|
|
|
|
|
Indiana
|
|
35-1068133
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
100 North Michigan Street, South Bend, Indiana
|
|
46601
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock — without par value
|
|
The NASDAQ Stock Market LLC
|
Large accelerated filer
o
|
|
Accelerated filer
x
|
|
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
Certifications
|
|
|
|
2016 Sales Price
|
|
Cash Dividends
|
|
2015 Sales Price
|
|
Cash Dividends
|
||||||||||||||||
Common Stock Prices
(quarter ended)
|
|
High
|
|
Low
|
|
Paid
|
|
High
|
|
Low
|
|
Paid
|
||||||||||||
March 31
|
|
$
|
33.50
|
|
|
$
|
27.01
|
|
|
$
|
0.180
|
|
|
$
|
31.35
|
|
|
$
|
26.95
|
|
|
$
|
0.164
|
|
June 30
|
|
34.83
|
|
|
30.32
|
|
|
0.180
|
|
|
31.75
|
|
|
27.69
|
|
|
0.164
|
|
||||||
September 30
|
|
35.99
|
|
|
31.50
|
|
|
0.180
|
|
|
32.37
|
|
|
28.06
|
|
|
0.164
|
|
||||||
December 31
|
|
45.61
|
|
|
33.27
|
|
|
0.180
|
|
|
34.35
|
|
|
29.35
|
|
|
0.180
|
|
|
Period
|
|
Total Number of
Shares Purchased
|
|
Average Price
Paid Per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly Announced
Plans or Programs*
|
|
Maximum Number (or Approximate
Dollar Value) of Shares that
may yet be Purchased Under
the Plans or Programs
|
|||||
October 01 - 31, 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
1,387,074
|
|
November 01 - 30, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,387,074
|
|
|
December 01 - 31, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,387,074
|
|
|
(Dollars in thousands, except per share amounts)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Interest income
|
|
$
|
191,760
|
|
|
$
|
184,684
|
|
|
$
|
178,554
|
|
|
$
|
179,585
|
|
|
$
|
182,085
|
|
Interest expense
|
|
22,101
|
|
|
18,163
|
|
|
18,225
|
|
|
22,768
|
|
|
30,309
|
|
|||||
Net interest income
|
|
169,659
|
|
|
166,521
|
|
|
160,329
|
|
|
156,817
|
|
|
151,776
|
|
|||||
Provision for loan and lease losses
|
|
5,833
|
|
|
2,160
|
|
|
3,733
|
|
|
772
|
|
|
5,752
|
|
|||||
Net interest income after provision for loan and lease losses
|
|
163,826
|
|
|
164,361
|
|
|
156,596
|
|
|
156,045
|
|
|
146,024
|
|
|||||
Noninterest income
|
|
88,945
|
|
|
83,316
|
|
|
77,887
|
|
|
77,212
|
|
|
81,192
|
|
|||||
Noninterest expense
|
|
163,645
|
|
|
159,114
|
|
|
150,040
|
|
|
149,314
|
|
|
151,536
|
|
|||||
Income before income taxes
|
|
89,126
|
|
|
88,563
|
|
|
84,443
|
|
|
83,943
|
|
|
75,680
|
|
|||||
Income taxes
|
|
31,340
|
|
|
31,077
|
|
|
26,374
|
|
|
28,985
|
|
|
26,047
|
|
|||||
Net income
|
|
$
|
57,786
|
|
|
$
|
57,486
|
|
|
$
|
58,069
|
|
|
$
|
54,958
|
|
|
$
|
49,633
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets at year-end
|
|
$
|
5,486,268
|
|
|
$
|
5,187,916
|
|
|
$
|
4,829,958
|
|
|
$
|
4,722,826
|
|
|
$
|
4,550,693
|
|
Long-term debt and mandatorily redeemable securities at year-end
|
|
74,308
|
|
|
57,379
|
|
|
56,232
|
|
|
58,335
|
|
|
71,021
|
|
|||||
Shareholders’ equity at year-end
|
|
672,650
|
|
|
644,053
|
|
|
614,473
|
|
|
585,378
|
|
|
558,655
|
|
|||||
Basic net income per common share
|
|
2.22
|
|
|
2.17
|
|
|
2.17
|
|
|
2.03
|
|
|
1.83
|
|
|||||
Diluted net income per common share
|
|
2.22
|
|
|
2.17
|
|
|
2.17
|
|
|
2.03
|
|
|
1.83
|
|
|||||
Cash dividends per common share
|
|
0.720
|
|
|
0.671
|
|
|
0.645
|
|
|
0.618
|
|
|
0.600
|
|
|||||
Dividend payout ratio
|
|
32.45
|
%
|
|
30.85
|
%
|
|
29.71
|
%
|
|
30.49
|
%
|
|
32.67
|
%
|
|||||
Return on average assets
|
|
1.08
|
%
|
|
1.15
|
%
|
|
1.21
|
%
|
|
1.19
|
%
|
|
1.11
|
%
|
|||||
Return on average common shareholders' equity
|
|
8.71
|
%
|
|
9.05
|
%
|
|
9.65
|
%
|
|
9.55
|
%
|
|
9.10
|
%
|
|||||
Average common shareholders' equity to average assets
|
|
12.38
|
%
|
|
12.72
|
%
|
|
12.52
|
%
|
|
12.49
|
%
|
|
12.20
|
%
|
•
|
Local, regional, national, and international economic conditions and the impact they may have on us and our clients and our assessment of that impact.
|
•
|
Changes in the level of nonperforming assets and charge-offs.
|
•
|
Changes in estimates of future cash reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements.
|
•
|
The effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board.
|
•
|
Inflation, interest rate, securities market, and monetary fluctuations.
|
•
|
Political instability.
|
•
|
Acts of war or terrorism.
|
•
|
Substantial changes in the cost of fuel.
|
•
|
The timely development and acceptance of new products and services and perceived overall value of these products and services by others.
|
•
|
Changes in consumer spending, borrowings, and savings habits.
|
•
|
Changes in the financial performance and/or condition of our borrowers.
|
•
|
Technological changes.
|
•
|
Acquisitions and integration of acquired businesses.
|
•
|
The ability to increase market share and control expenses.
|
•
|
The ability to expand effectively into new markets that we target.
|
•
|
Changes in the competitive environment among bank holding companies.
|
•
|
The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) with which we and our subsidiaries must comply.
|
•
|
The effect of changes in accounting policies and practices and auditing requirements, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters.
|
•
|
Changes in our organization, compensation, and benefit plans.
|
•
|
The costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquires and the results of regulatory examinations or reviews.
|
•
|
Greater than expected costs or difficulties related to the integration of new products and lines of business.
|
•
|
Our success at managing the risks described in Item 1A. Risk Factors.
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||||||||||||||
(Dollars in thousands)
|
|
Average Balance
|
|
Interest Income/Expense
|
|
Yield/Rate
|
|
Average Balance
|
|
Interest Income/Expense
|
|
Yield/Rate
|
|
Average Balance
|
|
Interest Income/Expense
|
|
Yield/Rate
|
|||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Investment securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Taxable
|
|
$
|
684,503
|
|
|
$
|
11,777
|
|
|
1.72
|
%
|
|
$
|
664,480
|
|
|
$
|
11,929
|
|
|
1.80
|
%
|
|
$
|
694,830
|
|
|
$
|
13,054
|
|
|
1.88
|
%
|
Tax-exempt
(1)
|
|
127,998
|
|
|
3,981
|
|
|
3.11
|
%
|
|
122,500
|
|
|
4,406
|
|
|
3.60
|
%
|
|
127,191
|
|
|
4,834
|
|
|
3.80
|
%
|
||||||
Mortgages held for sale
|
|
12,396
|
|
|
467
|
|
|
3.77
|
%
|
|
11,099
|
|
|
439
|
|
|
3.96
|
%
|
|
11,143
|
|
|
462
|
|
|
4.15
|
%
|
||||||
Loans and leases, net of unearned discount
(1)
|
|
4,113,508
|
|
|
176,116
|
|
|
4.28
|
%
|
|
3,837,149
|
|
|
168,611
|
|
|
4.39
|
%
|
|
3,639,985
|
|
|
161,027
|
|
|
4.42
|
%
|
||||||
Other investments
|
|
65,517
|
|
|
1,244
|
|
|
1.90
|
%
|
|
33,583
|
|
|
997
|
|
|
2.97
|
%
|
|
40,482
|
|
|
1,016
|
|
|
2.51
|
%
|
||||||
Total earning assets
(1)
|
|
5,003,922
|
|
|
193,585
|
|
|
3.87
|
%
|
|
4,668,811
|
|
|
186,382
|
|
|
3.99
|
%
|
|
4,513,631
|
|
|
180,393
|
|
|
4.00
|
%
|
||||||
Cash and due from banks
|
|
60,753
|
|
|
|
|
|
|
|
|
61,400
|
|
|
|
|
|
|
|
|
62,263
|
|
|
|
|
|
|
|
||||||
Reserve for loan and lease losses
|
|
(90,206
|
)
|
|
|
|
|
|
|
|
(87,208
|
)
|
|
|
|
|
|
|
|
(86,982
|
)
|
|
|
|
|
|
|
||||||
Other assets
|
|
386,216
|
|
|
|
|
|
|
|
|
351,205
|
|
|
|
|
|
|
|
|
317,893
|
|
|
|
|
|
|
|
||||||
Total assets
|
|
$
|
5,360,685
|
|
|
|
|
|
|
|
|
$
|
4,994,208
|
|
|
|
|
|
|
|
|
$
|
4,806,805
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing deposits
|
|
$
|
3,358,827
|
|
|
$
|
15,267
|
|
|
0.45
|
%
|
|
$
|
3,106,990
|
|
|
$
|
11,489
|
|
|
0.37
|
%
|
|
$
|
3,015,693
|
|
|
$
|
11,356
|
|
|
0.38
|
%
|
Short-term borrowings
|
|
210,876
|
|
|
525
|
|
|
0.25
|
%
|
|
236,940
|
|
|
484
|
|
|
0.20
|
%
|
|
263,377
|
|
|
541
|
|
|
0.21
|
%
|
||||||
Subordinated notes
|
|
58,764
|
|
|
4,220
|
|
|
7.18
|
%
|
|
58,764
|
|
|
4,220
|
|
|
7.18
|
%
|
|
58,764
|
|
|
4,220
|
|
|
7.18
|
%
|
||||||
Long-term debt and mandatorily redeemable securities
|
|
66,842
|
|
|
2,089
|
|
|
3.13
|
%
|
|
57,245
|
|
|
1,970
|
|
|
3.44
|
%
|
|
57,757
|
|
|
2,108
|
|
|
3.65
|
%
|
||||||
Total interest-bearing liabilities
|
|
3,695,309
|
|
|
22,101
|
|
|
0.60
|
%
|
|
3,459,939
|
|
|
18,163
|
|
|
0.52
|
%
|
|
3,395,591
|
|
|
18,225
|
|
|
0.54
|
%
|
||||||
Noninterest-bearing deposits
|
|
943,874
|
|
|
|
|
|
|
|
|
854,070
|
|
|
|
|
|
|
|
|
762,050
|
|
|
|
|
|
|
|
||||||
Other liabilities
|
|
57,799
|
|
|
|
|
|
|
|
|
44,702
|
|
|
|
|
|
|
|
|
47,272
|
|
|
|
|
|
|
|
||||||
Shareholders’ equity
|
|
663,703
|
|
|
|
|
|
|
|
|
635,497
|
|
|
|
|
|
|
|
|
601,892
|
|
|
|
|
|
|
|
||||||
Total liabilities and shareholders’ equity
|
|
$
|
5,360,685
|
|
|
|
|
|
|
|
|
$
|
4,994,208
|
|
|
|
|
|
|
|
|
$
|
4,806,805
|
|
|
|
|
|
|
|
|||
Less: Fully tax-equivalent adjustments
|
|
|
|
(1,825
|
)
|
|
|
|
|
|
(1,698
|
)
|
|
|
|
|
|
(1,839
|
)
|
|
|
||||||||||||
Net interest income/margin (GAAP-derived)
(1)
|
|
|
|
|
$
|
169,659
|
|
|
3.39
|
%
|
|
|
|
|
$
|
166,521
|
|
|
3.57
|
%
|
|
|
|
|
$
|
160,329
|
|
|
3.55
|
%
|
|||
Fully tax-equivalent adjustments
|
|
|
|
1,825
|
|
|
|
|
|
|
1,698
|
|
|
|
|
|
|
1,839
|
|
|
|
||||||||||||
Net interest income/margin - FTE
(1)
|
|
|
|
|
$
|
171,484
|
|
|
3.43
|
%
|
|
|
|
|
$
|
168,219
|
|
|
3.60
|
%
|
|
|
|
|
$
|
162,168
|
|
|
3.59
|
%
|
(Dollars in thousands)
|
2016
|
2015
|
2014
|
|||||||
Calculation of Net Interest Margin
|
|
|
|
|||||||
(A)
|
Interest income (GAAP)
|
$
|
191,760
|
|
$
|
184,684
|
|
$
|
178,554
|
|
|
Fully tax-equivalent adjustments:
|
|
|
|
||||||
(B)
|
- Loans and leases
|
584
|
|
284
|
|
274
|
|
|||
(C)
|
- Tax-exempt investment securities
|
1,241
|
|
1,414
|
|
1,565
|
|
|||
(D)
|
Interest income - FTE (A+B+C)
|
193,585
|
|
186,382
|
|
180,393
|
|
|||
(E)
|
Interest expense (GAAP)
|
22,101
|
|
18,163
|
|
18,225
|
|
|||
(F)
|
Net interest income (GAAP) (A-E)
|
169,659
|
|
166,521
|
|
160,329
|
|
|||
(G)
|
Net interest income - FTE (D-E)
|
171,484
|
|
168,219
|
|
162,168
|
|
|||
(H)
|
Total earning assets
|
$
|
5,003,922
|
|
$
|
4,668,811
|
|
$
|
4,513,631
|
|
|
Net interest margin (GAAP-derived) (F/H)
|
3.39
|
%
|
3.57
|
%
|
3.55
|
%
|
|||
|
Net interest margin - FTE (G/H)
|
3.43
|
%
|
3.60
|
%
|
3.59
|
%
|
|
|
Increase (Decrease) due to
|
|
|
||||||||
(Dollars in thousands)
|
|
Volume
|
|
Rate
|
|
Net
|
||||||
2016 compared to 2015
|
|
|
|
|
|
|
|
|
|
|||
Interest earned on:
|
|
|
|
|
|
|
|
|
|
|||
Investment securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|||
Taxable
|
|
$
|
353
|
|
|
$
|
(505
|
)
|
|
$
|
(152
|
)
|
Tax-exempt
|
|
191
|
|
|
(616
|
)
|
|
(425
|
)
|
|||
Mortgages held for sale
|
|
50
|
|
|
(22
|
)
|
|
28
|
|
|||
Loans and leases, net of unearned discount
|
|
11,914
|
|
|
(4,409
|
)
|
|
7,505
|
|
|||
Other investments
|
|
700
|
|
|
(453
|
)
|
|
247
|
|
|||
Total earning assets
|
|
$
|
13,208
|
|
|
$
|
(6,005
|
)
|
|
$
|
7,203
|
|
Interest paid on:
|
|
|
|
|
|
|
|
|
|
|||
Interest-bearing deposits
|
|
$
|
987
|
|
|
$
|
2,791
|
|
|
$
|
3,778
|
|
Short-term borrowings
|
|
(57
|
)
|
|
98
|
|
|
41
|
|
|||
Subordinated notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Long-term debt and mandatorily redeemable securities
|
|
311
|
|
|
(192
|
)
|
|
119
|
|
|||
Total interest-bearing liabilities
|
|
$
|
1,241
|
|
|
$
|
2,697
|
|
|
$
|
3,938
|
|
Net interest income - FTE
|
|
$
|
11,967
|
|
|
$
|
(8,702
|
)
|
|
$
|
3,265
|
|
|
|
|
|
|
|
|
||||||
2015 compared to 2014
|
|
|
|
|
|
|
|
|
|
|||
Interest earned on:
|
|
|
|
|
|
|
|
|
|
|||
Investment securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|||
Taxable
|
|
$
|
(558
|
)
|
|
$
|
(567
|
)
|
|
$
|
(1,125
|
)
|
Tax-exempt
|
|
(173
|
)
|
|
(255
|
)
|
|
(428
|
)
|
|||
Mortgages held for sale
|
|
(2
|
)
|
|
(21
|
)
|
|
(23
|
)
|
|||
Loans and leases, net of unearned discount
|
|
8,715
|
|
|
(1,131
|
)
|
|
7,584
|
|
|||
Other investments
|
|
(187
|
)
|
|
168
|
|
|
(19
|
)
|
|||
Total earning assets
|
|
$
|
7,795
|
|
|
$
|
(1,806
|
)
|
|
$
|
5,989
|
|
Interest paid on:
|
|
|
|
|
|
|
|
|
|
|||
Interest-bearing deposits
|
|
$
|
342
|
|
|
$
|
(209
|
)
|
|
$
|
133
|
|
Short-term borrowings
|
|
(54
|
)
|
|
(3
|
)
|
|
(57
|
)
|
|||
Subordinated notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Long-term debt and mandatorily redeemable securities
|
|
(18
|
)
|
|
(120
|
)
|
|
(138
|
)
|
|||
Total interest-bearing liabilities
|
|
$
|
270
|
|
|
$
|
(332
|
)
|
|
$
|
(62
|
)
|
Net interest income - FTE
|
|
$
|
7,525
|
|
|
$
|
(1,474
|
)
|
|
$
|
6,051
|
|
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Noninterest income:
|
|
|
|
|
|
|
|
|
|
|||
Trust and wealth advisory
|
|
$
|
19,256
|
|
|
$
|
19,126
|
|
|
$
|
18,511
|
|
Service charges on deposit accounts
|
|
9,053
|
|
|
9,313
|
|
|
8,684
|
|
|||
Debit card
|
|
10,887
|
|
|
10,217
|
|
|
9,585
|
|
|||
Mortgage banking
|
|
4,496
|
|
|
4,570
|
|
|
5,381
|
|
|||
Insurance commissions
|
|
5,513
|
|
|
5,465
|
|
|
5,556
|
|
|||
Equipment rental
|
|
25,863
|
|
|
22,302
|
|
|
17,156
|
|
|||
Gains on investment securities available-for-sale
|
|
1,796
|
|
|
4
|
|
|
963
|
|
|||
Other
|
|
12,081
|
|
|
12,319
|
|
|
12,051
|
|
|||
Total noninterest income
|
|
$
|
88,945
|
|
|
$
|
83,316
|
|
|
$
|
77,887
|
|
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Noninterest expense:
|
|
|
|
|
|
|
|
|
|
|||
Salaries and employee benefits
|
|
$
|
86,837
|
|
|
$
|
86,133
|
|
|
$
|
80,488
|
|
Net occupancy
|
|
9,686
|
|
|
9,768
|
|
|
9,311
|
|
|||
Furniture and equipment
|
|
19,500
|
|
|
18,348
|
|
|
17,657
|
|
|||
Depreciation — leased equipment
|
|
21,678
|
|
|
18,280
|
|
|
13,893
|
|
|||
Professional fees
|
|
5,161
|
|
|
4,682
|
|
|
5,046
|
|
|||
Supplies and communications
|
|
5,244
|
|
|
6,011
|
|
|
5,589
|
|
|||
FDIC and other insurance
|
|
3,147
|
|
|
3,412
|
|
|
3,384
|
|
|||
Business development and marketing
|
|
4,936
|
|
|
4,837
|
|
|
6,049
|
|
|||
Loan and lease collection and repossession
|
|
1,600
|
|
|
667
|
|
|
1,102
|
|
|||
Other
|
|
5,856
|
|
|
6,976
|
|
|
7,521
|
|
|||
Total noninterest expense
|
|
$
|
163,645
|
|
|
$
|
159,114
|
|
|
$
|
150,040
|
|
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Commercial and agricultural
|
|
$
|
812,264
|
|
|
$
|
744,749
|
|
|
$
|
710,758
|
|
|
$
|
679,492
|
|
|
$
|
639,069
|
|
Auto and light truck
|
|
411,764
|
|
|
425,236
|
|
|
397,902
|
|
|
391,649
|
|
|
396,602
|
|
|||||
Medium and heavy duty truck
|
|
294,790
|
|
|
278,254
|
|
|
247,153
|
|
|
237,854
|
|
|
213,547
|
|
|||||
Aircraft
|
|
802,414
|
|
|
778,012
|
|
|
727,665
|
|
|
738,133
|
|
|
696,479
|
|
|||||
Construction equipment
|
|
495,925
|
|
|
455,565
|
|
|
399,940
|
|
|
333,088
|
|
|
278,974
|
|
|||||
Commercial real estate
|
|
719,170
|
|
|
700,268
|
|
|
616,587
|
|
|
583,997
|
|
|
554,968
|
|
|||||
Residential real estate and home equity
|
|
521,931
|
|
|
490,468
|
|
|
476,504
|
|
|
495,273
|
|
|
474,322
|
|
|||||
Consumer
|
|
129,813
|
|
|
122,140
|
|
|
112,065
|
|
|
89,838
|
|
|
73,592
|
|
|||||
Total loans and leases
|
|
$
|
4,188,071
|
|
|
$
|
3,994,692
|
|
|
$
|
3,688,574
|
|
|
$
|
3,549,324
|
|
|
$
|
3,327,553
|
|
(Dollars in thousands)
|
|
0-1 Year
|
|
1-5 Years
|
|
Over 5 Years
|
|
Total
|
||||||||
Commercial and agricultural
|
|
$
|
384,190
|
|
|
$
|
347,995
|
|
|
$
|
80,079
|
|
|
$
|
812,264
|
|
Auto and light truck
|
|
172,224
|
|
|
233,006
|
|
|
6,534
|
|
|
411,764
|
|
||||
Medium and heavy duty truck
|
|
93,850
|
|
|
195,280
|
|
|
5,660
|
|
|
294,790
|
|
||||
Aircraft financing
|
|
205,417
|
|
|
510,239
|
|
|
86,758
|
|
|
802,414
|
|
||||
Construction equipment financing
|
|
139,285
|
|
|
342,709
|
|
|
13,931
|
|
|
495,925
|
|
||||
Total
|
|
$
|
994,966
|
|
|
$
|
1,629,229
|
|
|
$
|
192,962
|
|
|
$
|
2,817,157
|
|
Rate Sensitivity
(Dollars in thousands)
|
|
Fixed Rate
|
|
Variable Rate
|
|
Total
|
||||||
1 – 5 Years
|
|
$
|
1,083,471
|
|
|
$
|
545,758
|
|
|
$
|
1,629,229
|
|
Over 5 Years
|
|
50,046
|
|
|
142,916
|
|
|
192,962
|
|
|||
Total
|
|
$
|
1,133,517
|
|
|
$
|
688,674
|
|
|
$
|
1,822,191
|
|
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Amounts of loans and leases outstanding at end of period
|
|
$
|
4,188,071
|
|
|
$
|
3,994,692
|
|
|
$
|
3,688,574
|
|
|
$
|
3,549,324
|
|
|
$
|
3,327,553
|
|
Average amount of net loans and leases outstanding during period
|
|
$
|
4,113,508
|
|
|
$
|
3,837,149
|
|
|
$
|
3,639,985
|
|
|
$
|
3,433,938
|
|
|
$
|
3,209,490
|
|
Balance of reserve for loan and lease losses at beginning of period
