(Mark One) | |
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
SECURITIES EXCHANGE ACT OF 1934 |
COMMERCE BANCSHARES, INC. | ||
(Exact name of registrant as specified in its charter) |
Missouri | 43-0889454 | |
(State of Incorporation) | (IRS Employer Identification No.) | |
1000 Walnut, Kansas City, MO | 64106 | |
(Address of principal executive offices) | (Zip Code) | |
(816) 234-2000 | ||
(Registrant’s telephone number, including area code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company £ | Emerging growth company £ |
Page | |||
INDEX | |||
June 30, 2018 | December 31, 2017 | ||||||
(Unaudited) | |||||||
(In thousands) | |||||||
ASSETS | |||||||
Loans | $ | 13,954,111 | $ | 13,983,674 | |||
Allowance for loan losses | (159,532 | ) | (159,532 | ) | |||
Net loans | 13,794,579 | 13,824,142 | |||||
Loans held for sale (including $10,750,000 and $15,327,000 of residential mortgage loans carried at fair value at June 30, 2018 and December 31, 2017, respectively) | 20,352 | 21,398 | |||||
Investment securities: | |||||||
Available for sale debt ($557,698,000 and $662,515,000 pledged at June 30, 2018 and | |||||||
December 31, 2017, respectively, to secure swap and repurchase agreements) | 8,412,376 | 8,725,442 | |||||
Trading debt | 31,156 | 18,269 | |||||
Equity | 4,444 | 50,591 | |||||
Other | 112,309 | 99,005 | |||||
Total investment securities | 8,560,285 | 8,893,307 | |||||
Federal funds sold and short-term securities purchased under agreements to resell | 31,500 | 42,775 | |||||
Long-term securities purchased under agreements to resell | 700,000 | 700,000 | |||||
Interest earning deposits with banks | 114,947 | 30,631 | |||||
Cash and due from banks | 386,339 | 438,439 | |||||
Land, buildings and equipment, net | 331,782 | 335,110 | |||||
Goodwill | 138,921 | 138,921 | |||||
Other intangible assets, net | 8,083 | 7,618 | |||||
Other assets | 437,954 | 401,074 | |||||
Total assets | $ | 24,524,742 | $ | 24,833,415 | |||
LIABILITIES AND EQUITY | |||||||
Deposits: | |||||||
Non-interest bearing | $ | 6,876,756 | $ | 7,158,962 | |||
Savings, interest checking and money market | 11,761,832 | 11,499,620 | |||||
Time open and C.D.'s of less than $100,000 | 603,629 | 634,646 | |||||
Time open and C.D.'s of $100,000 and over | 1,079,340 | 1,132,218 | |||||
Total deposits | 20,321,557 | 20,425,446 | |||||
Federal funds purchased and securities sold under agreements to repurchase | 1,166,759 | 1,507,138 | |||||
Other borrowings | 9,291 | 1,758 | |||||
Other liabilities | 255,752 | 180,889 | |||||
Total liabilities | 21,753,359 | 22,115,231 | |||||
Commerce Bancshares, Inc. stockholders’ equity: | |||||||
Preferred stock, $1 par value | |||||||
Authorized 2,000,000 shares; issued 6,000 shares | 144,784 | 144,784 | |||||
Common stock, $5 par value | |||||||
Authorized 120,000,000 shares; | |||||||
issued 107,081,397 shares | 535,407 | 535,407 | |||||
Capital surplus | 1,804,057 | 1,815,360 | |||||
Retained earnings | 408,374 | 221,374 | |||||
Treasury stock of 275,577 shares at June 30, 2018 | |||||||
and 276,968 shares at December 31, 2017, at cost | (15,854 | ) | (14,473 | ) | |||
Accumulated other comprehensive income (loss) | (108,781 | ) | 14,108 | ||||
Total Commerce Bancshares, Inc. stockholders' equity | 2,767,987 | 2,716,560 | |||||
Non-controlling interest | 3,396 | 1,624 | |||||
Total equity | 2,771,383 | 2,718,184 | |||||
Total liabilities and equity | $ | 24,524,742 | $ | 24,833,415 |
For the Three Months Ended June 30 | For the Six Months Ended June 30 | ||||||||||||
(In thousands, except per share data) | 2018 | 2017 | 2018 | 2017 | |||||||||
(Unaudited) | |||||||||||||
INTEREST INCOME | |||||||||||||
Interest and fees on loans | $ | 154,135 | $ | 134,273 | $ | 301,150 | $ | 262,596 | |||||
Interest and fees on loans held for sale | 372 | 263 | 676 | 459 | |||||||||
Interest on investment securities | 65,564 | 54,975 | 118,806 | 110,240 | |||||||||
Interest on federal funds sold and short-term securities purchased under | |||||||||||||
