017
|
5,118,687
|
|
$
|
18.02
|
|
6.48
|
$
|
38,028
|
|
Granted
|
938,740
|
|
24.50
|
|
|
|
|||
Assumed from Bank Mutual acquisition
|
370,051
|
|
14.35
|
|
|
|
|||
Exercised
|
(888,661
|
)
|
16.69
|
|
|
|
|||
Forfeited or expired
|
(38,613
|
)
|
24.21
|
|
|
|
|||
Outstanding at June 30, 2018
|
5,500,204
|
|
$
|
19.05
|
|
6.69
|
$
|
45,418
|
|
Options Exercisable at June 30, 2018
|
3,287,488
|
|
$
|
16.80
|
|
5.39
|
$
|
34,551
|
|
(a)
|
$ in Thousands
|
Restricted Stock
|
Shares
|
|
Weighted Average
Grant Date Fair Value
|
|||
Outstanding at December 31, 2017
|
2,026,071
|
|
|
$
|
19.68
|
|
Granted
|
573,877
|
|
|
24.65
|
|
|
Vested
|
(537,881
|
)
|
|
18.21
|
|
|
Forfeited
|
(30,480
|
)
|
|
22.16
|
|
|
Outstanding at June 30, 2018
|
2,031,587
|
|
|
$
|
21.87
|
|
June 30, 2018
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|||||||||
|
($ in Thousands)
|
|||||||||||||||
Investment securities available for sale
|
|
|
|
|
|
|
|
|||||||||
U. S. Treasury securities
|
$
|
1,001
|
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
996
|
|
|
Residential mortgage-related securities
|
|
|
|
|
|
|
|
|||||||||
FNMA / FHLMC
|
396,368
|
|
|
5,573
|
|
|
(5,232
|
)
|
|
396,709
|
|
|||||
GNMA
|
2,275,481
|
|
|
23
|
|
|
(65,315
|
)
|
|
2,210,189
|
|
|||||
Private-label
|
1,037
|
|
|
—
|
|
|
(5
|
)
|
|
1,031
|
|
|||||
GNMA commercial mortgage-related securities
|
1,400,680
|
|
|
—
|
|
|
(52,399
|
)
|
|
1,348,282
|
|
|||||
FFELP asset backed securities
|
298,263
|
|
|
1,679
|
|
|
(111
|
)
|
|
299,831
|
|
|||||
Other debt securities
|
3,000
|
|
|
—
|
|
|
—
|
|
|
3,000
|
|
|||||
Other equity securities
|
1,613
|
|
|
—
|
|
|
—
|
|
|
1,613
|
|
|||||
Total investment securities available for sale
|
$
|
4,377,443
|
|
|
$
|
7,275
|
|
|
$
|
(123,068
|
)
|
|
$
|
4,261,651
|
|
|
Investment securities held to maturity
|
|
|
|
|
|
|
|
|||||||||
Obligations of state and political subdivisions (municipal securities)
|
$
|
1,593,147
|
|
|
$
|
4,851
|
|
|
$
|
(17,698
|
)
|
|
$
|
1,580,300
|
|
|
Residential mortgage-related securities
|
|
|
|
|
|
|
|
|||||||||
FNMA / FHLMC
|
97,822
|
|
|
191
|
|
|
(2,306
|
)
|
|
95,707
|
|
|||||
GNMA
|
388,174
|
|
|
1,969
|
|
|
(13,020
|
)
|
|
377,123
|
|
|||||
GNMA commercial mortgage-related securities
|
523,103
|
|
|
8,542
|
|
|
(23,832
|
)
|
|
507,813
|
|
|||||
Total investment securities held to maturity
|
$
|
2,602,247
|
|
|
$
|
15,553
|
|
|
$
|
(56,856
|
)
|
|
$
|
2,560,943
|
|
December 31, 2017
|
Amortized
Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair Value
|
|||||||||
|
($ in Thousands)
|
|||||||||||||||
Investment securities available for sale
|
|
|
|
|
|
|
|
|||||||||
U. S. Treasury securities
|
$
|
1,003
|
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
996
|
|
|
Residential mortgage-related securities
|
|
|
|
|
|
|
|
|||||||||
FNMA / FHLMC
|
457,680
|
|
|
9,722
|
|
|
(2,634
|
)
|
|
464,768
|
|
|||||
GNMA
|
1,944,453
|
|
|
275
|
|
|
(31,378
|
)
|
|
1,913,350
|
|
|||||
Private-label
|
1,067
|
|
|
—
|
|
|
(8
|
)
|
|
1,059
|
|
|||||
GNMA commercial mortgage-related securities
|
1,547,173
|
|
|
5
|
|
|
(33,901
|
)
|
|
1,513,277
|
|
|||||
FFELP asset backed securities
|
144,322
|
|
|
867
|
|
|
(13
|
)
|
|
145,176
|
|
|||||
Other debt securities
|
3,200
|
|
|
—
|
|
|
(12
|
)
|
|
3,188
|
|
|||||
Other equity securities
|
1,519
|
|
|
127
|
|
|
(14
|
)
|
|
1,632
|
|
|||||
Total investment securities available for sale
|
$
|
4,100,417
|
|
|
$
|
10,996
|
|
|
$
|
(67,967
|
)
|
|
$
|
4,043,446
|
|
|
Investment securities held to maturity
|
|
|
|
|
|
|
|
|||||||||
Obligations of state and political subdivisions (municipal securities)
|
$
|
1,281,320
|
|
|
$
|
13,899
|
|
|
$
|
(3,177
|
)
|
|
$
|
1,292,042
|
|
|
Residential mortgage-related securities
|
|
|
|
|
|
|
|
|||||||||
FNMA / FHLMC
|
40,995
|
|
|
398
|
|
|
(489
|
)
|
|
40,904
|
|
|||||
GNMA
|
414,440
|
|
|
2,700
|
|
|
(6,400
|
)
|
|
410,740
|
|
|||||
GNMA commercial mortgage-related securities
|
546,098
|
|
|
9,546
|
|
|
(15,756
|
)
|
|
539,888
|
|
|||||
Total investment securities held to maturity
|
$
|
2,282,853
|
|
|
$
|
26,543
|
|
|
$
|
(25,822
|
)
|
|
$
|
2,283,574
|
|
|
Available for Sale
|
|
Held to Maturity
|
||||||||||||
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
||||||||
|
($ in Thousands)
|
||||||||||||||
Due in one year or less
|
$
|
3,001
|
|
|
$
|
2,996
|
|
|
$
|
46,938
|
|
|
$
|
47,269
|
|
Due after one year through five years
|
1,000
|
|
|
1,000
|
|
|
200,725
|
|
|
199,266
|
|
||||
Due after five years through ten years
|
—
|
|
|
—
|
|
|
366,997
|
|
|
361,260
|
|
||||
Due after ten years
|
—
|
|
|
—
|
|
|
978,487
|
|
|
972,504
|
|
||||
Total debt securities
|
4,001
|
|
|
3,996
|
|
|
1,593,147
|
|
|
1,580,300
|
|
||||
Residential mortgage-related securities
|
|
|
|
|
|
|
|
||||||||
FNMA / FHLMC
|
396,368
|
|
|
396,709
|
|
|
97,822
|
|
|
95,707
|
|
||||
GNMA
|
2,275,481
|
|
|
2,210,189
|
|
|
388,174
|
|
|
377,123
|
|
||||
Private-label
|
1,037
|
|
|
1,031
|
|
|
—
|
|
|
—
|
|
||||
GNMA commercial mortgage-related securities
|
1,400,680
|
|
|
1,348,282
|
|
|
523,103
|
|
|
507,813
|
|
||||
FFELP asset backed securities
|
298,263
|
|
|
299,831
|
|
|
—
|
|
|
—
|
|
||||
Equity securities
|
1,613
|
|
|
1,613
|
|
|
—
|
|
|
—
|
|
||||
Total investment securities
|
$
|
4,377,443
|
|
|
$
|
4,261,651
|
|
|
$
|
2,602,247
|
|
|
$
|
2,560,943
|
|
Ratio of Fair Value to Amortized Cost
|
|
|
97.4
|
%
|
|
|
|
98.4
|
%
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
($ in Thousands)
|
||||||
Gross gains on available for sale securities
|
$
|
—
|
|
|
$
|
—
|
|
Gross gains on held to maturity securities
|
—
|
|
|
361
|
|
||
Total gains
|
—
|
|
|
361
|
|
||
Gross losses on available for sale securities
|
(2,015
|
)
|
|
—
|
|
||
Gross losses on held to maturity securities
|
$
|
—
|
|
|
$
|
(5
|
)
|
Total losses
|
$
|
(2,015
|
)
|
|
$
|
(5
|
)
|
Investment securities gains (losses), net
|
$
|
(2,015
|
)
|
|
$
|
356
|
|
Proceeds from sales of investment securities
|
$
|
493,060
|
|
|
$
|
16,059
|
|
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
||||||||||||||||||||||||
June 30, 2018
|
Number
of
Securities
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Number
of
Securities
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
||||||||||||||
|
($ in Thousands)
|
||||||||||||||||||||||||||||
Investment securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury securities
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
1
|
|
|
$
|
(6
|
)
|
|
$
|
996
|
|
|
$
|
(6
|
)
|
|
$
|
996
|
|
Residential mortgage-related securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
FNMA / FHLMC
|
19
|
|
|
(1,613
|
)
|
|
100,946
|
|
|
9
|
|
|
(3,620
|
)
|
|
128,509
|
|
|
(5,233
|
)
|
|
229,455
|
|
||||||
GNMA
|
62
|
|
|
(31,430
|
)
|
|
1,453,394
|
|
|
29
|
|
|
(33,885
|
)
|
|
756,061
|
|
|
(65,315
|
)
|
|
2,209,455
|
|
||||||
Private-label
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(5
|
)
|
|
1,031
|
|
|
(5
|
)
|
|
1,031
|
|
||||||
GNMA commercial mortgage-related securities
|
22
|
|
|
(8,821
|
)
|
|
284,733
|
|
|
80
|
|
|
(43,577
|
)
|
|
1,063,701
|
|
|
(52,398
|
)
|
|
1,348,434
|
|
||||||
FFELP asset backed securities
|
7
|
|
|
(111
|
)
|
|
100,757
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(111
|
)
|
|
100,757
|
|
||||||
Total
|
110
|
|
|
$
|
(41,975
|
)
|
|
$
|
1,939,830
|
|
|
120
|
|
|
$
|
(81,093
|
)
|
|
$
|
1,950,298
|
|
|
$
|
(123,068
|
)
|
|
$
|
3,890,128
|
|
Investment securities held to maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Obligations of state and political subdivisions (municipal securities)
|
890
|
|
|
$
|
(10,814
|
)
|
|
$
|
609,381
|
|
|
142
|
|
|
$
|
(6,884
|
)
|
|
$
|
128,244
|
|
|
$
|
(17,698
|
)
|
|
$
|
737,625
|
|
Residential mortgage-related securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
FNMA / FHLMC
|
25
|
|
|
(1,518
|
)
|
|
76,046
|
|
|
10
|
|
|
(788
|
)
|
|
14,728
|
|
|
(2,306
|
)
|
|
90,774
|
|
||||||
GNMA
|
61
|
|
|
(7,062
|
)
|
|
236,008
|
|
|
20
|
|
|
(5,957
|
)
|
|
137,093
|
|
|
(13,019
|
)
|
|
373,101
|
|
||||||
GNMA commercial mortgage-related securities
|
1
|
|
|
(813
|
)
|
|
29,243
|
|
|
24
|
|
|
(23,019
|
)
|
|
478,570
|
|
|
(23,832
|
)
|
|
507,813
|
|
||||||
Total
|
977
|
|
|
$
|
(20,207
|
)
|
|
$
|
950,678
|
|
|
196
|
|
|
$
|
(36,648
|
)
|
|
$
|
758,635
|
|
|
$
|
(56,856
|
)
|
|
$
|
1,709,313
|
|
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
||||||||||||||||||||||||
December 31, 2017
|
Number
of Securities |
|
Unrealized
Losses |
|
Fair
Value |
|
Number
of Securities |
|
Unrealized
Losses |
|
Fair
Value |
|
Unrealized
Losses |
|
Fair
Value |
||||||||||||||
|
($ in Thousands)
|
||||||||||||||||||||||||||||
Investment securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury securities
|
1
|
|
|
$
|
(7
|
)
|
|
$
|
996
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
996
|
|
Residential mortgage-related securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
FNMA / FHLMC
|
9
|
|
|
(572
|
)
|
|
69,939
|
|
|
9
|
|
|
(2,062
|
)
|
|
142,093
|
|
|
(2,634
|
)
|
|
212,032
|
|
||||||
GNMA
|
44
|
|
|
(8,927
|
)
|
|
1,028,221
|
|
|
25
|
|
|
(22,451
|
)
|
|
737,198
|
|
|
(31,378
|
)
|
|
1,765,419
|
|
||||||
Private-label
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(8
|
)
|
|
1,059
|
|
|
(8
|
)
|
|
1,059
|
|
||||||
GNMA commercial mortgage-related securities
|
33
|
|
|
(5,554
|
)
|
|
480,514
|
|
|
70
|
|
|
(28,347
|
)
|
|
1,026,642
|
|
|
(33,901
|
)
|
|
1,507,156
|
|
||||||
FFELP asset backed securities
|
1
|
|
|
(13
|
)
|
|
12,158
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
12,158
|
|
||||||
Other debt securities
|
1
|
|
|
(12
|
)
|
|
188
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
188
|
|
||||||
Other equity securities
|
3
|
|
|
(14
|
)
|
|
1,487
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
1,487
|
|
||||||
Total
|
92
|
|
|
$
|
(15,099
|
)
|
|
$
|
1,593,503
|
|
|
105
|
|
|
$
|
(52,868
|
)
|
|
$
|
1,906,992
|
|
|
$
|
(67,967
|
)
|
|
$
|
3,500,495
|
|
Investment securities held to maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Obligations of state and political subdivisions (municipal securities)
|
157
|
|
|
$
|
(746
|
)
|
|
$
|
122,761
|
|
|
132
|
|
|
$
|
(2,431
|
)
|
|
$
|
127,043
|
|
|
$
|
(3,177
|
)
|
|
$
|
249,804
|
|
Residential mortgage-related securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
FNMA / FHLMC
|
8
|
|
|
(73
|
)
|
|
13,143
|
|
|
10
|
|
|
(417
|
)
|
|
16,262
|
|
|
(490
|
)
|
|
29,405
|
|
||||||
GNMA
|
35
|
|
|
(3,373
|
)
|
|
268,388
|
|
|
18
|
|
|
(3,026
|
)
|
|
120,892
|
|
|
(6,399
|
)
|
|
389,280
|
|
||||||
GNMA commercial mortgage-related securities
|
2
|
|
|
(299
|
)
|
|
52,997
|
|
|
23
|
|
|
(15,457
|
)
|
|
486,891
|
|
|
(15,756
|
)
|
|
539,888
|
|
||||||
Total
|
202
|
|
|
$
|
(4,491
|
)
|
|
$
|
457,289
|
|
|
183
|
|
|
$
|
(21,331
|
)
|
|
$
|
751,088
|
|
|
$
|
(25,822
|
)
|
|
$
|
1,208,377
|
|
|
June 30,
2018(a)
|
|
December 31,
2017 |
||||
|
($ in Thousands)
|
||||||
Commercial and industrial
|
$
|
7,109,796
|
|
|
$
|
6,399,693
|
|
Commercial real estate — owner occupied
|
888,330
|
|
|
802,209
|
|
||
Commercial and business lending
|
7,998,126
|
|
|
7,201,902
|
|
||
Commercial real estate — investor
|
3,996,415
|
|
|
3,315,254
|
|
||
Real estate construction
|
1,487,159
|
|
|
1,451,684
|
|
||
Commercial real estate lending
|
5,483,574
|
|
|
4,766,938
|
|
||
Total commercial
|
13,481,700
|
|
|
11,968,840
|
|
||
Residential mortgage
|
8,207,253
|
|
|
7,546,534
|
|
||
Home equity
|
911,363
|
|
|
883,804
|
|
||
Other consumer
|
376,470
|
|
|
385,813
|
|
||
Total consumer
|
9,495,086
|
|
|
8,816,151
|
|
||
Total loans
|
$
|
22,976,786
|
|
|
$
|
20,784,991
|
|
|
Pass
|
|
Special Mention
|
|
Potential Problem
|
|
Nonaccrual
|
|
Total
|
||||||||||
|
($ in Thousands)
|
||||||||||||||||||
Commercial and industrial
|
$
|
6,763,557
|
|
|
$
|
92,286
|
|
|
$
|
172,177
|
|
|
$
|
81,776
|
|
|
$
|
7,109,796
|
|
Commercial real estate - owner occupied
|
814,769
|
|
|
16,033
|
|
|
38,879
|
|
|
18,649
|
|
|
888,330
|
|
|||||
Commercial and business lending
|
7,578,326
|
|
|
108,319
|
|
|
211,056
|
|
|
100,425
|
|
|
7,998,126
|
|
|||||
Commercial real estate - investor
|
3,885,535
|
|
|
59,587
|
|
|
24,790
|
|
|
26,503
|
|
|
3,996,415
|
|
|||||
Real estate construction
|
1,452,888
|
|
|
29,559
|
|
|
3,168
|
|
|
1,544
|
|
|
1,487,159
|
|
|||||
Commercial real estate lending
|
5,338,423
|
|
|
89,146
|
|
|
27,958
|
|
|
28,047
|
|
|
5,483,574
|
|
|||||
Total commercial
|
12,916,749
|
|
|
197,465
|
|
|
239,014
|
|
|
128,472
|
|
|
13,481,700
|
|
|||||
Residential mortgage
|
8,141,803
|
|
|
199
|
|
|
2,355
|
|
|
62,896
|
|
|
8,207,253
|
|
|||||
Home equity
|
897,471
|
|
|
792
|
|
|
142
|
|
|
12,958
|
|
|
911,363
|
|
|||||
Other consumer
|
375,624
|
|
|
706
|
|
|
6
|
|
|
134
|
|
|
376,470
|
|
|||||
Total consumer
|
9,414,898
|
|
|
1,697
|
|
|
2,503
|
|
|
75,988
|
|
|
9,495,086
|
|
|||||
Total
|
$
|
22,331,647
|
|
|
$
|
199,162
|
|
|
$
|
241,517
|
|
|
$
|
204,460
|
|
|
$
|
22,976,786
|
|
|
Pass
|
|
Special Mention
|
|
Potential Problem
|
|
Nonaccrual
|
|
Total
|
||||||||||
|
($ in Thousands)
|
||||||||||||||||||
Commercial and industrial
|
$
|
6,015,884
|
|
|
$
|
157,245
|
|
|
$
|
113,778
|
|
|
$
|
112,786
|
|
|
$
|
6,399,693
|
|
Commercial real estate - owner occupied
|
723,291
|
|
|
14,181
|
|
|
41,997
|
|
|
22,740
|
|
|
802,209
|
|
|||||
Commercial and business lending
|
6,739,175
|
|
|
171,426
|
|
|
155,775
|
|
|
135,526
|
|
|
7,201,902
|
|
|||||
Commercial real estate - investor
|
3,266,389
|
|
|
24,845
|
|
|
19,291
|
|
|
4,729
|
|
|
3,315,254
|
|
|||||
Real estate construction
|
1,421,504
|
|
|
29,206
|
|
|
—
|
|
|
974
|
|
|
1,451,684
|
|
|||||
Commercial real estate lending
|
4,687,893
|
|
|
54,051
|
|
|
19,291
|
|
|
5,703
|
|
|
4,766,938
|
|
|||||
Total commercial
|
11,427,068
|
|
|
225,477
|
|
|
175,066
|
|
|
141,229
|
|
|
11,968,840
|
|
|||||
Residential mortgage
|
7,490,860
|
|
|
426
|
|
|
1,616
|
|
|
53,632
|
|
|
7,546,534
|
|
|||||
Home equity
|
868,958
|
|
|
1,137
|
|
|
195
|
|
|
13,514
|
|
|
883,804
|
|
|||||
Other consumer
|
384,990
|
|
|
652
|
|
|
—
|
|
|
171
|
|
|
385,813
|
|
|||||
Total consumer
|
8,744,808
|
|
|
2,215
|
|
|
1,811
|
|
|
67,317
|
|
|
8,816,151
|
|
|||||
Total
|
$
|
20,171,876
|
|
|
$
|
227,692
|
|
|
$
|
176,877
|
|
|
$
|
208,546
|
|
|
$
|
20,784,991
|
|
|
Current
|
|
30-59 Days
Past Due
|
|
60-89 Days
Past Due
|
|
90 Days or
More
Past Due(a)
|
|
Nonaccrual(b)
|
|
Total
|
||||||||||||
|
($ in Thousands)
|
||||||||||||||||||||||
Commercial and industrial
|
$
|
7,027,210
|
|
|
$
|
407
|
|
|
$
|
181
|
|
|
$
|
222
|
|
|
$
|
81,776
|
|
|
$
|
7,109,796
|
|
Commercial real estate - owner occupied
|
869,488
|
|
|
193
|
|
|
—
|
|
|
—
|
|
|
18,649
|
|
|
888,330
|
|
||||||
Commercial and business lending
|
7,896,698
|
|
|
600
|
|
|
181
|
|
|
222
|
|
|
100,425
|
|
|
7,998,126
|
|
||||||
Commercial real estate - investor
|
3,969,084
|
|
|
828
|
|
|
—
|
|
|
—
|
|
|
26,503
|
|
|
3,996,415
|
|
||||||
Real estate construction
|
1,465,850
|
|
|
19,765
|
|
|
—
|
|
|
—
|
|
|
1,544
|
|
|
1,487,159
|
|
||||||
Commercial real estate lending
|
5,434,934
|
|
|
20,593
|
|
|
—
|
|
|
—
|
|
|
28,047
|
|
|
5,483,574
|
|
||||||
Total commercial
|
13,331,632
|
|
|
21,193
|
|
|
181
|
|
|
222
|
|
|
128,472
|
|
|
13,481,700
|
|
||||||
Residential mortgage
|
8,135,016
|
|
|
9,158
|
|
|
183
|
|
|
—
|
|
|
62,896
|
|
|
8,207,253
|
|
||||||
Home equity
|
891,135
|
|
|
6,534
|
|
|
736
|
|
|
—
|
|
|
12,958
|
|
|
911,363
|
|
||||||
Other consumer
|
372,984
|
|
|
972
|
|
|
763
|
|
|
1,617
|
|
|
134
|
|
|
376,470
|
|
||||||
Total consumer
|
9,399,135
|
|
|
16,664
|
|
|
1,682
|
|
|
1,617
|
|
|
75,988
|
|
|
9,495,086
|
|
||||||
Total
|
$
|
22,730,767
|
|
|
$
|
37,857
|
|
|
$
|
1,863
|
|
|
$
|
1,839
|
|
|
$
|
204,460
|
|
|
$
|
22,976,786
|
|
(a)
|
The recorded investment in loans past due 90 days or more and still accruing totaled $2 million at June 30, 2018 (the same as the reported balances for the accruing loans noted above).
