Loans and leases and the allowance for credit losses

9 Months Ended

Sep. 30, 2015

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 and included in the consolidated balance sheet follow:

	September 30,		December 31,
	2015		2014
	(in thousands)
Outstanding principal balance	$	2,410,454		3,070,268
Carrying amount:
Commercial, financial, leasing, etc.		103,583		247,820
Commercial real estate		728,376		961,828
Residential real estate		385,885		453,360
Consumer		812,117		933,537
	$	2,029,961		2,596,545

Purchased impaired loans included in the table above totaled $149 million at September 30, 2015 and $198 million at December 31, 2014, 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, 2015 and 2014 follows:

	Three months ended September 30
	2015						2014
	Purchased			Other			Purchased			Other
	impaired			acquired			impaired			acquired
	(in thousands)
Balance at beginning of period	$	77,624			344,989		$	26,082			450,970
Interest income		(5,865	)		(37,396	)		(4,149	)		(39,019	)
Reclassifications from nonaccretable balance		47			769			129			9,673
Other (a)		—			4,697			—			1,870
Balance at end of period	$	71,806			313,059		$	22,062			423,494
	Nine months ended September 30
	2015						2014
	Purchased			Other			Purchased			Other
	impaired			acquired			impaired			acquired
	(in thousands)
Balance at beginning of period	$	76,518			397,379		$	37,230			538,633
Interest income		(16,843	)		(118,697	)		(15,583	)		(135,105	)
Reclassifications from nonaccretable balance		12,131			27,792			415			10,448
Other (a)		—			6,585			—			9,518
Balance at end of period	$	71,806			313,059		$	22,062			423,494

(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, 2015 and December 31, 2014 follows:

			30-89 Days past due		90 Days or more past due and accruing				Purchased impaired (b)		Nonaccrual		Total
	Current				Non- acquired		Acquired (a)
	(in thousands)
September 30, 2015
Commercial, financial, leasing, etc.	$	19,965,307		29,451		5,882		3,477		4,645		224,415	$	20,233,177
Real estate:
Commercial		23,184,906		105,140		21,629		17,906		45,523		176,491		23,551,595
Residential builder and developer		1,479,659		15,951		—		7,488		65,102		46,022		1,614,222
Other commercial construction		3,493,349		28,433		1,373		1,769		17,484		12,312		3,554,720
Residential		7,323,813		206,044		194,280		16,295		14,392		153,354		7,908,178
Residential Alt-A		226,871		11,662		—		—		—		64,351		302,884
Consumer:
Home equity lines and loans		5,710,632		38,506		—		15,454		2,275		78,126		5,844,993
Automobile		2,319,556		36,867		—		53		—		13,892		2,370,368
Other		3,084,080		31,210		8,301		18,385		—		18,135		3,160,111
Total	$	66,788,173		503,264		231,465		80,827		149,421		787,098	$	68,540,248
	Current		30-89 Days past due		90 Days or more past due and accruing				Purchased impaired (b)		Nonaccrual		Total
					Non- acquired		Acquired (a)
	(in thousands)
December 31, 2014
Commercial, financial, leasing, etc.	$	19,228,265		37,246		1,805		6,231		10,300		177,445	$	19,461,292
Real estate:
Commercial		22,208,491		118,704		22,170		14,662		51,312		141,600		22,556,939
Residential builder and developer		1,273,607		11,827		492		9,350		98,347		71,517		1,465,140
Other commercial construction		3,484,932		17,678		—		—		17,181		25,699		3,545,490
Residential		7,640,368		226,932		216,489		35,726		18,223		180,275		8,318,013
Residential Alt-A		249,810		11,774		—		—		—		77,704		339,288
Consumer:
Home equity lines and loans		5,859,378		42,945		—		27,896		2,374		89,291		6,021,884
Automobile		1,931,138		30,500		—		133		—		17,578		1,979,349
Other		2,909,791		33,295		4,064		16,369		—		18,042		2,981,561
Total	$	64,785,780		530,901		245,020		110,367		197,737		799,151	$	66,668,956

(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 $422 million and $435 million at September 30, 2015 and December 31, 2014, respectively. Commercial mortgage loans held for sale were $71 million at September 30, 2015 and $308 million at December 31, 2014.

