NBT BANCORP INC - FORM 10-Q - May 10, 2018

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
 
(Mark One)
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2018.
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________.
 
COMMISSION FILE NUMBER 0-14703
 
NBT BANCORP INC.
(Exact Name of Registrant as Specified in its Charter)
 
DELAWARE
 
16-1268674
(State of Incorporation)
 
(I.R.S. Employer Identification No.)
 
 
 
 
52 SOUTH BROAD STREET, NORWICH, NEW YORK 13815
(Address of Principal Executive Offices) (Zip Code)
 
Registrant's Telephone Number, Including Area Code: (607) 337-2265
 
None
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes    No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company ☐
Emerging growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No
 
As of April 30, 2018, there were 43,632,377 shares outstanding of the Registrant's common stock, $0.01 par value per share.


NBT BANCORP INC.
FORM 10-Q-Quarter Ended March 31, 2018

TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION
  
     
Item 1
Financial Statements
  
     
 
3
     
 
4
     
 
5
     
 
6
     
 
7
     
 
9
     
Item 2
43
     
Item 3
56
     
Item 4
56
     
PART II
OTHER INFORMATION
  
     
Item 1
57
Item 1A
57
Item 2
57
Item 3
57
Item 4
57
Item 5
57
Item 6
58
     
 
59

Table of Contents
Item 1 – FINANCIAL STATEMENTS

NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets (unaudited)

 
  
March 31,
    
December 31,
  
   
2018
    
2017
  
(In thousands, except share and per share data)
            
Assets
            
Cash and due from banks
  
$
157,498
    
$
156,852
  
Short-term interest bearing accounts
    
2,081
      
2,812
  
Equity securities, at fair value
    
21,992
      
-
  
Securities available for sale, at fair value
    
1,265,912
      
1,255,925
  
Securities held to maturity (fair value $477,409 and $481,871, respectively)
    
487,126
      
484,073
  
Trading securities
    
-
      
11,467
  
Federal Reserve Bank and Federal Home Loan Bank stock
    
43,778
      
46,706
  
Loans
    
6,647,124
      
6,584,773
  
Less allowance for loan losses
    
70,200
      
69,500
  
Net loans
  
$
6,576,924
    
$
6,515,273
  
Premises and equipment, net
    
80,073
      
81,305
  
Goodwill
    
268,043
      
268,043
  
Intangible assets, net
    
12,506
      
13,420
  
Bank owned life insurance
    
173,735
      
172,388
  
Other assets
    
141,166
      
128,548
  
Total assets
  
$
9,230,834
    
$
9,136,812
  
Liabilities
                
Demand (noninterest bearing)
  
$
2,323,456
    
$
2,286,892
  
Savings, NOW and money market
    
4,230,047
      
4,076,978
  
Time
    
840,425
      
806,766
  
Total deposits
  
$
7,393,928
    
$
7,170,636
  
Short-term borrowings
    
586,012
      
719,123
  
Long-term debt
    
88,824
      
88,869
  
Junior subordinated debt
    
101,196
      
101,196
  
Other liabilities
    
108,144
      
98,811
  
Total liabilities
  
$
8,278,104
    
$
8,178,635
  
Stockholders' equity
                
Preferred stock, $0.01 par value. Authorized 2,500,000 shares at March 31, 2018 and December 31, 2017
  
$
-
    
$
-
  
Common stock, $0.01 par value. Authorized 100,000,000 shares at March 31, 2018 and December 31, 2017; issued 49,651,493 at March 31, 2018 and December 31, 2017
    
497
      
497
  
Additional paid-in-capital
    
574,626
      
574,209
  
Retained earnings
    
555,783
      
543,713
  
Accumulated other comprehensive loss
    
(40,991
)
    
(22,077
)
Common stock in treasury, at cost, 6,035,840 and 6,108,684 shares at March 31, 2018 and December 31, 2017, respectively
    
(137,185
)
    
(138,165
)
Total stockholders' equity
  
$
952,730
    
$
958,177
  
Total liabilities and stockholders' equity
  
$
9,230,834
    
$
9,136,812
  
 
See accompanying notes to unaudited interim consolidated financial statements.
3
Table of Contents
NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Income (unaudited)

   
Three Months Ended
March 31,
  
   
2018
    
2017
  
(In thousands, except per share data)
            
Interest, fee and dividend income
            
Interest and fees on loans
  
$
70,443
    
$
64,027
  
Securities available for sale
    
6,926
      
7,009
  
Securities held to maturity
    
2,625
      
2,781
  
Other
    
766
      
619
  
Total interest, fee and dividend income
  
$
80,760
    
$
74,436
  
Interest expense
                
Deposits
   $
3,931
     $
3,474
  
Short-term borrowings
    
1,966
      
1,139
  
Long-term debt
    
476
      
606
  
Junior subordinated debt
    
901
      
726
  
Total interest expense
  
$
7,274
    
$
5,945
  
Net interest income
  
$
73,486
    
$
68,491
  
Provision for loan losses
    
7,496
      
7,379
  
Net interest income after provision for loan losses
  
$
65,990
    
$
61,112
  
Noninterest income
                
Insurance and other financial services revenue
  
$
6,504
    
$
6,770
  
Service charges on deposit accounts
    
3,972
      
3,977
  
ATM and debit card fees
    
5,273
      
4,950
  
Retirement plan administration fees
    
5,339
      
4,172
  
Trust
    
4,878
      
4,532
  
Bank owned life insurance
    
1,347
      
1,411
  
Net securities gains
    
72
      
-
  
Other
    
3,892
      
2,938
  
Total noninterest income
  
$
31,277
    
$
28,750
  
Noninterest expense
                
Salaries and employee benefits
   $
36,567
     $
33,587
  
Occupancy
    
6,119
      
6,170
  
Data processing and communications
    
4,279
      
4,198
  
Professional fees and outside services
    
3,492
      
3,032
  
Equipment
    
4,038
      
3,698
  
Office supplies and postage
    
1,573
      
1,608
  
FDIC expenses
    
1,201
      
1,178
  
Advertising
    
337
      
390
  
Amortization of intangible assets
    
914
      
967
  
Loan collection and other real estate owned, net
    
1,337
      
1,279
  
Other
    
4,415
      
5,175
  
Total noninterest expense
  
$
64,272
    
$
61,282
  
Income before income tax expense
  
$
32,995
    
$
28,580
  
Income tax expense
    
7,009
      
8,301
  
Net income
  
$
25,986
    
$
20,279
  
Earnings per share
                
Basic
  
$
0.60
    
$
0.47
  
Diluted
  
$
0.59
    
$
0.46
  
 
See accompanying notes to unaudited interim consolidated financial statements.

