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þ
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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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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Large accelerated filer
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þ
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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Consolidated Statements of Financial Position as of
September 30, 2017 (unaudited) and December 31, 2016
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Consolidated Statements of Income for the Three
and Nine Months Ended September 30, 2017 and 2016 (unaudited)
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Consolidated Statements of Comprehensive Income for the Three
and Nine Months Ended September 30, 2017 and 2016 (unaudited)
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Consolidated Statements of Changes in Shareholders’ Equity for the
Nine Months Ended September 30, 2017 and 2016 (unaudited)
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Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 2017 and 2016 (unaudited)
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•
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The Corporation’s ability to attract and retain new commercial lenders and other bankers as well as key operations staff in light of competition for experienced employees in the banking industry;
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•
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The Corporation’s ability to grow its deposits while reducing the number of physical branches that it operates;
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•
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Negative reactions to the branch closures by Chemical Bank’s customers, employees and other counterparties;
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•
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Economic conditions (both generally and in the Corporation’s markets) may be less favorable than expected, which could result in, among other things, a deterioration in credit quality, a reduction in demand for credit and a decline in real estate values;
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•
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A general decline in the real estate and lending markets, particularly in the Corporation’s market areas, could negatively affect the Corporation’s financial results;
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•
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Increased cybersecurity risk, including potential network breaches, business disruptions, or financial losses;
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•
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Restrictions or conditions imposed by the Corporation’s or Chemical Bank’s regulators on the Corporation’s or Chemical Bank’s operations may make it more difficult for the Corporation to achieve its goals;
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•
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Legislative or regulatory changes, including changes in accounting standards and compliance requirements, may adversely affect the Corporation;
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•
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Changes in the interest rate environment may reduce margins or the volumes or values of the loans the Corporation makes or has acquired; and
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•
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Economic, governmental, or other factors may prevent the projected population, residential, and commercial growth in the markets in which the Corporation operates.
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(Dollars in thousands, except per share data)
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September 30, 2017
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December 31, 2016
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||||
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(Unaudited)
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Assets
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||||||
Cash and cash equivalents:
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||||
Cash and cash due from banks
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$
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223,498
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$
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237,758
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Interest-bearing deposits with the Federal Reserve Bank and other banks
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485,713
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236,644
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Total cash and cash equivalents
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709,211
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474,402
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Investment securities:
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Available-for-sale, at fair value
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2,029,672
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1,234,964
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Held-to-maturity, at amortized cost (fair value of $655,959 and $608,531, respectively)
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657,176
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623,427
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Total investment securities
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2,686,848
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1,858,391
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Loans held-for-sale, at fair value
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87,198
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81,830
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Loans
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13,833,368
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12,990,779
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Allowance for loan losses
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(85,760
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)
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(78,268
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)
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Net loans
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13,747,608
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12,912,511
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Premises and equipment
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141,550
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145,012
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Loan servicing rights ($62,195 and $48,085 measured at fair value, respectively)
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62,195
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58,315
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Goodwill
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1,134,568
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1,133,534
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Other intangible assets
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35,797
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40,211
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Interest receivable and other assets
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749,333
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650,973
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Total assets
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$
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19,354,308
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$
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17,355,179
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Liabilities
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Deposits:
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||||
Noninterest-bearing
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$
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3,688,848
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$
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3,341,520
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Interest-bearing
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10,116,397
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9,531,602
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Total deposits
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13,805,245
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12,873,122
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Interest payable and other liabilities
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163,532
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134,637
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Securities sold under agreements to repurchase with customers
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414,597
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343,047
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Short-term borrowings
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1,900,000
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825,000
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Long-term borrowings
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397,845
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597,847
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Total liabilities
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16,681,219
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14,773,653
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Shareholders’ equity
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Preferred stock, no par value:
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Authorized – 2,000,000 shares at 9/30/17 and 12/31/16, none issued
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—
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—
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Common stock, $1.00 par value per share:
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Authorized – 135,000,000 shares at 9/30/17 and 100,000,000 share at 12/31/16
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Issued and outstanding – 71,151,697 shares at 9/30/17 and 70,599,133 shares at 12/31/16
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71,152
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70,599
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Additional paid-in capital
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2,201,334
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2,210,762
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Retained earnings
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425,433
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340,201
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Accumulated other comprehensive loss
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(24,830
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)
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(40,036
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)
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Total shareholders’ equity
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2,673,089
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2,581,526
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Total liabilities and shareholders’ equity
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$
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19,354,308
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$
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17,355,179
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
(Dollars in thousands, except per share data)
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2017
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2016
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2017
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2016
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||||||||
Interest income
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Interest and fees on loans
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$
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148,771
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$
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97,103
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$
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422,570
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$
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249,082
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Interest on investment securities:
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Taxable
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9,326
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2,575
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21,207
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6,302
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Tax-exempt
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4,577
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3,072
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13,238
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8,377
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|
||||
Dividends on nonmarketable equity securities
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1,039
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358
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2,906
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1,391
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Interest on deposits with the Federal Reserve Bank, other banks and Federal funds sold
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1,231
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454
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3,052
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811
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|
||||
Total interest income
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164,944
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103,562
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462,973
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265,963
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||||
Interest expense
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||||||||
Interest on deposits
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12,926
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5,836
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32,424
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14,155
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|
||||
Interest on short-term borrowings
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6,591
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|
459
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12,908
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|
|
785
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|
||||
Interest on long-term borrowings
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1,799
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|
458
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5,968
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2,389
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|
||||
Total interest expense
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21,316
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6,753
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51,300
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17,329
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|
||||
Net interest income
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143,628
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96,809
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411,673
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248,634
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Provision for loan losses
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5,499
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4,103
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15,778
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8,603
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|
||||
Net interest income after provision for loan losses
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138,129
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92,706
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395,895
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|
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240,031
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|
||||
Noninterest income
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|
|
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|
||||||||
Service charges and fees on deposit accounts
|
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9,147
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|
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7,665
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25,928
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|
|
19,722
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|
||||
Wealth management revenue
|
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6,188
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|
|
5,584
|
|
|
18,973
|
|
|
16,567
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|
||||
Other charges and fees for customer services
|
|
6,624
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|
|
7,410
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|
|
25,249
|
|
|
20,265
|
|
||||
Net gain on sale of loans and other mortgage banking revenue
|
|
5,241
|
|
|
4,439
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|
|
24,280
|
|
|
7,439
|
|
||||
Gain on sale of investment securities
|
|
1
|
|
|
16
|
|
|
168
|
|
|
53
|
|
||||
Other
|
|
4,921
|
|
|
2,656
|
|
|
17,102
|
|
|
4,040
|
|
||||
Total noninterest income
|
|
32,122
|
|
|
27,770
|
|
|
111,700
|
|
|
68,086
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Salaries, wages and employee benefits
|
|
52,621
|
|
|
40,565
|
|
|
165,470
|
|
|
107,582
|
|
||||
Occupancy
|
|
6,871
|
|
|
5,462
|
|
|
23,008
|
|
|
15,881
|
|
||||
Equipment and software
|
|
7,582
|
|
|
6,420
|
|
|
24,248
|
|
|
15,699
|
|
||||
Merger expenses
|
|
2,379
|
|
|
37,470
|
|
|
7,011
|
|
|
43,118
|
|
||||
Restructuring expenses
|
|
18,824
|
|
|
—
|
|
|
18,824
|
|
|
—
|
|
||||
Other
|
|
31,262
|
|
|
16,227
|
|
|
83,411
|
|
|
41,836
|
|
||||
Total operating expenses
|
|
119,539
|
|
|
106,144
|
|
|
321,972
|
|
|
224,116
|
|
||||
Income before income taxes
|
|
50,712
|
|
|
14,332
|
|
|
185,623
|
|
|
84,001
|
|
||||
Income tax expense
|
|
10,253
|
|
|
2,848
|
|
|
45,546
|
|
|
23,137
|
|
||||
Net income
|
|
$
|
40,459
|
|
|
$
|
11,484
|
|
|
$
|
140,077
|
|
|
$
|
60,864
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.57
|
|
|
$
|
0.23
|
|
|
$
|
1.98
|
|
|
$
|
1.45
|
|
Diluted
|
|
0.56
|
|
|
0.23
|
|
|
1.95
|
|
|
1.42
|
|
||||
Cash dividends declared per common share
|
|
$
|
0.28
|
|
|
$
|
0.27
|
|
|
$
|
0.82
|
|
|
$
|
0.79
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Net income
|
|
$
|
40,459
|
|
|
$
|
11,484
|
|
|
$
|
140,077
|
|
|
$
|
60,864
|
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|||||||||
Unrealized holding gains (losses) on securities available-for-sale arising during the period
|
|
1,376
|
|
|
(1,238
|
)
|
|
9,643
|
|
|
5,082
|
|
|||||
Reclassification adjustment for gains and losses on realized income
|
|
(1
|
)
|
|
(16
|
)
|
|
(168
|
)
|
|
(53
|
)
|
|||||
Tax effect
|
|
(481
|
)
|
|
439
|
|
|
(3,316
|
)
|
|
(1,760
|
)
|
|||||
Net unrealized gains (losses) on securities available-for-sale, net of tax
|
|
894
|
|
|
(815
|
)
|
|
6,159
|
|
|
3,269
|
|
|||||
Unrealized gains on interest rate swaps designated as cash flow hedges
|
|
550
|
|
|
—
|
|
|
84
|
|
|
—
|
|
|||||
Reclassification adjustment for losses included in net income
|
|
575
|
|
|
—
|
|
|
984
|
|
|
—
|
|
|||||
Tax effect
|
|
(374
|
)
|
|
—
|
|
—
|
|
(374
|
)
|
|
—
|
|
||||
Net unrealized gains on interest rate swaps designated as cash flow hedges, net of tax
|
|
751
|
|
|
—
|
|
|
694
|
|
|
—
|
|
|||||
Plan remeasurement
|
|
11,238
|
|
|
(786
|
)
|
|
11,238
|
|
|
(786
|
)
|
|||||
Adjustment for pension and other postretirement benefits
|
|
537
|
|
|
2,895
|
|
|
1,613
|
|
|
1,742
|
|
|||||
Tax effect
|
|
(4,121
|
)
|
|
(738
|
)
|
|
(4,498
|
)
|
|
(335
|
)
|
|||||
Net adjustment for pension and other postretirement benefits
|
|
7,654
|
|
|
1,371
|
|
|
8,353
|
|
|
621
|
|
|||||
Other comprehensive income, net of tax
|
|
9,299
|
|
|
556
|
|
|
15,206
|
|
|
3,890
|
|
|||||
Total comprehensive income, net of tax
|
|
$
|
49,758
|
|
|
$
|
12,040
|
|
|
$
|
155,283
|
|
|
$
|
64,754
|
|
(Dollars in thousands)
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Retained
earnings
|
|
Accumulated other
comprehensive
income (loss)
|
|
Total
|
||||||||||
Balances at December 31, 2015
|
|
$
|
38,168
|
|
|
$
|
725,280
|
|
|
$
|
281,558
|
|
|
$
|
(29,032
|
)
|
|
$
|
1,015,974
|
|
Comprehensive income
|
|
|
|
|
|
60,864
|
|
|
3,890
|
|
|
64,754
|
|
|||||||
Cash dividends declared and paid of $0.79 per share
|
|
|
|
|
|
(30,293
|
)
|
|
|
|
(30,293
|
)
|
||||||||
Issuance of common stock and common stock equivalents in business combinations
|
|
32,074
|
|
|
1,472,737
|
|
|
|
|
|
|
1,504,811
|
|
|||||||
Net shares issued under share-based compensation plans
|
|
255
|
|
|
1,711
|
|
|
|
|
|
|
1,966
|
|
|||||||
Share-based compensation expense
|
|
—
|
|
|
6,454
|
|
|
|
|
|
|
6,454
|
|
|||||||
Balances at September 30, 2016
|
|
$
|
70,497
|
|
|
$
|
2,206,182
|
|
|
$
|
312,129
|
|
|
$
|
(25,142
|
)
|
|
$
|
2,563,666
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balances at December 31, 2016
|
|
$
|
70,599
|
|
|
$
|
2,210,762
|
|
|
$
|
340,201
|
|
|
$
|
(40,036
|
)
|
|
$
|
2,581,526
|
|
Cumulative effect adjustment of change in accounting policy, net of tax impact
(1)
|
|
|
|
|
|
3,659
|
|
|
|
|
3,659
|
|
||||||||
Comprehensive income
|
|
|
|
|
|
140,077
|
|
|
15,206
|
|
|
155,283
|
|
|||||||
Cash dividends declared and paid of $0.82 per share
|
|
|
|
|
|
(58,504
|
)
|
|
|
|
(58,504
|
)
|
||||||||
Net shares issued under share-based compensation plans
|
|
553
|
|
|
(24,001
|
)
|
|
|
|
|
|
(23,448
|
)
|
|||||||
Share-based compensation expense
|
|
—
|
|
|
14,573
|
|
|
|
|
|
|
14,573
|
|
|||||||
Balances at September 30, 2017
|
|
$
|
71,152
|
|
|
$
|
2,201,334
|
|
|
$
|
425,433
|
|
|
$
|
(24,830
|
)
|
|
$
|
2,673,089
|
|
(1)
|
Refer to Note 1, Basis of Presentation and Significant Accounting Policies and Note 8, Loan Servicing Rights, for further details on the changes in accounting policy.
|
|
|
Nine Months Ended September 30,
|
||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
||||
Cash flows from operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
140,077
|
|
|
$
|
60,864
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Provision for loan losses
|
|
15,778
|
|
|
8,603
|
|
||
Gain on sales of loans
|
|
(26,537
|
)
|
|
(8,957
|
)
|
||
Proceeds from sales of loans
|
|
601,694
|
|
|
287,295
|
|
||
Loans originated for sale
|
|
(577,874
|
)
|
|
(299,156
|
)
|
||
Net gains on sale of investment securities
|
|
(168
|
)
|
|
(53
|
)
|
||
Net gains from sales/writedowns of other real estate and repossessed assets
|
|
(597
|
)
|
|
(3,150
|
)
|
||
Depreciation of premises and equipment
|
|
13,444
|
|
|
8,925
|
|
||
Amortization of intangible assets
|
|
4,564
|
|
|
6,736
|
|
||
Additions to loan servicing rights
|
|
(6,461
|
)
|
|
(2,422
|
)
|
||
Valuation change in loan servicing rights
|
|
8,242
|
|
|
1,558
|
|
||
Net amortization of premiums and discounts on investment securities
|
|
13,933
|
|
|
5,211
|
|
||
Share-based compensation expense
|
|
14,573
|
|
|
6,454
|
|
||
Deferred income tax expense
|
|
36,568
|
|
|
5,889
|
|
||
Net increase in interest receivable and other assets
|
|
(148,037
|
)
|
|
(37,836
|
)
|
||
Net increase (decrease) in interest payable and other liabilities
|
|
40,181
|
|
|
(35,081
|
)
|
||
Net cash provided by operating activities
|
|
129,380
|
|
|
4,880
|
|
||
Cash flows from investing activities
|
|
|
|
|
||||
Investment securities – available-for-sale:
|
|
|
|
|
||||
Proceeds from maturities, calls and principal reductions
|
|
227,854
|
|
|
157,125
|
|
||
Proceeds from sales and redemptions
|
|
17,085
|
|
|
7,820
|
|
||
Purchases
|
|
(1,041,744
|
)
|
|
(104,657
|
)
|
||
Investment securities – held-to-maturity:
|
|
|
|
|
||||
Proceeds from maturities, calls and principal reductions
|
|
73,762
|
|
|
71,226
|
|
||
Purchases
|
|
(109,704
|
)
|
|
(124,492
|
)
|
||
Net increase in loans
|
|
(862,498
|
)
|
|
(575,963
|
)
|
||
Proceeds from sales of other real estate and repossessed assets
|
|
15,569
|
|
|
10,989
|
|
||
Purchases of premises and equipment, net of disposals
|
|
(11,616
|
)
|
|
(10,196
|
)
|
||
Cash acquired, net of cash paid, in business combinations
|
|
—
|
|
|
325,714
|
|
||
Net cash used in investing activities
|
|
(1,691,292
|
)
|
|
(242,434
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
||||
Net increase in interest- and noninterest-bearing demand deposits and savings accounts
|
|
828,517
|
|
|
734,330
|
|
||
Net increase (decrease) in time deposits
|
|
103,606
|
|
|
(213,105
|
)
|
||
Net increase in securities sold under agreements to repurchase with customers and other short-term borrowings
|
|
1,146,550
|
|
|
9,886
|
|
||
Proceeds from issuance of long-term borrowings
|
|
—
|
|
|
275,000
|
|
||
Repayment of long-term borrowings
|
|
(200,000
|
)
|
|
(223,018
|
)
|
||
Cash dividends paid
|
|
(58,504
|
)
|
|
(30,293
|
)
|
||
Proceeds from directors’ stock plans and exercise of stock options, net of shares withheld
|
|
3,353
|
|
|
3,595
|
|
||
Cash paid for payroll taxes upon conversion of share-based awards
|
|
(26,801
|
)
|
|
(1,063
|
)
|
||
Net cash provided by financing activities
|
|
1,796,721
|
|
|
555,332
|
|
||
Net increase in cash and cash equivalents
|
|
234,809
|
|
|
317,778
|
|
||
Cash and cash equivalents at beginning of period
|
|
474,402
|
|
|
238,789
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
709,211
|
|
|
$
|
556,567
|
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
||||
Interest paid
|
|
$
|
51,505
|
|
|
$
|
13,810
|
|
Net income tax payments
|
|
9,922
|
|
|
22,200
|
|
||
Non-cash activities:
|
|
|
|
|
||||
Loans transferred to other real estate and repossessed assets
|
|
8,972
|
|
|
6,029
|
|
||
Net transfer of loans held-for-sale to loans held- for-investment
|
|
(2,651
|
)
|
|
—
|
|
||
Closed branch offices transferred to other assets
|
|
1,634
|
|
|
2,136
|
|
||
|
|
|
|
|
||||
Business combinations:
|
|
|
|
|
||||
Fair value of tangible assets acquired (noncash)
|
|
$
|
420
|
|
|
$
|
6,374,784
|
|
Goodwill, loans servicing rights and other identifiable intangible assets acquired
|
|
1,034
|
|
|
905,160
|
|
||
Liabilities assumed
|
|
1,454
|
|
|
6,100,847
|
|
||
Common stock and stock options issued
|
|
—
|
|
|
1,504,811
|
|
(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
|
|
4,882,402
|
|
|
Premises and equipment
|
|
38,793
|
|
|
Loan servicing rights
|
|
42,462
|
|
|
Other intangible assets
|
|
19,088
|
|
|
Interest receivable and other assets
(2)
|
|
395,539
|
|
|
Total identifiable assets acquired
|
|
$
|
6,867,103
|
|
|
|
|
||
Fair value of liabilities assumed:
|
|
|
||
Noninterest-bearing deposits
|
|
1,236,902
|
|
|
Interest-bearing deposits
|
|
4,057,716
|
|
|
Interest payable and other liabilities
(2)
|
|
100,936
|
|
|
Securities sold under agreements to repurchase with customers
|
|
19,704
|
|
|
Short-term borrowings
|
|
387,500
|
|
|
Long-term borrowings
|
|
299,597
|
|
|
Total liabilities assumed
|
|
$
|
6,102,355
|
|
|
|
|
||
Fair value of net identifiable assets acquired
|
|
$
|
764,748
|
|
Goodwill resulting from acquisition
|
|
$
|
847,701
|
|
(1)
|
All amounts were previously reported in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2016, with the exception of interest receivable and other assets and interest payable and other liabilities.
|
(2)
|
Includes adjustments to the fair value as a result of additional valuation information obtained during the third quarter of 2017 prior to August 31, 2017, including the corresponding tax effects.
|
(Dollars in thousands)
|
|
|
||
Accounted for under ASC 310-30:
|
|
|
||
Contractual cash flows
|
|
$
|
5,968,488
|
|
Contractual cash flows not expected to be collected (nonaccretable difference)
|
|
223,959
|
|
|
Expected cash flows
|
|
5,744,529
|
|
|
Interest component of expected cash flows (accretable yield)
|
|
862,127
|
|
|
Fair value at acquisition
|
|
$
|
4,882,402
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in thousands)
(1)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net interest and other income
|
|
$
|
175,750
|
|
|
$
|
175,783
|
|
|
$
|
523,373
|
|
|
$
|
503,501
|
|
Net Income
|
|
40,459
|
|
|
10,439
|
|
|
140,077
|
|
|
86,911
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.57
|
|
|
$
|
0.15
|
|
|
$
|
1.98
|
|
|
$
|
1.23
|
|
Diluted
|
|
0.56
|
|
|
0.15
|
|
|
1.95
|
|
|
1.22
|
|
(1)
|
As the business combination was effective August 31, 2016, there were
no
proforma adjustments for the
three and nine months ended September 30, 2017
.
|
Level 1
|
Valuation is based upon quoted prices for identical instruments traded in active markets. Level 1 valuation for the Corporation includes 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
|
||||||||
September 30, 2017
|
|
|
|
|
|
|
|
||||||||
Investment securities – available-for-sale:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
$
|
5,799
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,799
|
|
Government sponsored agencies
|
—
|
|
|
277,848
|
|
|
—
|
|
|
277,848
|
|
||||
State and political subdivisions
|
—
|
|
|
352,619
|
|
|
—
|
|
|
352,619
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
297,319
|
|
|
—
|
|
|
297,319
|
|
||||
Collateralized mortgage obligations
|
—
|
|
|
879,429
|
|
|
—
|
|
|
879,429
|
|
||||
Corporate bonds
|
—
|
|
|
178,741
|
|
|
—
|
|
|
178,741
|
|
||||
Preferred stock and trust preferred securities
|
—
|
|
|
37,917
|
|
|
—
|
|
|
37,917
|
|
||||
Total investment securities – available-for-sale
|
5,799
|
|
|
2,023,873
|
|
|
—
|
|
|
2,029,672
|
|
||||
Loans held-for-sale
|
—
|
|
|
87,198
|
|
|
—
|
|
|
87,198
|
|
||||
Loan servicing rights
|
—
|
|
|
—
|
|
|
62,195
|
|
|
62,195
|
|
||||
Derivative assets:
|
|
|
|
|
|
|
|
||||||||
Customer-initiated derivatives
|
—
|
|
|
8,719
|
|
|
—
|
|
|
8,719
|
|
||||
Foreign exchange forwards
|
—
|
|
|
60
|
|
|
—
|
|
|
60
|
|
||||
Forward contracts related to mortgage loans to be delivered for sale
|
—
|
|
|
660
|
|
|
—
|
|
|
660
|
|
||||
Interest rate lock commitments
|
—
|
|
|
1,799
|
|
|
—
|
|
|
1,799
|
|
||||
Power Equity CD
|
—
|
|
|
2,301
|
|
|
—
|
|
|
2,301
|
|
||||
Risk management derivatives
|
—
|
|
|
1,174
|
|
|
—
|
|
|
1,174
|
|
||||
Total derivatives
|
—
|
|
|
14,713
|
|
|
—
|
|
|
14,713
|
|
||||
Total assets at fair value
|
$
|
5,799
|
|
|
$
|
2,125,784
|
|
|
$
|
62,195
|
|
|
$
|
2,193,778
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
||||||||
Customer-initiated derivatives
|
—
|
|
|
9,274
|
|
|
—
|
|
|
9,274
|
|
||||
Foreign exchange forwards
|
—
|
|
|
55
|
|
|
—
|
|
|
55
|
|
||||
Power Equity CD
|
—
|
|
|
2,301
|
|
|
—
|
|
|
2,301
|
|
||||
Risk management derivatives
|
—
|
|
|
109
|
|
|
—
|
|
|
109
|
|
||||
Total derivatives
|
—
|
|
|
11,739
|
|
|
—
|
|
|
11,739
|
|
||||
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
11,739
|
|
|
$
|
—
|
|
|
$
|
11,739
|
|
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
|
|
|
|
Three Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2017
|
|
Three Months Ended September 30, 2016
|
|
Nine months ended September 30, 2016
|
||||||||
(Dollars in thousands)
|
|
Loan servicing rights
|
||||||||||||||
Balance, beginning of period
|
|
$
|
64,522
|
|
|
$
|
48,085
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Additions due to acquisition
|
|
|
|
|
|
42,462
|
|
|
42,462
|
|
||||||
Transfer in based on new accounting policy election
(1)
|
|
—
|
|
|
15,891
|
|
|
—
|
|
|
—
|
|
||||
Gains (losses):
|
|
|
|
|
|
|
|
|
|
|
||||||
Recorded in earnings (realized):
|
|
|
|
|
|
|
|
|
|
|||||||
Recorded in "Net gain on sale of loans and other mortgage banking revenue"
|
|
(4,651
|
)
|
|
(8,242
|
)
|
|
(1,344
|
)
|
|
(1,344
|
)
|
||||
New originations
|
|
2,324
|
|
|
6,461
|
|
|
810
|
|
|
810
|
|
||||
Balance, end of period
|
|
$
|
62,195
|
|
|
$
|
62,195
|
|
|
$
|
41,928
|
|
|
$
|
41,928
|
|
(1)
|
Refer to Note 1, Basis of Presentation and Significant Accounting Policies, for further details.
|
(Dollars in thousands)
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Aggregate fair value
|
|
$
|
87,198
|
|
|
$
|
81,830
|
|
Contractual balance
|
|
84,375
|
|
|
81,009
|
|
||
Unrealized gain (loss)
|
|
2,823
|
|
|
821
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interest income
(1)
|
|
$
|
810
|
|
|
$
|
811
|
|
|
$
|
1,824
|
|
|
$
|
849
|
|
Change in fair value
(2)
|
|
614
|
|
|
43
|
|
|
2,002
|
|
|
199
|
|
||||
Net gain on sales of loans
(2)
|
|
6,512
|
|
|
5,526
|
|
|
26,537
|
|
|
8,957
|
|
||||
Total included in earnings
|
|
$
|
7,936
|
|
|
$
|
6,380
|
|
|
$
|
30,363
|
|
|
$
|
10,005
|
|
(1)
|
Included in "Interest and fees on loans" in the Consolidated Statements of Income.
|
(2)
|
Included in "Net gain on sale of loans and other mortgage banking revenue" in the Consolidated Statements of Income.
|
(Dollars in thousands)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||
September 30, 2017
|
|
|
|
|
|
||||
Impaired originated loans
|
|
|
$
|
65,565
|
|
|
$
|
65,565
|
|
Other real estate/repossessed assets
|
|
|
2,814
|
|
|
2,814
|
|
||
Total
|
|
|
$
|
68,379
|
|
|
$
|
68,379
|
|
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
|
|
(Dollars in thousands)
|
|
Fair Value at
September 30, 2017
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
|
|
Range
|
||
Impaired originated loans
|
|
$
|
65,565
|
|
|
Appraisal of collateral
|
|
Discount for type of collateral and age of appraisal
|
|
10%-25%
|
Other real estate/repossessed assets
|
|
2,814
|
|
|
Appraisal of property
|
|
Discount for type of property and age of appraisal
|
|
10%-25%
|
|
|
Level in Fair Value Measurement
Hierarchy
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||
(Dollars in thousands)
|
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
Level 1
|
|
$
|
709,211
|
|
|
$
|
709,211
|
|
|
$
|
474,402
|
|
|
$
|
474,402
|
|
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Held-to-maturity
|
|
Level 2
|
|
656,676
|
|
|
655,594
|
|
|
622,927
|
|
|
608,221
|
|
||||
Held-to-maturity
|
|
Level 3
|
|
500
|
|
|
365
|
|
|
500
|
|
|
310
|
|
||||
Nonmarketable equity securities
|
|
Level 2
|
|
180,098
|
|
|
180,098
|
|
|
97,350
|
|
|
97,350
|
|
||||
Net loans
(1)
|
|
Level 3
|
|
13,747,608
|
|
|
13,896,015
|
|
|
12,912,511
|
|
|
13,069,315
|
|
||||
Interest receivable
|
|
Level 2
|
|
51,928
|
|
|
51,928
|
|
|
42,235
|
|
|
42,235
|
|
||||
Bank-owned life insurance
|
|
Level 2
|
|
146,626
|
|
|
146,626
|
|
|
143,718
|
|
|
143,718
|
|
||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Deposits without defined maturities
|
|
Level 2
|
|
$
|
10,691,272
|
|
|
$
|
10,691,272
|
|
|
$
|
9,862,755
|
|
|
$
|
9,862,755
|
|
Time deposits
|
|
Level 2
|
|
3,113,973
|
|
|
3,113,921
|
|
|
3,010,367
|
|
|
3,010,048
|
|
||||
Total deposits
|
|
|
|
13,805,245
|
|
|
13,805,193
|
|
|
12,873,122
|
|
|
12,872,803
|
|
||||
Interest payable
|
|
Level 2
|
|
5,210
|
|
|
5,210
|
|
|
5,415
|
|
|
5,415
|
|
||||
Securities sold under agreements to repurchase with customers
|
|
Level 2
|
|
414,597
|
|
|
414,597
|
|
|
343,047
|
|
|
343,047
|
|
||||
Short-term borrowings
|
|
Level 2
|
|
1,900,000
|
|
|
1,899,794
|
|
|
825,000
|
|
|
825,000
|
|
||||
Long-term borrowings
|
|
Level 2
|
|
397,845
|
|
|
393,547
|
|
|
597,847
|
|
|
591,227
|
|
|
(1)
|
Included
$65.6 million
and
$62.2 million
of impaired loans recorded at fair value on a nonrecurring basis at
September 30, 2017
and
December 31, 2016
, respectively.