Changes in the allowance for credit losses for the three months ended September 30, 2015 were as follows:

	Commercial, Financial, Leasing, etc.			Real Estate
				Commercial			Residential			Consumer			Unallocated			Total
	(in thousands)
Beginning balance	$	286,750			311,294			60,294			194,238			77,411		$	929,987
Provision for credit losses		21,507			1,879			(3,155	)		24,448			(679	)		44,000
Net charge-offs
Charge-offs		(26,912	)		(2,203	)		(3,268	)		(20,758	)		—			(53,141	)
Recoveries		5,322			2,119			1,125			4,386			—			12,952
Net charge-offs		(21,590	)		(84	)		(2,143	)		(16,372	)		—			(40,189	)
Ending balance	$	286,667			313,089			54,996			202,314			76,732		$	933,798

Changes in the allowance for credit losses for the three months ended September 30, 2014 were as follows:

	Commercial, Financial, Leasing, etc.			Real Estate
				Commercial			Residential			Consumer			Unallocated			Total
	(in thousands)
Beginning balance	$	292,251			311,254			72,404			165,871			75,886		$	917,666
Provision for credit losses		2,373			8,046			(3,187	)		21,815			(47	)		29,000
Net charge-offs
Charge-offs		(15,921	)		(1,666	)		(4,193	)		(21,312	)		—			(43,092	)
Recoveries		7,849			1,267			2,498			3,445			—			15,059
Net charge-offs		(8,072	)		(399	)		(1,695	)		(17,867	)		—			(28,033	)
Ending balance	$	286,552			318,901			67,522			169,819			75,839		$	918,633

Changes in the allowance for credit losses for the nine months ended September 30, 2015 were as follows:

	Commercial, Financial, Leasing, etc.			Real Estate
				Commercial			Residential			Consumer			Unallocated		Total
	(in thousands)
Beginning balance	$	288,038			307,927			61,910			186,033			75,654	$	919,562
Provision for credit losses		32,686			13,769			(571	)		65,038			1,078		112,000
Net charge-offs
Charge-offs		(46,990	)		(12,352	)		(9,695	)		(64,542	)		—		(133,579	)
Recoveries		12,933			3,745			3,352			15,785			—		35,815
Net charge-offs		(34,057	)		(8,607	)		(6,343	)		(48,757	)		—		(97,764	)
Ending balance	$	286,667			313,089			54,996			202,314			76,732	$	933,798

Changes in the allowance for credit losses for the nine months ended September 30, 2014 were as follows:

	Commercial, Financial, Leasing, etc.			Real Estate
				Commercial			Residential			Consumer			Unallocated		Total
	(in thousands)
Beginning balance	$	273,383			324,978			78,656			164,644			75,015	$	916,676
Provision for credit losses		40,527			(4,067	)		(916	)		54,632			824		91,000
Net charge-offs
Charge-offs		(44,872	)		(7,966	)		(17,124	)		(62,407	)		—		(132,369	)
Recoveries		17,514			5,956			6,906			12,950			—		43,326
Net charge-offs		(27,358	)		(2,010	)		(10,218	)		(49,457	)		—		(89,043	)
Ending balance	$	286,552			318,901			67,522			169,819			75,839	$	918,633

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 loans 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 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 any time. Except for consumer loans and residential real estate 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. 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.

Information with respect to loans and leases that were considered impaired follows.

