LOANS AND LEASES

Our loan and lease portfolio includes originated and purchased loans and leases. Originated and purchased loans and leases for which there was no evidence of credit deterioration at their acquisition date and for which it was probable that we would be able to collect all contractually required payments, are referred to collectively as Non-PCI loans. Generally, PCI loans are purchased loans for which there was, at the acquisition date, evidence of credit deterioration since their origination and for which it was probable that collection of all contractually required payments was unlikely.

Non-PCI loans are carried at the principal amount outstanding, net of deferred fees and costs, and in the case of acquired loans, net of purchase discounts and premiums. Deferred fees and costs and purchase discounts and premiums on acquired non-impaired loans are recognized as an adjustment to interest income over the contractual life of the loans primarily using the effective interest method or taken into income when the related loans are paid off or included in the carrying amount of loans that are sold.

PCI loans are accounted for in accordance with ASC Subtopic 310‑30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality." For PCI loans, at the time of acquisition we (i) calculate the contractual amount and timing of undiscounted principal and interest payments (the "undiscounted contractual cash flows") and (ii) estimate the amount and timing of undiscounted expected principal and interest payments (the "undiscounted expected cash flows"). The difference between the undiscounted contractual cash flows and the undiscounted expected cash flows is the nonaccretable difference. The difference between the undiscounted cash flows expected to be collected and the estimated fair value of the acquired loans is the accretable yield. The nonaccretable difference represents an estimate of the loss exposure of principal and interest related to the PCI loan portfolio; such amount is subject to change over time based on the performance of such loans. The carrying value of PCI loans is reduced by payments received, both principal and interest, and increased by the portion of the accretable yield recognized as interest income.

The following table summarizes the composition of our loan and lease portfolio as of the dates indicated:



	March 31, 2017									December 31, 2016
	Non-PCI									Non-PCI
	Loans			PCI						Loans			PCI
	and Leases			Loans			Total			and Leases			Loans			Total
	(In thousands)
Real estate mortgage	$	5,904,995		$	88,918		$	5,993,913		$	5,635,675		$	92,793		$	5,728,468
Real estate construction and land	1,123,123			2,326			1,125,449			975,032			2,409			977,441
Commercial	8,115,953			4,863			8,120,816			8,426,236			12,994			8,439,230
Consumer	382,447			246			382,693			375,149			249			375,398
Total gross loans and leases	15,526,518			96,353			15,622,871			15,412,092			108,445			15,520,537
Deferred fees, net	(66,164		)	(18		)	(66,182		)	(64,562		)	(21		)	(64,583		)
Total loans and leases, net of deferred fees	15,460,354			96,335			15,556,689			15,347,530			108,424			15,455,954
Allowance for loan and lease losses	(149,826		)	(11,481		)	(161,307		)	(143,755		)	(13,483		)	(157,238		)
Total loans and leases, net	$	15,310,528		$	84,854		$	15,395,382		$	15,203,775		$	94,941		$	15,298,716

Non‑PCI Loans and Leases

The following tables present an aging analysis of our Non‑PCI loans and leases by portfolio segment and class as of the dates indicated:



	March 31, 2017
	30 - 89		90 or More
	Days		Days		Total
	Past Due		Past Due		Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Commercial	$	9,218	$	3,975	$	13,193	$	4,365,745	$	4,378,938
Residential	844		1,879		2,723		1,505,308		1,508,031
Total real estate mortgage	10,062		5,854		15,916		5,871,053		5,886,969
Real estate construction and land:
Commercial	—		—		—		666,185		666,185
Residential	—		362		362		441,689		442,051
Total real estate construction and land	—		362		362		1,107,874		1,108,236
Commercial:
Cash flow	598		2,915		3,513		3,129,896		3,133,409
Asset-based	500		204		704		2,390,379		2,391,083
Venture capital	14,381		257		14,638		1,920,311		1,934,949
Equipment finance	251		—		251		622,986		623,237
Total commercial	15,730		3,376		19,106		8,063,572		8,082,678
Consumer	77		—		77		382,394		382,471
Total Non-PCI loans and leases	$	25,869	$	9,592	$	35,461	$	15,424,893	$	15,460,354