|
|
|
Investment Securities Available-for-Sale
|
||||||||||||||
(Dollars in thousands)
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
5,799
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,799
|
|
Government sponsored agencies
|
|
278,195
|
|
|
969
|
|
|
1,316
|
|
|
277,848
|
|
||||
State and political subdivisions
|
|
357,657
|
|
|
97
|
|
|
5,135
|
|
|
352,619
|
|
||||
Residential mortgage-backed securities
|
|
300,501
|
|
|
105
|
|
|
3,287
|
|
|
297,319
|
|
||||
Collateralized mortgage obligations
|
|
884,742
|
|
|
574
|
|
|
5,887
|
|
|
879,429
|
|
||||
Corporate bonds
|
|
178,906
|
|
|
592
|
|
|
757
|
|
|
178,741
|
|
||||
Preferred stock and trust preferred securities
|
|
36,154
|
|
|
1,836
|
|
|
73
|
|
|
37,917
|
|
||||
Total
|
|
$
|
2,041,954
|
|
|
$
|
4,173
|
|
|
$
|
16,455
|
|
|
$
|
2,029,672
|
|
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
|
|
|
|
Investment Securities Held-to-Maturity
|
||||||||||||||
(Dollars in thousands)
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
State and political subdivisions
|
|
$
|
656,676
|
|
|
$
|
5,904
|
|
|
$
|
6,986
|
|
|
$
|
655,594
|
|
Trust preferred securities
|
|
500
|
|
|
—
|
|
|
135
|
|
|
365
|
|
||||
Total
|
|
$
|
657,176
|
|
|
$
|
5,904
|
|
|
$
|
7,121
|
|
|
$
|
655,959
|
|
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
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Proceeds
|
|
$
|
7,035
|
|
|
$
|
2,820
|
|
|
$
|
17,085
|
|
|
$
|
7,820
|
|
Gross gains
|
|
1
|
|
|
17
|
|
|
168
|
|
|
54
|
|
||||
Gross losses
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
|
September 30, 2017
|
||||||
(Dollars in thousands)
|
|
Amortized
Cost
|
|
Fair Value
|
||||
Investment Securities Available-for-Sale:
|
|
|
|
|
||||
Due in one year or less
|
|
$
|
370,316
|
|
|
$
|
368,404
|
|
Due after one year through five years
|
|
794,328
|
|
|
789,726
|
|
||
Due after five years through ten years
|
|
578,043
|
|
|
574,481
|
|
||
Due after ten years
|
|
297,878
|
|
|
295,189
|
|
||
Preferred stock
|
|
1,389
|
|
|
1,872
|
|
||
Total
|
|
$
|
2,041,954
|
|
|
$
|
2,029,672
|
|
Investment Securities Held-to-Maturity:
|
|
|
|
|
||||
Due in one year or less
|
|
$
|
85,395
|
|
|
$
|
85,413
|
|
Due after one year through five years
|
|
249,160
|
|
|
249,315
|
|
||
Due after five years through ten years
|
|
149,527
|
|
|
149,102
|
|
||
Due after ten years
|
|
173,094
|
|
|
172,129
|
|
||
Total
|
|
$
|
657,176
|
|
|
$
|
655,959
|
|
|
|
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
|
||||||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
|
$
|
2,999
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,999
|
|
|
$
|
—
|
|
Government sponsored agencies
|
|
111,672
|
|
|
(1,266
|
)
|
|
10,265
|
|
|
(50
|
)
|
|
121,937
|
|
|
(1,316
|
)
|
||||||
State and political subdivisions
|
|
506,514
|
|
|
(6,659
|
)
|
|
228,910
|
|
|
(5,462
|
)
|
|
735,424
|
|
|
(12,121
|
)
|
||||||
Residential mortgage-backed securities
|
|
213,620
|
|
|
(3,132
|
)
|
|
8,677
|
|
|
(155
|
)
|
|
222,297
|
|
|
(3,287
|
)
|
||||||
Collateralized mortgage obligations
|
|
664,682
|
|
|
(5,089
|
)
|
|
49,104
|
|
|
(798
|
)
|
|
713,786
|
|
|
(5,887
|
)
|
||||||
Corporate bonds
|
|
45,682
|
|
|
(475
|
)
|
|
58,123
|
|
|
(282
|
)
|
|
103,805
|
|
|
(757
|
)
|
||||||
Trust preferred securities
|
|
6,919
|
|
|
(27
|
)
|
|
4,195
|
|
|
(181
|
)
|
|
11,114
|
|
|
(208
|
)
|
||||||
Total
|
|
$
|
1,552,088
|
|
|
$
|
(16,648
|
)
|
|
$
|
359,274
|
|
|
$
|
(6,928
|
)
|
|
$
|
1,911,362
|
|
|
$
|
(23,576
|
)
|
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
|
|
(Dollars in thousands)
|
|
Originated
|
|
Acquired
(1)
|
|
Total Loans
|
|
||||||
September 30, 2017
|
|
|
|
|
|
|
|
||||||
Commercial loan portfolio:
|
|
|
|
|
|
|
|
||||||
Commercial
|
|
$
|
2,255,444
|
|
|
$
|
1,064,521
|
|
|
$
|
3,319,965
|
|
|
Commercial real estate
|
|
2,472,224
|
|
|
1,843,754
|
|
|
4,315,978
|
|
|
|||
Real estate construction and land development
|
|
421,764
|
|
|
79,649
|
|
|
501,413
|
|
|
|||
Subtotal
|
|
5,149,432
|
|
|
2,987,924
|
|
|
8,137,356
|
|
|
|||
Consumer loan portfolio:
|
|
|
|
|
|
|
|
||||||
Residential mortgage
|
|
1,881,285
|
|
|
1,340,022
|
|
|
3,221,307
|
|
|
|||
Consumer installment
|
|
1,502,814
|
|
|
113,169
|
|
|
1,615,983
|
|
|
|||
Home equity
|
|
622,565
|
|
|
236,157
|
|
|
858,722
|
|
|
|||
Subtotal
|
|
4,006,664
|
|
|
1,689,348
|
|
|
5,696,012
|
|
|
|||
Total loans
|
|
$
|
9,156,096
|
|
|
$
|
4,677,272
|
|
|
$
|
13,833,368
|
|
(2)
|
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)
|
(1)
|
Acquired loans are accounted for under ASC 310-30.
|
(2)
|
Reported net of deferred costs totaling
$25.6 million
and
$14.8 million
at
September 30, 2017
and
December 31, 2016
, respectively.
|
(Dollars in thousands)
|
|
Talmer
|
|
Lake Michigan
|
|
Monarch
|
|
North-western
|
|
OAK
|
|
Total
|
||||||||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at beginning of period
|
|
$
|
801,369
|
|
|
$
|
121,572
|
|
|
$
|
24,270
|
|
|
$
|
71,212
|
|
|
$
|
19,796
|
|
|
$
|
1,038,219
|
|
Accretion recognized in interest income
|
|
(43,816
|
)
|
|
(7,201
|
)
|
|
(1,119
|
)
|
|
(5,263
|
)
|
|
(3,004
|
)
|
|
(60,403
|
)
|
||||||
Net reclassification (to) from nonaccretable difference
(1)
|
|
11,861
|
|
|
(14,482
|
)
|
|
168
|
|
|
(1,358
|
)
|
|
1,999
|
|
|
(1,812
|
)
|
||||||
Balance at end of period
|
|
$
|
769,414
|
|
|
$
|
99,889
|
|
|
$
|
23,319
|
|
|
$
|
64,591
|
|
|
$
|
18,791
|
|
|
$
|
976,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at beginning of period
|
|
$
|
—
|
|
|
$
|
125,343
|
|
|
$
|
30,859
|
|
|
$
|
73,746
|
|
|
$
|
26,592
|
|
|
$
|
256,540
|
|
Addition attributable to acquisitions
|
|
862,127
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
862,127
|
|
||||||
Accretion recognized in interest income
|
|
(17,415
|
)
|
|
(7,968
|
)
|
|
(1,322
|
)
|
|
(3,890
|
)
|
|
(3,423
|
)
|
|
(34,018
|
)
|
||||||
Net reclassification (to) from nonaccretable difference
(1)
|
|
—
|
|
|
6,565
|
|
|
114
|
|
|
526
|
|
|
19
|
|
|
7,224
|
|
||||||
Balance at end of period
|
|
$
|
844,712
|
|
|
$
|
123,940
|
|
|
$
|
29,651
|
|
|
$
|
70,382
|
|
|
$
|
23,188
|
|
|
$
|
1,091,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
||||||||||||||||||||
Balance at beginning of period
|
|
$
|
798,210
|
|
|
$
|
121,416
|
|
|
$
|
27,182
|
|
|
$
|
69,847
|
|
|
$
|
23,316
|
|
|
$
|
1,039,971
|
|
Accretion recognized in interest income
|
|
(133,478
|
)
|
|
(22,050
|
)
|
|
(3,459
|
)
|
|
(15,222
|
)
|
|
(9,595
|
)
|
|
(183,804
|
)
|
||||||
Net reclassification (to) from nonaccretable difference
(1)
|
|
104,682
|
|
|
523
|
|
|
(404
|
)
|
|
9,966
|
|
|
5,070
|
|
|
119,837
|
|
||||||
Balance at end of period
|
|
$
|
769,414
|
|
|
$
|
99,889
|
|
|
$
|
23,319
|
|
|
$
|
64,591
|
|
|
$
|
18,791
|
|
|
$
|
976,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at beginning of period
|
|
$
|
—
|
|
|
$
|
152,999
|
|
|
$
|
34,558
|
|
|
$
|
82,623
|
|
|
$
|
28,077
|
|
|
$
|
298,257
|
|
Additions attributable to acquisitions
|
|
862,127
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
862,127
|
|
||||||
Accretion recognized in interest income
|
|
(17,415
|
)
|
|
(25,259
|
)
|
|
(4,158
|
)
|
|
(11,919
|
)
|
|
(9,707
|
)
|
|
(68,458
|
)
|
||||||
Net reclassification (to) from nonaccretable difference
(1)
|
|
—
|
|
|
(3,800
|
)
|
|
(749
|
)
|
|
(322
|
)
|
|
4,818
|
|
|
(53
|
)
|
||||||
Balance at end of period
|
|
$
|
844,712
|
|
|
$
|
123,940
|
|
|
$
|
29,651
|
|
|
$
|
70,382
|
|
|
$
|
23,188
|
|
|
$
|
1,091,873
|
|
(1)
|
The net reclassification results from changes in expected cash flows of the acquired loans which may include increases in the amount of contractual principal and interest expected to be collected due to improvement in credit quality, increases in balances outstanding from advances, renewals, extensions and interest rates; as well as reductions in contractual principal and interest expected to be collected due to credit deterioration, payoffs, and decreases in interest rates.
|
(Dollars in thousands)
|
|
Pass
|
|
Special Mention
|
|
Substandard
|
|
Doubtful
|
|
Total
|
||||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Originated Portfolio:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
$
|
2,170,377
|
|
|
$
|
34,571
|
|
|
$
|
49,504
|
|
|
$
|
992
|
|
|
$
|
2,255,444
|
|
Commercial real estate
|
|
2,405,684
|
|
|
20,037
|
|
|
45,483
|
|
|
1,020
|
|
|
2,472,224
|
|
|||||
Real estate construction and land development
|
|
421,213
|
|
|
337
|
|
|
214
|
|
|
—
|
|
|
421,764
|
|
|||||
Subtotal
|
|
4,997,274
|
|
|
54,945
|
|
|
95,201
|
|
|
2,012
|
|
|
5,149,432
|
|
|||||
Acquired Portfolio:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
990,101
|
|
|
34,169
|
|
|
40,251
|
|
|
—
|
|
|
1,064,521
|
|
|||||
Commercial real estate
|
|
1,693,878
|
|
|
68,261
|
|
|
81,450
|
|
|
165
|
|
|
1,843,754
|
|
|||||
Real estate construction and land development
|
|
75,560
|
|
|
2,134
|
|
|
1,955
|
|
|
—
|
|
|
79,649
|
|
|||||
Subtotal
|
|
2,759,539
|
|
|
104,564
|
|
|
123,656
|
|
|
165
|
|
|
2,987,924
|
|
|||||
Total
|
|
$
|
7,756,813
|
|
|
$
|
159,509
|
|
|
$
|
218,857
|
|
|
$
|
2,177
|
|
|
$
|
8,137,356
|
|
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
|
|
(Dollars in thousands)
|
|
Residential Mortgage
|
|
Consumer
Installment
|
|
Home Equity
|
|
Total
Consumer
|
||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
Originated Loans:
|
|
|
|
|
|
|
|
|
||||||||
Performing
|
|
$
|
1,872,639
|
|
|
$
|
1,501,939
|
|
|
$
|
618,657
|
|
|
$
|
3,993,235
|
|
Nonperforming
|
|
8,646
|
|
|
875
|
|
|
3,908
|
|
|
13,429
|
|
||||
Subtotal
|
|
1,881,285
|
|
|
1,502,814
|
|
|
622,565
|
|
|
4,006,664
|
|
||||
Acquired Loans
|
|
1,340,022
|
|
|
113,169
|
|
|
236,157
|
|
|
1,689,348
|
|
||||
Total
|
|
$
|
3,221,307
|
|
|
$
|
1,615,983
|
|
|
$
|
858,722
|
|
|
$
|
5,696,012
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Originated Loans:
|
|
|
|
|
|
|
|
|
||||||||
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
|
|
(Dollars in thousands)
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Nonperforming assets
|
|
|
|
|
||||
Nonaccrual loans:
|
|
|
|
|
||||
Commercial
|
|
$
|
15,648
|
|
|
$
|
13,178
|
|
Commercial real estate
|
|
25,150
|
|
|
19,877
|
|
||
Real estate construction and land development
|
|
78
|
|
|
80
|
|
||
Residential mortgage
|
|
8,646
|
|
|
6,969
|
|
||
Consumer installment
|
|
875
|
|
|
879
|
|
||
Home equity
|
|
3,908
|
|
|
3,351
|
|
||
Total nonaccrual loans
|
|
54,305
|
|
|
44,334
|
|
||
Other real estate owned and repossessed assets
|
|
10,605
|
|
|
17,187
|
|
||
Total nonperforming assets
|
|
$
|
64,910
|
|
|
$
|
61,521
|
|
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
|
|
3,521
|
|
|
11
|
|
||
Commercial real estate
|
|
144
|
|
|
277
|
|
||
Home equity
|
|
2,367
|
|
|
995
|
|
||
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
|
|
$
|
6,032
|
|
|
$
|
1,283
|
|
(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
|
||||||||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Originated Portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
|
$
|
13,786
|
|
|
$
|
10,449
|
|
|
$
|
11,539
|
|
|
$
|
35,774
|
|
|
$
|
2,219,670
|
|
|
$
|
2,255,444
|
|
|
$
|
3,521
|
|
Commercial real estate
|
|
7,545
|
|
|
6,574
|
|
|
7,192
|
|
|
21,311
|
|
|
2,450,913
|
|
|
2,472,224
|
|
|
144
|
|
|||||||
Real estate construction and land development
|
|
248
|
|
|
—
|
|
|
—
|
|
|
248
|
|
|
421,516
|
|
|
421,764
|
|
|
—
|
|
|||||||
Residential mortgage
|
|
4,380
|
|
|
22
|
|
|
1,756
|
|
|
6,158
|
|
|
1,875,127
|
|
|
1,881,285
|
|
|
—
|
|
|||||||
Consumer installment
|
|
3,393
|
|
|
266
|
|
|
219
|
|
|
3,878
|
|
|
1,498,936
|
|
|
1,502,814
|
|
|
—
|
|
|||||||
Home equity
|
|
2,469
|
|
|
1,297
|
|
|
2,690
|
|
|
6,456
|
|
|
616,109
|
|
|
622,565
|
|
|
2,367
|
|
|||||||
Total
|
|
$
|
31,821
|
|
|
$
|
18,608
|
|
|
$
|
23,396
|
|
|
$
|
73,825
|
|
|
$
|
9,082,271
|
|
|
$
|
9,156,096
|
|
|
$
|
6,032
|
|
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
|
|
(Dollars in thousands)
|
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Related
Valuation
Allowance
|
||||||
September 30, 2017
|
|
|
|
|
|
|
||||||
Impaired loans with a valuation allowance:
|
|
|
|
|
|
|
||||||
Commercial
|
|
$
|
27,521
|
|
|
$
|
32,626
|
|
|
$
|
1,688
|
|
Commercial real estate
|
|
21,569
|
|
|
28,104
|
|
|
1,486
|
|
|||
Real estate construction and land development
|
|
181
|
|
|
181
|
|
|
7
|
|
|||
Residential mortgage
|
|
16,416
|
|
|
16,416
|
|
|
1,814
|
|
|||
Consumer installment
|
|
1,041
|
|
|
1,041
|
|
|
99
|
|
|||
Home equity
|
|
4,551
|
|
|
4,551
|
|
|
620
|
|
|||
Subtotal
|
|
71,279
|
|
|
82,919
|
|
|
5,714
|
|
|||
Impaired loans with no related valuation allowance:
|
|
|
|
|
|
|
||||||
Commercial
|
|
7,290
|
|
|
9,989
|
|
|
—
|
|
|||
Commercial real estate
|
|
25,123
|
|
|
28,457
|
|
|
—
|
|
|||
Real estate construction and land development
|
|
78
|
|
|
78
|
|
|
—
|
|
|||
Residential mortgage
|
|
4,800
|
|
|
4,800
|
|
|
—
|
|
|||
Home equity
|
|
1,524
|
|
|
1,524
|
|
|
—
|
|
|||
Subtotal
|
|
38,815
|
|
|
44,848
|
|
|
—
|
|
|||
Total impaired loans:
|
|
|
|
|
|
|
||||||
Commercial
|
|
34,811
|
|
|
42,615
|
|
|
1,688
|
|
|||
Commercial real estate
|
|
46,692
|
|
|
56,561
|
|
|
1,486
|
|
|||
Real estate construction and land development
|
|
259
|
|
|
259
|
|
|
7
|
|
|||
Residential mortgage
|
|
21,216
|
|
|
21,216
|
|
|
1,814
|
|
|||
Consumer installment
|
|
1,041
|
|
|
1,041
|
|
|
99
|
|
|||
Home equity
|
|
6,075
|
|
|
6,075
|
|
|
620
|
|
|||
Total
|
|
$
|
110,094
|
|
|
$
|
127,767
|
|
|
$
|
5,714
|
|
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
|
|
74,740
|
|
|
85,264
|
|
|
9,392
|
|
|||
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
|
|
|
—
|
|
|||
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
|
|
|
240
|
|
|||
Home equity
|
|
3,351
|
|
|
3,351
|
|
|
390
|
|
|||
Total
|
|
$
|
106,869
|
|
|
$
|
124,058
|
|
|
$
|
9,392
|
|
|
|
Three Months Ended September 30, 2017
|
|
Three Months Ended September 30, 2016
|
|
Nine Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||||||||||||
(Dollars in thousands)
|
|
Average
recorded
investment
|
|
Interest income
recognized
while on
impaired status
|
|
Average
recorded
investment
|
|
Interest income
recognized
while on
impaired status
|
|
Average
recorded investment |
|
Interest income
recognized while on impaired status |
|
Average
recorded investment |
|
Interest income
recognized while on impaired status |
||||||||||||||||
Impaired loans with a valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial
|
|
$
|
25,628
|
|
|
$
|
222
|
|
|
$
|
4,350
|
|
|
$
|
—
|
|
|
$
|
25,278
|
|
|
$
|
647
|
|
|
$
|
6,256
|
|
|
$
|
—
|
|
Commercial real estate
|
|
18,300
|
|
|
197
|
|
|
2,430
|
|
|
—
|
|
|
19,120
|
|
|
602
|
|
|
4,461
|
|
|
—
|
|
||||||||
Real estate construction and land development
|
|
175
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
159
|
|
|
8
|
|
|
—
|
|
|
—
|
|
||||||||
Residential mortgage
|
|
15,945
|
|
|
144
|
|
|
20,238
|
|
|
321
|
|
|
16,529
|
|
|
446
|
|
|
20,725
|
|
|
987
|
|
||||||||
Consumer installment
|
|
748
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
737
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||||||
Home equity
|
|
4,369
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
4,154
|
|
|
58
|
|
|
—
|
|
|
—
|
|
||||||||
Subtotal
|
|
$
|
65,165
|
|
|
$
|
588
|
|
|
$
|
27,018
|
|
|
$
|
321
|
|
|
$
|
65,977
|
|
|
$
|
1,764
|
|
|
$
|
31,442
|
|
|
$
|
987
|
|
Impaired loans with no related valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial
|
|
$
|
10,120
|
|
|
$
|
14
|
|
|
$
|
31,717
|
|
|
$
|
399
|
|
|
$
|
10,142
|
|
|
$
|
92
|
|
|
$
|
31,874
|
|
|
$
|
986
|
|
Commercial real estate
|
|
25,435
|
|
|
101
|
|
|
41,205
|
|
|
285
|
|
|
24,697
|
|
|
304
|
|
|
44,207
|
|
|
977
|
|
||||||||
Real estate construction and land development
|
|
71
|
|
|
—
|
|
|
385
|
|
|
5
|
|
|
86
|
|
|
—
|
|
|
720
|
|
|
13
|
|
||||||||
Residential mortgage
|
|
5,144
|
|
|
8
|
|
|
5,173
|
|
|
—
|
|
|
4,511
|
|
|
25
|
|
|
5,139
|
|
|
—
|
|
||||||||
Consumer installment
|
|
244
|
|
|
—
|
|
|
340
|
|
|
—
|
|
|
201
|
|
|
—
|
|
|
320
|
|
|
—
|
|
||||||||
Home equity
|
|
1,639
|
|
|
—
|
|
|
2,124
|
|
|
—
|
|
|
1,227
|
|
|
6
|
|
|
2,166
|
|
|
—
|
|
||||||||
Subtotal
|
|
$
|
42,653
|
|
|
$
|
123
|
|
|
$
|
80,944
|
|
|
$
|
689
|
|
|
$
|
40,864
|
|
|
$
|
427
|
|
|
$
|
84,426
|
|
|
$
|
1,976
|
|
Total impaired loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial
|
|
$
|
35,748
|
|
|
$
|
236
|
|
|
$
|
36,067
|
|
|
$
|
399
|
|
|
$
|
35,420
|
|
|
$
|
739
|
|
|
$
|
38,130
|
|
|
$
|
986
|
|
Commercial real estate
|
|
43,735
|
|
|
298
|
|
|
43,635
|
|
|
285
|
|
|
43,817
|
|
|
906
|
|
|
48,668
|
|
|
977
|
|
||||||||
Real estate construction and land development
|
|
246
|
|
|
3
|
|
|
385
|
|
|
5
|
|
|
245
|
|
|
8
|
|
|
720
|
|
|
13
|
|
||||||||
Residential mortgage
|
|
21,089
|
|
|
152
|
|
|
25,411
|
|
|
321
|
|
|
21,040
|
|
|
471
|
|
|
25,864
|
|
|
987
|
|
||||||||
Consumer installment
|
|
992
|
|
|
1
|
|
|
340
|
|
|
—
|
|
|
938
|
|
|
3
|
|
|
320
|
|
|
—
|
|
||||||||
Home equity
|
|
6,008
|
|
|
21
|
|
|
2,124
|
|
|
—
|
|
|
5,381
|
|
|
64
|
|
|
2,166
|
|
|
—
|
|
||||||||
Total
|
|
$
|
107,818
|
|
|
$
|
711
|
|
|
$
|
107,962
|
|
|
$
|
1,010
|
|
|
$
|
106,841
|
|
|
$
|
2,191
|
|
|
$
|
115,868
|
|
|
$
|
2,963
|
|
|
|
Concession type
|
|
|
|
|
|
|
|||||||||||||||
(Dollars in thousands)
|
|
Principal
deferral |
|
Interest
rate |
|
Forbearance
agreement |
|
Total
number of loans |
|
Pre-modification recorded investment
|
|
Post-modification recorded investment
|
|||||||||||
For the three months ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Commercial
|
|
$
|
506
|
|
|
$
|
281
|
|
|
$
|
1,332
|
|
|
14
|
|
|
$
|
2,173
|
|
|
$
|
2,119
|
|
Commercial real estate
|
|
—
|
|
|
69
|
|
|
335
|
|
|
4
|
|
|
418
|
|
|
404
|
|
|||||
Real estate construction and land development
|
|
35
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
36
|
|
|
35
|
|
|||||
Subtotal
|
|
541
|
|
|
350
|
|
|
1,667
|
|
|
19
|
|
|
2,627
|
|
|
2,558
|
|
|||||
Consumer loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Residential mortgage
|
|
76
|
|
|
122
|
|
|
—
|
|
|
3
|
|
|
262
|
|
|
198
|
|
|||||
Consumer installment
|
|
47
|
|
|
7
|
|
|
—
|
|
|
11
|
|
|
58
|
|
|
54
|
|
|||||
Home equity
|
|
116
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
124
|
|
|
116
|
|
|||||
Subtotal
|
|
239
|
|
|
129
|
|
|
—
|
|
|
19
|
|
|
444
|
|
|
368
|
|
|||||
Total loans
|
|
$
|
780
|
|
|
$
|
479
|
|
|
$
|
1,667
|
|
|
38
|
|
|
$
|
3,071
|
|
|
$
|
2,926
|
|
For the nine months ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Commercial
|
|
$
|
841
|
|
|
$
|
1,648
|
|
|
$
|
1,911
|
|
|
26
|
|
|
$
|
4,476
|
|
|
$
|
4,400
|
|
Commercial real estate
|
|
447
|
|
|
209
|
|
|
457
|
|
|
10
|
|
|
1,134
|
|
|
1,113
|
|
|||||
Real estate construction and land development
|
|
35
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
36
|
|
|
35
|
|
|||||
Subtotal
|
|
1,323
|
|
|
1,857
|
|
|
2,368
|
|
|
37
|
|
|
5,646
|
|
|
5,548
|
|
|||||
Consumer loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Residential mortgage
|
|
211
|
|
|
383
|
|
|
—
|
|
|
9
|
|
|
676
|
|
|
594
|
|
|||||
Consumer installment
|
|
79
|
|
|
7
|
|
|
—
|
|
|
17
|
|
|
93
|
|
|
86
|
|
|||||
Home equity
|
|
380
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
449
|
|
|
380
|
|
|||||
Subtotal
|
|
670
|
|
|
390
|
|
|
—
|
|
|
36
|
|
|
1,218
|
|
|
1,060
|
|
|||||
Total loans
|
|
$
|
1,993
|
|
|
$
|
2,247
|
|
|
$
|
2,368
|
|
|
73
|
|
|
$
|
6,864
|
|
|
$
|
6,608
|
|
|
|
Concession type
|
|
|
|
|
|
|
|||||||||||||||
(Dollars in thousands)
|
|
Principal
deferral |
|
Interest
rate |
|
Forbearance
agreement |
|
Total
number of loans |
|
Pre-modification recorded investment
|
|
Post-modification recorded investment
|
|||||||||||
For the three months ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Commercial
|
|
$
|
4,160
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
4
|
|
|
$
|
4,160
|
|
|
$
|
4,160
|
|
Subtotal
|
|
4,160
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4,160
|
|
|
4,160
|
|
|||||
Consumer loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Home equity
|
|
—
|
|
|
89
|
|
|
—
|
|
|
2
|
|
|
89
|
|
|
89
|
|
|||||
Subtotal
|
|
—
|
|
|
89
|
|
|
—
|
|
|
2
|
|
|
89
|
|
|
89
|
|
|||||
Total loans
|
|
$
|
4,160
|
|
|
$
|
89
|
|
|
$
|
—
|
|
|
6
|
|
|
$
|
4,249
|
|
|
$
|
4,249
|
|
For the nine months ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Commercial loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Commercial
|
|
$
|
10,391
|
|
|
$
|
—
|
|
|
$
|
1,750
|
|
|
32
|
|
|
$
|
12,141
|
|
|
$
|
12,141
|
|
Commercial real estate
|
|
2,441
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
2,441
|
|
|
2,441
|
|
|||||
Subtotal
|
|
12,832
|
|
|
—
|
|
|
1,750
|
|
|
38
|
|
|
14,582
|
|
|
14,582
|
|
|||||
Consumer loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Residential mortgage
|
|
279
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
279
|
|
|
279
|
|
|||||
Consumer installment
|
|
80
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
80
|
|
|
80
|
|
|||||
Home equity
|
|
127
|
|
|
297
|
|
|
—
|
|
|
8
|
|
|
424
|
|
|
424
|
|
|||||
Subtotal
|
|
486
|
|
|
297
|
|
|
—
|
|
|
23
|
|
|
783
|
|
|
783
|
|
|||||
Total loans
|
|
$
|
13,318
|
|
|
$
|
297
|
|
|
$
|
1,750
|
|
|
61
|
|
|
$
|
15,365
|
|
|
$
|
15,365
|
|
(Dollars in thousands)
|
|
Accruing TDRs
|
|
Nonaccrual TDRs
|
|
Total
|
||||||
September 30, 2017
|
|
|
|
|
|
|
||||||
Commercial loan portfolio
|
|
$
|
40,886
|
|
|
$
|
19,342
|
|
|
$
|
60,228
|
|
Consumer loan portfolio
|
|
14,903
|
|
|
4,662
|
|
|
19,565
|
|
|||
Total
|
|
$
|
55,789
|
|
|
$
|
24,004
|
|
|
$
|
79,793
|
|
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
|
|
|
|
For The Three Months Ended September 30, 2017
|
|
For The Nine Months Ended September 30, 2017
|
||||||||||
(Dollars in thousands)
|
|
Number of loans
|
|
Principal balance
|
|
Number of loans
|
|
Principal balance
|
||||||
Commercial loan portfolio (commercial)
|
|
—
|
|
|
$
|
—
|
|
|
5
|
|
|
$
|
1,617
|
|
Consumer loan portfolio (residential mortgage)
|
|
—
|
|
|
—
|
|
|
5
|
|
|
163
|
|
||
Total
|
|
—
|
|
|
$
|
—
|
|
|
10
|
|
|
$
|
1,780
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
For The Three Months Ended September 30, 2016
|
|
For The Nine Months Ended September 30, 2016
|
||||||||||
(Dollars in thousands)
|
|
Number of loans
|
|
Principal balance
|
|
Number of loans
|
|
Principal balance
|
||||||
Commercial loan portfolio (commercial real estate)
|
|
—
|
|
|
$
|
—
|
|
|
2
|
|
|
$
|
1,721
|
|
Consumer loan portfolio (residential mortgage)
|
|
1
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||
Total
|
|
1
|
|
|
$
|
—
|
|
|
5
|
|
|
$
|
1,721
|
|
(Dollars in thousands)
|
|
Commercial
Loan
Portfolio
|
|
Consumer
Loan
Portfolio
|
|
Total
|
||||||
Originated Loan Portfolio
|
|
|
|
|
|
|
||||||
Changes in allowance for loan losses for the three months ended September 30, 2017:
|
||||||||||||
Beginning balance
|
|
$
|
57,955
|
|
|
$
|
25,842
|
|
|
$
|
83,797
|
|
Provision for loan losses
|
|
664
|
|
|
4,256
|
|
|
4,920
|
|
|||
Charge-offs
|
|
(3,792
|
)
|
|
(1,650
|
)
|
|
(5,442
|
)
|
|||
Recoveries
|
|
1,270
|
|
|
636
|
|
|
1,906
|
|
|||
Ending balance
|
|
$
|
56,097
|
|
|
$
|
29,084
|
|
|
$
|
85,181
|
|
Changes in allowance for loan losses for the nine months ended September 30, 2017:
|
||||||||||||
Beginning balance
|
|
$
|
51,201
|
|
|
$
|
27,067
|
|
|
$
|
78,268
|
|
Provision for loan losses
|
|
9,140
|
|
|
6,060
|
|
|
15,200
|
|
|||
Charge-offs
|
|
(7,209
|
)
|
|
(6,112
|
)
|
|
(13,321
|
)
|
|||
Recoveries
|
|
2,965
|
|
|
2,069
|
|
|
5,034
|
|
|||
Ending balance
|
|
$
|
56,097
|
|
|
$
|
29,084
|
|
|
$
|
85,181
|
|
Changes in allowance for loan losses for the three months ended September 30, 2016:
|
||||||||||||
Beginning balance
|
|
$
|
44,228
|
|
|
$
|
27,278
|
|
|
$
|
71,506
|
|
Provision for loan losses
|
|
3,537
|
|
|
566
|
|
|
4,103
|
|
|||
Charge-offs
|
|
(824
|
)
|
|
(2,037
|
)
|
|
(2,861
|
)
|
|||
Recoveries
|
|
489
|
|
|
538
|
|
|
1,027
|
|
|||
Ending balance
|
|
$
|
47,430
|
|
|
$
|
26,345
|
|
|
$
|
73,775
|
|
Changes in allowance for loan losses for the nine months ended September 30, 2016:
|
||||||||||||
Beginning balance
|
|
$
|
47,234
|
|
|
$
|
26,094
|
|
|
$
|
73,328
|
|
Provision for loan losses
|
|
5,437
|
|
|
3,166
|
|
|
8,603
|
|
|||
Charge-offs
|
|
(7,262
|
)
|
|
(4,677
|
)
|
|
(11,939
|
)
|
|||
Recoveries
|
|
2,021
|
|
|
1,762
|
|
|
3,783
|
|
|||
Ending balance
|
|
$
|
47,430
|
|
|
$
|
26,345
|
|
|
$
|
73,775
|
|
(Dollars in thousands)
|
|
Commercial
Loan Portfolio |
|
Consumer
Loan Portfolio |
|
Total
|
||||||
Acquired Loan Portfolio
|
|
|
|
|
|
|
||||||
Changes in allowance for loan losses for the three months ended September 30, 2017:
|
||||||||||||
Beginning balance
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Provision for loan losses
|
|
409
|
|
|
170
|
|
|
579
|
|
|||
Charge-offs
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Recoveries
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending balance
|
|
$
|
409
|
|
|
$
|
170
|
|
|
$
|
579
|
|
Changes in allowance for loan losses for the nine months ended September 30, 2017:
|
||||||||||||
Beginning balance
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Provision for loan losses
|
|
409
|
|
|
170
|
|
|
579
|
|
|||
Charge-offs
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Recoveries
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending balance
|
|
$
|
409
|
|
|
$
|
170
|
|
|
$
|
579
|
|
(Dollars in thousands)
|
|
Other real estate
owned |
|
Repossessed
assets |
||||
Balance at January 1, 2017
|
|
$
|
16,812
|
|
|
$
|
375
|
|
Other additions
(1)
|
|
5,339
|
|
|
3,633
|
|
||
Net payments received
|
|
(582
|
)
|
|
—
|
|
||
Disposals
|
|
(10,180
|
)
|
|
(3,469
|
)
|
||
Write-downs
|
|
(1,323
|
)
|
|
—
|
|
||
Balance at September 30, 2017
|
|
$
|
10,066
|
|
|
$
|
539
|
|
|
|
|
|
|
||||
Balance at January 1, 2016
|
|
$
|
9,716
|
|
|
$
|
219
|
|
Additions due to acquisitions
|
|
13,227
|
|
|
313
|
|
||
Other additions
(1)
|
|
3,945
|
|
|
2,084
|
|
||
Net payments received
|
|
(171
|
)
|
|
(764
|
)
|
||
Disposals
|
|
(6,232
|
)
|
|
(1,231
|
)
|
||
Write-downs
|
|
(376
|
)
|
|
—
|
|
||
Balance at September 30, 2016
|
|
$
|
20,109
|
|
|
$
|
621
|
|
|
(1)
|
Includes loans transferred to other real estate owned and other repossessed assets.
