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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2018
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Wisconsin
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39-1098068
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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433 Main Street
Green Bay, Wisconsin
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54301
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common stock, par value $0.01 per share
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The New York Stock Exchange
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Depositary Shares, each representing a 1/40th interest in a
share of 6.125% Non-Cumulative Perpetual Preferred Stock, Series C
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The New York Stock Exchange
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Depositary Shares, each representing a 1/40th interest in a
share of 5.375% Non-Cumulative Perpetual Preferred Stock, Series D
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The New York Stock Exchange
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Depositary Shares, each representing a 1/40th interest in a
share of 5.875% Non-Cumulative Perpetual Preferred Stock, Series E
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The New York Stock Exchange
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Large accelerated filer þ
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Accelerated filer ¨
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Non-accelerated filer ¨
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Smaller reporting company ¨
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Emerging growth company ¨
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Document:
Proxy Statement for Annual Meeting of
Shareholders to be held on April 30, 2019
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Part of Form 10-K Into Which
Portions of Documents are Incorporated:
Part III
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Page
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Credit risks, including changes in economic conditions and risk relating to our allowance for credit losses.
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Liquidity and interest rate risks, including the impact of capital market conditions and changes in monetary policy on our borrowings and net interest income.
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Operational risks, including processing, information systems, cybersecurity, vendor problems, business interruption, and fraud risks.
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Strategic and external risks, including economic, political, and competitive forces impacting our business.
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Legal, compliance, and reputational risks, including regulatory and litigation risks.
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The risk that our analyses of these risks and forces could be incorrect and / or that the strategies developed to address them could be unsuccessful.
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ITEM 1.
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BUSINESS
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The Economic Growth Act also enacted several important changes in some technical compliance areas, for which the banking agencies issued certain corresponding proposed and interim final rules, including:
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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;
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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;
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Exempting from appraisal requirements certain transactions involving real property in rural areas and valued at less than $400,000; and
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Directing the Bureau of Consumer Financial Protection to provide guidance on the applicability of the Truth in Lending Act and Real Estate Settlement Procedures Act ("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.
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revise minimum capital requirements and adjust prompt corrective action thresholds;
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revise the components of regulatory capital and create a new capital measure called “Common Equity Tier 1,” which must constitute at least 4.5% of risk-weighted assets;
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specify that Tier 1 capital consists only of Common Equity Tier 1 and certain “Additional Tier 1 Capital” instruments meeting specified requirements;
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apply most deductions / adjustments to regulatory capital measures to Common Equity Tier 1 and not to other components of capital, potentially requiring higher levels of Common Equity Tier 1 in order to meet minimum ratio requirements;
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increase the minimum Tier 1 capital ratio requirement from 4% to 6%;
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retain the existing risk-based capital treatment for 1-4 family residential mortgage exposures;
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permit most banking organizations, including the Parent Company, to retain, through a one-time permanent election, the existing capital treatment for accumulated other comprehensive income;
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implement a new capital conservation buffer of Common Equity Tier 1 capital equal to 2.5% of risk-weighted assets, which will be in addition to the 4.5% Common Equity Tier 1 capital ratio and be phased in over a three year period beginning January 1, 2016. This buffer is generally required to make capital distributions and pay executive bonuses;
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increase capital requirements for past due loans, high volatility commercial real estate exposures, and certain short-term loan commitments;
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require the deduction of mortgage servicing assets and deferred tax assets that exceed 10% of Common Equity Tier 1 capital in each category and 15% of Common Equity Tier 1 capital in the aggregate; and
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remove references to credit ratings consistent with the Dodd-Frank Act and establish due diligence requirements for securitization exposures.
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Tax Rate. The Tax Act replaced the graduated corporate tax rates applicable under prior law, which imposed a maximum tax rate of 35%, with a reduced 21% flat tax rate. Although the reduced tax rate generally should be favorable to us by resulting in increased earnings and capital, it decreased the value of our then-existing deferred tax assets effective in the fourth quarter of 2017. The effect of remeasuring deferred tax assets due to the reduction in the tax rate is a nonrecurring event that generally is not expected to have a substantial adverse impact on the our core earnings or capital over the long term. Tax planning strategies relating to the 2017 tax year were implemented in 2018 which reduced the amount of the deferred tax assets at December 31, 2017, reducing the decrease in value of the deferred tax assets calculated in the fourth quarter of 2017. The Corporation has recorded and reported the effects of these strategies in its financial statements for the period ended December 31, 2018.
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FDIC Insurance Premiums. The Tax Act prohibits taxpayers with consolidated assets over $50 billion from deducting any FDIC insurance premiums and prohibits taxpayers with consolidated assets between $10 and $50 billion, such as the Bank, from deducting the portion of their FDIC premiums equal to the ratio, expressed as a percentage, that (i) the taxpayer’s total consolidated assets over $10 billion, as of the close of the taxable year, bears to (ii) $40 billion. As a result, Associated Bank’s ability to deduct its FDIC premiums is now limited.
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Employee Compensation. A “publicly held corporation” is not permitted to deduct compensation in excess of $1 million per year paid to certain employees. The Tax Act eliminated certain exceptions to the $1 million limit applicable under prior law related to performance-based compensation, such as equity grants and cash bonuses that are paid only on the attainment of performance goals. As a result, our ability to deduct certain compensation paid to our most highly compensated employees is now limited.
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Business Asset Expensing. The Tax Act allows taxpayers immediately to expense the entire cost (instead of only 50%, as under prior law) of certain depreciable tangible property and real property improvements acquired and placed in service after September 27, 2017 and before January 1, 2023 (with an additional year for certain property). This 100% “bonus” depreciation is phased out proportionately for property placed in service on or after January 1, 2023 and before January 1, 2027 (with an additional year for certain property).
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Interest Expense. The Tax Act limits a taxpayer’s annual deduction of business interest expense to the sum of (i) business interest income and (ii) 30% of “adjusted taxable income,” defined as a business’s taxable income without taking into account business interest income or expense, net operating losses, and, for 2018 through 2021, depreciation, amortization and depletion. Because we generate significant amounts of net interest income, we do not expect to be impacted by this limitation.
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ITEM 1A.
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RISK FACTORS
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the ability to develop, maintain, and build upon long-term customer relationships based on top quality service, high ethical standards, and safe, sound assets;
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the ability to expand our market position;
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the scope, relevance, and pricing of products and services offered to meet customer needs and demands;
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the rate at which we introduce new products and services relative to our competitors;
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customer satisfaction with our level of service; and
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industry and general economic trends.
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incurring time and expense associated with identifying and evaluating potential acquisitions and negotiating potential transactions, and with integrating acquired businesses, resulting in the diversion of resources from the operation of our existing businesses;
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difficulty in estimating the value of target companies or assets and in evaluating credit, operations, management, and market risks associated with those companies or assets;
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payment of a premium over book and market values that may dilute our tangible book value and earnings per share in the short and long term;
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potential exposure to unknown or contingent liabilities of the target company, including, without limitation, liabilities for regulatory and compliance issues;
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exposure to potential asset quality issues of the target company;
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there may be volatility in reported income as goodwill impairment losses could occur irregularly and in varying amounts;
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difficulties, inefficiencies or cost overruns associated with the integration of the operations, personnel, technologies, services, and products of acquired companies with ours;
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inability to realize the expected revenue increases, cost savings, increases in geographic or product presence, and / or other projected benefits;
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potential disruption to our business;
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the possible loss of key employees and customers of the target company; and
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potential changes in banking or tax laws or regulations that may affect the target company.
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actual or anticipated variations in quarterly results of operations or financial condition;
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operating results and stock price performance of other companies that investors deem comparable to us;
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news reports relating to trends, concerns, and other issues in the financial services industry;
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perceptions in the marketplace regarding us and / or our competitors;
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new technology used or services offered by competitors;
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significant acquisitions or business combinations, strategic partnerships, joint ventures, or capital commitments by or involving us or our competitors;
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failure to integrate acquisitions or realize anticipated benefits from acquisitions;
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changes in government regulations;
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changes in international trade policy and any resulting disputes or reprisals;
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geopolitical conditions, such as acts or threats of terrorism or military conflicts; and
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recommendations by securities analysts.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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(a)
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During the fourth quarter of 2018, the Corporation repurchased 29,647 shares of common stock to satisfy minimum tax withholding on settlements of equity compensation awards. These purchases do not count against the maximum number of shares that may yet be purchased under the Board of Directors’ authorization.
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(b)
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On September 18, 2018, the Board of Directors authorized the repurchase of up to $200 million of the Corporation's common stock. Using the closing stock price on December 31, 2018 of $19.79, a total of approximately 5.6 million shares of common stock remained available to be repurchased under this Board authorization as of December 31, 2018.
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2013
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2014
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2015
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2016
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2017
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2018
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Associated Banc-Corp
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$
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100.0
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$
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109.2
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$
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112.3
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$
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150.6
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$
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158.0
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$
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126.9
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S&P 500 Index
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$
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100.0
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$
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113.5
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$
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115.1
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$
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128.6
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$
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156.4
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$
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149.8
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S&P 400 Regional Banks Sub-Industry Index
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$
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100.0
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$
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101.1
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$
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107.8
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$
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142.5
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$
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149.8
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$
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118.4
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ITEM 6.
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SELECTED FINANCIAL DATA
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Years Ended December 31,
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2018
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2017
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2016
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2015
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2014
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($ in Thousands, Except Per Share Data)
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Interest income
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$
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1,154,137
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$
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886,605
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$
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791,568
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$
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753,662
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$
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736,745
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Interest expense
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274,557
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145,385
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84,295
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77,384
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55,778
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Net interest income
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879,580
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741,220
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707,273
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676,278
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680,967
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Provision for credit losses
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—
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26,000
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70,000
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37,500
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16,000
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Net interest income after provision for credit losses
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879,580
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715,220
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637,273
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638,778
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664,967
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Noninterest income
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355,568
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332,680
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352,883
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329,357
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290,861
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Noninterest expense
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821,799
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709,133
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702,560
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698,347
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679,783
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Income before income taxes
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413,349
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338,767
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287,596
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269,788
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276,045
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Income tax expense
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79,786
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109,503
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87,322
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81,487
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85,536
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Net income
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333,562
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229,264
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200,274
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188,301
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190,509
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Preferred stock dividends
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10,784
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9,347
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8,903
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7,155
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5,002
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Net income available to common equity
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$
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322,779
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$
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219,917
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$
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191,371
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$
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181,146
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$
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185,507
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Earnings per common share
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Basic
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$
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1.92
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$
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1.45
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$
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1.27
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$
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1.20
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$
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1.17
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Diluted
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1.89
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1.42
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1.26
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1.19
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1.16
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Cash dividends per common share
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0.62
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0.50
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0.45
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0.41
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0.37
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Weighted average common shares outstanding
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Basic
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167,345
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150,877
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148,769
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149,350
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157,286
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Diluted
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169,732
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153,647
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149,961
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150,603
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158,254
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Selected Financial Data
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Year-End Balances
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Loans
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$
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22,940,429
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$
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20,784,991
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$
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20,054,716
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$
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18,714,343
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$
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17,593,846
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Allowance for loan losses
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238,023
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265,880
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278,335
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274,264
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266,302
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Investment securities
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6,689,021
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6,326,299
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5,953,762
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6,135,644
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5,801,267
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Total assets
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33,647,859
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30,483,594
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29,139,315
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27,711,835
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26,817,423
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Deposits
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24,897,393
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22,785,962
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21,888,448
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21,007,665
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18,763,504
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Short- and long-term funding, and Federal Home Loan Bank ("FHLB") advances
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4,527,056
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4,073,732
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3,853,830
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3,510,580
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4,994,054
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Stockholders’ equity
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3,780,888
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3,237,443
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3,091,312
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2,937,246
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2,800,251
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Book value per common share
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21.43
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20.13
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19.27
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18.62
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18.32
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Tangible book value per common share
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13.86
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13.65
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12.78
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12.10
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12.06
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Average Balances
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Loans
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$
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22,718,297
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$
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20,592,383
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$
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19,650,667
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$
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18,252,264
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$
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16,838,994
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Investment securities
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6,912,921
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6,028,262
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6,048,563
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5,912,849
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5,594,232
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Earning assets
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30,049,793
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26,999,884
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26,026,661
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24,571,087
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22,760,128
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Total assets
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33,053,405
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29,485,733
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28,506,112
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27,019,216
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25,109,997
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Deposits
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24,072,049
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21,923,602
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21,005,772
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19,903,087
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17,647,084
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Interest-bearing liabilities
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23,699,823
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21,045,399
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20,122,402
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19,330,847
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|
17,824,786
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Stockholders’ equity
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3,692,433
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|
3,172,634
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3,022,962
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2,895,158
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|
2,871,932
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Risk-based Capital (a)
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Total risk-weighted assets
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$
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23,875,278
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$
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21,544,463
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$
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21,340,951
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$
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19,929,963
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$
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18,567,646
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Common equity Tier 1
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2,449,721
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|
2,171,508
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2,032,587
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1,897,944
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|
1,808,332
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Common equity Tier 1 capital ratio
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10.26
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%
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10.08
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%
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9.52
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%
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9.52
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%
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9.74
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%
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Return on average common equity Tier 1
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13.15
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%
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10.43
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%
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9.86
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%
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9.88
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%
|
9.92
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%
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(a)
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The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. Prior to 2015, the regulatory capital requirements effective for the Corporation followed the Capital Accord of the Basel Committee on Banking Supervision ("Basel I"). Beginning January 1, 2015, the regulatory capital requirements effective for the Corporation follow 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 our capital with the capital of other financial services companies. See Table 26 for a reconciliation of common equity Tier 1 and average common equity Tier 1.
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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•
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On February 1, 2018, the Corporation completed the acquisition of Bank Mutual. The acquisition added $2.8 billion of assets, $1.9 billion of loans, and $1.8 billion of deposits.
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•
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Diluted earnings per common share of $1.89 in 2018 increased $0.47, or 33%, from 2017.
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•
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Average loans of $22.7 billion for 2018 increased $2.1 billion, or 10%, from a year ago. Average deposits of $24.1 billion for 2018 increased $2.1 billion, or 10%, from a year ago. For 2019, the Corporation expects to grow 3-6% in annual average loans and to maintain a loan-to-deposit ratio under 100%.
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•
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Net interest income of $880 million in 2018 increased $138 million, or 19%, from 2017. Net interest margin of 2.97% in 2018 increased 15bps from 2.82% in 2017. For 2019, the Corporation expects a stable to improving full year net interest margin based on the expected levels of the target federal funds rate.
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•
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Provision for credit losses was zero in 2018, a decrease of $26 million from 2017. For 2019, the Corporation expects the provision for credit losses to adjust with changes to risk grade, other indications of credit quality, and loan volume.
|
•
|
Noninterest income of $356 million in 2018 increased $23 million, or 7%, from 2017. For 2019, the Corporation expects improving year-over-year fee-based revenues and approximately $360 million to $375 million in full year noninterest income.
|
•
|
Noninterest expenses of $822 million in 2018, which includes $29 million of acquisition related costs primarily related to Bank Mutual, increased $113 million, or 16%, from 2017. For 2019, the Corporation expects full year noninterest expense to be approximately $800 million.
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|
Years Ended December 31,
|
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2018
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2017
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2016
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Average
Balance
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Interest
Income /
Expense
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Average
Yield /
Rate
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Average
Balance
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Interest
Income /
Expense
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Average
Yield /
Rate
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Average
Balance
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Interest
Income /
Expense
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Average
Yield /
Rate
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($ in Thousands)
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Assets
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Earning assets
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Loans (a) (b) (c)
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Commercial and business lending
|
$
|
7,744,640
|
|
$
|
349,266
|
|
4.51
|
%
|
$
|
7,254,613
|
|
$
|
265,796
|
|
3.66
|
%
|
$
|
7,395,524
|
|
$
|
239,064
|
|
3.23
|
%
|
Commercial real estate lending
|
5,433,361
|
|
273,937
|
|
5.04
|
%
|
4,952,605
|
|
192,838
|
|
3.89
|
%
|
4,724,412
|
|
163,421
|
|
3.46
|
%
|
||||||
Total commercial
|
13,178,001
|
|
623,203
|
|
4.73
|
%
|
12,207,218
|
|
458,634
|
|
3.76
|
%
|
12,119,936
|
|
402,485
|
|
3.32
|
%
|
||||||
Residential mortgage
|
8,289,432
|
|
281,814
|
|
3.40
|
%
|
7,105,486
|
|
229,210
|
|
3.23
|
%
|
6,156,524
|
|
194,941
|
|
3.17
|
%
|
||||||
Retail
|
1,250,863
|
|
73,605
|
|
5.88
|
%
|
1,279,679
|
|
64,892
|
|
5.07
|
%
|
1,374,207
|
|
65,910
|
|
4.80
|
%
|
||||||
Total loans
|
22,718,297
|
|
978,622
|
|
4.31
|
%
|
20,592,383
|
|
752,736
|
|
3.66
|
%
|
19,650,667
|
|
663,336
|
|
3.38
|
%
|
||||||
Investment securities
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Taxable
|
5,366,825
|
|
119,741
|
|
2.23
|
%
|
4,861,597
|
|
96,909
|
|
1.99
|
%
|
4,955,980
|
|
95,152
|
|
1.92
|
%
|
||||||
Tax-exempt (a)
|
1,546,096
|
|
56,426
|
|
3.65
|
%
|
1,166,665
|
|
50,455
|
|
4.32
|
%
|
1,092,583
|
|
49,036
|
|
4.49
|
%
|
||||||
Other short-term investments
|
418,576
|
|
12,623
|
|
3.02
|
%
|
379,239
|
|
7,719
|
|
2.04
|
%
|
327,431
|
|
4,829
|
|
1.48
|
%
|
||||||
Investments and other
|
7,331,497
|
|
188,790
|
|
2.58
|
%
|
6,407,501
|
|
155,083
|
|
2.42
|
%
|
6,375,994
|
|
149,017
|
|
2.34
|
%
|
||||||
Total earning assets
|
$
|
30,049,793
|
|
$
|
1,167,412
|
|
3.88
|
%
|
$
|
26,999,884
|
|
$
|
907,819
|
|
3.36
|
%
|
$
|
26,026,661
|
|
$
|
812,353
|
|
3.12
|
%
|
Other assets, net
|
3,003,612
|
|
|
|
2,485,849
|
|
|
|
2,479,451
|
|
|
|
||||||||||||
Total assets
|
$
|
33,053,405
|
|
|
|
$
|
29,485,733
|
|
|
|
$
|
28,506,112
|
|
|
|
|||||||||
Liabilities and stockholders' equity
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing deposits
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Savings
|
$
|
1,878,960
|
|
$
|
1,435
|
|
0.08
|
%
|
$
|
1,527,161
|
|
$
|
816
|
|
0.05
|
%
|
$
|
1,428,292
|
|
$
|
860
|
|
0.06
|
%
|
Interest-bearing demand
|
4,767,873
|
|
44,911
|
|
0.94
|
%
|
3,953,014
|
|
20,344
|
|
0.51
|
%
|
3,377,441
|
|
8,706
|
|
0.26
|
%
|
||||||
Money market
|
7,260,692
|
|
54,573
|
|
0.75
|
%
|
6,321,603
|
|
22,991
|
|
0.36
|
%
|
6,039,198
|
|
13,194
|
|
0.22
|
%
|
||||||
Network transaction deposits
|
2,095,715
|
|
39,251
|
|
1.87
|
%
|
3,145,554
|
|
31,455
|
|
1.00
|
%
|
3,501,486
|
|
15,439
|
|
0.44
|
%
|
||||||
Time deposits
|
2,831,229
|
|
35,948
|
|
1.27
|
%
|
1,979,709
|
|
18,419
|
|
0.93
|
%
|
1,553,069
|
|
12,136
|
|
0.78
|
%
|
||||||
Total interest-bearing deposits
|
18,834,469
|
|
176,118
|
|
0.94
|
%
|
16,927,041
|
|
94,025
|
|
0.56
|
%
|
15,899,486
|
|
50,335
|
|
0.32
|
%
|
||||||
Federal funds purchased and securities sold under agreements to repurchase
|
224,967
|
|
2,006
|
|
0.89
|
%
|
415,086
|
|
2,527
|
|
0.61
|
%
|
609,807
|
|
1,314
|
|
0.22
|
%
|
||||||
Commercial paper
|
56,076
|
|
186
|
|
0.33
|
%
|
91,797
|
|
293
|
|
0.32
|
%
|
78,200
|
|
248
|
|
0.32
|
%
|
||||||
FHLB advances
|
3,971,797
|
|
73,668
|
|
1.85
|
%
|
3,114,545
|
|
30,364
|
|
0.97
|
%
|
2,968,590
|
|
10,741
|
|
0.36
|
%
|
||||||
Long-term funding
|
612,513
|
|
22,579
|
|
3.69
|
%
|
496,930
|
|
18,176
|
|
3.66
|
%
|
566,319
|
|
21,657
|
|
3.82
|
%
|
||||||
Total short and long-term funding
|
4,865,353
|
|
98,439
|
|
2.02
|
%
|
4,118,358
|
|
51,360
|
|
1.25
|
%
|
4,222,916
|
|
33,960
|
|
0.80
|
%
|
||||||
Total interest-bearing liabilities
|
$
|
23,699,823
|
|
$
|
274,557
|
|
1.16
|
%
|
$
|
21,045,399
|
|
$
|
145,385
|
|
0.69
|
%
|
$
|
20,122,402
|
|
$
|
84,295
|
|
0.42
|
%
|
Noninterest-bearing demand deposits
|
5,237,580
|
|
|
|
4,996,561
|
|
|
|
5,106,286
|
|
|
|
||||||||||||
Other liabilities
|
423,570
|
|
|
|
271,139
|
|
|
|
254,462
|
|
|
|
||||||||||||
Stockholders’ equity
|
3,692,433
|
|
|
|
3,172,634
|
|
|
|
3,022,962
|
|
|
|
||||||||||||
Total liabilities and stockholders’ equity
|
$
|
33,053,405
|
|
|
|
$
|
29,485,733
|
|
|
|
$
|
28,506,112
|
|
|
|
|||||||||
Interest rate spread
|
|
|
2.72
|
%
|
|
|
2.67
|
%
|
|
|
2.70
|
%
|
||||||||||||
Net free funds
|
|
|
0.25
|
%
|
|
|
0.15
|
%
|
|
|
0.10
|
%
|
||||||||||||
Fully tax-equivalent net interest income and net interest margin
|
|
$
|
892,855
|
|
2.97
|
%
|
|
$
|
762,434
|
|
2.82
|
%
|
|
$
|
728,058
|
|
2.80
|
%
|
||||||
Fully tax-equivalent adjustment
|
|
$
|
13,275
|
|
|
|
$
|
21,214
|
|
|
|
$
|
20,785
|
|
|
|||||||||
Net interest income
|
|
$
|
879,580
|
|
|
|
$
|
741,220
|
|
|
|
$
|
707,273
|
|
|
•
|
Net interest income in the consolidated statements of income (which excludes the fully tax-equivalent adjustment) was $880 million in 2018 compared to $741 million in 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 $893 million for 2018 was $130 million higher than 2017.
|
•
|
Average earning assets of $30.0 billion in 2018 were $3.0 billion, or 11%, higher than 2017. Average loans increased $2.1 billion, or 10%, primarily driven by the Bank Mutual acquisition.
|
•
|
Average interest-bearing liabilities of $23.7 billion in 2018 were up $2.7 billion, or 13%, versus 2017. On average, interest-bearing deposits increased $1.9 billion, or 11%, while noninterest-bearing demand deposits (a principal component of net free funds) increased by $241 million from 2017. Average short- and long-term funding increased $747 million from 2017, with FHLB advances increasing $857 million.
|
•
|
The net interest margin for 2018 was 2.97% compared to 2.82% in 2017.
|
•
|
For 2018, loan yields increased 65 bps to 4.31%. This increase was primarily due to total commercial loan yields increasing 97 bps to 4.73%, as adjustable rate loans re-priced. Accreted income from the acquisition of the Bank Mutual loan portfolio contributed $28 million to net interest income during 2018, contributing to the increase in loan yields from 2017.
|
•
|
The yield on investment securities and other short-term investments increased 16 bp to 2.58%.
|
•
|
The average cost of interest-bearing liabilities was 1.16% in 2018, 47 bp higher than 2017. The increase was due to a 38 bp increase in the average cost of interest-bearing deposits to 0.94% and a 77 bp increase in the cost of short- and long-term funding to 2.02%, both primarily due to increases in the Federal Reserve interest rate.
|
•
|
The Federal Reserve increased the target federal funds rate on December 19, 2018 to a range of 2.25% to 2.50% compared to a range of 1.25% to 1.50% at the end of 2017. The Federal Reserve has indicated it will closely assess economic data and be patient before moving ahead with any additional hikes in the Federal Funds rate. Therefore, the timing and magnitude of any such increases are uncertain and will depend on domestic and global economic conditions.
