ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
PENNSYLVANIA | 23-2195389 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
One Penn Square, P.O. Box 4887, Lancaster, Pennsylvania | 17604 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ý | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Description | Page | ||
PART I. FINANCIAL INFORMATION | |||
(a) | |||
(b) | |||
(c) | |||
(d) | |||
(e) | |||
(f) | |||
March 31, 2012 | December 31, 2011 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Cash and due from banks | $ | 286,875 | $ | 292,598 | |||
Interest-bearing deposits with other banks | 106,227 | 175,336 | |||||
Loans held for sale | 70,128 | 47,009 | |||||
Investment securities: | |||||||
Held to maturity (estimated fair value of $6,626 in 2012 and $6,699 in 2011) | 6,608 | 6,669 | |||||
Available for sale | 3,082,799 | 2,673,298 | |||||
Loans, net of unearned income | 11,957,600 | 11,968,970 | |||||
Less: Allowance for loan losses | (256,496 | ) | (256,471 | ) | |||
Net Loans | 11,701,104 | 11,712,499 | |||||
Premises and equipment | 215,756 | 212,274 | |||||
Accrued interest receivable | 51,247 | 51,098 | |||||
Goodwill | 535,980 | 536,005 | |||||
Intangible assets | 7,403 | 8,204 | |||||
Other assets | 472,095 | 655,518 | |||||
Total Assets | $ | 16,536,222 | $ | 16,370,508 | |||
LIABILITIES | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | 2,682,259 | $ | 2,588,034 | |||
Interest-bearing | 9,658,463 | 9,937,705 | |||||
Total Deposits | 12,340,722 | 12,525,739 | |||||
Short-term borrowings: | |||||||
Federal funds purchased | 585,547 | 253,470 | |||||
Other short-term borrowings | 379,003 | 343,563 | |||||
Total Short-Term Borrowings | 964,550 | 597,033 | |||||
Accrued interest payable | 27,674 | 25,686 | |||||
Other liabilities | 246,432 | 189,362 | |||||
Federal Home Loan Bank advances and long-term debt | 933,981 | 1,040,149 | |||||
Total Liabilities | 14,513,359 | 14,377,969 | |||||
SHAREHOLDERS’ EQUITY | |||||||
Common stock, $2.50 par value, 600 million shares authorized, 216.2 million shares issued in 2012 and 2011 | 540,594 | 540,386 | |||||
Additional paid-in capital | 1,423,875 | 1,423,727 | |||||
Retained earnings | 288,151 | 264,059 | |||||
Accumulated other comprehensive income | 12,109 | 7,955 | |||||
Treasury stock, at cost, 15.9 million shares outstanding in 2012 and 16.0 million shares oustanding in 2011 | (241,866 | ) | (243,588 | ) | |||
Total Shareholders’ Equity | 2,022,863 | 1,992,539 | |||||
Total Liabilities and Shareholders’ Equity | $ | 16,536,222 | $ | 16,370,508 | |||
See Notes to Consolidated Financial Statements |
Three Months Ended March 31 | |||||||
2012 | 2011 | ||||||
INTEREST INCOME | |||||||
Loans, including fees | $ | 144,346 | $ | 149,496 | |||
Investment securities: | |||||||
Taxable | 18,661 | 21,807 | |||||
Tax-exempt | 2,701 | 3,175 | |||||
Dividends | 699 | 683 | |||||
Loans held for sale | 431 | 500 | |||||
Other interest income | 53 | 33 | |||||
Total Interest Income | 166,891 | 175,694 | |||||
INTEREST EXPENSE | |||||||
Deposits | 16,250 | 23,286 | |||||
Short-term borrowings | 281 | 254 | |||||
Long-term debt | 11,665 | 12,591 | |||||
Total Interest Expense | 28,196 | 36,131 | |||||
Net Interest Income | 138,695 | 139,563 | |||||
Provision for credit losses | 28,000 | 38,000 | |||||
Net Interest Income After Provision for Credit Losses | 110,695 | 101,563 | |||||
OTHER INCOME | |||||||
Service charges on deposit accounts | 14,842 | 13,305 | |||||