|
(Dollars in thousands)
|
|
Other real estate
owned
|
|
Repossessed
assets
|
||||
For the three months ended September 30, 2017
|
|
|
|
|
|
|
||
Net gain (loss) on sale
|
|
$
|
388
|
|
|
$
|
(112
|
)
|
Write-downs
|
|
(550
|
)
|
|
—
|
|
||
Net operating expenses
|
|
(509
|
)
|
|
(1
|
)
|
||
Total
|
|
$
|
(671
|
)
|
|
$
|
(113
|
)
|
For the nine months ended September 30, 2017
|
|
|
|
|
||||
Net gain (loss) on sale
|
|
$
|
2,203
|
|
|
$
|
(283
|
)
|
Write-downs
|
|
(1,323
|
)
|
|
—
|
|
||
Net operating expenses
|
|
(1,727
|
)
|
|
(8
|
)
|
||
Total
|
|
$
|
(847
|
)
|
|
$
|
(291
|
)
|
For the three months ended September 30, 2016
|
|
|
|
|
|
|
||
Net gain (loss) on sale
|
|
$
|
788
|
|
|
$
|
(5
|
)
|
Write-downs
|
|
(145
|
)
|
|
—
|
|
||
Net operating expenses
|
|
(176
|
)
|
|
(8
|
)
|
||
Total
|
|
$
|
467
|
|
|
$
|
(13
|
)
|
For the nine months ended September 30, 2016
|
|
|
|
|
||||
Net gain on sale
|
|
$
|
2,830
|
|
|
$
|
696
|
|
Write-downs
|
|
(376
|
)
|
|
—
|
|
||
Net operating expenses
|
|
(588
|
)
|
|
(11
|
)
|
||
Total
|
|
$
|
1,866
|
|
|
$
|
685
|
|
(Dollars in thousands)
|
|
Commercial
Real Estate
|
|
Mortgage
|
|
Total
|
||||||
For the three months ended September 30, 2017
|
|
|
|
|
|
|
||||||
Fair value, beginning of period
|
|
$
|
486
|
|
|
$
|
64,036
|
|
|
$
|
64,522
|
|
Additions from loans sold with servicing retained
|
|
—
|
|
|
2,324
|
|
|
2,324
|
|
|||
Changes in fair value due to:
|
|
|
|
|
|
|
||||||
Reductions from pay-offs, pay downs and run-off
|
|
(31
|
)
|
|
(579
|
)
|
|
(610
|
)
|
|||
Changes in estimates of fair value
(1)
|
|
—
|
|
|
(4,041
|
)
|
|
(4,041
|
)
|
|||
Fair value, end of period
|
|
$
|
455
|
|
|
$
|
61,740
|
|
|
$
|
62,195
|
|
For the nine months ended September 30, 2017
|
|
344
|
|
|
47741
|
|
|
48085
|
|
|||
Fair value, beginning of period
|
|
$
|
344
|
|
|
$
|
47,741
|
|
|
$
|
48,085
|
|
Transfers based on new accounting policy election
|
|
—
|
|
|
15,891
|
|
|
15,891
|
|
|||
Additions from loans sold with servicing retained
|
|
188
|
|
|
6,273
|
|
|
6,461
|
|
|||
Changes in fair value due to:
|
|
0
|
|
|
0
|
|
|
|
||||
Reductions from pay-offs, pay downs and run-off
|
|
(77
|
)
|
|
(1,803
|
)
|
|
(1,880
|
)
|
|||
Changes in estimates of fair value
(1)
|
|
—
|
|
|
(6,362
|
)
|
|
(6,362
|
)
|
|||
Fair value, end of period
|
|
$
|
455
|
|
|
$
|
61,740
|
|
|
$
|
62,195
|
|
Principal balance of loans serviced for others that have servicing capitalized
|
|
$
|
41,798
|
|
|
$
|
7,102,485
|
|
|
$
|
7,144,283
|
|
For the three and nine months ended September 30, 2016
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
Fair value, beginning of period
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acquired in Talmer Bancorp, Inc. merger
|
|
$
|
365
|
|
|
$
|
42,097
|
|
|
$
|
42,462
|
|
Additions from loans sold with servicing retained
|
|
—
|
|
|
810
|
|
|
810
|
|
|||
Changes in fair value due to:
|
|
|
|
|
|
0
|
|
|||||
Reductions from pay-offs, pay downs and run-off
|
|
(2
|
)
|
|
(685
|
)
|
|
(687
|
)
|
|||
Changes in estimates of fair value
(1)
|
|
—
|
|
|
(657
|
)
|
|
(657
|
)
|
|||
Fair value, end of period
|
|
$
|
363
|
|
|
$
|
41,565
|
|
|
$
|
41,928
|
|
Principal balance of loans serviced
|
|
$
|
79,405
|
|
|
$
|
5,523,423
|
|
|
$
|
5,602,828
|
|
(1)
|
Represents estimated LSR value change resulting primarily from market-driven changes in interest rates and prepayments. Included in "Net gain on sale of loans and other mortgage banking revenue" in the Consolidated Statements of Income.
|
(Dollars in thousands)
|
|
For the Three Months Ended September 30, 2016
|
|
For the Nine Months Ended September 30, 2016
|
||||
Balance at beginning of period
|
|
$
|
9,677
|
|
|
$
|
11,122
|
|
Additions
|
|
695
|
|
|
1,612
|
|
||
Amortization
|
|
(1,105
|
)
|
|
(3,055
|
)
|
||
Change in valuation allowance
|
|
198
|
|
|
(214
|
)
|
||
Balance at end of period
|
|
$
|
9,465
|
|
|
$
|
9,465
|
|
|
|
Mortgage
|
||
As of September 30, 2017
|
|
|
|
|
Prepayment speed
|
|
0.0 - 37.66%
|
|
|
Weighted average ("WA") discount rate
|
|
10.1
|
%
|
|
Cost to service/per year
|
|
$
|
66
|
|
Ancillary income/per year
|
|
$
|
31
|
|
WA float range
|
|
1.2
|
%
|
|
As of December 31, 2016
|
|
|
|
|
Prepayment speed
|
|
0.0 - 99.8%
|
|
|
WA discount rate
|
|
10.1
|
%
|
|
Cost to service/per year
|
|
$65-$90
|
|
|
Ancillary income/per year
|
|
$
|
28
|
|
WA float range
|
|
1.0
|
%
|
(Dollars in thousands)
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Core deposit intangible assets
|
|
$
|
35,747
|
|
|
$
|
40,211
|
|
Non-compete intangible assets
|
|
50
|
|
|
—
|
|
||
Total other intangible assets
|
|
$
|
35,797
|
|
|
$
|
40,211
|
|
(Dollars in thousands)
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Gross original amount
|
|
$
|
59,143
|
|
|
$
|
59,143
|
|
Accumulated amortization
|
|
23,396
|
|
|
18,932
|
|
||
Net carrying amount
|
|
$
|
35,747
|
|
|
$
|
40,211
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
|
|
|
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)
|
||||||||||||
Risk management purposes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
$
|
520,000
|
|
|
$
|
1,174
|
|
|
$
|
109
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total risk management purposes
|
|
520,000
|
|
|
1,174
|
|
|
109
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Customer-initiated and mortgage banking derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer-initiated derivatives
|
|
1,059,921
|
|
|
8,719
|
|
|
9,274
|
|
|
600,598
|
|
|
4,406
|
|
|
4,141
|
|
||||||
Foreign exchange forwards
|
|
4,000
|
|
|
60
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Forward contracts related to mortgage loans to be delivered for sale
|
|
180,961
|
|
|
660
|
|
|
—
|
|
|
140,155
|
|
|
635
|
|
|
—
|
|
||||||
Interest rate lock commitments
|
|
106,649
|
|
|
1,799
|
|
|
—
|
|
|
76,034
|
|
|
956
|
|
|
—
|
|
||||||
Power Equity CD
|
|
38,748
|
|
|
2,301
|
|
|
2,301
|
|
|
36,807
|
|
|
2,218
|
|
|
2,218
|
|
||||||
Total customer-initiated and mortgage banking derivatives
|
|
1,390,279
|
|
|
13,539
|
|
|
11,630
|
|
|
853,594
|
|
|
8,215
|
|
|
6,359
|
|
||||||
Total gross derivatives
|
|
$
|
1,910,279
|
|
|
$
|
14,713
|
|
|
$
|
11,739
|
|
|
$
|
853,594
|
|
|
$
|
8,215
|
|
|
$
|
6,359
|
|
|
(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 "Interest receivable and other assets" and derivative liabilities are included within "Interest payable and 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
$576 thousand
at
September 30, 2017
and
$99 thousand
at
December 31, 2016
.
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in thousands)
|
|
Location of Gain (Loss)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Forward contracts related to mortgage loans to be delivered for sale
|
|
Net gain (loss) on sale of loans and other mortgage banking revenue
|
|
$
|
43
|
|
|
$
|
(156
|
)
|
|
$
|
25
|
|
|
$
|
(798
|
)
|
Interest rate lock commitments
|
|
Net gain (loss) on sale of loans and other mortgage banking revenue
|
|
(198
|
)
|
|
(179
|
)
|
|
843
|
|
|
307
|
|
||||
Foreign exchange forwards
|
|
Other noninterest income
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Customer-initiated derivatives
|
|
Other noninterest income
|
|
(39
|
)
|
|
(60
|
)
|
|
(820
|
)
|
|
(60
|
)
|
||||
Total gain (loss) recognized in income
|
|
|
|
$
|
(189
|
)
|
|
$
|
(395
|
)
|
|
$
|
53
|
|
|
$
|
(551
|
)
|
(Dollars in thousands)
|
|
Amount of gain (loss) recognized in other comprehensive income (Effective portion)
|
|
Amount of gain (loss) reclassified from other comprehensive income to interest income or expense (Effective portion)
|
|
Amount of gain (loss) recognized in other noninterest income (Ineffective portion)
|
||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
|
||||||
Interest rate swaps designated as cash flow hedges
|
|
$
|
751
|
|
|
$
|
(575
|
)
|
|
$
|
(3
|
)
|
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
||||||
Interest rate swaps designated as cash flow hedges
|
|
$
|
694
|
|
|
$
|
(984
|
)
|
|
$
|
(3
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Reserve balance at beginning of period
|
$
|
5,469
|
|
|
$
|
3,825
|
|
|
$
|
6,459
|
|
|
$
|
4,048
|
|
Addition of fair value of representations and warranties due to acquisitions
|
—
|
|
|
3,100
|
|
|
—
|
|
|
3,100
|
|
||||
Reserve reduction
|
(71
|
)
|
|
—
|
|
|
(1,061
|
)
|
|
(150
|
)
|
||||
Charge-offs
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|
(73
|
)
|
||||
Ending reserve balance
|
$
|
5,389
|
|
|
$
|
6,925
|
|
|
$
|
5,389
|
|
|
$
|
6,925
|
|
(Dollars in thousands)
|
September 30, 2017
|
|
December 31, 2016
|
||||
Reserve balance
|
|
|
|
||||
Liability for specific claims
|
$
|
506
|
|
|
$
|
730
|
|
General allowance
|
4,883
|
|
|
5,729
|
|
||
Total reserve balance
|
$
|
5,389
|
|
|
$
|
6,459
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Weighted Average Rate
(1)
|
|
Amount
|
|
Weighted Average Rate
(1)
|
||||||
Securities sold under agreements to repurchase with customers:
|
|
|
|
|
|
|
|
|
||||||
Securities sold under agreements to repurchase with customers
|
|
$
|
414,597
|
|
|
0.44
|
%
|
|
$
|
343,047
|
|
|
0.16
|
%
|
Short-term borrowings:
|
|
|
|
|
|
|
|
|
||||||
FHLB advances: 1.20% - 1.22% fixed-rate notes
|
|
1,900,000
|
|
|
1.21
|
|
|
825,000
|
|
|
0.65
|
|
||
Long-term borrowings:
|
|
|
|
|
|
|
|
|
||||||
FHLB advances: 0.92% - 7.44% fixed-rate notes due 2017 to 2020
(2)
|
|
339,255
|
|
|
1.28
|
|
|
438,538
|
|
|
1.24
|
|
||
Securities sold under agreements to repurchase: 1.48% - 2.75% fixed-rate notes due in 2017
(3)
|
|
3,005
|
|
|
2.75
|
|
|
19,144
|
|
|
3.17
|
|
||
Line-of-credit: floating-rate based on one-month LIBOR plus 1.75%
|
|
39,914
|
|
|
2.98
|
|
|
124,625
|
|
|
2.52
|
|
||
Subordinated debt obligations: floating-rate based on three-month LIBOR plus 1.45% - 2.85% due 2034 to 2035
(4)
|
|
11,390
|
|
|
3.49
|
|
|
11,285
|
|
|
3.14
|
|
||
Subordinated debt obligations: floating-rate based on three-month LIBOR plus 3.25% due in 2032
(5)
|
|
4,281
|
|
|
4.55
|
|
|
4,255
|
|
|
4.25
|
|
||
Total long-term borrowings
|
|
397,845
|
|
|
1.56
|
|
|
597,847
|
|
|
1.63
|
|
||
Total borrowings
|
|
$
|
2,712,442
|
|
|
1.14
|
%
|
|
$
|
1,765,894
|
|
|
0.89
|
%
|
|
(1)
|
Weighted average rate presented is the contractual rate which excludes premiums and discounts related to purchase accounting.
|
(2)
|
The
September 30, 2017
balances include advances payable of
$338.9 million
and purchase accounting premiums of
$0.4 million
. The
December 31, 2016
balance includes advances payable of
$437.8 million
and purchase accounting premiums of
$0.7 million
.
|
(3)
|
The
September 30, 2017
balance includes advances payable of
$3.0 million
and purchase accounting premiums of
$5 thousand
. The
December 31, 2016
balance includes advance payable of
$19.0 million
and purchase accounting premiums of
$0.1 million
.
|
(4)
|
The
September 30, 2017
balance includes advances payable of
$15.0 million
and purchase accounting discounts of
$3.6 million
. The
December 31, 2016
balance includes advances payable of
$15.0 million
and purchase accounting discounts of
$3.7 million
.
|
(5)
|
The
September 30, 2017
balance includes advances payable of
$5.0 million
and purchase accounting discounts of
$0.7 million
. The
December 31, 2016
balance includes advances payable of
$5.0 million
and purchase accounting discounts of
$0.7 million
.
|
|
|
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, 2016
|
|
407,939
|
|
|
$
|
32.81
|
|
|
$
|
6.15
|
|
|
2,453,395
|
|
|
$
|
21.41
|
|
Granted
|
|
132,414
|
|
|
53.43
|
|
|
9.94
|
|
|
132,414
|
|
|
53.43
|
|
|||
Exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,341,354
|
)
|
|
16.93
|
|
|||
Vested
|
|
(161,751
|
)
|
|
37.73
|
|
|
7.07
|
|
|
—
|
|
|
—
|
|
|||
Forfeited/expired
|
|
(42,885
|
)
|
|
37.68
|
|
|
7.06
|
|
|
(42,885
|
)
|
|
37.68
|
|
|||
Outstanding at September 30, 2017
|
|
335,717
|
|
|
$
|
37.95
|
|
|
$
|
7.09
|
|
|
1,201,570
|
|
|
$
|
29.36
|
|
Exercisable/vested at September 30, 2017
|
|
|
|
|
|
|
|
865,853
|
|
|
$
|
26.03
|
|
Expected dividend yield
|
3.31
|
%
|
|
Risk-free interest rate
|
2.05
|
%
|
|
Expected stock price volatility
|
26.7
|
%
|
|
Expected life of options – in years
|
6.0
|
|
|
Weighted average fair value of options granted
|
$
|
9.94
|
|
|
|
Number of
Units
|
|
Weighted-average
grant date fair value per unit
|
|||
Outstanding at December 31, 2016
|
|
298,357
|
|
|
$
|
32.81
|
|
Granted
|
|
168,173
|
|
|
51.90
|
|
|
Converted into shares of common stock
|
|
(64,750
|
)
|
|
29.30
|
|
|
Forfeited/expired
|
|
(8,374
|
)
|
|
47.05
|
|
|
Outstanding at September 30, 2017
|
|
393,406
|
|
|
$
|
41.25
|
|
Nonvested restricted stock awards
|
|
Number of Awards
|
|
Weighted-average acquisition-date
fair value |
|||
Nonvested at January 1, 2017
|
|
365,891
|
|
|
$
|
46.23
|
|
Vested
|
|
(277,821
|
)
|
|
46.23
|
|
|
Forfeited
|
|
(4,165
|
)
|
|
46.23
|
|
|
Nonvested at September 30, 2017
|
|
83,905
|
|
|
$
|
46.23
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Defined Benefit Pension Plans
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
233
|
|
|
$
|
279
|
|
|
$
|
700
|
|
|
$
|
834
|
|
Interest cost
|
|
1,302
|
|
|
1,357
|
|
|
3,906
|
|
|
4,072
|
|
||||
Contractual termination cost
|
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
||||
Expected return on plan assets
|
|
(2,216
|
)
|
|
(2,141
|
)
|
|
(6,650
|
)
|
|
(6,422
|
)
|
||||
Amortization of unrecognized net loss
|
|
578
|
|
|
585
|
|
|
1,734
|
|
|
1,729
|
|
||||
Settlement
(1)
|
|
322
|
|
|
—
|
|
|
322
|
|
|
—
|
|
||||
Net periodic benefit cost (income)
|
|
$
|
219
|
|
|
$
|
112
|
|
|
$
|
12
|
|
|
$
|
245
|
|
Postretirement Benefit Plan
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
7
|
|
Interest cost
|
|
24
|
|
|
33
|
|
|
70
|
|
|
99
|
|
||||
Amortization of prior service cost
|
|
—
|
|
|
29
|
|
|
—
|
|
|
88
|
|
||||
Amortization of unrecognized net gain
|
|
(41
|
)
|
|
(24
|
)
|
|
(121
|
)
|
|
(75
|
)
|
||||
Net periodic benefit cost (income)
|
|
$
|
(16
|
)
|
|
$
|
40
|
|
|
$
|
(47
|
)
|
|
$
|
119
|
|
(1)
|
The settlement charge relates to the settlement of liabilities under the SERP for the retirement of the plan participant during the third quarter of 2017.
