Loans and Leases and the Allowance for Credit Losses

9 Months Ended

Sep. 30, 2013

Receivables [Abstract]

Loans and Leases and the Allowance for Credit Losses

4. Loans and leases and the allowance for credit losses

The outstanding principal balance and the carrying amount of acquired loans that were recorded at fair value at the acquisition date that is included in the consolidated balance sheet is as follows:

	September 30, 2013		December 31, 2012
	(in thousands)
Outstanding principal balance	$	5,274,466		6,705,120
Carrying amount:
Commercial, financial, leasing, etc.		730,743		928,107
Commercial real estate		1,875,842		2,567,050
Residential real estate		598,820		707,309
Consumer		1,357,847		1,637,887
	$	4,563,252		5,840,353

Purchased impaired loans included in the table above totaled $357 million at September 30, 2013 and $447 million at December 31, 2012, representing less than 1% of the Company’s assets as of each date. A summary of changes in the accretable yield for acquired loans for the three months and nine months ended September 30, 2013 and 2012 follows:

	Three months ended September 30
	2013						2012
	Purchased impaired			Other acquired			Purchased impaired			Other acquired
	(in thousands)
Balance at beginning of period	$	55,149			622,093		$	55,599			733,161
Interest income		(10,428	)		(60,786	)		(12,436	)		(74,936	)
Reclassifications from nonaccretable balance, net		172			—			542			—
Other (a)		—			6,254			—			1,382
Balance at end of period	$	44,893			567,561		$	43,705			659,607

	Nine months ended September 30
	2013						2012
	Purchased impaired			Other acquired			Purchased impaired			Other acquired
	(in thousands)
Balance at beginning of period	$	42,252			638,272		$	30,805			807,960
Interest income		(28,879	)		(190,072	)		(29,721	)		(228,908	)
Reclassifications from nonaccretable balance, net		31,520			122,519			42,621			98,165
Other (a)		—			(3,158	)		—			(17,610	)
Balance at end of period	$	44,893			567,561		$	43,705			659,607

(a) Other changes in expected cash flows including changes in interest rates and prepayment assumptions.

A summary of current, past due and nonaccrual loans as of September 30, 2013 and December 31, 2012 were as follows:

					90 Days or more past due and accruing
	Current		30-89 Days past due		Non- acquired		Acquired (a)		Purchased impaired (b)		Nonaccrual		Total
					(in thousands)
September 30, 2013
Commercial, financial, leasing, etc.	$	17,678,290		91,757		2,582		11,147		16,257		111,116		17,911,149
Real estate:
Commercial		21,447,385		179,972		12,859		50,853		101,049		198,397		21,990,515
Residential builder and developer		921,728		10,622		52		12,353		138,651		113,096		1,196,502
Other commercial construction		3,029,504		16,903		1,888		5,090		68,539		36,326		3,158,250
Residential		7,884,094		301,564		317,660		44,489		30,201		252,987		8,830,995
Residential Alt-A		297,840		18,263		—		—		—		80,905		397,008
Consumer:
Home equity lines and loans		6,027,315		32,428		—		29,472		2,640		77,537		6,169,392
Automobile		1,144,216		39,221		—		181		—		22,087		1,205,705
Other		2,736,469		34,886		4,751		—		—		23,420		2,799,526
Total	$	61,166,841		725,616		339,792		153,585		357,337		915,871		63,659,042

					90 Days or more past due and accruing
	Current		30-89 Days past due		Non- acquired		Acquired (a)		Purchased impaired (b)		Nonaccrual		Total
	(in thousands)
December 31, 2012
Commercial, financial, leasing, etc.	$	17,511,052		62,479		23,490		10,587		17,437		151,908	$	17,776,953
Real estate:
Commercial		21,759,997		118,249		13,111		54,995		132,962		193,859		22,273,173
Residential builder and developer		757,311		35,419		3,258		23,909		187,764		181,865		1,189,526
Other commercial construction		2,379,953		35,274		509		9,572		68,971		36,812		2,531,091
Residential		9,811,956		337,969		313,184		45,124		36,769		249,314		10,794,316
Residential Alt-A		331,021		19,692		—		—		—		95,808		446,521
Consumer:
Home equity lines and loans		6,199,591		40,759		—		20,318		3,211		58,071		6,321,950
Automobile		2,442,502		40,461		—		251		—		25,107		2,508,321
Other		2,661,432		40,599		4,845		1,798		—		20,432		2,729,106
Total	$	63,854,815		730,901		358,397		166,554		447,114		1,013,176	$	66,570,957

(a) Acquired loans that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.