|
(b)
|
Of the total nonaccrual loans, $141 million or 69% were current with respect to payment at June 30, 2018.
|
|
Current
|
|
30-59 Days
Past Due
|
|
60-89 Days
Past Due
|
|
90 Days or
More
Past Due(a)
|
|
Nonaccrual(b)
|
|
Total
|
||||||||||||
|
($ in Thousands)
|
||||||||||||||||||||||
Commercial and industrial
|
$
|
6,286,369
|
|
|
$
|
170
|
|
|
$
|
101
|
|
|
$
|
267
|
|
|
$
|
112,786
|
|
|
$
|
6,399,693
|
|
Commercial real estate - owner occupied
|
779,421
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
22,740
|
|
|
802,209
|
|
||||||
Commercial and business lending
|
7,065,790
|
|
|
218
|
|
|
101
|
|
|
267
|
|
|
135,526
|
|
|
7,201,902
|
|
||||||
Commercial real estate - investor
|
3,310,000
|
|
|
374
|
|
|
—
|
|
|
151
|
|
|
4,729
|
|
|
3,315,254
|
|
||||||
Real estate construction
|
1,450,459
|
|
|
168
|
|
|
83
|
|
|
—
|
|
|
974
|
|
|
1,451,684
|
|
||||||
Commercial real estate lending
|
4,760,459
|
|
|
542
|
|
|
83
|
|
|
151
|
|
|
5,703
|
|
|
4,766,938
|
|
||||||
Total commercial
|
11,826,249
|
|
|
760
|
|
|
184
|
|
|
418
|
|
|
141,229
|
|
|
11,968,840
|
|
||||||
Residential mortgage
|
7,483,350
|
|
|
9,186
|
|
|
366
|
|
|
—
|
|
|
53,632
|
|
|
7,546,534
|
|
||||||
Home equity
|
863,465
|
|
|
5,688
|
|
|
1,137
|
|
|
—
|
|
|
13,514
|
|
|
883,804
|
|
||||||
Other consumer
|
382,186
|
|
|
1,227
|
|
|
780
|
|
|
1,449
|
|
|
171
|
|
|
385,813
|
|
||||||
Total consumer
|
8,729,001
|
|
|
16,101
|
|
|
2,283
|
|
|
1,449
|
|
|
67,317
|
|
|
8,816,151
|
|
||||||
Total
|
$
|
20,555,250
|
|
|
$
|
16,861
|
|
|
$
|
2,467
|
|
|
$
|
1,867
|
|
|
$
|
208,546
|
|
|
$
|
20,784,991
|
|
(a)
|
The recorded investment in loans past due 90 days or more and still accruing totaled $2 million at December 31, 2017 (the same as the reported balances for the accruing loans noted above).
|
(b)
|
Of the total nonaccrual loans, $135 million or 65% were current with respect to payment at December 31, 2017.
|
|
Recorded
Investment |
|
Unpaid
Principal Balance |
|
Related
Allowance |
|
Average
Recorded Investment |
|
Interest
Income Recognized |
||||||||||
|
($ in Thousands)
|
||||||||||||||||||
Loans with a related allowance
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
75,928
|
|
|
$
|
77,873
|
|
|
$
|
17,628
|
|
|
$
|
70,082
|
|
|
$
|
725
|
|
Commercial real estate — owner occupied
|
15,386
|
|
|
15,853
|
|
|
829
|
|
|
15,649
|
|
|
95
|
|
|||||
Commercial and business lending
|
91,314
|
|
|
93,726
|
|
|
18,457
|
|
|
85,731
|
|
|
820
|
|
|||||
Commercial real estate — investor
|
15,397
|
|
|
15,469
|
|
|
4,132
|
|
|
15,485
|
|
|
901
|
|
|||||
Real estate construction
|
448
|
|
|
523
|
|
|
77
|
|
|
456
|
|
|
15
|
|
|||||
Commercial real estate lending
|
15,845
|
|
|
15,992
|
|
|
4,209
|
|
|
15,941
|
|
|
916
|
|
|||||
Total commercial
|
107,159
|
|
|
109,718
|
|
|
22,666
|
|
|
101,672
|
|
|
1,736
|
|
|||||
Residential mortgage
|
39,926
|
|
|
44,171
|
|
|
6,208
|
|
|
39,433
|
|
|
863
|
|
|||||
Home equity
|
9,817
|
|
|
10,809
|
|
|
3,514
|
|
|
9,917
|
|
|
282
|
|
|||||
Other consumer
|
1,049
|
|
|
1,051
|
|
|
109
|
|
|
1,051
|
|
|
1
|
|
|||||
Total consumer
|
50,792
|
|
|
56,031
|
|
|
9,831
|
|
|
50,401
|
|
|
1,146
|
|
|||||
Total loans(a)
|
$
|
157,951
|
|
|
$
|
165,749
|
|
|
$
|
32,497
|
|
|
$
|
152,073
|
|
|
$
|
2,882
|
|
Loans with no related allowance
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
35,065
|
|
|
$
|
47,914
|
|
|
$
|
—
|
|
|
$
|
39,201
|
|
|
$
|
(286
|
)
|
Commercial real estate — owner occupied
|
4,869
|
|
|
5,920
|
|
|
—
|
|
|
4,179
|
|
|
24
|
|
|||||
Commercial and business lending
|
39,934
|
|
|
53,834
|
|
|
—
|
|
|
43,380
|
|
|
(262
|
)
|
|||||
Commercial real estate — investor
|
984
|
|
|
1,031
|
|
|
—
|
|
|
1,006
|
|
|
—
|
|
|||||
Real estate construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commercial real estate lending
|
984
|
|
|
1,031
|
|
|
—
|
|
|
1,006
|
|
|
—
|
|
|||||
Total commercial
|
40,918
|
|
|
54,865
|
|
|
—
|
|
|
44,386
|
|
|
(262
|
)
|
|||||
Residential mortgage
|
11,543
|
|
|
11,862
|
|
|
—
|
|
|
7,839
|
|
|
128
|
|
|||||
Home equity
|
1,275
|
|
|
1,289
|
|
|
—
|
|
|
785
|
|
|
12
|
|
|||||
Other consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total consumer
|
12,818
|
|
|
13,151
|
|
|
—
|
|
|
8,624
|
|
|
140
|
|
|||||
Total loans(a)
|
$
|
53,736
|
|
|
$
|
68,016
|
|
|
$
|
—
|
|
|
$
|
53,010
|
|
|
$
|
(122
|
)
|
Total
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
110,993
|
|
|
$
|
125,787
|
|
|
$
|
17,628
|
|
|
$
|
109,283
|
|
|
$
|
439
|
|
Commercial real estate — owner occupied
|
20,255
|
|
|
21,773
|
|
|
829
|
|
|
19,828
|
|
|
119
|
|
|||||
Commercial and business lending
|
131,248
|
|
|
147,560
|
|
|
18,457
|
|
|
129,111
|
|
|
558
|
|
|||||
Commercial real estate — investor
|
16,381
|
|
|
16,500
|
|
|
4,132
|
|
|
16,491
|
|
|
901
|
|
|||||
Real estate construction
|
448
|
|
|
523
|
|
|
77
|
|
|
456
|
|
|
15
|
|
|||||
Commercial real estate lending
|
16,829
|
|
|
17,023
|
|
|
4,209
|
|
|
16,947
|
|
|
916
|
|
|||||
Total commercial
|
148,077
|
|
|
164,583
|
|
|
22,666
|
|
|
146,058
|
|
|
1,474
|
|
|||||
Residential mortgage
|
51,469
|
|
|
56,033
|
|
|
6,208
|
|
|
47,272
|
|
|
991
|
|
|||||
Home equity
|
11,092
|
|
|
12,098
|
|
|
3,514
|
|
|
10,702
|
|
|
294
|
|
|||||
Other consumer
|
1,049
|
|
|
1,051
|
|
|
109
|
|
|
1,051
|
|
|
1
|
|
|||||
Total consumer
|
63,610
|
|
|
69,182
|
|
|
9,831
|
|
|
59,025
|
|
|
1,286
|
|
|||||
Total loans(a)
|
$
|
211,687
|
|
|
$
|
233,765
|
|
|
$
|
32,497
|
|
|
$
|
205,083
|
|
|
$
|
2,760
|
|
(a)
|
The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 77% of the unpaid principal balance at June 30, 2018.
|
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Related
Allowance
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
||||||||||
|
($ in Thousands)
|
||||||||||||||||||
Loans with a related allowance
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
81,649
|
|
|
$
|
83,579
|
|
|
$
|
10,838
|
|
|
$
|
58,494
|
|
|
$
|
2,629
|
|
Commercial real estate — owner occupied
|
23,796
|
|
|
23,937
|
|
|
2,973
|
|
|
12,124
|
|
|
736
|
|
|||||
Commercial and business lending
|
105,445
|
|
|
107,516
|
|
|
13,811
|
|
|
70,618
|
|
|
3,365
|
|
|||||
Commercial real estate — investor
|
17,823
|
|
|
17,862
|
|
|
1,597
|
|
|
16,924
|
|
|
1,694
|
|
|||||
Real estate construction
|
467
|
|
|
578
|
|
|
86
|
|
|
484
|
|
|
29
|
|
|||||
Commercial real estate lending
|
18,290
|
|
|
18,440
|
|
|
1,683
|
|
|
17,408
|
|
|
1,723
|
|
|||||
Total commercial
|
123,735
|
|
|
125,956
|
|
|
15,494
|
|
|
88,026
|
|
|
5,088
|
|
|||||
Residential mortgage
|
40,561
|
|
|
42,922
|
|
|
6,512
|
|
|
40,411
|
|
|
1,614
|
|
|||||
Home equity
|
10,250
|
|
|
10,986
|
|
|
3,718
|
|
|
10,521
|
|
|
549
|
|
|||||
Other consumer
|
1,135
|
|
|
1,138
|
|
|
122
|
|
|
1,140
|
|
|
3
|
|
|||||
Total consumer
|
51,946
|
|
|
55,046
|
|
|
10,352
|
|
|
52,072
|
|
|
2,166
|
|
|||||
Total loans(a)
|
$
|
175,681
|
|
|
$
|
181,002
|
|
|
$
|
25,846
|
|
|
$
|
140,098
|
|
|
$
|
7,254
|
|
Loans with no related allowance
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
60,595
|
|
|
$
|
82,839
|
|
|
$
|
—
|
|
|
$
|
89,275
|
|
|
$
|
492
|
|
Commercial real estate — owner occupied
|
2,438
|
|
|
2,829
|
|
|
—
|
|
|
1,948
|
|
|
36
|
|
|||||
Commercial and business lending
|
63,033
|
|
|
85,668
|
|
|
—
|
|
|
91,223
|
|
|
528
|
|
|||||
Commercial real estate — investor
|
1,295
|
|
|
1,295
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|||||
Real estate construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commercial real estate lending
|
1,295
|
|
|
1,295
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|||||
Total commercial
|
64,328
|
|
|
86,963
|
|
|
—
|
|
|
91,223
|
|
|
573
|
|
|||||
Residential mortgage
|
6,925
|
|
|
7,204
|
|
|
—
|
|
|
4,999
|
|
|
217
|
|
|||||
Home equity
|
641
|
|
|
645
|
|
|
—
|
|
|
540
|
|
|
7
|
|
|||||
Other consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total consumer
|
7,566
|
|
|
7,849
|
|
|
—
|
|
|
5,539
|
|
|
224
|
|
|||||
Total loans(a)
|
$
|
71,894
|
|
|
$
|
94,812
|
|
|
$
|
—
|
|
|
$
|
96,762
|
|
|
$
|
797
|
|
Total
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
142,244
|
|
|
$
|
166,418
|
|
|
$
|
10,838
|
|
|
$
|
147,769
|
|
|
$
|
3,121
|
|
Commercial real estate — owner occupied
|
26,234
|
|
|
26,766
|
|
|
2,973
|
|
|
14,072
|
|
|
772
|
|
|||||
Commercial and business lending
|
168,478
|
|
|
193,184
|
|
|
13,811
|
|
|
161,841
|
|
|
3,893
|
|
|||||
Commercial real estate — investor
|
19,118
|
|
|
19,157
|
|
|
1,597
|
|
|
16,924
|
|
|
1,739
|
|
|||||
Real estate construction
|
467
|
|
|
578
|
|
|
86
|
|
|
484
|
|
|
29
|
|
|||||
Commercial real estate lending
|
19,585
|
|
|
19,735
|
|
|
1,683
|
|
|
17,408
|
|
|
1,768
|
|
|||||
Total commercial
|
188,063
|
|
|
212,919
|
|
|
15,494
|
|
|
179,249
|
|
|
5,661
|
|
|||||
Residential mortgage
|
47,486
|
|
|
50,126
|
|
|
6,512
|
|
|
45,410
|
|
|
1,831
|
|
|||||
Home equity
|
10,891
|
|
|
11,631
|
|
|
3,718
|
|
|
11,061
|
|
|
556
|
|
|||||
Other consumer
|
1,135
|
|
|
1,138
|
|
|
122
|
|
|
1,140
|
|
|
3
|
|
|||||
Total consumer
|
59,512
|
|
|
62,895
|
|
|
10,352
|
|
|
57,611
|
|
|
2,390
|
|
|||||
Total loans(a)
|
$
|
247,575
|
|
|
$
|
275,814
|
|
|
$
|
25,846
|
|
|
$
|
236,860
|
|
|
$
|
8,051
|
|
(a)
|
The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 80% of the unpaid principal balance at December 31, 2017.
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Performing
Restructured
Loans
|
|
Nonaccrual
Restructured
Loans(a)
|
|
Performing
Restructured
Loans
|
|
Nonaccrual
Restructured
Loans(a)
|
||||||||
|
($ in Thousands)
|
||||||||||||||
Commercial and industrial
|
$
|
32,438
|
|
|
$
|
155
|
|
|
$
|
30,047
|
|
|
$
|
1,776
|
|
Commercial real estate — owner occupied
|
3,820
|
|
|
—
|
|
|
3,989
|
|
|
—
|
|
||||
Commercial real estate — investor
|
372
|
|
|
14,268
|
|
|
14,389
|
|
|
—
|
|
||||
Real estate construction
|
222
|
|
|
226
|
|
|
310
|
|
|
157
|
|
||||
Residential mortgage
|
17,934
|
|
|
20,372
|
|
|
17,068
|
|
|
18,991
|
|
||||
Home equity
|
7,900
|
|
|
2,972
|
|
|
7,705
|
|
|
2,537
|
|
||||
Other consumer
|
1,037
|
|
|
12
|
|
|
1,110
|
|
|
25
|
|
||||
Total
|
$
|
63,723
|
|
|
$
|
38,005
|
|
|
$
|
74,618
|
|
|
$
|
23,486
|
|
(a)
|
Nonaccrual restructured loans have been included within nonaccrual loans.
|
|
Six Months Ended June 30, 2018
|
|
Six Months Ended June 30, 2017
|
||||||||||||||||||
|
Number
of
Loans
|
|
Recorded
Investment(a)
|
|
Unpaid
Principal
Balance(b)
|
|
Number
of
Loans
|
|
Recorded
Investment(a)
|
|
Unpaid
Principal
Balance(b)
|
||||||||||
|
($ in Thousands)
|
||||||||||||||||||||
Commercial and industrial
|
1
|
|
|
$
|
47
|
|
|
$
|
47
|
|
|
24
|
|
|
$
|
30,935
|
|
|
$
|
52,260
|
|
Commercial real estate — owner occupied
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
716
|
|
|
716
|
|
||||
Commercial real estate — investor
|
1
|
|
|
984
|
|
|
1,031
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Residential mortgage
|
10
|
|
|
2,064
|
|
|
2,064
|
|
|
36
|
|
|
2,695
|
|
|
2,805
|
|
||||
Home equity
|
10
|
|
|
935
|
|
|
949
|
|
|
26
|
|
|
674
|
|
|
919
|
|
||||
Other consumer
|
1
|
|
|
5
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
23
|
|
|
$
|
4,035
|
|
|
$
|
4,099
|
|
|
88
|
|
|
$
|
35,020
|
|
|
$
|
56,700
|
|
(a)
|
Represents post-modification outstanding recorded investment.
|
(b)
|
Represents pre-modification outstanding recorded investment.
|
|
Six Months Ended June 30, 2018
|
|
Six Months Ended June 30, 2017
|
||||||||||
|
Number of
Loans
|
|
Recorded
Investment
|
|
Number of
Loans
|
|
Recorded
Investment
|
||||||
|
($ in Thousands)
|
||||||||||||
Commercial and industrial
|
3
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Residential mortgage
|
8
|
|
|
2,219
|
|
|
17
|
|
|
941
|
|
||
Home equity
|
21
|
|
|
1,409
|
|
|
9
|
|
|
271
|
|
||
Total
|
32
|
|
|
$
|
3,628
|
|
|
26
|
|
|
$
|
1,212
|
|
($ in Thousands)
|
Commercial and
industrial |
Commercial real estate
- owner occupied |
Commercial real estate -
investor |
Real estate
construction |
Residential
mortgage |
Home
equity |
Other
consumer |
Total
|
||||||||||||||||
December 31, 2017
|
$
|
123,068
|
|
$
|
10,352
|
|
$
|
41,059
|
|
$
|
34,370
|
|
$
|
29,607
|
|
$
|
22,126
|
|
$
|
5,298
|
|
$
|
265,880
|
|
Charge offs
|
(19,611
|
)
|
(1,042
|
)
|
(1,202
|
)
|
(53
|
)
|
(956
|
)
|
(1,729
|
)
|
(2,488
|
)
|
(27,081
|
)
|
||||||||
Recoveries
|
6,406
|
|
287
|
|
21
|
|
290
|
|
690
|
|
1,192
|
|
416
|
|
9,302
|
|
||||||||
Net Charge offs
|
(13,205
|
)
|
(755
|
)
|
(1,181
|
)
|
237
|
|
(266
|
)
|
(537
|
)
|
(2,072
|
)
|
(17,779
|
)
|
||||||||
Provision for loan losses
|
750
|
|
1,213
|
|
4,272
|
|
(5,455
|
)
|
1,796
|
|
(301
|
)
|
2,225
|
|
4,500
|
|
||||||||
June 30, 2018
|
$
|
110,613
|
|
$
|
10,810
|
|
$
|
44,150
|
|
$
|
29,152
|
|
$
|
31,137
|
|
$
|
21,288
|
|
$
|
5,451
|
|
$
|
252,601
|
|
Allowance for loan losses
|
|
|
|
|
|
|
|
|
||||||||||||||||
Individually evaluated for impairment
|
$
|
17,628
|
|
$
|
829
|
|
$
|
4,132
|
|
$
|
77
|
|
$
|
6,208
|
|
$
|
3,514
|
|
$
|
109
|
|
$
|
32,497
|
|
Collectively evaluated for impairment
|
92,985
|
|
9,981
|
|
40,018
|
|
29,075
|
|
24,929
|
|
17,774
|
|
5,342
|
|
220,104
|
|
||||||||
Acquired and accounted for under ASC 310-30(a)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Total allowance for loan losses
|
$
|
110,613
|
|
$
|
10,810
|
|
$
|
44,150
|
|
$
|
29,152
|
|
$
|
31,137
|
|
$
|
21,288
|
|
$
|
5,451
|
|
$
|
252,601
|
|
Loans
|
|
|
|
|
|
|
|
|
||||||||||||||||
Individually evaluated for impairment
|
$
|
110,993
|
|
$
|
20,255
|
|
$
|
16,381
|
|
$
|
448
|
|
$
|
51,469
|
|
$
|
11,092
|
|
$
|
1,049
|
|
$
|
211,687
|
|
Collectively evaluated for impairment
|
6,996,038
|
|
866,356
|
|
3,969,829
|
|
1,486,464
|
|
8,154,904
|
|
900,187
|
|
375,421
|
|
22,749,199
|
|
||||||||
Acquired and accounted for under ASC 310-30(a)
|
2,765
|
|
1,719
|
|
10,205
|
|
247
|
|
880
|
|
84
|
|
—
|
|
15,900
|
|
||||||||
Total loans
|
$
|
7,109,796
|
|
$
|
888,330
|
|
$
|
3,996,415
|
|
$
|
1,487,159
|
|
$
|
8,207,253
|
|
$
|
911,363
|
|
$
|
376,470
|
|
$
|
22,976,786
|
|
(a)
|
Loans acquired in business combinations and accounted for under ASC Subtopic 310-30 "Receivables — Loans and Debt Securities Acquired with Deteriorated Credit Quality."
