Loans and Allowance for Loan and Lease Losses

The Company’s loan portfolio includes loans acquired in the FSB Acquisition. Residential loans acquired in the FSB Acquisition are covered under the Single Family Shared-Loss Agreement (the “covered loans”). Loans originated or purchased since the FSB Acquisition (“new loans”) are not covered by the Loss Sharing Agreements and, effective May 21, 2014, commercial and consumer loans acquired in the FSB Acquisition are no longer covered under the Loss Sharing Agreements. Loans acquired in the FSB Acquisition may be further segregated between those acquired with evidence of deterioration in credit quality since origination (“Acquired Credit Impaired” or “ACI” loans) and those acquired without evidence of deterioration in credit quality since origination (“non-ACI” loans).

Loans consisted of the following at the dates indicated (dollars in thousands):



	September 30, 2014
	Non-Covered Loans					Covered Loans								Percent of Total
	New Loans			ACI		ACI		Non-ACI			Total			Percent of Total
Residential:
1-4 single family residential	$	2,281,342		$	—	$	915,189	$	60,475		$	3,257,006		29.5	%
Home equity loans and lines of credit	1,680			—		26,584		109,250			137,514			1.2	%
	2,283,022			—		941,773		169,725			3,394,520			30.7	%
Commercial:
Multi-family	1,505,723			24,859		—		—			1,530,582			13.8	%
Commercial real estate
Owner occupied	957,657			37,008		—		—			994,665			9.0	%
Non-owner occupied	1,452,444			32,374		—		—			1,484,818			13.4	%
Construction and land	137,412			1,994		—		—			139,406			1.3	%
Commercial and industrial	3,049,280			1,329		—		—			3,050,609			27.6	%
Lease financing	436,714			—		—		—			436,714			4.0	%
	7,539,230			97,564		—		—			7,636,794			69.1	%
Consumer	21,204			51		—		—			21,255			0.2	%
Total loans	9,843,456			97,615		941,773		169,725			11,052,569			100.0	%
Premiums, discounts and deferred fees and costs, net	44,778			—		—		(11,571		)	33,207
Loans net of premiums, discounts and deferred fees and costs	9,888,234			97,615		941,773		158,154			11,085,776
Allowance for loan and lease losses	(73,079		)	—		—		(5,789		)	(78,868		)
Loans, net	$	9,815,155		$	97,615	$	941,773	$	152,365		$	11,006,908



	December 31, 2013
	Non-Covered Loans					Covered Loans									Percent of Total
	New Loans			ACI		ACI			Non-ACI			Total			Percent of Total
Residential:
1-4 single family residential	$	1,800,332		$	—	$	1,057,012		$	70,378		$	2,927,722		32.4	%
Home equity loans and lines of credit	1,535			—		39,602			127,807			168,944			1.9	%
	1,801,867			—		1,096,614			198,185			3,096,666			34.3	%
Commercial:
Multi-family	1,097,872			8,093		33,354			—			1,139,319			12.6	%
Commercial real estate
Owner occupied	712,844			5,318		49,861			689			768,712			8.5	%
Non-owner occupied	946,543			1,449		93,089			52			1,041,133			11.5	%
Construction and land	138,091			—		10,600			729			149,420			1.7	%
Commercial and industrial	2,266,407			—		6,050			6,234			2,278,691			25.3	%
Lease financing	337,382			—		—			—			337,382			3.7	%
	5,499,139			14,860		192,954			7,704			5,714,657			63.3	%
Consumer	213,107			—		1,679			—			214,786			2.4	%
Total loans	7,514,113			14,860		1,291,247			205,889			9,026,109			100.0	%
Premiums, discounts and deferred fees and costs, net	40,748			—		—			(13,248		)	27,500
Loans net of premiums, discounts and deferred fees and costs	7,554,861			14,860		1,291,247			192,641			9,053,609
Allowance for loan and lease losses	(57,330		)	—		(2,893		)	(9,502		)	(69,725		)
Loans, net	$	7,497,531		$	14,860	$	1,288,354		$	183,139		$	8,983,884

At September 30, 2014 and December 31, 2013, the unpaid principal balance (“UPB”) of ACI loans was $2.7 billion and $3.3 billion, respectively.