Other service charges and fees | 10,555 | 11,482 | |||||
Mortgage banking income | 10,050 | 5,463 | |||||
Investment management and trust services | 9,377 | 9,204 | |||||
Other | 5,605 | 3,722 | |||||
Investment securities gains (losses), net: | |||||||
Other-than-temporary impairment losses | — | (995 | ) | ||||
Less: Portion of gain recognized in other comprehensive income (before taxes) | — | (296 | ) | ||||
Net other-than-temporary impairment losses | — | (1,291 | ) | ||||
Net gains on sales of investment securities | 1,251 | 3,576 | |||||
Investment securities gains, net | 1,251 | 2,285 | |||||
Total Other Income | 51,680 | 45,461 | |||||
OTHER EXPENSES | |||||||
Salaries and employee benefits | 60,360 | 54,308 | |||||
Net occupancy expense | 10,935 | 11,366 | |||||
Data processing | 3,688 | 3,372 | |||||
Equipment expense | 3,369 | 3,132 | |||||
Operating risk loss | 3,368 | (462 | ) | ||||
FDIC insurance expense | 3,021 | 4,754 | |||||
Other real estate owned and repossession expense | 2,928 | 1,271 | |||||
Professional fees | 2,582 | 2,849 | |||||
Marketing | 2,472 | 2,836 | |||||
Software | 2,175 | 2,031 | |||||
Intangible amortization | 801 | 1,178 | |||||
Other | 15,012 | 14,229 | |||||
Total Other Expenses | 110,711 | 100,864 | |||||
Income Before Income Taxes | 51,664 | 46,160 | |||||
Income taxes | 13,532 | 12,375 | |||||
Net Income | $ | 38,132 | $ | 33,785 | |||
PER SHARE: | |||||||
Net Income (Basic) | $ | 0.19 | $ | 0.17 | |||
Net Income (Diluted) | 0.19 | 0.17 | |||||
Cash Dividends | 0.07 | 0.04 | |||||
See Notes to Consolidated Financial Statements |
Three Months Ended March 31 | |||||||
2012 | 2011 | ||||||
(in thousands) | |||||||
Net Income | $ | 38,132 | $ | 33,785 | |||
Other Comprehensive Income: | |||||||
Unrealized gain on securities (net of a $2.5 million and $1.9 million tax effect in 2012 and 2011, respectively) | 4,584 | 3,568 | |||||
Non-credit related unrealized gain on other-than-temporarily impaired debt securities (net of a $73,000 and $134,000 tax effect in 2012 and 2011, respectively) | 135 | 249 | |||||
Unrealized gain on derivative financial instruments (net of an $18,000 tax effect in 2012 and 2011) | 34 | 34 | |||||
Amortization (accretion) of net unrecognized pension and postretirement plan items (net of a $115,000 and $6,000 tax effect in 2012 and 2011, respectively) | 214 | (12 | ) | ||||
Reclassification adjustment for securities gains included in net income (net of a $438,000 and $800,000 tax effect in 2012 and 2011, respectively) | (813 | ) | (1,485 | ) | |||
Other Comprehensive Income | 4,154 | 2,354 | |||||
Total Comprehensive Income | $ | 42,286 | $ | 36,139 | |||
See Notes to Consolidated Financial Statements |
Common Stock | Retained Earnings | Treasury Stock | Total | |||||||||||||||||||||||
Shares Outstanding | Amount | Additional Paid-in Capital | Accumulated Other Comprehensive Income | |||||||||||||||||||||||
Balance at December 31, 2011 | 200,164 | $ | 540,386 | $ | 1,423,727 | $ | 264,059 | $ | 7,955 | $ | (243,588 | ) | $ | 1,992,539 | ||||||||||||
Net income | 38,132 | 38,132 | ||||||||||||||||||||||||
Other comprehensive income | 4,154 | 4,154 | ||||||||||||||||||||||||
Stock issued, including related tax benefits | 190 | 208 | (565 | ) | 1,722 | 1,365 | ||||||||||||||||||||
Stock-based compensation awards | 713 | 713 | ||||||||||||||||||||||||
Common stock cash dividends - $0.07 per share | (14,040 | ) | (14,040 | ) | ||||||||||||||||||||||