agreements to resell | 177 | 37 | 357 | 60 | |||||||||
Interest on long-term securities purchased under agreements to resell | 3,785 | 3,684 | 7,899 | 7,477 | |||||||||
Interest on deposits with banks | 1,590 | 362 | 2,730 | 759 | |||||||||
Total interest income | 225,623 | 193,594 | 431,618 | 381,591 | |||||||||
INTEREST EXPENSE | |||||||||||||
Interest on deposits: | |||||||||||||
Savings, interest checking and money market | 6,519 | 4,342 | 12,108 | 8,232 | |||||||||
Time open and C.D.'s of less than $100,000 | 694 | 674 | 1,356 | 1,318 | |||||||||
Time open and C.D.'s of $100,000 and over | 3,483 | 2,822 | 6,322 | 5,585 | |||||||||
Interest on federal funds purchased and securities sold under | |||||||||||||
agreements to repurchase | 3,956 | 2,038 | 7,957 | 3,577 | |||||||||
Interest on other borrowings | 12 | 911 | 24 | 1,799 | |||||||||
Total interest expense | 14,664 | 10,787 | 27,767 | 20,511 | |||||||||
Net interest income | 210,959 | 182,807 | 403,851 | 361,080 | |||||||||
Provision for loan losses | 10,043 | 10,758 | 20,439 | 21,886 | |||||||||
Net interest income after provision for loan losses | 200,916 | 172,049 | 383,412 | 339,194 | |||||||||
NON-INTEREST INCOME | |||||||||||||
Bank card transaction fees | 43,215 | 37,295 | 84,668 | 73,046 | |||||||||
Trust fees | 37,036 | 33,120 | 73,098 | 65,134 | |||||||||
Deposit account charges and other fees | 23,893 | 22,861 | 46,875 | 44,803 | |||||||||
Capital market fees | 1,992 | 2,156 | 4,283 | 4,498 | |||||||||
Consumer brokerage services | 3,971 | 3,726 | 7,739 | 7,375 | |||||||||
Loan fees and sales | 3,229 | 4,091 | 6,091 | 7,259 | |||||||||
Other | 11,514 | 12,131 | 21,786 | 22,878 | |||||||||
Total non-interest income | 124,850 | 115,380 | 244,540 | 224,993 | |||||||||
INVESTMENT SECURITIES GAINS (LOSSES), NET | (3,075 | ) | 1,651 | 2,335 | 879 | ||||||||
NON-INTEREST EXPENSE | |||||||||||||
Salaries and employee benefits | 115,589 | 108,829 | 231,483 | 221,198 | |||||||||
Net occupancy | 11,118 | 11,430 | 22,702 | 22,873 | |||||||||
Equipment | 4,594 | 4,776 | 9,025 | 9,385 | |||||||||
Supplies and communication | 5,126 | 5,446 | 10,439 | 11,155 | |||||||||
Data processing and software | 21,016 | 20,035 | 41,706 | 39,940 | |||||||||
Marketing | 5,142 | 4,488 | 9,947 | 7,712 | |||||||||
Deposit insurance | 3,126 | 3,592 | 6,583 | 7,063 | |||||||||
Community service | 656 | 2,916 | 1,385 | 5,860 | |||||||||
Other | 15,493 | 15,378 | 30,867 | 31,081 | |||||||||
Total non-interest expense | 181,860 | 176,890 | 364,137 | 356,267 | |||||||||
Income before income taxes | 140,831 | 112,190 | 266,150 | 208,799 | |||||||||
Less income taxes | 29,507 | 33,201 | 52,765 | 58,108 | |||||||||
Net income | 111,324 | 78,989 | 213,385 | 150,691 | |||||||||
Less non-controlling interest expense | 994 | 29 | 2,071 | 227 | |||||||||
Net income attributable to Commerce Bancshares, Inc. | 110,330 | 78,960 | 211,314 | 150,464 | |||||||||
Less preferred stock dividends | 2,250 | 2,250 | 4,500 | 4,500 | |||||||||
Net income available to common shareholders | $ | 108,080 | $ | 76,710 | $ | 206,814 | $ | 145,964 | |||||
Net income per common share — basic | $ | 1.02 | $ | .71 | $ | 1.94 | $ | 1.36 | |||||
Net income per common share — diluted | $ | 1.01 | $ | .71 | $ | 1.93 | $ | 1.36 |
For the Three Months Ended June 30 | For the Six Months Ended June 30 | |||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | ||||||||||
(Unaudited) | ||||||||||||||
Net income | $ | 111,324 | $ | 78,989 | $ | 213,385 | $ | 150,691 | ||||||
Other comprehensive income (loss): | ||||||||||||||
Net unrealized gains (losses) on securities for which a portion of an other-than-temporary impairment has been recorded in earnings | (123 | ) | 76 | (78 | ) | 171 | ||||||||
Net unrealized gains (losses) on other securities | (19,489 | ) | 11,241 | (93,210 | ) | 30,243 | ||||||||
Pension loss amortization | 394 | 341 | 787 | 681 | ||||||||||
Other comprehensive income (loss) | (19,218 | ) | 11,658 | (92,501 | ) | 31,095 | ||||||||