|
|
$
|
88,112
|
|
|
$
|
85,068
|
|
|
$
|
83,505
|
|
|
$
|
83,311
|
|
|
$
|
81,644
|
|
Charge-offs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial and agricultural
|
|
547
|
|
|
3,489
|
|
|
5,007
|
|
|
538
|
|
|
524
|
|
|||||
Auto and light truck
|
|
4
|
|
|
24
|
|
|
42
|
|
|
226
|
|
|
3,754
|
|
|||||
Medium and heavy duty truck
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
41
|
|
|||||
Aircraft
|
|
6,123
|
|
|
244
|
|
|
—
|
|
|
1,308
|
|
|
600
|
|
|||||
Construction equipment
|
|
128
|
|
|
—
|
|
|
4
|
|
|
88
|
|
|
120
|
|
|||||
Commercial real estate
|
|
32
|
|
|
—
|
|
|
99
|
|
|
170
|
|
|
471
|
|
|||||
Residential real estate and home equity
|
|
219
|
|
|
295
|
|
|
46
|
|
|
424
|
|
|
687
|
|
|||||
Consumer
|
|
888
|
|
|
658
|
|
|
833
|
|
|
1,017
|
|
|
1,439
|
|
|||||
Total charge-offs
|
|
7,941
|
|
|
4,710
|
|
|
6,031
|
|
|
3,828
|
|
|
7,636
|
|
|||||
Recoveries:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial and agricultural
|
|
509
|
|
|
851
|
|
|
929
|
|
|
468
|
|
|
484
|
|
|||||
Auto and light truck
|
|
253
|
|
|
380
|
|
|
1,283
|
|
|
139
|
|
|
230
|
|
|||||
Medium and heavy duty truck
|
|
10
|
|
|
28
|
|
|
142
|
|
|
462
|
|
|
1,185
|
|
|||||
Aircraft
|
|
528
|
|
|
802
|
|
|
240
|
|
|
884
|
|
|
711
|
|
|||||
Construction equipment
|
|
461
|
|
|
434
|
|
|
525
|
|
|
323
|
|
|
268
|
|
|||||
Commercial real estate
|
|
469
|
|
|
2,807
|
|
|
347
|
|
|
627
|
|
|
223
|
|
|||||
Residential real estate and home equity
|
|
31
|
|
|
34
|
|
|
111
|
|
|
22
|
|
|
59
|
|
|||||
Consumer
|
|
278
|
|
|
258
|
|
|
284
|
|
|
325
|
|
|
391
|
|
|||||
Total recoveries
|
|
2,539
|
|
|
5,594
|
|
|
3,861
|
|
|
3,250
|
|
|
3,551
|
|
|||||
Net charge-offs (recoveries)
|
|
5,402
|
|
|
(884
|
)
|
|
2,170
|
|
|
578
|
|
|
4,085
|
|
|||||
Provision for loan and lease losses
|
|
5,833
|
|
|
2,160
|
|
|
3,733
|
|
|
772
|
|
|
5,752
|
|
|||||
Balance at end of period
|
|
$
|
88,543
|
|
|
$
|
88,112
|
|
|
$
|
85,068
|
|
|
$
|
83,505
|
|
|
$
|
83,311
|
|
Ratio of net charge-offs (recoveries) to average net loans and leases outstanding
|
|
0.13
|
%
|
|
(0.02
|
)%
|
|
0.06
|
%
|
|
0.02
|
%
|
|
0.13
|
%
|
|||||
Ratio of reserve for loan and lease losses to net loans and leases outstanding end of period
|
|
2.11
|
%
|
|
2.21
|
%
|
|
2.31
|
%
|
|
2.35
|
%
|
|
2.50
|
%
|
|||||
Coverage ratio of reserve for loan and lease losses to nonperforming loans and leases
|
|
435.68
|
%
|
|
686.23
|
%
|
|
239.07
|
%
|
|
225.73
|
%
|
|
226.03
|
%
|
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|||||
Commercial and agricultural
|
|
—
|
%
|
|
0.36
|
%
|
|
0.58
|
%
|
|
0.01
|
%
|
|
0.01
|
%
|
Auto and light truck
|
|
(0.06
|
)
|
|
(0.08
|
)
|
|
(0.30
|
)
|
|
0.02
|
|
|
0.85
|
|
Medium and heavy duty truck
|
|
—
|
|
|
(0.01
|
)
|
|
(0.06
|
)
|
|
(0.19
|
)
|
|
(0.53
|
)
|
Aircraft
|
|
0.69
|
|
|
(0.07
|
)
|
|
(0.03
|
)
|
|
0.06
|
|
|
(0.02
|
)
|
Construction equipment
|
|
(0.07
|
)
|
|
(0.10
|
)
|
|
(0.14
|
)
|
|
(0.08
|
)
|
|
(0.05
|
)
|
Commercial real estate
|
|
(0.06
|
)
|
|
(0.44
|
)
|
|
(0.04
|
)
|
|
(0.08
|
)
|
|
0.05
|
|
Residential real estate and home equity
|
|
0.04
|
|
|
0.05
|
|
|
(0.01
|
)
|
|
0.08
|
|
|
0.13
|
|
Consumer
|
|
0.49
|
|
|
0.33
|
|
|
0.56
|
|
|
0.82
|
|
|
1.57
|
|
Total net charge-offs (recoveries) to average portfolio loans and leases
|
|
0.13
|
%
|
|
(0.02
|
)%
|
|
0.06
|
%
|
|
0.02
|
%
|
|
0.13
|
%
|
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
|
Reserve Amount
|
|
Percentage of Loans and Leases in Each Category to Total Loans and Leases
|
|
Reserve Amount
|
|
Percentage of Loans and Leases in Each Category to Total Loans and Leases
|
|
Reserve Amount
|
|
Percentage of Loans and Leases in Each Category to Total Loans and Leases
|
|
Reserve Amount
|
|
Percentage of Loans and Leases in Each Category to Total Loans and Leases
|
|
Reserve Amount
|
|
Percentage of Loans and Leases in Each Category to Total Loans and Leases
|
|||||||||||||||
Commercial and agricultural
|
|
$
|
14,668
|
|
|
19.40
|
%
|
|
$
|
15,456
|
|
|
18.64
|
%
|
|
$
|
11,760
|
|
|
19.27
|
%
|
|
$
|
11,515
|
|
|
19.14
|
%
|
|
$
|
12,326
|
|
|
19.21
|
%
|
Auto and light truck
|
|
8,064
|
|
|
9.83
|
|
|
9,269
|
|
|
10.64
|
|
|
10,326
|
|
|
10.79
|
|
|
9,657
|
|
|
11.04
|
|
|
8,864
|
|
|
11.92
|
|
|||||
Medium and heavy duty truck
|
|
4,740
|
|
|
7.04
|
|
|
4,699
|
|
|
6.97
|
|
|
4,500
|
|
|
6.70
|
|
|
4,212
|
|
|
6.70
|
|
|
3,721
|
|
|
6.42
|
|
|||||
Aircraft
|
|
34,352
|
|
|
19.16
|
|
|
32,373
|
|
|
19.48
|
|
|
32,234
|
|
|
19.73
|
|
|
34,037
|
|
|
20.80
|
|
|
34,205
|
|
|
20.93
|
|
|||||
Construction equipment
|
|
8,207
|
|
|
11.84
|
|
|
7,592
|
|
|
11.40
|
|
|
7,008
|
|
|
10.84
|
|
|
5,972
|
|
|
9.38
|
|
|
5,390
|
|
|
8.38
|
|
|||||
Commercial real estate
|
|
13,677
|
|
|
17.17
|
|
|
13,762
|
|
|
17.53
|
|
|
13,270
|
|
|
16.72
|
|
|
12,406
|
|
|
16.45
|
|
|
13,778
|
|
|
16.68
|
|
|||||
Residential real estate and home equity
|
|
3,550
|
|
|
12.46
|
|
|
3,662
|
|
|
12.28
|
|
|
4,504
|
|
|
12.91
|
|
|
4,539
|
|
|
13.96
|
|
|
4,101
|
|
|
14.25
|
|
|||||
Consumer
|
|
1,285
|
|
|
3.10
|
|
|
1,299
|
|
|
3.06
|
|
|
1,466
|
|
|
3.04
|
|
|
1,167
|
|
|
2.53
|
|
|
926
|
|
|
2.21
|
|
|||||
Total
|
|
$
|
88,543
|
|
|
100.00
|
%
|
|
$
|
88,112
|
|
|
100.00
|
%
|
|
$
|
85,068
|
|
|
100.00
|
%
|
|
$
|
83,505
|
|
|
100.00
|
%
|
|
$
|
83,311
|
|
|
100.00
|
%
|
Nonperforming assets at December 31
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Loans past due over 90 days
|
|
$
|
416
|
|
|
$
|
122
|
|
|
$
|
981
|
|
|
$
|
287
|
|
|
$
|
442
|
|
Nonaccrual loans and leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial and agricultural
|
|
3,981
|
|
|
4,283
|
|
|
14,284
|
|
|
11,765
|
|
|
9,179
|
|
|||||
Auto and light truck
|
|
166
|
|
|
46
|
|
|
38
|
|
|
3,511
|
|
|
35
|
|
|||||
Medium and heavy duty truck
|
|
—
|
|
|
—
|
|
|
56
|
|
|
188
|
|
|
875
|
|
|||||
Aircraft
|
|
6,110
|
|
|
4,388
|
|
|
12,473
|
|
|
10,365
|
|
|
5,292
|
|
|||||
Construction equipment
|
|
1,248
|
|
|
539
|
|
|
751
|
|
|
1,032
|
|
|
5,285
|
|
|||||
Commercial real estate
|
|
5,555
|
|
|
1,392
|
|
|
4,807
|
|
|
7,064
|
|
|
13,055
|
|
|||||
Residential real estate and home equity
|
|
2,641
|
|
|
1,961
|
|
|
2,094
|
|
|
2,691
|
|
|
2,603
|
|
|||||
Consumer
|
|
206
|
|
|
109
|
|
|
99
|
|
|
91
|
|
|
93
|
|
|||||
Total nonaccrual loans and leases
|
|
19,907
|
|
|
12,718
|
|
|
34,602
|
|
|
36,707
|
|
|
36,417
|
|
|||||
Total nonperforming loans and leases
|
|
20,323
|
|
|
12,840
|
|
|
35,583
|
|
|
36,994
|
|
|
36,859
|
|
|||||
Other real estate
|
|
704
|
|
|
736
|
|
|
1,109
|
|
|
4,539
|
|
|
7,311
|
|
|||||
Former bank premises held for sale
|
|
—
|
|
|
—
|
|
|
626
|
|
|
951
|
|
|
1,034
|
|
|||||
Repossessions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial and agricultural
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|||||
Auto and light truck
|
|
32
|
|
|
10
|
|
|
25
|
|
|
145
|
|
|
52
|
|
|||||
Medium and heavy duty truck
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Aircraft
|
|
9,335
|
|
|
6,916
|
|
|
5,123
|
|
|
4,082
|
|
|
—
|
|
|||||
Construction equipment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Consumer
|
|
6
|
|
|
1
|
|
|
8
|
|
|
12
|
|
|
11
|
|
|||||
Total repossessions
|
|
9,373
|
|
|
6,927
|
|
|
5,156
|
|
|
4,262
|
|
|
63
|
|
|||||
Operating leases
|
|
34
|
|
|
121
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|||||
Total nonperforming assets
|
|
$
|
30,434
|
|
|
$
|
20,624
|
|
|
$
|
42,480
|
|
|
$
|
46,746
|
|
|
$
|
45,267
|
|
Nonperforming loans and leases to loans and leases, net of unearned discount
|
|
0.49
|
%
|
|
0.32
|
%
|
|
0.96
|
%
|
|
1.04
|
%
|
|
1.11
|
%
|
|||||
Nonperforming assets to loans and leases and operating leases, net of unearned discount
|
|
0.70
|
%
|
|
0.50
|
%
|
|
1.13
|
%
|
|
1.29
|
%
|
|
1.25
|
%
|
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
U.S. Treasury and Federal agencies securities
|
|
$
|
424,495
|
|
|
$
|
389,457
|
|
|
$
|
371,878
|
|
U.S. States and political subdivisions securities
|
|
133,509
|
|
|
120,441
|
|
|
121,510
|
|
|||
Mortgage-backed securities — Federal agencies
|
|
252,981
|
|
|
234,400
|
|
|
248,299
|
|
|||
Corporate debt securities
|
|
35,266
|
|
|
34,241
|
|
|
31,677
|
|
|||
Foreign government and other securities
|
|
800
|
|
|
800
|
|
|
800
|
|
|||
Marketable equity securities
|
|
1,265
|
|
|
1,893
|
|
|
1,893
|
|
|||
Total investment securities available-for-sale
|
|
$
|
848,316
|
|
|
$
|
781,232
|
|
|
$
|
776,057
|
|
(Dollars in thousands)
|
|
Amount
|
|
Yield
|
|||
U.S. Treasury and Federal agencies securities
|
|
|
|
|
|
|
|
Under 1 year
|
|
$
|
88,623
|
|
|
1.54
|
%
|
1 – 5 years
|
|
289,501
|
|
|
1.51
|
|
|
5 – 10 years
|
|
46,371
|
|
|
1.88
|
|
|
Over 10 years
|
|
—
|
|
|
—
|
|
|
Total U.S. Treasury and Federal agencies securities
|
|
424,495
|
|
|
1.56
|
|
|
U.S. States and political subdivisions securities
|
|
|
|
|
|
|
|
Under 1 year
|
|
16,940
|
|
|
2.78
|
|
|
1 – 5 years
|
|
74,076
|
|
|
3.14
|
|
|
5 – 10 years
|
|
42,493
|
|
|
2.76
|
|
|
Over 10 years
|
|
—
|
|
|
—
|
|
|
Total U.S. States and political subdivisions securities
|
|
133,509
|
|
|
2.98
|
|
|
Corporate debt securities
|
|
|
|
|
|
|
|
Under 1 year
|
|
11,167
|
|
|
1.99
|
|
|
1 – 5 years
|
|
24,099
|
|
|
1.72
|
|
|
5 – 10 years
|
|
—
|
|
|
—
|
|
|
Over 10 years
|
|
—
|
|
|
—
|
|
|
Total Corporate debt securities
|
|
35,266
|
|
|
1.81
|
|
|
Foreign government and other securities
|
|
|
|
|
|
|
|
Under 1 year
|
|
600
|
|
|
1.98
|
|
|
1 – 5 years
|
|
200
|
|
|
1.86
|
|
|
5 – 10 years
|
|
—
|
|
|
—
|
|
|
Over 10 years
|
|
—
|
|
|
—
|
|
|
Total Foreign government and other securities
|
|
800
|
|
|
1.95
|
|
|
Mortgage-backed securities — Federal agencies
|
|
252,981
|
|
|
2.19
|
|
|
Marketable equity securities
|
|
1,265
|
|
|
12.74
|
|
|
Total investment securities available-for-sale
|
|
$
|
848,316
|
|
|
2.00
|
%
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
|||||||||
Noninterest bearing demand
|
|
$
|
943,874
|
|
|
—
|
%
|
|
$
|
854,070
|
|
|
—
|
%
|
|
$
|
762,050
|
|
|
—
|
%
|
Interest bearing demand
|
|
1,395,195
|
|
|
0.17
|
|
|
1,334,850
|
|
|
0.12
|
|
|
1,296,929
|
|
|
0.12
|
|
|||
Savings
|
|
786,983
|
|
|
0.08
|
|
|
733,848
|
|
|
0.08
|
|
|
710,216
|
|
|
0.08
|
|
|||
Time
|
|
1,176,649
|
|
|
1.04
|
|
|
1,038,292
|
|
|
0.89
|
|
|
1,008,548
|
|
|
0.91
|
|
|||
Total deposits
|
|
$
|
4,302,701
|
|
|
|
|
$
|
3,961,060
|
|
|
|
|
$
|
3,777,743
|
|
|
|
(Dollars in thousands)
|
|
Federal Funds Purchased and Securities Repurchase Agreements
|
|
Commercial Paper
|
|
Other
Short-Term Borrowings
|
|
Total Borrowings
|
||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at December 31, 2016
|
|
$
|
162,913
|
|
|
$
|
5,761
|
|
|
$
|
123,269
|
|
|
$
|
291,943
|
|
Maximum amount outstanding at any month-end
|
|
187,239
|
|
|
8,640
|
|
|
130,822
|
|
|
326,701
|
|
||||
Average amount outstanding
|
|
171,316
|
|
|
6,929
|
|
|
32,631
|
|
|
210,876
|
|
||||
Weighted average interest rate during the year
|
|
0.21
|
%
|
|
0.27
|
%
|
|
0.45
|
%
|
|
0.25
|
%
|
||||
Weighted average interest rate for outstanding amounts at December 31, 2016
|
|
0.17
|
%
|
|
0.27
|
%
|
|
0.57
|
%
|
|
0.34
|
%
|
||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at December 31, 2015
|
|
$
|
130,662
|
|
|
$
|
7,295
|
|
|
$
|
95,272
|
|
|
$
|
233,229
|
|
Maximum amount outstanding at any month-end
|
|
179,600
|
|
|
14,135
|
|
|
149,783
|
|
|
343,518
|
|
||||
Average amount outstanding
|
|
145,084
|
|
|
10,722
|
|
|
81,134
|
|
|
236,940
|
|
||||
Weighted average interest rate during the year
|
|
0.16
|
%
|
|
0.27
|
%
|
|
0.28
|
%
|
|
0.20
|
%
|
||||
Weighted average interest rate for outstanding amounts at December 31, 2015
|
|
0.29
|
%
|
|
0.28
|
%
|
|
0.38
|
%
|
|
0.33
|
%
|
||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at December 31, 2014
|
|
$
|
138,843
|
|
|
$
|
11,778
|
|
|
$
|
95,201
|
|
|
$
|
245,822
|
|
Maximum amount outstanding at any month-end
|
|
230,075
|
|
|
17,245
|
|
|
155,573
|
|
|
402,893
|
|
||||
Average amount outstanding
|
|
143,270
|
|
|
13,137
|
|
|
106,970
|
|
|
263,377
|
|
||||
Weighted average interest rate during the year
|
|
0.15
|
%
|
|
0.26
|
%
|
|
0.27
|
%
|
|
0.21
|
%
|
||||
Weighted average interest rate for outstanding amounts at December 31, 2014
|
|
0.13
|
%
|
|
0.27
|
%
|
|
0.29
|
%
|
|
0.20
|
%
|
(i)
|
Available Liquidity (sum of short term borrowing capacity) greater than $500 million;
|
(ii)
|
Liquidity Ratio (total of net cash, short term investments and unpledged marketable assets divided by the sum of net deposits and short term liabilities) greater than 15%;
|
(iii)
|
Dependency Ratio (net potentially volatile liabilities minus short term investments divided by total earning assets minus short term investments) less than 15%; and
|
(iv)
|
Loans to Deposits Ratio less than 100%
|
|
|
Percentage Change in Net Interest Income
|
||||||
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Basis Point Interest Rate Change
|
|
12 Months
|
|
24 Months
|
|
12 Months
|
|
24 Months
|
Up 200
|
|
3.74%
|
|
9.67%
|
|
4.41%
|
|
9.59%
|
Up 100
|
|
1.61%
|
|
4.47%
|
|
1.55%
|
|
3.95%
|
Down 100
|
|
(3.84)%
|
|
(8.04)%
|
|
(2.60)%
|
|
(6.57)%
|
(Dollars in thousands)
|
|
Note
|
|
0 – 1 Year
|
|
1 – 3 Years
|
|
3 – 5 Years
|
|
Over 5 Years
|
|
Indeterminate maturity
|
|
Total
|
||||||||||||
Deposits without stated maturity
|
|
—
|
|
$
|
3,277,108
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,277,108
|
|
Certificates of deposit
|
|
10
|
|
581,280
|
|
|
369,469
|
|
|
98,329
|
|
|
7,574
|
|
|
—
|
|
|
1,056,652
|
|
||||||
Long-term debt
|
|
11
|
|
26,559
|
|
|
2,163
|
|
|
2,151
|
|
|
24,258
|
|
|
19,177
|
|
|
74,308
|
|
||||||
Subordinated notes
|
|
12
|
|
—
|
|
|
|
|
|
—
|
|
|
58,764
|
|
|
—
|
|
|
58,764
|
|
||||||
Operating leases
|
|
18
|
|
3,517
|
|
|
5,982
|
|
|
4,148
|
|
|
1,377
|
|
|
—
|
|
|
15,024
|
|
||||||
Purchase obligations
|
|
—
|
|
23,797
|
|
|
8,388
|
|
|
421
|
|
|
—
|
|
|
—
|
|
|
32,606
|
|
||||||
Total contractual obligations
|
|
|
|
$
|
3,912,261
|
|
|
$
|
386,002
|
|
|
$
|
105,049
|
|
|
$
|
91,973
|
|
|
$
|
19,177
|
|
|
$
|
4,514,462
|
|
Three Months Ended
(Dollars in thousands, except per share amounts)
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income
|
|
$
|
46,799
|
|
|
$
|
47,937
|
|
|
$
|
48,300
|
|
|
$
|
48,724
|
|
Interest expense
|
|
5,510
|
|
|
5,644
|
|
|
5,606
|
|
|
5,341
|
|
||||
Net interest income
|
|
41,289
|
|
|
42,293
|
|
|
42,694
|
|
|
43,383
|
|
||||
Provision for loan and lease losses
|
|
975
|
|
|
2,049
|
|
|
2,067
|
|
|
742
|
|
||||
Gains (losses) on investment securities available-for-sale
|
|
10
|
|
|
(209
|
)
|
|
989
|
|
|
1,006
|
|
||||
Income before income taxes
|
|
21,236
|
|
|
22,507
|
|
|
22,147
|
|
|
23,236
|
|
||||
Net income
|
|
13,818
|
|
|
14,479
|
|
|
14,264
|
|
|
15,225
|
|
||||
Diluted net income per common share
|
|
0.53
|
|
|
0.56
|
|
|
0.55
|
|
|
0.58
|
|
||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest income
|
|
$
|
43,632
|
|
|
$
|
46,214
|
|
|
$
|
46,821
|
|
|
$
|
48,017
|
|
Interest expense
|
|
4,196
|
|
|
4,549
|
|
|
4,612
|
|
|
4,806
|
|
||||
Net interest income
|
|
39,436
|
|
|
41,665
|
|
|
42,209
|
|
|
43,211
|
|
||||
Provision for loan and lease losses
|
|
357
|
|
|
811
|
|
|
992
|
|
|
—
|
|
||||
Gains on investment securities available-for-sale
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Income before income taxes
|
|
20,769
|
|
|
24,144
|
|
|
21,281
|
|
|
22,369
|
|
||||
Net income
|
|
13,511
|
|
|
15,630
|
|
|
13,928
|
|
|
14,417
|
|
||||
Diluted net income per common share
|
|
0.51
|
|
|
0.59
|
|
|
0.53
|
|
|
0.55
|
|
/s/ BKD, LLP
|
|
|
|
|
|
Fort Wayne, Indiana
|
|
February 17, 2017
|
|
/s/ Ernst & Young LLP
|
|
|
|
|
|
Chicago, Illinois
|
|
February 20, 2015
|
|
except for Note 13 as to which the date is
|
|
February 19, 2016
|
|
/s/ BKD, LLP
|
|
|
|
|
|
Fort Wayne, Indiana
|
|
February 17, 2017
|
|
December 31
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
|
|
|
||
Cash and due from banks
|
|
$
|
58,578
|
|
|
$
|
65,171
|
|
Federal funds sold and interest bearing deposits with other banks
|
|
49,726
|
|
|
14,550
|
|
||
Investment securities available-for-sale
|
|
850,467
|
|
|
791,727
|
|
||
Other investments
|
|
22,458
|
|
|
21,973
|
|
||
Mortgages held for sale
|
|
15,849
|
|
|
9,825
|
|
||