4
Table of Contents
NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (unaudited)
 
   
Three Months Ended
March 31,
  
   
2018
    
2017
  
(In thousands)
            
Net income
  
$
25,986
    
$
20,279
  
Other comprehensive (loss) income, net of tax:
                
Unrealized net holding (losses) gains arising during the period (pre-tax amounts of $(15,454) and $836)
    
(11,590
)
    
497
  
Reclassification adjustment for an impairment write-down of equity security (pre-tax amounts of $- and $1,312)
    
-
      
811
  
Unrealized gains on derivatives (cash flow hedges) (pre-tax amounts of $1,048 and $249)
    
786
      
154
  
Reclassification of net unrealized (gains) losses on cash flow hedges to interest expense (pre-tax amounts of $(359) and $82)
    
(269
)
    
50
  
Amortization of unrealized net gains and losses related to the reclassification of available for sale investment securities to held to maturity (pre-tax amounts of $188 and $238)
    
141
      
147
  
Pension and other benefits:
                
Amortization of prior service cost and actuarial gains (pre-tax amounts of $295 and $435)
    
221
      
269
  
Total other comprehensive (loss) income
  
$
(10,711
)
  
$
1,928
  
Comprehensive income
  
$
15,275
    
$
22,207
  
 
See accompanying notes to unaudited interim consolidated financial statements.
 
5
Table of Contents
NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity (unaudited)

   
Common Stock
    
Additional Paid-in- Capital
    
Retained Earnings
    
Accumulated Other Comprehensive (Loss) Income
    
Common Stock in Treasury
    
Total
  
(In thousands, except share and per share data)
                                    
Balance at December 31, 2016
  
$
497
    
$
575,078
    
$
501,761
    
$
(21,520
)
  
$
(142,500
)
  
$
913,316
  
Net income
    
-
      
-
      
20,279
      
-
      
-
      
20,279
  
Cash dividends - $0.23 per share
    
-
      
-
      
(10,020
)
    
-
      
-
      
(10,020
)
Net issuance of 184,651 shares to employee and other stock plans
    
-
      
(3,712
)
    
-
      
-
      
2,882
      
(830
)
Stock-based compensation
    
-
      
2,261
      
(95
)
    
-
      
-
      
2,166
  
Other comprehensive income
    
-
      
-
      
-
      
1,928
      
-
      
1,928
  
Balance at March 31, 2017
  
$
497
    
$
573,627
    
$
511,925
    
$
(19,592
)
  
$
(139,618
)
  
$
926,839
  
 
                                                
Balance at December 31, 2017
  
$
497
    
$
574,209
    
$
543,713
    
$
(22,077
)
  
$
(138,165
)
  
$
958,177
  
Net income
    
-
      
-
      
25,986
      
-
      
-
      
25,986
  
Cumulative effect adjustment for ASU 2016-01 implementation
    
-
      
-
      
1,475
      
(2,628
)
    
-
      
(1,153
)
Cumulative effect adjustment for ASU 2018-02 implementation
    
-
      
-
      
5,575
      
(5,575
)
    
-
      
-
  
Cash dividends - $0.48 per share
    
-
      
-
      
(20,966
)
    
-
      
-
      
(20,966
)
Net issuance of 72,844 shares to employee and other stock plans
    
-
      
(2,037
)
    
-
      
-
      
980
      
(1,057
)
Stock-based compensation
    
-
      
2,454
      
-
      
-
      
-
      
2,454
  
Other comprehensive loss
    
-
      
-
      
-
      
(10,711
)
    
-
      
(10,711
)
Balance at March 31, 2018
  
$
497
    
$
574,626
    
$
555,783
    
$
(40,991
)
  
$
(137,185
)
  
$
952,730
  
 
See accompanying notes to unaudited interim consolidated financial statements.


6
Table of Contents
NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)

   
Three Months Ended
March 31,
  
   
2018
    
2017
  
(In thousands)
            
Operating activities
            
Net income
  
$
25,986
    
$
20,279
  
Adjustments to reconcile net income to net cash provided by operating activities
                
Provision for loan losses
    
7,496
      
7,379
  
Depreciation and amortization of premises and equipment
    
2,327
      
2,249
  
Net amortization on securities
    
1,081
      
1,267
  
Amortization of intangible assets
    
914
      
967
  
Excess tax (benefit) on stock-based compensation
    
(407
 )    
(1,472
 )
Stock-based compensation expense
    
2,454
      
2,166
  
Bank owned life insurance income
    
(1,347
)
    
(1,411
)
Trading security purchases
    
-
      
(1,277
)
Net unrealized losses in trading securities
    
-
      
491
  
Proceeds from sales of loans held for sale
    
23,977
      
24,896
  
Originations and purchases of loans held for sale
    
(24,188
)
    
(27,622
)
Net gains on sales of loans held for sale
    
(57
)
    
(46
)
Net security (gains)
    
(72
)
    
-
  
Net (gain) loss on sales and write-down of other real estate owned
    
(174
)
    
157
  
Impairment write-down of equity security
    
-
      
1,312
  
Net (increase) decrease in other assets
    
(7,272
)
    
3,539
  
Net increase (decrease) in other liabilities
    
9,333
      
(5,145
)
Net cash provided by operating activities
  
$
40,051
    
$
27,729
  
Investing activities
                
Securities available for sale:
                
Proceeds from maturities, calls and principal paydowns
  
$
51,122
    
$
78,038
  
Proceeds from sales
    
-
      
1,000
  
Purchases
    
(91,520
)
    