Comprehensive income | 92,106 | 90,647 | 120,884 | 181,786 | ||||||||||
Less non-controlling interest expense | 994 | 29 | 2,071 | 227 | ||||||||||
Comprehensive income attributable to Commerce Bancshares, Inc. | $ | 91,112 | $ | 90,618 | $ | 118,813 | $ | 181,559 |
Commerce Bancshares, Inc. Shareholders | ||||||||||||||||||||||||
(In thousands, except per share data) | Preferred Stock | Common Stock | Capital Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Non-Controlling Interest | Total | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Balance December 31, 2017 | $ | 144,784 | $ | 535,407 | $ | 1,815,360 | $ | 221,374 | $ | (14,473 | ) | $ | 14,108 | $ | 1,624 | $ | 2,718,184 | |||||||
Adoption of ASU 2018-02 | (2,932 | ) | 2,932 | — | ||||||||||||||||||||
Adoption of ASU 2016-01 | 33,320 | (33,320 | ) | — | ||||||||||||||||||||
Net income | 211,314 | 2,071 | 213,385 | |||||||||||||||||||||
Other comprehensive income (loss) | (92,501 | ) | (92,501 | ) | ||||||||||||||||||||
Distributions to non-controlling interest | (299 | ) | (299 | ) | ||||||||||||||||||||
Purchases of treasury stock | (19,069 | ) | (19,069 | ) | ||||||||||||||||||||
Issuance of stock under purchase and equity compensation plans | (17,697 | ) | 17,688 | (9 | ) | |||||||||||||||||||
Stock-based compensation | 6,394 | 6,394 | ||||||||||||||||||||||
Cash dividends on common stock ($.470 per share) | (50,202 | ) | (50,202 | ) | ||||||||||||||||||||
Cash dividends on preferred stock ($.750 per depositary share) | (4,500 | ) | (4,500 | ) | ||||||||||||||||||||
Balance June 30, 2018 | $ | 144,784 | $ | 535,407 | $ | 1,804,057 | $ | 408,374 | $ | (15,854 | ) | $ | (108,781 | ) | $ | 3,396 | $ | 2,771,383 | ||||||
Balance December 31, 2016 | $ | 144,784 | $ | 510,015 | $ | 1,552,454 | $ | 292,849 | $ | (15,294 | ) | $ | 10,975 | $ | 5,349 | $ | 2,501,132 | |||||||
Adoption of ASU 2016-09 | 3,441 | (2,144 | ) | 1,297 | ||||||||||||||||||||
Net income | 150,464 | 227 | 150,691 | |||||||||||||||||||||
Other comprehensive income | 31,095 | 31,095 | ||||||||||||||||||||||
Distributions to non-controlling interest | (1,252 | ) | (1,252 | ) | ||||||||||||||||||||
Purchases of treasury stock | (10,628 | ) | (10,628 | ) | ||||||||||||||||||||
Issuance of stock under purchase and equity compensation plans | (15,556 | ) | 15,549 | (7 | ) | |||||||||||||||||||
Stock-based compensation | 6,195 | 6,195 | ||||||||||||||||||||||
Cash dividends on common stock ($.429 per share) | (45,816 | ) | (45,816 | ) | ||||||||||||||||||||
Cash dividends on preferred stock ($.750 per depositary share) | (4,500 | ) | (4,500 | ) | ||||||||||||||||||||
Balance June 30, 2017 | $ | 144,784 | $ | 510,015 | $ | 1,546,534 | $ | 390,853 | $ | (10,373 | ) | $ | 42,070 | $ | 4,324 | $ | 2,628,207 |
For the Six Months Ended June 30 | |||||||
(In thousands) | 2018 | 2017 | |||||
(Unaudited) | |||||||
OPERATING ACTIVITIES: | |||||||
Net income | $ | 213,385 | $ | 150,691 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for loan losses | 20,439 | 21,886 | |||||
Provision for depreciation and amortization | 19,180 | 19,890 | |||||
Amortization of investment security premiums, net | 11,679 | 17,827 | |||||
Investment securities gains, net (A) | (2,335 | ) | (879 | ) | |||
Net gains on sales of loans held for sale | (2,671 | ) | (3,547 | ) | |||
Originations of loans held for sale | (89,183 | ) | (96,943 | ) | |||
Proceeds from sales of loans held for sale | 91,671 | 92,423 | |||||
Net (increase) decrease in trading debt securities | (23,843 | ) | 6,097 | ||||
Stock-based compensation | 6,394 | 6,195 | |||||
Increase in interest receivable | (1,717 | ) | (428 | ) | |||
Decrease in interest payable | (601 | ) | (692 | ) | |||
Increase in income taxes payable | 25,721 | 1,483 | |||||
Other changes, net | 19,958 | (6,939 | ) | ||||
Net cash provided by operating activities | 288,077 | 207,064 | |||||
INVESTING ACTIVITIES: | |||||||
Proceeds from sales of investment securities (A) | 192,522 | 6,552 | |||||
