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Michigan
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38-2022454
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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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235 E. Main Street
Midland, Michigan
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48640
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(Address of Principal Executive Offices)
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(Zip Code)
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Common Stock, $1 Par Value Per Share
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The NASDAQ Stock Market
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(Title of Class)
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(Name of each exchange on which registered)
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Page
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December 31,
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|||||||||||||||||||
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2016
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2015
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2014
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|||||||||||||||
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Amount
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Percent of Total
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Amount
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Percent of Total
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Amount
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Percent of Total
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|||||||||
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(Dollars in thousands)
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|||||||||||||||||||
Composition of Loans:
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|||||||||
Commercial
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$
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3,217,300
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25
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%
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$
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1,905,879
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26
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%
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$
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1,354,881
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24
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%
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Commercial real estate
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3,973,140
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30
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2,112,162
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29
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1,557,648
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27
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Real estate construction and land development
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403,772
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3
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232,076
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3
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171,495
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3
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Residential mortgage
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3,086,474
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24
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1,429,636
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20
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1,110,390
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19
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Consumer installment
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1,433,884
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11
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877,457
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12
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829,570
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15
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Home equity
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876,209
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7
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713,937
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10
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664,246
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12
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|||
Total composition of loans
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$
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12,990,779
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100
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%
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$
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7,271,147
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100
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%
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$
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5,688,230
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100
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%
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Leverage Ratio
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Common Equity Tier 1 Capital Ratio
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Tier 1 Risk-Based Capital Ratio
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Total Risk-Based Capital Ratio
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Actual Capital Ratios:
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Chemical Financial Corporation
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9.0%
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10.7%
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10.7%
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11.5%
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Chemical Bank
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9.5%
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11.4%
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11.4%
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12.0%
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Minimum for capital adequacy purposes
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4.0%
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4.5%
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6.0%
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8.0%
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Minimum to be well capitalized under prompt corrective action regulations
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5.0%
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6.5%
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8.0%
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10.0%
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Minimum for capital adequacy, including capital conservation buffer
(1)
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4.0%
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7.0%
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8.5%
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10.5%
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•
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Variations in quarterly or annual results of operations
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•
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Changes in dividends paid per share
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•
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Deterioration in asset quality, including declining real estate values
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•
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Changes in interest rates
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•
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Significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by, or involving, the Corporation or its competitors
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•
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Failure to integrate acquisitions or realize anticipated benefits from acquisitions
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•
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Regulatory actions, including changes to regulatory capital levels, the components of regulatory capital and how regulatory capital is calculated
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•
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New regulations that limit or significantly change the Corporation's ability to continue to offer existing banking products
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•
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Volatility of stock market prices and volumes
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•
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Issuance of additional shares of common stock or other debt or equity securities of the Corporation
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•
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Changes in market valuations of similar companies
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•
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Uncertainties, disruptions and fluctuations in the credit and financial markets, either nationally or globally
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•
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Changes in securities analysts' estimates of financial performance or recommendations
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•
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New litigation or contingencies or changes in existing litigation or contingencies
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•
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New technology used, or services offered, by competitors
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•
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Breaches in information security systems of the Corporation and/or its customers and competitors
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•
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Changes in accounting policies or procedures required by standard setting or other regulatory agencies
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•
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New developments in the financial services industry
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•
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News reports relating to trends, concerns and other issues in the financial services industry
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•
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Perceptions in the marketplace regarding the financial services industry, the Corporation and/or its competitors
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•
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Rumors or erroneous information
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•
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Geopolitical conditions such as acts or threats of terrorism or military conflicts
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•
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Delay in completing an acquisition or merger due to litigation or the regulatory approval process
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•
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The recording of assets and liabilities of the acquired or merged company at fair value may materially dilute shareholder value at the transaction date and could have a material adverse effect on the Corporation's financial condition and results of operations
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•
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The time and costs associated with identifying and evaluating potential acquisition or merger targets
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•
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Potential exposure to unknown or contingent liabilities of the acquired or merged company
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•
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The estimates and judgments used to evaluate credit, operations, management and market risks with respect to the acquired or merged company may not be accurate
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•
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Exposure to potential asset quality issues of the acquired or merged company
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•
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The time and costs of evaluating new markets, hiring experienced local management and opening new offices, and the time lags between these activities and the generation of sufficient assets and deposits to support the costs of the expansion
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•
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The diversion of the Corporation's management's attention to the negotiation of a transaction, and the integration of the operations and personnel of the combining businesses
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•
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The introduction of new products and services into the Corporation's business
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•
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Potential disruption to the Corporation's business
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•
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The incurrence and possible impairment of goodwill and other intangible assets associated with an acquisition or merger and possible adverse short-term effects on the Corporation's results of operations
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•
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The possible loss of key employees and customers of the acquired or merged company
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•
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Difficulty in estimating the value of the acquired or merged company
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•
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Potential changes in banking or tax laws or regulations that may affect the acquired or merged company
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•
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Difficulty or unanticipated expense associated with converting the operating systems of the acquired or merged company to those of the Corporation
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•
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Supervision, examination and enforcement by the CFPB with respect to consumer financial protection laws;
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•
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Regulatory stress testing requirements, whereby the Corporation would be required to conduct an annual stress test (using assumptions for baseline, adverse and severely adverse scenarios);
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•
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A modified methodology for calculating FDIC insurance assessments and potentially higher assessment rates as a result of institutions with $10 billion or more in assets being required to bear a greater portion of the cost of raising the reserve ratio to 1.35% as required by the Dodd-Frank Act;
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•
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Heightened compliance standards under the Volcker Rule;
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Enhanced supervision as a larger financial institution; and
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Under the Durbin Amendment to the Dodd-Frank Act, institutions with $10 billion or more in assets are subject to a cap on the interchange fees that may be charged in certain electronic debit and prepaid card transactions. The maximum permissible interchange fee for electronic debit transactions is the sum of 21 cents per transaction and 5 basis points multiplied by the value of the transaction. In addition, an issuer may charge up to 1 cent on each transaction as a fraud prevention adjustment if the issuer meets certain fraud prevention standards.
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•
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The ability to develop, maintain and build long-term customer relationships based on quality service, high ethical standards and safe, sound assets
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•
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The ability to expand the Corporation's market position
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•
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The ability to keep up-to-date with technological advancements in both delivering new products and maintaining existing products, while continuing to invest in cybersecurity and control operating costs
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•
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The scope, relevance and pricing of products and services offered to meet customer needs and demands
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•
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The rate at which the Corporation introduces new products and services relative to its competitors
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•
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Customer satisfaction with the Corporation's level of service
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•
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Industry and general economic trends
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2016
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2015
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||||||||||||
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High
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Low
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High
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Low
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||||||||
First quarter
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$
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36.45
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$
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29.40
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$
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31.56
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$
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28.16
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Second quarter
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40.14
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34.29
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34.27
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29.73
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Third quarter
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47.62
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35.73
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34.49
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30.09
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Fourth quarter
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55.55
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40.93
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37.26
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30.98
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Years Ended December 31,
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2016
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2015
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2014
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2013
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2012
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||||||||||
First quarter
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$
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0.26
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$
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0.24
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$
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0.23
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$
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0.21
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$
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0.20
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Second quarter
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0.26
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0.24
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0.23
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|
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0.21
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|
|
0.20
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|||||
Third quarter
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0.27
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0.26
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0.24
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0.22
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|
|
0.21
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|||||
Fourth quarter
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0.27
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0.26
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0.24
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0.23
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0.21
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|||||
Total
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$
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1.06
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$
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1.00
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$
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0.94
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$
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0.87
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$
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0.82
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December 31,
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2011
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2012
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2013
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2014
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2015
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|
2016
|
||||||||||||
Chemical Financial Corporation
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$
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100.00
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|
|
$
|
115.71
|
|
|
$
|
159.28
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|
|
$
|
159.16
|
|
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$
|
183.67
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$
|
297.64
|
|
KBW Nasdaq Regional Banking Index
|
|
100.00
|
|
|
113.25
|
|
|
166.31
|
|
|
170.34
|
|
|
180.41
|
|
|
250.80
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|
||||||
S&P 500 Stock Index
|
|
100.00
|
|
|
116.00
|
|
|
153.57
|
|
|
174.60
|
|
|
177.01
|
|
|
198.18
|
|
|
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Issuer Purchases of Equity Securities
|
||||||||||
Period
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced
Plans or Programs
|
|
Maximum Number of Shares that May Yet Be Purchased Under
Plans or Programs
|
||||
October 1, 2016 to October 31, 2016
|
|
103,505
|
|
|
$
|
44.03
|
|
|
—
|
|
|
500,000
|
November 1, 2016 to November 30, 2016
|
|
21,086
|
|
|
50.03
|
|
|
—
|
|
|
500,000
|
|
December 1, 2016 to December 31, 2016
|
|
2,147
|
|
|
52.76
|
|
|
—
|
|
|
500,000
|
|
Total
|
|
126,738
|
|
|
$
|
45.18
|
|
|
—
|
|
|
|
(1)
|
Represents shares delivered or attested in satisfaction of the exercise price and/or tax withholding obligations by employees who received shares of the Corporation's common stock in
2016
under the Corporation's share-based compensation plans, as these plans permit employees to use the Corporation's stock to satisfy such obligations based on the market value of the Corporation's stock on the date of vesting or date of exercise, as applicable.
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|
|
As of and for the years ended December 31,
|
||||||||||||||||||
(Dollars in thousands, except per share data)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Earnings Summary
|
|
|
|
|
|
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|
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|
||||||||||
Interest income
|
|
$
|
410,379
|
|
|
$
|
291,789
|
|
|
$
|
227,261
|
|
|
$
|
214,061
|
|
|
$
|
210,758
|
|
Interest expense
|
|
29,298
|
|
|
17,781
|
|
|
14,710
|
|
|
17,414
|
|
|
23,213
|
|
|||||
Net interest income
|
|
381,081
|
|
|
274,008
|
|
|
212,551
|
|
|
196,647
|
|
|
187,545
|
|
|||||
Provision for loan losses
|
|
14,875
|
|
|
6,500
|
|
|
6,100
|
|
|
11,000
|
|
|
18,500
|
|
|||||
Noninterest income
|
|
122,350
|
|
|
80,216
|
|
|
63,095
|
|
|
60,409
|
|
|
54,684
|
|
|||||
Operating expenses
|
|
338,418
|
|
|
223,894
|
|
|
179,925
|
|
|
164,948
|
|
|
151,921
|
|
|||||
Income before income taxes
|
|
150,138
|
|
|
123,830
|
|
|
89,621
|
|
|
81,108
|
|
|
71,808
|
|
|||||
Income tax expense
|
|
42,106
|
|
|
37,000
|
|
|
27,500
|
|
|
24,300
|
|
|
20,800
|
|
|||||
Net income
|
|
108,032
|
|
|
86,830
|
|
|
62,121
|
|
|
56,808
|
|
|
51,008
|
|
|||||
Per Common Share Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per common share
|
|
$
|
2.21
|
|
|
$
|
2.41
|
|
|
$
|
1.98
|
|
|
$
|
2.02
|
|
|
$
|
1.86
|
|
Diluted earnings per common share
|
|
2.17
|
|
|
2.39
|
|
|
1.97
|
|
|
2.00
|
|
|
1.85
|
|
|||||
Cash dividends declared and paid
|
|
1.06
|
|
|
1.00
|
|
|
0.94
|
|
|
0.87
|
|
|
0.82
|
|
|||||
Book value at end of period
|
|
36.57
|
|
|
26.62
|
|
|
24.32
|
|
|
23.38
|
|
|
21.69
|
|
|||||
Tangible book value per share
(1)
|
|
20.20
|
|
|
18.73
|
|
|
18.57
|
|
|
19.17
|
|
|
17.03
|
|
|||||
Market value at end of period
|
|
54.17
|
|
|
34.27
|
|
|
30.64
|
|
|
31.67
|
|
|
23.76
|
|
|||||
Common shares outstanding (in thousands)
|
|
70,599
|
|
|
38,168
|
|
|
32,774
|
|
|
29,790
|
|
|
27,499
|
|
|||||
Average diluted common shares (in thousands)
|
|
49,603
|
|
|
36,353
|
|
|
31,588
|
|
|
28,352
|
|
|
27,583
|
|
|||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
17,355,179
|
|
|
$
|
9,188,797
|
|
|
$
|
7,322,143
|
|
|
$
|
6,184,708
|
|
|
$
|
5,917,252
|
|
Investment securities
|
|
1,858,391
|
|
|
1,063,702
|
|
|
1,065,277
|
|
|
958,475
|
|
|
816,786
|
|
|||||
Total loans
|
|
12,990,779
|
|
|
7,271,147
|
|
|
5,688,230
|
|
|
4,647,621
|
|
|
4,167,735
|
|
|||||
Total deposits
|
|
12,873,122
|
|
|
7,456,767
|
|
|
6,078,971
|
|
|
5,122,385
|
|
|
4,921,443
|
|
|||||
Total liabilities
|
|
14,773,653
|
|
|
8,172,823
|
|
|
6,525,010
|
|
|
5,488,208
|
|
|
5,320,911
|
|
|||||
Total shareholders' equity
|
|
2,581,526
|
|
|
1,015,974
|
|
|
797,133
|
|
|
696,500
|
|
|
596,341
|
|
|||||
Tangible shareholders' equity
(1)
|
|
1,425,998
|
|
|
714,901
|
|
|
606,419
|
|
|
571,947
|
|
|
466,168
|
|
|||||
Balance Sheet Averages
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
12,037,155
|
|
|
$
|
8,481,228
|
|
|
$
|
6,473,144
|
|
|
$
|
5,964,592
|
|
|
$
|
5,442,079
|
|
Total earning assets
|
|
10,856,795
|
|
|
7,851,134
|
|
|
6,095,064
|
|
|
5,628,969
|
|
|
5,116,127
|
|
|||||
Total loans
|
|
9,304,573
|
|
|
6,583,846
|
|
|
4,976,563
|
|
|
4,355,152
|
|
|
3,948,407
|
|
|||||
Total deposits
|
|
9,397,562
|
|
|
6,958,667
|
|
|
5,339,422
|
|
|
4,964,082
|
|
|
4,464,062
|
|
|||||
Total interest-bearing liabilities
|
|
7,821,366
|
|
|
5,704,205
|
|
|
4,349,977
|
|
|
4,181,921
|
|
|
3,868,108
|
|
|||||
Total shareholders' equity
|
|
1,546,721
|
|
|
919,328
|
|
|
754,211
|
|
|
626,555
|
|
|
587,451
|
|
|||||
Performance Ratios
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest margin
|
|
3.51
|
%
|
|
3.49
|
%
|
|
3.49
|
%
|
|
3.49
|
%
|
|
3.67
|
%
|
|||||
Net interest margin (fully taxable equivalent)
(2)
|
|
3.60
|
|
|
3.58
|
|
|
3.59
|
|
|
3.59
|
|
|
3.76
|
|
|||||
Return on average assets
|
|
0.90
|
|
|
1.02
|
|
|
0.96
|
|
|
0.95
|
|
|
0.94
|
|
|||||
Return on average shareholders' equity
|
|
7.0
|
|
|
9.4
|
|
|
8.2
|
|
|
9.1
|
|
|
8.7
|
|
|||||
Efficiency ratio
|
|
54.4
|
|
|
58.7
|
|
|
61.6
|
|
|
63.1
|
|
|
60.8
|
|
|||||
Dividend payout ratio
|
|
48.8
|
|
|
41.8
|
|
|
47.7
|
|
|
43.5
|
|
|
44.3
|
|
|||||
Consolidated Capital Ratios
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Shareholders' equity as a percentage of total assets
|
|
14.9
|
%
|
|
11.1
|
%
|
|
10.9
|
%
|
|
11.3
|
%
|
|
10.1
|
%
|
|||||
Tangible shareholders' equity as a percentage of tangible assets
(1)
|
|
8.8
|
|
|
8.0
|
|
|
8.5
|
|
|
9.4
|
|
|
8.1
|
|
|||||
Year end ratios:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tangible equity to tangible assets ratio
(1)
|
|
8.1
|
|
|
8.1
|
|
|
8.4
|
|
|
9.4
|
|
|
8.1
|
|
|||||
Common equity tier 1 capital
(3)
|
|
10.7
|
|
|
10.6
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||||
Tier 1 leverage ratio
(3)
|
|
9.0
|
|
|
8.6
|
|
|
9.3
|
|
|
9.9
|
|
|
9.2
|
|
|||||
Tier 1 risk-based capital ratio
(3)
|
|
10.7
|
|
|
10.7
|
|
|
11.1
|
|
|
12.7
|
|
|
12.0
|
|
|||||
Total risk-based capital ratio
(3)
|
|
11.5
|
|
|
11.8
|
|
|
12.4
|
|
|
14.0
|
|
|
13.2
|
|
|||||
Asset Quality
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loan charge-offs
|
|
$
|
9,935
|
|
|
$
|
8,855
|
|
|
$
|
9,489
|
|
|
$
|
16,419
|
|
|
$
|
22,342
|
|
Net loan charge-offs as a percentage of average loans
|
|
0.11
|
%
|
|
0.13
|
%
|
|
0.19
|
%
|
|
0.38
|
%
|
|
0.57
|
%
|
|||||
Year end balances:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses — originated loans
|
|
$
|
78,268
|
|
|
$
|
73,328
|
|
|
$
|
75,183
|
|
|
$
|
78,572
|
|
|
$
|
83,991
|
|
Allowance for loan losses — acquired loans
|
|
—
|
|
|
—
|
|
|
500
|
|
|
500
|
|
|
500
|
|
|||||
Total nonperforming loans
|
|
44,334
|
|
|
62,225
|
|
|
50,644
|
|
|
61,897
|
|
|
71,298
|
|
|||||
Total nonperforming assets
|
|
61,521
|
|
|
72,160
|
|
|
64,849
|
|
|
71,673
|
|
|
89,767
|
|
|||||
Year end ratios:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses as a percentage of total originated loans
|
|
1.05
|
%
|
|
1.26
|
%
|
|
1.51
|
%
|
|
1.81
|
%
|
|
2.22
|
%
|
|||||
Allowance for loan losses as a percentage of nonperforming loans
|
|
176.5
|
|
|
117.8
|
|
|
148.5
|
|
|
126.9
|
|
|
117.8
|
|
|||||
Nonperforming loans as a percentage of total loans
|
|
0.34
|
|
|
0.86
|
|
|
0.89
|
|
|
1.33
|
|
|
1.71
|
|
|||||
Nonperforming assets as a percentage of total assets
|
|
0.35
|
|
|
0.79
|
|
|
0.89
|
|
|
1.16
|
|
|
1.52
|
|
(1)
|
Denotes a non-GAAP Financial Measure, see section entitled "
Non-GAAP Financial Measures
" for a reconciliation to the most directly comparable GAAP financial measure.
|
(2)
|
Presented on a tax equivalent basis using a 35% tax rate for all periods presented. Denotes a non-GAAP Financial Measure, see section entitled
Non-GAAP Financial Measures"
for a reconciliation to the most directly comparable GAAP financial measure.
|
(3)
|
The years ended December 31, 2016 and 2015 are under Basel III transitional and the years ended December 31, 2014, 2013 and 2012 are under Basel I.
|
|
|
December 31,
|
||||||||||||||||||
(Dollars in thousands, except per share data)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Tangible Book Value
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Shareholders' equity, as reported
|
|
$
|
2,581,526
|
|
|
$
|
1,015,974
|
|
|
$
|
797,133
|
|
|
$
|
696,500
|
|
|
$
|
596,341
|
|
Goodwill, CDI and noncompete agreements, net of tax
|
|
(1,155,528
|
)
|
|
(301,073
|
)
|
|
(190,714
|
)
|
|
(124,553
|
)
|
|
(130,173
|
)
|
|||||
Tangible shareholders' equity
|
|
$
|
1,425,998
|
|
|
$
|
714,901
|
|
|
$
|
606,419
|
|
|
$
|
571,947
|
|
|
$
|
466,168
|
|
Common shares outstanding
|
|
70,599
|
|
|
38,168
|
|
|
32,774
|
|
|
29,790
|
|
|
27,499
|
|
|||||
Book value per share (shareholders' equity, as reported, divided by common shares outstanding)
|
|
$
|
36.57
|
|
|
$
|
26.62
|
|
|
$
|
24.32
|
|
|
$
|
23.38
|
|
|
$
|
21.69
|
|
Tangible book value per share (tangible shareholders' equity divided by common shares outstanding)
|
|
$
|
20.20
|
|
|
$
|
18.73
|
|
|
$
|
18.50
|
|
|
$
|
19.20
|
|
|
$
|
16.95
|
|
Tangible Shareholders' Equity to Tangible Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets, as reported
|
|
$
|
17,355,179
|
|
|
$
|
9,188,797
|
|
|
$
|
7,322,143
|
|
|
$
|
6,184,708
|
|
|
$
|
5,917,252
|
|
Goodwill, CDI and noncompete agreements, net of tax
|
|
(1,155,528
|
)
|
|
(301,073
|
)
|
|
(190,714
|
)
|
|
(124,553
|
)
|
|
(130,173
|
)
|
|||||
Tangible assets
|
|
$
|
16,199,651
|
|
|
$
|
8,887,724
|
|
|
$
|
7,131,429
|
|
|
$
|
6,060,155
|
|
|
$
|
5,787,079
|
|
Shareholders' equity to total assets
|
|
14.9
|
%
|
|
11.1
|
%
|
|
10.9
|
%
|
|
11.3
|
%
|
|
10.1
|
%
|
|||||
Tangible shareholders' equity to tangible assets
|
|
8.8
|
%
|
|
8.0
|
%
|
|
8.5
|
%
|
|
9.4
|
%
|
|
8.1
|
%
|
|
Maturity as of December 31, 2016
(1)
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Within
One Year
|
|
After One
but Within
Five Years
|
|
After Five
but Within
Ten Years
|
|
After
Ten Years
|
|
Total
Carrying
Value
(2)
|
|
Total
Fair
Value
|
|||||||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
|
Yield
(3)
|
|
Amount
|
|
Yield
(3)
|
|
Amount
|
|
Yield
(3)
|
|
Amount
|
|
Yield
(3)
|
|
Amount
|
|
Yield
(3)
|
|
||||||||||||||||||
Available-for-Sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
U.S. Treasury securities
|
$
|
5,793
|
|
|
0.95
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
5,793
|
|
|
0.95
|
%
|
|
$
|
5,793
|
|
Government sponsored agencies
|
71,233
|
|
|
1.11
|
|
|
82,888
|
|
|
1.43
|
|
|
56,363
|
|
|
1.78
|
|
|
4,527
|
|
|
1.85
|
|
|
215,011
|
|
|
1.42
|
|
|
215,011
|
|
||||||
State and political subdivisions
|
9,438
|
|
|
2.53
|
|
|
70,435
|
|
|
2.11
|
|
|
116,239
|
|
|
2.39
|
|
|
103,976
|
|
|
2.94
|
|
|
300,088
|
|
|
2.52
|
|
|
300,088
|
|
||||||
Residential mortgage-backed securities
|
54,204
|
|
|
1.55
|
|
|
143,937
|
|
|
1.60
|
|
|
48,400
|
|
|
2.08
|
|
|
25,741
|
|
|
2.31
|
|
|
272,282
|
|
|
1.74
|
|
|
272,282
|
|
||||||
Collateralized mortgage obligations
|
87,400
|
|
|
2.04
|
|
|
135,646
|
|
|
2.26
|
|
|
79,496
|
|
|
2.42
|
|
|
17,483
|
|
|
2.58
|
|
|
320,025
|
|
|
2.26
|
|
|
320,025
|
|
||||||
Corporate bonds
|
7,778
|
|
|
1.47
|
|
|
52,315
|
|
|
1.85
|
|
|
29,381
|
|
|
3.66
|
|
|
—
|
|
|
—
|
|
|
89,474
|
|
|
2.41
|
|
|
89,474
|
|
||||||
Preferred stock and trust preferred securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,291
|
|
|
2.95
|
|
|
32,291
|
|
|
2.95
|
|
|
32,291
|
|
||||||
Total investment securities available-for-sale
|
235,846
|
|
|
1.62
|
|
|
485,221
|
|
|
1.86
|
|
|
329,879
|
|
|
2.36
|
|
|
184,018
|
|
|
2.79
|
|
|
1,234,964
|
|
|
2.09
|
|
|
1,234,964
|
|
||||||
Held-to-Maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
State and political subdivisions
|
66,090
|
|
|
2.18
|
|
|
262,136
|
|
|
2.74
|
|
|
145,225
|
|
|
3.90
|
|
|
149,476
|
|
|
3.13
|
|
|
622,927
|
|
|
3.04
|
|
|
608,221
|
|
||||||
Trust preferred securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|
4.00
|
|
|
500
|
|
|
4.00
|
|
|
310
|
|
||||||
Total investment securities held-to-maturity
|
66,090
|
|
|
2.18
|
|
|
262,136
|
|
|
2.74
|
|
|
145,225
|
|
|
3.90
|
|
|
149,976
|
|
|
3.13
|
|
|
623,427
|
|
|
3.05
|
|
|
608,531
|
|
||||||
Total investment securities
|
$
|
301,936
|
|
|
1.74
|
%
|
|
$
|
747,357
|
|
|
2.17
|
%
|
|
$
|
475,104
|
|
|
2.83
|
%
|
|
$
|
333,994
|
|
|
2.95
|
%
|
|
$
|
1,858,391
|
|
|
2.41
|
%
|
|
$
|
1,843,495
|
|
(1)
|
Residential mortgage-backed securities, collateralized mortgage obligations and certain government sponsored agencies are based on scheduled principal maturity. All other investment securities are based on final contractual maturity.
|
(2)
|
The aggregate book value of securities issued by any single issuer, other than the U.S. government and government sponsored agencies, did not exceed 10% of the Corporation's shareholders' equity.
|
(3)
|
Yields are weighted by amount and time to contractual maturity, are on a taxable equivalent basis using a 35% federal income tax rate and are based on carrying value. Yields disclosed are actual yields based on carrying value at December 31, 2016. Approximately 10% of the Corporation's investment securities at December 31, 2016 were variable-rate financial instruments.
|
|
Maturity as of December 31, 2015
(1)
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Within
One Year
|
|
After One
but Within
Five Years
|
|
After Five
but Within
Ten Years
|
|
After
Ten Years
|
|
Total
Carrying
Value
(2)
|
|
Total
Fair
Value
|
|||||||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
|
Yield
(3)
|
|
Amount
|
|
Yield
(3)
|
|
Amount
|
|
Yield
(3)
|
|
Amount
|
|
Yield
(3)
|
|
Amount
|
|
Yield
(3)
|
|
||||||||||||||||||
Available-for-Sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
U.S. Treasury securities
|
$
|
—
|
|
|
—
|
%
|
|
$
|
5,765
|
|
|
0.95
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
5,765
|
|
|
0.95
|
%
|
|
$
|
5,765
|
|
Government sponsored agencies
|
59,963
|
|
|
0.66
|
|
|
132,207
|
|
|
1.11
|
|
|
2,648
|
|
|
1.08
|
|
|
171
|
|
|
1.14
|
|
|
194,989
|
|
|
0.97
|
|
|
194,989
|
|
||||||
State and political subdivisions
|
1,976
|
|
|
3.25
|
|
|
11,403
|
|
|
4.26
|
|
|
1,741
|
|
|
5.89
|
|
|
—
|
|
|
—
|
|
|
15,120
|
|
|
4.32
|
|
|
15,120
|
|
||||||
Residential mortgage-backed securities
|
42,110
|
|
|
1.39
|
|
|
114,971
|
|
|
1.37
|
|
|
28,803
|
|
|
1.62
|
|
|
1,884
|
|
|
3.15
|
|
|
187,768
|
|
|
1.43
|
|
|
187,768
|
|
||||||
Collateralized mortgage obligations
|
55,993
|
|
|
1.06
|
|
|
59,841
|
|
|
1.29
|
|
|
14,886
|
|
|
1.82
|
|
|
1,510
|
|
|
1.76
|
|
|
132,230
|
|
|
1.26
|
|
|
132,230
|
|
||||||
Corporate bonds
|
10,056
|
|
|
1.38
|
|
|
—
|
|
|
—
|
|
|
4,571
|
|
|
2.72
|
|
|
—
|
|
|
—
|
|
|
14,627
|
|
|
1.80
|
|
|
14,627
|
|
||||||
Preferred stock and trust preferred securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,232
|
|
|
4.25
|
|
|
3,232
|
|
|
4.25
|
|
|
3,232
|
|
||||||
Total investment securities available-for-sale
|
170,098
|
|
|
1.05
|
|
|
324,187
|
|
|
1.34
|
|
|
52,649
|
|
|
1.89
|
|
|
6,797
|
|
|
2.86
|
|
|
553,731
|
|
|
1.32
|
|
|
553,731
|
|
||||||
Held-to-Maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
State and political subdivisions
|
59,834
|
|
|
2.02
|
|
|
236,141
|
|
|
2.68
|
|
|
136,383
|
|
|
3.87
|
|
|
77,113
|
|
|
4.61
|
|
|
509,471
|
|
|
3.21
|
|
|
512,405
|
|
||||||
Trust preferred securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|
5.75
|
|
|
500
|
|
|
5.75
|
|
|
300
|
|
||||||
Total investment securities held-to-maturity
|
59,834
|
|
|
2.02
|
|
|
236,141
|
|
|
2.68
|
|
|
136,383
|
|
|
3.87
|
|
|
77,613
|
|
|
4.62
|
|
|
509,971
|
|
|
3.22
|
|
|
512,705
|
|
||||||
Total investment securities
|
$
|
229,932
|
|
|
1.30
|
%
|
|
$
|
560,328
|
|
|
1.91
|
%
|
|
$
|
189,032
|
|
|
3.32
|
%
|
|
$
|
84,410
|
|
|
4.48
|
%
|
|
$
|
1,063,702
|
|
|
2.23
|
%
|
|
$
|
1,066,436
|
|
(1)
|
Residential mortgage-backed securities, collateralized mortgage obligations and certain government sponsored agencies are based on scheduled principal maturity. All other investment securities are based on final contractual maturity.
|
(2)
|
The aggregate book value of securities issued by any single issuer, other than the U.S. government and government sponsored agencies, did not exceed 10% of the Corporation's shareholders' equity.
|
(3)
|
Yields are weighted by amount and time to contractual maturity, are on a taxable equivalent basis using a 35% federal income tax rate and are based on carrying value. Yields disclosed are actual yields based on carrying value at December 31, 2015. Approximately 10% of the Corporation's investment securities at December 31, 2015 were variable-rate financial instruments.
|
|
|
December 31,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Available-for-Sale:
|
|
|
|
|
|
|
||||||
U.S. Treasury securities
|
|
$
|
5,793
|
|
|
$
|
5,765
|
|
|
$
|
8,259
|
|
Government sponsored agencies
|
|
215,011
|
|
|
194,989
|
|
|
263,503
|
|
|||
State and political subdivisions
|
|
300,088
|
|
|
15,120
|
|
|
46,227
|
|
|||
Residential mortgage-backed securities
|
|
272,282
|
|
|
187,768
|
|
|
239,807
|
|
|||
Collateralized mortgage obligations
|
|
320,025
|
|
|
132,230
|
|
|
144,383
|
|
|||
Corporate bonds
|
|
89,474
|
|
|
14,627
|
|
|
45,095
|
|
|||
Preferred stock and trust preferred securities
|
|
32,291
|
|
|
3,232
|
|
|
1,590
|
|
|||
Total investment securities available-for-sale
|
|
1,234,964
|
|
|
553,731
|
|
|
748,864
|
|
|||
Held-to-Maturity:
|
|
|
|
|
|
|
||||||
State and political subdivisions
|
|
622,927
|
|
|
509,471
|
|
|
305,913
|
|
|||
Trust preferred securities
|
|
500
|
|
|
500
|
|
|
10,500
|
|
|||
Total investment securities held-to-maturity
|
|
623,427
|
|
|
509,971
|
|
|
316,413
|
|
|||
Total investment securities
|
|
$
|
1,858,391
|
|
|
$
|
1,063,702
|
|
|
$
|
1,065,277
|
|
|
|
2016
|
|
2015
|
||||||||||||
(Dollars in millions)
|
|
Talmer Bancorp, Inc.