(110,330
)
Securities held to maturity:
                
Proceeds from maturities, calls and principal paydowns
    
18,242
      
19,914
  
Purchases
    
(21,333
)
    
(5,943
)
Equity securities:
                
Proceeds from sales
    
2,623
      
-
  
Other:
                
Net increase in loans
    
(69,659
)
    
(82,299
)
Proceeds from Federal Home Loan Bank stock redemption
    
71,081
      
56,521
  
Purchases of Federal Reserve Bank and Federal Home Loan Bank stock
    
(68,153
)
    
(52,065
)
Purchases of premises and equipment, net
    
(1,186
)
    
(1,269
)
Proceeds from the sales of other real estate owned
    
534
      
2,430
  
Net cash (used in) investing activities
  
$
(108,249
)
  
$
(94,003
)
Financing activities
                
Net increase in deposits
  
$
223,292
    
$
211,363
  
Net (decrease) in short-term borrowings
    
(133,111
)
    
(141,460
)
Proceeds from issuance of long-term debt     25,000       -  
Repayments of long-term debt
    
(25,045
)
    
(64
)
Proceeds from the issuance of shares to employee benefit plans and other stock plans
    
672
      
1,983
  
Cash paid by employer for tax-withholding on stock issuance
    
(1,729
)
    
(2,813
)
Cash dividends
    
(20,966
)
    
(10,020
)
Net cash provided by financing activities
  
$
68,113
    
$
58,989
  
Net (decrease) in cash and cash equivalents
  
$
(85
)
  
$
(7,285
)
Cash and cash equivalents at beginning of period
    
159,664
      
149,181
  
Cash and cash equivalents at end of period
  
$
159,579
    
$
141,896
  

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Table of Contents
   
Three Months Ended
March 31,
  
   
2018
    
2017
  
Supplemental disclosure of cash flow information
            
Cash paid during the period for:
            
Interest expense
  
$
7,677
    
$
6,363
  
Income taxes paid, net of refund
    
3,199
      
1,019
  
Noncash investing activities:
                
Loans transferred to other real estate owned
  
$
780
    
$
3,946
  
 
See accompanying notes to unaudited interim consolidated financial statements.
8
Table of Contents

NBT Bancorp Inc. and Subsidiaries
Notes to Unaudited Interim Consolidated Financial Statements
March 31, 2018
 
1.
Description of Business
 
NBT Bancorp Inc. (the "Registrant" or the "Company") is a registered financial holding company incorporated in the state of Delaware in 1986, with its principal headquarters located in Norwich, New York. The principal assets of the Registrant consist of all of the outstanding shares of common stock of its subsidiaries, including: NBT Bank, National Association (the "Bank"), NBT Financial Services, Inc. ("NBT Financial"), NBT Holdings, Inc. ("NBT Holdings"), Hathaway Agency, Inc. and CNBF Capital Trust I, NBT Statutory Trust I, NBT Statutory Trust II, Alliance Financial Capital Trust I and Alliance Financial Capital Trust II (collectively, the "Trusts"). The Company's principal sources of revenue are the management fees and dividends it receives from the Bank, NBT Financial and NBT Holdings.
 
The Company's business, primarily conducted through the Bank but also through its other subsidiaries, consists of providing commercial banking, retail banking and wealth management services primarily to customers in its market area, which includes central and upstate New York, northeastern Pennsylvania, southern New Hampshire, western Massachusetts, Vermont and the southern coastal Maine area. The Company has been, and intends to continue to be, a community-oriented financial institution offering a variety of financial services. The Company's business philosophy is to operate as a community bank with local decision-making providing a broad array of banking and financial services to retail, commercial and municipal customers.

2.
Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the accounts of the Registrant and its wholly-owned subsidiaries, the Bank, NBT Financial and NBT Holdings. Collectively, the Registrant and its subsidiaries are referred to herein as "the Company." The interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods in accordance with generally accepted accounting principles in the United States of America ("GAAP"). These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2017 Annual Report on Form 10-K. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. All intercompany transactions have been eliminated in consolidation. Amounts in the prior period financial statements are reclassified whenever necessary to conform to current period presentation. The Company has evaluated subsequent events for potential recognition and/or disclosure and there were none identified.


9
Table of Contents
3. Securities

The amortized cost, estimated fair value and unrealized gains (losses) of available for sale ("AFS") securities are as follows:

(In thousands)
  
Amortized
Cost
    
Unrealized
Gains
    
Unrealized
Losses
    
Estimated
Fair Value
  
As of March 31, 2018
                        
Federal agency
  
$
139,775
    
$
-
    
$
1,316
    
$
138,459
  
State & municipal
    
39,700
      
31
      
345
      
39,386
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
524,468
      
523
      
11,155
      
513,836
  
U.S. government agency securities
    
30,473
      
267
      
545
      
30,195
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
511,727
      
243
      
15,541
      
496,429
  
U.S. government agency securities
    
48,944
      
151
      
1,488
      
47,607
  
Total AFS securities
  
$
1,295,087
    
$
1,215
    
$
30,390
    
$
1,265,912
  
As of December 31, 2017
                                
Federal agency
  
$
109,862
    
$
-
    
$
963
    
$
108,899
  
State & municipal
    
42,171
      
62
      
277
      
41,956
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
530,392
      
1,406
      
3,345
      
528,453
  
U.S. government agency securities
    
26,363
      
334
      
223
      
26,474
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
496,033
      
254
      
10,114
      
486,173
  
U.S. government agency securities
    
50,721
      
165
      
1,065
      
49,821
  
Equity securities
    
10,623
      
3,672
      
146
      
14,149
  
Total AFS securities
  
$
1,266,165
    
$
5,893
    
$
16,133
    
$
1,255,925
  

The amortized cost, estimated fair value and unrealized gains (losses) of securities held to maturity ("HTM") are as follows:

(In thousands)
  
Amortized Cost
    
Unrealized Gains
    
Unrealized Losses
    
Estimated Fair Value
  
As of March 31, 2018
                        
Mortgage-backed:
                        