Balance at March 31, 2012 | 200,354 | $ | 540,594 | $ | 1,423,875 | $ | 288,151 | $ | 12,109 | $ | (241,866 | ) | $ | 2,022,863 | ||||||||||||
Balance at December 31, 2010 | 199,050 | $ | 538,492 | $ | 1,420,127 | $ | 158,453 | $ | 12,495 | $ | (249,178 | ) | $ | 1,880,389 | ||||||||||||
Net income | 33,785 | 33,785 | ||||||||||||||||||||||||
Other comprehensive income | 2,354 | 2,354 | ||||||||||||||||||||||||
Stock issued, including related tax benefits | 141 | 177 | (8 | ) | 1,062 | 1,231 | ||||||||||||||||||||
Stock-based compensation awards | 547 | 547 | ||||||||||||||||||||||||
Common stock cash dividends - $0.04 per share | (7,984 | ) | (7,984 | ) | ||||||||||||||||||||||
Balance at March 31, 2011 | 199,191 | $ | 538,669 | $ | 1,420,666 | $ | 184,254 | $ | 14,849 | $ | (248,116 | ) | $ | 1,910,322 | ||||||||||||
See Notes to Consolidated Financial Statements |
Three Months Ended March 31 | |||||||
2012 | 2011 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net Income | $ | 38,132 | $ | 33,785 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for credit losses | 28,000 | 38,000 | |||||
Depreciation and amortization of premises and equipment | 5,327 | 5,104 | |||||
Net amortization of investment securities premiums | 2,849 | 1,704 | |||||
Investment securities gains | (1,251 | ) | (2,285 | ) | |||
Net (increase) decrease in loans held for sale | (23,119 | ) | 53,037 | ||||
Amortization of intangible assets | 801 | 1,178 | |||||
Stock-based compensation | 713 | 547 | |||||
Excess tax benefits from stock-based compensation | (3 | ) | — | ||||
(Increase) decrease in accrued interest receivable | (149 | ) | 963 | ||||
(Increase) decrease in other assets | (428 | ) | 14,626 | ||||
Increase in accrued interest payable | 1,988 | 1,059 | |||||
Increase (decrease) in other liabilities | 10,282 | (6,362 | ) | ||||
Total adjustments | 25,010 | 107,571 | |||||
Net cash provided by operating activities | 63,142 | 141,356 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Proceeds from sales of securities available for sale | 183,685 | 411,196 | |||||
Proceeds from maturities of securities held to maturity | 75 | 92 | |||||
Proceeds from maturities of securities available for sale | 177,855 | 161,756 | |||||
Purchase of securities held to maturity | (14 | ) | (8 | ) | |||
Purchase of securities available for sale | (539,783 | ) | (282,144 | ) | |||
Decrease (increase) in short-term investments | 69,109 | (49,996 | ) | ||||
Net (increase) decrease in loans | (16,670 | ) | 17,757 | ||||
Net purchases of premises and equipment | (8,809 | ) | (5,458 | ) | |||
Net cash (used in) provided by investing activities | (134,552 | ) | 253,195 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Net (decrease) increase in demand and savings deposits | (47,636 | ) | 210,068 | ||||
Net decrease in time deposits | (137,381 | ) | (190,039 | ) | |||
Increase (decrease) in short-term borrowings | 367,517 | (259,679 | ) | ||||
Repayments of long-term debt | (106,168 | ) | (83,761 | ) | |||
Net proceeds from issuance of stock | 1,362 | 1,231 | |||||
Excess tax benefits from stock-based compensation | 3 | — | |||||
Dividends paid | (12,010 | ) | (5,972 | ) | |||
Net cash provided by (used in) financing activities | 65,687 | (328,152 | ) | ||||
Net (Decrease) Increase in Cash and Due From Banks | (5,723 | ) | 66,399 | ||||
Cash and Due From Banks at Beginning of Period | 292,598 | 198,954 | |||||
Cash and Due From Banks at End of Period | $ | 286,875 | $ | 265,353 | |||