During the three and nine months ended September 30, 2014 and 2013, the Company purchased 1-4 single family residential loans totaling $234 million, $614 million, $331 million, and $906 million, respectively.

At September 30, 2014, the Company had pledged real estate loans with UPB of approximately $6.9 billion and recorded investment of approximately $5.4 billion as security for FHLB advances.

The accretable yield on ACI loans represents the amount by which undiscounted expected future cash flows exceed recorded investment. Changes in the accretable yield on ACI loans for the nine months ended September 30, 2014 and the year ended December 31, 2013 were as follows (in thousands):



Balance, December 31, 2012	$	1,286,066
Reclassifications from non-accretable difference	282,952
Accretion	(410,446		)
Balance, December 31, 2013	1,158,572
Reclassifications from non-accretable difference	135,521
Accretion	(262,562		)
Balance, September 30, 2014	$	1,031,531

Loan sales

During the periods indicated, the Company sold covered 1-4 single family residential loans to third parties on a non-recourse basis. The following table summarizes the impact of these transactions (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
UPB of loans sold	$	71,301		$	62,963		$	205,570		$	165,201

Cash proceeds, net of transaction costs	$	52,279		$	32,639		$	138,726		$	85,821
Recorded investment in loans sold	36,241			23,694			106,163			56,196
Net pre-tax impact on earnings, excluding gain (loss) on FDIC indemnification	$	16,038		$	8,945		$	32,563		$	29,625

Gain (loss) on sale of covered loans	$	3,667		$	(4,286	)	$	4,624		$	(9,368	)
Proceeds recorded in interest income	12,371			13,231			27,939			38,993
	$	16,038		$	8,945		$	32,563		$	29,625

Gain (loss) on FDIC indemnification	$	(4,068	)	$	5,626		$	(2,823	)	$	11,794

For the three and nine months ended September 30, 2014 and 2013, covered 1-4 single family residential loans with UPB of $16 million, $45 million, $26 million, and $76 million, respectively, were sold from a pool of ACI loans with a zero carrying value. Proceeds of the sale of loans from this pool, representing realization of accretable yield, were recorded in interest income. The gain or loss on the sale of loans from the remaining pools, representing the difference between the recorded investment and consideration received, was recorded in “Gain (loss) on sale of loans, net” in the accompanying consolidated statements of income.

During the nine months ended September 30, 2014, in accordance with the terms of the Commercial Shared-Loss Agreement, the Bank requested and received approval from the FDIC to sell certain covered commercial and consumer loans. These loans were transferred to loans held for sale at the lower of carrying value or fair value, determined at the individual loan level, upon receipt of FDIC approval and sold in March 2014. The reduction of carrying value to fair value for specific loans was recognized in the provision for loan losses.

The following table summarizes the pre-tax impact of these sales, as reflected in the consolidated statements of income for the nine months ended September 30, 2014 (in thousands):



Cash proceeds, net of transaction costs	$	101,023

Carrying value of loans transferred to loans held for sale	86,521
Provision for loan losses recorded upon transfer to loans held for sale	(3,469		)
Recorded investment in loans sold	83,052
Gain on sale of covered loans	$	17,971

Loss on FDIC indemnification	$	(2,085	)

During the nine months ended September 30, 2014, the Company made the decision to terminate its indirect auto lending activities and sold indirect auto loans with a recorded investment of $302.8 million. The Company received cash proceeds, net of transaction costs, of $303.0 million and recognized a gain on the sale totaling $0.2 million, which was recoded in "Gain (loss) on sale of loans, net" in the accompanying consolidated statement of income for the nine months ended September 30, 2014. The total impact of this transaction on pre-tax earnings was a net increase of $1.8 million, inclusive of the gain on sale, exit costs and elimination of the related allowance for loan losses.