Government-sponsored enterprises
  
$
93,769
    
$
-
    
$
2,749
    
$
91,020
  
U.S. government agency securities
    
389
      
47
      
-
      
436
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
188,260
      
-
      
5,004
      
183,256
  
State & municipal
    
204,708
      
292
      
2,303
      
202,697
  
Total HTM securities
  
$
487,126
    
$
339
    
$
10,056
    
$
477,409
  
As of December 31, 2017
                                
Mortgage-backed:
                                
Government-sponsored enterprises
  
$
96,357
    
$
85
    
$
810
    
$
95,632
  
U.S. government agency securities
    
418
      
57
      
-
      
475
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
186,327
      
224
      
2,577
      
183,974
  
State & municipal
    
200,971
      
1,439
      
620
      
201,790
  
Total HTM securities
  
$
484,073
    
$
1,805
    
$
4,007
    
$
481,871
  
 
Available for sale and held to maturity securities with amortized costs totaling $1.6 billion at March 31, 2018 and $1.5 billion at December 31, 2017 were pledged to secure public deposits and for other purposes required or permitted by law. Additionally, at March 31, 2018 and December 31, 2017, available for sale and held to maturity securities with an amortized cost of $218.3 million and $231.3 million, respectively, were pledged as collateral for securities sold under the repurchase agreements.
 
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The following table sets forth information with regard to investment securities with unrealized losses segregated according to the length of time the securities had been in a continuous unrealized loss position:
 
 
  
Less than 12 months
    
12 months or longer
    
Total
  
(In thousands)
  
Fair Value
    
Unrealized Losses
    
Number of Positions
    
Fair Value
    
Unrealized Losses
    
Number of Positions
    
Fair Value
    
Unrealized Losses
    
Number of Positions
  
As of March 31, 2018
                                                      
AFS securities:
                                                      
Federal agency
  
$
74,268
    
$
(459
)
    
6
    
$
64,191
    
$
(857
)
    
6
    
$
138,459
    
$
(1,316
)
    
12
  
State & municipal
    
25,927
      
(271
)
    
44
      
4,979
      
(74
)
    
7
      
30,906
      
(345
)
    
51
  
Mortgage-backed
    
440,714
      
(9,582
)
    
90
      
55,185
      
(2,118
)
    
25
      
495,899
      
(11,700
)
    
115
  
Collateralized mortgage obligations
    
249,512
      
(5,330
)
    
38
      
259,488
      
(11,699
)
    
43
      
509,000
      
(17,029
)
    
81
  
Total securities with unrealized losses
  
$
790,421
    
$
(15,642
)
    
178
    
$
383,843
    
$
(14,748
)
    
81
    
$
1,174,264
    
$
(30,390
)
    
259
  
 
                                                                        
HTM securities:
                                                                        
Mortgaged-backed
  
$
59,070
    
$
(1,344
)
    
4
    
$
31,950
    
$
(1,405
)
    
2
    
$
91,020
    
$
(2,749
)
    
6
  
Collateralized mortgage obligations
    
147,877
      
(2,864
)
    
23
      
35,379
      
(2,140
)
    
6
      
183,256
      
(5,004
)
    
29
  
State & municipal
    
74,241
      
(1,299
)
    
118
      
15,177
      
(1,004
)
    
24
      
89,418
      
(2,303
)
    
142
  
Total securities with unrealized losses
  
$
281,188
    
$
(5,507
)
    
145
    
$
82,506
    
$
(4,549
)
    
32
    
$
363,694
    
$
(10,056
)
    
177
  
                                                                         
As of December 31, 2017
                                                                        
AFS securities:
                                                                        
Federal agency
  
$
64,653
    
$
(242
)
    
5
    
$
44,246
    
$
(721
)
    
4
    
$
108,899
    
$
(963
)
    
9
  
State & municipal
    
23,566
      
(200
)
    
39
      
5,994
      
(77
)
    
8
      
29,560
      
(277
)
    
47
  
Mortgage-backed
    
317,630
      
(2,381
)
    
55
      
58,316
      
(1,187
)
    
24
      
375,946
      
(3,568
)
    
79
  
Collateralized mortgage obligations
    
227,917
      
(2,658
)
    
35
      
275,303
      
(8,521
)
    
42
      
503,220
      
(11,179
)
    
77
  
Equity securities
    
-
      
-
      
-
      
2,959
      
(146
)
    
1
      
2,959
      
(146
)
    
1
  
Total securities with unrealized losses
  
$
633,766
    
$
(5,481
)
    
134
    
$
386,818
    
$
(10,652
)
    
79
    
$
1,020,584
    
$
(16,133
)
    
213
  
 
                                                                        
HTM securities:
                                                                        
Mortgage -backed
  
$
15,477
    
$
(140
)
    
2
    
$
33,703
    
$
(670
)
    
2
    
$
49,180
    
$
(810
)
    
4
  
Collateralized mortgage obligations
    
118,476
      
(1,064
)
    
17
      
37,614
      
(1,513
)
    
6
      
156,090
      
(2,577
)
    
23
  
State & municipal
    
22,387
      
(132
)
    
40
      
15,720
      
(488
)
    
24
      
38,107
      
(620
)
    
64
  
Total securities with unrealized losses
  
$
156,340
    
$
(1,336
)
    
59
    
$
87,037
    
$
(2,671
)
    
32
    
$
243,377
    
$
(4,007
)
    
91
  
 
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Declines in the fair value of HTM securities below their amortized cost, less any current period credit loss, that are deemed to be other-than-temporary are reflected in earnings as realized losses or in other comprehensive income. This classification is dependent upon whether the Company intends to sell the security, or whether it is more likely than not it will be required to sell the security before recovery. The other-than-temporary impairment ("OTTI") shall be recognized in earnings equal to the entire difference between the investment's amortized cost basis and its fair value at the balance sheet date. If the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the OTTI shall be separated into (a) the amount representing the credit loss and (b) the amount related to all other factors. The amount of the total OTTI related to the credit loss shall be recognized in earnings. The amount of the total OTTI related to other factors shall be recognized in other comprehensive income net of applicable taxes.
 