|
($ in Thousands)
|
Commercial and
industrial |
Commercial real estate
- owner occupied |
Commercial real estate -
investor |
Real estate
construction |
Residential
mortgage |
Home
equity |
Other
consumer |
Total
|
||||||||||||||||
December 31, 2016
|
$
|
140,126
|
|
$
|
14,034
|
|
$
|
45,285
|
|
$
|
26,932
|
|
$
|
27,046
|
|
$
|
20,364
|
|
$
|
4,548
|
|
$
|
278,335
|
|
Charge offs
|
(44,533
|
)
|
(344
|
)
|
(991
|
)
|
(604
|
)
|
(2,611
|
)
|
(2,724
|
)
|
(4,439
|
)
|
(56,246
|
)
|
||||||||
Recoveries
|
11,465
|
|
173
|
|
242
|
|
74
|
|
927
|
|
3,194
|
|
716
|
|
16,791
|
|
||||||||
Net Charge offs
|
(33,068
|
)
|
(171
|
)
|
(749
|
)
|
(530
|
)
|
(1,684
|
)
|
470
|
|
(3,723
|
)
|
(39,455
|
)
|
||||||||
Provision for loan losses
|
16,010
|
|
(3,511
|
)
|
(3,477
|
)
|
7,968
|
|
4,245
|
|
1,292
|
|
4,473
|
|
27,000
|
|
||||||||
December 31, 2017
|
$
|
123,068
|
|
$
|
10,352
|
|
$
|
41,059
|
|
$
|
34,370
|
|
$
|
29,607
|
|
$
|
22,126
|
|
$
|
5,298
|
|
$
|
265,880
|
|
Allowance for loan losses
|
|
|
|
|
|
|
|
|
||||||||||||||||
Individually evaluated for impairment
|
$
|
10,838
|
|
$
|
2,973
|
|
$
|
1,597
|
|
$
|
86
|
|
$
|
6,512
|
|
$
|
3,718
|
|
$
|
122
|
|
$
|
25,846
|
|
Collectively evaluated for impairment
|
112,230
|
|
7,379
|
|
39,462
|
|
34,284
|
|
23,095
|
|
18,408
|
|
5,176
|
|
240,034
|
|
||||||||
Total allowance for loan losses
|
$
|
123,068
|
|
$
|
10,352
|
|
$
|
41,059
|
|
$
|
34,370
|
|
$
|
29,607
|
|
$
|
22,126
|
|
$
|
5,298
|
|
$
|
265,880
|
|
Loans
|
|
|
|
|
|
|
|
|
||||||||||||||||
Individually evaluated for impairment
|
$
|
142,244
|
|
$
|
26,234
|
|
$
|
19,118
|
|
$
|
467
|
|
$
|
47,486
|
|
$
|
10,891
|
|
$
|
1,135
|
|
$
|
247,575
|
|
Collectively evaluated for impairment
|
6,257,449
|
|
775,975
|
|
3,296,136
|
|
1,451,217
|
|
7,499,048
|
|
872,913
|
|
384,678
|
|
20,537,416
|
|
||||||||
Total loans
|
$
|
6,399,693
|
|
$
|
802,209
|
|
$
|
3,315,254
|
|
$
|
1,451,684
|
|
$
|
7,546,534
|
|
$
|
883,804
|
|
$
|
385,813
|
|
$
|
20,784,991
|
|
($ in Millions)
|
Six Months Ended June 30, 2018
|
|
Year Ended December 31, 2017
|
||||
Balance at beginning of period
|
$
|
27
|
|
|
$
|
38
|
|
Charge offs
|
(14
|
)
|
|
(25
|
)
|
||
Recoveries
|
3
|
|
|
—
|
|
||
Net Charge offs
|
(11
|
)
|
|
(25
|
)
|
||
Provision for loan losses
|
1
|
|
|
14
|
|
||
Balance at end of period
|
$
|
17
|
|
|
$
|
27
|
|
Allowance for loan losses
|
|
|
|
||||
Individually evaluated for impairment
|
$
|
9
|
|
|
$
|
5
|
|
Collectively evaluated for impairment
|
8
|
|
|
22
|
|
||
Total allowance for loan losses
|
$
|
17
|
|
|
$
|
27
|
|
Loans
|
|
|
|
||||
Individually evaluated for impairment
|
$
|
45
|
|
|
$
|
77
|
|
Collectively evaluated for impairment
|
637
|
|
|
523
|
|
||
Total loans
|
$
|
682
|
|
|
$
|
600
|
|
|
Six Months Ended June 30, 2018
|
|
Year Ended December 31, 2017
|
||||
|
($ in Thousands)
|
||||||
Allowance for Unfunded Commitments
|
|
|
|
||||
Balance at beginning of period
|
$
|
24,400
|
|
|
$
|
25,400
|
|
Provision for unfunded commitments
|
(500
|
)
|
|
(1,000
|
)
|
||
Amount recorded at acquisition
|
2,436
|
|
|
—
|
|
||
Balance at end of period
|
$
|
26,336
|
|
|
$
|
24,400
|
|
•
|
Performing loans are accounted for in accordance with ASC Topic 310-20 "Nonrefundable Fees and Other Costs" as these loans do not have evidence of credit deterioration since origination.
|
•
|
Nonperforming loans are accounted for in accordance with ASC Topic 310-30 as they display significant credit deterioration since origination.
|
|
Six Months Ended June 30, 2018
|
|
Year Ended December 31, 2017
|
||||
|
($ in Thousands)
|
||||||
Changes in Accretable Yield
|
|
|
|
||||
Balance at beginning of period
|
$
|
—
|
|
|
$
|
—
|
|
Purchases
|
4,881
|
|
|
—
|
|
||
Accretion
|
(119
|
)
|
|
—
|
|
||
Balance at end of period
|
$
|
4,762
|
|
|
$
|
—
|
|
|
Six Months Ended June 30, 2018
|
|
Year Ended December 31, 2017
|
||||
|
($ in Thousands)
|
||||||
Core deposit intangibles
|
|
|
|
||||
Gross carrying amount
|
$
|
58,100
|
|
|
$
|
4,385
|
|
Accumulated amortization
|
(2,421
|
)
|
|
(4,385
|
)
|
||
Net book value
|
$
|
55,679
|
|
|
$
|
—
|
|
Additions during the periods
|
$
|
58,100
|
|
|
$
|
—
|
|
Amortization during the year
|
$
|
2,421
|
|
|
$
|
112
|
|
Other intangibles
|
|
|
|
||||
Gross carrying amount
|
$
|
44,931
|
|
|
$
|
34,572
|
|
Accumulated amortization
|
(20,262
|
)
|
|
(18,992
|
)
|
||
Net book value
|
$
|
24,668
|
|
|
$
|
15,580
|
|
Additions during the period
|
$
|
10,359
|
|
|
$
|
2,162
|
|
Amortization during the year
|
$
|
1,270
|
|
|
$
|
1,847
|
|
|
Six Months Ended June 30, 2018
|
|
Year Ended December 31, 2017
|
||||
|
($ in Thousands)
|
||||||
Mortgage servicing rights
|
|||||||
Mortgage servicing rights at beginning of period
|
$
|
59,168
|
|
|
$
|
62,085
|
|
Additions from acquisition
|
8,136
|
|
|
—
|
|
||
Additions
|
4,502
|
|
|
7,167
|
|
||
Amortization
|
(4,649
|
)
|
|
(10,084
|
)
|
||
Mortgage servicing rights at end of period
|
$
|
67,157
|
|
|
$
|
59,168
|
|
Valuation allowance at beginning of period
|
(784
|
)
|
|
(609
|
)
|
||
(Additions) recoveries, net
|
607
|
|
|
(175
|
)
|
||
Valuation allowance at end of period
|
(177
|
)
|
|
(784
|
)
|
||
Mortgage servicing rights, net
|
$
|
66,980
|
|
|
$
|
58,384
|
|
Fair value of mortgage servicing rights
|
$
|
84,585
|
|
|
$
|
64,387
|
|
Portfolio of residential mortgage loans serviced for others (“servicing portfolio”)
|
$
|
8,500,578
|
|
|
$
|
7,646,846
|
|
Mortgage servicing rights, net to servicing portfolio
|
0.79
|
%
|
|
0.76
|
%
|
||
Mortgage servicing rights expense (a)
|
$
|
4,042
|
|
|
$
|
10,259
|
|
(a)
|
Includes the amortization of mortgage servicing rights and additions / recoveries to the valuation allowance of mortgage servicing rights, and is a component of mortgage banking, net in the consolidated statements of income.
|
Estimated Amortization Expense
|
Core Deposit Intangibles
|
|
Other Intangibles
|
|
Mortgage Servicing Rights
|
||||||
|
($ in Thousands)
|
||||||||||
Six Months Ending December 31, 2018
|
$
|
2,905
|
|
|
$
|
1,563
|
|
|
$
|
4,725
|
|
2019
|
5,810
|
|
|
2,828
|
|
|
9,150
|
|
|||
2020
|
5,810
|
|
|
2,711
|
|
|
7,963
|
|
|||
2021
|
5,810
|
|
|
2,687
|
|
|
6,906
|
|
|||
2022
|
5,810
|
|
|
2,663
|
|
|
6,000
|
|
|||
2023
|
5,810
|
|
|
2,644
|
|
|
5,228
|
|
|||
Beyond 2023
|
23,724
|
|
|
9,571
|
|
|
27,185
|
|
|||
Total Estimated Amortization Expense
|
$
|
55,679
|
|
|
$
|
24,668
|
|
|
$
|
67,157
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
($ in Thousands)
|
||||||
Short-Term Funding
|
|
|
|
||||
Federal funds purchased
|
$
|
20,720
|
|
|
$
|
141,950
|
|
Securities sold under agreements to repurchase
|
183,013
|
|
|
182,865
|
|
||
Federal funds purchased and securities sold under agreements to repurchase
|
203,733
|
|
|
324,815
|
|
||
Commercial paper
|
52,791
|
|
|
67,467
|
|
||
Total short-term funding
|
$
|
256,525
|
|
|
$
|
392,282
|
|
Long-Term Funding
|
|
|
|
||||
Senior notes, at par
|
$
|
250,000
|
|
|
$
|
250,000
|
|
Subordinated notes, at par
|
250,000
|
|
|
250,000
|
|
||
Other long-term funding and capitalized costs
|
(2,381
|
)
|
|
(2,718
|
)
|
||
Total long-term funding
|
497,619
|
|
|
497,282
|
|
||
Total short and long-term funding, excluding FHLB advances
|
$
|
754,144
|
|
|
$
|
889,564
|
|
FHLB Advances
|
|
|
|
||||
Short-term FHLB advances
|
$
|
370,000
|
|
|
$
|
284,000
|
|
Long-term FHLB advances
|
4,427,857
|
|
|
2,900,168
|
|
||
Total FHLB advances
|
$
|
4,797,857
|
|
|
$
|
3,184,168
|
|
|
|
|
|
||||
Total short and long-term funding
|
$
|
5,552,001
|
|
|
$
|
4,073,732
|
|
|
Remaining Contractual Maturity of the Agreements
|
||||||||||||||||||
|
Overnight and Continuous
|
|
Up to 30 days
|
|
30-90 days
|
|
Greater than 90 days
|
|
Total
|
||||||||||
June 30, 2018
|
|
|
|
|
($ in Thousands)
|
|
|
|
|
||||||||||
Repurchase agreements
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency mortgage-related securities
|
$
|
183,013
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
183,013
|
|
Total
|
$
|
183,013
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
183,013
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchase agreements
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency mortgage-related securities
|
$
|
182,865
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
182,865
|
|
Total
|
$
|
182,865
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
182,865
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||
|
Amount
|
|
Weighted Average Contractual Coupon Rate
|
|
Amount
|
|
Weighted Average Contractual Coupon Rate
|
||||||
|
($ in Thousands)
|
||||||||||||
Maturity or put date within 1 year
|
$
|
2,632,613
|
|
|
1.70
|
%
|
|
$
|
2,434,000
|
|
|
1.26
|
%
|
After 1 but within 2
|
1,861,040
|
|
|
2.25
|
%
|
|
750,013
|
|
|
1.23
|
%
|
||
After 2 but within 3
|
291,606
|
|
|
2.60
|
%
|
|
155
|
|
|
4.91
|
%
|
||
After 3 years
|
12,598
|
|
|
4.55
|
%
|
|
—
|
|
|
—
|
%
|
||
FHLB advances and overall rate
|
$
|
4,797,857
|
|
|
1.97
|
%
|
|
$
|
3,184,168
|
|
|
1.26
|
%
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||
($ in Thousands)
|
Notional Amount
|
|
Fair
Value |
|
Balance Sheet
Category |
|
Notional Amount
|
|
Fair
Value |
|
Balance Sheet
Category |
||||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate-related instruments — customer and mirror
|
$
|
2,668,542
|
|
|
$
|
62,708
|
|
|
Trading assets
|
|
$
|
2,183,687
|
|
|
$
|
28,494
|
|
|
Trading assets
|
Interest rate-related instruments — customer and mirror
|
2,668,542
|
|
|
(62,141
|
)
|
|
Trading liabilities
|
|
2,183,687
|
|
|
(28,035
|
)
|
|
Trading liabilities
|
||||
Foreign currency exchange forwards
|
143,551
|
|
|
3,317
|
|
|
Trading assets
|
|
124,851
|
|
|
2,495
|
|
|
Trading assets
|
||||
Foreign currency exchange forwards
|
136,177
|
|
|
(3,091
|
)
|
|
Trading liabilities
|
|
118,094
|
|
|
(2,339
|
)
|
|
Trading liabilities
|
||||
Commodity contracts
|
419,459
|
|
|
66,894
|
|
|
Trading assets
|
|
457,868
|
|
|
38,686
|
|
|
Trading assets
|
||||
Commodity contracts
|
419,458
|
|
|
(66,380
|
)
|
|
Trading liabilities
|
|
457,108
|
|
|
(37,286
|
)
|
|
Trading liabilities
|
||||
Interest rate lock commitments (mortgage)
|
335,070
|
|
|
3,287
|
|
|
Other assets
|
|
222,736
|
|
|
1,538
|
|
|
Other assets
|
||||
Forward commitments (mortgage)
|
312,003
|
|
|
(919
|
)
|
|
Other liabilities
|
|
164,567
|
|
|
(313
|
)
|
|
Other liabilities
|
||||
Purchased options (time deposit)
|
25,511
|
|
|
1,027
|
|
|
Other assets
|
|
31,063
|
|
|
1,175
|
|
|
Other assets
|
||||
Written options (time deposit)
|
25,511
|
|
|
(1,027
|
)
|
|
Other liabilities
|
|
31,063
|
|
|
(1,175
|
)
|
|
Other liabilities
|
||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Products
|
500,000
|
|
|
2,396
|
|
|
Other assets
|
|
—
|
|
|
—
|
|
|
Other assets
|
(a)
|
These amounts include the amortized cost basis of closed portfolios used to designated hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. At June 30, 2018, the amortized cost basis of the closed portfolios used in these hedging relationships was $1.2 billion; the negative cumulative basis adjustments associated with these hedging relationships was $2.4 million; and the amounts of the designated hedged items were $500 million.
|
|
Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
|
|||||||
|
Six Months Ended June 30, 2018
|
Year Ended December 31, 2017
|
||||||
($ in Thousands)
|
Interest Income
|
Other Income (Expense)
|
Interest Income
|
Other Income (Expense)
|
||||
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded
|
(13
|
)
|
—
|
|
—
|
|
—
|
|
The effects of fair value and cash flow hedging: Gain or (loss) on fair value hedging relationships in Subtopic 815-20
|
|
|
|
|
||||
Interest contracts
|
|
|
|
|
||||
Hedged items
|
(2,409
|
)
|
—
|
|
—
|
|
—
|
|
Derivatives designated as hedging instruments
|
2,396
|
|
—
|
|
—
|
|
—
|
|
|
Income Statement Category of
Gain / (Loss) Recognized in Income
|
For the Six Months Ended June 30,
|
||||||
($ in Thousands)
|
|
2018
|
|
2017
|
||||
Derivative Instruments
|
|
|
|
|
||||
Interest rate-related instruments — customer and mirror, net
|
Capital markets, net
|
$
|
108
|
|
|
$
|
(69
|
)
|
Interest rate lock commitments (mortgage)
|
Mortgage banking, net
|
1,749
|
|
|
2,474
|
|
||
Forward commitments (mortgage)
|
Mortgage banking, net
|
(606
|
)
|
|
(2,749
|
)
|
||
Foreign currency exchange forwards
|
Capital markets, net
|
70
|
|
|
9
|
|
||
Commodity contracts
|
Capital markets, net
|
(886
|
)
|
|
198
|
|
|
June 30, 2018
|
December 31, 2017
|
||||
|
($ in Thousands)
|
|||||
Commitments to extend credit, excluding commitments to originate residential mortgage loans held for sale(a)(b)
|
$
|
8,552,601
|
|
$
|
8,027,187
|
|
Commercial letters of credit(a)
|
13,167
|
|
11,886
|
|
||
Standby letters of credit(c)
|
255,858
|
|
235,361
|
|
(a)
|
These off-balance sheet financial instruments are exercisable at the market rate prevailing at the date the underlying transaction will be completed and, thus, are deemed to have no current fair value, or the fair value is based on fees currently charged to enter into similar agreements and is not material at June 30, 2018 or December 31, 2017.
|
(b)
|
Interest rate lock commitments to originate residential mortgage loans held for sale are considered derivative instruments and are disclosed in Note 10.
|
(c)
|
The Corporation has established a liability of $3 million at June 30, 2018 and $2 million at December 31, 2017, as an estimate of the fair value of these financial instruments.
|
|
Six Months Ended June 30, 2018
|
|
Year Ended December 31, 2017
|
||||
|
($ in Thousands)
|
||||||
Balance at beginning of period
|
$
|
987
|
|
|
$
|
900
|
|
Repurchase provision expense
|
150
|
|
|
246
|
|
||
Charge offs, net
|
(90
|
)
|
|
(159
|
)
|
||
Amount recorded at acquisition
|
88
|
|
|
—
|
|
||
Balance at end of period
|
$
|
1,135
|
|
|
$
|
987
|
|
|
Fair Value Hierarchy
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
($ in Thousands)
|
||||||
Assets
|
|
|
|
|
|
||||
Investment securities available for sale
|
|
|
|
|
|
||||
U.S. Treasury securities
|
Level 1
|
|
$
|
996
|
|
|
$
|
996
|
|
Residential mortgage-related securities
|
|
|
|
|
|
||||
FNMA / FHLMC
|
Level 2
|
|
396,709
|
|
|
464,768
|
|
||
GNMA
|
Level 2
|
|
2,210,189
|
|
|
1,913,350
|
|
||
Private-label
|
Level 2
|
|
1,031
|
|
|
1,059
|
|
||
GNMA commercial mortgage-related securities
|
Level 2
|
|
1,348,282
|
|
|
1,513,277
|
|
||
FFELP asset backed securities
|
Level 2
|
|
299,831
|
|
|
145,176
|
|
||
Other equity securities
|
Level 1
|
|
1,613
|
|
|
1,632
|
|
||
Other debt securities
|
Level 2
|
|
3,000
|
|
|
3,188
|
|
||
Total investment securities available for sale
|
Level 1
|
|
2,609
|
|
|
2,628
|
|
||
Total investment securities available for sale
|
Level 2
|
|
4,259,042
|
|
|
4,040,818
|
|
||
Residential loans held for sale
|
Level 2
|
|
143,022
|
|
|
85,544
|
|
||
Interest rate-related instruments
|
Level 2
|
|
62,708
|
|
|
28,494
|
|
||
Foreign currency exchange forwards
|
Level 2
|
|
3,317
|
|
|
2,495
|
|
||
Interest rate products (designated as hedging instruments)
|
Level 2
|
|
2,396
|
|
|
—
|
|
||
Interest rate lock commitments to originate residential mortgage loans held for sale
|
Level 3
|
|
3,287
|
|
|
1,538
|
|
||
Commodity contracts
|
Level 2
|
|
66,894
|
|
|
38,686
|
|
||
Purchased options (time deposit)
|
Level 2
|
|
1,027
|
|
|
1,175
|
|
||
Liabilities
|
|
|
|
|
|
||||
Interest rate-related instruments
|
Level 2
|
|
$
|
62,141
|
|
|
$
|
28,035
|
|
Foreign currency exchange forwards
|
Level 2
|
|
3,091
|
|
|
2,339
|
|
||
Forward commitments to sell residential mortgage loans
|
Level 3
|
|
919
|
|
|
313
|
|
||
Commodity contracts
|
Level 2
|
|
66,380
|
|
|
37,286
|
|
||
Written options (time deposit)
|
Level 2
|
|
1,027
|
|
|
1,175
|
|
|
Investment Securities
Available for Sale
|
|
Derivative Financial
Instruments
|
||||
|
($ in Thousands)
|
||||||
Balance December 31, 2016
|
$
|
200
|
|
|
$
|
3,114
|
|
Total net gains (losses) included in income
|
|
|
|
||||
Mortgage derivative gain (loss)
|
—
|
|
|
(1,889
|
)
|
||
Transfer out of level 3 securities (a)
|
(200
|
)
|
|
—
|
|
||
Balance December 31, 2017
|
$
|
—
|
|
|
$
|
1,225
|
|
Total net gains (losses) included in income
|
|
|
|
||||
Mortgage derivative gain (loss)
|
—
|
|
|
1,147
|
|
||
Balance June 30, 2018
|
$
|
—
|
|
|
$
|
2,372
|
|
(a)
|
Represents individually evaluated impaired loans, net of the related allowance for loan losses.
|
(b)
|
Represents provision for credit losses on individually evaluated impaired loans.
|
(c)
|
If the fair value of the collateral exceeds the carrying amount of the asset, no charge-off or adjustment is necessary, the asset is not considered to be carried at fair value, and is therefore not included in the table.
|
|
Valuation Technique
|
|
Significant Unobservable Input
|
|
Weighted Average Input Applied
|
June 30, 2018
|
|||||
Mortgage servicing rights
|
Discounted cash flow
|
|
Discount rate
|
|
11%
|
Mortgage servicing rights
|
Discounted cash flow
|
|
Constant prepayment rate
|
|
9%
|
Impaired Loans
|
Appraisals / Discounted cash flow
|
|
Collateral / Discount factor
|
|
24%
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Fair Value Hierarchy Level
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
|
|
|
|||||||||||||||
|
|
|
($ in Thousands)
|
||||||||||||||
Financial assets
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and due from banks
|
Level 1
|
|
$
|
396,761
|
|
|
$
|
396,761
|
|
|
$
|
483,666
|
|
|
$
|
483,666
|
|
Interest-bearing deposits in other financial institutions
|
Level 1
|
|
71,462
|
|
|
71,462
|
|
|
199,702
|
|
|
199,702
|
|
||||
Federal funds sold and securities purchased under agreements to resell
|
Level 1
|
|
3,150
|
|
|
3,150
|
|
|
32,650
|
|
|
32,650
|
|
||||
Investment securities held to maturity
|
Level 2
|
|
2,602,247
|
|
|
2,560,943
|
|
|
2,282,853
|
|
|
2,283,574
|
|
||||
Investment securities available for sale
|
Level 1
|
|
2,609
|
|
|
2,609
|
|
|
2,628
|
|
|
2,628
|
|
||||
Investment securities available for sale
|
Level 2
|
|
4,259,042
|
|
|
4,259,042
|
|
|
4,040,818
|
|
|
4,040,818
|
|
||||
FHLB and Federal Reserve Bank stocks
|
Level 2
|
|
249,040
|
|
|
249,040
|
|
|
165,331
|
|
|
165,331
|
|
||||
Residential loans held for sale
|
Level 2
|
|
143,022
|
|
|
143,022
|
|
|
85,544
|
|
|
85,544
|
|
||||
Loans, net
|
Level 3
|
|
22,724,184
|
|
|
22,282,282
|
|
|
20,519,111
|
|
|
20,314,984
|
|
||||
Bank and corporate owned life insurance
|
Level 2
|
|
659,592
|
|
|
659,592
|
|
|
591,057
|
|
|
591,057
|
|
||||
Derivatives (trading and other assets)
|
Level 2
|
|
136,342
|
|
|
136,342
|
|
|
70,850
|
|
|
70,850
|
|
||||
Derivatives (trading and other assets)
|
Level 3
|
|
3,287
|
|
|
3,287
|
|
|
1,538
|
|
|
1,538
|
|
||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
||||||||
Noninterest-bearing demand, savings, interest-bearing demand, and money market accounts
|
Level 3
|
|
$
|
21,088,538
|
|
|
$
|
21,088,538
|
|
|
$
|
20,436,893
|
|
|
$
|
20,436,893
|
|
Brokered CDs and other time deposits
|
Level 2
|
|
2,727,776
|
|
|
2,727,776
|
|
|
2,349,069
|
|
|
2,349,069
|
|
||||
Short-term funding
|
Level 2
|
|
626,525
|
|
|
626,525
|
|
|
676,282
|
|
|
676,282
|
|
||||
Long-term funding
|
Level 2
|
|
4,925,476
|
|
|
4,921,348
|
|
|
3,397,450
|
|
|
3,411,368
|
|
||||
Standby letters of credit(a)
|
Level 2
|
|
2,549
|
|
|
2,549
|
|
|
2,402
|
|
|
2,402
|
|
||||
Derivatives (trading and other liabilities)
|
Level 2
|
|
132,639
|
|
|
132,639
|
|
|
68,835
|
|
|
68,835
|
|
||||
Derivatives (trading and other liabilities)
|
Level 3
|
|
919
|
|
|
919
|
|
|
313
|
|
|
313
|
|
(a)
|
The commitment on standby letters of credit was $256 million and $235 million at June 30, 2018 and December 31, 2017, respectively. See Note 12 for additional information on the standby letters of credit and for information on the fair value of lending-related commitments.