|
|
2018 Compared to 2017
Increase (Decrease) Due to
|
2017 Compared to 2016
Increase (Decrease) Due to |
||||||||||||||||
|
Volume
|
Rate
|
Net
|
Volume
|
Rate
|
Net
|
||||||||||||
|
($ in Thousands)
|
|||||||||||||||||
Interest income
|
|
|
|
|
|
|
||||||||||||
Loans (b)
|
|
|
|
|
|
|
||||||||||||
Commercial and business lending
|
$
|
18,904
|
|
$
|
64,566
|
|
$
|
83,470
|
|
$
|
(4,635
|
)
|
$
|
31,367
|
|
$
|
26,732
|
|
Commercial real estate lending
|
20,086
|
|
61,014
|
|
81,100
|
|
8,169
|
|
21,248
|
|
29,417
|
|
||||||
Total commercial
|
38,990
|
|
125,580
|
|
164,570
|
|
3,534
|
|
52,615
|
|
56,149
|
|
||||||
Residential mortgage
|
39,747
|
|
12,856
|
|
52,603
|
|
30,550
|
|
3,719
|
|
34,269
|
|
||||||
Retail
|
(1,490
|
)
|
10,203
|
|
8,713
|
|
(4,675
|
)
|
3,657
|
|
(1,018
|
)
|
||||||
Total loans
|
77,247
|
|
148,639
|
|
225,886
|
|
29,409
|
|
59,991
|
|
89,400
|
|
||||||
Investment securities
|
|
|
|
|
|
|
||||||||||||
Taxable
|
7,660
|
|
15,172
|
|
22,832
|
|
(3,731
|
)
|
5,488
|
|
1,757
|
|
||||||
Tax-exempt (b)
|
14,678
|
|
(8,708
|
)
|
5,970
|
|
3,245
|
|
(1,826
|
)
|
1,419
|
|
||||||
Other short-term investments
|
869
|
|
4,035
|
|
4,904
|
|
850
|
|
2,040
|
|
2,890
|
|
||||||
Investments and other
|
23,207
|
|
10,499
|
|
33,707
|
|
364
|
|
5,702
|
|
6,066
|
|
||||||
Total earning assets
|
$
|
100,454
|
|
$
|
159,138
|
|
$
|
259,593
|
|
$
|
29,773
|
|
$
|
65,693
|
|
$
|
95,466
|
|
Interest expense
|
|
|
|
|
|
|
||||||||||||
Savings
|
$
|
216
|
|
$
|
403
|
|
$
|
619
|
|
$
|
57
|
|
$
|
(101
|
)
|
$
|
(44
|
)
|
Interest-bearing demand
|
4,886
|
|
19,680
|
|
24,566
|
|
1,699
|
|
9,939
|
|
11,638
|
|
||||||
Money market
|
3,861
|
|
27,722
|
|
31,583
|
|
644
|
|
9,153
|
|
9,797
|
|
||||||
Network transaction deposits
|
(13,033
|
)
|
20,829
|
|
7,796
|
|
(1,717
|
)
|
17,733
|
|
16,016
|
|
||||||
Time deposits
|
9,660
|
|
7,869
|
|
17,529
|
|
3,705
|
|
2,578
|
|
6,283
|
|
||||||
Total interest-bearing deposits
|
5,590
|
|
76,502
|
|
82,093
|
|
4,388
|
|
39,302
|
|
43,690
|
|
||||||
Federal funds purchased and securities sold under agreements to repurchase
|
(1,425
|
)
|
903
|
|
(522
|
)
|
(534
|
)
|
1,747
|
|
1,213
|
|
||||||
Commercial paper
|
(118
|
)
|
11
|
|
(107
|
)
|
44
|
|
1
|
|
45
|
|
||||||
FHLB advances
|
10,120
|
|
33,184
|
|
43,304
|
|
553
|
|
19,070
|
|
19,623
|
|
||||||
Long-term funding
|
4,260
|
|
144
|
|
4,403
|
|
(2,568
|
)
|
(913
|
)
|
(3,481
|
)
|
||||||
Total short and long-term funding
|
12,837
|
|
34,242
|
|
47,079
|
|
(2,505
|
)
|
19,905
|
|
17,400
|
|
||||||
Total interest-bearing liabilities
|
18,427
|
|
110,744
|
|
129,172
|
|
1,883
|
|
59,207
|
|
61,090
|
|
||||||
Fully tax-equivalent net interest income
|
$
|
82,027
|
|
$
|
48,394
|
|
$
|
130,421
|
|
$
|
27,890
|
|
$
|
6,486
|
|
$
|
34,376
|
|
|
2018 Average
|
2017 Average
|
2016 Average
|
||||||||||||||||||
|
Balance
|
% of
Earning
Assets
|
Yield /
Rate
|
Balance
|
% of
Earning
Assets
|
Yield /
Rate
|
Balance
|
% of
Earning
Assets
|
Yield /
Rate
|
||||||||||||
|
($ in Thousands)
|
||||||||||||||||||||
Total loans
|
$
|
22,718,297
|
|
75.6
|
%
|
4.31
|
%
|
$
|
20,592,383
|
|
76.3
|
%
|
3.66
|
%
|
$
|
19,650,667
|
|
75.5
|
%
|
3.38
|
%
|
Investments and other
|
7,331,497
|
|
24.4
|
%
|
2.58
|
%
|
6,407,501
|
|
23.7
|
%
|
2.42
|
%
|
6,375,994
|
|
24.5
|
%
|
2.34
|
%
|
|||
Earning assets
|
$
|
30,049,793
|
|
100.0
|
%
|
3.88
|
%
|
$
|
26,999,884
|
|
100.0
|
%
|
3.36
|
%
|
$
|
26,026,661
|
|
100.0
|
%
|
3.12
|
%
|
Financed by:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing liabilities
|
$
|
23,699,823
|
|
78.9
|
%
|
1.16
|
%
|
$
|
21,045,399
|
|
77.9
|
%
|
0.69
|
%
|
$
|
20,122,402
|
|
77.3
|
%
|
0.42
|
%
|
Noninterest-bearing liabilities
|
6,349,970
|
|
21.1
|
%
|
—
|
|
5,954,485
|
|
22.1
|
%
|
—
|
|
5,904,259
|
|
22.7
|
%
|
—
|
|
|||
Total funds sources
|
$
|
30,049,793
|
|
100.0
|
%
|
0.91
|
%
|
$
|
26,999,884
|
|
100.0
|
%
|
0.54
|
%
|
$
|
26,026,661
|
|
100.0
|
%
|
0.32
|
%
|
Interest rate spread
|
|
|
2.72
|
%
|
|
|
2.67
|
%
|
|
|
2.70
|
%
|
|||||||||
Net free funds
|
|
|
0.25
|
%
|
|
|
0.15
|
%
|
|
|
0.10
|
%
|
|||||||||
Net interest margin
|
|
|
2.97
|
%
|
|
|
2.82
|
%
|
|
|
2.80
|
%
|
|||||||||
Average prime rate (a)
|
|
|
4.91
|
%
|
|
|
4.10
|
%
|
|
|
3.51
|
%
|
|||||||||
Average effective federal funds rate (a)
|
|
|
1.82
|
%
|
|
|
1.00
|
%
|
|
|
0.39
|
%
|
|||||||||
Average spread
|
|
|
309 bp
|
|
|
|
310 bp
|
|
|
|
312 bp
|
|
(a)
|
Source: Bloomberg
|
|
Years Ended December 31,
|
Change From Prior Year
|
|||||||||||||||||
|
2018
|
2017
|
2016
|
$ Change
2018
|
% Change
2018
|
$ Change
2017
|
% Change
2017
|
||||||||||||
|
($ in Thousands)
|
||||||||||||||||||
Insurance commissions and fees
|
$
|
89,511
|
|
$
|
81,474
|
|
$
|
80,795
|
|
$
|
8,037
|
|
10
|
%
|
$
|
679
|
|
1
|
%
|
Service charges and deposit account fees
|
66,075
|
|
64,427
|
|
66,609
|
|
1,648
|
|
3
|
%
|
(2,182
|
)
|
(3
|
)%
|
|||||
Card-based and loan fees
|
57,474
|
|
52,688
|
|
50,077
|
|
4,786
|
|
9
|
%
|
2,611
|
|
5
|
%
|
|||||
Trust and asset management fees
|
54,316
|
|
50,191
|
|
46,867
|
|
4,125
|
|
8
|
%
|
3,324
|
|
7
|
%
|
|||||
Brokerage and advisory fees
|
28,246
|
|
19,935
|
|
16,235
|
|
8,311
|
|
42
|
%
|
3,700
|
|
23
|
%
|
|||||
Total fee-based revenue
|
295,622
|
|
268,715
|
|
260,583
|
|
26,907
|
|
10
|
%
|
8,132
|
|
3
|
%
|
|||||
Capital markets, net
|
20,120
|
|
19,642
|
|
22,059
|
|
478
|
|
2
|
%
|
(2,417
|
)
|
(11
|
)%
|
|||||
Mortgage banking income
|
28,960
|
|
29,619
|
|
50,248
|
|
(659
|
)
|
(2
|
)%
|
(20,629
|
)
|
(41
|
)%
|
|||||
Mortgage servicing rights expense
|
9,049
|
|
10,259
|
|
12,127
|
|
(1,210
|
)
|
(12
|
)%
|
(1,868
|
)
|
(15
|
)%
|
|||||
Mortgage banking, net
|
19,911
|
|
19,360
|
|
38,121
|
|
551
|
|
3
|
%
|
(18,761
|
)
|
(49
|
)%
|
|||||
Bank and corporate owned life insurance
|
13,951
|
|
16,250
|
|
14,371
|
|
(2,299
|
)
|
(14
|
)%
|
1,879
|
|
13
|
%
|
|||||
Other
|
9,051
|
|
9,523
|
|
8,519
|
|
(472
|
)
|
(5
|
)%
|
1,004
|
|
12
|
%
|
|||||
Subtotal
|
358,655
|
|
333,490
|
|
343,653
|
|
25,165
|
|
8
|
%
|
(10,163
|
)
|
(3
|
)%
|
|||||
Asset gains (losses), net (a)
|
(1,103
|
)
|
(1,244
|
)
|
(86
|
)
|
141
|
|
(11
|
)%
|
(1,158
|
)
|
N/M
|
|
|||||
Investment securities gains (losses), net
|
(1,985
|
)
|
434
|
|
9,316
|
|
(2,419
|
)
|
N/M
|
|
(8,882
|
)
|
(95
|
)%
|
|||||
Total noninterest income
|
$
|
355,568
|
|
$
|
332,680
|
|
$
|
352,883
|
|
$
|
22,888
|
|
7
|
%
|
$
|
(20,203
|
)
|
(6
|
)%
|
Mortgage loans originated for sale during period
|
$
|
1,092,318
|
|
$
|
715,357
|
|
$
|
1,271,124
|
|
$
|
376,961
|
|
53
|
%
|
$
|
(555,767
|
)
|
(44
|
)%
|
Mortgage loan settlements during period
|
$
|
1,131,652
|
|
$
|
819,950
|
|
$
|
1,542,660
|
|
$
|
311,702
|
|
38
|
%
|
$
|
(722,710
|
)
|
(47
|
)%
|
Assets under management, at market value (b)
|
$
|
10,291
|
|
$
|
10,555
|
|
$
|
8,302
|
|
$
|
(265
|
)
|
(3
|
)%
|
$
|
2,254
|
|
27
|
%
|
(a)
|
2018 includes approximately $2 million of Bank Mutual acquisition related asset losses net of asset gains.
|
(b)
|
$ in millions. Excludes assets held in brokerage accounts.
|
•
|
Fee-based revenue was $296 million in 2018, an increase of $27 million, or 10%, compared to 2017. The increase was driven primarily by the incremental insurance commissions and fees, brokerage and advisory fees, and trust fees resulting from the acquisitions of Whitnell & Co. (fourth quarter of 2017), Diversified Insurance Solutions ("Diversified") (first quarter of 2018), and Anderson Insurance and Investment Agency, Inc. ("Anderson") (second quarter of 2018). Brokerage and advisory fees further benefited from strong equity markets through the first three quarters of 2018.
|
•
|
During 2018, the Corporation executed a strategy to improve the yield on securities and increase interest income during the current and future calendar years. As a result, the Corporation sold lower yielding Government National Mortgage Association ("GNMA") commercial mortgage-related securities for a $2 million loss.
|
|
Years Ended December 31,
|
Change From Prior Year
|
|||||||||||||||||
|
2018
|
2017
|
2016
|
$ Change
2018
|
% Change
2018
|
$ Change
2017
|
% Change
2017
|
||||||||||||
|
($ in Thousands)
|
||||||||||||||||||
Personnel
|
$
|
482,676
|
|
$
|
428,976
|
|
$
|
424,676
|
|
$
|
53,700
|
|
13
|
%
|
$
|
4,300
|
|
1
|
%
|
Technology
|
72,674
|
|
63,004
|
|
57,300
|
|
9,670
|
|
15
|
%
|
5,704
|
|
10
|
%
|
|||||
Occupancy
|
59,121
|
|
53,842
|
|
56,069
|
|
5,279
|
|
10
|
%
|
(2,227
|
)
|
(4
|
)%
|
|||||
Business development and advertising
|
30,923
|
|
28,946
|
|
26,351
|
|
1,977
|
|
7
|
%
|
2,595
|
|
10
|
%
|
|||||
Equipment
|
23,243
|
|
21,201
|
|
21,489
|
|
2,042
|
|
10
|
%
|
(288
|
)
|
(1
|
)%
|
|||||
Legal and professional
|
23,061
|
|
22,509
|
|
19,869
|
|
552
|
|
2
|
%
|
2,640
|
|
13
|
%
|
|||||
Card issuance and loan costs
|
12,386
|
|
11,760
|
|
13,641
|
|
626
|
|
5
|
%
|
(1,881
|
)
|
(14
|
)%
|
|||||
Foreclosure / OREO expense, net
|
3,603
|
|
4,878
|
|
4,844
|
|
(1,275
|
)
|
(26
|
)%
|
34
|
|
1
|
%
|
|||||
FDIC assessment
|
30,000
|
|
31,300
|
|
34,750
|
|
(1,300
|
)
|
(4
|
)%
|
(3,450
|
)
|
(10
|
)%
|
|||||
Other intangible amortization
|
8,159
|
|
1,959
|
|
2,093
|
|
6,200
|
|
N/M
|
|
(134
|
)
|
(6
|
)%
|
|||||
Acquisition related costs(a)
|
29,002
|
|
—
|
|
—
|
|
29,002
|
|
N/M
|
|
—
|
|
N/M
|
|
|||||
Other
|
46,951
|
|
40,758
|
|
41,478
|
|
6,193
|
|
15
|
%
|
(720
|
)
|
(2
|
)%
|
|||||
Total noninterest expense
|
$
|
821,799
|
|
$
|
709,133
|
|
$
|
702,560
|
|
$
|
112,666
|
|
16
|
%
|
$
|
6,573
|
|
1
|
%
|
Personnel expense to total noninterest expense
|
59
|
%
|
60
|
%
|
60
|
%
|
|
|
|
|
|||||||||
Average full-time equivalent employees(b)
|
4,699
|
|
4,307
|
|
4,368
|
|
|
|
|
|
•
|
Personnel expense (which includes salary-related expenses and fringe benefit expenses) was $483 million for 2018, up $54 million, or 13%, from 2017, primarily driven by the additional cost of adding Bank Mutual staff and by increases in incentive funding and commission expense.
|
•
|
Technology expense of $73 million increased $10 million, or 15%, compared to 2017, driven by the additional cost of Bank Mutual operations and investments to enhance operational efficiency and the customer experience.
|
•
|
During 2018, the Corporation incurred $29 million of acquisition related costs primarily related to severance, contract terminations, and conversion costs from the Bank Mutual acquisition.
|
•
|
At December 31, 2018, total assets were $33.6 billion, up $3.2 billion, or 10%, from December 31, 2017. On February 1, 2018, the Corporation added $2.8 billion of assets as a result of the Bank Mutual acquisition.
|
•
|
Loans of $22.9 billion at December 31, 2018 were up $2.2 billion, or 10%, from December 31, 2017. See Note 4 Loans of the notes to the consolidated financial statements for additional information on loans. On February 1, 2018, the Corporation added $1.9 billion of loans as a result of the Bank Mutual acquisition.
|
•
|
At December 31, 2018, total deposits of $24.9 billion were up $2.1 billion, or 9%, from December 31, 2017. See Note 7 Deposits of the notes to the consolidated financial statements for additional information on deposits. On February 1, 2018, the Corporation assumed $1.8 billion of deposits as a result of the Bank Mutual acquisition.
|
•
|
At December 31, 2018, funding, including short-term, long-term, and FHLB advances, was $4.5 billion, up $453 million, or 11%, from December 31, 2017. See Note 8 Short- and Long-Term Funding of the notes to the consolidated financial statements for additional information on short- and long-term funding.
|
|
As of December 31,
|
||||||||||||||||||||||||
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||||||||||||
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
|||||||||||||||
|
($ in Thousands)
|
||||||||||||||||||||||||
Commercial and industrial
|
$
|
7,398,044
|
|
32
|
%
|
$
|
6,399,693
|
|
31
|
%
|
$
|
6,489,014
|
|
32
|
%
|
$
|
6,190,683
|
|
33
|
%
|
$
|
5,957,431
|
|
34
|
%
|
Commercial real estate — owner occupied
|
920,443
|
|
4
|
%
|
802,209
|
|
4
|
%
|
897,724
|
|
5
|
%
|
918,212
|
|
5
|
%
|
1,007,937
|
|
6
|
%
|
|||||
Commercial and business lending
|
8,318,487
|
|
36
|
%
|
7,201,902
|
|
35
|
%
|
7,386,738
|
|
37
|
%
|
7,108,895
|
|
38
|
%
|
6,965,368
|
|
40
|
%
|
|||||
Commercial real estate — investor
|
3,751,554
|
|
16
|
%
|
3,315,254
|
|
16
|
%
|
3,574,732
|
|
18
|
%
|
3,234,266
|
|
17
|
%
|
3,056,485
|
|
17
|
%
|
|||||
Real estate construction
|
1,335,031
|
|
6
|
%
|
1,451,684
|
|
7
|
%
|
1,432,497
|
|
7
|
%
|
1,162,145
|
|
6
|
%
|
1,008,956
|
|
6
|
%
|
|||||
Commercial real estate lending
|
5,086,585
|
|
22
|
%
|
4,766,938
|
|
23
|
%
|
5,007,229
|
|
25
|
%
|
4,396,411
|
|
23
|
%
|
4,065,441
|
|
23
|
%
|
|||||
Total commercial
|
13,405,072
|
|
58
|
%
|
11,968,840
|
|
58
|
%
|
12,393,967
|
|
62
|
%
|
11,505,306
|
|
61
|
%
|
11,030,809
|
|
63
|
%
|
|||||
Residential mortgage
|
8,277,712
|
|
36
|
%
|
7,546,534
|
|
36
|
%
|
6,332,327
|
|
31
|
%
|
5,783,267
|
|
31
|
%
|
5,056,891
|
|
28
|
%
|
|||||
Home equity
|
894,473
|
|
4
|
%
|
883,804
|
|
4
|
%
|
934,443
|
|
5
|
%
|
1,005,802
|
|
6
|
%
|
1,051,927
|
|
6
|
%
|
|||||
Other consumer
|
363,171
|
|
2
|
%
|
385,813
|
|
2
|
%
|
393,979
|
|
2
|
%
|
419,968
|
|
2
|
%
|
454,219
|
|
3
|
%
|
|||||
Total consumer
|
9,535,357
|
|
42
|
%
|
8,816,151
|
|
42
|
%
|
7,660,749
|
|
38
|
%
|
7,209,037
|
|
39
|
%
|
6,563,037
|
|
37
|
%
|
|||||
Total loans
|
$
|
22,940,429
|
|
100
|
%
|
$
|
20,784,991
|
|
100
|
%
|
$
|
20,054,716
|
|
100
|
%
|
$
|
18,714,343
|
|
100
|
%
|
$
|
17,593,846
|
|
100
|
%
|
Commercial real estate and real estate construction loan detail
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Farmland
|
$
|
1,250
|
|
—
|
%
|
$
|
1,399
|
|
—
|
%
|
$
|
1,613
|
|
—
|
%
|
$
|
7,135
|
|
—
|
%
|
$
|
9,249
|
|
—
|
%
|
Multi-family
|
1,204,552
|
|
32
|
%
|
952,473
|
|
29
|
%
|
1,027,541
|
|
29
|
%
|
932,360
|
|
29
|
%
|
976,956
|
|
32
|
%
|
|||||
Non-owner occupied
|
2,545,751
|
|
68
|
%
|
2,361,382
|
|
71
|
%
|
2,545,578
|
|
71
|
%
|
2,294,771
|
|
71
|
%
|
2,070,280
|
|
68
|
%
|
|||||
Commercial real estate — investor
|
$
|
3,751,554
|
|
100
|
%
|
$
|
3,315,254
|
|
100
|
%
|
$
|
3,574,732
|
|
100
|
%
|
$
|
3,234,266
|
|
100
|
%
|
$
|
3,056,485
|
|
100
|
%
|
1-4 family construction
|
$
|
289,558
|
|
22
|
%
|
$
|
353,902
|
|
24
|
%
|
$
|
358,398
|
|
25
|
%
|
$
|
309,396
|
|
27
|
%
|
$
|
304,992
|
|
30
|
%
|
All other construction
|
1,045,474
|
|
78
|
%
|
1,097,782
|
|
76
|
%
|
1,074,099
|
|
75
|
%
|
852,749
|
|
73
|
%
|
703,964
|
|
70
|
%
|
|||||
Real estate construction
|
$
|
1,335,031
|
|
100
|
%
|
$
|
1,451,684
|
|
100
|
%
|
$
|
1,432,497
|
|
100
|
%
|
$
|
1,162,145
|
|
100
|
%
|
$
|
1,008,956
|
|
100
|
%
|
December 31, 2018
|
Within 1 Year(a)
|
|
1-5 Years
|
|
After 5 Years
|
|
Total
|
|
% of Total
|
|||||||||
|
($ in Thousands)
|
|||||||||||||||||
Commercial and industrial
|
$
|
6,744,120
|
|
|
$
|
526,979
|
|
|
$
|
126,945
|
|
|
$
|
7,398,044
|
|
|
32
|
%
|
Commercial real estate — owner occupied
|
478,510
|
|
|
292,101
|
|
|
149,832
|
|
|
920,443
|
|
|
4
|
%
|
||||
Commercial real estate — investor
|
3,121,193
|
|
|
528,307
|
|
|
102,054
|
|
|
3,751,554
|
|
|
16
|
%
|
||||
Real estate construction
|
1,239,620
|
|
|
87,509
|
|
|
7,902
|
|
|
1,335,031
|
|
|
6
|
%
|
||||
Residential Mortgage - Adjustable(b)
|
654,585
|
|
|
2,850,970
|
|
|
1,813,921
|
|
|
5,319,477
|
|
|
23
|
%
|
||||
Residential Mortgage - Fixed
|
38,519
|
|
|
67,586
|
|
|
2,852,130
|
|
|
2,958,235
|
|
|
13
|
%
|
||||
Home Equity
|
45,932
|
|
|
64,687
|
|
|
783,854
|
|
|
894,473
|
|
|
4
|
%
|
||||
Other Consumer
|
157,393
|
|
|
47,866
|
|
|
157,913
|
|
|
363,171
|
|
|
2
|
%
|
||||
Total Loans
|
$
|
12,479,873
|
|
|
$
|
4,466,004
|
|
|
$
|
5,994,551
|
|
|
$
|
22,940,429
|
|
|
100
|
%
|
Fixed-rate
|
$
|
5,277,484
|
|
|
$
|
1,083,102
|
|
|
$
|
3,345,534
|
|
|
$
|
9,706,119
|
|
|
42
|
%
|
Floating or adjustable rate
|
7,202,390
|
|
|
3,382,903
|
|
|
2,649,017
|
|
|
13,234,310
|
|
|
58
|
%
|
||||
Total
|
$
|
12,479,873
|
|
|
$
|
4,466,004
|
|
|
$
|
5,994,551
|
|
|
$
|
22,940,429
|
|
|
100
|
%
|
(a)
|
Demand loans, past due loans, overdrafts, and credit cards are reported in the “Within 1 Year” category.
|
(b)
|
Based on contractual loan terms for adjustable rate mortgages; does not factor in early prepayments or amortization.
|
December 31, 2018
|
% of Total Loans
|
% of Total Commercial and Business Lending
|
||
Manufacturing and Wholesale Trade
|
8
|
%
|
23
|
%
|
Power and Utilities
|
6
|
%
|
15
|
%
|
|
Years Ended December 31,
|
||||||||||||||
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
|
($ in Millions)
|
||||||||||||||
Pass
|
$
|
678
|
|
$
|
483
|
|
$
|
426
|
|
$
|
522
|
|
$
|
725
|
|
Special mention
|
9
|
|
—
|
|
20
|
|
86
|
|
29
|
|
|||||
Potential problem
|
39
|
|
40
|
|
75
|
|
124
|
|
—
|
|
|||||
Nonaccrual
|
22
|
|
77
|
|
147
|
|
20
|
|
—
|
|
|||||
Total oil and gas related loans
|
$
|
747
|
|
$
|
600
|
|
$
|
668
|
|
$
|
752
|
|
$
|
754
|
|
Annual net charge offs
|
$
|
17
|
|
$
|
25
|
|
$
|
59
|
|
$
|
—
|
|
$
|
—
|
|
Oil and gas related allowance
|
$
|
12
|
|
$
|
27
|
|
$
|
38
|
|
$
|
42
|
|
$
|
17
|
|
Oil and gas related allowance ratio
|
1.6
|
%
|
4.5
|
%
|
5.7
|
%
|
5.6
|
%
|
2.3
|
%
|
December 31, 2018
|
% of Total Loans
|
% of Total Commercial Real Estate - Investor
|
||
Multi-Family
|
5
|
%
|
32
|
%
|
|
As of December 31,
|
||||||||||||||
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
|
($ in Thousands)
|
||||||||||||||
Nonperforming assets by type
|
|
||||||||||||||
Commercial and industrial
|
$
|
41,021
|
|
$
|
112,786
|
|
$
|
183,371
|
|
$
|
93,575
|
|
$
|
51,464
|
|
Commercial real estate — owner occupied
|
3,957
|
|
22,740
|
|
9,544
|
|
8,049
|
|
25,825
|
|
|||||
Commercial and business lending
|
44,978
|
|
135,526
|
|
192,915
|
|
101,624
|
|
77,289
|
|
|||||
Commercial real estate — investor
|
1,952
|
|
4,729
|
|
18,051
|
|
8,643
|
|
22,685
|
|
|||||
Real estate construction
|
979
|
|
974
|
|
844
|
|
940
|
|
5,399
|
|
|||||
Commercial real estate lending
|
2,931
|
|
5,703
|
|
18,895
|
|
9,583
|
|
28,084
|
|
|||||
Total commercial
|
47,909
|
|
141,229
|
|
211,810
|
|
111,207
|
|
105,373
|
|
|||||
Residential mortgage
|
67,574
|
|
53,632
|
|
50,236
|
|
51,482
|
|
54,976
|
|
|||||
Home equity
|
12,339
|
|
13,514
|
|
13,001
|
|
15,244
|
|
16,451
|
|
|||||
Other consumer
|
79
|
|
171
|
|
256
|
|
325
|
|
613
|
|
|||||
Total consumer
|
79,992
|
|
67,317
|
|
63,493
|
|
67,051
|
|
72,040
|
|
|||||
Total nonaccrual loans (“NALs”)
|
127,901
|
|
208,546
|
|
275,303
|
|
178,258
|
|
177,413
|
|
|||||
Commercial real estate owned
|
4,047
|
|
6,735
|
|
7,176
|
|
7,942
|
|
11,699
|
|
|||||
Residential real estate owned
|
2,963
|
|
5,873
|
|
3,098
|
|
4,768
|
|
4,111
|
|
|||||
Bank properties real estate owned
|
4,974
|
|
—
|
|
—
|
|
1,859
|
|
922
|
|
|||||
Other real estate owned ("OREO")
|
11,984
|
|
12,608
|
|
10,274
|
|
14,569
|
|
16,732
|
|
|||||
Other nonperforming assets
|
—
|
|
7,418
|
|
7,418
|
|
—
|
|
—
|
|
|||||
Total nonperforming assets (“NPAs”)
|
$
|
139,885
|
|
$
|
228,572
|
|
$
|
292,995
|
|
$
|
192,827
|
|
$
|
194,145
|
|
Accruing loans past due 90 days or more
|
|
|
|
|
|
||||||||||
Commercial
|
$
|
311
|
|
$
|
418
|
|
$
|
236
|
|
$
|
249
|
|
$
|
254
|
|
Consumer
|
1,853
|
|
1,449
|
|
1,377
|
|
1,399
|
|
1,369
|
|
|||||
Total accruing loans past due 90 days or more
|
$
|
2,165
|
|
$
|
1,867
|
|
$
|
1,613
|
|
$
|
1,648
|
|
$
|
1,623
|
|
Restructured loans (accruing)
|
|
|
|
|
|
||||||||||
Commercial
|
$
|
28,668
|
|
$
|
48,735
|
|
$
|
53,022
|
|
$
|
59,595
|
|
$
|
68,200
|
|
Consumer
|
24,595
|
|
25,883
|
|
26,835
|
|
27,768
|
|
30,016
|
|
|||||
Total restructured loans (accruing)
|
$
|
53,263
|
|
$
|
74,618
|
|
$
|
79,857
|
|
$
|
87,363
|
|
$
|
98,216
|
|
Nonaccrual restructured loans (included in nonaccrual loans)
|
$
|
26,292
|
|
$
|
23,486
|
|
$
|
29,385
|
|
$
|
37,684
|
|
$
|
57,656
|
|
Ratios at year end
|
|
|
|
|
|
||||||||||
Nonaccrual loans to total loans
|
0.56
|
%
|
1.00
|
%
|
1.37
|
%
|
0.95
|
%
|
1.01
|
%
|
|||||
NPAs to total loans plus OREO
|
0.61
|
%
|
1.10
|
%
|
1.46
|
%
|
1.03
|
%
|
1.10
|
%
|
|||||
NPAs to total assets
|
0.42
|
%
|
0.75
|
%
|
1.01
|
%
|
0.70
|
%
|
0.72
|
%
|
|||||
Allowance for loan losses to nonaccrual loans
|
186.10
|
%
|
127.49
|
%
|
101.10
|
%
|
153.86
|
%
|
150.10
|
%
|
|
Years Ended December 31,
|
||||||||||||||
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
|
($ in Thousands)
|
||||||||||||||
Accruing loans 30-89 days past due by type
|
|
|
|||||||||||||
Commercial and industrial
|
$
|
525
|
|
$
|
271
|
|
$
|
1,413
|
|
$
|
1,011
|
|
$
|
14,747
|
|
Commercial real estate — owner occupied
|
2,699
|
|
48
|
|
1,384
|
|
7,142
|
|
10,628
|
|
|||||
Commercial and business lending
|
3,224
|
|
319
|
|
2,797
|
|
8,153
|
|
25,375
|
|
|||||
Commercial real estate — investor
|
3,767
|
|
374
|
|
931
|
|
291
|
|
1,208
|
|
|||||
Real estate construction
|
330
|
|
251
|
|
369
|
|
296
|
|
984
|
|
|||||
Commercial real estate lending
|
4,097
|
|
625
|
|
1,300
|
|
587
|
|
2,192
|
|
|||||
Total commercial
|
7,321
|
|
944
|
|
4,097
|
|
8,740
|
|
27,567
|
|
|||||
Residential mortgage
|
9,706
|
|
9,552
|
|
8,142
|
|
4,930
|
|
4,846
|
|
|||||
Home equity
|
6,049
|
|
6,825
|
|
5,849
|
|
7,919
|
|
8,783
|
|
|||||
Other consumer
|
2,269
|
|
2,007
|
|
3,189
|
|
1,870
|
|
1,932
|
|
|||||
Total consumer
|
18,024
|
|
18,384
|
|
17,180
|
|
14,719
|
|
15,561
|
|
|||||
Total accruing loans 30-89 days past due
|
$
|
25,345
|
|
$
|
19,328
|
|
$
|
21,277
|
|
$
|
23,459
|
|
$
|
43,128
|
|
Potential problem loans by type
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
116,578
|
|
$
|
113,778
|
|
$
|
227,196
|
|
$
|
233,130
|
|
$
|
111,231
|
|
Commercial real estate — owner occupied
|
55,964
|
|
41,997
|
|
64,524
|
|
35,706
|
|
48,695
|
|
|||||
Commercial and business lending
|
172,542
|
|
155,775
|
|
291,720
|
|
268,836
|
|
159,926
|
|
|||||
Commercial real estate — investor
|
67,481
|
|
19,291
|
|
51,228
|
|
25,944
|
|
24,043
|
|
|||||
Real estate construction
|
3,834
|
|
—
|
|
2,465
|
|
3,919
|
|
1,776
|
|
|||||
Commercial real estate lending
|
71,315
|
|
19,291
|
|
53,693
|
|
29,863
|
|
25,819
|
|
|||||
Total commercial
|
243,856
|
|
175,066
|
|
345,413
|
|
298,699
|
|
185,745
|
|
|||||
Residential mortgage
|
5,975
|
|
1,616
|
|
5,615
|
|
2,796
|
|
3,781
|
|
|||||
Home equity
|
103
|
|
195
|
|
114
|
|
222
|
|
880
|
|
|||||
Other consumer
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
|||||
Total consumer
|
6,078
|
|
1,811
|
|
5,729
|
|
3,018
|
|
4,663
|
|
|||||
Total potential problem loans
|
$
|
249,935
|
|
$
|
176,877
|
|
$
|
351,142
|
|
$
|
301,717
|
|
$
|
190,408
|
|
|
Years Ended December 31,
|
||||||||||||||
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
|
($ in Thousands)
|
||||||||||||||
Interest income in accordance with original terms
|
$
|
10,606
|
|
$
|
16,205
|
|
$
|
16,811
|
|
$
|
11,745
|
|
$
|
14,259
|
|
Interest income recognized
|
(5,500
|
)
|
(9,339
|
)
|
(10,228
|
)
|
(8,716
|
)
|
(9,384
|
)
|
|||||
Reduction in interest income
|
$
|
5,106
|
|
$
|
6,866
|
|
$
|
6,583
|
|
$
|
3,029
|
|
$
|
4,875
|
|
|
Years Ended December 31,
|
||||||||||||||
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
|
($ in Thousands)
|
||||||||||||||
Allowance for loan losses
|
|
|
|
|
|
||||||||||
Balance at beginning of period
|
$
|
265,880
|
|
$
|
278,335
|
|
$
|
274,264
|
|
$
|
266,302
|
|
$
|
268,315
|
|
Provision for loan losses
|
2,500
|
|
27,000
|
|
69,000
|
|
38,000
|
|
13,000
|
|
|||||
Loans charged off
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
(30,837
|
)
|
(44,533
|
)
|
(71,016
|
)
|
(27,687
|
)
|
(14,672
|
)
|
|||||
Commercial real estate — owner occupied
|
(1,363
|
)
|
(344
|
)
|
(512
|
)
|
(2,645
|
)
|
(3,476
|
)
|
|||||
Commercial and business lending
|
(32,200
|
)
|
(44,877
|
)
|
(71,528
|
)
|
(30,332
|
)
|
(18,148
|
)
|
|||||
Commercial real estate — investor
|
(7,914
|
)
|
(991
|
)
|
(1,504
|
)
|
(4,645
|
)
|
(4,529
|
)
|
|||||
Real estate construction
|
(298
|
)
|
(604
|
)
|
(558
|
)
|
(750
|
)
|
(1,958
|
)
|
|||||
Commercial real estate lending
|
(8,212
|
)
|
(1,595
|
)
|
(2,062
|
)
|
(5,395
|
)
|
(6,487
|
)
|
|||||
Total commercial
|
(40,412
|
)
|
(46,472
|
)
|
(73,590
|
)
|
(35,727
|
)
|
(24,635
|
)
|
|||||
Residential mortgage
|
(1,627
|
)
|
(2,611
|
)
|
(4,332
|
)
|
(5,636
|
)
|
(5,639
|
)
|
|||||
Home equity
|
(3,236
|
)
|
(2,724
|
)
|
(4,686
|
)
|
(7,048
|
)
|
(10,946
|
)
|
|||||
Other consumer
|
(5,261
|
)
|
(4,439
|
)
|
(3,831
|
)
|
(3,869
|
)
|
(2,876
|
)
|
|||||
Total consumer
|
(10,124
|
)
|
(9,774
|
)
|
(12,849
|
)
|
(16,553
|
)
|
(19,461
|
)
|
|||||
Total loans charged off
|
(50,536
|
)
|
(56,246
|
)
|
(86,439
|
)
|
(52,280
|
)
|
(44,096
|
)
|
|||||
Recoveries of loans previously charged off
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
13,714
|
|
11,465
|
|
14,543
|
|
9,821
|
|
11,397
|
|
|||||
Commercial real estate — owner occupied
|
639
|
|
173
|
|
74
|
|
921
|
|
1,806
|
|
|||||
Commercial and business lending
|
14,353
|
|
11,638
|
|
14,617
|
|
10,742
|
|
13,203
|
|
|||||
Commercial real estate — investor
|
668
|
|
242
|
|
1,624
|
|
4,157
|
|
9,996
|
|
|||||
Real estate construction
|
446
|
|
74
|
|
203
|
|
2,268
|
|
816
|
|
|||||
Commercial real estate lending
|
1,114
|
|
316
|
|
1,827
|
|
6,425
|
|
10,812
|
|
|||||
Total commercial
|
15,467
|
|
11,954
|
|
16,444
|
|
17,167
|
|
24,015
|
|
|||||
Residential mortgage
|
1,271
|
|
927
|
|
755
|
|
1,077
|
|
1,252
|
|
|||||
Home equity
|
2,628
|
|
3,194
|
|
3,491
|
|
3,233
|
|
3,200
|
|
|||||
Other consumer
|
812
|
|
716
|
|
820
|
|
765
|
|
616
|
|
|||||
Total consumer
|
4,712
|
|
4,837
|
|
5,066
|
|
5,075
|
|
5,068
|
|
|||||
Total recoveries
|
20,179
|
|
16,791
|
|
21,510
|
|
22,242
|
|
29,083
|
|
|||||
Net charge offs
|
(30,358
|
)
|
(39,455
|
)
|
(64,929
|
)
|
(30,038
|
)
|
(15,013
|
)
|
|||||
Balance at end of period
|
$
|
238,023
|
|
$
|
265,880
|
|
$
|
278,335
|
|
$
|
274,264
|
|
$
|
266,302
|
|
Allowance for unfunded commitments
|
|
|
|
|
|
||||||||||
Balance at beginning of period
|
$
|
24,400
|
|
$
|
25,400
|
|
$
|
24,400
|
|
$
|
24,900
|
|
$
|
21,900
|
|
Provision for unfunded commitments
|
(2,500
|
)
|
(1,000
|
)
|
1,000
|
|
(500
|
)
|
3,000
|
|
|||||
Amount recorded at acquisition
|
2,436
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Balance at end of period
|
$
|
24,336
|
|
$
|
24,400
|
|
$
|
25,400
|
|
$
|
24,400
|
|
$
|
24,900
|
|
Allowance for credit losses (a)
|
$
|
262,359
|
|
$
|
290,280
|
|
$
|
303,735
|
|
$
|
298,664
|
|
$
|
291,202
|
|
Provision for credit losses (b)
|
$
|
—
|
|
$
|
26,000
|
|
$
|
70,000
|
|
$
|
37,500
|
|
$
|
16,000
|
|
|
Years Ended December 31,
|
||||||||||||||
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
|
($ in Thousands)
|
||||||||||||||
Net loan (charge offs) recoveries
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
(17,123
|
)
|
$
|
(33,068
|
)
|
$
|
(56,473
|
)
|
$
|
(17,866
|
)
|
$
|
(3,275
|
)
|
Commercial real estate — owner occupied
|
(724
|
)
|
(171
|
)
|
(438
|
)
|
(1,724
|
)
|
(1,670
|
)
|
|||||
Commercial and business lending
|
(17,848
|
)
|
(33,239
|
)
|
(56,911
|
)
|
(19,590
|
)
|
(4,945
|
)
|
|||||
Commercial real estate — investor
|
(7,246
|
)
|
(749
|
)
|
120
|
|
(488
|
)
|
5,467
|
|
|||||
Real estate construction
|
149
|
|
(530
|
)
|
(355
|
)
|
1,518
|
|
(1,142
|
)
|
|||||
Commercial real estate lending
|
(7,098
|
)
|
(1,279
|
)
|
(235
|
)
|
1,030
|
|
4,325
|
|
|||||
Total commercial
|
(24,946
|
)
|
(34,518
|
)
|
(57,146
|
)
|
(18,560
|
)
|
(620
|
)
|
|||||
Residential mortgage
|
(355
|
)
|
(1,684
|
)
|
(3,577
|
)
|
(4,559
|
)
|
(4,387
|
)
|
|||||
Home equity
|
(608
|
)
|
470
|
|
(1,195
|
)
|
(3,815
|
)
|
(7,746
|
)
|
|||||
Other consumer
|
(4,448
|
)
|
(3,723
|
)
|
(3,011
|
)
|
(3,104
|
)
|
(2,260
|
)
|
|||||
Total consumer
|
(5,412
|
)
|
(4,937
|
)
|
(7,783
|
)
|
(11,478
|
)
|
(14,393
|
)
|
|||||
Total net charge offs
|
$
|
(30,358
|
)
|
$
|
(39,455
|
)
|
$
|
(64,929
|
)
|
$
|
(30,038
|
)
|
$
|
(15,013
|
)
|
Ratios
|
|
|
|
|
|
||||||||||
Allowance for loan losses to total loans
|
1.04
|
%
|
1.28
|
%
|
1.39
|
%
|
1.47
|
%
|
1.51
|
%
|
|||||
Allowance for loan losses to net charge offs
|
7.8x
|
|
6.7x
|
|
4.3x
|
|
9.1x
|
|
17.7x
|
|
(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.