Allowance for loan and lease losses

Activity in the allowance for loan and lease losses (“ALLL”) is summarized as follows for the periods indicated (in thousands):



	Three Months Ended
	September 30, 2014												September 30, 2013
	Residential			Commercial			Consumer			Total			Residential			Commercial			Consumer			Total
Beginning balance	$	14,285		$	60,695		$	491		$	75,471		$	18,115		$	39,514		$	802		$	58,431
Provision for (recovery of) loan losses:
ACI loans	—			—			—			—			—			(842		)	—			(842		)
Non-ACI loans	(450		)	(450		)	—			(900		)	(1,815		)	(180		)	—			(1,995		)
New loans	355			6,195			(263		)	6,287			963			3,606			872			5,441
Total provision	(95		)	5,745			(263		)	5,387			(852		)	2,584			872			2,604
Charge-offs:
ACI loans	—			—			—			—			—			(117		)	—			(117		)
Non-ACI loans	(1,052		)	—			—			(1,052		)	(1,317		)	—			—			(1,317		)
New loans	—			(1,469		)	(173		)	(1,642		)	(10		)	(458		)	(118		)	(586		)
Total charge-offs	(1,052		)	(1,469		)	(173		)	(2,694		)	(1,327		)	(575		)	(118		)	(2,020		)
Recoveries:
Non-ACI loans	4			450			—			454			3			144			—			147
New loans	—			122			128			250			—			417			40			457
Total recoveries	4			572			128			704			3			561			40			604
Ending balance	$	13,142		$	65,543		$	183		$	78,868		$	15,939		$	42,084		$	1,596		$	59,619



	Nine Months Ended
	September 30, 2014												September 30, 2013
	Residential			Commercial			Consumer			Total			Residential			Commercial			Consumer			Total
Beginning balance	$	15,353		$	52,185		$	2,187		$	69,725		$	19,164		$	39,543		$	414		$	59,121
Provision for (recovery of) loan losses:
ACI loans	—			1,988			324			2,312			—			(2,440		)	—			(2,440		)
Non-ACI loans	(1,101		)	(418		)	—			(1,519		)	4,241			(2,789		)	—			1,452
New loans	1,070			20,529			(1,410		)	20,189			(4,423		)	23,554			1,309			20,440
Total provision	(31		)	22,099			(1,086		)	20,982			(182		)	18,325			1,309			19,452
Charge-offs:
ACI loans	—			(4,881		)	(324		)	(5,205		)	—			(2,234		)	—			(2,234		)
Non-ACI loans	(2,196		)	(490		)	—			(2,686		)	(3,051		)	(172		)	—			(3,223		)
New loans	—			(4,286		)	(1,083		)	(5,369		)	(10		)	(16,628		)	(199		)	(16,837		)
Total charge-offs	(2,196		)	(9,657		)	(1,407		)	(13,260		)	(3,061		)	(19,034		)	(199		)	(22,294		)
Recoveries:
Non-ACI loans	16			476			—			492			18			2,622			—			2,640
New loans	—			440			489			929			—			628			72			700
Total recoveries	16			916			489			1,421			18			3,250			72			3,340
Ending balance	$	13,142		$	65,543		$	183		$	78,868		$	15,939		$	42,084		$	1,596		$	59,619

The impact of provisions for (recoveries of) losses on covered loans is significantly mitigated by increases (decreases) in the FDIC indemnification asset, recorded in the consolidated statements of income line item “Net loss on FDIC indemnification.”