	September 30, 2015						December 31, 2014
	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
	(in thousands)
With an allowance recorded:
Commercial, financial, leasing, etc.	$	144,051		166,877		35,195		132,340		165,146		31,779
Real estate:
Commercial		105,561		122,369		18,932		83,955		96,209		14,121
Residential builder and developer		6,544		10,276		788		17,632		22,044		805
Other commercial construction		2,445		3,991		391		5,480		6,484		900
Residential		83,349		101,367		4,775		88,970		107,343		4,296
Residential Alt-A		93,168		107,075		8,500		101,137		114,565		11,000
Consumer:
Home equity lines and loans		23,257		24,239		3,541		19,771		20,806		6,213
Automobile		23,985		23,985		5,118		30,317		30,317		8,070
Other		18,870		18,870		5,486		18,973		18,973		5,459
		501,230		579,049		82,726		498,575		581,887		82,643
With no related allowance recorded:
Commercial, financial, leasing, etc.		111,023		133,100		—		73,978		81,493		—
Real estate:
Commercial		77,147		84,677		—		66,777		78,943		—
Residential builder and developer		42,800		68,906		—		58,820		96,722		—
Other commercial construction		10,307		28,480		—		20,738		41,035		—
Residential		16,232		26,626		—		16,815		26,750		—
Residential Alt-A		20,891		35,836		—		26,752		46,964		—
		278,400		377,625		—		263,880		371,907		—
Total:
Commercial, financial, leasing, etc.		255,074		299,977		35,195		206,318		246,639		31,779
Real estate:
Commercial		182,708		207,046		18,932		150,732		175,152		14,121
Residential builder and developer		49,344		79,182		788		76,452		118,766		805
Other commercial construction		12,752		32,471		391		26,218		47,519		900
Residential		99,581		127,993		4,775		105,785		134,093		4,296
Residential Alt-A		114,059		142,911		8,500		127,889		161,529		11,000
Consumer:
Home equity lines and loans		23,257		24,239		3,541		19,771		20,806		6,213
Automobile		23,985		23,985		5,118		30,317		30,317		8,070
Other		18,870		18,870		5,486		18,973		18,973		5,459
Total	$	779,630		956,674		82,726		762,455		953,794		82,643

	Three months ended September 30, 2015						Three months ended September 30, 2014
			Interest income recognized						Interest income recognized
	Average recorded investment		Total		Cash basis		Average recorded investment		Total		Cash basis
	(in thousands)
Commercial, financial, leasing, etc.	$	242,157		1,017		1,017		228,749		611		611
Real estate:
Commercial		179,327		2,327		2,327		189,952		821		821
Residential builder and developer		53,009		81		81		90,493		18		18
Other commercial construction		17,236		1,943		1,943		58,500		251		251
Residential		99,939		1,835		1,316		104,516		1,328		776
Residential Alt-A		116,191		1,539		618		131,574		1,643		681
Consumer:
Home equity lines and loans		21,952		231		66		19,268		219		81
Automobile		24,429		391		39		33,666		528		67
Other		19,238		188		23		18,677		177		44
Total	$	773,478		9,552		7,430		875,395		5,596		3,350
	Nine months ended September 30, 2015						Nine months ended September 30, 2014
			Interest income recognized						Interest income recognized
	Average recorded investment		Total		Cash basis		Average recorded investment		Total		Cash basis
	(in thousands)
Commercial, financial, leasing, etc.	$	226,243		2,123		2,123		171,227		1,379		1,379
Real estate:
Commercial		161,834		4,433		4,433		194,337		2,616		2,616
Residential builder and developer		64,165		275		275		94,453		131		131
Other commercial construction		22,130		2,166		2,166		74,531		1,694		1,694
Residential		101,997		4,639		3,011		132,606		7,784		6,146
Residential Alt-A		120,710		4,799		1,962		135,374		5,002		1,900
Consumer:
Home equity lines and loans		20,619		656		179		17,902		540		182
Automobile		26,521		1,257		136		36,560		1,742		228
Other		19,053		547		86		18,229		517		145
Total	$	763,272		20,895		14,371		875,219		21,405		14,421

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 carrying value of residential real estate loans and home equity loans and lines of credit for which a partial charge-off has been recognized aggregated $59 million and $20 million, respectively, at September 30, 2015 and $63 million and $18 million,

respectively, at December 31, 2014. Residential real estate loans and home equity loans and lines of credit that were more than 150 days past due but did not require a partial charge-off because the net realizable value of the collateral exceeded the outstanding customer balance totaled $20 million and $28 million, respectively, at September 30, 2015 and $27 million and $28 million, respectively, at December 31, 2014.

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 loans 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 loans and commercial real estate loans.