|
|
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
|
||||||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Capital to Risk-Weighted Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporation
|
$
|
1,626,898
|
|
|
11.2
|
%
|
|
$
|
1,160,602
|
|
|
8.0
|
%
|
|
$
|
1,341,946
|
|
|
9.3
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Chemical Bank
|
1,619,878
|
|
|
11.2
|
|
|
1,158,070
|
|
|
8.0
|
|
|
1,339,019
|
|
|
9.3
|
|
|
$
|
1,447,588
|
|
|
10.0
|
%
|
|||
Tier 1 Capital to Risk-Weighted Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporation
|
1,517,561
|
|
|
10.5
|
|
|
870,451
|
|
|
6.0
|
|
|
1,051,795
|
|
|
7.3
|
|
|
N/A
|
|
|
N/A
|
|
||||
Chemical Bank
|
1,526,212
|
|
|
10.5
|
|
|
868,553
|
|
|
6.0
|
|
|
1,049,501
|
|
|
7.3
|
|
|
1,158,070
|
|
|
8.0
|
|
||||
Common Equity Tier 1 Capital to Risk-Weighted Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporation
|
1,517,561
|
|
|
10.5
|
|
|
652,839
|
|
|
4.5
|
|
|
834,183
|
|
|
5.8
|
|
|
N/A
|
|
|
N/A
|
|
||||
Chemical Bank
|
1,526,212
|
|
|
10.5
|
|
|
651,414
|
|
|
4.5
|
|
|
832,363
|
|
|
5.8
|
|
|
940,932
|
|
|
6.5
|
|
||||
Leverage Ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporation
|
1,517,561
|
|
|
8.6
|
|
|
707,330
|
|
|
4.0
|
|
|
707,330
|
|
|
4.0
|
|
|
N/A
|
|
|
N/A
|
|
||||
Chemical Bank
|
1,526,212
|
|
|
8.6
|
|
|
706,323
|
|
|
4.0
|
|
|
706,323
|
|
|
4.0
|
|
|
882,903
|
|
|
5.0
|
|
||||
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 Asset
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands, except per share data)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
|
$
|
40,459
|
|
|
$
|
11,484
|
|
|
$
|
140,077
|
|
|
$
|
60,864
|
|
Net income allocated to participating securities
|
|
129
|
|
|
37
|
|
|
566
|
|
|
78
|
|
||||
Net income allocated to common shareholders
(1)
|
|
$
|
40,330
|
|
|
$
|
11,447
|
|
|
$
|
139,511
|
|
|
$
|
60,786
|
|
Weighted average common shares - issued
|
|
71,139
|
|
|
49,109
|
|
|
71,077
|
|
|
41,881
|
|
||||
Average unvested restricted share awards
|
|
(228
|
)
|
|
(159
|
)
|
|
(290
|
)
|
|
(53
|
)
|
||||
Weighted average common shares outstanding - basic
|
|
70,911
|
|
|
48,950
|
|
|
70,787
|
|
|
41,828
|
|
||||
Effect of dilutive securities
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common stock equivalents
|
|
594
|
|
|
687
|
|
|
667
|
|
|
493
|
|
||||
Weighted average common shares outstanding - diluted
|
|
71,505
|
|
|
49,637
|
|
|
71,454
|
|
|
42,321
|
|
||||
EPS available to common shareholders
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
|
|
$
|
0.57
|
|
|
$
|
0.23
|
|
|
$
|
1.98
|
|
|
$
|
1.45
|
|
Diluted earnings per common share
|
|
$
|
0.56
|
|
|
$
|
0.23
|
|
|
$
|
1.95
|
|
|
$
|
1.42
|
|
|
(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
|
|
Unrealized gains (losses) on cash flow hedges, net of tax
|
|
Total
|
||||||||
For the three months ended September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
|
$
|
(8,877
|
)
|
|
$
|
(25,195
|
)
|
|
$
|
(57
|
)
|
|
$
|
(34,129
|
)
|
Other comprehensive income before reclassifications
|
|
895
|
|
|
7,305
|
|
|
520
|
|
|
8,720
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
|
(1
|
)
|
|
349
|
|
|
231
|
|
|
579
|
|
||||
Net current period other comprehensive income
|
|
894
|
|
|
7,654
|
|
|
751
|
|
|
9,299
|
|
||||
Ending balance
|
|
$
|
(7,983
|
)
|
|
$
|
(17,541
|
)
|
|
$
|
694
|
|
|
$
|
(24,830
|
)
|
For the three months ended September 30, 2016
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
|
$
|
2,196
|
|
|
$
|
(27,894
|
)
|
|
$
|
—
|
|
|
$
|
(25,698
|
)
|
Other comprehensive loss before reclassifications
|
|
(805
|
)
|
|
(511
|
)
|
|
—
|
|
|
(1,316
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
|
(10
|
)
|
|
1,882
|
|
|
—
|
|
|
1,872
|
|
||||
Net current period other comprehensive income (loss)
|
|
(815
|
)
|
|
1,371
|
|
|
—
|
|
|
556
|
|
||||
Ending balance
|
|
$
|
1,381
|
|
|
$
|
(26,523
|
)
|
|
$
|
—
|
|
|
$
|
(25,142
|
)
|
For the nine months ended September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
|
$
|
(14,142
|
)
|
|
$
|
(25,894
|
)
|
|
$
|
—
|
|
|
$
|
(40,036
|
)
|
Other comprehensive income before reclassifications
|
|
6,268
|
|
|
7,305
|
|
|
54
|
|
|
13,627
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
|
(109
|
)
|
|
1,048
|
|
|
640
|
|
|
1,579
|
|
||||
Net current period other comprehensive income
|
|
6,159
|
|
|
8,353
|
|
|
694
|
|
|
15,206
|
|
||||
Ending balance
|
|
$
|
(7,983
|
)
|
|
$
|
(17,541
|
)
|
|
$
|
694
|
|
|
$
|
(24,830
|
)
|
For the nine months ended September 30, 2016
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
|
$
|
(1,888
|
)
|
|
$
|
(27,144
|
)
|
|
$
|
—
|
|
|
$
|
(29,032
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
3,304
|
|
|
(511
|
)
|
|
—
|
|
|
2,793
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
|
(35
|
)
|
|
1,132
|
|
|
—
|
|
|
1,097
|
|
||||
Net current period other comprehensive income
|
|
3,269
|
|
|
621
|
|
|
—
|
|
|
3,890
|
|
||||
Ending balance
|
|
$
|
1,381
|
|
|
$
|
(26,523
|
)
|
|
$
|
—
|
|
|
$
|
(25,142
|
)
|
(Dollars in thousands)
|
|
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)
|
|
Affected Line Item in the Income Statement
|
||||||||||||||
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
||||||||
Gains and losses on available-for-sale securities
|
|
$
|
1
|
|
|
$
|
16
|
|
|
$
|
168
|
|
|
$
|
53
|
|
|
Gain on sale of investment securities (noninterest income)
|
|
|
—
|
|
|
(6
|
)
|
|
(59
|
)
|
|
(18
|
)
|
|
Income tax (expense)/benefit
|
||||
|
|
$
|
1
|
|
|
$
|
10
|
|
|
$
|
109
|
|
|
$
|
35
|
|
|
Net Income
|
Amortization of defined benefit pension plan items
|
|
$
|
(537
|
)
|
|
$
|
(2,895
|
)
|
|
$
|
(1,613
|
)
|
|
$
|
(1,742
|
)
|
|
Salaries, wages and employee benefits (operating expenses)
|
|
|
188
|
|
|
1,013
|
|
|
565
|
|
|
610
|
|
|
Income tax (expense)/benefit
|
||||
|
|
$
|
(349
|
)
|
|
$
|
(1,882
|
)
|
|
(1,048
|
)
|
|
$
|
(1,132
|
)
|
|
Net Income (loss)
|
|
Gains and losses on cash flow hedges
|
|
$
|
(575
|
)
|
|
$
|
—
|
|
|
$
|
(984
|
)
|
|
$
|
—
|
|
|
Interest on short-term borrowings (interest expense)
|
|
|
344
|
|
|
—
|
|
|
344
|
|
|
—
|
|
|
Income tax (expense)/benefit
|
||||
|
|
$
|
(231
|
)
|
|
$
|
—
|
|
|
$
|
(640
|
)
|
|
$
|
—
|
|
|
Net Income (loss)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
(Dollars in thousands, except per share data)
|
September 30,
2017 |
|
June 30,
2017 |
|
September 30,
2016 |
|
September 30,
2017 |
|
September 30,
2016 |
||||||||||
Summary of Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
$
|
164,944
|
|
|
$
|
155,133
|
|
|
$
|
103,562
|
|
|
$
|
462,973
|
|
|
$
|
265,963
|
|
Interest expense
|
21,316
|
|
|
17,185
|
|
|
6,753
|
|
|
51,300
|
|
|
17,329
|
|
|||||
Net interest income
|
143,628
|
|
|
137,948
|
|
|
96,809
|
|
|
411,673
|
|
|
248,634
|
|
|||||
Provision for loan losses
|
5,499
|
|
|
6,229
|
|
|
4,103
|
|
|
15,778
|
|
|
8,603
|
|
|||||
Net interest income after provision for loan losses
|
138,129
|
|
|
131,719
|
|
|
92,706
|
|
|
395,895
|
|
|
240,031
|
|
|||||
Noninterest income
|
32,122
|
|
|
41,568
|
|
|
27,770
|
|
|
111,700
|
|
|
68,086
|
|
|||||
Operating expenses, excluding merger expenses, restructuring expenses and impairment of income tax credits (non-GAAP)
(2)
|
95,241
|
|
|
97,772
|
|
|
68,674
|
|
|
293,042
|
|
|
180,998
|
|
|||||
Merger expenses
|
2,379
|
|
|
465
|
|
|
37,470
|
|
|
7,011
|
|
|
43,118
|
|
|||||
Restructuring expenses
|
18,824
|
|
|
—
|
|
|
—
|
|
|
18,824
|
|
|
—
|
|
|||||
Impairment of income tax credits
|
3,095
|
|
|
—
|
|
|
—
|
|
|
3,095
|
|
|
—
|
|
|||||
Income before income taxes
|
50,712
|
|
|
75,050
|
|
|
14,332
|
|
|
185,623
|
|
|
84,001
|
|
|||||
Income tax expense
|
10,253
|
|
|
23,036
|
|
|
2,848
|
|
|
45,546
|
|
|
23,137
|
|
|||||
Net income
|
$
|
40,459
|
|
|
$
|
52,014
|
|
|
$
|
11,484
|
|
|
$
|
140,077
|
|
|
$
|
60,864
|
|
Significant items, net of tax
(1)
|
16,409
|
|
|
1,474
|
|
|
25,921
|
|
|
20,929
|
|
|
29,592
|
|
|||||
Net income, excluding significant items (non-GAAP)
(2)
|
$
|
56,868
|
|
|
$
|
53,488
|
|
|
$
|
37,405
|
|
|
$
|
161,006
|
|
|
$
|
90,456
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Per Common Share Data
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic
|
$
|
0.57
|
|
|
$
|
0.73
|
|
|
$
|
0.23
|
|
|
$
|
1.98
|
|
|
$
|
1.45
|
|
Diluted
|
0.56
|
|
|
0.73
|
|
|
0.23
|
|
|
1.95
|
|
|
1.42
|
|
|||||
Diluted, excluding significant items (non-GAAP)
(2)
|
0.79
|
|
|
0.75
|
|
|
0.75
|
|
|
2.24
|
|
|
2.11
|
|
|||||
Cash dividends declared
|
0.28
|
|
|
0.27
|
|
|
0.27
|
|
|
0.82
|
|
|
0.79
|
|
|||||
Book value - period-end
|
37.57
|
|
|
37.11
|
|
|
36.37
|
|
|
37.57
|
|
|
36.37
|
|
|||||
Tangible book value - period-end (non-GAAP)
(2)
|
21.36
|
|
|
20.89
|
|
|
19.99
|
|
|
21.36
|
|
|
19.99
|
|
|||||
Market value - period-end
|
52.26
|
|
|
48.41
|
|
|
44.13
|
|
|
52.26
|
|
|
44.13
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Key Ratios (annualized where applicable)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest margin (GAAP)
|
3.40
|
%
|
|
3.41
|
%
|
|
3.49
|
%
|
|
3.40
|
%
|
|
3.53
|
%
|
|||||
Net interest margin (taxable equivalent basis) (non-GAAP)
(3)
|
3.48
|
%
|
|
3.48
|
%
|
|
3.58
|
%
|
|
3.48
|
%
|
|
3.62
|
%
|
|||||
Efficiency ratio (GAAP)
|
68.0
|
%
|
|
54.7
|
%
|
|
85.2
|
%
|
|
61.5
|
%
|
|
70.8
|
%
|
|||||
Efficiency ratio - adjusted (non-GAAP)
(2)
|
51.2
|
%
|
|
52.2
|
%
|
|
52.7
|
%
|
|
53.5
|
%
|
|
54.7
|
%
|
|||||
Return on average assets
|
0.86
|
%
|
|
1.14
|
%
|
|
0.37
|
%
|
|
1.03
|
%
|
|
0.79
|
%
|
|||||
Return on average shareholders' equity
|
6.1
|
%
|
|
8.0
|
%
|
|
2.9
|
%
|
|
7.2
|
%
|
|
6.7
|
%
|
|||||
Return on average tangible shareholders' equity (non-GAAP)
(2)
|
10.9
|
%
|
|
14.3
|
%
|
|
4.7
|
%
|
|
12.8
|
%
|
|
10.0
|
%
|
|||||
Average shareholders' equity as a percent of average assets
|
14.0
|
%
|
|
14.3
|
%
|
|
12.7
|
%
|
|
14.3
|
%
|
|
11.7
|
%
|
|||||
Capital ratios (period end):
|
|
|
|
|
|
|
|
|
|
||||||||||
Tangible shareholders' equity as a percent of tangible assets (non-GAAP)
(2)
|
8.3
|
%
|
|
8.4
|
%
|
|
8.7
|
%
|
|
8.3
|
%
|
|
8.7
|
%
|
|||||
Total risk-based capital ratio
|
11.2
|
%
|
|
11.1
|
%
|
|
11.1
|
%
|
|
11.2
|
%
|
|
11.1
|
%
|
(1)
|
Significant items include merger expenses, restructuring expenses and loan servicing rights change in fair value.
|
(2)
|
Denotes a non-GAAP financial measure. Please refer to the section entitled "Non-GAAP Financial Measures" included within this Management’s Discussion and Analysis of Financial Condition and Results of Operations for a reconciliation to the most directly comparable GAAP financial measures.
|
(3)
|
Denotes a non-GAAP financial measure. Please refer to the section entitled "Average Balances, Fully Tax Equivalent (FTE) Interest and Effective Yields and Rates" included within this Management's Discussion and Analysis of Financial Condition and Results of Operations for a reconciliation to the most directly comparable GAAP financial measure.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
(Dollars in thousands, except per share data)
|
September 30,
2017 |
|
June 30,
2017 |
|
September 30,
2016 |
|
September 30,
2017 |
|
September 30,
2016 |
||||||||||
Reconciliation of Non-GAAP Operating Results
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income, as reported
|
$
|
40,459
|
|
|
$
|
52,014
|
|
|
$
|
11,484
|
|
|
$
|
140,077
|
|
|
$
|
60,864
|
|
Merger expenses
|
2,379
|
|
|
465
|
|
|
37,470
|
|
|
25,835
|
|
|
43,118
|
|
|||||
Restructuring expenses
|
18,824
|
|
|
—
|
|
|
—
|
|
|
18,824
|
|
|
—
|
|
|||||
Loan servicing rights change in fair value
|
4,041
|
|
|
1,802
|
|
|
1,236
|
|
|
6,362
|
|
|
1,236
|
|
|||||
Significant items
|
25,244
|
|
|
2,267
|
|
|
38,706
|
|
|
51,021
|
|
|
44,354
|
|
|||||
Income tax benefit
(1)
|
(8,835
|
)
|
|
(793
|
)
|
|
(12,785
|
)
|
|
(11,268
|
)
|
|
(14,762
|
)
|
|||||
Significant items, net of tax
|
16,409
|
|
|
1,474
|
|
|
25,921
|
|
|
39,753
|
|
|
29,592
|
|
|||||
Net income, excluding significant items
|
$
|
56,868
|
|
|
$
|
53,488
|
|
|
$
|
37,405
|
|
|
$
|
179,830
|
|
|
$
|
90,456
|
|
Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per share, as reported
|
$
|
0.56
|
|
|
$
|
0.73
|
|
|
$
|
0.23
|
|
|
$
|
1.95
|
|
|
$
|
1.42
|
|
Effect of significant items, net of tax
|
0.23
|
|
|
0.02
|
|
|
0.52
|
|
|
0.29
|
|
|
0.69
|
|
|||||
Diluted earnings per share, excluding significant items
|
$
|
0.79
|
|
|
$
|
0.75
|
|
|
$
|
0.75
|
|
|
$
|
2.24
|
|
|
$
|
2.11
|
|
Return on Average Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Return on average assets, as reported
|
0.86
|
%
|
|
1.14
|
%
|
|
0.37
|
%
|
|
1.03
|
%
|
|
0.79
|
%
|
|||||
Effect of significant items, net of tax
|
0.35
|
|
|
0.03
|
|
|
0.85
|
|
|
0.15
|
|
|
0.38
|
|
|||||
Return on average assets, excluding significant items
|
1.21
|
%
|
|
1.17
|
%
|
|
1.22
|
%
|
|
1.18
|
%
|
|
1.17
|
%
|
|||||
Return on Average Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Return on average shareholders' equity, as reported
|
6.1
|
%
|
|
8.0
|
%
|
|
2.9
|
%
|
|
7.2
|
%
|
|
6.7
|
%
|
|||||
Effect of significant items, net of tax
|
2.5
|
|
|
0.2
|
|
|
6.7
|
|
|
1.0
|
|
|
3.3
|
|
|||||
Return on average shareholders' equity, excluding significant items
|
8.6
|
%
|
|
8.2
|
%
|
|
9.6
|
%
|
|
8.2
|
%
|
|
10.0
|
%
|
(Dollars in thousands, except per share data)
|
|
September 30,
2017 |
|
June 30,
2017 |
|
December 31,
2016 |
|
September 30,
2016 |
||||||||
Tangible Book Value
|
|
|
|
|
|
|
|
|
||||||||
Shareholders' equity, as reported
|
|
$
|
2,673,089
|
|
|
$
|
2,639,442
|
|
|
$
|
2,581,526
|
|
|
$
|
2,563,666
|
|
Goodwill, CDI and noncompete agreements, net of tax
|
|
(1,153,576
|
)
|
|
(1,153,595
|
)
|
|
(1,155,617
|
)
|
|
(1,154,121
|
)
|
||||
Tangible shareholders' equity
|
|
$
|
1,519,513
|
|
|
$
|
1,485,847
|
|
|
$
|
1,425,909
|
|
|
$
|
1,409,545
|
|
Common shares outstanding
|
|
71,152
|
|
|
71,131
|
|
|
70,599
|
|
|
70,497
|
|
||||
Book value per share (shareholders' equity, as reported, divided by common shares outstanding)
|
|
$
|
37.57
|
|
|
$
|
37.11
|
|
|
$
|
36.57
|
|
|
$
|
36.37
|
|
Tangible book value per share (tangible shareholders' equity divided by common shares outstanding)
|
|
$
|
21.36
|
|
|
$
|
20.89
|
|
|
$
|
20.20
|
|
|
$
|
19.99
|
|
Tangible Shareholders' Equity to Tangible Assets
|
|
|
|
|
|
|
|
|
||||||||
Total assets, as reported
|
|
$
|
19,354,308
|
|
|
$
|
18,781,405
|
|
|
$
|
17,355,179
|
|
|
$
|
17,383,637
|
|
Goodwill, CDI and noncompete agreements, net of tax
|
|
(1,153,576
|
)
|
|
(1,153,595
|
)
|
|
(1,155,617
|
)
|
|
(1,154,121
|
)
|
||||
Tangible assets
|
|
$
|
18,200,732
|
|
|
$
|
17,627,810
|
|
|
$
|
16,199,562
|
|
|
$
|
16,229,516
|
|
Shareholders' equity to total assets
|
|
13.8
|
%
|
|
14.1
|
%
|
|
14.9
|
%
|
|
14.7
|
%
|
||||
Tangible shareholders' equity to tangible assets
|
|
8.3
|
%
|
|
8.4
|
%
|
|
8.8
|
%
|
|
8.7
|
%
|
|
Maturity as of September 30, 2017
(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
|
$
|
5,799
|
|
|
0.95
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
5,799
|
|
|
0.95
|
%
|
|
$
|
5,799
|
|
Government sponsored agencies
|
80,311
|
|
|
1.58
|
|
|
82,082
|
|
|
2.13
|
|
|
83,215
|
|
|
2.15
|
|
|
32,240
|
|
|
2.41
|
|
|
277,848
|
|
|
2.01
|
|
|
277,848
|
|
||||||
State and political subdivisions
|
10,296
|
|
|
3.15
|
|
|
74,285
|
|
|
2.22
|
|
|
124,829
|
|
|
2.71
|
|
|
143,209
|
|
|
2.81
|
|
|
352,619
|
|
|
2.66
|
|
|
352,619
|
|
||||||
Residential mortgage-backed securities
|
60,904
|
|
|
1.73
|
|
|
156,379
|
|
|
1.82
|
|
|
53,077
|
|
|
2.27
|
|
|
26,959
|
|
|
2.37
|
|
|
297,319
|
|
|
1.93
|
|
|
297,319
|
|
||||||
Collateralized mortgage obligations
|
192,020
|
|
|
2.48
|
|
|
439,226
|
|
|
2.47
|
|
|
184,090
|
|
|
2.62
|
|
|
64,093
|
|
|
2.87
|
|
|
879,429
|
|
|
2.53
|
|
|
879,429
|
|
||||||
Corporate bonds
|
19,074
|
|
|
1.59
|
|
|
37,754
|
|
|
1.99
|
|
|
106,299
|
|
|
3.62
|
|
|
15,614
|
|
|
2.70
|
|
|
178,741
|
|
|
2.98
|
|
|
178,741
|
|
||||||
Preferred stock and trust preferred securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,971
|
|
|
3.33
|
|
|
14,946
|
|
|
3.11
|
|
|
37,917
|
|
|
3.24
|
|
|
37,917
|
|
||||||
Total investment securities available-for-sale
|
368,404
|
|
|
2.11
|
|
|
789,726
|
|
|
2.26
|
|
|
574,481
|
|
|
2.75
|
|
|
297,061
|
|
|
2.75
|
|
|
2,029,672
|
|
|
2.44
|
|
|
2,029,672
|
|
||||||
Held-to-Maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
State and political subdivisions
|
85,395
|
|
|
2.22
|
|
|
249,159
|
|
|
3.03
|
|
|
149,527
|
|
|
3.91
|
|
|
172,594
|
|
|
3.47
|
|
|
656,676
|
|
|
3.24
|
|
|
655,594
|
|
||||||
Trust preferred securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|
4.75
|
|
|
500
|
|
|
4.75
|
|
|
365
|
|
||||||
Total investment securities held-to-maturity
|
85,395
|
|
|
2.22
|
|
|
249,159
|
|
|
3.03
|
|
|
149,527
|
|
|
3.91
|
|
|
173,094
|
|
|
3.47
|
|
|
657,176
|
|
|
3.24
|
|
|
655,959
|
|
||||||
Total investment securities
|
$
|
453,799
|
|
|
2.13
|
%
|
|
$
|
1,038,885
|
|
|
2.44
|
%
|
|
$
|
724,008
|
|
|
2.99
|
%
|
|
$
|
470,155
|
|
|
3.02
|
%
|
|
$
|
2,686,848
|
|
|
2.64
|
%
|
|
$
|
2,685,631
|
|
(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 September 30, 2017. Approximately 20% of the Corporation's investment securities at September 30, 2017 were variable-rate financial instruments.
|
|
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.
|
(Dollars in thousands)
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Available-for-sale:
|
|
|
|
|
||||
U.S. Treasury securities
|
|
$
|
5,799
|
|
|
$
|
5,793
|
|
Government sponsored agencies
|
|
277,848
|
|
|
215,011
|
|
||
State and political subdivisions
|
|
352,619
|
|
|
300,088
|
|
||
Residential mortgage-backed securities
|
|
297,319
|
|
|
272,282
|
|
||
Collateralized mortgage obligations
|
|
879,429
|
|
|
320,025
|
|
||
Corporate bonds
|
|
178,741
|
|
|
89,474
|
|
||
Preferred stock and trust preferred securities
|
|
37,917
|
|
|
32,291
|
|
||
Total investment securities available-for-sale
|
|
2,029,672
|
|
|
1,234,964
|
|
||
Held-to-maturity:
|
|
|
|
|
||||
State and political subdivisions
|
|
656,676
|
|
|
622,927
|
|
||
Trust preferred securities
|
|
500
|
|
|
500
|
|
||
Total investment securities held-to-maturity
|
|
657,176
|
|
|
623,427
|
|
||
Total investment securities
|
|
$
|
2,686,848
|
|
|
$
|
1,858,391
|
|
(Dollars in thousands)
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Commercial loan portfolio:
|
|
|
|
|
||||
Commercial
|
|
$
|
3,319,965
|
|
|
$
|
3,217,300
|
|
Commercial real estate:
|
|
|
|
|
||||
Owner-occupied
|
|
1,718,404
|
|
|
1,697,238
|
|
||
Non-owner occupied
|
|
2,514,538
|
|
|
2,217,594
|
|
||
Vacant land
|
|
83,036
|
|
|
58,308
|
|
||
Total commercial real estate
|
|
4,315,978
|
|
|
3,973,140
|
|
||
Real estate construction and land development
|
|
501,413
|
|
|
403,772
|
|
||
Subtotal - commercial loan portfolio
|
|
8,137,356
|
|
|
7,594,212
|
|
||
Consumer loan portfolio:
|
|
|
|
|
||||
Residential mortgage
|
|
3,221,307
|
|
|
3,086,474
|
|
||
Consumer installment
|
|
1,615,983
|
|
|
1,433,884
|
|
||
Home equity
|
|
858,722
|
|
|
876,209
|
|
||
Subtotal - consumer loan portfolio
|
|
5,696,012
|
|
|
5,396,567
|
|
||
Total loans
|
|
$
|
13,833,368
|
|
|
$
|
12,990,779
|
|
|
|
September 30, 2017
|
||||||||||||||
|
|
Due In
|
||||||||||||||
(Dollars in thousands)
|
|
1 Year
or Less
|
|
1 to 5
Years
|
|
Over 5
Years
|
|
Total
|
||||||||
Loan maturities:
|
|
|
|
|
|
|
|
|
||||||||
Commercial
|
|
$
|
1,118,455
|
|
|
$
|
1,759,917
|
|
|
$
|
441,593
|
|
|
$
|
3,319,965
|
|
Commercial real estate
|
|
552,946
|
|
|
2,506,392
|
|
|
1,256,640
|
|
|
4,315,978
|
|
||||
Real estate construction and land development
|
|
91,981
|
|
|
241,367
|
|
|
168,065
|
|
|
501,413
|
|
||||
Total
|
|
$
|
1,763,382
|
|
|
$
|
4,507,676
|
|
|
$
|
1,866,298
|
|
|
$
|
8,137,356
|
|
Percent of total
|
|
21.7
|
%
|
|
55.4
|
%
|
|
22.9
|
%
|
|
100.0
|
%
|
||||
Interest sensitivity of above loans:
|
|
|
|
|
|
|
|
|
||||||||
Fixed interest rates
|
|
$
|
659,451
|
|
|
$
|
3,018,839
|
|
|
$
|
1,003,850
|
|
|
$
|
4,682,140
|
|
Variable interest rates
|
|
1,103,931
|
|
|
1,488,837
|
|
|
862,448
|
|
|
3,455,216
|
|
||||
Total
|
|
$
|
1,763,382
|
|
|
$
|
4,507,676
|
|
|
$
|
1,866,298
|
|
|
$
|
8,137,356
|
|
|
|
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
|
|
(Dollars in thousands)
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Nonaccrual loans
(1)
:
|
|
|
|
|
||||
Commercial
|
|
$
|
15,648
|
|
|
$
|
13,178
|
|
Commercial real estate
|
|
25,150
|
|
|
19,877
|
|
||
Real estate construction and land development
|
|
78
|
|
|
80
|
|
||
Residential mortgage
|
|
8,646
|
|
|
6,969
|
|
||
Consumer installment
|
|
875
|
|
|
879
|
|
||
Home equity
|
|
3,908
|
|
|
3,351
|
|
||
Total nonaccrual loans
|
|
54,305
|
|
|
44,334
|
|
||
Other real estate and repossessed assets
|
|
10,605
|
|
|
17,187
|
|
||
Total nonperforming assets
|
|
64,910
|
|
|
61,521
|
|
||
Accruing troubled debt restructurings
|
|
|
|
|
||||
Commercial loan portfolio
|
|
40,886
|
|
|
45,388
|
|
||
Consumer loan portfolio
|
|
14,903
|
|
|
17,147
|
|
||
Total performing troubled debt restructurings
|
|
55,789
|
|
|
62,535
|
|
||
Total impaired assets
|
|
$
|
120,699
|
|
|
$
|
124,056
|
|
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
|
|
$
|
3,665
|
|
|
$
|
288
|
|
Consumer loan portfolio
|
|
2,367
|
|
|
995
|
|
||
Total accruing loans contractually past due 90 days or more as to interest or principal payments
|
|
$
|
6,032
|
|
|
$
|
1,283
|
|
Nonperforming loans as a percent of total loans
|
|
0.39
|
%
|
|
0.34
|
%
|
||
Nonperforming assets as a percent of total assets
|
|
0.34
|
%
|
|
0.35
|
%
|
||
Impaired assets as a percent of total assets
|
|
0.62
|
%
|
|
0.71
|
%
|
(1)
|
Includes nonaccrual troubled debt restructuring.