The following table presents information about the balance of the ALLL and related loans at the dates indicated (in thousands):



	September 30, 2014								December 31, 2013
	Residential		Commercial		Consumer		Total		Residential		Commercial		Consumer		Total
Allowance for loan and lease losses:
Ending balance	$	13,142	$	65,543	$	183	$	78,868	$	15,353	$	52,185	$	2,187	$	69,725
Ending balance: non-ACI and new loans individually evaluated for impairment	$	1,009	$	4,131	$	—	$	5,140	$	855	$	9,467	$	—	$	10,322
Ending balance: non-ACI and new loans collectively evaluated for impairment	$	12,133	$	61,412	$	183	$	73,728	$	14,498	$	39,825	$	2,187	$	56,510
Ending balance: ACI	$	—	$	—	$	—	$	—	$	—	$	2,893	$	—	$	2,893
Ending balance: non-ACI	$	5,789	$	—	$	—	$	5,789	$	9,070	$	432	$	—	$	9,502
Ending balance: new loans	$	7,353	$	65,543	$	183	$	73,079	$	6,283	$	48,860	$	2,187	$	57,330
Loans:															0
Ending balance	$	3,418,601	$	7,645,938	$	21,237	$	11,085,776	$	3,111,167	$	5,720,722	$	221,720	$	9,053,609
Ending balance: non-ACI and new loans individually evaluated for impairment	$	6,341	$	24,228	$	—	$	30,569	$	5,663	$	22,584	$	—	$	28,247
Ending balance: non-ACI and new loans collectively evaluated for impairment	$	2,470,487	$	7,524,146	$	21,186	$	10,015,819	$	2,008,890	$	5,490,324	$	220,041	$	7,719,255
Ending balance: ACI loans	$	941,773	$	97,564	$	51	$	1,039,388	$	1,096,614	$	207,814	$	1,679	$	1,306,107

Credit quality information

New commercial relationships on non-accrual status with internal risk ratings of substandard or doubtful and with committed balances greater than or equal to $750,000 as well as loans that have been modified in troubled debt restructurings (“TDRs”) are individually evaluated for impairment. ACI loans or loan pools are considered to be impaired when there has been further deterioration in the cash flows expected at acquisition plus any additional cash flows expected to be collected arising from changes in estimates after acquisition, other than due to decreases in interest rate indices and changes in prepayment assumptions. Discount continues to be accreted on ACI loans or pools as long as there are expected future cash flows in excess of the current carrying amount; therefore, these loans are not classified as non-accrual even though they may be contractually delinquent. ACI 1-4 single family residential and home equity loans accounted for in pools are evaluated for impairment on a pool basis and the amount of any impairment is measured based on the expected aggregate cash flows of the pools. ACI commercial and commercial real estate loans are evaluated individually for impairment.

The tables below present information about loans or pools identified as impaired at the dates indicated (in thousands):



	September 30, 2014						December 31, 2013
	Recorded Investment		UPB		Related Specific Allowance		Recorded Investment		UPB		Related Specific Allowance
New loans:
With no specific allowance recorded:
Commercial real estate
Owner occupied	$	3,042	$	3,019	$	—	$	1,751	$	1,754	$	—
Non-owner occupied	1,355		1,355		—		1,444		1,444		—
Commercial and industrial	5,197		5,192		—		—		—		—
With a specific allowance recorded:
Commercial and industrial	13,621		13,605		3,692		16,048		16,055		8,696
Lease financing	1,013		1,013		439		1,345		1,345		771
Total:
Residential	$	—	$	—	$	—	$	—	$	—	$	—
Commercial	24,228		24,184		4,131		20,588		20,598		9,467
	$	24,228	$	24,184	$	4,131	$	20,588	$	20,598	$	9,467
Non-ACI loans:
With no specific allowance recorded:
1-4 single family residential	$	257	$	307	$	—	$	168	$	198	$	—
Home equity loans and lines of credit	1,819		1,849		—		1,703		1,734		—
Commercial and industrial	—		—		—		1,996		1,999		—
With a specific allowance recorded:
1-4 single family residential	3,513		4,193		971		3,564		4,203		827
Home equity loans and lines of credit	752		765		38		228		232		28
Total:
Residential	$	6,341	$	7,114	$	1,009	$	5,663	$	6,367	$	855
Commercial	—		—		—		1,996		1,999		—
	$	6,341	$	7,114	$	1,009	$	7,659	$	8,366	$	855
ACI loans:
With no specific allowance recorded:
Commercial real estate
Non-owner occupied	$	—	$	—	$	—	$	384	$	406	$	—
Construction and land	—		—		—		567		588		—
With a specific allowance recorded:
Multi-family	—		—		—		3,478		3,459		323
Commercial real estate
Owner occupied	—		—		—		2,643		2,812		369
Non-owner occupied	—		—		—		32,436		37,392		1,444
Construction and land	—		—		—		1,686		1,500		192
Commercial and industrial	—		—		—		3,932		4,262		565
Total:
Commercial	$	—	$	—	$	—	$	45,126	$	50,419	$	2,893
	$	—	$	—	$	—	$	45,126	$	50,419	$	2,893