|
|
Years Ended December 31,
|
|||||||||
|
2018
|
2017
|
2016
|
2015
|
2014
|
|||||
|
(In Basis Points)
|
|||||||||
Net loan (charge offs) recoveries
|
|
|
|
|
|
|||||
Commercial and industrial
|
(25
|
)
|
(52
|
)
|
(87
|
)
|
(29
|
)
|
(6
|
)
|
Commercial real estate — owner occupied
|
(9
|
)
|
(2
|
)
|
(5
|
)
|
(18
|
)
|
(16
|
)
|
Commercial and business lending
|
(23
|
)
|
(46
|
)
|
(77
|
)
|
(28
|
)
|
(8
|
)
|
Commercial real estate — investor
|
(18
|
)
|
(2
|
)
|
—
|
|
(2
|
)
|
18
|
|
Real estate construction
|
1
|
|
(3
|
)
|
(3
|
)
|
14
|
|
(12
|
)
|
Commercial real estate lending
|
(13
|
)
|
(3
|
)
|
—
|
|
2
|
|
11
|
|
Total commercial
|
(19
|
)
|
(28
|
)
|
(47
|
)
|
(16
|
)
|
(1
|
)
|
Residential mortgage
|
—
|
|
(2
|
)
|
(6
|
)
|
(8
|
)
|
(9
|
)
|
Home equity
|
(6
|
)
|
5
|
|
(12
|
)
|
(37
|
)
|
(73
|
)
|
Other consumer
|
(119
|
)
|
(99
|
)
|
(74
|
)
|
(72
|
)
|
(53
|
)
|
Total consumer
|
(6
|
)
|
(6
|
)
|
(10
|
)
|
(16
|
)
|
(23
|
)
|
Total net (charge offs) recoveries
|
(13
|
)
|
(19
|
)
|
(33
|
)
|
(16
|
)
|
(9
|
)
|
(a)
|
Ratio of net charge offs to average loans by loan type.
|
•
|
At December 31, 2018, net charge offs of $30 million decreased $9 million from the comparable period in December 31, 2017. See Tables 14, 15 and 16 for additional information regarding the activity in the allowance for loan losses.
|
•
|
Total loans increased $2.2 billion, or 10%, from December 31, 2017, primarily driven by the Bank Mutual acquisition. 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 decreased $81 million from December 31, 2017, primarily due to the risk migration of oil and gas related credits. See Table 10 for additional information on the oil and gas portfolio. See also Note 4 Loans of the notes to consolidated financial statements and section Nonperforming Assets for additional disclosures on the changes in asset quality.
|
•
|
The allowance for loan losses attributable to oil and gas related credits (included within the commercial and industrial allowance for loan losses) was $12 million at December 31, 2018, compared to $27 million at December 31, 2017. See also oil and gas lending within the Credit Risk section for additional information.
|
•
|
The allowance for unfunded commitments of $24 million was relatively unchanged from December 31, 2017.
|
|
As of December 31,
|
||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
|
||||||||||||||
|
($ in Thousands)
|
||||||||||||||||||||||||
|
|
(a)
|
|
(a)
|
|
(a)
|
|
(a)
|
|
(a)
|
|||||||||||||||
Commercial and industrial
|
$
|
108,835
|
|
1.47
|
%
|
$
|
123,068
|
|
1.92
|
%
|
$
|
140,126
|
|
2.16
|
%
|
$
|
129,959
|
|
2.10
|
%
|
$
|
117,635
|
|
1.97
|
%
|
Commercial real estate — owner occupied
|
9,255
|
|
1.01
|
%
|
10,352
|
|
1.29
|
%
|
14,034
|
|
1.56
|
%
|
18,680
|
|
2.03
|
%
|
16,510
|
|
1.64
|
%
|
|||||
Commercial and business lending
|
118,090
|
|
1.42
|
%
|
133,420
|
|
1.85
|
%
|
154,160
|
|
2.09
|
%
|
148,639
|
|
2.09
|
%
|
134,145
|
|
1.93
|
%
|
|||||
Commercial real estate — investor
|
40,844
|
|
1.09
|
%
|
41,059
|
|
1.24
|
%
|
45,285
|
|
1.27
|
%
|
43,018
|
|
1.33
|
%
|
46,333
|
|
1.52
|
%
|
|||||
Real estate construction
|
28,240
|
|
2.12
|
%
|
34,370
|
|
2.37
|
%
|
26,932
|
|
1.88
|
%
|
25,266
|
|
2.17
|
%
|
20,999
|
|
2.08
|
%
|
|||||
Commercial real estate lending
|
69,084
|
|
1.36
|
%
|
75,429
|
|
1.58
|
%
|
72,217
|
|
1.44
|
%
|
68,284
|
|
1.55
|
%
|
67,332
|
|
1.66
|
%
|
|||||
Total commercial
|
187,174
|
|
1.40
|
%
|
208,849
|
|
1.74
|
%
|
226,377
|
|
1.83
|
%
|
216,923
|
|
1.89
|
%
|
201,477
|
|
1.83
|
%
|
|||||
Residential mortgage
|
25,595
|
|
0.31
|
%
|
29,607
|
|
0.39
|
%
|
27,046
|
|
0.43
|
%
|
28,261
|
|
0.49
|
%
|
31,926
|
|
0.63
|
%
|
|||||
Home equity
|
19,266
|
|
2.15
|
%
|
22,126
|
|
2.50
|
%
|
20,364
|
|
2.18
|
%
|
23,555
|
|
2.34
|
%
|
26,464
|
|
2.52
|
%
|
|||||
Other consumer
|
5,988
|
|
1.65
|
%
|
5,298
|
|
1.37
|
%
|
4,548
|
|
1.15
|
%
|
5,525
|
|
1.32
|
%
|
6,435
|
|
1.42
|
%
|
|||||
Total consumer
|
50,849
|
|
0.53
|
%
|
57,031
|
|
0.65
|
%
|
51,958
|
|
0.68
|
%
|
57,341
|
|
0.80
|
%
|
64,825
|
|
0.99
|
%
|
|||||
Total allowance for loan losses
|
$
|
238,023
|
|
1.04
|
%
|
$
|
265,880
|
|
1.28
|
%
|
$
|
278,335
|
|
1.39
|
%
|
$
|
274,264
|
|
1.47
|
%
|
$
|
266,302
|
|
1.51
|
%
|
(a)
|
Allowance for loan losses category as a percentage of total loans by category.
|
|
At December 31,
|
||||||||||||||
|
2018
|
% of Total
|
2017
|
% of Total
|
2016
|
% of Total
|
|||||||||
|
($ in Thousands)
|
||||||||||||||
Investment securities available for sale
|
|
|
|
|
|
|
|||||||||
Amortized cost
|
|
|
|
|
|
|
|||||||||
U.S. Treasury securities
|
$
|
1,000
|
|
<1%
|
|
$
|
1,003
|
|
<1%
|
|
$
|
1,000
|
|
<1%
|
|
Residential mortgage-related securities
|
|
|
|
|
|
|
|||||||||
FNMA / FHLMC
|
296,296
|
|
7
|
%
|
457,680
|
|
11
|
%
|
625,234
|
|
13
|
%
|
|||
GNMA
|
2,169,943
|
|
54
|
%
|
1,944,453
|
|
47
|
%
|
2,028,301
|
|
43
|
%
|
|||
Private-label
|
1,007
|
|
<1%
|
|
1,067
|
|
<1%
|
|
1,134
|
|
<1%
|
|
|||
GNMA commercial mortgage-related securities
|
1,273,309
|
|
31
|
%
|
1,547,173
|
|
38
|
%
|
2,064,508
|
|
44
|
%
|
|||
Federal Family Education Loan Program ("FFELP") asset backed securities
|
297,347
|
|
7
|
%
|
144,322
|
|
4
|
%
|
—
|
|
—
|
|
|||
Other debt securities
|
3,000
|
|
<1%
|
|
3,200
|
|
<1%
|
|
3,200
|
|
<1%
|
|
|||
Other equity securities
|
1,568
|
|
<1%
|
|
1,519
|
|
<1%
|
|
1,518
|
|
<1%
|
|
|||
Total amortized cost
|
$
|
4,043,470
|
|
100
|
%
|
$
|
4,100,417
|
|
100
|
%
|
$
|
4,724,895
|
|
100
|
%
|
Fair value
|
|
|
|
|
|
|
|||||||||
U.S. Treasury securities
|
$
|
999
|
|
<1%
|
|
$
|
996
|
|
<1%
|
|
$
|
1,000
|
|
<1%
|
|
Residential mortgage-related securities
|
|
|
|
|
|
|
|||||||||
FNMA / FHLMC
|
295,252
|
|
7
|
%
|
464,768
|
|
11
|
%
|
639,930
|
|
14
|
%
|
|||
GNMA
|
2,128,531
|
|
54
|
%
|
1,913,350
|
|
47
|
%
|
2,004,475
|
|
43
|
%
|
|||
Private-label
|
1,003
|
|
<1%
|
|
1,059
|
|
<1%
|
|
1,121
|
|
<1%
|
|
|||
GNMA commercial mortgage-related securities
|
1,220,797
|
|
31
|
%
|
1,513,277
|
|
37
|
%
|
2,028,898
|
|
43
|
%
|
|||
FFELP asset backed securities
|
297,360
|
|
8
|
%
|
145,176
|
|
4
|
%
|
—
|
|
—
|
|
|||
Other debt securities
|
3,000
|
|
<1%
|
|
3,188
|
|
<1%
|
|
3,200
|
|
<1%
|
|
|||
Other equity securities
|
1,568
|
|
<1%
|
|
1,632
|
|
<1%
|
|
1,602
|
|
<1%
|
|
|||
Total fair value and carrying value
|
$
|
3,948,510
|
|
100
|
%
|
$
|
4,043,446
|
|
100
|
%
|
$
|
4,680,226
|
|
100
|
%
|
Net unrealized holding gains (losses)
|
$
|
(94,961
|
)
|
|
$
|
(56,971
|
)
|
|
$
|
(44,669
|
)
|
|
|||
Investment securities held to maturity
|
|
|
|
|
|
|
|||||||||
Amortized cost
|
|
|
|
|
|
|
|||||||||
Obligations of state and political subdivisions (municipal securities)
|
$
|
1,790,683
|
|
65
|
%
|
$
|
1,281,320
|
|
56
|
%
|
$
|
1,145,843
|
|
90
|
%
|
Residential mortgage-related securities
|
|
|
|
|
|
|
|||||||||
FNMA / FHLMC
|
92,788
|
|
3
|
%
|
40,995
|
|
2
|
%
|
37,697
|
|
3
|
%
|
|||
GNMA
|
351,606
|
|
13
|
%
|
414,440
|
|
18
|
%
|
89,996
|
|
7
|
%
|
|||
GNMA commercial mortgage-related securities
|
505,434
|
|
18
|
%
|
546,098
|
|
24
|
%
|
—
|
|
—
|
|
|||
Total amortized cost and carrying value
|
$
|
2,740,511
|
|
100
|
%
|
$
|
2,282,853
|
|
100
|
%
|
$
|
1,273,536
|
|
100
|
%
|
Fair value
|
|
|
|
|
|
|
|||||||||
Obligations of state and political subdivisions (municipal securities)
|
$
|
1,783,659
|
|
66
|
%
|
$
|
1,292,042
|
|
56
|
%
|
$
|
1,137,675
|
|
90
|
%
|
Residential mortgage-related securities
|
|
|
|
|
|
|
|||||||||
FNMA / FHLMC
|
91,162
|
|
3
|
%
|
40,904
|
|
2
|
%
|
37,443
|
|
3
|
%
|
|||
GNMA
|
345,035
|
|
13
|
%
|
410,740
|
|
18
|
%
|
89,556
|
|
7
|
%
|
|||
GNMA commercial mortgage-related securities
|
490,414
|
|
18
|
%
|
539,888
|
|
24
|
%
|
—
|
|
—
|
|
|||
Total fair value
|
$
|
2,710,271
|
|
100
|
%
|
$
|
2,283,574
|
|
100
|
%
|
$
|
1,264,674
|
|
100
|
%
|
Net unrealized holding gains (losses)
|
$
|
(30,240
|
)
|
|
$
|
721
|
|
|
$
|
(8,862
|
)
|
|
|
December 31, 2018
|
|||||||
|
Amortized Cost
|
Fair Value
|
Yield (b)
|
|||||
|
($ in Thousands)
|
|||||||
Available for sale securities
|
|
|
|
|||||
U. S. Treasury securities
|
|
|
|
|||||
Within one year
|
$
|
1,000
|
|
$
|
999
|
|
1.25
|
%
|
Total U. S. Treasury securities
|
$
|
1,000
|
|
$
|
999
|
|
1.25
|
%
|
Residential mortgage-related securities
|
|
|
|
|
|
|
||
Within one year
|
$
|
9,359
|
|
$
|
9,354
|
|
3.31
|
%
|
After one but within five years
|
2,207,386
|
|
2,171,182
|
|
2.44
|
%
|
||
After five years but within ten years
|
250,501
|
|
244,249
|
|
2.42
|
%
|
||
Total residential mortgage-related securities
|
$
|
2,467,246
|
|
$
|
2,424,785
|
|
2.44
|
%
|
GNMA commercial mortgage-related securities
|
|
|
|
|
|
|
||
Within one year
|
$
|
9,957
|
|
$
|
9,854
|
|
2.26
|
%
|
After one but within five years
|
563,745
|
|
549,659
|
|
2.27
|
%
|
||
After five years but within ten years
|
699,607
|
|
661,283
|
|
2.14
|
%
|
||
Total GNMA commercial mortgage-related securities
|
$
|
1,273,309
|
|
$
|
1,220,797
|
|
2.20
|
%
|
FFELP asset backed securities
|
|
|
|
|
|
|
||
After five years but within ten years
|
$
|
297,347
|
|
$
|
297,360
|
|
3.25
|
%
|
Total FFELP asset backed securities
|
$
|
297,347
|
|
$
|
297,360
|
|
3.25
|
%
|
Other debt securities
|
|
|
|
|
|
|
||
Within one year
|
$
|
1,000
|
|
$
|
1,000
|
|
2.00
|
%
|
After one but within five years
|
2,000
|
|
2,000
|
|
3.46
|
%
|
||
Total other debt securities
|
3,000
|
|
3,000
|
|
2.97
|
%
|
||
Marketable equity securities
|
$
|
1,568
|
|
$
|
1,568
|
|
—
|
%
|
Total available for sale securities
|
$
|
4,043,470
|
|
$
|
3,948,510
|
|
2.42
|
%
|
|
|
|
|
|
|
|
||
Held to maturity securities
|
|
|
|
|
|
|
||
Obligations of state and political subdivisions (municipal securities)
|
|
|
|
|
|
|
||
Within one year
|
$
|
48,865
|
|
$
|
49,128
|
|
4.38
|
%
|
After one but within five years
|
187,828
|
|
186,797
|
|
3.66
|
%
|
||
After five years but within ten years
|
409,682
|
|
406,702
|
|
3.21
|
%
|
||
After ten years
|
1,144,309
|
|
1,141,032
|
|
3.99
|
%
|
||
Total obligations of state and political subdivisions (municipal securities)
|
$
|
1,790,683
|
|
$
|
1,783,659
|
|
3.79
|
%
|
Residential mortgage-related securities
|
|
|
|
|
|
|
||
Within one year
|
$
|
46
|
|
$
|
46
|
|
5.04
|
%
|
After one but within five years
|
90,703
|
|
90,330
|
|
2.20
|
%
|
||
After five years but within ten years
|
259,993
|
|
253,904
|
|
2.42
|
%
|
||
After ten years
|
93,652
|
|
91,918
|
|
3.30
|
%
|
||
Total residential mortgage-related securities
|
$
|
444,394
|
|
$
|
436,198
|
|
2.56
|
%
|
GNMA commercial mortgage-related securities
|
|
|
|
|
|
|
||
After one but within five years
|
$
|
230,885
|
|
$
|
230,032
|
|
2.02
|
%
|
After five years but within ten years
|
274,549
|
|
260,383
|
|
2.19
|
%
|
||
Total GNMA commercial mortgage-related securities
|
$
|
505,434
|
|
$
|
490,414
|
|
2.11
|
%
|
Total held to maturity securities
|
$
|
2,740,511
|
|
$
|
2,710,271
|
|
3.28
|
%
|
(a)
|
Expected maturities will differ from contractual maturities, as borrowers may have the right to call or repay obligations with or without call or prepayment penalties.
|
(b)
|
Yields on tax-exempt securities are computed on a fully tax-equivalent basis using a tax rate of 21% and are net of the effects of certain disallowed interest deductions.
|
|
As of December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Noninterest-bearing demand
|
$
|
5,698,530
|
|
$
|
5,478,416
|
|
$
|
5,392,208
|
|
Savings
|
2,012,841
|
|
1,524,992
|
|
1,431,494
|
|
|||
Interest-bearing demand
|
5,336,952
|
|
4,603,157
|
|
4,687,656
|
|
|||
Money market
|
9,033,669
|
|
8,830,328
|
|
8,770,963
|
|
|||
Brokered CDs
|
192,234
|
|
18,609
|
|
52,725
|
|
|||
Other time
|
2,623,167
|
|
2,330,460
|
|
1,553,402
|
|
|||
Total deposits
|
24,897,393
|
|
22,785,962
|
|
21,888,448
|
|
|||
Customer funding (a)
|
137,364
|
|
250,332
|
|
401,885
|
|
|||
Total deposits and customer funding
|
$
|
25,034,757
|
|
$
|
23,036,294
|
|
$
|
22,290,333
|
|
Network transaction deposits (b)
|
$
|
2,276,296
|
|
$
|
2,520,968
|
|
$
|
3,895,467
|
|
Brokered CDs
|
192,234
|
|
18,609
|
|
52,725
|
|
|||
Total network and brokered funding
|
2,468,530
|
|
2,539,577
|
|
3,948,192
|
|
|||
Net deposits and customer funding (total deposits and customer funding, excluding Brokered CDs and network transaction deposits)
|
$
|
22,566,227
|
|
$
|
20,496,717
|
|
$
|
18,342,141
|
|
(a)
|
Securities sold under agreement to repurchase and commercial paper.
|
(b)
|
Included above in interest-bearing demand and money markets.
|
•
|
Deposits are the Corporation's largest source of funds.
|
•
|
Total deposits increased $2.1 billion, or 9%, from December 31, 2017, primarily driven by the acquisition of Bank Mutual.
|
•
|
Non-maturity deposit accounts comprised of savings, money market, and demand (both interest and non-interest bearing demand) accounts, accounted for 89% of our total deposits at December 31, 2018.
|
•
|
Included in the above amounts were $2.3 billion of network deposits, a decrease of $245 million, or 10%, from December 31, 2017. These deposits are primarily sourced from other financial institutions and intermediaries. Network deposits represented 9% of our deposits at December 31, 2018, which was down from 11% of our deposits at December 31, 2017.
|
|
As of December 31, 2018
|
||||||||
|
Certificates
of Deposit
|
Other
Time Deposits
|
Total Certificates
of Deposits and Other
Time Deposits
|
||||||
|
($ in Thousands)
|
||||||||
Three months or less
|
$
|
191,033
|
|
$
|
281,282
|
|
$
|
472,315
|
|
Over three months through six months
|
88,773
|
|
222,827
|
|
311,599
|
|
|||
Over six months through twelve months
|
149,009
|
|
102,067
|
|
251,077
|
|
|||
Over twelve months
|
283,783
|
|
60,942
|
|
344,725
|
|
|||
Total
|
$
|
712,598
|
|
$
|
667,118
|
|
$
|
1,379,716
|
|
•
|
Selected period end deposit information is detailed in Note 7 Deposits of the notes to consolidated financial statements, including a maturity distribution of all time deposits at December 31, 2018. See Table 2 for additional information on average deposit balances and deposit rates.
|
•
|
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 3 Investment Securities of the notes to consolidated financial statements for additional information on the Corporation's investment securities portfolio, including pledged investment securities.
|
•
|
The Bank pledges eligible loans to both the Federal Reserve 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. The collateral is also used to enable the FHLB to issue letters of credit in favor of public fund depositors of the Bank. As of December 31, 2018, the Bank had $2.9 billion available for future advances. The Federal Reserve also establishes a collateral value of assets to support borrowings from the discount window. As of December 31, 2018, the Bank had $2.2 billion available for discount window borrowings.
|
•
|
The Parent Company has a $200 million commercial paper program, of which $45 million was outstanding at December 31, 2018.
|
•
|
Dividends and service fees from subsidiaries, as well as the proceeds from issuance of capital, are also 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.
|
•
|
The Bank has implemented a global bank note program pursuant to which it may from time to time offer up to $2.0 billion aggregate principal amount of its unsecured senior and subordinated notes.