|
(Dollars in thousands)
|
|
Amount
|
|
Valuation
Allowance
|
|
Confirmed
Losses
|
|
Cumulative
Inherent
Loss
Percentage
|
|||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|||||||
Impaired loans – originated commercial loan portfolio:
|
|
|
|
|
|
|
|
|
|||||||
With valuation allowance and no charge-offs
|
|
$
|
40,596
|
|
|
$
|
1,959
|
|
|
$
|
—
|
|
|
5
|
%
|
With valuation allowance and charge-offs
|
|
8,675
|
|
|
1,222
|
|
|
11,640
|
|
|
63
|
%
|
|||
With charge-offs and no valuation allowance
|
|
5,389
|
|
|
—
|
|
|
6,033
|
|
|
53
|
%
|
|||
Without valuation allowance or charge-offs
|
|
27,102
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Total impaired loans to commercial borrowers
|
|
$
|
81,762
|
|
|
$
|
3,181
|
|
|
$
|
17,673
|
|
|
21
|
%
|
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
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Balance at beginning of period
|
|
$
|
50,894
|
|
|
$
|
43,997
|
|
|
$
|
44,334
|
|
|
$
|
62,225
|
|
Additions during period
|
|
13,923
|
|
|
5,370
|
|
|
39,005
|
|
|
16,110
|
|
||||
Principal balances charged off
|
|
(4,680
|
)
|
|
(2,093
|
)
|
|
(10,987
|
)
|
|
(10,313
|
)
|
||||
Transfers to other real estate/repossessed assets
|
|
(1,046
|
)
|
|
(1,609
|
)
|
|
(4,427
|
)
|
|
(4,511
|
)
|
||||
Returned to accrual status
|
|
(2,429
|
)
|
|
(700
|
)
|
|
(4,324
|
)
|
|
(4,917
|
)
|
||||
Payments received
|
|
(2,357
|
)
|
|
(3,668
|
)
|
|
(9,296
|
)
|
|
(17,297
|
)
|
||||
Balance at end of period
|
|
$
|
54,305
|
|
|
$
|
41,297
|
|
|
$
|
54,305
|
|
|
$
|
41,297
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||
(Dollars in thousands)
|
|
Number of
Borrowers
|
|
Amount
|
|
Number of
Borrowers |
|
Amount
|
||||||
$5,000,000 or more
|
|
1
|
|
|
$
|
5,225
|
|
|
—
|
|
|
$
|
—
|
|
$2,500,000 – $4,999,999
|
|
1
|
|
|
4,844
|
|
|
1
|
|
|
4,793
|
|
||
$1,000,000 – $2,499,999
|
|
3
|
|
|
4,768
|
|
|
7
|
|
|
10,526
|
|
||
$500,000 – $999,999
|
|
13
|
|
|
9,452
|
|
|
8
|
|
|
5,652
|
|
||
$250,000 – $499,999
|
|
18
|
|
|
6,218
|
|
|
10
|
|
|
3,809
|
|
||
Under $250,000
|
|
140
|
|
|
10,369
|
|
|
105
|
|
|
8,355
|
|
||
Total
|
|
176
|
|
|
$
|
40,876
|
|
|
131
|
|
|
$
|
33,135
|
|
|
|
Accruing TDRs
|
|
Nonaccrual TDRs
|
|
Total
|
||||||||||||||
(Dollars in thousands)
|
Current
|
|
Past due
31-90 days
|
|
Subtotal
|
|||||||||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial loan portfolio
|
|
$
|
37,859
|
|
|
$
|
3,027
|
|
|
$
|
40,886
|
|
|
$
|
19,342
|
|
|
$
|
60,228
|
|
Consumer loan portfolio
|
|
14,313
|
|
|
590
|
|
|
14,903
|
|
|
4,662
|
|
|
19,565
|
|
|||||
Total TDRs
|
|
$
|
52,172
|
|
|
$
|
3,617
|
|
|
$
|
55,789
|
|
|
$
|
24,004
|
|
|
$
|
79,793
|
|
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
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Balance at beginning of period
|
|
$
|
39,714
|
|
|
$
|
45,106
|
|
|
$
|
45,388
|
|
|
$
|
46,141
|
|
Additions for modifications
|
|
2,144
|
|
|
4,120
|
|
|
3,363
|
|
|
9,803
|
|
||||
Principal payments and pay-offs
|
|
(2,747
|
)
|
|
(3,005
|
)
|
|
(6,562
|
)
|
|
(8,086
|
)
|
||||
Transfers from nonaccrual status
|
|
2,110
|
|
|
—
|
|
|
3,286
|
|
|
970
|
|
||||
Transfers to nonaccrual status
|
|
(335
|
)
|
|
(298
|
)
|
|
(4,589
|
)
|
|
(2,905
|
)
|
||||
Balance at end of period
|
|
$
|
40,886
|
|
|
$
|
45,923
|
|
|
$
|
40,886
|
|
|
$
|
45,923
|
|
(Dollars in thousands)
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Composition of ORE:
|
|
|
|
|
||||
Vacant land
|
|
$
|
3,306
|
|
|
$
|
5,473
|
|
Commercial real estate properties
|
|
3,414
|
|
|
6,812
|
|
||
Residential real estate properties
|
|
3,346
|
|
|
4,527
|
|
||
Total ORE
|
|
$
|
10,066
|
|
|
$
|
16,812
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Balance at beginning of period
|
|
$
|
13,637
|
|
|
$
|
8,326
|
|
|
$
|
16,812
|
|
|
$
|
9,716
|
|
Additions attributable to acquisitions (at fair value)
|
|
—
|
|
|
13,227
|
|
|
—
|
|
|
13,227
|
|
||||
Additions attributable to foreclosures
|
|
1,563
|
|
|
1,790
|
|
|
5,339
|
|
|
3,945
|
|
||||
Write-downs to fair value
|
|
(550
|
)
|
|
(146
|
)
|
|
(1,323
|
)
|
|
(376
|
)
|
||||
Net payments received
|
|
(380
|
)
|
|
(86
|
)
|
|
(582
|
)
|
|
(171
|
)
|
||||
Dispositions
|
|
(4,204
|
)
|
|
(3,002
|
)
|
|
(10,180
|
)
|
|
(6,232
|
)
|
||||
Balance at end of period
|
|
$
|
10,066
|
|
|
$
|
20,109
|
|
|
$
|
10,066
|
|
|
$
|
20,109
|
|
(Dollars in thousands)
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Allowance for loan losses:
|
|
|
|
|
||||
Originated loans
|
|
$
|
85,181
|
|
|
$
|
78,268
|
|
Acquired loans
|
|
579
|
|
|
—
|
|
||
Total
|
|
$
|
85,760
|
|
|
$
|
78,268
|
|
Nonperforming loans
|
|
$
|
54,305
|
|
|
$
|
44,334
|
|
Allowance for loan losses (originated loans) as a percent of:
|
|
|
|
|
||||
Total originated loans
|
|
0.93
|
%
|
|
1.05
|
%
|
||
Nonperforming loans
|
|
157
|
%
|
|
177
|
%
|
||
Nonperforming loans, less impaired originated loans for which the expected loss has been charged-off
|
|
174
|
%
|
|
194
|
%
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
(Dollars in thousands)
|
|
September 30,
2017 |
|
June 30,
2017 |
|
September 30,
2016 |
|
September 30,
2017 |
|
September 30,
2016 |
||||||||||
Allowance for loan losses - originated loan portfolio
|
|
|
|
|
|
|
||||||||||||||
Allowance for loan losses - beginning of period
|
|
$
|
83,797
|
|
|
$
|
78,774
|
|
|
$
|
71,506
|
|
|
$
|
78,268
|
|
|
$
|
73,328
|
|
Provision for loan losses
|
|
4,921
|
|
|
6,229
|
|
|
4,103
|
|
|
15,200
|
|
|
8,603
|
|
|||||
Loan charge-offs:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
(3,521
|
)
|
|
(355
|
)
|
|
(284
|
)
|
|
(6,513
|
)
|
|
(5,302
|
)
|
|||||
Commercial real estate
|
|
(271
|
)
|
|
(371
|
)
|
|
(509
|
)
|
|
(687
|
)
|
|
(1,918
|
)
|
|||||
Real estate construction and land development
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
(9
|
)
|
|
(42
|
)
|
|||||
Residential mortgage
|
|
(174
|
)
|
|
(168
|
)
|
|
(362
|
)
|
|
(985
|
)
|
|
(791
|
)
|
|||||
Consumer installment
|
|
(1,312
|
)
|
|
(1,347
|
)
|
|
(1,595
|
)
|
|
(4,474
|
)
|
|
(3,502
|
)
|
|||||
Home equity
|
|
(164
|
)
|
|
(63
|
)
|
|
(80
|
)
|
|
(653
|
)
|
|
(384
|
)
|
|||||
Total loan charge-offs
|
|
(5,442
|
)
|
|
(2,304
|
)
|
|
(2,861
|
)
|
|
(13,321
|
)
|
|
(11,939
|
)
|
|||||
Recoveries of loans previously charged off:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
1,173
|
|
|
116
|
|
|
134
|
|
|
1,927
|
|
|
884
|
|
|||||
Commercial real estate
|
|
97
|
|
|
166
|
|
|
355
|
|
|
1,038
|
|
|
1,137
|
|
|||||
Residential mortgage
|
|
130
|
|
|
187
|
|
|
58
|
|
|
393
|
|
|
323
|
|
|||||
Consumer installment
|
|
455
|
|
|
600
|
|
|
458
|
|
|
1,559
|
|
|
1,277
|
|
|||||
Home equity
|
|
51
|
|
|
29
|
|
|
22
|
|
|
117
|
|
|
162
|
|
|||||
Total loan recoveries
|
|
1,906
|
|
|
1,098
|
|
|
1,027
|
|
|
5,034
|
|
|
3,783
|
|
|||||
Net loan charge-offs
|
|
(3,536
|
)
|
|
(1,206
|
)
|
|
(1,834
|
)
|
|
(8,287
|
)
|
|
(8,156
|
)
|
|||||
Allowance for loan losses - end of period
|
|
85,182
|
|
|
83,797
|
|
|
73,775
|
|
|
85,181
|
|
|
73,775
|
|
|||||
Allowance for loan losses - acquired loan portfolio
|
|
|
|
|
|
|
||||||||||||||
Allowance for loan losses - beginning of period
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Provision for loan losses
|
|
579
|
|
|
—
|
|
|
—
|
|
|
579
|
|
|
—
|
|
|||||
Allowance for loan losses - end of period
|
|
579
|
|
|
—
|
|
|
—
|
|
|
579
|
|
|
—
|
|
|||||
Total allowance for loan losses
|
|
$
|
85,761
|
|
|
$
|
83,797
|
|
|
$
|
73,775
|
|
|
$
|
85,760
|
|
|
$
|
73,775
|
|
Net loan charge-offs as a percent of average loans (annualized)
|
|
0.10
|
%
|
|
0.04
|
%
|
|
0.08
|
%
|
|
0.08
|
%
|
|
0.13
|
%
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||
(Dollars in thousands)
|
|
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
|
|
$
|
25,531
|
|
|
25
|
%
|
|
$
|
22,388
|
|
|
25
|
%
|
Commercial real estate
|
|
26,297
|
|
|
27
|
|
|
25,396
|
|
|
26
|
|
||
Real estate
construction and land development
|
|
4,269
|
|
|
5
|
|
|
3,417
|
|
|
4
|
|
||
Residential mortgage
|
|
14,493
|
|
|
20
|
|
|
13,760
|
|
|
20
|
|
||
Consumer Installment
|
|
10,333
|
|
|
16
|
|
|
8,907
|
|
|
17
|
|
||
Home equity
|
|
4,258
|
|
|
7
|
|
|
4,400
|
|
|
8
|
|
||
Subtotal — originated loans
|
|
85,181
|
|
|
100
|
%
|
|
78,268
|
|
|
100
|
%
|
||
Acquired loans
|
|
579
|
|
|
|
|
—
|
|
|
|
||||
Total
|
|
$
|
85,760
|
|
|
|
|
$
|
78,268
|
|
|
|
(Dollars in thousands)
|
|
Amount
|
|
Weighted
Average
Interest Rate
|
|||
2017 remaining maturities
|
|
$
|
753,290
|
|
|
0.8
|
%
|
2018 maturities
|
|
1,637,030
|
|
|
1.1
|
|
|
2019 maturities
|
|
334,734
|
|
|
1.1
|
|
|
2020 maturities
|
|
174,320
|
|
|
1.4
|
|
|
2021 maturities
|
|
136,830
|
|
|
1.6
|
|
|
2022 maturities and beyond
|
|
77,769
|
|
|
1.6
|
|
|
Total time deposits
|
|
$
|
3,113,973
|
|
|
1.1
|
%
|
|
|
September 30, 2017
|
|||||
(Dollars in thousands)
|
|
Amount
|
|
Percent
|
|||
Maturity:
|
|
|
|
|
|||
Within 3 months
|
|
$
|
449,291
|
|
|
29.6
|
%
|
After 3 but within 6 months
|
|
295,469
|
|
|
19.5
|
|
|
After 6 but within 12 months
|
|
546,839
|
|
|
36.0
|
|
|
After 12 months
|
|
226,483
|
|
|
14.9
|
|
|
Total
|
|
$
|
1,518,082
|
|
|
100.0
|
%
|
(Dollars in thousands)
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Long-term borrowings:
|
|
|
|
|
||||
Long-term FHLB advances
|
|
$
|
339,255
|
|
|
$
|
438,538
|
|
Securities sold under agreements to repurchase
|
|
3,005
|
|
|
19,144
|
|
||
Non-revolving line-of-credit
|
|
39,914
|
|
|
124,625
|
|
||
Subordinated debt obligations
|
|
15,671
|
|
|
15,540
|
|
||
Total long-term borrowings
|
|
$
|
397,845
|
|
|
$
|
597,847
|
|
(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
|
|
$
|
999,652
|
|
|
$
|
622,789
|
|
|
$
|
233,048
|
|
|
$
|
402,876
|
|
|
$
|
2,258,365
|
|
Loans to consumer borrowers
|
|
226,346
|
|
|
166,906
|
|
|
137,909
|
|
|
187,610
|
|
|
718,771
|
|
|||||
Total unused commitments to extend credit
|
|
1,225,998
|
|
|
789,695
|
|
|
370,957
|
|
|
590,486
|
|
|
2,977,136
|
|
|||||
Undisbursed loan commitments
|
|
566,029
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
566,029
|
|
|||||
Standby letters of credit
|
|
111,287
|
|
|
11,269
|
|
|
18,853
|
|
|
20,030
|
|
|
161,439
|
|
|||||
Total credit-related commitments
|
|
$
|
1,903,314
|
|
|
$
|
800,964
|
|
|
$
|
389,810
|
|
|
$
|
610,516
|
|
|
$
|
3,704,604
|
|
|
|
September 30, 2017
|
||||||||||
|
|
Leverage Ratio
|
|
Risk-Based Capital Ratios
|
||||||||
|
|
|
CET Tier 1
|
|
Tier 1
|
|
Total
|
|||||
Actual Capital Ratios:
|
|
|
|
|
|
|
|
|
||||
Chemical Financial Corporation
|
|
8.6
|
%
|
|
10.5
|
%
|
|
10.5
|
%
|
|
11.2
|
%
|
Chemical Bank
|
|
8.6
|
|
|
10.5
|
|
|
10.5
|
|
|
11.2
|
|
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
|
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||||||||||
|
|
Compared to Three Months Ended September 30, 2017
|
|
Compared to Three Months Ended September 30, 2016
|
||||||||||||||||||||
|
|
Increase (Decrease)
Due to Changes in |
|
|
|
Increase (Decrease)
Due to Changes in |
|
|
||||||||||||||||
(Dollars in thousands)
|
|
Average
Volume (1) |
|
Average
Yield/Rate (1) |
|
Combined Increase/
(Decrease) |
|
Average
Volume (1) |
|
Average
Yield/Rate (1) |
|
Combined Increase/
(Decrease) |
||||||||||||
Changes in Interest Income on Interest-Earning Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans
|
|
$
|
3,839
|
|
|
$
|
3,628
|
|
|
$
|
7,467
|
|
|
$
|
47,866
|
|
|
$
|
3,849
|
|
|
$
|
51,715
|
|
Taxable investment securities/other assets
|
|
1,580
|
|
|
414
|
|
|
1,994
|
|
|
5,597
|
|
|
1,835
|
|
|
7,432
|
|
||||||
Tax-exempt investment securities
|
|
106
|
|
|
126
|
|
|
232
|
|
|
2,386
|
|
|
(94
|
)
|
|
2,292
|
|
||||||
Interest-bearing deposits with the FRB and other banks
|
|
(14
|
)
|
|
223
|
|
|
209
|
|
|
176
|
|
|
601
|
|
|
777
|
|
||||||
Total change in interest income on interest-earning assets
|
|
5,511
|
|
|
4,391
|
|
|
9,902
|
|
|
56,025
|
|
|
6,191
|
|
|
62,216
|
|
||||||
Changes in Interest Expense on Interest-Bearing Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing demand deposits
|
|
46
|
|
|
(14
|
)
|
|
32
|
|
|
173
|
|
|
187
|
|
|
360
|
|
||||||
Savings deposits
|
|
289
|
|
|
649
|
|
|
938
|
|
|
1,215
|
|
|
2,021
|
|
|
3,236
|
|
||||||
Time deposits
|
|
26
|
|
|
1,348
|
|
|
1,374
|
|
|
1,899
|
|
|
1,595
|
|
|
3,494
|
|
||||||
Short-term borrowings
|
|
645
|
|
|
1,287
|
|
|
1,932
|
|
|
4,395
|
|
|
1,737
|
|
|
6,132
|
|
||||||
Long-term borrowings
|
|
(230
|
)
|
|
85
|
|
|
(145
|
)
|
|
103
|
|
|
1,238
|
|
|
1,341
|
|
||||||
Total change in interest expense on interest-bearing liabilities
|
|
776
|
|
|
3,355
|
|
|
4,131
|
|
|
7,785
|
|
|
6,778
|
|
|
14,563
|
|
||||||
Total Change in Net Interest Income (FTE)
(2)
|
|
$
|
4,735
|
|
|
$
|
1,036
|
|
|
$
|
5,771
|
|
|
$
|
48,240
|
|
|
$
|
(587
|
)
|
|
$
|
47,653
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(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.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
(Dollars in thousands)
|
|
September 30,
2017 |
|
June 30,
2017 |
|
September 30,
2016 |
|
September 30,
2017 |
|
September 30,
2016 |
||||||||||
Noninterest income
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Service charges and fees on deposit accounts
|
|
$
|
9,147
|
|
|
$
|
8,777
|
|
|
$
|
7,665
|
|
|
$
|
25,928
|
|
|
$
|
19,722
|
|
Wealth management revenue
|
|
6,188
|
|
|
6,958
|
|
|
5,584
|
|
|
18,973
|
|
|
16,567
|
|
|||||
Electronic banking fees
|
|
4,370
|
|
|
7,482
|
|
|
5,533
|
|
|
18,669
|
|
|
15,237
|
|
|||||
Net gain on sale of loans and other mortgage banking revenue
|
|
5,241
|
|
|
9,879
|
|
|
4,439
|
|
|
24,280
|
|
|
7,439
|
|
|||||
Other fees for customer services
|
|
1,749
|
|
|
1,739
|
|
|
1,325
|
|
|
5,055
|
|
|
3,647
|
|
|||||
Title insurance commissions
|
|
505
|
|
|
513
|
|
|
552
|
|
|
1,525
|
|
|
1,381
|
|
|||||
Gain on sale of investment securities
|
|
1
|
|
|
77
|
|
|
16
|
|
|
168
|
|
|
53
|
|
|||||
Bank-owned life insurance
|
|
1,124
|
|
|
1,106
|
|
|
446
|
|
|
3,441
|
|
|
879
|
|
|||||
Rental income
|
|
280
|
|
|
139
|
|
|
151
|
|
|
578
|
|
|
440
|
|
|||||
Gain on sale of closed branch offices and other assets
|
|
—
|
|
|
—
|
|
|
309
|
|
|
—
|
|
|
570
|
|
|||||
Other
|
|
3,517
|
|
|
4,898
|
|
|
1,750
|
|
|
13,083
|
|
|
2,151
|
|
|||||
Total noninterest income
|
|
$
|
32,122
|
|
|
$
|
41,568
|
|
|
$
|
27,770
|
|
|
$
|
111,700
|
|
|
$
|
68,086
|
|
Loan servicing rights change in
fair value (gains) losses
(1)
|
|
4,041
|
|
|
1,802
|
|
|
1,236
|
|
|
6,362
|
|
|
1,236
|
|
|||||
Noninterest income excluding loan servicing rights change in fair value
(1)
|
|
$
|
28,081
|
|
|
$
|
39,766
|
|
|
$
|
26,534
|
|
|
$
|
105,338
|
|
|
$
|
66,850
|
|
Noninterest income
as a percentage of:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue (net interest income plus noninterest income)
|
|
18.3
|
%
|
|
23.2
|
%
|
|
22.3
|
%
|
|
21.3
|
%
|
|
21.5
|
%
|
|||||
Average total assets
|
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|
0.6
|
|
|
0.7
|
|
|||||
Net revenue, excluding the change in fair value of loan servicing rights
(1)
|
|
16.4
|
|
|
22.4
|
|
|
21.5
|
|
|
20.4
|
|
|
21.2
|
|
|||||
Average total assets, excluding the change in fair value of loan servicing rights
(1)
|
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
|
0.6
|
|
|
0.7
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
(Dollars in thousands)
|
September 30, 2017
|
|
June 30,
2017 |
|
September 30, 2016
|
|
September 30, 2017
|
|
September 30, 2016
|
||||||||||
Operating expense
|
|
|
|
|
|
|
|
|
|
||||||||||
Salaries and wages
|
$
|
44,641
|
|
|
$
|
44,959
|
|
|
$
|
33,841
|
|
|
$
|
138,126
|
|
|
$
|
87,471
|
|
Employee benefits
|
7,980
|
|
|
7,642
|
|
|
6,724
|
|
|
27,344
|
|
|
20,111
|
|
|||||
Occupancy
|
6,871
|
|
|
8,745
|
|
|
5,462
|
|
|
23,008
|
|
|
15,881
|
|
|||||
Equipment and software
|
7,582
|
|
|
8,149
|
|
|
6,420
|
|
|
24,248
|
|
|
15,699
|
|
|||||
Outside processing and service fees
|
9,626
|
|
|
8,924
|
|
|
5,365
|
|
|
26,061
|
|
|
13,909
|
|
|||||
FDIC insurance premiums
|
2,768
|
|
|
2,460
|
|
|
1,849
|
|
|
6,634
|
|
|
4,594
|
|
|||||
Professional fees
|
3,489
|
|
|
2,567
|
|
|
1,472
|
|
|
8,024
|
|
|
3,528
|
|
|||||
Intangible asset amortization
|
1,526
|
|
|
1,525
|
|
|
1,292
|
|
|
4,564
|
|
|
3,681
|
|
|||||
Advertising and marketing
|
980
|
|
|
2,098
|
|
|
981
|
|
|
5,103
|
|
|
2,540
|
|
|||||
Postage and express mail
|
1,221
|
|
|
1,486
|
|
|
818
|
|
|
4,258
|
|
|
2,668
|
|
|||||
Training, travel and other employee expenses
|
1,537
|
|
|
1,785
|
|
|
1,093
|
|
|
4,946
|
|
|
2,760
|
|
|||||
Telephone
|
907
|
|
|
1,038
|
|
|
708
|
|
|
2,933
|
|
|
2,052
|
|
|||||
Supplies
|
575
|
|
|
773
|
|
|
519
|
|
|
2,035
|
|
|
1,630
|
|
|||||
Donations
|
515
|
|
|
690
|
|
|
345
|
|
|
1,723
|
|
|
1,335
|
|
|||||
Credit-related expenses
|
1,874
|
|
|
1,895
|
|
|
(371
|
)
|
|
4,969
|
|
|
(1,672
|
)
|
|||||
Merger expenses
|
2,379
|
|
|
465
|
|
|
37,470
|
|
|
7,011
|
|
|
43,118
|
|
|||||
Restructuring expenses
|
18,824
|
|
|
—
|
|
|
—
|
|
|
18,824
|
|
|
—
|
|
|||||
Impairment of income tax credit
|
3,095
|
|
|
—
|
|
|
—
|
|
|
3,095
|
|
|
—
|
|
|||||
Other
|
3,149
|
|
|
3,036
|
|
|
2,156
|
|
|
9,066
|
|
|
4,811
|
|
|||||
Total operating expenses
|
$
|
119,539
|
|
|
$
|
98,237
|
|
|
$
|
106,144
|
|
|
$
|
321,972
|
|
|
$
|
224,116
|
|
Core operating expenses (excludes merger expenses, restructuring expenses and impairment of income tax credits (non-GAAP))
(2)
|
$
|
95,241
|
|
|
$
|
97,772
|
|
|
$
|
68,674
|
|
|
$
|
293,042
|
|
|
$
|
180,998
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Full-time equivalent staff (at period end)
|
3,113
|
|
|
3,364
|
|
|
3,282
|
|
|
3,113
|
|
|
3,282
|
|
|||||
Average assets
|
$18,858,148
|
|
$18,264,699
|
|
$12,250,730
|
|
$18,204,024
|
|
$10,281,932
|
||||||||||
Efficiency ratio - GAAP
|
68.0
|
%
|
|
54.7
|
%
|
|
85.2
|
%
|
|
61.5
|
%
|
|
70.8
|
%
|
|||||
Efficiency ratio - adjusted non-GAAP
(2)
|
51.2
|
%
|
|
52.2
|
%
|
|
52.7
|
%
|
|
57.0
|
%
|
|
54.7
|
%
|
|||||
Total operating expenses as a percentage of total average assets
|
0.6
|
%
|
|
0.5
|
%
|
|
0.9
|
%
|
|
1.8
|
%
|
|
2.2
|
%
|
|||||
Total operating expenses as a percentage of total average assets - adjusted non-GAAP
(1)
|
0.5
|
%
|
|
0.5
|
%
|
|
0.6
|
%
|
|
1.6
|
%
|
|
1.8
|
%
|
(1)
|
Core operating expenses, which excludes merger expenses, restructuring expenses and impairment of income tax credit, and adjusted total operating expenses as a percentage of total average assets are non-GAAP financial measures. Please refer to the section entitled
"Non-GAAP Financial Measures."
|
(2)
|
The adjusted efficiency rat
i
o, which excludes merger expenses, restructuring expenses, the change in fair value in loan servicing rights, amortization of intangibles, impairment of federal housing tax credits, net interest income FTE adjustment, gains from sale of investment securities and closed branch locations, is a non-GAAP financial measure. Please refer to the section entitled
Non-GAAP Financial Measures."
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||
|
September 30,
2017 |
|
June 30,
2017 |
|
September 30,
2016 |
|
September 30,
2017 |
|
September 30,
2016 |
||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Rate
|
|
Amount
|
Rate
|
|
Amount
|
Rate
|
|
Amount
|
Rate
|
|
Amount
|
Rate
|
|||||||||||||||
Tax at statutory rate
|
$
|
17,749
|
|
35.0
|
%
|
|
$
|
26,268
|
|
35.0
|
%
|
|
$
|
5,016
|
|
35.0
|
%
|
|
$
|
64,968
|
|
35.0
|
%
|
|
$
|
29,400
|
|
35.0
|
%
|
Changes resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Tax-exempt interest income
|
(3,033
|
)
|
(6.0
|
)
|
|
(1,832
|
)
|
(2.4
|
)
|
|
(1,321
|
)
|
(9.2
|
)
|
|
(6,622
|
)
|
(3.6
|
)
|
|
(3,599
|
)
|
(4.3
|
)
|
|||||
State taxes, net of federal benefit
|
(336
|
)
|
(0.7
|
)
|
|
258
|
|
0.3
|
|
|
(803
|
)
|
(5.6
|
)
|
|
134
|
|
0.2
|
|
|
(803
|
)
|
(1.0
|
)
|
|||||
Change in valuation allowance
|
11
|
|
—
|
|
|
38
|
|
—
|
|
|
(29
|
)
|
(0.2
|
)
|
|
60
|
|
—
|
|
|
(29
|
)
|
—
|
|
|||||
Bank-owned life insurance adjustments
|
(344
|
)
|
(0.7
|
)
|
|
(335
|
)
|
(0.4
|
)
|
|
(169
|
)
|
(1.2
|
)
|
|
(1,023
|
)
|
(0.6
|
)
|
|
(524
|
)
|
(0.6
|
)
|
|||||
Director plan change in control
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
(525
|
)
|
(3.7
|
)
|
|
—
|
|
—
|
|
|
(525
|
)
|
(0.6
|
)
|
|||||
Income tax credits, net
|
(3,941
|
)
|
(7.7
|
)
|
|
(1,102
|
)
|
(1.5
|
)
|
|
(797
|
)
|
(5.6
|
)
|
|
(5,738
|
)
|
(3.1
|
)
|
|
(2,428
|
)
|
(2.9
|
)
|
|||||
Nondeductible transaction expenses
|
328
|
|
0.6
|
|
|
—
|
|
—
|
|
|
2,100
|
|
14.7
|
|
|
328
|
|
0.2
|
|
|
2,100
|
|
2.5
|
|
|||||
Tax detriment (benefits) in excess of compensation costs on share-based payments
(1)
|
511
|
|
1.0
|
|
|
(248
|
)
|
(0.3
|
)
|
|
(752
|
)
|
(5.2
|
)
|
|
(5,871
|
)
|
(3.2
|
)
|
|
(1,163
|
)
|
(1.4
|
)
|
|||||
Other, net
|
(692
|
)
|
(1.3
|
)
|
|
(11
|
)
|
—
|
|
|
128
|
|
0.9
|
|
|
(690
|
)
|
(0.4
|
)
|
|
708
|
|
0.8
|
|
|||||
Income tax expense
|
$
|
10,253
|
|
20.2
|
%
|
|
$
|
23,036
|
|
30.7
|
%
|
|
$
|
2,848
|
|
19.9
|
%
|
|
$
|
45,546
|
|
24.5
|
%
|
|
$
|
23,137
|
|
27.5
|
%
|
(1)
|
Represents excess tax benefits resulting from the exercise or settlement of share-based payment transactions.
|
|
|
Gradual Change
|
|
Immediate
Change
|
||||||||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Twelve month interest rate change projection (in basis points)
|
|
-200
|
|
-100
|
|
0
|
|
+100
|
|
+200
|
|
+400
|
||||||
Percent change in net interest income vs. constant rates
|
|
(4.7
|
)%
|
|
(1.8
|
)%
|
|
—
|
%
|
|
(0.6
|
)%
|
|
(2.0
|
)%
|
|
(7.0
|
)%
|
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
|
)%
|
|
|
Issuer Purchases of Equity Securities
|
||||||||||
Period Beginning on First Day of Month Ended
|
|
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
|
||||
July 31, 2017
|
|
11,395
|
|
|
$
|
48.77
|
|
|
—
|
|
|
500,000
|
August 31, 2017
|
|
9,229
|
|
|
46.17
|
|
|
—
|
|
|
500,000
|
|
September 30, 2017
|
|
28,281
|
|
|
46.63
|
|
|
—
|
|
|
500,000
|
|
Total
|
|
48,905
|
|
|
$
|
47.04
|
|
|
—
|
|
|
|
(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 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 stock on the date of exercise or date of vesting, as applicable.
|
Exhibit
Number
|
|
Document
|
|
|
|
||
3.1
|
|
|
Restated Articles of Incorporation. Previously filed as Exhibit 3.1 to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed with the SEC on May 10, 2017. Here incorporated by reference.
|
|
|
||
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.
|
|
|
||
10.1
|
|
|
Employment agreement between David T. Provost and Chemical Financial Corporation, dated August 9, 2017.
|
|
|
|
|
10.2
|
|
|
Employment agreement between Gary Torgow and Chemical Financial Corporation, dated August 9, 2017.
|
|
|
|
|
10.3
|
|
|
Employment agreement between Robert Rathbun and Chemical Bank, dated November 3, 2017.
|
|
|
|
|
10.4
|
|
|
Employment agreement between Thomas W. Kohn and Chemical Bank, dated November 3, 2017.
|
|
|
|
|
10.5
|
|
|
General Release agreement between David B. Ramaker and Chemical Financial Corporation, dated August 9, 2017.
|
|
|
|
|
31.1
|
|
|
Certification of Chief Executive Officer.
|
|
|
||
31.2
|
|
|
Certification of Chief Financial Officer.
|
|
|
||
32.1
|
|
|
Certification pursuant to 18 U.S.C. §1350.
|
|
|
||
101.1
|
|
|
Interactive Data File.
|
|
|
|
|
|
CHEMICAL FINANCIAL CORPORATION
|
|
|
|
|
|
Date:
|
November 8, 2017
|
By:
|
/s/ David T. Provost
|
|
|
|
David T. Provost
|
|
|
|
Chief Executive Officer and President
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date:
|
November 8, 2017
|
By:
|
/s/ Dennis L. Klaeser
|
|
|
|
Dennis L. Klaeser
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
Exhibit
Number
|
|
Document
|
|
|
|
||
|
|
|
|
|
|
|
|
3.1
|
|
|
|
|
|
||
3.2
|
|
|
|
|
|
||
4.1
|
|
|
|
|
|
||
4.2
|
|
|
|
|
|
|
|
10.1
|
|
|
|
|
|
|
|
10.2
|
|
|
|
|
|
|
|
10.3
|
|
|
|
|
|
|
|
10.4
|
|
|
|
|
|
|
|
10.5
|
|
|
|
|
|
||
31.1
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
|
||
101.1
|
|
|
Interactive Data File.
|
|
|
|
1.
|
Employment; Term.