Interest income recognized on impaired loans after impairment was not significant for any of the periods presented.

The following tables present the average recorded investment in impaired loans for the periods indicated (in thousands):



	Three Months Ended September 30,
	2014						2013
	New Loans		Non-ACI Loans		ACI Loans		New Loans		Non-ACI Loans		ACI Loans
Residential:
1-4 single family residential	$	—	$	3,727	$	—	$	—	$	3,907	$	—
Home equity loans and lines of credit	—		2,719		—		—		1,727		—
	—		6,446		—		—		5,634		—
Commercial:
Multi-family	—		—		—		—		—		3,092
Commercial real estate
Owner occupied	3,416		—		—		920		—		2,752
Non-owner occupied	1,370		—		—		1,493		—		15,132
Construction and land	—		—		—		—		—		2,907
Commercial and industrial	15,105		—		—		16,756		2,146		5,326
Lease financing	1,096		—		—		1,428		—		—
	20,987		—		—		20,597		2,146		29,209
	$	20,987	$	6,446	$	—	$	20,597	$	7,780	$	29,209



	Nine Months Ended September 30,
	2014						2013
	New Loans		Non-ACI Loans		ACI Loans		New Loans		Non-ACI Loans		ACI Loans
Residential:
1-4 single family residential	$	—	$	3,723	$	—	$	—	$	3,930	$	—
Home equity loans and lines of credit	—		2,383		—		—		1,385		—
	—		6,106		—		—		5,315		—
Commercial:
Multi-family	—		—		870		912		—		5,136
Commercial real estate
Owner occupied	2,941		—		661		460		—		3,414
Non-owner occupied	1,400		—		8,205		1,521		15		20,399
Construction and land	—		—		563		—		—		4,278
Commercial and industrial	14,827		499		983		17,034		2,531		6,197
Lease financing	1,179		—		—		1,511		—		—
	20,347		499		11,282		21,438		2,546		39,424
	$	20,347	$	6,605	$	11,282	$	21,438	$	7,861	$	39,424

The following table presents the recorded investment in new and non-ACI loans on non-accrual status at the dates indicated (in thousands):



	September 30, 2014				December 31, 2013
	New Loans		Non-ACI Loans		New Loans		Non-ACI Loans
Residential:
1-4 single family residential	$	50	$	372	$	194	$	293
Home equity loans and lines of credit	—		3,825		—		6,559
	50		4,197		194		6,852
Commercial:
Commercial real estate
Owner occupied	3,421		—		2,785		—
Non-owner occupied	1,355		—		1,444		52
Construction and land	218		—		244		—
Commercial and industrial	18,365		—		16,612		2,765
Lease financing	1,013		—		1,370		—
	24,372		—		22,455		2,817
Consumer	20		—		75		—
	$	24,442	$	4,197	$	22,724	$	9,669

As of December 31, 2013, discount was no longer being accreted on ACI commercial real estate loans with a carrying value of $1 million.