Supplemental Disclosures of Cash Flow Information: | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 26,208 | $ | 35,072 | |||
Income taxes | 4,169 | 145 | |||||
See Notes to Consolidated Financial Statements |
2012 | 2011 | ||||
(in thousands) | |||||
Weighted average shares outstanding (basic) | 199,492 | 198,599 | |||
Effect of dilutive securities | 852 | 687 | |||
Weighted average shares outstanding (diluted) | 200,344 | 199,286 |
Unrealized Gains on Investment Securities Not Other-Than-Temporarily Impaired | Unrealized Non-Credit Losses on Other-Than-Temporarily Impaired Debt Securities | Unrecognized Pension and Postretirement Plan Items | Unrealized Effective Portions of Losses on Forward-Starting Interest Rate Swaps | Total | |||||||||||||||
(in thousands) | |||||||||||||||||||
Three months ended March 31, 2012 | |||||||||||||||||||
Balance at December 31, 2011 | $ | 27,054 | $ | (1,011 | ) | $ | (15,134 | ) | $ | (2,954 | ) | $ | 7,955 | ||||||
Current-period other comprehensive income | 3,771 | 135 | 214 | 34 | 4,154 | ||||||||||||||
Balance at March 31, 2012 | $ | 30,825 | $ | (876 | ) | $ | (14,920 | ) | $ | (2,920 | ) | $ | 12,109 | ||||||
Three months ended March 31, 2011 | |||||||||||||||||||
Balance at December 31, 2010 | $ | 22,354 | $ | (2,355 | ) | $ | (4,414 | ) | $ | (3,090 | ) | $ | 12,495 | ||||||
Current-period other comprehensive income (loss) | 1,437 | 895 | (12 | ) | 34 | 2,354 | |||||||||||||
Balance at March 31, 2011 | $ | 23,791 | $ | (1,460 | ) | $ | (4,426 | ) | $ | (3,056 | ) | $ | 14,849 |
Held to Maturity at March 31, 2012 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||
(in thousands) | |||||||||||||||
U.S. Government sponsored agency securities | $ | 6,001 | $ | — | $ | (21 | ) | $ | 5,980 | ||||||
State and municipal securities | 179 | — | — | 179 | |||||||||||
Mortgage-backed securities | 428 | 39 | — | 467 | |||||||||||
$ | 6,608 | $ | 39 | $ | (21 | ) | $ | 6,626 | |||||||
Available for Sale at March 31, 2012 | |||||||||||||||
Equity securities | $ | 110,336 | $ | 3,811 | $ | (1,028 | ) | $ | 113,119 | ||||||
U.S. Government securities | 330 | — | — | 330 | |||||||||||
U.S. Government sponsored agency securities | 3,980 | 71 | (1 | ) | 4,050 | ||||||||||
State and municipal securities | 296,231 | 14,437 | (36 | ) | 310,632 | ||||||||||
Corporate debt securities | 132,686 | 6,235 | (11,341 | ) | 127,580 | ||||||||||
Collateralized mortgage obligations | 1,077,326 | 19,678 | (419 | ) | 1,096,585 | ||||||||||
Mortgage-backed securities | 1,174,146 | 33,126 | (646 | ) | 1,206,626 | ||||||||||
Auction rate securities | 241,682 | 151 | (17,956 | ) | 223,877 | ||||||||||
$ | 3,036,717 | $ | 77,509 | $ | (31,427 | ) | $ | 3,082,799 |
Held to Maturity at December 31, 2011 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||
(in thousands) | |||||||||||||||
U.S. Government sponsored agency securities | $ | 5,987 | $ | — | $ | (14 | ) | $ | 5,973 | ||||||
State and municipal securities | 179 | — | — | 179 | |||||||||||
Mortgage-backed securities | 503 | 44 | — | 547 | |||||||||||
$ | 6,669 | $ | 44 | $ | (14 | ) | $ | 6,699 | |||||||
Available for Sale at December 31, 2011 | |||||||||||||||
Equity securities | $ | 117,486 | $ | 2,383 | $ | (2,819 | ) | $ | 117,050 | ||||||
U.S. Government securities | 334 | — | — | 334 | |||||||||||
U.S. Government sponsored agency securities | 3,987 | 87 | (1 | ) | 4,073 | ||||||||||
State and municipal securities | 306,186 | 15,832 | — | 322,018 | |||||||||||
Corporate debt securities | 132,855 | 4,979 | (14,528 | ) | 123,306 | ||||||||||