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
2018
|
|
2017
|
||||||||
|
($ in Thousands)
|
|||||||||||||
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
||||||||
RAP
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1,893
|
|
|
$
|
1,782
|
|
$
|
3,785
|
|
|
$
|
3,563
|
|
Interest cost
|
1,660
|
|
|
1,756
|
|
3,320
|
|
|
3,512
|
|
||||
Expected return on plan assets
|
(4,755
|
)
|
|
(4,882
|
)
|
(9,510
|
)
|
|
(9,763
|
)
|
||||
Amortization of prior service cost
|
(19
|
)
|
|
(18
|
)
|
(38
|
)
|
|
(37
|
)
|
||||
Amortization of actuarial loss
|
463
|
|
|
487
|
|
925
|
|
|
975
|
|
||||
Total net pension cost
|
$
|
(759
|
)
|
|
$
|
(875
|
)
|
$
|
(1,518
|
)
|
|
$
|
(1,750
|
)
|
Bank Mutual Pension Plan(a)
|
|
|
|
|
|
|
||||||||
Interest cost
|
$
|
650
|
|
|
N/A
|
|
$
|
1,083
|
|
|
N/A
|
|
||
Expected return on plan assets
|
(1,060
|
)
|
|
N/A
|
|
(1,592
|
)
|
|
N/A
|
|
||||
Total net pension cost
|
$
|
(410
|
)
|
|
N/A
|
|
$
|
(509
|
)
|
|
N/A
|
|
||
Postretirement Plan(b)
|
|
|
|
|
|
|
||||||||
Interest cost
|
$
|
27
|
|
|
$
|
24
|
|
$
|
53
|
|
|
$
|
48
|
|
Amortization of prior service cost
|
(19
|
)
|
|
(19
|
)
|
(38
|
)
|
|
(38
|
)
|
||||
Amortization of actuarial loss
|
2
|
|
|
—
|
|
4
|
|
|
—
|
|
||||
Total net periodic benefit cost
|
$
|
10
|
|
|
$
|
5
|
|
$
|
19
|
|
|
$
|
10
|
|
(a)
|
The reported figures only include five months of expense due to the timing of the Bank Mutual acquisition. See Note 2 for additional information on the Bank Mutual acquisition.
|
(b)
|
The portion of the Postretirement Plan attributed to Bank Mutual's Postretirement Plan only includes five months of expense due to the timing of the Bank Mutual acquisition. See Note 2 for additional information on the Bank Mutual acquisition.
|
Segment Income Statement Data
|
|
|
|
|
|
|
|
||||||||
($ in Thousands)
|
Corporate and
Commercial Specialty |
|
Community,
Consumer, and Business |
|
Risk Management
and Shared Services |
|
Consolidated
Total |
||||||||
Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
||||||||
Net interest income
|
$
|
203,287
|
|
|
$
|
218,163
|
|
|
$
|
14,783
|
|
|
$
|
436,233
|
|
Noninterest income
|
26,876
|
|
|
150,286
|
|
|
6,059
|
|
|
183,222
|
|
||||
Total revenue
|
230,163
|
|
|
368,449
|
|
|
20,842
|
|
|
619,455
|
|
||||
Credit provision(a)
|
21,723
|
|
|
9,846
|
|
|
(27,569
|
)
|
|
4,000
|
|
||||
Noninterest expense
|
81,025
|
|
|
265,700
|
|
|
77,498
|
|
|
424,223
|
|
||||
Income (loss) before income taxes
|
127,415
|
|
|
92,904
|
|
|
(29,087
|
)
|
|
191,232
|
|
||||
Income tax expense (benefit)
|
24,880
|
|
|
19,510
|
|
|
(11,806
|
)
|
|
32,583
|
|
||||
Net income
|
$
|
102,535
|
|
|
$
|
73,394
|
|
|
$
|
(17,280
|
)
|
|
$
|
158,648
|
|
Return on average allocated capital (ROCET1)(b)
|
17.2
|
%
|
|
22.8
|
%
|
|
(7.5
|
)%
|
|
12.7
|
%
|
||||
Six Months Ended June 30, 2017
|
|
|
|
|
|
|
|
||||||||
Net interest income
|
$
|
179,259
|
|
|
$
|
179,059
|
|
|
$
|
5,775
|
|
|
$
|
364,093
|
|
Noninterest income
|
24,490
|
|
|
130,679
|
|
|
7,072
|
|
|
162,241
|
|
||||
Total revenue
|
203,749
|
|
|
309,738
|
|
|
12,847
|
|
|
526,334
|
|
||||
Credit provision(a)
|
23,050
|
|
|
10,271
|
|
|
(12,321
|
)
|
|
21,000
|
|
||||
Noninterest expense
|
76,897
|
|
|
241,339
|
|
|
31,771
|
|
|
350,007
|
|
||||
Income (loss) before income taxes
|
103,802
|
|
|
58,128
|
|
|
(6,603
|
)
|
|
155,327
|
|
||||
Income tax expense (benefit)
|
34,012
|
|
|
20,345
|
|
|
(13,283
|
)
|
|
41,074
|
|
||||
Net income
|
$
|
69,790
|
|
|
$
|
37,783
|
|
|
$
|
6,680
|
|
|
$
|
114,253
|
|
Return on average allocated capital (ROCET1)(b)
|
12.6
|
%
|
|
13.1
|
%
|
|
1.1
|
%
|
|
10.6
|
%
|
Segment Balance Sheet Data
|
|
|
|
|
|
|
|
||||||||
($ in Thousands)
|
Corporate and
Commercial Specialty |
|
Community,
Consumer, and Business |
|
Risk Management
and Shared Services |
|
Consolidated
Total |
||||||||
Average balances for YTD June 2018
|
|
|
|
|
|
|
|
||||||||
Average earning assets
|
$
|
11,729,745
|
|
|
$
|
10,271,021
|
|
|
$
|
7,849,775
|
|
|
$
|
29,850,541
|
|
Average loans
|
11,718,236
|
|
|
10,267,066
|
|
|
559,238
|
|
|
22,544,539
|
|
||||
Average deposits
|
7,838,409
|
|
|
13,418,283
|
|
|
2,391,868
|
|
|
23,648,560
|
|
||||
Average allocated capital (CET1)(b)
|
$
|
1,204,160
|
|
|
$
|
648,032
|
|
|
$
|
587,297
|
|
|
$
|
2,439,489
|
|
Average balances for YTD June 2017
|
|
|
|
|
|
|
|
||||||||
Average earning assets
|
$
|
10,807,106
|
|
|
$
|
9,321,564
|
|
|
$
|
6,414,384
|
|
|
$
|
26,543,054
|
|
Average loans
|
10,797,831
|
|
|
9,319,719
|
|
|
181,049
|
|
|
20,298,599
|
|
||||
Average deposits
|
6,433,870
|
|
|
11,456,200
|
|
|
3,604,524
|
|
|
21,494,594
|
|
||||
Average allocated capital (CET1)(b)
|
$
|
1,120,082
|
|
|
$
|
582,706
|
|
|
$
|
378,104
|
|
|
$
|
2,080,892
|
|
(a)
|
The consolidated credit provision is equal to the actual reported provision for credit losses.
|
(b)
|
The Federal Reserve establishes capital adequacy requirements for the Corporation, including common equity Tier 1. For segment reporting purposes, the return on common equity Tier 1 ("ROCET1") reflects return on average allocated common equity Tier 1. The ROCET1 for the Risk Management and Shared Services segment and the Consolidated Total is inclusive of the annualized effect of the preferred stock dividends.
|
Segment Income Statement Data
|
|
|
|
|
|
|
|
||||||||
($ in Thousands)
|
Corporate and
Commercial
Specialty
|
|
Community,
Consumer, and
Business
|
|
Risk Management
and Shared Services
|
|
Consolidated
Total
|
||||||||
Three Months Ended June 30, 2018
|
|
|
|
|
|
|
|
||||||||
Net interest income
|
$
|
107,330
|
|
|
$
|
114,620
|
|
|
$
|
4,413
|
|
|
$
|
226,362
|
|
Noninterest income
|
14,194
|
|
|
76,250
|
|
|
2,399
|
|
|
92,842
|
|
||||
Total revenue
|
121,524
|
|
|
190,870
|
|
|
6,812
|
|
|
319,204
|
|
||||
Credit provision(a)
|
11,126
|
|
|
4,880
|
|
|
(12,006
|
)
|
|
4,000
|
|
||||
Noninterest expense
|
41,775
|
|
|
138,553
|
|
|
30,929
|
|
|
211,258
|
|
||||
Income (loss) before income taxes
|
68,623
|
|
|
47,437
|
|
|
(12,111
|
)
|
|
103,947
|
|
||||
Income tax expense (benefit)
|
13,454
|
|
|
9,962
|
|
|
(8,661
|
)
|
|
14,754
|
|
||||
Net income (loss)
|
$
|
55,169
|
|
|
$
|
37,475
|
|
|
$
|
(3,450
|
)
|
|
$
|
89,192
|
|
Return on average allocated capital (ROCET1)(b)
|
17.9
|
%
|
|
22.7
|
%
|
|
(3.9
|
)%
|
|
14.0
|
%
|
||||
Three Months Ended June 30, 2017
|
|
|
|
|
|
|
|
||||||||
Net interest income
|
$
|
89,871
|
|
|
$
|
90,131
|
|
|
$
|
3,817
|
|
|
$
|
183,819
|
|
Noninterest income
|
12,497
|
|
|
65,809
|
|
|
4,104
|
|
|
82,410
|
|
||||
Total revenue
|
102,368
|
|
|
155,940
|
|
|
7,921
|
|
|
266,229
|
|
||||
Credit provision(a)
|
11,470
|
|
|
5,764
|
|
|
(5,234
|
)
|
|
12,000
|
|
||||
Noninterest expense
|
39,418
|
|
|
125,242
|
|
|
11,656
|
|
|
176,316
|
|
||||
Income (loss) before income taxes
|
51,480
|
|
|
24,934
|
|
|
1,499
|
|
|
77,913
|
|
||||
Income tax expense (benefit)
|
16,363
|
|
|
8,727
|
|
|
(5,160
|
)
|
|
19,930
|
|
||||
Net income
|
$
|
35,117
|
|
|
$
|
16,207
|
|
|
$
|
6,659
|
|
|
$
|
57,983
|
|
Return on average allocated capital (ROCET1)(b)
|
12.5
|
%
|
|
11.0
|
%
|
|
4.5
|
%
|
|
10.6
|
%
|
Segment Balance Sheet Data
|
|
|
|
|
|
|
|
||||||||
($ in Thousands)
|
Corporate and
Commercial
Specialty
|
|
Community,
Consumer, and
Business
|
|
Risk Management
and Shared Services
|
|
Consolidated
Total
|
||||||||
Three Months Ended June 30, 2018
|
|
|
|
|
|
|
|
||||||||
Average earning assets
|
$
|
12,066,538
|
|
|
$
|
10,402,680
|
|
|
$
|
7,943,487
|
|
|
$
|
30,412,705
|
|
Average loans
|
12,054,347
|
|
|
10,399,458
|
|
|
551,624
|
|
|
23,005,428
|
|
||||
Average deposits
|
7,621,977
|
|
|
13,736,251
|
|
|
2,288,021
|
|
|
23,646,250
|
|
||||
Average allocated capital (CET1)(b)
|
$
|
1,236,918
|
|
|
$
|
663,172
|
|
|
$
|
588,411
|
|
|
$
|
2,488,501
|
|
Three Months Ended June 30, 2017
|
|
|
|
|
|
|
|
||||||||
Average earning assets
|
$
|
10,853,881
|
|
|
$
|
9,510,571
|
|
|
$
|
6,380,103
|
|
|
$
|
26,744,555
|
|
Average loans
|
10,841,858
|
|
|
9,508,683
|
|
|
171,449
|
|
|
20,521,990
|
|
||||
Average deposits
|
6,447,190
|
|
|
11,574,028
|
|
|
3,501,931
|
|
|
21,523,149
|
|
||||
Average allocated capital (CET1)(b)
|
$
|
1,125,494
|
|
|
$
|
588,880
|
|
|
$
|
385,451
|
|
|
$
|
2,099,825
|
|
(a)
|
The consolidated credit provision is equal to the actual reported provision for credit losses.
|
(b)
|
The Federal Reserve establishes capital adequacy requirements for the Corporation, including common equity Tier 1. For segment reporting purposes, the ROCET1 reflects return on average allocated common equity Tier 1. The ROCET1 for the Risk Management and Shared Services segment and the Consolidated Total is inclusive of the annualized effect of the preferred stock dividends.
|
($ in Thousands)
|
Investment
Securities
Available
For Sale
|
|
Defined Benefit
Pension and
Post Retirement
Obligations
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||
Balance January 1, 2018
|
$
|
(38,453
|
)
|
|
$
|
(24,305
|
)
|
|
$
|
(62,758
|
)
|
Other comprehensive income (loss) before reclassifications
|
(60,754
|
)
|
|
—
|
|
|
(60,754
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
|||||
Investment securities losses (gains), net
|
2,015
|
|
|
—
|
|
|
2,015
|
|
|||
Personnel expense
|
—
|
|
|
(76
|
)
|
|
(76
|
)
|
|||
Other expense
|
—
|
|
|
929
|
|
|
929
|
|
|||
Adjustment for adoption of ASU 2016-01
|
(84
|
)
|
|
—
|
|
|
(84
|
)
|
|||
Adjustment for adoption of ASU 2018-02
|
(8,419
|
)
|
|
(5,235
|
)
|
|
(13,654
|
)
|
|||
Interest income (amortization of net unrealized losses (gains) on available for sale securities transferred to held to maturity securities)
|
(632
|
)
|
|
—
|
|
|
(632
|
)
|
|||
Income tax (expense) benefit
|
15,340
|
|
|
(216
|
)
|
|
15,124
|
|
|||
Net other comprehensive income (loss) during period
|
(52,533
|
)
|
|
(4,597
|
)
|
|
(57,130
|
)
|
|||
Balance June 30, 2018
|
$
|
(90,986
|
)
|
|
$
|
(28,902
|
)
|
|
$
|
(119,888
|
)
|
|
|
|
|
|
|
||||||
Balance January 1, 2017
|
$
|
(20,079
|
)
|
|
$
|
(34,600
|
)
|
|
$
|
(54,679
|
)
|
Other comprehensive income (loss) before reclassifications
|
3,632
|
|
|
—
|
|
|
3,632
|
|
|||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
|||||
Personnel expense
|
—
|
|
|
(75
|
)
|
|
(75
|
)
|
|||
Other expense
|
—
|
|
|
975
|
|
|
975
|
|
|||
Interest income (amortization of net unrealized losses (gains) on available for sale securities transferred to held to maturity securities)
|
(2,575
|
)
|
|
—
|
|
|
(2,575
|
)
|
|||
Income tax (expense) benefit
|
(406
|
)
|
|
(342
|
)
|
|
(748
|
)
|
|||
Net other comprehensive income (loss) during period
|
651
|
|
|
558
|
|
|
1,209
|
|
|||
Balance June 30, 2017
|
$
|
(19,428
|
)
|
|
$
|
(34,042
|
)
|
|
$
|
(53,470
|
)
|
|
Investments
Securities Available For Sale |
|
Defined Benefit
Pension and Post Retirement Obligations |
|
Accumulated
Other Comprehensive Income (Loss) |
||||||
Balance April 1, 2018
|
$
|
(78,453
|
)
|
|
$
|
(29,220
|
)
|
|
$
|
(107,673
|
)
|
Other comprehensive income (loss) before reclassifications
|
(18,919
|
)
|
|
—
|
|
|
(18,919
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
|
|
|
|
||||||
Investment securities losses (gains), net
|
2,015
|
|
|
—
|
|
|
2,015
|
|
|||
Personnel expense
|
—
|
|
|
(38
|
)
|
|
(38
|
)
|
|||
Other expense
|
—
|
|
|
465
|
|
|
465
|
|
|||
Interest income (amortization of net unrealized losses (gains) on available for sale securities transferred to held to maturity securities)
|
(335
|
)
|
|
—
|
|
|
(335
|
)
|
|||
Income tax (expense) benefit
|
4,705
|
|
|
(109
|
)
|
|
4,596
|
|
|||
Net other comprehensive income (loss) during period
|
(12,533
|
)
|
|
318
|
|
|
(12,215
|
)
|
|||
Balance June 30, 2018
|
$
|
(90,986
|
)
|
|
$
|
(28,902
|
)
|
|
$
|
(119,888
|
)
|
|
|
|
|
|
|
||||||
Balance April 1, 2017
|
$
|
(22,023
|
)
|
|
$
|
(34,321
|
)
|
|
$
|
(56,344
|
)
|
Other comprehensive income (loss) before reclassifications
|
5,744
|
|
|
—
|
|
|
5,744
|
|
|||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
|
|
|
|
||||||
Personnel expense
|
—
|
|
|
(37
|
)
|
|
(37
|
)
|
|||
Other expense
|
—
|
|
|
487
|
|
|
487
|
|
|||
Interest income (Amortization of net unrealized losses (gains)on available for sale securities transferred to held to maturity securities)
|
(1,548
|
)
|
|
—
|
|
|
(1,548
|
)
|
|||
Income tax (expense) benefit
|
(1,601
|
)
|
|
(171
|
)
|
|
(1,772
|
)
|
|||
Net other comprehensive income (loss) during period
|
2,595
|
|
|
279
|
|
|
2,874
|
|
|||
Balance June 30, 2017
|
$
|
(19,428
|
)
|
|
$
|
(34,042
|
)
|
|
$
|
(53,470
|
)
|
Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
||||||||
($ in Thousands)
|
Corporate and
Commercial
Specialty
|
|
Community,
Consumer, and
Business
|
|
Risk Management
and Shared Services
|
|
Consolidated
Total
|
||||||||
Insurance commissions and fees
|
$
|
—
|
|
|
$
|
46,612
|
|
|
$
|
32
|
|
|
46,644
|
|
|
Service charges and deposit account fees
|
8,011
|
|
|
24,773
|
|
|
25
|
|
|
32,810
|
|
||||
Card-based and loan fees(a)
|
674
|
|
|
19,691
|
|
|
67
|
|
|
20,432
|
|
||||
Trust and asset management fees
|
—
|
|
|
26,806
|
|
|
—
|
|
|
26,806
|
|
||||
Brokerage commissions and fees
|
—
|
|
|
13,902
|
|
|
267
|
|
|
14,169
|
|
||||
Other revenue
|
(170
|
)
|
|
4,763
|
|
|
98
|
|
|
4,692
|
|
||||
Noninterest Income (in-scope of Topic 606)
|
8,515
|
|
|
136,547
|
|
|
490
|
|
|
145,553
|
|
||||
Noninterest Income (out-of-scope of Topic 606)
|
18,361
|
|
|
13,739
|
|
|
5,570
|
|
|
37,670
|
|
||||
Total Noninterest Income
|
26,876
|
|
|
150,286
|
|
|
6,059
|
|
|
183,222
|
|
||||
(a) Loan fees are out-of-scope of Topic 606.
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Six Months Ended June 30, 2017
|
|
|
|
|
|
|
|
||||||||
($ in Thousands)
|
Corporate and
Commercial Specialty |
|
Community,
Consumer, and Business |
|
Risk Management
and Shared Services |
|
Consolidated
Total |
||||||||
Insurance commissions and fees
|
$
|
—
|
|
|
$
|
42,473
|
|
|
$
|
—
|
|
|
$
|
42,473
|
|
Service charges and deposit account fees
|
8,511
|
|
|
23,826
|
|
|
49
|
|
|
32,386
|
|
||||
Card-based and loan fees(a)
|
592
|
|
|
16,973
|
|
|
11
|
|
|
17,575
|
|
||||
Trust and asset management fees
|
—
|
|
|
24,281
|
|
|
—
|
|
|
24,281
|
|
||||
Brokerage commissions and fees
|
—
|
|
|
8,679
|
|
|
—
|
|
|
8,679
|
|
||||
Other revenue
|
82
|
|
|
4,315
|
|
|
105
|
|
|
4,502
|
|
||||
Noninterest Income (in-scope of Topic 606)
|
9,184
|
|
|
120,547
|
|
|
165
|
|
|
129,896
|
|
||||
Noninterest Income (out-of-scope of Topic 606)
|
15,306
|
|
|
10,132
|
|
|
6,906
|
|
|
32,344
|
|
||||
Total Noninterest Income
|
24,490
|
|
|
130,679
|
|
|
7,072
|
|
|
162,241
|
|
||||
(a) Loan fees are out-of-scope of Topic 606.