|
|
Moody’s
|
S&P (a)
|
|
Bank short-term deposits
|
P-1
|
—
|
|
Bank long-term deposits/issuer
|
A1
|
BBB+
|
|
Corporation commercial paper
|
P-2
|
—
|
|
Corporation long-term senior debt/issuer
|
Baa1
|
BBB
|
|
Outlook
|
Stable
|
Stable
|
|
(a)
|
Standard and Poor's
|
|
Dynamic Forecast
December 31, 2018 |
Static Forecast
December 31, 2018 |
Dynamic Forecast
December 31, 2017 |
Static Forecast
December 31, 2017 |
||||
Instantaneous Rate Change
|
|
|
|
|
||||
100 bp increase in interest rates
|
5.0
|
%
|
4.1
|
%
|
2.5
|
%
|
2.7
|
%
|
200 bp increase in interest rates
|
9.9
|
%
|
8.1
|
%
|
4.6
|
%
|
4.9
|
%
|
|
December 31, 2018
|
December 31, 2017
|
||
Instantaneous Rate Change
|
|
|
||
100 bp increase in interest rates
|
(2.0
|
)%
|
(3.1
|
)%
|
200 bp increase in interest rates
|
(4.5
|
)%
|
(6.7
|
)%
|
December 31, 2018
|
Note
Reference
|
One Year
or Less
|
One to
Three Years
|
Three to
Five Years
|
Over
Five Years
|
Total
|
||||||||||
|
($ in Thousands)
|
|||||||||||||||
Time deposits
|
7
|
$
|
1,952,008
|
|
$
|
738,249
|
|
$
|
120,314
|
|
$
|
4,830
|
|
$
|
2,815,401
|
|
Short-term funding
|
8
|
157,074
|
|
—
|
|
—
|
|
—
|
|
157,074
|
|
|||||
FHLB advances
|
8
|
912,584
|
|
99,432
|
|
208,687
|
|
2,353,667
|
|
3,574,371
|
|
|||||
Long-term funding
|
8
|
249,680
|
|
297,654
|
|
—
|
|
248,277
|
|
795,611
|
|
|||||
Operating leases
|
6
|
10,235
|
|
19,607
|
|
12,267
|
|
22,622
|
|
64,732
|
|
|||||
Commitments to extend credit
|
13 & 15
|
4,224,588
|
|
2,690,239
|
|
1,836,869
|
|
159,820
|
|
8,911,516
|
|
|||||
Total
|
|
$
|
7,506,169
|
|
$
|
3,845,181
|
|
$
|
2,178,137
|
|
$
|
2,789,216
|
|
$
|
16,318,704
|
|
|
As of December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Risk-based Capital (a)
|
|
|
|
||||||
Common equity Tier 1
|
$
|
2,449,721
|
|
$
|
2,171,508
|
|
$
|
2,032,587
|
|
Tier 1 capital
|
2,705,939
|
|
2,331,245
|
|
2,191,798
|
|
|||
Total capital
|
3,216,575
|
|
2,848,851
|
|
2,706,760
|
|
|||
Total risk-weighted assets
|
23,875,278
|
|
21,544,463
|
|
21,340,951
|
|
|||
Common equity Tier 1 capital ratio
|
10.26
|
%
|
10.08
|
%
|
9.52
|
%
|
|||
Tier 1 capital ratio
|
11.33
|
%
|
10.82
|
%
|
10.27
|
%
|
|||
Total capital ratio
|
13.47
|
%
|
13.22
|
%
|
12.68
|
%
|
|||
Tier 1 leverage ratio
|
8.48
|
%
|
8.02
|
%
|
7.83
|
%
|
|||
Selected Equity and Performance Ratios
|
|
|
|
||||||
Stockholders’ equity / assets
|
11.24
|
%
|
10.62
|
%
|
10.61
|
%
|
|||
Dividend payout ratio (b)
|
32.29
|
%
|
34.48
|
%
|
35.43
|
%
|
(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 26 for a reconciliation of common equity Tier 1.
|
(b)
|
Ratio is based upon basic earnings per common share.
|
|
At or for the Year Ended December 31,
|
||||||||||||||
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
|
($ in Thousands)
|
||||||||||||||
Selected Equity and Performance Ratios (a) (b)
|
|
|
|
|
|
||||||||||
Tangible common equity / tangible assets
|
7.03
|
%
|
7.07
|
%
|
6.91
|
%
|
6.85
|
%
|
6.97
|
%
|
|||||
Return on average equity
|
9.03
|
%
|
7.23
|
%
|
6.63
|
%
|
6.50
|
%
|
6.63
|
%
|
|||||
Return on average tangible common equity
|
14.06
|
%
|
10.86
|
%
|
10.07
|
%
|
9.97
|
%
|
9.91
|
%
|
|||||
Return on average Common equity Tier 1
|
13.15
|
%
|
10.43
|
%
|
9.86
|
%
|
9.88
|
%
|
9.92
|
%
|
|||||
Return on average assets
|
1.01
|
%
|
0.78
|
%
|
0.70
|
%
|
0.70
|
%
|
0.76
|
%
|
|||||
Average stockholders' equity / average assets
|
11.17
|
%
|
10.76
|
%
|
10.60
|
%
|
10.72
|
%
|
11.44
|
%
|
|||||
Tangible Common Equity and Common Equity Tier 1 Reconciliation (a) (b)
|
|
|
|
|
|
||||||||||
Common equity
|
$
|
3,524,171
|
|
$
|
3,077,514
|
|
$
|
2,931,383
|
|
$
|
2,815,867
|
|
$
|
2,740,524
|
|
Goodwill and other intangible assets, net
|
(1,244,859
|
)
|
(991,819
|
)
|
(987,328
|
)
|
(985,302
|
)
|
(936,605
|
)
|
|||||
Tangible common equity
|
$
|
2,279,312
|
|
$
|
2,085,695
|
|
$
|
1,944,055
|
|
$
|
1,830,565
|
|
$
|
1,803,919
|
|
Tangible Assets Reconciliation (a)
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
33,647,859
|
|
$
|
30,483,594
|
|
$
|
29,139,315
|
|
$
|
27,711,835
|
|
$
|
26,817,423
|
|
Goodwill and other intangible assets, net
|
(1,244,859
|
)
|
(991,819
|
)
|
(987,328
|
)
|
(985,302
|
)
|
(936,605
|
)
|
|||||
Tangible assets
|
$
|
32,402,999
|
|
$
|
29,491,775
|
|
$
|
28,151,987
|
|
$
|
26,726,533
|
|
$
|
25,880,818
|
|
Average Tangible Common Equity and Average Common Equity Tier 1 Reconciliation (a) (b)
|
|
|
|
|
|
||||||||||
Common equity
|
$
|
3,505,075
|
|
$
|
3,012,704
|
|
$
|
2,888,579
|
|
$
|
2,799,150
|
|
$
|
2,810,872
|
|
Goodwill and other intangible assets, net
|
(1,209,311
|
)
|
(988,073
|
)
|
(988,406
|
)
|
(982,454
|
)
|
(938,472
|
)
|
|||||
Tangible common equity
|
2,295,764
|
|
2,024,631
|
|
1,900,173
|
|
1,816,696
|
|
1,872,400
|
|
|||||
Less: Accumulated other comprehensive income / loss
|
117,408
|
|
53,879
|
|
7,526
|
|
(9,059
|
)
|
(1,651
|
)
|
|||||
Less: Deferred tax assets / deferred tax liabilities, net
|
41,747
|
|
30,949
|
|
32,692
|
|
25,960
|
|
(140
|
)
|
|||||
Average common equity Tier 1
|
$
|
2,454,919
|
|
$
|
2,109,459
|
|
$
|
1,940,391
|
|
$
|
1,833,597
|
|
$
|
1,870,609
|
|
Efficiency Ratio Reconciliation (c)
|
|
|
|
|
|
||||||||||
Federal Reserve efficiency ratio
|
66.23
|
%
|
65.97
|
%
|
66.95
|
%
|
69.96
|
%
|
70.28
|
%
|
|||||
Fully tax-equivalent adjustment
|
(0.71
|
)%
|
(1.28
|
)%
|
(1.29
|
)%
|
(1.41
|
)%
|
(1.36
|
)%
|
|||||
Other intangible amortization
|
(0.66
|
)%
|
(0.18
|
)%
|
(0.20
|
)%
|
(0.31
|
)%
|
(0.39
|
)%
|
|||||
Fully tax-equivalent efficiency ratio
|
64.87
|
%
|
64.51
|
%
|
65.46
|
%
|
68.24
|
%
|
68.53
|
%
|
(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.
|
|
2018 Quarters Ended
|
|||||||||||
|
December 31
|
September 30
|
June 30
|
March 31
|
||||||||
|
(In Thousands, Except Per Common Share Data)
|
|||||||||||
Net interest income
|
$
|
223,955
|
|
$
|
219,392
|
|
$
|
226,362
|
|
$
|
209,871
|
|
Provision for credit losses
|
1,000
|
|
(5,000
|
)
|
4,000
|
|
—
|
|
||||
Income before income taxes
|
113,839
|
|
108,279
|
|
103,947
|
|
87,285
|
|
||||
Net income available to common equity
|
85,278
|
|
83,521
|
|
86,863
|
|
67,117
|
|
||||
Basic earnings per common share
|
$
|
0.52
|
|
$
|
0.49
|
|
$
|
0.51
|
|
$
|
0.41
|
|
Diluted earnings per common share
|
$
|
0.51
|
|
$
|
0.48
|
|
$
|
0.50
|
|
$
|
0.40
|
|
|
2017 Quarters Ended
|
|||||||||||
|
December 31
|
September 30
|
June 30
|
March 31
|
||||||||
|
(In Thousands, Except Per Common Share Data)
|
|||||||||||
Net interest income
|
$
|
187,005
|
|
$
|
190,122
|
|
$
|
183,819
|
|
$
|
180,274
|
|
Provision for credit losses
|
—
|
|
5,000
|
|
12,000
|
|
9,000
|
|
||||
Income before income taxes
|
89,850
|
|
93,590
|
|
77,913
|
|
77,414
|
|
||||
Net income available to common equity
|
47,671
|
|
62,662
|
|
55,644
|
|
53,940
|
|
||||
Basic earnings per common share
|
$
|
0.31
|
|
$
|
0.41
|
|
$
|
0.36
|
|
$
|
0.36
|
|
Diluted earnings per common share
|
$
|
0.31
|
|
$
|
0.41
|
|
$
|
0.36
|
|
$
|
0.35
|
|
•
|
At December 31, 2017, total loans were $20.8 billion, up $730 million, or 4%, from December 31, 2016, driven by growth in total consumer loans due to the Corporation's on balance sheet mortgage retention strategy. 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 deposits at December 31, 2017 were $22.8 billion, up $898 million, or 4%, from December 31, 2016, primarily due to an increase in CDs issued to public entities.
|
•
|
Average earning assets of $27.0 billion in 2017 were $973 million, or 4%, higher than 2016. Average loans increased $942 million, or 5%, primarily driven by a $949 million increase in residential mortgage loans. Average interest-bearing liabilities of $21.0 billion in 2017 were up $923 million, or 5%, versus 2016.
|
•
|
The provision for credit losses decreased to $26 million in 2017, a decrease of $44 million from 2016. See Table 14 for additional information on provision for credit losses. Total nonaccrual loans decreased $67 million from December 31, 2016. Potential problem loans decreased to $177 million, a decrease of $174 million, or 50%, from December 31, 2016, primarily due to the risk migration of general commercial loans. See Table 12 for additional information on nonaccrual loans and the changes in potential problem loans. At December 31, 2017, the allowance for loan losses to total loans ratio was 1.28%, covering 127% of nonaccrual loans, compared to 1.39% at December 31, 2016, covering 101% of nonaccrual loans. Net charge offs to average loans decreased to 0.19%, compared to a net charge off ratio of 0.33% for 2016.
|
•
|
Fully tax-equivalent net interest income was $762 million for 2017, an increase of $34 million from 2016, including favorable volume variances (increasing fully tax-equivalent net interest income by $28 million) and favorable rate variances (increasing fully tax-equivalent net interest income by $6 million). The net interest margin for 2017 was 2.82%, 2 bp higher than 2.80% in 2016, attributable to a 3 bp decrease in interest rate spread and a 5 bp increase in contribution from net free funds.
|
•
|
Noninterest income was $333 million for 2017, down $20 million, or 6%, from 2016. Net mortgage banking income for 2017 was $19 million, down $19 million, or 49%, compared to 2016.The decrease was primarily due to a shift in the Corporation's strategy to hold some longer dated production on balance sheet during the first half of 2017.
|
•
|
Noninterest expense for 2017 was $709 million, up $7 million, or 1%, from 2016. Personnel expense was $429 million, up $4 million, or 1%, versus 2016, driven by higher management incentive plan expenses and $1 million of one-time hourly, non-commission bonus payments recorded during the fourth quarter of 2017.
|
•
|
Income tax expense for 2017 was $110 million, compared to income tax expense of $87 million for 2016. The effective tax rate was 32.3% for 2017, compared to an effective rate of 30.4% for 2016.
|
Standard
|
|
Description
|
|
Date of anticipated adoption
|
|
Effect on financial statements
|
ASU-2018-15 Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract
|
|
The FASB issued an amendment which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments in this Update require an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The amendments also require the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. The amendment is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Entities should apply the amendment either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Early adoption is permitted.
|
|
1st Quarter 2019
|
|
The Corporation has evaluated adoption of the new guidance and determined it will not have a material impact on its results of operations, financial position, or liquidity.
|
ASU 2018-09 Codification Improvements
|
|
The FASB issued an amendment which affects a wide variety of Topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance. The amendments in this Update represent changes to clarify, correct errors in, or make minor improvements to the Codification. The amendments make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments in this Update do not require transition guidance and will be effective upon issuance of this Update. However, many of the amendments in this Update do have transition guidance with effective dates for annual periods beginning after December 15, 2018. There are some conforming amendments in this Update that have been made to recently issued guidance that is not yet effective that may require application of the transition and effective date guidance in the original Accounting Standards Update.
|
|
1st Quarter 2019
|
|
The Corporation has evaluated adoption of the new guidance and determined it will not have a material impact on its results of operations, financial position, or liquidity.
|
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 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. ASU 2018-11 was issued to provide entities with an additional (and optional) transition method to adopt the new leases standard under ASU 2016-02. ASU 2018-20 was issued to address three concerns arising from the issuance of Update 2016-02 which included sales taxes and other similar taxes collected from lessees, certain lessor costs and recognition of variable payments for contracts with lease and nonlease components.
|
|
1st Quarter 2019
|
|
The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the consolidated statements of income. The Corporation has evaluated and plans to elect the practical expedients, which would allow for existing leases to be accounted for consistent with current guidance, with the exception of balance sheet recognition for lessees. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Corporation will use the effective date as the date of initial application. At adoption, the Corporation expects to recognize a ROU asset and corresponding lease liability of $52 million. Due to the limited size of the Corporation's leasing portfolio, many other items related to this standard don't apply, or have an immaterial impact to the results of operations, financial position, or liquidity.
|
Standard
|
|
Description
|
|
Date of anticipated adoption
|
|
Effect on financial statements
|
ASU 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement
|
|
The FASB issued an amendment to add, modify, and remove disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the FASB Concepts Statement "Conceptual Framework for Financial Reporting", including the consideration of costs and benefits. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted.
|
|
1st Quarter 2020
|
|
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. ASU 2018-19 was issued to clarify that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. 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, consisting of credit, risk management, finance and information technology is currently developing the allowance methodology and assumptions that will be used under the new life of loan methodology. In determining the appropriate methodology, the Corporation has reviewed portfolio segmentation, data, system requirements or upgrades, and the development of models. The Corporation will continue to review and update assumptions, as appropriate.
|
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.
|
|
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. The Corporation has not had to perform a step one quantitative analysis since 2012, which concluded no impairment was necessary.
|
ASU 2018-14
Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans
|
|
The FASB issued an amendment to modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments also added requirements to disclose the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The amendment also clarifies the disclosure requirements in paragraph 715-20-50-3, which states that certain information for defined benefit pension plans should be disclosed. The amendments in this Update remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. Although narrow in scope, the amendments are considered an important part of the Board’s efforts to improve the effectiveness of disclosures in the notes to financial statements by applying concepts in the Concepts Statement. The amendment is effective for fiscal years ending after December 15, 2020. Entities should apply the amendments in this Update on a retrospective basis to all periods presented. Early adoption is permitted.
|
|
1st Quarter 2021
|
|
The Corporation is currently evaluating the impact on its results of operations, financial position and liquidity.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
December 31,
|
|||||
|
2018
|
2017
|
||||
|
(In Thousands, Except Share and Per Share Data)
|
|||||
Assets
|
|
|
||||
Cash and due from banks
|
$
|
507,187
|
|
$
|
483,666
|
|
Interest-bearing deposits in other financial institutions
|
221,226
|
|
199,702
|
|
||
Federal funds sold and securities purchased under agreements to resell
|
148,285
|
|
32,650
|
|
||
Investment securities held to maturity, at amortized cost
|
2,740,511
|
|
2,282,853
|
|
||
Investment securities available for sale, at fair value
|
3,948,510
|
|
4,043,446
|
|
||
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost
|
250,534
|
|
165,331
|
|
||
Residential loans held for sale
|
64,321
|
|
85,544
|
|
||
Commercial loans held for sale
|
14,943
|
|
—
|
|
||
Loans
|
22,940,429
|
|
20,784,991
|
|
||
Allowance for loan losses
|
(238,023
|
)
|
(265,880
|
)
|
||
Loans, net
|
22,702,406
|
|
20,519,111
|
|
||
Bank and corporate owned life insurance
|
663,203
|
|
591,057
|
|
||
Investment in unconsolidated subsidiaries
|
161,181
|
|
170,473
|
|
||
Trading assets
|
88,943
|
|
69,675
|
|
||
Premises and equipment, net
|
363,225
|
|
330,963
|
|
||
Goodwill
|
1,169,023
|
|
976,239
|
|
||
Mortgage servicing rights, net
|
68,193
|
|
58,384
|
|
||
Other intangible assets, net
|
75,836
|
|
15,580
|
|
||
Other assets
|
460,331
|
|
458,920
|
|
||
Total assets
|
$
|
33,647,859
|
|
$
|
30,483,594
|
|
Liabilities and stockholders' equity
|
|
|
||||
Noninterest-bearing demand deposits
|
$
|
5,698,530
|
|
$
|
5,478,416
|
|
Interest-bearing deposits
|
19,198,863
|
|
17,307,546
|
|
||
Total deposits
|
24,897,393
|
|
22,785,962
|
|
||
Federal funds purchased and securities sold under agreements to repurchase
|
111,651
|
|
324,815
|
|
||
Commercial Paper
|
45,423
|
|
67,467
|
|
||
FHLB advances
|
3,574,371
|
|
3,184,168
|
|
||
Other long-term funding
|
795,611
|
|
497,282
|
|
||
Trading liabilities
|
87,668
|
|
67,660
|
|
||
Accrued expenses and other liabilities
|
354,855
|
|
318,797
|
|
||
Total liabilities
|
29,866,971
|
|
27,246,151
|
|
||
Stockholders’ equity (a)
|
|
|
||||
Preferred equity
|
256,716
|
|
159,929
|
|
||
Common equity
|
|
|
|
|
||
Common stock
|
1,752
|
|
1,618
|
|
||
Surplus
|
1,712,615
|
|
1,338,722
|
|
||
Retained earnings
|
2,181,414
|
|
1,934,696
|
|
||
Accumulated other comprehensive income (loss)
|
(124,972
|
)
|
(62,758
|
)
|
||
Treasury stock, at cost
|
(246,638
|
)
|
(134,764
|
)
|
||
Total common equity
|
3,524,171
|
|
3,077,514
|
|
||
Total stockholders’ equity
|
3,780,888
|
|
3,237,443
|
|
||
Total liabilities and stockholders’ equity
|
$
|
33,647,859
|
|
$
|
30,483,594
|
|
Preferred shares issued
|
264,458
|
|
165,000
|
|
||
Preferred shares authorized (par value $1.00 per share)
|
750,000
|
|
750,000
|
|
||
Common shares issued
|
175,216,409
|
|
161,751,975
|
|
||
Common shares authorized (par value $0.01 per share)
|
250,000,000
|
|
250,000,000
|
|
||
Treasury shares of common stock
|
10,775,938
|
|
8,908,448
|
|
|
For the Years Ended December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
(In Thousands, Except Per Share Data)
|
||||||||
Interest income
|
|
|
|
||||||
Interest and fees on loans
|
$
|
976,990
|
|
$
|
749,000
|
|
$
|
659,538
|
|
Interest and dividends on investment securities
|
|
|
|
||||||
Taxable
|
119,741
|
|
96,909
|
|
95,152
|
|
|||
Tax-exempt
|
44,782
|
|
32,977
|
|
32,049
|
|
|||
Other interest
|
12,623
|
|
7,719
|
|
4,829
|
|
|||
Total interest income
|
1,154,137
|
|
886,605
|
|
791,568
|
|
|||
Interest expense
|
|
|
|
||||||
Interest on deposits
|
176,118
|
|
94,025
|
|
50,335
|
|
|||
Interest on federal funds purchased and securities sold under agreements to repurchase
|
2,006
|
|
2,527
|
|
1,314
|
|
|||
Interest on other short-term funding
|
186
|
|
293
|
|
248
|
|
|||
Interest on FHLB advances
|
73,668
|
|
30,364
|
|
10,741
|
|
|||
Interest on long-term funding
|
22,579
|
|
18,176
|
|
21,657
|
|
|||
Total interest expense
|
274,557
|
|
145,385
|
|
84,295
|
|
|||
Net interest income
|
879,580
|
|
741,220
|
|
707,273
|
|
|||
Provision for credit losses
|
—
|
|
26,000
|
|
70,000
|
|
|||
Net interest income after provision for credit losses
|
879,580
|
|
715,220
|
|
637,273
|
|
|||
Noninterest income
|
|
|
|
||||||
Insurance commissions and fees
|
89,511
|
|
81,474
|
|
80,795
|
|
|||
Service charges and deposit account fees
|
66,075
|
|
64,427
|
|
66,609
|
|
|||
Card-based and loan fees
|
57,474
|
|
52,688
|
|
50,077
|
|
|||
Trust and asset management fees
|
54,316
|
|
50,191
|
|
46,867
|
|
|||
Brokerage and advisory fees
|
28,246
|
|
19,935
|
|
16,235
|
|
|||
Capital markets, net
|
20,120
|
|
19,642
|
|
22,059
|
|
|||
Mortgage banking, net
|
19,911
|
|
19,360
|
|
38,121
|
|
|||
Bank and corporate owned life insurance
|
13,951
|
|
16,250
|
|
14,371
|
|
|||
Asset gains (losses), net (a)
|
(1,103
|
)
|
(1,244
|
)
|
(86
|
)
|
|||
Investment securities gains (losses), net
|
(1,985
|
)
|
434
|
|
9,316
|
|
|||
Other
|
9,051
|
|
9,523
|
|
8,519
|
|
|||
Total noninterest income
|
355,568
|
|
332,680
|
|
352,883
|
|
|||
Noninterest expense
|
|
|
|
||||||
Personnel
|
482,676
|
|
428,976
|
|
424,676
|
|
|||
Technology
|
72,674
|
|
63,004
|
|
57,300
|
|
|||
Occupancy
|
59,121
|
|
53,842
|
|
56,069
|
|
|||
Business development and advertising
|
30,923
|
|
28,946
|
|
26,351
|
|
|||
Equipment
|
23,243
|
|
21,201
|
|
21,489
|
|
|||
Legal and professional
|
23,061
|
|
22,509
|
|
19,869
|
|
|||
Card issuance and loan costs
|
12,386
|
|
11,760
|
|
13,641
|
|
|||
Foreclosure / OREO expense, net
|
3,603
|
|
4,878
|
|
4,844
|
|
|||
FDIC assessment
|
30,000
|
|
31,300
|
|
34,750
|
|
|||
Other intangible amortization
|
8,159
|
|
1,959
|
|
2,093
|
|
|||
Acquisition related costs (b)
|
29,002
|
|
—
|
|
—
|
|
|||
Other
|
46,951
|
|
40,758
|
|
41,478
|
|
|||
Total noninterest expense
|
821,799
|
|
709,133
|
|
702,560
|
|
|||
Income before income taxes
|
413,349
|
|
338,767
|
|
287,596
|
|
|||
Income tax expense
|
79,786
|
|
109,503
|
|
87,322
|
|
|||
Net income
|
333,562
|
|
229,264
|
|
200,274
|
|
|||
Preferred stock dividends
|
10,784
|
|
9,347
|
|
8,903
|
|
|||
Net income available to common equity
|
$
|
322,779
|
|
$
|
219,917
|
|
$
|
191,371
|
|
Earnings per common share
|
|
|
|
||||||
Basic
|
$
|
1.92
|
|
$
|
1.45
|
|
$
|
1.27
|
|
Diluted
|
$
|
1.89
|
|
$
|
1.42
|
|
$
|
1.26
|
|
Average common shares outstanding
|
|
|
|
||||||
Basic
|
167,345
|
|
150,877
|
|
148,769
|
|
|||
Diluted
|
169,732
|
|
153,647
|
|
149,961
|
|
|
For the Years Ended December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Net income
|
$
|
333,562
|
|
$
|
229,264
|
|
$
|
200,274
|
|
Other comprehensive income, net of tax
|
|
|
|
||||||
Investment securities available for sale
|
|
|
|
||||||
Net unrealized gains (losses)
|
(39,891
|
)
|
(12,302
|
)
|
(17,900
|
)
|
|||
Net unrealized gain (loss) on available for sale securities transferred to held to maturity securities
|
—
|
|
(14,738
|
)
|
—
|
|
|||
Amortization of net unrealized gain (loss) on available for sale securities transferred to held to maturity securities
|
(572
|
)
|
(2,665
|
)
|
(5,887
|
)
|
|||
Reclassification adjustment for net losses (gains) realized in net income (a)
|
1,985
|
|
—
|
|
(9,316
|
)
|
|||
Reclassification from OCI due to change in accounting principle
|
(84
|
)
|
—
|
|
—
|
|
|||
Reclassification of certain tax effects from OCI
|
(8,419
|
)
|
—
|
|
—
|
|
|||
Income tax (expense) benefit
|
9,791
|
|
11,331
|
|
12,565
|
|
|||
Other comprehensive income (loss) on investment securities available for sale
|
(37,189
|
)
|
(18,374
|
)
|
(20,538
|
)
|
|||
Defined benefit pension and postretirement obligations
|
|
|
|
||||||
Amortization of prior service cost
|
(148
|
)
|
(148
|
)
|
(73
|
)
|
|||
Plan amendments
|
—
|
|
—
|
|
1,759
|
|
|||
Net actuarial (loss) gain
|
(28,612
|
)
|
14,273
|
|
(6,141
|
)
|
|||
Amortization of actuarial loss (gain)
|
2,203
|
|
2,282
|
|
2,115
|
|
|||
Reclassification of certain tax effects from OCI
|
(5,235
|
)
|
—
|
|
—
|
|
|||
Income tax (expense) benefit
|
6,767
|
|
(6,112
|
)
|
815
|
|
|||
Other comprehensive income (loss) on pension and postretirement obligations
|
(25,025
|
)
|
10,295
|
|
(1,525
|
)
|
|||
Total other comprehensive income (loss)
|
(62,214
|
)
|
(8,079
|
)
|
(22,063
|
)
|
|||
Comprehensive income
|
$
|
271,348
|
|
$
|
221,185
|
|
$
|
178,211
|
|
|
Preferred Equity
|
Common Stock
|
|
|
|
||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Surplus
|
Retained
Earnings |
Accumulated
Other Comprehensive Income (Loss) |
Treasury Stock
|
Total
|
|||||||||||||||||
|
(In Thousands, Except Per Share Data)
|
||||||||||||||||||||||||
Balance, December 31, 2015(a)
|
125
|
|
$
|
121,379
|
|
164,200
|
|
$
|
1,642
|
|
$
|
1,382,446
|
|
$
|
1,669,315
|
|
$
|
(32,616
|
)
|
$
|
(204,920
|
)
|
$
|
2,937,246
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
200,274
|
|
—
|
|
—
|
|
200,274
|
|
|||||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(22,063
|
)
|
—
|
|
(22,063
|
)
|
|||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
$
|
178,211
|
|
||||||||||||||
Common stock issued:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Stock-based compensation plans, net(a)
|
—
|
|
—
|
|
—
|
|
—
|
|
(17,416
|
)
|
—
|
|
—
|
|
39,164
|
|
21,748
|
|
|||||||
Purchase of common stock returned to authorized but unissued
|
—
|
|
—
|
|
(1,170
|
)
|
(12
|
)
|
(19,995
|
)
|
—
|
|
—
|
|
—
|
|
(20,007
|
)
|
|||||||
Purchase of treasury stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5,074
|
)
|
(5,074
|
)
|
|||||||
Cash dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Common stock, $0.45 per share
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(67,855
|
)
|
—
|
|
—
|
|
(67,855
|
)
|
|||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(8,903
|
)
|
—
|
|
—
|
|
(8,903
|
)
|
|||||||
Issuance of preferred stock
|
100
|
|
97,066
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
97,066
|
|
|||||||
Redemption of preferred stock
|
(60
|
)
|
(57,338
|
)
|
—
|
|
—
|
|
—
|
|
(1,565
|
)
|
—
|
|
—
|
|
(58,903
|
)
|
|||||||
Purchase of preferred stock
|
—
|
|
(1,178
|
)
|
—
|
|
—
|
|
—
|
|
(70
|
)
|
—
|
|
—
|
|
(1,248
|
)
|
|||||||
Stock-based compensation expense, net
|
—
|
|
—
|
|
—
|
|
—
|
|
21,971
|
|
—
|
|
—
|
|
—
|
|
21,971
|
|
|||||||
Tax impact of stock-based compensation
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,940
|
)
|
—
|
|
—
|
|
—
|
|
(2,940
|
)
|
|||||||
Balance, December 31, 2016
|
165
|
|
$
|
159,929
|
|
163,030
|
|
$
|
1,630
|
|
$
|
1,364,066
|
|
$
|
1,791,196
|
|
$
|
(54,679
|
)
|
$
|
(170,830
|
)
|
$
|
3,091,312
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
229,264
|
|
—
|
|
—
|
|
229,264
|
|
|||||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(8,079
|
)
|
—
|
|
(8,079
|
)
|
|||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
$
|
221,185
|
|
||||||||||||||
Common stock issued:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Stock-based compensation plans, net(a)
|
—
|
|
—
|
|
—
|
|
—
|
|
(17,737
|
)
|
—
|
|
—
|
|
45,356
|
|
27,619
|
|
|||||||
Acquisitions
|
—
|
|
—
|
|
291
|
|
3
|
|
7,148
|
|
—
|
|
—
|
|
—
|
|
7,151
|
|
|||||||
Purchase of common stock returned to authorized but unissued
|
—
|
|
—
|
|
(1,569
|
)
|
(15
|
)
|
(37,016
|
)
|
—
|
|
—
|
|
—
|
|
(37,031
|
)
|
|||||||
Purchase of treasury stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(9,290
|
)
|
(9,290
|
)
|
|||||||
Cash dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Common stock, $0.50 per share
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(76,417
|
)
|
—
|
|
—
|
|
(76,417
|
)
|
|||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(9,347
|
)
|
—
|
|
—
|
|
(9,347
|
)
|
|||||||
Stock-based compensation expense, net
|
—
|
|
—
|
|
—
|
|
—
|
|
21,227
|
|
—
|
|
—
|
|
—
|
|
21,227
|
|
|||||||
Tax impact of stock-based compensation
|
—
|
|
—
|
|
—
|
|
—
|
|
1,034
|
|
—
|
|
—
|
|
—
|
|
1,034
|
|
|||||||
Balance, December 31, 2017
|
165
|
|
$
|
159,929
|
|
161,752
|
|
$
|
1,618
|
|
$
|
1,338,722
|
|
$
|
1,934,696
|
|
$
|
(62,758
|
)
|
$
|
(134,764
|
)
|
$
|
3,237,443
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
333,562
|
|
—
|
|
—
|
|
$
|
333,562
|
|
||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(48,476
|
)
|
—
|
|
(48,476
|
)
|
|||||||
Adoption of new accounting standards
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(13,738
|
)
|
—
|
|
(13,738
|
)
|
|||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
271,348
|
|
||||||
Common stock issued:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Stock-based compensation plans, net(a)
|
—
|
|
—
|
|
—
|
|
—
|
|
(7,116
|
)
|
15,096
|
|
—
|
|
10,428
|
|
18,408
|
|
|||||||
Acquisitions
|
—
|
|
—
|
|
13,705
|
|
137
|
|
396,975
|
|
—
|
|
—
|
|
91,296
|
|
488,408
|
|
|||||||
Purchase of common stock returned to authorized but unissued
|
—
|
|
—
|
|
(1,357
|
)
|
(14
|
)
|
(33,061
|
)
|
—
|
|
—
|
|
—
|
|
(33,075
|
)
|
|||||||
Purchase of treasury stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(213,598
|
)
|
(213,598
|
)
|
|||||||
Cash dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Common stock, $0.62 per share
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(105,519
|
)
|
—
|
|
—
|
|
(105,519
|
)
|
|||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(10,784
|
)
|
—
|
|
—
|
|
(10,784
|
)
|
|||||||
Issuance of preferred stock
|
100
|
|
97,315
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
97,315
|
|
|||||||
Purchase of preferred stock
|
(1
|
)
|
(528
|
)
|
—
|
|
—
|
|
—
|
|
(8
|
)
|
—
|
|
—
|
|
(537
|
)
|
|||||||
Common stock warrants exercised
|
—
|
|
—
|
|
1,116
|
|
11
|
|
(12
|
)
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
|||||||
Stock-based compensation expense, net
|
—
|
|
—
|
|
—
|
|
—
|
|
17,107
|
|
—
|
|
—
|
|
—
|
|
17,107
|
|
|||||||
Tax Act reclassification
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
13,654
|
|
—
|
|
—
|
|
13,654
|
|
|||||||
Change in accounting principle
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
84
|
|
—
|
|
—
|
|
84
|
|
|||||||
Other
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
632
|
|
—
|
|
—
|
|
632
|
|
|||||||
Balance, December 31, 2018
|
264
|
|
$
|
256,716
|
|
175,216
|
|
$
|
1,752
|
|
$
|
1,712,615
|
|
$
|
2,181,414
|
|
$
|
(124,972
|
)
|
$
|
(246,638
|
)
|
$
|
3,780,888
|
|
(a)
|
An adjustment of $76 million was made within stockholders' equity related to the grant and vesting of options, restricted stock awards, and restricted stock units awarded from 2006-2015 to the December 31, 2015 ending balances. In addition, within the Statement of Stockholders' Equity, Stock-based compensation plans, net was adjusted for years 2016-2018. This adjustment impacted Retained Earnings and Surplus. The reclassification had no impact on earnings, expenses, or total stockholder’s equity.