	December 31, 2016
	30 - 89		90 or More
	Days		Days		Total
	Past Due		Past Due		Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Commercial	$	8,590	$	3,303	$	11,893	$	4,341,740	$	4,353,633
Residential	5,694		1,999		7,693		1,256,630		1,264,323
Total real estate mortgage	14,284		5,302		19,586		5,598,370		5,617,956
Real estate construction and land:
Commercial	—		—		—		578,838		578,838
Residential	364		—		364		383,637		384,001
Total real estate construction and land	364		—		364		962,475		962,839
Commercial:
Cash flow	191		1,821		2,012		3,105,380		3,107,392
Asset-based	1,500		2		1,502		2,607,543		2,609,045
Venture capital	13,589		5,769		19,358		1,963,798		1,983,156
Equipment finance	1,417		3,051		4,468		687,499		691,967
Total commercial	16,697		10,643		27,340		8,364,220		8,391,560
Consumer	224		—		224		374,951		375,175
Total Non-PCI loans and leases	$	31,569	$	15,945	$	47,514	$	15,300,016	$	15,347,530

It is our policy to discontinue accruing interest when principal or interest payments are past due 90 days or more unless the loan is both well secured and in the process of collection or when, in the opinion of management, there is a reasonable doubt as to the collectability of a loan or lease in the normal course of business. Interest income on nonaccrual loans is recognized only to the extent cash is received and the principal balance of the loan is deemed collectable.

The following table presents our nonaccrual and performing Non‑PCI loans and leases by portfolio segment and class as of the dates indicated:



	March 31, 2017						December 31, 2016
	Nonaccrual		Performing		Total		Nonaccrual		Performing		Total
	(In thousands)
Real estate mortgage:
Commercial	$	66,216	$	4,312,722	$	4,378,938	$	62,454	$	4,291,179	$	4,353,633
Residential	5,826		1,502,205		1,508,031		6,881		1,257,442		1,264,323
Total real estate mortgage	72,042		5,814,927		5,886,969		69,335		5,548,621		5,617,956
Real estate construction and land:
Commercial	—		666,185		666,185		—		578,838		578,838
Residential	362		441,689		442,051		364		383,637		384,001
Total real estate construction and land	362		1,107,874		1,108,236		364		962,475		962,839
Commercial:
Cash flow	53,611		3,079,798		3,133,409		53,908		3,053,484		3,107,392
Asset-based	1,165		2,389,918		2,391,083		2,118		2,606,927		2,609,045
Venture capital	15,289		1,919,660		1,934,949		11,687		1,971,469		1,983,156
Equipment finance	30,388		592,849		623,237		32,848		659,119		691,967
Total commercial	100,453		7,982,225		8,082,678		100,561		8,290,999		8,391,560
Consumer	173		382,298		382,471		339		374,836		375,175
Total Non-PCI loans and leases	$	173,030	$	15,287,324	$	15,460,354	$	170,599	$	15,176,931	$	15,347,530

At March 31, 2017, nonaccrual loans and leases totaled $173.0 million and included $9.6 million of loans and leases 90 or more days past due, $4.0 million of loans and leases 30 to 89 days past due, and $159.4 million of loans and leases current with respect to contractual payments that were placed on nonaccrual status based on management’s judgment regarding their collectability. Nonaccrual loans and leases totaled $170.6 million at December 31, 2016, including $15.9 million of the loans and leases 90 or more days past due, $3.0 million of loans and leases 30 to 89 days past due, and $151.7 million of current loans and leases that were placed on nonaccrual status based on management’s judgment regarding their collectability.