There were no new and non-ACI loans contractually delinquent by 90 days or more and still accruing at September 30, 2014. New and non-ACI loans contractually delinquent by 90 days or more and still accruing totaled $0.5 million at December 31, 2013. The amount of additional interest income that would have been recognized on non-accrual loans had they performed in accordance with their contractual terms is not material.

Management considers delinquency status to be the most meaningful indicator of the credit quality of 1-4 single family residential, home equity and consumer loans. Delinquency statistics are updated at least monthly. See "Aging of loans" below for more information on the delinquency status of loans. Original loan to value ratio (“LTV”) and original FICO score are also important indicators of credit quality for the new 1-4 single family residential portfolio.

Internal risk ratings are considered the most meaningful indicator of credit quality for commercial loans. Internal risk ratings are a key factor in identifying loans that are individually evaluated for impairment and impact management’s estimates of loss factors used in determining the amount of the ALLL. Internal risk ratings are updated on a continuous basis. Relationships with balances in excess of $1 million are re-evaluated at least annually and more frequently if circumstances indicate that a change in risk rating may be warranted. Loans exhibiting potential credit weaknesses that deserve management’s close attention and that if left uncorrected may result in deterioration of the repayment capacity of the borrower are categorized as special mention. Loans with well-defined credit weaknesses, including payment defaults, declining collateral values, frequent overdrafts, operating losses, increasing balance sheet leverage, inadequate cash flow, project cost overruns, unreasonable construction delays, past due real estate taxes or exhausted interest reserves, are assigned an internal risk rating of substandard. A loan with a weakness so severe that collection in full is highly questionable or improbable will be assigned an internal risk rating of doubtful.

The following tables summarize key indicators of credit quality for the Company's loans at the dates indicated. Amounts are net of premiums, discounts and deferred fees and costs (in thousands):

1-4 Single Family Residential credit exposure for new loans, based on original LTV and FICO score:



	September 30, 2014
	FICO
LTV	720 or less		721 - 740		741 - 760		761 or greater		Total
60% or less	$	61,427	$	77,822	$	116,019	$	547,606	$	802,874
60% - 70%	52,349		53,697		94,815		384,192		585,053
70% - 80%	28,796		88,755		159,487		604,678		881,716
More than 80%	27,454		4,357		3,606		11,934		47,351
	$	170,026	$	224,631	$	373,927	$	1,548,410	$	2,316,994



	December 31, 2013
	FICO
LTV	720 or less		721 - 740		741 - 760		761 or greater		Total
60% or less	$	37,293	$	60,626	$	86,920	$	473,250	$	658,089
60% - 70%	25,861		45,485		77,253		308,242		456,841
70% - 80%	19,610		60,021		116,332		472,279		668,242
More than 80%	26,492		5,487		3,166		9,463		44,608
	$	109,256	$	171,619	$	283,671	$	1,263,234	$	1,827,780

Commercial credit exposure, based on internal risk rating:



	September 30, 2014
			Commercial Real Estate
	Multi-Family		Owner Occupied		Non-Owner Occupied		Construction and Land		Commercial and Industrial		Lease Financing		Total
New loans:
Pass	$	1,507,055	$	949,883	$	1,450,219	$	136,802	$	2,991,984	$	441,431	$	7,477,374
Special mention	—		2,138		—		—		25,018		—		27,156
Substandard	410		6,513		1,355		218		26,835		574		35,905
Doubtful	—		—		—		—		7,500		439		7,939
	$	1,507,465	$	958,534	$	1,451,574	$	137,020	$	3,051,337	$	442,444	$	7,548,374
ACI loans:
Pass	$	22,640	$	37,008	$	31,578	$	1,994	$	1,264	$	—	$	94,484
Substandard	2,219		—		796		—		65		—		3,080
	$	24,859	$	37,008	$	32,374	$	1,994	$	1,329	$	—	$	97,564