Collateralized mortgage obligations | 982,851 | 19,186 | (828 | ) | 1,001,209 | ||||||||||
Mortgage-backed securities | 848,675 | 31,837 | (415 | ) | 880,097 | ||||||||||
Auction rate securities | 240,852 | 120 | (15,761 | ) | 225,211 | ||||||||||
$ | 2,633,226 | $ | 74,424 | $ | (34,352 | ) | $ | 2,673,298 |
Held to Maturity | Available for Sale | ||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
Due in one year or less | $ | 179 | $ | 179 | $ | 55,804 | $ | 56,063 | |||||||
Due from one year to five years | 6,001 | 5,980 | 42,008 | 43,985 | |||||||||||
Due from five years to ten years | — | — | 151,445 | 162,134 | |||||||||||
Due after ten years | — | — | 425,652 | 404,287 | |||||||||||
6,180 | 6,159 | 674,909 | 666,469 | ||||||||||||
Collateralized mortgage obligations | — | — | 1,077,326 | 1,096,585 | |||||||||||
Mortgage-backed securities | 428 | 467 | 1,174,146 | 1,206,626 | |||||||||||
$ | 6,608 | $ | 6,626 | $ | 2,926,381 | $ | 2,969,680 |
Gross Realized Gains | Gross Realized Losses | Other-than- temporary Impairment Losses | Net Gains (Losses) | ||||||||||||
(in thousands) | |||||||||||||||
Three months ended March 31, 2012 | |||||||||||||||
Equity securities | $ | 1,086 | $ | — | $ | — | $ | 1,086 | |||||||
Debt securities | 165 | — | — | 165 | |||||||||||
Total | $ | 1,251 | $ | — | $ | — | $ | 1,251 | |||||||
Three months ended March 31, 2011: | |||||||||||||||
Equity securities | $ | 5 | $ | — | $ | (297 | ) | $ | (292 | ) | |||||
Debt securities | 3,589 | (18 | ) | (994 | ) | 2,577 | |||||||||
Total | $ | 3,594 | $ | (18 | ) | $ | (1,291 | ) | $ | 2,285 |
2012 | 2011 | ||||||
(in thousands) | |||||||
Balance of cumulative credit losses on debt securities, beginning of period | $ | (22,781 | ) | $ | (27,560 | ) | |
Additions for credit losses recorded which were not previously recognized as components of earnings | — | (994 | ) | ||||
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security | 89 | 37 | |||||
Balance of cumulative credit losses on debt securities, end of period | $ | (22,692 | ) | $ | (28,517 | ) |
Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||
Estimated Fair Value | Unrealized Losses | Estimated Fair Value | Unrealized Losses | Estimated Fair Value | Unrealized Losses | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
U.S. Government sponsored agency securities | $ | 197 | $ | (1 | ) | $ | 5,379 | $ | (21 | ) | $ | 5,576 | $ | (22 | ) | ||||||||
State and municipal securities | 1,676 | (36 | ) | — | — | 1,676 | (36 | ) | |||||||||||||||
Corporate debt securities | 9,503 | (1,660 | ) | 37,877 | (9,681 | ) | 47,380 | (11,341 | ) | ||||||||||||||
Collateralized mortgage obligations | 161,795 | (419 | ) | — | — | 161,795 | (419 | ) | |||||||||||||||
Mortgage-backed securities | 201,971 | (646 | ) | — | — | 201,971 | (646 | ) | |||||||||||||||
Auction rate securities | 14,574 | (623 | ) | 193,699 | (17,333 | ) | 208,273 | (17,956 | ) | ||||||||||||||
Total debt securities | 389,716 | (3,385 | ) | 236,955 | (27,035 | ) | 626,671 | (30,420 | ) | ||||||||||||||
Equity securities | 8,424 | (761 | ) | 1,914 | (267 | ) | 10,338 | (1,028 | ) | ||||||||||||||
$ | 398,140 | $ | (4,146 | ) | $ | 238,869 | $ | (27,302 | ) | $ | 637,009 | $ | (31,448 | ) |
March 31, 2012 | December 31, 2011 | ||||||||||||||
Amortized cost | Estimated fair value | Amortized cost | Estimated fair value | ||||||||||||
(in thousands) | |||||||||||||||
Single-issuer trust preferred securities | $ | 83,935 | $ | 77,625 | $ | 83,899 | $ | 74,365 | |||||||