Loans and leases, net of unearned discount:
|
|
|
|
|
|
|
||
Commercial and agricultural
|
|
812,264
|
|
|
744,749
|
|
||
Auto and light truck
|
|
411,764
|
|
|
425,236
|
|
||
Medium and heavy duty truck
|
|
294,790
|
|
|
278,254
|
|
||
Aircraft
|
|
802,414
|
|
|
778,012
|
|
||
Construction equipment
|
|
495,925
|
|
|
455,565
|
|
||
Commercial real estate
|
|
719,170
|
|
|
700,268
|
|
||
Residential real estate and home equity
|
|
521,931
|
|
|
490,468
|
|
||
Consumer
|
|
129,813
|
|
|
122,140
|
|
||
Total loans and leases
|
|
4,188,071
|
|
|
3,994,692
|
|
||
Reserve for loan and lease losses
|
|
(88,543
|
)
|
|
(88,112
|
)
|
||
Net loans and leases
|
|
4,099,528
|
|
|
3,906,580
|
|
||
Equipment owned under operating leases, net
|
|
118,793
|
|
|
110,371
|
|
||
Net premises and equipment
|
|
56,708
|
|
|
53,191
|
|
||
Goodwill and intangible assets
|
|
84,102
|
|
|
84,676
|
|
||
Accrued income and other assets
|
|
130,059
|
|
|
129,852
|
|
||
Total assets
|
|
$
|
5,486,268
|
|
|
$
|
5,187,916
|
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
|
|
|
||
Deposits:
|
|
|
|
|
|
|
||
Noninterest-bearing demand
|
|
$
|
991,256
|
|
|
$
|
902,364
|
|
Interest-bearing deposits:
|
|
|
|
|
||||
Interest-bearing demand
|
|
1,471,526
|
|
|
1,350,417
|
|
||
Savings
|
|
814,326
|
|
|
745,661
|
|
||
Time
|
|
1,056,652
|
|
|
1,140,744
|
|
||
Total interest-bearing deposits
|
|
3,342,504
|
|
|
3,236,822
|
|
||
Total deposits
|
|
4,333,760
|
|
|
4,139,186
|
|
||
Short-term borrowings:
|
|
|
|
|
|
|
||
Federal funds purchased and securities sold under agreements to repurchase
|
|
162,913
|
|
|
130,662
|
|
||
Other short-term borrowings
|
|
129,030
|
|
|
102,567
|
|
||
Total short-term borrowings
|
|
291,943
|
|
|
233,229
|
|
||
Long-term debt and mandatorily redeemable securities
|
|
74,308
|
|
|
57,379
|
|
||
Subordinated notes
|
|
58,764
|
|
|
58,764
|
|
||
Accrued expenses and other liabilities
|
|
54,843
|
|
|
55,305
|
|
||
Total liabilities
|
|
4,813,618
|
|
|
4,543,863
|
|
||
|
|
|
|
|
||||
SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
||
Preferred stock; no par value
Authorized 10,000,000 shares; none issued or outstanding
|
|
—
|
|
|
—
|
|
||
Common Stock; no par value
Authorized 40,000,000 shares; issued 28,205,674 shares at December 31, 2016 and 2015
|
|
436,538
|
|
|
436,538
|
|
||
Retained earnings
|
|
290,824
|
|
|
251,812
|
|
||
Cost of common stock in treasury (2,329,909 shares at December 31, 2016 and 2,178,090 shares at December 31, 2015)
|
|
(56,056
|
)
|
|
(50,852
|
)
|
||
Accumulated other comprehensive income
|
|
1,344
|
|
|
6,555
|
|
||
Total shareholders’ equity
|
|
672,650
|
|
|
644,053
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
5,486,268
|
|
|
$
|
5,187,916
|
|
Year Ended December 31
(Dollars in thousands, except per share amounts)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Interest income:
|
|
|
|
|
|
|
|
|
|
|||
Loans and leases
|
|
$
|
175,999
|
|
|
$
|
168,766
|
|
|
$
|
161,215
|
|
Investment securities, taxable
|
|
11,777
|
|
|
11,929
|
|
|
13,054
|
|
|||
Investment securities, tax-exempt
|
|
2,740
|
|
|
2,992
|
|
|
3,269
|
|
|||
Other
|
|
1,244
|
|
|
997
|
|
|
1,016
|
|
|||
Total interest income
|
|
191,760
|
|
|
184,684
|
|
|
178,554
|
|
|||
Interest expense:
|
|
|
|
|
|
|
|
|
|
|||
Deposits
|
|
15,267
|
|
|
11,489
|
|
|
11,356
|
|
|||
Short-term borrowings
|
|
525
|
|
|
484
|
|
|
541
|
|
|||
Subordinated notes
|
|
4,220
|
|
|
4,220
|
|
|
4,220
|
|
|||
Long-term debt and mandatorily redeemable securities
|
|
2,089
|
|
|
1,970
|
|
|
2,108
|
|
|||
Total interest expense
|
|
22,101
|
|
|
18,163
|
|
|
18,225
|
|
|||
Net interest income
|
|
169,659
|
|
|
166,521
|
|
|
160,329
|
|
|||
Provision for loan and lease losses
|
|
5,833
|
|
|
2,160
|
|
|
3,733
|
|
|||
Net interest income after provision for loan and lease losses
|
|
163,826
|
|
|
164,361
|
|
|
156,596
|
|
|||
Noninterest income:
|
|
|
|
|
|
|
|
|
|
|||
Trust and wealth advisory
|
|
19,256
|
|
|
19,126
|
|
|
18,511
|
|
|||
Service charges on deposit accounts
|
|
9,053
|
|
|
9,313
|
|
|
8,684
|
|
|||
Debit card
|
|
10,887
|
|
|
10,217
|
|
|
9,585
|
|
|||
Mortgage banking
|
|
4,496
|
|
|
4,570
|
|
|
5,381
|
|
|||
Insurance commissions
|
|
5,513
|
|
|
5,465
|
|
|
5,556
|
|
|||
Equipment rental
|
|
25,863
|
|
|
22,302
|
|
|
17,156
|
|
|||
Gains on investment securities available-for-sale
|
|
1,796
|
|
|
4
|
|
|
963
|
|
|||
Other
|
|
12,081
|
|
|
12,319
|
|
|
12,051
|
|
|||
Total noninterest income
|
|
88,945
|
|
|
83,316
|
|
|
77,887
|
|
|||
Noninterest expense:
|
|
|
|
|
|
|
|
|
|
|||
Salaries and employee benefits
|
|
86,837
|
|
|
86,133
|
|
|
80,488
|
|
|||
Net occupancy
|
|
9,686
|
|
|
9,768
|
|
|
9,311
|
|
|||
Furniture and equipment
|
|
19,500
|
|
|
18,348
|
|
|
17,657
|
|
|||
Depreciation — leased equipment
|
|
21,678
|
|
|
18,280
|
|
|
13,893
|
|
|||
Professional fees
|
|
5,161
|
|
|
4,682
|
|
|
5,046
|
|
|||
Supplies and communication
|
|
5,244
|
|
|
6,011
|
|
|
5,589
|
|
|||
FDIC and other insurance
|
|
3,147
|
|
|
3,412
|
|
|
3,384
|
|
|||
Business development and marketing
|
|
4,936
|
|
|
4,837
|
|
|
6,049
|
|
|||
Loan and lease collection and repossession
|
|
1,600
|
|
|
667
|
|
|
1,102
|
|
|||
Other
|
|
5,856
|
|
|
6,976
|
|
|
7,521
|
|
|||
Total noninterest expense
|
|
163,645
|
|
|
159,114
|
|
|
150,040
|
|
|||
Income before income taxes
|
|
89,126
|
|
|
88,563
|
|
|
84,443
|
|
|||
Income tax expense
|
|
31,340
|
|
|
31,077
|
|
|
26,374
|
|
|||
Net income
|
|
$
|
57,786
|
|
|
$
|
57,486
|
|
|
$
|
58,069
|
|
Basic net income per common share
|
|
$
|
2.22
|
|
|
$
|
2.17
|
|
|
$
|
2.17
|
|
Diluted net income per common share
|
|
$
|
2.22
|
|
|
$
|
2.17
|
|
|
$
|
2.17
|
|
Year Ended December 31
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
|
$
|
57,786
|
|
|
$
|
57,486
|
|
|
$
|
58,069
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
|
|||
Change in unrealized (depreciation) appreciation of investment securities available-for-sale
|
|
(6,547
|
)
|
|
(4,562
|
)
|
|
5,488
|
|
|||
Reclassification adjustment for realized (gains) losses included in net income
|
|
(1,796
|
)
|
|
(4
|
)
|
|
(963
|
)
|
|||
Income tax effect
|
|
3,132
|
|
|
1,714
|
|
|
(1,699
|
)
|
|||
Other comprehensive (loss) income, net of tax
|
|
(5,211
|
)
|
|
(2,852
|
)
|
|
2,826
|
|
|||
Comprehensive income
|
|
$
|
52,575
|
|
|
$
|
54,634
|
|
|
$
|
60,895
|
|
(Dollars in thousands, except per share amounts)
|
|
Preferred Stock
|
|
Common Stock
|
|
Retained Earnings
|
|
Cost of Common Stock in Treasury
|
|
Accumulated Other Comprehensive Income (Loss), Net
|
|
Total
|
||||||||||||
Balance at January 1, 2014
|
|
$
|
—
|
|
|
$
|
346,535
|
|
|
$
|
261,626
|
|
|
$
|
(29,364
|
)
|
|
$
|
6,581
|
|
|
$
|
585,378
|
|
Net income
|
|
—
|
|
|
—
|
|
|
58,069
|
|
|
—
|
|
|
—
|
|
|
58,069
|
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,826
|
|
|
2,826
|
|
||||||
Issuance of 91,675 common shares under stock based compensation awards, including related tax effects
|
|
—
|
|
|
—
|
|
|
(243
|
)
|
|
1,995
|
|
|
—
|
|
|
1,752
|
|
||||||
Cost of 597,747 shares of common stock acquired for treasury
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,342
|
)
|
|
—
|
|
|
(16,342
|
)
|
||||||
Common stock dividend ($0.645 per share)
|
|
—
|
|
|
—
|
|
|
(17,210
|
)
|
|
—
|
|
|
—
|
|
|
(17,210
|
)
|
||||||
Balance at December 31, 2014
|
|
$
|
—
|
|
|
$
|
346,535
|
|
|
$
|
302,242
|
|
|
$
|
(43,711
|
)
|
|
$
|
9,407
|
|
|
$
|
614,473
|
|
Net income
|
|
—
|
|
|
—
|
|
|
57,486
|
|
|
—
|
|
|
—
|
|
|
57,486
|
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,852
|
)
|
|
(2,852
|
)
|
||||||
Issuance of 118,281 common shares under stock based compensation awards, including related tax effects
|
|
—
|
|
|
—
|
|
|
(245
|
)
|
|
2,829
|
|
|
—
|
|
|
2,584
|
|
||||||
Cost of 338,985 shares of common stock acquired for treasury
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,970
|
)
|
|
—
|
|
|
(9,970
|
)
|
||||||
Common stock dividend ($0.671 per share)
|
|
—
|
|
|
—
|
|
|
(17,655
|
)
|
|
—
|
|
|
—
|
|
|
(17,655
|
)
|
||||||
10% common stock dividend ($13 cash paid in lieu of fractional shares)
|
|
—
|
|
|
90,003
|
|
|
(90,016
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||||
Balance at December 31, 2015
|
|
$
|
—
|
|
|
$
|
436,538
|
|
|
$
|
251,812
|
|
|
$
|
(50,852
|
)
|
|
$
|
6,555
|
|
|
$
|
644,053
|
|
Net income
|
|
—
|
|
|
—
|
|
|
57,786
|
|
|
—
|
|
|
—
|
|
|
57,786
|
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,211
|
)
|
|
(5,211
|
)
|
||||||
Issuance of 118,559 common shares under stock based compensation awards, including related tax effects
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
2,826
|
|
|
—
|
|
|
2,808
|
|
||||||
Cost of 270,378 shares of common stock acquired for treasury
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,030
|
)
|
|
—
|
|
|
(8,030
|
)
|
||||||
Common stock dividend ($0.720 per share)
|
|
—
|
|
|
—
|
|
|
(18,756
|
)
|
|
—
|
|
|
—
|
|
|
(18,756
|
)
|
||||||
Balance at December 31, 2016
|
|
$
|
—
|
|
|
$
|
436,538
|
|
|
$
|
290,824
|
|
|
$
|
(56,056
|
)
|
|
$
|
1,344
|
|
|
$
|
672,650
|
|
Year Ended December 31
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Net income
|
|
$
|
57,786
|
|
|
$
|
57,486
|
|
|
$
|
58,069
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Provision for loan and lease losses
|
|
5,833
|
|
|
2,160
|
|
|
3,733
|
|
|||
Depreciation of premises and equipment
|
|
5,245
|
|
|
4,780
|
|
|
4,748
|
|
|||
Depreciation of equipment owned and leased to others
|
|
21,678
|
|
|
18,280
|
|
|
13,893
|
|
|||
Stock-based compensation
|
|
2,884
|
|
|
3,843
|
|
|
3,179
|
|
|||
Amortization of investment securities premiums and accretion of discounts, net
|
|
5,861
|
|
|
4,652
|
|
|
4,351
|
|
|||
Amortization of mortgage servicing rights
|
|
1,478
|
|
|
1,424
|
|
|
1,278
|
|
|||
Deferred income taxes
|
|
2,856
|
|
|
1,620
|
|
|
4,341
|
|
|||
Gains on investment securities available-for-sale
|
|
(1,796
|
)
|
|
(4
|
)
|
|
(963
|
)
|
|||
Originations of loans held for sale, net of principal collected
|
|
(119,134
|
)
|
|
(113,029
|
)
|
|
(121,440
|
)
|
|||
Proceeds from the sales of loans held for sale
|
|
116,397
|
|
|
120,138
|
|
|
117,447
|
|
|||
Net gain on sale of loans held for sale
|
|
(3,287
|
)
|
|
(3,330
|
)
|
|
(3,532
|
)
|
|||
Net gain on sale of other real estate and repossessions
|
|
(228
|
)
|
|
(814
|
)
|
|
(1,624
|
)
|
|||
Change in trading account securities
|
|
—
|
|
|
205
|
|
|
(13
|
)
|
|||
Change in interest receivable
|
|
(1,326
|
)
|
|
(549
|
)
|
|
(603
|
)
|
|||
Change in interest payable
|
|
570
|
|
|
798
|
|
|
(917
|
)
|
|||
Change in other assets
|
|
2,145
|
|
|
(8,230
|
)
|
|
(9,848
|
)
|
|||
Change in other liabilities
|
|
648
|
|
|
8,010
|
|
|
(2,481
|
)
|
|||
Other
|
|
450
|
|
|
3,168
|
|
|
2,733
|
|
|||
Net change in operating activities
|
|
98,060
|
|
|
100,608
|
|
|
72,351
|
|
|||
Investing activities:
|
|
|
|
|
|
|
|
|
|
|||
Proceeds from sales of investment securities available-for-sale
|
|
23,784
|
|
|
1,299
|
|
|
1,236
|
|
|||
Proceeds from maturities and paydowns of investment securities available-for-sale
|
|
217,613
|
|
|
136,649
|
|
|
190,323
|
|
|||
Purchases of investment securities available-for-sale
|
|
(313,074
|
)
|
|
(147,771
|
)
|
|
(148,841
|
)
|
|||
Proceeds from liquidation of partnership investment
|
|
2,903
|
|
|
423
|
|
|
570
|
|
|||
Net change in other investments
|
|
(485
|
)
|
|
(1,172
|
)
|
|
1,599
|
|
|||
Loans sold or participated to others
|
|
5,926
|
|
|
1,962
|
|
|
16,889
|
|
|||
Net change in loans and leases
|
|
(209,668
|
)
|
|
(315,938
|
)
|
|
(165,463
|
)
|
|||
Net change in equipment owned under operating leases
|
|
(30,100
|
)
|
|
(54,508
|
)
|
|
(27,069
|
)
|
|||
Purchases of premises and equipment
|
|
(8,935
|
)
|
|
(9,498
|
)
|
|
(8,489
|
)
|
|||
Proceeds from sales of other real estate and repossessions
|
|
2,189
|
|
|
6,941
|
|
|
10,418
|
|
|||
Net change in investing activities
|
|
(309,847
|
)
|
|
(381,613
|
)
|
|
(128,827
|
)
|
|||
Financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Net change in demand deposits and savings accounts
|
|
278,666
|
|
|
173,508
|
|
|
102,130
|
|
|||
Net change in time deposits
|
|
(84,092
|
)
|
|
162,818
|
|
|
47,080
|
|
|||
Net change in short-term borrowings
|
|
58,714
|
|
|
(12,593
|
)
|
|
(68,309
|
)
|
|||
Proceeds from issuance of long-term debt
|
|
20,837
|
|
|
—
|
|
|
7,161
|
|
|||
Payments on long-term debt
|
|
(6,429
|
)
|
|
(1,250
|
)
|
|
(11,660
|
)
|
|||
Stock issued under stock purchase plans
|
|
120
|
|
|
149
|
|
|
197
|
|
|||
Acquisition of treasury stock
|
|
(8,030
|
)
|
|
(9,970
|
)
|
|
(16,342
|
)
|
|||
Cash dividends paid on common stock
|
|
(19,416
|
)
|
|
(18,126
|
)
|
|
(17,643
|
)
|
|||
Net change in financing activities
|
|
240,370
|
|
|
294,536
|
|
|
42,614
|
|
|||
Net change in cash and cash equivalents
|
|
28,583
|
|
|
13,531
|
|
|
(13,862
|
)
|
|||
Cash and cash equivalents, beginning of year
|
|
79,721
|
|
|
66,190
|
|
|
80,052
|
|
|||
Cash and cash equivalents, end of year
|
|
$
|
108,304
|
|
|
$
|
79,721
|
|
|
$
|
66,190
|
|
Supplemental Information:
|
|
|
|
|
|
|
|
|
|
|||
Non-cash transactions:
|
|
|
|
|
|
|
|
|
|
|||
Loans transferred to other real estate and repossessions
|
|
$
|
4,961
|
|
|
$
|
8,742
|
|
|
$
|
7,154
|
|
Common stock matching contribution to Employee Stock Ownership and Profit Sharing Plan
|
|
800
|
|
|
500
|
|
|
—
|
|
|||
Stock dividend paid on common stock
|
|
—
|
|
|
90,003
|
|
|
—
|
|
|||
Cash paid for:
|
|
|
|
|
|
|
|
|
|
|||
Interest
|
|
$
|
21,531
|
|
|
$
|
17,364
|
|
|
$
|
19,143
|
|
Income taxes
|
|
19,866
|
|
|
30,429
|
|
|
29,211
|
|
(Dollars in thousands)
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury and Federal agencies securities
|
|
$
|
424,495
|
|
|
$
|
809
|
|
|
$
|
(4,471
|
)
|
|
$
|
420,833
|
|
U.S. States and political subdivisions securities
|
|
133,509
|
|
|
1,036
|
|
|
(1,570
|
)
|
|
132,975
|
|
||||
Mortgage-backed securities - Federal agencies
|
|
252,981
|
|
|
2,175
|
|
|
(2,582
|
)
|
|
252,574
|
|
||||
Corporate debt securities
|
|
35,266
|
|
|
111
|
|
|
(301
|
)
|
|
35,076
|
|
||||
Foreign government and other securities
|
|
800
|
|
|
7
|
|
|
—
|
|
|
807
|
|
||||
Total debt securities
|
|
847,051
|
|
|
4,138
|
|
|
(8,924
|
)
|
|
842,265
|
|
||||
Marketable equity securities
|
|
1,265
|
|
|
7,007
|
|
|
(70
|
)
|
|
8,202
|
|
||||
Total investment securities available-for-sale
|
|
$
|
848,316
|
|
|
$
|
11,145
|
|
|
$
|
(8,994
|
)
|
|
$
|
850,467
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury and Federal agencies securities
|
|
$
|
389,457
|
|
|
$
|
1,718
|
|
|
$
|
(1,506
|
)
|
|
$
|
389,669
|
|
U.S. States and political subdivisions securities
|
|
120,441
|
|
|
2,692
|
|
|
(143
|
)
|
|
122,990
|
|
||||
Mortgage-backed securities - Federal agencies
|
|
234,400
|
|
|
3,430
|
|
|
(1,533
|
)
|
|
236,297
|
|
||||
Corporate debt securities
|
|
34,241
|
|
|
199
|
|
|
(57
|
)
|
|
34,383
|
|
||||
Foreign government and other securities
|
|
800
|
|
|
10
|
|
|
(1
|
)
|
|
809
|
|
||||
Total debt securities
|
|
779,339
|
|
|
8,049
|
|
|
(3,240
|
)
|
|
784,148
|
|
||||
Marketable equity securities
|
|
1,893
|
|
|
5,906
|
|
|
(220
|
)
|
|
7,579
|
|
||||
Total investment securities available-for-sale
|
|
$
|
781,232
|
|
|
$
|
13,955
|
|
|
$
|
(3,460
|
)
|
|
$
|
791,727
|
|
(Dollars in thousands)
|
|
Amortized Cost
|
|
Fair Value
|
||||
Due in one year or less
|
|
$
|
117,330
|
|
|
$
|
117,718
|
|
Due after one year through five years
|
|
387,876
|
|
|
385,245
|
|
||
Due after five years through ten years
|
|
88,864
|
|
|
86,728
|
|
||
Due after ten years
|
|
—
|
|
|
—
|
|
||
Mortgage-backed securities
|
|
252,981
|
|
|
252,574
|
|
||
Total debt securities available-for-sale
|
|
$
|
847,051
|
|
|
$
|
842,265
|
|
|
|
Less than 12 Months
|
|
12 months or Longer
|
|
Total
|
||||||||||||||||||
(Dollars in thousands)
|
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Treasury and Federal agencies securities
|
|
$
|
263,680
|
|
|
$
|
(4,471
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
263,680
|
|
|
$
|
(4,471
|
)
|
U.S. States and political subdivisions securities
|
|
74,129
|
|
|
(1,515
|
)
|
|
3,337
|
|
|
(55
|
)
|
|
77,466
|
|
|
(1,570
|
)
|
||||||
Mortgage-backed securities - Federal agencies
|
|
168,554
|
|
|
(2,341
|
)
|
|