(August 31, 2016)
|
|
Lake Michigan
(May 31, 2015)
|
|
Monarch
(April 1, 2015)
|
|
Total
|
||||||||
Commercial loan portfolio:
|
|
|
|
|
|
|
|
|
||||||||
Commercial
|
|
$
|
1,223
|
|
|
$
|
301
|
|
|
$
|
19
|
|
|
$
|
320
|
|
Commercial real estate
|
|
1,590
|
|
|
532
|
|
|
45
|
|
|
577
|
|
||||
Real estate construction
|
|
166
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Subtotal
|
|
2,979
|
|
|
835
|
|
|
64
|
|
|
899
|
|
||||
Consumer loan portfolio:
|
|
|
|
|
|
|
|
|
||||||||
Residential mortgage
|
|
1,532
|
|
|
95
|
|
|
49
|
|
|
144
|
|
||||
Consumer installment
|
|
159
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||
Home equity
|
|
212
|
|
|
48
|
|
|
9
|
|
|
57
|
|
||||
Subtotal
|
|
1,903
|
|
|
151
|
|
|
58
|
|
|
209
|
|
||||
Total loans
|
|
$
|
4,882
|
|
|
$
|
986
|
|
|
$
|
122
|
|
|
$
|
1,108
|
|
|
|
December 31,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Commercial loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
$
|
3,217,300
|
|
|
$
|
1,905,879
|
|
|
$
|
1,354,881
|
|
|
$
|
1,176,307
|
|
|
$
|
1,002,722
|
|
Commercial real estate
|
|
3,973,140
|
|
|
2,112,162
|
|
|
1,557,648
|
|
|
1,232,658
|
|
|
1,161,861
|
|
|||||
Real estate construction and land development
|
|
403,772
|
|
|
232,076
|
|
|
171,495
|
|
|
109,861
|
|
|
100,237
|
|
|||||
Subtotal — commercial loan portfolio
|
|
7,594,212
|
|
|
4,250,117
|
|
|
3,084,024
|
|
|
2,518,826
|
|
|
2,264,820
|
|
|||||
Consumer loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage
|
|
3,086,474
|
|
|
1,429,636
|
|
|
1,110,390
|
|
|
960,423
|
|
|
883,835
|
|
|||||
Consumer installment
|
|
1,433,884
|
|
|
877,457
|
|
|
829,570
|
|
|
644,769
|
|
|
546,036
|
|
|||||
Home equity
|
|
876,209
|
|
|
713,937
|
|
|
664,246
|
|
|
523,603
|
|
|
473,044
|
|
|||||
Subtotal — consumer loan portfolio
|
|
5,396,567
|
|
|
3,021,030
|
|
|
2,604,206
|
|
|
2,128,795
|
|
|
1,902,915
|
|
|||||
Total loans
|
|
$
|
12,990,779
|
|
|
$
|
7,271,147
|
|
|
$
|
5,688,230
|
|
|
$
|
4,647,621
|
|
|
$
|
4,167,735
|
|
|
|
December 31, 2016
|
||||||||||||||
|
|
Due In
|
||||||||||||||
(Dollars in thousands)
|
|
1 Year
or Less
|
|
1 to 5
Years
|
|
Over 5
Years
|
|
Total
|
||||||||
Loan maturities:
|
|
|
|
|
|
|
|
|
||||||||
Commercial
|
|
$
|
1,064,276
|
|
|
$
|
1,739,072
|
|
|
$
|
413,952
|
|
|
$
|
3,217,300
|
|
Commercial real estate
|
|
517,175
|
|
|
2,333,992
|
|
|
1,121,973
|
|
|
3,973,140
|
|
||||
Real estate construction and land development
|
|
91,514
|
|
|
223,846
|
|
|
88,412
|
|
|
403,772
|
|
||||
Total
|
|
$
|
1,672,965
|
|
|
$
|
4,296,910
|
|
|
$
|
1,624,337
|
|
|
$
|
7,594,212
|
|
Percent of total
|
|
22.0
|
%
|
|
56.6
|
%
|
|
21.4
|
%
|
|
100.0
|
%
|
||||
Interest sensitivity of above loans:
|
|
|
|
|
|
|
|
|
||||||||
Fixed interest rates
|
|
$
|
572,841
|
|
|
$
|
2,972,849
|
|
|
$
|
1,080,768
|
|
|
$
|
4,626,458
|
|
Variable interest rates
|
|
1,100,124
|
|
|
1,324,061
|
|
|
543,569
|
|
|
2,967,754
|
|
||||
Total
|
|
$
|
1,672,965
|
|
|
$
|
4,296,910
|
|
|
$
|
1,624,337
|
|
|
$
|
7,594,212
|
|
|
|
December 31, 2015
|
||||||||||||||
|
|
Due In
|
||||||||||||||
(Dollars in thousands)
|
|
1 Year
or Less
|
|
1 to 5
Years
|
|
Over 5
Years
|
|
Total
|
||||||||
Loan maturities:
|
|
|
|
|
|
|
|
|
||||||||
Commercial
|
|
$
|
756,291
|
|
|
$
|
907,100
|
|
|
$
|
242,488
|
|
|
$
|
1,905,879
|
|
Commercial real estate
|
|
257,426
|
|
|
1,392,219
|
|
|
462,517
|
|
|
2,112,162
|
|
||||
Real estate construction and land development
|
|
74,671
|
|
|
103,027
|
|
|
54,378
|
|
|
232,076
|
|
||||
Total
|
|
$
|
1,088,388
|
|
|
$
|
2,402,346
|
|
|
$
|
759,383
|
|
|
$
|
4,250,117
|
|
Percent of total
|
|
25.6
|
%
|
|
56.5
|
%
|
|
17.9
|
%
|
|
100.0
|
%
|
||||
Interest sensitivity of above loans:
|
|
|
|
|
|
|
|
|
||||||||
Fixed interest rates
|
|
$
|
301,581
|
|
|
$
|
1,776,914
|
|
|
$
|
523,270
|
|
|
$
|
2,601,765
|
|
Variable interest rates
|
|
786,807
|
|
|
625,432
|
|
|
236,113
|
|
|
1,648,352
|
|
||||
Total
|
|
$
|
1,088,388
|
|
|
$
|
2,402,346
|
|
|
$
|
759,383
|
|
|
$
|
4,250,117
|
|
|
|
December 31,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Nonaccrual loans:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
$
|
13,178
|
|
|
$
|
28,554
|
|
|
$
|
16,418
|
|
|
$
|
18,374
|
|
|
$
|
14,601
|
|
Commercial real estate
|
|
19,877
|
|
|
25,163
|
|
|
24,966
|
|
|
28,598
|
|
|
37,660
|
|
|||||
Real estate construction and land development
|
|
80
|
|
|
521
|
|
|
387
|
|
|
2,680
|
|
|
5,401
|
|
|||||
Residential mortgage
|
|
6,969
|
|
|
5,557
|
|
|
6,706
|
|
|
8,921
|
|
|
10,164
|
|
|||||
Consumer installment
|
|
879
|
|
|
451
|
|
|
500
|
|
|
676
|
|
|
739
|
|
|||||
Home equity
|
|
3,351
|
|
|
1,979
|
|
|
1,667
|
|
|
2,648
|
|
|
2,733
|
|
|||||
Total nonaccrual loans
|
|
44,334
|
|
|
62,225
|
|
|
50,644
|
|
|
61,897
|
|
|
71,298
|
|
|||||
Other real estate and repossessed assets
|
|
17,187
|
|
|
9,935
|
|
|
14,205
|
|
|
9,776
|
|
|
18,469
|
|
|||||
Total nonperforming assets
|
|
61,521
|
|
|
72,160
|
|
|
64,849
|
|
|
71,673
|
|
|
89,767
|
|
|||||
Accruing troubled debt restructurings
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial loan portfolio
|
|
45,388
|
|
|
46,141
|
|
|
44,450
|
|
|
40,253
|
|
|
29,665
|
|
|||||
Consumer loan portfolio
|
|
17,147
|
|
|
21,037
|
|
|
19,681
|
|
|
17,408
|
|
|
18,901
|
|
|||||
Total performing troubled debt restructurings
|
|
62,535
|
|
|
67,178
|
|
|
64,131
|
|
|
57,661
|
|
|
48,566
|
|
|||||
Total impaired assets
|
|
$
|
124,056
|
|
|
$
|
139,338
|
|
|
$
|
128,980
|
|
|
$
|
129,334
|
|
|
$
|
138,333
|
|
Accruing loans contractually past due 90 days or more as to interest or principal payments, excluding loans accounted for under ASC 310-30
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial loan portfolio
|
|
$
|
288
|
|
|
$
|
618
|
|
|
$
|
170
|
|
|
$
|
726
|
|
|
$
|
87
|
|
Consumer loan portfolio
|
|
995
|
|
|
1,669
|
|
|
1,903
|
|
|
1,271
|
|
|
2,272
|
|
|||||
Total accruing loans contractually past due 90 days or more as to interest or principal payments
|
|
$
|
1,283
|
|
|
$
|
2,287
|
|
|
$
|
2,073
|
|
|
$
|
1,997
|
|
|
$
|
2,359
|
|
Nonperforming loans as a percent of total loans
|
|
0.34
|
%
|
|
0.86
|
%
|
|
0.89
|
%
|
|
1.33
|
%
|
|
1.71
|
%
|
|||||
Nonperforming assets as a percent of total assets
|
|
0.35
|
%
|
|
0.79
|
%
|
|
0.89
|
%
|
|
1.16
|
%
|
|
1.52
|
%
|
|||||
Impaired assets as a percent of total assets
|
|
0.71
|
%
|
|
1.52
|
%
|
|
1.76
|
%
|
|
2.09
|
%
|
|
2.34
|
%
|
(Dollars in thousands)
|
|
Amount
|
|
Valuation
Allowance
|
|
Confirmed
Losses
|
|
Cumulative
Inherent
Loss Percentage
|
|||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|||||||
Impaired loans — originated commercial loan portfolio:
|
|
|
|
|
|
|
|
|
|||||||
With valuation allowance and no charge-offs
|
|
$
|
41,305
|
|
|
$
|
4,377
|
|
|
$
|
—
|
|
|
11
|
%
|
With valuation allowance and charge-offs
|
|
9,115
|
|
|
857
|
|
|
10,524
|
|
|
58
|
|
|||
With charge-offs and no valuation allowance
|
|
4,001
|
|
|
—
|
|
|
6,665
|
|
|
62
|
|
|||
Without valuation allowance or charge-offs
|
|
24,102
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total impaired loans to commercial borrowers
|
|
$
|
78,523
|
|
|
$
|
5,234
|
|
|
$
|
17,189
|
|
|
23
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|||||||
Impaired loans — originated commercial loan portfolio:
|
|
|
|
|
|
|
|
|
|||||||
With valuation allowance and no charge-offs
|
|
$
|
20,635
|
|
|
$
|
6,019
|
|
|
$
|
—
|
|
|
29
|
%
|
With valuation allowance and charge-offs
|
|
2,711
|
|
|
178
|
|
|
768
|
|
|
27
|
|
|||
With charge-offs and no valuation allowance
|
|
18,718
|
|
|
—
|
|
|
16,373
|
|
|
47
|
|
|||
Without valuation allowance or charge-offs
|
|
58,315
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total impaired loans to commercial borrowers
|
|
$
|
100,379
|
|
|
$
|
6,197
|
|
|
$
|
17,141
|
|
|
20
|
%
|
|
|
December 31,
|
||||||||||||
|
|
2016
|
|
2015
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Percent
of Total
|
|
Amount
|
|
Percent
of Total
|
||||||
Commercial loan portfolio:
|
|
|
|
|
|
|
|
|
||||||
Commercial
|
|
$
|
13,178
|
|
|
29.7
|
%
|
|
$
|
28,554
|
|
|
46.0
|
%
|
Commercial real estate
|
|
19,877
|
|
|
44.8
|
|
|
25,163
|
|
|
40.4
|
|
||
Real estate construction and land development
|
|
80
|
|
|
0.2
|
|
|
521
|
|
|
0.8
|
|
||
Subtotal — commercial loan portfolio
|
|
33,135
|
|
|
74.7
|
|
|
54,238
|
|
|
87.2
|
|
||
Consumer loan portfolio:
|
|
|
|
|
|
|
|
|
||||||
Residential mortgage
|
|
6,969
|
|
|
15.7
|
|
|
5,557
|
|
|
8.9
|
|
||
Consumer installment
|
|
879
|
|
|
2.0
|
|
|
451
|
|
|
0.7
|
|
||
Home equity
|
|
3,351
|
|
|
7.6
|
|
|
1,979
|
|
|
3.2
|
|
||
Subtotal — consumer loan portfolio
|
|
11,199
|
|
|
25.3
|
|
|
7,987
|
|
|
12.8
|
|
||
Total nonperforming loans
|
|
$
|
44,334
|
|
|
100.0
|
%
|
|
$
|
62,225
|
|
|
100.0
|
%
|
|
|
Years Ended December 31,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Balance at beginning of period
|
|
$
|
62,225
|
|
|
$
|
50,644
|
|
Additions during period
|
|
28,263
|
|
|
47,709
|
|
||
Principal balances charged off
|
|
(12,974
|
)
|
|
(11,282
|
)
|
||
Transfers to other real estate/repossessed assets
|
|
(7,046
|
)
|
|
(6,510
|
)
|
||
Return to accrual status
|
|
(6,410
|
)
|
|
(4,004
|
)
|
||
Payments received
|
|
(19,724
|
)
|
|
(14,332
|
)
|
||
Balance at end of period
|
|
$
|
44,334
|
|
|
$
|
62,225
|
|
|
|
December 31,
|
||||||||||
|
|
2016
|
|
2015
|
||||||||
(Dollars in thousands)
|
|
Number of
Borrowers
|
|
Amount
|
|
Number of
Borrowers
|
|
Amount
|
||||
$5,000,000 or more
|
|
—
|
|
$
|
—
|
|
|
1
|
|
$
|
10,009
|
|
$2,500,000 - $4,999,999
|
|
1
|
|
4,793
|
|
|
2
|
|
8,108
|
|
||
$1,000,000 - $2,499,999
|
|
7
|
|
10,526
|
|
|
9
|
|
16,479
|
|
||
$500,000 - $999,999
|
|
8
|
|
5,652
|
|
|
9
|
|
6,199
|
|
||
$250,000 - $499,999
|
|
10
|
|
3,809
|
|
|
16
|
|
5,560
|
|
||
Under $250,000
|
|
105
|
|
8,355
|
|
|
105
|
|
7,883
|
|
||
Total
|
|
131
|
|
$
|
33,135
|
|
|
142
|
|
$
|
54,238
|
|
|
|
Accruing TDRs
|
|
|
|
Total
|
||||||||||||||
(Dollars in thousands)
|
|
Current
|
|
Past Due
31-90 Days
|
|
Sub-
Total
|
|
Nonaccrual TDRs
|
|
|||||||||||
December 31, 2016
|
|
|
||||||||||||||||||
Commercial loan portfolio
|
|
$
|
43,041
|
|
|
$
|
2,347
|
|
|
$
|
45,388
|
|
|
$
|
25,397
|
|
|
$
|
70,785
|
|
Consumer loan portfolio
|
|
16,690
|
|
|
457
|
|
|
17,147
|
|
|
5,134
|
|
|
22,281
|
|
|||||
Total TDRs
|
|
$
|
59,731
|
|
|
$
|
2,804
|
|
|
$
|
62,535
|
|
|
$
|
30,531
|
|
|
$
|
93,066
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial loan portfolio
|
|
$
|
45,570
|
|
|
$
|
571
|
|
|
$
|
46,141
|
|
|
$
|
32,682
|
|
|
$
|
78,823
|
|
Consumer loan portfolio
|
|
20,685
|
|
|
352
|
|
|
21,037
|
|
|
3,251
|
|
|
24,288
|
|
|||||
Total TDRs
|
|
$
|
66,255
|
|
|
$
|
923
|
|
|
$
|
67,178
|
|
|
$
|
35,933
|
|
|
$
|
103,111
|
|
|
|
Years Ended December 31,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Balance at beginning of period
|
|
$
|
46,141
|
|
|
$
|
44,450
|
|
Additions for modifications
|
|
13,238
|
|
|
9,292
|
|
||
Principal payments and pay-offs
|
|
(10,457
|
)
|
|
(5,135
|
)
|
||
Transfers from nonaccrual status
|
|
2,045
|
|
|
860
|
|
||
Transfers to nonaccrual status
|
|
(5,579
|
)
|
|
(3,326
|
)
|
||
Balance at end of period
|
|
$
|
45,388
|
|
|
$
|
46,141
|
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Composition of ORE:
|
|
|
|
|
||||
Vacant land
|
|
$
|
5,473
|
|
|
$
|
3,036
|
|
Commercial real estate properties
|
|
6,812
|
|
|
4,583
|
|
||
Residential real estate properties
|
|
4,527
|
|
|
2,097
|
|
||
Total ORE
|
|
$
|
16,812
|
|
|
$
|
9,716
|
|
|
|
Years Ended December 31,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Balance at beginning of year
|
|
$
|
9,716
|
|
|
$
|
13,953
|
|
Additions attributable to acquisitions (at fair value)
|
|
13,227
|
|
|
440
|
|
||
Additions attributable to foreclosures
|
|
9,938
|
|
|
6,957
|
|
||
Write-downs to fair value
|
|
(636
|
)
|
|
(1,421
|
)
|
||
Net payments received
|
|
(1,560
|
)
|
|
(45
|
)
|
||
Dispositions
|
|
(13,873
|
)
|
|
(10,168
|
)
|
||
Balance at end of year
|
|
$
|
16,812
|
|
|
$
|
9,716
|
|
|
|
December 31,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Originated loans
|
|
$
|
78,268
|
|
|
$
|
73,328
|
|
|
$
|
75,183
|
|
|
$
|
78,572
|
|
|
$
|
83,991
|
|
Acquired loans
|
|
—
|
|
|
—
|
|
|
500
|
|
|
500
|
|
|
500
|
|
|||||
Total
|
|
$
|
78,268
|
|
|
$
|
73,328
|
|
|
$
|
75,683
|
|
|
$
|
79,072
|
|
|
$
|
84,491
|
|
Nonperforming loans
|
|
$
|
44,334
|
|
|
$
|
62,225
|
|
|
$
|
50,644
|
|
|
$
|
61,897
|
|
|
$
|
71,298
|
|
Allowance for originated loans as a percent of:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total originated loans
|
|
1.05
|
%
|
|
1.26
|
%
|
|
1.51
|
%
|
|
1.81
|
%
|
|
2.22
|
%
|
|||||
Nonperforming loans
|
|
177
|
%
|
|
118
|
%
|
|
148
|
%
|
|
127
|
%
|
|
118
|
%
|
|||||
Nonperforming loans, less impaired originated loans for which the expected loss has been charged-off
|
|
194
|
%
|
|
169
|
%
|
|
216
|
%
|
|
191
|
%
|
|
181
|
%
|
|
|
Years Ended December 31,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Allowance for loan losses - beginning of year
|
|
$
|
73,328
|
|
|
$
|
75,683
|
|
|
$
|
79,072
|
|
|
$
|
84,491
|
|
|
$
|
88,333
|
|
Provision for loan losses
|
|
14,875
|
|
|
6,500
|
|
|
6,100
|
|
|
11,000
|
|
|
18,500
|
|
|||||
Loan charge-offs:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
(6,012
|
)
|
|
(3,551
|
)
|
|
(3,169
|
)
|
|
(4,104
|
)
|
|
(6,427
|
)
|
|||||
Commercial real estate
|
|
(2,852
|
)
|
|
(2,693
|
)
|
|
(2,929
|
)
|
|
(7,363
|
)
|
|
(7,930
|
)
|
|||||
Real estate construction and land development
|
|
(42
|
)
|
|
(141
|
)
|
|
(301
|
)
|
|
(813
|
)
|
|
(1,366
|
)
|
|||||
Residential mortgage
|
|
(1,080
|
)
|
|
(2,427
|
)
|
|
(2,277
|
)
|
|
(2,878
|
)
|
|
(5,438
|
)
|
|||||
Consumer installment
|
|
(4,751
|
)
|
|
(4,182
|
)
|
|
(4,194
|
)
|
|
(3,993
|
)
|
|
(4,605
|
)
|
|||||
Home equity
|
|
(565
|
)
|
|
(507
|
)
|
|
(1,359
|
)
|
|
(1,995
|
)
|
|
(1,670
|
)
|
|||||
Total loan charge-offs
|
|
(15,302
|
)
|
|
(13,501
|
)
|
|
(14,229
|
)
|
|
(21,146
|
)
|
|
(27,436
|
)
|
|||||
Recoveries of loans previously charged off:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
1,258
|
|
|
970
|
|
|
900
|
|
|
1,783
|
|
|
744
|
|
|||||
Commercial real estate
|
|
1,791
|
|
|
1,218
|
|
|
873
|
|
|
1,086
|
|
|
2,246
|
|
|||||
Real estate construction and land development
|
|
36
|
|
|
—
|
|
|
836
|
|
|
23
|
|
|
2
|
|
|||||
Residential mortgage
|
|
376
|
|
|
515
|
|
|
651
|
|
|
346
|
|
|
562
|
|
|||||
Consumer installment
|
|
1,703
|
|
|
1,391
|
|
|
1,279
|
|
|
1,350
|
|
|
1,396
|
|
|||||
Home equity
|
|
203
|
|
|
552
|
|
|
201
|
|
|
139
|
|
|
144
|
|
|||||
Total loan recoveries
|
|
5,367
|
|
|
4,646
|
|
|
4,740
|
|
|
4,727
|
|
|
5,094
|
|
|||||
Net loan charge-offs
|
|
(9,935
|
)
|
|
(8,855
|
)
|
|
(9,489
|
)
|
|
(16,419
|
)
|
|
(22,342
|
)
|
|||||
Allowance for loan losses - end of year
|
|
$
|
78,268
|
|
|
$
|
73,328
|
|
|
$
|
75,683
|
|
|
$
|
79,072
|
|
|
$
|
84,491
|
|
Net loan charge-offs during the year as a percentage of average loans outstanding during the year
|
|
0.11
|
%
|
|
0.13
|
%
|
|
0.19
|
%
|
|
0.38
|
%
|
|
0.57
|
%
|
|
|
December 31,
|
|||||||||||||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||||||||||||
(Dollars in millions)
|
|
Allowance
Amount
|
|
Percent of
Originated
Loans
in Each
Category
to Total
Loans
|
|
Allowance
Amount
|
|
Percent of
Originated
Loans
in Each
Category
to Total
Loans
|
|
Allowance
Amount
|
|
Percent of
Originated
Loans
in Each
Category
to Total
Loans
|
|
Allowance
Amount
|
|
Percent of
Originated
Loans
in Each
Category
to Total
Loans
|
|
Allowance
Amount
|
|
Percent of
Originated Loans in Each Category to Total Loans |
|||||||||||||||
Originated loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial
|
|
$
|
22.4
|
|
|
25
|
%
|
|
$
|
21.9
|
|
|
26
|
%
|
|
$
|
18.0
|
|
|
25
|
%
|
|
$
|
18.2
|
|
|
25
|
%
|
|
$
|
18.8
|
|
|
24
|
%
|
Commercial real estate
|
|
25.4
|
|
|
26
|
|
|
22.8
|
|
|
25
|
|
|
23.6
|
|
|
24
|
|
|
23.8
|
|
|
25
|
|
|
28.4
|
|
|
25
|
|
|||||
Real estate
construction and land development
|
|
3.4
|
|
|
4
|
|
|
2.5
|
|
|
3
|
|
|
2.6
|
|
|
3
|
|
|
2.5
|
|
|
2
|
|
|
2.8
|
|
|
2
|
|
|||||
Residential mortgage
|
|
13.8
|
|
|
20
|
|
|
14.3
|
|
|
21
|
|
|
11.3
|
|
|
20
|
|
|
12.8
|
|
|
22
|
|
|
13.3
|
|
|
23
|
|
|||||
Consumer Installment
|
|
8.9
|
|
|
17
|
|
|
5.7
|
|
|
15
|
|
|
9.4
|
|
|
17
|
|
|
8.7
|
|
|
15
|
|
|
8.3
|
|
|
14
|
|
|||||
Home equity
|
|
4.4
|
|
|
8
|
|
|
6.1
|
|
|
10
|
|
|
7.6
|
|
|
11
|
|
|
8.1
|
|
|
11
|
|
|
7.2
|
|
|
12
|
|
|||||
Unallocated
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
|
4.5
|
|
|
—
|
|
|
5.2
|
|
|
—
|
|
|||||
Subtotal — originated loans
|
|
78.3
|
|
|
100
|
%
|
|
73.3
|
|
|
100
|
%
|
|
75.2
|
|
|
100
|
%
|
|
78.6
|
|
|
100
|
%
|
|
84.0
|
|
|
100
|
%
|
|||||
Acquired loans
|
|
—
|
|
|
|
|
—
|
|
|
|
|
0.5
|
|
|
|
|
0.5
|
|
|
|
|
0.5
|
|
|
|
||||||||||
Total
|
|
$
|
78.3
|
|
|
|
|
$
|
73.3
|
|
|
|
|
$
|
75.7
|
|
|
|
|
$
|
79.1
|
|
|
|
|
$
|
84.5
|
|
|
|
(Dollars in thousands)
|
|
Amount
|
|
Weighted
Average
Interest Rate
|
|||
2017 maturities:
|
|
|
|
|
|||
First quarter
|
|
$
|
754,040
|
|
|
0.59
|
%
|
Second quarter
|
|
678,331
|
|
|
0.88
|
|
|
Third quarter
|
|
364,858
|
|
|
0.77
|
|
|
Fourth quarter
|
|
362,248
|
|
|
0.81
|
|
|
Total 2017 maturities
|
|
2,159,477
|
|
|
0.75
|
|
|
2018 maturities
|
|
393,811
|
|
|
0.94
|
|
|
2019 maturities
|
|
167,132
|
|
|
1.26
|
|
|
2020 maturities
|
|
139,555
|
|
|
1.53
|
|
|
2021 maturities and beyond
|
|
150,392
|
|
|
1.54
|
|
|
Total time deposits
|
|
$
|
3,010,367
|
|
|
0.88
|
%
|
|
|
December 31, 2016
|
|||||
(Dollars in thousands)
|
|
Amount
|
|
Percent
|
|||
Maturity:
|
|
|
|
|
|||
Within 3 months
|
|
$
|
465,848
|
|
|
27.6
|
%
|
After 3 but within 6 months
|
|
427,545
|
|
|
25.4
|
|
|
After 6 but within 12 months
|
|
419,971
|
|
|
25.0
|
|
|
After 12 months
|
|
369,622
|
|
|
22.0
|
|
|
Total
|
|
$
|
1,682,986
|
|
|
100.0
|
%
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Short-term borrowings:
|
|
|
|
|
||||
Short-term FHLB advances
|
|
$
|
825,000
|
|
|
$
|
100,000
|
|
Federal funds purchased
|
|
—
|
|
|
—
|
|
||
Total short-term-borrowings
|
|
$
|
825,000
|
|
|
$
|
100,000
|
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Long-term borrowings:
|
|
|
|
|
||||
Long-term FHLB advances
|
|
$
|
438,538
|
|
|
$
|
181,394
|
|
Securities sold under agreement to repurchase
|
|
19,144
|
|
|
17,453
|
|
||
Non-revolving line-of-credit
|
|
124,625
|
|
|
25,000
|
|
||
Subordinated debt obligations
|
|
15,540
|
|
|
18,544
|
|
||
Total long-term borrowings
|
|
$
|
597,847
|
|
|
$
|
242,391
|
|
|
|
December 31, 2016
|
||||||||||||||||||
|
|
Minimum Payments Due by Period
|
||||||||||||||||||
(Dollars in thousands)
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
|
Total
|
||||||||||
Contractual Obligations:
|
|
|
||||||||||||||||||
Deposits with no stated maturity
(1)
|
|
$
|
9,862,755
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,862,755
|
|
Time deposits with a stated maturity
(1)
|
|
2,159,477
|
|
|
560,943
|
|
|
281,701
|
|
|
8,246
|
|
|
3,010,367
|
|
|||||
Short-term borrowings
(1)
|
|
825,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
825,000
|
|
|||||
Long-term borrowings
(1)
|
|
126,089
|
|
|
345,545
|
|
|
110,673
|
|
|
15,540
|
|
|
597,847
|
|
|||||
Operating leases and noncancelable contracts
(2)
|
|
20,712
|
|
|
32,594
|
|
|
18,535
|
|
|
16,549
|
|
|
88,390
|
|
|||||
Other contractual obligations
(3)
|
|
13,221
|
|
|
4,171
|
|
|
130
|
|
|
261
|
|
|
17,783
|
|
|||||
Total contractual obligations
|
|
$
|
13,007,254
|
|
|
$
|
943,253
|
|
|
$
|
411,039
|
|
|
$
|
40,596
|
|
|
$
|
14,402,142
|
|
(Dollars in thousands)
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
|
Total
|
||||||||||
Unused commitments to extend credit:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loans to commercial borrowers
|
|
$
|
1,068,877
|
|
|
$
|
487,424
|
|
|
$
|
165,833
|
|
|
$
|
316,279
|
|
|
$
|
2,038,413
|
|
Loans to consumer borrowers
|
|
287,817
|
|
|
163,533
|
|
|
154,692
|
|
|
53,931
|
|
|
659,973
|
|
|||||
Total unused commitments to extend credit
|
|
1,356,694
|
|
|
650,957
|
|
|
320,525
|
|
|
370,210
|
|
|
2,698,386
|
|
|||||
Undisbursed loan commitments
(1)
|
|
578,181
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
578,181
|
|
|||||
Standby letters of credit
|
|
67,609
|
|
|
5,938
|
|
|
15,114
|
|
|
30,222
|
|
|
118,883
|
|
|||||
Total credit-related commitments
|
|
$
|
2,002,484
|
|
|
$
|
656,895
|
|
|
$
|
335,639
|
|
|
$
|
400,432
|
|
|
$
|
3,395,450
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Annual Cash Dividend (per common share)
|
|
$
|
1.06
|
|
|
$
|
1.00
|
|
|
$
|
0.94
|
|
|
$
|
0.87
|
|
|
$
|
0.82
|
|
|
|
December 31, 2016
|
||||||||||
|
|
Leverage
Ratio
|
|
Risk-Based Capital Ratios
|
||||||||
|
|
CET Tier 1
|
|
Tier 1
|
|
Total
|
||||||
Actual Capital Ratios:
|
|
|
|
|
|
|
|
|
||||
Chemical Financial Corporation
|
|
9.0
|
%
|
|
10.7
|
%
|
|
10.7
|
%
|
|
11.5
|
%
|
Chemical Bank
|
|
9.5
|
|
|
11.4
|
|
|
11.4
|
|
|
12.0
|
|
Minimum required for capital adequacy purposes
|
|
4.0
|
|
|
4.5
|
|
|
6.0
|
|
|
8.0
|
|
Minimum required for "well-capitalized" capital adequacy purposes
|
|
5.0
|
|
|
6.5
|
|
|
8.0
|
|
|
10.0
|
|
|
|
2016 Compared to 2015
|
|
2015 Compared to 2014
|
||||||||||||||||||||
|
|
Increase (Decrease)
Due to Changes in
|
|
Combined
Increase/
(Decrease)
|
|
Increase (Decrease)
Due to Changes in
|
|
Combined
Increase/
(Decrease)
|
||||||||||||||||
(Dollars in thousands)
|
|
Average
Volume
(1)
|
|
Average
Yield/ Rate
(1)
|
|
|
Average
Volume (1) |
|
Average
Yield/ Rate
(1)
|
|
||||||||||||||
Changes in Interest Income on Interest-Earning Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans
|
|
$
|
114,289
|
|
|
$
|
(2,055
|
)
|
|
$
|
112,234
|
|
|
$
|
69,542
|
|
|
$
|
(6,809
|
)
|
|
$
|
62,733
|
|
Taxable investment securities/other assets
|
|
1,144
|
|
|
1,384
|
|
|
2,528
|
|
|
573
|
|
|
(510
|
)
|
|
63
|
|
||||||
Tax-exempt investment securities
|
|
5,781
|
|
|
(808
|
)
|
|
4,973
|
|
|
4,743
|
|
|
(1,637
|
)
|
|
3,106
|
|
||||||
Interest-bearing deposits with the FRB and other banks
|
|
730
|
|
|
315
|
|
|
1,045
|
|
|
(47
|
)
|
|
150
|
|
|
103
|
|
||||||
Total change in interest income on interest-earning assets
|
|
121,944
|
|
|
(1,164
|
)
|
|
120,780
|
|
|
74,811
|
|
|
(8,806
|
)
|
|
66,005
|
|
||||||
Changes in Interest Expense on Interest-Bearing Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing demand deposits
|
|
485
|
|
|
1,327
|
|
|
1,812
|
|
|
405
|
|
|
(137
|
)
|
|
268
|
|
||||||
Savings deposits
|
|
537
|
|
|
828
|
|
|
1,365
|
|
|
434
|
|
|
(247
|
)
|
|
187
|
|
||||||
Time deposits
|
|
4,800
|
|
|
(362
|
)
|
|
4,438
|
|
|
2,027
|
|
|
(1,330
|
)
|
|
697
|
|
||||||
Short-term borrowings
|
|
3,265
|
|
|
(433
|
)
|
|
2,832
|
|
|
203
|
|
|
(164
|
)
|
|
39
|
|
||||||
Long-term borrowings
|
|
1,007
|
|
|
62
|
|
|
1,069
|
|
|
1,841
|
|
|
39
|
|
|
1,880
|
|
||||||
Total change in interest expense on interest-bearing liabilities
|
|
10,094
|
|
|
1,422
|
|
|
11,516
|
|
|
4,910
|
|
|
(1,839
|
)
|
|
3,071
|
|
||||||
Total Change in Net Interest Income (FTE)
(2)
|
|
$
|
111,850
|
|
|
$
|
(2,586
|
)
|
|
$
|
109,264
|
|
|
$
|
69,901
|
|
|
$
|
(6,967
|
)
|
|
$
|
62,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) The change in interest income and interest expense due to both volume and rate has been allocated to the volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.
|
||||||||||||||||||||||||
(2) Fully taxable equivalent basis using a federal income tax rate of 35%. The presentation of net interest income on a FTE basis is not in accordance with GAAP, but is customary in the banking industry.
|
|
|
Years Ended December 31,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Noninterest income
|
|
|
|
|
|
|
||||||
Service charges and fees on deposit accounts
|
|
$
|
28,136
|
|
|
$
|
25,481
|
|
|
$
|
22,414
|
|
Wealth management revenue
|
|
22,601
|
|
|
20,552
|
|
|
16,015
|
|
|||
Electronic banking fees
|
|
23,433
|
|
|
19,119
|
|
|
13,480
|
|
|||
Mortgage banking revenue
|
|
21,859
|
|
|
6,133
|
|
|
5,041
|
|
|||
Other fees for customer services
|
|
4,939
|
|
|
4,428
|
|
|
3,539
|
|
|||
Title insurance commissions
|
|
1,874
|
|
|
1,966
|
|
|
1,559
|
|
|||
Gain on sale of investment securities
|
|
129
|
|
|
630
|
|
|
—
|
|
|||
Bank-owned life insurance
|
|
1,836
|
|
|
646
|
|
|
281
|
|
|||
Rental income
|
|
592
|
|
|
466
|
|
|
145
|
|
|||
Gain on sale of branch offices
|
|
7,391
|
|
|
—
|
|
|
—
|
|
|||
Gain on sale of closed branch offices and other assets
|
|
—
|
|
|
266
|
|
|
—
|
|
|||
Gain on sale of merchant card servicing business
|
|
—
|
|
|
—
|
|
|
400
|
|
|||
Other income
|
|
9,560
|
|
|
529
|
|
|
221
|
|
|||
Total noninterest income
|
|
$
|
122,350
|
|
|
$
|
80,216
|
|
|
$
|
63,095
|
|
Significant items
(1)
|
|
12,505
|
|
|
—
|
|
|
—
|
|
|||
Noninterest income excluding significant items
(1)
|
|
$
|
109,845
|
|
|
$
|
80,216
|
|
|
$
|
63,095
|
|
Noninterest income
as a percentage of:
|
|
|
|
|
|
|
||||||
Net revenue (net interest income plus noninterest income)
|
|
24.3
|
%
|
|
22.6
|
%
|
|
22.9
|
%
|
|||
Average total assets
|
|
1.02
|
|
|
0.95
|
|
|
0.97
|
|
|||
Net revenue, excluding significant items
(1)
|
|
21.82
|
|
|
22.65
|
|
|
22.89
|
|
|||
Average total assets, excluding significant items
(1)
|
|
0.91
|
|
|
0.95
|
|
|
0.97
|
|
|
Years Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Operating expense
|
|
|
|
|
|
||||||
Salaries and wages
|
$
|
135,407
|
|
|
$
|
104,490
|
|
|
$
|
83,229
|
|
Employee benefits
|
29,806
|
|
|
23,430
|
|
|
19,328
|
|
|||
Occupancy
|
23,525
|
|
|
18,213
|
|
|
15,842
|
|
|||
Equipment and software
|
24,408
|
|
|
18,569
|
|
|
14,737
|
|
|||
Outside processing and service fees
|
21,199
|
|
|
15,207
|
|
|
11,586
|
|
|||
FDIC insurance premiums
|
7,407
|
|
|
5,485
|
|
|
4,307
|
|
|||
Professional fees
|
5,832
|
|
|
4,842
|
|
|
3,570
|
|
|||
Intangible asset amortization
|
5,524
|
|
|
4,389
|
|
|
2,029
|
|
|||
Postage and express mail
|
3,777
|
|
|
3,313
|
|
|
3,418
|
|
|||
Advertising and marketing
|
3,740
|
|
|
3,288
|
|
|
3,051
|
|
|||
Training, travel and other employee expenses
|
4,025
|
|
|
3,224
|
|
|
2,480
|
|
|||
Telephone
|
2,964
|
|
|
2,608
|
|
|
1,966
|
|
|||
Supplies
|
2,318
|
|
|
2,216
|
|
|
1,897
|
|
|||
Donations
|
1,951
|
|
|
1,375
|
|
|
1,155
|
|
|||
Credit-related expenses
|
(2,701
|
)
|
|
632
|
|
|
996
|
|
|||
Transaction expenses
|
61,134
|
|
|
7,804
|
|
|
6,388
|
|
|||
Other
|
8,102
|
|
|
4,809
|
|
|
3,946
|
|
|||
Total operating expenses
|
$
|
338,418
|
|
|
$
|
223,894
|
|
|
$
|
179,925
|
|
Operating expenses, excluding transaction expenses
(1)
|
$
|
277,284
|
|
|
$
|
216,090
|
|
|
$
|
173,537
|
|
|
|
|
|
|
|
||||||
Full-time equivalent staff (at December 31)
|
3,261
|
|
|
2,116
|
|
|
1,997
|
|
|||
Average assets
|
$
|
12,037,155
|
|
|
$
|
8,481,228
|
|
|
$
|
6,473,144
|
|
Efficiency ratio - GAAP
|
67.2
|
%
|
|
63.2
|
%
|
|
65.3
|
%
|
|||
Efficiency ratio - adjusted non-GAAP
(1)
|
54.4
|
%
|
|
58.7
|
%
|
|
60.9
|
%
|
|||
Total operating expenses as a percentage of total average assets
|
2.81
|
%
|
|
2.64
|
%
|
|
2.78
|
%
|
|||
Total operating expenses as a percentage of total average assets - adjusted Non-GAAP
(1)
|
2.30
|
%
|
|
2.55
|
%
|
|
2.68
|
%
|
|
|
December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Investment securities available-for-sale to total deposits
|
|
9.59
|
%
|
|
7.43
|
%
|
|
12.32
|
%
|
Loans to total deposits
|
|
100.91
|
|
|
97.51
|
|
|
93.57
|
|
Interest-earning assets to total assets
|
|
86.03
|
|
|
90.82
|
|
|
92.36
|
|
Interest-bearing deposits to total deposits
|
|
74.04
|
|
|
74.06
|
|
|
73.82
|
|
|
Gradual Change
|
|
Immediate
Change
|
|||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Twelve month interest rate change projection (in basis points)
|
-200
|
|
-100
|
|
0
|
|
+100
|
|
+200
|
|
+400
|
|||||
Percent change in net interest income vs. constant rates
|
(3.9
|
)%
|
|
(0.9
|
)%
|
|
—
|
|
(1.4
|
)%
|
|
(2.6
|
)%
|
|
(6.8
|
)%
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Twelve month interest rate change projection (in basis points)
|
-200
|
|
-100
|
|
0
|
|
+100
|
|
+200
|
|
+400
|
|||||
Percent change in net interest income vs. constant rates
|
(5.0
|
)%
|
|
(2.1
|
)%
|
|
—
|
|
(0.2
|
)%
|
|
(1.1
|
)%
|
|
(5.0)%
|
(Dollars in thousands, except per share data)
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents:
|
|
|
|
|
||||
Cash and cash due from banks
|
|
$
|
237,758
|
|
|
$
|
194,136
|
|
Interest-bearing deposits with the Federal Reserve Bank and other banks
|
|
236,644
|
|
|
44,653
|
|
||
Total cash and cash equivalents
|
|
474,402
|
|
|
238,789
|
|
||
Investment securities:
|
|
|
|
|
||||
Available-for-sale, at fair value
|
|
1,234,964
|
|
|
553,731
|
|
||
Held-to-maturity, at amortized cost (fair value of $608,531 at 12/31/16 and $512,705 at 12/31/15)
|
|
623,427
|
|
|
509,971
|
|
||
Total investment securities
|
|
1,858,391
|
|
|
1,063,702
|
|
||
Loans held-for-sale, at fair value
|
|
81,830
|
|
|
10,327
|
|
||
Loans
|
|
12,990,779
|
|
|
7,271,147
|
|
||
Allowance for loan losses
|
|
(78,268
|
)
|
|
(73,328
|
)
|
||
Net loans
|
|
12,912,511
|
|
|
7,197,819
|
|
||
Premises and equipment
|
|
145,012
|
|
|
106,317
|
|
||
Loan servicing rights
|
|
58,315
|
|
|
11,122
|
|
||
Goodwill
|
|
1,133,534
|
|
|
287,393
|
|
||
Other intangible assets
|
|
40,211
|
|
|
26,982
|
|
||
Interest receivable and other assets
|
|
650,973
|
|
|
246,346
|
|
||
Total assets
|
|
$
|
17,355,179
|
|
|
$
|
9,188,797
|
|
Liabilities
|
|
|
|
|
||||
Deposits:
|
|
|
|
|
||||
Noninterest-bearing
|
|
$
|
3,341,520
|
|
|
$
|
1,934,583
|
|
Interest-bearing
|
|
9,531,602
|
|
|
5,522,184
|
|
||
Total deposits
|
|
12,873,122
|
|
|
7,456,767
|
|
||
Interest payable and other liabilities
|
|
134,637
|
|
|
76,466
|
|
||
Securities sold under agreements to repurchase with customers
|
|
343,047
|
|
|
297,199
|
|
||
Short-term borrowings
|
|
825,000
|
|
|
100,000
|
|
||
Long-term borrowings
|
|
597,847
|
|
|
242,391
|
|
||
Total liabilities
|
|
14,773,653
|
|
|
8,172,823
|
|
||
Shareholders' equity
|
|
|
|
|
||||
Preferred stock, no par value:
|
|
|
|
|
||||
Authorized – 2,000,000 shares at 12/31/16 and 12/31/15.