Subject to the terms and conditions of this Agreement, Chemical hereby employs Executive under the terms of this Agreement, and Executive hereby accepts such employment terms for an initial one (1) year period commencing September 1, 2017 (the “
Effective Date
”) and ending August 31, 2018 (the “
Initial Term
”), unless sooner terminated as provided in Section 5 below. Following the Initial Term, unless one party provides the other with thirty (30) days’ advance written notice of non-renewal, this Agreement automatically shall renew on the anniversary of the Effective Date for successive one (1) year periods (each such period, a “
Renewal Term
”), except and until terminated as provided in Section 5 below. The Initial Term and all Renewal Terms together shall constitute the “
Term
” of this Agreement. In the event the Corporation provides Executive with notice of non-renewal, Executive shall receive Severance for Termination Without Cause, as provided in Section 6(b).
|
2.
|
Position; Duties.
Executive shall serve as Chemical’s Chief Executive Officer and President and shall perform such services for Chemical as are customarily associated with such positions and as otherwise may be assigned to Executive from time to time by Chemical’s Board of Directors (the “
Board
”), including positions with Chemical’s Affiliates as directed by the Board. Executive shall devote the majority of his business time to the affairs of Chemical and to his duties hereunder; provided, however, 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 to Chemical. Executive shall perform his Chemical employment duties diligently and to the best of his ability, in compliance with Chemical’s policies and procedures, and the laws and regulations that apply to Chemical’s business. For purposes of this Agreement,
|
3.
|
Compensation and Benefits.
As compensation for the services to be rendered by Executive under this Agreement, Chemical shall provide the following compensation and benefits during Executive’s employment Term:
|
(a)
|
Base Salary.
Chemical shall pay Executive an annual base salary of one dollar ($1.00) (the “
Base Salary
”), which shall be paid on the first regular pay date after September 1 each year. In the event that Executive’s Base Salary is increased during the Term, the Base Salary shall be payable in equal installments in accordance with Chemical’s then customary payroll practices. Executive’s Base Salary shall be reviewed from time to time by the Board (and no less often than annually) beginning in 2018 and may be increased or decreased in the sole discretion of the Board.
|
(b)
|
Stock Grant
. On September 1, 2017, Chemical shall provide Executive with a fully-vested grant of 23,000 shares of Chemical’s Common Stock.
|
(c)
|
Bonus and Equity Programs.
Executive shall be eligible to participate in Chemical’s annual bonus and equity programs for senior executives, based upon Executive’s and Chemical’s achievement of certain individual and Company goals as established by Chemical’s Compensation Committee.
|
(d)
|
Vacation.
Executive shall be entitled to thirty (30) paid vacation days, to be accrued and used in accordance with Chemical’s vacation policy. Upon employment termination, any accrued and unused vacation for the year of termination, shall be paid to Executive.
|
(e)
|
Health Care Stipend.
Executive shall receive an annual taxable stipend for health care payments under Chemical’s group health care plan in the amount of $20,000, as may be adjusted from time to time, payable in accordance with Chemical’s normal payroll practices.
|
(f)
|
Auto Allowance
. Executive shall receive a monthly auto allowance of nine hundred dollars ($900.00), as may be adjusted from time to time, payable in accordance with Chemical’s normal payroll practices.
|
(g)
|
Country Clubs
. Executive shall be reimbursed for memberships in two (2) country clubs of his selection.
|
(h)
|
General Benefits.
Executive shall be entitled to such other benefits, and to participate in such benefit plans, as are generally made available to similarly situated employees of Chemical from time to time, subject to Chemical’s policies, and the terms and conditions of any applicable benefit plans. Nothing in this Agreement shall be deemed to alter Chemical’s rights to modify or terminate any such plans or programs in its sole discretion.
|
(i)
|
Withholdings.
Chemical shall withhold from any amounts payable under this Agreement such federal, state and local taxes as Chemical determines are required to be withheld pursuant to applicable law.
|
4.
|
Reimbursement of Expenses.
Chemical shall reimburse Executive for all reasonable ordinary and necessary business expenses incurred by Executive in connection with the performance of his duties hereunder, including but not limited to Executive’s fees and expenses for attendance at banking-related conventions and similar events, reasonable professional association and seminar expenses and other expenses authorized by Chemical, upon submission of proper documentation for tax and accounting purposes in compliance with Chemical’s reimbursement policies in effect from time to time. Such reimbursements shall be made promptly but in no event later than the last day of the calendar year following the calendar year in which an expense is incurred. For purposes of reimbursements subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “
Code
”), the amount of expenses eligible for reimbursement during one (1) year shall not affect the expenses eligible for reimbursement in any other year, and is not subject to liquidation or exchange for another benefit.
|
5.
|
Termination.
The employment of Executive under this Agreement shall terminate as of the earliest Termination Date to occur. Executive’s “
Termination Date
” shall be as follows:
|
(a)
|
Death.
Automatically effective upon Executive’s death.
|
(b)
|
Disability.
By Chemical, effective upon written notice to Executive in the event of Executive’s permanent and total disability, as defined under Chemical’s long-term disability plan in effect at such time (“
Disability
”).
|
(c)
|
For Cause.
By Chemical, effective upon written notice to Executive for Cause, unless otherwise specified in this Section 5(c). For purposes of this Agreement, “
Cause
” means: (i) Executive’s material breach of any provision in this Agreement; if the breach is curable, it shall constitute Cause only if it continues uncured for a period of twenty (20) days after Executive’s receipt of written notice of such breach by Chemical; (ii) Executive’s failure or refusal, in any material manner to perform all lawful services required of him in his employment position with Chemical, which failure or refusal continues for more than twenty (20) days after Executive’s receipt of written notice of such deficiency; (iii) Executive’s commission of fraud, embezzlement, theft, or a crime constituting moral turpitude, whether or not involving Chemical, which in the reasonable good faith judgment of the Board, renders Executive’s continued employment harmful to Chemical; (iv) Executive’s misappropriation of Chemical’s assets or property, including without limitation, obtaining material reimbursement through financial vouchers or expense reports; or (v) Executive’s conviction or the entry of a plea of guilty or no contest by Executive with respect to any felony or other crime which, in the reasonable good faith judgment of the Board, adversely affects Chemical, its reputation.
|
(d)
|
Without Cause.
By Chemical, effective upon thirty (30) days’ written notice to Executive at any time for any reason other than for Cause or Executive’s Disability (“
Termination Without Cause
”).
|
(e)
|
Resignation.
By Executive, effective upon thirty (30) days’ written notice to Chemical at any time for any reason.
|
(f)
|
Good Reason
. By Executive, in the event of Good Reason, as defined below. For purposes of this Agreement, “Good Reason” means the occurrence of any of the following events without the written consent of Executive:.
|
(i)
|
any material reduction in Executive’s base salary (if more than one dollar ($1.00) annually), as it may be adjusted from time to time
|
(ii)
|
any material reduction in the status, position or responsibilities of Executive;
|
(iii)
|
any requirement by Chemical (without Executive’s consent) that Executive be principally based at any office or location more than fifty (50) miles from Executive’s principal work location as of the effective date of this Agreement; or
|
(iv)
|
any material breach of this Agreement by Chemical.
|
(g)
|
During any notice period under Sections 5(c), 5(d), or 5(e), Chemical may, in its sole discretion, relieve Executive of some or all of his duties during the notice period, but Chemical shall continue to provide Executive with his full salary, compensation, equity vesting, and benefits during such period.
|
6.
|
Effect of Termination.
|
(a)
|
Generally.
When Executive’s employment with Chemical is terminated for any reason, Executive, or his estate, as the case may be, shall be entitled to receive the compensation and benefits earned through the applicable Termination Date, along with reimbursement for any approved business expenses that Executive has timely submitted for reimbursement in accordance with Chemical’s expense reimbursement policy or practice.
|
(b)
|
Separation Benefits upon Certain Terminations.
|
(i)
|
Termination Without Cause.
|
(A)
|
If Chemical terminates Executive’s employment pursuant to a Termination Without Cause, Executive shall be entitled to receive severance in the amount of two (2) times Executive’s then Base Salary, disregarding any Base Salary reduction due to a Good Reason termination, plus two (2) times the average of Executive’s bonuses under Chemical’s annual executive incentive plan for each of the three most recent complete calendar years of Executive’s employment with Chemical (including for such purpose, complete calendar years with Talmer Bank and Trust, if applicable), and with each bonus calculated as the higher of the actual bonus, or one million five hundred dollars ($1,500,000) per year (“
Severance
”). The Severance is conditioned upon Executive and Chemical executing a mutually agreeable release of claims, in substantially the form attached hereto as Appendix A (the “
Release
”), which
|
(B)
|
If Executive incurs a Termination Without Cause within two (2) years following the date of a Change in Control of Chemical, upon Executive’s execution of the aforementioned Release, the amount of Executive’s Severance, calculated in accordance with (A) above, shall be paid subject to the same timing constraints as set forth herein but contributed directly to the Executive-designated Community Foundation of Southeastern Michigan - Donor Advised Fund, in the form of a cash, lump sum payment. At the same time, and in the spirit of voluntary generosity to the community and not as compensation to Executive, Chemical shall one hundred percent (100%) match the aforementioned contribution to the same Executive-designated charity, also in the form of a cash, lump sum contribution. For purposes of this Agreement, Change in Control shall be defined as the occurrence of any of the following events: (1) 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 fifty percent (50%) of the total fair market value or total voting power of the stock of the Corporation; (2) the majority of the members of the Corporation’s Board are replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of appointment or election; or (3) 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 fifty percent (50%) of the total gross fair market value of the Corporation’s assets in a single transaction or within a 12-month period ending with the most recent acquisition. For purposes 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. 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 (B)(1) 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
|
(C)
|
Notwithstanding anything in this Agreement to the contrary, any payment or benefit to be provided to Executive, whether pursuant to this Agreement or otherwise, that is a “
Parachute Payment
” as defined in Code Section 280G(b)(2), shall be reduced to the extent necessary so that the benefits payable or to be provided to Executive under this Agreement that are Parachute Payments, as well as any Parachute Payments provided outside of this Agreement shall not cause Chemical or any Affiliate to have paid an “
Excess Parachute Payment
” as defined in Code Section 280G(b)(1). If it is established that an Excess Parachute Payment has occurred or shall occur under this Agreement or otherwise, any remaining Parachute Payments shall be reduced to ensure that the total payments to Executive do not exceed 2.99 times Executive’s “
Base Amount
” as defined in Code Section 280G(b)(3).
|
(ii)
|
Death
. For avoidance of doubt,
the termination of Executive’s employment as a result of his death shall
not constitute a Termination Without Cause triggering the rights described in this Section 6(b).
|
(c)
|
Application of Internal Revenue Code Section 409A.
|
(i)
|
All payments and benefits provided under this Agreement are intended to be exempt from, or in accordance with, Code Section 409A, and the Agreement is to be interpreted accordingly. Each installment payment is intended to constitute a separate benefit and terms such as “employment termination,” “termination from employment” or like terms are intended to constitute a Separation from Service, as defined below. To the extent exempt from Code Section 409A, payments are intended to be exempt under the short term deferral exemption or partially exempt under the involuntary separation pay plan exemption. Notwithstanding the forgoing, Chemical has no responsibility for any taxes, penalties or interest incurred by Executive in connection with payments and benefits provided under this Agreement, including any imposed by Code Section 409A.
|
(ii)
|
Despite other payment timing provisions in this Agreement, any payments and benefits provided under this Section 6 that constitute nonqualified deferred compensation that are subject to Code Section 409A, shall not commence in connection with Executive’s termination of employment unless and until Executive has also incurred a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h)) (a “
Separation From Service).
However, if Chemical determines that the Severance is subject to Code Section 409A, and Executive is a “
Specified Employee
” (as defined under Code Section 409A) at the time of Separation from Service, then, solely to the extent necessary to avoid adverse tax consequences to Executive under Code Section 409A, the timing of the Severance payments shall be delayed until the earlier to occur of: (i) the date that is six (6) months and one (1) day after Executive’s Separation From
|
(d)
|
No Further Obligations.
Except as expressly provided above or as otherwise required by law, Chemical shall have no obligations to Executive in the event of the termination of this Agreement for any reason.
|
7.
|
Representations of Executive.
Executive represents and warrants that he is not obligated or restricted under any agreement (including any non-competition or confidentiality agreement), judgment, decree, order or other restraint of any kind that could impair his ability to perform the duties and obligations required hereunder. Executive further agrees that he shall not divulge to Chemical any confidential information and/or trade secrets belonging to others, including Executive’s former employers, nor shall Chemical seek to elicit from Executive such information. Consistent with the foregoing, Executive shall not provide to Chemical, and Chemical shall not request, any documents or copies of documents containing such information.
|
8.
|
Confidential Information.
|
(a)
|
Executive acknowledges that Chemical has and shall give Executive access to certain highly-sensitive, confidential, and proprietary information belonging to Chemical, its Affiliates or third parties who may have furnished such information under obligations of confidentiality, relating to and used in Chemical’s Business (collectively, “
Confidential Information
”). Executive acknowledges that, unless otherwise available to the public, Confidential Information includes, but is not limited to, the following categories of confidential or proprietary information and material: financial statements and information; budgets, forecasts, and projections; business and strategic plans; marketing, sales, and distribution strategies; research and development projects; records relating to any intellectual property developed by, owned by, controlled, or maintained by Chemical or its Affiliates; information related to Chemical’s or its Affiliates’ inventions, research, products, designs, methods, formulae, techniques, systems, processes; customer lists; non-public information relating to Chemical’s or its Affiliates’ customers, suppliers, distributors, or investors; the specific terms of Chemical’s or its’ Affiliates’ agreements or arrangements, whether oral or written, with any customer, supplier, vendor, or contractor with which Chemical or its Affiliates may be associated from time to time; and any and all information relating to the operation of Chemical’s or its Affiliates’ business which Chemical or its Affiliates may from time to time designate as confidential or proprietary or that Executive reasonably knows should be, or has been, treated by Chemical or its Affiliates as confidential or proprietary. Confidential Information encompasses all formats in which information is preserved, whether electronic, print, or any other form, including all originals, copies, notes, or other reproductions or replicas thereof.
|
(b)
|
Confidential Information does not include any information that: (i) at the time of disclosure is generally known to, or readily ascertainable by, the public; (ii) becomes known to the public
|
(c)
|
Executive acknowledges that Confidential Information owned or licensed by Chemical or its Affiliates is unique, valuable, proprietary and confidential; derives independent actual or potential commercial value from not being generally known or available to the public; and is subject to reasonable efforts to maintain its secrecy. Executive hereby relinquishes, and agrees that he shall not at any time claim, any right, title or interest of any kind in or to any Confidential Information.
|
(d)
|
During and after his employment with Chemical, Executive shall hold in trust and confidence all Confidential Information, and shall not disclose any Confidential Information to any person or entity, except in the course of performing duties assigned by Chemical or as authorized in writing by Chemical. Executive further agrees that during and after his employment with Chemical, Executive shall not use any Confidential Information for the benefit of any third party, except in the course of performing duties assigned by Chemical or as authorized in writing by Chemical.
|
(e)
|
The restrictions in Section 8(d) above shall not apply to any information to the extent that Executive is required to disclose such information by law, provided that Executive (i) notifies Chemical of the existence and terms of such obligation, (ii) gives Chemical a reasonable opportunity to seek a protective or similar order to prevent or limit such disclosure, and (iii) only discloses that information actually required to be disclosed.
|
(f)
|
Return of Property.
Upon request by Chemical during employment and automatically and immediately at termination of his employment, Executive shall return to Chemical all Confidential Information in any form (including all copies and reproductions thereof) and all other property whatsoever of Chemical in his possession or under his control. If requested by Chemical, Executive shall certify in writing that all such materials have been returned to Chemical. Executive also expressly agrees that immediately upon the termination of his employment with Chemical for any reason, Executive shall cease using any secure website, computer systems, e-mail system, or phone system or voicemail service provided by Chemical for the use of its employees.
|
9.
|
Assignment of Inventions.
|
(a)
|
Executive agrees that all developments or inventions (including without limitation any and all software programs (source and object code), algorithms and applications, concepts, designs, discoveries, improvements, processes, techniques, know-how and data) that result from work performed by Executive for Chemical and its Affiliates, whether or not patentable or registrable under copyright or similar statutes or subject to analogous protection (“
Inventions
”), shall be the sole and exclusive property of Chemical or its nominees, and Executive shall and hereby does assign to Chemical all rights in and to such Inventions upon the creation of any such Invention, including, without limitation: (i) patents, patent applications and patent rights throughout the world; (ii) rights associated with works of authorship throughout the world, including copyrights, copyright applications, copyright registrations, mask work rights, mask work applications and mask work registrations; (iii) rights relating to the protection of trade secrets and confidential information throughout the
|
(b)
|
For avoidance of doubt, if any Inventions fall within the definition of “work made for hire” as such term is defined in 17 U.S.C. § 101, such Inventions shall be considered “work made for hire” and the copyright of such Inventions shall be owned solely and exclusively by Chemical. If any Invention does not fall within such definition of “work made for hire” then Executive’s right, title and interest in and to such Inventions shall be assigned to Chemical pursuant to Section 9(a) above.
|
(c)
|
Chemical and its nominees shall have the right to use and/or to apply for statutory or common law protections for such Inventions in any and all countries. Executive further agrees, at Chemical’s expense, to: (i) reasonably assist Chemical in obtaining and from time to time enforcing such IP Rights relating to Inventions, and (ii) execute and deliver to Chemical or its nominee upon reasonable request all such documents as Chemical or its nominee may reasonably determine are necessary or appropriate to effect the purposes of this Section 9, including assignments of inventions. Such documents may be necessary to: (1) vest in Chemical or its nominee clear and marketable title in and to Inventions; (2) apply for, prosecute and obtain patents, copyrights, mask works rights and other rights and protections relating to Inventions; or (3) enforce patents, copyrights, mask works rights and other rights and protections relating to Inventions. Executive’s obligations pursuant to this Section 9 shall continue beyond the termination of Executive’s employment with Chemical. If Chemical is unable for any reason to secure Executive’s signature to any lawful and necessary document required to apply for or execute any patent, trademark, copyright or other applications with respect to any Inventions (including renewals, extensions, continuations, divisions or continuations in part thereof), Executive hereby irrevocably designates and appoints Chemical and its then current Chairman of the Board as Executive’s agent and attorney-in-fact to act for and in behalf and instead of Executive, to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, trademarks, copyrights or other rights thereon with the same legal force and effect as if executed by Executive.
|
(d)
|
The obligations of Executive under Section 9(a) above shall not apply to any Invention that Executive developed entirely on his own time without using Chemical’s equipment, supplies, facility or trade secret information, except for those Inventions that (i) relate to Chemical’s business or actual or demonstrably anticipated research or development, or (ii) result from any work performed by Executive for Company. Executive shall bear the burden of proof in establishing the applicability of this subsection to a particular circumstance.
|
10.
|
Non-Competition and Non-Solicitation.
|
(a)
|
Purpose.
Executive understands and agrees that the purpose of this Section 10 is solely to protect Chemical’s legitimate business interests, including, but not limited to its confidential and proprietary information, customer relationships and goodwill, and Chemical’s competitive advantage. Therefore, Executive agrees to be subject to restrictive covenants under the following terms.
|
(b)
|
Definitions.
As used in this Agreement, the following terms have the meanings given to such terms below.
|
(i)
|
“
Business
” means the business(es) in which Chemical or its Affiliates were engaged in at the time of, or during the twelve (12) month period prior to, the applicable Termination Date.
|
(ii)
|
“
Customer
” means any person or entity who is or was a customer, supplier or client of Chemical or its Affiliates with whom Executive had any contact or association for any reason and with whom Executive had dealings on behalf of Chemical or its Affiliates in the course of his employment with Chemical.
|
(iii)
|
“
Chemical Employee
” means any person who is or was an employee of Chemical or its Affiliates at the time of, or during the twelve (12) month period prior to, the applicable Termination Date.
|
(iv)
|
“
Restricted Period
” means the period during Executive’s employment with Chemical and for twenty-four (24) months from and after Executive’s applicable Termination Date; provided, however, that this period shall be tolled and shall not run during any time Executive is in violation of this Section 10, it being the intent of the parties that the Restricted Period shall be extended for any period of time in which Executive is in violation of this Section 10.
|
(v)
|
“
Restricted
Territory
” means Michigan or any other state in which Chemical or any Affiliate operates a banking, insurance or securities products and services institution at the time of, or during the twelve (12) month period prior to, the applicable Termination Date.
|
(c)
|
Non-Competition.
During the Restricted Period, Executive shall not in the Restricted Area, on his own behalf or on behalf of any other person:
|
(i)
|
assist or have an interest in (whether or not such interest is active), whether as partner, investor, stockholder, officer, director or as any type of principal whatever, any person, firm, partnership, association, corporation or business organization, entity or enterprise that is or is about to become directly or indirectly engaged in, any business or activity (whether such enterprise is in operation or in the planning or development stage) that competes in any manner with the Business; provided, however, that Executive shall be permitted to make passive investments in the stock of any publicly traded business (including a competitive business), as long as the stock investment in any competitive business does not rise above five percent (5%) of the outstanding shares of such business; or
|
(ii)
|
enter into the employment of or act as an independent contractor or agent for or advisor or consultant to, any person, firm, partnership, association, corporation, business organization, entity or enterprise that is or is about to become directly or indirectly engaged in, any business or activity (whether such enterprise is in operation or in the planning or development stage) that competes in any manner with the Business, or is a governmental regulator agency of the Business;.
|
(d)
|
Non-Solicitation.
During the Restricted Period, Executive shall not, directly or indirectly, on Executive’s own behalf or on behalf of any other party:
|
(i)
|
Call upon, solicit, divert, encourage or attempt to call upon, solicit, divert, or encourage any Customer for purposes of marketing, selling, or providing products or services to such Customer that are similar to or competitive with those offered by Chemical or its Affiliates;
|
(ii)
|
Accept as a customer any Customer for purposes of marketing, selling, or providing products or services to such Customer that are similar to or competitive with those offered by Chemical or its Affiliates;
|
(iii)
|
Induce, encourage, or attempt to induce or encourage any Customer to purchase or accept products or services that are similar to or competitive with those offered by Chemical or its Affiliates from any person or entity (other than Chemical or its Affiliates ) engaging in the Business;
|
(iv)
|
Induce, encourage, or attempt to induce or encourage any Customer to reduce, limit, or cancel its business with Chemical or its Affiliates; or
|
(v)
|
Solicit, induce, or attempt to solicit or induce any employee of Chemical or its Affiliates to terminate employment with Chemical or its Affiliates.
|
(e)
|
Reasonableness of Restrictions.
Executive acknowledges and agrees that the restrictive covenants in this Agreement (i) are essential elements of Executive’s employment by Chemical and are reasonable given Executive’s access to Chemical’s and its Affiliates’ Confidential Information and the substantial knowledge and goodwill. Executive shall acquire with respect to the business of Chemical and its Affiliates as a result of his employment with Chemical, and the unique and extraordinary services to be provided by Executive to Chemical; and (ii) are reasonable in time, territory, and scope, and in all other respects.
|
(f)
|
Preserve Livelihood.
Executive represents that his experience, capabilities and personal assets are such that this Agreement does not deprive him from either earning a livelihood in the unrestricted business activities which remain open to him or from otherwise adequately and appropriately supporting himself and his family.
|
(g)
|
Judicial Modification.
Should any part or provision of this Section 10 be held invalid, void, or unenforceable in any court of competent jurisdiction, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Agreement. The parties further agree that if any portion of this Section 10 is found to be invalid or unenforceable by a court of competent jurisdiction because its duration, territory, or other restrictions are deemed to be invalid or unreasonable in scope, the invalid or unreasonable terms shall be replaced by terms that such court deems valid and enforceable and that come closest to expressing the intention of such invalid or unenforceable terms.
|
11.
|
Enforcement.
Executive acknowledges and agrees that Chemical shall suffer irreparable harm in the event that Executive breaches any of Executive’s obligations under Sections 8, 9, or 10 of this Agreement and that monetary damages would be inadequate to compensate Chemical for such breach. Accordingly, Executive agrees that, in the event of a breach by Executive of any of Executive’s
|
12.
|
Miscellaneous.
|
(a)
|
Entire Agreement.
This Agreement, when aggregated with the attached Release, as applicable, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements (whether written or oral and whether express or implied) between the parties to the extent related to such subject matter, including Executive’s employment agreement with Chemical dated January 25, 2016.
|
(b)
|
Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, permitted assigns and, in the case of Executive, heirs, executors, and/or personal representatives. Chemical may freely assign or transfer this Agreement to an affiliated company or to a successor following a merger, consolidation, sale of assets or equity, or other business transaction. Executive may not assign, delegate or otherwise transfer any of Executive’s rights, interests or obligations in this Agreement.
|
(c)
|
Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement. Facsimile or PDF reproductions of original signatures shall be deemed binding for the purpose of the execution of this Agreement.
|
(d)
|
Notices.
Any notice pursuant to this Agreement must be in writing and shall be deemed effectively given to the other party on (i) the date it is actually delivered by overnight courier service (such as FedEx) or personal delivery of such notice in person, or (ii) three (3) days after mailing by certified or registered U.S. mail, return receipt requested; in each case the appropriate address shown below (or to such other address as a party may designate by notice to the other party):
|
(e)
|
Amendments and Waivers.
No amendment of any provision of this Agreement shall be valid unless the amendment is in writing and signed by Chemical and Executive. No waiver of any provision of this Agreement shall be valid unless the waiver is in writing and signed by the waiving party. The failure of a party at any time to require performance of any provision of this Agreement shall not affect such party’s rights at a later time to enforce such provision. No waiver by a party of any breach of this Agreement shall be deemed to extend to any other breach hereunder or affect in any way any rights arising by virtue of any other breach.
|
(f)
|
Severability.
Each provision of this Agreement is severable from every other provision of this Agreement. Any provision of this Agreement that is determined by any court of competent jurisdiction to be invalid or unenforceable shall not affect the validity or enforceability of any other provision. Any provision of this Agreement held invalid or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable.
|
(g)
|
Construction.
The section headings in this Agreement are inserted for convenience only and are not intended to affect the interpretation of this Agreement. Any reference in this Agreement to any “Section” refers to the corresponding Section of this Agreement. The word “including” in this Agreement means “including without limitation.” This Agreement shall be construed as if drafted jointly by Chemical and Executive and no presumption or burden of proof shall arise favoring or disfavoring Chemical or Executive by virtue of the authorship of any provision in this Agreement. All words in this Agreement shall be construed to be of such gender or number as the circumstances require.
|
(h)
|
Survival.
The terms of Sections 6, 7, 8, 9, 10, 11 and 12 shall survive the termination of this Agreement for any reason.
|
(i)
|
Remedies Cumulative.
The rights and remedies of the parties under this Agreement are cumulative (not alternative) and in addition to all other rights and remedies available to such parties at law, in equity, by contract or otherwise.
|
(j)
|
Venue.
Executive and the Corporation agree that the exclusive forum for resolving any disputes between the parties related to Release Agreement shall be arbitration before the American Arbitration Association applying the Employment Arbitration Rules and Mediation Procedures as amended and effective November 1, 2009. The Arbitrator shall be empowered to grant any legal or equitable relief available to the parties, including interim equitable relief as set forth in the Optional Rules for Emergency Measures of Protection. Any award of the Arbitration may be enforced through proceedings in a court of competent jurisdiction.
|
(k)
|
Governing Law.