(b) Accruing loans that were impaired at acquisition date and were recorded at fair value.

One-to-four family residential mortgage loans held for sale were $667 million and $1.2 billion at September 30, 2013 and December 31, 2012, respectively. Commercial mortgage loans held for sale were $152 million at September 30, 2013 and $200 million at December 31, 2012.

Changes in the allowance for credit losses for the three months ended September 30, 2013 were as follows:

	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Unallocated		Total
	(in thousands)
Beginning balance	$	268,867			324,264			85,311			174,291			74,332	$	927,065
Provision for credit losses		20,209			12,139			315			14,935			402		48,000
Allowance related to loans securitized and sold		—			—			—			(11,000	)		—		(11,000	)
Net charge-offs
Charge-offs		(30,931	)		(7,701	)		(5,320	)		(20,242	)		—		(64,194	)
Recoveries		5,150			4,751			2,399			4,199			—		16,499
Net charge-offs		(25,781	)		(2,950	)		(2,921	)		(16,043	)		—		(47,695	)
Ending balance	$	263,295			333,453			82,705			162,183			74,734	$	916,370

Changes in the allowance for credit losses for the three months ended September 30, 2012 were as follows:

	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Unallocated		Total
	(in thousands)
Beginning balance	$	244,728			341,521			93,269			164,352			73,158	$	917,028
Provision for credit losses		439			9,891			8,247			26,962			461		46,000
Net charge-offs
Charge-offs		(8,874	)		(7,982	)		(8,687	)		(24,553	)		—		(50,096	)
Recoveries		1,174			1,421			1,139			4,557			—		8,291
Net charge-offs		(7,700	)		(6,561	)		(7,548	)		(19,996	)		—		(41,805	)
Ending balance	$	237,467			344,851			93,968			171,318			73,619	$	921,223

Changes in the allowance for credit losses for the nine months ended September 30, 2013 were as follows:

	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Unallocated		Total
	(in thousands)
Beginning balance	$	246,759			337,101			88,807			179,418			73,775	$	925,860
Provision for credit losses		93,736			914			3,913			43,478			959		143,000
Allowance related to loans securitized and sold		—			—			—			(11,000	)		—		(11,000	)
Net charge-offs
Charge-offs		(86,787	)		(21,493	)		(18,583	)		(62,905	)		—		(189,768	)
Recoveries		9,587			16,931			8,568			13,192			—		48,278
Net charge-offs		(77,200	)		(4,562	)		(10,015	)		(49,713	)		—		(141,490	)
Ending balance	$	263,295			333,453			82,705			162,183			74,734	$	916,370

Changes in the allowance for credit losses for the nine months ended September 30, 2012 were as follows:

	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Unallocated		Total
	(in thousands)
Beginning balance	$	234,022			367,637			91,915			143,121			71,595	$	908,290
Provision for credit losses		29,663			4,322			30,064			88,927			2,024		155,000
Net charge-offs
Charge-offs		(32,989	)		(31,578	)		(32,812	)		(77,155	)		—		(174,534	)
Recoveries		6,771			4,470			4,801			16,425			—		32,467
Net charge-offs		(26,218	)		(27,108	)		(28,011	)		(60,730	)		—		(142,067	)
Ending balance	$	237,467			344,851			93,968			171,318			73,619	$	921,223

Despite the above allocation, the allowance for credit losses is general in nature and is available to absorb losses from any loan or lease type.