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
|
|
|
|
|
||||||||
($ in Thousands)
|
Corporate and
Commercial
Specialty
|
|
Community,
Consumer, and
Business
|
|
Risk Management
and Shared Services
|
|
Consolidated
Total
|
||||||||
Insurance commissions and fees
|
$
|
—
|
|
|
$
|
23,988
|
|
|
$
|
7
|
|
|
$
|
23,996
|
|
Service charges and deposit account fees
|
3,786
|
|
|
12,590
|
|
|
13
|
|
|
16,390
|
|
||||
Card-based and loan fees(a)
|
358
|
|
|
10,162
|
|
|
42
|
|
|
10,562
|
|
||||
Trust and asset management fees
|
—
|
|
|
13,437
|
|
|
—
|
|
|
13,437
|
|
||||
Brokerage commissions and fees
|
—
|
|
|
6,870
|
|
|
26
|
|
|
6,896
|
|
||||
Other revenue
|
(825
|
)
|
|
2,302
|
|
|
68
|
|
|
1,545
|
|
||||
Noninterest Income (in-scope of Topic 606)
|
3,320
|
|
|
69,349
|
|
|
156
|
|
|
72,825
|
|
||||
Noninterest Income (out-of-scope of Topic 606)
|
10,874
|
|
|
6,901
|
|
|
2,242
|
|
|
20,017
|
|
||||
Total Noninterest Income
|
14,194
|
|
|
76,250
|
|
|
2,399
|
|
|
92,842
|
|
||||
(a) Loan fees are out-of-scope of Topic 606.
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Three Months Ended June 30, 2017
|
|
|
|
|
|
|
|
||||||||
($ in Thousands)
|
Corporate and
Commercial Specialty |
|
Community,
Consumer, and Business |
|
Risk Management
and Shared Services |
|
Consolidated
Total |
||||||||
Insurance commissions and fees
|
$
|
—
|
|
|
$
|
20,853
|
|
|
$
|
—
|
|
|
$
|
20,853
|
|
Service charges and deposit account fees
|
4,070
|
|
|
11,938
|
|
|
23
|
|
|
16,030
|
|
||||
Card-based and loan fees(a)
|
320
|
|
|
8,829
|
|
|
5
|
|
|
9,154
|
|
||||
Trust and asset management fees
|
—
|
|
|
12,346
|
|
|
—
|
|
|
12,346
|
|
||||
Brokerage commissions and fees
|
—
|
|
|
4,346
|
|
|
—
|
|
|
4,346
|
|
||||
Other revenue
|
37
|
|
|
2,196
|
|
|
53
|
|
|
2,286
|
|
||||
Noninterest Income (in-scope of Topic 606)
|
4,426
|
|
|
60,507
|
|
|
81
|
|
|
65,014
|
|
||||
Noninterest Income (out-of-scope of Topic 606)
|
8,071
|
|
|
5,302
|
|
|
4,022
|
|
|
17,395
|
|
||||
Total Noninterest Income
|
12,497
|
|
|
65,809
|
|
|
4,104
|
|
|
82,410
|
|
||||
(a) Loan fees are out-of-scope of Topic 606.
|
|
|
|
|
|
|
|
Revenue Stream
|
|
Noninterest income in-scope of Topic 606
|
Insurance commissions and fees
|
|
The Corporation's insurance revenue has two distinct performance obligations. The first performance obligation is the selling of the policy as an agent for the carrier. This performance obligation is satisfied upon binding of the policy. The second performance obligation is the ongoing servicing of the policy which is satisfied over the life of the policy. For employee benefits, the payment is typically received monthly. For property and casualty, payments can vary, but are typically received at, or in advance, of the policy period.
|
Service charges and deposit account fees
|
|
Service charges on deposit accounts consist of monthly service fees (i.e. business analysis fees and consumer service charges) and other deposit account related fees. The Corporation's performance obligation for monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Other deposit account related fees are largely transactional based, and therefore, the Corporation's performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts.
|
Card-based and loan fees(a)
|
|
Card-based and loan fees are primarily comprised of debit and credit card income, ATM fees, and merchant services income. Debit and credit card income is primarily comprised of interchange fees earned whenever the Corporation's debit and credit cards are processed through card payment networks. ATM and merchant fees are largely transactional based, and therefore, the Corporation's performance obligation is satisfied, and related revenue recognized, at a point in time. Payment is typically received immediately or in the following month.
|
Trust and asset management fees
|
|
Trust and asset management income is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Corporation's performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days after month end through a direct charge to customers’ accounts. The Corporation's performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered.
|
Brokerage commissions and fees
|
|
Brokerage commissions and fees primarily consists of investment advisory, brokerage, retirement services, and annuities. The Corporation's performance obligation for investment advisory services and retirement services is generally satisfied, and the related revenue recognized, over the period in which the services are provided. The performance obligation for annuities is satisfied upon sale of the annuity, and therefore, the related revenue is primarily recognized at the time of sale. Payment for these services are typically received immediately or in advance of the service.
|
ITEM 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Raising the total asset threshold from $10 billion to $250 billion at which bank holding companies are required to conduct annual company-run stress tests mandated by the Dodd-Frank Act;
|
•
|
Raising the total asset threshold from $10 billion to $50 billion at which publicly traded bank holding companies are required to establish risk committees for the oversight of the enterprise-wide risk management practices of the institution;
|
•
|
Raising the total asset threshold from $50 billion to $250 billion at which bank holding companies would be subject to annual supervisory stress tests;
|
•
|
Raising the total asset threshold for enhanced prudential supervision by the Board of Governors of the Federal Reserve System (“Federal Reserve Board”) from $50 billion to $250 billion, which had resulted in enhanced prudential standards in the areas of risk-based capital and leverage limits, liquidity requirements, and resolution planning (preparation of so-called “living wills”). Under the amended provisions, the Federal Reserve Board retains discretion to subject bank holding companies with more than $100 billion in assets to enhanced supervision.
|
•
|
Prohibiting federal banking regulators from imposing higher capital standards on High Volatility Commercial Real Estate (“HVCRE”) exposures unless they are for acquisition, development or construction (“ADC”), and clarifying ADC status;
|
•
|
Requiring the federal banking agencies to amend the Liquidity Coverage Ratio Rule such that all qualifying investment-grade, liquid and readily-marketable municipal securities are treated as level 2B liquid assets, making them more attractive investment alternatives;
|
•
|
Exempting from appraisal requirements certain transactions involving real property in rural areas and valued at less than $400,000; and
|
•
|
Directing the Bureau of Consumer Financial Protection to provide guidance on the applicability of the TILA-RESPA Integrated Disclosure rule to mortgage assumption transactions and construction-to-permanent home loans, as well the extent to which lenders can rely on model disclosures that do not reflect recent regulatory changes.
|
•
|
Average loans of $22.5 billion increased $2.2 billion, or 11%, from the first six months of 2017. Average deposits of $23.6 billion increased $2.2 billion, or 10%, from the first six months of 2017. For the remainder of 2018, the Corporation expects 1% to 2% quarterly loan growth and to maintain the loan to deposit ratio under 100%.
|
•
|
Net interest income of $436 million increased $72 million, or 20%, from the first six months of 2017. Net interest margin was 2.97%, compared to 2.83% for the first six months of 2017. For the remainder of 2018, the Corporation expects an improving year over year net interest margin.
|
•
|
Provision for credit losses was $4 million, down from $21 million the first six months of 2017. For the remainder of 2018, the Corporation expects the provision for credit losses will change based on changes in risk grade or other indicators of credit quality, and loan volume.
|
•
|
Noninterest income of $183 million was up $21 million, or 13% from the first six months of 2017. For 2018, the Corporation expects noninterest income of approximately $365 million to $370 million.
|
•
|
Noninterest expense of $424 million including $28 million of acquisition related costs pertaining to Bank Mutual, was up $74 million, or 21% compared to the first six months 2017. For 2018, the Corporation expects noninterest expense to be approximately $825 million, which includes the Diversified and Anderson acquisitions and all costs related to Bank Mutual.
|
•
|
The effective tax rate for the first six months of 2018 was 17.04%, compared to 26.44% for the first six months of 2017. The Corporation expects the effective tax rate to be approximately 22% for the remainder of the year, and approximately 20% for the full year 2018.
|
|
YTD Jun 2018
|
|
YTD Jun 2017
|
|
2Q18
|
|
1Q18
|
|
4Q17
|
|
3Q17
|
|
2Q17
|
||||||||||||||
|
($ in Thousands, except per share data)
|
||||||||||||||||||||||||||
Net income
|
$
|
158,648
|
|
|
$
|
114,253
|
|
|
$
|
89,192
|
|
|
$
|
69,456
|
|
|
$
|
50,010
|
|
|
$
|
65,001
|
|
|
$
|
57,983
|
|
Net income available to common equity
|
153,980
|
|
|
109,584
|
|
|
86,863
|
|
|
67,117
|
|
|
47,671
|
|
|
62,662
|
|
|
55,644
|
|
|||||||
Earnings per common share - basic
|
0.92
|
|
|
0.72
|
|
|
0.51
|
|
|
0.41
|
|
|
0.31
|
|
|
0.41
|
|
|
0.36
|
|
|||||||
Earnings per common share - diluted
|
0.90
|
|
|
0.71
|
|
|
0.50
|
|
|
0.40
|
|
|
0.31
|
|
|
0.41
|
|
|
0.36
|
|
|||||||
Effective tax rate
|
17.04
|
%
|
|
26.44
|
%
|
|
14.19
|
%
|
|
20.43
|
%
|
|
44.34
|
%
|
|
30.55
|
%
|
|
25.58
|
%
|
|
Six Months Ended June 30,
|
||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||
|
Average
Balance
|
Interest
Income /
Expense
|
Average
Yield /
Rate
|
|
Average
Balance |
Interest
Income / Expense |
Average
Yield / Rate |
||||||||||
|
($ in Thousands)
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||||
Earning assets
|
|
|
|
|
|
|
|
||||||||||
Loans(a)(b)(c)
|
|
|
|
|
|
|
|
||||||||||
Commercial and business lending
|
$
|
7,506,399
|
|
$
|
161,476
|
|
4.34
|
%
|
|
$
|
7,260,839
|
|
$
|
126,187
|
|
3.50
|
%
|
Commercial real estate lending
|
5,553,469
|
|
133,554
|
|
4.85
|
%
|
|
4,982,027
|
|
92,697
|
|
3.75
|
%
|
||||
Total commercial
|
13,059,868
|
|
295,030
|
|
4.55
|
%
|
|
12,242,866
|
|
218,884
|
|
3.60
|
%
|
||||
Residential mortgage
|
8,124,546
|
|
135,432
|
|
3.34
|
%
|
|
6,762,319
|
|
109,404
|
|
3.24
|
%
|
||||
Retail
|
1,360,125
|
|
37,061
|
|
5.46
|
%
|
|
1,293,414
|
|
31,497
|
|
4.88
|
%
|
||||
Total loans
|
22,544,539
|
|
467,523
|
|
4.17
|
%
|
|
20,298,599
|
|
359,785
|
|
3.56
|
%
|
||||
Investment securities
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
5,547,289
|
|
60,727
|
|
2.19
|
%
|
|
4,805,819
|
|
47,133
|
|
1.96
|
%
|
||||
Tax-exempt(a)
|
1,405,561
|
|
25,200
|
|
3.59
|
%
|
|
1,140,889
|
|
24,897
|
|
4.36
|
%
|
||||
Other short-term investments
|
353,152
|
|
5,330
|
|
3.04
|
%
|
|
297,747
|
|
3,089
|
|
2.09
|
%
|
||||
Investments and other
|
7,306,003
|
|
91,257
|
|
2.50
|
%
|
|
6,244,455
|
|
75,119
|
|
2.41
|
%
|
||||
Total earning assets
|
29,850,541
|
|
$
|
558,780
|
|
3.76
|
%
|
|
26,543,054
|
|
$
|
434,904
|
|
3.29
|
%
|
||
Other assets, net
|
2,953,835
|
|
|
|
|
2,447,719
|
|
|
|
||||||||
Total assets
|
$
|
32,804,377
|
|
|
|
|
$
|
28,990,773
|
|
|
|
||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits
|
|
|
|
|
|
|
|
||||||||||
Savings
|
$
|
1,808,207
|
|
$
|
412
|
|
0.05
|
%
|
|
$
|
1,503,678
|
|
$
|
389
|
|
0.05
|
%
|
Interest-bearing demand
|
4,620,383
|
|
17,736
|
|
0.77
|
%
|
|
3,822,996
|
|
8,001
|
|
0.42
|
%
|
||||
Money market
|
7,202,684
|
|
21,830
|
|
0.61
|
%
|
|
6,070,492
|
|
8,748
|
|
0.29
|
%
|
||||
Network transaction deposits
|
2,269,000
|
|
18,281
|
|
1.62
|
%
|
|
3,485,279
|
|
14,119
|
|
0.82
|
%
|
||||
Time
|
2,639,731
|
|
13,585
|
|
1.04
|
%
|
|
1,683,177
|
|
6,849
|
|
0.82
|
%
|
||||
Total interest-bearing deposits
|
18,540,005
|
|
71,843
|
|
0.78
|
%
|
|
16,565,621
|
|
38,104
|
|
0.46
|
%
|
||||
Federal funds purchased and securities sold under agreements to repurchase
|
267,602
|
|
1,060
|
|
0.80
|
%
|
|
492,425
|
|
1,339
|
|
0.55
|
%
|
||||
Other short-term funding
|
69,654
|
|
111
|
|
0.32
|
%
|
|
107,035
|
|
169
|
|
0.32
|
%
|
||||
FHLB advances
|
4,275,753
|
|
34,402
|
|
1.62
|
%
|
|
3,007,025
|
|
11,596
|
|
0.78
|
%
|
||||
Long-term funding
|
497,433
|
|
9,088
|
|
3.65
|
%
|
|
496,755
|
|
9,088
|
|
3.66
|
%
|
||||
Total short and long-term funding
|
5,110,442
|
|
44,661
|
|
1.76
|
%
|
|
4,103,240
|
|
22,192
|
|
1.09
|
%
|
||||
Total interest-bearing liabilities
|
23,650,448
|
|
$
|
116,504
|
|
0.99
|
%
|
|
20,668,861
|
|
$
|
60,296
|
|
0.59
|
%
|
||
Noninterest-bearing demand deposits
|
5,108,554
|
|
|
|
|
4,928,973
|
|
|
|
||||||||
Other liabilities
|
415,683
|
|
|
|
|
248,559
|
|
|
|
||||||||
Stockholders’ equity
|
3,629,692
|
|
|
|
|
3,144,380
|
|
|
|
||||||||
Total liabilities and stockholders’ equity
|
$
|
32,804,377
|
|
|
|
|
$
|
28,990,773
|
|
|
|
||||||
Interest rate spread
|
|
|
2.77
|
%
|
|
|
|
2.70
|
%
|
||||||||
Net free funds
|
|
|
0.20
|
%
|
|
|
|
0.13
|
%
|
||||||||
Fully tax-equivalent net interest income and net interest margin
|
|
$
|
442,277
|
|
2.97
|
%
|
|
|
$
|
374,608
|
|
2.83
|
%
|
||||
Fully tax-equivalent adjustment
|
|
6,043
|
|
|
|
|
10,515
|
|
|
||||||||
Net interest income
|
|
$
|
436,233
|
|
|
|
|
$
|
364,093
|
|
|
(a)
|
Beginning in 2018, the yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions. Prior to 2018, the yield on tax-exempt loans and securities was computed on a fully tax-equivalent basis using a tax rate of 35% and was net of the effects of certain disallowed interest deductions.
|
(b)
|
Nonaccrual loans and loans held for sale have been included in the average balances.
|
(c)
|
Interest income includes net deferred loan origination costs and net accreted purchase loan discount.
|
|
Quarter ended
|
|||||||||||||||||||||||||
|
June 30, 2018
|
|
March 31, 2018
|
|
June 30, 2017
|
|||||||||||||||||||||
|
Average
Balance
|
Interest
Income /
Expense
|
Average
Yield /
Rate
|
|
Average
Balance |
Interest
Income / Expense |
Average
Yield / Rate |
|
Average
Balance
|
Interest
Income /
Expense
|
Average
Yield /
Rate
|
|||||||||||||||
|
($ in Thousands)
|
|||||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Loans(a)(b)(c)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial and business lending
|
$
|
7,697,057
|
|
$
|
86,771
|
|
4.52
|
%
|
|
$
|
7,313,621
|
|
$
|
74,706
|
|
4.14
|
%
|
|
$
|
7,321,523
|
|
$
|
65,507
|
|
3.59
|
%
|
Commercial real estate lending
|
5,705,817
|
|
72,049
|
|
5.06
|
%
|
|
5,399,429
|
|
61,504
|
|
4.62
|
%
|
|
4,964,257
|
|
47,562
|
|
3.84
|
%
|
||||||
Total commercial
|
13,402,874
|
|
158,820
|
|
4.75
|
%
|
|
12,713,050
|
|
136,210
|
|
4.34
|
%
|
|
12,285,780
|
|
113,069
|
|
3.69
|
%
|
||||||
Residential mortgage
|
8,237,457
|
|
69,030
|
|
3.35
|
%
|
|
8,010,381
|
|
66,402
|
|
3.32
|
%
|
|
6,957,865
|
|
56,097
|
|
3.23
|
%
|
||||||
Retail
|
1,365,097
|
|
19,210
|
|
5.63
|
%
|
|
1,355,098
|
|
17,852
|
|
5.29
|
%
|
|
1,278,345
|
|
16,048
|
|
5.03
|
%
|
||||||
Total loans
|
23,005,428
|
|
247,060
|
|
4.30
|
%
|
|
22,078,529
|
|
220,464
|
|
4.03
|
%
|
|
20,521,990
|
|
185,214
|
|
3.62
|
%
|
||||||
Investment securities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Taxable
|
5,518,077
|
|
30,623
|
|
2.22
|
%
|
|
5,576,826
|
|
30,104
|
|
2.16
|
%
|
|
4,781,488
|
|
23,658
|
|
1.98
|
%
|
||||||
Tax-exempt(a)
|
1,497,192
|
|
13,587
|
|
3.63
|
%
|
|
1,312,913
|
|
11,613
|
|
3.54
|
%
|
|
1,143,736
|
|
12,459
|
|
4.36
|
%
|
||||||
Other short-term investments
|
392,009
|
|
3,153
|
|
3.22
|
%
|
|
313,864
|
|
2,177
|
|
2.80
|
%
|
|
297,341
|
|
1,553
|
|
2.09
|
%
|
||||||
Investments and other
|
7,407,277
|
|
47,363
|
|
2.56
|
%
|
|
7,203,603
|
|
43,894
|
|
2.44
|
%
|
|
6,222,565
|
|
37,670
|
|
2.42
|
%
|
||||||
Total earning assets
|
30,412,705
|
|
$
|
294,423
|
|
3.88
|
%
|
|
29,282,132
|
|
$
|
264,358
|
|
3.64
|
%
|
|
26,744,555
|
|
$
|
222,884
|
|
3.34
|
%
|
|||
Other assets, net
|
3,022,659
|
|
|
|
|
2,884,248
|
|
|
|
|
2,454,351
|
|
|
|
||||||||||||
Total assets
|
$
|
33,435,364
|
|
|
|
|
$
|
32,166,380
|
|
|
|
|
$
|
29,198,906
|
|
|
|
|||||||||
Liabilities and Stockholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing deposits
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Savings
|
$
|
1,892,808
|
|
$
|
210
|
|
0.04
|
%
|
|
$
|
1,722,665
|
|
$
|
202
|
|
0.05
|
%
|
|
$
|
1,541,129
|
|
$
|
201
|
|
0.05
|
%
|
Interest-bearing demand
|
4,735,514
|
|
9,918
|
|
0.84
|
%
|
|
4,503,974
|
|
7,818
|
|
0.70
|
%
|
|
3,824,759
|
|
4,401
|
|
0.46
|
%
|
||||||
Money market
|
7,190,178
|
|
12,045
|
|
0.67
|
%
|
|
7,215,329
|
|
9,785
|
|
0.55
|
%
|
|
6,135,222
|
|
4,851
|
|
0.32
|
%
|
||||||
Network transaction deposits
|
2,130,854
|
|
9,503
|
|
1.79
|
%
|
|
2,408,681
|
|
8,778
|
|
1.48
|
%
|
|
3,377,513
|
|
8,017
|
|
0.95
|
%
|
||||||
Time deposits
|
2,565,001
|
|
6,755
|
|
1.06
|
%
|
|
2,715,292
|
|
6,830
|
|
1.02
|
%
|
|
1,752,255
|
|
3,710
|
|
0.85
|
%
|
||||||
Total interest-bearing deposits
|
18,514,355
|
|
38,431
|
|
0.83
|
%
|
|
18,565,941
|
|
33,412
|
|
0.73
|
%
|
|
16,630,878
|
|
21,180
|
|
0.51
|
%
|
||||||
Federal funds purchased and securities sold under agreements to repurchase
|
259,713
|
|
538
|
|
0.83
|
%
|
|
275,578
|
|
522
|
|
0.77
|
%
|
|
489,571
|
|
824
|
|
0.67
|
%
|
||||||
Other short-term funding
|
65,631
|
|
51
|
|
0.31
|
%
|
|
73,722
|
|
60
|
|
0.33
|
%
|
|
105,558
|
|
84
|
|
0.32
|
%
|
||||||
FHLB advances
|
4,809,071
|
|
21,279
|
|
1.77
|
%
|
|
3,736,510
|
|
13,123
|
|
1.42
|
%
|
|
3,172,254
|
|
7,149
|
|
0.90
|
%
|
||||||
Long-term funding
|
497,517
|
|
4,544
|
|
3.65
|
%
|
|
497,348
|
|
4,544
|
|
3.66
|
%
|
|
496,841
|
|
4,544
|
|
3.66
|
%
|
||||||
Total short and long-term funding
|
5,631,932
|
|
26,412
|
|
1.88
|
%
|
|
4,583,158
|
|
18,249
|
|
1.61
|
%
|
|
4,264,224
|
|
12,601
|
|
1.18
|
%
|
||||||
Total interest-bearing liabilities
|
24,146,287
|
|
$
|
64,843
|
|
1.08
|
%
|
|
23,149,099
|
|
$
|
51,661
|
|
0.90
|
%
|
|
20,895,102
|
|
$
|
33,781
|
|
0.65
|
%
|
|||
Noninterest-bearing demand deposits
|
5,131,894
|
|
|
|
|
5,084,957
|
|
|
|
|
4,892,271
|
|
|
|
||||||||||||
Other liabilities
|
436,130
|
|
|
|
|
395,008
|
|
|
|
|
246,395
|
|
|
|
||||||||||||
Stockholders’ equity
|
3,721,053
|
|
|
|
|
3,537,316
|
|
|
|
|
3,165,138
|
|
|
|
||||||||||||
Total liabilities and stockholders’ equity
|
$
|
33,435,364
|
|
|
|
|
$
|
32,166,380
|
|
|
|
|
$
|
29,198,906
|
|
|
|
|||||||||
Interest rate spread
|
|
|
2.80
|
%
|
|
|
|
2.74
|
%
|
|
|
|
2.69
|
%
|
||||||||||||
Net free funds
|
|
|
0.22
|
%
|
|
|
|
0.18
|
%
|
|
|
|
0.14
|
%
|
||||||||||||
Fully tax-equivalent net interest income and net interest margin
|
|
$
|
229,580
|
|
3.02
|
%
|
|
|
$
|
212,697
|
|
2.92
|
%
|
|
|
$
|
189,103
|
|
2.83
|
%
|
||||||
Fully tax-equivalent adjustment
|
|
3,217
|
|
|
|
|
2,826
|
|
|
|
|
5,284
|
|
|
||||||||||||
Net interest income
|
|
$
|
226,362
|
|
|
|
|
$
|
209,871
|
|
|
|
|
$
|
183,819
|
|
|
(a)
|
Beginning in 2018, the yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions. Prior to 2018, the yield on tax-exempt loans and securities was computed on a fully tax-equivalent basis using a tax rate of 35% and was net of the effects of certain disallowed interest deductions.