|
|
—
|
|
|
—
|
|
||
Common stock, $1 par value per share:
|
|
|
|
|
||||
Authorized — 100,000,000 shares at 12/31/16 and 60,000,000 shares at 12/31/15
|
|
|
|
|
||||
Issued and outstanding — 70,599,133 shares at 12/31/16 and 38,167,861 shares at 12/31/15
|
|
70,599
|
|
|
38,168
|
|
||
Additional paid in capital
|
|
2,210,762
|
|
|
725,280
|
|
||
Retained earnings
|
|
340,201
|
|
|
281,558
|
|
||
Accumulated other comprehensive loss
|
|
(40,036
|
)
|
|
(29,032
|
)
|
||
Total shareholders' equity
|
|
2,581,526
|
|
|
1,015,974
|
|
||
Total liabilities and shareholders' equity
|
|
$
|
17,355,179
|
|
|
$
|
9,188,797
|
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands, except per share data)
|
2016
|
|
2015
|
|
2014
|
||||||
Interest Income
|
|
|
|
|
|
||||||
Interest and fees on loans
|
$
|
383,545
|
|
|
$
|
271,772
|
|
|
$
|
209,429
|
|
Interest on investment securities:
|
|
|
|
|
|
||||||
Taxable
|
10,989
|
|
|
8,786
|
|
|
9,147
|
|
|||
Tax-exempt
|
12,317
|
|
|
9,073
|
|
|
7,054
|
|
|||
Dividends on nonmarketable equity securities
|
1,973
|
|
|
1,648
|
|
|
1,224
|
|
|||
Interest on deposits with the Federal Reserve Bank, other banks and Federal funds sold
|
1,555
|
|
|
510
|
|
|
407
|
|
|||
Total interest income
|
410,379
|
|
|
291,789
|
|
|
227,261
|
|
|||
Interest Expense
|
|
|
|
|
|
||||||
Interest on deposits
|
23,021
|
|
|
15,406
|
|
|
14,254
|
|
|||
Interest on short-term borrowings
|
1,660
|
|
|
453
|
|
|
414
|
|
|||
Interest on long-term borrowings
|
4,617
|
|
|
1,922
|
|
|
42
|
|
|||
Total Interest Expense
|
29,298
|
|
|
17,781
|
|
|
14,710
|
|
|||
Net Interest Income
|
381,081
|
|
|
274,008
|
|
|
212,551
|
|
|||
Provision for loan losses
|
14,875
|
|
|
6,500
|
|
|
6,100
|
|
|||
Net interest income after provision for loan losses
|
366,206
|
|
|
267,508
|
|
|
206,451
|
|
|||
Noninterest Income
|
|
|
|
|
|
||||||
Service charges and fees on deposit accounts
|
28,136
|
|
|
25,481
|
|
|
22,414
|
|
|||
Wealth management revenue
|
22,601
|
|
|
20,552
|
|
|
16,015
|
|
|||
Other charges and fees for customer services
|
30,246
|
|
|
25,513
|
|
|
18,928
|
|
|||
Mortgage banking revenue
|
21,859
|
|
|
6,133
|
|
|
5,041
|
|
|||
Net gain on sale of investment securities
|
129
|
|
|
630
|
|
|
—
|
|
|||
Net gain on sale of branch offices
|
7,391
|
|
|
—
|
|
|
—
|
|
|||
Other
|
11,988
|
|
|
1,907
|
|
|
697
|
|
|||
Total noninterest income
|
122,350
|
|
|
80,216
|
|
|
63,095
|
|
|||
Operating Expenses
|
|
|
|
|
|
||||||
Salaries, wages and employee benefits
|
165,213
|
|
|
127,920
|
|
|
102,557
|
|
|||
Occupancy
|
23,525
|
|
|
18,213
|
|
|
15,842
|
|
|||
Equipment and software
|
24,408
|
|
|
18,569
|
|
|
14,737
|
|
|||
Merger and acquisition-related transaction expenses
|
61,134
|
|
|
7,804
|
|
|
6,388
|
|
|||
Other
|
64,138
|
|
|
51,388
|
|
|
40,401
|
|
|||
Total operating expenses
|
338,418
|
|
|
223,894
|
|
|
179,925
|
|
|||
Income before income taxes
|
150,138
|
|
|
123,830
|
|
|
89,621
|
|
|||
Income tax expense
|
42,106
|
|
|
37,000
|
|
|
27,500
|
|
|||
Net income
|
$
|
108,032
|
|
|
$
|
86,830
|
|
|
$
|
62,121
|
|
Earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.21
|
|
|
$
|
2.41
|
|
|
$
|
1.98
|
|
Diluted
|
2.17
|
|
|
2.39
|
|
|
1.97
|
|
|||
Cash Dividends Declared Per Common Share
|
1.06
|
|
|
1.00
|
|
|
0.94
|
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Net Income
|
$
|
108,032
|
|
|
$
|
86,830
|
|
|
$
|
62,121
|
|
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
||||||
Unrealized holding gains (losses) on securities available-for-sale arising during the period
|
(18,723
|
)
|
|
(1,952
|
)
|
|
3,492
|
|
|||
Reclassification adjustment for gains on realized income
|
(129
|
)
|
|
(630
|
)
|
|
—
|
|
|||
Tax effect
|
6,598
|
|
|
904
|
|
|
(1,222
|
)
|
|||
Net unrealized gains (losses) on securities available-for-sale, net of tax
|
(12,254
|
)
|
|
(1,678
|
)
|
|
2,270
|
|
|||
Pension plan remeasurement (1)
|
(707
|
)
|
|
—
|
|
|
—
|
|
|||
Adjustment for pension and other postretirement benefits
|
2,630
|
|
|
7,845
|
|
|
(21,851
|
)
|
|||
Tax effect
|
(673
|
)
|
|
(2,746
|
)
|
|
7,648
|
|
|||
Net adjustment for pension and other postretirement benefits
|
1,250
|
|
|
5,099
|
|
|
(14,203
|
)
|
|||
Other comprehensive income (loss), net of tax
|
(11,004
|
)
|
|
3,421
|
|
|
(11,933
|
)
|
|||
Total comprehensive income, net of tax
|
$
|
97,028
|
|
|
$
|
90,251
|
|
|
$
|
50,188
|
|
(Dollars in thousands)
|
Common
Stock
|
|
Additional
Paid in
Capital
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive
Income (Loss)
|
|
Total Shareholders' Equity
|
||||||||||
Balances at December 31, 2013
|
$
|
29,790
|
|
|
$
|
488,177
|
|
|
$
|
199,053
|
|
|
$
|
(20,520
|
)
|
|
$
|
696,500
|
|
Comprehensive income
|
|
|
|
|
62,121
|
|
|
(11,933
|
)
|
|
50,188
|
|
|||||||
Cash dividends declared and paid of $0.94 per share
|
|
|
|
|
(29,528
|
)
|
|
|
|
(29,528
|
)
|
||||||||
Issuance of common stock, net of issuance costs
|
2,875
|
|
|
73,300
|
|
|
|
|
|
|
76,175
|
|
|||||||
Shares issued — stock options
|
44
|
|
|
887
|
|
|
|
|
|
|
931
|
|
|||||||
Shares issued — directors' stock plans
|
18
|
|
|
420
|
|
|
|
|
|
|
438
|
|
|||||||
Shares issued — restricted stock units
|
37
|
|
|
(539
|
)
|
|
|
|
|
|
(502
|
)
|
|||||||
Share-based compensation expense
|
10
|
|
|
2,921
|
|
|
|
|
|
|
2,931
|
|
|||||||
Balances at December 31, 2014
|
32,774
|
|
|
565,166
|
|
|
231,646
|
|
|
(32,453
|
)
|
|
797,133
|
|
|||||
Comprehensive income
|
|
|
|
|
86,830
|
|
|
3,421
|
|
|
90,251
|
|
|||||||
Cash dividends declared and paid of $1.00 per share
|
|
|
|
|
(36,918
|
)
|
|
|
|
(36,918
|
)
|
||||||||
Issuance of common stock in business combinations
|
5,183
|
|
|
154,721
|
|
|
|
|
|
|
159,904
|
|
|||||||
Shares issued — stock options
|
135
|
|
|
2,022
|
|
|
|
|
|
|
2,157
|
|
|||||||
Shares issued — directors' stock plans
|
11
|
|
|
305
|
|
|
|
|
|
|
316
|
|
|||||||
Shares issued — restricted stock units
|
54
|
|
|
(401
|
)
|
|
|
|
|
|
(347
|
)
|
|||||||
Share-based compensation expense
|
11
|
|
|
3,467
|
|
|
|
|
|
|
3,478
|
|
|||||||
Balances at December 31, 2015
|
38,168
|
|
|
725,280
|
|
|
281,558
|
|
|
(29,032
|
)
|
|
1,015,974
|
|
|||||
Comprehensive income
|
|
|
|
|
108,032
|
|
|
(11,004
|
)
|
|
97,028
|
|
|||||||
Cash dividends declared and paid of $1.06 per share
|
|
|
|
|
(49,389
|
)
|
|
|
|
(49,389
|
)
|
||||||||
Issuance of common stock and common stock equivalents in business combinations
|
32,074
|
|
|
1,472,737
|
|
|
|
|
|
|
1,504,811
|
|
|||||||
Shares issued — stock options
|
229
|
|
|
(656
|
)
|
|
|
|
|
|
(427
|
)
|
|||||||
Shares issued — directors' stock plans
|
95
|
|
|
2,502
|
|
|
|
|
|
|
2,597
|
|
|||||||
Shares issued — restricted stock units
|
60
|
|
|
(1,125
|
)
|
|
|
|
|
|
(1,065
|
)
|
|||||||
Net shares — restricted stock awards
|
(33
|
)
|
|
(1,422
|
)
|
|
|
|
|
|
(1,455
|
)
|
|||||||
Share-based compensation expense
|
6
|
|
|
13,446
|
|
|
|
|
|
|
13,452
|
|
|||||||
Balances at December 31, 2016
|
$
|
70,599
|
|
|
$
|
2,210,762
|
|
|
$
|
340,201
|
|
|
$
|
(40,036
|
)
|
|
$
|
2,581,526
|
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
108,032
|
|
|
$
|
86,830
|
|
|
$
|
62,121
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Provision for loan losses
|
14,875
|
|
|
6,500
|
|
|
6,100
|
|
|||
Gains on sales of loans
|
(15,686
|
)
|
|
(6,354
|
)
|
|
(4,451
|
)
|
|||
Proceeds from sales of loans
|
723,521
|
|
|
228,995
|
|
|
153,743
|
|
|||
Loans originated for sale
|
(534,422
|
)
|
|
(220,765
|
)
|
|
(150,795
|
)
|
|||
Net gains on sale of investment securities
|
(129
|
)
|
|
(630
|
)
|
|
—
|
|
|||
Net gains from sales/writedowns of other real estate and repossessed assets
|
(5,212
|
)
|
|
(2,681
|
)
|
|
(1,886
|
)
|
|||
Depreciation of premises and equipment
|
13,270
|
|
|
11,028
|
|
|
8,980
|
|
|||
Amortization of intangible assets
|
10,046
|
|
|
8,444
|
|
|
3,345
|
|
|||
Additions to loan servicing rights
|
(4,333
|
)
|
|
(1,476
|
)
|
|
(1,075
|
)
|
|||
Valuation change in loan servicing rights
|
(4,585
|
)
|
|
(200
|
)
|
|
200
|
|
|||
Net amortization of premiums and discounts on investment securities
|
9,713
|
|
|
6,007
|
|
|
4,497
|
|
|||
Share-based compensation expense
|
13,452
|
|
|
3,478
|
|
|
2,931
|
|
|||
Deferred income tax expense (benefit)
|
24,091
|
|
|
5,700
|
|
|
(1,700
|
)
|
|||
Net (increase) decrease in interest receivable and other assets
|
(25,606
|
)
|
|
(19,027
|
)
|
|
2,322
|
|
|||
Net increase (decrease) in interest payable and other liabilities
|
(46,449
|
)
|
|
(2,800
|
)
|
|
5,893
|
|
|||
Net cash from operating activities
|
280,578
|
|
|
103,049
|
|
|
90,225
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Investment securities — available-for-sale:
|
|
|
|
|
|
||||||
Proceeds from maturities, calls and principal reductions
|
248,772
|
|
|
212,051
|
|
|
165,749
|
|
|||
Proceeds from sales and redemptions
|
41,446
|
|
|
40,301
|
|
|
—
|
|
|||
Purchases
|
(187,702
|
)
|
|
—
|
|
|
—
|
|
|||
Investment securities — held-to-maturity:
|
|
|
|
|
|
||||||
Proceeds from maturities, calls and principal reductions
|
90,933
|
|
|
87,189
|
|
|
83,989
|
|
|||
Purchases
|
(206,023
|
)
|
|
(279,226
|
)
|
|
(127,187
|
)
|
|||
Net increase in loans
|
(860,135
|
)
|
|
(493,776
|
)
|
|
(586,121
|
)
|
|||
Proceeds from sales of other real estate and repossessed assets
|
22,147
|
|
|
16,653
|
|
|
12,192
|
|
|||
Purchases of premises and equipment, net of disposals
|
(18,098
|
)
|
|
(8,527
|
)
|
|
(13,411
|
)
|
|||
Net cash acquired (paid) in business combinations
|
325,714
|
|
|
16,551
|
|
|
(14,260
|
)
|
|||
Net cash used in investing activities
|
(542,946
|
)
|
|
(408,784
|
)
|
|
(479,049
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Net increase in interest- and noninterest-bearing demand deposits and savings accounts
|
672,584
|
|
|
479,386
|
|
|
277,781
|
|
|||
Net decrease in time deposits
|
(550,847
|
)
|
|
(170,598
|
)
|
|
(115,642
|
)
|
|||
Net increase (decrease) in securities sold under agreements to repurchase with customers and other short-term borrowings
|
401,144
|
|
|
(31,268
|
)
|
|
62,039
|
|
|||
Proceeds from issuance of long-term borrowings
|
375,000
|
|
|
125,000
|
|
|
—
|
|
|||
Repayment of long-term borrowings
|
(351,018
|
)
|
|
(6,000
|
)
|
|
(10,310
|
)
|
|||
Cash dividends paid
|
(49,389
|
)
|
|
(36,918
|
)
|
|
(29,528
|
)
|
|||
Proceeds from issuance of common stock, net of issuance costs
|
—
|
|
|
—
|
|
|
76,175
|
|
|||
Proceeds from directors' stock plans and exercise of stock options, net of shares withheld
|
1,572
|
|
|
2,473
|
|
|
1,242
|
|
|||
Cash paid for payroll taxes upon conversion of share-based awards
|
(1,065
|
)
|
|
(571
|
)
|
|
(701
|
)
|
|||
Net cash from financing activities
|
497,981
|
|
|
361,504
|
|
|
261,056
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
235,613
|
|
|
55,769
|
|
|
(127,768
|
)
|
|||
Cash and cash equivalents at beginning of year
|
238,789
|
|
|
183,020
|
|
|
310,788
|
|
|||
Cash and cash equivalents at end of year
|
$
|
474,402
|
|
|
$
|
238,789
|
|
|
$
|
183,020
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
25,460
|
|
|
$
|
16,958
|
|
|
$
|
14,823
|
|
Income taxes paid, net of refunds
|
22,200
|
|
|
41,450
|
|
|
25,900
|
|
|||
Loans transferred to other real estate and repossessed assets
|
12,970
|
|
|
9,329
|
|
|
11,308
|
|
|||
Closed branch offices transferred to other assets
|
4,846
|
|
|
2,692
|
|
|
841
|
|
|||
|
|
|
|
|
|
||||||
Business combinations:
|
|
|
|
|
|
||||||
Fair value of tangible assets acquired (noncash)
|
6,371,781
|
|
|
1,282,420
|
|
|
747,181
|
|
|||
Goodwill, loan servicing rights and other identifiable intangible assets acquired
|
908,217
|
|
|
118,744
|
|
|
82,090
|
|
|||
Liabilities assumed
|
6,100,901
|
|
|
1,258,051
|
|
|
815,011
|
|
|||
Common stock and stock options issued
|
1,504,811
|
|
|
159,904
|
|
|
—
|
|
(Dollars in thousands)
|
|
|
||
Consideration paid:
|
|
|
||
Stock
|
|
$
|
1,504,811
|
|
Cash
|
|
107,638
|
|
|
Total consideration
|
|
1,612,449
|
|
|
|
|
|
||
Fair value of identifiable assets acquired
(1)
:
|
|
|
||
Cash and cash equivalents
|
|
433,352
|
|
|
Investment securities:
|
|
|
||
Available-for-sale
|
|
808,894
|
|
|
Held-to-maturity
|
|
1,657
|
|
|
Loans held-for-sale
|
|
244,916
|
|
|
Loans
(2)
|
|
4,882,402
|
|
|
Premises and equipment
|
|
38,793
|
|
|
Loan servicing rights
|
|
42,462
|
|
|
Other intangible assets
(2)
|
|
19,088
|
|
|
Interest receivable and other assets
(2)
|
|
395,119
|
|
|
Total identifiable assets acquired
|
|
6,866,683
|
|
|
|
|
|
||
Fair value of liabilities assumed
(1)
:
|
|
|
||
Noninterest-bearing deposits
|
|
1,236,902
|
|
|
Interest-bearing deposits
|
|
4,057,716
|
|
|
Interest payable and other liabilities
(2)
|
|
99,482
|
|
|
Securities sold under agreements to repurchase with customers
|
|
19,704
|
|
|
Short-term borrowings
|
|
387,500
|
|
|
Long-term borrowings
|
|
299,597
|
|
|
Total liabilities assumed
|
|
6,100,901
|
|
|
|
|
|
||
Fair value of net identifiable assets acquired
|
|
765,782
|
|
|
Goodwill resulting from acquisition
|
|
$
|
846,667
|
|
(Dollars in thousands)
|
|
|
||
Assets
|
|
|
||
Cash and cash equivalents
|
|
$
|
39,301
|
|
Investment securities
|
|
66,699
|
|
|
Loans
|
|
985,542
|
|
|
Premises and equipment
|
|
10,975
|
|
|
Deferred tax asset, net
|
|
16,715
|
|
|
Goodwill
|
|
101,061
|
|
|
Core deposit intangible asset
|
|
8,003
|
|
|
Bank-owned life insurance
|
|
23,844
|
|
|
Other assets
|
|
37,695
|
|
|
Assets acquired, at fair value
|
|
1,289,835
|
|
|
Liabilities
|
|
|
||
Deposits
|
|
924,697
|
|
|
Short-term borrowings
|
|
30,000
|
|
|
Other borrowings
|
|
124,857
|
|
|
Other liabilities
|
|
22,887
|
|
|
Total liabilities acquired, at fair value
|
|
1,102,441
|
|
|
Total purchase price
|
|
$
|
187,394
|
|
(Dollars in thousands)
|
|
|
||
Assets
|
|
|
||
Cash and cash equivalents
|
|
$
|
32,171
|
|
Loans
|
|
121,783
|
|
|
Premises and equipment
|
|
3,019
|
|
|
Deferred tax assets, net
|
|
|
||
Net operating loss carryforward
|
|
7,900
|
|
|
Other
|
|
2,392
|
|
|
Interest receivable and other assets
|
|
6,972
|
|
|
Goodwill
|
|
5,339
|
|
|
Core deposit intangibles
|
|
1,930
|
|
|
Mortgage servicing rights
|
|
1,284
|
|
|
Assets acquired, at fair value
|
|
182,790
|
|
|
Liabilities
|
|
|
||
Deposits
|
|
144,300
|
|
|
FHLB advances
|
|
8,000
|
|
|
Interest payable and other liabilities
|
|
3,299
|
|
|
Total liabilities acquired, at fair value
|
|
155,599
|
|
|
Total purchase price
|
|
$
|
27,191
|
|
|
|
Years ended December 31,
|
||||||||||
(In thousands, except per share data)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net interest and other income
|
|
$
|
492,323
|
|
|
$
|
654,962
|
|
|
$
|
361,695
|
|
Net Income
|
|
115,847
|
|
|
142,504
|
|
|
79,455
|
|
|||
Earnings per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
1.65
|
|
|
$
|
2.03
|
|
|
$
|
2.17
|
|
Diluted
|
|
$
|
1.62
|
|
|
$
|
2.01
|
|
|
$
|
2.16
|
|
(Dollars in thousands)
|
Talmer
|
|
Lake Michigan
|
|
Monarch
|
|
Northwestern
|
|
OAK
|
|
Total
|
||||||||||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at beginning of period
|
$
|
—
|
|
|
$
|
152,999
|
|
|
$
|
34,558
|
|
|
$
|
82,623
|
|
|
$
|
28,077
|
|
|
$
|
298,257
|
|
Addition attributable to acquisitions
|
862,127
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
862,127
|
|
||||||
Additions, net of reductions*
|
—
|
|
|
(3,552
|
)
|
|
(1,908
|
)
|
|
(6,985
|
)
|
|
1,091
|
|
|
(11,354
|
)
|
||||||
Accretion recognized in interest income
|
(63,917
|
)
|
|
(33,031
|
)
|
|
(5,468
|
)
|
|
(15,791
|
)
|
|
(13,352
|
)
|
|
(131,559
|
)
|
||||||
Reclassification from nonaccretable difference
|
—
|
|
|
5,000
|
|
|
—
|
|
|
10,000
|
|
|
7,500
|
|
|
22,500
|
|
||||||
Balance at end of period
|
$
|
798,210
|
|
|
$
|
121,416
|
|
|
$
|
27,182
|
|
|
$
|
69,847
|
|
|
$
|
23,316
|
|
|
$
|
1,039,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at beginning of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
104,675
|
|
|
$
|
33,286
|
|
|
$
|
137,961
|
|
Addition attributable to acquisitions
|
—
|
|
|
190,246
|
|
|
37,914
|
|
|
—
|
|
|
—
|
|
|
228,160
|
|
||||||
Additions, net of reductions*
|
—
|
|
|
(12,991
|
)
|
|
1,336
|
|
|
(3,396
|
)
|
|
6,601
|
|
|
(8,450
|
)
|
||||||
Accretion recognized in interest income
|
—
|
|
|
(24,256
|
)
|
|
(4,692
|
)
|
|
(18,656
|
)
|
|
(11,810
|
)
|
|
(59,414
|
)
|
||||||
Balance at end of period
|
$
|
—
|
|
|
$
|
152,999
|
|
|
$
|
34,558
|
|
|
$
|
82,623
|
|
|
$
|
28,077
|
|
|
$
|
298,257
|
|
*
|
Represents additions in estimated contractual interest expected to be collected from acquired loans being renewed or extended, less reductions in contractual interest resulting from the early payoff of acquired loans.
|
Level 1
|
Valuation is based upon quoted prices for identical instruments traded in active markets. Level 1 valuations for the Corporation include U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets. Valuations are obtained from a third-party pricing service for these investment securities.
|
Level 2
|
Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 2 valuations for the Corporation include government sponsored agency securities, including securities issued by the Federal Home Loan Bank, Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, Federal Farm Credit Bank, Student Loan Marketing Corporation and the Small Business Administration, securities issued by certain state and political subdivisions, residential mortgage-backed securities, collateralized mortgage obligations, corporate bonds, preferred stock and available-for-sale trust preferred securities. Valuations are obtained from a third-party pricing service for these investment securities. Additionally included in Level 2 valuations are loans held-for-sale and derivative assets and liabilities.
|
Level 3
|
Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models, yield curves and similar techniques. The determination of fair value requires management judgment or estimation and generally is corroborated by external data, which includes third-party pricing services. Level 3 valuations for the Corporation include securities issued by certain state and political subdivisions, held-to-maturity trust preferred investment securities, impaired loans, goodwill, core deposit intangible assets, non-compete intangible assets, LSRs and other real estate and repossessed assets.
|
(Dollars in thousands)
|
|
Quoted Prices
In Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Investment securities — available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
5,793
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,793
|
|
Government sponsored agencies
|
|
—
|
|
|
215,011
|
|
|
—
|
|
|
215,011
|
|
||||
State and political subdivisions
|
|
—
|
|
|
300,088
|
|
|
—
|
|
|
300,088
|
|
||||
Residential mortgage-backed securities
|
|
—
|
|
|
272,282
|
|
|
—
|
|
|
272,282
|
|
||||
Collateralized mortgage obligations
|
|
—
|
|
|
320,025
|
|
|
—
|
|
|
320,025
|
|
||||
Corporate bonds
|
|
—
|
|
|
89,474
|
|
|
—
|
|
|
89,474
|
|
||||
Preferred stock and trust preferred securities
|
|
—
|
|
|
32,291
|
|
|
—
|
|
|
32,291
|
|
||||
Total investment securities — available-for-sale
|
|
5,793
|
|
|
1,229,171
|
|
|
—
|
|
|
1,234,964
|
|
||||
Loans held-for-sale
|
|
—
|
|
|
81,830
|
|
|
—
|
|
|
81,830
|
|
||||
Loan servicing rights
|
|
—
|
|
|
—
|
|
|
48,085
|
|
|
48,085
|
|
||||
Derivative assets:
|
|
|
|
|
|
|
|
|
||||||||
Customer-initiated derivatives
|
|
—
|
|
|
4,406
|
|
|
—
|
|
|
4,406
|
|
||||
Forward contracts related to mortgage loans to be delivered for sale
|
|
—
|
|
|
635
|
|
|
—
|
|
|
635
|
|
||||
Interest rate lock commitments
|
|
—
|
|
|
956
|
|
|
—
|
|
|
956
|
|
||||
Power Equity CD
|
|
—
|
|
|
2,218
|
|
|
—
|
|
|
2,218
|
|
||||
Total derivatives
|
|
—
|
|
|
8,215
|
|
|
—
|
|
|
8,215
|
|
||||
Total assets at fair value
|
|
$
|
5,793
|
|
|
$
|
1,319,216
|
|
|
$
|
48,085
|
|
|
$
|
1,373,094
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Customer-initiated derivatives
|
|
—
|
|
|
4,141
|
|
|
—
|
|
|
4,141
|
|
||||
Power Equity CD
|
|
—
|
|
|
2,218
|
|
|
—
|
|
|
2,218
|
|
||||
Total derivatives
|
|
—
|
|
|
6,359
|
|
|
—
|
|
|
6,359
|
|
||||
Total liabilities at fair value
|
|
$
|
—
|
|
|
$
|
6,359
|
|
|
$
|
—
|
|
|
$
|
6,359
|
|
(Dollars in thousands)
|
|
Quoted Prices
In Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Investment securities — available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
5,765
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,765
|
|
Government sponsored agencies
|
|
—
|
|
|
194,989
|
|
|
—
|
|
|
194,989
|
|
||||
State and political subdivisions
|
|
—
|
|
|
15,120
|
|
|
—
|
|
|
15,120
|
|
||||
Residential mortgage-backed securities
|
|
—
|
|
|
187,768
|
|
|
—
|
|
|
187,768
|
|
||||
Collateralized mortgage obligations
|
|
—
|
|
|
132,230
|
|
|
—
|
|
|
132,230
|
|
||||
Corporate bonds
|
|
—
|
|
|
14,627
|
|
|
—
|
|
|
14,627
|
|
||||
Preferred stock and trust preferred securities
|
|
—
|
|
|
3,232
|
|
|
—
|
|
|
3,232
|
|
||||
Total investment securities — available-for-sale
|
|
5,765
|
|
|
547,966
|
|
|
—
|
|
|
553,731
|
|
||||
Loans held-for-sale
|
|
—
|
|
|
10,327
|
|
|
—
|
|
|
10,327
|
|
||||
Derivative assets:
|
|
|
|
|
|
|
|
|
|
|||||||
Forward contracts related to mortgage loans to be delivered for sale
|
|
—
|
|
|
144
|
|
|
—
|
|
|
144
|
|
||||
Interest rate lock commitments
|
|
—
|
|
|
42
|
|
|
—
|
|
|
42
|
|
||||
Power Equity CD
|
|
—
|
|
|
1,832
|
|
|
—
|
|
|
1,832
|
|
||||
Total derivatives
|
|
—
|
|
|
2,018
|
|
|
—
|
|
|
2,018
|
|
||||
Total assets at fair value
|
|
$
|
5,765
|
|
|
$
|
560,311
|
|
|
$
|
—
|
|
|
$
|
566,076
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Forward contracts related to mortgage loans to be delivered for sale
|
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
||||
Interest rate lock commitments
|
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
||||
Power Equity CD
|
|
—
|
|
|
1,832
|
|
|
—
|
|
|
1,832
|
|
||||
Total derivatives
|
|
—
|
|
|
1,979
|
|
|
—
|
|
|
1,979
|
|
||||
Total liabilities at fair value
|
|
$
|
—
|
|
|
$
|
1,979
|
|
|
$
|
—
|
|
|
$
|
1,979
|
|
|
|
Year ended
December 31, 2016
|
||
(Dollars in thousands)
|
|
Loan servicing
rights
|
||
Balance, beginning of period
|
|
$
|
—
|
|
Additions due to acquisition
|
|
42,462
|
|
|
Gains (losses):
|
|
|
|
|
Recorded in earnings (realized):
|
|
|
||
Recorded in “Mortgage banking revenue”
|
|
4,593
|
|
|
New originations
|
|
1,030
|
|
|
Balance, end of period
|
|
$
|
48,085
|
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Aggregate fair value
|
|
$
|
81,830
|
|
|
$
|
10,327
|
|
Contractual balance
|
|
81,009
|
|
|
10,366
|
|
||
Unrealized gain (loss)
|
|
821
|
|
|
(39
|
)
|
|
|
For the years ended December 31,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Interest income
(1)
|
|
$
|
1,606
|
|
|
$
|
83
|
|
|
$
|
66
|
|
Change in fair value
(2)
|
|
39
|
|
|
(61
|
)
|
|
110
|
|
|||
Total included in earnings
|
|
$
|
1,645
|
|
|
$
|
22
|
|
|
$
|
176
|
|
|
(Dollars in thousands)
|
|
Quoted Prices
In Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Impaired originated loans
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
62,184
|
|
|
$
|
62,184
|
|
Other real estate/repossessed assets
|
|
—
|
|
|
—
|
|
|
1,386
|
|
|
1,386
|
|
||||
Loan servicing rights
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
63,572
|
|
|
$
|
63,572
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Impaired originated loans
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
42,065
|
|
|
$
|
42,065
|
|
Other real estate/repossessed assets
|
|
—
|
|
|
—
|
|
|
3,068
|
|
|
3,068
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45,133
|
|
|
$
|
45,133
|
|
(Dollars in thousands)
|
|
Fair Value at December 31, 2016
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
|
|
Range
|
||
Impaired originated loans
|
|
$
|
62,184
|
|
|
Appraisal of collateral
|
|
Discount for type of collateral and age of appraisal
|
|
10%-25%
|
Other real estate/repossessed assets
|
|
1,386
|
|
|
Appraisal of property
|
|
Discount for type of property and age of appraisal
|
|
10%-25%
|
|
Loan servicing rights
|
|
2
|
|
|
Discounted cash flow
|
|
Constant prepayment rate
|
|
9%-18%
|
|
|
|
|
|
|
|
Discount rate
|
|
10%-11%
|
|
|
|
|
December 31,
|
||||||||||||||
|
|
Level in Fair Value Measurement Hierarchy
|
|
2016
|
|
2015
|
||||||||||||
(Dollars in thousands)
|
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
Level 1
|
|
$
|
474,402
|
|
|
$
|
474,402
|
|
|
$
|
238,789
|
|
|
$
|
238,789
|
|
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Held-to-maturity
|
|
Level 2
|
|
622,927
|
|
|
608,221
|
|
|
509,471
|
|
|
512,405
|
|
||||
Held-to-maturity
|
|
Level 3
|
|
500
|
|
|
310
|
|
|
500
|
|
|
7,090
|
|
||||
Nonmarketable equity securities
|
|
NA
|
|
97,350
|
|
|
97,350
|
|
|
36,907
|
|
|
36,907
|
|
||||
Net loans
(1)
|
|
Level 3
|
|
12,912,511
|
|
|
13,069,315
|
|
|
7,197,819
|
|
|
7,201,994
|
|
||||
Interest receivable
|
|
Level 2
|
|
42,235
|
|
|
42,235
|
|
|
21,953
|
|
|
21,953
|
|
||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Deposits without defined maturities
|
|
Level 2
|
|
$
|
9,862,755
|
|
|
$
|
9,862,755
|
|
|
$
|
5,809,355
|
|
|
$
|
5,809,355
|
|
Time deposits
|
|
Level 2
|
|
3,010,367
|
|
|
3,010,048
|
|
|
1,647,412
|
|
|
1,647,412
|
|
||||
Total deposits
|
|
|
|
12,873,122
|
|
|
12,872,803
|
|
|
7,456,767
|
|
|
7,456,767
|
|
||||
Interest payable
|
|
Level 2
|
|
5,415
|
|
|
5,415
|
|
|
1,578
|
|
|
1,578
|
|
||||
Securities sold under agreements to repurchase with customers
|
|
Level 2
|
|
343,047
|
|
|
343,047
|
|
|
297,199
|
|
|
297,199
|
|
||||
Short-term borrowings
|
|
Level 2
|
|
825,000
|
|
|
825,000
|
|
|
100,000
|
|
|
100,000
|
|
||||
Long-term borrowings
|
|
Level 2
|
|
597,847
|
|
|
591,227
|
|
|
242,391
|
|
|
242,391
|
|
|
(1)
|
Included
$62.2 million
and
$42.1 million
of impaired loans recorded at fair value on a nonrecurring basis at
December 31, 2016
and
2015
, respectively.