In establishing the allowance for credit losses, the Company estimates losses attributable to specific troubled credits identified through both normal and detailed or intensified credit review processes and also estimates losses inherent in other loans and leases on a collective basis. For purposes of determining the level of the allowance for credit losses, the Company evaluates its loan and lease portfolio by loan type. The amounts of loss components in the Company’s loan and lease portfolios are determined through a loan by loan analysis of larger balance commercial and commercial real estate loans that are in nonaccrual status and by applying loss factors to groups of loan balances based on loan type and management’s classification of such loans under the Company’s loan grading system. Measurement of the specific loss components is typically based on expected future cash flows, collateral values and other factors that may impact the borrower’s ability to pay. In determining the allowance for credit losses, the Company utilizes a loan grading system which is applied to commercial and commercial real estate credits on an individual loan basis. Loan officers are responsible for continually assigning grades to these loans based on standards outlined in the Company’s Credit Policy. Internal loan grades are also monitored by the Company’s loan review department to ensure consistency and strict adherence to the prescribed standards. Loan grades are assigned loss component factors that reflect the Company’s loss estimate for each group of loans and leases. Factors considered in assigning loan grades and loss component factors include borrower-specific information related to expected future cash flows and operating results, collateral values, geographic location, financial condition and performance, payment status, and other information; levels of and trends in portfolio charge-offs and recoveries; levels of and trends in portfolio delinquencies and impaired loans; changes in the risk profile of specific portfolios; trends in volume and terms of loans; effects of changes in credit concentrations; and observed trends and practices in the banking industry. As updated appraisals are obtained on individual loans or other events in the market place indicate that collateral values have significantly changed, individual loan grades are adjusted as appropriate. Changes in other factors cited may also lead to loan grade changes at anytime. Except for consumer and residential mortgage loans that are considered smaller balance homogenous loans and acquired loans that are evaluated on an aggregated basis, the Company considers a loan to be impaired for purposes of applying GAAP when, based on current information and events, it is probable that the Company will be unable to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more. Regardless of loan type, the Company considers a loan to be impaired if it qualifies as a troubled debt restructuring. Modified loans, including smaller balance homogenous loans, that are considered to be troubled debt restructurings are evaluated for impairment giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows.

The following tables provide information with respect to loans and leases that were considered impaired as of September 30, 2013 and December 31, 2012 and for the three months and nine months ended September 30, 2013 and September 30, 2012.

	September 30, 2013						December 31, 2012
	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
	(in thousands)
With an allowance recorded:
Commercial, financial, leasing, etc.	$	93,568		114,572		25,530		127,282		149,534		33,829
Real estate:
Commercial		127,921		152,885		24,104		121,542		143,846		23,641
Residential builder and developer		61,947		102,395		7,374		115,306		216,218		25,661
Other commercial construction		74,116		77,180		3,104		73,544		76,869		6,836
Residential		100,287		118,572		6,537		103,451		121,819		3,521
Residential Alt-A		115,695		128,446		15,000		128,891		141,940		17,000
Consumer:
Home equity lines and loans		13,258		14,372		3,408		12,360		13,567		2,254
Automobile		42,106		42,106		12,060		49,210		49,210		14,273
Other		16,057		16,057		4,169		14,408		14,408		5,667
		644,955		766,585		101,286		745,994		927,411		132,682
With no related allowance recorded:
Commercial, financial, leasing, etc.		24,945		30,551		—		32,631		42,199		—
Real estate:
Commercial		77,284		99,461		—		78,380		100,337		—
Residential builder and developer		56,015		84,852		—		74,307		105,438		—
Other commercial construction		19,960		24,051		—		23,018		23,532		—
Residential		83,041		93,898		—		86,342		96,448		—
Residential Alt-A		28,397		52,565		—		31,354		58,768		—
		289,642		385,378		—		326,032		426,722		—
Total:
Commercial, financial, leasing, etc.		118,513		145,123		25,530		159,913		191,733		33,829
Real estate:
Commercial		205,205		252,346		24,104		199,922		244,183		23,641
Residential builder and developer		117,962		187,247		7,374		189,613		321,656		25,661
Other commercial construction		94,076		101,231		3,104		96,562		100,401		6,836
Residential		183,328		212,470		6,537		189,793		218,267		3,521
Residential Alt-A		144,092		181,011		15,000		160,245		200,708		17,000
Consumer:
Home equity lines and loans		13,258		14,372		3,408		12,360		13,567		2,254
Automobile		42,106		42,106		12,060		49,210		49,210		14,273
Other		16,057		16,057		4,169		14,408		14,408		5,667
Total	$	934,597		1,151,963		101,286		1,072,026		1,354,133		132,682