|
|
For the Years Ended December 31,
|
||||||||
($ in Thousands)
|
2018
|
2017
|
2016
|
||||||
Cash Flows from Operating Activities
|
|
|
|
||||||
Net income
|
$
|
333,562
|
|
$
|
229,264
|
|
$
|
200,274
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||||
Provision for credit losses
|
—
|
|
26,000
|
|
70,000
|
|
|||
Depreciation and amortization
|
48,253
|
|
46,967
|
|
45,434
|
|
|||
Addition to (recovery of) valuation allowance on mortgage servicing rights, net
|
(545
|
)
|
175
|
|
(200
|
)
|
|||
Amortization of mortgage servicing rights
|
9,594
|
|
10,084
|
|
12,327
|
|
|||
Amortization of other intangible assets
|
8,159
|
|
1,959
|
|
2,093
|
|
|||
Amortization and accretion on earning assets, funding, and other, net
|
11,624
|
|
37,476
|
|
46,615
|
|
|||
Net amortization of tax credit investments
|
19,425
|
|
19,834
|
|
5,272
|
|
|||
Deferred income taxes
|
46,947
|
|
21,402
|
|
10,656
|
|
|||
Losses (gains) on sales of investment securities, net
|
1,985
|
|
(434
|
)
|
(9,316
|
)
|
|||
Asset (gains) losses, net
|
1,103
|
|
1,244
|
|
86
|
|
|||
(Gain) loss on mortgage banking activities, net
|
(22,497
|
)
|
(3,516
|
)
|
(27,060
|
)
|
|||
Mortgage loans originated and acquired for sale
|
(1,092,318
|
)
|
(715,357
|
)
|
(1,271,124
|
)
|
|||
Proceeds from sales of mortgage loans held for sale
|
1,131,652
|
|
819,950
|
|
1,542,660
|
|
|||
Pension contributions
|
(41,877
|
)
|
(6,242
|
)
|
—
|
|
|||
(Increase) decrease in interest receivable
|
(7,417
|
)
|
(9,476
|
)
|
(7,836
|
)
|
|||
Increase (decrease) in interest payable
|
10,407
|
|
6,535
|
|
(4,642
|
)
|
|||
Increase (decrease) in cash collateral
|
41,274
|
|
(5,578
|
)
|
—
|
|
|||
Net change in other assets and other liabilities
|
(2,763
|
)
|
(21,919
|
)
|
26,144
|
|
|||
Net cash provided by operating activities
|
496,567
|
|
458,368
|
|
641,383
|
|
|||
Cash Flows from Investing Activities
|
|
|
|
||||||
Net increase in loans
|
(326,464
|
)
|
(861,934
|
)
|
(1,682,579
|
)
|
|||
Purchases of
|
|
|
|
||||||
Available for sale securities
|
(737,580
|
)
|
(1,137,191
|
)
|
(1,304,921
|
)
|
|||
Held to maturity securities
|
(682,622
|
)
|
(234,379
|
)
|
(195,442
|
)
|
|||
Federal Home Loan Bank and Federal Reserve Bank stocks
|
(347,323
|
)
|
(262,986
|
)
|
(92,761
|
)
|
|||
Premises, equipment, and software, net of disposals
|
(65,854
|
)
|
(47,369
|
)
|
(103,881
|
)
|
|||
Proceeds from
|
|
|
|
||||||
Sales of available for sale securities
|
601,130
|
|
18,467
|
|
549,555
|
|
|||
Sale of Federal Home Loan Bank and Federal Reserve Bank stocks
|
282,145
|
|
237,656
|
|
100,000
|
|
|||
Prepayments, calls, and maturities of available for sale investment securities
|
633,859
|
|
713,486
|
|
997,701
|
|
|||
Prepayments, calls, and maturities of held to maturity investment securities
|
217,836
|
|
210,753
|
|
75,796
|
|
|||
Sales, prepayments, calls and maturities of other assets
|
41,856
|
|
20,070
|
|
27,692
|
|
|||
Net change in tax credit and alternative investments
|
(57,327
|
)
|
(53,770
|
)
|
(23,498
|
)
|
|||
Net cash (paid) received in acquisition
|
59,472
|
|
339
|
|
(685
|
)
|
|||
Net cash used in investing activities
|
(380,872
|
)
|
(1,396,858
|
)
|
(1,653,023
|
)
|
|||
Cash Flows from Financing Activities
|
|
|
|
||||||
Net increase (decrease) in deposits
|
270,481
|
|
897,514
|
|
880,783
|
|
|||
Net increase (decrease) in short-term funding
|
(581,371
|
)
|
(217,753
|
)
|
110,619
|
|
|||
Net increase (decrease) in short-term FHLB advances
|
616,000
|
|
(198,000
|
)
|
147,000
|
|
|||
Repayment of long-term FHLB advances
|
(2,150,016
|
)
|
(115,020
|
)
|
(38
|
)
|
|||
Proceeds from long-term FHLB advances
|
1,837,680
|
|
750,000
|
|
515,000
|
|
|||
Repayment of long-term funding
|
—
|
|
—
|
|
(430,000
|
)
|
|||
Proceeds from issuance of long-term funding
|
300,000
|
|
—
|
|
—
|
|
|||
Proceeds from issuance of preferred shares
|
97,315
|
|
—
|
|
97,066
|
|
|||
Proceeds from issuance of common stock for stock-based compensation plans
|
18,408
|
|
27,619
|
|
21,748
|
|
|||
Redemption of preferred shares
|
—
|
|
—
|
|
(58,903
|
)
|
|||
Common stock warrants exercised
|
(1
|
)
|
—
|
|
—
|
|
|||
Purchase of preferred shares
|
(537
|
)
|
—
|
|
(1,248
|
)
|
|||
Purchase of common stock returned to authorized but unissued
|
(33,075
|
)
|
(37,031
|
)
|
(20,007
|
)
|
|||
Purchase of treasury stock
|
(213,598
|
)
|
(9,290
|
)
|
(5,074
|
)
|
|||
Cash dividends on common stock
|
(105,519
|
)
|
(76,417
|
)
|
(67,855
|
)
|
|||
Cash dividends on preferred stock
|
(10,784
|
)
|
(9,347
|
)
|
(8,903
|
)
|
|||
Net cash provided by (used in) financing activities
|
44,983
|
|
1,012,275
|
|
1,180,188
|
|
|||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
160,678
|
|
73,785
|
|
168,548
|
|
|||
Cash, cash equivalents, and restricted cash at beginning of period
|
716,018
|
|
642,233
|
|
473,685
|
|
|||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
876,698
|
|
$
|
716,018
|
|
$
|
642,233
|
|
Supplemental disclosures of cash flow information
|
|
|
|
||||||
Cash paid for interest
|
$
|
261,724
|
|
$
|
138,174
|
|
$
|
88,269
|
|
Cash paid for income and franchise taxes
|
18,335
|
|
81,450
|
|
75,558
|
|
|||
Loans and bank premises transferred to other real estate owned
|
26,517
|
|
11,505
|
|
9,752
|
|
|||
Capitalized mortgage servicing rights
|
10,722
|
|
7,167
|
|
12,262
|
|
|||
Loans transferred into held for sale from portfolio, net
|
33,010
|
|
71,954
|
|
256,194
|
|
|||
Acquisition
|
|
|
|
||||||
Fair value of assets acquired, including cash and cash equivalents
|
2,567,488
|
|
647
|
|
522
|
|
|||
Fair value ascribed to goodwill and intangible assets
|
261,243
|
|
6,450
|
|
4,119
|
|
|||
Fair value of liabilities assumed
|
2,340,323
|
|
54
|
|
1,423
|
|
|||
Common stock issued in acquisition
|
488,408
|
|
7,151
|
|
—
|
|
|
For the Years Ended December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Cash and cash equivalents
|
$
|
782,784
|
|
$
|
643,042
|
|
$
|
527,135
|
|
Restricted cash
|
93,914
|
|
72,976
|
|
115,098
|
|
|||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows
|
$
|
876,698
|
|
$
|
716,018
|
|
$
|
642,233
|
|
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 was 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 Cuts and Jobs Act of 2017 is recognized.
|
|
1st Quarter 2018
|
|
The Corporation elected to early adopt this amendment. During the first quarter of 2018, the Corporation reclassified approximately $14 million from accumulated other comprehensive income to retained earnings as a result of the Tax 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 sheets as of the date of adoption. Early adoption was 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. ASU 2018-16 permits the OIS (Overnight Index Swap) rate based on SOFR (Secured Overnight Financing Rate) as a U.S. benchmark interest rate for hedge accounting purposes.
|
|
1st Quarter 2018
|
|
The Corporation elected to early adopt this amendment. No material impact on results of operations, financial position, or liquidity. See Note 13 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 was 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.
|
|
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 11 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. This amendment was effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Entities should apply the amendment prospectively on or after the effective date.
|
|
1st Quarter 2018
|
|
No material impact on results of operations, financial position, or liquidity.
|
Standard
|
|
Description
|
|
Date of adoption
|
|
Effect on financial statements
|
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 was 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.
|
|
1st Quarter 2018
|
|
No impact on results of operations, financial position, or liquidity. See Consolidated Statements of Cash Flows.
|
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 was 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.
|
|
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 was 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.
|
|
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 was 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 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. See Consolidated Statements of Comprehensive Income and Note 17 Fair Value Measurements.
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 December 31, 2018 are carried at a zero cost basis.
|
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 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 adopted this amendment using the modified retrospective approach with no material impact on the Corporation's results of operations, financial position, or liquidity. See Note 22 for expanded disclosure requirements.
|
|
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
|
2,930
|
|
42,689
|
|
||
Bank owned life insurance
|
(24
|
)
|
65,390
|
|
||
Goodwill
|
|
|
175,499
|
|
||
Core deposit intangibles (included in other intangible assets, net on the face of the Consolidated Balance Sheets)
|
58,100
|
|
58,100
|
|
||
Other real estate owned (included in other assets on the face of the Consolidated Balance Sheets)
|
199
|
|
4,848
|
|
||
Others assets
|
$
|
7,054
|
|
$
|
47,158
|
|
Total assets
|
|
$
|
2,820,506
|
|
||
Liabilities
|
|
|
||||
Deposits
|
$
|
2,498
|
|
$
|
1,840,950
|
|
Other borrowings
|
1,875
|
|
431,886
|
|
||
Other liabilities
|
$
|
4,487
|
|
$
|
65,982
|
|
Total liabilities
|
|
$
|
2,338,818
|
|
||
Total consideration paid
|
|
$
|
481,688
|
|
|
February 1, 2018
|
||||||||
|
Acquired Performing Loans
|
Acquired Impaired Loans
|
Total
|
||||||
|
($ in Thousands)
|
||||||||
Contractual required principal and interest at acquisition
|
$
|
1,899,932
|
|
$
|
23,988
|
|
$
|
1,923,920
|
|
Contractual cash flows not expected to be collected (nonaccretable discount)
|
—
|
|
(1,866
|
)
|
(1,866
|
)
|
|||
Expected cash flows at acquisition
|
1,899,932
|
|
22,122
|
|
1,922,054
|
|
|||
Interest component of expected cash flows (accretable discount)
|
(41,324
|
)
|
(4,853
|
)
|
(46,177
|
)
|
|||
Fair value of acquired loans
|
$
|
1,858,608
|
|
$
|
17,269
|
|
$
|
1,875,877
|
|
December 31, 2018
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
|||||||||
|
($ in Thousands)
|
||||||||||||
Investment securities available for sale
|
|
|
|
|
|||||||||
U.S. Treasury securities
|
$
|
1,000
|
|
$
|
—
|
|
$
|
(1
|
)
|
$
|
999
|
|
|
Residential mortgage-related securities
|
|
|
|
|
|||||||||
FNMA / FHLMC
|
296,296
|
|
2,466
|
|
(3,510
|
)
|
295,252
|
|
|||||
GNMA
|
2,169,943
|
|
473
|
|
(41,885
|
)
|
2,128,531
|
|
|||||
Private-label
|
1,007
|
|
—
|
|
(4
|
)
|
1,003
|
|
|||||
GNMA commercial mortgage-related securities
|
1,273,309
|
|
—
|
|
(52,512
|
)
|
1,220,797
|
|
|||||
FFELP asset backed securities
|
297,347
|
|
711
|
|
(698
|
)
|
297,360
|
|
|||||
Other debt securities
|
3,000
|
|
—
|
|
—
|
|
3,000
|
|
|||||
Other equity securities
|
1,568
|
|
—
|
|
—
|
|
1,568
|
|
|||||
Total investment securities available for sale
|
$
|
4,043,470
|
|
$
|
3,649
|
|
$
|
(98,610
|
)
|
$
|
3,948,510
|
|
|
Investment securities held to maturity
|
|
|
|
|
|||||||||
Obligations of state and political subdivisions (municipal securities)
|
$
|
1,790,683
|
|
$
|
8,255
|
|
$
|
(15,279
|
)
|
$
|
1,783,659
|
|
|
Residential mortgage-related securities
|
|
|
|
|
|||||||||
FNMA / FHLMC
|
92,788
|
|
169
|
|
(1,795
|
)
|
91,162
|
|
|||||
GNMA
|
351,606
|
|
1,611
|
|
(8,181
|
)
|
345,035
|
|
|||||
GNMA commercial mortgage-related securities
|
505,434
|
|
7,559
|
|
(22,579
|
)
|
490,414
|
|
|||||
Total investment securities held to maturity
|
$
|
2,740,511
|
|
$
|
17,593
|
|
$
|
(47,835
|
)
|
$
|
2,710,271
|
|
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
|
$
|
2,000
|
|
|
$
|
1,999
|
|
|
$
|
48,865
|
|
|
$
|
49,128
|
|
Due after one year through five years
|
2,000
|
|
|
2,000
|
|
|
187,828
|
|
|
186,797
|
|
||||
Due after five years through ten years
|
—
|
|
|
—
|
|
|
409,682
|
|
|
406,702
|
|
||||
Due after ten years
|
—
|
|
|
—
|
|
|
1,144,309
|
|
|
1,141,032
|
|
||||
Total debt securities
|
4,000
|
|
|
3,999
|
|
|
1,790,683
|
|
|
1,783,659
|
|
||||
Residential mortgage-related securities
|
|
|
|
|
|
|
|
||||||||
FNMA / FHLMC
|
296,296
|
|
|
295,252
|
|
|
92,788
|
|
|
91,162
|
|
||||
GNMA
|
2,169,943
|
|
|
2,128,531
|
|
|
351,606
|
|
|
345,035
|
|
||||
Private-label
|
1,007
|
|
|
1,003
|
|
|
—
|
|
|
—
|
|
||||
GNMA commercial mortgage-related securities
|
1,273,309
|
|
|
1,220,797
|
|
|
505,434
|
|
|
490,414
|
|
||||
FFELP asset backed securities
|
297,347
|
|
|
297,360
|
|
|
—
|
|
|
—
|
|
||||
Equity securities
|
1,568
|
|
|
1,568
|
|
|
—
|
|
|
—
|
|
||||
Total investment securities
|
$
|
4,043,470
|
|
|
$
|
3,948,510
|
|
|
$
|
2,740,511
|
|
|
$
|
2,710,271
|
|
Ratio of Fair Value to Amortized Cost
|
|
|
97.7
|
%
|
|
|
|
98.9
|
%
|
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Gross gains on available for sale securities
|
$
|
1,954
|
|
$
|
—
|
|
$
|
9,485
|
|
Gross gains on held to maturity securities
|
—
|
|
439
|
|
33
|
|
|||
Total gains
|
1,954
|
|
439
|
|
9,518
|
|
|||
Gross losses on available for sale securities
|
(3,938
|
)
|
—
|
|
(202
|
)
|
|||
Gross losses on held to maturity securities
|
—
|
|
(5
|
)
|
—
|
|
|||
Total losses
|
(3,938
|
)
|
(5
|
)
|
(202
|
)
|
|||
Investment securities gains (losses), net
|
$
|
(1,985
|
)
|
$
|
434
|
|
$
|
9,316
|
|
Proceeds from sales of investment securities
|
$
|
601,130
|
|
$
|
18,467
|
|
$
|
549,555
|
|
|
Less than 12 months
|
12 months or more
|
Total
|
|||||||||||||||||||
December 31, 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
|
|
$
|
(1
|
)
|
$
|
999
|
|
$
|
(1
|
)
|
$
|
999
|
|
Residential mortgage-related securities
|
|
|
|
|
|
|
|
|
||||||||||||||
FNMA / FHLMC
|
15
|
|
(31
|
)
|
17,993
|
|
17
|
|
(3,479
|
)
|
189,405
|
|
(3,510
|
)
|
207,398
|
|
||||||
GNMA
|
12
|
|
(4,529
|
)
|
452,183
|
|
79
|
|
(37,355
|
)
|
1,598,159
|
|
(41,885
|
)
|
2,050,342
|
|
||||||
Private-label
|
1
|
|
(4
|
)
|
1,003
|
|
—
|
|
—
|
|
—
|
|
(4
|
)
|
1,003
|
|
||||||
GNMA commercial mortgage-related securities
|
—
|
|
—
|
|
—
|
|
93
|
|
(52,512
|
)
|
1,220,854
|
|
(52,512
|
)
|
1,220,854
|
|
||||||
FFELP asset backed securities
|
13
|
|
(698
|
)
|
142,432
|
|
—
|
|
—
|
|
—
|
|
(698
|
)
|
142,432
|
|
||||||
Total
|
41
|
|
$
|
(5,262
|
)
|
$
|
613,612
|
|
190
|
|
$
|
(93,347
|
)
|
$
|
3,009,417
|
|
$
|
(98,610
|
)
|
$
|
3,623,028
|
|
Investment securities held to maturity
|
|
|
|
|
|
|
|
|
||||||||||||||
Obligations of state and political subdivisions (municipal securities)
|
272
|
|
$
|
(2,860
|
)
|
$
|
313,212
|
|
752
|
|
$
|
(12,419
|
)
|
$
|
509,374
|
|
$
|
(15,279
|
)
|
$
|
822,586
|
|
Residential mortgage-related securities
|
|
|
|
|
|
|
|
|
||||||||||||||
FNMA / FHLMC
|
13
|
|
(780
|
)
|
57,896
|
|
22
|
|
(1,015
|
)
|
28,888
|
|
(1,795
|
)
|
86,784
|
|
||||||
GNMA
|
13
|
|
(414
|
)
|
19,822
|
|
66
|
|
(7,767
|
)
|
320,387
|
|
(8,181
|
)
|
340,209
|
|
||||||
GNMA commercial mortgage-related securities
|
—
|
|
—
|
|
—
|
|
25
|
|
(22,579
|
)
|
490,414
|
|
(22,579
|
)
|
490,414
|
|
||||||
Total
|
298
|
|
$
|
(4,053
|
)
|
$
|
390,929
|
|
865
|
|
$
|
(43,780
|
)
|
$
|
1,349,063
|
|
$
|
(47,835
|
)
|
$
|
1,739,992
|
|
|
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
|
|
|
2018(a)
|
|
2017
|
||||
|
($ in Thousands)
|
||||||
Commercial and industrial
|
$
|
7,398,044
|
|
|
$
|
6,399,693
|
|
Commercial real estate - owner occupied
|
920,443
|
|
|
802,209
|
|
||
Commercial and business lending
|
8,318,487
|
|
|
7,201,902
|
|
||
Commercial real estate - investor
|
3,751,554
|
|
|
3,315,254
|
|
||
Real estate construction
|
1,335,031
|
|
|
1,451,684
|
|
||
Commercial real estate lending
|
5,086,585
|
|
|
4,766,938
|
|
||
Total commercial
|
13,405,072
|
|
|
11,968,840
|
|
||
Residential mortgage
|
8,277,712
|
|
|
7,546,534
|
|
||
Home equity
|
894,473
|
|
|
883,804
|
|
||
Other consumer
|
363,171
|
|
|
385,813
|
|
||
Total consumer
|
9,535,357
|
|
|
8,816,151
|
|
||
Total loans
|
$
|
22,940,429
|
|
|
$
|
20,784,991
|
|
|
2018
|
2017
|
||||
|
($ in Thousands)
|
|||||
Balance at beginning of year
|
$
|
20,260
|
|
$
|
27,589
|
|
New loans
|
3,076
|
|
5,329
|
|
||
Repayments
|
(5,017
|
)
|
(7,632
|
)
|
||
Change due to status of executive officers and directors
|
(489
|
)
|
(5,026
|
)
|
||
Balance at end of year
|
$
|
17,831
|
|
$
|
20,260
|
|
|
Pass
|
|
Special Mention
|
|
Potential Problem
|
|
Nonaccrual
|
|
Total
|
||||||||||
|
($ in Thousands)
|
||||||||||||||||||
Commercial and industrial
|
$
|
7,162,370
|
|
|
$
|
78,075
|
|
|
$
|
116,578
|
|
|
$
|
41,021
|
|
|
$
|
7,398,044
|
|
Commercial real estate - owner occupied
|
854,265
|
|
|
6,257
|
|
|
55,964
|
|
|
3,957
|
|
|
920,443
|
|
|||||
Commercial and business lending
|
8,016,635
|
|
|
84,332
|
|
|
172,542
|
|
|
44,978
|
|
|
8,318,487
|
|
|||||
Commercial real estate - investor
|
3,653,642
|
|
|
28,479
|
|
|
67,481
|
|
|
1,952
|
|
|
3,751,554
|
|
|||||
Real estate construction
|
1,321,447
|
|
|
8,771
|
|
|
3,834
|
|
|
979
|
|
|
1,335,031
|
|
|||||
Commercial real estate lending
|
4,975,089
|
|
|
37,249
|
|
|
71,315
|
|
|
2,931
|
|
|
5,086,585
|
|
|||||
Total commercial
|
12,991,724
|
|
|
121,582
|
|
|
243,856
|
|
|
47,909
|
|
|
13,405,072
|
|
|||||
Residential mortgage
|
8,203,729
|
|
|
434
|
|
|
5,975
|
|
|
67,574
|
|
|
8,277,712
|
|
|||||
Home equity
|
880,808
|
|
|
1,223
|
|
|
103
|
|
|
12,339
|
|
|
894,473
|
|
|||||
Other consumer
|
362,343
|
|
|
749
|
|
|
—
|
|
|
79
|
|
|
363,171
|
|
|||||
Total consumer
|
9,446,881
|
|
|
2,406
|
|
|
6,078
|
|
|
79,992
|
|
|
9,535,357
|
|
|||||
Total loans
|
$
|
22,438,605
|
|
|
$
|
123,988
|
|
|
$
|
249,935
|
|
|
$
|
127,901
|
|
|
$
|
22,940,429
|
|
|
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 loans
|
$
|
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 and Still Accruing
|
|
Nonaccrual (a)
|
Total
|
||||||||||||
|
($ in Thousands)
|
|||||||||||||||||||||
Commercial and industrial
|
$
|
7,356,187
|
|
|
$
|
187
|
|
|
$
|
338
|
|
|
$
|
311
|
|
|
$
|
41,021
|
|
$
|
7,398,044
|
|
Commercial real estate - owner occupied
|
913,787
|
|
|
2,580
|
|
|
119
|
|
|
—
|
|
|
3,957
|
|
920,443
|
|
||||||
Commercial and business lending
|
8,269,974
|
|
|
2,767
|
|
|
457
|
|
|
311
|
|
|
44,978
|
|
8,318,487
|
|
||||||
Commercial real estate - investor
|
3,745,835
|
|
|
2,954
|
|
|
813
|
|
|
—
|
|
|
1,952
|
|
3,751,554
|
|
||||||
Real estate construction
|
1,333,722
|
|
|
330
|
|
|
—
|
|
|
—
|
|
|
979
|
|
1,335,031
|
|
||||||
Commercial real estate lending
|
5,079,557
|
|
|
3,284
|
|
|
813
|
|
|
—
|
|
|
2,931
|
|
5,086,585
|
|
||||||
Total commercial
|
13,349,531
|
|
|
6,051
|
|
|
1,270
|
|
|
311
|
|
|
47,909
|
|
13,405,072
|
|
||||||
Residential mortgage
|
8,200,432
|
|
|
9,272
|
|
|
434
|
|
|
—
|
|
|
67,574
|
|
8,277,712
|
|
||||||
Home equity
|
876,085
|
|
|
4,826
|
|
|
1,223
|
|
|
—
|
|
|
12,339
|
|
894,473
|
|
||||||
Other consumer
|
358,970
|
|
|
1,401
|
|
|
868
|
|
|
1,853
|
|
|
79
|
|
363,171
|
|
||||||
Total consumer
|
9,435,487
|
|
|
15,499
|
|
|
2,525
|
|
|
1,853
|
|
|
79,992
|
|
9,535,357
|
|
||||||
Total loans
|
$
|
22,785,019
|
|
|
$
|
21,550
|
|
|
$
|
3,795
|
|
|
$
|
2,165
|
|
|
$
|
127,901
|
|
$
|
22,940,429
|
|
(a)
|
Of the total nonaccrual loans, $74 million, or 58%, were current with respect to payment at December 31, 2018.