|
|
|
Investment Securities Available-for-Sale
|
||||||||||||||
(Dollars in thousands)
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
5,788
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5,793
|
|
Government sponsored agencies
|
|
216,890
|
|
|
189
|
|
|
2,068
|
|
|
215,011
|
|
||||
State and political subdivisions
|
|
311,704
|
|
|
163
|
|
|
11,779
|
|
|
300,088
|
|
||||
Residential mortgage-backed securities
|
|
276,162
|
|
|
112
|
|
|
3,992
|
|
|
272,282
|
|
||||
Collateralized mortgage obligations
|
|
323,965
|
|
|
63
|
|
|
4,003
|
|
|
320,025
|
|
||||
Corporate bonds
|
|
90,859
|
|
|
16
|
|
|
1,401
|
|
|
89,474
|
|
||||
Preferred stock and trust preferred securities
|
|
31,353
|
|
|
1,018
|
|
|
80
|
|
|
32,291
|
|
||||
Total
|
|
$
|
1,256,721
|
|
|
$
|
1,566
|
|
|
$
|
23,323
|
|
|
$
|
1,234,964
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
5,773
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
5,765
|
|
Government sponsored agencies
|
|
195,711
|
|
|
78
|
|
|
800
|
|
|
194,989
|
|
||||
State and political subdivisions
|
|
14,731
|
|
|
395
|
|
|
6
|
|
|
15,120
|
|
||||
Residential mortgage-backed securities
|
|
189,452
|
|
|
538
|
|
|
2,222
|
|
|
187,768
|
|
||||
Collateralized mortgage obligations
|
|
133,256
|
|
|
111
|
|
|
1,137
|
|
|
132,230
|
|
||||
Corporate bonds
|
|
14,825
|
|
|
2
|
|
|
200
|
|
|
14,627
|
|
||||
Preferred stock and trust preferred securities
|
|
2,888
|
|
|
344
|
|
|
—
|
|
|
3,232
|
|
||||
Total
|
|
$
|
556,636
|
|
|
$
|
1,468
|
|
|
$
|
4,373
|
|
|
$
|
553,731
|
|
|
|
Investment Securities Held-to-Maturity
|
||||||||||||||
(Dollars in thousands)
|
|
Amortized
Cost
|
|
Unrecognized
Gains
|
|
Unrecognized
Losses
|
|
Fair
Value
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
State and political subdivisions
|
|
$
|
622,927
|
|
|
$
|
2,648
|
|
|
$
|
17,354
|
|
|
$
|
608,221
|
|
Trust preferred securities
|
|
500
|
|
|
—
|
|
|
190
|
|
|
310
|
|
||||
Total
|
|
$
|
623,427
|
|
|
$
|
2,648
|
|
|
$
|
17,544
|
|
|
$
|
608,531
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
State and political subdivisions
|
|
$
|
509,471
|
|
|
$
|
7,446
|
|
|
$
|
4,512
|
|
|
$
|
512,405
|
|
Trust preferred securities
|
|
500
|
|
|
—
|
|
|
200
|
|
|
300
|
|
||||
Total
|
|
$
|
509,971
|
|
|
$
|
7,446
|
|
|
$
|
4,712
|
|
|
$
|
512,705
|
|
|
|
For the years ended December 31,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Proceeds
|
|
$
|
41,446
|
|
|
$
|
40,301
|
|
|
$
|
—
|
|
Gross gains
|
|
325
|
|
|
631
|
|
|
—
|
|
|||
Gross losses
|
|
(196
|
)
|
|
(1
|
)
|
|
—
|
|
|
|
December 31, 2016
|
||||||
(Dollars in thousands)
|
|
Amortized Cost
|
|
Fair Value
|
||||
Investment Securities Available-for-Sale:
|
|
|
|
|
||||
Due in one year or less
|
|
$
|
237,047
|
|
|
$
|
235,845
|
|
Due after one year through five years
|
|
490,634
|
|
|
485,221
|
|
||
Due after five years through ten years
|
|
339,222
|
|
|
329,879
|
|
||
Due after ten years
|
|
188,429
|
|
|
182,281
|
|
||
Preferred stock
|
|
1,389
|
|
|
1,738
|
|
||
Total
|
|
$
|
1,256,721
|
|
|
$
|
1,234,964
|
|
Investment Securities Held-to-Maturity:
|
|
|
|
|
||||
Due in one year or less
|
|
$
|
66,090
|
|
|
$
|
65,954
|
|
Due after one year through five years
|
|
262,136
|
|
|
257,936
|
|
||
Due after five years through ten years
|
|
145,225
|
|
|
139,320
|
|
||
Due after ten years
|
|
149,976
|
|
|
145,321
|
|
||
Total
|
|
$
|
623,427
|
|
|
$
|
608,531
|
|
|
|
Less Than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
(Dollars in thousands)
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Government sponsored agencies
|
|
$
|
105,702
|
|
|
$
|
1,707
|
|
|
$
|
15,023
|
|
|
$
|
361
|
|
|
$
|
120,725
|
|
|
$
|
2,068
|
|
State and political subdivisions
|
|
758,063
|
|
|
28,158
|
|
|
26,810
|
|
|
975
|
|
|
784,873
|
|
|
29,133
|
|
||||||
Residential mortgage-backed securities
|
|
244,239
|
|
|
3,992
|
|
|
—
|
|
|
—
|
|
|
244,239
|
|
|
3,992
|
|
||||||
Collateralized mortgage obligations
|
|
279,001
|
|
|
3,778
|
|
|
14,754
|
|
|
225
|
|
|
293,755
|
|
|
4,003
|
|
||||||
Corporate bonds
|
|
80,536
|
|
|
1,401
|
|
|
—
|
|
|
—
|
|
|
80,536
|
|
|
1,401
|
|
||||||
Trust preferred securities
|
|
10,699
|
|
|
80
|
|
|
310
|
|
|
190
|
|
|
11,009
|
|
|
270
|
|
||||||
Total
|
|
$
|
1,478,240
|
|
|
$
|
39,116
|
|
|
$
|
56,897
|
|
|
$
|
1,751
|
|
|
$
|
1,535,137
|
|
|
$
|
40,867
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
|
$
|
5,765
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,765
|
|
|
$
|
8
|
|
Government sponsored agencies
|
|
114,640
|
|
|
292
|
|
|
21,681
|
|
|
508
|
|
|
136,321
|
|
|
800
|
|
||||||
State and political subdivisions
|
|
195,285
|
|
|
2,891
|
|
|
68,361
|
|
|
1,627
|
|
|
263,646
|
|
|
4,518
|
|
||||||
Residential mortgage-backed securities
|
|
169,226
|
|
|
2,146
|
|
|
3,435
|
|
|
76
|
|
|
172,661
|
|
|
2,222
|
|
||||||
Collateralized mortgage obligations
|
|
60,459
|
|
|
408
|
|
|
39,382
|
|
|
729
|
|
|
99,841
|
|
|
1,137
|
|
||||||
Corporate bonds
|
|
9,532
|
|
|
200
|
|
|
—
|
|
|
—
|
|
|
9,532
|
|
|
200
|
|
||||||
Trust preferred securities
|
|
—
|
|
|
—
|
|
|
300
|
|
|
200
|
|
|
300
|
|
|
200
|
|
||||||
Total
|
|
$
|
554,907
|
|
|
$
|
5,945
|
|
|
$
|
133,159
|
|
|
$
|
3,140
|
|
|
$
|
688,066
|
|
|
$
|
9,085
|
|
(Dollars in thousands)
|
|
Originated
|
|
Acquired
(1)
|
|
Total loans
|
|
||||||
December 31, 2016
|
|
|
|
|
|
|
|
||||||
Commercial loan portfolio:
|
|
|
|
|
|
|
|
||||||
Commercial
|
|
$
|
1,901,526
|
|
|
$
|
1,315,774
|
|
|
$
|
3,217,300
|
|
|
Commercial real estate
|
|
1,921,799
|
|
|
2,051,341
|
|
|
3,973,140
|
|
|
|||
Real estate construction and land development
|
|
281,724
|
|
|
122,048
|
|
|
403,772
|
|
|
|||
Subtotal
|
|
4,105,049
|
|
|
3,489,163
|
|
|
7,594,212
|
|
|
|||
Consumer loan portfolio:
|
|
|
|
|
|
|
|
||||||
Residential mortgage
|
|
1,475,342
|
|
|
1,611,132
|
|
|
3,086,474
|
|
|
|||
Consumer installment
|
|
1,282,588
|
|
|
151,296
|
|
|
1,433,884
|
|
|
|||
Home equity
|
|
595,422
|
|
|
280,787
|
|
|
876,209
|
|
|
|||
Subtotal
|
|
3,353,352
|
|
|
2,043,215
|
|
|
5,396,567
|
|
|
|||
Total loans
|
|
$
|
7,458,401
|
|
|
$
|
5,532,378
|
|
|
$
|
12,990,779
|
|
(2)
|
December 31, 2015
|
|
|
|
|
|
|
|
||||||
Commercial loan portfolio:
|
|
|
|
|
|
|
|
||||||
Commercial
|
|
$
|
1,521,515
|
|
|
$
|
384,364
|
|
|
$
|
1,905,879
|
|
|
Commercial real estate
|
|
1,424,059
|
|
|
688,103
|
|
|
2,112,162
|
|
|
|||
Real estate construction and land development
|
|
185,147
|
|
|
46,929
|
|
|
232,076
|
|
|
|||
Subtotal
|
|
3,130,721
|
|
|
1,119,396
|
|
|
4,250,117
|
|
|
|||
Consumer loan portfolio:
|
|
|
|
|
|
|
|
||||||
Residential mortgage
|
|
1,216,975
|
|
|
212,661
|
|
|
1,429,636
|
|
|
|||
Consumer installment
|
|
869,426
|
|
|
8,031
|
|
|
877,457
|
|
|
|||
Home equity
|
|
590,812
|
|
|
123,125
|
|
|
713,937
|
|
|
|||
Subtotal
|
|
2,677,213
|
|
|
343,817
|
|
|
3,021,030
|
|
|
|||
Total loans
|
|
$
|
5,807,934
|
|
|
$
|
1,463,213
|
|
|
$
|
7,271,147
|
|
(2)
|
(Dollars in thousands)
|
|
Pass
|
|
Special Mention
|
|
Substandard
|
|
Doubtful
|
|
Total
|
||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Originated Portfolio:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
$
|
1,803,750
|
|
|
$
|
44,809
|
|
|
$
|
51,898
|
|
|
$
|
1,069
|
|
|
$
|
1,901,526
|
|
Commercial real estate
|
|
1,849,315
|
|
|
36,981
|
|
|
35,502
|
|
|
1
|
|
|
1,921,799
|
|
|||||
Real estate construction and land development
|
|
280,968
|
|
|
157
|
|
|
599
|
|
|
—
|
|
|
281,724
|
|
|||||
Subtotal
|
|
3,934,033
|
|
|
81,947
|
|
|
87,999
|
|
|
1,070
|
|
|
4,105,049
|
|
|||||
Acquired Portfolio:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
1,218,848
|
|
|
46,643
|
|
|
50,283
|
|
|
—
|
|
|
1,315,774
|
|
|||||
Commercial real estate
|
|
1,897,011
|
|
|
61,441
|
|
|
92,636
|
|
|
253
|
|
|
2,051,341
|
|
|||||
Real estate construction and land development
|
|
117,505
|
|
|
1,982
|
|
|
2,561
|
|
|
—
|
|
|
122,048
|
|
|||||
Subtotal
|
|
3,233,364
|
|
|
110,066
|
|
|
145,480
|
|
|
253
|
|
|
3,489,163
|
|
|||||
Total
|
|
$
|
7,167,397
|
|
|
$
|
192,013
|
|
|
$
|
233,479
|
|
|
$
|
1,323
|
|
|
$
|
7,594,212
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Originated Portfolio:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
$
|
1,418,301
|
|
|
$
|
34,727
|
|
|
$
|
66,392
|
|
|
$
|
2,095
|
|
|
$
|
1,521,515
|
|
Commercial real estate
|
|
1,341,202
|
|
|
31,036
|
|
|
51,821
|
|
|
—
|
|
|
1,424,059
|
|
|||||
Real estate construction and land development
|
|
183,323
|
|
|
180
|
|
|
1,644
|
|
|
—
|
|
|
185,147
|
|
|||||
Subtotal
|
|
2,942,826
|
|
|
65,943
|
|
|
119,857
|
|
|
2,095
|
|
|
3,130,721
|
|
|||||
Acquired Portfolio:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
340,782
|
|
|
28,321
|
|
|
15,261
|
|
|
—
|
|
|
384,364
|
|
|||||
Commercial real estate
|
|
629,430
|
|
|
23,926
|
|
|
34,747
|
|
|
—
|
|
|
688,103
|
|
|||||
Real estate construction and land development
|
|
41,683
|
|
|
2,556
|
|
|
2,690
|
|
|
—
|
|
|
46,929
|
|
|||||
Subtotal
|
|
1,011,895
|
|
|
54,803
|
|
|
52,698
|
|
|
—
|
|
|
1,119,396
|
|
|||||
Total
|
|
$
|
3,954,721
|
|
|
$
|
120,746
|
|
|
$
|
172,555
|
|
|
$
|
2,095
|
|
|
$
|
4,250,117
|
|
(Dollars in thousands)
|
|
Residential mortgage
|
|
Consumer
installment
|
|
Home equity
|
|
Total consumer
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Originated Portfolio:
|
|
|
|
|
|
|
|
|
||||||||
Performing
|
|
$
|
1,468,373
|
|
|
$
|
1,281,709
|
|
|
$
|
592,071
|
|
|
$
|
3,342,153
|
|
Nonperforming
|
|
6,969
|
|
|
879
|
|
|
3,351
|
|
|
11,199
|
|
||||
Subtotal
|
|
1,475,342
|
|
|
1,282,588
|
|
|
595,422
|
|
|
3,353,352
|
|
||||
Acquired Loans
|
|
1,611,132
|
|
|
151,296
|
|
|
280,787
|
|
|
2,043,215
|
|
||||
Total
|
|
$
|
3,086,474
|
|
|
$
|
1,433,884
|
|
|
$
|
876,209
|
|
|
$
|
5,396,567
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Originated Portfolio:
|
|
|
|
|
|
|
|
|
||||||||
Performing
|
|
$
|
1,211,418
|
|
|
$
|
868,975
|
|
|
$
|
588,833
|
|
|
$
|
2,669,226
|
|
Nonperforming
|
|
5,557
|
|
|
451
|
|
|
1,979
|
|
|
7,987
|
|
||||
Subtotal
|
|
1,216,975
|
|
|
869,426
|
|
|
590,812
|
|
|
2,677,213
|
|
||||
Acquired Loans
|
|
212,661
|
|
|
8,031
|
|
|
123,125
|
|
|
343,817
|
|
||||
Total
|
|
$
|
1,429,636
|
|
|
$
|
877,457
|
|
|
$
|
713,937
|
|
|
$
|
3,021,030
|
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Nonperforming assets
|
|
|
|
|
||||
Nonaccrual loans:
|
|
|
|
|
||||
Commercial
|
|
$
|
13,178
|
|
|
$
|
28,554
|
|
Commercial real estate
|
|
19,877
|
|
|
25,163
|
|
||
Real estate construction and land development
|
|
80
|
|
|
521
|
|
||
Residential mortgage
|
|
6,969
|
|
|
5,557
|
|
||
Consumer installment
|
|
879
|
|
|
451
|
|
||
Home equity
|
|
3,351
|
|
|
1,979
|
|
||
Total nonaccrual loans
|
|
44,334
|
|
|
62,225
|
|
||
Other real estate owned and repossessed assets
|
|
17,187
|
|
|
9,935
|
|
||
Total nonperforming assets
|
|
$
|
61,521
|
|
|
$
|
72,160
|
|
Accruing loans contractually past due 90 days or more as to interest or principal payments, excluding acquired loans accounted for under ASC 310-30
|
|
|
|
|
||||
Commercial
|
|
11
|
|
|
364
|
|
||
Commercial real estate
|
|
277
|
|
|
254
|
|
||
Residential mortgage
|
|
—
|
|
|
402
|
|
||
Home equity
|
|
995
|
|
|
1,267
|
|
||
Total accruing loans contractually past due 90 days or more as to interest or principal payments, excluding acquired loans accounted for under ASC 310-30
|
|
$
|
1,283
|
|
|
$
|
2,287
|
|
(Dollars in thousands)
|
|
30-59
days
past due
|
|
60-89
days
past due
|
|
90 days or more past due
|
|
Total past due
|
|
Current
|
|
Total loans
|
|
90 days or more past due and still accruing
|
||||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Originated Portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
|
$
|
10,421
|
|
|
$
|
4,842
|
|
|
$
|
3,641
|
|
|
$
|
18,904
|
|
|
$
|
1,882,622
|
|
|
$
|
1,901,526
|
|
|
$
|
11
|
|
Commercial real estate
|
|
6,551
|
|
|
1,589
|
|
|
5,165
|
|
|
13,305
|
|
|
1,908,494
|
|
|
1,921,799
|
|
|
277
|
|
|||||||
Real estate construction and land development
|
|
2,721
|
|
|
499
|
|
|
—
|
|
|
3,220
|
|
|
278,504
|
|
|
281,724
|
|
|
—
|
|
|||||||
Residential mortgage
|
|
3,147
|
|
|
62
|
|
|
1,752
|
|
|
4,961
|
|
|
1,470,381
|
|
|
1,475,342
|
|
|
—
|
|
|||||||
Consumer installment
|
|
3,991
|
|
|
675
|
|
|
238
|
|
|
4,904
|
|
|
1,277,684
|
|
|
1,282,588
|
|
|
—
|
|
|||||||
Home equity
|
|
3,097
|
|
|
893
|
|
|
2,349
|
|
|
6,339
|
|
|
589,083
|
|
|
595,422
|
|
|
995
|
|
|||||||
Total
|
|
$
|
29,928
|
|
|
$
|
8,560
|
|
|
$
|
13,145
|
|
|
$
|
51,633
|
|
|
$
|
7,406,768
|
|
|
$
|
7,458,401
|
|
|
$
|
1,283
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Originated Portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
|
$
|
9,393
|
|
|
$
|
5,243
|
|
|
$
|
364
|
|
|
$
|
15,000
|
|
|
$
|
1,506,515
|
|
|
$
|
1,521,515
|
|
|
$
|
364
|
|
Commercial real estate
|
|
6,941
|
|
|
2,262
|
|
|
254
|
|
|
9,457
|
|
|
1,414,602
|
|
|
1,424,059
|
|
|
254
|
|
|||||||
Real estate construction and land development
|
|
596
|
|
|
—
|
|
|
—
|
|
|
596
|
|
|
184,551
|
|
|
185,147
|
|
|
—
|
|
|||||||
Residential mortgage
|
|
7,475
|
|
|
1,170
|
|
|
402
|
|
|
9,047
|
|
|
1,207,928
|
|
|
1,216,975
|
|
|
402
|
|
|||||||
Consumer installment
|
|
3,347
|
|
|
741
|
|
|
—
|
|
|
4,088
|
|
|
865,338
|
|
|
869,426
|
|
|
—
|
|
|||||||
Home equity
|
|
2,075
|
|
|
1,113
|
|
|
1,267
|
|
|
4,455
|
|
|
586,357
|
|
|
590,812
|
|
|
1,267
|
|
|||||||
Total
|
|
$
|
29,827
|
|
|
$
|
10,529
|
|
|
$
|
2,287
|
|
|
$
|
42,643
|
|
|
$
|
5,765,291
|
|
|
$
|
5,807,934
|
|
|
$
|
2,287
|
|
(Dollars in thousands)
|
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Related
valuation
allowance
|
||||||
December 31, 2016
|
|
|
|
|
|
|
||||||
Impaired loans with a valuation allowance:
|
|
|
|
|
|
|
||||||
Commercial
|
|
$
|
28,925
|
|
|
$
|
33,209
|
|
|
$
|
3,128
|
|
Commercial real estate
|
|
21,318
|
|
|
27,558
|
|
|
2,102
|
|
|||
Real estate construction and land development
|
|
177
|
|
|
177
|
|
|
4
|
|
|||
Residential mortgage
|
|
20,864
|
|
|
20,864
|
|
|
3,528
|
|
|||
Consumer installment
|
|
879
|
|
|
879
|
|
|
240
|
|
|||
Home equity
|
|
2,577
|
|
|
2,577
|
|
|
390
|
|
|||
Subtotal
|
|
71,284
|
|
|
81,808
|
|
|
8,762
|
|
|||
Impaired loans with no related valuation allowance:
|
|
|
|
|
|
|
||||||
Commercial
|
|
7,435
|
|
|
11,153
|
|
|
—
|
|
|||
Commercial real estate
|
|
20,588
|
|
|
23,535
|
|
|
—
|
|
|||
Real estate construction and land development
|
|
80
|
|
|
80
|
|
|
—
|
|
|||
Residential mortgage
|
|
3,252
|
|
|
3,252
|
|
|
—
|
|
|||
Consumer installment
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Home equity
|
|
774
|
|
|
774
|
|
|
—
|
|
|||
Subtotal
|
|
32,129
|
|
|
38,794
|
|
|
—
|
|
|||
Total impaired loans:
|
|
|
|
|
|
|
||||||
Commercial
|
|
36,360
|
|
|
44,362
|
|
|
3,128
|
|
|||
Commercial real estate
|
|
41,906
|
|
|
51,093
|
|
|
2,102
|
|
|||
Real estate construction and land development
|
|
257
|
|
|
257
|
|
|
4
|
|
|||
Residential mortgage
|
|
24,116
|
|
|
24,116
|
|
|
3,528
|
|
|||
Consumer installment
|
|
879
|
|
|
879
|
|
|
—
|
|
|||
Home equity
|
|
3,351
|
|
|
3,351
|
|
|
—
|
|
|||
Total
|
|
$
|
106,869
|
|
|
$
|
124,058
|
|
|
$
|
8,762
|
|
(Dollars in thousands)
|
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Related
valuation
allowance
|
||||||
December 31, 2015
|
|
|
||||||||||
Impaired loans with a valuation allowance:
|
|
|
|
|
|
|
||||||
Commercial
|
|
$
|
18,898
|
|
|
$
|
19,426
|
|
|
$
|
5,700
|
|
Commercial real estate
|
|
4,448
|
|
|
4,688
|
|
|
497
|
|
|||
Residential mortgage
|
|
21,037
|
|
|
21,037
|
|
|
192
|
|
|||
Subtotal
|
|
44,383
|
|
|
45,151
|
|
|
6,389
|
|
|||
Impaired loans with no related valuation allowance:
|
|
|
|
|
|
|
||||||
Commercial
|
|
27,304
|
|
|
32,395
|
|
|
—
|
|
|||
Commercial real estate
|
|
48,747
|
|
|
59,949
|
|
|
—
|
|
|||
Real estate construction and land development
|
|
982
|
|
|
1,062
|
|
|
—
|
|
|||
Residential mortgage
|
|
5,557
|
|
|
5,557
|
|
|
—
|
|
|||
Consumer installment
|
|
451
|
|
|
451
|
|
|
—
|
|
|||
Home equity
|
|
1,979
|
|
|
1,979
|
|
|
—
|
|
|||
Subtotal
|
|
85,020
|
|
|
101,393
|
|
|
—
|
|
|||
Total impaired loans:
|
|
|
|
|
|
|
||||||
Commercial
|
|
46,202
|
|
|
51,821
|
|
|
5,700
|
|
|||
Commercial real estate
|
|
53,195
|
|
|
64,637
|
|
|
497
|
|
|||
Real estate construction and land development
|
|
982
|
|
|
1,062
|
|
|
—
|
|
|||
Residential mortgage
|
|
26,594
|
|
|
26,594
|
|
|
192
|
|
|||
Consumer installment
|
|
451
|
|
|
451
|
|
|
—
|
|
|||
Home equity
|
|
1,979
|
|
|
1,979
|
|
|
—
|
|
|||
Total
|
|
$
|
129,403
|
|
|
$
|
146,544
|
|
|
$
|
6,389
|
|
|
|
For the years ended December 31,
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
(Dollars in thousands)
|
|
Average annual recorded investment
|
|
Interest income recognized while on impaired status
|
|
Average annual recorded investment
|
|
Interest income recognized while on impaired status
|
|
Average annual recorded investment
|
|
Interest income recognized while on impaired status
|
||||||||||||
Impaired loans with a valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial
|
|
$
|
7,829
|
|
|
$
|
—
|
|
|
$
|
9,511
|
|
|
$
|
—
|
|
|
$
|
2,117
|
|
|
$
|
—
|
|
Commercial real estate
|
|
5,658
|
|
|
—
|
|
|
2,918
|
|
|
—
|
|
|
3,699
|
|
|
—
|
|
||||||
Real estate construction and land development
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential mortgage
|
|
23,958
|
|
|
1,285
|
|
|
20,661
|
|
|
1,312
|
|
|
19,740
|
|
|
1,252
|
|
||||||
Consumer installment
|
|
359
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Home equity
|
|
1,759
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Subtotal
|
|
37,464
|
|
|
1,285
|
|
|
33,090
|
|
|
1,312
|
|
|
25,556
|
|
|
1,252
|
|
||||||
Impaired loans with no related valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial
|
|
29,559
|
|
|
1,343
|
|
|
27,778
|
|
|
1,005
|
|
|
32,895
|
|
|
961
|
|
||||||
Commercial real estate
|
|
41,646
|
|
|
1,236
|
|
|
50,079
|
|
|
1,547
|
|
|
46,344
|
|
|
1,342
|
|
||||||
Real estate construction and land development
|
|
585
|
|
|
22
|
|
|
889
|
|
|
25
|
|
|
1,831
|
|
|
3
|
|
||||||
Residential mortgage
|
|
1,519
|
|
|
—
|
|
|
6,027
|
|
|
—
|
|
|
6,783
|
|
|
—
|
|
||||||
Consumer installment
|
|
—
|
|
|
—
|
|
|
448
|
|
|
—
|
|
|
592
|
|
|
—
|
|
||||||
Home equity
|
|
555
|
|
|
—
|
|
|
1,872
|
|
|
—
|
|
|
2,118
|
|
|
—
|
|
||||||
Subtotal
|
|
73,864
|
|
|
2,601
|
|
|
87,093
|
|
|
2,577
|
|
|
90,563
|
|
|
2,306
|
|
||||||
Total impaired loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial
|
|
37,388
|
|
|
1,343
|
|
|
37,289
|
|
|
1,005
|
|
|
35,012
|
|
|
961
|
|
||||||
Commercial real estate
|
|
47,304
|
|
|
1,236
|
|
|
52,997
|
|
|
1,547
|
|
|
50,043
|
|
|
1,342
|
|
||||||
Real estate construction and land development
|
|
604
|
|
|
22
|
|
|
889
|
|
|
25
|
|
|
1,831
|
|
|
3
|
|
||||||
Residential mortgage
|
|
25,477
|
|
|
1,285
|
|
|
26,688
|
|
|
1,312
|
|
|
26,523
|
|
|
1,252
|
|
||||||
Consumer installment
|
|
359
|
|
|
—
|
|
|
448
|
|
|
—
|
|
|
592
|
|
|
—
|
|
||||||
Home equity
|
|
2,314
|
|
|
—
|
|
|
1,872
|
|
|
—
|
|
|
2,118
|
|
|
—
|
|
||||||
Total
|
|
$
|
113,446
|
|
|
$
|
3,886
|
|
|
$
|
120,183
|
|
|
$
|
3,889
|
|
|
$
|
116,119
|
|
|
$
|
3,558
|
|
|
Concession type
|
|
|
|
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
Principal
deferral |
|
Principal
reduction |
|
A/B Note Restructure
(1)
|
|
Interest
rate |
|
Forbearance
agreement |
|
Total
number of loans |
|
Pre-
modification
recorded
investment
|
|
Post-
modification
recorded
investment
|
|||||||||||||||
For the year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial
|
$
|
11,533
|
|
|
$
|
1,527
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
1,750
|
|
|
54
|
|
|
$
|
14,853
|
|
|
$
|
14,853
|
|
Commercial real estate
|
2,993
|
|
|
1,866
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
4,859
|
|
|
4,859
|
|
|||||||
Subtotal
|
14,526
|
|
|
3,393
|
|
|
43
|
|
|
—
|
|
|
1,750
|
|
|
70
|
|
|
19,712
|
|
|
19,712
|
|
|||||||
Consumer loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Residential mortgage
|
477
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
477
|
|
|
477
|
|
|||||||
Consumer installment
|
87
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
87
|
|
|
87
|
|
|||||||
Home equity
|
179
|
|
|
—
|
|
|
—
|
|
|
364
|
|
|
—
|
|
|
10
|
|
|
543
|
|
|
543
|
|
|||||||
Subtotal
|
743
|
|
|
—
|
|
|
—
|
|
|
364
|
|
|
—
|
|
|
28
|
|
|
1,107
|
|
|
1,107
|
|
|||||||
Total loans
|
$
|
15,269
|
|
|
$
|
3,393
|
|
|
$
|
43
|
|
|
$
|
364
|
|
|
$
|
1,750
|
|
|
98
|
|
|
$
|
20,819
|
|
|
$
|
20,819
|
|
|
Concession type
|
|
|
|
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
Principal
deferral |
|
Principal
reduction |
|
A/B Note Restructure
(1)
|
|
Interest
rate |
|
Forbearance
agreement |
|
Total
number of loans |
|
Pre-
modification
recorded
investment
|
|
Post-
modification
recorded
investment
|
|||||||||||||||
For the year ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial
|
$
|
6,031
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
117
|
|
|
$
|
5,298
|
|
|
53
|
|
|
$
|
11,446
|
|
|
$
|
11,446
|
|
Commercial real estate
|
5,904
|
|
|
450
|
|
|
—
|
|
|
102
|
|
|
740
|
|
|
21
|
|
|
7,196
|
|
|
7,196
|
|
|||||||
Real estate construction and land development
|
705
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
705
|
|
|
705
|
|
|||||||
Subtotal
|
12,640
|
|
|
450
|
|
|
—
|
|
|
219
|
|
|
6,038
|
|
|
77
|
|
|
19,347
|
|
|
19,347
|
|
|||||||
Consumer loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Residential mortgage
|
1,246
|
|
|
—
|
|
|
—
|
|
|
635
|
|
|
—
|
|
|
20
|
|
|
1,881
|
|
|
1,881
|
|
|||||||
Consumer installment
|
210
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
210
|
|
|
210
|
|
|||||||
Home equity
|
1,110
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
26
|
|
|
1,158
|
|
|
1,156
|
|
|||||||
Subtotal
|
2,566
|
|
|
—
|
|
|
—
|
|
|
681
|
|
|
—
|
|
|
65
|
|
|
3,249
|
|
|
3,247
|
|
|||||||
Total loans
|
$
|
15,206
|
|
|
$
|
450
|
|
|
$
|
—
|
|
|
$
|
900
|
|
|
$
|
6,038
|
|
|
142
|
|
|
$
|
22,596
|
|
|
$
|
22,594
|
|
|
Concession type
|
|
|
|
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
Principal
deferral |
|
Principal
reduction |
|
A/B Note Restructure
(1)
|
|
Interest
rate |
|
Forbearance
agreement |
|
Total
number of loans |
|
Pre-
modification
recorded
investment
|
|
Post-
modification
recorded
investment
|
|||||||||||||||
For the year ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial
|
$
|
12,657
|
|
|
$
|
112
|
|
|
$
|
111
|
|
|
$
|
901
|
|
|
$
|
—
|
|
|
53
|
|
|
$
|
13,781
|
|
|
$
|
13,781
|
|
Commercial real estate
|
10,713
|
|
|
154
|
|
|
223
|
|
|
671
|
|
|
314
|
|
|
46
|
|
|
12,075
|
|
|
12,075
|
|
|||||||
Real estate construction and land development
|
72
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
72
|
|
|
72
|
|
|||||||
Subtotal
|
23,442
|
|
|
266
|
|
|
334
|
|
|
1,572
|
|
|
314
|
|
|
100
|
|
|
25,928
|
|
|
25,928
|
|
|||||||
Consumer loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Residential mortgage
|
1,832
|
|
|
—
|
|
|
—
|
|
|
991
|
|
|
—
|
|
|
36
|
|
|
2,847
|
|
|
2,823
|
|
|||||||
Consumer installment
|
572
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
572
|
|
|
572
|
|
|||||||
Home equity
|
606
|
|
|
—
|
|
|
—
|
|
|
157
|
|
|
—
|
|
|
31
|
|
|
765
|
|
|
763
|
|
|||||||
Subtotal
|
3,010
|
|
|
—
|
|
|
—
|
|
|
1,148
|
|
|
—
|
|
|
119
|
|
|
4,184
|
|
|
4,158
|
|
|||||||
Total loans
|
$
|
26,452
|
|
|
$
|
266
|
|
|
$
|
334
|
|
|
$
|
2,720
|
|
|
$
|
314
|
|
|
219
|
|
|
$
|
30,112
|
|
|
$
|
30,086
|
|
(Dollars in thousands)
|
|
Accruing
TDRs
|
|
Nonaccrual TDRs
|
|
Total
|
||||||
December 31, 2016
|
|
|
|
|
|
|
||||||
Commercial loan portfolio
|
|
$
|
45,388
|
|
|
$
|
25,397
|
|
|
$
|
70,785
|
|
Consumer loan portfolio
|
|
17,147
|
|
|
5,134
|
|
|
22,281
|
|
|||
Total
|
|
$
|
62,535
|
|
|
$
|
30,531
|
|
|
$
|
93,066
|
|
December 31, 2015
|
|
|
|
|
|
|
||||||
Commercial loan portfolio
|
|
$
|
46,141
|
|
|
$
|
32,682
|
|
|
$
|
78,823
|
|
Consumer loan portfolio
|
|
21,037
|
|
|
3,251
|
|
|
24,288
|
|
|||
Total
|
|
$
|
67,178
|
|
|
$
|
35,933
|
|
|
$
|
103,111
|
|
|
|
For the years ended December 31,
|
||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||
|
|
Number of loans
|
|
Principal balance at year end
|
|
Number of loans
|
|
Principal balance at year end
|
|
Number of loans
|
|
Principal balance at year end
|
||||||
(Dollars in thousands)
|
|
|
|
|
|
|
||||||||||||
Commercial loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial
|
|
—
|
|
$
|
—
|
|
|
1
|
|
$
|
1,206
|
|
|
7
|
|
$
|
885
|
|
Commercial real estate
|
|
2
|
|
1,721
|
|
|
5
|
|
1,016
|
|
|
6
|
|
2,352
|
|
|||
Subtotal — commercial loan portfolio
|
|
2
|
|
1,721
|
|
|
6
|
|
2,222
|
|
|
13
|
|
3,237
|
|
|||
Consumer loan portfolio (residential mortgage)
|
|
14
|
|
259
|
|
|
3
|
|
65
|
|
|
12
|
|
259
|
|
|||
Total
|
|
16
|
|
$
|
1,980
|
|
|
9
|
|
$
|
2,287
|
|
|
25
|
|
$
|
3,496
|
|
(Dollars in thousands)
|
|
Commercial
loan
portfolio
|
|
Consumer
loan
portfolio
|
|
Unallocated
|
|
Total
|
||||||||
Changes in allowance for loan losses for the year ended December 31, 2016:
|
|
|
|
|
||||||||||||
Beginning balance
|
|
$
|
47,234
|
|
|
$
|
26,094
|
|
|
$
|
—
|
|
|
$
|
73,328
|
|
Provision for loan losses
|
|
9,788
|
|
|
5,087
|
|
|
—
|
|
|
14,875
|
|
||||
Charge-offs
|
|
(8,906
|
)
|
|
(6,396
|
)
|
|
—
|
|
|
(15,302
|
)
|
||||
Recoveries
|
|
3,085
|
|
|
2,282
|
|
|
—
|
|
|
5,367
|
|
||||
Ending balance
|
|
$
|
51,201
|
|
|
$
|
27,067
|
|
|
$
|
—
|
|
|
$
|
78,268
|
|
Allowance for loan losses balance at December 31, 2016 attributable to:
|
|
|
|
|
||||||||||||
Loans individually evaluated for impairment
|
|
$
|
5,234
|
|
|
$
|
3,528
|
|
|
$
|
—
|
|
|
$
|
8,762
|
|
Loans collectively evaluated for impairment
|
|
45,967
|
|
|
23,539
|
|
|
—
|
|
|
69,506
|
|
||||
Loans accounted for under ASC 310-30
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
51,201
|
|
|
$
|
27,067
|
|
|
$
|
—
|
|
|
$
|
78,268
|
|
Recorded investment (loan balance) at December 31, 2016:
|
|
|
|
|
||||||||||||
Loans individually evaluated for impairment
|
|
$
|
78,523
|
|
|
$
|
28,346
|
|
|
$
|
—
|
|
|
$
|
106,869
|
|
Loans collectively evaluated for impairment
|
|
4,026,526
|
|
|
3,325,006
|
|
|
—
|
|
|
7,351,532
|
|
||||
Loans accounted for under ASC 310-30
|
|
3,489,163
|
|
|
2,043,215
|
|
|
—
|
|
|
5,532,378
|
|
||||
Total
|
|
$
|
7,594,212
|
|
|
$
|
5,396,567
|
|
|
$
|
—
|
|
|
$
|
12,990,779
|
|
Changes in allowance for loan losses for the year ended December 31, 2015:
|
|
|
|
|
||||||||||||
Beginning balance
|
|
$
|
44,156
|
|
|
$
|
28,803
|
|
|
$
|
2,724
|
|
|
$
|
75,683
|
|
Provision (benefit) for loan losses
|
|
7,275
|
|
|
1,949
|
|
|
(2,724
|
)
|
|
6,500
|
|
||||
Charge-offs
|
|
(6,385
|
)
|
|
(7,116
|
)
|
|
—
|
|
|
(13,501
|
)
|
||||
Recoveries
|
|
2,188
|
|
|
2,458
|
|
|
—
|
|
|
4,646
|
|
||||
Ending balance
|
|
$
|
47,234
|
|
|
$
|
26,094
|
|
|
$
|
—
|
|
|
$
|
73,328
|
|
Allowance for loan losses balance at December 31, 2015 attributable to:
|
|
|
|
|
||||||||||||
Loans individually evaluated for impairment
|
|
$
|
6,197
|
|
|
$
|
192
|
|
|
$
|
—
|
|
|
$
|
6,389
|
|
Loans collectively evaluated for impairment
|
|
41,037
|
|
|
25,902
|
|
|
—
|
|
|
66,939
|
|
||||
Loans accounted for under ASC 310-30
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
47,234
|
|
|
$
|
26,094
|
|
|
$
|
—
|
|
|
$
|
73,328
|
|
Recorded investment (loan balance) at December 31, 2015:
|
|
|
|
|
|
|
||||||||||
Loans individually evaluated for impairment
|
|
$
|
100,379
|
|
|
$
|
29,024
|
|
|
$
|
—
|
|
|
$
|
129,403
|
|
Loans collectively evaluated for impairment
|
|
3,030,342
|
|
|
2,648,189
|
|
|
—
|
|
|
5,678,531
|
|
||||
Loans accounted for under ASC 310-30
|
|
1,119,396
|
|
|
343,817
|
|
|
—
|
|
|
1,463,213
|
|
||||
Total
|
|
$
|
4,250,117
|
|
|
$
|
3,021,030
|
|
|
$
|
—
|
|
|
$
|
7,271,147
|
|
Changes in allowance for loan losses for the year ended December 31, 2014:
|
|
|
|
|
||||||||||||
Beginning balance
|
|
$
|
44,482
|
|
|
$
|
30,145
|
|
|
$
|
4,445
|
|
|
$
|
79,072
|
|
Provision (benefit) for loan losses
|
|
3,464
|
|
|
4,357
|
|
|
(1,721
|
)
|
|
6,100
|
|
||||
Charge-offs
|
|
(6,399
|
)
|
|
(7,830
|
)
|
|
—
|
|
|
(14,229
|
)
|
||||
Recoveries
|
|
2,609
|
|
|
2,131
|
|
|
—
|
|
|
4,740
|
|
||||
Ending balance
|
|
$
|
44,156
|
|
|
$
|
28,803
|
|
|
$
|
2,724
|
|
|
$
|
75,683
|
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Land and land improvements
|
|
$
|
36,185
|
|
|
$
|
28,447
|
|
Buildings
|
|
144,155
|
|
|
120,370
|
|
||
Furniture and equipment
|
|
91,963
|
|
|
77,882
|
|
||
Total
|
|
272,303
|
|
|
226,699
|
|
||
Less accumulated depreciation
|
|
(127,291
|
)
|
|
(120,382
|
)
|
||
Premises and equipment, net
|
|
$
|
145,012
|
|
|
$
|
106,317
|
|
(Dollars in thousands)
|
|
Other real estate
owned |
|
Repossessed
assets |
||||
Balance at January 1, 2014
|
|
$
|
9,518
|
|
|
$
|
258
|
|
Additions due to acquisitions
|
|
3,721
|
|
|
—
|
|
||
Other additions
(1)
|
|
8,986
|
|
|
2,322
|
|
||
Net payments received
|
|
(264
|
)
|
|
(30
|
)
|
||
Disposals
|
|
(7,360
|
)
|
|
(2,298
|
)
|
||
Write-downs
|
|
(648
|
)
|
|
—
|
|
||
Balance at December 31, 2014
|
|
$
|
13,953
|
|
|
$
|
252
|
|
Additions due to acquisitions
|
|
440
|
|
|
—
|
|
||
Other additions
(1)
|
|
6,957
|
|
|
2,372
|
|
||
Net payments received
|
|
(45
|
)
|
|
(22
|
)
|
||
Disposals
|
|
(10,168
|
)
|
|
(2,383
|
)
|
||
Write-downs
|
|
(1,421
|
)
|
|
—
|
|
||
Balance at December 31, 2015
|
|
$
|
9,716
|
|
|
$
|
219
|
|
Additions due to acquisitions
|
|
13,227
|
|
|
313
|
|
||
Other additions
(1)
|
|
9,938
|
|
|
3,032
|
|
||
Net payments received
|
|
(1,560
|
)
|
|
(763
|
)
|
||
Disposals
|
|
(13,873
|
)
|
|
(2,426
|
)
|
||
Write-downs
|
|
(636
|
)
|
|
—
|
|
||
Balance at December 31, 2016
|
|
$
|
16,812
|
|
|
$
|
375
|
|
|
(Dollars in thousands)
|
|
Other real estate
owned
|
|
Repossessed
assets
|
||||
For the year ended December 31, 2016
|
|
|
|
|
|
|
||
Net gain (loss) on sale
|
|
$
|
5,325
|
|
|
$
|
523
|
|
Write-downs
|
|
(636
|
)
|
|
—
|
|
||
Net operating expenses
|
|
(740
|
)
|
|
(60
|
)
|
||
Total
|
|
$
|
3,949
|
|
|
$
|
463
|
|
For the year ended December 31, 2015
|
|
|
|
|
||||
Net gain (loss) on sale
|
|
$
|
4,128
|
|
|
$
|
(26
|
)
|
Write-downs
|
|
(1,421
|
)
|
|
—
|
|
||
Net operating expenses
|
|
(1,604
|
)
|
|
(19
|
)
|
||
Total
|
|
$
|
1,103
|
|
|
$
|
(45
|
)
|
For the year ended December 31, 2014
|
|
|
|
|
||||
Net gain (loss) on sale
|
|
$
|
2,545
|
|
|
$
|
(11
|
)
|
Write-downs
|
|
(648
|
)
|
|
—
|
|
||
Net operating expenses
|
|
(1,242
|
)
|
|
(53
|
)
|
||
Total
|
|
$
|
655
|
|
|
$
|
(64
|
)
|
|
|
For the year ended December 31, 2016
|
||||||||||
(Dollars in thousands)
|
|
Commercial
Real Estate
|
|
Mortgage
|
|
Total
|
||||||
Fair value, beginning of period
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acquired in Talmer Bancorp, Inc. merger
|
|
365
|
|
|
42,097
|
|
|
42,462
|
|
|||
Additions from loans sold with servicing retained
|
|
—
|
|
|
1,030
|
|
|
1,030
|
|
|||
Changes in fair value due to:
|
|
|
|
|
|
|
||||||
Reductions from pay downs
|
|
(17
|
)
|
|
(502
|
)
|
|
(519
|
)
|
|||
Changes in estimates of fair value
(1)
|
|
(4
|
)
|
|
5,116
|
|
|
5,112
|
|
|||
Fair value, end of period
|
|
$
|
344
|
|
|
$
|
47,741
|
|
|
$
|
48,085
|
|
Principal balance of loans serviced for others that have servicing capitalized
|
|
$
|
64,756
|
|
|
$
|
5,235,415
|
|
|
$
|
5,300,171
|
|
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Net carrying value of LSRs
|
|
$
|
10,230
|
|
|
$
|
11,122
|
|
Fair value of LSRs
|
|
$
|
15,891
|
|
|
$
|
15,542
|
|
Valuation allowance
|
|
$
|
8
|
|
|
$
|
—
|
|
Loans serviced for others that have servicing rights capitalized
|
|
$
|
2,074,057
|
|
|
$
|
2,082,899
|
|
|
|
Years Ended December 31,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of period
|
|
$
|
11,122
|
|
|
$
|
12,217
|
|
|
$
|
3,423
|
|
Acquired through acquisitions
|
|
—
|
|
|
1,284
|
|
|
9,235
|
|
|||
Additions
|
|
3,303
|
|
|
1,476
|
|
|
1,075
|
|
|||
Amortization
|
|
(4,187
|
)
|
|
(4,055
|
)
|
|
(1,316
|
)
|
|||
Change in valuation allowance
|
|
(8
|
)
|
|
200
|
|
|
(200
|
)
|
|||
Balance at end of period
|
|
$
|
10,230
|
|
|
$
|
11,122
|
|
|
$
|
12,217
|
|
|
|
Commercial
Real Estate
|
|
Mortgage
|
|||
As of December 31, 2016
|
|
|
|
|
|
|
|
Prepayment speed
|
|
0.00 - 22.47%
|
|
|
0.00 - 99.75%
|
|
|
Weighted average (“WA”) discount rate
|
|
16.46
|
%
|
|
10.09
|
%
|
|
Cost to service/per year
|
|
$467-$500
|
|
|
$65-$90
|
|
|
WA Ancillary income/per year
|
|
N/A
|
|
|
$
|
28
|
|
WA float range
|
|
0.53
|
%
|
|
1.01
|
%
|
|
As of December 31, 2015
|
|
|
|
|
|
|
|
Prepayment speed
|
|
N/A
|
|
|
6.96 - 17.65%
|
|
|
WA discount rate
|
|
N/A
|
|
|
10.04
|
%
|
|
Cost to service/per year
|
|
N/A
|
|
|
$70-$85
|
|
|
Ancillary income/per year
|
|
N/A
|
|
|
$
|
20
|
|
WA float range
|
|
N/A
|
|
|
1.72
|
%
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Core deposit intangible assets
|
|
$
|
40,211
|
|
|
$
|
26,654
|
|
Non-compete intangible assets
|
|
—
|
|
|
328
|
|
||
Total other intangible assets
|
|
$
|
40,211
|
|
|
$
|
26,982
|
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Gross carrying amount
|
|
$
|
59,143
|
|
|
$
|
40,055
|
|
Accumulated amortization
|
|
18,932
|
|
|
13,401
|
|
||
Net carrying amount
|
|
$
|
40,211
|
|
|
$
|
26,654
|
|
(Dollars in thousands)
|
Estimated
amortization
expense
|
||
2017
|
$
|
5,952
|
|
2018
|
5,703
|
|
|
2019
|
5,441
|
|
|
2020
|
4,850
|
|
|
2021
|
4,471
|
|
|
|
December 31,
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
|
|
|
Fair Value
|
|
|
|
Fair Value
|
||||||||||||||||
(Dollars in thousands)
|
|
Notional
Amount (1)
|
|
Gross
Derivative
Assets (2)
|
|
Gross
Derivative
Liabilities
(2)
|
|
Notional
Amount (1)
|
|
Gross
Derivative
Assets (2)
|
|
Gross
Derivative
Liabilities
(2)
|
||||||||||||
Customer-initiated and mortgage banking derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer-initiated derivatives
|
|
$
|
600,598
|
|
|
$
|
4,406
|
|
|
$
|
4,141
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward contracts related to mortgage loans to be delivered for sale
|
|
140,155
|
|
|
635
|
|
|
—
|
|
|
33,787
|
|
|
144
|
|
|
57
|
|
||||||
Interest rate lock commitments
|
|
76,034
|
|
|
956
|
|
|
—
|
|
|
23,421
|
|
|
42
|
|
|
90
|
|
||||||
Power Equity CD
|
|
36,807
|
|
|
2,218
|
|
|
2,218
|
|
|
33,703
|
|
|
1,832
|
|
|
1,832
|
|
||||||
Total gross derivatives
|
|
$
|
853,594
|
|
|
$
|
8,215
|
|
|
$
|
6,359
|
|
|
$
|
90,911
|
|
|
$
|
2,018
|
|
|
$
|
1,979
|
|
|
(1)
|
Notional or contract amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the Consolidated Statements of Financial Position.