In estimating OTTI losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer and (iii) the historical and implied volatility of the fair value of the security.
 
Management has the intent to hold the securities classified as HTM until they mature, at which time it is believed the Company will receive full value for the securities. The unrealized losses on HTM debt securities are due to increases in market interest rates over yields at the time the underlying securities were purchased. When necessary, the Company has performed a discounted cash flow analysis to determine whether or not it will receive the contractual principal and interest on certain securities. The fair value is expected to recover as the bonds approach their maturity date or if market yields for such investments decline.

Management also has the intent to hold and will not be required to sell, the debt securities classified as AFS for a period of time sufficient for a recovery of cost, which may be until maturity. The unrealized losses on AFS debt securities are due to increases in market interest rates over the yields available at the time the underlying securities were purchased. When necessary, the Company has performed a discounted cash flow analysis to determine whether or not it will receive the contractual principal and interest on certain securities. For AFS debt securities, OTTI losses are recognized in earnings if the Company intends to sell the security. In other cases the Company considers the relevant factors noted above, as well as the Company's intent and ability to retain its investment for a period of time sufficient to allow for any anticipated recovery in market value and whether evidence exists to support a realizable value equal to or greater than the cost basis. Any impairment loss on an equity security is equal to the full difference between the cost basis and the fair value of the security.

As of March 31, 2018 and December 31, 2017, management believes the impairments detailed in the table above are temporary. There were no OTTI losses realized in the Company's consolidated statement of income for the quarter ended March 31, 2018. For the quarter ended March 31, 2017, a $1.3 million impairment loss on an equity investment was realized in the Company's consolidated statements of income.
 
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The following tables set forth information with regard to gains and losses on equity securities for the quarter ended March 31, 2018:
(In thousands)
      
Net gains and losses recognized on equity securities
  
$
72
  
Less: Net gains and losses recognized during the period on equity securities sold during the period
    
44
  
Unrealized gains and losses recognized on equity securities still held at March 31, 2018
  
$
28
  

As of March 31, 2018, the carrying value of equity securities without readily determinable fair values was $5.0 million. The Company performed a qualitative assessment to determine whether the investments were impaired and identified no areas of concern as of March 31, 2018. There were no impairments, downward or upward adjustments recognized for equity securities without readily determinable fair values during the quarter ended March 31, 2018.

The following tables set forth information with regard to contractual maturities of debt securities at March 31, 2018:
 
(In thousands)
  
Amortized Cost
    
Estimated Fair Value
  
AFS debt securities:
            
Within one year
  
$
99,647
    
$
99,288
  
From one to five years
    
82,353
      
81,136
  
From five to ten years
    
175,040
      
172,862
  
After ten years
    
938,047
      
912,626
  
Total AFS debt securities
  
$
1,295,087
    
$
1,265,912
  
HTM debt securities:
                
Within one year
  
$
37,885
    
$
37,885
  
From one to five years
    
43,089
      
43,159
  
From five to ten years
    
208,715
      
204,710
  
After ten years
    
197,437
      
191,655
  
Total HTM debt securities
  
$
487,126
    
$
477,409
  
 
Maturities of mortgage-backed, collateralized mortgage obligations and asset-backed securities are stated based on their estimated average lives. Actual maturities may differ from estimated average lives or contractual maturities because, in certain cases, borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
 
Except for U.S. Government securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of consolidated stockholders' equity at March 31, 2018 and December 31, 2017.
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4. Allowance for Loan Losses and Credit Quality of Loans

Allowance for Loan Losses

The allowance for loan losses is maintained at a level estimated by management to provide adequately for probable incurred losses inherent in the current loan portfolio. The appropriateness of the allowance for loan losses is continuously monitored. It is assessed for appropriateness using a methodology designed to ensure the level of the allowance reasonably reflects the loan portfolio's risk profile. It is evaluated to ensure that it is sufficient to absorb all reasonably estimable credit losses inherent in the current loan portfolio.

To develop and document a systematic methodology for determining the allowance for loan losses, the Company has divided the loan portfolio into three segments, each with different risk characteristics and methodologies for assessing risk. Those segments are further segregated between our loans accounted for under the amortized cost method (referred to as "originated" loans) and loans acquired in a business combination (referred to as "acquired" loans). Each portfolio segment is broken down into class segments where appropriate. Class segments contain unique measurement attributes, risk characteristics and methods for monitoring and assessing risk that are necessary to develop the allowance for loan losses. Unique characteristics such as borrower type, loan type, collateral type, and risk characteristics define each class segment. 
 
As of March 31, 2018, the Company made adjustments to the class segments within the portfolios to better align risk characteristics and reflect the monitoring and assessment of risks as the portfolios continue to evolve. Agricultural Non-Real Estate and Agricultural Real Estate were consolidated with Commercial and Commercial Real Estate, respectively. Agricultural loans are a type of commercial loan with certain specific underwriting guidelines; however, the portfolio has decreased to less than 3% of the Commercial portfolio and separate classification was no longer warranted. The Indirect Lending class segment was further separated into Dealer Finance and Specialty Lending class segments. The growth in our Specialty Lending portfolio to 21% of Consumer Loans warranted evaluation of this class separately due to different risk characteristics from Dealer Finance class segment. The Direct and Home Equity class segments were consolidated into Direct to reflect common management, similar underwriting and in-market focus. The change to the class segments in the allowance methodology did not have a significant impact on the allowance for loan losses. The following table illustrates the portfolio and class segments for the loan portfolio in 2018 compared to 2017:
 
Portfolio
Class - 2018
Class - 2017
Commercial Loans
Commercial and Industrial
Commercial
 
Commercial Real Estate
Commercial Real Estate
 
Business Banking
Agricultural
 
  
Agricultural Real Estate
 
  
Business Banking
Consumer Loans
Dealer Finance
Indirect
 
Specialty Lending
Home Equity
 
Direct
Direct
Residential Real Estate Mortgages

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Table of Contents
Commercial Loans

The Company offers a variety of commercial loan products including commercial (non-real estate), commercial real estate, agricultural, agricultural real estate and business banking loans. The Company's underwriting analysis for commercial loans typically includes credit verification, independent appraisals, a review of the borrower's financial condition and a detailed analysis of the borrower's underlying cash flows.