|
|
Current
|
|
30-59 Days
Past Due
|
|
60-89 Days
Past Due
|
|
90 Days or More
Past Due and Still Accruing |
|
Nonaccrual (a)
|
Total
|
||||||||||||
|
($ 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 loans
|
$
|
20,555,250
|
|
|
$
|
16,861
|
|
|
$
|
2,467
|
|
|
$
|
1,867
|
|
|
$
|
208,546
|
|
$
|
20,784,991
|
|
(a)
|
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
|
$
|
40,747
|
|
|
$
|
42,131
|
|
|
$
|
5,721
|
|
|
$
|
52,461
|
|
|
$
|
1,167
|
|
Commercial real estate - owner occupied
|
2,080
|
|
|
2,087
|
|
|
24
|
|
|
2,179
|
|
|
104
|
|
|||||
Commercial and business lending
|
42,827
|
|
|
44,218
|
|
|
5,745
|
|
|
54,640
|
|
|
1,271
|
|
|||||
Commercial real estate - investor
|
799
|
|
|
805
|
|
|
28
|
|
|
827
|
|
|
38
|
|
|||||
Real estate construction
|
510
|
|
|
589
|
|
|
75
|
|
|
533
|
|
|
32
|
|
|||||
Commercial real estate lending
|
1,309
|
|
|
1,394
|
|
|
103
|
|
|
1,360
|
|
|
70
|
|
|||||
Total commercial
|
44,136
|
|
|
45,612
|
|
|
5,848
|
|
|
56,000
|
|
|
1,341
|
|
|||||
Residential mortgage
|
41,691
|
|
|
45,149
|
|
|
6,023
|
|
|
42,687
|
|
|
1,789
|
|
|||||
Home equity
|
9,601
|
|
|
10,539
|
|
|
3,312
|
|
|
10,209
|
|
|
566
|
|
|||||
Other consumer
|
1,181
|
|
|
1,183
|
|
|
121
|
|
|
1,184
|
|
|
3
|
|
|||||
Total consumer
|
52,473
|
|
|
56,871
|
|
|
9,456
|
|
|
54,080
|
|
|
2,358
|
|
|||||
Total loans
|
$
|
96,609
|
|
|
$
|
102,483
|
|
|
$
|
15,304
|
|
|
$
|
110,079
|
|
|
$
|
3,699
|
|
Loans with no related allowance
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
22,406
|
|
|
$
|
45,024
|
|
|
$
|
—
|
|
|
$
|
21,352
|
|
|
$
|
(344
|
)
|
Commercial real estate - owner occupied
|
3,772
|
|
|
4,823
|
|
|
—
|
|
|
3,975
|
|
|
—
|
|
|||||
Commercial and business lending
|
26,178
|
|
|
49,847
|
|
|
—
|
|
|
25,327
|
|
|
(344
|
)
|
|||||
Commercial real estate - investor
|
1,585
|
|
|
2,820
|
|
|
—
|
|
|
980
|
|
|
68
|
|
|||||
Real estate construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commercial real estate lending
|
1,585
|
|
|
2,820
|
|
|
—
|
|
|
980
|
|
|
68
|
|
|||||
Total commercial
|
27,763
|
|
|
52,667
|
|
|
—
|
|
|
26,307
|
|
|
(276
|
)
|
|||||
Residential mortgage
|
8,795
|
|
|
9,074
|
|
|
—
|
|
|
8,790
|
|
|
203
|
|
|||||
Home equity
|
523
|
|
|
542
|
|
|
—
|
|
|
530
|
|
|
—
|
|
|||||
Other consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total consumer
|
9,318
|
|
|
9,616
|
|
|
—
|
|
|
9,320
|
|
|
203
|
|
|||||
Total loans
|
$
|
37,081
|
|
|
$
|
62,283
|
|
|
$
|
—
|
|
|
$
|
35,627
|
|
|
$
|
(73
|
)
|
Total
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
63,153
|
|
|
$
|
87,155
|
|
|
$
|
5,721
|
|
|
$
|
73,813
|
|
|
$
|
823
|
|
Commercial real estate - owner occupied
|
5,852
|
|
|
6,910
|
|
|
24
|
|
|
6,154
|
|
|
104
|
|
|||||
Commercial and business lending
|
69,005
|
|
|
94,065
|
|
|
5,745
|
|
|
79,967
|
|
|
927
|
|
|||||
Commercial real estate - investor
|
2,384
|
|
|
3,625
|
|
|
28
|
|
|
1,807
|
|
|
106
|
|
|||||
Real estate construction
|
510
|
|
|
589
|
|
|
75
|
|
|
533
|
|
|
32
|
|
|||||
Commercial real estate lending
|
2,894
|
|
|
4,214
|
|
|
103
|
|
|
2,340
|
|
|
138
|
|
|||||
Total commercial
|
71,899
|
|
|
98,279
|
|
|
5,848
|
|
|
82,307
|
|
|
1,065
|
|
|||||
Residential mortgage
|
50,486
|
|
|
54,223
|
|
|
6,023
|
|
|
51,477
|
|
|
1,992
|
|
|||||
Home equity
|
10,124
|
|
|
11,081
|
|
|
3,312
|
|
|
10,739
|
|
|
566
|
|
|||||
Other consumer
|
1,181
|
|
|
1,183
|
|
|
121
|
|
|
1,184
|
|
|
3
|
|
|||||
Total consumer
|
61,791
|
|
|
66,487
|
|
|
9,456
|
|
|
63,400
|
|
|
2,561
|
|
|||||
Total loans (a)
|
$
|
133,690
|
|
|
$
|
164,766
|
|
|
$
|
15,304
|
|
|
$
|
145,707
|
|
|
$
|
3,626
|
|
(a)
|
The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 72% of the unpaid principal balance at December 31, 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
|
$
|
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
|
$
|
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.
|
|
December 31, 2018
|
December 31, 2017
|
December 31, 2016
|
|||||||||||||||
|
Performing
Restructured
Loans
|
Nonaccrual
Restructured
Loans(a)
|
Performing
Restructured
Loans
|
Nonaccrual
Restructured
Loans(a)
|
Performing
Restructured
Loans
|
Nonaccrual
Restructured
Loans(a)
|
||||||||||||
|
($ in Thousands)
|
|||||||||||||||||
Commercial and industrial
|
$
|
25,478
|
|
$
|
249
|
|
$
|
30,047
|
|
$
|
1,776
|
|
$
|
31,884
|
|
$
|
1,276
|
|
Commercial real estate - owner occupied
|
2,080
|
|
—
|
|
3,989
|
|
—
|
|
5,490
|
|
2,220
|
|
||||||
Commercial real estate - investor
|
799
|
|
933
|
|
14,389
|
|
—
|
|
15,289
|
|
924
|
|
||||||
Real estate construction
|
311
|
|
198
|
|
310
|
|
157
|
|
359
|
|
150
|
|
||||||
Residential mortgage
|
16,036
|
|
22,279
|
|
17,068
|
|
18,991
|
|
18,100
|
|
21,906
|
|
||||||
Home equity
|
7,385
|
|
2,627
|
|
7,705
|
|
2,537
|
|
7,756
|
|
2,877
|
|
||||||
Other consumer
|
1,174
|
|
6
|
|
1,110
|
|
25
|
|
979
|
|
32
|
|
||||||
Total restructured loans
|
$
|
53,263
|
|
$
|
26,292
|
|
$
|
74,618
|
|
$
|
23,486
|
|
$
|
79,857
|
|
$
|
29,385
|
|
(a)
|
Nonaccrual restructured loans have been included within nonaccrual loans.
|
|
Years Ended December 31,
|
|||||||||||||||||||||||
|
2018
|
2017
|
2016
|
|||||||||||||||||||||
|
Number
of
Loans
|
Recorded
Investment(a)
|
Unpaid
Principal
Balance(b)
|
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
|
5
|
|
$
|
1,315
|
|
$
|
1,330
|
|
8
|
|
$
|
3,991
|
|
$
|
6,339
|
|
8
|
|
$
|
1,509
|
|
$
|
1,526
|
|
Commercial real estate - owner occupied
|
—
|
|
—
|
|
—
|
|
2
|
|
690
|
|
690
|
|
1
|
|
116
|
|
122
|
|
||||||
Commercial real estate - investor
|
2
|
|
1,393
|
|
1,472
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Real estate construction
|
1
|
|
78
|
|
80
|
|
—
|
|
—
|
|
—
|
|
1
|
|
65
|
|
91
|
|
||||||
Residential mortgage
|
41
|
|
6,977
|
|
7,210
|
|
45
|
|
4,238
|
|
4,364
|
|
63
|
|
5,535
|
|
5,792
|
|
||||||
Home equity
|
34
|
|
1,649
|
|
1,681
|
|
22
|
|
507
|
|
507
|
|
57
|
|
2,030
|
|
2,084
|
|
||||||
Other consumer
|
3
|
|
17
|
|
19
|
|
—
|
|
—
|
|
—
|
|
1
|
|
15
|
|
16
|
|
||||||
Total
|
86
|
|
$
|
11,429
|
|
$
|
11,792
|
|
77
|
|
$
|
9,426
|
|
$
|
11,900
|
|
131
|
|
$
|
9,270
|
|
$
|
9,631
|
|
(a)
|
Represents post-modification outstanding recorded investment.
|
(b)
|
Represents pre-modification outstanding recorded investment.
|
|
Years Ended December 31,
|
||||||||||||||
|
2018
|
2017
|
2016
|
||||||||||||
|
Number of
Loans
|
Recorded
Investment
|
Number of
Loans
|
Recorded
Investment
|
Number of
Loans |
Recorded
Investment |
|||||||||
|
($ in Thousands)
|
||||||||||||||
Commercial and industrial
|
3
|
|
$
|
—
|
|
2
|
|
$
|
—
|
|
—
|
|
$
|
—
|
|
Residential mortgage
|
20
|
|
3,553
|
|
36
|
|
3,137
|
|
44
|
|
4,102
|
|
|||
Home equity
|
32
|
|
1,688
|
|
27
|
|
735
|
|
23
|
|
457
|
|
|||
Other consumer
|
—
|
|
—
|
|
1
|
|
7
|
|
1
|
|
15
|
|
|||
Total
|
55
|
|
$
|
5,241
|
|
66
|
|
$
|
3,879
|
|
68
|
|
$
|
4,574
|
|
|
Commercial
and
industrial
|
Commercial
real estate
- owner
occupied
|
Commercial
real estate
- investor
|
Real estate
construction
|
Residential
mortgage
|
Home
equity
|
Other
consumer
|
Total
|
||||||||||||||||
|
($ in Thousands)
|
|||||||||||||||||||||||
December 31, 2017
|
$
|
123,068
|
|
$
|
10,352
|
|
$
|
41,059
|
|
$
|
34,370
|
|
$
|
29,607
|
|
$
|
22,126
|
|
$
|
5,298
|
|
$
|
265,880
|
|
Charge offs
|
(30,837
|
)
|
(1,363
|
)
|
(7,914
|
)
|
(298
|
)
|
(1,627
|
)
|
(3,236
|
)
|
(5,261
|
)
|
(50,536
|
)
|
||||||||
Recoveries
|
13,714
|
|
639
|
|
668
|
|
446
|
|
1,271
|
|
2,628
|
|
812
|
|
20,179
|
|
||||||||
Net charge offs
|
(17,123
|
)
|
(724
|
)
|
(7,246
|
)
|
149
|
|
(355
|
)
|
(608
|
)
|
(4,448
|
)
|
(30,358
|
)
|
||||||||
Provision for loan losses
|
2,890
|
|
(373
|
)
|
7,031
|
|
(6,279
|
)
|
(3,657
|
)
|
(2,252
|
)
|
5,138
|
|
2,500
|
|
||||||||
December 31, 2018
|
$
|
108,835
|
|
$
|
9,255
|
|
$
|
40,844
|
|
$
|
28,240
|
|
$
|
25,595
|
|
$
|
19,266
|
|
$
|
5,988
|
|
$
|
238,023
|
|
Allowance for loan losses
|
|
|
|
|
|
|
|
|
||||||||||||||||
Individually evaluated for impairment
|
$
|
5,721
|
|
$
|
24
|
|
$
|
28
|
|
$
|
75
|
|
$
|
6,023
|
|
$
|
3,312
|
|
$
|
121
|
|
$
|
15,304
|
|
Collectively evaluated for impairment
|
103,114
|
|
9,231
|
|
40,816
|
|
28,165
|
|
19,572
|
|
15,954
|
|
5,867
|
|
222,719
|
|
||||||||
Acquired and accounted for under ASC 310-30(a)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Total allowance for loan losses
|
$
|
108,835
|
|
$
|
9,255
|
|
$
|
40,844
|
|
$
|
28,240
|
|
$
|
25,595
|
|
$
|
19,266
|
|
$
|
5,988
|
|
$
|
238,023
|
|
Loans
|
|
|
|
|
|
|
|
|
||||||||||||||||
Individually evaluated for impairment
|
$
|
63,153
|
|
$
|
5,852
|
|
$
|
2,384
|
|
$
|
510
|
|
$
|
50,486
|
|
$
|
10,124
|
|
$
|
1,181
|
|
$
|
133,690
|
|
Collectively evaluated for impairment
|
7,331,898
|
|
913,708
|
|
3,748,883
|
|
1,334,500
|
|
8,226,642
|
|
884,266
|
|
361,990
|
|
22,801,887
|
|
||||||||
Acquired and accounted for under ASC 310-30(a)
|
2,994
|
|
883
|
|
287
|
|
21
|
|
584
|
|
83
|
|
—
|
|
4,853
|
|
||||||||
Total loans
|
$
|
7,398,044
|
|
$
|
920,443
|
|
$
|
3,751,554
|
|
$
|
1,335,031
|
|
$
|
8,277,712
|
|
$
|
894,473
|
|
$
|
363,171
|
|
$
|
22,940,429
|
|
|
Commercial
and
industrial
|
Commercial
real estate
- owner
occupied
|
Commercial
real estate
- investor
|
Real estate
construction
|
Residential
mortgage
|
Home
equity
|
Other
consumer
|
Total
|
||||||||||||||||
|
($ in Thousands)
|
|||||||||||||||||||||||
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
|
|
|
Year Ended December 31, 2018
|
Year Ended December 31, 2017
|
||||
|
($ in Millions)
|
|||||
Balance at beginning of period
|
$
|
27
|
|
$
|
38
|
|
Charge offs
|
(24
|
)
|
(25
|
)
|
||
Recoveries
|
6
|
|
—
|
|
||
Net Charge offs
|
(17
|
)
|
(25
|
)
|
||
Provision for loan losses
|
2
|
|
14
|
|
||
Balance at end of period
|
$
|
12
|
|
$
|
27
|
|
Allowance for loan losses
|
|
|
||||
Individually evaluated for impairment
|
$
|
—
|
|
$
|
5
|
|
Collectively evaluated for impairment
|
12
|
|
22
|
|
||
Total allowance for loan losses
|
$
|
12
|
|
$
|
27
|
|
Loans
|
|
|
||||
Individually evaluated for impairment
|
$
|
22
|
|
$
|
77
|
|
Collectively evaluated for impairment
|
725
|
|
523
|
|
||
Total loans
|
$
|
747
|
|
$
|
600
|
|
|
Years Ended December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Allowance for Unfunded Commitments
|
|
|
|
||||||
Balance at beginning of period
|
$
|
24,400
|
|
$
|
25,400
|
|
$
|
24,400
|
|
Provision for unfunded commitments
|
(2,500
|
)
|
(1,000
|
)
|
1,000
|
|
|||
Amount recorded at acquisition
|
2,436
|
|
—
|
|
—
|
|
|||
Balance at end of period
|
$
|
24,336
|
|
$
|
24,400
|
|
$
|
25,400
|
|
•
|
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.
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||
|
($ in Thousands)
|
||||||
Changes in Accretable Yield
|
|
|
|
||||
Balance at beginning of period
|
$
|
—
|
|
|
$
|
—
|
|
Purchases
|
4,853
|
|
|
—
|
|
||
Accretion
|
(4,954
|
)
|
|
—
|
|
||
Net reclassification from non-accretable yield
|
1,605
|
|
|
—
|
|
||
Other(a)
|
(22
|
)
|
|
—
|
|
||
Balance at end of period
|
$
|
1,482
|
|
|
$
|
—
|
|
(a)
|
Primarily includes charge offs which are accounted for under ASC Subtopic 310-30 "Receivables — Loans and Debt Securities Acquired with Deteriorated Credit Quality."
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
($ in Thousands)
|
||||||||||
Core deposit intangibles
|
|
|
|
|
|
||||||
Gross carrying amount
|
$
|
58,100
|
|
|
$
|
4,385
|
|
|
$
|
4,385
|
|
Accumulated amortization
|
(5,326
|
)
|
|
(4,385
|
)
|
|
(4,273
|
)
|
|||
Net book value
|
$
|
52,774
|
|
|
$
|
—
|
|
|
$
|
112
|
|
Additions during the period
|
$
|
58,100
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Amortization during the year
|
$
|
5,326
|
|
|
$
|
112
|
|
|
$
|
281
|
|
Other intangibles
|
|
|
|
|
|
||||||
Gross carrying amount
|
$
|
44,931
|
|
|
$
|
34,572
|
|
|
$
|
32,410
|
|
Reductions due to sale
|
(43
|
)
|
|
—
|
|
|
—
|
|
|||
Accumulated amortization
|
(21,825
|
)
|
|
(18,992
|
)
|
|
(17,145
|
)
|
|||
Net book value
|
$
|
23,062
|
|
|
$
|
15,580
|
|
|
$
|
15,265
|
|
Additions during the period
|
$
|
10,359
|
|
|
$
|
2,162
|
|
|
$
|
1,012
|
|
Amortization during the year
|
$
|
2,833
|
|
|
$
|
1,847
|
|
|
$
|
1,812
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
($ in Thousands)
|
||||||||||
Mortgage servicing rights
|
|
|
|||||||||
Mortgage servicing rights at beginning of year
|
$
|
59,168
|
|
|
$
|
62,085
|
|
|
$
|
62,150
|
|
Additions from acquisition
|
8,136
|
|
|
—
|
|
|
—
|
|
|||
Additions
|
10,722
|
|
|
7,167
|
|
|
12,262
|
|
|||
Amortization
|
(9,594
|
)
|
|
(10,084
|
)
|
|
(12,327
|
)
|
|||
Mortgage servicing rights at end of year
|
$
|
68,433
|
|
|
$
|
59,168
|
|
|
$
|
62,085
|
|
Valuation allowance at beginning of year
|
(784
|
)
|
|
(609
|
)
|
|
(809
|
)
|
|||
(Additions) recoveries, net
|
545
|
|
|
(175
|
)
|
|
200
|
|
|||
Valuation allowance at end of year
|
(239
|
)
|
|
(784
|
)
|
|
(609
|
)
|
|||
Mortgage servicing rights, net
|
$
|
68,193
|
|
|
$
|
58,384
|
|
|
$
|
61,476
|
|
Fair value of mortgage servicing rights
|
$
|
81,012
|
|
|
$
|
64,387
|
|
|
$
|
73,149
|
|
Portfolio of residential mortgage loans serviced for others (“servicing portfolio”)
|
$
|
8,600,983
|
|
|
$
|
7,646,846
|
|
|
$
|
7,974,742
|
|
Mortgage servicing rights, net to servicing portfolio
|
0.79
|
%
|
|
0.76
|
%
|
|
0.77
|
%
|
|||
Mortgage servicing rights expense (a)
|
$
|
9,049
|
|
|
$
|
10,259
|
|
|
$
|
12,127
|
|
(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)
|
||||||||||
Year ending December 31,
|
|
|
|
|
|
||||||
2019
|
$
|
5,810
|
|
|
$
|
2,824
|
|
|
$
|
9,666
|
|
2020
|
5,810
|
|
|
2,707
|
|
|
10,355
|
|
|||
2021
|
5,810
|
|
|
2,682
|
|
|
8,951
|
|
|||
2022
|
5,810
|
|
|
2,659
|
|
|
7,694
|
|
|||
2023
|
5,810
|
|
|
2,640
|
|
|
6,580
|
|
|||
Beyond 2023
|
23,724
|
|
|
9,551
|
|
|
25,187
|
|
|||
Total Estimated Amortization Expense
|
$
|
52,774
|
|
|
$
|
23,062
|
|
|
$
|
68,433
|
|
|
|
2018
|
2017
|
|||||||||||
($ in Thousands)
|
Estimated
Useful Lives
|
Cost
|
Accumulated
Depreciation
|
Net Book
Value
|
Net Book
Value
|
|||||||||
Land
|
—
|
|
$
|
67,737
|
|
$
|
—
|
|
$
|
67,737
|
|
$
|
59,257
|
|
Land improvements
|
3 – 15 years
|
|
14,730
|
|
7,518
|
|
7,212
|
|
6,313
|
|
||||
Buildings and improvements
|
5 – 39 years
|
|
363,000
|
|
150,464
|
|
212,536
|
|
198,431
|
|
||||
Computers
|
3 – 5 years
|
|
45,768
|
|
33,375
|
|
12,392
|
|
11,078
|
|
||||
Furniture, fixtures and other equipment
|
3 – 15 years
|
|
168,567
|
|
118,676
|
|
49,891
|
|
42,049
|
|
||||
Leasehold improvements
|
3 – 15 years
|
|
34,248
|
|
20,791
|
|
13,457
|
|
13,835
|
|
||||
Total premises and equipment
|
|
$
|
694,050
|
|
$
|
330,824
|
|
$
|
363,225
|
|
$
|
330,963
|
|
($ in Thousands)
|
Payments
|
Receipts
|
||||
2019
|
$
|
10,235
|
|
$
|
2,963
|
|
2020
|
10,107
|
|
3,030
|
|
||
2021
|
9,500
|
|
2,860
|
|
||
2022
|
7,084
|
|
1,875
|
|
||
2023
|
5,183
|
|
1,260
|
|
||
Thereafter
|
22,622
|
|
7,806
|
|
||
Total
|
$
|
64,732
|
|
$
|
19,794
|
|
|
2018
|
2017
|
||||
|
($ in Thousands)
|
|||||
Noninterest-bearing demand
|
$
|
5,698,530
|
|
$
|
5,478,416
|
|
Savings
|
2,012,841
|
|
1,524,992
|
|
||
Interest-bearing demand
|
5,336,952
|
|
4,603,157
|
|
||
Money market
|
9,033,669
|
|
8,830,328
|
|
||
Brokered CDs
|
192,234
|
|
18,609
|
|
||
Other time
|
2,623,167
|
|
2,330,460
|
|
||
Total deposits
|
$
|
24,897,393
|
|
$
|
22,785,962
|
|
Maturities During Year Ending December 31,
|
($ in Thousands)
|
||
2019
|
$
|
1,952,008
|
|
2020
|
561,758
|
|
|
2021
|
176,491
|
|
|
2022
|
67,738
|
|
|
2023
|
52,576
|
|
|
Thereafter
|
4,830
|
|
|
Total
|
$
|
2,815,401
|
|
|
December 31, 2018
|
December 31, 2017
|
||||
|
($ in Thousands)
|
|||||
Short-Term Funding
|
|
|
||||
Federal funds purchased
|
$
|
19,710
|
|
$
|
141,950
|
|
Securities sold under agreements to repurchase
|
91,941
|
|
182,865
|
|
||
Federal funds purchased and securities sold under agreements to repurchase
|
111,651
|
|
324,815
|
|
||
Commercial paper
|
45,423
|
|
67,467
|
|
||
Total short-term funding
|
$
|
157,074
|
|
$
|
392,282
|
|
Long-Term Funding
|
|
|
||||
Senior notes, at par
|
$
|
550,000
|
|
$
|
250,000
|
|
Subordinated notes, at par
|
250,000
|
|
250,000
|
|
||
Other long-term funding and capitalized costs
|
(4,389
|
)
|
(2,718
|
)
|
||
Total long-term funding
|
795,611
|
|
497,282
|
|
||
Total short and long-term funding, excluding FHLB advances
|
$
|
952,685
|
|
$
|
889,564
|
|
FHLB Advances
|
|
|
||||
Short-term FHLB advances
|
$
|
900,000
|
|
$
|
284,000
|
|
Long-term FHLB advances
|
2,674,371
|
|
2,900,168
|
|
||
Total FHLB advances
|
$
|
3,574,371
|
|
$
|
3,184,168
|
|
Total short and long-term funding
|
$
|
4,527,056
|
|
$
|
4,073,732
|
|
|
Remaining Contractual Maturity of the Agreements
|
||||||||||||||
|
Overnight and Continuous
|
Up to 30 days
|
30-90 days
|
Greater than 90 days
|
Total
|
||||||||||
|
($ in Thousands)
|
||||||||||||||
December 31, 2018
|
|
|
|
|
|
||||||||||
Repurchase agreements
|
|
|
|
|
|
||||||||||
Agency mortgage-related securities
|
$
|
91,941
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
91,941
|
|
Total
|
$
|
91,941
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
91,941
|
|
December 31, 2017
|
|
|
|
|
|
||||||||||
Repurchase agreements
|
|
|
|
|
|
||||||||||
Agency mortgage-related securities
|
$
|
182,865
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
182,865
|
|
Total
|
$
|
182,865
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
182,865
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||
|
Amount
|
|
Weighted Average Contractual Coupon Rate
|
|
Amount
|
|
Weighted Average Contractual Coupon Rate
|
||||||
|
($ in Thousands)
|
||||||||||||
Maturity or put date 1 year or less
|
$
|
2,262,584
|
|
|
2.06
|
%
|
|
$
|
2,434,000
|
|
|
1.26
|
%
|
After 1 but within 2
|
1,285,039
|
|
|
2.39
|
%
|
|
750,013
|
|
|
1.23
|
%
|
||
After 2 but within 3
|
14,393
|
|
|
2.98
|
%
|
|
155
|
|
|
4.91
|
%
|
||
After 3 years
|
12,354
|
|
|
4.55
|
%
|
|
—
|
|
|
—
|
%
|
||
FHLB advances and overall rate
|
$
|
3,574,371
|
|
|
2.19
|
%
|
|
$
|
3,184,168
|
|
|
1.26
|
%
|
Year
|
($ in Thousands)
|
||
2019
|
$
|
1,612,265
|
|
2020
|
1,285,039
|
|
|
2021
|
312,047
|
|
|
2022
|
6,023
|
|
|
2023
|
2,665
|
|
|
Thereafter
|
251,943
|
|
|
Total long-term funding
|
$
|
3,469,982
|
|
|
2018
|
2017
|
2016
|
|||
Dividend yield
|
2.50
|
%
|
2.00
|
%
|
2.50
|
%
|
Risk-free interest rate
|
2.60
|
%
|
2.00
|
%
|
2.00
|
%
|
Weighted average expected volatility
|
22.00
|
%
|
25.00
|
%
|
25.00
|
%
|
Weighted average expected life
|
5.75 years
|
|
5.5 years
|
|
5.5 years
|
|
Weighted average per share fair value of options
|
$4.47
|
$5.30
|
$3.36
|
Stock Options
|
Shares
|
Weighted Average
Exercise Price
|
Weighted Average
Remaining
Contractual Term
|
Aggregate
Intrinsic Value
(in thousands)
|
|||||
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
|
(1,031,875
|
)
|
16.45
|
|
|
|
|||
Forfeited or expired
|
(114,695
|
)
|
23.88
|
|
|
|
|||
Outstanding at December 31, 2018
|
5,280,908
|
|
$
|
19.09
|
|
6.18
|
$
|
12,392
|
|
Options exercisable at December 31, 2018
|
3,187,894
|
|
$
|
16.93
|
|
4.92
|
$
|
10,796
|
|
|
Retirement Account Plan
|
Bank Mutual Pension
|
Postretirement
Plan
|
Retirement Account Plan
|
Postretirement
Plan
|
||||||||||
($ in Thousands)
|
2018
|
2018
|
2018
|
2017
|
2017
|
||||||||||
Change in Fair Value of Plan Assets
|
|
|
|
|
|
||||||||||
Fair value of plan assets at beginning of year
|
$
|
331,609
|
|
N/A
|
|
$
|
—
|
|
$
|
295,718
|
|
$
|
—
|
|
|
Fair value of Bank Mutual plan assets at February 1, 2018
|
N/A
|
|
59,445
|
|
—
|
|
N/A
|
|
N/A
|
|
|||||
Actual return on plan assets
|
(14,609
|
)
|
(1,665
|
)
|
—
|
|
41,490
|
|
—
|
|
|||||
Employer contributions
|
4,340
|
|
37,537
|
|
292
|
|
6,242
|
|
235
|
|
|||||
Gross benefits paid
|
(10,582
|
)
|
(15,513
|
)
|
(292
|
)
|
(11,841
|
)
|
(235
|
)
|
|||||
Bank Mutual plan assets transferred at December 31, 2018
|
79,805
|
|
(79,805
|
)
|
—
|
|
N/A
|
|
N/A
|
|
|||||
Fair value of plan assets at end of year (a)
|
$
|
390,564
|
|
$
|
—
|
|
$
|
—
|
|
$
|
331,609
|
|
$
|
—
|
|
Change in Benefit Obligation
|
|
|
|
|
|
||||||||||
Net benefit obligation at beginning of year
|
$
|
186,423
|
|
N/A
|
|
$
|
2,478
|
|
$
|
176,825
|
|
$
|
2,403
|
|
|
Net Bank Mutual benefit obligation at February 1, 2018
|
N/A
|
|
66,364
|
|
576
|
|
N/A
|
|
N/A
|
|
|||||
Service cost
|
7,540
|
|
—
|
|
—
|
|
6,955
|
|
—
|
|
|||||
Interest cost
|
6,727
|
|
2,398
|
|
108
|
|
7,121
|
|
101
|
|
|||||
Actuarial (gain) loss
|
(8,000
|
)
|
(1,701
|
)
|
(347
|
)
|
7,363
|
|
209
|
|
|||||
Gross benefits paid
|
(10,582
|
)
|
(2,644
|
)
|
(292
|
)
|
(11,841
|
)
|
(235
|
)
|
|||||
Lump sums paid
|
—
|
|
(12,868
|
)
|
—
|
|
—
|
|
—
|
|
|||||
Bank Mutual benefit obligations transferred at December 31, 2018
|
51,549
|
|
(51,549
|
)
|
—
|
|
N/A
|
|
N/A
|
|
|||||
Net benefit obligation at end of year (a)
|
$
|
233,658
|
|
$
|
—
|
|
$
|
2,523
|
|
$
|
186,423
|
|
$
|
2,478
|
|
Funded (unfunded) status
|
$
|
156,906
|
|
$
|
—
|
|
$
|
(2,523
|
)
|
$
|
145,186
|
|
$
|
(2,478
|
)
|
Noncurrent assets
|
156,906
|
|
—
|
|
—
|
|
145,186
|
|
—
|
|
|||||
Current liabilities
|
—
|
|
—
|
|
(219
|
)
|
—
|
|
(233
|
)
|
|||||
Noncurrent liabilities
|
—
|
|
—
|
|
(2,304
|
)
|
—
|
|
(2,245
|
)
|
|||||
Asset (Liability) Recognized in the Consolidated Balance Sheets
|
$
|
156,906
|
|
$
|
—
|
|
$
|
(2,523
|
)
|
$
|
145,186
|
|
$
|
(2,478
|
)
|
(a)
|
The fair value of the plan assets represented 167% and 178% of the net benefit obligation of the pension plan at December 31, 2018 and 2017, respectively.