|
(2)
|
Derivative assets are included within “Other assets” and derivative liabilities are included within “Other liabilities” on the Consolidated Statements of Financial Position. Included in the fair value of the derivative assets are credit valuation adjustments for counterparty credit risk totaling
$99 thousand
at December 31, 2016 and
$0
at December 31, 2015.
|
|
|
|
|
For the years ended December 31,
|
||||||||||
(Dollars in thousands)
|
|
Location of Gain (Loss)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Forward contracts related to mortgage loans to be delivered for sale
|
|
Mortgage banking revenue
|
|
$
|
692
|
|
|
$
|
193
|
|
|
$
|
(267
|
)
|
Interest rate lock commitments
|
|
Mortgage banking revenue
|
|
(1,356
|
)
|
|
(132
|
)
|
|
157
|
|
|||
Power Equity CD
|
|
Other noninterest income
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Customer-initiated derivatives
|
|
Other noninterest income
|
|
581
|
|
|
—
|
|
|
—
|
|
|||
Total gain (loss) recognized in income
|
|
|
|
$
|
(83
|
)
|
|
$
|
61
|
|
|
$
|
(110
|
)
|
|
For the years ended December 31,
|
||||||||||
(Dollars in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Reserve balance at beginning of period
|
$
|
4,048
|
|
|
$
|
3,000
|
|
|
$
|
1,600
|
|
Addition of fair value of representations and warranties due to acquisitions
|
3,100
|
|
|
1,712
|
|
|
2,000
|
|
|||
Reserve reduction
|
(580
|
)
|
|
—
|
|
|
(287
|
)
|
|||
Charge-offs
|
(109
|
)
|
|
(664
|
)
|
|
(313
|
)
|
|||
Ending reserve balance
|
$
|
6,459
|
|
|
$
|
4,048
|
|
|
$
|
3,000
|
|
Reserve balance:
|
|
|
|
|
|
||||||
Liability for specific claims
|
730
|
|
|
—
|
|
|
118
|
|
|||
General allowance
|
5,729
|
|
|
4,048
|
|
|
2,882
|
|
|||
Total reserve balance
|
$
|
6,459
|
|
|
$
|
4,048
|
|
|
$
|
3,000
|
|
(1)
|
Future minimum lease payments are reduced by
$312 thousand
related to sublease income to be received within the next five years.
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Noninterest-bearing demand
|
|
$
|
3,341,520
|
|
|
$
|
1,934,583
|
|
Interest-bearing demand
|
|
2,825,801
|
|
|
1,870,197
|
|
||
Savings and money market accounts
|
|
3,695,434
|
|
|
2,004,575
|
|
||
Time deposits over $100,000
|
|
1,682,986
|
|
|
701,830
|
|
||
Other time deposits
|
|
1,327,381
|
|
|
945,582
|
|
||
Total deposits
|
|
$
|
12,873,122
|
|
|
$
|
7,456,767
|
|
|
|
December 31,
|
||||||||||||
|
|
2016
|
|
2015
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Weighted Average Rate
(1)
|
|
Amount
|
|
Weighted Average Rate
(1)
|
||||||
Short-term borrowings:
|
|
|
|
|
|
|
|
|
||||||
FHLB advances: 0.60% - 0.66% fixed-rate notes
|
|
$
|
825,000
|
|
|
0.65
|
%
|
|
$
|
100,000
|
|
|
0.34
|
%
|
Long-term borrowings:
|
|
|
|
|
|
|
|
|
||||||
FHLB advances: 0.81% - 7.44% fixed-rate notes due 2017 to 2020
(2)
|
|
438,538
|
|
|
1.24
|
|
|
181,394
|
|
|
1.41
|
|
||
Securities sold under agreements to repurchase: 1.48% - 4.11% fixed-rate notes due through 2017
(3)
|
|
19,144
|
|
|
3.17
|
|
|
17,453
|
|
|
0.27
|
|
||
Line-of-credit: floating-rate based on one-month LIBOR plus 1.75%
|
|
124,625
|
|
|
2.52
|
|
|
25,000
|
|
|
2.27
|
|
||
Subordinated debt obligations: floating-rate based on three-month LIBOR plus 1.45% - 2.85% due 2034 to 2035
(4)
|
|
11,285
|
|
|
3.14
|
|
|
—
|
|
|
—
|
|
||
Subordinated debt obligations: floating-rate based on three-month LIBOR plus 3.25% due in 2032
(5)
|
|
4,255
|
|
|
4.25
|
|
|
—
|
|
|
—
|
|
||
Subordinated debt obligations
|
|
—
|
|
|
—
|
|
|
18,544
|
|
|
3.99
|
|
||
Total long-term borrowings
|
|
597,847
|
|
|
1.63
|
|
|
242,391
|
|
|
1.61
|
|
||
Total short-term and long-term borrowings
|
|
$
|
1,422,847
|
|
|
1.06
|
%
|
|
$
|
342,391
|
|
|
1.24
|
%
|
|
(1)
|
Weighted average rate presented is the contractual rate which excludes premiums and discounts related to purchase accounting.
|
(2)
|
The
December 31, 2016
balance includes advances payable of
$437.8 million
and purchase accounting premiums of
$0.7 million
. The
December 31, 2015
balance includes advances payable of
$181.0 million
and purchase accounting premiums of
$0.4 million
.
|
(3)
|
The
December 31, 2016
balance includes advances payable of
$19.0 million
and purchase accounting premiums of
$0.1 million
. The
December 31, 2015
balance includes advance payable of
$17.0 million
and purchase accounting premiums of
$0.5 million
.
|
(4)
|
The
December 31, 2016
balance includes advances payable of
$15.0 million
and purchase accounting discounts of
$3.7 million
.
|
(5)
|
The
December 31, 2016
balance includes advances payable of
$5.0 million
and purchase accounting discounts of
$0.7 million
.
|
(Dollars in thousands)
|
Long-term Debt by Maturity
|
||
Years Ending December 31,
|
|
||
2017
|
$
|
126,089
|
|
2018
|
159,207
|
|
|
2019
|
186,338
|
|
|
2020
|
110,673
|
|
|
2021
|
—
|
|
|
Thereafter
|
15,540
|
|
|
Total
|
$
|
597,847
|
|
|
|
Years Ended December 31,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current income tax expense (benefit)
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
19,144
|
|
|
$
|
31,300
|
|
|
$
|
29,200
|
|
State
|
|
(423
|
)
|
|
—
|
|
|
—
|
|
|||
Total current income tax expense
|
|
18,721
|
|
|
31,300
|
|
|
29,200
|
|
|||
Deferred expense (benefit)
|
|
|
|
|
|
|
||||||
Federal
|
|
23,649
|
|
|
5,700
|
|
|
(1,700
|
)
|
|||
State
|
|
442
|
|
|
—
|
|
|
—
|
|
|||
Total deferred income tax expense (benefit)
|
|
24,091
|
|
|
5,700
|
|
|
(1,700
|
)
|
|||
Change in valuation allowance
|
|
(706
|
)
|
|
—
|
|
|
—
|
|
|||
Income tax provision
|
|
$
|
42,106
|
|
|
$
|
37,000
|
|
|
$
|
27,500
|
|
|
|
Years Ended December 31,
|
|||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
|||||||||
Tax at statutory rate
|
|
$
|
52,548
|
|
|
35.0
|
%
|
|
$
|
43,341
|
|
|
35.0
|
%
|
|
$
|
31,367
|
|
|
35.0
|
%
|
Changes resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tax-exempt interest income
|
|
(5,320
|
)
|
|
(3.5
|
)
|
|
(3,943
|
)
|
|
(3.2
|
)
|
|
(3,142
|
)
|
|
(3.5
|
)
|
|||
State taxes, net of federal benefit
|
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Change in valuation allowance
|
|
(706
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Bank-owned life insurance adjustments
|
|
(832
|
)
|
|
(0.6
|
)
|
|
(124
|
)
|
|
(0.1
|
)
|
|
(95
|
)
|
|
(0.1
|
)
|
|||
Director plan change in control
|
|
(508
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Income tax credits, net
|
|
(2,454
|
)
|
|
(1.6
|
)
|
|
(2,557
|
)
|
|
(2.1
|
)
|
|
(1,624
|
)
|
|
(1.8
|
)
|
|||
Nondeductible transaction expenses
|
|
2,100
|
|
|
1.4
|
|
|
411
|
|
|
0.3
|
|
|
403
|
|
|
0.4
|
|
|||
Tax benefits in excess of compensation costs on share-based payments
(1)
|
|
(2,240
|
)
|
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
(495
|
)
|
|
(0.4
|
)
|
|
(128
|
)
|
|
—
|
|
|
591
|
|
|
0.7
|
|
|||
Income tax expense
|
|
$
|
42,106
|
|
|
28.0
|
%
|
|
$
|
37,000
|
|
|
29.9
|
%
|
|
$
|
27,500
|
|
|
30.7
|
%
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Allowance for loan losses
|
|
$
|
45,763
|
|
|
$
|
24,863
|
|
Acquisition-related fair value adjustments
|
|
62,078
|
|
|
29,280
|
|
||
Accrued stock-based compensation
|
|
18,891
|
|
|
3,240
|
|
||
Loss and tax credit carry forwards
|
|
47,977
|
|
|
7,235
|
|
||
Acquisition built in loss carry forward
|
|
28,469
|
|
|
—
|
|
||
Depreciation
|
|
3,896
|
|
|
4,333
|
|
||
Nonaccrual loan interest
|
|
9,465
|
|
|
4,994
|
|
||
Accrued expense
|
|
20,858
|
|
|
13,296
|
|
||
Other
|
|
7,401
|
|
|
5,951
|
|
||
Total deferred tax assets
|
|
244,798
|
|
|
93,192
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Loan servicing rights
|
|
20,450
|
|
|
3,893
|
|
||
Core deposit intangible assets
|
|
11,844
|
|
|
7,379
|
|
||
Goodwill
|
|
6,373
|
|
|
5,808
|
|
||
Other
|
|
(715
|
)
|
|
4,742
|
|
||
Total deferred tax liabilities
|
|
37,952
|
|
|
21,822
|
|
||
Net deferred tax asset before valuation allowance
|
|
206,846
|
|
|
71,370
|
|
||
Valuation allowance
|
|
(2,239
|
)
|
|
(1,180
|
)
|
||
Net deferred tax asset
|
|
$
|
204,607
|
|
|
$
|
70,190
|
|
|
From the Acquisition of:
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
|
Talmer's Prior Ownership Changes
|
|
|
|
|
|||||||||||||||||||||
(Dollars in thousands)
|
Talmer
|
|
Monarch
|
|
First Place Holdings/First Place Bank
|
|
Talmer West Bank
|
|
First of Huron Corp./Signature Bank
|
|
From 2009 Ownership change
|
|
Not Limited by Section 382
|
|
Total
|
|||||||||||||||
Tax Loss and Credit Carryforwards as of 12/31/16:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Years Expiring (except AMT Credits)
|
2032-2034
|
|
2026-2034
|
|
2026-2031
|
|
2030-2035
|
|
2031-2033
|
|
2027-2029
|
|
2033-2035
|
|
|
|||||||||||||||
Annual Section 382 limitation-base
(1)
|
$
|
34,668
|
|
|
$
|
673
|
|
|
$
|
6,650
|
|
|
$
|
3,028
|
|
|
$
|
365
|
|
|
$
|
145
|
|
|
$
|
—
|
|
|
N/A
|
|
Gross Federal Net Operating Losses
|
17,723
|
|
|
17,744
|
|
|
1,222
|
|
|
50,086
|
|
|
1,014
|
|
|
1,885
|
|
|
—
|
|
|
89,674
|
|
|||||||
Gross Capital Losses
|
797
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
797
|
|
|||||||
Realized Built-in Losses
|
—
|
|
|
—
|
|
|
71,805
|
|
|
8,936
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80,741
|
|
|||||||
Business Tax Credits
|
170
|
|
|
1,651
|
|
|
781
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
592
|
|
|
3,194
|
|
|||||||
Less amounts not recorded due to Sec 382 Limitation
|
—
|
|
|
(1,738
|
)
|
|
—
|
|
|
(2,992
|
)
|
|
—
|
|
|
(145
|
)
|
|
—
|
|
|
(4,875
|
)
|
|||||||
Alternative Minimum Tax Credits - no expiration
|
12,473
|
|
|
106
|
|
|
2,115
|
|
|
—
|
|
|
303
|
|
|
—
|
|
|
730
|
|
|
15,727
|
|
|||||||
Valuation Allowance
|
—
|
|
|
—
|
|
|
(66
|
)
|
|
(1,287
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,353
|
)
|
|
|
Options outstanding
|
|
Options exercisable
|
||||||||||||||
Range of
exercise
prices
per share
|
|
Number
outstanding
|
|
Weighted
average
exercise
price
per share
|
|
Weighted
average
contractual
term
(in years)
|
|
Number
exercisable
|
|
Weighted
average
exercise
price
per share
|
|
Weighted
average
contractual
term
(in years)
|
||||||
$10.56 - 12.80
|
|
289,512
|
|
|
$
|
11.83
|
|
|
3.50
|
|
289,512
|
|
|
$
|
11.83
|
|
|
3.50
|
$13.20 - 16.24
|
|
1,044,881
|
|
|
16.20
|
|
|
5.99
|
|
1,044,881
|
|
|
16.20
|
|
|
5.99
|
||
$19.97 - 21.10
|
|
62,422
|
|
|
20.49
|
|
|
3.39
|
|
62,422
|
|
|
20.49
|
|
|
3.39
|
||
$28.43 - 32.81
|
|
703,378
|
|
|
31.58
|
|
|
8.58
|
|
295,439
|
|
|
29.88
|
|
|
7.76
|
||
$23.78 - 25.14
|
|
353,202
|
|
|
24.60
|
|
|
4.49
|
|
353,202
|
|
|
24.60
|
|
|
4.49
|
||
$10.56 - 32.81
|
|
2,453,395
|
|
|
$
|
21.41
|
|
|
6.16
|
|
2,045,456
|
|
|
$
|
19.14
|
|
|
5.56
|
|
|
Non-vested
stock options outstanding
|
|
Stock options outstanding
|
||||||||||||||
|
|
Number of
options
|
|
Weighted-
average
exercise
price
per share
|
|
Weighted-
average
grant date
fair value
per share
|
|
Number of
options
|
|
Weighted-
average
exercise
price
per share
|
||||||||
Outstanding at December 31, 2013
|
|
414,080
|
|
|
$
|
24.29
|
|
|
$
|
7.19
|
|
|
1,073,990
|
|
|
$
|
26.84
|
|
Granted
|
|
190,011
|
|
|
29.45
|
|
|
9.64
|
|
|
190,011
|
|
|
29.45
|
|
|||
Exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(72,936
|
)
|
|
24.67
|
|
|||
Vested
|
|
(148,016
|
)
|
|
23.43
|
|
|
6.98
|
|
|
—
|
|
|
—
|
|
|||
Expired or forfeited
|
|
(23,876
|
)
|
|
25.67
|
|
|
7.79
|
|
|
(153,754
|
)
|
|
37.50
|
|
|||
Outstanding at December 31, 2014
|
|
432,199
|
|
|
26.75
|
|
|
8.30
|
|
|
1,037,311
|
|
|
25.90
|
|
|||
Granted
|
|
244,165
|
|
|
30.18
|
|
|
8.40
|
|
|
244,165
|
|
|
30.18
|
|
|||
Acquired
|
|
—
|
|
|
—
|
|
|
—
|
|
|
132,883
|
|
|
12.93
|
|
|||
Exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(310,985
|
)
|
|
25.10
|
|
|||
Vested
|
|
(150,224
|
)
|
|
25.57
|
|
|
7.80
|
|
|
—
|
|
|
—
|
|
|||
Expired or forfeited
|
|
(46,385
|
)
|
|
27.99
|
|
|
8.50
|
|
|
(48,635
|
)
|
|
28.18
|
|
|||
Outstanding at December 31, 2015
|
|
479,755
|
|
|
$
|
28.75
|
|
|
$
|
8.49
|
|
|
1,054,739
|
|
|
$
|
25.38
|
|
Acquired
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,466,408
|
|
|
15.08
|
|
|||
Granted
|
|
441,167
|
|
|
32.81
|
|
|
6.15
|
|
|
441,167
|
|
|
32.81
|
|
|||
Exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(450,296
|
)
|
|
20.02
|
|
|||
Vested
|
|
(454,360
|
)
|
|
28.74
|
|
|
8.49
|
|
|
—
|
|
|
—
|
|
|||
Forfeited/expired
|
|
(58,623
|
)
|
|
31.10
|
|
|
7.17
|
|
|
(58,623
|
)
|
|
31.10
|
|
|||
Outstanding at December 31, 2016
|
|
407,939
|
|
|
$
|
32.81
|
|
|
$
|
6.15
|
|
|
2,453,395
|
|
|
$
|
21.41
|
|
Exercisable/vested at December 31, 2016
|
|
|
|
|
|
|
|
2,045,456
|
|
|
$
|
19.14
|
|
|
|
2016
|
|
2015
|
|
2014
|
|||
Expected dividend yield
|
|
3.30
|
%
|
|
3.50
|
%
|
|
3.00
|
%
|
Risk-free interest rate
|
|
1.39
|
%
|
|
1.78
|
%
|
|
2.16
|
%
|
Expected stock price volatility
|
|
27.9
|
%
|
|
39.1
|
%
|
|
42.2
|
%
|
Expected life of options — in years
|
|
6.5
|
|
|
7.0
|
|
|
7.0
|
|
Weighted average fair value of options granted
|
|
$6.15
|
|
$8.40
|
|
$9.64
|
|
|
Number of
units
|
|
Weighted-average
grant date fair value per unit
|
|||
Outstanding at December 31, 2015
|
|
207,989
|
|
|
$
|
26.41
|
|
Granted
|
|
165,876
|
|
|
37.41
|
|
|
Converted into shares of common stock
|
|
(67,331
|
)
|
|
24.54
|
|
|
Forfeited/expired
|
|
(8,177
|
)
|
|
31.19
|
|
|
Outstanding at December 31, 2016
|
|
298,357
|
|
|
$
|
32.81
|
|
Nonvested restricted stock awards
|
|
Number of awards
|
|
Weighted-average acquisition-date fair value
|
|||
Nonvested at January 1, 2016
|
|
—
|
|
|
$
|
—
|
|
Acquired
|
|
484,892
|
|
|
46.23
|
|
|
Vested
|
|
(118,493
|
)
|
|
46.23
|
|
|
Forfeited
|
|
(508
|
)
|
|
46.23
|
|
|
Nonvested at December 31, 2016
|
|
365,891
|
|
|
$
|
46.23
|
|
|
|
Pension Plan
|
|
Postretirement Plan
|
||||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Projected benefit obligation:
|
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
|
$
|
119,873
|
|
|
$
|
129,160
|
|
|
$
|
3,247
|
|
|
$
|
3,702
|
|
Service cost
|
|
1,041
|
|
|
1,021
|
|
|
9
|
|
|
16
|
|
||||
Interest cost
|
|
5,335
|
|
|
5,242
|
|
|
132
|
|
|
133
|
|
||||
Net actuarial loss (gain)
|
|
2,684
|
|
|
(10,837
|
)
|
|
(478
|
)
|
|
(363
|
)
|
||||
Benefits paid
|
|
(4,965
|
)
|
|
(4,713
|
)
|
|
(309
|
)
|
|
(241
|
)
|
||||
Benefit obligation at end of year
|
|
123,968
|
|
|
119,873
|
|
|
2,601
|
|
|
3,247
|
|
||||
Fair value of plan assets:
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
|
126,930
|
|
|
130,775
|
|
|
—
|
|
|
—
|
|
||||
Actual return on plan assets
|
|
10,786
|
|
|
868
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
|
—
|
|
|
—
|
|
|
309
|
|
|
241
|
|
||||
Benefits paid
|
|
(4,965
|
)
|
|
(4,713
|
)
|
|
(309
|
)
|
|
(241
|
)
|
||||
Fair value of plan assets at end of year
|
|
132,751
|
|
|
126,930
|
|
|
—
|
|
|
—
|
|
||||
Funded (unfunded) status at December 31
|
|
$
|
8,783
|
|
|
$
|
7,057
|
|
|
$
|
(2,601
|
)
|
|
$
|
(3,247
|
)
|
Accumulated benefit obligation
|
|
$
|
115,418
|
|
|
$
|
109,583
|
|
|
$
|
2,601
|
|
|
$
|
3,247
|
|
|
|
Pension Plan
|
|
Postretirement Plan
|
||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||
Discount rate used in determining benefit obligation — December 31
|
|
4.22
|
%
|
|
4.55
|
%
|
|
4.15
|
%
|
|
3.79
|
%
|
|
4.23
|
%
|
|
3.75
|
%
|
Discount rate used in determining expense
|
|
4.55
|
|
|
4.15
|
|
|
5.00
|
|
|
4.23
|
|
|
3.75
|
|
|
4.27
|
|
Expected long-term return on Pension Plan assets
|
|
6.75
|
|
|
6.75
|
|
|
7.00
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Rate of compensation increase used in determining benefit obligation — December 31
|
|
3.50
|
|
|
3.50
|
|
|
3.50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Rate of compensation increase used in determining pension expense
|
|
3.50
|
|
|
3.50
|
|
|
3.50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Year 1 increase in cost of postretirement benefits
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.0
|
|
|
7.5
|
|
|
8.0
|
|
|
|
Pension Plan
|
|
Postretirement Plan
|
||||||||||||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||
Service cost
|
|
$
|
1,041
|
|
|
$
|
1,021
|
|
|
$
|
944
|
|
|
$
|
9
|
|
|
$
|
16
|
|
|
$
|
18
|
|
Interest cost
|
|
5,335
|
|
|
5,242
|
|
|
5,167
|
|
|
132
|
|
|
133
|
|
|
142
|
|
||||||
Expected return on plan assets
|
|
(8,562
|
)
|
|
(8,645
|
)
|
|
(8,314
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service credit
|
|
—
|
|
|
(5
|
)
|
|
(1
|
)
|
|
117
|
|
|
130
|
|
|
130
|
|
||||||
Amortization of net actuarial loss (gain)
|
|
2,259
|
|
|
3,962
|
|
|
2,159
|
|
|
(100
|
)
|
|
(1
|
)
|
|
(104
|
)
|
||||||
Net cost (income)
|
|
$
|
73
|
|
|
$
|
1,575
|
|
|
$
|
(45
|
)
|
|
$
|
158
|
|
|
$
|
278
|
|
|
$
|
186
|
|
(Dollars in thousands)
|
|
Pension Plan
|
|
Postretirement Plan
|
||||
2017
|
|
$
|
5,474
|
|
|
$
|
243
|
|
2018
|
|
5,706
|
|
|
239
|
|
||
2019
|
|
6,083
|
|
|
240
|
|
||
2020
|
|
6,263
|
|
|
237
|
|
||
2021
|
|
6,626
|
|
|
234
|
|
||
2022 - 2026
|
|
36,438
|
|
|
1,028
|
|
||
Total
|
|
$
|
66,590
|
|
|
$
|
2,221
|
|
|
|
One Percentage-Point
|
||||||
(Dollars in thousands)
|
|
Increase
|
|
Decrease
|
||||
Effect on total of service and interest cost components in 2016
|
|
$
|
14
|
|
|
$
|
(13
|
)
|
Effect on postretirement benefit obligation as of December 31, 2016
|
|
204
|
|
|
(194
|
)
|
(Dollars in thousands)
|
|
Quoted Prices
In Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Cash
|
|
$
|
2,825
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,825
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. large- and mid-cap stocks
(1)
|
|
55,389
|
|
|
—
|
|
|
—
|
|
|
55,389
|
|
||||
U.S. small-cap mutual funds
|
|
5,687
|
|
|
—
|
|
|
—
|
|
|
5,687
|
|
||||
International large-cap mutual funds
|
|
13,701
|
|
|
—
|
|
|
—
|
|
|
13,701
|
|
||||
Emerging markets mutual funds
|
|
5,147
|
|
|
—
|
|
|
—
|
|
|
5,147
|
|
||||
Chemical Financial Corporation common stock
|
|
11,412
|
|
|
—
|
|
|
—
|
|
|
11,412
|
|
||||
Debt securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and government sponsored agency bonds and notes
|
|
—
|
|
|
806
|
|
|
—
|
|
|
806
|
|
||||
Corporate bonds
(2)
|
|
—
|
|
|
1,503
|
|
|
—
|
|
|
1,503
|
|
||||
Mutual funds
(3)
|
|
36,220
|
|
|
—
|
|
|
—
|
|
|
36,220
|
|
||||
Other
|
|
61
|
|
|
—
|
|
|
—
|
|
|
61
|
|
||||
Total
|
|
$
|
130,442
|
|
|
$
|
2,309
|
|
|
$
|
—
|
|
|
$
|
132,751
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Cash
|
|
$
|
354
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
354
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. large- and mid-cap stocks
(1)
|
|
55,709
|
|
|
—
|
|
|
—
|
|
|
55,709
|
|
||||
U.S. small-cap mutual funds
|
|
4,749
|
|
|
—
|
|
|
—
|
|
|
4,749
|
|
||||
International large-cap mutual funds
|
|
14,124
|
|
|
—
|
|
|
—
|
|
|
14,124
|
|
||||
Emerging markets mutual funds
|
|
4,886
|
|
|
—
|
|
|
—
|
|
|
4,886
|
|
||||
Chemical Financial Corporation common stock
|
|
7,219
|
|
|
—
|
|
|
—
|
|
|
7,219
|
|
||||
Debt securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and government sponsored agency bonds and notes
|
|
—
|
|
|
2,815
|
|
|
—
|
|
|
2,815
|
|
||||
Corporate bonds
(2)
|
|
—
|
|
|
3,554
|
|
|
—
|
|
|
3,554
|
|
||||
Mutual funds
(3)
|
|
33,424
|
|
|
—
|
|
|
—
|
|
|
33,424
|
|
||||
Other
|
|
96
|
|
|
—
|
|
|
—
|
|
|
96
|
|
||||
Total
|
|
$
|
120,561
|
|
|
$
|
6,369
|
|
|
$
|
—
|
|
|
$
|
126,930
|
|
(1)
|
Comprised of common stocks and mutual funds traded on U.S. Exchanges whose issuers had market capitalizations exceeding
$3 billion
.
|
(2)
|
Comprised of investment grade bonds of U.S. issuers from diverse industries.
|
(3)
|
Comprised primarily of fixed-income bonds issued by the U.S. Treasury and government sponsored agencies and bonds of U.S. and foreign issuers from diverse industries.