Proceeds from maturities/pay downs of investment securities (A) | 812,970 | 910,411 | |||||
Purchases of investment securities (A) | (748,707 | ) | (625,931 | ) | |||
Net (increase) decrease in loans | 7,978 | (234,405 | ) | ||||
Repayments of long-term securities purchased under agreements to resell | — | 100,000 | |||||
Purchases of land, buildings and equipment | (13,525 | ) | (14,117 | ) | |||
Sales of land, buildings and equipment | 1,667 | 2,527 | |||||
Net cash provided by investing activities | 252,905 | 145,037 | |||||
FINANCING ACTIVITIES: | |||||||
Net increase (decrease) in non-interest bearing, savings, interest checking and money market deposits | (27,222 | ) | 77,562 | ||||
Net decrease in time open and C.D.'s | (83,895 | ) | (157,367 | ) | |||
Net decrease in federal funds purchased and securities sold under agreements to repurchase | (340,379 | ) | (467,461 | ) | |||
Repayment of long-term borrowings | (149 | ) | (146 | ) | |||
Net increase in short-term borrowings | 7,682 | — | |||||
Purchases of treasury stock | (19,069 | ) | (10,628 | ) | |||
Issuance of stock under equity compensation plans | (9 | ) | (7 | ) | |||
Cash dividends paid on common stock | (50,202 | ) | (45,816 | ) | |||
Cash dividends paid on preferred stock | (4,500 | ) | (4,500 | ) | |||
Net cash used in financing activities | (517,743 | ) | (608,363 | ) | |||
Increase (decrease) in cash, cash equivalents and restricted cash | 23,239 | (256,262 | ) | ||||
Cash, cash equivalents and restricted cash at beginning of year | 524,352 | 801,641 | |||||
Cash, cash equivalents and restricted cash at June 30 | $ | 547,591 | $ | 545,379 | |||
(A) Available for sale debt securities, equity securities and other securities | |||||||
Income tax payments, net | $ | 24,969 | $ | 54,621 | |||
Interest paid on deposits and borrowings | $ | 28,368 | $ | 21,203 | |||
Loans transferred to foreclosed real estate | $ | 1,044 | $ | 461 |
• | ASU 2014-09, Revenue from Contracts with Customers, which is discussed further in Note 13. |
• | ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which is discussed further in Note 3 - Investment Securities, Note 8 - Accumulated Other Comprehensive Income, and Note 15 - Fair Value of Financial Instruments. |
• | ASU 2016-18, Restricted Cash, which requires that the beginning and end of period amounts shown on the statement of cash flows include not only cash and cash equivalents, but also restricted cash and restricted cash equivalents, as considered such by the reporting entity. |
• | ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which is discussed further in Note 6 - Pension. |
• | ASU 2018-02, Reclassification for Certain Tax Effects from Accumulated Other Comprehensive Income, which is discussed further in Note 8 - Accumulated Other Comprehensive Income. |
(In thousands) | June 30, 2018 | December 31, 2017 | ||||||
Commercial: | ||||||||
Business | $ | 4,990,298 | $ | 4,958,554 | ||||
Real estate – construction and land | 967,151 | 968,820 | ||||||
Real estate – business | 2,727,580 | 2,697,452 | ||||||
Personal Banking: | ||||||||
Real estate – personal | 2,102,586 | 2,062,787 | ||||||
Consumer | 2,012,644 | 2,104,487 | ||||||
Revolving home equity | 374,557 | 400,587 | ||||||
Consumer credit card | 775,214 | 783,864 | ||||||
Overdrafts | 4,081 | 7,123 | ||||||
Total loans | $ | 13,954,111 | $ | 13,983,674 |
For the Three Months Ended June 30 | For the Six Months Ended June 30 | |||||||||||||||||||
(In thousands) | Commercial | Personal Banking | Total | Commercial | Personal Banking | Total | ||||||||||||||
Balance at beginning of period | $ | 93,065 | $ | 66,467 | $ | 159,532 | $ | 93,704 | $ | 65,828 | $ | 159,532 | ||||||||
Provision | 485 | 9,558 | 10,043 | (409 | ) | 20,848 | 20,439 | |||||||||||||
Deductions: | ||||||||||||||||||||
Loans charged off | 362 | 13,323 | 13,685 | 728 | 26,688 | 27,416 | ||||||||||||||
Less recoveries on loans | 663 | 2,979 | 3,642 | 1,284 | 5,693 | 6,977 | ||||||||||||||