	Three months ended September 30, 2013						Three months ended September 30, 2012
			Interest income recognized						Interest income recognized
	Average recorded investment		Total		Cash basis		Average recorded investment		Total		Cash basis
	(in thousands)
Commercial, financial, leasing, etc.	$	149,357		516		516		141,166		1,507		1,507
Real estate:
Commercial		205,971		716		716		180,009		531		531
Residential builder and developer		130,855		213		188		237,847		476		370
Other commercial construction		95,486		208		208		84,604		9		9
Residential		180,995		1,391		865		131,114		1,269		765
Residential Alt-A		147,056		1,763		692		167,780		1,836		593
Consumer:
Home equity lines and loans		12,810		167		49		11,949		172		48
Automobile		42,957		710		127		51,138		863		185
Other		15,791		161		50		11,996		121		52
Total	$	981,278		5,845		3,411		1,017,603		6,784		4,060

	Nine months ended September 30, 2013						Nine months ended September 30, 2012
			Interest income recognized						Interest income recognized
	Average recorded investment		Total		Cash basis		Average recorded investment		Total		Cash basis
	(in thousands)
Commercial, financial, leasing, etc.	$	164,877		6,358		6,358		155,627		2,659		2,659
Real estate:
Commercial		200,354		1,428		1,428		179,524		2,087		2,087
Residential builder and developer		159,308		871		637		260,858		1,202		801
Other commercial construction		97,268		3,322		3,322		100,242		5,019		5,019
Residential		184,719		4,795		3,188		128,646		3,926		2,453
Residential Alt-A		151,992		5,173		1,799		174,390		5,432		1,666
Consumer:
Home equity lines and loans		12,633		499		127		11,024		502		136
Automobile		45,075		2,226		404		52,249		2,632		553
Other		15,438		468		153		10,097		320		138
Total	$	1,031,664		25,140		17,416		1,072,657		23,779		15,512

In accordance with the previously described policies, the Company utilizes a loan grading system that is applied to all commercial loans and commercial real estate loans. Loan grades are utilized to differentiate risk within the portfolio and consider the expectations of default for each loan. Commercial loans and commercial real estate loans with a lower expectation of default are assigned one of ten possible “pass” loan grades and are generally ascribed lower loss factors when determining the allowance for credit losses. Loans with an elevated level of credit risk are classified as “criticized” and are ascribed a higher loss factor when determining the allowance for credit losses. Criticized loans may be classified as “nonaccrual” if the Company no longer expects to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more. All larger balance criticized commercial and commercial real estate loans are individually reviewed by centralized loan review personnel each quarter to determine the appropriateness of the assigned loan grade, including whether the loan should be reported as accruing or nonaccruing. Smaller balance criticized loans are analyzed by business line risk management areas to ensure proper loan grade classification. Furthermore, criticized nonaccrual commercial loans and commercial real estate loans are considered impaired and, as a result, specific loss allowances on such loans are established within the allowance for credit losses to the extent appropriate in each individual instance. The following table summarizes the loan grades applied to the various classes of the Company’s commercial and commercial real estate loans.

			Real Estate
	Commercial, Financial, Leasing, etc.		Commercial		Residential Builder and Developer		Other Commercial Construction
	(in thousands)
September 30, 2013
Pass	$	17,022,772		20,978,696		1,005,932		3,066,941
Criticized accrual		777,261		813,422		77,474		54,983
Criticized nonaccrual		111,116		198,397		113,096		36,326
Total	$	17,911,149		21,990,515		1,196,502		3,158,250
December 31, 2012
Pass	$	16,889,753		21,275,182		922,141		2,307,436
Criticized accrual		735,292		804,132		85,520		186,843
Criticized nonaccrual		151,908		193,859		181,865		36,812
Total	$	17,776,953		22,273,173		1,189,526		2,531,091