|
|
Retirement Account Plan
|
Postretirement
Plan
|
Retirement Account Plan
|
Postretirement
Plan
|
||||||||
($ in Thousands)
|
2018
|
2018
|
2017
|
2017
|
||||||||
Prior service cost
|
$
|
(303
|
)
|
$
|
(588
|
)
|
$
|
(295
|
)
|
$
|
(531
|
)
|
Net actuarial loss
|
50,238
|
|
(17
|
)
|
24,926
|
|
205
|
|
||||
Amount not yet recognized in net periodic benefit cost, but recognized in accumulated other comprehensive (income) loss
|
$
|
49,935
|
|
$
|
(605
|
)
|
$
|
24,631
|
|
$
|
(326
|
)
|
|
Retirement Account Plan
|
Postretirement
Plan |
Retirement Account Plan
|
Postretirement
Plan |
||||||||
($ in Thousands)
|
2018
|
2018
|
2017
|
2017
|
||||||||
Net actuarial gain (loss)
|
$
|
(28,959
|
)
|
$
|
347
|
|
$
|
14,482
|
|
$
|
(209
|
)
|
Amortization of prior service cost
|
(73
|
)
|
(75
|
)
|
(73
|
)
|
(75
|
)
|
||||
Amortization of actuarial loss (gain)
|
2,195
|
|
8
|
|
2,278
|
|
4
|
|
||||
Adjustment for adoption of ASU 2018-02
|
(5,235
|
)
|
—
|
|
—
|
|
—
|
|
||||
Income tax (expense) benefit
|
6,838
|
|
(71
|
)
|
(6,219
|
)
|
107
|
|
||||
Total Recognized in OCI
|
$
|
(25,234
|
)
|
$
|
209
|
|
$
|
10,468
|
|
$
|
(173
|
)
|
|
Retirement Account Plan
|
Retirement Account Plan
|
Retirement Account Plan
|
||||||
($ in Thousands)
|
2018
|
2017
|
2016
|
||||||
Service cost
|
$
|
7,540
|
|
$
|
6,955
|
|
$
|
6,780
|
|
Interest cost
|
9,125
|
|
7,121
|
|
7,121
|
|
|||
Expected return on plan assets
|
(23,195
|
)
|
(19,646
|
)
|
(20,287
|
)
|
|||
Amortization of prior service cost
|
(73
|
)
|
(73
|
)
|
(73
|
)
|
|||
Amortization of actuarial loss (gain)
|
2,195
|
|
2,278
|
|
2,115
|
|
|||
Recognized settlement loss (gain)
|
809
|
|
—
|
|
—
|
|
|||
Total net periodic pension cost
|
$
|
(3,600
|
)
|
$
|
(3,365
|
)
|
$
|
(4,344
|
)
|
|
Postretirement Plan
|
Postretirement Plan
|
Postretirement Plan
|
||||||
($ in Thousands)
|
2018
|
2017
|
2016
|
||||||
Interest cost
|
$
|
108
|
|
$
|
101
|
|
$
|
142
|
|
Amortization of prior service cost
|
(75
|
)
|
(75
|
)
|
—
|
|
|||
Amortization of actuarial loss (gain)
|
8
|
|
4
|
|
—
|
|
|||
Total net periodic benefit cost
|
$
|
41
|
|
$
|
30
|
|
$
|
142
|
|
|
Retirement Account Plan
|
Postretirement
Plan
|
Retirement Account Plan
|
Postretirement
Plan
|
||||
|
2018
|
2018
|
2017
|
2017
|
||||
Weighted average assumptions used to determine benefit obligations
|
|
|
|
|
||||
Discount rate
|
4.30
|
%
|
4.30
|
%
|
3.70
|
%
|
3.70
|
%
|
Rate of increase in compensation levels
|
3.00
|
%
|
N/A
|
|
3.00
|
%
|
N/A
|
|
Weighted average assumptions used to determine net periodic benefit costs
|
|
|
|
|
||||
Discount rate(a)
|
3.77
|
%
|
3.77
|
%
|
4.10
|
%
|
4.10
|
%
|
Rate of increase in compensation levels
|
3.00
|
%
|
N/A
|
|
4.00
|
%
|
N/A
|
|
Expected long-term rate of return on plan assets(b)
|
5.93
|
%
|
N/A
|
|
6.50
|
%
|
N/A
|
|
Asset Category
|
2018
|
2017
|
||
Equity securities
|
49
|
%
|
60
|
%
|
Fixed-income securities
|
34
|
%
|
37
|
%
|
Group annuity contracts
|
12
|
%
|
—
|
%
|
Alternative securities
|
3
|
%
|
—
|
%
|
Other
|
2
|
%
|
3
|
%
|
Total
|
100
|
%
|
100
|
%
|
|
|
Fair Value Measurements Using
|
||||||||||
($ in Thousands)
|
December 31, 2018
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Retirement Account Plan Investments
|
|
|
|
|
||||||||
Money market account
|
$
|
7,159
|
|
$
|
7,159
|
|
$
|
—
|
|
$
|
—
|
|
Common /collective trust funds
|
138,020
|
|
138,020
|
|
—
|
|
—
|
|
||||
Mutual funds
|
198,120
|
|
198,120
|
|
—
|
|
—
|
|
||||
Group annuity contracts
|
47,265
|
|
—
|
|
—
|
|
47,265
|
|
||||
Total Retirement Account Plan Investments
|
$
|
390,564
|
|
$
|
343,299
|
|
$
|
—
|
|
$
|
47,265
|
|
|
|
Fair Value Measurements Using
|
||||||||||
($ in Thousands)
|
December 31, 2017
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Retirement Account Plan Investments
|
|
|
|
|
||||||||
Money market account
|
$
|
9,577
|
|
$
|
9,577
|
|
$
|
—
|
|
$
|
—
|
|
Common /collective trust funds
|
133,210
|
|
133,210
|
|
—
|
|
—
|
|
||||
Mutual funds
|
188,823
|
|
188,823
|
|
—
|
|
—
|
|
||||
Total Retirement Account Plan Investments
|
$
|
331,610
|
|
$
|
331,610
|
|
$
|
—
|
|
$
|
—
|
|
Fair Value Reconciliation of Level 3 Retirement Account Plan Investments
|
2018
|
2017
|
||
Fair value of group annuity contract at February 1, 2018 (date of Bank Mutual acquisition)
|
$
|
49,191
|
|
N/A
|
Actual return on plan assets
|
565
|
|
N/A
|
|
Benefits paid
|
(2,491
|
)
|
N/A
|
|
Fair value of group annuity contract at December 31, 2018
|
$
|
47,265
|
|
N/A
|
($ in Thousands)
|
Retirement Account Plan
|
Postretirement Plan
|
||||
Estimated future benefit payments
|
|
|
||||
2019
|
$
|
18,774
|
|
$
|
224
|
|
2020
|
19,265
|
|
220
|
|
||
2021
|
19,161
|
|
216
|
|
||
2022
|
20,210
|
|
211
|
|
||
2023
|
20,086
|
|
206
|
|
||
2024-2028
|
89,992
|
|
925
|
|
|
2018
|
2017
|
||||||||||
($ in Thousands)
|
100 bp Increase
|
100 bp Decrease
|
100 bp Increase
|
100 bp Decrease
|
||||||||
Effect on total of service and interest cost
|
$
|
7
|
|
$
|
(6
|
)
|
$
|
7
|
|
$
|
(6
|
)
|
Effect on postretirement benefit obligation
|
$
|
164
|
|
$
|
(143
|
)
|
$
|
162
|
|
$
|
(140
|
)
|
|
Years Ended December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Current
|
|
|
|
||||||
Federal
|
$
|
20,246
|
|
$
|
76,525
|
|
$
|
73,781
|
|
State
|
12,593
|
|
11,576
|
|
2,885
|
|
|||
Total current
|
32,839
|
|
88,101
|
|
76,666
|
|
|||
Deferred
|
|
|
|
||||||
Federal
|
34,941
|
|
19,755
|
|
3,338
|
|
|||
State
|
12,006
|
|
1,647
|
|
7,318
|
|
|||
Total deferred
|
46,947
|
|
21,402
|
|
10,656
|
|
|||
Total income tax expense
|
$
|
79,786
|
|
$
|
109,503
|
|
$
|
87,322
|
|
|
2018
|
2017
|
||||
|
($ in Thousands)
|
|||||
Deferred tax assets
|
|
|
||||
Allowance for loan losses
|
$
|
61,143
|
|
$
|
66,377
|
|
Allowance for other losses
|
8,304
|
|
7,095
|
|
||
Accrued liabilities
|
3,736
|
|
3,884
|
|
||
Deferred compensation
|
24,754
|
|
20,015
|
|
||
Benefit of tax loss and credit carryforwards
|
10,126
|
|
8,438
|
|
||
Nonaccrual interest
|
1,666
|
|
1,619
|
|
||
Net unrealized losses on available-for-sale securities
|
25,731
|
|
15,968
|
|
||
Net unrealized losses on pension and postretirement benefits
|
16,640
|
|
9,928
|
|
||
Other
|
1,916
|
|
4,435
|
|
||
Total deferred tax assets
|
154,015
|
|
137,759
|
|
||
Valuation allowance for deferred tax assets
|
(251
|
)
|
(269
|
)
|
||
Total deferred tax assets after valuation allowance
|
$
|
153,764
|
|
$
|
137,490
|
|
Deferred tax liabilities
|
|
|
||||
Prepaid expenses
|
$
|
61,250
|
|
$
|
49,695
|
|
Goodwill
|
20,178
|
|
19,144
|
|
||
Mortgage banking activities
|
17,428
|
|
10,949
|
|
||
Deferred loan fee income
|
11,892
|
|
11,467
|
|
||
State deferred taxes
|
518
|
|
2,001
|
|
||
Lease financing
|
410
|
|
535
|
|
||
Bank premises and equipment
|
18,655
|
|
5,063
|
|
||
Purchase accounting
|
12,414
|
|
5,015
|
|
||
Other
|
684
|
|
304
|
|
||
Total deferred tax liabilities
|
$
|
143,429
|
|
$
|
104,173
|
|
Net deferred tax assets
|
$
|
10,335
|
|
$
|
33,317
|
|
|
2018
|
2017
|
||||
|
($ in Thousands)
|
|||||
Valuation allowance for deferred tax assets, beginning of year
|
$
|
(269
|
)
|
$
|
—
|
|
(Increase) decrease in current year
|
18
|
|
(269
|
)
|
||
Valuation allowance for deferred tax assets, end of year
|
$
|
(251
|
)
|
$
|
(269
|
)
|
|
2018
|
2017
|
2016
|
|||
Federal income tax rate at statutory rate
|
21.0
|
%
|
35.0
|
%
|
35.0
|
%
|
Increases (decreases) resulting from:
|
|
|
|
|||
Tax-exempt interest and dividends
|
(2.6
|
)%
|
(4.1
|
)%
|
(4.8
|
)%
|
State income taxes (net of federal benefit)
|
3.7
|
%
|
2.9
|
%
|
2.5
|
%
|
Bank owned life insurance
|
(0.7
|
)%
|
(1.7
|
)%
|
(1.7
|
)%
|
Tax effect of tax credits and benefits, net of related expenses
|
(0.7
|
)%
|
(0.7
|
)%
|
(1.0
|
)%
|
Tax reserve adjustments / settlements
|
1.5
|
%
|
(1.2
|
)%
|
0.3
|
%
|
Net tax benefit from stock-based compensation
|
(0.5
|
)%
|
(1.3
|
)%
|
(0.4
|
)%
|
Tax Act impact on deferred remeasurement
|
—
|
%
|
3.5
|
%
|
—
|
%
|
Tax planning in response to the Tax Act
|
(3.6
|
)%
|
—
|
%
|
—
|
%
|
FDIC premium
|
0.9
|
%
|
—
|
%
|
—
|
%
|
Other
|
0.3
|
%
|
(0.1
|
)%
|
0.5
|
%
|
Effective income tax rate
|
19.3
|
%
|
32.3
|
%
|
30.4
|
%
|
|
2018
|
2017
|
||||
|
($ in Millions)
|
|||||
Balance at beginning of year
|
$
|
4
|
|
$
|
10
|
|
Subtractions for tax positions related to prior years
|
—
|
|
(5
|
)
|
||
Subtractions for settlements with tax authorities
|
(3
|
)
|
(1
|
)
|
||
Additions for tax positions related to current year
|
1
|
|
—
|
|
||
Balance at end of year
|
$
|
2
|
|
$
|
4
|
|
|
December 31, 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
|
$
|
2,707,204
|
|
$
|
52,796
|
|
Trading assets
|
$
|
2,183,687
|
|
$
|
28,494
|
|
Trading assets
|
Interest rate-related instruments — customer and mirror
|
2,707,204
|
|
(52,653
|
)
|
Trading liabilities
|
2,183,687
|
|
(28,035
|
)
|
Trading liabilities
|
||||
Foreign currency exchange forwards
|
117,879
|
|
721
|
|
Trading assets
|
124,851
|
|
2,495
|
|
Trading assets
|
||||
Foreign currency exchange forwards
|
69,153
|
|
(675
|
)
|
Trading liabilities
|
118,094
|
|
(2,339
|
)
|
Trading liabilities
|
||||
Commodity contracts
|
331,727
|
|
35,426
|
|
Trading assets
|
457,868
|
|
38,686
|
|
Trading assets
|
||||
Commodity contracts
|
315,861
|
|
(34,340
|
)
|
Trading liabilities
|
457,108
|
|
(37,286
|
)
|
Trading liabilities
|
||||
Interest rate lock commitments (mortgage)
|
191,222
|
|
2,208
|
|
Other assets
|
222,736
|
|
1,538
|
|
Other assets
|
||||
Forward commitments (mortgage)
|
139,984
|
|
(2,072
|
)
|
Other liabilities
|
164,567
|
|
(313
|
)
|
Other liabilities
|
||||
Purchased options (time deposit)
|
11,185
|
|
109
|
|
Other assets
|
31,063
|
|
1,175
|
|
Other assets
|
||||
Written options (time deposit)
|
11,185
|
|
(109
|
)
|
Other liabilities
|
31,063
|
|
(1,175
|
)
|
Other liabilities
|
||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
||||||||
Interest rate products
|
500,000
|
|
(40
|
)
|
Other liabilities
|
—
|
|
—
|
|
—
|
|
Line Item in the Statement of Financial Position in Which the Hedged Item is Included
|
||||||
|
Carrying Amount of the Hedged Assets/(Liabilities)
|
|
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)
|
||||
($ in Thousands)
|
December 31, 2018
|
||||||
Loans and investment securities available for sale (a)
|
$
|
499,498
|
|
|
$
|
(502
|
)
|
Total
|
$
|
499,498
|
|
|
$
|
(502
|
)
|
(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 December 31, 2018, the amortized cost basis of the closed portfolios used in these hedging relationships was $1.1 billion; the negative cumulative basis adjustments associated with these hedging relationships was approximately $502,000; and the amounts of the designated hedged items were $500 million.
|
|
Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
|
|||||||||||
|
Year Ended December 31, 2018
|
Year Ended December 31, 2017
|
||||||||||
($ 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(a)
|
$
|
(1,325
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
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
|
(502
|
)
|
—
|
|
—
|
|
—
|
|
||||
Derivatives designated as hedging instruments(a)
|
(823
|
)
|
—
|
|
—
|
|
—
|
|
(a)
|
Includes net settlements on the derivatives
|
|
Income Statement Category of
Gain / (Loss) Recognized in Income
|
For the Year Ended December 31,
|
|||||
($ in Thousands)
|
2018
|
2017
|
|||||
Derivative Instruments
|
|
|
|||||
Interest rate-related instruments — customer and mirror, net
|
Capital market fees, net
|
$
|
(316
|
)
|
$
|
(24
|
)
|
Interest rate lock commitments (mortgage)
|
Mortgage banking, net
|
670
|
|
1,332
|
|
||
Forward commitments (mortgage)
|
Mortgage banking, net
|
(1,759
|
)
|
(3,221
|
)
|
||
Foreign currency exchange forwards
|
Capital market fees, net
|
(110
|
)
|
97
|
|
||
Commodity contracts
|
Capital market fees, net
|
(314
|
)
|
647
|
|
|
2018
|
2017
|
||||
|
($ in Thousands)
|
|||||
Commitments to extend credit, excluding commitments to originate residential mortgage loans held for sale (a) (b)
|
$
|
8,720,293
|
|
$
|
8,027,187
|
|
Commercial letters of credit (a)
|
7,599
|
|
11,886
|
|
||
Standby letters of credit (c)
|
255,904
|
|
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 December 31, 2018 and 2017.
|
(b)
|
Interest rate lock commitments to originate residential mortgage loans held for sale are considered derivative instruments and are disclosed in Note 13.
|
(c)
|
The Corporation has established a liability of $2 million at both December 31, 2018 and December 31, 2017, respectively, as an estimate of the fair value of these financial instruments.
|
|
2018
|
2017
|
||||
|
($ in Thousands)
|
|||||
Balance at beginning of year
|
$
|
987
|
|
$
|
900
|
|
Repurchase provision expense
|
345
|
|
246
|
|
||
Adjustments to provision expense
|
(450
|
)
|
—
|
|
||
Charge offs, net
|
(218
|
)
|
(159
|
)
|
||
Amount recorded at acquisition
|
88
|
|
—
|
|
||
Balance at end of year
|
$
|
752
|
|
$
|
987
|
|
|
December 31,
|
|||||
|
2018
|
2017
|
||||
|
($ in Thousands)
|
|||||
Assets
|
|
|
||||
Cash and due from banks
|
$
|
16,245
|
|
$
|
25,544
|
|
Interest-bearing deposits in other financial institutions
|
38,374
|
|
121,333
|
|
||
Investment securities available for sale, at fair value
|
—
|
|
11,645
|
|
||
Notes and interest receivable from subsidiaries
|
453,615
|
|
301,378
|
|
||
Investments in and receivable due from subsidiaries
|
3,787,574
|
|
3,320,090
|
|
||
Other assets
|
47,448
|
|
51,466
|
|
||
Total assets
|
$
|
4,343,256
|
|
$
|
3,831,456
|
|
Liabilities and Stockholders' Equity
|
|
|
||||
Commercial paper
|
$
|
45,423
|
|
$
|
67,467
|
|
Senior notes, at par
|
250,000
|
|
250,000
|
|
||
Subordinated notes, at par
|
250,000
|
|
250,000
|
|
||
Long-term funding capitalized costs
|
(2,043
|
)
|
(2,718
|
)
|
||
Total long-term funding
|
497,957
|
|
497,282
|
|
||
Accrued expenses and other liabilities
|
18,988
|
|
29,264
|
|
||
Total liabilities
|
562,368
|
|
594,013
|
|
||
Preferred equity
|
256,716
|
|
159,929
|
|
||
Common equity
|
3,524,171
|
|
3,077,514
|
|
||
Total stockholders’ equity
|
3,780,888
|
|
3,237,443
|
|
||
Total liabilities and stockholders’ equity
|
$
|
4,343,256
|
|
$
|
3,831,456
|
|
|
For the Years Ended December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Income
|
|
|
|
||||||
Dividends from subsidiaries
|
$
|
336,000
|
|
$
|
213,000
|
|
$
|
188,000
|
|
Interest income on notes receivable from subsidiaries
|
12,199
|
|
4,175
|
|
—
|
|
|||
Other income
|
994
|
|
1,763
|
|
4,669
|
|
|||
Total income
|
349,193
|
|
218,938
|
|
192,669
|
|
|||
Expense
|
|
|
|
||||||
Interest expense on short and long-term funding
|
18,355
|
|
18,464
|
|
21,901
|
|
|||
Other expense
|
11,736
|
|
6,927
|
|
4,289
|
|
|||
Total expense
|
30,091
|
|
25,391
|
|
26,190
|
|
|||
Income before income tax expense and equity in undistributed net income of subsidiaries
|
319,102
|
|
193,547
|
|
166,479
|
|
|||
Income tax expense
|
4,176
|
|
4,768
|
|
3,468
|
|
|||
Income before equity in undistributed net income of subsidiaries
|
314,926
|
|
188,779
|
|
163,011
|
|
|||
Equity in undistributed net income of subsidiaries
|
18,636
|
|
40,485
|
|
37,263
|
|
|||
Net income
|
333,562
|
|
229,264
|
|
200,274
|
|
|||
Preferred stock dividends
|
10,784
|
|
9,347
|
|
8,903
|
|
|||
Net income available to common equity
|
$
|
322,779
|
|
$
|
219,917
|
|
$
|
191,371
|
|
|
For the Years Ended December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Cash Flows from Operating Activities
|
|
|
|
||||||
Net income
|
$
|
333,562
|
|
$
|
229,264
|
|
$
|
200,274
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||||
(Increase) decrease in equity in undistributed net income (loss) of subsidiaries
|
(18,636
|
)
|
(40,485
|
)
|
(37,263
|
)
|
|||
(Gain) loss on sales of investment securities, net of impairment write-downs
|
—
|
|
—
|
|
(466
|
)
|
|||
(Gain) loss on sales of assets, net
|
—
|
|
(88
|
)
|
(793
|
)
|
|||
Net change in other assets and other liabilities
|
(92,366
|
)
|
(9,589
|
)
|
19,708
|
|
|||
Net cash provided by operating activities
|
222,562
|
|
179,102
|
|
181,460
|
|
|||
Cash Flows from Investing Activities
|
|
|
|
||||||
Proceeds from sales of investment securities
|
827
|
|
2,618
|
|
47,719
|
|
|||
Net increase in notes receivable from subsidiaries
|
(139,317
|
)
|
(300,000
|
)
|
—
|
|
|||
Net (increase) decrease in loans
|
2,210
|
|
1,058
|
|
2,211
|
|
|||
Net cash provided by (used in) investing activities
|
(136,280
|
)
|
(296,324
|
)
|
49,930
|
|
|||
Cash Flows from Financing Activities
|
|
|
|
||||||
Net increase (decrease) in commercial paper
|
(22,044
|
)
|
(34,221
|
)
|
33,710
|
|
|||
Repayment of long-term funding
|
—
|
|
—
|
|
(430,000
|
)
|
|||
Proceeds from issuance of common stock for stock-based compensation plans
|
18,408
|
|
27,619
|
|
21,748
|
|
|||
Proceeds from issuance of preferred stock
|
97,315
|
|
—
|
|
97,066
|
|
|||
Redemption of preferred stock
|
—
|
|
—
|
|
(58,903
|
)
|
|||
Purchase of preferred stock
|
(537
|
)
|
—
|
|
(1,248
|
)
|
|||
Common stock warrants exercised
|
(1
|
)
|
—
|
|
—
|
|
|||
Purchase of common stock returned to authorized but unissued
|
(33,075
|
)
|
(37,031
|
)
|
(20,007
|
)
|
|||
Issuance of Treasury Stock for Acquisition
|
91,296
|
|
—
|
|
—
|
|
|||
Purchase of treasury stock
|
(213,598
|
)
|
(9,290
|
)
|
(5,074
|
)
|
|||
Cash dividends on common stock
|
(105,519
|
)
|
(76,417
|
)
|
(67,855
|
)
|
|||
Cash dividends on preferred stock
|
(10,784
|
)
|
(9,347
|
)
|
(8,903
|
)
|
|||
Net cash used in financing activities
|
(178,540
|
)
|
(138,687
|
)
|
(439,466
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
(92,258
|
)
|
(255,909
|
)
|
(208,076
|
)
|
|||
Cash and cash equivalents at beginning of year
|
146,877
|
|
402,786
|
|
610,862
|
|
|||
Cash and cash equivalents at end of year
|
$
|
54,619
|
|
$
|
146,877
|
|
$
|
402,786
|
|
|
Fair Value Hierarchy
|
December 31, 2018
|
December 31, 2017
|
||||
|
|
($ in Thousands)
|
|||||
Assets
|
|
|
|
||||
Investment securities available for sale
|
|
|
|
||||
U.S. Treasury securities
|
Level 1
|
$
|
999
|
|
$
|
996
|
|
Residential mortgage-related securities
|
|
|
|
||||
FNMA / FHLMC
|
Level 2
|
295,252
|
|
464,768
|
|
||
GNMA
|
Level 2
|
2,128,531
|
|
1,913,350
|
|
||
Private-label
|
Level 2
|
1,003
|
|
1,059
|
|
||
GNMA commercial mortgage-related securities
|
Level 2
|
1,220,797
|
|
1,513,277
|
|
||
FFELP asset backed securities
|
Level 2
|
297,360
|
|
145,176
|
|
||
Other equity securities
|
Level 1
|
1,568
|
|
1,632
|
|
||
Other debt securities
|
Level 2
|
3,000
|
|
3,188
|
|
||
Total investment securities available for sale
|
Level 1
|
2,567
|
|
2,628
|
|
||
Total investment securities available for sale
|
Level 2
|
3,945,943
|
|
4,040,818
|
|
||
Residential loans held for sale
|
Level 2
|
64,321
|
|
85,544
|
|
||
Commercial loans held for sale
|
Level 2
|
14,943
|
|
—
|
|
||
Interest rate-related instruments
|
Level 2
|
52,796
|
|
28,494
|
|
||
Foreign currency exchange forwards
|
Level 2
|
721
|
|
2,495
|
|
||
Interest rate lock commitments to originate residential mortgage loans held for sale
|
Level 3
|
2,208
|
|
1,538
|
|
||
Commodity contracts
|
Level 2
|
35,426
|
|
38,686
|
|
||
Purchased options (time deposit)
|
Level 2
|
109
|
|
1,175
|
|
||
Liabilities
|
|
|
|
||||
Interest rate-related instruments
|
Level 2
|
$
|
52,653
|
|
$
|
28,035
|
|
Foreign currency exchange forwards
|
Level 2
|
675
|
|
2,339
|
|
||
Forward commitments to sell residential mortgage loans
|
Level 3
|
2,072
|
|
313
|
|
||
Commodity contracts
|
Level 2
|
34,340
|
|
37,286
|
|
||
Written options (time deposit)
|
Level 2
|
109
|
|
1,175
|
|
||
Interest rate products (designated as hedging instruments)
|
Level 2
|
40
|
|
—
|
|
|
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)
|
—
|
|
(1,085
|
)
|
||
Balance December 31, 2018
|
$
|
—
|
|
$
|
140
|
|
($ in Thousands)
|
Fair Value Hierarchy
|
Fair Value
|
Income Statement Category of
Adjustment Recognized in Income |
Adjustment Recognized in Income
|
||||
December 31, 2018
|
|
|
|
|
||||
Assets
|
|
|
|
|||||
Impaired loans (a)
|
Level 3
|
$
|
26,191
|
|
Provision for credit losses (b)
|
$
|
(14,521
|
)
|
Other real estate owned (c)
|
Level 2
|
2,200
|
|
Foreclosure / OREO expense, net
|
(1,545
|
)
|
||
Mortgage servicing rights
|
Level 3
|
81,012
|
|
Mortgage banking, net
|
545
|
|
||
|
|
|
|
|
||||
December 31, 2017
|
|
|
|
|
||||
Assets
|
|
|
|
|
||||
Impaired loans (a)
|
Level 3
|
$
|
92,534
|
|
Provision for credit losses (b)
|
$
|
(32,159
|
)
|
Other real estate owned (c)
|
Level 2
|
2,604
|
|
Foreclosure / OREO expense, net
|
(939
|
)
|
||
Mortgage servicing rights
|
Level 3
|
64,387
|
|
Mortgage banking, net
|
(175
|
)
|
(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.