	December 31, 2013
			Commercial Real Estate
	Multi-Family		Owner Occupied		Non-Owner Occupied		Construction and Land		Commercial and Industrial		Lease Financing		Total
New loans:
Pass	$	1,098,383	$	704,403	$	946,208	$	137,513	$	2,236,331	$	338,992	$	5,461,830
Special mention	—		—		—		—		7,892		—		7,892
Substandard	770		7,080		1,444		244		15,906		599		26,043
Doubtful	—		51		—		—		8,918		771		9,740
	$	1,099,153	$	711,534	$	947,652	$	137,757	$	2,269,047	$	340,362	$	5,505,505
Non-ACI loans:
Pass	$	—	$	687	$	—	$	688	$	3,177	$	—	$	4,552
Substandard	—		—		52		—		2,379		—		2,431
Doubtful	—		—		—		—		420		—		420
	$	—	$	687	$	52	$	688	$	5,976	$	—	$	7,403
ACI loans:
Pass	$	31,002	$	40,725	$	53,238	$	7,373	$	1,824	$	—	$	134,162
Special mention	—		1,000		3,361		—		—		—		4,361
Substandard	10,445		13,454		37,845		3,227		4,206		—		69,177
Doubtful	—		—		94		—		20		—		114
	$	41,447	$	55,179	$	94,538	$	10,600	$	6,050	$	—	$	207,814

Aging of loans:

The following table presents an aging of loans at the dates indicated. Amounts are net of premiums, discounts and deferred fees and costs (in thousands):



	September 30, 2014										December 31, 2013
	Current		30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due or in Foreclosure		Total		Current		30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due or in Foreclosure		Total
New loans:
1-4 single family residential	$	2,311,356	$	5,588	$	—	$	50	$	2,316,994	$	1,824,084	$	2,990	$	109	$	597	$	1,827,780
Home equity loans and lines of credit	1,680		—		—		—		1,680		1,535		—		—		—		1,535
Multi-family	1,507,465		—		—		—		1,507,465		1,099,153		—		—		—		1,099,153
Commercial real estate
Owner occupied	958,534		—		—		—		958,534		710,938		—		—		596		711,534
Non-owner occupied	1,451,574		—		—		—		1,451,574		947,652		—		—		—		947,652
Construction and land	137,020		—		—		—		137,020		137,757		—		—		—		137,757
Commercial and industrial	3,044,640		238		1,150		5,309		3,051,337		2,260,628		610		165		7,644		2,269,047
Lease financing	442,444		—		—		—		442,444		340,337		—		25		—		340,362
Consumer	21,040		146		—		—		21,186		219,083		766		161		31		220,041
	$	9,875,753	$	5,972	$	1,150	$	5,359	$	9,888,234	$	7,541,167	$	4,366	$	460	$	8,868	$	7,554,861
Non-ACI loans:
1-4 single family residential	$	50,090	$	210	$	372	$	—	$	50,672	$	56,248	$	3,129	$	293	$	—	$	59,670
Home equity loans and lines of credit	101,270		1,941		446		3,825		107,482		116,036		2,417		556		6,559		125,568
Commercial real estate
Owner occupied	—		—		—		—		—		687		—		—		—		687
Non-owner occupied	—		—		—		—		—		52		—		—		—		52
Construction and land	—		—		—		—		—		688		—		—		—		688
Commercial and industrial	—		—		—		—		—		3,722		—		4		2,250		5,976
	$	151,360	$	2,151	$	818	$	3,825	$	158,154	$	177,433	$	5,546	$	853	$	8,809	$	192,641
ACI loans:
1-4 single family residential	$	862,654	$	21,391	$	5,281	$	25,863	$	915,189	$	957,791	$	33,067	$	10,279	$	55,875	$	1,057,012
Home equity loans and lines of credit	24,194		509		190		1,691		26,584		33,967		1,150		329		4,156		39,602
Multi-family	24,859		—		—		—		24,859		38,877		—		—		2,570		41,447
Commercial real estate
Owner occupied	34,707		2,301		—		—		37,008		54,501		253		—		425		55,179
Non-owner occupied	32,374		—		—		—		32,374		81,754		3,245		—		9,539		94,538
Construction and land	1,994		—		—		—		1,994		7,373		—		—		3,227		10,600
Commercial and industrial	1,281		44		4		—		1,329		3,193		—		—		2,857		6,050
Consumer	51		—		—		—		51		1,477		—		201		1		1,679
	$	982,114	$	24,245	$	5,475	$	27,554	$	1,039,388	$	1,178,933	$	37,715	$	10,809	$	78,650	$	1,306,107