Subordinated debt | 40,211 | 42,357 | 40,184 | 41,296 | |||||||||||
Pooled trust preferred securities | 6,004 | 5,062 | 6,236 | 5,109 | |||||||||||
Corporate debt securities issued by financial institutions | 130,150 | 125,044 | 130,319 | 120,770 | |||||||||||
Other corporate debt securities | 2,536 | 2,536 | 2,536 | 2,536 | |||||||||||
Available for sale corporate debt securities | $ | 132,686 | $ | 127,580 | $ | 132,855 | $ | 123,306 |
March 31, 2012 | December 31, 2011 | ||||||
(in thousands) | |||||||
Real-estate - commercial mortgage | $ | 4,634,428 | $ | 4,602,596 | |||
Commercial - industrial, financial and agricultural | 3,518,228 | 3,639,368 | |||||
Real-estate - home equity | 1,601,880 | 1,624,562 | |||||
Real-estate - residential mortgage | 1,176,947 | 1,097,192 | |||||
Real-estate - construction | 647,700 | 615,445 | |||||
Consumer | 308,495 | 318,101 | |||||
Leasing and other | 62,994 | 63,254 | |||||
Overdrafts | 13,782 | 15,446 | |||||
Loans, gross of unearned income | 11,964,454 | 11,975,964 | |||||
Unearned income | (6,854 | ) | (6,994 | ) | |||
Loans, net of unearned income | $ | 11,957,600 | $ | 11,968,970 |
March 31, 2012 | December 31, 2011 | ||||||
(in thousands) | |||||||
Allowance for loan losses | $ | 256,496 | $ | 256,471 | |||
Reserve for unfunded lending commitments | 1,641 | 1,706 | |||||
Allowance for credit losses | $ | 258,137 | $ | 258,177 |
2012 | 2011 | ||||||
(in thousands) | |||||||
Balance at beginning of period | $ | 258,177 | $ | 275,498 | |||
Loans charged off | (30,259 | ) | (45,529 | ) | |||
Recoveries of loans previously charged off | 2,219 | 3,187 | |||||
Net loans charged off | (28,040 | ) | (42,342 | ) | |||
Provision for credit losses | 28,000 | 38,000 | |||||
Balance at end of period | $ | 258,137 | $ | 271,156 |
Real Estate - Commercial Mortgage | Commercial - Industrial, Financial and Agricultural | Real Estate - Home Equity | Real Estate - Residential Mortgage | Real Estate - Construction | Consumer | Leasing and other and overdrafts | Unallocated | Total | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||
Three months ended March 31, 2012 | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2011 | $ | 85,112 | $ | 74,896 | $ | 12,841 | $ | 22,986 | $ | 30,066 | $ | 2,083 | $ | 2,397 | $ | 26,090 | $ | 256,471 | |||||||||||||||||
Loans charged off | (11,891 | ) | (5,669 | ) | (2,206 | ) | (847 | ) | (8,571 | ) | (634 | ) | (441 | ) | — | (30,259 | ) | ||||||||||||||||||
Recoveries of loans previously charged off | 816 | 636 | 20 | 73 | 64 | 350 | 260 | — | 2,219 | ||||||||||||||||||||||||||
Net loans charged off | (11,075 | ) | (5,033 | ) | (2,186 | ) | (774 | ) | (8,507 | ) | (284 | ) | (181 | ) | — | (28,040 | ) | ||||||||||||||||||
Provision for loan losses (1) | 7,615 | 9,893 | 2,428 | 2,639 | 9,627 | (156 | ) | 1,058 | (5,039 | ) | 28,065 | ||||||||||||||||||||||||
Balance at March 31, 2012 | $ | 81,652 | $ | 79,756 | $ | 13,083 | $ | 24,851 | $ | 31,186 | $ | 1,643 | $ | 3,274 | $ | 21,051 | $ | 256,496 | |||||||||||||||||
Three months ended March 31, 2011 | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2010 | $ | 40,831 | $ | 101,436 | $ | 6,454 | $ | 17,425 | $ | 58,117 | $ | 4,669 | $ | 3,840 | $ | 41,499 | $ | 274,271 | |||||||||||||||||
Loans charged off | (10,047 | ) | (13,336 | ) | (1,468 | ) | (4,996 | ) | (13,894 | ) | (1,291 | ) | (497 | ) | — | (45,529 | ) | ||||||||||||||||||