			Real Estate
	Commercial,				Residential		Other
	Financial,				Builder and		Commercial
	Leasing, etc.		Commercial		Developer		Construction
	(in thousands)
September 30, 2015
Pass	$	19,223,102		22,479,501		1,507,057		3,447,841
Criticized accrual		785,660		895,603		61,143		94,567
Criticized nonaccrual		224,415		176,491		46,022		12,312
Total	$	20,233,177		23,551,595		1,614,222		3,554,720
December 31, 2014
Pass	$	18,695,440		21,837,022		1,347,778		3,347,522
Criticized accrual		588,407		578,317		45,845		172,269
Criticized nonaccrual		177,445		141,600		71,517		25,699
Total	$	19,461,292		22,556,939		1,465,140		3,545,490

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, 2015
Individually evaluated for impairment	$	35,195		19,743		13,275		14,145	$	82,358
Collectively evaluated for impairment		250,271		292,214		39,804		186,706		768,995
Purchased impaired		1,201		1,132		1,917		1,463		5,713
Allocated	$	286,667		313,089		54,996		202,314		857,066
Unallocated										76,732
Total									$	933,798
December 31, 2014
Individually evaluated for impairment	$	31,779		15,490		14,703		19,742	$	81,714
Collectively evaluated for impairment		251,607		291,244		45,061		165,140		753,052
Purchased impaired		4,652		1,193		2,146		1,151		9,142
Allocated	$	288,038		307,927		61,910		186,033		843,908
Unallocated										75,654
Total									$	919,562

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, 2015
Individually evaluated for impairment	$	255,074		243,743		213,640		66,112	$	778,569
Collectively evaluated for impairment		19,973,458		28,348,685		7,983,030		11,307,085		67,612,258
Purchased impaired		4,645		128,109		14,392		2,275		149,421
Total	$	20,233,177		28,720,537		8,211,062		11,375,472	$	68,540,248
December 31, 2014
Individually evaluated for impairment	$	206,318		252,347		232,398		69,061	$	760,124
Collectively evaluated for impairment		19,244,674		27,148,382		8,406,680		10,911,359		65,711,095
Purchased impaired		10,300		166,840		18,223		2,374		197,737
Total	$	19,461,292		27,567,569		8,657,301		10,982,794	$	66,668,956

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, 2015 and 2014:

			Recorded investment				Financial effects of modification
Three months ended September 30, 2015	Number		Pre- modification		Post- modification		Recorded investment (a)			Interest (b)
	(dollars in thousands)
Commercial, financial, leasing, etc.
Principal deferral		36	$	7,893	$	7,419	$	(474	)	$	—
Combination of concession types		1		31		31		—			(6	)
Real estate:
Commercial
Principal deferral		15		4,230		4,208		(22	)		—
Combination of concession types		1		1,156		1,169		13			(54	)
Other commercial construction
Principal deferral		3		296		390		94			—
Residential
Principal deferral		31		3,540		3,743		203			—
Other		1		267		267		—			—
Combination of concession types		10		1,296		1,380		84			(178	)
Residential Alt-A
Principal deferral		1		265		276		11			—
Combination of concession types		4		605		662		57			(91	)
Consumer:
Home equity lines and loans
Principal deferral		4		727		727		—			—
Combination of concession types		22		2,003		2,003		—			(199	)
Automobile
Principal deferral		35		316		316		—			—
Other		15		93		93		—			—
Combination of concession types		25		471		471		—			(17	)
Other
Principal deferral		24		352		352		—			—
Other		5		33		33		—			—
Combination of concession types		12		117		117		—			(12	)
Total		245	$	23,691	$	23,657	$	(34	)	$	(557	)