5,102
|
|
|
(241
|
)
|
|
173,656
|
|
|
(2,582
|
)
|
||||||
Corporate debt securities
|
|
13,312
|
|
|
(301
|
)
|
|
—
|
|
|
—
|
|
|
13,312
|
|
|
(301
|
)
|
||||||
Foreign government and other securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total debt securities
|
|
519,675
|
|
|
(8,628
|
)
|
|
8,439
|
|
|
(296
|
)
|
|
528,114
|
|
|
(8,924
|
)
|
||||||
Marketable equity securities
|
|
280
|
|
|
(70
|
)
|
|
4
|
|
|
—
|
|
|
284
|
|
|
(70
|
)
|
||||||
Total temporarily impaired available-for-sale securities
|
|
$
|
519,955
|
|
|
$
|
(8,698
|
)
|
|
$
|
8,443
|
|
|
$
|
(296
|
)
|
|
$
|
528,398
|
|
|
$
|
(8,994
|
)
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Treasury and Federal agencies securities
|
|
$
|
151,581
|
|
|
$
|
(928
|
)
|
|
$
|
43,372
|
|
|
$
|
(578
|
)
|
|
$
|
194,953
|
|
|
$
|
(1,506
|
)
|
U.S. States and political subdivisions securities
|
|
17,040
|
|
|
(79
|
)
|
|
3,795
|
|
|
(64
|
)
|
|
20,835
|
|
|
(143
|
)
|
||||||
Mortgage-backed securities - Federal agencies
|
|
78,731
|
|
|
(777
|
)
|
|
20,592
|
|
|
(756
|
)
|
|
99,323
|
|
|
(1,533
|
)
|
||||||
Corporate debt securities
|
|
9,340
|
|
|
(57
|
)
|
|
—
|
|
|
—
|
|
|
9,340
|
|
|
(57
|
)
|
||||||
Foreign government and other securities
|
|
99
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
99
|
|
|
(1
|
)
|
||||||
Total debt securities
|
|
256,791
|
|
|
(1,842
|
)
|
|
67,759
|
|
|
(1,398
|
)
|
|
324,550
|
|
|
(3,240
|
)
|
||||||
Marketable equity securities
|
|
427
|
|
|
(218
|
)
|
|
3
|
|
|
(2
|
)
|
|
430
|
|
|
(220
|
)
|
||||||
Total temporarily impaired available-for-sale securities
|
|
$
|
257,218
|
|
|
$
|
(2,060
|
)
|
|
$
|
67,762
|
|
|
$
|
(1,400
|
)
|
|
$
|
324,980
|
|
|
$
|
(3,460
|
)
|
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Gross realized gains
|
|
$
|
2,090
|
|
|
$
|
4
|
|
|
$
|
963
|
|
Gross realized losses
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
OTTI losses
|
|
(294
|
)
|
|
—
|
|
|
—
|
|
|||
Net realized (losses) gains
|
|
$
|
1,796
|
|
|
$
|
4
|
|
|
$
|
963
|
|
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Direct finance leases:
|
|
|
|
|
|
|
||
Rentals receivable
|
|
$
|
218,543
|
|
|
$
|
206,426
|
|
Estimated residual value of leased assets
|
|
21,992
|
|
|
15,756
|
|
||
Gross investment in lease financing
|
|
240,535
|
|
|
222,182
|
|
||
Unearned income
|
|
(35,751
|
)
|
|
(32,499
|
)
|
||
Net investment in lease financing
|
|
$
|
204,784
|
|
|
$
|
189,683
|
|
|
|
Credit Quality Grades
|
||||||||||
(Dollars in thousands)
|
|
1-6
|
|
7-12
|
|
Total
|
||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|||
Commercial and agricultural
|
|
$
|
784,811
|
|
|
$
|
27,453
|
|
|
$
|
812,264
|
|
Auto and light truck
|
|
407,931
|
|
|
3,833
|
|
|
411,764
|
|
|||
Medium and heavy duty truck
|
|
291,558
|
|
|
3,232
|
|
|
294,790
|
|
|||
Aircraft
|
|
772,802
|
|
|
29,612
|
|
|
802,414
|
|
|||
Construction equipment
|
|
486,923
|
|
|
9,002
|
|
|
495,925
|
|
|||
Commercial real estate
|
|
707,252
|
|
|
11,918
|
|
|
719,170
|
|
|||
Total
|
|
$
|
3,451,277
|
|
|
$
|
85,050
|
|
|
$
|
3,536,327
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|||
Commercial and agricultural
|
|
$
|
710,030
|
|
|
$
|
34,719
|
|
|
$
|
744,749
|
|
Auto and light truck
|
|
413,836
|
|
|
11,400
|
|
|
425,236
|
|
|||
Medium and heavy duty truck
|
|
275,367
|
|
|
2,887
|
|
|
278,254
|
|
|||
Aircraft
|
|
750,264
|
|
|
27,748
|
|
|
778,012
|
|
|||
Construction equipment
|
|
448,683
|
|
|
6,882
|
|
|
455,565
|
|
|||
Commercial real estate
|
|
680,304
|
|
|
19,964
|
|
|
700,268
|
|
|||
Total
|
|
$
|
3,278,484
|
|
|
$
|
103,600
|
|
|
$
|
3,382,084
|
|
(Dollars in thousands)
|
|
Performing
|
|
Nonperforming
|
|
Total
|
||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|||
Residential real estate and home equity
|
|
$
|
518,896
|
|
|
$
|
3,035
|
|
|
$
|
521,931
|
|
Consumer
|
|
129,585
|
|
|
228
|
|
|
129,813
|
|
|||
Total
|
|
$
|
648,481
|
|
|
$
|
3,263
|
|
|
$
|
651,744
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|||
Residential real estate and home equity
|
|
$
|
488,436
|
|
|
$
|
2,032
|
|
|
$
|
490,468
|
|
Consumer
|
|
121,980
|
|
|
160
|
|
|
122,140
|
|
|||
Total
|
|
$
|
610,416
|
|
|
$
|
2,192
|
|
|
$
|
612,608
|
|
(Dollars in thousands)
|
|
Current
|
|
30-59 Days Past Due
|
|
60-89 Days Past Due
|
|
90 Days or More Past Due and Accruing
|
|
Total Accruing Loans
|
|
Nonaccrual
|
|
Total Financing Receivables
|
||||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial and agricultural
|
|
$
|
808,283
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
808,283
|
|
|
$
|
3,981
|
|
|
$
|
812,264
|
|
Auto and light truck
|
|
411,300
|
|
|
298
|
|
|
—
|
|
|
—
|
|
|
411,598
|
|
|
166
|
|
|
411,764
|
|
|||||||
Medium and heavy duty truck
|
|
294,790
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
294,790
|
|
|
—
|
|
|
294,790
|
|
|||||||
Aircraft
|
|
791,559
|
|
|
1,429
|
|
|
3,316
|
|
|
—
|
|
|
796,304
|
|
|
6,110
|
|
|
802,414
|
|
|||||||
Construction equipment
|
|
493,131
|
|
|
1,546
|
|
|
—
|
|
|
—
|
|
|
494,677
|
|
|
1,248
|
|
|
495,925
|
|
|||||||
Commercial real estate
|
|
713,482
|
|
|
133
|
|
|
—
|
|
|
—
|
|
|
713,615
|
|
|
5,555
|
|
|
719,170
|
|
|||||||
Residential real estate and home equity
|
|
517,212
|
|
|
1,310
|
|
|
374
|
|
|
394
|
|
|
519,290
|
|
|
2,641
|
|
|
521,931
|
|
|||||||
Consumer
|
|
129,000
|
|
|
453
|
|
|
132
|
|
|
22
|
|
|
129,607
|
|
|
206
|
|
|
129,813
|
|
|||||||
Total
|
|
$
|
4,158,757
|
|
|
$
|
5,169
|
|
|
$
|
3,822
|
|
|
$
|
416
|
|
|
$
|
4,168,164
|
|
|
$
|
19,907
|
|
|
$
|
4,188,071
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial and agricultural
|
|
$
|
740,335
|
|
|
$
|
52
|
|
|
$
|
79
|
|
|
$
|
—
|
|
|
$
|
740,466
|
|
|
$
|
4,283
|
|
|
$
|
744,749
|
|
Auto and light truck
|
|
424,997
|
|
|
170
|
|
|
23
|
|
|
—
|
|
|
425,190
|
|
|
46
|
|
|
425,236
|
|
|||||||
Medium and heavy duty truck
|
|
278,254
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
278,254
|
|
|
—
|
|
|
278,254
|
|
|||||||
Aircraft
|
|
764,074
|
|
|
9,442
|
|
|
108
|
|
|
—
|
|
|
773,624
|
|
|
4,388
|
|
|
778,012
|
|
|||||||
Construction equipment
|
|
454,993
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
455,026
|
|
|
539
|
|
|
455,565
|
|
|||||||
Commercial real estate
|
|
698,514
|
|
|
362
|
|
|
—
|
|
|
—
|
|
|
698,876
|
|
|
1,392
|
|
|
700,268
|
|
|||||||
Residential real estate and home equity
|
|
486,768
|
|
|
1,135
|
|
|
533
|
|
|
71
|
|
|
488,507
|
|
|
1,961
|
|
|
490,468
|
|
|||||||
Consumer
|
|
121,422
|
|
|
455
|
|
|
103
|
|
|
51
|
|
|
122,031
|
|
|
109
|
|
|
122,140
|
|
|||||||
Total
|
|
$
|
3,969,357
|
|
|
$
|
11,649
|
|
|
$
|
846
|
|
|
$
|
122
|
|
|
$
|
3,981,974
|
|
|
$
|
12,718
|
|
|
$
|
3,994,692
|
|
(Dollars in thousands)
|
|
Recorded Investment
|
|
Unpaid Principal Balance
|
|
Related Reserve
|
||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|||
With no related reserve recorded:
|
|
|
|
|
|
|
|
|
|
|||
Commercial and agricultural
|
|
$
|
1,700
|
|
|
$
|
1,700
|
|
|
$
|
—
|
|
Auto and light truck
|
|
115
|
|
|
115
|
|
|
—
|
|
|||
Medium and heavy duty truck
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Aircraft
|
|
2,918
|
|
|
2,918
|
|
|
—
|
|
|||
Construction equipment
|
|
605
|
|
|
605
|
|
|
—
|
|
|||
Commercial real estate
|
|
2,607
|
|
|
2,607
|
|
|
—
|
|
|||
Residential real estate and home equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Consumer
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total with no related reserve recorded
|
|
7,945
|
|
|
7,945
|
|
|
—
|
|
|||
With a reserve recorded:
|
|
|
|
|
|
|
|
|
|
|||
Commercial and agricultural
|
|
1,890
|
|
|
1,890
|
|
|
297
|
|
|||
Auto and light truck
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Medium and heavy duty truck
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Aircraft
|
|
3,192
|
|
|
3,192
|
|
|
1,076
|
|
|||
Construction equipment
|
|
562
|
|
|
562
|
|
|
35
|
|
|||
Commercial real estate
|
|
2,765
|
|
|
2,765
|
|
|
322
|
|
|||
Residential real estate and home equity
|
|
674
|
|
|
676
|
|
|
148
|
|
|||
Consumer
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total with a reserve recorded
|
|
9,083
|
|
|
9,085
|
|
|
1,878
|
|
|||
Total impaired loans
|
|
$
|
17,028
|
|
|
$
|
17,030
|
|
|
$
|
1,878
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|||
With no related reserve recorded:
|
|
|
|
|
|
|
|
|
|
|||
Commercial and agricultural
|
|
$
|
1,016
|
|
|
$
|
1,016
|
|
|
$
|
—
|
|
Auto and light truck
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Medium and heavy duty truck
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Aircraft
|
|
4,384
|
|
|
4,384
|
|
|
—
|
|
|||
Construction equipment
|
|
539
|
|
|
539
|
|
|
—
|
|
|||
Commercial real estate
|
|
8,494
|
|
|
8,494
|
|
|
—
|
|
|||
Residential real estate and home equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Consumer
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total with no related reserve recorded
|
|
14,433
|
|
|
14,433
|
|
|
—
|
|
|||
With a reserve recorded:
|
|
|
|
|
|
|
|
|
|
|||
Commercial and agricultural
|
|
2,884
|
|
|
2,884
|
|
|
649
|
|
|||
Auto and light truck
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Medium and heavy duty truck
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Aircraft
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Construction equipment
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Residential real estate and home equity
|
|
366
|
|
|
368
|
|
|
148
|
|
|||
Consumer
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total with a reserve recorded
|
|
3,250
|
|
|
3,252
|
|
|
797
|
|
|||
Total impaired loans
|
|
$
|
17,683
|
|
|
$
|
17,685
|
|
|
$
|
797
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
(Dollars in thousands)
|
|
Average
Recorded
Investment
|
|
Interest
Income
|
|
Average
Recorded
Investment
|
|
Interest
Income
|
|
Average
Recorded
Investment
|
|
Interest
Income
|
||||||||||||
Commercial and agricultural
|
|
$
|
3,484
|
|
|
$
|
6
|
|
|
$
|
5,362
|
|
|
$
|
32
|
|
|
$
|
16,325
|
|
|
$
|
48
|
|
Auto and light truck
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
407
|
|
|
—
|
|
||||||
Medium and heavy duty truck
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Aircraft
|
|
6,291
|
|
|
2
|
|
|
7,285
|
|
|
6
|
|
|
4,088
|
|
|
28
|
|
||||||
Construction equipment
|
|
766
|
|
|
—
|
|
|
695
|
|
|
—
|
|
|
938
|
|
|
—
|
|
||||||
Commercial real estate
|
|
5,417
|
|
|
123
|
|
|
10,126
|
|
|
518
|
|
|
13,162
|
|
|
588
|
|
||||||
Residential real estate and home equity
|
|
415
|
|
|
15
|
|
|
370
|
|
|
16
|
|
|
376
|
|
|
16
|
|
||||||
Consumer loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
16,383
|
|
|
$
|
146
|
|
|
$
|
23,838
|
|
|
$
|
572
|
|
|
$
|
35,296
|
|
|
$
|
680
|
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
(Dollars in thousands)
|
|
Number of Modifications
|
|
Recorded Investment
|
|
Number of Modifications
|
|
Recorded Investment
|
|
Number of Modifications
|
|
Recorded Investment
|
|||||||||
Performing TDRs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial and agricultural
|
|
—
|
|
|
$
|
—
|
|
|
2
|
|
|
$
|
218
|
|
|
2
|
|
|
$
|
273
|
|
Auto and light truck
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Medium and heavy duty truck
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Aircraft financing
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
337
|
|
|||
Construction equipment financing
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Residential real estate and home equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Consumer
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total performing TDR modifications
|
|
—
|
|
|
—
|
|
|
2
|
|
|
218
|
|
|
4
|
|
|
610
|
|
|||
Nonperforming TDRs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial and agricultural
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
7,315
|
|
|||
Auto and light truck
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Medium and heavy duty truck
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Aircraft financing
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Construction equipment financing
|
|
1
|
|
|
562
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
798
|
|
|||
Residential real estate and home equity
|
|
1
|
|
|
314
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Consumer
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total nonperforming TDR modifications
|
|
2
|
|
|
876
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
8,113
|
|
|||
Total TDR modifications
|
|
2
|
|
|
$
|
876
|
|
|
2
|
|
|
$
|
218
|
|
|
9
|
|
|
$
|
8,723
|
|
Year Ended December 31
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Performing TDRs
|
|
$
|
360
|
|
|
$
|
7,437
|
|
Nonperforming TDRs
|
|
1,642
|
|
|
1,926
|
|
||
Total TDRs
|
|
$
|
2,002
|
|
|
$
|
9,363
|
|
(Dollars in thousands)
|
|
Commercial and agricultural
|
|
Auto and light truck
|
|
Medium and heavy duty truck
|
|
Aircraft
|
|
Construction equipment
|
|
Commercial real estate
|
|
Residential real estate and home equity
|
|
Consumer
|
|
Total
|
||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, beginning of year
|
|
$
|
15,456
|
|
|
$
|
9,269
|
|
|
$
|
4,699
|
|
|
$
|
32,373
|
|
|
$
|
7,592
|
|
|
$
|
13,762
|
|
|
$
|
3,662
|
|
|
$
|
1,299
|
|
|
$
|
88,112
|
|
Charge-offs
|
|
547
|
|
|
4
|
|
|
—
|
|
|
6,123
|
|
|
128
|
|
|
32
|
|
|
219
|
|
|
888
|
|
|
7,941
|
|
|||||||||
Recoveries
|
|
509
|
|
|
253
|
|
|
10
|
|
|
528
|
|
|
461
|
|
|
469
|
|
|
31
|
|
|
278
|
|
|
2,539
|
|
|||||||||
Net charge-offs (recoveries)
|
|
38
|
|
|
(249
|
)
|
|
(10
|
)
|
|
5,595
|
|
|
(333
|
)
|
|
(437
|
)
|
|
188
|
|
|
610
|
|
|
5,402
|
|
|||||||||
Provision (recovery of provision)
|
|
(750
|
)
|
|
(1,454
|
)
|
|
31
|
|
|
7,574
|
|
|
282
|
|
|
(522
|
)
|
|
76
|
|
|
596
|
|
|
5,833
|
|
|||||||||
Balance, end of year
|
|
$
|
14,668
|
|
|
$
|
8,064
|
|
|
$
|
4,740
|
|
|
$
|
34,352
|
|
|
$
|
8,207
|
|
|
$
|
13,677
|
|
|
$
|
3,550
|
|
|
$
|
1,285
|
|
|
$
|
88,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, beginning of year
|
|
$
|
11,760
|
|
|
$
|
10,326
|
|
|
$
|
4,500
|
|
|
$
|
32,234
|
|
|
$
|
7,008
|
|
|
$
|
13,270
|
|
|
$
|
4,504
|
|
|
$
|
1,466
|
|
|
$
|
85,068
|
|
Charge-offs
|
|
3,489
|
|
|
24
|
|
|
—
|
|
|
244
|
|
|
—
|
|
|
—
|
|
|
295
|
|
|
658
|
|
|
4,710
|
|
|||||||||
Recoveries
|
|
851
|
|
|
380
|
|
|
28
|
|
|
802
|
|
|
434
|
|
|
2,807
|
|
|
34
|
|
|
258
|
|
|
5,594
|
|
|||||||||
Net charge-offs (recoveries)
|
|
2,638
|
|
|
(356
|
)
|
|
(28
|
)
|
|
(558
|
)
|
|
(434
|
)
|
|
(2,807
|
)
|
|
261
|
|
|
400
|
|
|
(884
|
)
|
|||||||||
Provision (recovery of provision)
|
|
6,334
|
|
|
(1,413
|
)
|
|
171
|
|
|
(419
|
)
|
|
150
|
|
|
(2,315
|
)
|
|
(581
|
)
|
|
233
|
|
|
2,160
|
|
|||||||||
Balance, end of year
|
|
$
|
15,456
|
|
|
$
|
9,269
|
|
|
$
|
4,699
|
|
|
$
|
32,373
|
|
|
$
|
7,592
|
|
|
$
|
13,762
|
|
|
$
|
3,662
|
|
|
$
|
1,299
|
|
|
$
|
88,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, beginning of year
|
|
$
|
11,515
|
|
|
$
|
9,657
|
|
|
$
|
4,212
|
|
|
$
|
34,037
|
|
|
$
|
5,972
|
|
|
$
|
12,406
|
|
|
$
|
4,539
|
|
|
$
|
1,167
|
|
|
$
|
83,505
|
|
Charge-offs
|
|
5,007
|
|
|
42
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
99
|
|
|
46
|
|
|
833
|
|
|
6,031
|
|
|||||||||
Recoveries
|
|
929
|
|
|
1,283
|
|
|
142
|
|
|
240
|
|
|
525
|
|
|
347
|
|
|
111
|
|
|
284
|
|
|
3,861
|
|
|||||||||
Net charge-offs (recoveries)
|
|
4,078
|
|
|
(1,241
|
)
|
|
(142
|
)
|
|
(240
|
)
|
|
(521
|
)
|
|
(248
|
)
|
|
(65
|
)
|
|
549
|
|
|
2,170
|
|
|||||||||
Provision (recovery of provision)
|
|
4,323
|
|
|
(572
|
)
|
|
146
|
|
|
(2,043
|
)
|
|
515
|
|
|
616
|
|
|
(100
|
)
|
|
848
|
|
|
3,733
|
|
|||||||||
Balance, end of year
|
|
$
|
11,760
|
|
|
$
|
10,326
|
|
|
$
|
4,500
|
|
|
$
|
32,234
|
|
|
$
|
7,008
|
|
|
$
|
13,270
|
|
|
$
|
4,504
|
|
|
$
|
1,466
|
|
|
$
|
85,068
|
|
(Dollars in thousands)
|
|
Commercial and agricultural
|
|
Auto and light truck
|
|
Medium and heavy duty truck
|
|
Aircraft
|
|
Construction equipment
|
|
Commercial real estate
|
|
Residential real estate and home equity
|
|
Consumer
|
|
Total
|
||||||||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Reserve for loan and lease losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ending balance, individually evaluated for impairment
|
|
$
|
297