|
December 31, 2018
|
Valuation Technique
|
Significant Unobservable Input
|
Weighted Average Input Applied
|
Mortgage servicing rights
|
Discounted cash flow
|
Discount rate
|
11%
|
Mortgage servicing rights
|
Discounted cash flow
|
Constant prepayment rate
|
11%
|
Impaired loans
|
Appraisals / Discounted cash flow
|
Collateral / Discount factor
|
40%
|
|
|
|
December 31, 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
|
|
$
|
507,187
|
|
|
$
|
507,187
|
|
|
$
|
483,666
|
|
|
$
|
483,666
|
|
Interest-bearing deposits in other financial institutions
|
Level 1
|
|
221,226
|
|
|
221,226
|
|
|
199,702
|
|
|
199,702
|
|
||||
Federal funds sold and securities purchased under agreements to resell
|
Level 1
|
|
148,285
|
|
|
148,285
|
|
|
32,650
|
|
|
32,650
|
|
||||
Investment securities held to maturity
|
Level 2
|
|
2,740,511
|
|
|
2,710,271
|
|
|
2,282,853
|
|
|
2,283,574
|
|
||||
Investment securities available for sale
|
Level 1
|
|
2,567
|
|
|
2,567
|
|
|
2,628
|
|
|
2,628
|
|
||||
Investment securities available for sale
|
Level 2
|
|
3,945,943
|
|
|
3,945,943
|
|
|
4,040,818
|
|
|
4,040,818
|
|
||||
FHLB and Federal Reserve Bank stocks
|
Level 2
|
|
250,534
|
|
|
250,534
|
|
|
165,331
|
|
|
165,331
|
|
||||
Residential loans held for sale
|
Level 2
|
|
64,321
|
|
|
64,321
|
|
|
85,544
|
|
|
85,544
|
|
||||
Commercial loans held for sale
|
Level 2
|
|
14,943
|
|
|
14,943
|
|
|
—
|
|
|
—
|
|
||||
Loans, net
|
Level 3
|
|
22,702,406
|
|
|
22,317,395
|
|
|
20,519,111
|
|
|
20,314,984
|
|
||||
Bank and corporate owned life insurance
|
Level 2
|
|
663,203
|
|
|
663,203
|
|
|
591,057
|
|
|
591,057
|
|
||||
Derivatives (trading and other assets)
|
Level 2
|
|
89,052
|
|
|
89,052
|
|
|
70,850
|
|
|
70,850
|
|
||||
Derivatives (trading and other assets)
|
Level 3
|
|
2,208
|
|
|
2,208
|
|
|
1,538
|
|
|
1,538
|
|
||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
||||||||
Noninterest-bearing demand, savings, interest-bearing demand, and money market accounts
|
Level 3
|
|
$
|
22,081,992
|
|
|
$
|
22,081,992
|
|
|
$
|
20,436,893
|
|
|
$
|
20,436,893
|
|
Brokered CDs and other time deposits (a)
|
Level 2
|
|
2,815,401
|
|
|
2,815,401
|
|
|
2,349,069
|
|
|
2,349,069
|
|
||||
Short-term funding (b)
|
Level 2
|
|
1,057,074
|
|
|
1,057,074
|
|
|
676,282
|
|
|
676,282
|
|
||||
Long-term funding
|
Level 2
|
|
3,469,982
|
|
|
3,492,174
|
|
|
3,397,450
|
|
|
3,411,368
|
|
||||
Standby letters of credit (c)
|
Level 2
|
|
2,482
|
|
|
2,482
|
|
|
2,402
|
|
|
2,402
|
|
||||
Derivatives (trading and other liabilities)
|
Level 2
|
|
87,817
|
|
|
87,817
|
|
|
68,835
|
|
|
68,835
|
|
||||
Derivatives (trading and other liabilities)
|
Level 3
|
|
2,072
|
|
|
2,072
|
|
|
313
|
|
|
313
|
|
|
Actual
|
For Capital Adequacy
Purposes
|
To Be Well Capitalized
Under Prompt Corrective
Action Provisions (b)
|
||||||||||||||
|
Amount
|
Ratio (a)
|
Amount
|
Ratio (a)
|
Amount
|
Ratio (a)
|
|||||||||||
|
($ in Thousands)
|
||||||||||||||||
As of December 31 , 2018
|
|
|
|
|
|
|
|
|
|||||||||
Associated Banc-Corp
|
|
|
|
|
|
|
|
|
|||||||||
Total capital
|
$
|
3,216,575
|
|
13.47
|
%
|
$
|
1,910,022
|
|
≥
|
8.00
|
%
|
|
|
|
|||
Tier 1 capital
|
2,705,939
|
|
11.33
|
%
|
1,432,517
|
|
≥
|
6.00
|
%
|
|
|
|
|||||
Common equity Tier 1 capital
|
2,449,721
|
|
10.26
|
%
|
1,074,388
|
|
≥
|
4.50
|
%
|
|
|
|
|||||
Leverage
|
2,705,939
|
|
8.48
|
%
|
1,276,624
|
|
≥
|
4.00
|
%
|
|
|
|
|||||
Associated Bank, N.A.
|
|
|
|
|
|
|
|
|
|||||||||
Total capital
|
$
|
2,909,064
|
|
12.23
|
%
|
$
|
1,903,155
|
|
≥
|
8.00
|
%
|
$
|
2,378,944
|
|
≥
|
10.00
|
%
|
Tier 1 capital
|
2,646,705
|
|
11.13
|
%
|
1,427,367
|
|
≥
|
6.00
|
%
|
1,903,155
|
|
≥
|
8.00
|
%
|
|||
Common equity Tier 1 capital
|
2,446,782
|
|
10.29
|
%
|
1,070,525
|
|
≥
|
4.50
|
%
|
1,546,314
|
|
≥
|
6.50
|
%
|
|||
Leverage
|
2,646,705
|
|
8.31
|
%
|
1,274,380
|
|
≥
|
4.00
|
%
|
1,592,976
|
|
≥
|
5.00
|
%
|
|||
As of December 31 , 2017
|
|
|
|
|
|
|
|
|
|||||||||
Associated Banc-Corp
|
|
|
|
|
|
|
|
|
|||||||||
Total capital
|
$
|
2,848,851
|
|
13.22
|
%
|
$
|
1,723,557
|
|
≥
|
8.00
|
%
|
|
|
|
|||
Tier 1 capital
|
2,331,245
|
|
10.82
|
%
|
1,292,668
|
|
≥
|
6.00
|
%
|
|
|
|
|||||
Common equity Tier 1 capital
|
2,171,508
|
|
10.08
|
%
|
969,501
|
|
≥
|
4.50
|
%
|
|
|
|
|||||
Leverage
|
2,331,245
|
|
8.02
|
%
|
1,162,929
|
|
≥
|
4.00
|
%
|
|
|
|
|||||
Associated Bank, N.A.
|
|
|
|
|
|
|
|
|
|||||||||
Total capital
|
$
|
2,625,945
|
|
12.24
|
%
|
$
|
1,716,910
|
|
≥
|
8.00
|
%
|
$
|
2,146,138
|
|
≥
|
10.00
|
%
|
Tier 1 capital
|
2,357,354
|
|
10.98
|
%
|
1,287,683
|
|
≥
|
6.00
|
%
|
1,716,910
|
|
≥
|
8.00
|
%
|
|||
Common equity Tier 1 capital
|
2,157,354
|
|
10.05
|
%
|
965,762
|
|
≥
|
4.50
|
%
|
1,394,989
|
|
≥
|
6.50
|
%
|
|||
Leverage
|
2,357,354
|
|
8.13
|
%
|
1,159,959
|
|
≥
|
4.00
|
%
|
1,449,948
|
|
≥
|
5.00
|
%
|
(a)
|
When fully phased-in on January 1, 2019, the Basel III capital rules include a capital conservation buffer of 2.5% that is added on top of each of the minimum risk-based capital ratios noted above. Implementation began on January 1, 2016 at the 0.625% level and has increased each subsequent January 1, until it reaches 2.5% on January 1, 2019.
|
|
For the Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
($ in Thousands, Except Per Share Data)
|
||||||||||
Net income
|
$
|
333,562
|
|
|
$
|
229,264
|
|
|
$
|
200,274
|
|
Preferred stock dividends
|
(10,784
|
)
|
|
(9,347
|
)
|
|
(8,903
|
)
|
|||
Net income available to common equity
|
322,779
|
|
|
219,917
|
|
|
191,371
|
|
|||
Common shareholder dividends
|
(104,981
|
)
|
|
(75,967
|
)
|
|
(67,100
|
)
|
|||
Unvested share-based payment awards
|
(537
|
)
|
|
(450
|
)
|
|
(755
|
)
|
|||
Undistributed earnings
|
217,260
|
|
|
143,500
|
|
|
123,516
|
|
|||
Undistributed earnings allocated to common shareholders
|
216,199
|
|
|
142,593
|
|
|
122,205
|
|
|||
Undistributed earnings allocated to unvested share-based payment awards
|
1,060
|
|
|
907
|
|
|
1,311
|
|
|||
Undistributed earnings
|
$
|
217,260
|
|
|
$
|
143,500
|
|
|
$
|
123,516
|
|
Basic
|
|
|
|
|
|
||||||
Distributed earnings to common shareholders
|
$
|
104,981
|
|
|
$
|
75,967
|
|
|
$
|
67,100
|
|
Undistributed earnings allocated to common shareholders
|
216,199
|
|
|
142,593
|
|
|
122,205
|
|
|||
Total common shareholders earnings, basic
|
$
|
321,181
|
|
|
$
|
218,560
|
|
|
$
|
189,305
|
|
Diluted
|
|
|
|
|
|
||||||
Distributed earnings to common shareholders
|
$
|
104,981
|
|
|
$
|
75,967
|
|
|
$
|
67,100
|
|
Undistributed earnings allocated to common shareholders
|
216,199
|
|
|
142,593
|
|
|
122,205
|
|
|||
Total common shareholders earnings, diluted
|
$
|
321,181
|
|
|
$
|
218,560
|
|
|
$
|
189,305
|
|
Weighted average common shares outstanding
|
$
|
167,345
|
|
|
$
|
150,877
|
|
|
$
|
148,769
|
|
Effect of dilutive common stock awards
|
1,985
|
|
|
2,038
|
|
|
1,192
|
|
|||
Effect of dilutive common stock warrants
|
402
|
|
|
732
|
|
|
—
|
|
|||
Diluted weighted average common shares outstanding
|
$
|
169,732
|
|
|
$
|
153,647
|
|
|
$
|
149,961
|
|
Basic earnings per common share
|
$
|
1.92
|
|
|
$
|
1.45
|
|
|
$
|
1.27
|
|
Diluted earnings per common share
|
$
|
1.89
|
|
|
$
|
1.42
|
|
|
$
|
1.26
|
|
|
Corporate and Commercial Specialty
|
||||||||
|
For the Years Ended December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Net interest income
|
$
|
457,613
|
|
$
|
360,789
|
|
$
|
312,982
|
|
Net intersegment interest income (expense)
|
(56,356
|
)
|
(3,737
|
)
|
15,621
|
|
|||
Segment net interest income
|
401,258
|
|
357,051
|
|
328,603
|
|
|||
Noninterest income
|
52,321
|
|
52,297
|
|
47,776
|
|
|||
Total revenue
|
453,578
|
|
409,348
|
|
376,379
|
|
|||
Credit provision (a)
|
44,592
|
|
42,298
|
|
50,397
|
|
|||
Noninterest expense
|
160,399
|
|
156,890
|
|
148,493
|
|
|||
Income (loss) before income taxes
|
248,587
|
|
210,160
|
|
177,489
|
|
|||
Income tax expense (benefit)
|
47,850
|
|
71,655
|
|
59,261
|
|
|||
Net income
|
$
|
200,737
|
|
$
|
138,505
|
|
$
|
118,228
|
|
Return on average allocated capital (ROCET1) (b)
|
16.60
|
%
|
12.39
|
%
|
11.04
|
%
|
|||
|
|
|
|
||||||
Average earning assets
|
$
|
11,852,662
|
|
$
|
10,820,998
|
|
$
|
10,178,813
|
|
Average loans
|
11,841,818
|
|
10,811,827
|
|
10,169,300
|
|
|||
Average deposits
|
8,112,430
|
|
6,938,913
|
|
5,904,238
|
|
|||
Average allocated capital (CETI)(b)
|
1,209,558
|
|
1,117,761
|
|
1,070,598
|
|
|||
Allocated goodwill
|
524,525
|
|
428,000
|
|
428,000
|
|
|
Community, Consumer, and Business
|
||||||||
|
For the Years Ended December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Net interest income
|
$
|
357,245
|
|
$
|
316,008
|
|
$
|
306,913
|
|
Net intersegment interest income (expense)
|
87,737
|
|
45,353
|
|
43,639
|
|
|||
Segment net interest income
|
444,982
|
|
361,361
|
|
350,551
|
|
|||
Noninterest income
|
295,647
|
|
266,250
|
|
277,942
|
|
|||
Total revenue
|
740,629
|
|
627,611
|
|
628,493
|
|
|||
Credit provision(a)
|
20,083
|
|
20,400
|
|
24,185
|
|
|||
Noninterest expense
|
542,117
|
|
490,908
|
|
502,285
|
|
|||
Income (loss) before income taxes
|
178,429
|
|
116,303
|
|
102,023
|
|
|||
Income tax expense (benefit)
|
37,476
|
|
40,706
|
|
35,708
|
|
|||
Net income
|
$
|
140,953
|
|
$
|
75,597
|
|
$
|
66,315
|
|
Return on average allocated capital (ROCET1)(b)
|
21.57
|
%
|
12.89
|
%
|
10.53
|
%
|
|||
|
|
|
|
||||||
Average earning assets
|
$
|
10,336,105
|
|
$
|
9,456,549
|
|
$
|
9,309,028
|
|
Average loans
|
10,332,665
|
|
9,452,253
|
|
9,307,723
|
|
|||
Average deposits
|
13,623,852
|
|
11,711,407
|
|
11,451,759
|
|
|||
Average allocated capital (CETI)(b)
|
653,354
|
|
586,417
|
|
629,540
|
|
|||
Allocated goodwill
|
644,498
|
|
548,238
|
|
543,951
|
|
|
Risk Management and Shared Services
|
||||||||
|
For the Years Ended December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Net interest income
|
$
|
64,722
|
|
$
|
64,423
|
|
$
|
87,378
|
|
Net intersegment interest income (expense)
|
(31,382
|
)
|
(41,615
|
)
|
(59,259
|
)
|
|||
Segment net interest income
|
33,341
|
|
22,808
|
|
28,119
|
|
|||
Noninterest income
|
7,600
|
|
14,133
|
|
27,165
|
|
|||
Total revenue
|
40,941
|
|
36,941
|
|
55,284
|
|
|||
Credit provision(a)
|
(64,675
|
)
|
(36,698
|
)
|
(4,582
|
)
|
|||
Noninterest expense(c)
|
119,283
|
|
61,335
|
|
51,782
|
|
|||
Income (loss) before income taxes
|
(13,668
|
)
|
12,304
|
|
8,084
|
|
|||
Income tax expense (benefit)
|
(5,540
|
)
|
(2,858
|
)
|
(7,647
|
)
|
|||
Net income
|
$
|
(8,128
|
)
|
$
|
15,162
|
|
$
|
15,731
|
|
Return on average allocated capital (ROCET1)(b)
|
(3.19
|
)%
|
1.44
|
%
|
2.84
|
%
|
|||
|
|
|
|
||||||
Average earning assets
|
$
|
7,861,026
|
|
$
|
6,722,337
|
|
$
|
6,538,820
|
|
Average loans
|
543,814
|
|
328,303
|
|
173,644
|
|
|||
Average deposits
|
2,335,768
|
|
3,273,282
|
|
3,649,775
|
|
|||
Average allocated capital (CETI)(b)
|
592,006
|
|
405,281
|
|
240,253
|
|
|||
Allocated goodwill
|
—
|
|
—
|
|
—
|
|
|
Consolidated Total
|
||||||||
|
For the Years Ended December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Net interest income
|
$
|
879,580
|
|
$
|
741,220
|
|
$
|
707,273
|
|
Net intersegment interest income (expense)
|
—
|
|
—
|
|
—
|
|
|||
Segment net interest income
|
879,580
|
|
741,220
|
|
707,273
|
|
|||
Noninterest income
|
355,568
|
|
332,680
|
|
352,883
|
|
|||
Total revenue
|
1,235,148
|
|
1,073,900
|
|
1,060,156
|
|
|||
Credit provision(a)
|
—
|
|
26,000
|
|
70,000
|
|
|||
Noninterest expense
|
821,799
|
|
709,133
|
|
702,560
|
|
|||
Income (loss) before income taxes
|
413,349
|
|
338,767
|
|
287,596
|
|
|||
Income tax expense (benefit)
|
79,786
|
|
109,503
|
|
87,322
|
|
|||
Net income
|
$
|
333,562
|
|
$
|
229,264
|
|
$
|
200,274
|
|
Return on average allocated capital (ROCET1)(b)
|
13.15
|
%
|
10.43
|
%
|
9.86
|
%
|
|||
|
|
|
|
||||||
Average earning assets
|
$
|
30,049,793
|
|
$
|
26,999,884
|
|
$
|
26,026,661
|
|
Average loans
|
22,718,297
|
|
20,592,383
|
|
19,650,667
|
|
|||
Average deposits
|
24,072,049
|
|
21,923,602
|
|
21,005,772
|
|
|||
Average allocated capital (CETI)(b)
|
2,454,919
|
|
2,109,459
|
|
1,940,391
|
|
|||
Allocated goodwill
|
1,169,023
|
|
976,239
|
|
971,951
|
|
(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. Average allocated capital represents average common equity Tier 1, as defined by the Federal Reserve. For segment reporting purposes, the ROCET1, a non-GAAP financial measure, reflects return on average allocated common equity Tier 1 (“CET1”). 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.
|
(c)
|
For the year ended December 31, 2018, the Risk Management and Shared Services segment includes approximately $29 million of acquisition related costs within noninterest expense and approximately $2 million of acquisition related asset losses, net of asset gains within noninterest income.
|
|
Investments
Securities
Available
For Sale
|
Defined Benefit
Pension and
Postretirement
Obligations
|
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||
|
($ in Thousands)
|
||||||||
Balance, December 31, 2015
|
$
|
459
|
|
$
|
(33,075
|
)
|
$
|
(32,616
|
)
|
Other comprehensive income (loss) before reclassifications
|
(17,900
|
)
|
(6,141
|
)
|
(24,041
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
|
|
||||||
Investment securities losses (gains), net
|
(9,316
|
)
|
—
|
|
(9,316
|
)
|
|||
Personnel expense
|
—
|
|
(73
|
)
|
(73
|
)
|
|||
Other expense
|
—
|
|
3,874
|
|
3,874
|
|
|||
Interest income (amortization of net unrealized losses (gains) on available for sale securities transferred to held to maturity securities)
|
(5,887
|
)
|
—
|
|
(5,887
|
)
|
|||
Income tax (expense) benefit
|
12,565
|
|
815
|
|
13,380
|
|
|||
Net other comprehensive income (loss) during period
|
(20,538
|
)
|
(1,525
|
)
|
(22,063
|
)
|
|||
Balance, December 31, 2016
|
$
|
(20,079
|
)
|
$
|
(34,600
|
)
|
$
|
(54,679
|
)
|
Other comprehensive income (loss) before reclassifications
|
(27,040
|
)
|
14,273
|
|
(12,767
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
|
|
||||||
Personnel expense
|
—
|
|
(148
|
)
|
(148
|
)
|
|||
Other expense
|
—
|
|
2,282
|
|
2,282
|
|
|||
Interest income (amortization of net unrealized losses (gains) on available for sale securities transferred to held to maturity securities)
|
(2,665
|
)
|
—
|
|
(2,665
|
)
|
|||
Income tax (expense) benefit
|
11,331
|
|
(6,112
|
)
|
5,219
|
|
|||
Net other comprehensive income (loss) during period
|
(18,374
|
)
|
10,295
|
|
(8,079
|
)
|
|||
Balance, December 31, 2017
|
$
|
(38,453
|
)
|
$
|
(24,305
|
)
|
$
|
(62,758
|
)
|
Other comprehensive income (loss) before reclassifications
|
(39,891
|
)
|
(28,612
|
)
|
(68,503
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
|
|
||||||
Investment securities losses (gains), net
|
1,985
|
|
—
|
|
1,985
|
|
|||
Personnel expense
|
—
|
|
(148
|
)
|
(148
|
)
|
|||
Other expense
|
—
|
|
2,203
|
|
2,203
|
|
|||
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)
|
(572
|
)
|
—
|
|
(572
|
)
|
|||
Income tax (expense) benefit
|
9,791
|
|
6,767
|
|
16,558
|
|
|||
Net other comprehensive income (loss) during period
|
(37,189
|
)
|
(25,025
|
)
|
(62,214
|
)
|
|||
Balance, December 31, 2018
|
$
|
(75,643
|
)
|
$
|
(49,330
|
)
|
$
|
(124,972
|
)
|
|
Corporate and Commercial Specialty
|
||||||||
|
For the Years Ended December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Insurance commissions and fees
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Service charges and deposit account fees
|
14,981
|
|
16,006
|
|
15,378
|
|
|||
Card-based and loan fees(a)
|
1,343
|
|
1,163
|
|
740
|
|
|||
Trust and asset management fees
|
—
|
|
—
|
|
—
|
|
|||
Brokerage and advisory fees
|
—
|
|
—
|
|
—
|
|
|||
Other revenue
|
685
|
|
772
|
|
(1,096
|
)
|
|||
Noninterest Income (in-scope of Topic 606)
|
$
|
17,009
|
|
$
|
17,941
|
|
$
|
15,022
|
|
Noninterest Income (out-of-scope of Topic 606)
|
35,311
|
|
34,355
|
|
32,754
|
|
|||
Total Noninterest Income
|
$
|
52,321
|
|
$
|
52,297
|
|
$
|
47,776
|
|
|
Community, Consumer, and Business
|
||||||||
|
For the Years Ended December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Insurance commissions and fees
|
$
|
89,472
|
|
$
|
81,468
|
|
$
|
80,795
|
|
Service charges and deposit account fees
|
51,025
|
|
48,344
|
|
51,047
|
|
|||
Card-based and loan fees(a)
|
39,883
|
|
34,695
|
|
33,765
|
|
|||
Trust and asset management fees
|
54,316
|
|
50,191
|
|
46,866
|
|
|||
Brokerage and advisory fees
|
28,024
|
|
19,935
|
|
16,235
|
|
|||
Other revenue
|
9,643
|
|
9,249
|
|
8,556
|
|
|||
Noninterest Income (in-scope of Topic 606)
|
$
|
272,363
|
|
$
|
243,883
|
|
$
|
237,265
|
|
Noninterest Income (out-of-scope of Topic 606)
|
23,284
|
|
22,367
|
|
40,677
|
|
|||
Total Noninterest Income
|
$
|
295,647
|
|
$
|
266,250
|
|
$
|
277,942
|
|
|
Risk Management and Share Services
|
||||||||
|
For the Years Ended December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Insurance commissions and fees
|
$
|
39
|
|
$
|
6
|
|
$
|
—
|
|
Service charges and deposit account fees
|
69
|
|
77
|
|
184
|
|
|||
Card-based and loan fees(a)
|
98
|
|
23
|
|
22
|
|
|||
Trust and asset management fees
|
—
|
|
—
|
|
—
|
|
|||
Brokerage and advisory fees
|
222
|
|
—
|
|
—
|
|
|||
Other revenue
|
283
|
|
245
|
|
158
|
|
|||
Noninterest Income (in-scope of Topic 606)
|
$
|
712
|
|
$
|
351
|
|
$
|
364
|
|
Noninterest Income (out-of-scope of Topic 606)
|
6,889
|
|
13,783
|
|
26,801
|
|
|||
Total Noninterest Income
|
$
|
7,600
|
|
$
|
14,133
|
|
$
|
27,165
|
|
|
Consolidated Total
|
||||||||
|
For the Years Ended December 31,
|
||||||||
|
2018
|
2017
|
2016
|
||||||
|
($ in Thousands)
|
||||||||
Insurance commissions and fees
|
$
|
89,511
|
|
$
|
81,474
|
|
$
|
80,795
|
|
Service charges and deposit account fees
|
66,075
|
|
64,427
|
|
66,609
|
|
|||
Card-based and loan fees(a)
|
41,325
|
|
35,881
|
|
34,527
|
|
|||
Trust and asset management fees
|
54,316
|
|
50,191
|
|
46,867
|
|
|||
Brokerage and advisory fees
|
28,246
|
|
19,935
|
|
16,235
|
|
|||
Other revenue
|
10,611
|
|
10,267
|
|
7,617
|
|
|||
Noninterest Income (in-scope of Topic 606)
|
$
|
290,084
|
|
$
|
262,175
|
|
$
|
252,651
|
|
Noninterest Income (out-of-scope of Topic 606)
|
65,483
|
|
70,505
|
|
100,232
|
|
|||
Total Noninterest Income
|
$
|
355,568
|
|
$
|
332,680
|
|
$
|
352,883
|
|
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 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 the 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 and advisory fees
|
|
Brokerage and advisory 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 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
December 31, 2018
|
(a)
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights |
|
(b)
Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights |
|
(c)
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) |
||||
Plan Category
|
|
|
|
|
|
||||
Equity compensation plan approved by security holders
|
5,280,908
|
|
|
$
|
19.09
|
|
|
11,619,336
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
5,280,908
|
|
|
$
|
19.09
|
|
|
11,619,336
|
|
December 31, 2017
|
(a)
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights |
|
(b)
Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights |
|
(c)
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) |
||||
Plan Category
|
|
|
|
|
|
||||
Equity compensation plan approved by security holders
|
5,118,687
|
|
|
$
|
18.02
|
|
|
13,964,511
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
5,118,687
|
|
|
$
|
18.02
|
|
|
13,964,511
|
|
December 31, 2016
|
(a)
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights |
|
(b)
Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights |
|
(c)
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) |
||||
Plan Category
|
|
|
|
|
|
||||
Equity compensation plan approved by security holders
|
6,357,843
|
|
|
$
|
17.67
|
|
|
7,390,136
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
6,357,843
|
|
|
$
|
17.67
|
|
|
7,390,136
|
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
Exhibit
Number
|
Description
|
|
|
|
|
*(10)(d)
|
Associated Banc-Corp Deferred Compensation Plan
|
|
|
|
|
*(10)(e)
|
Associated Banc-Corp Directors’ Deferred Compensation Plan, Restated Effective December 4, 2018
|
|
|
|
|
*(10)(f)
|
Associated Banc-Corp Deferred Compensation Plan, Restated Effective November 16, 2015
|
|
|
|
|
*(10)(g)
|
Amendment to Associated Banc-Corp 2003 Long-Term Incentive Stock Plan effective November 15, 2009
|
|
|
|
|
*(10)(h)
|
Associated Banc-Corp 2010 Incentive Compensation Plan
|
|
|
|
|
*(10)(i)
|
Associated Banc-Corp 2013 Incentive Compensation Plan
|
|
|
|
|
*(10)(j)
|
Associated Banc-Corp 2017 Incentive Compensation Plan
|
|
|
|
|
*(10)(k)
|
Form of Non-Qualified Stock Option Agreement
|
|
|
|
|
*(10)(l)
|
Associated Banc-Corp Change of Control Plan, Restated Effective September 28, 2011
|
|
|
|
|
*(10)(m)
|
Associated Banc-Corp Supplemental Executive Retirement Plan for Philip B. Flynn
|
|
|
|
|
*(10)(n)
|
Form of Performance-Based Restricted Stock Unit Agreement
|
|
|
|
|
*(10)(o)
|
Supplemental Executive Retirement Plan, Restated Effective January 22, 2013
|
|
|
|
|
*(10)(p)
|
Supplemental Executive Retirement Plan, Restated Effective November 16, 2015
|
|
|
|
|
*(10)(q)
|
Form of 2013 Incentive Compensation Plan Restricted Unit Agreement
|
|
|
|
|
*(10)(r)
|
Form of Amendment to 2013 Incentive Compensation Plan Restricted Unit Agreement
|
|
|
|
|
*(10)(s)
|
James K. Simons Separation Agreement and General Release dated August 4, 2017
|
|
|
|
|
*(10)(t)
|
Form of Change of Control Agreement, by and among Associated Banc-Corp and the executive officers of Associated Banc-Corp.
|
|
|
|
|
*(10)(u)
|
Form of Associated Banc-Corp 2017 Incentive Compensation Plan Restricted Stock Agreement
|
|
|
|
|
*(10)(v)
|
Retirement Agreement dated July 25, 2018 between Associated Banc-Corp and James S. Payne
|
|
|
|
|
(21)
|
Subsidiaries of Associated Banc-Corp
|
|
|
|
|
(23)
|
Consent of Independent Registered Public Accounting Firm
|
|
|
|
|
(24)
|
Powers of Attorney
|
|
|
|
|
(31.1)
|
Certification Under Section 302 of Sarbanes-Oxley by Philip B. Flynn, Chief Executive Officer
|
|
|
|
|
(31.2)
|
Certification Under Section 302 of Sarbanes-Oxley by Christopher J. Del Moral-Niles, Chief Financial Officer
|
|
|
|
|
(32)
|
Certification by the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of Sarbanes-Oxley.
|
|
|
|
|
(101)
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.
|
Filed herewith
|
*
|
Management contracts and arrangements.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
|
ASSOCIATED BANC-CORP
|
|
|
|
|
|
Date: February 19, 2019
|
|
By:
|
/s/ Philip B. Flynn
|
|
|
|
Philip B. Flynn
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ Philip B. Flynn
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
|
February 19, 2019
|
Philip B. Flynn
|
|
|
||
|
|
|
||
/s/ Christopher J. Del Moral-Niles
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
February 19, 2019
|
Christopher J. Del Moral-Niles
|
|
|
||
|
|
|
|
|
/s/ Tammy C. Stadler
|
|
Principal Accounting Officer
|
|
February 19, 2019
|
Tammy C. Stadler
|
|
|
By:
|
|
/s/ Randall J. Erickson
|
|
|
Randall J. Erickson
|
|
|
As Attorney-In-Fact*
|
*
|
Pursuant to authority granted by powers of attorney, copies of which are filed herewith.
|
|
|
|
Date: February 19, 2019
|
|
/s/ Philip B. Flynn
|
|
|
Philip B. Flynn
|
|
|
President and Chief Executive Officer
|
|
|
|
Date: February 19, 2019
|
|
/s/ Christopher J. Del Moral-Niles
|
|
|
Christopher J. Del Moral-Niles
|
|
|
Chief Financial Officer
|
|
|
|
/s/ Philip B. Flynn
|
|
Philip B. Flynn
|
|
Chief Executive Officer
|
|
February 19, 2019
|
|
|
|
/s/ Christopher J. Del Moral-Niles
|
|
Christopher J. Del Moral-Niles
|
|
Chief Financial Officer
|
|
February 19, 2019
|