1-4 single family residential and home equity ACI loans that are contractually delinquent by more than 90 days and accounted for in pools that are on accrual status because discount continues to be accreted totaled $28 million and $60 million at September 30, 2014 and December 31, 2013, respectively. The recorded investment in commercial and commercial real estate ACI loans that were contractually delinquent in excess of ninety days but still classified as accruing loans due to discount accretion totaled $18 million at December 31, 2013.

Troubled debt restructurings:

The following tables summarize loans that were modified in TDRs during the periods indicated, as well as loans modified during the twelve months preceding September 30, 2014 and 2013, that experienced payment defaults during the periods indicated (dollars in thousands):



	Three Months Ended September 30,
	2014						2013
	Loans Modified in TDRs During the Period			TDRs Experiencing Payment Defaults During the Period			Loans Modified in TDRs During the Period			TDRs Experiencing Payment Defaults During the Period
	Number of TDRs	Recorded Investment		Number of TDRs	Recorded Investment		Number of TDRs	Recorded Investment		Number of TDRs	Recorded Investment
New loans:
Commercial and industrial	1	913		—	—		1	1,871		—	—
	1	$	913	—	$	—	1	$	1,871	—	$	—
Non-ACI loans:
1-4 single family residential	1	164		—	—		—	—		—	—
	1	$	164	—	$	—	—	$	—	—	$	—



	Nine Months Ended September 30,
	2014						2013
	Loans Modified in TDRs During the Period			TDRs Experiencing Payment Defaults During the Period			Loans Modified in TDRs During the Period			TDRs Experiencing Payment Defaults During the Period
	Number of TDRs	Recorded Investment		Number of TDRs	Recorded Investment		Number of TDRs	Recorded Investment		Number of TDRs	Recorded Investment
New loans:
Commercial real estate	1	$	318	—	$	—	—	$	—	—	$	—
Commercial and industrial	1	913		—	—		2	2,364		—	—
	2	$	1,231	—	$	—	2	$	2,364	—	$	—
Non-ACI loans:
1-4 single family residential	1	$	164	—	$	—	2	$	334	1	$	166
Home equity loans and lines of credit	2	402		1	164		3	1,119		—	—
	3	$	566	1	$	164	5	$	1,453	1	$	166
ACI loans:
Commercial real estate	—	$	—	—	$	—	3	$	1,313	—	$	—
Commercial and industrial	—	—		—	—		1	168		—	—
	—	$	—	—	$	—	4	$	1,481	—	$	—

Modifications during the three and nine month periods ended September 30, 2014 and 2013 included restructuring of the amount and timing of required periodic payments, extensions of maturity and residential modifications under the U.S. Treasury Department’s Home Affordable Modification Program (“HAMP”). Included in TDRs are residential loans to borrowers who have not reaffirmed their debt discharged in Chapter 7 bankruptcy. The total amount of such loans is not material. Modified ACI loans accounted for in pools are not considered TDRs, are not separated from the pools and are not classified as impaired loans. Because of the immateriality of the amount of loans modified in TDRs and nature of the modifications, the modifications did not have a material impact on the Company’s consolidated financial statements or on the determination of the amount of the ALLL at September 30, 2014 and 2013.