Commercial and Industrial ("C&I") – The Company offers a variety of loan options to meet the specific needs of our C&I customers including term loans, time notes and lines of credit. Such loans are made available to businesses for working capital needs such as inventory and receivables, business expansion, equipment purchases, livestock purchases and finance seasonal crop expenses. Generally, a collateral lien is placed on equipment or other assets owned by the borrower. These loans typically carry a higher risk than commercial real estate loans due to the nature of the underlying collateral, which can be business assets such as equipment, accounts receivable and perishable agricultural products, which are generally less liquid than real estate and exposed to industry price volatility. To reduce these risks, management also attempts to obtain personal guarantees of the borrowers or obtain government loan guarantees to provide further support. In 2018 the Commercial and Agricultural class segments were combined to create the C&I class segment.

Commercial Real Estate ("CRE") – The Company offers CRE loans to finance real estate purchases, refinancings, expansions and improvements to commercial and agricultural properties. CRE loans are made to finance the purchases and improvements of real property, which generally consists of real estate with completed structures. These CRE loans are secured by liens on the real estate, which may include both owner occupied and non-owner-occupied properties, such as apartments, commercial structures, health care facilities and other facilities. These loans are typically less risky than commercial loans, since they are secured by real estate. The Company's underwriting analysis includes credit verification, independent appraisals, a review of the borrower's financial condition and a detailed analysis of the borrower's underlying cash flows. These loans are typically originated in amounts of no more than 80% of the appraised value of the commercial property and no more than 75% of the appraised value of the agricultural property. Government loan guarantees may be obtained to provide further support for agricultural property. In 2018 the Commercial Real Estate and Agricultural Real Estate class segments were combined to create the CRE class segment.
 
Business Banking - The Company offers a variety of loan options to meet the specific needs of our Business Banking customers including term loans, Business Banking mortgages and lines of credit. Such loans are generally less than $750 thousand and are made available to businesses for working capital such as inventory and receivables, business expansion, equipment purchases and agricultural needs. Generally, a collateral lien is placed on assets owned by the borrower and can include real estate, equipment, inventory, receivables or other business assets. These loans carry a higher risk than C&I and CRE loans due to the smaller size of the borrower and lower levels of capital. To reduce the risk, the Company obtains personal guarantees of the owners for a majority of the loans.

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Table of Contents
Consumer Loans

The Company offers a variety of consumer loan products including Dealer Finance, Specialty Lending and Direct loans.

Dealer Finance – The Company maintains relationships with many dealers primarily in the communities that we serve. Through these relationships, the Company primarily finances the purchases of automobiles and recreational vehicles (such as campers, boats, etc.) indirectly through dealer relationships. Approximately 70% of the Dealer Finance relationships represent automobile financing. Most of these loans carry a fixed rate of interest with principal repayment terms typically ranging from three to six years, based upon the nature of the collateral and the size of the loan. The majority of Dealer Finance consumer loans are underwritten on a secured basis using the underlying collateral being financed. In 2018 the Indirect class segment was further separated into Dealer Finance and Specialty Lending class segments (see above and below).

Specialty Lending – The Company offers unsecured consumer loans across a national footprint originated through our relationship with national technology-driven consumer lending companies. Advances of credit through this specialty lending business line are subject to the Company's underwriting standards including criteria such as FICO score and debt to income thresholds. In 2018 the Indirect class segment has been further separated into Dealer Finance (see above) and Specialty Lending class segments. The Company offers unsecured consumer loans across a national footprint originated through relationships with national technology-driven consumer lending companies to finance such things as dental and medical procedures, K-12 tuition, solar energy installations and other consumer purpose loans.
 
Direct – The Company offers a variety of consumer installment loans to finance vehicle purchases, mobile home purchases and personal expenditures. In addition to installment loans, the Company also offers personal lines of credit, overdraft protection, home equity lines of credit and second mortgage loans (loans secured by a lien position on one-to-four family residential real estate) to finance home improvements, debt consolidation, education and other uses. Most of the consumer installment loans carry a fixed rate of interest with principal repayment terms typically ranging from one to ten years, based upon the nature of the collateral and the size of the loan. For home equity loans, consumers are able to borrow up to 85% of the equity in their homes. These loans carry a higher risk than first mortgage residential loans as they are in a second position with respect to collateral. Consumer installment loans are often secured with collateral consisting of a perfected lien on the asset being purchased or a perfected lien on a consumer's deposit account. A minimal amount of consumer installment loans are unsecured, which carry a higher risk of loss. Risk is reduced through underwriting criteria, which include credit verification, appraisals, a review of the borrower's financial condition and personal cash flows. A security interest, with title insurance when necessary, is taken in the underlying real estate. In 2018 the Home Equity segment was consolidated into the Direct class segment.
 
Residential Real Estate Mortgages

Residential real estate loans consist primarily of loans secured by a first or second mortgage on primary residences. We originate adjustable-rate and fixed-rate, one-to-four-family residential real estate loans for the construction, purchase or refinancing of a mortgage. These loans are collateralized by owner-occupied properties located in the Company’s market area. When market conditions are favorable, for longer term, fixed-rate residential real estate mortgages without escrow, the Company retains the servicing, but sells the right to receive principal and interest to Freddie Mac. This practice allows the Company to manage interest rate risk, liquidity risk and credit risk. Loans on one-to-four-family residential real estate are generally originated in amounts of no more than 85% of the purchase price or appraised value (whichever is lower) or have private mortgage insurance. Mortgage title insurance and hazard insurance are normally required. Construction loans have a unique risk because they are secured by an incomplete dwelling. This risk is reduced through periodic site inspections, including one at each loan draw period.
 