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,076
|
|
|
$
|
35
|
|
|
$
|
322
|
|
|
$
|
148
|
|
|
$
|
—
|
|
|
$
|
1,878
|
|
Ending balance, collectively evaluated for impairment
|
|
14,371
|
|
|
8,064
|
|
|
4,740
|
|
|
33,276
|
|
|
8,172
|
|
|
13,355
|
|
|
3,402
|
|
|
1,285
|
|
|
86,665
|
|
|||||||||
Total reserve for loan and lease losses
|
|
$
|
14,668
|
|
|
$
|
8,064
|
|
|
$
|
4,740
|
|
|
$
|
34,352
|
|
|
$
|
8,207
|
|
|
$
|
13,677
|
|
|
$
|
3,550
|
|
|
$
|
1,285
|
|
|
$
|
88,543
|
|
Recorded investment in loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Ending balance, individually evaluated for impairment
|
|
$
|
3,590
|
|
|
$
|
115
|
|
|
$
|
—
|
|
|
$
|
6,110
|
|
|
$
|
1,167
|
|
|
$
|
5,372
|
|
|
$
|
674
|
|
|
$
|
—
|
|
|
$
|
17,028
|
|
Ending balance, collectively evaluated for impairment
|
|
808,674
|
|
|
411,649
|
|
|
294,790
|
|
|
796,304
|
|
|
494,758
|
|
|
713,798
|
|
|
521,257
|
|
|
129,813
|
|
|
4,171,043
|
|
|||||||||
Total recorded investment in loans
|
|
$
|
812,264
|
|
|
$
|
411,764
|
|
|
$
|
294,790
|
|
|
$
|
802,414
|
|
|
$
|
495,925
|
|
|
$
|
719,170
|
|
|
$
|
521,931
|
|
|
$
|
129,813
|
|
|
$
|
4,188,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Reserve for loan and lease losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ending balance, individually evaluated for impairment
|
|
$
|
649
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
148
|
|
|
$
|
—
|
|
|
$
|
797
|
|
Ending balance, collectively evaluated for impairment
|
|
14,807
|
|
|
9,269
|
|
|
4,699
|
|
|
32,373
|
|
|
7,592
|
|
|
13,762
|
|
|
3,514
|
|
|
1,299
|
|
|
87,315
|
|
|||||||||
Total reserve for loan and lease losses
|
|
$
|
15,456
|
|
|
$
|
9,269
|
|
|
$
|
4,699
|
|
|
$
|
32,373
|
|
|
$
|
7,592
|
|
|
$
|
13,762
|
|
|
$
|
3,662
|
|
|
$
|
1,299
|
|
|
$
|
88,112
|
|
Recorded investment in loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Ending balance, individually evaluated for impairment
|
|
$
|
3,900
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,384
|
|
|
$
|
539
|
|
|
$
|
8,494
|
|
|
$
|
366
|
|
|
$
|
—
|
|
|
$
|
17,683
|
|
Ending balance, collectively evaluated for impairment
|
|
740,849
|
|
|
425,236
|
|
|
278,254
|
|
|
773,628
|
|
|
455,026
|
|
|
691,774
|
|
|
490,102
|
|
|
122,140
|
|
|
3,977,009
|
|
|||||||||
Total recorded investment in loans
|
|
$
|
744,749
|
|
|
$
|
425,236
|
|
|
$
|
278,254
|
|
|
$
|
778,012
|
|
|
$
|
455,565
|
|
|
$
|
700,268
|
|
|
$
|
490,468
|
|
|
$
|
122,140
|
|
|
$
|
3,994,692
|
|
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Land
|
|
$
|
16,127
|
|
|
$
|
16,105
|
|
Buildings and improvements
|
|
59,027
|
|
|
53,917
|
|
||
Furniture and equipment
|
|
37,604
|
|
|
38,942
|
|
||
Total premises and equipment
|
|
112,758
|
|
|
108,964
|
|
||
Accumulated depreciation and amortization
|
|
(56,050
|
)
|
|
(55,773
|
)
|
||
Net premises and equipment
|
|
$
|
56,708
|
|
|
$
|
53,191
|
|
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Mortgage servicing rights:
|
|
|
|
|
|
|
||
Balance at beginning of year
|
|
$
|
4,608
|
|
|
$
|
4,733
|
|
Additions
|
|
1,167
|
|
|
1,299
|
|
||
Amortization
|
|
(1,478
|
)
|
|
(1,424
|
)
|
||
Sales
|
|
—
|
|
|
—
|
|
||
Carrying value before valuation allowance at end of year
|
|
4,297
|
|
|
4,608
|
|
||
Valuation allowance:
|
|
|
|
|
|
|
||
Balance at beginning of year
|
|
—
|
|
|
—
|
|
||
Impairment recoveries
|
|
—
|
|
|
—
|
|
||
Balance at end of year
|
|
$
|
—
|
|
|
$
|
—
|
|
Net carrying value of mortgage servicing rights at end of year
|
|
$
|
4,297
|
|
|
$
|
4,608
|
|
Fair value of mortgage servicing rights at end of year
|
|
$
|
7,484
|
|
|
$
|
7,246
|
|
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Core deposit intangibles:
|
|
|
|
|
|
|
||
Gross carrying amount
|
|
$
|
9,566
|
|
|
$
|
9,566
|
|
Less: accumulated amortization
|
|
(9,143
|
)
|
|
(8,569
|
)
|
||
Net carrying amount
|
|
$
|
423
|
|
|
$
|
997
|
|
Other intangibles:
|
|
|
|
|
|
|
||
Gross carrying amount
|
|
$
|
—
|
|
|
$
|
—
|
|
Less: accumulated amortization
|
|
—
|
|
|
—
|
|
||
Net carrying amount
|
|
$
|
—
|
|
|
$
|
—
|
|
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Federal Home Loan Bank borrowings (1.04% – 6.46%)
|
|
$
|
53,075
|
|
|
$
|
38,044
|
|
Mandatorily redeemable securities
|
|
19,177
|
|
|
17,388
|
|
||
Other long-term debt
|
|
2,056
|
|
|
1,947
|
|
||
Total long-term debt and mandatorily redeemable securities
|
|
$
|
74,308
|
|
|
$
|
57,379
|
|
|
|
2016
|
|
2015
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Weighted Average Rate
|
|
Amount
|
|
Weighted Average Rate
|
||||||
Federal funds purchased
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Security repurchase agreements
|
|
162,913
|
|
|
0.17
|
|
|
130,662
|
|
|
0.29
|
|
||
Commercial paper
|
|
5,761
|
|
|
0.27
|
|
|
7,295
|
|
|
0.28
|
|
||
Other short-term borrowings
|
|
123,269
|
|
|
0.57
|
|
|
95,272
|
|
|
0.38
|
|
||
Total short-term borrowings
|
|
$
|
291,943
|
|
|
0.34
|
%
|
|
$
|
233,229
|
|
|
0.33
|
%
|
(Dollars in thousands)
|
|
Amount of Subordinated Notes
|
|
Interest Rate
|
|
Maturity Date
|
|||
June 2007 issuance (1)
|
|
$
|
41,238
|
|
|
7.22
|
%
|
|
6/15/2037
|
August 2007 issuance (2)
|
|
17,526
|
|
|
7.10
|
%
|
|
9/15/2037
|
|
Total
|
|
$
|
58,764
|
|
|
|
|
|
|
|
(Dollars in thousands - except per share amounts)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Distributed earnings allocated to common stock
|
|
$
|
18,707
|
|
|
$
|
17,582
|
|
|
$
|
17,091
|
|
Undistributed earnings allocated to common stock
|
|
38,670
|
|
|
39,336
|
|
|
40,249
|
|
|||
Net earnings allocated to common stock
|
|
57,377
|
|
|
56,918
|
|
|
57,340
|
|
|||
Net earnings allocated to participating securities
|
|
409
|
|
|
568
|
|
|
729
|
|
|||
Net income allocated to common stock and participating securities
|
|
$
|
57,786
|
|
|
$
|
57,486
|
|
|
$
|
58,069
|
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding for basic earnings per common share
|
|
25,879,397
|
|
|
26,173,351
|
|
|
26,434,769
|
|
|||
Dilutive effect of stock compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Weighted average shares outstanding for diluted earnings per common share
|
|
25,879,397
|
|
|
26,173,351
|
|
|
26,434,769
|
|
|||
|
|
|
|
|
|
|
||||||
Basic earnings per common share
|
|
$
|
2.22
|
|
|
$
|
2.17
|
|
|
$
|
2.17
|
|
Diluted earnings per common share
|
|
$
|
2.22
|
|
|
$
|
2.17
|
|
|
$
|
2.17
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
Affected Line Item in the Statements of Income
|
||||
Realized gains included in net income
|
|
$
|
1,796
|
|
|
$
|
4
|
|
|
Gains on investment securities available-for-sale
|
|
|
1,796
|
|
|
4
|
|
|
Income before income taxes
|
||
Tax effect
|
|
(674
|
)
|
|
(2
|
)
|
|
Income tax expense
|
||
Net of tax
|
|
$
|
1,122
|
|
|
$
|
2
|
|
|
Net income
|
|
|
|
Non-Vested Stock Awards Outstanding
|
||||||
|
Shares Available for Grant
|
|
Number of Shares
|
|
Weighted-Average Grant-Date Fair Value
|
||||
Balance, January 1, 2014
|
2,503,769
|
|
|
467,990
|
|
|
$
|
19.17
|
|
Shares authorized - 2014 EIP
|
76,230
|
|
|
—
|
|
|
—
|
|
|
Granted
|
(123,154
|
)
|
|
123,154
|
|
|
23.56
|
|
|
Stock awards vested
|
—
|
|
|
(144,941
|
)
|
|
18.57
|
|
|
Forfeited
|
3,363
|
|
|
(6,168
|
)
|
|
18.97
|
|
|
Canceled
|
—
|
|
|
—
|
|
|
—
|
|
|
Balance, December 31, 2014
|
2,460,208
|
|
|
440,035
|
|
|
20.60
|
|
|
Shares authorized - 2015 EIP
|
70,202
|
|
|
—
|
|
|
—
|
|
|
Granted
|
(81,591
|
)
|
|
81,591
|
|
|
24.44
|
|
|
Stock awards vested
|
—
|
|
|
(159,381
|
)
|
|
19.51
|
|
|
Forfeited
|
1,980
|
|
|
(3,384
|
)
|
|
23.85
|
|
|
Canceled
|
—
|
|
|
—
|
|
|
—
|
|
|
Balance, December 31, 2015
|
2,450,799
|
|
|
358,861
|
|
|
21.93
|
|
|
Shares authorized - 2016 EIP
|
59,342
|
|
|
—
|
|
|
—
|
|
|
Shares authorized - Restricted Stock Award Plan
(1)
|
229,439
|
|
|
—
|
|
|
—
|
|
|
Granted
|
(79,118
|
)
|
|
79,118
|
|
|
26.19
|
|
|
Stock awards vested
|
—
|
|
|
(155,981
|
)
|
|
20.47
|
|
|
Forfeited
|
3,543
|
|
|
(5,383
|
)
|
|
23.39
|
|
|
Canceled
|
(1,950,000
|
)
|
|
—
|
|
|
—
|
|
|
Balance, December 31, 2016
|
714,005
|
|
|
276,615
|
|
|
$
|
23.94
|
|
|
|
|
|
|
|
|
Year Ended December 31
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
$
|
25,479
|
|
|
$
|
26,092
|
|
|
$
|
20,999
|
|
State
|
|
3,005
|
|
|
3,365
|
|
|
1,034
|
|
|||
Total current
|
|
28,484
|
|
|
29,457
|
|
|
22,033
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
2,530
|
|
|
1,577
|
|
|
4,022
|
|
|||
State
|
|
326
|
|
|
43
|
|
|
319
|
|
|||
Total deferred
|
|
2,856
|
|
|
1,620
|
|
|
4,341
|
|
|||
Total provision
|
|
$
|
31,340
|
|
|
$
|
31,077
|
|
|
$
|
26,374
|
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Year Ended December 31
(Dollars in thousands)
|
|
Amount
|
|
Percent of Pretax Income
|
|
Amount
|
|
Percent of Pretax Income
|
|
Amount
|
|
Percent of Pretax Income
|
|||||||||
Statutory federal income tax
|
|
$
|
31,194
|
|
|
35.0
|
%
|
|
$
|
30,997
|
|
|
35.0
|
%
|
|
$
|
29,555
|
|
|
35.0
|
%
|
(Decrease) increase in income taxes resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Tax-exempt interest income
|
|
(1,235
|
)
|
|
(1.4
|
)
|
|
(1,152
|
)
|
|
(1.3
|
)
|
|
(1,236
|
)
|
|
(1.5
|
)
|
|||
State taxes, net of federal income tax benefit
|
|
2,165
|
|
|
2.4
|
|
|
2,215
|
|
|
2.5
|
|
|
2,300
|
|
|
2.7
|
|
|||
Reduction in uncertain tax positions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,300
|
)
|
|
(3.9
|
)
|
|||
Other
|
|
(784
|
)
|
|
(0.8
|
)
|
|
(983
|
)
|
|
(1.1
|
)
|
|
(945
|
)
|
|
(1.1
|
)
|
|||
Total
|
|
$
|
31,340
|
|
|
35.2
|
%
|
|
$
|
31,077
|
|
|
35.1
|
%
|
|
$
|
26,374
|
|
|
31.2
|
%
|
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
|
|
|
||
Reserve for loan and lease losses
|
|
$
|
34,663
|
|
|
$
|
34,410
|
|
Accruals for employee benefits
|
|
3,948
|
|
|
3,816
|
|
||
Tax advantaged partnerships
|
|
1,411
|
|
|
307
|
|
||
Other
|
|
477
|
|
|
598
|
|
||
Total deferred tax assets
|
|
40,499
|
|
|
39,131
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
|
||
Differing depreciable bases in premises and leased equipment
|
|
31,449
|
|
|
27,274
|
|
||
Net unrealized gains on securities available-for-sale
|
|
807
|
|
|
3,940
|
|
||
Differing bases in assets related to acquisitions
|
|
6,170
|
|
|
5,738
|
|
||
Mortgage servicing
|
|
1,540
|
|
|
1,630
|
|
||
Capitalized loan costs
|
|
1,463
|
|
|
1,454
|
|
||
Prepaid expenses
|
|
646
|
|
|
1,055
|
|
||
Other
|
|
419
|
|
|
312
|
|
||
Total deferred tax liabilities
|
|
42,494
|
|
|
41,403
|
|
||
Net deferred tax liability
|
|
$
|
(1,995
|
)
|
|
$
|
(2,272
|
)
|
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance, beginning of year
|
|
$
|
380
|
|
|
$
|
—
|
|
|
$
|
4,611
|
|
Additions based on tax positions related to the current year
|
|
382
|
|
|
380
|
|
|
66
|
|
|||
Additions for tax positions of prior years
|
|
—
|
|
|
—
|
|
|
592
|
|
|||
Reductions for tax positions of prior years
|
|
—
|
|
|
—
|
|
|
(553
|
)
|
|||
Reductions due to lapse in statute of limitations
|
|
—
|
|
|
—
|
|
|
(1,650
|
)
|
|||
Settlements
|
|
—
|
|
|
—
|
|
|
(3,066
|
)
|
|||
Balance, end of year
|
|
$
|
762
|
|
|
$
|
380
|
|
|
$
|
—
|
|
Year Ended December 31
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Gross rental expense
|
|
$
|
3,995
|
|
|
$
|
3,889
|
|
|
$
|
3,799
|
|
Sublease rental income
|
|
(921
|
)
|
|
(914
|
)
|
|
(878
|
)
|
|||
Net rental expense
|
|
$
|
3,074
|
|
|
$
|
2,975
|
|
|
$
|
2,921
|
|
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Amounts of commitments:
|
|
|
|
|
||||
Loan commitments to extend credit
|
|
$
|
868,267
|
|
|
$
|
829,509
|
|
Standby letters of credit
|
|
$
|
33,397
|
|
|
$
|
37,984
|
|
Commercial and similar letters of credit
|
|
$
|
1,704
|
|
|
$
|
741
|
|
|
|
|
|
Asset derivatives
|
|
Liability derivatives
|
||||||||||
(Dollars in thousands)
|
|
Notional or contractual amount
|
|
Statement of Financial Condition classification
|
|
Fair value
|
|
Statement of Financial Condition classification
|
|
Fair value
|
||||||
Interest rate swap contracts
|
|
$
|
570,004
|
|
|
Other assets
|
|
$
|
6,621
|
|
|
Other liabilities
|
|
$
|
6,743
|
|
Loan commitments
|
|
5,527
|
|
|
Mortgages held for sale
|
|
43
|
|
|
N/A
|
|
—
|
|
|||
Forward contracts - mortgage loan
|
|
16,525
|
|
|
Mortgages held for sale
|
|
222
|
|
|
N/A
|
|
—
|
|
|||
Total - December 31, 2016
|
|
$
|
592,056
|
|
|
|
|
$
|
6,886
|
|
|
|
|
$
|
6,743
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swap contracts
|
|
$
|
554,083
|
|
|
Other assets
|
|
$
|
9,859
|
|
|
Other liabilities
|
|
$
|
10,044
|
|
Loan commitments
|
|
12,440
|
|
|
Mortgages held for sale
|
|
47
|
|
|
N/A
|
|
—
|
|
|||
Forward contracts - mortgage loan
|
|
16,416
|
|
|
Mortgages held for sale
|
|
13
|
|
|
N/A
|
|
—
|
|
|||
Total - December 31, 2015
|
|
$
|
582,939
|
|
|
|
|
$
|
9,919
|
|
|
|
|
$
|
10,044
|
|
|
|
|
|
Gain (loss)
|
||||||||||
(Dollars in thousands)
|
|
Statement of Income classification
|
|
2016
|
|
2015
|
|
2014
|
||||||
Interest rate swap contracts
|
|
Other expense
|
|
$
|
64
|
|
|
$
|
(8
|
)
|
|
$
|
16
|
|
Interest rate swap contracts
|
|
Other income
|
|
730
|
|
|
1,045
|
|
|
357
|
|
|||
Loan commitments
|
|
Mortgage banking
|
|
(4
|
)
|
|
45
|
|
|
(10
|
)
|
|||
Forward contracts - mortgage loan
|
|
Mortgage banking
|
|
209
|
|
|
155
|
|
|
(263
|
)
|
|||
Forward contracts - foreign exchange
|
|
Other income
|
|
—
|
|
|
—
|
|
|
79
|
|
|||
Total
|
|
|
|
$
|
999
|
|
|
$
|
1,237
|
|
|
$
|
179
|
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Statement of Financial Condition
|
|
|
||||||||||||||
(Dollars in thousands)
|
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts Offset in the Statement of Financial Condition
|
|
Net Amounts of Assets Presented in the Statement of Financial Condition
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
$
|
6,681
|
|
|
$
|
60
|
|
|
$
|
6,621
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
$
|
10,016
|
|
|
$
|
157
|
|
|
$
|
9,859
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,859
|
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Statement of Financial Condition
|
|
|
||||||||||||||
(Dollars in thousands)
|
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset in the Statement of Financial Condition
|
|
Net Amounts of Liabilities Presented in the Statement of Financial Condition
|
|
Financial Instruments
|
|
Cash Collateral Pledged
|
|
Net Amount
|
||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
$
|
6,803
|
|
|
$
|
60
|
|
|
$
|
6,743
|
|
|
$
|
—
|
|
|
$
|
3,794
|
|
|
$
|
2,949
|
|
Repurchase agreements
|
|
162,913
|
|
|
—
|
|
|
162,913
|
|
|
162,913
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
169,716
|
|
|
$
|
60
|
|
|
$
|
169,656
|
|
|
$
|
162,913
|
|
|
$
|
3,794
|
|
|
$
|
2,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
$
|
10,201
|
|
|
$
|
157
|
|
|
$
|
10,044
|
|
|
$
|
—
|
|
|
$
|
9,833
|
|
|
$
|
211
|
|
Repurchase agreements
|
|
130,662
|
|
|
—
|
|
|
130,662
|
|
|
130,662
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
140,863
|
|
|
$
|
157
|
|
|
$
|
140,706
|
|
|
$
|
130,662
|
|
|
$
|
9,833
|
|
|
$
|
211
|
|
|
|
Actual
|
|
Minimum Capital Adequacy
|
|
Minimum Capital Adequacy with Capital Buffer
(1)
|
|
To Be Well Capitalized Under Prompt Corrective Action Provisions
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Capital (to Risk-Weighted Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
1st Source Corporation
|
|
$
|
713,498
|
|
|
15.12
|
%
|
|
$
|
377,432
|
|
|
8.00
|
%
|
|
$
|
406,919
|
|
|
8.625
|
%
|
|
$
|
471,791
|
|
|
10.00
|
%
|
1st Source Bank
|
|
662,531
|
|
|
14.06
|
|
|
377,014
|
|
|
8.00
|
|
|
406,468
|
|
|
8.625
|
|
|
471,267
|
|
|
10.00
|
|
||||
Tier 1 Capital (to Risk-Weighted Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
1st Source Corporation
|
|
651,006
|
|
|
13.80
|
|
|
283,074
|
|
|
6.00
|
|
|
312,561
|
|
|
6.625
|
|
|
377,432
|
|
|
8.00
|
|
||||
1st Source Bank
|
|
603,022
|
|
|
12.80
|
|
|
282,760
|
|
|
6.00
|
|
|
312,214
|
|
|
6.625
|
|
|
377,014
|
|
|
8.00
|
|
||||
Common Equity Tier 1 Capital (to Risk-Weighted Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
1st Source Corporation
|
|
594,006
|
|
|
12.59
|
|
|
212,306
|
|
|
4.50
|
|
|
241,793
|
|
|
5.125
|
|
|
306,664
|
|
|
6.50
|
|
||||
1st Source Bank
|
|
603,022
|
|
|
12.80
|
|
|
212,070
|
|
|
4.50
|
|
|
241,524
|
|
|
5.125
|
|
|
306,324
|
|
|
6.50
|
|
||||