Net loan charge-offs (recoveries) | (301 | ) | 10,344 | 10,043 | (556 | ) | 20,995 | 20,439 | ||||||||||||
Balance June 30, 2018 | $ | 93,851 | $ | 65,681 | $ | 159,532 | $ | 93,851 | $ | 65,681 | $ | 159,532 | ||||||||
Balance at beginning of period | $ | 92,951 | $ | 64,881 | $ | 157,832 | $ | 91,361 | $ | 64,571 | $ | 155,932 | ||||||||
Provision | (111 | ) | 10,869 | 10,758 | 1,002 | 20,884 | 21,886 | |||||||||||||
Deductions: | ||||||||||||||||||||
Loans charged off | 531 | 13,415 | 13,946 | 1,077 | 25,745 | 26,822 | ||||||||||||||
Less recoveries on loans | 430 | 2,758 | 3,188 | 1,453 | 5,383 | 6,836 | ||||||||||||||
Net loan charge-offs (recoveries) | 101 | 10,657 | 10,758 | (376 | ) | 20,362 | 19,986 | |||||||||||||
Balance June 30, 2017 | $ | 92,739 | $ | 65,093 | $ | 157,832 | $ | 92,739 | $ | 65,093 | $ | 157,832 |
Impaired Loans | All Other Loans | ||||||||||||
(In thousands) | Allowance for Loan Losses | Loans Outstanding | Allowance for Loan Losses | Loans Outstanding | |||||||||
June 30, 2018 | |||||||||||||
Commercial | $ | 2,631 | $ | 90,724 | $ | 91,220 | $ | 8,594,305 | |||||
Personal Banking | 919 | 18,172 | 64,762 | 5,250,910 | |||||||||
Total | $ | 3,550 | $ | 108,896 | $ | 155,982 | $ | 13,845,215 | |||||
December 31, 2017 | |||||||||||||
Commercial | $ | 3,067 | $ | 92,613 | $ | 90,637 | $ | 8,532,213 | |||||
Personal Banking | 1,176 | 22,182 | 64,652 | 5,336,666 | |||||||||
Total | $ | 4,243 | $ | 114,795 | $ | 155,289 | $ | 13,868,879 |
(In thousands) | June 30, 2018 | Dec. 31, 2017 | ||||||
Non-accrual loans | $ | 9,472 | $ | 11,983 | ||||
Restructured loans (accruing) | 99,424 | 102,812 | ||||||
Total impaired loans | $ | 108,896 | $ | 114,795 |
(In thousands) | Recorded Investment | Unpaid Principal Balance | Related Allowance | ||||||
June 30, 2018 | |||||||||
With no related allowance recorded: | |||||||||
Business | $ | 4,946 | $ | 8,936 | $ | — | |||
Real estate – business | 1,210 | 1,300 | — | ||||||
$ | 6,156 | $ | 10,236 | $ | — | ||||
With an allowance recorded: | |||||||||
Business | $ | 70,871 | $ | 71,157 | $ | 2,090 | |||
Real estate – construction and land | 1,342 | 1,346 | 39 | ||||||
Real estate – business | 12,355 | 12,928 | 502 | ||||||
Real estate – personal | 5,707 | 8,134 | 295 | ||||||
Consumer | 5,464 | 5,464 | 52 | ||||||
Revolving home equity | 114 | 114 | 11 | ||||||
Consumer credit card | 6,887 | 6,887 | 561 | ||||||
$ | 102,740 | $ | 106,030 | $ | 3,550 | ||||
Total | $ | 108,896 | $ | 116,266 | $ | 3,550 | |||
December 31, 2017 | |||||||||
With no related allowance recorded: | |||||||||
Business | $ | 5,356 | $ | 9,000 | $ | — | |||
Real estate – business | 1,299 | 1,303 | — | ||||||
Consumer | 779 | 817 | — | ||||||
$ | 7,434 | $ | 11,120 | $ | — | ||||
With an allowance recorded: | |||||||||
Business | $ | 72,589 | $ | 73,168 | $ | 2,455 | |||
Real estate – construction and land | 837 | 841 | 27 | ||||||
Real estate – business | 12,532 | 13,071 | 585 | ||||||
Real estate – personal | 9,126 | 11,914 | 532 | ||||||
Consumer | 5,388 | 5,426 | 67 | ||||||
Revolving home equity | 204 | 204 | 11 | ||||||
Consumer credit card | 6,685 | 6,685 | 566 | ||||||
$ | 107,361 | $ | 111,309 | $ | 4,243 | ||||
Total | $ | 114,795 | $ | 122,429 | $ | 4,243 |
(In thousands) | Commercial | Personal Banking | Total | ||||||
Average Impaired Loans: | |||||||||
For the three months ended June 30, 2018 | |||||||||
Non-accrual loans | $ | 7,676 | $ | 2,005 | $ | 9,681 | |||
Restructured loans (accruing) | 81,832 | 17,122 | 98,954 | ||||||
Total | $ | 89,508 | $ | 19,127 | $ | 108,635 | |||
For the six months ended June 30, 2018 | |||||||||
Non-accrual loans | $ | 8,097 | $ | 2,464 | $ | 10,561 | |||
Restructured loans (accruing) | 80,552 | 17,943 | 98,495 | ||||||
Total | $ | 88,649 | $ | 20,407 | $ | 109,056 | |||
For the three months ended June 30, 2017 | |||||||||
Non-accrual loans | $ | 9,867 | $ | 4,539 | $ | 14,406 | |||
Restructured loans (accruing) | 34,765 | 15,780 | 50,545 | ||||||
Total | $ | 44,632 | $ | 20,319 | $ | 64,951 | |||