|
(Dollars in thousands)
|
|
Pension
Plan
|
|
Postretirement
Plan
|
|
Supplemental
Plan
|
|
Total
|
||||||||
Accumulated other comprehensive income (loss) at beginning of year
|
|
$
|
(27,291
|
)
|
|
$
|
402
|
|
|
$
|
(255
|
)
|
|
$
|
(27,144
|
)
|
Comprehensive income (loss) adjustment:
|
|
|
|
|
|
|
|
|
||||||||
Prior service costs (credits)
|
|
—
|
|
|
76
|
|
|
—
|
|
|
76
|
|
||||
Net actuarial (income) loss
|
|
1,168
|
|
|
246
|
|
|
(240
|
)
|
|
1,174
|
|
||||
Comprehensive income (loss) adjustment
|
|
1,168
|
|
|
322
|
|
|
(240
|
)
|
|
1,250
|
|
||||
Accumulated other comprehensive income (loss) at end of year
|
|
$
|
(26,123
|
)
|
|
$
|
724
|
|
|
$
|
(495
|
)
|
|
$
|
(25,894
|
)
|
(Dollars in thousands)
|
|
Pension
Plan
|
|
Postretirement
Plan
|
|
Supplemental
Plan
|
|
Total
|
||||||||
Prior service (costs) credits
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net gain (loss)
|
|
(1,436
|
)
|
|
105
|
|
|
(67
|
)
|
|
(1,398
|
)
|
||||
Total
|
|
$
|
(1,436
|
)
|
|
$
|
105
|
|
|
$
|
(67
|
)
|
|
$
|
(1,398
|
)
|
|
|
Actual
|
|
Minimum Required
for Capital Adequacy
Purposes
|
|
Minimum Required for Capital Adequacy Purposes Plus Capital Conservation Buffer
|
|
Required to be Well
Capitalized Under
Prompt Corrective
Action Regulations
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Capital
Amount
|
|
Ratio
|
|
Capital
Amount
|
|
Ratio
|
|
Capital
Amount
|
|
Ratio
|
|
Capital
Amount
|
|
Ratio
|
||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Capital to Risk-Weighted Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporation
|
|
$
|
1,543,018
|
|
|
11.5
|
%
|
|
$
|
1,073,431
|
|
|
8.0
|
%
|
|
$
|
1,157,293
|
|
|
8.6
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Chemical Bank
|
|
1,608,980
|
|
|
12.0
|
|
|
1,068,560
|
|
|
8.0
|
|
|
1,152,041
|
|
|
8.6
|
|
|
$
|
1,335,700
|
|
|
10.0
|
%
|
|||
Tier 1 Capital to Risk-Weighted Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporation
|
|
1,441,209
|
|
|
10.7
|
|
|
805,073
|
|
|
6.0
|
|
|
888,935
|
|
|
6.6
|
|
|
N/A
|
|
|
N/A
|
|
||||
Chemical Bank
|
|
1,522,711
|
|
|
11.4
|
|
|
801,420
|
|
|
6.0
|
|
|
884,901
|
|
|
6.6
|
|
|
1,068,560
|
|
|
8.0
|
|
||||
Common Equity Tier 1 Capital to Risk-Weighted Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporation
|
|
1,441,209
|
|
|
10.7
|
|
|
603,805
|
|
|
4.5
|
|
|
687,667
|
|
|
5.1
|
|
|
N/A
|
|
|
N/A
|
|
||||
Chemical Bank
|
|
1,522,711
|
|
|
11.4
|
|
|
601,065
|
|
|
4.5
|
|
|
684,546
|
|
|
5.1
|
|
|
868,205
|
|
|
6.5
|
|
||||
Leverage Ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporation
|
|
1,441,209
|
|
|
9.0
|
|
|
643,603
|
|
|
4.0
|
|
|
643,603
|
|
|
4.0
|
|
|
N/A
|
|
|
N/A
|
|
||||
Chemical Bank
|
|
1,522,711
|
|
|
9.5
|
|
|
641,457
|
|
|
4.0
|
|
|
641,457
|
|
|
4.0
|
|
|
801,822
|
|
|
5.0
|
|
||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Capital to Risk-Weighted Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporation
|
|
$
|
841,257
|
|
|
11.8
|
%
|
|
$
|
571,509
|
|
|
8.0
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
||
Chemical Bank
|
|
830,294
|
|
|
11.7
|
|
|
570,073
|
|
|
8.0
|
|
|
N/A
|
|
|
N/A
|
|
|
$
|
712,591
|
|
|
10.0
|
%
|
|||
Tier 1 Capital to Risk-Weighted Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporation
|
|
767,929
|
|
|
10.7
|
|
|
428,631
|
|
|
6.0
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
||||
Chemical Bank
|
|
756,966
|
|
|
10.6
|
|
|
427,555
|
|
|
6.0
|
|
|
N/A
|
|
|
N/A
|
|
|
570,073
|
|
|
8.0
|
|
||||
Common Equity Tier 1 Capital to Risk-Weighted Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporation
|
|
753,815
|
|
|
10.6
|
|
|
321,474
|
|
|
4.5
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
||||
Chemical Bank
|
|
756,966
|
|
|
10.6
|
|
|
320,666
|
|
|
4.5
|
|
|
N/A
|
|
|
N/A
|
|
|
463,184
|
|
|
6.5
|
|
||||
Leverage Ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporation
|
|
767,929
|
|
|
8.6
|
|
|
356,396
|
|
|
4.0
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
||||
Chemical Bank
|
|
756,966
|
|
|
8.5
|
|
|
355,911
|
|
|
4.0
|
|
|
N/A
|
|
|
N/A
|
|
|
444,888
|
|
|
5.0
|
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
|
||||
Cash at subsidiary bank
|
|
$
|
16,851
|
|
|
$
|
28,884
|
|
Investment in subsidiaries
|
|
2,654,458
|
|
|
1,023,285
|
|
||
Premises and equipment
|
|
4,051
|
|
|
3,632
|
|
||
Goodwill
|
|
1,092
|
|
|
1,092
|
|
||
Other assets
|
|
63,584
|
|
|
13,051
|
|
||
Total assets
|
|
$
|
2,740,036
|
|
|
$
|
1,069,944
|
|
Liabilities
|
|
|
|
|
||||
Other liabilities
|
|
$
|
18,345
|
|
|
$
|
10,426
|
|
Non-revolving line-of-credit
|
|
124,625
|
|
|
25,000
|
|
||
Subordinated debentures
|
|
15,540
|
|
|
18,544
|
|
||
Total liabilities
|
|
158,510
|
|
|
53,970
|
|
||
Shareholders' equity
|
|
2,581,526
|
|
|
1,015,974
|
|
||
Total liabilities and shareholders' equity
|
|
$
|
2,740,036
|
|
|
$
|
1,069,944
|
|
|
|
Years Ended December 31,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Income
|
|
|
|
|
|
|
||||||
Cash dividends from subsidiaries
|
|
$
|
110,450
|
|
|
$
|
56,860
|
|
|
$
|
64,468
|
|
Other income
|
|
151
|
|
|
144
|
|
|
95
|
|
|||
Total income
|
|
110,601
|
|
|
57,004
|
|
|
64,563
|
|
|||
Expenses
|
|
|
|
|
|
|
||||||
Interest expense
|
|
1,816
|
|
|
761
|
|
|
42
|
|
|||
Operating expenses
|
|
30,589
|
|
|
7,794
|
|
|
7,200
|
|
|||
Total expenses
|
|
32,405
|
|
|
8,555
|
|
|
7,242
|
|
|||
Income before income taxes and equity in undistributed net income of subsidiaries
|
|
78,196
|
|
|
48,449
|
|
|
57,321
|
|
|||
Income tax benefit
|
|
11,378
|
|
|
2,582
|
|
|
2,302
|
|
|||
Equity in undistributed net income of subsidiaries
|
|
18,458
|
|
|
35,799
|
|
|
2,498
|
|
|||
Net income
|
|
$
|
108,032
|
|
|
$
|
86,830
|
|
|
$
|
62,121
|
|
|
|
Years Ended December 31,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cash Flows From Operating Activities
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
108,032
|
|
|
$
|
86,830
|
|
|
$
|
62,121
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Share-based compensation expense
|
|
13,452
|
|
|
3,478
|
|
|
2,931
|
|
|||
Depreciation of premises and equipment
|
|
355
|
|
|
318
|
|
|
327
|
|
|||
Equity in undistributed net income of subsidiaries
|
|
(18,458
|
)
|
|
(35,799
|
)
|
|
(2,498
|
)
|
|||
Net decrease in other assets
|
|
9,752
|
|
|
2,873
|
|
|
1,101
|
|
|||
Net decrease in other liabilities
|
|
(11,830
|
)
|
|
(19,033
|
)
|
|
(2,519
|
)
|
|||
Net cash provided by operating activities
|
|
101,303
|
|
|
38,667
|
|
|
61,463
|
|
|||
Cash Flows From Investing Activities
|
|
|
|
|
|
|
||||||
Cash paid, net of cash assumed, in business combinations
|
|
(107,622
|
)
|
|
(45,267
|
)
|
|
(117,853
|
)
|
|||
Purchases of premises and equipment, net
|
|
(774
|
)
|
|
(320
|
)
|
|
(26
|
)
|
|||
Net cash used in investing activities
|
|
(108,396
|
)
|
|
(45,587
|
)
|
|
(117,879
|
)
|
|||
Cash Flows From Financing Activities
|
|
|
|
|
|
|
||||||
Cash dividends paid
|
|
(49,389
|
)
|
|
(36,918
|
)
|
|
(29,528
|
)
|
|||
Proceeds from issuance of common stock, net of issuance costs
|
|
—
|
|
|
—
|
|
|
76,175
|
|
|||
Repayment of subordinated debt obligations
|
|
(18,558
|
)
|
|
—
|
|
|
(10,310
|
)
|
|||
Repayments of other borrowings
|
|
(62,500
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of other borrowings
|
|
125,000
|
|
|
25,000
|
|
|
—
|
|
|||
Proceeds from directors' stock purchase plan and exercise of stock options
|
|
1,572
|
|
|
2,473
|
|
|
1,242
|
|
|||
Cash paid for payroll taxes upon conversion of restricted stock units
|
|
(1,065
|
)
|
|
(571
|
)
|
|
(701
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
(4,940
|
)
|
|
(10,016
|
)
|
|
36,878
|
|
|||
Net decrease in cash and cash equivalents
|
|
(12,033
|
)
|
|
(16,936
|
)
|
|
(19,538
|
)
|
|||
Cash and cash equivalents at beginning of year
|
|
28,884
|
|
|
45,820
|
|
|
65,358
|
|
|||
Cash and cash equivalents at end of year
|
|
$
|
16,851
|
|
|
$
|
28,884
|
|
|
$
|
45,820
|
|
|
|
|
|
|
|
|
||||||
Business combinations:
|
|
|
|
|
|
|
||||||
Fair value of assets acquired (noncash)
|
|
$
|
46,898
|
|
|
$
|
10,304
|
|
|
$
|
1,537
|
|
Liabilities assumed
|
|
58,309
|
|
|
42,019
|
|
|
13,010
|
|
|||
Common stock and stock options issued
|
|
1,504,811
|
|
|
159,904
|
|
|
—
|
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands, except per share data)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
|
$
|
108,032
|
|
|
$
|
86,830
|
|
|
$
|
62,121
|
|
Net income allocated to participating securities
|
|
166
|
|
|
—
|
|
|
—
|
|
|||
Net income allocated to common shareholders
(1)
|
|
$
|
107,866
|
|
|
$
|
86,830
|
|
|
$
|
62,121
|
|
Weighted average common shares - issued
|
|
49,091
|
|
|
36,081
|
|
|
31,367
|
|
|||
Average unvested restricted share awards
|
|
(139
|
)
|
|
—
|
|
|
—
|
|
|||
Weighted average common shares outstanding - basic
|
|
48,952
|
|
|
36,081
|
|
|
31,367
|
|
|||
Effect of dilutive securities
|
|
|
|
|
|
|
||||||
Weighted average common stock equivalents
|
|
651
|
|
|
272
|
|
|
221
|
|
|||
Weighted average common shares outstanding - diluted
|
|
49,603
|
|
|
36,353
|
|
|
31,588
|
|
|||
EPS available to common shareholders
|
|
|
|
|
|
|
||||||
Basic earnings per common share
|
|
$
|
2.21
|
|
|
$
|
2.41
|
|
|
$
|
1.98
|
|
Diluted earnings per common share
|
|
$
|
2.17
|
|
|
$
|
2.39
|
|
|
$
|
1.97
|
|
|
(1)
|
Net income allocated to common shareholders for basic and diluted earnings per share may differ under the two-class method as a result of adding common share equivalents for options and warrants to dilutive shares outstanding, which alters the ratio used to allocate net income to common shareholders and participating securities for the purposes of calculating diluted earnings per share.
|
(Dollars in thousands)
|
|
Unrealized gains
(losses) on securities available-for-sale, net of tax |
|
Defined Benefit Pension Plans
|
|
Total
|
||||||
For the year ended December 31, 2016
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
(1,888
|
)
|
|
$
|
(27,144
|
)
|
|
$
|
(29,032
|
)
|
Other comprehensive loss before reclassifications
|
|
(12,170
|
)
|
|
(229
|
)
|
|
(12,399
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
|
(84
|
)
|
|
1,479
|
|
|
1,395
|
|
|||
Net current period other comprehensive income (loss)
|
|
(12,254
|
)
|
|
1,250
|
|
|
(11,004
|
)
|
|||
Ending balance
|
|
$
|
(14,142
|
)
|
|
$
|
(25,894
|
)
|
|
$
|
(40,036
|
)
|
For the year ended December 31, 2015
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
(210
|
)
|
|
$
|
(32,243
|
)
|
|
$
|
(32,453
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
(1,269
|
)
|
|
2,443
|
|
|
1,174
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
|
(409
|
)
|
|
2,656
|
|
|
2,247
|
|
|||
Net current period other comprehensive income (loss)
|
|
(1,678
|
)
|
|
5,099
|
|
|
3,421
|
|
|||
Ending balance
|
|
$
|
(1,888
|
)
|
|
$
|
(27,144
|
)
|
|
$
|
(29,032
|
)
|
For the year ended December 31, 2014
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
(2,480
|
)
|
|
$
|
(18,040
|
)
|
|
$
|
(20,520
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
2,270
|
|
|
(15,623
|
)
|
|
(13,353
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
|
—
|
|
|
1,420
|
|
|
1,420
|
|
|||
Net current period other comprehensive income (loss)
|
|
2,270
|
|
|
(14,203
|
)
|
|
(11,933
|
)
|
|||
Ending balance
|
|
$
|
(210
|
)
|
|
$
|
(32,243
|
)
|
|
$
|
(32,453
|
)
|
(Dollars in thousands)
|
|
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)
|
|
Affected Line Item in the Income Statement
|
||||||||||
|
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
|
|
||||||
Gains and losses on available-for-sale securities
|
|
$
|
129
|
|
|
$
|
630
|
|
|
$
|
—
|
|
|
Net gain on sale of investment securities (noninterest income)
|
|
|
(45
|
)
|
|
(221
|
)
|
|
—
|
|
|
Income tax (expense)/benefit
|
|||
|
|
$
|
84
|
|
|
$
|
409
|
|
|
$
|
—
|
|
|
Net Income
|
|
|
|
|
|
|
|
|
|
||||||
Amortization of defined benefit pension plan items
|
|
$
|
(2,276
|
)
|
|
$
|
(4,086
|
)
|
|
$
|
(2,184
|
)
|
|
Salaries, wages and employee benefits (operating expenses)
|
|
|
797
|
|
|
1,430
|
|
|
764
|
|
|
Income tax (expense)/benefit
|
|||
|
|
$
|
(1,479
|
)
|
|
$
|
(2,656
|
)
|
|
$
|
(1,420
|
)
|
|
Net Income
|
|
|
Years Ended December 31,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Service charges and fees on deposit accounts
|
|
$
|
28,136
|
|
|
$
|
25,481
|
|
|
$
|
22,414
|
|
Wealth management revenue
|
|
22,601
|
|
|
20,552
|
|
|
16,015
|
|
|||
Electronic banking fees
|
|
23,433
|
|
|
19,119
|
|
|
13,480
|
|
|||
Mortgage banking revenue
|
|
21,859
|
|
|
6,133
|
|
|
5,041
|
|
|||
Other fees for customer services
|
|
4,939
|
|
|
4,428
|
|
|
3,539
|
|
|||
Insurance commissions
|
|
1,874
|
|
|
1,966
|
|
|
1,559
|
|
|||
Gain on sale of investment securities
|
|
129
|
|
|
630
|
|
|
—
|
|
|||
Bank owned life insurance
|
|
1,836
|
|
|
646
|
|
|
281
|
|
|||
Rental income
|
|
592
|
|
|
466
|
|
|
145
|
|
|||
Gain on sale of branch offices
|
|
7,391
|
|
|
—
|
|
|
—
|
|
|||
Gain on sale of closed branch offices and other assets
|
|
—
|
|
|
266
|
|
|
—
|
|
|||
Gain on sale of merchant card servicing business
|
|
—
|
|
|
—
|
|
|
400
|
|
|||
Other
|
|
9,560
|
|
|
529
|
|
|
221
|
|
|||
Total noninterest income
|
|
$
|
122,350
|
|
|
$
|
80,216
|
|
|
$
|
63,095
|
|
|
|
Years Ended December 31,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Salaries and wages
|
|
$
|
135,407
|
|
|
$
|
104,490
|
|
|
$
|
83,229
|
|
Employee benefits
|
|
29,806
|
|
|
23,430
|
|
|
19,328
|
|
|||
Occupancy
|
|
23,525
|
|
|
18,213
|
|
|
15,842
|
|
|||
Equipment and software
|
|
24,408
|
|
|
18,569
|
|
|
14,737
|
|
|||
Outside processing and service fees
|
|
21,199
|
|
|
15,207
|
|
|
11,586
|
|
|||
FDIC insurance premiums
|
|
7,407
|
|
|
5,485
|
|
|
4,307
|
|
|||
Professional fees
|
|
5,832
|
|
|
4,842
|
|
|
3,570
|
|
|||
Intangible asset amortization
|
|
5,524
|
|
|
4,389
|
|
|
2,029
|
|
|||
Postage and express mail
|
|
3,777
|
|
|
3,313
|
|
|
3,418
|
|
|||
Advertising and marketing
|
|
3,740
|
|
|
3,288
|
|
|
3,051
|
|
|||
Training, travel and other employee expenses
|
|
4,025
|
|
|
3,224
|
|
|
2,480
|
|
|||
Telephone
|
|
2,964
|
|
|
2,608
|
|
|
1,966
|
|
|||
Supplies
|
|
2,318
|
|
|
2,216
|
|
|
1,897
|
|
|||
Donations
|
|
1,951
|
|
|
1,375
|
|
|
1,155
|
|
|||
Credit-related expenses
|
|
(2,701
|
)
|
|
632
|
|
|
996
|
|
|||
Merger and acquisition-related transaction expenses
|
|
61,134
|
|
|
7,804
|
|
|
6,388
|
|
|||
Other
|
|
8,102
|
|
|
4,809
|
|
|
3,946
|
|
|||
Total operating expenses
|
|
$
|
338,418
|
|
|
$
|
223,894
|
|
|
$
|
179,925
|
|
|
|
2016
|
||||||||||||||||||
(Dollars in thousands, except per share data)
|
|
First
Quarter
(1)
|
|
Second
Quarter
(1)
|
|
Third
Quarter
(1)
|
|
Fourth
Quarter
|
|
Total
|
||||||||||
Interest income
|
|
$
|
79,464
|
|
|
$
|
82,937
|
|
|
$
|
103,562
|
|
|
$
|
144,416
|
|
|
$
|
410,379
|
|
Interest expense
|
|
5,134
|
|
|
5,442
|
|
|
6,753
|
|
|
11,969
|
|
|
29,298
|
|
|||||
Net interest income
|
|
74,330
|
|
|
77,495
|
|
|
96,809
|
|
|
132,447
|
|
|
381,081
|
|
|||||
Provision for loan losses
|
|
1,500
|
|
|
3,000
|
|
|
4,103
|
|
|
6,272
|
|
|
14,875
|
|
|||||
Noninterest income
|
|
19,419
|
|
|
20,897
|
|
|
27,770
|
|
|
54,264
|
|
|
122,350
|
|
|||||
Operating expenses
|
|
58,887
|
|
|
59,085
|
|
|
106,144
|
|
|
114,302
|
|
|
338,418
|
|
|||||
Income before income taxes
|
|
33,362
|
|
|
36,307
|
|
|
14,332
|
|
|
66,137
|
|
|
150,138
|
|
|||||
Income tax expense
|
|
9,757
|
|
|
10,532
|
|
|
2,848
|
|
|
18,969
|
|
|
42,106
|
|
|||||
Net income
|
|
$
|
23,605
|
|
|
$
|
25,775
|
|
|
$
|
11,484
|
|
|
$
|
47,168
|
|
|
$
|
108,032
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.61
|
|
|
$
|
0.67
|
|
|
$
|
0.23
|
|
|
$
|
0.67
|
|
|
$
|
2.21
|
|
Diluted
|
|
0.60
|
|
|
0.67
|
|
|
0.23
|
|
|
0.66
|
|
|
2.17
|
|
|||||
Cash dividends declared per common share
|
|
0.26
|
|
|
0.26
|
|
|
0.27
|
|
|
0.27
|
|
|
1.06
|
|
|
|
2015
|
||||||||||||||||||
(Dollars in thousands, except per share data)
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
|
||||||||||
Interest income
|
|
$
|
62,630
|
|
|
$
|
69,679
|
|
|
$
|
78,851
|
|
|
$
|
80,629
|
|
|
$
|
291,789
|
|
Interest expense
|
|
3,450
|
|
|
3,944
|
|
|
5,234
|
|
|
5,153
|
|
|
17,781
|
|
|||||
Net interest income
|
|
59,180
|
|
|
65,735
|
|
|
73,617
|
|
|
75,476
|
|
|
274,008
|
|
|||||
Provision for loan losses
|
|
1,500
|
|
|
1,500
|
|
|
1,500
|
|
|
2,000
|
|
|
6,500
|
|
|||||
Noninterest income
|
|
19,275
|
|
|
20,674
|
|
|
20,215
|
|
|
20,052
|
|
|
80,216
|
|
|||||
Operating expenses
|
|
51,020
|
|
|
56,785
|
|
|
58,265
|
|
|
57,824
|
|
|
223,894
|
|
|||||
Income before income taxes
|
|
25,935
|
|
|
28,124
|
|
|
34,067
|
|
|
35,704
|
|
|
123,830
|
|
|||||
Income tax expense
|
|
8,100
|
|
|
9,100
|
|
|
9,600
|
|
|
10,200
|
|
|
37,000
|
|
|||||
Net income
|
|
$
|
17,835
|
|
|
$
|
19,024
|
|
|
$
|
24,467
|
|
|
$
|
25,504
|
|
|
$
|
86,830
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.54
|
|
|
$
|
0.54
|
|
|
$
|
0.64
|
|
|
$
|
0.67
|
|
|
$
|
2.41
|
|
Diluted
|
|
0.54
|
|
|
0.54
|
|
|
0.64
|
|
|
0.66
|
|
|
2.39
|
|
|||||
Cash dividends declared per common share
|
|
0.24
|
|
|
0.24
|
|
|
0.26
|
|
|
0.26
|
|
|
1.00
|
|
|
|
|
|
|
|
/s/ David B. Ramaker
|
|
/s/ Dennis L. Klaeser
|
David B. Ramaker
|
|
Dennis L. Klaeser
|
Chief Executive Officer and President
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
March 1, 2017
|
|
March 1, 2017
|
|
|
Equity Compensation Plan Information
|
|
||||||||
Plan category
|
|
Number of Securities to be Issued upon Exercise of Outstanding Options,
Warrants and Rights
(a)
|
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(b)
|
|
Number of Securities
Remaining Available for Future Issuance under Equity Compensation Plans
(excluding Securities Reflected in Column (a))
(c)
|
|
||||
Equity compensation plans approved by security holders
(1)
|
|
1,119,002
|
|
|
$
|
28.76
|
|
|
913,824
|
|
(3)
|
Equity compensation plans not approved by security holders
(2)
|
|
1,334,393
|
|
|
$
|
15.25
|
|
|
—
|
|
|
Total
|
|
2,453,395
|
|
|
$
|
21.41
|
|
|
913,824
|
|
|
(1)
|
Consists of the Chemical Financial Corporation Stock Incentive Plan of 2006 (2006 Plan), the Chemical Financial Corporation Stock Incentive Plan of 2012 (2012 Plan), the Chemical Financial Corporation Stock Incentive Plan of 2015 (2015 Plan) and the Chemical Financial Corporation Directors' Deferred Stock Plan. Stock options or other awards may no longer be granted under either the 2006 Plan or 2012 Plan.
|
(2)
|
At
December 31, 2016
, equity compensation plans not approved by shareholders consisted of the Talmer Bancorp, Inc. 2009 Equity Incentive Plan ("TLMR Equity Incentive Plan"), the Lake Michigan Financial Corporation Stock Incentive Plan of 2003 and the Lake Michigan Financial Corporation Stock Incentive Plan of 2012 (collectively referred to as the "LMFC Stock Incentive Plans"). The TLMR Equity Incentive Plan granted non-statutory stock options that were awarded at the fair value of Talmer Bancorp, Inc. common stock on the date of grant. Effective as of the Corporation's merger with Talmer Bancorp, Inc. on August 31, 2016, each option outstanding under the TLMR Equity Incentive Plan ceased to represent a stock option for TLMR common stock and was converted into a stock option for common stock of the Corporation. The LMFC Stock Incentive Plans granted non-statutory stock options that were awarded at the fair value of Lake Michigan Financial Corporation common stock on the date of grant. Effective as of the Corporation's acquisition of Lake Michigan Financial Corporation on May 31, 2015, each option outstanding under the LMFC Stock Incentive Plans ceased to represent a stock option for LMFC common stock and was converted into a stock option for common stock of the Corporation. Payment for the exercise of an option at the time of exercise may be made in the form of shares of the Corporation’s common stock having a market value equal to the exercise price of the option at the time of exercise, or in cash. There are no further stock options or other awards available for grant under the TLMR Equity Incentive Plan or the LMFC Stock Incentive Plans. As of
December 31, 2016
, there were
1,283,634
options to purchase the Corporation's common stock under the TLMR Equity Incentive Plan with a weighted average exercise price of $
15.32
per share and
50,759
options to purchase the Corporation's common stock outstanding under the LMFC Stock Incentive Plans with a weighted average exercise price of $
13.66
per share.
|
(3)
|
Represents
626,353
remaining available shares for future grant under the 2015 Plan and
287,471
remaining shares available for future issuance under the Directors' Deferred Stock Plan.
|
(2)
|
Financial Statement Schedules.
The schedules for the Corporation are omitted because of the absence of conditions under which they are required, or because the information is set forth in the consolidated financial statements or the notes thereto.
|
(3)
|
Exhibits.
The following lists the Exhibits to the Annual Report on Form 10-K:
|
Number
|
|
Exhibit
|
3.1
|
|
Restated Articles of Incorporation.
|
3.2
|
|
Bylaws. Previously filed as Exhibit 3.2 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 26, 2014. Here incorporated by reference.
|
4.1
|
|
Restated Articles of Incorporation. Exhibit 3.1 is here incorporated by reference.
|
4.2
|
|
Bylaws. Exhibit 3.2 is here incorporated by reference.
|
4.3
|
|
Long-Term Debt. The registrant has outstanding long-term debt which at the time of this report does not exceed 10% of the registrant's total consolidated assets. The registrant agrees to furnish copies of the agreements defining the rights of holders of such long-term debt to the SEC upon request.
|
10.1
|
|
Amended and Restated Chemical Financial Corporation Stock Incentive Plan of 2006.* Previously filed as Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, filed with the SEC on August 3, 2011. Here incorporated by reference.
|
10.2
|
|
Chemical Financial Corporation Deferred Compensation Plan for Directors.* Previously filed as Exhibit 10.2 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2011, filed with the SEC on February 24, 2012. Here incorporated by reference.
|
10.3
|
|
Chemical Financial Corporation Deferred Compensation Plan.* Previously filed as Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, filed with the SEC on April 30, 2013. Here incorporated by reference.
|
10.4
|
|
Chemical Financial Corporation Supplemental Retirement Income Plan.* Previously filed as Exhibit 10.5 to the registrant's Registration Statement on Form S-4, filed with the SEC on February 19, 2010. Here incorporated by reference.
|
10.5
|
|
Chemical Financial Corporation Stock Incentive Plan of 2012.* Previously filed as Appendix A to the registrant's definitive proxy statement for the registrant's 2012 Annual Meeting of Shareholders, filed with the SEC on March 1, 2012. Here incorporated by reference.
|
10.6
|
|
Chemical Financial Corporation Directors' Deferred Stock Plan.* Previously filed as Exhibit 10.8 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 26, 2014. Here incorporated by reference.
|
10.7
|
|
Chemical Financial Corporation Stock Incentive Plan of 2015.* Previously filed as Appendix C to the registrant's definitive proxy statement for the registrant's 2015 Annual Meeting of Shareholders, filed with the SEC on March 6, 2015. Here incorporated by reference.
|
10.8
|
|
Employment Agreement between David R. Ramaker and Chemical Financial Corporation, dated August 31, 2016*. Previously filed as Exhibit 10.1 to the registrant's Current Report on Form 8-K dated August 31, 2016, filed with the SEC on August 31, 2016. Here incorporated by reference.
|
10.9
|
|
Employment Agreement between Dennis L. Klaeser and Chemical Financial Corporation, dated August 31, 2016*. Previously filed as Exhibit 10.2 to the registrant's Current Report on Form 8-K dated August 31, 2016, filed with the SEC on August 31, 2016. Here incorporated by reference.
|
10.10
|
|
Employment Agreement between Lori A. Gwizdala and Chemical Financial Corporation, dated August 31, 2016*. Previously filed as Exhibit 10.3 to the registrant's Current Report on Form 8-K dated August 31, 2016, filed with the SEC on August 31, 2016. Here incorporated by reference.
|
10.11
|
|
Employment Agreement between Leonardo A. Amat and Chemical Financial Corporation, dated August 31, 2016.*
|
10.12
|
|
Employment Agreement between Robert S. Rathburn and Chemical Financial Corporation, dated August 31, 2016.*
|
21
|
|
Subsidiaries.
|
23.1
|
|
Consent of KPMG LLP.
|
23.2
|
|
Consent of Andrews Hooper Pavlik PLC.
|
24
|
|
Powers of Attorney.
|
31.1
|
|
Certification of Chief Executive Officer.
|
31.2
|
|
Certification of Chief Financial Officer.
|
32
|
|
Certification pursuant to 18 U.S.C. §1350.
|
99.1
|
|
Chemical Financial Corporation Directors' Deferred Stock Plan Audited Financial Statements and Notes.
|
101.1
|
|
Interactive Data File.
|
*
|
These agreements are management contracts or compensation plans or arrangements required to be filed as Exhibits to this Form 10-K.
|
EXHIBIT 3.1
RESTATED ARTICLES OF INCORPORATION
OF
CHEMICAL FINANCIAL CORPORATION
(As Amended Through July 19, 2016)
1. These Restated Articles of Incorporation are executed pursuant to the provisions of Sections 641-657, Act 284, Public Acts of 1972.
2. The present name of the Corporation is Chemical Financial Corporation; and the Corporation has had no other former name.
3. The date of filing the original Articles of Incorporation was August 27, 1973.
4. The following Restated Articles of Incorporation supersede the original Articles of Incorporation as amended, and shall be the Articles of Incorporation of the Corporation:
Article I
The name of the Corporation is CHEMICAL FINANCIAL CORPORATION
Article II
The purpose or purposes for which the Corporation is organized is to engage in any activity within the purposes for which corporations may be organized under the Business Corporation Act of Michigan.
ARTICLE III
The total authorized capital stock of the Corporation is 102,000,000 shares of stock divided into two classes, as follows:
A. 100,000,000 shares of common stock, par value $1.00 per share; and
B. 2,000,000 shares of preferred stock, no par value.
The following provisions apply to the authorized capital stock of the corporation:
1. Provisions Applicable to Common Stock .
a. No Preference . None of the shares of common stock are entitled to any preferences, and each share of common stock is equal to every other share of common stock in every respect.
b. Dividends . After payment or declaration of full dividends on all shares having a priority over the common stock as to dividends, and after making all required sinking or retirement fund payments, if any, on all classes of preferred stock and on any other stock of the corporation ranking with priority as to dividends or assets over the common stock, dividends on the shares of common stock may be declared and paid, but only when and as determined by the board of directors.
c. Rights on Liquidation . On any liquidation, dissolution or winding up of the affairs of the corporation, after payment or setting aside of the full preferential amounts to which holders of all shares having priority over the common stock are entitled, the holders of the common stock will be entitled to receive pro rata all the remaining assets of the corporation available for distribution to shareholders. The board of directors may distribute in kind to the holders of common stock the remaining assets of the corporation or may sell, transfer or otherwise dispose of all or any part of the remaining assets to any person and may sell all or any part of the consideration so received and distribute any balance thereof in kind to holders of common stock. The merger or consolidation of the corporation into or with any other corporation, or the merger or consolidation of any other corporation into it, or any purchase or redemption of shares of stock of the corporation of any class, will not be deemed to be a dissolution, liquidation or winding up of the corporation for the purposes of this paragraph.
d. Voting . At all meetings of shareholders of the corporation, the holders of the common stock are entitled to one vote for each share of common stock held by them respectively.
2. Provisions Applicable To Preferred Stock .
a. Provisions to be Fixed by the Board of Directors . The board of directors is expressly authorized at any time, and from time to time, to provide for the issuance of shares of preferred stock in one or more series, each having the designations and relative voting, distribution, dividend, liquidation, and other rights, preferences, and limitations, consistent with the Michigan Business Corporation Act, as amended, as are stated in the resolution or resolutions providing for the issuance of shares of preferred stock adopted by the board of directors, and as are not stated in these Restated Articles of Incorporation, or any amendments thereto, including (without limiting the generality of the foregoing) the following:
(1) The distinctive designation and number of shares comprising the series, which number may (except where otherwise provided by the board of directors in creating the series) be increased or decreased (but not below the number of shares then issued and outstanding) from time to time by action of the board of directors.
(2) The stated value of the shares of the series.
(3) The dividend rate or rates on the shares of the series and the relation which dividends will bear to the dividends payable on any other class of capital stock or on any other series of preferred stock, the terms and conditions upon which and the periods in respect of which dividends will be payable, whether and upon what conditions dividends
2 |
will be cumulative and, if cumulative, the date or dates from which dividends will accumulate.
(4) Whether the shares of the series are redeemable and, if redeemable, whether redeemable for cash, property or rights, including securities of any other corporation, and whether redeemable at the option of the holder or the corporation or upon the happening of a specified event, the limitations and restrictions with respect to the redemption, the time or times when, the price or prices or rate or rates at which, the adjustments with which and the manner in which such shares are redeemable, including the manner of selecting shares of the series for redemption if less than all shares are to be redeemed.
(5) The rights to which the holders of shares of the series are entitled, and the preferences, if any, over any other series (or of any other series over the series), upon the voluntary or involuntary liquidation, dissolution, distribution or winding up of the corporation, which rights may vary depending on whether the liquidation, dissolution, distribution or winding up is voluntary or involuntary, and, if voluntary, may vary at different dates.
(6) Whether the shares of the series are subject to the operation of a purchase, retirement or sinking fund and, if so, whether and upon what conditions the fund will be cumulative or noncumulative, the extent to which and the manner in which the fund will be applied to the purchase or redemption of the shares of the series for retirement or to other corporation purposes and the terms and provisions relative to the operation thereof.
(7) Whether the shares of the series are convertible into or exchangeable for shares of any other class or of any other series of any class of capital stock of the corporation or any other corporation, and, if so convertible or exchangeable, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms and conditions of such conversion or exchange.
(8) The voting powers, if any, of the shares of the series, and whether and under what conditions the shares of the series (alone or together with the shares of one or more of other series having similar provisions) are entitled to vote separately as a single class, for the election of one or more additional directors of the corporation or upon other matters.
(9) Whether the issuance of any additional shares of the series, or of any shares of any other series, is subject to restrictions as to issuance, or as to the powers, preferences or rights of any other series.
(10) Any other preferences, privileges and powers and relative participating, optional or other special rights, and qualifications, limitations or restrictions of the series, as the board of directors determines and as are not inconsistent with the provisions of these Restated Articles of Incorporation.
3 |
b. Provisions Applicable to All Preferred Stock .
(1) Subject to the designations, relative rights, preferences, and limitations applicable to separate series, each share shall be equal to every other share of the same class.
(2) Shares of preferred stock redeemed, converted, exchanged, purchased, retired or surrendered to the corporation, or which have been issued and reacquired in any manner, may, upon compliance with any applicable provisions of the Michigan Business Corporation Act, as amended, be given the status of authorized and unissued shares of preferred stock and may be reissued by the board of directors as part of the series of which they were originally a part or may be reclassified into and reissued as part of a new series or as a part of any other series, all subject to the protective conditions or restrictions of any outstanding series of preferred stock.