Tier 1 Capital (to Average Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
1st Source Corporation
|
|
651,006
|
|
|
12.11
|
|
|
215,115
|
|
|
4.00
|
|
|
N/A
|
|
|
N/A
|
|
|
268,893
|
|
|
5.00
|
|
||||
1st Source Bank
|
|
603,022
|
|
|
11.22
|
|
|
214,949
|
|
|
4.00
|
|
|
N/A
|
|
|
N/A
|
|
|
268,686
|
|
|
5.00
|
|
||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Capital (to Risk-Weighted Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
1st Source Corporation
|
|
$
|
676,007
|
|
|
14.97
|
%
|
|
$
|
361,267
|
|
|
8.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
$
|
451,584
|
|
|
10.00
|
%
|
|
1st Source Bank
|
|
636,592
|
|
|
14.13
|
|
|
360,402
|
|
|
8.00
|
|
|
N/A
|
|
|
N/A
|
|
|
450,502
|
|
|
10.00
|
|
||||
Tier 1 Capital (to Risk-Weighted Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
1st Source Corporation
|
|
616,577
|
|
|
13.65
|
|
|
270,951
|
|
|
6.00
|
|
|
N/A
|
|
|
N/A
|
|
|
361,267
|
|
|
8.00
|
|
||||
1st Source Bank
|
|
579,833
|
|
|
12.87
|
|
|
270,301
|
|
|
6.00
|
|
|
N/A
|
|
|
N/A
|
|
|
360,402
|
|
|
8.00
|
|
||||
Common Equity Tier 1 Capital (to Risk-Weighted Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
1st Source Corporation
|
|
559,577
|
|
|
12.39
|
|
|
203,213
|
|
|
4.50
|
|
|
N/A
|
|
|
N/A
|
|
|
293,530
|
|
|
6.50
|
|
||||
1st Source Bank
|
|
579,833
|
|
|
12.87
|
|
|
202,726
|
|
|
4.50
|
|
|
N/A
|
|
|
N/A
|
|
|
292,826
|
|
|
6.50
|
|
||||
Tier 1 Capital (to Average Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
1st Source Corporation
|
|
616,577
|
|
|
12.21
|
|
|
201,921
|
|
|
4.00
|
|
|
N/A
|
|
|
N/A
|
|
|
252,401
|
|
|
5.00
|
|
||||
1st Source Bank
|
|
579,833
|
|
|
11.50
|
|
|
201,701
|
|
|
4.00
|
|
|
N/A
|
|
|
N/A
|
|
|
252,126
|
|
|
5.00
|
|
|
(Dollars in thousands)
|
|
Fair value carrying amount
|
|
Aggregate unpaid principal
|
|
Excess of fair value carrying amount over (under) unpaid principal
|
|
||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|||
Mortgages held for sale reported at fair value:
|
|
|
|
|
|
|
|
|
|
|
|||
Total Loans
|
|
$
|
15,849
|
|
|
$
|
15,809
|
|
|
$
|
40
|
|
(1)
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|||
Mortgages held for sale reported at fair value:
|
|
|
|
|
|
|
|
|
|
|
|||
Total Loans
|
|
$
|
9,825
|
|
|
$
|
9,691
|
|
|
$
|
134
|
|
(1)
|
|
•
|
U.S. treasuries are priced using the market approach and utilizing live data feeds from active market exchanges for identical securities.
|
•
|
Government-sponsored agency debt securities and corporate bonds are primarily priced using available market information through processes such as benchmark curves, market valuations of like securities, sector groupings and matrix pricing.
|
•
|
Other government-sponsored agency securities, mortgage-backed securities and some of the actively traded REMICs and CMOs, are primarily priced using available market information including benchmark yields, prepayment speeds, spreads and volatility of similar securities.
|
•
|
Inactively traded government-sponsored agency securities are primarily priced using consensus pricing and dealer quotes.
|
•
|
State and political subdivisions are largely grouped by characteristics, i.e., geographical data and source of revenue in trade dissemination systems. Since some securities are not traded daily and due to other grouping limitations, active market quotes are often obtained using benchmarking for like securities. Local direct placement municipal securities, with very little market activity, are priced using an appropriate market yield curve which incorporates a credit spread assumption.
|
•
|
Marketable equity (common) securities are primarily priced using the market approach and utilizing live data feeds from active market exchanges for identical securities.
|
(Dollars in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury and Federal agencies securities
|
|
$
|
20,164
|
|
|
$
|
400,669
|
|
|
$
|
—
|
|
|
$
|
420,833
|
|
U.S. States and political subdivisions securities
|
|
—
|
|
|
130,276
|
|
|
2,699
|
|
|
132,975
|
|
||||
Mortgage-backed securities - Federal agencies
|
|
—
|
|
|
252,574
|
|
|
—
|
|
|
252,574
|
|
||||
Corporate debt securities
|
|
—
|
|
|
35,076
|
|
|
—
|
|
|
35,076
|
|
||||
Foreign government and other securities
|
|
—
|
|
|
—
|
|
|
807
|
|
|
807
|
|
||||
Total debt securities
|
|
20,164
|
|
|
818,595
|
|
|
3,506
|
|
|
842,265
|
|
||||
Marketable equity securities
|
|
8,202
|
|
|
—
|
|
|
—
|
|
|
8,202
|
|
||||
Total investment securities available-for-sale
|
|
28,366
|
|
|
818,595
|
|
|
3,506
|
|
|
850,467
|
|
||||
Mortgages held for sale
|
|
—
|
|
|
15,849
|
|
|
—
|
|
|
15,849
|
|
||||
Accrued income and other assets (interest rate swap agreements)
|
|
—
|
|
|
6,621
|
|
|
—
|
|
|
6,621
|
|
||||
Total
|
|
$
|
28,366
|
|
|
$
|
841,065
|
|
|
$
|
3,506
|
|
|
$
|
872,937
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accrued expenses and other liabilities (interest rate swap agreements)
|
|
$
|
—
|
|
|
$
|
6,743
|
|
|
$
|
—
|
|
|
$
|
6,743
|
|
Total
|
|
$
|
—
|
|
|
$
|
6,743
|
|
|
$
|
—
|
|
|
$
|
6,743
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury and Federal agencies securities
|
|
$
|
19,879
|
|
|
$
|
369,790
|
|
|
$
|
—
|
|
|
$
|
389,669
|
|
U.S. States and political subdivisions securities
|
|
—
|
|
|
118,462
|
|
|
4,528
|
|
|
122,990
|
|
||||
Mortgage-backed securities - Federal agencies
|
|
—
|
|
|
236,297
|
|
|
—
|
|
|
236,297
|
|
||||
Corporate debt securities
|
|
—
|
|
|
34,383
|
|
|
—
|
|
|
34,383
|
|
||||
Foreign government and other securities
|
|
—
|
|
|
—
|
|
|
809
|
|
|
809
|
|
||||
Total debt securities
|
|
19,879
|
|
|
758,932
|
|
|
5,337
|
|
|
784,148
|
|
||||
Marketable equity securities
|
|
7,579
|
|
|
—
|
|
|
—
|
|
|
7,579
|
|
||||
Total investment securities available-for-sale
|
|
27,458
|
|
|
758,932
|
|
|
5,337
|
|
|
791,727
|
|
||||
Mortgages held for sale
|
|
—
|
|
|
9,825
|
|
|
—
|
|
|
9,825
|
|
||||
Accrued income and other assets (interest rate swap agreements)
|
|
—
|
|
|
9,859
|
|
|
—
|
|
|
9,859
|
|
||||
Total
|
|
$
|
27,458
|
|
|
$
|
778,616
|
|
|
$
|
5,337
|
|
|
$
|
811,411
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accrued expenses and other liabilities (interest rate swap agreements)
|
|
$
|
—
|
|
|
$
|
10,044
|
|
|
$
|
—
|
|
|
$
|
10,044
|
|
Total
|
|
$
|
—
|
|
|
$
|
10,044
|
|
|
$
|
—
|
|
|
$
|
10,044
|
|
(Dollars in thousands)
|
|
U.S. States and political subdivisions securities
|
|
Foreign government and other securities
|
|
Investment securities available-for-sale
|
||||||
Beginning balance January 1, 2016
|
|
$
|
4,528
|
|
|
$
|
809
|
|
|
$
|
5,337
|
|
Total gains or losses (realized/unrealized):
|
|
|
|
|
|
|
|
|
||||
Included in earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Included in other comprehensive income
|
|
(24
|
)
|
|
(2
|
)
|
|
(26
|
)
|
|||
Purchases
|
|
1,100
|
|
|
—
|
|
|
1,100
|
|
|||
Issuances
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Settlements
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Maturities
|
|
(2,905
|
)
|
|
—
|
|
|
(2,905
|
)
|
|||
Transfers into Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Transfers out of Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending balance December 31, 2016
|
|
$
|
2,699
|
|
|
$
|
807
|
|
|
$
|
3,506
|
|
|
|
|
|
|
|
|
||||||
Beginning balance January 1, 2015
|
|
$
|
6,466
|
|
|
$
|
811
|
|
|
$
|
7,277
|
|
Total gains or losses (realized/unrealized):
|
|
|
|
|
|
|
|
|
||||
Included in earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Included in other comprehensive income
|
|
(31
|
)
|
|
(2
|
)
|
|
(33
|
)
|
|||
Purchases
|
|
—
|
|
|
200
|
|
|
200
|
|
|||
Issuances
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Settlements
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Maturities
|
|
(1,907
|
)
|
|
(200
|
)
|
|
(2,107
|
)
|
|||
Transfers into Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Transfers out of Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending balance December 31, 2015
|
|
$
|
4,528
|
|
|
$
|
809
|
|
|
$
|
5,337
|
|
(Dollars in thousands)
|
|
Fair value
|
|
Valuation Methodology
|
|
Unobservable Inputs
|
|
Range of Inputs
|
||
December 31, 2016
|
|
|
|
|
|
|
|
|
||
Investment securities available-for-sale
|
|
|
|
|
|
|
|
|
|
|
Direct placement municipal securities
|
|
$
|
2,699
|
|
|
Discounted cash flows
|
|
Credit spread assumption
|
|
0.92% - 3.17%
|
|
|
|
|
|
|
|
|
|
||
Foreign government
|
|
$
|
807
|
|
|
Discounted cash flows
|
|
Market yield assumption
|
|
0.28% - 1.12%
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||
December 31, 2015
|
|
|
|
|
|
|
|
|
||
Investment securities available-for-sale
|
|
|
|
|
|
|
|
|
||
Direct placement municipal securities
|
|
$
|
4,528
|
|
|
Discounted cash flows
|
|
Credit spread assumption
|
|
1.27% - 2.03%
|
|
|
|
|
|
|
|
|
|
||
Foreign government
|
|
$
|
809
|
|
|
Discounted cash flows
|
|
Market yield assumption
|
|
0.88% - 2.00%
|
(Dollars in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Impaired loans - collateral based
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,280
|
|
|
$
|
6,280
|
|
Accrued income and other assets (partnership investments)
|
|
—
|
|
|
—
|
|
|
1,032
|
|
|
1,032
|
|
||||
Accrued income and other assets (mortgage servicing rights)
|
|
—
|
|
|
—
|
|
|
4,297
|
|
|
4,297
|
|
||||
Accrued income and other assets (repossessions)
|
|
—
|
|
|
—
|
|
|
9,373
|
|
|
9,373
|
|
||||
Accrued income and other assets (other real estate)
|
|
—
|
|
|
—
|
|
|
704
|
|
|
704
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,686
|
|
|
$
|
21,686
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Impaired loans - collateral based
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
220
|
|
|
$
|
220
|
|
Accrued income and other assets (partnership investments)
|
|
—
|
|
|
—
|
|
|
1,000
|
|
|
1,000
|
|
||||
Accrued income and other assets (mortgage servicing rights)
|
|
—
|
|
|
—
|
|
|
4,608
|
|
|
4,608
|
|
||||
Accrued income and other assets (repossessions)
|
|
—
|
|
|
—
|
|
|
6,927
|
|
|
6,927
|
|
||||
Accrued income and other assets (other real estate)
|
|
—
|
|
|
—
|
|
|
736
|
|
|
736
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,491
|
|
|
$
|
13,491
|
|
(Dollars in thousands)
|
|
Carrying Value
|
|
Fair value
|
|
Valuation Methodology
|
|
Unobservable Inputs
|
|
Range of Inputs
|
||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||
Impaired loans
|
|
$
|
6,280
|
|
|
$
|
6,280
|
|
|
Collateral based measurements including appraisals, trade publications, and auction values
|
|
Discount for lack of marketability and current conditions
|
|
0% - 100%
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mortgage servicing rights
|
|
4,297
|
|
|
7,484
|
|
|
Discounted cash flows
|
|
Constant prepayment rate (CPR)
|
|
8.6% - 15.0%
|
||
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
9.6% - 12.5%
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Repossessions
|
|
9,373
|
|
|
9,452
|
|
|
Appraisals, trade publications and auction values
|
|
Discount for lack of marketability
|
|
0% - 4%
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Other real estate
|
|
704
|
|
|
752
|
|
|
Appraisals
|
|
Discount for lack of marketability
|
|
0% - 16%
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||
Impaired loans
|
|
$
|
220
|
|
|
$
|
220
|
|
|
Collateral based measurements including appraisals, trade publications, and auction values
|
|
Discount for lack of marketability and current conditions
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mortgage servicing rights
|
|
4,608
|
|
|
7,246
|
|
|
Discounted cash flows
|
|
Constant prepayment rate (CPR)
|
|
9.4% - 15.0%
|
||
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
9.8% - 13.3%
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Repossessions
|
|
6,927
|
|
|
7,104
|
|
|
Appraisals, trade publications and auction values
|
|
Discount for lack of marketability
|
|
2% - 3%
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Other real estate
|
|
736
|
|
|
851
|
|
|
Appraisals
|
|
Discount for lack of marketability
|
|
8% - 35%
|
(Dollars in thousands)
|
|
Carrying or Contract Value
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and due from banks
|
|
$
|
58,578
|
|
|
$
|
58,578
|
|
|
$
|
58,578
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Federal funds sold and interest bearing deposits with other banks
|
|
49,726
|
|
|
49,726
|
|
|
49,726
|
|
|
—
|
|
|
—
|
|
|||||
Investment securities, available-for-sale
|
|
850,467
|
|
|
850,467
|
|
|
28,366
|
|
|
818,595
|
|
|
3,506
|
|
|||||
Other investments
|
|
22,458
|
|
|
22,458
|
|
|
22,458
|
|
|
—
|
|
|
—
|
|
|||||
Mortgages held for sale
|
|
15,849
|
|
|
15,849
|
|
|
—
|
|
|
15,849
|
|
|
—
|
|
|||||
Loans and leases, net of reserve for loan and lease losses
|
|
4,099,528
|
|
|
4,107,079
|
|
|
—
|
|
|
—
|
|
|
4,107,079
|
|
|||||
Mortgage servicing rights
|
|
4,297
|
|
|
7,484
|
|
|
—
|
|
|
—
|
|
|
7,484
|
|
|||||
Interest rate swaps
|
|
6,621
|
|
|
6,621
|
|
|
—
|
|
|
6,621
|
|
|
—
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Deposits
|
|
$
|
4,333,760
|
|
|
$
|
4,332,744
|
|
|
$
|
3,277,108
|
|
|
$
|
1,055,636
|
|
|
$
|
—
|
|
Short-term borrowings
|
|
291,943
|
|
|
291,943
|
|
|
163,652
|
|
|
128,291
|
|
|
—
|
|
|||||
Long-term debt and mandatorily redeemable securities
|
|
74,308
|
|
|
73,149
|
|
|
—
|
|
|
73,149
|
|
|
—
|
|
|||||
Subordinated notes
|
|
58,764
|
|
|
51,031
|
|
|
—
|
|
|
51,031
|
|
|
—
|
|
|||||
Interest rate swaps
|
|
6,743
|
|
|
6,743
|
|
|
—
|
|
|
6,743
|
|
|
—
|
|
|||||
Off-balance-sheet instruments *
|
|
—
|
|
|
382
|
|
|
—
|
|
|
382
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and due from banks
|
|
$
|
65,171
|
|
|
$
|
65,171
|
|
|
$
|
65,171
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Federal funds sold and interest bearing deposits with other banks
|
|
14,550
|
|
|
14,550
|
|
|
14,550
|
|
|
—
|
|
|
—
|
|
|||||
Investment securities, available-for-sale
|
|
791,727
|
|
|
791,727
|
|
|
27,458
|
|
|
758,932
|
|
|
5,337
|
|
|||||
Other investments and trading account securities
|
|
21,973
|
|
|
21,973
|
|
|
21,973
|
|
|
—
|
|
|
—
|
|
|||||
Mortgages held for sale
|
|
9,825
|
|
|
9,825
|
|
|
—
|
|
|
9,825
|
|
|
—
|
|
|||||
Loans and leases, net of reserve for loan and lease losses
|
|
3,906,580
|
|
|
3,927,967
|
|
|
—
|
|
|
—
|
|
|
3,927,967
|
|
|||||
Mortgage servicing rights
|
|
4,608
|
|
|
7,246
|
|
|
—
|
|
|
—
|
|
|
7,246
|
|
|||||
Interest rate swaps
|
|
9,859
|
|
|
9,859
|
|
|
—
|
|
|
9,859
|
|
|
—
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Deposits
|
|
$
|
4,139,186
|
|
|
$
|
4,139,649
|
|
|
$
|
2,998,443
|
|
|
$
|
1,141,206
|
|
|
$
|
—
|
|
Short-term borrowings
|
|
233,229
|
|
|
233,229
|
|
|
134,156
|
|
|
99,073
|
|
|
—
|
|
|||||
Long-term debt and mandatorily redeemable securities
|
|
57,379
|
|
|
57,193
|
|
|
—
|
|
|
57,193
|
|
|
—
|
|
|||||
Subordinated notes
|
|
58,764
|
|
|
48,304
|
|
|
—
|
|
|
48,304
|
|
|
—
|
|
|||||
Interest rate swaps
|
|
10,044
|
|
|
10,044
|
|
|
—
|
|
|
10,044
|
|
|
—
|
|
|||||
Off-balance-sheet instruments *
|
|
—
|
|
|
375
|
|
|
—
|
|
|
375
|
|
|
—
|
|
|
December 31
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
73,324
|
|
|
$
|
60,429
|
|
Short-term investments with bank subsidiary
|
|
500
|
|
|
500
|
|
||
Investment securities available-for-sale
(amortized cost of $884 at December 31, 2016 and $1,218 at December 31, 2015) |
|
7,369
|
|
|
6,855
|
|
||
Investments in:
|
|
|
|
|
|
|
||
Bank subsidiaries
|
|
676,915
|
|
|
660,087
|
|
||
Non-bank subsidiaries
|
|
1,812
|
|
|
1,496
|
|
||
Other assets
|
|
4,013
|
|
|
4,668
|
|
||
Total assets
|
|
$
|
763,933
|
|
|
$
|
734,035
|
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
||
Commercial paper
|
|
$
|
5,761
|
|
|
$
|
8,042
|
|
Long-term debt and mandatorily redeemable securities
|
|
21,228
|
|
|
19,335
|
|
||
Subordinated notes
|
|
58,764
|
|
|
58,764
|
|
||
Other liabilities
|
|
5,530
|
|
|
3,841
|
|
||
Total liabilities
|
|
91,283
|
|
|
89,982
|
|
||
Total shareholders’ equity
|
|
672,650
|
|
|
644,053
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
763,933
|
|
|
$
|
734,035
|
|
Year Ended December 31
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Income:
|
|
|
|
|
|
|
|
|
|
|||
Dividends from bank subsidiary
|
|
$
|
36,064
|
|
|
$
|
36,064