For the six months ended June 30, 2017 | |||||||||
Non-accrual loans | $ | 10,238 | $ | 4,027 | $ | 14,265 | |||
Restructured loans (accruing) | 33,333 | 15,991 | 49,324 | ||||||
Total | $ | 43,571 | $ | 20,018 | $ | 63,589 |
For the Three Months Ended June 30 | For the Six Months Ended June 30 | ||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||
Interest income recognized on impaired loans: | |||||||||||||
Business | $ | 821 | $ | 319 | $ | 1,641 | $ | 637 | |||||
Real estate – construction and land | 22 | 1 | 44 | 2 | |||||||||
Real estate – business | 147 | 88 | 294 | 175 | |||||||||
Real estate – personal | 52 | 36 | 103 | 71 | |||||||||
Consumer | 82 | 80 | 164 | 159 | |||||||||
Revolving home equity | 1 | 6 | 2 | 12 | |||||||||
Consumer credit card | 159 | 145 | 317 | 289 | |||||||||
Total | $ | 1,284 | $ | 675 | $ | 2,565 | $ | 1,345 |
(In thousands) | Current or Less Than 30 Days Past Due | 30 – 89 Days Past Due | 90 Days Past Due and Still Accruing | Non-accrual | Total | ||||||||||
June 30, 2018 | |||||||||||||||
Commercial: | |||||||||||||||
Business | $ | 4,983,337 | $ | 1,404 | $ | 443 | $ | 5,114 | $ | 4,990,298 | |||||
Real estate – construction and land | 963,654 | 3,492 | — | 5 | 967,151 | ||||||||||
Real estate – business | 2,718,888 | 6,227 | — | 2,465 | 2,727,580 | ||||||||||
Personal Banking: | |||||||||||||||
Real estate – personal | 2,092,350 | 7,155 | 1,193 | 1,888 | 2,102,586 | ||||||||||
Consumer | 1,985,195 | 25,096 | 2,353 | — | 2,012,644 | ||||||||||
Revolving home equity | 372,865 | 708 | 984 | — | 374,557 | ||||||||||
Consumer credit card | 758,230 | 8,504 | 8,480 | — | 775,214 | ||||||||||
Overdrafts | 3,731 | 350 | — | — | 4,081 | ||||||||||
Total | $ | 13,878,250 | $ | 52,936 | $ | 13,453 | $ | 9,472 | $ | 13,954,111 | |||||
December 31, 2017 | |||||||||||||||
Commercial: | |||||||||||||||
Business | $ | 4,949,148 | $ | 3,085 | $ | 374 | $ | 5,947 | $ | 4,958,554 | |||||
Real estate – construction and land | 967,321 | 1,473 | 21 | 5 | 968,820 | ||||||||||
Real estate – business | 2,694,234 | 482 | — | 2,736 | 2,697,452 | ||||||||||
Personal Banking: | |||||||||||||||
Real estate – personal | 2,050,787 | 6,218 | 3,321 | 2,461 | 2,062,787 | ||||||||||
Consumer | 2,067,025 | 32,674 | 3,954 | 834 | 2,104,487 | ||||||||||
Revolving home equity | 397,349 | 1,962 | 1,276 | — | 400,587 | ||||||||||
Consumer credit card | 764,568 | 10,115 | 9,181 | — | 783,864 | ||||||||||
Overdrafts | 6,840 | 283 | — | — | 7,123 | ||||||||||
Total | $ | 13,897,272 | $ | 56,292 | $ | 18,127 | $ | 11,983 | $ | 13,983,674 |
Commercial Loans | ||||||||||||
(In thousands) | Business | Real Estate-Construction | Real Estate- Business | Total | ||||||||
June 30, 2018 | ||||||||||||
Pass | $ | 4,771,613 | $ | 954,492 | $ | 2,648,144 | $ | 8,374,249 | ||||
Special mention | 58,771 | 10,501 | 33,791 | 103,063 | ||||||||
Substandard | 154,800 | 2,153 | 43,180 | 200,133 | ||||||||
Non-accrual | 5,114 | 5 | 2,465 | 7,584 | ||||||||
Total | $ | 4,990,298 | $ | 967,151 | $ | 2,727,580 | $ | 8,685,029 | ||||
December 31, 2017 | ||||||||||||
Pass | $ | 4,740,013 | $ | 955,499 | $ | 2,593,005 | $ | 8,288,517 | ||||
Special mention | 59,177 | 10,614 | 50,577 | 120,368 | ||||||||
Substandard | 153,417 | 2,702 | 51,134 | 207,253 | ||||||||
Non-accrual | 5,947 | 5 | 2,736 | 8,688 | ||||||||
Total | $ | 4,958,554 | $ | 968,820 | $ | 2,697,452 | $ | 8,624,826 |
Personal Banking Loans | ||||||||
% of Loan Category | ||||||||
Real Estate - Personal | Consumer | Revolving Home Equity | Consumer Credit Card | |||||
June 30, 2018 | ||||||||
FICO score: | ||||||||
Under 600 | 1.1 | % | 3.2 | % | .8 | % | 4.6 | % |
600 - 659 | 2.0 | 5.1 | 1.6 | 14.1 | ||||
660 - 719 | 10.0 | 18.0 | 9.2 | 35.3 | ||||
720 - 779 | 23.6 | 23.6 | 22.1 | 26.4 | ||||
780 and over | 63.3 | 50.1 | 66.3 | 19.6 | ||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
December 31, 2017 | ||||||||
FICO score: | ||||||||
Under 600 | 1.3 | % | 3.3 | % | 1.1 | % | 4.7 | % |
600 - 659 | 2.1 | 5.5 | 1.7 | 14.4 | ||||