Recoveries of loans previously charged off | 1,535 | 391 | 1 | 44 | 563 | 309 | 344 | — | 3,187 | ||||||||||||||||||||||||||
Net loans charged off | (8,512 | ) | (12,945 | ) | (1,467 | ) | (4,952 | ) | (13,331 | ) | (982 | ) | (153 | ) | — | (42,342 | ) | ||||||||||||||||||
Provision for loan losses (1) | 16,239 | 11,689 | 669 | 7,102 | 10,705 | 1,049 | (1,111 | ) | (7,999 | ) | 38,343 | ||||||||||||||||||||||||
Balance at March 31, 2011 | $ | 48,558 | $ | 100,180 | $ | 5,656 | $ | 19,575 | $ | 55,491 | $ | 4,736 | $ | 2,576 | $ | 33,500 | $ | 270,272 | |||||||||||||||||
(1) | Provision for loan losses is gross of a $65,000 and $343,000 decrease, respectively, in provision applied to unfunded commitments for the three months ended March 31, 2012 and 2011. The total provision for credit losses, comprised of allocations for both funded and unfunded loans, was $28.0 million and $38.0 million for the three months ended March 31, 2012 and 2011, respectively. |
Real Estate - Commercial Mortgage | Commercial - Industrial, Financial and Agricultural | Real Estate - Home Equity | Real Estate - Residential Mortgage | Real Estate - Construction | Consumer | Leasing and other and overdrafts | Unallocated (1) | Total | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||
Allowance for loan losses at March 31, 2012 | |||||||||||||||||||||||||||||||||||
Measured for impairment under FASB ASC Subtopic 450-20 | $ | 50,619 | $ | 47,484 | $ | 9,549 | $ | 8,045 | $ | 17,551 | $ | 1,638 | $ | 3,253 | $ | 21,051 | $ | 159,190 | |||||||||||||||||
Evaluated for impairment under FASB ASC Section 310-10-35 | 31,033 | 32,272 | 3,534 | 16,806 | 13,635 | 5 | 21 | N/A | 97,306 | ||||||||||||||||||||||||||
$ | 81,652 | $ | 79,756 | $ | 13,083 | $ | 24,851 | $ | 31,186 | $ | 1,643 | $ | 3,274 | $ | 21,051 | $ | 256,496 | ||||||||||||||||||
Loans, net of unearned income at March 31, 2012 | |||||||||||||||||||||||||||||||||||
Measured for impairment under FASB ASC Subtopic 450-20 | $ | 4,523,691 | $ | 3,441,018 | $ | 1,595,522 | $ | 1,136,199 | $ | 581,381 | $ | 308,487 | $ | 69,890 | N/A | $ | 11,656,188 | ||||||||||||||||||
Evaluated for impairment under FASB ASC Section 310-10-35 | 110,737 | 77,210 | 6,358 | 40,748 | 66,319 | 8 | 32 | N/A | 301,412 | ||||||||||||||||||||||||||
$ | 4,634,428 | $ | 3,518,228 | $ | 1,601,880 | $ | 1,176,947 | $ | 647,700 | $ | 308,495 | $ | 69,922 | N/A | $ | 11,957,600 | |||||||||||||||||||
Allowance for loan losses at March 31, 2011 | |||||||||||||||||||||||||||||||||||
Measured for impairment under FASB ASC Subtopic 450-20 | $ | 26,327 | $ | 36,709 | $ | 5,656 | $ | 15,288 | $ | 39,448 | $ | 4,736 | $ | 2,576 | $ | 33,500 | $ | 164,240 | |||||||||||||||||
Evaluated for impairment under FASB ASC Section 310-10-35 | 22,231 | 63,471 | — | 4,287 | 16,043 | — | — | N/A | 106,032 | ||||||||||||||||||||||||||
$ | 48,558 | $ | 100,180 | $ | 5,656 | $ | 19,575 | $ | 55,491 | $ | 4,736 | $ | 2,576 | $ | 33,500 | $ | 270,272 | ||||||||||||||||||
Loans, net of unearned income at March 31, 2011 | |||||||||||||||||||||||||||||||||||
Measured for impairment under FASB ASC Subtopic 450-20 | $ | 4,224,868 | $ | 3,472,225 | $ | 1,620,340 | $ | 1,003,323 | $ | 629,359 | $ | 337,413 | $ | 60,051 | N/A | $ | 11,347,579 | ||||||||||||||||||
Evaluated for impairment under FASB ASC Section 310-10-35 | 167,811 | 220,443 | — | 18,928 | 118,447 | — | — | N/A | 525,629 | ||||||||||||||||||||||||||
$ | 4,392,679 | $ | 3,692,668 | $ | 1,620,340 | $ | 1,022,251 | $ | 747,806 | $ | 337,413 | $ | 60,051 | N/A | $ | 11,873,208 |