|
(b)
|
Nonaccrual loans and loans held for sale have been included in the average balances.
|
(c)
|
Interest income includes amortization of net deferred loan origination costs and net accreted purchase loan discount.
|
•
|
Net interest income in the consolidated statements of income (which excludes the fully tax-equivalent adjustment) was $436 million for the first six months of 2018 compared to $364 million for the first six months of 2017. The primary reason for increased net interest income and earning assets from last year was the acquisition of Bank Mutual in February 2018. See sections Interest Rate Risk and Quantitative and Qualitative Disclosures about Market Risk, for a discussion of interest rate risk and market risk.
|
•
|
Fully tax-equivalent net interest income of $442 million for the first six months of 2018 was $68 million higher than the first six months of 2017.
|
•
|
Accreted income from the acquisition of the Bank Mutual loan portfolio contributed $15 million to net interest income for the first six months of 2018. Approximately $7 million of the accreted income was from prepayments.
|
•
|
Average earning assets of $29.9 billion for the first six months of 2018 were $3.3 billion, or 12%, higher than the first six months of 2017. Average loans of $22.5 billion for the first six months of 2018 increased $2.2 billion, or 11% primarily due to an increase of $1.4 billion, or 20% in residential mortgage loans.
|
•
|
Average interest-bearing liabilities of $23.7 billion for the first six months of 2018 were up $3.0 billion, or 14% versus the first six months of 2017. On average, interest-bearing deposits increased $2.0 billion and FHLB advances increased $1.3 billion from the first six months of 2017.
|
•
|
The net interest margin for the first six months of 2018 was 2.97%, compared to 2.83% for the first six months of 2017.
|
•
|
The cost of interest-bearing liabilities was 0.99% for the first six months of 2018, which was 40 bps higher than the first six months of 2017. The increase was primarily due to a 32 bp increase in the cost of average interest-bearing deposits (to 0.78%) and a 84 bp increase in the cost of FHLB advances (to 1.62%), both primarily due to increases in the Federal Reserve interest rate.
|
•
|
The Federal Reserve increased the targeted federal funds rate on June 13, 2018, to a range of 1.75% to 2.00% which compares to a range of 1.00% to 1.25% at the end of the second quarter of 2017. The Federal Reserve has indicated that it expects gradual increases in the Federal Funds rate. However, the timing and magnitude of any such increases are uncertain and will depend on domestic and global economic conditions.
|
|
|
|
|
|
|
|
|
|
2Q18 Change vs
|
||||||||||||||||||
($ in Thousands)
|
YTD 2018
|
YTD 2017
|
% Change
|
2Q18
|
1Q18
|
4Q17
|
3Q17
|
2Q17
|
1Q18
|
2Q17
|
|||||||||||||||||
Insurance commissions and fees
|
$
|
46,644
|
|
$
|
42,473
|
|
10
|
%
|
$
|
23,996
|
|
$
|
22,648
|
|
$
|
19,186
|
|
$
|
19,815
|
|
$
|
20,853
|
|
6
|
%
|
15
|
%
|
Service charges and deposit account fees
|
32,810
|
|
32,386
|
|
1
|
%
|
16,390
|
|
16,420
|
|
15,773
|
|
16,268
|
|
16,030
|
|
—
|
%
|
2
|
%
|
|||||||
Card-based and loan fees
|
27,809
|
|
26,229
|
|
6
|
%
|
14,387
|
|
13,422
|
|
13,840
|
|
12,619
|
|
13,764
|
|
7
|
%
|
5
|
%
|
|||||||
Trust and asset management fees
|
26,806
|
|
24,281
|
|
10
|
%
|
13,437
|
|
13,369
|
|
13,125
|
|
12,785
|
|
12,346
|
|
1
|
%
|
9
|
%
|
|||||||
Brokerage commissions and fees
|
14,169
|
|
8,679
|
|
63
|
%
|
6,896
|
|
7,273
|
|
6,864
|
|
4,392
|
|
4,346
|
|
(5
|
)%
|
59
|
%
|
|||||||
Total core fee-based revenue
|
148,238
|
|
134,048
|
|
11
|
%
|
75,106
|
|
73,132
|
|
68,788
|
|
65,879
|
|
67,339
|
|
3
|
%
|
12
|
%
|
|||||||
Mortgage banking income
|
16,670
|
|
14,965
|
|
11
|
%
|
8,451
|
|
8,219
|
|
5,507
|
|
9,147
|
|
7,692
|
|
3
|
%
|
10
|
%
|
|||||||
Mortgage servicing rights expense
|
4,042
|
|
5,359
|
|
(25
|
)%
|
2,193
|
|
1,849
|
|
2,337
|
|
2,563
|
|
2,665
|
|
19
|
%
|
(18
|
)%
|
|||||||
Mortgage banking, net
|
12,628
|
|
9,606
|
|
31
|
%
|
6,258
|
|
6,370
|
|
3,169
|
|
6,585
|
|
5,027
|
|
(2
|
)%
|
24
|
%
|
|||||||
Capital markets, net
|
10,089
|
|
7,925
|
|
27
|
%
|
4,783
|
|
5,306
|
|
7,107
|
|
4,610
|
|
4,042
|
|
(10
|
)%
|
18
|
%
|
|||||||
Bank and corporate owned life insurance
|
7,165
|
|
6,514
|
|
10
|
%
|
3,978
|
|
3,187
|
|
3,156
|
|
6,580
|
|
3,899
|
|
25
|
%
|
2
|
%
|
|||||||
Other
|
4,727
|
|
4,492
|
|
5
|
%
|
2,235
|
|
2,492
|
|
2,777
|
|
2,254
|
|
2,213
|
|
(10
|
)%
|
1
|
%
|
|||||||
Subtotal
|
182,847
|
|
162,585
|
|
12
|
%
|
92,360
|
|
90,487
|
|
84,997
|
|
85,908
|
|
82,520
|
|
2
|
%
|
12
|
%
|
|||||||
Asset gains(losses), net
|
2,390
|
|
(700
|
)
|
N/M
|
|
2,497
|
|
(107
|
)
|
(528
|
)
|
(16
|
)
|
(466
|
)
|
N/M
|
|
N/M
|
|
|||||||
Investment securities gains(losses), net
|
(2,015
|
)
|
356
|
|
N/M
|
|
(2,015
|
)
|
—
|
|
75
|
|
3
|
|
356
|
|
N/M
|
|
N/M
|
|
|||||||
Total noninterest income
|
183,222
|
|
162,241
|
|
13
|
%
|
$
|
92,842
|
|
$
|
90,380
|
|
$
|
84,544
|
|
$
|
85,895
|
|
$
|
82,410
|
|
3
|
%
|
13
|
%
|
||
Mortgage loans originated for sale during period
|
$
|
516,285
|
|
$
|
220,284
|
|
134
|
%
|
$
|
318,682
|
|
$
|
197,603
|
|
$
|
249,222
|
|
$
|
245,851
|
|
$
|
119,004
|
|
61
|
%
|
168
|
%
|
Mortgage loan settlements during period
|
$
|
482,080
|
|
$
|
364,128
|
|
32
|
%
|
$
|
294,456
|
|
$
|
187,624
|
|
$
|
268,254
|
|
$
|
187,568
|
|
$
|
167,550
|
|
57
|
%
|
76
|
%
|
Assets under management, at market value(a)
|
$
|
10,776
|
|
$
|
8,997
|
|
20
|
%
|
$
|
10,776
|
|
$
|
10,540
|
|
$
|
10,555
|
|
$
|
9,243
|
|
$
|
8,997
|
|
2%
|
|
20
|
%
|
(a)
|
$ in millions. Excludes assets held in brokerage firms
|
•
|
Fee-based revenue was $148 million, an increase of $14 million (11%) compared to the first six months of 2017. Within fee based revenue, brokerage commissions and fees increased $5 million (63%), primarily due to the acquisition of Whitnell & Co. in the fourth quarter of 2017. In addition, trust and asset management fees increased $3 million (10%), primarily due to an increase in assets under management, and insurance commissions and fees increased $4 million (10%), primarily due to the acquisition of Diversified and Anderson in the first and second quarters of 2018, respectively.
|
•
|
Net mortgage banking income for the first six months of 2018 was $13 million, up $3 million (31%) from the first six months of 2017, primarily due to the Corporation's strategy to hold mortgages on balance sheet during 2017.
|
•
|
Capital markets, net increased $2 million (27%) compared to the first six months of 2017, primarily driven by higher customer hedging transactions and increased syndication activity.
|
•
|
During the second quarter of 2018, the Corporation had $2 million of asset gains primarily driven by a distribution from an alternative equity investment.
|
•
|
During the second quarter of 2018, the Corporation recorded a $2 million loss on the sale of investment securities related to the sale of two lower yielding GNMA commercial mortgage-related securities.
|
|
|
|
|
|
|
|
|
|
2Q18 Change vs
|
||||||||||||||||||
($ in Thousands)
|
YTD 2018
|
YTD
2017 |
YTD % Change
|
2Q18
|
1Q18
|
4Q17
|
3Q17
|
2Q17
|
1Q18
|
2Q17
|
|||||||||||||||||
Personnel
|
$
|
241,665
|
|
$
|
213,848
|
|
13
|
%
|
$
|
123,980
|
|
$
|
117,685
|
|
$
|
107,031
|
|
$
|
108,098
|
|
$
|
107,066
|
|
5
|
%
|
16
|
%
|
Occupancy
|
30,428
|
|
28,051
|
|
8
|
%
|
15,071
|
|
15,357
|
|
13,497
|
|
12,294
|
|
12,832
|
|
(2
|
)%
|
17
|
%
|
|||||||
Technology
|
37,167
|
|
29,893
|
|
24
|
%
|
19,452
|
|
17,715
|
|
17,878
|
|
15,233
|
|
15,473
|
|
10
|
%
|
26
|
%
|
|||||||
Equipment
|
11,509
|
|
10,719
|
|
7
|
%
|
5,953
|
|
5,556
|
|
5,250
|
|
5,232
|
|
5,234
|
|
7
|
%
|
14
|
%
|
|||||||
Business development and advertising
|
13,760
|
|
12,987
|
|
6
|
%
|
7,067
|
|
6,693
|
|
8,195
|
|
7,764
|
|
7,152
|
|
6
|
%
|
(1
|
)%
|
|||||||
Legal and professional
|
11,697
|
|
9,877
|
|
18
|
%
|
6,284
|
|
5,413
|
|
6,384
|
|
6,248
|
|
5,711
|
|
16
|
%
|
10
|
%
|
|||||||
Card Issuance and loan costs
|
6,477
|
|
5,594
|
|
16
|
%
|
3,173
|
|
3,304
|
|
2,836
|
|
3,330
|
|
2,974
|
|
(4
|
)%
|
7
|
%
|
|||||||
Foreclosure / OREO expense, net
|
1,744
|
|
2,687
|
|
(35
|
)%
|
1,021
|
|
723
|
|
1,285
|
|
906
|
|
1,182
|
|
41
|
%
|
(14
|
)%
|
|||||||
FDIC assessment
|
16,500
|
|
16,000
|
|
3
|
%
|
8,250
|
|
8,250
|
|
7,500
|
|
7,800
|
|
8,000
|
|
—
|
%
|
3
|
%
|
|||||||
Other intangible amortization
|
3,693
|
|
1,009
|
|
N/M
|
|
2,168
|
|
1,525
|
|
500
|
|
450
|
|
496
|
|
42
|
%
|
N/M
|
|
|||||||
Acquisition related costs(a)
|
27,712
|
|
—
|
|
N/M
|
|
7,107
|
|
20,605
|
|
—
|
|
—
|
|
—
|
|
(66
|
)%
|
N/M
|
|
|||||||
Other
|
21,873
|
|
19,342
|
|
13
|
%
|
11,732
|
|
10,140
|
|
11,343
|
|
10,072
|
|
10,196
|
|
16
|
%
|
15
|
%
|
|||||||
Total noninterest expense
|
$
|
424,223
|
|
$
|
350,007
|
|
21
|
%
|
$
|
211,258
|
|
$
|
212,965
|
|
$
|
181,699
|
|
$
|
177,427
|
|
$
|
176,316
|
|
(1
|
)%
|
20
|
%
|
(a)
|
Includes Bank Mutual acquisition-related costs only.
|
•
|
Personnel expense (which includes salary-related expenses and fringe benefit expenses) was $242 million for the first six months of 2018, up $28 million (13%) from the first six months of 2017, primarily driven by the additional cost of Bank Mutual staff and an increase in the management incentive plan.
|
•
|
All other nonpersonnel noninterest expense on a combined basis was $183 million, up $46 million compared to the first six months of 2017. The increase was primarily driven by $28 million of acquisition related costs pertaining to Bank Mutual. In addition, technology expense increased $7 million (24%) from the first six months of 2017, driven by the additional cost of Bank Mutual operations.
|
•
|
At June 30, 2018, total assets were $33.7 billion, up $3.2 billion (10%) from December 31, 2017 and up $3.9 billion (13%) from June 30, 2017. On February 1, 2018, the Corporation added $2.8 billion of assets as a result of the Bank Mutual acquisition.
|
•
|
Loans of $23.0 billion at June 30, 2018 were up $2.2 billion (11%) from December 31, 2017 and were up $2.2 billion (11%) from June 30, 2017. On February 1, 2018, the Corporation added $1.9 billion of loans as a result of the Bank Mutual acquisition. See section Loans for additional information on loans.
|
•
|
At June 30, 2018, total deposits of $23.8 billion were up $1.0 billion (5%) from December 31, 2017 and were up $2.2 billion (10%) from June 30, 2017. On February 1, 2018, the Corporation assumed $1.8 billion of deposits as a result of the Bank Mutual acquisition. These inflows were partially offset by seasonal deposit outflows. See section Deposits and Customer Funding for additional information on deposits.
|
•
|
FHLB advances of $4.8 billion increased $1.6 billion (51%) from December 31, 2017 and increased $1.3 billion (39%) from June 30, 2017. The increase in FHLB advances replaced seasonal deposit outflows and provided funding for incremental asset growth. Other short and long-term funding, excluding FHLB advances, of $754 million decreased $135 million (15%) from December 31, 2017 and decreased $448 million (37%) from June 30, 2017.
|
|
|
|||||||||||||||||||||||||||||||||
|
June 30, 2018
|
|
March 31, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
|
June 30, 2017
|
|||||||||||||||||||||||||
|
Amount
|
|
% of
Total
|
|
Amount
|
|
% of
Total
|
|
Amount
|
|
% of
Total
|
|
Amount
|
|
% of
Total
|
|
Amount
|
|
% of
Total
|
|||||||||||||||
|
($ in Thousands)
|
|||||||||||||||||||||||||||||||||
Commercial and industrial
|
$
|
7,109,796
|
|
|
31
|
%
|
|
$
|
6,756,983
|
|
|
30
|
%
|
|
$
|
6,399,693
|
|
|
31
|
%
|
|
$
|
6,534,660
|
|
|
31
|
%
|
|
$
|
6,571,000
|
|
|
32
|
%
|
Commercial real estate — owner occupied
|
888,330
|
|
|
4
|
%
|
|
900,913
|
|
|
4
|
%
|
|
802,209
|
|
|
4
|
%
|
|
827,064
|
|
|
4
|
%
|
|
845,336
|
|
|
4
|
%
|
|||||
Commercial and business lending
|
7,998,126
|
|
|
35
|
%
|
|
7,657,896
|
|
|
34
|
%
|
|
7,201,902
|
|
|
35
|
%
|
|
7,361,724
|
|
|
35
|
%
|
|
7,416,336
|
|
|
36
|
%
|
|||||
Commercial real estate — investor
|
3,996,415
|
|
|
17
|
%
|
|
4,077,671
|
|
|
18
|
%
|
|
3,315,254
|
|
|
16
|
%
|
|
3,345,536
|
|
|
16
|
%
|
|
3,329,585
|
|
|
16
|
%
|
|||||
Real estate construction
|
1,487,159
|
|
|
6
|
%
|
|
1,579,778
|
|
|
7
|
%
|
|
1,451,684
|
|
|
7
|
%
|
|
1,552,135
|
|
|
8
|
%
|
|
1,651,805
|
|
|
8
|
%
|
|||||
Commercial real estate lending
|
5,483,574
|
|
|
24
|
%
|
|
5,657,449
|
|
|
25
|
%
|
|
4,766,938
|
|
|
23
|
%
|
|
4,897,671
|
|
|
24
|
%
|
|
4,981,390
|
|
|
24
|
%
|
|||||
Total commercial
|
13,481,700
|
|
|
59
|
%
|
|
13,315,345
|
|
|
58
|
%
|
|
11,968,840
|
|
|
58
|
%
|
|
12,259,395
|
|
|
59
|
%
|
|
12,397,726
|
|
|
60
|
%
|
|||||
Residential mortgage
|
8,207,253
|
|
|
36
|
%
|
|
8,197,223
|
|
|
36
|
%
|
|
7,546,534
|
|
|
36
|
%
|
|
7,408,471
|
|
|
35
|
%
|
|
7,115,457
|
|
|
34
|
%
|
|||||
Home equity
|
911,363
|
|
|
4
|
%
|
|
923,470
|
|
|
4
|
%
|
|
883,804
|
|
|
4
|
%
|
|
890,130
|
|
|
4
|
%
|
|
897,111
|
|
|
4
|
%
|
|||||
Other consumer
|
376,470
|
|
|
2
|
%
|
|
374,453
|
|
|
2
|
%
|
|
385,813
|
|
|
2
|
%
|
|
373,464
|
|
|
2
|
%
|
|
372,775
|
|
|
2
|
%
|
|||||
Total consumer
|
9,495,086
|
|
|
41
|
%
|
|
9,495,146
|
|
|
42
|
%
|
|
8,816,151
|
|
|
42
|
%
|
|
8,672,065
|
|
|
41
|
%
|
|
8,385,343
|
|
|
40
|
%
|
|||||
Total loans
|
$
|
22,976,786
|
|
|
100
|
%
|
|
$
|
22,810,491
|
|
|
100
|
%
|
|
$
|
20,784,991
|
|
|
100
|
%
|
|
$
|
20,931,460
|
|
|
100
|
%
|
|
$
|
20,783,069
|
|
|
100
|
%
|
|
June 30, 2018
|
|
March 31, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
|
June 30, 2017
|
||||||||||
|
($ in Millions)
|
||||||||||||||||||
Pass
|
$
|
603
|
|
|
$
|
548
|
|
|
$
|
483
|
|
|
$
|
446
|
|
|
$
|
411
|
|
Special mention
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|||||
Potential problem
|
34
|
|
|
40
|
|
|
40
|
|
|
39
|
|
|
37
|
|
|||||
Nonaccrual
|
45
|
|
|
69
|
|
|
77
|
|
|
92
|
|
|
114
|
|
|||||
Total oil and gas related loans
|
$
|
682
|
|
|
$
|
657
|
|
|
$
|
600
|
|
|
$
|
577
|
|
|
$
|
601
|
|
Quarter net charge offs
|
$
|
7
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
12
|
|
Oil and gas related allowance
|
$
|
17
|
|
|
$
|
19
|
|
|
$
|
27
|
|
|
$
|
30
|
|
|
$
|
33
|
|
Oil and gas related allowance ratio
|
2.5
|
%
|
|
2.9
|
%
|
|
4.5
|
%
|
|
5.2
|
%
|
|
5.4
|
%
|
June 30, 2018
|
Within 1 Year(a)
|
|
1-5 Years
|
|
After 5 Years
|
|
Total
|
|
% of Total
|
|||||||||
|
($ in Thousands)
|
|||||||||||||||||
Commercial and industrial
|
$
|
6,409,615
|
|
|
$
|
507,868
|
|
|
$
|
192,314
|
|
|
$
|
7,109,796
|
|
|
53
|
%
|
Commercial real estate — investor
|
3,251,035
|
|
|
640,802
|
|
|
104,578
|
|
|
3,996,415
|
|
|
30
|
%
|
||||
Commercial real estate — owner occupied
|
451,573
|
|
|
287,350
|
|
|
149,406
|
|
|
888,330
|
|
|
7
|
%
|
||||
Real estate construction
|
1,370,679
|
|
|
110,071
|
|
|
6,409
|
|
|
1,487,159
|
|
|
11
|
%
|
||||
Total
|
$
|
11,482,902
|
|
|
$
|
1,546,091
|
|
|
$
|
452,707
|
|
|
$
|
13,481,700
|
|
|
100
|
%
|
Fixed rate
|
$
|
4,630,936
|
|
|
$
|
972,613
|
|
|
$
|
354,526
|
|
|
$
|
5,958,075
|
|
|
44
|
%
|
Floating or adjustable rate
|
6,851,966
|
|
|
573,478
|
|
|
98,181
|
|
|
7,523,625
|
|
|
56
|
%
|
||||
Total
|
$
|
11,482,902
|
|
|
$
|
1,546,091
|
|
|
$
|
452,707
|
|
|
$
|
13,481,700
|
|
|
100
|
%
|
Percent repricing distribution
|
85
|
%
|
|
12
|
%
|
|
3
|
%
|
|
100
|
%
|
|
|
(a)
|
Demand loans, past due loans, and overdrafts are reported in the “Within 1 Year” category.