|
|
|
$
|
33,810
|
|
Rental income from subsidiaries
|
|
2,363
|
|
|
2,342
|
|
|
2,314
|
|
|||
Other
|
|
444
|
|
|
426
|
|
|
408
|
|
|||
Investment securities and other investment gains (losses)
|
|
3,901
|
|
|
26
|
|
|
(370
|
)
|
|||
Total income
|
|
42,772
|
|
|
38,858
|
|
|
36,162
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
|
|
|||
Interest on subordinated notes
|
|
4,220
|
|
|
4,220
|
|
|
4,220
|
|
|||
Interest on long-term debt and mandatorily redeemable securities
|
|
1,454
|
|
|
1,375
|
|
|
1,475
|
|
|||
Interest on commercial paper and other short-term borrowings
|
|
20
|
|
|
30
|
|
|
36
|
|
|||
Rent
|
|
1,739
|
|
|
1,737
|
|
|
1,713
|
|
|||
Other
|
|
1,179
|
|
|
351
|
|
|
2,553
|
|
|||
Total expenses
|
|
8,612
|
|
|
7,713
|
|
|
9,997
|
|
|||
Income before income tax benefit and equity in undistributed income of subsidiaries
|
|
34,160
|
|
|
31,145
|
|
|
26,165
|
|
|||
Income tax benefit
|
|
741
|
|
|
1,721
|
|
|
2,722
|
|
|||
Income before equity in undistributed income of subsidiaries
|
|
34,901
|
|
|
32,866
|
|
|
28,887
|
|
|||
Equity in undistributed income of subsidiaries:
|
|
|
|
|
|
|
|
|
|
|||
Bank subsidiaries
|
|
22,569
|
|
|
24,289
|
|
|
28,891
|
|
|||
Non-bank subsidiaries
|
|
316
|
|
|
331
|
|
|
291
|
|
|||
Net income
|
|
$
|
57,786
|
|
|
$
|
57,486
|
|
|
$
|
58,069
|
|
Comprehensive income
|
|
$
|
52,575
|
|
|
$
|
54,634
|
|
|
$
|
60,895
|
|
Year Ended December 31
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Net income
|
|
$
|
57,786
|
|
|
$
|
57,486
|
|
|
$
|
58,069
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Equity (undistributed) distributed in excess of income of subsidiaries
|
|
(22,885
|
)
|
|
(24,620
|
)
|
|
(29,182
|
)
|
|||
Depreciation of premises and equipment
|
|
4
|
|
|
9
|
|
|
21
|
|
|||
Stock-based compensation
|
|
52
|
|
|
64
|
|
|
35
|
|
|||
Realized/unrealized investment securities and other investment (gains) losses
|
|
(3,901
|
)
|
|
(26
|
)
|
|
370
|
|
|||
Change in trading account securities
|
|
—
|
|
|
205
|
|
|
(13
|
)
|
|||
Other
|
|
3,132
|
|
|
2,585
|
|
|
(2,329
|
)
|
|||
Net change in operating activities
|
|
34,188
|
|
|
35,703
|
|
|
26,971
|
|
|||
Investing activities:
|
|
|
|
|
|
|
|
|
|
|||
Proceeds from sales and maturities of investment securities
|
|
1,795
|
|
|
1,470
|
|
|
—
|
|
|||
Proceeds from liquidation of partnership investment
|
|
2,903
|
|
|
423
|
|
|
570
|
|
|||
Return of capital from subsidiaries
|
|
—
|
|
|
—
|
|
|
1,500
|
|
|||
Net change in investing activities
|
|
4,698
|
|
|
1,893
|
|
|
2,070
|
|
|||
Financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Net change in commercial paper
|
|
(2,281
|
)
|
|
(4,126
|
)
|
|
(183
|
)
|
|||
Proceeds from issuance of long-term debt and mandatorily redeemable securities
|
|
1,607
|
|
|
1,520
|
|
|
1,356
|
|
|||
Payments on long-term debt and mandatorily redeemable securities
|
|
(627
|
)
|
|
(712
|
)
|
|
(569
|
)
|
|||
Stock issued under stock purchase plans
|
|
120
|
|
|
149
|
|
|
197
|
|
|||
Net proceeds from issuance of treasury stock
|
|
2,636
|
|
|
2,373
|
|
|
1,520
|
|
|||
Acquisition of treasury stock
|
|
(8,030
|
)
|
|
(9,970
|
)
|
|
(16,342
|
)
|
|||
Cash dividends paid on common stock
|
|
(19,416
|
)
|
|
(18,126
|
)
|
|
(17,643
|
)
|
|||
Net change in financing activities
|
|
(25,991
|
)
|
|
(28,892
|
)
|
|
(31,664
|
)
|
|||
Net change in cash and cash equivalents
|
|
12,895
|
|
|
8,704
|
|
|
(2,623
|
)
|
|||
Cash and cash equivalents, beginning of year
|
|
60,429
|
|
|
51,725
|
|
|
54,348
|
|
|||
Cash and cash equivalents, end of year
|
|
$
|
73,324
|
|
|
$
|
60,429
|
|
|
$
|
51,725
|
|
By
|
/s/ CHRISTOPHER J. MURPHY III
|
|
|
Christopher J. Murphy III, Chief Executive Officer
|
|
|
|
|
|
|
|
By
|
/s/ ANDREA G. SHORT
|
|
|
Andrea G. Short, Treasurer and Chief Financial Officer
|
|
|
|
(A) Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights
|
|
Weighted-average Exercise Price of Outstanding Options, Warrants and Rights
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans [excluding securities reflected in column (A)]
|
|
||||
Equity compensation plans approved by shareholders
|
|
|
|
|
|
|
|
|
|
|
|
2011 Stock Option Plan
|
|
—
|
|
|
$
|
—
|
|
|
250,000
|
|
|
1997 Employee Stock Purchase Plan
|
|
10,507
|
|
|
31.15
|
|
|
126,174
|
|
|
|
1982 Executive Incentive Plan
|
|
—
|
|
|
—
|
|
|
123,413
|
|
(1)(2)
|
|
1982 Restricted Stock Award Plan
|
|
—
|
|
|
—
|
|
|
241,947
|
|
(1)
|
|
Strategic Deployment Incentive Plan
|
|
—
|
|
|
—
|
|
|
98,645
|
|
(1)(2)
|
|
Total plans approved by shareholders
|
|
10,507
|
|
|
$
|
31.15
|
|
|
840,179
|
|
|
Equity compensation plans not approved by shareholders
|
|
|
|
|
|
|
|
||||
Director Retainer Stock Plan
|
|
—
|
|
|
—
|
|
|
64,048
|
|
|
|
Total equity compensation plans
|
|
10,507
|
|
|
$
|
31.15
|
|
|
904,227
|
|
|
|
(1)
|
Amount is to be awarded by grants administered by the Executive Compensation and Human Resources Committee of the 1st Source Corporation Board of Directors.
|
(2)
|
Amount includes market value stock only. Book value shares used for annual awards may only be sold to 1st Source.
|
3(a)
|
|
Articles of Incorporation of Registrant, amended April 30, 1996, filed as exhibit to Form 10-K, dated December 31, 1996, and incorporated herein by reference.
|
|
|
|
3(b)
|
|
By-Laws of Registrant, as amended October 22, 2015, filed as an exhibit to Form 10-K, dated December 31, 2015, and incorporated herein by reference.
|
|
|
|
3(c)
|
|
Certificate of Designations for Series A Preferred Stock, dated January 23, 2009, filed as exhibit to Form 8-K, dated January 23, 2009, and incorporated herein by reference.
|
|
|
|
4(a)
|
|
Form of Common Stock Certificates of Registrant, filed as exhibit to Registration Statement 2-40481 and incorporated herein by reference.
|
|
|
|
4(b)
|
|
1st Source agrees to furnish to the Commission, upon request, a copy of each instrument defining the rights of holders of Senior and Subordinated debt of 1st Source.
|
|
|
|
10(a)(1)
|
|
Employment Agreement of Christopher J. Murphy III, dated January 1, 2008, filed as exhibit to Form 8-K, dated March 17, 2008, amended February 6, 2014, filed as exhibit to Form 8-K, dated March 12, 2014, and incorporated herein by reference.
|
|
|
|
10(a)(2)
|
|
Employment Agreement of Andrea G. Short dated January 1, 2013, filed as exhibit to Form 10-K, dated December 31, 2012, amended February 6, 2014, filed as exhibit to Form 8-K, dated March 12, 2014, and incorporated herein by reference.
|
|
|
|
10(a)(3)
|
|
Employment Agreement of John B. Griffith, dated January 1, 2008, filed as exhibit to Form 8-K, dated March 17, 2008, amended February 6, 2014, filed as exhibit to Form 8-K, dated March 12, 2014, and incorporated herein by reference.
|
|
|
|
10(b)
|
|
1st Source Corporation Employee Stock Purchase Plan dated April 17, 1997, filed as exhibit to Form 10-K, dated December 31, 1997, and incorporated herein by reference.
|
|
|
|
10(c)
|
|
1st Source Corporation 1982 Executive Incentive Plan, amended November 9, 2016, filed herewith.
|
|
|
|
10(d)
|
|
1st Source Corporation 1982 Restricted Stock Award Plan, amended November 9, 2016, filed as Exhibit 4.3 to Registration Statement on Form S-8 No. 333-215910, filed February 6, 2017, and incorporated herein by reference.
|
|
|
|
10(e)
|
|
1st Source Corporation Strategic Deployment Incentive Plan, formerly known as the 1998 Performance Compensation Plan, amended January 20, 2011, filed as exhibit to Form 10-K, dated December 31, 2010, and incorporated herein by reference.
|
|
|
|
10(f)
|
|
Contract with Fiserv Solutions, Inc. dated November 23, 2005, filed as exhibit to Form 10-K, dated December 31, 2005, and incorporated herein by reference.
|
|
|
|
10 (g)
|
|
1st Source Corporation 2011 Stock Option Plan, amended November 9, 2016, filed herewith.
|
|
|
|
10 (h)
|
|
1st Source Corporation Director Retainer Stock Plan, amended July 24, 2014, filed as exhibit to Form 10-Q, dated September 30, 2014, and incorporated herein by reference.
|
21
|
|
Subsidiaries of Registrant (unless otherwise indicated, each subsidiary does business under its own name):
|
Name
|
|
Jurisdiction
|
1st Source Bank
|
|
Indiana
|
SFG Aircraft, Inc. *
(formerly known as SFG Equipment Leasing, Inc.)
|
|
Indiana
|
1st Source Insurance, Inc. *
|
|
Indiana
|
1st Source Specialty Finance, Inc. *
|
|
Indiana
|
1st Source Leasing, Inc.
|
|
Indiana
|
1st Source Capital Corporation *
|
|
Indiana
|
Trustcorp Mortgage Company (Inactive)
|
|
Indiana
|
1st Source Master Trust
|
|
Delaware
|
Michigan Transportation Finance Corporation *
|
|
Michigan
|
1st Source Intermediate Holding, LLC
|
|
Delaware
|
1st Source Funding, LLC (Inactive)
|
|
Delaware
|
1st Source Corporation Investment Advisors, Inc. *
|
|
Indiana
|
SFG Commercial Aircraft Leasing, Inc. *
|
|
Indiana
|
SFG Equipment Leasing Corporation I*
|
|
Indiana
|
Washington and Michigan Insurance, Inc.*
|
|
Arizona
|
|
*Wholly-owned subsidiaries of 1st Source Bank
|
|
|
23(a)
|
|
Consent of BKD, LLP, Independent Registered Public Accounting Firm.
|
|
|
|
23(b)
|
|
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
|
|
|
|
31.1
|
|
Certification of Christopher J. Murphy III, Chief Executive Officer (Rule 13a-14(a)).
|
|
|
|
31.2
|
|
Certification of Andrea G. Short, Chief Financial Officer (Rule 13a-14(a)).
|
|
|
|
32.1
|
|
Certification of Christopher J. Murphy III, Chief Executive Officer.
|
|
|
|
32.2
|
|
Certification of Andrea G. Short, Chief Financial Officer.
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
By
|
/s/ CHRISTOPHER J. MURPHY III
|
|
|
|
|
|
|
|
|
|
|
Christopher J. Murphy III, Chairman of the Board
|
|
|
|
and Chief Executive Officer
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ CHRISTOPHER J. MURPHY III
|
|
Chairman of the Board
|
|
February 17, 2017
|
Christopher J. Murphy III
|
|
and Chief Executive Officer
|
|
|
|
|
|
|
|
/s/ JAMES R. SEITZ
|
|
President
|
|
February 17, 2017
|
James R. Seitz
|
|
|
|
|
|
|
|
|
|
/s/ ANDREA G. SHORT
|
|
Treasurer, Chief Financial Officer
|
|
February 17, 2017
|
Andrea G. Short
|
|
and Principal Accounting Officer
|
|
|
|
|
|
|
|
/s/ JOHN B. GRIFFITH
|
|
Secretary
|
|
February 17, 2017
|
John B. Griffith
|
|
and General Counsel
|
|
|
|
|
|
|
|
/s/ ALLISON N. EGIDI
|
|
Director
|
|
February 17, 2017
|
Allison N. Egidi
|
|
|
|
|
|
|
|
|
|
/s/ DANIEL B. FITZPATRICK
|
|
Director
|
|
February 17, 2017
|
Daniel B. Fitzpatrick
|
|
|
|
|
|
|
|
|
|
/s/ CRAIG A. KAPSON
|
|
Director
|
|
February 17, 2017
|
Craig A. Kapson
|
|
|
|
|
|
|
|
|
|
/s/ NAJEEB A. KHAN
|
|
Director
|
|
February 17, 2017
|
Najeeb A. Khan
|
|
|
|
|
|
|
|
|
|
/s/ VINOD M. KHILNANI
|
|
Director
|
|
February 17, 2017
|
Vinod M. Khilnani
|
|
|
|
|
|
|
|
|
|
/s/ REX MARTIN
|
|
Director
|
|
February 17, 2017
|
Rex Martin
|
|
|
|
|
|
|
|
|
|
/s/ CHRISTOPHER J. MURPHY IV
|
|
Director
|
|
February 17, 2017
|
Christopher J. Murphy IV
|
|
|
|
|
|
|
|
|
|
/s/ TIMOTHY K. OZARK
|
|
Director
|
|
February 17, 2017
|
Timothy K. Ozark
|
|
|
|
|
|
|
|
|
|
/s/ JOHN T. PHAIR
|
|
Director
|
|
February 17, 2017
|
John T. Phair
|
|
|
|
|
|
|
|
|
|
/s/ MARK D. SCHWABERO
|
|
Director
|
|
February 17, 2017
|
Mark D. Schwabero
|
|
|
|
|
(a)
|
The Corporation may provide two annual awards up to a maximum amount as determined by the Committee: (i) an amount payable in cash and earned immediately, and (ii) an amount equal to a full or partial match of the cash award in book value or market value shares of common stock. At the end of the performance period the Committee shall determine (i) the amount of cash earned, which shall be paid in a lump sum after the end of the performance period and (ii) the type of shares (i.e. book value shares or market shares) and the number of shares. These shares of stock are fixed at a maximum amount and will be subject to a substantial risk of forfeiture over the succeeding five (5) years based on the achievement of future performance metrics and the employee remaining with the Corporation, as described in Section 8 as the “Forfeiture Period”. The total value of cash and stock as of the end of each performance period shall not exceed $1 million. The total annual awards paid in a single calendar year to a single Participant made in cash and in shares shall not exceed $3 million in the aggregate. The book value shares will be restricted as described in paragraph 8 and 9 below.
|
(b)
|
Each Participant under the Plan (except for Participants under separate sales and service incentive plans discussed in section (f) below) is assigned a “partnership level” percentage as of the date of grant that is the starting point for determining his or her annual cash award. Partnership levels are stated as a percentage of the Participant’s salary range midpoint or base salary as assigned by the Committee as of the date of grant for purposes of computing the cash award. The “Base Bonus” for each Participant is equal to the Participant’s assigned salary range midpoint or base salary multiplied by the assigned partnership share percentage.
|
(c)
|
If the Committee determines it appropriate at the date of grant of an award, the Base Bonus may be further adjusted up or down by the “Company Performance Factor.” The Company Performance Factor is 2.5 times the percentage by which actual net income for the year exceeded (or missed) budgeted net income or such other net income target selected by the Committee at the beginning of the year with a maximum upward adjustment of 25%. As long as such adjustments do not result in the award failing to be qualified performance based compensation under Section 162(m) of the Internal Revenue Code, the Committee is authorized to make adjustments from reported net income in its discretion for purposes of determining the Company Performance Factor to account for extraordinary impacts positive or negative that were not in control of nor could be foreseen by the Participants or that were caused by actions undertaken for the long-term benefit of the shareholders and that are not considered “normal operating activities” and the sources of such adjustments may include one or more of the following not included in the budget or other net income target: (i) results of acquisition, divestiture or restructuring activities; (ii) investment securities gains or losses; (iii) tax planning activities; (iv) new regulatory costs; (v) tax law or regulatory changes; (vi) changes in generally accepted accounting principles or the Company’s interpretation or implementation of these; or (vii) significant national and/or international events significantly affecting the Company’s reported net income.
|
(d)
|
For each Participant, the Base Bonus opportunity after adjustment for the Company Performance Factor is multiplied by 300% for each goal to calculate the maximum award and then the maximum award may be adjusted down to a minimum of 0% for each goal based upon the Participant’s performance against a set of corporate, group, division, unit and individual Participant performance goals established at the beginning of the fiscal year with such award levels generally being targeted at 150% for staff employees and 200% for those line managers with primary responsibility for revenues and/or credit.
|
(e)
|
After applying the Company Performance Factor in (c) above the Base Bonus opportunity will be adjusted for each Participant as described in (d) above based on one or more of the following criteria at the corporate, group, division, unit or individual Participant level: (i) net income; (ii) return on assets; (iii) exceed median return on assets results for selected peer group; (iv) return on common equity; (v) revenues, net interest margin, pricing, and/or fees; (vi) expense to revenue ratio and/or expenses; (vii) growth in average assets, loans or core deposits; (viii) average 30-day delinquency ratio; (ix) year-end nonperforming assets and/or monthly average nonperforming assets; (x) net charge offs and other credit-related losses to average loans, leases, repossessed assets and other real estate; (xi) net growth in primary relationships or other strategic growth metrics; (xii) deposit mix or noninterest-bearing deposit growth; (xiii) assets under management and/or investment performance; and (xii) other performance goals.