The following table presents the credit risk rating categories for Non‑PCI loans and leases by portfolio segment and class as of the dates indicated. Nonclassified loans and leases are those with a credit risk rating of either pass or special mention, while classified loans and leases are those with a credit risk rating of either substandard or doubtful.



	March 31, 2017						December 31, 2016
	Classified		Nonclassified		Total		Classified		Nonclassified		Total
	(In thousands)
Real estate mortgage:
Commercial	$	100,202	$	4,278,736	$	4,378,938	$	99,641	$	4,253,992	$	4,353,633
Residential	9,680		1,498,351		1,508,031		17,540		1,246,783		1,264,323
Total real estate mortgage	109,882		5,777,087		5,886,969		117,181		5,500,775		5,617,956
Real estate construction and land:
Commercial	403		665,782		666,185		409		578,429		578,838
Residential	362		441,689		442,051		364		383,637		384,001
Total real estate construction and land	765		1,107,471		1,108,236		773		962,066		962,839
Commercial:
Cash flow	175,511		2,957,898		3,133,409		177,661		2,929,731		3,107,392
Asset-based	32,285		2,358,798		2,391,083		28,112		2,580,933		2,609,045
Venture capital	75,222		1,859,727		1,934,949		52,646		1,930,510		1,983,156
Equipment finance	30,388		592,849		623,237		32,848		659,119		691,967
Total commercial	313,406		7,769,272		8,082,678		291,267		8,100,293		8,391,560
Consumer	346		382,125		382,471		424		374,751		375,175
Total Non-PCI loans and leases	$	424,399	$	15,035,955	$	15,460,354	$	409,645	$	14,937,885	$	15,347,530

In addition to our internal risk rating process, our federal and state banking regulators, as an integral part of their examination process, periodically review the Company’s loan and lease risk rating classifications. Our regulators may require the Company to recognize rating downgrades based on their judgments related to information available to them at the time of their examinations. Risk rating downgrades generally result in increases in the provisions for credit losses and the allowance for credit losses.

Non‑PCI nonaccrual loans and leases and performing troubled debt restructured loans are considered impaired for reporting purposes. Troubled debt restructurings are a result of rate reductions, term extensions, fee concessions, and debt forgiveness, or a combination thereof. The following table presents the composition of our impaired loans and leases as of the dates indicated:



	March 31, 2017						December 31, 2016
			Performing		Total				Performing		Total
	Nonaccrual		Troubled		Impaired		Nonaccrual		Troubled		Impaired
	Loans		Debt		Loans		Loans		Debt		Loans
	and		Restructured		and		and		Restructured		and
	Leases		Loans		Leases		Leases		Loans		Leases
	(In thousands)
Real estate mortgage	$	72,042	$	47,119	$	119,161	$	69,335	$	54,750	$	124,085
Real estate construction and land	362		6,321		6,683		364		6,893		7,257
Commercial	100,453		2,920		103,373		100,561		3,157		103,718
Consumer	173		141		314		339		152		491
Total	$	173,030	$	56,501	$	229,531	$	170,599	$	64,952	$	235,551

The following tables present information regarding our Non‑PCI impaired loans and leases by portfolio segment and class as of and for the dates indicated:



	March 31, 2017						December 31, 2016
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
Impaired Loans and Leases	Investment		Balance		Allowance		Investment		Balance		Allowance
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Commercial	$	14,350	$	15,257	$	633	$	63,325	$	65,031	$	6,266
Residential	3,502		3,570		437		8,424		8,612		585
Real estate construction and land:
Residential	—		—		—		213		213		—
Commercial:
Cash flow	50,690		65,605		8,901		51,272		52,910		12,474
Asset-based	1,430		1,423		144		4,395		4,861		2,144
Venture capital	12,206		12,254		3,222		5,821		5,880		3,294
Equipment finance	—		—		—		1,524		4,636		—
Consumer	187		191		90		270		280		170
With No Related Allowance Recorded:
Real estate mortgage:
Commercial	$	96,032	$	105,317			$	44,557	$	51,402
Residential	5,277		6,408				7,779		8,940
Real estate construction and land:
Commercial	6,111		6,111				6,680		6,680
Residential	572		576				364		366
Commercial:
Cash flow	2,925		5,718				2,852		5,939
Asset-based	2,651		3,782				664		1,652
Venture capital	3,083		9,907				5,866		8,939
Equipment finance	30,388		51,682				31,324		53,319
Consumer	127		198				221		292
Total Non-PCI Loans and Leases With
and Without an Allowance Recorded:
Real estate mortgage	$	119,161	$	130,552	$	1,070	$	124,085	$	133,985	$	6,851
Real estate construction and land	6,683		6,687		—		7,257		7,259		—
Commercial	103,373		150,371		12,267		103,718		138,136		17,912
Consumer	314		389		90		491		572		170
Total	$	229,531	$	287,999	$	13,427	$	235,551	$	279,952	$	24,933



	Three Months Ended March 31,
	2017				2016
	Weighted		Interest		Weighted		Interest
	Average		Income		Average		Income
Impaired Loans and Leases	Balance⁽¹⁾		Recognized		Balance⁽¹⁾		Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Commercial	$	14,350	$	206	$	19,471	$	243
Residential	3,501		12		4,198		24
Real estate construction and land:
Residential	—		—		743		4
Commercial:
Cash flow	43,172		—		20,823		12
Asset-based	1,162		15		3,696		27
Venture capital	4,693		—		—		—
Equipment finance	—		—		49,322		—
Consumer	187		—		341		3
With No Related Allowance Recorded:
Real estate mortgage:
Commercial	$	92,753	$	560	$	54,132	$	217
Residential	5,216		15		5,405		14
Real estate construction and land:
Commercial	6,111		67		7,202		62
Residential	572		2		—		—
Commercial:
Cash flow	2,821		5		2,683		1
Asset-based	2,279		25		1,181		15
Venture capital	2,429		—		—		—
Equipment finance	30,388		—		—		—
Consumer	127		2		797		—
Total Non-PCI Loans and Leases With
and Without an Allowance Recorded:
Real estate mortgage	$	115,820	$	793	$	83,206	$	498
Real estate construction and land	6,683		69		7,945		66
Commercial	86,944		45		77,705		55
Consumer	314		2		1,138		3
Total	$	209,761	$	909	$	169,994	$	622

_________________________


(1)	For Non-PCI loans and leases reported as impaired at March 31, 2017 and 2016, amounts were calculated based on the period of time such loans and leases were impaired during the reported period.

The following table presents new troubled debt restructurings of Non-PCI loans for the periods indicated:



	Three Months Ended March 31,
	2017					2016
		Pre-		Post-			Pre-		Post-
		Modification		Modification			Modification		Modification
		Outstanding		Outstanding			Outstanding		Outstanding
	Number	Recorded		Recorded		Number	Recorded		Recorded
Troubled Debt Restructurings	of Loans	Investment		Investment		of Loans	Investment		Investment
	(Dollars in thousands)
Real estate mortgage:
Commercial	1	$	64	$	—	4	$	3,140	$	3,140
Residential	2	42		42		1	165		165
Commercial:
Cash flow	2	106		106		4	257		257
Asset-based	2	613		613		2	629		629
Venture capital	3	13,065		13,065		—	—		—
Equipment finance	—	—		—		2	2,660		2,660
Consumer	1	97		97		1	60		60
Total	11	$	13,987	$	13,923	14	$	6,911	$	6,911

The following table presents troubled debt restructurings that subsequently defaulted for the periods indicated:



	Three Months Ended March 31,
	2017				2016
Troubled Debt Restructurings	Number	Recorded			Number	Recorded
That Subsequently Defaulted	of Loans	Investment⁽¹⁾			of Loans	Investment⁽¹⁾
	(Dollars in thousands)
Real estate mortgage:
Commercial	—	$	—		1	$	230
Consumer	1	28			—	—
Total	1	$	28	(2)	1	$	230	(3)

_________________________

(1)

The population of defaulted restructured loans for the period indicated includes only those loans restructured during the preceding 12-month period. For example, for the 12-month period ended March 31, 2017, the population of defaulted restructured loans includes only those loans restructured after March 31, 2016. The table excludes defaulted troubled restructurings in those classes for which the recorded investment was zero at the end of the period.