In determining the allowance for credit losses, residential real estate loans and consumer loans are generally evaluated collectively after considering such factors as payment performance and recent loss experience and trends, which are mainly driven by current collateral values in the market place as well as the amount of loan defaults. Loss rates on such loans are determined by reference to recent charge-off history and are evaluated (and adjusted if deemed appropriate) through consideration of other factors including near-term forecasted loss estimates developed by the Company’s Credit Department. In arriving at such forecasts, the Company considers the current estimated fair value of its collateral based on geographical adjustments for home price depreciation/appreciation and overall borrower repayment performance. With regard to collateral values, the realizability of such values by the Company contemplates repayment of any first lien position prior to recovering amounts on a second lien position. However, residential real estate loans and outstanding balances of home equity loans and lines of credit that are more than 150 days past due are generally evaluated for collectibility on a loan-by-loan basis giving consideration to estimated collateral values.

The Company also measures additional losses for purchased impaired loans when it is probable that the Company will be unable to collect all cash flows expected at acquisition plus additional cash flows expected to be collected arising from changes in estimates after acquisition. The determination of the allocated portion of the allowance for credit losses is very subjective. Given that inherent subjectivity and potential imprecision involved in determining the allocated portion of the allowance for credit losses, the Company also provides an inherent unallocated portion of the allowance. The unallocated portion of the allowance is intended to recognize probable losses that are not otherwise identifiable and includes management’s subjective determination of amounts necessary to provide for the possible use of imprecise estimates in determining the allocated portion of the allowance. Therefore, the level of the unallocated portion of the allowance is primarily reflective of the inherent imprecision in the various calculations used in determining the allocated portion of the allowance for credit losses. Other factors that could also lead to changes in the unallocated portion include the effects of expansion into new markets for which the Company does not have the same degree of familiarity and experience regarding portfolio performance in changing market conditions, the introduction of new loan and lease product types, and other risks associated with the Company’s loan portfolio that may not be specifically identifiable.

The allocation of the allowance for credit losses summarized on the basis of the Company’s impairment methodology was as follows:

	Commercial, Financial,		Real Estate
	Leasing, etc.		Commercial		Residential		Consumer		Total
	(in thousands)
September 30, 2013
Individually evaluated for impairment	$	25,530		34,139		21,517		19,637	$	100,823
Collectively evaluated for impairment		234,912		298,579		59,645		141,202		734,338
Purchased impaired		2,853		735		1,543		1,344		6,475
Allocated	$	263,295		333,453		82,705		162,183		841,636
Unallocated										74,734
Total									$	916,370
December 31, 2012
Individually evaluated for impairment	$	33,669		55,291		20,502		22,194	$	131,656
Collectively evaluated for impairment		212,930		280,789		66,684		156,661		717,064
Purchased impaired		160		1,021		1,621		563		3,365
Allocated	$	246,759		337,101		88,807		179,418		852,085
Unallocated										73,775
Total									$	925,860

The recorded investment in loans and leases summarized on the basis of the Company’s impairment methodology was as follows:

	Commercial, Financial,		Real Estate
	Leasing, etc.		Commercial		Residential		Consumer		Total
	(in thousands)
September 30, 2013
Individually evaluated for impairment	$	118,513		413,443		326,860		71,421	$	930,237
Collectively evaluated for impairment		17,776,379		25,623,585		8,870,942		10,100,562		62,371,468
Purchased impaired		16,257		308,239		30,201		2,640		357,337
Total	$	17,911,149		26,345,267		9,228,003		10,174,623	$	63,659,042
December 31, 2012
Individually evaluated for impairment	$	159,761		480,335		349,477		75,978	$	1,065,551
Collectively evaluated for impairment		17,599,755		25,123,758		10,854,591		11,480,188		65,058,292
Purchased impaired		17,437		389,697		36,769		3,211		447,114
Total	$	17,776,953		25,993,790		11,240,837		11,559,377	$	66,570,957

During the normal course of business, the Company modifies loans to maximize recovery efforts. If the borrower is experiencing financial difficulty and a concession is granted, the Company considers such modifications as troubled debt restructurings and classifies those loans as either nonaccrual loans or renegotiated loans. The types of concessions that the Company grants typically include principal deferrals and interest rate concessions, but may also include other types of concessions.