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Table of Contents
Allowance for Loan Loss Calculation

For purposes of evaluating the adequacy of the allowance, the Company considers a number of significant factors that affect the collectability of the portfolio. For individually impaired loans, these include estimates of impairment, if any, which reflect the facts and circumstances that affect the likelihood of repayment of such loans as of the evaluation date. For homogeneous pools of loans, estimates of the Company's exposure to credit loss reflect a current assessment of a number of factors, which could affect collectability. These factors include: past loss experience, size, trend, composition and nature of loans; changes in lending policies and procedures, including underwriting standards and collection, charge-offs and recoveries; trends experienced in nonperforming and delinquent loans; current economic conditions in the Company's market; portfolio concentrations that may affect loss experienced across one or more components of the portfolio; the effect of external factors such as competition, legal and regulatory requirements; and the experience, ability, and depth of lending management and staff. In addition, various regulatory agencies, as an integral component of their examination process, periodically review the Company's allowance for loan losses. Such agencies may require the Company to make loan grade changes as well as recognize additions to the allowance based on their examinations.

After a thorough consideration of the factors discussed above, any required additions or reductions to the allowance for loan losses are made periodically by charges or credits to the provision for loan losses. These charges are necessary to maintain the allowance at a level which management believes is reflective of overall level of incurred loss in the portfolio. While management uses available information to recognize losses on loans, additions and reductions of the allowance may fluctuate from one reporting period to another. These fluctuations are reflective of changes in risk associated with portfolio content or changes in management's assessment of any or all of the determining factors discussed above.

The following tables illustrate the changes in the allowance for loan losses by our portfolio segments:

(In thousands)
  
Commercial Loans
    
Consumer Loans
    
Residential Real Estate Mortgages
    
Total
  
Balance as of December 31, 2017
  
$
27,606
    
$
36,830
    
$
5,064
    
$
69,500
  
Charge-offs
    
(805
)
    
(7,687
)
    
(182
)
    
(8,674
)
Recoveries
    
187
      
1,644
      
47
      
1,878
  
Provision
    
1,202
      
6,186
      
108
      
7,496
  
Ending Balance as of March 31, 2018
  
$
28,190
    
$
36,973
    
$
5,037
    
$
70,200
  
 
                                
Balance as of December 31, 2016
  
$
25,444
    
$
33,375
    
$
6,381
    
$
65,200
  
Charge-offs
    
(1,294
)
    
(6,502
)
    
(598
)
    
(8,394
)
Recoveries
    
447
      
1,035
      
33
      
1,515
  
Provision
    
130
      
6,861
      
388
      
7,379
  
Ending Balance as of March 31, 2017
  
$
24,727
    
$
34,769
    
$
6,204
    
$
65,700
  

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Table of Contents
For acquired loans, to the extent that we experience deterioration in borrower credit quality resulting in a decrease in our expected cash flows subsequent to acquisition of the loans, an allowance for loan losses would be established based on our estimate of incurred losses at the balance sheet date. There was no allowance for loan losses for the acquired loan portfolio as of March 31, 2018 and December 31, 2017. Net charge-offs related to acquired loans totaled approximately $0.1 million and $0.4 million during the three months ended March 31, 2018 and March 31, 2017, respectively, and are included in the table above.

The following tables illustrate the allowance for loan losses and the recorded investment by portfolio segments:

 
(In thousands)
  
Commercial Loans
    
Consumer Loans
    
Residential Real Estate Mortgages
    
Total
  
As of March 31, 2018
                        
Allowance for loan losses
  
$
28,190
    
$
36,973
    
$
5,037
    
$
70,200
  
Allowance for loans individually evaluated for impairment
    
42
      
-
      
-
      
42
  
Allowance for loans collectively evaluated for impairment
    
28,148
      
36,973
      
5,037
      
70,158
  
Ending balance of loans
    
3,048,003
      
2,266,054
      
1,333,067
      
6,647,124
  
Ending balance of originated loans individually evaluated for impairment
    
6,006
      
8,305
      
6,771
      
21,082
  
Ending balance of acquired loans collectively evaluated for impairment
    
172,920
      
40,666
      
164,123
      
377,709
  
Ending balance of originated loans collectively evaluated for impairment
  
$
2,869,077
    
$
2,217,083
    
$
1,162,173
    
$
6,248,333
  
 
                                
As of December 31, 2017
                                
Allowance for loan losses
  
$
27,606
    
$
36,830
    
$
5,064
    
$
69,500
  
Allowance for loans individually evaluated for impairment
    
57
      
-
      
-
      
57
  
Allowance for loans collectively evaluated for impairment
    
27,549
      
36,830
      
5,064
      
69,443
  
Ending balance of loans
    
3,028,269
      
2,234,809
      
1,321,695
      
6,584,773
  
Ending balance of originated loans individually evaluated for impairment
    
5,876
      
8,432
      
6,830
      
21,138
  
Ending balance of acquired loans collectively evaluated for impairment
    
187,313
      
43,906
      
170,472
      
401,691
  
Ending balance of originated loans collectively evaluated for impairment
  
$
2,835,080
    
$
2,182,471
    
$
1,144,393
    
$
6,161,944
  
 
Credit Quality of Loans

For all loan classes within the Company's loan portfolio, loans are placed on nonaccrual status when timely collection of principal and/or interest in accordance with contractual terms is in doubt. Loans are transferred to nonaccrual status generally when principal or interest payments become ninety days delinquent, unless the loan is well-secured and in the process of collection, or sooner when management concludes circumstances indicate that borrowers may be unable to meet contractual principal or interest payments. When a loan is transferred to a nonaccrual status, all interest previously accrued in the current period but not collected is reversed against interest income in that period. Interest accrued in a prior period and not collected is charged-off against the allowance for loan losses.
 
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If ultimate repayment of a nonaccrual loan is expected, any payments received are applied in accordance with contractual terms. If ultimate repayment of principal is not expected, any payment received on a nonaccrual loan is applied to principal until ultimate repayment becomes expected. For all loan classes within the Company's loan portfolio, nonaccrual loans are returned to accrual status when they become current as to principal and interest and demonstrate a period of performance under the contractual terms and, in the opinion of management, are fully collectible as to principal and interest. For loans in all portfolios, the principal amount is charged off in full or in part as soon as management determines, based on available facts, that the collection of principal in full or in part is improbable. For commercial loans, management considers specific facts and circumstances relative to individual credits in making such a determination. For consumer and residential loan classes, management uses specific guidance and thresholds from the Federal Financial Institutions Examination Council's Uniform Retail Credit Classification and Account Management Policy.