660 - 719 | 10.5 | 17.3 | 9.5 | 34.4 | ||||
720 - 779 | 25.6 | 26.8 | 21.4 | 26.0 | ||||
780 and over | 60.5 | 47.1 | 66.3 | 20.5 | ||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
(In thousands) | June 30, 2018 | December 31, 2017 | |||||
Accruing loans: | |||||||
Non-market interest rates | $ | 86,906 | $ | 88,588 | |||
Assistance programs | 6,887 | 6,685 | |||||
Bankruptcy non-affirmation | 5,335 | 7,283 | |||||
Other | 296 | 256 | |||||
Non-accrual loans | 7,156 | 7,796 | |||||
Total troubled debt restructurings | $ | 106,580 | $ | 110,608 |
(In thousands) | June 30, 2018 | Balance 90 days past due at any time during previous 12 months | ||||
Commercial: | ||||||
Business | $ | 75,680 | $ | 32 | ||
Real estate - construction and land | 1,337 | — | ||||
Real estate - business | 12,311 | — | ||||
Personal Banking: | ||||||
Real estate - personal | 4,787 | 303 | ||||
Consumer | 5,464 | 115 | ||||
Revolving home equity | 114 | 42 | ||||
Consumer credit card | 6,887 | 577 | ||||
Total troubled debt restructurings | $ | 106,580 | $ | 1,069 |
(In thousands) | June 30, 2018 | December 31, 2017 | ||||
Available for sale debt securities | $ | 8,412,376 | $ | 8,725,442 | ||
Trading debt securities | 31,156 | 18,269 | ||||
Equity securities: | ||||||
Readily determinable fair value | 2,741 | 48,838 | ||||
No readily determinable fair value | 1,703 | 1,753 | ||||
Other: | ||||||
Federal Reserve Bank stock | 33,369 | 33,253 | ||||
Federal Home Loan Bank stock | 10,000 | 10,000 | ||||
Private equity investments | 68,940 | 55,752 | ||||
Total investment securities | $ | 8,560,285 | $ | 8,893,307 |
(In thousands) | Amortized Cost | Fair Value | ||||
U.S. government and federal agency obligations: | ||||||
Within 1 year | $ | 52,660 | $ | 52,603 | ||
After 1 but within 5 years | 645,431 | 634,819 | ||||
After 5 but within 10 years | 157,967 | 155,108 | ||||
After 10 years | 69,202 | 68,562 | ||||
Total U.S. government and federal agency obligations | 925,260 | 911,092 | ||||
Government-sponsored enterprise obligations: | ||||||
Within 1 year | 117,562 | 117,444 | ||||
After 1 but within 5 years | 121,584 | 119,743 | ||||
After 5 but within 10 years | 34,984 | 33,946 | ||||
After 10 years | 42,852 | 40,228 | ||||
Total government-sponsored enterprise obligations | 316,982 | 311,361 | ||||
State and municipal obligations: | ||||||
Within 1 year | 147,325 | 147,668 | ||||
After 1 but within 5 years | 598,663 | 600,688 | ||||
After 5 but within 10 years | 591,819 | 590,950 | ||||
After 10 years | 40,963 | 39,858 | ||||
Total state and municipal obligations | 1,378,770 | 1,379,164 | ||||
Mortgage and asset-backed securities: | ||||||
Agency mortgage-backed securities | 3,194,764 | 3,131,025 | ||||
Non-agency mortgage-backed securities | 1,019,545 | 1,010,331 | ||||
Asset-backed securities | 1,351,461 | 1,338,542 | ||||
Total mortgage and asset-backed securities | 5,565,770 | 5,479,898 | ||||
Other debt securities: | ||||||
Within 1 year | 9,003 | 8,971 | ||||
After 1 but within 5 years | 257,704 | 252,151 | ||||
After 5 but within 10 years | 73,283 | 69,739 | ||||
Total other debt securities | 339,990 | 330,861 | ||||
Total available for sale debt securities | $ | 8,526,772 | $ | 8,412,376 |
(In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||
June 30, 2018 | ||||||||||||
U.S. government and federal agency obligations | $ | 925,260 | $ | 503 | $ | (14,671 | ) | $ | 911,092 | |||
Government-sponsored enterprise obligations | 316,982 | — | (5,621 | ) | 311,361 | |||||||
State and municipal obligations | 1,378,770 | 8,105 | (7,711 | ) | 1,379,164 | |||||||
Mortgage and asset-backed securities: | ||||||||||||
Agency mortgage-backed securities | 3,194,764 | 5,995 | (69,734 | ) | 3,131,025 | |||||||
Non-agency mortgage-backed securities | 1,019,545 | 6,232 | (15,446 | ) | 1,010,331 | |||||||
Asset-backed securities | 1,351,461 | 2,343 | (15,262 | ) | 1,338,542 | |||||||
Total mortgage and asset-backed securities | 5,565,770 | 14,570 | (100,442 | ) | 5,479,898 | |||||||