|
(f)
|
The Corporation may also provide the annual awards described in (a) above to Participants whose awards are calculated pursuant to other sales incentive programs, investment management programs, operational risk management programs, or other programs established by the Corporation and determined by the Committee.
|
(g)
|
The stock portion of the awards shall be made in whole book value shares or whole market value shares only. No fractional shares shall be awarded.
|
(h)
|
Except as otherwise determined by the Committee, if the Participant’s employment ends prior to the payment of the cash portion of the annual award, the entire annual award shall be forfeited, void and of no further force and effect.
|
(a)
|
The Corporation may also provide for a long-term award from time to time for selected Participants as designated by the Committee. These awards will be granted for attainment of longer-term goals, usually for three (3) years or longer. Such awards will consist of two distinct parts: (i) an amount payable in cash and earned immediately; and (ii) an amount in market value shares of common stock. At the end of the performance period the Committee shall determine (i) the amount of cash earned, which shall be paid in a lump sum after the end of the performance period and (ii) the number of shares. These shares of stock are fixed at a maximum amount and will be subject to a substantial risk of forfeiture over the succeeding five (5) years based on the Participant remaining with the Corporation and the Corporation continuing to have positive net income calculated as of the end of each calendar year, as described in Section 8 as the Forfeiture Period. The total value of cash and stock as of the end of each performance period shall not exceed $1 million. Total long-term awards paid in a single calendar year to a single Participant made in cash and in shares shall not exceed $3 million in the aggregate.
|
(b)
|
The Committee assigns a set of weighted long-term goals at the start of each long-term award period. For each goal Company performance is scored at 50% for minimum, 100% for target and 200% for maximum.
|
(c)
|
The Committee also assigns each Participant a “partnership level” for long-term award purposes as of the date of grant.
|
(d)
|
The long-term awards then are calculated based upon a pre-determined mathematical formula that multiplies the Company’s weighted performance relative to its long-term goals by the Participant’s partnership level and then by the Participant’s average annual incentive award under the Plan over the long-term award period.
|
(e)
|
Long-term cash awards made to Participants under the Plan will be performance-based compensation subject to the attainment of pre-established objective performance goals, based on one or more of the following criteria: (i) return on assets; (ii) expense to revenue ratio; (iii) net interest margin; (iv) net charge offs and other credit-related losses to average loans, leases, repossessed assets and other real estate; (v) average and/or period-end nonperforming assets; (vi) sales volume and/or pricing; (vii) fee income; (viii) average and/or period-end loans, deposits, or other volumes outstanding; and (ix) net new primary relationships.
|
(f)
|
The stock portion of the awards shall be made in whole market value shares only. No fractional shares shall be awarded.
|
(g)
|
Except as otherwise determined by the Committee, if the Participant’s employment ends prior to the payment of the cash portion of the long-term award, the entire long-term award shall be forfeited, void and of no further force and effect.
|
(a)
|
Within 30 days from the date of such written notice of a Participant’s initial award under the Plan, the Participant shall notify the Committee, in writing, of acceptance of the award and the terms thereof, applicable to the initial award and to all subsequent awards accepted under the Plan, which notice shall be deemed delivered for all purposes under this Plan when personally delivered or mailed to Chief Financial Officer, 1st Source Corporation, P.O. Box 1602, South Bend, Indiana 46634 by postpaid certified United States mail. In addition, commencing with awards made in 2017 for 2016 performance, each new or existing Participant who has not already signed and delivered to the Corporation the Corporation’s standard form of Confidentiality and Non-Solicitation Agreement shall, before receipt of any initial or further awards under the Plan, be required to do so as a condition for continued participation and receipt of awards under the Plan.
|
(b)
|
The Corporation may require that, in allocating shares, the Participant agree with, and represent to, the Corporation that Participant is acquiring such shares for the purpose of investment and with no present intention to transfer, sell or otherwise dispose of such shares except such transfer by a legal representative as shall be required by will or the laws of any jurisdiction in winding up the estate of any Participant. Such shares shall be transferable thereafter only if the proposed transfer shall be permissible pursuant to this Plan and if, in the opinion of counsel (who shall be satisfactory to Corporation), such transfer shall at such time be in compliance with applicable securities law.
|
(a)
|
All shares are subject to forfeiture and shall be retained by Corporation. A notice of the shares awarded to a Participant shall be delivered by the Corporation to a Participant on or after the date of issuance. Such Participant thereupon shall be a shareholder with respect to all of the shares represented by such certificate or certificates and shall have all rights of a shareholder with respect to all such shares, including the right to vote such shares and receive all dividends and other distributions, subject to termination upon the occurrence of an Act of Forfeiture as set forth in the Plan. The certificates for such shares shall be either imprinted or stamped with a legend to the effect that the shares represented thereby may not be sold, exchanged, transferred, pledged, hypothecated (except to issuer), assigned, conveyed, or otherwise voluntarily or involuntarily disposed of except in accordance with this Plan (any such disposition being automatically an Act of Forfeiture) by the holder thereof until such time as the restrictions provided for herein lapse.
|
(b)
|
If new or additional or different shares or securities are distributed with respect to shares of common stock of the Corporation as the result of a stock split, stock dividend, combination of shares or other change involving 1st Source securities, or exchange for other securities, or reclassification, reorganization, merger, consolidation, recapitalization or otherwise, the Participant shall, as the owner of book value or market value shares subject to terms and restrictions hereunder, be entitled to such new or additional or different shares of stock or securities subject to such terms, conditions and restrictions as existed on the originally awarded shares.
|
(c)
|
The term “Restricted Period” with respect to any book value shares awarded to a Participant under this Plan shall mean that period commencing with the date of issuance of such shares and ending on the date at which all such shares have been purchased from Participant by Corporation or exchanged by the Participant for market value shares as provided herein.
|
(d)
|
The term “Forfeiture Period” with respect to any award of shares issued to a Participant under this Plan shall mean a period commencing on the date of grant of such shares to the Participant and ending over a five (5) year period thereafter. The Forfeiture Period shall terminate at an equal and proportionate rate for each year in which:
|
(e)
|
The “normal retirement age” means age 65 unless changed by the Committee, provided, however, that the Committee may authorize a normal retirement at an earlier age for a Participant if it determines that such action is in the best interests of the Corporation or otherwise is warranted based upon hardship or other special circumstances.
|
(f)
|
With respect to annual award shares only, for any year in which the Corporation’s performance is equal to or has exceeded the requisite cumulative goals established for the accumulated years subsequent to the date of the award, all risk of forfeiture is removed for those shares which were not released in that year or any prior year in which the Corporation failed to meet the required annual or cumulative goals.
|
(g)
|
The Committee generally may not change or adjust upward the number of shares determined as of the end of the applicable performance period, however, the Committee may reduce the number of shares, down to zero, in such circumstances as are set forth herein or otherwise determined by the Committee in its discretion. In addition, there may be circumstances in which the annual net income growth, EPS growth, ROA, ROE or other performance goal or goals established by the Committee for annual award shares become unattainable or otherwise unreasonable during the Forfeiture Period. In such situations, and upon an explicit determination that (i) unfavorable market conditions or external events have demonstrably rendered such performance goals unattainable, unreasonable or adverse, and (ii) the Corporation’s relative financial performance under the current conditions or since such event remains in the top quartile of the Corporation’s peers with regard to ROA, nonperforming assets, net charge-offs, or other performance indicators, the Committee may take such other action as the Committee deems appropriate with respect to an award as long as such action does not increase the award. Such other action includes, without limitation, extending the forfeiture period or adjusting the performance goals for the forfeiture period to fairly compensate the Participants for their performance during the calendar years for which such annual awards were made. Relative performance in the top quartile of peers in the face of unfavorable market conditions or external events is an indicator that financial performance goals were achieved in prior years without sacrificing the management of the risks of unfavorable market conditions or external events. The Committee’s authorization to make adjustments under these circumstances is intended to recognize and encourage continuing good stewardship of the Corporation as reflected by high quality financial performance and strong risk management for the long-term benefit of its shareholders.
|
(h)
|
For all purposes of this Plan, an Act of Forfeiture shall be deemed to be any one of the following:
|
(i)
|
Upon the occurrence of an Act of Forfeiture relating to a Participant, the right, title and interest of all remaining unearned stock of Corporation held by such Participant shall be automatically forfeited and terminated for all purposes.
|
(j)
|
The right, title and interest of any transferee of any shares acquired from a Participant under this Plan by will or by laws of descent and distribution will and shall be subject to all of the terms and conditions of the Plan, including but without limitation, the restrictions on transfer and the provisions relating to forfeiture.
|
(k)
|
The book value shares may only be sold to the Corporation under the terms of this Plan except as provided in subparagraphs 8(b)(2) and 8(b)(3) above. 1st Source may, in addition to any other purchases required by this Plan, upon request of a Participant, purchase earned book value stock from the Participant prior to death, disability, retirement, or other termination of employment. Any such purchase is limited to 50% of the Participant’s shares of earned book value stock which, at the time of purchase, have been earned book value stock for at least seven years. Such a purchase is permitted only upon approval of the Committee and only for the following reasons: (1) purchase of the Participant’s principal residence or a second home, (2) payment of tuition or related educational expenses for the Participant, the Participant’s spouse, or a dependent and (3) financial hardship. The Committee will have sole discretion to determine whether the enumerated criteria are being satisfied in any purchase. Any transfer or purported transfer made by a Participant at any time, except at the times and in the manner expressly authorized, shall be null and void and the Corporation shall not be obligated to recognize nor to give effect to such transfer on its books or records nor to recognize the person or persons to whom such purported transfer has been made as the legal beneficial holder of such shares.
|
(l)
|
The Committee may impose such other restrictions on any shares awarded to a Participant pursuant to this Plan as it may deem advisable, including without limitation, restrictions under the Securities Act of 1933, as amended, under the requirements of any stock exchange upon which such shares or shares of the same class are then listed, and under any blue-sky or securities laws applicable to such shares.
|
(a)
|
If the Participant is employed at the time of his death, total disability, or normal retirement, Participant or his/her personal representative must sell his/her earned book value stock back to the Corporation.
|
(b)
|
Upon termination of employment by voluntary act of Participant or by act of Corporation, except death or disability or normal retirement, all of such Participant’s earned book value stock must be sold to Corporation.
|
(c)
|
If the Committee in its sole discretion determines in any case that lump sum payment instead of installment payment as required by paragraph 9(a) or (b) would be desirable (whether for financial reasons, administrative ease, or otherwise) due to the size of the required installment payments, the Committee may order without consent of the Participant such lump sum payment be made in lieu of payment in installments. Such a lump sum payment shall be in an amount equal to the present value of the installment payments which would have otherwise been paid discounted at the current long-term ”applicable federal rate.”
|
(a)
|
Expense
. All expenses and costs in connection with the administration of the Plan shall be borne by the Corporation.
|
(b)
|
No Prior Rights of Offer
. Nothing in the Plan shall be deemed to give any officer or employee of the Corporation or his or its legal representatives or assigns or any other person or entity claiming under or through any Participant any contractual or other right to participate in the benefits of the Plan.
|
(c)
|
Indemnification of the Committee
. In addition to such other rights or indemnification as they may have, the members of the Committee shall be indemnified by the Corporation against all costs and expenses reasonably incurred by them or any of them in connection with any action, suit or proceeding to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any award granted thereof and against all amounts paid by them in settlement thereof (provided such settlement is approved by legal counsel selected by the Corporation) or paid by them in satisfaction of a judgment in any such action, suit or proceedings, the person desiring indemnification shall give the Corporation an opportunity, at its own expense, to handle and defend the same.
|
(d)
|
Liability of Corporation
. The liability of the Corporation under this Plan or any award of shares made hereunder is limited to the obligation set forth with respect to such award, and nothing herein contained shall be construed to impose any liability on the Corporation in favor of any Participant with respect to any loss, cost or expense which a Participant may incur in connection with or arising out of any transaction in connection therewith.
|
(e)
|
No Agreement to Employ
. Nothing in the Plan shall be construed to constitute or be evidence of an agreement or understanding expressed or implied on the part of the Corporation or any Subsidiary to employ or retain any Participant to whom any shares have been awarded for any specified period of time or times.
|
(f)
|
Book value
. Book value under this Plan shall be determined in accordance with generally accepted accounting principles, as published in the Corporation’s Annual Report.
|
(g)
|
Market value
. Market value under this Plan shall mean the closing price of a share of common stock, as reported by NASDAQ, or by any other exchange upon which the shares may be traded, for the day on which the value is to be determined or if that day is not a stock trading day, then on the last preceding trading day.
|
(h)
|
Overstated Financial Results or Other Metrics, Fraud, Malfeasance or Purposeful Misstatement.
In addition to any terms as the Committee may determine, all awards under the Plan are subject to the Corporation’s Clawback Policy which provides for potential forfeiture and/or recovery by the Corporation of (i) excess awards received by any Participant upon a determination that the awards were based upon financial results or other metrics that were misstated or otherwise inaccurate, either for business units of the Corporation or the Corporation as a whole, and (ii) all such awards received by any Participant upon a determination that the Participant had responsibilities for the accounting that led to the misstatement or inaccuracy, or committed fraud or other malfeasance while employed by the Corporation.
|
(i)
|
Requirements of Internal Revenue Section Code 162(m).
Notwithstanding any other provision of the Plan, the Committee may impose such conditions on any award as may be required to satisfy the requirements of Section 162(m) of the Internal Revenue Code (or any successor or similar rule relating thereto) to the extent desired by the Committee and whether awards are qualified performance based compensation under Section 162(m) of the Internal Revenue Code shall be at the sole discretion of the Committee.
|
(j)
|
Tax Withholding.
The Corporation will have the right to withhold from the payment of any Award the amount of any federal, state or local taxes which the Corporation is required to withhold.
|
(i)
|
To select the eligible employees to whom options shall be granted under the Plan;
|
(ii)
|
To determine the terms and conditions of each option including but not limited to the date of grant, the dates(s) of exercise, the number of shares of Common Stock subject to the option, the exercise price, and the restrictions, if any, to be imposed upon the transfer of shares purchased pursuant to the option;
|
(iii)
|
To prescribe the form of all stock option agreements and any other agreement or document which the Committee determines is appropriate in connection with the Plan;
|
(iv)
|
To prescribe rules and regulations for the administration of the Plan;
|
(v)
|
To construe and interpret any provision of the Plan and any option agreement or other agreement executed in connection with the Plan; and
|
(vi)
|
To determine whether the option is an incentive stock option or a nonstatutory stock option.
|
5.1
|
The price to be paid for shares of Common Stock upon the exercise of each option shall be determined by the Committee at the time such option is granted, but such price in no event shall be less than the fair market value of the Common Stock on the date on which such option is granted. For purposes of the Plan, “fair market value” shall mean the closing price of a share of Common Stock, as reported by the Nasdaq Stock Market, or by any other exchange upon which the shares may be traded, on the day on which the value is to be determined or if that day is not a stock trading day, then on the last preceding stock trading day. Notwithstanding the foregoing, in the case of an incentive stock option granted to any person who, at the time of grant of such option, owns stock of the Company possessing more than 10% of the total combined voting power of all classes of stock of the Company, the option price must be at least 110% of the fair market value of the stock subject to the option and such option by its terms must not be exercisable after the expiration of five years from the date such option is granted.
|
5.2
|
Each option shall be exercisable during and over such period ending not later than ten years from the date it was granted, as may be determined by the Committee and stated in the option, except as otherwise required in Paragraph 5.1 above. No incentive stock option shall be granted after the date 10 years after the date this Plan is first adopted and approved by the Board of Directors or the date the Plan is approved by the shareholders, whichever is earlier. The term “Board of Directors” as used herein shall mean the Board of Directors of the Company and not a committee thereof.
|
5.3
|
In the case of incentive stock options, the aggregate fair market value (determined as of the date an incentive stock option is granted) of stock with respect to which stock options intended to meet the requirements of Code Section 422 become exercisable for the first time by an individual during any calendar year under all plans of the Company shall not exceed $100,000; provided further, that if the limitation is exceeded, the incentive stock option(s) which cause the limitation to be exceeded shall be treated as nonstatutory stock options.
|
5.4
|
Payment for shares purchased pursuant to exercise of an option shall be made either in cash or by check, or by delivery in exchange for such option shares Company shares with a fair market value on the date of exercise equal to the option price, or a combination of both. If Company shares are used, an optionee may tender only shares without legend that such optionee has owned for six months or longer prior to the exercise date of the option. The Committee also may allow exercises by any other means which the Committee determines to be consistent with the Plan’s purpose and applicable law. Fair market value for the purpose of this Paragraph 5.4 shall have the same meaning as provided in Paragraph 5.1. No optionee shall have any rights to dividends or other rights of a stockholder with respect to shares subject to an option until such optionee has given written notice of exercise of such option and paid in full for such shares. Whenever the Company proposes or is required to issue or transfer shares of Common Stock under the Plan, the Company shall have the right to require the optionee or his or her legal representative to remit to the Company an amount sufficient to satisfy any federal, state and/or local withholding tax requirements prior to the delivery of any certificate or certificates for such shares. If required by the Committee, or, pursuant to procedures established by the Committee, an optionee so elects, shares of Common Stock having an aggregate fair market value, as determined by the Committee, consistent with the requirements of Treas. Reg. § 20.2031-2 sufficient to satisfy the applicable withholding taxes, shall be withheld from the shares otherwise to be received upon the exercise of a non-qualified option. The maximum number of shares that may be withheld by the Company from option shares at the time of an option exercise shall not exceed the number of shares necessary to meet the optionee’s required tax withholding based on the minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to the optionee’s supplemental taxable income generated by the exercise.
|
5.5
|
The Committee shall, in its sole discretion, provide in an award agreement for the automatic grant of a new option to any optionee who delivers Company shares as full or partial payment of the exercise price of the original option. Any new option granted in such a case shall:
|
(i)
|
Be for the same number of shares as the optionee delivered in exercising the original option;
|
(ii)
|
Have an exercise price of 100% of the fair market value of the shares on the date of exercise of the original option (the grant date for the new option); and
|
(iii)
|
Have a term equal to the remaining term of the original option.
|
5.6
|
If an optionee’s employment by the Company or a subsidiary terminates by reason of the optionee’s retirement, death or permanent and total disability (as defined in Section 22(e)(3) of the Code), all of the optionee’s outstanding options must thereafter be exercised during the period of twelve months after the date of the optionee’s retirement, death or disability, or the stated period of the option, whichever period is shorter. Notwithstanding the foregoing, in the case of an incentive stock option, if an optionee’s employment by the Company or a subsidiary terminates solely by reason of the optionee’s retirement, all such outstanding options must thereafter be exercised during the period of three months after the date of the optionee’s retirement, or the stated period of the option, whichever period is shorter. (The term “retirement” as used herein means such termination of employment in circumstances under which an individual is entitled to early or normal retirement benefits under any then existing pension plan of the Company or a subsidiary.)
|
5.7
|
If an optionee’s employment by the Company or a subsidiary is terminated by reason other than retirement, death or permanent and total disability, all of the optionee’s unexercised outstanding options, unless otherwise provided in an employment agreement, shall become null and void.
|
5.8
|
The Committee may require each person purchasing shares pursuant to the option to represent to and agree with the Company in writing that he/she is acquiring the shares without a view to distribution thereof. The certificates for such may include any legend which the Committee deems appropriate to reflect any restrictions on transfers.
|
5.9
|
Except as provided in Paragraph 5.10, no option granted pursuant to this Plan shall be transferable otherwise than by will or by the laws of descent and distribution, or pursuant to a qualified domestic relations order. The Company shall not be liable to any person for honoring the exercise of the option of a deceased optionee by the person or persons it shall have determined in good faith to have acquired the option. During the lifetime of an optionee, the option shall be exercisable only by the optionee.
|
5.10
|
Subject to such rules as the Committee may adopt to preserve the purposes of the Plan, an optionee may transfer a nonstatutory stock option without consideration to the following (“Permitted Transferees”):
|
(i)
|
a member of the optionee’s immediate family, including only his or her spouse, lineal descendants, and adopted children, the spouse’s lineal descendants and adopted children, and the legal representatives of any of those persons who are minors;
|
(ii)
|
an irrevocable trust solely for the benefit of the optionee and his or her immediate family;
|
(iii)
|
a partnership, limited liability company, or corporate entity for which the sole owners of its capital interests are the optionee and his or her immediate family; or
|
(iv)
|
a revocable trust with respect to which the optionee, as settlor of the trust, retains the right of revocation or amendment until his or her death.
|
(i)
|
Increase the total number of shares reserved for the purposes of the Plan.
|
(ii)
|
Change the employees (or class of employees) eligible to receive options under the Plan.
|
(iv)
|
Change the provisions of Paragraph 5.1 concerning the exercise price.
|
(v)
|
Change the provisions of Paragraph 5.2 concerning the maximum term of the options.
|
/s/ BKD, LLP
|
|
/s/ Ernst & Young LLP
|
|
1.
|
I have reviewed this annual report on Form 10-K of 1st Source 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 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 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 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:
|
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.
|
By
|
/s/ CHRISTOPHER J. MURPHY III
|
|
Christopher J. Murphy III, Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of 1st Source 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 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 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 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:
|
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.
|
By
|
/s/ ANDREA G. SHORT
|
|
Andrea G. Short, Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of sections 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of 1st Source.
|
By
|
/s/ CHRISTOPHER J. MURPHY III
|
|
Christopher J. Murphy III, Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of sections 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of 1st Source.
|
By
|
/s/ ANDREA G. SHORT
|
|
Andrea G. Short, Chief Financial Officer
|