(1) | The Corporation’s unallocated allowance, which was approximately 8% and 12% as of March 31, 2012 and 2011, respectively, was reasonable and appropriate as the estimates used in the allocation process are inherently imprecise. |
• | Original appraisal – if the original appraisal indicated a very strong loan to value position and, in the opinion of the Corporation’s internal loan evaluation staff, there has not been a significant deterioration in the collateral value, the original appraisal may be used to support the value of the collateral. Original appraisals are typically used only when the estimated collateral value, as adjusted, results in a current loan to value ratio that is lower than the Corporation’s policy for new loans, generally 80%. |
• | Broker price opinions – in lieu of obtaining an updated certified appraisal, a less formal indication of value, such as a broker price opinion, may be obtained. These opinions are generally used to validate internal estimates of collateral value |
• | Discounted cash flows – while substantially all of the Corporation’s impaired loans are measured based on the estimated fair value of collateral, discounted cash flows analyses may be used to validate estimates of collateral value derived from other approaches. |
Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||||||||||
March 31, 2012 | December 31, 2011 | March 31, 2012 | March 31, 2011 | ||||||||||||||||||||||||||||||||||||
Unpaid Principal Balance | Recorded Investment | Related Allowance | Unpaid Principal Balance | Recorded Investment | Related Allowance | Average Recorded Investment | Interest Income Recognized (1) | Average Recorded Investment | Interest Income Recognized | ||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||||||||||||
Real estate - commercial mortgage | $ | 54,397 | $ | 40,526 | $ | — | $ | 54,445 | $ | 46,768 | $ | — | $ | 43,647 | $ | 71 | $ | 54,346 | $ | 403 | |||||||||||||||||||
Commercial - secured | 28,420 | 21,679 | — | 35,529 | 28,440 | — | 25,060 | 7 | 25,767 | 146 | |||||||||||||||||||||||||||||
Commercial - unsecured | 13 | 13 | — | — | — | — | 7 | — | 528 | 3 | |||||||||||||||||||||||||||||
Real estate - home equity | 500 | 500 | — | — | — | — | 350 | — | — | — | |||||||||||||||||||||||||||||
Real estate - residential mortgage | 491 | 491 | — | 199 | 199 | — | 246 | 2 | 13,665 | 43 | |||||||||||||||||||||||||||||
Construction - commercial residential | 66,370 | 30,492 | — | 62,822 | 31,233 | — | 30,863 | 25 | 32,406 | 178 | |||||||||||||||||||||||||||||
Construction - commercial | 3,597 | 3,143 | — | 3,604 | 3,298 | — | 3,221 | 2 | 2,909 | 20 | |||||||||||||||||||||||||||||
153,788 | 96,844 | 156,599 | 109,938 | 103,394 | 107 | 129,621 | 793 | ||||||||||||||||||||||||||||||||
With a related allowance recorded: | |||||||||||||||||||||||||||||||||||||||
Real estate - commercial mortgage | 91,655 | 70,211 | 31,033 | 100,529 | 79,566 | 36,060 | 74,889 | 122 | 108,720 | 839 | |||||||||||||||||||||||||||||
Commercial - secured | 67,416 | 52,478 | 30,005 | 61,970 | 47,652 | 26,248 | 50,065 | 13 | 194,450 | 1,177 | |||||||||||||||||||||||||||||
Commercial - unsecured | 3,408 | 3,040 | 2,267 | 3,139 | 2,789 | 2,177 | 2,915 | 1 | 6,782 | 31 | |||||||||||||||||||||||||||||
Real estate - home equity | 5,858 | 5,858 | 3,534 | 5,294 | 5,294 | 3,076 | 5,576 | — | 15,664 | 90 | |||||||||||||||||||||||||||||
Real estate - residential mortgage | 40,257 | 40,257 | 16,806 | 39,918 | 39,918 | 16,295 |