This Agreement shall be governed by the laws of the State of Michigan without giving effect to any choice or conflict of law principles of any jurisdiction.
|
1.
|
Additional Compensation
. Subject to the terms and conditions hereof, Chemical shall pay Executive the additional compensation set forth in Section 6 of the Employment Agreement, net of applicable withholding taxes, commencing after the expiration of the waiting period set forth herein and in accordance with the terms of the Employment Agreement.
|
2.
|
Release.
|
(a)
|
In exchange for the good and valuable consideration set forth herein, Executive agrees for himself, his heirs, administrators, representatives, executors, successors and assigns (“Releasors”), to irrevocably and unconditionally release, waive and forever discharge any and all manner of action, causes of action, claims, rights, promises, charges, suits, damages, debts, lawsuits, liabilities, rights, due controversies, charges, complaints, remedies, losses, demands, obligations, costs, expenses, fees (including, without limitation attorneys’ fees), or any and all other liabilities or claims of whatsoever nature, whether arising in contract, tort, or any other theory of action, whether arising in law or in equity, whether known or unknown, choate or inchoate, matured or unmatured, contingent or fixed, liquidated or unliquidated, accrued or unaccrued, asserted or unasserted, including, but not limited to, any claim and/or claim of damages or other relief for tort, breach of contract, personal injury, negligence, age discrimination under The Age Discrimination In Employment Act of 1967 (as amended), employment discrimination prohibited by other federal, state or local laws including sex, race, national origin, marital status, age, handicap, height, weight, or religious discrimination, and any other claims of unlawful employment practices or any other unlawful criterion or circumstance which Executive and Releasors had, now have, or may have in the future against each or any of Chemical, its parent, divisions, affiliates and related companies or entities, regardless of its or their form of business organization (the “Company Entities”), any predecessors, successors, joint ventures, and parents of any Company Entity, and any and all of their respective past or present directors, officers, shareholders, partners, employees,
|
(b)
|
Executive acknowledges that he has read this Release carefully and understands all of its terms.
|
(c)
|
Executive understands and agrees that he has been advised to consult with an attorney prior to executing this Release.
|
(d)
|
Executive understands that he is entitled to consider this Release for at least twenty-one (21) days before signing the Release. However, after due deliberation, Executive may elect to sign this Release without availing himself of the opportunity to consider its provisions for at least twenty-one (21) days. Executive hereby acknowledges that any decision to shorten the time for considering this Release prior to signing it is voluntary, and such decision is not induced by or through fraud, misrepresentation, or a threat to withdraw or alter the provisions set forth in this Release in the event Executive elected to consider this Release for at least twenty-one (21) days prior to signing the Release.
|
(e)
|
Executive understands that he may revoke this Release as it relates to any potential claim that could be brought or filed under the Age Discrimination in Employment Act 29 U.S.C. §§ 621-634, within seven (7) days after the date on which he signs this Release, and that this Release as it relates to such a claim does not become effective until the expiration of the seven (7) day period. In the event that Executive wishes to revoke this Release within the seven (7) day period, Executive understands that he must provide such revocation in writing to the then Chairman of the Board at Chemical Financial Corporation, 2301 W. Big Beaver Rd., Troy, MI 48084.
|
(f)
|
In agreeing to sign this Release, Executive is doing so voluntarily and agrees that he has not relied on any oral statements or explanations made by Chemical or its representatives.
|
(g)
|
This Release shall not be construed as an admission of wrongdoing by either Executive or Chemical.
|
3.
|
Notices
. Every notice relating to this Release shall be in writing and if given by mail shall be given by registered or certified mail with return receipt requested. All notices to Chemical shall be delivered to the Chairman of the Board of Chemical at Chemical Financial Corporation, 2301 W. Big Beaver Rd., Troy, MI 48084. All notices by Chemical to Executive shall be delivered to Executive personally or addressed to Executive at Executive’s last residence address as then contained in the records of Chemical or such other address as Executive may designate. Either party by notice to the other may designate a different address to which notices shall be addressed. Any notice given by Chemical to Executive at Executive’s last designated address shall be effective to bind any other person who shall acquire rights hereunder.
|
4.
|
Governing Law
. To the extent not preempted by Federal law, this Release shall be governed by and construed in accordance with the laws of the State of Michigan, without giving effect to conflicts of laws.
|
5.
|
Counterparts
. This Release may be executed in two (2) or more counterparts, all of which when taken together shall be considered one (1), and the same Release and shall become effective when the counterparts have been signed by each party and delivered to the other party; it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature page were an original thereof.
|
6.
|
Entire Agreement
. This Release, when aggregated with the Employment Agreement [Note: Add any other documents, as applicable], contains the entire understanding of the parties with respect to the subject matter hereof and together supersedes all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into this Release.
|
1.
|
Employment; Term.
Subject to the terms and conditions of this Agreement, Chemical hereby employs Executive under the terms of this Agreement, and Executive hereby accepts such employment terms for an initial one (1) year period commencing September 1, 2017 (the “
Effective Date
”) and ending August 31, 2018 (the “
Initial Term
”), unless sooner terminated as provided in Section 5 below. Following the Initial Term, unless one party provides the other with thirty (30) days’ advance written notice of non-renewal, this Agreement automatically shall renew on the anniversary of the Effective Date for successive one (1) year periods (each such period, a “
Renewal Term
”), except and until terminated as provided in Section 5 below. The Initial Term and all Renewal Terms together shall constitute the “
Term
” of this Agreement. In the event the Corporation provides Executive with notice of non-renewal, Executive shall receive Severance for Termination Without Cause, as provided in Section 6(b).
|
2.
|
Position; Duties.
Executive shall serve as Chemical’s Chairman of the Board and shall perform such services for Chemical as are customarily associated with such position and as otherwise may be assigned to Executive from time to time by Chemical’s Board of Directors (the “
Board
”). Executive shall devote the majority of his business time to the affairs of Chemical and to his duties hereunder; provided, however, 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 to Chemical. Executive shall perform his Chemical employment duties diligently and to the best of his ability, in compliance with Chemical’s policies and procedures, and the laws and regulations that apply to Chemical’s business. For purposes of this Agreement, “
Chemical
” includes Chemical Bank, unless the context clearly requires otherwise, and the term
|
3.
|
Compensation and Benefits.
As compensation for the services to be rendered by Executive under this Agreement, Chemical shall provide the following compensation and benefits during Executive’s employment Term:
|
(a)
|
Base Salary.
Chemical shall pay Executive an annual base salary of one dollar ($1.00) (the “
Base Salary
”), which shall be paid on the first regular pay date after September 1 each year. In the event that Executive’s Base Salary is increased during the Term, the Base Salary shall be payable in equal installments in accordance with Chemical’s then customary payroll practices. Executive’s Base Salary shall be reviewed from time to time by the Board (and no less often than annually) beginning in 2018 and may be increased or decreased in the sole discretion of the Board.
|
(b)
|
Stock Grant
. On September 1, 2017, Chemical shall provide Executive with a fully-vested grant of 23,000 shares of Chemical’s Common Stock.
|
(c)
|
Bonus and Equity Programs.
Executive shall be eligible to participate in Chemical’s annual bonus and equity programs for senior executives, based upon Executive’s and Chemical’s achievement of certain individual and Company goals as established by Chemical’s Compensation Committee.
|
(d)
|
Vacation.
Executive shall be entitled to thirty (30) paid vacation days, to be accrued and used in accordance with Chemical’s vacation policy. Upon employment termination, any accrued and unused vacation for the year of termination, shall be paid to Executive.
|
(e)
|
Health Care Stipend.
Executive shall receive an annual taxable stipend for health care payments under Chemical’s group health care plan in the amount of $20,000, as may be adjusted from time to time, payable in accordance with Chemical’s normal payroll practices.
|
(f)
|
Auto Allowance
. Executive shall receive a monthly auto allowance of nine hundred dollars ($900.00), as may be adjusted from time to time, payable in accordance with Chemical’s normal payroll practices.
|
(g)
|
Country Clubs
. Executive shall be reimbursed for memberships in two (2) country clubs of his selection.
|
(h)
|
General Benefits.
Executive shall be entitled to such other benefits, and to participate in such benefit plans, as are generally made available to similarly situated employees of Chemical from time to time, subject to Chemical’s policies, and the terms and conditions of any applicable benefit plans. Nothing in this Agreement shall be deemed to alter Chemical’s rights to modify or terminate any such plans or programs in its sole discretion.
|
(i)
|
Withholdings.
Chemical shall withhold from any amounts payable under this Agreement such federal, state and local taxes as Chemical determines are required to be withheld pursuant to applicable law.
|
4.
|
Reimbursement of Expenses.
Chemical shall reimburse Executive for all reasonable ordinary and necessary business expenses incurred by Executive in connection with the performance of his duties hereunder, including but not limited to Executive’s fees and expenses for attendance at banking-related conventions and similar events, reasonable professional association and
seminar
expenses and other expenses authorized by Chemical, upon submission of proper documentation for tax and accounting purposes in compliance with Chemical’s reimbursement policies in effect from time to time. Such reimbursements shall be made promptly but in no event later than the last day of the calendar year following the calendar year in which an expense is incurred. For purposes of reimbursements subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “
Code
”), the amount of expenses eligible for reimbursement during one (1) year shall not affect the expenses eligible for reimbursement in any other year, and is not subject to liquidation or exchange for another benefit.
|
5.
|
Termination.
The employment of Executive under this Agreement shall terminate as of the earliest Termination Date to occur. Executive’s “
Termination Date
” shall be as follows:
|
(a)
|
Death.
Automatically effective upon Executive’s death.
|
(b)
|
Disability.
By Chemical, effective upon written notice to Executive in the event of Executive’s permanent and total disability, as defined under Chemical’s long-term disability plan in effect at such time (“
Disability
”).
|
(c)
|
For Cause.
By Chemical, effective upon written notice to Executive for Cause, unless otherwise specified in this Section 5(c). For purposes of this Agreement, “
Cause
” means: (i) Executive’s material breach of any provision in this Agreement; if the breach is curable, it shall constitute Cause only if it continues uncured for a period of twenty (20) days after Executive’s receipt of written notice of such breach by Chemical; (ii) Executive’s failure or refusal, in any material manner to perform all lawful services required of him in his employment position with Chemical, which failure or refusal continues for more than twenty (20) days after Executive’s receipt of written notice of such deficiency; (iii) Executive’s commission of fraud, embezzlement, theft, or a crime constituting moral turpitude, whether or not involving Chemical, which in the reasonable good faith judgment of the Board, renders Executive’s continued employment harmful to Chemical; (iv) Executive’s misappropriation of Chemical’s assets or property, including without limitation, obtaining material reimbursement through financial vouchers or expense reports; or (v) Executive’s conviction or the entry of a plea of guilty or no contest by Executive with respect to any felony or other crime which, in the reasonable good faith judgment of the Board, adversely affects Chemical, its reputation.
|
(d)
|
Without Cause.
By Chemical, effective upon thirty (30) days’ written notice to Executive at any time for any reason other than for Cause or Executive’s Disability (“
Termination Without Cause
”).
|
(e)
|
Resignation.
By Executive, effective upon thirty (30) days’ written notice to Chemical at any time for any reason.
|
(f)
|
Good Reason
. By Executive, in the event of Good Reason, as defined below. For purposes of this Agreement, “Good Reason” means the occurrence of any of the following events without the written consent of Executive:.
|
(i)
|
any material reduction in Executive’s base salary (if more than one dollar ($1.00) annually), as it may be adjusted from time to time
|
(ii)
|
any material reduction in the status, position or responsibilities of Executive;
|
(iii)
|
any requirement by Chemical (without Executive’s consent) that Executive be principally based at any office or location more than fifty (50) miles from Executive’s principal work location as of the effective date of this Agreement; or
|
(iv)
|
any material breach of this Agreement by Chemical.
|
(g)
|
During any notice period under Sections 5(c), 5(d), or 5(e), Chemical may, in its sole discretion, relieve Executive of some or all of his duties during the notice period, but Chemical shall continue to provide Executive with his full salary, compensation, equity vesting, and benefits during such period.
|
6.
|
Effect of Termination.
|
(a)
|
Generally.
When Executive’s employment with Chemical is terminated for any reason, Executive, or his estate, as the case may be, shall be entitled to receive the compensation and benefits earned through the applicable Termination Date, along with reimbursement for any approved business expenses that Executive has timely submitted for reimbursement in accordance with Chemical’s expense reimbursement policy or practice.
|
(b)
|
Separation Benefits upon Certain Terminations.
|
(i)
|
Termination Without Cause.
|
(A)
|
If Chemical terminates Executive’s employment pursuant to a Termination Without Cause, Executive shall be entitled to receive severance in the amount of two (2) times Executive’s then Base Salary, disregarding any Base Salary reduction due to a Good Reason termination, plus two (2) times the average of Executive’s bonuses under Chemical’s annual executive incentive plan for each of the three most recent complete calendar years of Executive’s employment with Chemical (including for such purpose, complete calendar years with Talmer Bank and Trust, if applicable), and with each bonus calculated as the higher of the actual bonus, or one million five hundred dollars ($1,500,000) per year (“
Severance
”). The Severance is conditioned upon Executive and Chemical executing a mutually agreeable release of claims, in
|
(B)
|
If Executive incurs a Termination Without Cause within two (2) years following the date of a Change in Control of Chemical, upon Executive’s execution of the aforementioned Release, the amount of Executive’s Severance, calculated in accordance with (A) above, shall be paid subject to the same timing constraints as set forth herein, but contributed directly to the Executive-designated Community Foundation of Southeastern Michigan - Donor Advised Fund, in the form of a cash, lump sum payment. At the same time, and in the spirit of voluntary generosity to the community and not as compensation to Executive, Chemical shall one hundred percent (100%) match the aforementioned contribution to the same Executive-designated charity, also in the form of a cash, lump sum contribution. For purposes of this Agreement, Change in Control shall be defined as the occurrence of any of the following events: (1) 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 fifty percent (50%) of the total fair market value or total voting power of the stock of the Corporation; (2) the majority of the members of the Corporation’s Board are replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of appointment or election; or (3) 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 fifty percent (50%) of the total gross fair market value of the Corporation’s assets in a single transaction or within a 12-month period ending with the most recent acquisition. For purposes 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. 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 (B)(1) hereof. Further, no profit sharing, employee stock ownership, employee stock purchase and savings, employee pension, or
|
(C)
|
Notwithstanding anything in this Agreement to the contrary, any payment or benefit to be provided to Executive, whether pursuant to this Agreement or otherwise, that is a “
Parachute Payment
” as defined in Code Section 280G(b)(2), shall be reduced to the extent necessary so that the benefits payable or to be provided to Executive under this Agreement that are Parachute Payments, as well as any Parachute Payments provided outside of this Agreement shall not cause Chemical or any Affiliate to have paid an “
Excess Parachute Payment
” as defined in Code Section 280G(b)(1). If it is established that an Excess Parachute Payment has occurred or shall occur under this Agreement or otherwise, any remaining Parachute Payments shall be reduced to ensure that the total payments to Executive do not exceed 2.99 times Executive’s “
Base Amount
” as defined in Code Section 280G(b)(3).
|
(ii)
|
Termination for Good Reason
. Executive may terminate employment for Good Reason and receive the same benefits as Termination Without Cause, subject to the same Release and payment timing restrictions as a Termination Without Cause.
|
(iii)
|
Death
. For avoidance of doubt,
the termination of Executive’s employment as a result of his death shall
not constitute a Termination Without Cause triggering the rights described in this Section 6(b).
|
(c)
|
Application of Internal Revenue Code Section 409A.
|
(i)
|
All payments and benefits provided under this Agreement are intended to be exempt from, or in accordance with, Code Section 409A, and the Agreement is to be interpreted accordingly. Each installment payment is intended to constitute a separate benefit and terms such as “employment termination,” “termination from employment” or like terms are intended to constitute a Separation from Service, as defined below. To the extent exempt from Code Section 409A, payments are intended to be exempt under the short term deferral exemption or partially exempt under the involuntary separation pay plan exemption. Notwithstanding the forgoing, Chemical has no responsibility for any taxes, penalties or interest incurred by Executive in connection with payments and benefits provided under this Agreement, including any imposed by Code Section 409A.
|
(ii)
|
Despite other payment timing provisions in this Agreement, any payments and benefits provided under this Section 6 that constitute nonqualified deferred compensation that are subject to Code Section 409A, shall not commence in connection with Executive’s termination of employment unless and until Executive has also incurred a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h)) (a “
Separation From Service).
However, if Chemical determines that the Severance is subject to Code Section 409A, and Executive is a “
Specified Employee
” (as defined under Code Section 409A) at the time of Separation from Service, then, solely to the extent necessary to avoid adverse tax consequences to Executive under Code Section 409A, the timing of the Severance payments shall be delayed until the earlier to occur
|
(d)
|
No Further Obligations.
Except as expressly provided above or as otherwise required by law, Chemical shall have no obligations to Executive in the event of the termination of this Agreement for any reason.
|
7.
|
Representations of Executive.
Executive represents and warrants that he is not obligated or restricted under any agreement (including any non-competition or confidentiality agreement), judgment, decree, order or other restraint of any kind that could impair his ability to perform the duties and obligations required hereunder. Executive further agrees that he shall not divulge to Chemical any confidential information and/or trade secrets belonging to others, including Executive’s former employers, nor shall Chemical seek to elicit from Executive such information. Consistent with the foregoing, Executive shall not provide to Chemical, and Chemical shall not request, any documents or copies of documents containing such information.
|
8.
|
Confidential Information.
|
(a)
|
Executive acknowledges that Chemical has and shall give Executive access to certain highly-sensitive, confidential, and proprietary information belonging to Chemical, its Affiliates or third parties who may have furnished such information under obligations of confidentiality, relating to and used in Chemical’s Business (collectively, “
Confidential Information
”). Executive acknowledges that, unless otherwise available to the public, Confidential Information includes, but is not limited to, the following categories of confidential or proprietary information and material: financial statements and information; budgets, forecasts, and projections; business and strategic plans; marketing, sales, and distribution strategies; research and development projects; records relating to any intellectual property developed by, owned by, controlled, or maintained by Chemical or its Affiliates; information related to Chemical’s or its Affiliates’ inventions, research, products, designs, methods, formulae, techniques, systems, processes; customer lists; non-public information relating to Chemical’s or its Affiliates’ customers, suppliers, distributors, or investors; the specific terms of Chemical’s or its’ Affiliates’ agreements or arrangements, whether oral or written, with any customer, supplier, vendor, or contractor with which Chemical or its Affiliates may be associated from time to time; and any and all information relating to the operation of Chemical’s or its Affiliates’ business which Chemical or its Affiliates may from time to time designate as confidential or proprietary or that Executive reasonably knows should be, or has been, treated by Chemical or its Affiliates as confidential or proprietary. Confidential Information encompasses all formats in which information is preserved, whether electronic, print, or any other form, including all originals, copies, notes, or other reproductions or replicas thereof.
|
(b)
|
Confidential Information does not include any information that: (i) at the time of disclosure is generally known to, or readily ascertainable by, the public; (ii) becomes known to the public through no fault of Executive or other violation of this Agreement; or (iii) is disclosed to Executive by a third party under no obligation to maintain the confidentiality of the information.
|
(c)
|
Executive acknowledges that Confidential Information owned or licensed by Chemical or its Affiliates is unique, valuable, proprietary and confidential; derives independent actual or potential commercial value from not being generally known or available to the public; and is subject to reasonable efforts to maintain its secrecy. Executive hereby relinquishes, and agrees that he shall not at any time claim, any right, title or interest of any kind in or to any Confidential Information.
|
(d)
|
During and after his employment with Chemical, Executive shall hold in trust and confidence all Confidential Information, and shall not disclose any Confidential Information to any person or entity, except in the course of performing duties assigned by Chemical or as authorized in writing by Chemical. Executive further agrees that during and after his employment with Chemical, Executive shall not use any Confidential Information for the benefit of any third party, except in the course of performing duties assigned by Chemical or as authorized in writing by Chemical.
|
(e)
|
The restrictions in Section 8(d) above shall not apply to any information to the extent that Executive is required to disclose such information by law, provided that Executive (i) notifies Chemical of the existence and terms of such obligation, (ii) gives Chemical a reasonable opportunity to seek a protective or similar order to prevent or limit such disclosure, and (iii) only discloses that information actually required to be disclosed.
|
(f)
|
Return of Property.
Upon request by Chemical during employment and automatically and immediately at termination of his employment, Executive shall return to Chemical all Confidential Information in any form (including all copies and reproductions thereof) and all other property whatsoever of Chemical in his possession or under his control. If requested by Chemical, Executive shall certify in writing that all such materials have been returned to Chemical. Executive also expressly agrees that immediately upon the termination of his employment with Chemical for any reason, Executive shall cease using any secure website, computer systems, e-mail system, or phone system or voicemail service provided by Chemical for the use of its employees.
|
9.
|
Assignment of Inventions.
|
(a)
|
Executive agrees that all developments or inventions (including without limitation any and all software programs (source and object code), algorithms and applications, concepts, designs, discoveries, improvements, processes, techniques, know-how and data) that result from work performed by Executive for Chemical and its Affiliates, whether or not patentable or registrable under copyright or similar statutes or subject to analogous protection (“
Inventions
”), shall be the sole and exclusive property of Chemical or its nominees, and Executive shall and hereby does assign to Chemical all rights in and to such Inventions upon the creation of any such Invention, including, without limitation: (i) patents, patent applications and patent rights throughout the world; (ii) rights associated with works of authorship throughout the world, including copyrights, copyright applications, copyright
|
(b)
|
For avoidance of doubt, if any Inventions fall within the definition of “work made for hire” as such term is defined in 17 U.S.C. § 101, such Inventions shall be considered “work made for hire” and the copyright of such Inventions shall be owned solely and exclusively by Chemical. If any Invention does not fall within such definition of “work made for hire” then Executive’s right, title and interest in and to such Inventions shall be assigned to Chemical pursuant to Section 9(a) above.
|
(c)
|
Chemical and its nominees shall have the right to use and/or to apply for statutory or common law protections for such Inventions in any and all countries. Executive further agrees, at Chemical’s expense, to: (i) reasonably assist Chemical in obtaining and from time to time enforcing such IP Rights relating to Inventions, and (ii) execute and deliver to Chemical or its nominee upon reasonable request all such documents as Chemical or its nominee may reasonably determine are necessary or appropriate to effect the purposes of this Section 9, including assignments of inventions. Such documents may be necessary to: (1) vest in Chemical or its nominee clear and marketable title in and to Inventions; (2) apply for, prosecute and obtain patents, copyrights, mask works rights and other rights and protections relating to Inventions; or (3) enforce patents, copyrights, mask works rights and other rights and protections relating to Inventions. Executive’s obligations pursuant to this Section 9 shall continue beyond the termination of Executive’s employment with Chemical. If Chemical is unable for any reason to secure Executive’s signature to any lawful and necessary document required to apply for or execute any patent, trademark, copyright or other applications with respect to any Inventions (including renewals, extensions, continuations, divisions or continuations in part thereof), Executive hereby irrevocably designates and appoints Chemical and its then current Chief Executive Officer as Executive’s agent and attorney-in-fact to act for and in behalf and instead of Executive, to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, trademarks, copyrights or other rights thereon with the same legal force and effect as if executed by Executive.
|
(d)
|
The obligations of Executive under Section 9(a) above shall not apply to any Invention that Executive developed entirely on his own time without using Chemical’s equipment, supplies, facility or trade secret information, except for those Inventions that (i) relate to Chemical’s business or actual or demonstrably anticipated research or development, or (ii) result from any work performed by Executive for Company. Executive shall bear the burden of proof in establishing the applicability of this subsection to a particular circumstance.
|
10.
|
Non-Competition and Non-Solicitation.
|
(a)
|
Purpose.
Executive understands and agrees that the purpose of this Section 10 is solely to protect Chemical’s legitimate business interests, including, but not limited to its confidential and proprietary information, customer relationships and goodwill, and Chemical’s
|
(b)
|
Definitions.
As used in this Agreement, the following terms have the meanings given to such terms below.
|
(i)
|
Business
” means the business(es) in which Chemical or its Affiliates were engaged in at the time of, or during the twelve (12) month period prior to, the applicable Termination Date.
|
(ii)
|
“
Customer
” means any person or entity who is or was a customer, supplier or client of Chemical or its Affiliates with whom Executive had any contact or association for any reason and with whom Executive had dealings on behalf of Chemical or its Affiliates in the course of his employment with Chemical.
|
(iii)
|
“
Chemical Employee
” means any person who is or was an employee of Chemical or its Affiliates at the time of, or during the twelve (12) month period prior to, the applicable Termination Date.
|
(iv)
|
“
Restricted Period
” means the period during Executive’s employment with Chemical and for twenty-four (24) months from and after Executive’s applicable Termination Date; provided, however, that this period shall be tolled and shall not run during any time Executive is in violation of this Section 10, it being the intent of the parties that the Restricted Period shall be extended for any period of time in which Executive is in violation of this Section 10.
|
(v)
|
“
Restricted
Territory
” means Michigan or any other state in which Chemical or any Affiliate operates a banking, insurance or securities products and services institution at the time of, or during the twelve (12) month period prior to, the applicable Termination Date.
|
(c)
|
Non-Competition.
During the Restricted Period, Executive shall not in the Restricted Area, on his own behalf or on behalf of any other person:
|
(i)
|
assist or have an interest in (whether or not such interest is active), whether as partner, investor, stockholder, officer, director or as any type of principal whatever, any person, firm, partnership, association, corporation or business organization, entity or enterprise that is or is about to become directly or indirectly engaged in, any business or activity (whether such enterprise is in operation or in the planning or development stage) that competes in any manner with the Business; provided, however, that Executive shall be permitted to make passive investments in the stock of any publicly traded business (including a competitive business), as long as the stock investment in any competitive business does not rise above five percent (5%) of the outstanding shares of such business; or
|
(ii)
|
enter into the employment of or act as an independent contractor or agent for or advisor or consultant to, any person, firm, partnership, association, corporation, business organization, entity or enterprise that is or is about to become directly or indirectly engaged in, any business or activity (whether such enterprise is in operation or in the
|
(d)
|
Non-Solicitation.
During the Restricted Period, Executive shall not, directly or indirectly, on Executive’s own behalf or on behalf of any other party:
|
(i)
|
Call upon, solicit, divert, encourage or attempt to call upon, solicit, divert, or encourage any Customer for purposes of marketing, selling, or providing products or services to such Customer that are similar to or competitive with those offered by Chemical or its Affiliates;
|
(ii)
|
Accept as a customer any Customer for purposes of marketing, selling, or providing products or services to such Customer that are similar to or competitive with those offered by Chemical or its Affiliates;
|
(iii)
|
Induce, encourage, or attempt to induce or encourage any Customer to purchase or accept products or services that are similar to or competitive with those offered by Chemical or its Affiliates from any person or entity (other than Chemical or its Affiliates ) engaging in the Business;
|
(iv)
|
Induce, encourage, or attempt to induce or encourage any Customer to reduce, limit, or cancel its business with Chemical or its Affiliates; or
|
(v)
|
Solicit, induce, or attempt to solicit or induce any employee of Chemical or its Affiliates to terminate employment with Chemical or its Affiliates.
|
(e)
|
Reasonableness of Restrictions.
Executive acknowledges and agrees that the restrictive covenants in this Agreement (i) are essential elements of Executive’s employment by Chemical and are reasonable given Executive’s access to Chemical’s and its Affiliates’ Confidential Information and the substantial knowledge and goodwilll Executive shall acquire with respect to the business of Chemical and its Affiliates as a result of his employment with Chemical, and the unique and extraordinary services to be provided by Executive to Chemical; and (ii) are reasonable in time, territory, and scope, and in all other respects.
|
(f)
|
Preserve Livelihood.
Executive represents that his experience, capabilities and personal assets are such that this Agreement does not deprive him from either earning a livelihood in the unrestricted business activities which remain open to him or from otherwise adequately and appropriately supporting himself and his family.
|
(g)
|
Judicial Modification.
Should any part or provision of this Section 10 be held invalid, void, or unenforceable in any court of competent jurisdiction, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Agreement. The parties further agree that if any portion of this Section 10 is found to be invalid or unenforceable by a court of competent jurisdiction because its duration, territory, or other restrictions are deemed to be invalid or unreasonable in scope, the invalid or unreasonable terms shall be replaced by terms that such court deems valid and enforceable and that come closest to expressing the intention of such invalid or unenforceable terms.
|
11.
|
Enforcement.
Executive acknowledges and agrees that Chemical shall suffer irreparable harm in the event that Executive breaches any of Executive’s obligations under Sections 8, 9, or 10 of this Agreement and that monetary damages would be inadequate to compensate Chemical for such breach. Accordingly, Executive agrees that, in the event of a breach by Executive of any of Executive’s obligations under Sections 8, 9, or 10 of this Agreement, Chemical shall be entitled to obtain from any court of competent jurisdiction preliminary and permanent injunctive relief, and expedited discovery for the purpose of seeking relief, in order to prevent or to restrain any such breach. Chemical shall be entitled to recover its costs incurred in connection with any action to enforce Sections 8, 9, or 10 of this Agreement, including reasonable attorneys’ fees and expenses.
|
12.
|
Miscellaneous.
|
(a)
|
Entire Agreement.
This Agreement, when aggregated with the attached Release, as applicable, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements (whether written or oral and whether express or implied) between the parties to the extent related to such subject matter, including Executive’s employment agreement with Chemical dated January 25, 2016.
|
(b)
|
Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, permitted assigns and, in the case of Executive, heirs, executors, and/or personal representatives. Chemical may freely assign or transfer this Agreement to an affiliated company or to a successor following a merger, consolidation, sale of assets or equity, or other business transaction. Executive may not assign, delegate or otherwise transfer any of Executive’s rights, interests or obligations in this Agreement.
|
(c)
|
Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement. Facsimile or PDF reproductions of original signatures shall be deemed binding for the purpose of the execution of this Agreement.
|
(d)
|
Notices.
Any notice pursuant to this Agreement must be in writing and shall be deemed effectively given to the other party on (i) the date it is actually delivered by overnight courier service (such as FedEx) or personal delivery of such notice in person, or (ii) three (3) days after mailing by certified or registered U.S. mail, return receipt requested; in each case the appropriate address shown below (or to such other address as a party may designate by notice to the other party):
|
(e)
|
Amendments and Waivers.
No amendment of any provision of this Agreement shall be valid unless the amendment is in writing and signed by Chemical and Executive. No waiver of any provision of this Agreement shall be valid unless the waiver is in writing and signed by the waiving party. The failure of a party at any time to require performance of any provision
|
(f)
|
Severability.
Each provision of this Agreement is severable from every other provision of this Agreement. Any provision of this Agreement that is determined by any court of competent jurisdiction to be invalid or unenforceable shall not affect the validity or enforceability of any other provision. Any provision of this Agreement held invalid or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable.
|
(g)
|
Construction.
The section headings in this Agreement are inserted for convenience only and are not intended to affect the interpretation of this Agreement. Any reference in this Agreement to any “Section” refers to the corresponding Section of this Agreement. The word “including” in this Agreement means “including without limitation.” This Agreement shall be construed as if drafted jointly by Chemical and Executive and no presumption or burden of proof shall arise favoring or disfavoring Chemical or Executive by virtue of the authorship of any provision in this Agreement. All words in this Agreement shall be construed to be of such gender or number as the circumstances require.
|
(h)
|
Survival.
The terms of Sections 6, 7, 8, 9, 10, 11 and 12 shall survive the termination of this Agreement for any reason.
|
(i)
|
Remedies Cumulative.