|
|
$ in Thousands
|
% to Total
|
|||
2018
|
$
|
187,044
|
|
4
|
%
|
2019
|
669,301
|
|
13
|
%
|
|
2020
|
610,417
|
|
12
|
%
|
|
2021
|
723,320
|
|
14
|
%
|
|
2022
|
773,414
|
|
15
|
%
|
|
Thereafter
|
2,293,420
|
|
44
|
%
|
|
Total adjustable rate mortgages
|
$
|
5,256,916
|
|
100
|
%
|
(a)
|
Based on contractual loan terms for 3/1, 5/1, 7/1, and 10/1 adjustable rate mortgages; does not factor in early prepayments or amortization.
|
|
$ in Thousands
|
|
% of Total
|
|||
Less than 5 years
|
$
|
68,185
|
|
|
8
|
%
|
5 to 10 years
|
206,893
|
|
|
25
|
%
|
|
Over 10 years
|
567,236
|
|
|
67
|
%
|
|
Total home equity revolving lines of credit
|
$
|
842,314
|
|
|
100
|
%
|
|
June 30,
2018 |
|
March 31,
2018 |
|
December 31,
2017 |
|
September 30,
2017 |
|
June 30,
2017 |
||||||||||
|
($ in Thousands)
|
||||||||||||||||||
Nonperforming assets
|
|
||||||||||||||||||
Commercial and industrial
|
$
|
81,776
|
|
|
$
|
102,667
|
|
|
$
|
112,786
|
|
|
$
|
122,284
|
|
|
$
|
141,475
|
|
Commercial real estate — owner occupied
|
18,649
|
|
|
20,636
|
|
|
22,740
|
|
|
15,598
|
|
|
15,800
|
|
|||||
Commercial and business lending
|
100,425
|
|
|
123,303
|
|
|
135,526
|
|
|
137,882
|
|
|
157,275
|
|
|||||
Commercial real estate — investor
|
26,503
|
|
|
15,574
|
|
|
4,729
|
|
|
3,543
|
|
|
7,206
|
|
|||||
Real estate construction
|
1,544
|
|
|
1,219
|
|
|
974
|
|
|
1,540
|
|
|
1,717
|
|
|||||
Commercial real estate lending
|
28,047
|
|
|
16,793
|
|
|
5,703
|
|
|
5,083
|
|
|
8,923
|
|
|||||
Total commercial
|
128,472
|
|
|
140,096
|
|
|
141,229
|
|
|
142,965
|
|
|
166,198
|
|
|||||
Residential mortgage
|
62,896
|
|
|
55,100
|
|
|
53,632
|
|
|
54,654
|
|
|
51,975
|
|
|||||
Home equity
|
12,958
|
|
|
13,218
|
|
|
13,514
|
|
|
12,639
|
|
|
13,482
|
|
|||||
Other consumer
|
134
|
|
|
139
|
|
|
171
|
|
|
259
|
|
|
233
|
|
|||||
Total consumer
|
75,988
|
|
|
68,456
|
|
|
67,317
|
|
|
67,552
|
|
|
65,690
|
|
|||||
Total nonaccrual loans
|
204,460
|
|
|
208,553
|
|
|
208,546
|
|
|
210,517
|
|
|
231,888
|
|
|||||
Commercial real estate owned
|
4,848
|
|
|
7,511
|
|
|
6,735
|
|
|
5,098
|
|
|
4,825
|
|
|||||
Residential real estate owned
|
3,715
|
|
|
5,806
|
|
|
5,873
|
|
|
3,385
|
|
|
2,957
|
|
|||||
Bank properties real estate owned
|
18,645
|
|
|
3,601
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other real estate owned (“OREO”)
|
27,207
|
|
|
16,919
|
|
|
12,608
|
|
|
8,483
|
|
|
7,782
|
|
|||||
Other nonperforming assets
|
7,059
|
|
|
7,117
|
|
|
7,418
|
|
|
7,418
|
|
|
7,418
|
|
|||||
Total nonperforming assets (“NPAs”)
|
$
|
238,726
|
|
|
$
|
232,589
|
|
|
$
|
228,572
|
|
|
$
|
226,418
|
|
|
$
|
247,088
|
|
Accruing loans past due 90 days or more
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
$
|
222
|
|
|
$
|
505
|
|
|
$
|
418
|
|
|
$
|
308
|
|
|
$
|
248
|
|
Consumer
|
1,617
|
|
|
2,888
|
|
|
1,449
|
|
|
1,303
|
|
|
1,287
|
|
|||||
Total accruing loans past due 90 days or more
|
$
|
1,839
|
|
|
$
|
3,393
|
|
|
$
|
1,867
|
|
|
$
|
1,611
|
|
|
$
|
1,535
|
|
Restructured loans (accruing)
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
$
|
36,852
|
|
|
$
|
47,460
|
|
|
$
|
48,735
|
|
|
$
|
51,259
|
|
|
$
|
50,634
|
|
Consumer
|
26,871
|
|
|
29,041
|
|
|
25,883
|
|
|
25,919
|
|
|
26,691
|
|
|||||
Total restructured loans (accruing)
|
$
|
63,723
|
|
|
$
|
76,501
|
|
|
$
|
74,618
|
|
|
$
|
77,178
|
|
|
$
|
77,325
|
|
Nonaccrual restructured loans (included in nonaccrual loans)
|
$
|
38,005
|
|
|
$
|
23,827
|
|
|
$
|
23,486
|
|
|
$
|
33,520
|
|
|
$
|
51,715
|
|
Ratios
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonaccrual loans to total loans
|
0.89
|
%
|
|
0.91
|
%
|
|
1.00
|
%
|
|
1.01
|
%
|
|
1.12
|
%
|
|||||
NPAs to total loans plus OREO
|
1.04
|
%
|
|
1.02
|
%
|
|
1.10
|
%
|
|
1.08
|
%
|
|
1.19
|
%
|
|||||
NPAs to total assets
|
0.71
|
%
|
|
0.70
|
%
|
|
0.75
|
%
|
|
0.75
|
%
|
|
0.83
|
%
|
|||||
Allowance for loan losses to nonaccrual loans
|
123.55
|
%
|
|
123.26
|
%
|
|
127.49
|
%
|
|
131.37
|
%
|
|
121.22
|
%
|
|
June 30,
2018 |
|
March 31,
2018 |
|
December 31,
2017 |
|
September 30,
2017 |
|
June 30,
2017 |
||||||||||
|
($ in Thousands)
|
||||||||||||||||||
Accruing loans 30-89 days past due
|
|
|
|
||||||||||||||||
Commercial and industrial
|
$
|
588
|
|
|
$
|
880
|
|
|
$
|
271
|
|
|
$
|
1,378
|
|
|
$
|
1,255
|
|
Commercial real estate — owner occupied
|
193
|
|
|
511
|
|
|
48
|
|
|
1,522
|
|
|
1,284
|
|
|||||
Commercial and business lending
|
781
|
|
|
1,391
|
|
|
319
|
|
|
2,900
|
|
|
2,539
|
|
|||||
Commercial real estate — investor
|
828
|
|
|
240
|
|
|
374
|
|
|
1,109
|
|
|
899
|
|
|||||
Real estate construction
|
19,765
|
|
|
490
|
|
|
251
|
|
|
700
|
|
|
135
|
|
|||||
Commercial real estate lending
|
20,593
|
|
|
730
|
|
|
625
|
|
|
1,809
|
|
|
1,034
|
|
|||||
Total commercial
|
21,374
|
|
|
2,121
|
|
|
944
|
|
|
4,709
|
|
|
3,573
|
|
|||||
Residential mortgage
|
9,341
|
|
|
15,133
|
|
|
9,552
|
|
|
8,870
|
|
|
9,165
|
|
|||||
Home equity
|
7,270
|
|
|
5,868
|
|
|
6,825
|
|
|
7,191
|
|
|
5,924
|
|
|||||
Other consumer
|
1,735
|
|
|
1,811
|
|
|
2,007
|
|
|
1,686
|
|
|
1,746
|
|
|||||
Total consumer
|
18,346
|
|
|
22,812
|
|
|
18,384
|
|
|
17,747
|
|
|
16,835
|
|
|||||
Total accruing loans 30-89 days past due
|
$
|
39,720
|
|
|
$
|
24,934
|
|
|
$
|
19,328
|
|
|
$
|
22,456
|
|
|
$
|
20,408
|
|
Potential problem loans
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
172,177
|
|
|
$
|
196,766
|
|
|
$
|
113,778
|
|
|
$
|
153,779
|
|
|
$
|
142,607
|
|
Commercial real estate — owner occupied
|
38,879
|
|
|
34,410
|
|
|
41,997
|
|
|
57,468
|
|
|
60,724
|
|
|||||
Commercial and business lending
|
211,056
|
|
|
231,176
|
|
|
155,775
|
|
|
211,247
|
|
|
203,331
|
|
|||||
Commercial real estate — investor
|
24,790
|
|
|
46,970
|
|
|
19,291
|
|
|
46,770
|
|
|
48,569
|
|
|||||
Real estate construction
|
3,168
|
|
|
1,695
|
|
|
—
|
|
|
118
|
|
|
8,901
|
|
|||||
Commercial real estate lending
|
27,958
|
|
|
48,665
|
|
|
19,291
|
|
|
46,888
|
|
|
57,470
|
|
|||||
Total commercial
|
239,014
|
|
|
279,841
|
|
|
175,066
|
|
|
258,135
|
|
|
260,801
|
|
|||||
Residential mortgage
|
2,355
|
|
|
2,155
|
|
|
1,616
|
|
|
650
|
|
|
1,576
|
|
|||||
Home equity
|
142
|
|
|
188
|
|
|
195
|
|
|
124
|
|
|
208
|
|
|||||
Other consumer
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total consumer
|
2,503
|
|
|
2,343
|
|
|
1,811
|
|
|
774
|
|
|
1,784
|
|
|||||
Total potential problem loans
|
$
|
241,517
|
|
|
$
|
282,184
|
|
|
$
|
176,877
|
|
|
$
|
258,909
|
|
|
$
|
262,585
|
|
|
YTD
|
|
|
|
|
|
|||||||||||||||
|
2018
|
2017
|
June 30,
2018 |
March 31,
2018 |
December 31,
2017 |
September 30,
2017 |
June 30,
2017 |
||||||||||||||
|
($ in Thousands)
|
||||||||||||||||||||
Allowance for Loan Losses
|
|
|
|
|
|
|
|
||||||||||||||
Balance at beginning of period
|
$
|
265,880
|
|
$
|
278,335
|
|
$
|
257,058
|
|
$
|
265,880
|
|
$
|
276,551
|
|
$
|
281,101
|
|
$
|
282,672
|
|
Provision for loan losses
|
4,500
|
|
21,000
|
|
4,000
|
|
500
|
|
—
|
|
6,000
|
|
11,000
|
|
|||||||
Charge offs
|
(27,081
|
)
|
(27,230
|
)
|
(14,926
|
)
|
(12,155
|
)
|
(14,289
|
)
|
(14,727
|
)
|
(15,376
|
)
|
|||||||
Recoveries
|
9,302
|
|
8,996
|
|
6,470
|
|
2,832
|
|
3,618
|
|
4,177
|
|
2,805
|
|
|||||||
Net charge offs
|
(17,779
|
)
|
(18,234
|
)
|
(8,456
|
)
|
(9,323
|
)
|
(10,671
|
)
|
(10,550
|
)
|
(12,571
|
)
|
|||||||
Balance at end of period
|
$
|
252,601
|
|
$
|
281,101
|
|
$
|
252,601
|
|
$
|
257,058
|
|
$
|
265,880
|
|
$
|
276,551
|
|
$
|
281,101
|
|
Allowance for Unfunded Commitments
|
|
|
|
|
|
|
|
||||||||||||||
Balance at beginning of period
|
$
|
24,400
|
|
$
|
25,400
|
|
$
|
26,336
|
|
$
|
24,400
|
|
$
|
24,400
|
|
$
|
25,400
|
|
$
|
24,400
|
|
Provision for unfunded commitments
|
(500
|
)
|
—
|
|
—
|
|
(500
|
)
|
—
|
|
(1,000
|
)
|
1,000
|
|
|||||||
Amount recorded at acquisition
|
2,436
|
|
—
|
|
—
|
|
2,436
|
|
—
|
|
—
|
|
—
|
|
|||||||
Balance at end of period
|
$
|
26,336
|
|
$
|
25,400
|
|
$
|
26,336
|
|
$
|
26,336
|
|
$
|
24,400
|
|
$
|
24,400
|
|
$
|
25,400
|
|
Allowance for credit losses(a)
|
$
|
278,937
|
|
$
|
306,501
|
|
$
|
278,937
|
|
$
|
283,394
|
|
$
|
290,280
|
|
$
|
300,951
|
|
$
|
306,501
|
|
Provision for credit losses(b)
|
$
|
4,000
|
|
$
|
21,000
|
|
4,000
|
|
—
|
|
—
|
|
5,000
|
|
12,000
|
|
|||||
Net loan (charge offs) recoveries
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and industrial
|
$
|
(13,205
|
)
|
$
|
(15,414
|
)
|
$
|
(6,606
|
)
|
$
|
(6,599
|
)
|
$
|
(8,212
|
)
|
$
|
(9,442
|
)
|
$
|
(11,046
|
)
|
Commercial real estate — owner occupied
|
(755
|
)
|
62
|
|
270
|
|
(1,025
|
)
|
(246
|
)
|
13
|
|
43
|
|
|||||||
Commercial and business lending
|
(13,960
|
)
|
(15,352
|
)
|
(6,336
|
)
|
(7,624
|
)
|
(8,458
|
)
|
(9,429
|
)
|
(11,003
|
)
|
|||||||
Commercial real estate — investor
|
(1,181
|
)
|
(640
|
)
|
(1,189
|
)
|
8
|
|
(164
|
)
|
55
|
|
(126
|
)
|
|||||||
Real estate construction
|
237
|
|
(15
|
)
|
48
|
|
189
|
|
(365
|
)
|
(150
|
)
|
(26
|
)
|
|||||||
Commercial real estate lending
|
(944
|
)
|
(655
|
)
|
(1,141
|
)
|
197
|
|
(529
|
)
|
(95
|
)
|
(152
|
)
|
|||||||
Total commercial
|
(14,904
|
)
|
(16,007
|
)
|
(7,477
|
)
|
(7,427
|
)
|
(8,987
|
)
|
(9,524
|
)
|
(11,155
|
)
|
|||||||
Residential mortgage
|
(266
|
)
|
(692
|
)
|
(135
|
)
|
(131
|
)
|
(966
|
)
|
(26
|
)
|
(564
|
)
|
|||||||
Home equity
|
(537
|
)
|
227
|
|
140
|
|
(677
|
)
|
330
|
|
(87
|
)
|
54
|
|
|||||||
Other consumer
|
(2,072
|
)
|
(1,762
|
)
|
(984
|
)
|
(1,088
|
)
|
(1,048
|
)
|
(913
|
)
|
(906
|
)
|
|||||||
Total consumer
|
(2,875
|
)
|
(2,227
|
)
|
(979
|
)
|
(1,896
|
)
|
(1,684
|
)
|
(1,026
|
)
|
(1,416
|
)
|
|||||||
Total net charge offs
|
$
|
(17,779
|
)
|
$
|
(18,234
|
)
|
$
|
(8,456
|
)
|
$
|
(9,323
|
)
|
$
|
(10,671
|
)
|
$
|
(10,550
|
)
|
$
|
(12,571
|
)
|
Ratios
|
|
|
|
|
|
|
|
||||||||||||||
Allowance for loan losses to total loans
|
1.10
|
%
|
1.35
|
%
|
1.10
|
%
|
1.13
|
%
|
1.28
|
%
|
1.32
|
%
|
1.35
|
%
|
|||||||
Allowance for loan losses to net charge offs (annualized)
|
7.0x
|
|
7.6x
|
|
7.4x
|
|
6.8x
|
|
6.3x
|
|
6.6x
|
|
5.6x
|
|
(a)
|
Includes the allowance for loan losses and the allowance for unfunded commitments.
|
(b)
|
Includes the provision for loan losses and the provision for unfunded commitments.
|
|
YTD
|
|
|
|
|
|
||||||||
(In basis points)
|
2018
|
2017
|
June 30,
2018 |
March 31,
2018 |
December 31,
2017 |
September 30,
2017 |
June 30,
2017 |
|||||||
Net loan (charge offs) recoveries
|
|
|
|
|
|
|
|
|||||||
Commercial and industrial
|
(40
|
)
|
(49
|
)
|
(39
|
)
|
(41
|
)
|
(51
|
)
|
(58
|
)
|
(69
|
)
|
Commercial real estate — owner occupied
|
(19
|
)
|
1
|
|
12
|
|
(48
|
)
|
(12
|
)
|
1
|
|
2
|
|
Commercial and business lending
|
(38
|
)
|
(43
|
)
|
(33
|
)
|
(42
|
)
|
(47
|
)
|
(51
|
)
|
(60
|
)
|
Commercial real estate — investor
|
(6
|
)
|
(4
|
)
|
(12
|
)
|
N/M
|
|
(2
|
)
|
1
|
|
(2
|
)
|
Real estate construction
|
3
|
|
N/M
|
|
1
|
|
5
|
|
(10
|
)
|
(4
|
)
|
(1
|
)
|
Commercial real estate lending
|
(3
|
)
|
(3
|
)
|
(8
|
)
|
1
|
|
(4
|
)
|
(1
|
)
|
(1
|
)
|
Total commercial
|
(23
|
)
|
(26
|
)
|
(22
|
)
|
(24
|
)
|
(30
|
)
|
(31
|
)
|
(36
|
)
|
Residential mortgage
|
(1
|
)
|
(2
|
)
|
(1
|
)
|
(1
|
)
|
(5
|
)
|
N/M
|
|
(3
|
)
|
Home equity
|
(11
|
)
|
5
|
|
6
|
|
(28
|
)
|
15
|
|
(4
|
)
|
2
|
|
Other consumer
|
(110
|
)
|
(94
|
)
|
(105
|
)
|
(115
|
)
|
(109
|
)
|
(97
|
)
|
(98
|
)
|
Total consumer
|
(6
|
)
|
(6
|
)
|
(4
|
)
|
(8
|
)
|
(8
|
)
|
(5
|
)
|
(7
|
)
|
Total net charge offs
|
(16
|
)
|
(18
|
)
|
(15
|
)
|
(17
|
)
|
(20
|
)
|
(20
|
)
|
(25
|
)
|
(a)
|
Annualized ratio of net charge offs to average loans by loan type.
|
•
|
Total loans increased $2.2 billion (11%) for the first six months of 2018, including a $1.5 billion (13%) increase in total commercial loans primarily attributable to the Bank Mutual acquisition. Compared to June 30, 2017, total loans increased $2.2 billion (11%), including a $1.1 billion (15%) increase in total residential mortgage loans, a $502 million (10%) increase in commercial real estate lending, and a $582 million (8%) increase in commercial and business lending. See section Loans for additional information on the changes in the loan portfolio and see section Credit Risk for discussion about credit risk management for each loan type.
|
•
|
Total nonaccrual loans decrease $4 million (2%) for the first six months of 2018, and decreased $27 million from June 30, 2017, primarily due to migration in the oil and gas related credits. See also Note 7 Loans, of the notes to consolidated financial statements and section Nonperforming Assets for additional disclosures on the changes in asset quality.
|
•
|
Potential problem loans increased $65 million from December 31, 2017 primarily due to the downward migration of general commercial related credits and the addition of Bank Mutual loans. However, potential problem loans decreased $21 million from June 30, 2017, primarily due to improvements in general commercial related credits and migration in oil and gas related credits, respectively. See Table 10, for additional information on the changes in potential problem loans.
|
•
|
Net charge offs decreased $2 million from December 31, 2017 and decreased $4 million from June 30, 2017. See Table 12 and Table 13 for additional information regarding the activity in the allowance for loan losses.
|
•
|
The allowance for loan losses attributable to oil and gas related credits (included within the commercial and industrial allowance for loan losses) was $17 million at June 30, 2018, compared to $27 million at December 31, 2017 and $33 million at June 30, 2017. See also Oil and gas lending within the Credit Risk section for additional disclosure.