The tables below summarize the Company’s loan modification activities that were considered troubled debt restructurings for the three months ended September 30, 2013 and 2012:

			Recorded investment				Financial effects of modification
Three months ended September 30, 2013	Number		Pre- modification		Post- modification		Recorded investment (a)			Interest (b)
	(dollars in thousands)
Commercial, financial, leasing, etc.
Principal deferral		14	$	2,407	$	2,266	$	(141	)	$	—
Other		2		1,773		2,067		294			—
Combination of concession types		3		374		374		—			(25	)
Real estate:
Commercial
Principal deferral		10		4,160		4,134		(26	)		—
Other		2		449		475		26			—
Combination of concession types		6		1,868		2,264		396			(156	)
Residential builder and developer
Principal deferral		1		249		241		(8	)		—
Other commercial construction
Principal deferral		1		226		158		(68	)		—
Residential
Principal deferral		6		860		912		52			—
Combination of concession types		14		1,258		1,308		50			(197	)
Residential Alt-A
Principal deferral		5		764		773		9			—
Combination of concession types		4		332		496		164			(252	)
Consumer:
Home equity lines and loans
Principal deferral		2		179		179		—			—
Combination of concession types		9		682		682		—			(79	)
Automobile
Principal deferral		121		1,718		1,718		—			—
Interest rate reduction		2		19		19		—			(2	)
Other		20		42		42		—			—
Combination of concession types		61		551		551		—			(33	)
Other
Principal deferral		9		60		60		—			—
Combination of concession types		18		470		470		—			(86	)
Total		310	$	18,441	$	19,189	$	748		$	(830	)

(a) Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages.

(b) Represents the present value of interest rate concessions discounted at the effective rate of the original loan.

			Recorded investment				Financial effects of modification
Three months ended September 30, 2012	Number		Pre- modification		Post- modification		Recorded investment (a)			Interest (b)
	(dollars in thousands)
Commercial, financial, leasing, etc.
Principal deferral		21	$	7,823	$	7,653	$	(170	)	$	—
Combination of concession types		2		327		322		(5	)		(39	)
Real estate:
Commercial
Principal deferral		8		5,951		6,238		287			—
Combination of concession types		1		214		214		—			(49	)
Residential builder and developer
Principal deferral		11		17,383		16,275		(1,108	)		—
Combination of concession types		1		2,486		2,486		—			—
Other commercial construction
Principal deferral		2		5,429		4,702		(727	)		—
Residential
Principal deferral		5		738		772		34			—
Combination of concession types		18		5,490		5,553		63			(150	)
Residential Alt-A
Principal deferral		1		218		220		2			—
Combination of concession types		13		2,771		2,795		24			—
Consumer:
Home equity lines and loans
Principal deferral		5		434		434		—			—
Combination of concession types		11		976		976		—			(125	)
Automobile
Principal deferral		135		1,721		1,721		—			—
Interest rate reduction		9		157		157		—			(11	)
Other		20		68		68		—			—
Combination of concession types		109		2,329		2,329		—			(319	)
Other
Principal deferral		14		336		336		—			—
Other		1		1		1		—			—
Combination of concession types		22		339		339		—			(97	)
Total		409	$	55,191	$	53,591	$	(1,600	)	$	(790	)

(a) Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages.

(b) Represents the present value of interest rate concessions discounted at the effective rate of the original loan.