The rights and remedies of the parties under this Agreement are cumulative (not alternative) and in addition to all other rights and remedies available to such parties at law, in equity, by contract or otherwise.
|
(j)
|
Venue.
Executive and the Corporation agree that the exclusive forum for resolving any disputes between the parties related to Release Agreement shall be arbitration before the American Arbitration Association applying the Employment Arbitration Rules and Mediation Procedures as amended and effective November 1, 2009. The Arbitrator shall be empowered to grant any legal or equitable relief available to the parties, including interim equitable relief as set forth in the Optional Rules for Emergency Measures of Protection. Any award of the Arbitration may be enforced through proceedings in a court of competent jurisdiction.
|
(k)
|
Governing Law.
This Agreement shall be governed by the laws of the State of Michigan without giving effect to any choice or conflict of law principles of any jurisdiction.
|
1.
|
Additional Compensation
. Subject to the terms and conditions hereof, Chemical shall pay Executive the additional compensation set forth in Section 6 of the Employment Agreement, net of applicable withholding taxes, commencing after the expiration of the waiting period set forth herein and in accordance with the terms of the Employment Agreement.
|
2.
|
Release.
|
(a)
|
In exchange for the good and valuable consideration set forth herein, Executive agrees for himself, his heirs, administrators, representatives, executors, successors and assigns (“Releasors”), to irrevocably and unconditionally release, waive and forever discharge any and all manner of action, causes of action, claims, rights, promises, charges, suits, damages, debts, lawsuits, liabilities, rights, due controversies, charges, complaints, remedies, losses, demands, obligations, costs, expenses, fees (including, without limitation attorneys’ fees), or any and all other liabilities or claims of whatsoever nature, whether arising in contract, tort, or any other theory of action, whether arising in law or in equity, whether known or unknown, choate or inchoate, matured or unmatured, contingent or fixed, liquidated or unliquidated, accrued or unaccrued, asserted or unasserted, including, but not limited to, any claim and/or claim of damages or other relief for tort, breach of contract, personal injury, negligence, age discrimination under The Age Discrimination In Employment Act of 1967 (as amended), employment discrimination prohibited by other federal, state or local laws including sex, race, national origin, marital status, age, handicap, height, weight, or religious discrimination, and any other claims of unlawful employment practices or any other unlawful criterion or circumstance which Executive and Releasors had, now have, or may have in the future against each or any of Chemical, its parent, divisions, affiliates and related companies or entities, regardless of its or their form of business organization (the “Company Entities”), any predecessors, successors, joint ventures, and parents of any Company Entity, and any and all of their respective past or present directors, officers, shareholders, partners, employees,
|
(b)
|
Executive acknowledges that he has read this Release carefully and understands all of its terms.
|
(c)
|
Executive understands and agrees that he has been advised to consult with an attorney prior to executing this Release.
|
(d)
|
Executive understands that he is entitled to consider this Release for at least twenty-one (21) days before signing the Release. However, after due deliberation, Executive may elect to sign this Release without availing himself of the opportunity to consider its provisions for at least twenty-one (21) days. Executive hereby acknowledges that any decision to shorten the time for considering this Release prior to signing it is voluntary, and such decision is not induced by or through fraud, misrepresentation, or a threat to withdraw or alter the provisions set forth in this Release in the event Executive elected to consider this Release for at least twenty-one (21) days prior to signing the Release.
|
(e)
|
Executive understands that he may revoke this Release as it relates to any potential claim that could be brought or filed under the Age Discrimination in Employment Act 29 U.S.C. §§ 621-634, within seven (7) days after the date on which he signs this Release, and that this Release as it relates to such a claim does not become effective until the expiration of the seven (7) day period. In the event that Executive wishes to revoke this Release within the seven (7) day period, Executive understands that he must provide such revocation in writing to the then Chief Executive Officer at the address set forth below.
|
(f)
|
In agreeing to sign this Release, Executive is doing so voluntarily and agrees that he has not relied on any oral statements or explanations made by Chemical or its representatives.
|
(g)
|
This Release shall not be construed as an admission of wrongdoing by either Executive or Chemical.
|
3.
|
Notices
. Every notice relating to this Release shall be in writing and if given by mail shall be given by registered or certified mail with return receipt requested. All notices to Chemical shall be delivered to Chemical’s Chief Executive Officer at Chemical Financial Corporation, 2301 W. Big Beaver Rd, Troy, MI 48084. All notices by Chemical to Executive shall be delivered to Executive personally or addressed to Executive at Executive’s last residence address as then contained in the records of Chemical or such other address as Executive may designate. Either party by notice to the other may designate a different address to which notices shall be addressed. Any notice given by Chemical to Executive at Executive’s last designated address shall be effective to bind any other person who shall acquire rights hereunder.
|
4.
|
Governing Law
. To the extent not preempted by Federal law, this Release shall be governed by and construed in accordance with the laws of the State of Michigan, without giving effect to conflicts of laws.
|
5.
|
Counterparts
. This Release may be executed in two (2) or more counterparts, all of which when taken together shall be considered one (1), and the same Release and shall become effective when the counterparts have been signed by each party and delivered to the other party; it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature page were an original thereof.
|
6.
|
Entire Agreement
. This Release, when aggregated with the Employment Agreement [Note: Add any other documents, as applicable], contains the entire understanding of the parties with respect to the subject matter hereof and together supersedes all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into this Release.
|
•
|
Effective Date
- Monday, November 13, 2017.
|
•
|
Base Salary
- Your annual base salary will be $250,000, paid bi-weekly. This base salary will be reviewed by Management on an annual basis.
|
•
|
2017 Annual Cash and Long Term Equity Incentive
- For purposes of calculating your 2017 Annual Cash Incentive, you will remain on your current plan with a 60% target bonus and 70% Annual Equity Award based on your previous salary of $330,000.
|
•
|
Severance Payment
-The Bank will pay you a one-time severance payment in the amount of $200,000, subject to all applicable taxes, on the January 12, 2018 pay date provided that you accept this offer. In the event that you are involuntarily terminated in the future and it is not for Cause (as defined under “Stay Bonus” below), or due to a Change in Control (as defined under “Change in Control Agreement” below), you will be eligible for 6 months’ severance.
|
•
|
Retention Bonus
- Provided that you remain employed with the Bank on October 1, 2018, the Bank will pay you a Retention Bonus on the next regular pay date in the amount of $100,000, subject to all applicable taxes. If the Bank terminates you prior to October 1, 2018 for anything other than Cause, the Bank will pay you the full retention bonus amount of $100,000. For purposes of this letter, “Cause” means: (i) your removal by order of a regulatory agency having jurisdiction over the Bank; (ii) your material breach of any provision in this Agreement; if the breach is curable, it shall constitute Cause only if it continues uncured for a period of 20 days after your receipt of written notice of such breach by the Bank; (iii) your failure or refusal, in any material manner to perform all lawful services required by you in your employment positions with the Bank, which failure or refusal continues for more than 20 days after your receipt of written notice of such deficiency; (iv) your commission of fraud,
|
•
|
Vesting of Equity Grants
- The follow vesting strategies will be applied to your equity grants:
|
◦
|
Stock Options
- Upon your acceptance of this offer letter, all of our outstanding Stock Options will become 100% vested.
|
◦
|
Time Restricted Stock Units
- In the event that you are involuntarily terminated without cause (as defined under the Retention Bonus paragraph), or you voluntarily retire with 1 year’s notice, all of your unvested TRSUs will immediately vest and be converted into Chemical’s Common Stock with settlement to occur as soon as administratively feasible.
|
◦
|
Performance Restricted Stock Units
- In the event that you are involuntarily terminated without cause (as defined under the Retention Bonus paragraph), or you voluntarily retire with 1 year’s notice, all of your unvested PSUs shall remain outstanding subject their original performance goals, and the restrictions under each such grant shall not lapse until Chemical’s Compensation and Pension Committee has determined the that applicable performance goals have been attained and the level to which such goals are attained, at which time the restrictions shall lapse on the number of units corresponding to the level of the attained performance, as if you had remained employed by Chemical through the last day of the applicable performance period, and such units shall become convertible into Chemical’s Common Stock, with settlement to occur as soon as administratively feasible.
|
•
|
Annual Incentive Plan
- As a Regional President, you will receive an annual cash bonus opportunity. This incentive program is intended to focus our leadership on the achievement of annual corporate and departmental goals. You target annual cash incentive will be equal to 35% of your base salary for 2018. This target cash incentive is currently weighted 20% Corporate Goals, 40% Department Goals and 40% Individual Goals. Actual cash incentive received will be based on the achievement of the goals and can vary from 0% - 150% of your target.
|
•
|
Annual Long Term Incentive Plan
- As a Regional President, you will receive an annual long term incentive. Your target annual long term incentive will be equal to 45% of your base salary and you will be eligible to participate in the 2018 grants. The long term incentive award will be issued as follows:
|
◦
|
40% Performance Based Stock Units
- these units will vest based on the satisfactory achievement of 3-year corporate goals with respect to Earning per Share (EPS) and Relative Total Shareholder Return (TSR). The number of PRSUs that ultimately vest and convert to shares may range from 0% - 150% of the underlying units originally awarded, depending on the Banks’ performance relative to these goals.
|
◦
|
40% Time Restricted Stock Units
- these units will 100% vest after 5 years provided you remain employed with the Bank.
|
◦
|
20% Stock Options
- these options will vest at a rate of 20% per year over a five (5) year period provide you remain employed by the Bank.
|
•
|
Change in Control Agreement
- In the event of a Change in Control, you will be eligible for a severance of 1 times your base salary, plus your average bonus over the past 3 years. Further details will be defined in a formal Change in Control Agreement to be completed within 30 days after your start date. For purposes of this offer letter and the formal Change in Control Agreement, Change in Control” means the occurrence of any of the following events: (i) the acquisition by a person or persons acting as a group, of the stock of the Bank or Chemical Financial Corporation (“Chemical”) 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 Bank or Chemical; (ii) the majority of the members of the Board of the Bank or Chemical are replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Bank or Chemical Board prior to the date of appointment or election; or (iii) the acquisition, by a person or persons acting as a group, of the assets of the Bank or Chemical that have a total gross fair market value equal to or exceeding 50% of the total gross fair market value of the assets of the Bank or Chemical in a single transaction or within a 12-month period ending with the most recent acquisition. For purposes of this Section, gross fair market value means the value of the assets of the Bank or Chemical, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. Notwithstanding the foregoing, no trust department or designated fiduciary or other trustee of such trust department of the Bank, Chemical or a subsidiary of the Bank, or Chemical or other similar fiduciary capacity of the Bank or Chemical with direct voting control of the stock shall be treated as a person or group within the meaning of subsection (i) hereof. Further, no profit sharing, employee stock ownership, employee stock purchase and savings, employee pension, or other employee benefit plan of the Bank, Chemical or any of their 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 (i) hereof.
|
•
|
Car Allowance and Country Club Membership
- You will continue to receive a car allowance in the amount of $900 per month. In addition the Bank will continue to reimburse you for eligible country club membership fees and expenses.
|
•
|
Effective Date
- Monday, November 13, 2017.
|
•
|
Duties
-
In this position, you will report directly to Dan Terpsma, Director of Regional Presidents and Commercial Lending of Chemical Bank (the “Bank”). As the Community Bank Liaison, you will work the hours needed to serve as the Bank’s executive representative to its community bank boards, attending all of the Bank’s community board meetings, working to strengthen the Bank’s relationships with community board members in an effort to expand the Bank’s business through those relationships. In addition, you will continue in your position as President and Chief Executive Officer of Insite Capital.
|
•
|
Base Salary
- Your annual base salary will be $100,000, paid bi-weekly. This base salary will be reviewed by Management on an annual basis.
|
•
|
2017 Annual Cash and Long Term Equity Incentive
- For purposes of calculating your 2017 Annual Cash Incentive, you will remain on your current plan based on your previous salary of $338,466.
|
•
|
Retention Bonus
- Provided that you remain employed with the Bank on May 1, 2018, the Bank will pay you a Retention Bonus on the next regular pay date in the amount of $170,000, subject to all applicable taxes. In addition, provided that you remain employed with the Bank on February 1, 2019, the Bank will pay you a Retention Bonus on the next regular pay date in the amount of $170,000, subject to all applicable taxes. If you are terminated without Cause, die or if there is a Change in Control prior to either payment, the Bank will pay you or your estate, as applicable, the Retention Bonus in the amount of $340,000 within 30 days following the applicable event. For purposes of this paragraph, the following definitions apply:
|
•
|
Equity Grants
- Your outstanding equity grants will continue in accordance with the terms of the applicable plans and your grant agreements under those plans.
|
•
|
Company Car
- You will continue to keep your car as long as you remain in your position as Community Bank Liaison.
|
•
|
InSite Capital
- You will remain as President and CEO of InSite Capital.
|
1.
|
Any and all employment relationships between Executive and the Corporation shall terminate as of the Separation from Service. Executive hereby waives any and all rights Executive may otherwise have to continued employment with or re-employment by the Corporation. Executive hereby resigns from all positions with or representing the Corporation, including but not limited to, membership on the Boards of the Corporation, Chemical Bank, their subsidiaries and affiliates. The boards from which Executive agrees to resign, excluding membership on the boards of the Corporation, Chemical Bank, and their subsidiaries and affiliates are as follows: Midland Tomorrow, Midland Business Alliance, Economic Development Corporation of Midland County, Brownfield Authority, MBA PAC Board, Momentum Midland, Business Leaders for Michigan, and the HH and Grace A Dow Foundation.
|
2.
|
Effective with the Separation from Service, Executive is relieved of all duties and obligations to the Corporation, except as provided in this Release Agreement.
|
3.
|
Pursuant to this Release Agreement, and subject to the terms and conditions set forth herein, the Corporation shall make the following payments, which also satisfy the requirements under Executive’s Employment Agreement with the Corporation, dated August 31, 2016 (the “Employment Agreement”):
|
a.
|
The Corporation shall pay Executive salary continuation in an amount equal to $2,755,322. Salary continuation payments shall begin on the first regular payroll date occurring at least eight (8) calendar days after Executive executes this Release Agreement without revocation. The payments shall be made according to the following schedule:
|
i.
|
For the first six (6) months after Executive’s Separation from Service, Executive shall be paid $90,000 per month, to be paid in 13 bi-weekly payments equal to $41,538.46;
|
ii.
|
On the first regular payroll date of the seventh (7
th
) month after Executive’s Separation from Service, Executive shall be paid a catch-up payment equal to $148,830; and
|
iii.
|
Beginning with the first regular payroll date of the seventh (7
th
) month after Executive’s Separation from Service, Executive shall be paid a monthly sum of $114,805.08, to be paid in 39 bi-weekly payments equal to $52,986.92.
|
b.
|
The Corporation shall pay Executive a lump sum payment equal to $20,087.76 on the first regular payroll date occurring at least eight (8) calendar days after Executive executes this Release Agreement without revocation.
|
c.
|
On the eighth (8
th
) day immediately following the date Executive executes this Release Agreement without revocation, the 56,494 nonqualified stock options described below shall automatically vest and Executive shall have three (3) years from his Separation from Service to exercise those options:
|
Grant Date
|
2-16-16
|
2-21-17
|
Price at Grant
|
$32.81
|
$53.72
|
Number of Shares
|
32,195
|
24,299
|
d.
|
On the eighth (8
th
) day immediately following the date Executive executes this Release Agreement without revocation, the 9,667 time-based restricted stock units described below shall automatically vest and become convertible into the Corporation’s Common Stock, with settlement to occur within seven (7) days thereafter.
|
Grant Date
|
2-22-13
|
2-18-14
|
2-27-15
|
2-16-16
|
2-21-17
|
Number of Shares
|
2,178
|
1,934
|
2,028
|
2,012
|
1,515
|
e.
|
On the eighth (8
th
) day immediately following the date Executive executes this Release Agreement without revocation, the performance-based stock units (“PSUs”) identified below shall remain outstanding, subject to their original performance goals. The restrictions under each grant shall not lapse until the Corporation has determined that the applicable performance goals have been attained and the level to which such goals have been attained, at which time the restrictions shall lapse on the number of units corresponding to the level of attained performance, and such units shall become convertible into the Corporation’s Common Stock, with settlement to occur as soon as administratively feasible, on the same date as settlement occurs for the other holders of PSUs for the applicable performance period.
|
Grant Date
|
2-27-15
|
2-16-16
|
2-21-17
|
Number of Shares
|
13,525
|
13,529
|
9,770
|
f.
|
Corporation shall provide Executive with executive-level outplacement services through an outplacement services firm selected by the Corporation 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 Separation from Service. The timing of outplacement services to be received shall be determined by Executive, provided that all costs under this subsection must be incurred, and all applicable payments to the outplacement firm made, within twelve (12) months following Executive’s Separation from Service;
|
g.
|
Corporation shall pay Executive a stipend equal to $1,377,661. This payment shall be made in 26 bi-weekly payments equal to $52,986.96 each. The payments will commence on the first payroll date following the final salary continuation payment identified above in Paragraph 3.a.
|
h.
|
Corporation shall transfer to Executive the title to the Corporation’s Cadillac automobile in Executive’s use immediately prior to his Separation from Service on the eighth (8
th
) day following Executive’s execution of this Release Agreement without revocation.
|
i.
|
All payments provided for under this Paragraph 3 shall have all applicable and legally required income and employment taxes withheld.
|
j.
|
The Corporation and Executive believe that the payments set forth above are scheduled to be paid and will be paid in compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that this Release Agreement provides for deferred compensation under Section 409A of the Code, this Release Agreement is intended to comply with Code Section 409A and is to be construed accordingly. Notwithstanding the foregoing, any taxes, penalties and interest that Executive may incur as a result of Code Section 409A are Executive’s obligation and not the obligation of the Corporation or Chemical Bank.
|
k.
|
Should Executive die on or after the eighth (8
th
) day following execution of this Release without revocation but before the commencement or receipt of all payments and benefits provided for hereunder (except outplacement), such remaining payments and benefits shall commence or continue to be paid at the times specified herein in accordance with Executive’s Will, Trust, or the laws of descent and distribution.
|
4.
|
Any fringe benefits that Executive has received or currently is receiving from the Corporation shall cease effective on his Separation from Service, except that the Corporation shall transfer title to
the Corporation’s Cadillac as provided under Paragraph 3(h) to the Executive, and as otherwise provided for in this Release Agreement. Executive shall be entitled to benefits under the Corporation’s retiree medical plan in accordance with the terms of such plan as in effect from time to time. Notwithstanding the foregoing, the Corporation retains the right to amend or terminate the retiree medical plan at any time, as long as any modification to such plan shall have the same effect on Executive as on any similarly-situated retirees.
|
5.
|
Executive shall be under no duty or obligation to seek or accept other employment and shall not be required to mitigate the amount of the termination benefits provided by this Release Agreement by seeking employment or otherwise, provided that Executive continues to comply with the terms hereof. However, should Executive obtain other employment during any time that he is receiving payments or benefits pursuant to this Release Agreement, Executive will have no duty or obligation to offset such payments or benefits against any pay or benefits due to him under this Release Agreement.
|
6.
|
In exchange for the consideration provided herein, including but not limited to Paragraph 3 hereof, Executive waives, releases and forever discharges the Corporation, and each of its direct or indirect parents, subsidiaries, affiliates and related entities, and any partnerships, joint ventures or other entities involving or related to the Corporation, or any of its respective affiliates, and each of the present or former employees, officers, agents, directors, successors, assigns and attorneys of any of these corporations, persons or entities, (collectively referred to in this Release Agreement as the “Released”), from any and all claims, charges, suits, causes of action, demands, expenses and compensation whatsoever, known or unknown, direct or indirect, on account of or growing out of Executive’s employment or other relationships with and Separation from Service from the Corporation, or relationship or termination of such relationship with any of the Released, or arising out of related events occurring through the date on which this Release Agreement is executed. This
|
7.
|
Executive acknowledges and agrees that Executive has been advised in writing by this Release Agreement, and otherwise, to
CONSULT WITH AN ATTORNEY
before Executive executes this Release Agreement.
|
8.
|
Executive acknowledges that Executive received a copy of this Release Agreement prior to executing the Release Agreement, that this Release Agreement incorporates the Corporation’s FINAL OFFER; that Executive has been given a period of at least twenty-one (21) calendar days within which to consider this Release Agreement and its terms and to consult with an attorney should Executive so elect. Executive may waive the twenty-one (21) day period at Executive’s discretion.
|
9.
|
If this Release Agreement is executed by the parties, Executive shall have seven (7) calendar days following Executive’s execution of this Release Agreement to revoke this Release Agreement. Any revocation of this Release Agreement shall be made in writing by Executive and shall be received on or before the time of close of business on the seventh calendar day following the date of Executive’s execution of this Release Agreement by the Chairman of the Board at: Chemical Financial Corporation, Attn: Chairman of the Board of Directors, 2301 W. Big Beaver Road, Troy, MI 48084, or such other place as the Corporation may notify Executive in writing. This Release Agreement shall not become effective or enforceable until the eighth (8
th
) calendar day following Executive’s execution of this Release Agreement, provided Executive has not exercised his right to revoke this Release Agreement.
|
10.
|
Executive expressly acknowledges and agrees that 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 those of third-parties that is not generally disclosed to persons not employed by 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. Executive’s commitments in this Section
|
11.
|
If Executive is deemed to have materially breached this Release Agreement, including, without limitation, the release set forth herein, the Corporation may, in addition to any other remedy the Corporation may have, withhold or cancel any remaining payments or benefits due to Executive pursuant to Paragraph 3 of this Release Agreement or otherwise. Before withholding any payments pursuant to this Paragraph, the Corporation shall first give Executive written notice of the material breach and provide thirty (30) calendar days in which to cure the breach. If Executive violates any of these restrictions, the Corporation may be further entitled to immediate Preliminary Injunctive Relief, without bond, in addition to any other remedy which may be available to the Corporation. In the event a court of competent jurisdiction ultimately rules on any matter under this Paragraph, the losing party shall be responsible for payment of the reasonable attorneys’ fees of the successful party.
|
12.
|
Executive represents that he has returned all Corporation property to the Corporation except that Executive has in his possession notebooks he kept during his tenure. Executive shall return those notebooks within 14 days of the execution of this Release Agreement.
|
13.
|
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.
|
14.
|
Noncompetition and Nonsolicitation
.
|
a.
|
In view of Executive’s importance to the success of the Corporation, the Corporation would likely suffer significant harm from Executive’s competing with Corporation during the Restricted Period as defined in this Article. Accordingly, Executive agrees that Executive shall not engage in competitive activities during the Restricted Period. 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 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
|
b.
|
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 reduce or refrain from doing any business with the Corporation or (ii) interfere with or damage (or attempt to interfere with or damage) any relationship between Corporation and any such customer or prospective customer, or any shareholder of the Corporation. The term “solicit” as used in this Paragraph 14 means any communication of any kind whatsoever, inviting, encouraging or requesting any person to take or refrain from taking any action with respect to the business of Corporation.
|
c.
|
During the Restricted Period, Executive agrees that Executive shall not, in any manner directly solicit any person who is an employee of Corporation 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.
|
This Section shall survive the Separation from Service.
|
15.
|
Executive must provide the Corporation for a period of six (6) months after the Separation of Service 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 service by telephone at Executive’s reasonable convenience and without substantial interference with Executive’s other activities or commitments.
|
16.
|
Executive and the Corporation acknowledge that they have read and understand this Release Agreement, that they have had adequate time to consider this Release Agreement and discuss it with their attorneys and advisors, that they understand the consequences of entering into this Release Agreement, that they are knowingly and voluntarily entering into this Release Agreement, and that they are competent to enter into this Release Agreement.
|
17.
|
This Release Agreement shall benefit and be binding upon the parties and their respective directors, officers, employees, agents, heirs, successors, assigns, devises and legal or personal representatives.
|
18.
|
This Release Agreement and the Waiver of Notice set forth the entire agreement between the parties at the time and date these documents are executed, and fully supersedes any and all prior agreements or understandings between them pertaining to the subject matter in this Release Agreement, except that this Release Agreement shall not in any way modify, change, amend or reduce any benefits in which Executive has vested rights and to which Executive is entitled before entering into this Release Agreement. This Release Agreement may not be modified or amended except by a written agreement intended as such, and signed by all parties.
|
19.
|
Upon Executive’s timely completion and submission of any required application and tax forms, Executive’s entire account balance in the Chemical Financial Corporation Deferred Compensation Plan will be paid to Executive on the first payroll date of the seventh (7
th
) month after Executive’s Separation from Service.
|
20.
|
Upon Executive’s timely completion and submission of any required application and tax forms, Executive’s entire benefit under the Chemical Financial Corporation Supplemental Executive Retirement Plan will be paid to Executive on the first payroll period of the seventh (7
th
) month after Executive’s Separation from Service.
|
21.
|
The Corporation believes that the acquisition of Talmer did not constitute a “Change in Control” as defined in Internal Revenue Code Section 280G that would have triggered the Code Section 280G parachute cap limitation in Section 8 of the Employment Agreement.
|
a.
|
However, notwithstanding anything in this Release Agreement to the contrary, and except as set forth below, in the event it shall be determined that any payment, benefit, vesting or distribution to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Release Agreement or otherwise) (a "Payment") would but for this Paragraph 21 be subject to the excise tax imposed by Code Section 4999, or any comparable successor provisions (the "Excise Tax"), then the Payments either shall be (i) provided to Executive in full, or (ii) provided to Executive as to such lesser extent that would result in no portion of such Payments being subject to the Excise Tax, whichever of the foregoing amounts, when taking into account applicable income and employment taxes, the Excise Tax, and any other applicable taxes, results in the receipt by Executive on an after-tax basis, of the greatest amount of Payments, notwithstanding that all or some portion of such Payments may be subject to the Excise Tax. Any determination required under this Paragraph 21 shall be made in writing in good faith by the Corporation’s independent certified public accountants, appointed prior to any Change in Control (as defined under Code Section 280G(b)(2)), and/or tax counsel selected by such accountants (the “Accounting Firm”), in accordance with the principles of Code Section 280G. In the event of a reduction of Payments hereunder, the Payments shall be reduced as follows: (i) first from cash payments that are included in full as parachute payments, (ii) second from equity awards that are included in
|
b.
|
If, notwithstanding any reduction described in this Paragraph 21, the Internal Revenue Service (the "IRS") determines that Executive is liable for the Excise Tax as a result of the receipt of the Payments as described above, then Executive shall be obligated to pay back to the Corporation, within thirty (30) days after a final IRS determination or in the event that Executive challenges the final IRS determination, a final judicial determination, a portion of the Payments equal to the "Repayment Amount." The Repayment Amount with respect to the Payments shall be the smallest such amount, if any, as shall be required to be paid to the Corporation so that Executive's net after-tax proceeds with respect to the Payments (after taking into account the payment of the Excise Tax and all other applicable taxes imposed on such payment) shall be maximized. The Repayment Amount with respect to the Payments shall be zero if a Repayment Amount of more than zero would not result in Executive's net after-tax proceeds with respect to the Payments being maximized. If the Excise Tax is not eliminated pursuant to this paragraph, Executive shall pay the Excise Tax.
|
c.
|
Notwithstanding any other provision of this Paragraph 21, if (i) there is a reduction in the Payments as described in this Paragraph 21, (ii) the IRS later determines that Executive is liable for the Excise Tax, the payment of which would result in the maximization of Executive's net after-tax proceeds (calculated as if Executive's Payments had not previously been reduced), and (iii) Executive pays the Excise Tax, then the Corporation shall pay to Executive those Payments that were reduced pursuant to this subsection as soon as administratively possible after Executive pays the Excise Tax so that Executive's net after-tax proceeds with respect to the Payments are maximized.
|
22.
|
Except to the extent that federal law controls, this Release Agreement is to be construed according to Michigan law without regard to its conflict of laws principles.
|
23.
|
If any provision of this Release Agreement is determined to be unenforceable, at the discretion of the Corporation, the remainder of this Release Agreement shall not be affected but each remaining provision or portion shall continue to be valid and effective and shall be modified so that it is enforceable to the fullest extent permitted by law.
|
1.
|
Paragraph 19 of the Release Agreement is hereby superseded and replaced in its entirety by the following paragraph:
|
2.
|
Paragraph 20 of the Release Agreement is hereby superseded and replaced in its entirety by the following paragraph:
|
3.
|
This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Amendment in enforcing its provisions to produce or account for more than one such counterpart. The parties also agree that this Amendment may be executed and exchanged by electronic mail or facsimile transmission, and such signature shall be treated as an original signature of full force and effect.
|
4.
|
The remaining provisions of the Release Agreement shall continue in full and binding effect.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended
September 30, 2017
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):
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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
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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.
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Date:
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November 8, 2017
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|
|
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/s/ David T. Provost
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|
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David T. Provost
Chief Executive Officer and President
Chemical Financial Corporation
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1.
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I have reviewed this Quarterly Report on Form 10-Q for the quarter ended
September 30, 2017
of Chemical Financial Corporation;
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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;
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3.
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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;
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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;
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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
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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:
|
November 8, 2017
|
|
|
|
/s/ Dennis L. Klaeser
|
|
|
Dennis L. Klaeser
Executive Vice President and
Chief Financial Officer
Chemical Financial Corporation
|
Dated:
|
November 8, 2017
|
/s/ David T. Provost
|
|
|
David T. Provost
Chief Executive Officer and President
|
|
|
|
Dated:
|
November 8, 2017
|
/s/ Dennis L. Klaeser
|
|
|
Dennis L. Klaeser
Executive Vice President and Chief Financial Officer
|