(3) Any of the voting, distribution, liquidation, or other rights, preferences, or limitations of a series may be made dependent upon facts or circumstances ascertainable outside of the Restated Articles of Incorporation or the resolution or resolutions providing for the issuance of shares of preferred stock adopted by the board of directors, if the manner in which the facts or events operate on the rights, preferences, or limitations is set forth in the Restated Articles of Incorporation or board resolution or resolutions.
Article IV
[Reserved.]
Article V
All of the powers of this Corporation, insofar as the same may be lawfully vested by these Articles of Incorporation, are hereby vested in and conferred upon the Board of Directors of this Corporation. In furtherance and not in limitation thereof, the Board of Directors is expressly authorized:
(a) | To set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve in the manner in which it was created. | |
(b) | To designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. |
4 |
Article VI
Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.
Article VII
Any action required or permitted under the Michigan Business Corporation Act to be taken at an annual or special meeting of shareholders may be taken without a meeting, without prior notice and without a vote, if consent in writing setting forth the action so taken is signed by the holders of outstanding stock having not less than the minimum number of votes necessary to authorize or take the action at a meeting at which all shares entitled to vote were present and voted.
Article VIII
(a) | A director of this Corporation shall not be liable to the Corporation or its shareholders for monetary damages for a breach of a director's fiduciary duty, except for liability; (i) for a breach of the director's duty of loyalty to the Corporation or its shareholders; (ii) for acts or omissions not in god faith or that involve intentional misconduct or a knowing violation of law; (iii) a violation of Section 551(1) of the Michigan Business Corporation Act; or (iv) for a transaction from which the director derived an improper personal benefit. No Amendment to or repeal of this Article VIII (a) shall apply to, or have any effect on, the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal. | |
(b) | The Corporation shall provide indemnification to persons who serve or have served as directors, officers, employees or agents of the Corporation, and to persons who serve or have served at the request of the Corporation as directors, officers, employees, partners or agents of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, whether for profit or not, to the fullest extent permitted by the Michigan Business Corporation Act, as the same now exists or may hereafter be amended. |
5 |
EXHIBIT 10.11
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made by CHEMICAL FINANCIAL CORPORATION, a Michigan corporation (the “Corporation”) and LEONARDO A. AMAT (“Executive”). The parties agree as follows.
WHEREAS, the Board of Directors of the Corporation believes that the future services of Executive as provided in this Agreement will be of great value to the Corporation; and
WHEREAS, the Corporation owns and operates a wholly owned subsidiary, Chemical Bank (“Bank”), which is engaged in the general business of banking; and
WHEREAS, the Board of Directors of the Corporation has determined that it is in the best interests of the Corporation, its shareholders and the Bank to secure Executive’s continued services and to ensure Executive’s continued dedication and objectivity in the event of any potential or occurrence of, or negotiation or other action that could lead to, or create the possibility of, a Change in Control (as hereafter defined) of the Corporation, without concern as to whether Executive might be hindered or distracted by personal uncertainties and risks created by any such possible Change in Control, and to encourage Executive’s full attention and dedication to the Corporation and the Bank, the Board of Directors has authorized the Corporation to enter into this Agreement; and
WHEREAS, Executive is willing to serve in the employ of the Corporation and the Bank on a full-time basis as an at-will employee as provided in this Agreement.
NOW, THEREFORE, the parties agree as follows.
1. Effective Date and Term. This Agreement will take effect as of the Effective Time of the Corporation’s acquisition of Talmer Bancorp, Inc. (“Talmer”), as defined in the Agreement and Plan of Merger dated as of January 25, 2016, between Chemical and Talmer (the “Merger Agreement”) (“Effective Date”). If the merger of the Corporation and Talmer does not close, this Agreement shall be null and void. The initial term of this Agreement shall be two years, and, at the end of the initial term, the term shall automatically be extended by another year on each anniversary of the Effective Date unless either party gives the other notice (as provided in Section 15) of intention to terminate this Agreement at least thirty (30) days before an anniversary of the Effective Date, in which case this Agreement shall terminate at the end of the then-current term without any further extension; provided, however, that:
(a) except for termination as provided above pursuant to notice from Executive to the Corporation, this Agreement will not terminate during an “Active Change in Control Proposal Period” (as defined in Section 10), even if the Corporation has given Executive notice of intention to terminate this Agreement;
(b) except for termination as provided above pursuant to notice from Executive to the Corporation, upon the occurrence of a “Change in Control” (as defined in Section 9), the term of this Agreement shall automatically be extended until the second
anniversary of the effective date of the Change in Control, even if the Corporation has given notice of intention to terminate this Agreement; and
(c) termination of this Agreement shall not affect the obligations of either party accrued before termination of this Agreement, including Executive’s obligations under Sections 11, 12 and 13.
2. Employment. Executive will serve as: (A) Executive Vice President Chief Operating Officer – Business Operations of the Corporation; (the “principal position”); and (B) in such positions with Affiliates (defined for purposes of this Agreement as any organizations controlling, controlled by or under common control with the Corporation) as reasonably requested by the Corporation, provided that the duties of such positions are consistent with Executive’s responsibilities in Executive’s principal position (together, the “Employment”). As used in this Agreement, the term “Corporation” includes the Bank, unless the context clearly requires otherwise.
Executive will serve the Corporation and the Bank well and faithfully during the Employment and will devote Executive’s best reasonable full time business efforts to the Employment, except that Executive may engage in civic and professional activities, service on boards of directors, and similar activities as long as such activities do not constitute a conflict of interest or impair Executive’s performance of the duties of the Employment. The Employment may be terminated during the term of this Agreement as provided in Sections 4 and 5.
3. Compensation. Executive will be compensated during the Employment as follows:
(a) Salary. Executive’s annual salary (“Salary”) will be $330,000.00, prorated for any partial year, subject to required payroll deductions and payable in weekly, bi-weekly or semi-monthly installments pursuant to the Corporation’s normal payroll practices. Such Salary shall be subject to review annually commencing in 2017 and will be subject to adjustment pursuant to the Corporation’s normal procedures.
(b) Bonus. Executive will participate in any bonus programs for senior executives of the Corporation or the Bank, at a level commensurate with Executive’s principal position.
(c) Equity Plans. Executive will participate in any stock option or other equity based compensation programs (“Equity Plans”) offered by the Corporation, at a level commensurate with Executive’s principal position.
(d) Fringe Benefits. Executive will participate in health and dental, life insurance, short and long term disability insurance, retirement and other employee fringe benefit programs covering the Corporation’s salaried employees as a group, and in any programs applicable to senior executives of the Corporation or the Bank. The terms of applicable insurance policies and benefit plans in effect from time to time will govern with regard to specific issues of coverage and benefit eligibility. All benefit programs are subject to change from time to time in the Corporation’s discretion, except that Executive will at all times receive the following specific benefits:
-2- |
i. Thirty (30) days of paid time off per year, to be taken in the year earned, and which may not be accumulated or carried forward except as permitted by Corporation policy. Such paid time off shall be subject to review annually commencing in 2017 and Executive’s days of paid time off per year shall be subject to adjustment pursuant to the Corporation’s normal procedures.
ii. Reimbursement of expenses incurred to purchase or lease an executive automobile not to exceed $900.00 per month. Executive will be responsible for payment of all other expenses related to the automobile, such as fuel expenses, automobile insurance, maintenance and repair costs. Such automobile expense reimbursement shall be subject to review annually commencing in 2017 and subject to adjustment pursuant to the Corporation’s normal procedures.
iii. Reimbursement of up to $_____ per year for country club membership dues. Reimbursement is to be paid according to the Corporation’s standard reimbursement policies and procedures, but not later than March 15 of the year following the year in which the expense was incurred.
(e) Business Expenses. The Corporation will reimburse Executive for reasonable ordinary and necessary business expenses incurred in the course of the Employment, for fees and expenses of Executive’s attendance in the course of the Employment at banking related conventions and similar events, for reasonable professional association and seminar expenses, and for any additional expenses authorized by the Corporation, subject to Executive’s submission of proper documentation for tax and accounting purposes. Reimbursement under this section and Sections 3(d)(ii)-(iv) will be paid within thirty (30) days after Executive submits documentation as provided by this Section, provided that payments may not be made after March 15 of the calendar year following the calendar year in which the expenses were incurred.
4. Termination of the Employment Without Severance Pay. Executive shall not be entitled to any further compensation from the Corporation or any Affiliate after termination of the Employment as permitted by this Section 4, except (A) unpaid Salary installments through the Employment termination date, (B) any vested benefits accrued as of the date of termination of the Employment under the terms of any written Corporation or Bank employment, compensation or benefit program; and (C) any rights of Executive to indemnification under the provisions of the Articles of Incorporation or Bylaws of the Corporation or the Bank or any indemnification agreement entered into between Executive and the Corporation or any Affiliate (together, the “Vested Rights”).
(a) Death. The Employment will terminate automatically upon Executive’s death.
(b) Disability. The Corporation may terminate the Employment due to Executive’s “Permanent Disability”, as defined and provided for in this Section 4(b). If Executive has been unable by reason of physical or mental disability to properly perform
-3- |
Executive’s duties hereunder for a period of one hundred eighty (180) days, the Corporation may give Executive notice of its intention to terminate the Employment due to Permanent Disability. If Executive wishes to contest the existence of termination due to Permanent Disability, he must give the Corporation notice of Executive’s disagreement within ten (10) days after receipt of the notice from the Corporation, and he must promptly submit to examination by three physicians who are reasonably acceptable to both Executive and the Corporation (with consultation from other physicians as determined by those three). If (A) within sixty (60) days after receipt by Executive of the notice from the Corporation, two of such physicians shall issue their written statement to the effect that in their opinion, based on their diagnosis, Executive is capable of resuming Executive’s employment and devoting Executive’s full time and energy to discharging Executive’s duties within sixty (60) days after the date of such statement, and (B) Executive does in fact within such sixty (60) day period resume the Employment and properly perform Executive’s duties hereunder, then the Employment shall not be terminated due to Permanent Disability. It is understood that the Corporation has the right to terminate the Employment due to Executive’s disability without meeting the standards in this Section 4(b), but in that event the termination shall be deemed to be a termination of the Employment pursuant to Section 5(a).
(c) Termination by Corporation for Cause. The Corporation may terminate the Employment for “Cause”, defined as (i) removal by order of a regulatory agency having jurisdiction over the Corporation or the Bank, (ii) Executive’s conviction of, or plea of no contest to, a felony, (iii) Executive’s gross misconduct, or (iv) Executive’s willful and repeated failure to perform Executive’s duties under this Employment Agreement. The Corporation may only terminate the Employment for Cause under (iii) and (iv) above if the failure has not been cured by Executive within thirty (30) days after the Corporation gives notice thereof to Executive; it being expressly understood that negligence or bad judgment shall not constitute “Cause” so long as such act or omission shall be without intent of personal profit and is reasonably believed by Executive to be in or not adverse to the best interests of the Corporation.
(d) Discretionary Termination by Executive. Executive may terminate the Employment at will, with at least thirty (30) days advance notice. If Executive gives such notice of termination, the Corporation may (but need not) relieve Executive of some or all of Executive’s offices and responsibilities for part or all of such notice period, provided that Executive’s Salary and benefits are continued for the lesser of thirty (30) days or the remaining period of the Employment.
(e) Termination of Employment after Termination of This Agreement. If Executive continues to be employed by the Corporation or the Bank after termination of this Agreement as provided in Section 1, Executive’s employment shall be terminable by either party at will without any Severance Pay.
5. Termination With Severance Pay. Executive shall not be entitled to any further compensation from the Corporation or any Affiliate after termination of the Employment as permitted by this Section 5, except (A) Vested Rights; and (B) Severance Pay under Section 6 or the Change in Control Severance under Section 7, whichever is applicable.
-4- |
(a) Discretionary Termination by Corporation. The Corporation may terminate the Employment during the term of this Agreement at will, with at least thirty (30) days advance notice to Executive. Any termination of Executive’s Employment by the Corporation under Section 4 that is found not to meet the standards of such Section will be considered to have been a termination under this Section 5(a).
(b) Termination by Executive for Good Reason . Executive may terminate the Employment during the term of this Agreement for “Good Reason” if there is a material negative change to the employment relationship between Executive and the Corporation because: (i) Executive is removed from any of Executive’s principal positions; (ii) the status, authority or responsibility of Executive’s principal positions is materially diminished; (iii) Executive’s Salary as then in effect is materially reduced without a corresponding reduction in the salaries of the Corporation and Bank’s other executives, (iv) the Corporation requires Executive be based in a facility that is more than sixty (60) miles from the facility where Executive is located immediately prior to the relocation or any substantial increase in the business travel required of Executive; or (v) any material breach by the Corporation or the Bank, or any successor, of its obligations to Executive under this Agreement.
Executive may not terminate the employment for “Good Reason” unless:
A. Executive notifies the CEO in writing, within 60 days after Executive becomes aware of the act or omission constituting Good Reason, that the act or omission in question constitutes Good Reason and explaining why Executive considers it to constitute Good Reason;
B. the Corporation fails, within 30 days after notice from Executive under A. above, to revoke the action or correct the omission and make Executive whole; and
C. Executive gives notice of termination within 30 days after expiration of the 30-day period under B. above.
6. Severance Pay. The Corporation will pay and provide Executive with the payments and benefit continuation provided in this Section 6 (“Severance Pay”) if Executive’s Employment is terminated during the term of this Agreement as provided in Section 5 in a manner that constitutes a “separation from service” as that term is defined by Section 409A of the Internal Revenue Code of 1986 (the “Code”) and Executive is not entitled to the Change in Control Severance under Section 7. If Executive becomes entitled to Severance Pay under this Section 6, and subsequently becomes entitled to the Change in Control Severance under Section 7, the amount of the lump sum Cash Payment under Section 7(a) shall be reduced by the amount of Severance Pay already received by Executive under this Section 6, and no further Severance Pay will be payable under this Section 6.
(a) Amount and Duration of Severance Pay. Subject to the other provisions of this Section, Severance Pay will consist of:
-5- |
i. Severance. Payment of an amount equal to one times the sum of (A) Executive’s then-current Salary (disregarding any reduction in Salary that constitutes Good Reason) and (B) the sum of Executive’s cash bonuses under the Corporation’s executive annual incentive plan for each of the most recent three complete calendar years of Executive’s employment by the Corporation (or such lesser number of complete calendar years as Executive has been employed by the Corporation) divided by three (or the lesser number of complete calendar years for which Executive has been employed by the Corporation), payable in equal installments over fifty-two (52) weeks following the week in which the Employment terminates (the “Severance Pay Period”) pursuant to the Corporation’s normal payroll process, subject to required payroll withholding;
ii. Health Coverage Payment. The Corporation will pay Executive a lump sum equal to twelve (12) times the Corporation’s monthly contribution towards Executive’s then current employee and dependent health, prescription drug and dental coverage elections, payable in the first payroll occurring on or after the tenth business day after the date Executive’s Employment terminates, subject to required payroll withholding. If Executive is not enrolled in the Corporation’s health, prescription drug and dental plans, then the monthly contribution will be based on the Corporation’s contribution towards family coverage for such plans determined at the time employment terminates. Although the right to payment under this paragraph is based on the Corporation’s health, prescription drug and/or dental plan at the time employment terminates and is intended to fund payment for health coverage, the payment is not required to be used for health coverage and Executive may use the payment for any purpose;
iii. Acceleration of Vesting . Effective at the time of termination of employment, all unvested stock options and stock previously issued to Executive as to which rights of ownership are subject to forfeiture shall immediately vest; all risk of forfeiture of the ownership of stock or stock options and restrictions on the exercise of options shall lapse; and, Executive shall be entitled to exercise any or all options, such that the underlying shares will be considered outstanding at the time of the termination of employment; and
iv. Outplacement Services . The Corporation will provide Executive with executive-level outplacement services through an outplacement services firm selected by the Company with the Executive’s approval, which shall not be withheld if the firm selected is reputable, for a period not to exceed twelve (12) months after Executive’s termination date. The timing of outplacement services to be received shall be determined by the Executive, provided that all costs under this subsection must be incurred, and all applicable payments to the outplacement firm made, within twelve months following Executive’s termination of employment.
Executive will receive the Severance Pay provided in Section 6(a) notwithstanding any other earnings that Executive may have, and subject to offset only as provided in Section 6(c). If Executive dies during the Severance Pay Period, the Severance Pay under Section
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6(a) will continue for the remainder of the Severance Pay Period for the benefit of Executive’s designated beneficiary (or Executive’s estate if Executive fails to designate a beneficiary).
(b) Conditions to Severance Pay. To be eligible for Severance Pay, Executive must meet the following conditions: (i) Executive must comply with Executive’s obligations under this Agreement that continue after termination of the Employment; (ii) Executive must promptly sign and continue to honor a release, in form acceptable to the Corporation, of any and all claims arising out of or relating to Executive’s employment or its termination and that Executive might otherwise have against the Corporation, the Corporation’s Affiliates, or any of their officers, directors, employees and agents, provided that the release will not waive Executive’s right to claims or rights related to (A) this Agreement; (B) unpaid salary through the employment termination date; (C) unpaid expense reimbursements for authorized business expenses incurred before the employment termination date; (D) any Equity Plan benefits; (E) benefit plans (for example to convert life insurance); (F) any rights under the terms of any qualified retirement plan covering Executive; and (G) rights of indemnification under the Corporation’s Articles of Incorporation or Bylaws or any indemnification agreement entered into between Executive and the Corporation or any Affiliate (in addition, the release does not affect Executive’s right to cooperate in an investigation by the Equal Employment Opportunity Commission), (iii) Executive must resign upon written request by Corporation from all positions with or representing the Corporation or any Affiliate, including but not limited to, membership on boards of directors; and (iv) Executive must provide the Corporation for a period of six (6) months after the Employment termination date with consulting services regarding matters within the scope of Executive’s former duties upon request by the Corporation’s Chief Executive Officer; provided, however, that Executive will only be required to provide those services by telephone at Executive’s reasonable convenience and without substantial interference with Executive’s other activities or commitments.
(c) Reductions to Severance Pay. The Severance Pay due to Executive under Section 6(a)(i) for any week will be reduced (but not below zero) by: (i) any disability benefits to which Executive is entitled for that week under any disability insurance policy or program of the Corporation or any Affiliate (including but not limited to worker’s disability compensation); (ii) any severance pay payable to Executive under any other agreement or Corporation policy; (iii) any payment due to Executive under the Federal Worker Adjustment and Retraining Notification Act or any comparable state statute or local ordinance; and (iv) up to $5,000 of expenses owed by Executive to the Corporation from debt incurred in the ordinary course of the service relationship.
(d) Delay in Payment to a Specified Employee . Notwithstanding any other timing provision in this Section 6, if, at the time any payment that is not exempt from Section 409A would commence due to a separation from service, and Executive is a “specified employee” as that term is defined by Section 409A of the Code, then no such payment under this Agreement may be paid before the date that is six months after Executive’s separation from service (or, if earlier, the individual’s death). Payments that are not exempt from Section 409A and that Executive would otherwise have been entitled
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during those six months will be accumulated and paid on the first payroll date after six months following Executive’s separation from service (or, if earlier, the individual’s death). All payments that are exempt from Section 409A, or that would otherwise be made more than six months following Executive’s separation from service, will be made in accordance with the general timing provisions described above.
7. Change in Control Severance. The Corporation will make the payments provided for in this Section 7 if Executive’s Employment is terminated under Section 5 during the term of this Agreement in a manner that constitutes a “separation from service” as that term is defined by Section 409A of the Code, and such termination of Employment occurs either (i) within two years after the date of a Change in Control or (ii) within six months before the date of a Change in Control.
(a) Amount and Payment of Cash Payment. The Corporation will make a cash payment (the “Cash Payment”) to Executive in an amount equal to one times the sum of (A) Executive’s then-current Salary (disregarding any reduction in Salary that constitutes Good Reason) and (B) the sum of Executive’s cash bonuses under the Corporation’s [executive annual incentive plan] for each of the most recent three complete calendar years of Executive’s employment by the Corporation (or such lesser number of complete calendar years as Executive has been employed by the Corporation) divided by three (or the lesser number of complete calendar years for which Executive has been employed by the Corporation). The Cash Payment shall be paid to Executive in a single lump sum in the first payroll occurring on or after the tenth business day after the date Executive’s Employment terminates. If Executive dies after becoming entitled to the Cash Payment but before it has been paid in full, any remaining Cash Payments will be made to Executive’s designated beneficiary (or Executive’s estate if Executive fails to designate a beneficiary).
(b) Health Coverage Payment. The Corporation will pay Executive a lump sum equal to twelve (12) times the Corporation’s monthly contribution towards Executive’s then current employee and dependent health, prescription drug and dental coverage elections, payable in the first payroll occurring on or after the tenth business day after the date Executive’s Employment terminates, subject to required payroll withholding. If Executive is not enrolled in the Corporation’s health, prescription drug and dental plans, then the monthly contribution will be based on the Corporation’s contribution towards family coverage for such plans determined at the time employment terminates. Although the right to payment under this paragraph is based on the Corporation’s health, prescription drug and/or dental plan at the time employment terminates and is intended to fund payment for health coverage, the payment is not required to be used for health coverage and Executive may use the payment for any purpose.
(c) Acceleration of Vesting . Effective at the time of termination of employment, all unvested stock options and stock previously issued to Executive as to which rights of ownership are subject to forfeiture shall immediately vest; all risk of forfeiture of the ownership of stock or stock options and restrictions on the exercise of options shall lapse; and, Executive shall be entitled to exercise any or all options, such
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that the underlying shares will be considered outstanding at the time of the termination of employment.
(d) Outplacement Services . The Corporation will provide Executive with executive-level outplacement services through an outplacement services firm selected by the Company with the Executive’s approval, which shall not be withheld if the firm selected is reputable, for a period not to exceed twelve (12) months after Executive’s termination date. The timing of outplacement services to be received shall be determined by the Executive, provided that all costs under this subsection must be incurred, and all applicable payments to the outplacement firm made, within twelve months following Executive’s termination of employment.
(d) Reductions to Cash Payment. Executive will receive the Cash Payment notwithstanding any other earnings that Executive may have and without offset of any kind except required payroll deductions.
8. Parachute Cap. Notwithstanding anything in this Agreement to the contrary, any payment, benefit, or amount payable or benefit to be provided to Executive, whether pursuant to this Agreement or otherwise, that is a “Parachute Payment” as defined in Section 280G(b)(2) of the Internal Revenue Code (the “Code”), will be reduced to the extent necessary so that the benefits payable or to be provided to Executive under this Agreement that are treated as Parachute Payments as well as any payments or benefits provided outside of this Agreement that are so treated will not cause the Corporation or any Affiliate to have paid an “Excess Parachute Payment” as defined in Section 280G(b)(1) of the Code. If it is established that an “Excess Parachute Payment” has occurred or will occur under this Agreement or otherwise, any remaining Parachute Payments to be made will be reduced to ensure that the total payments to Executive do not exceed 2.99 times Executive’s “base amount” as defined in Section 280G(b)(3) of the Code. The lump sum cash severance payment under Section 7(a) will be reduced to comply with this Section 8 only to the extent necessary to ensure that the total payments to Executive do not exceed 2.99 times Executive’s “base amount” as defined in Section 280G(b)(3) of the Code.
9. Definition of Change in Control. As used in this Agreement, the term “Change in Control” means any of the occurrences listed in (a) below, subject to (b) below.
(a) A Change in Control means the occurrence of a change in the ownership of effective control of the Corporation or a change in the ownership of a substantial portion of the assets of the Corporation as provided by Treasury Regulation § 1.409A-3(i)(5), which includes the occurrence of any of the following events:
(i) The acquisition, by a person or persons acting as a group, of stock of the Corporation that together with stock held by such person or group constitutes more than 50% of the total fair market value or total voting power of the stock of the Corporation.
(ii) The majority of members of the Board of Directors of the Corporation are replaced during any twelve month period by directors whose
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appointment or election is not endorsed by a majority of the members of the Board of Directors prior to the date of appointment or election.
(iii) The acquisition, by a person or persons acting as a group, of the Corporation’s assets that have a total gross fair market value equal to or exceeding 50% of the total gross fair market value of the Corporation’s assets in a single transaction or within a twelve month period ending with the most recent acquisition. For the purpose of this section, gross fair market value means the value of the assets of the Corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
The parties agree that the merger between the Corporation and Talmer pursuant to the Merger Agreement does not constitute a Change in Control under this Agreement and does not trigger any payments that may otherwise be required by this Section and Executive waives any right to any payment under this Agreement as a result of that merger.
(b) Notwithstanding the foregoing, no trust department or designated fiduciary or other trustee of such trust department of the Corporation or a subsidiary of the Corporation, or other similar fiduciary capacity of the Corporation with direct voting control of the stock shall be treated as a person or group within the meaning of subsection (a)(i) hereof. Further, no profit-sharing, employee stock ownership, employee stock purchase and savings, employee pension, or other employee benefit plan of the Corporation or any of its subsidiaries, and no trustee of any such plan in its capacity as such trustee, shall be treated as a person or group within the meaning of subsection (a)(i) hereof.
10. Definition of “Active Change in Control Proposal Period”. As used in this Agreement the term “Active Change in Control Proposal Period” shall mean any period:
(a) during which the Board of Directors of the Corporation has authorized solicitation by the Corporation of offers for a transaction which, if consummated, would constitute a Change in Control; or
(b) during which the Corporation has received a proposal for a transaction which, if consummated, would constitute a Change in Control, and the Board of Directors has not determined to reject such proposal without any counter-offer or further discussions; or
(c) during which any proxy solicitation or tender offer with regard to the securities of the Corporation is ongoing, if the intent of such proxy solicitation or tender offer is to cause the Corporation to solicit offers for or enter into a transaction that would constitute a Change in Control.
11. Confidentiality, Return of Property. Executive has obtained and may obtain confidential information concerning the business, operations, financial affairs, organizational and personnel matters, policies, procedures and other non-public matters of Corporation and its Affiliates, and those of third-parties that is not generally disclosed to persons not employed by
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Corporation or its subsidiaries. Such information (referred to herein as the “Confidential Information”) may have been or may be provided in written form or orally. Executive shall not disclose to any other person the Confidential Information at any time during or after termination of the Employment, except that during the Employment Executive may use and disclose Confidential Information as reasonably required by the Employment. Upon termination of the Employment, Executive will deliver to the Corporation any and all property owned or leased by the Corporation or any Affiliate and any and all Confidential Information (in whatever form) including without limitation all customer lists and information, financial information, business notes, business plans, documents, keys, credit cards and other Corporation-provided equipment. Executive’s commitments in this Section will continue in effect after termination of the Employment and after termination of this Agreement. The parties agree that any breach of Executive’s covenants in this Section would cause the Corporation irreparable harm, and that injunctive relief would be appropriate.
12. Inventions, Discoveries and Improvements. Executive hereby agrees to assign and transfer to the Corporation, its successors and assigns, Executive’s entire right, title and interest in and to any and all inventions, discoveries, trade secrets and improvements thereto which he may discover to develop, either solely or jointly with others, during Executive’s employment hereunder and for a period of one year after termination of such employment, which would relate in any way to the business of the Corporation or any Affiliate of the Corporation, together with all rights to letters patent, copyrights or trademarks which may be granted with respect thereto. Immediately upon making or developing any invention, discovery, trade secret or improvement thereto, Executive shall notify the Corporation thereof and shall execute and deliver to the Corporation, without further compensation, such documents as may be necessary to assign and transfer to the Corporation Executive’s entire right, title and interest in and to such invention, discovery, trade secret or improvement thereto, and to prepare or prosecute applications for letters patent with respect to the same in the name of the Corporation. Executive’s obligations under this Section 12 shall continue in effect, as to inventions, discoveries and improvements covered by this Section 12, notwithstanding any termination of the employment or this Agreement.
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13. Noncompetition and Nonsolicitation.
(a) In view of Executive’s importance to the success of the Corporation, Executive and Corporation agree that the Corporation would likely suffer significant harm from Executive’s competing with Corporation during the Employment and for some period of time thereafter. Accordingly, Executive agrees that Executive shall not engage in competitive activities either: (A) while employed by Corporation; or (B) if Executive’s Employment is terminated during the term of this Agreement, during the Restricted Period (as defined below). Executive shall be deemed to engage in competitive activities if he shall, without the prior written consent of the Corporation, (i) in any county in which the Corporation has a branch office, ATM, loan processing center or any other facility, and all contiguous counties, (including the municipalities therein), render services directly or indirectly, as an employee, officer, director, consultant, advisor, partner or otherwise, for any organization or enterprise which competes directly or indirectly with the business of Corporation or any of its Affiliates in providing financial products or services (including, without limitation, banking, insurance, or securities products or services) to consumers and businesses, or (ii) directly or indirectly acquires any financial or beneficial interest in (except as provided in the next sentence) any organization which conducts or is otherwise engaged in a business or enterprise in any county in which the Corporation has a branch office, ATM, loan processing center or any other facility, and all contiguous counties, (including all municipalities therein) which competes directly or indirectly with the business of Corporation or any of its Affiliates in providing financial products or services (including, without limitation, banking, insurance or securities products or services) to consumers and businesses. Notwithstanding the preceding sentence, Executive shall not be prohibited from owning less than 1 percent of any class of publicly traded securities of a competitor. For purposes of this Section 13 the term “Restricted Period” shall equal twelve (12) months, commencing as of the date of termination of Executive’s Employment during the term of this Agreement by the Corporation without Cause or by Executive without Good Reason before a Change in Control or by either the Corporation or Executive for any reason after a Change in Control. For the avoidance of doubt, the Restricted Period shall not apply following a termination of Executive’s Employment during the term of this Agreement by the Corporation with Cause or by Executive with Good Reason.
(b) While employed by Corporation and during the Restricted Period, Executive agrees that Executive shall not, in any manner directly (i) solicit by mail, by telephone, by personal meeting, or by any other means, any customer or prospective customer of Corporation to whom Executive provided services, or for whom Executive transacted business, or whose identity become known to Executive in connection with Executive’s services to Corporation (including employment with or services to any predecessor or successor entities), to transact business with a person or an entity other than the Corporation or its Affiliates or reduce or refrain from doing any business with the Corporation or its Affiliates or (ii) interfere with or damage (or attempt to interfere with or damage) any relationship between Corporation or any of its Affiliates and any such customer or prospective customer, or any shareholder of the Corporation. The term “solicit” as used in this Section 13 means any communication of any kind whatsoever,
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inviting, encouraging or requesting any person to take or refrain from taking any action with respect to the business of Corporation or any of its Affiliates.
(c) While employed by Corporation and during the Restricted Period, Executive agrees that Executive shall not, in any manner directly solicit any person who is an employee of Corporation or any of its Affiliates to apply for or accept employment or a business opportunity with any other person or entity.
(d) The parties agree that nothing herein shall be construed to limit or negate the common law of torts or trade secrets where it provides broader protection than that provided herein.
(e) If Executive’s Employment is terminated during the term of this Agreement, Executive’s obligations under this Section shall survive termination of this Agreement.
14. Successors; Binding Agreement.
(a) This Agreement shall not be terminated by any merger or consolidation of the Corporation whereby the Corporation is or is not the surviving or resulting corporation or as a result of any transfer of all or substantially all of the assets of the Corporation. In the event of any such merger, consolidation, or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred.
(b) The Corporation agrees that concurrently with any merger, consolidation or transfer of assets constituting a Change in Control, it will cause any successor or transferee unconditionally to assume, by written instrument delivered to Executive (or Executive’s beneficiary or estate), all of the obligations of the Corporation hereunder. Failure of the Corporation to obtain such assumption prior to the effective date of any Change in Control shall be a material breach of the Corporation’s obligations to Executive under this Agreement.
(c) This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive shall die while any amounts would be payable to Executive hereunder had Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by Executive to receive such amounts or, if no person is so appointed, to Executive’s estate.
15. Notice. For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or received by facsimile transmission or five (5) days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed as follows:
If to the Corporation: | Chemical Financial Corporation | |
Attn:CEO | ||
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333 East Main Street, P.O. Box 569 | ||
Midland, Michigan 48640-0569 | ||
If to Executive: |
Leonardo A. Amat ________________ ________________ |
Either party may change its address for notices by notice to the other party.
16. Amendment and Waiver. No provisions of this Agreement may be amended, modified, waived or discharged unless the waiver, modification, or discharge is authorized by the Corporation’s Board of Directors, or a committee of the Board of Directors, and is agreed to in a writing signed by Executive and by the CEO. No waiver by either party at any time of any breach or non-performance of this Agreement by the other party shall be deemed a waiver of any prior or subsequent breach or non-performance.
17. Severability. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect. If a court of competent jurisdiction ever determines that any provision of this Agreement (including, but not limited to, all or any part of the non-competition covenant in this Agreement) is unenforceable as written, the parties intend that the provision shall be deemed narrowed or revised in that jurisdiction (as to geographic scope, duration, or any other matter) to the extent necessary to allow enforcement of the provision. The revision shall thereafter govern in that jurisdiction, subject only to any allowable appeals of that court decision.
18. Entire Agreement. No agreements or representations, oral or otherwise, express or implied, with respect to Executive’s Employment with the Corporation or any of the subjects covered by this Agreement have been made by either party that are not set forth expressly in this Agreement, and this Agreement supersedes any pre-existing employment agreements and any other agreements on the subjects covered by this Agreement; provided, however, except as expressly modified hereby, this Agreement shall not affect Executive’s rights under any retirement and health and welfare plans in which Executive participates which are maintained by the Corporation or its Affiliates.
19. Governing Law. The validity, interpretation, and construction of this Agreement are to be governed by Michigan laws, without regard to choice of law rules. The parties agree that any judicial action involving a dispute arising under this Agreement will be filed, heard and decided in the Midland County Circuit Court. The parties agree that they will subject themselves to the personal jurisdiction and venue of either court, regardless of where Executive or the Corporation may be located at the time any action may be commenced. The parties agree that the locations specified above are mutually convenient forums and that each of the parties conducts business in Midland County.
20. Section 409A. This Agreement is intended to be exempt from Section 409A of the Internal Revenue Code partially as an involuntary separation pay plan as that term is
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understood under Treasury Regulation § 1.409A-1(b)(9) and partially as providing for short-term deferrals as that term is understood under Treasury Regulation § 1.409A-1(b)(4) and shall be interpreted and operated consistently with those intentions. To the extent Section 409A is found to be applicable to this Agreement, this Agreement is to be interpreted to comply with Section 409A and shall be interpreted and operated consistently with those intentions, including but not limited to, any applicable six-month delay in payment if Executive is a specified employee of the Corporation.
21. Counterparts. This Agreement may be signed in original or by fax in counterparts, each of which shall be deemed an original, and together the counterparts shall constitute one complete document.
Signature Page to Follow
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The parties made this Agreement effective as of the Effective Date in Section 1.
CHEMICAL BANK |
By | /s/ David B. Ramaker |
David B. Ramaker, Chairman, Chief Executive Officer and President |
Date: | 8-31-16 |
CHEMICAL FINANCIAL CORPORATION |
By | /s/ David B. Ramaker |
David B. Ramaker, Chairman, Chief Executive Officer and President |
Date: | 8-31-16 |
EXECUTIVE |
By | /s/ Leonardo A. Amat |
Leonardo A. Amat |
Date: | 8-31-16 |
[signature page to Employment Agreement]
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EXHIBIT 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made by CHEMICAL FINANCIAL CORPORATION, a Michigan corporation (the “Corporation”) and ROBERT S. RATHBUN (“Executive”). The parties agree as follows.
WHEREAS, the Board of Directors of the Corporation believes that the future services of Executive as provided in this Agreement will be of great value to the Corporation; and
WHEREAS, the Corporation owns and operates a wholly owned subsidiary, Chemical Bank (“Bank”), which is engaged in the general business of banking; and
WHEREAS, the Board of Directors of the Corporation has determined that it is in the best interests of the Corporation, its shareholders and the Bank to secure Executive’s continued services and to ensure Executive’s continued dedication and objectivity in the event of any potential or occurrence of, or negotiation or other action that could lead to, or create the possibility of, a Change in Control (as hereafter defined) of the Corporation, without concern as to whether Executive might be hindered or distracted by personal uncertainties and risks created by any such possible Change in Control, and to encourage Executive’s full attention and dedication to the Corporation and the Bank, the Board of Directors has authorized the Corporation to enter into this Agreement; and
WHEREAS, Executive is willing to serve in the employ of the Corporation and the Bank on a full-time basis as an at-will employee as provided in this Agreement.
NOW, THEREFORE, the parties agree as follows.