|
($ in Thousands)
|
June 30, 2018
|
|
March 31, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
|
June 30, 2017
|
|||||||||||||||||||||||||
|
Amount
|
|
% of
Total |
|
Amount
|
|
% of
Total |
|
Amount
|
|
% of
Total |
|
Amount
|
|
% of
Total |
|
Amount
|
|
% of
Total |
|||||||||||||||
Noninterest-bearing demand
|
$
|
5,341,361
|
|
|
22
|
%
|
|
$
|
5,458,473
|
|
|
23
|
%
|
|
$
|
5,478,416
|
|
|
24
|
%
|
|
$
|
5,177,734
|
|
|
23
|
%
|
|
$
|
5,038,162
|
|
|
23
|
%
|
Savings
|
1,887,777
|
|
|
8
|
%
|
|
1,883,638
|
|
|
8
|
%
|
|
1,524,992
|
|
|
7
|
%
|
|
1,544,037
|
|
|
7
|
%
|
|
1,552,820
|
|
|
7
|
%
|
|||||
Interest-bearing demand
|
4,650,407
|
|
|
20
|
%
|
|
4,719,566
|
|
|
20
|
%
|
|
4,603,157
|
|
|
20
|
%
|
|
4,990,891
|
|
|
22
|
%
|
|
3,858,739
|
|
|
18
|
%
|
|||||
Money market
|
9,208,993
|
|
|
39
|
%
|
|
9,086,553
|
|
|
38
|
%
|
|
8,830,328
|
|
|
39
|
%
|
|
8,299,512
|
|
|
37
|
%
|
|
9,228,129
|
|
|
43
|
%
|
|||||
Brokered CDs
|
228,029
|
|
|
1
|
%
|
|
44,503
|
|
|
—
|
%
|
|
18,609
|
|
|
—
|
%
|
|
3,554
|
|
|
—
|
%
|
|
131,184
|
|
|
1
|
%
|
|||||
Other time
|
2,499,747
|
|
|
10
|
%
|
|
2,632,869
|
|
|
11
|
%
|
|
2,330,460
|
|
|
10
|
%
|
|
2,317,723
|
|
|
11
|
%
|
|
1,809,146
|
|
|
8
|
%
|
|||||
Total deposits
|
$
|
23,816,314
|
|
|
100
|
%
|
|
$
|
23,825,602
|
|
|
100
|
%
|
|
$
|
22,785,962
|
|
|
100
|
%
|
|
$
|
22,333,451
|
|
|
100
|
%
|
|
$
|
21,618,180
|
|
|
100
|
%
|
Customer funding(a)
|
235,804
|
|
|
|
|
297,289
|
|
|
|
|
250,332
|
|
|
|
|
324,042
|
|
|
|
|
360,131
|
|
|
|
||||||||||
Total deposits and customer funding
|
$
|
24,052,118
|
|
|
|
|
$
|
24,122,891
|
|
|
|
|
$
|
23,036,294
|
|
|
|
|
$
|
22,657,493
|
|
|
|
|
$
|
21,978,311
|
|
|
|
|||||
Network transaction deposits(b)
|
$
|
2,094,670
|
|
|
|
|
$
|
2,244,739
|
|
|
|
|
$
|
2,520,968
|
|
|
|
|
$
|
2,622,787
|
|
|
|
|
$
|
3,220,956
|
|
|
|
|||||
Net deposits and customer funding (total deposits and customer funding, excluding Brokered CDs and network transaction deposits)
|
$
|
21,729,419
|
|
|
|
|
$
|
21,833,649
|
|
|
|
|
$
|
20,496,717
|
|
|
|
|
$
|
20,031,152
|
|
|
|
|
$
|
18,626,171
|
|
|
|
|||||
Time deposits of more than $250,000
|
$
|
804,210
|
|
|
|
|
$
|
906,727
|
|
|
|
|
$
|
1,056,172
|
|
|
|
|
$
|
1,009,097
|
|
|
|
|
$
|
477,043
|
|
|
|
•
|
Deposits are the Corporation’s largest source of funds.
|
•
|
Total deposits increased $1.0 billion (5%) from December 31, 2017, primarily due to the acquisition of Bank Mutual partially offset by seasonal deposit outflows, and increased $2.2 billion (10%) from June 30, 2017.
|
•
|
Non-maturity deposit accounts, comprised of savings, money market, and demand (both interest and noninterest-bearing) accounts accounted for 89% of the Corporation's total deposits at June 30, 2018.
|
•
|
Included in the above amounts were $2.1 billion of network deposits, primarily sourced from other financial institutions and intermediaries. These represented 9% of the Corporation's total deposits at June 30, 2018. Network transaction deposits have declined approximately $1.1 billion from June 30, 2017, and have primarily been replaced by FHLB advances.
|
•
|
Investment securities are an important tool to the Corporation’s liquidity objective, and can be pledged or sold to enhance liquidity, if necessary. See Note 6 Investment Securities of the notes to consolidated financial statements for additional information on the Corporation's investment securities portfolio, including investment securities pledged.
|
•
|
The Bank pledges eligible loans to both the Federal Reserve Bank and the FHLB as collateral to establish lines of credit and borrow from these entities. Based on the amount of collateral pledged, the FHLB established a collateral value from which the Bank may draw advances against the collateral. Also, the collateral is used to enable the FHLB to issue letters of credit in favor of public fund depositors of the Bank. As of June 30, 2018, the Bank had $1.2 billion available for future advances. The Federal Reserve Bank also establishes a collateral value of assets to support borrowings from the discount window. As of June 30, 2018, the Bank had $2.1 billion available for discount window borrowings.
|
•
|
The Parent Company has a $200 million commercial paper program, of which, $53 million was outstanding as of June 30, 2018.
|
•
|
Dividends and service fees from subsidiaries, as well as the proceeds from issuance of capital, are funding sources for the Parent Company.
|
•
|
The Parent Company has filed a shelf registration statement with the SEC under which the Parent Company may, from time to time, offer shares of the Corporation’s common stock in connection with acquisitions of businesses, assets or securities of other companies.
|
•
|
The Parent Company also has filed a universal shelf registration statement with the SEC, under which the Parent Company may offer the following securities, either separately or in units: debt securities, preferred stock, depositary shares, common stock, and warrants.
|
•
|
The Bank may also issue institutional certificates of deposit, network transaction deposits, and brokered certificates of deposit.
|
|
Moody’s
|
|
S&P(a)
|
Associated Bank short-term deposits
|
P-1
|
|
-
|
Associated Bank long-term
|
A1
|
|
BBB+
|
Corporation short-term
|
P-2
|
|
-
|
Corporation long-term
|
Baa1
|
|
BBB
|
Outlook
|
Stable
|
|
Stable
|
|
Estimated % Change in Rate Sensitive Earnings at Risk (EAR) Over 12 Months
|
||||||||||
|
Dynamic Forecast
June 30, 2018 |
|
Static Forecast
June 30, 2018 |
|
Dynamic Forecast
December 31, 2017 |
|
Static Forecast
December 31, 2017 |
||||
Instantaneous Rate Change
|
|
|
|
|
|
|
|
||||
100 bp increase in interest rates
|
4.5
|
%
|
|
3.4
|
%
|
|
2.5
|
%
|
|
2.7
|
%
|
200 bp increase in interest rates
|
8.9
|
%
|
|
6.7
|
%
|
|
4.6
|
%
|
|
4.9
|
%
|
|
June 30, 2018
|
|
December 31, 2017
|
||
Instantaneous Rate Change
|
|
|
|
||
100 bp increase in interest rates
|
(2.6
|
)%
|
|
(3.1
|
)%
|
200 bp increase in interest rates
|
(5.5
|
)%
|
|
(6.7
|
)%
|
June 30, 2018
|
One Year
or Less
|
|
One to
Three Years
|
|
Three to
Five Years
|
|
Over
Five Years
|
|
Total
|
||||||||||
|
($ in Thousands)
|
||||||||||||||||||
Time deposits
|
$
|
1,950,673
|
|
|
$
|
646,062
|
|
|
$
|
128,296
|
|
|
$
|
2,745
|
|
|
$
|
2,727,776
|
|
Short-term funding
|
256,525
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
256,525
|
|
|||||
FHLB advances
|
1,882,613
|
|
|
352,646
|
|
|
208,876
|
|
|
2,353,722
|
|
|
4,797,857
|
|
|||||
Long-term funding
|
—
|
|
|
249,490
|
|
|
—
|
|
|
248,129
|
|
|
497,619
|
|
|||||
Operating leases
|
9,815
|
|
|
18,572
|
|
|
13,881
|
|
|
22,447
|
|
|
64,715
|
|
|||||
Commitments to extend credit
|
4,450,407
|
|
|
2,706,972
|
|
|
1,565,756
|
|
|
164,536
|
|
|
8,887,671
|
|
|||||
Total
|
$
|
8,550,033
|
|
|
$
|
3,973,742
|
|
|
$
|
1,916,809
|
|
|
$
|
2,791,579
|
|
|
$
|
17,232,163
|
|
|
2Q18
|
|
1Q18
|
|
4Q17
|
|
3Q17
|
|
2Q17
|
||||||||||
|
($ in Thousands)
|
||||||||||||||||||
Risk-based Capital(a)
|
|
|
|
|
|
|
|
|
|
||||||||||
Common equity Tier 1
|
$
|
2,528,002
|
|
|
$
|
2,473,677
|
|
|
$
|
2,171,508
|
|
|
$
|
2,144,325
|
|
|
$
|
2,130,238
|
|
Tier 1 capital
|
2,686,658
|
|
|
2,632,912
|
|
|
2,331,245
|
|
|
2,304,037
|
|
|
2,289,831
|
|
|||||
Total capital
|
3,213,726
|
|
|
3,164,362
|
|
|
2,848,851
|
|
|
2,823,097
|
|
|
2,808,049
|
|
|||||
Total risk-weighted assets
|
24,059,029
|
|
|
23,535,483
|
|
|
21,544,463
|
|
|
21,657,286
|
|
|
21,590,134
|
|
|||||
Common equity Tier 1 capital ratio
|
10.51
|
%
|
|
10.51
|
%
|
|
10.08
|
%
|
|
9.90
|
%
|
|
9.87
|
%
|
|||||
Tier 1 capital ratio
|
11.17
|
%
|
|
11.19
|
%
|
|
10.82
|
%
|
|
10.64
|
%
|
|
10.61
|
%
|
|||||
Total capital ratio
|
13.36
|
%
|
|
13.45
|
%
|
|
13.22
|
%
|
|
13.04
|
%
|
|
13.01
|
%
|
|||||
Tier 1 leverage ratio
|
8.32
|
%
|
|
8.48
|
%
|
|
8.02
|
%
|
|
7.93
|
%
|
|
8.09
|
%
|
|||||
Selected Equity and Performance Ratios
|
|
|
|
|
|
|
|
|
|
||||||||||
Total stockholders’ equity / assets
|
11.20
|
%
|
|
11.13
|
%
|
|
10.62
|
%
|
|
10.66
|
%
|
|
10.72
|
%
|
|||||
Dividend payout ratio(b)
|
29.41
|
%
|
|
36.59
|
%
|
|
45.16
|
%
|
|
29.27
|
%
|
|
33.33
|
%
|
(a)
|
The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. The Corporation follows Basel III, subject to certain transition provisions. These regulatory capital measurements are used by management, regulators, investors, and analysts to assess, monitor and compare the quality and composition of the Corporation's capital with the capital of other financial services companies. See Table 20 for a reconciliation of common equity Tier 1 and average common equity Tier 1.
|
(b)
|
Ratio is based upon basic earnings per common share.
|
|
YTD
|
Quarter Ended
|
|||||||||||||||||||
|
June 30,
2018 |
June 30,
2017 |
June 30,
2018 |
March 31,
2018 |
December 31,
2017 |
September 30,
2017 |
June 30,
2017 |
||||||||||||||
|
($ in Thousands)
|
||||||||||||||||||||
Selected Equity and Performance Ratios(a)(b)
|
|
|
|
|
|
|
|
||||||||||||||
Tangible common equity / tangible assets
|
|
|
7.29
|
%
|
7.22
|
%
|
7.07
|
%
|
7.08
|
%
|
7.11
|
%
|
|||||||||
Return on average equity
|
8.81
|
%
|
7.33
|
%
|
9.61
|
%
|
7.96
|
%
|
6.17
|
%
|
8.10
|
%
|
7.35
|
%
|
|||||||
Return on average tangible common equity
|
13.51
|
%
|
11.06
|
%
|
14.98
|
%
|
11.99
|
%
|
9.16
|
%
|
12.20
|
%
|
11.06
|
%
|
|||||||
Return on average Common equity Tier 1
|
12.73
|
%
|
10.62
|
%
|
14.00
|
%
|
11.39
|
%
|
8.77
|
%
|
11.73
|
%
|
10.63
|
%
|
|||||||
Return on average assets
|
0.98
|
%
|
0.79
|
%
|
1.07
|
%
|
0.88
|
%
|
0.66
|
%
|
0.86
|
%
|
0.80
|
%
|
|||||||
Average stockholders' equity / average assets
|
11.06
|
%
|
10.85
|
%
|
11.13
|
%
|
11.00
|
%
|
10.73
|
%
|
10.63
|
%
|
10.84
|
%
|
|||||||
Tangible Common Equity and Common Equity Tier 1 Reconciliation(a)(b)
|
|
|
|
|
|
|
|
||||||||||||||
Common equity
|
|
|
$
|
3,610,843
|
|
$
|
3,552,846
|
|
$
|
3,077,514
|
|
$
|
3,043,672
|
|
$
|
3,031,573
|
|
||||
Goodwill and other intangible assets, net
|
|
|
(1,247,011
|
)
|
(1,232,870
|
)
|
(991,819
|
)
|
(986,086
|
)
|
(986,536
|
)
|
|||||||||
Tangible common equity
|
|
|
2,363,832
|
|
2,319,977
|
|
2,085,695
|
|
2,057,586
|
|
2,045,037
|
|
|||||||||
Less: Accumulated other comprehensive income / loss
|
|
|
119,888
|
|
107,673
|
|
62,758
|
|
54,288
|
|
53,470
|
|
|||||||||
Less: Deferred tax assets/deferred tax liabilities, net
|
|
|
44,282
|
|
46,027
|
|
23,055
|
|
32,451
|
|
31,731
|
|
|||||||||
Common equity Tier 1
|
|
|
$
|
2,528,002
|
|
$
|
2,473,677
|
|
$
|
2,171,508
|
|
$
|
2,144,325
|
|
$
|
2,130,238
|
|
||||
Tangible Assets Reconciliation(a)
|
|
|
|
|
|
|
|
||||||||||||||
Total assets
|
|
|
$
|
33,652,647
|
|
$
|
33,366,505
|
|
$
|
30,483,594
|
|
$
|
30,064,547
|
|
$
|
29,769,025
|
|
||||
Goodwill and other intangible assets, net
|
|
|
(1,247,011
|
)
|
(1,232,870
|
)
|
(991,819
|
)
|
(986,086
|
)
|
(986,536
|
)
|
|||||||||
Tangible assets
|
|
|
$
|
32,405,635
|
|
$
|
32,133,636
|
|
$
|
29,491,775
|
|
$
|
29,078,461
|
|
$
|
28,782,489
|
|
||||
Average Tangible Common Equity and Average Common Equity Tier 1 Reconciliation(a)(b)
|
|
|
|
|
|
|
|
||||||||||||||
Common equity
|
$
|
3,469,861
|
|
$
|
2,984,451
|
|
$
|
3,561,319
|
|
$
|
3,377,388
|
|
$
|
3,056,077
|
|
$
|
3,024,918
|
|
$
|
3,005,209
|
|
Goodwill and other intangible assets, net
|
(1,171,917
|
)
|
(986,980
|
)
|
(1,235,623
|
)
|
(1,107,503
|
)
|
(991,955
|
)
|
(986,342
|
)
|
(986,826
|
)
|
|||||||
Tangible common equity
|
2,297,945
|
|
1,997,471
|
|
2,325,696
|
|
2,269,885
|
|
2,064,121
|
|
2,038,576
|
|
2,018,383
|
|
|||||||
Less: Accumulated other comprehensive income / loss
|
103,379
|
|
52,179
|
|
117,497
|
|
89,105
|
|
61,937
|
|
49,164
|
|
50,148
|
|
|||||||
Less: Deferred tax assets/deferred tax liabilities, net
|
38,165
|
|
31,242
|
|
45,308
|
|
30,943
|
|
29,386
|
|
31,935
|
|
31,294
|
|
|||||||
Average common equity Tier 1
|
$
|
2,439,489
|
|
$
|
2,080,892
|
|
$
|
2,488,501
|
|
$
|
2,389,933
|
|
$
|
2,155,444
|
|
$
|
2,119,675
|
|
$
|
2,099,825
|
|
Efficiency Ratio Reconciliation(c)
|
|
|
|
|
|
|
|
||||||||||||||
Federal Reserve efficiency ratio
|
68.18
|
%
|
66.54
|
%
|
65.77
|
%
|
70.76
|
%
|
66.93
|
%
|
63.92
|
%
|
66.69
|
%
|
|||||||
Fully tax-equivalent adjustment
|
(0.66
|
)%
|
(1.30
|
)%
|
(0.65
|
)%
|
(0.66
|
)%
|
(1.30
|
)%
|
(1.21
|
)%
|
(1.30
|
)%
|
|||||||
Other intangible amortization
|
(0.59
|
)%
|
(0.19
|
)%
|
(0.68
|
)%
|
(0.51
|
)%
|
(0.18
|
)%
|
(0.16
|
)%
|
(0.18
|
)%
|
|||||||
Fully tax-equivalent efficiency ratio
|
66.94
|
%
|
65.05
|
%
|
64.45
|
%
|
69.60
|
%
|
65.45
|
%
|
62.55
|
%
|
65.21
|
%
|
(a)
|
The ratio tangible common equity to tangible assets excludes goodwill and other intangible assets, net, which is a non-GAAP financial measure. This financial measure has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength.
|
(b)
|
The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. The Corporation follows Basel III, subject to certain transition provisions. These regulatory capital measurements are used by management, regulators, investors, and analysts to assess, monitor and compare the quality and composition of the Corporation's capital with the capital of other financial services companies.
|
(c)
|
The efficiency ratio as defined by the Federal Reserve guidance is noninterest expense (which includes the provision for unfunded commitments) divided by the sum of net interest income plus noninterest income, excluding investment securities gains / losses, net. The fully tax-equivalent efficiency ratio is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains / losses, net. Management believes the fully tax-equivalent efficiency ratio, which adjusts net interest income for the tax-favored status of certain loans and investment securities, to be the preferred industry measurement as it enhances the comparability of net interest income arising from taxable and tax-exempt sources.
|
Standard
|
|
Description
|
|
Date of anticipated adoption
|
|
Effect on financial statements
|
ASU 2018-07 Compensation - Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting
|
|
The FASB issued an amendment as part of its simplification initiative. As part of this amendment, several aspects of the accounting for nonemployee share-based payment transactions for acquiring goods and services from nonemployees are changing. The amendment expands the scope of Topic 718 to apply to nonemployee awards with the exception for specific guidance on inputs to an option pricing model and the attribution of cost.
|
|
1st Quarter 2019
|
|
The Corporation is currently evaluating the impact on its results of operations, financial position and liquidity.
|
ASU 2017-04 Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
|
|
The FASB issued an amendment to simplify the subsequent quantitative measurement of goodwill by eliminating step two from the goodwill impairment test. Instead, an entity will perform only step one of its quantitative goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and then recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity will still have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative step one impairment test is necessary. This amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Entities should apply the amendment prospectively. Early adoption is permitted, including in an interim period, for impairment tests performed after January 1, 2017. The Corporation has not had to perform a step one quantitative analysis since 2012, which concluded no impairment was necessary.
|
|
2nd Quarter 2020, consistent with the Corporation's annual impairment test in May of each year.
|
|
The Corporation is currently evaluating the impact on its results of operations, financial position, and liquidity.
|
ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
|
|
The FASB issued an amendment to replace the current incurred loss impairment methodology. Under the new guidance, entities will be required to measure expected credit losses by utilizing forward-looking information to assess an entity's allowance for credit losses. The guidance also requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. This amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Entities should apply the amendment by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Early adoption is permitted.
|
|
1st Quarter 2020
|
|
The Corporation is currently evaluating the impact on its results of operations, financial position, and liquidity. A cross-functional team has been established to assess and implement the standard.
|
ASU 2016-02 Leases (Topic 842)
|
|
The FASB issued an amendment to provide transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This amendment will require lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. This amendment is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. Early adoption is permitted. ASU 2018-01 amendment permits an entity to elect an optional transition practical expedient to not evaluate under Topic 842 land easements that exist or expired before the entity's adoption of Topic 842. ASU 2018-10 was issued as improvements and clarifications of ASU 2016-02 were identified. This update provides clarification on narrow aspects of the previously issued updates.
|
|
1st Quarter 2019
|
|
The Corporation is currently evaluating the impact on its results of operations, financial position, and liquidity. A cross-functional team has been established to assess and implement the standard.
|
ITEM 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
ITEM 4.
|
Controls and Procedures
|
PART II - OTHER INFORMATION
|
ITEM 1.
|
Legal Proceedings
|
ITEM 1A.
|
Risk Factors
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
(a)
|
During the second quarter of 2018, the Corporation repurchased 17,613 common shares for minimum tax withholding settlements on equity compensation. These purchases do not count against the maximum number of shares that may yet be purchased under the Board of Directors’ authorization.
|
(b)
|
On April 21, 2015, the Board of Directors authorized the repurchase of up to $125 million of the Corporation's common stock, of which approximately $18 million remained available to repurchase as of June 30, 2018. On April 24, 2018, the Board of Directors authorized the repurchase of up to $100 million of the Corporation's common stock, of which all remains available for repurchase. Using the closing stock price on June 30, 2018 of $27.30, a total of approximately 4.3 million shares of common stock remained available to be repurchased under these previously approved Board authorizations as of June 30, 2018.
|
(a)
|
On July 25, 2017, the Board of Directors authorized the repurchase of up to $15 million of the depository shares of the Series D Preferred Stock, of which approximately $14.5 million remained available to repurchase as of June 30, 2018. Using the closing stock price on June 30, 2018 of $24.99, a total of approximately 579,000 shares of Series D Preferred stock remained available to be repurchased under the previously approved Board authorizations as of June 30, 2018.
|
ITEM 6.
|
Exhibits
|
Exhibit (11), Statement regarding computation of per share earnings. The information required by this item is set forth in Part I, Item 1 under Note 4 Earnings Per Common Share.
|
Exhibit (101), Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Unaudited Consolidated Balance Sheets, (ii) Unaudited Consolidated Statements of Income, (iii) Unaudited Consolidated Statements of Comprehensive Income, (iv) Unaudited Consolidated Statements of Changes in Stockholders’ Equity, (v) Unaudited Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.
|
Signatures
|
|
|
|
|
|
ASSOCIATED BANC-CORP
|
|
|
(Registrant)
|
|
|
|
Date: July 26, 2018
|
|
/s/ Philip B. Flynn
|
|
|
Philip B. Flynn
|
|
|
President and Chief Executive Officer
|
|
|
|
Date: July 26, 2018
|
|
/s/ Christopher J. Del Moral-Niles
|
|
|
Christopher J. Del Moral-Niles
|
|
|
Chief Financial Officer
|
|
|
|
Date: July 26, 2018
|
|
/s/ Tammy C. Stadler
|
|
|
Tammy C. Stadler
|
|
|
Principal Accounting Officer
|
|
|
|
Date: July 26, 2018
|
|
/s/ Philip B. Flynn
|
|
|
Philip B. Flynn
|
|
|
President and Chief Executive Officer
|
|
|
|
Date: July 26, 2018
|
|
/s/ Christopher J. Del Moral-Niles
|
|
|
Christopher J. Del Moral-Niles
|
|
|
Chief Financial Officer
|
|
|
|
/s/ Philip B. Flynn
|
|
Philip B. Flynn
|
|
Chief Executive Officer
|
|
July 26, 2018
|
|
|
|
/s/ Christopher J. Del Moral-Niles
|
|
Christopher J. Del Moral-Niles
|
|
Chief Financial Officer
|
|
July 26, 2018
|