The following tables set forth information with regard to past due and nonperforming loans by loan class:
 
(In thousands)
  
31-60 Days Past Due Accruing
    
61-90 Days Past Due Accruing
    
Greater Than 90 Days Past Due Accruing
    
Total Past Due Accruing
    
NonAccrual
    
Current
    
Recorded Total Loans
  
As of March 31, 2018
                                          
Originated
                                          
Commercial Loans:
                                          
C&I
  
$
639
    
$
1,268
    
$
-
    
$
1,907
    
$
1,196
    
$
784,845
    
$
787,948
  
CRE
    
28
      
-
      
-
      
28
      
5,232
      
1,600,096
      
1,605,356
  
Business Banking
    
2,116
      
797
      
-
      
2,913
      
6,194
      
472,672
      
481,779
  
Total Commercial Loans
  
$
2,783
    
$
2,065
    
$
-
    
$
4,848
    
$
12,622
    
$
2,857,613
    
$
2,875,083
  
Consumer Loans:
                                                        
Dealer Finance
  
$
10,850
    
$
1,920
    
$
987
    
$
13,757
    
$
2,201
    
$
1,224,238
    
$
1,240,196
  
Specialty Lending
    
3,843
      
1,627
      
1,292
      
6,762
      
-
      
464,912
      
471,674
  
Direct
    
2,334
      
982
      
401
      
3,717
      
2,470
      
507,331
      
513,518
  
Total Consumer Loans
  
$
17,027
    
$
4,529
    
$
2,680
    
$
24,236
    
$
4,671
    
$
2,196,481
    
$
2,225,388
  
Residential Real Estate
Mortgages
  
$
2,389
    
$
1,635
    
$
203
    
$
4,227
    
$
5,487
    
$
1,159,230
    
$
1,168,944
  
Total Originated Loans
  
$
22,199
    
$
8,229
    
$
2,883
    
$
33,311
    
$
22,780
    
$
6,213,324
    
$
6,269,415
  
 
                                                        
Acquired
                                                        
Commercial Loans:
                                                        
C&I
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
33,484
    
$
33,484
  
CRE
    
-
      
-
      
-
      
-
      
2
      
97,463
      
97,465
  
Business Banking
    
539
      
9
      
-
      
548
      
673
      
40,750
      
41,971
  
Total Commercial Loans
  
$
539
    
$
9
    
$
-
    
$
548
    
$
675
    
$
171,697
    
$
172,920
  
Consumer Loans:
                                                        
Dealer Finance
  
$
7
    
$
3
    
$
-
    
$
10
    
$
15
    
$
577
    
$
602
  
Direct
    
368
      
-
      
51
      
419
      
281
      
39,364
      
40,064
  
Total Consumer Loans
  
$
375
    
$
3
    
$
51
    
$
429
    
$
296
    
$
39,941
    
$
40,666
  
Residential Real Estate
Mortgages
  
$
565
    
$
102
    
$
-
    
$
667
    
$
1,675
    
$
161,781
    
$
164,123
  
Total Acquired Loans
  
$
1,479
    
$
114
    
$
51
    
$
1,644
    
$
2,646
    
$
373,419
    
$
377,709
  
                                                         
Total Loans
  
$
23,678
    
$
8,343
    
$
2,934
    
$
34,955
    
$
25,426
    
$
6,586,743
    
$
6,647,124
  
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(In thousands)
  
31-60 Days Past Due Accruing
    
61-90 Days Past Due Accruing
    
Greater Than 90 Days Past Due Accruing
    
Total Past Due Accruing
    
Non-Accrual
    
Current
    
Recorded Total Loans
  
As of December 31, 2017
                                          
Originated
                                          
Commercial Loans:
                                          
Commercial
  
$
-
    
$
-
    
$
-
    
$
-
    
$
202
    
$
753,577
    
$
753,779
  
Commercial Real Estate
    
161
      
138
      
-
      
299
      
3,178
      
1,533,065
      
1,536,542
  
Agricultural
    
117
      
-
      
-
      
117
      
1,043
      
34,386
      
35,546
  
Agricultural Real Estate
    
493
      
-
      
-
      
493
      
2,736
      
30,905
      
34,134
  
Business Banking
    
1,907
      
597
      
-
      
2,504
      
5,304
      
473,147
      
480,955
  
Total Commercial Loans
  
$
2,678
    
$
735
    
$
-
    
$
3,413
    
$
12,463
    
$
2,825,080
    
$
2,840,956
  
Consumer Loans:
                                                        
Indirect
  
$
18,747
    
$
4,033
    
$
3,492
    
$
26,272
    
$
2,115
    
$
1,642,664
    
$
1,671,051
  
Home Equity
    
2,887
      
854
      
341
      
4,082
      
2,736
      
448,081
      
454,899
  
Direct
    
341
      
108
      
70
      
519
      
35
      
64,399
      
64,953
  
Total Consumer Loans
  
$
21,975
    
$
4,995
    
$
3,903
    
$
30,873
    
$
4,886
    
$
2,155,144
    
$
2,190,903
  
Residential Real Estate
Mortgages
  
$
3,730
    
$
667
    
$
1,262
    
$
5,659
    
$
5,987
    
$
1,139,577
    
$
1,151,223
  
Total Originated Loans
  
$
28,383
    
$
6,397
    
$
5,165
    
$
39,945
    
$
23,336
    
$
6,119,801
    
$
6,183,082
  
                                                         
Acquired
                                                        
Commercial Loans:
                                                        
Commercial
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
39,575
    
$
39,575
  
Commercial Real Estate
    
-
      
-
      
-
      
-
      
2
      
106,632
      
106,634
  
Business Banking
    
354
      
-
      
-
      
354
      
669
      
40,081
      
41,104
  
Total Commercial Loans
  
$
354
    
$
-