The tables below summarize the Company’s loan modification activities that were considered troubled debt restructurings for the nine months ended September 30, 2013 and 2012:

			Recorded investment				Financial effects of modification
Nine months ended September 30, 2013	Number		Pre- modification		Post- modification		Recorded investment (a)			Interest (b)
	(dollars in thousands)
Commercial, financial, leasing, etc.
Principal deferral		53	$	9,283	$	9,070	$	(213	)	$	—
Other		4		50,433		50,924		491			—
Combination of concession types		6		2,206		1,696		(510	)		(25	)
Real estate:
Commercial
Principal deferral		23		38,187		38,027		(160	)		—
Other		2		449		475		26			—
Combination of concession types		8		2,450		2,845		395			(212	)
Residential builder and developer
Principal deferral		16		19,102		18,303		(799	)		—
Other		1		4,039		3,888		(151	)		—
Combination of concession types		3		15,580		15,514		(66	)		(535	)
Other commercial construction
Principal deferral		3		590		521		(69	)		—
Residential
Principal deferral		21		2,642		2,877		235			—
Other		1		195		195		—			—
Combination of concession types		52		72,917		69,734		(3,183	)		(754	)
Residential Alt-A
Principal deferral		6		863		875		12			—
Combination of concession types		17		2,426		2,715		289			(640	)
Consumer:
Home equity lines and loans
Principal deferral		6		359		361		2			—
Interest rate reduction		1		99		99		—			(8	)
Other		1		106		106		—			—
Combination of concession types		19		1,299		1,299		—			(176	)
Automobile
Principal deferral		359		4,933		4,933		—			—
Interest rate reduction		11		159		159		—			(17	)
Other		65		274		274		—			—
Combination of concession types		184		2,148		2,148		—			(162	)
Other
Principal deferral		29		290		290		—			—
Interest rate reduction		1		12		12		—			(2	)
Other		1		12		12		—			—
Combination of concession types		90		2,394		2,394		—			(587	)
Total		983	$	233,447	$	229,746	$	(3,701	)	$	(3,118	)

(a) Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages.

(b) Represents the present value of interest rate concessions discounted at the effective rate of the original loan.

			Recorded investment				Financial effects of modification
Nine months ended September 30, 2012	Number		Pre- modification		Post- modification		Recorded investment (a)			Interest (b)
	(dollars in thousands)
Commercial, financial, leasing, etc.
Principal deferral		39	$	21,027	$	19,668	$	(1,359	)	$	—
Other		3		2,967		3,052		85			—
Combination of concession types		3		372		366		(6	)		(72	)
Real estate:
Commercial
Principal deferral		11		10,387		10,642		255			—
Interest rate reduction		1		383		430		47			(89	)
Combination of concession types		5		1,424		1,445		21			(305	)
Residential builder and developer
Principal deferral		19		26,708		24,812		(1,896	)		—
Combination of concession types		3		4,836		5,212		376			—
Other commercial construction
Principal deferral		5		66,317		65,600		(717	)		—
Residential
Principal deferral		27		3,302		3,447		145			—
Combination of concession types		47		10,475		10,658		183			(415	)
Residential Alt-A
Principal deferral		5		768		785		17			—
Combination of concession types		28		5,640		5,732		92			(49	)
Consumer:
Home equity lines and loans
Principal deferral		15		1,285		1,285		—			—
Interest rate reduction		1		144		144		—			(6	)
Combination of concession types		17		1,691		1,691		—			(272	)
Automobile
Principal deferral		484		6,306		6,306		—			—
Interest rate reduction		16		234		234		—			(16	)
Other		51		239		239		—			—
Combination of concession types		298		5,108		5,108		—			(601	)
Other
Principal deferral		73		1,117		1,117		—			—
Interest rate reduction		3		23		23		—			(3	)
Other		10		50		50		—			—
Combination of concession types		74		700		700		—			(155	)
Total		1,238	$	171,503	$	168,746	$	(2,757	)	$	(1,983	)

(a) Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages.

(b) Represents the present value of interest rate concessions discounted at the effective rate of the original loan.

Troubled debt restructurings are considered to be impaired loans and for purposes of establishing the allowance for credit losses are evaluated for impairment giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows. Impairment of troubled debt restructurings that have subsequently defaulted may also be measured based on the loan’s observable market price or the fair value of collateral if the loan is collateral-dependent. Charge-offs may also be recognized on troubled debt restructurings that have subsequently defaulted. Loans that were modified as troubled debt restructurings during the twelve months ended September 30, 2013 and 2012 for which there was a subsequent payment default during the nine-month periods ended September 30, 2013 and 2012, were $20 million (largely commercial real estate loans) and $13 million (largely residential builder and developer loans), respectively.