Other debt securities | 339,990 | — | (9,129 | ) | 330,861 | |||||||
Total | $ | 8,526,772 | $ | 23,178 | $ | (137,574 | ) | $ | 8,412,376 | |||
December 31, 2017 | ||||||||||||
U.S. government and federal agency obligations | $ | 917,494 | $ | 4,096 | $ | (4,443 | ) | $ | 917,147 | |||
Government-sponsored enterprise obligations | 408,266 | 26 | (1,929 | ) | 406,363 | |||||||
State and municipal obligations | 1,592,707 | 21,413 | (2,754 | ) | 1,611,366 | |||||||
Mortgage and asset-backed securities: | ||||||||||||
Agency mortgage-backed securities | 3,046,701 | 17,956 | (23,744 | ) | 3,040,913 | |||||||
Non-agency mortgage-backed securities | 903,920 | 6,710 | (4,837 | ) | 905,793 | |||||||
Asset-backed securities | 1,495,380 | 2,657 | (5,237 | ) | 1,492,800 | |||||||
Total mortgage and asset-backed securities | 5,446,001 | 27,323 | (33,818 | ) | 5,439,506 | |||||||
Other debt securities | 350,988 | 1,250 | (1,178 | ) | 351,060 | |||||||
Total | $ | 8,715,456 | $ | 54,108 | $ | (44,122 | ) | $ | 8,725,442 |
Significant Inputs | Range | ||
Prepayment CPR | 0% | - | 25% |
Projected cumulative default | 13% | - | 52% |
Credit support | 0% | - | 20% |
Loss severity | 14% | - | 63% |
For the Six Months Ended June 30 | ||||||
(In thousands) | 2018 | 2017 | ||||
Cumulative OTTI credit losses at January 1 | $ | 14,199 | $ | 14,080 | ||
Credit losses on debt securities for which impairment was not previously recognized | 58 | 46 | ||||
Credit losses on debt securities for which impairment was previously recognized | 10 | 274 | ||||
Increase in expected cash flows that are recognized over remaining life of security | (104 | ) | (146 | ) | ||
Cumulative OTTI credit losses at June 30 | $ | 14,163 | $ | 14,254 |
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||
(In thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||
June 30, 2018 | ||||||||||||||||||||
U.S. government and federal agency obligations | $ | 707,018 | $ | 12,156 | $ | 90,340 | $ | 2,515 | $ | 797,358 | $ | 14,671 | ||||||||
Government-sponsored enterprise obligations | 261,378 | 5,605 | 49,983 | 16 | 311,361 | 5,621 | ||||||||||||||
State and municipal obligations | 458,880 | 5,700 | 51,863 | 2,011 | 510,743 | 7,711 | ||||||||||||||
Mortgage and asset-backed securities: | ||||||||||||||||||||
Agency mortgage-backed securities | 2,029,957 | 45,267 | 566,986 | 24,467 | 2,596,943 | 69,734 | ||||||||||||||
Non-agency mortgage-backed securities | 773,890 | 12,076 | 134,679 | 3,370 | 908,569 | 15,446 | ||||||||||||||
Asset-backed securities | 862,416 | 13,296 | 173,895 | 1,966 | 1,036,311 | 15,262 | ||||||||||||||
Total mortgage and asset-backed securities | 3,666,263 | 70,639 | 875,560 | 29,803 | 4,541,823 | 100,442 | ||||||||||||||
Other debt securities | 311,714 | 8,033 | 19,147 | 1,096 | 330,861 | 9,129 | ||||||||||||||
Total | $ | 5,405,253 | $ | 102,133 | $ | 1,086,893 | $ | 35,441 | $ | 6,492,146 | $ | 137,574 | ||||||||
December 31, 2017 | ||||||||||||||||||||
U.S. government and federal agency obligations | $ | 618,617 | $ | 4,443 | $ | — | $ | — | $ | 618,617 | $ | 4,443 | ||||||||
Government-sponsored enterprise obligations | 286,393 | 1,712 | 49,766 | 217 | 336,159 | 1,929 | ||||||||||||||
State and municipal obligations | 282,843 | 1,752 | 49,339 | 1,002 | 332,182 | 2,754 | ||||||||||||||
Mortgage and asset-backed securities: | ||||||||||||||||||||
Agency mortgage-backed securities | 1,320,689 | 9,433 | 619,300 | 14,311 | 1,939,989 | 23,744 | ||||||||||||||
Non-agency mortgage-backed securities | 577,017 | 2,966 | 153,813 | 1,871 | 730,830 | 4,837 | ||||||||||||||
Asset-backed securities | 786,048 | 3,168 | 264,295 | 2,069 | 1,050,343 | 5,237 | ||||||||||||||
Total mortgage and asset-backed securities | 2,683,754 | 15,567 | 1,037,408 | 18,251 | 3,721,162 | 33,818 | ||||||||||||||
Other debt securities | 144,090 | 727 | 20,202 | 451 | 164,292 | 1,178 | ||||||||||||||
Total | $ | 4,015,697 | $ | 24,201 | $ | 1,156,715 | $ | 19,921 | $ | 5,172,412 | $ | 44,122 |