(2)	Represents the balance at March 31, 2017, and there were no charge-offs.


(3)	Represents the balance at March 31, 2016, and there were no charge-offs.

Allowance for Loan and Lease Losses

The following tables present a summary of the activity in the allowance for loan and lease losses on Non‑PCI loans and leases by portfolio segment and PCI loans for the periods indicated:



	Three Months Ended March 31, 2017
				Real Estate
	Real Estate			Construction								Total			Total
	Mortgage			and Land		Commercial			Consumer			Non-PCI			PCI			Total
	(In thousands)
Allowance for Loan
and Lease Losses:
Balance, beginning of period	$	37,765		$	10,045	$	93,853		$	2,092		$	143,755		$	13,483		$	157,238
Charge-offs	(1,544		)	—		(19,285		)	(99		)	(20,928		)	(2,230		)	(23,158		)
Recoveries	230			8		2,448			53			2,739			—			2,739
Provision (negative provision)	(1,083		)	423		25,118			(198		)	24,260			228			24,488
Balance, end of period	$	35,368		$	10,476	$	102,134		$	1,848		$	149,826		$	11,481		$	161,307

Ending Allowance by
Impairment Methodology:
Individually evaluated for
impairment	$	1,070		$	—	$	12,267		$	90		$	13,427
Collectively evaluated for
impairment	$	34,298		$	10,476	$	89,867		$	1,758		$	136,399
Acquired loans with
deteriorated credit quality															$	11,481

Ending Loans and Leases by
Impairment Methodology:
Individually evaluated for
impairment	$	118,275		$	6,683	$	103,221		$	281		$	228,460
Collectively evaluated for
impairment	5,768,694			1,101,553		7,979,457			382,190			15,231,894
Acquired loans with
deteriorated credit quality															$	96,335
Ending balance	$	5,886,969		$	1,108,236	$	8,082,678		$	382,471		$	15,460,354		$	96,335		$	15,556,689



	Three Months Ended March 31, 2016
				Real Estate
	Real Estate			Construction									Total			Total
	Mortgage			and Land			Commercial			Consumer			Non-PCI			PCI			Total
	(In thousands)
Allowance for Loan
and Lease Losses:
Balance, beginning of period	$	36,654		$	7,137		$	61,082		$	661		$	105,534		$	9,577		$	115,111
Charge-offs	(737		)	—			(4,045		)	(591		)	(5,373		)	(163		)	(5,536		)
Recoveries	999			152			314			16			1,481			—			1,481
Provision (negative provision)	(7,817		)	(413		)	26,606			789			19,165			140			19,305
Balance, end of period	$	29,099		$	6,876		$	83,957		$	875		$	120,807		$	9,554		$	130,361

Ending Allowance by
Impairment Methodology:
Individually evaluated for
impairment	$	1,954		$	21		$	27,902		$	163		$	30,040
Collectively evaluated for
impairment	$	27,145		$	6,855		$	56,055		$	712		$	90,767
Acquired loans with
deteriorated credit quality																$	9,554

Ending Loans and Leases by
Impairment Methodology:
Individually evaluated for
impairment	$	90,830		$	7,945		$	96,614		$	1,102		$	196,491
Collectively evaluated for
impairment	5,539,467			567,528			7,893,955			109,520			14,110,470
Acquired loans with
deteriorated credit quality																$	176,556
Ending balance	$	5,630,297		$	575,473		$	7,990,569		$	110,622		$	14,306,961		$	176,556		$	14,483,517