1. Effective Date and Term. This Agreement will take effect as of the Effective Time of the Corporation’s acquisition of Talmer Bancorp, Inc. (“Talmer”), as defined in the Agreement and Plan of Merger dated as of January 25, 2016, between Chemical and Talmer (the “Merger Agreement”) (“Effective Date”). If the merger of the Corporation and Talmer does not close, this Agreement shall be null and void. The initial term of this Agreement shall be two years, and, at the end of the initial term, the term shall automatically be extended by another year on each anniversary of the Effective Date unless either party gives the other notice (as provided in Section 15) of intention to terminate this Agreement at least thirty (30) days before an anniversary of the Effective Date, in which case this Agreement shall terminate at the end of the then-current term without any further extension; provided, however, that:
(a) except for termination as provided above pursuant to notice from Executive to the Corporation, this Agreement will not terminate during an “Active Change in Control Proposal Period” (as defined in Section 10), even if the Corporation has given Executive notice of intention to terminate this Agreement;
(b) except for termination as provided above pursuant to notice from Executive to the Corporation, upon the occurrence of a “Change in Control” (as defined in Section 9), the term of this Agreement shall automatically be extended until the second
anniversary of the effective date of the Change in Control, even if the Corporation has given notice of intention to terminate this Agreement; and
(c) termination of this Agreement shall not affect the obligations of either party accrued before termination of this Agreement, including Executive’s obligations under Sections 11, 12 and 13.
2. Employment. Executive will serve as: (A) Executive Vice President Chief Operating Officer – Customer Experience of the Corporation; (the “principal position”); and (B) in such positions with Affiliates (defined for purposes of this Agreement as any organizations controlling, controlled by or under common control with the Corporation) as reasonably requested by the Corporation, provided that the duties of such positions are consistent with Executive’s responsibilities in Executive’s principal position (together, the “Employment”). As used in this Agreement, the term “Corporation” includes the Bank, unless the context clearly requires otherwise.
Executive will serve the Corporation and the Bank well and faithfully during the Employment and will devote Executive’s best reasonable full time business efforts to the Employment, except that Executive may engage in civic and professional activities, service on boards of directors, and similar activities as long as such activities do not constitute a conflict of interest or impair Executive’s performance of the duties of the Employment. The Employment may be terminated during the term of this Agreement as provided in Sections 4 and 5.
3. Compensation. Executive will be compensated during the Employment as follows:
(a) Salary. Executive’s annual salary (“Salary”) will be $330,000.00, prorated for any partial year, subject to required payroll deductions and payable in weekly, bi-weekly or semi-monthly installments pursuant to the Corporation’s normal payroll practices. Such Salary shall be subject to review annually commencing in 2017 and will be subject to adjustment pursuant to the Corporation’s normal procedures.
(b) Bonus. Executive will participate in any bonus programs for senior executives of the Corporation or the Bank, at a level commensurate with Executive’s principal position.
(c) Equity Plans. Executive will participate in any stock option or other equity based compensation programs (“Equity Plans”) offered by the Corporation, at a level commensurate with Executive’s principal position.
(d) Fringe Benefits. Executive will participate in health and dental, life insurance, short and long term disability insurance, retirement and other employee fringe benefit programs covering the Corporation’s salaried employees as a group, and in any programs applicable to senior executives of the Corporation or the Bank. The terms of applicable insurance policies and benefit plans in effect from time to time will govern with regard to specific issues of coverage and benefit eligibility. All benefit programs are subject to change from time to time in the Corporation’s discretion, except that Executive will at all times receive the following specific benefits:
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i. Thirty (30) days of paid time off per year, to be taken in the year earned, and which may not be accumulated or carried forward except as permitted by Corporation policy. Such paid time off shall be subject to review annually commencing in 2017 and Executive’s days of paid time off per year shall be subject to adjustment pursuant to the Corporation’s normal procedures.
ii. Reimbursement of expenses incurred to purchase or lease an executive automobile not to exceed $900.00 per month. Executive will be responsible for payment of all other expenses related to the automobile, such as fuel expenses, automobile insurance, maintenance and repair costs. Such automobile expense reimbursement shall be subject to review annually commencing in 2017 and subject to adjustment pursuant to the Corporation’s normal procedures.
iii. Reimbursement of up to $_____ per year for country club membership dues. Reimbursement is to be paid according to the Corporation’s standard reimbursement policies and procedures, but not later than March 15 of the year following the year in which the expense was incurred.
(e) Business Expenses. The Corporation will reimburse Executive for reasonable ordinary and necessary business expenses incurred in the course of the Employment, for fees and expenses of Executive’s attendance in the course of the Employment at banking related conventions and similar events, for reasonable professional association and seminar expenses, and for any additional expenses authorized by the Corporation, subject to Executive’s submission of proper documentation for tax and accounting purposes. Reimbursement under this section and Sections 3(d)(ii)-(iv) will be paid within thirty (30) days after Executive submits documentation as provided by this Section, provided that payments may not be made after March 15 of the calendar year following the calendar year in which the expenses were incurred.
4. Termination of the Employment Without Severance Pay. Executive shall not be entitled to any further compensation from the Corporation or any Affiliate after termination of the Employment as permitted by this Section 4, except (A) unpaid Salary installments through the Employment termination date, (B) any vested benefits accrued as of the date of termination of the Employment under the terms of any written Corporation or Bank employment, compensation or benefit program; and (C) any rights of Executive to indemnification under the provisions of the Articles of Incorporation or Bylaws of the Corporation or the Bank or any indemnification agreement entered into between Executive and the Corporation or any Affiliate (together, the “Vested Rights”).
(a) Death. The Employment will terminate automatically upon Executive’s death.
(b) Disability. The Corporation may terminate the Employment due to Executive’s “Permanent Disability”, as defined and provided for in this Section 4(b). If Executive has been unable by reason of physical or mental disability to properly perform
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Executive’s duties hereunder for a period of one hundred eighty (180) days, the Corporation may give Executive notice of its intention to terminate the Employment due to Permanent Disability. If Executive wishes to contest the existence of termination due to Permanent Disability, he must give the Corporation notice of Executive’s disagreement within ten (10) days after receipt of the notice from the Corporation, and he must promptly submit to examination by three physicians who are reasonably acceptable to both Executive and the Corporation (with consultation from other physicians as determined by those three). If (A) within sixty (60) days after receipt by Executive of the notice from the Corporation, two of such physicians shall issue their written statement to the effect that in their opinion, based on their diagnosis, Executive is capable of resuming Executive’s employment and devoting Executive’s full time and energy to discharging Executive’s duties within sixty (60) days after the date of such statement, and (B) Executive does in fact within such sixty (60) day period resume the Employment and properly perform Executive’s duties hereunder, then the Employment shall not be terminated due to Permanent Disability. It is understood that the Corporation has the right to terminate the Employment due to Executive’s disability without meeting the standards in this Section 4(b), but in that event the termination shall be deemed to be a termination of the Employment pursuant to Section 5(a).
(c) Termination by Corporation for Cause. The Corporation may terminate the Employment for “Cause”, defined as (i) removal by order of a regulatory agency having jurisdiction over the Corporation or the Bank, (ii) Executive’s conviction of, or plea of no contest to, a felony, (iii) Executive’s gross misconduct, or (iv) Executive’s willful and repeated failure to perform Executive’s duties under this Employment Agreement. The Corporation may only terminate the Employment for Cause under (iii) and (iv) above if the failure has not been cured by Executive within thirty (30) days after the Corporation gives notice thereof to Executive; it being expressly understood that negligence or bad judgment shall not constitute “Cause” so long as such act or omission shall be without intent of personal profit and is reasonably believed by Executive to be in or not adverse to the best interests of the Corporation.
(d) Discretionary Termination by Executive. Executive may terminate the Employment at will, with at least thirty (30) days advance notice. If Executive gives such notice of termination, the Corporation may (but need not) relieve Executive of some or all of Executive’s offices and responsibilities for part or all of such notice period, provided that Executive’s Salary and benefits are continued for the lesser of thirty (30) days or the remaining period of the Employment.
(e) Termination of Employment after Termination of This Agreement. If Executive continues to be employed by the Corporation or the Bank after termination of this Agreement as provided in Section 1, Executive’s employment shall be terminable by either party at will without any Severance Pay.
5. Termination With Severance Pay. Executive shall not be entitled to any further compensation from the Corporation or any Affiliate after termination of the Employment as permitted by this Section 5, except (A) Vested Rights; and (B) Severance Pay under Section 6 or the Change in Control Severance under Section 7, whichever is applicable.
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(a) Discretionary Termination by Corporation. The Corporation may terminate the Employment during the term of this Agreement at will, with at least thirty (30) days advance notice to Executive. Any termination of Executive’s Employment by the Corporation under Section 4 that is found not to meet the standards of such Section will be considered to have been a termination under this Section 5(a).
(b) Termination by Executive for Good Reason . Executive may terminate the Employment during the term of this Agreement for “Good Reason” if there is a material negative change to the employment relationship between Executive and the Corporation because: (i) Executive is removed from any of Executive’s principal positions; (ii) the status, authority or responsibility of Executive’s principal positions is materially diminished; (iii) Executive’s Salary as then in effect is materially reduced without a corresponding reduction in the salaries of the Corporation and Bank’s other executives, (iv) the Corporation requires Executive be based in a facility that is more than sixty (60) miles from the facility where Executive is located immediately prior to the relocation or any substantial increase in the business travel required of Executive; or (v) any material breach by the Corporation or the Bank, or any successor, of its obligations to Executive under this Agreement.
Executive may not terminate the employment for “Good Reason” unless:
A. Executive notifies the CEO in writing, within 60 days after Executive becomes aware of the act or omission constituting Good Reason, that the act or omission in question constitutes Good Reason and explaining why Executive considers it to constitute Good Reason;
B. the Corporation fails, within 30 days after notice from Executive under A. above, to revoke the action or correct the omission and make Executive whole; and
C. Executive gives notice of termination within 30 days after expiration of the 30-day period under B. above.
6. Severance Pay. The Corporation will pay and provide Executive with the payments and benefit continuation provided in this Section 6 (“Severance Pay”) if Executive’s Employment is terminated during the term of this Agreement as provided in Section 5 in a manner that constitutes a “separation from service” as that term is defined by Section 409A of the Internal Revenue Code of 1986 (the “Code”) and Executive is not entitled to the Change in Control Severance under Section 7. If Executive becomes entitled to Severance Pay under this Section 6, and subsequently becomes entitled to the Change in Control Severance under Section 7, the amount of the lump sum Cash Payment under Section 7(a) shall be reduced by the amount of Severance Pay already received by Executive under this Section 6, and no further Severance Pay will be payable under this Section 6.
(a) Amount and Duration of Severance Pay. Subject to the other provisions of this Section, Severance Pay will consist of:
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i. Severance. Payment of an amount equal to one times the sum of (A) Executive’s then-current Salary (disregarding any reduction in Salary that constitutes Good Reason) and (B) the sum of Executive’s cash bonuses under the Corporation’s executive annual incentive plan for each of the most recent three complete calendar years of Executive’s employment by the Corporation (or such lesser number of complete calendar years as Executive has been employed by the Corporation) divided by three (or the lesser number of complete calendar years for which Executive has been employed by the Corporation), payable in equal installments over fifty-two (52) weeks following the week in which the Employment terminates (the “Severance Pay Period”) pursuant to the Corporation’s normal payroll process, subject to required payroll withholding;
ii. Health Coverage Payment. The Corporation will pay Executive a lump sum equal to twelve (12) times the Corporation’s monthly contribution towards Executive’s then current employee and dependent health, prescription drug and dental coverage elections, payable in the first payroll occurring on or after the tenth business day after the date Executive’s Employment terminates, subject to required payroll withholding. If Executive is not enrolled in the Corporation’s health, prescription drug and dental plans, then the monthly contribution will be based on the Corporation’s contribution towards family coverage for such plans determined at the time employment terminates. Although the right to payment under this paragraph is based on the Corporation’s health, prescription drug and/or dental plan at the time employment terminates and is intended to fund payment for health coverage, the payment is not required to be used for health coverage and Executive may use the payment for any purpose;
iii. Acceleration of Vesting . Effective at the time of termination of employment, all unvested stock options and stock previously issued to Executive as to which rights of ownership are subject to forfeiture shall immediately vest; all risk of forfeiture of the ownership of stock or stock options and restrictions on the exercise of options shall lapse; and, Executive shall be entitled to exercise any or all options, such that the underlying shares will be considered outstanding at the time of the termination of employment; and
iv. Outplacement Services . The Corporation will provide Executive with executive-level outplacement services through an outplacement services firm selected by the Company with the Executive’s approval, which shall not be withheld if the firm selected is reputable, for a period not to exceed twelve (12) months after Executive’s termination date. The timing of outplacement services to be received shall be determined by the Executive, provided that all costs under this subsection must be incurred, and all applicable payments to the outplacement firm made, within twelve months following Executive’s termination of employment.
Executive will receive the Severance Pay provided in Section 6(a) notwithstanding any other earnings that Executive may have, and subject to offset only as provided in Section 6(c). If Executive dies during the Severance Pay Period, the Severance Pay under Section
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6(a) will continue for the remainder of the Severance Pay Period for the benefit of Executive’s designated beneficiary (or Executive’s estate if Executive fails to designate a beneficiary).
(b) Conditions to Severance Pay. To be eligible for Severance Pay, Executive must meet the following conditions: (i) Executive must comply with Executive’s obligations under this Agreement that continue after termination of the Employment; (ii) Executive must promptly sign and continue to honor a release, in form acceptable to the Corporation, of any and all claims arising out of or relating to Executive’s employment or its termination and that Executive might otherwise have against the Corporation, the Corporation’s Affiliates, or any of their officers, directors, employees and agents, provided that the release will not waive Executive’s right to claims or rights related to (A) this Agreement; (B) unpaid salary through the employment termination date; (C) unpaid expense reimbursements for authorized business expenses incurred before the employment termination date; (D) any Equity Plan benefits; (E) benefit plans (for example to convert life insurance); (F) any rights under the terms of any qualified retirement plan covering Executive; and (G) rights of indemnification under the Corporation’s Articles of Incorporation or Bylaws or any indemnification agreement entered into between Executive and the Corporation or any Affiliate (in addition, the release does not affect Executive’s right to cooperate in an investigation by the Equal Employment Opportunity Commission), (iii) Executive must resign upon written request by Corporation from all positions with or representing the Corporation or any Affiliate, including but not limited to, membership on boards of directors; and (iv) Executive must provide the Corporation for a period of six (6) months after the Employment termination date with consulting services regarding matters within the scope of Executive’s former duties upon request by the Corporation’s Chief Executive Officer; provided, however, that Executive will only be required to provide those services by telephone at Executive’s reasonable convenience and without substantial interference with Executive’s other activities or commitments.
(c) Reductions to Severance Pay. The Severance Pay due to Executive under Section 6(a)(i) for any week will be reduced (but not below zero) by: (i) any disability benefits to which Executive is entitled for that week under any disability insurance policy or program of the Corporation or any Affiliate (including but not limited to worker’s disability compensation); (ii) any severance pay payable to Executive under any other agreement or Corporation policy; (iii) any payment due to Executive under the Federal Worker Adjustment and Retraining Notification Act or any comparable state statute or local ordinance; and (iv) up to $5,000 of expenses owed by Executive to the Corporation from debt incurred in the ordinary course of the service relationship.
(d) Delay in Payment to a Specified Employee . Notwithstanding any other timing provision in this Section 6, if, at the time any payment that is not exempt from Section 409A would commence due to a separation from service, and Executive is a “specified employee” as that term is defined by Section 409A of the Code, then no such payment under this Agreement may be paid before the date that is six months after Executive’s separation from service (or, if earlier, the individual’s death). Payments that are not exempt from Section 409A and that Executive would otherwise have been entitled
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during those six months will be accumulated and paid on the first payroll date after six months following Executive’s separation from service (or, if earlier, the individual’s death). All payments that are exempt from Section 409A, or that would otherwise be made more than six months following Executive’s separation from service, will be made in accordance with the general timing provisions described above.
7. Change in Control Severance. The Corporation will make the payments provided for in this Section 7 if Executive’s Employment is terminated under Section 5 during the term of this Agreement in a manner that constitutes a “separation from service” as that term is defined by Section 409A of the Code, and such termination of Employment occurs either (i) within two years after the date of a Change in Control or (ii) within six months before the date of a Change in Control.
(a) Amount and Payment of Cash Payment. The Corporation will make a cash payment (the “Cash Payment”) to Executive in an amount equal to one times the sum of (A) Executive’s then-current Salary (disregarding any reduction in Salary that constitutes Good Reason) and (B) the sum of Executive’s cash bonuses under the Corporation’s [executive annual incentive plan] for each of the most recent three complete calendar years of Executive’s employment by the Corporation (or such lesser number of complete calendar years as Executive has been employed by the Corporation) divided by three (or the lesser number of complete calendar years for which Executive has been employed by the Corporation). The Cash Payment shall be paid to Executive in a single lump sum in the first payroll occurring on or after the tenth business day after the date Executive’s Employment terminates. If Executive dies after becoming entitled to the Cash Payment but before it has been paid in full, any remaining Cash Payments will be made to Executive’s designated beneficiary (or Executive’s estate if Executive fails to designate a beneficiary).
(b) Health Coverage Payment. The Corporation will pay Executive a lump sum equal to twelve (12) times the Corporation’s monthly contribution towards Executive’s then current employee and dependent health, prescription drug and dental coverage elections, payable in the first payroll occurring on or after the tenth business day after the date Executive’s Employment terminates, subject to required payroll withholding. If Executive is not enrolled in the Corporation’s health, prescription drug and dental plans, then the monthly contribution will be based on the Corporation’s contribution towards family coverage for such plans determined at the time employment terminates. Although the right to payment under this paragraph is based on the Corporation’s health, prescription drug and/or dental plan at the time employment terminates and is intended to fund payment for health coverage, the payment is not required to be used for health coverage and Executive may use the payment for any purpose.
(c) Acceleration of Vesting . Effective at the time of termination of employment, all unvested stock options and stock previously issued to Executive as to which rights of ownership are subject to forfeiture shall immediately vest; all risk of forfeiture of the ownership of stock or stock options and restrictions on the exercise of options shall lapse; and, Executive shall be entitled to exercise any or all options, such
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that the underlying shares will be considered outstanding at the time of the termination of employment.
(d) Outplacement Services . The Corporation will provide Executive with executive-level outplacement services through an outplacement services firm selected by the Company with the Executive’s approval, which shall not be withheld if the firm selected is reputable, for a period not to exceed twelve (12) months after Executive’s termination date. The timing of outplacement services to be received shall be determined by the Executive, provided that all costs under this subsection must be incurred, and all applicable payments to the outplacement firm made, within twelve months following Executive’s termination of employment.
(d) Reductions to Cash Payment. Executive will receive the Cash Payment notwithstanding any other earnings that Executive may have and without offset of any kind except required payroll deductions.
8. Parachute Cap. Notwithstanding anything in this Agreement to the contrary, any payment, benefit, or amount payable or benefit to be provided to Executive, whether pursuant to this Agreement or otherwise, that is a “Parachute Payment” as defined in Section 280G(b)(2) of the Internal Revenue Code (the “Code”), will be reduced to the extent necessary so that the benefits payable or to be provided to Executive under this Agreement that are treated as Parachute Payments as well as any payments or benefits provided outside of this Agreement that are so treated will not cause the Corporation or any Affiliate to have paid an “Excess Parachute Payment” as defined in Section 280G(b)(1) of the Code. If it is established that an “Excess Parachute Payment” has occurred or will occur under this Agreement or otherwise, any remaining Parachute Payments to be made will be reduced to ensure that the total payments to Executive do not exceed 2.99 times Executive’s “base amount” as defined in Section 280G(b)(3) of the Code. The lump sum cash severance payment under Section 7(a) will be reduced to comply with this Section 8 only to the extent necessary to ensure that the total payments to Executive do not exceed 2.99 times Executive’s “base amount” as defined in Section 280G(b)(3) of the Code.
9. Definition of Change in Control. As used in this Agreement, the term “Change in Control” means any of the occurrences listed in (a) below, subject to (b) below.
(a) A Change in Control means the occurrence of a change in the ownership of effective control of the Corporation or a change in the ownership of a substantial portion of the assets of the Corporation as provided by Treasury Regulation § 1.409A-3(i)(5), which includes the occurrence of any of the following events:
(i) The acquisition, by a person or persons acting as a group, of stock of the Corporation that together with stock held by such person or group constitutes more than 50% of the total fair market value or total voting power of the stock of the Corporation.
(ii) The majority of members of the Board of Directors of the Corporation are replaced during any twelve month period by directors whose
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appointment or election is not endorsed by a majority of the members of the Board of Directors prior to the date of appointment or election.
(iii) The acquisition, by a person or persons acting as a group, of the Corporation’s assets that have a total gross fair market value equal to or exceeding 50% of the total gross fair market value of the Corporation’s assets in a single transaction or within a twelve month period ending with the most recent acquisition. For the purpose of this section, gross fair market value means the value of the assets of the Corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
The parties agree that the merger between the Corporation and Talmer pursuant to the Merger Agreement does not constitute a Change in Control under this Agreement and does not trigger any payments that may otherwise be required by this Section and Executive waives any right to any payment under this Agreement as a result of that merger.
(b) Notwithstanding the foregoing, no trust department or designated fiduciary or other trustee of such trust department of the Corporation or a subsidiary of the Corporation, or other similar fiduciary capacity of the Corporation with direct voting control of the stock shall be treated as a person or group within the meaning of subsection (a)(i) hereof. Further, no profit-sharing, employee stock ownership, employee stock purchase and savings, employee pension, or other employee benefit plan of the Corporation or any of its subsidiaries, and no trustee of any such plan in its capacity as such trustee, shall be treated as a person or group within the meaning of subsection (a)(i) hereof.
10. Definition of “Active Change in Control Proposal Period”. As used in this Agreement the term “Active Change in Control Proposal Period” shall mean any period:
(a) during which the Board of Directors of the Corporation has authorized solicitation by the Corporation of offers for a transaction which, if consummated, would constitute a Change in Control; or
(b) during which the Corporation has received a proposal for a transaction which, if consummated, would constitute a Change in Control, and the Board of Directors has not determined to reject such proposal without any counter-offer or further discussions; or
(c) during which any proxy solicitation or tender offer with regard to the securities of the Corporation is ongoing, if the intent of such proxy solicitation or tender offer is to cause the Corporation to solicit offers for or enter into a transaction that would constitute a Change in Control.
11. Confidentiality, Return of Property. Executive has obtained and may obtain confidential information concerning the business, operations, financial affairs, organizational and personnel matters, policies, procedures and other non-public matters of Corporation and its Affiliates, and those of third-parties that is not generally disclosed to persons not employed by
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Corporation or its subsidiaries. Such information (referred to herein as the “Confidential Information”) may have been or may be provided in written form or orally. Executive shall not disclose to any other person the Confidential Information at any time during or after termination of the Employment, except that during the Employment Executive may use and disclose Confidential Information as reasonably required by the Employment. Upon termination of the Employment, Executive will deliver to the Corporation any and all property owned or leased by the Corporation or any Affiliate and any and all Confidential Information (in whatever form) including without limitation all customer lists and information, financial information, business notes, business plans, documents, keys, credit cards and other Corporation-provided equipment. Executive’s commitments in this Section will continue in effect after termination of the Employment and after termination of this Agreement. The parties agree that any breach of Executive’s covenants in this Section would cause the Corporation irreparable harm, and that injunctive relief would be appropriate.
12. Inventions, Discoveries and Improvements. Executive hereby agrees to assign and transfer to the Corporation, its successors and assigns, Executive’s entire right, title and interest in and to any and all inventions, discoveries, trade secrets and improvements thereto which he may discover to develop, either solely or jointly with others, during Executive’s employment hereunder and for a period of one year after termination of such employment, which would relate in any way to the business of the Corporation or any Affiliate of the Corporation, together with all rights to letters patent, copyrights or trademarks which may be granted with respect thereto. Immediately upon making or developing any invention, discovery, trade secret or improvement thereto, Executive shall notify the Corporation thereof and shall execute and deliver to the Corporation, without further compensation, such documents as may be necessary to assign and transfer to the Corporation Executive’s entire right, title and interest in and to such invention, discovery, trade secret or improvement thereto, and to prepare or prosecute applications for letters patent with respect to the same in the name of the Corporation. Executive’s obligations under this Section 12 shall continue in effect, as to inventions, discoveries and improvements covered by this Section 12, notwithstanding any termination of the employment or this Agreement.
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13. Noncompetition and Nonsolicitation.
(a) In view of Executive’s importance to the success of the Corporation, Executive and Corporation agree that the Corporation would likely suffer significant harm from Executive’s competing with Corporation during the Employment and for some period of time thereafter. Accordingly, Executive agrees that Executive shall not engage in competitive activities either: (A) while employed by Corporation; or (B) if Executive’s Employment is terminated during the term of this Agreement, during the Restricted Period (as defined below). Executive shall be deemed to engage in competitive activities if he shall, without the prior written consent of the Corporation, (i) in any county in which the Corporation has a branch office, ATM, loan processing center or any other facility, and all contiguous counties, (including the municipalities therein), render services directly or indirectly, as an employee, officer, director, consultant, advisor, partner or otherwise, for any organization or enterprise which competes directly or indirectly with the business of Corporation or any of its Affiliates in providing financial products or services (including, without limitation, banking, insurance, or securities products or services) to consumers and businesses, or (ii) directly or indirectly acquires any financial or beneficial interest in (except as provided in the next sentence) any organization which conducts or is otherwise engaged in a business or enterprise in any county in which the Corporation has a branch office, ATM, loan processing center or any other facility, and all contiguous counties, (including all municipalities therein) which competes directly or indirectly with the business of Corporation or any of its Affiliates in providing financial products or services (including, without limitation, banking, insurance or securities products or services) to consumers and businesses. Notwithstanding the preceding sentence, Executive shall not be prohibited from owning less than 1 percent of any class of publicly traded securities of a competitor. For purposes of this Section 13 the term “Restricted Period” shall equal twelve (12) months, commencing as of the date of termination of Executive’s Employment during the term of this Agreement by the Corporation without Cause or by Executive without Good Reason before a Change in Control or by either the Corporation or Executive for any reason after a Change in Control. For the avoidance of doubt, the Restricted Period shall not apply following a termination of Executive’s Employment during the term of this Agreement by the Corporation with Cause or by Executive with Good Reason.
(b) While employed by Corporation and during the Restricted Period, Executive agrees that Executive shall not, in any manner directly (i) solicit by mail, by telephone, by personal meeting, or by any other means, any customer or prospective customer of Corporation to whom Executive provided services, or for whom Executive transacted business, or whose identity become known to Executive in connection with Executive’s services to Corporation (including employment with or services to any predecessor or successor entities), to transact business with a person or an entity other than the Corporation or its Affiliates or reduce or refrain from doing any business with the Corporation or its Affiliates or (ii) interfere with or damage (or attempt to interfere with or damage) any relationship between Corporation or any of its Affiliates and any such customer or prospective customer, or any shareholder of the Corporation. The term “solicit” as used in this Section 13 means any communication of any kind whatsoever,
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inviting, encouraging or requesting any person to take or refrain from taking any action with respect to the business of Corporation or any of its Affiliates.
(c) While employed by Corporation and during the Restricted Period, Executive agrees that Executive shall not, in any manner directly solicit any person who is an employee of Corporation or any of its Affiliates to apply for or accept employment or a business opportunity with any other person or entity.
(d) The parties agree that nothing herein shall be construed to limit or negate the common law of torts or trade secrets where it provides broader protection than that provided herein.
(e) If Executive’s Employment is terminated during the term of this Agreement, Executive’s obligations under this Section shall survive termination of this Agreement.
14. Successors; Binding Agreement.
(a) This Agreement shall not be terminated by any merger or consolidation of the Corporation whereby the Corporation is or is not the surviving or resulting corporation or as a result of any transfer of all or substantially all of the assets of the Corporation. In the event of any such merger, consolidation, or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred.
(b) The Corporation agrees that concurrently with any merger, consolidation or transfer of assets constituting a Change in Control, it will cause any successor or transferee unconditionally to assume, by written instrument delivered to Executive (or Executive’s beneficiary or estate), all of the obligations of the Corporation hereunder. Failure of the Corporation to obtain such assumption prior to the effective date of any Change in Control shall be a material breach of the Corporation’s obligations to Executive under this Agreement.
(c) This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive shall die while any amounts would be payable to Executive hereunder had Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by Executive to receive such amounts or, if no person is so appointed, to Executive’s estate.
15. Notice. For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or received by facsimile transmission or five (5) days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed as follows:
If to the Corporation: | Chemical Financial Corporation | |
Attn:CEO | ||
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333 East Main Street, P.O. Box 569 | ||
Midland, Michigan 48640-0569 | ||
If to Executive: |
Robert S. Rathbun ________________ ________________ |
Either party may change its address for notices by notice to the other party.
16. Amendment and Waiver. No provisions of this Agreement may be amended, modified, waived or discharged unless the waiver, modification, or discharge is authorized by the Corporation’s Board of Directors, or a committee of the Board of Directors, and is agreed to in a writing signed by Executive and by the CEO. No waiver by either party at any time of any breach or non-performance of this Agreement by the other party shall be deemed a waiver of any prior or subsequent breach or non-performance.
17. Severability. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect. If a court of competent jurisdiction ever determines that any provision of this Agreement (including, but not limited to, all or any part of the non-competition covenant in this Agreement) is unenforceable as written, the parties intend that the provision shall be deemed narrowed or revised in that jurisdiction (as to geographic scope, duration, or any other matter) to the extent necessary to allow enforcement of the provision. The revision shall thereafter govern in that jurisdiction, subject only to any allowable appeals of that court decision.
18. Entire Agreement. No agreements or representations, oral or otherwise, express or implied, with respect to Executive’s Employment with the Corporation or any of the subjects covered by this Agreement have been made by either party that are not set forth expressly in this Agreement, and this Agreement supersedes any pre-existing employment agreements and any other agreements on the subjects covered by this Agreement; provided, however, except as expressly modified hereby, this Agreement shall not affect Executive’s rights under any retirement and health and welfare plans in which Executive participates which are maintained by the Corporation or its Affiliates.
19. Governing Law. The validity, interpretation, and construction of this Agreement are to be governed by Michigan laws, without regard to choice of law rules. The parties agree that any judicial action involving a dispute arising under this Agreement will be filed, heard and decided in the Midland County Circuit Court. The parties agree that they will subject themselves to the personal jurisdiction and venue of either court, regardless of where Executive or the Corporation may be located at the time any action may be commenced. The parties agree that the locations specified above are mutually convenient forums and that each of the parties conducts business in Midland County.
20. Section 409A. This Agreement is intended to be exempt from Section 409A of the Internal Revenue Code partially as an involuntary separation pay plan as that term is understood under Treasury Regulation § 1.409A-1(b)(9) and partially as providing for short-term
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deferrals as that term is understood under Treasury Regulation § 1.409A-1(b)(4) and shall be interpreted and operated consistently with those intentions. To the extent Section 409A is found to be applicable to this Agreement, this Agreement is to be interpreted to comply with Section 409A and shall be interpreted and operated consistently with those intentions, including but not limited to, any applicable six-month delay in payment if Executive is a specified employee of the Corporation.
21. Counterparts. This Agreement may be signed in original or by fax in counterparts, each of which shall be deemed an original, and together the counterparts shall constitute one complete document.
Signature Page to Follow
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The parties made this Agreement effective as of the Effective Date in Section 1.
CHEMICAL BANK |
By | /s/ David B. Ramaker |
David B. Ramaker, Chairman, Chief Executive Officer and President |
Date: | 8-31-16 |
CHEMICAL FINANCIAL CORPORATION |
By | /s/ David B. Ramaker |
David B. Ramaker, Chairman, Chief Executive Officer and President |
Date: | 8-31-16 |
EXECUTIVE |
By | /s/ Robert S. Rathbun |
Robert S. Rathbun |
Date: | 8-31-16 |
[signature page to Employment Agreement]
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Subsidiaries
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Ownership
Percentage
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State or Other Jurisdiction
of Incorporation
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Chemical Bank
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(1)
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Michigan
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CFC Financial Services, Inc.
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—
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also operates under d/b/a
Chemical Financial Advisors
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(2)
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Michigan
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CFC Title Services, Inc.
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(1)
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Michigan
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CFC Capital, Inc.
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(2)
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Michigan
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First of Huron Capital Trust I
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(1)
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Delaware
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First Place Capital Trust
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(1)
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Delaware
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First Place Capital Trust II
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(1)
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Delaware
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First Place Capital Trust III
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(1)
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Delaware
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InSite Capital, LLC
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(1)
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Michigan
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Port Huron CDE, LLC
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(2)
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Michigan
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Talmer Financial, Inc.
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(2)
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Michigan
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(1)
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100% owned by Chemical Financial Corporation.
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(2)
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100% owned by Chemical Bank.
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Dated: December 24, 2016
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/s/ Gary E. Anderson
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(signature)
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Gary E. Anderson
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(type or print name)
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Dated: January 12, 2017
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/s/ James R. Fitterling
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(signature)
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James R. Fitterling
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(type or print name)
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Dated: February 20, 2017
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/s/ Ronald A. Klein
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(signature)
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Ronald A. Klein
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(type or print name)
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Dated: December 31, 2016
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/s/ Richard M. Lievense
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(signature)
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Richard M. Lievense
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(type or print name)
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Dated: December 31, 2016
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/s/ Barbara J. Mahone
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(signature)
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|
|
|
Barbara J. Mahone
|
|
(type or print name)
|
Dated: January 3, 2017
|
/s/ John E. Pelizzari
|
|
(signature)
|
|
|
|
|
|
John E. Pelizzari
|
|
(type or print name)
|
Dated: February 23, 2017
|
/s/ David T. Provost
|
|
(signature)
|
|
|
|
|
|
David T. Provost
|
|
(type or print name)
|
Dated: December 23, 2016
|
/s/ Larry D. Stauffer
|
|
(signature)
|
|
|
|
|
|
Larry D. Stauffer
|
|
(type or print name)
|
Dated: February 21, 2017
|
/s/ Gary Torgow
|
|
(signature)
|
|
|
|
|
|
Gary Torgow
|
|
(type or print name)
|
Dated: December 27, 2016
|
/s/ Arthur A. Weiss
|
|
(signature)
|
|
|
|
|
|
Arthur A. Weiss
|
|
(type or print name)
|
Dated: December 23, 2016
|
/s/ Franklin C. Wheatlake
|
|
(signature)
|
|
|
|
|
|
Franklin C. Wheatlake
|
|
(type or print name)
|
1.
|
I have reviewed this Annual Report on Form 10-K for the year ended
December 31, 2016
of Chemical Financial Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 1, 2017
|
/s/ David B. Ramaker
|
|
|
David B. Ramaker
Chief Executive Officer and President
Chemical Financial Corporation
|
1.
|
I have reviewed this Annual Report on Form 10-K for the year ended
December 31, 2016
of Chemical Financial Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 1, 2017
|
/s/ Dennis L. Klaeser
|
|
|
Dennis L. Klaeser
Executive Vice President and Chief Financial Officer
Chemical Financial Corporation
|
Dated:
|
March 1, 2017
|
/s/ David B. Ramaker
|
|
|
David B. Ramaker
Chief Executive Officer and President
|
|
|
|
Dated:
|
March 1, 2017
|
/s/ Dennis L. Klaeser
|
|
|
Dennis L. Klaeser
Executive Vice President and Chief Financial Officer
|
A signed original of this written statement required by Section 906 has been provided to Chemical Financial Corporation and will be retained by Chemical Financial Corporation and furnished to the Securities and Exchange Commission or its staff upon request.
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
|
||||
Cash
|
|
$
|
64,100
|
|
|
$
|
46,900
|
|
Common stock receivable of Chemical Financial Corporation, at fair value (880 shares at a cost of $47,451 at December 31, 2016 and 80,246 shares at a cost of $2,024,580 at December 31, 2015)
|
|
47,649
|
|
|
2,750,030
|
|
||
Total Assets
|
|
$
|
111,749
|
|
|
$
|
2,796,930
|
|
Plan Equity
|
|
|
|
|
||||
Plan equity (19 participants at December 31, 2016 and 13 participants at December 31, 2015)
|
|
$
|
111,749
|
|
|
$
|
2,796,930
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Additions:
|
|
|
|
|
|
|
||||||
Participant contributions
|
|
$
|
569,400
|
|
|
$
|
420,050
|
|
|
$
|
275,700
|
|
Dividend equivalents
|
|
67,788
|
|
|
76,024
|
|
|
63,010
|
|
|||
|
|
637,188
|
|
|
496,074
|
|
|
338,710
|
|
|||
|
|
|
|
|
|
|
||||||
Plan distributions
|
|
(4,128,269
|
)
|
|
(106,700
|
)
|
|
(157,156
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net realized and unrealized (depreciation) appreciation in fair value of common stock receivable
|
|
805,900
|
|
|
314,740
|
|
|
(85,330
|
)
|
|||
Net increase (decrease)
|
|
(2,685,181
|
)
|
|
704,114
|
|
|
96,224
|
|
|||
Plan equity at beginning of period
|
|
2,796,930
|
|
|
2,092,816
|
|
|
1,996,592
|
|
|||
Plan equity at end of period
|
|
$
|
111,749
|
|
|
$
|
2,796,930
|
|
|
$
|
2,092,816
|
|