(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, 2014	Number		Pre- modification		Post- modification		Recorded investment (a)			Interest (b)
	(dollars in thousands)
Commercial, financial, leasing, etc.
Principal deferral		15	$	1,305	$	1,300	$	(5	)	$	—
Real estate:
Commercial
Principal deferral		8		2,081		2,068		(13	)		—
Other		1		650		—		(650	)		—
Combination of concession types		4		483		478		(5	)		(95	)
Residential builder and developer
Principal deferral		1		241		241		—			—
Other commercial construction
Principal deferral		1		145		142		(3	)		—
Residential
Principal deferral		3		98		97		(1	)		—
Combination of concession types		8		1,100		1,136		36			(135	)
Residential Alt-A
Combination of concession types		3		349		369		20			(64	)
Consumer:
Home equity lines and loans
Combination of concession types		5		519		519		—			(67	)
Automobile
Principal deferral		45		1,003		1,003		—			—
Interest rate reduction		3		30		30		—			(2	)
Other		7		96		96		—			—
Combination of concession types		19		348		348		—			(21	)
Other
Principal deferral		6		48		48		—			—
Interest rate reduction		1		2		2		—			—
Combination of concession types		24		511		511		—			(121	)
Total		154	$	9,009	$	8,388	$	(621	)	$	(505	)

(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, 2015 and 2014:

			Recorded investment				Financial effects of modification
Nine months ended September 30, 2015	Number		Pre- modification		Post- modification		Recorded investment (a)			Interest (b)
	(dollars in thousands)
Commercial, financial, leasing, etc.
Principal deferral		87	$	25,483	$	24,331	$	(1,152	)	$	—
Interest rate reduction		1		99		99		—			(19	)
Other		2		8,991		8,883		(108	)		—
Combination of concession types		6		25,075		24,884		(191	)		(245	)
Real estate:
Commercial
Principal deferral		37		47,005		45,569		(1,436	)		—
Combination of concession types		6		3,238		3,242		4			(159	)
Residential builder and developer
Principal deferral		2		10,650		10,598		(52	)		—
Other commercial construction
Principal deferral		3		296		390		94			—
Residential
Principal deferral		50		4,954		5,239		285			—
Other		1		267		267		—			—
Combination of concession types		22		2,551		2,795		244			(356	)
Residential Alt-A
Principal deferral		2		426		437		11			—
Combination of concession types		7		1,239		1,298		59			(121	)
Consumer:
Home equity lines and loans
Principal deferral		6		1,946		1,946		—			—
Combination of concession types		41		3,555		3,555		—			(424	)
Automobile
Principal deferral		133		1,234		1,234		—			—
Interest rate reduction		7		137		137		—			(10	)
Other		38		134		134		—			—
Combination of concession types		42		693		693		—			(28	)
Other
Principal deferral		73		1,418		1,418		—			—
Other		12		113		113		—			—
Combination of concession types		35		384		384		—			(44	)
Total		613	$	139,888	$	137,646	$	(2,242	)	$	(1,406	)

(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, 2014	Number		Pre- modification		Post- modification		Recorded investment (a)			Interest (b)
	(dollars in thousands)
Commercial, financial, leasing, etc.
Principal deferral		66	$	20,673	$	20,499	$	(174	)	$	—
Other		1		19,593		19,593		—			—
Combination of concession types		5		9,836		9,766		(70	)		(14	)
Real estate:
Commercial
Principal deferral		32		17,452		17,384		(68	)		—
Other		1		650		—		(650	)		—
Interest rate reduction		1		255		252		(3	)		(48	)
Combination of concession types		6		892		940		48			(208	)
Residential builder and developer
Principal deferral		2		1,639		1,639		—			—
Other commercial construction
Principal deferral		4		6,703		6,611		(92	)		—
Residential
Principal deferral		19		1,842		1,926		84			—
Interest rate reduction		1		98		104		6			(32	)
Other		1		188		188		—			—
Combination of concession types		30		4,211		4,287		76			(483	)
Residential Alt-A
Principal deferral		5		828		900		72			—
Combination of concession types		19		3,101		3,134		33			(345	)
Consumer:
Home equity lines and loans
Principal deferral		3		280		280		—			—
Interest rate reduction		5		341		341		—			(76	)
Combination of concession types		41		4,147		4,147		—			(443	)
Automobile
Principal deferral		168		2,599		2,599		—			—
Interest rate reduction		6		90		90		—			(5	)
Other		26		204		204		—			—
Combination of concession types		65		939		939		—			(83	)
Other
Principal deferral		21		141		141		—			—
Interest rate reduction		4		293		293		—			(63	)
Other		1		45		45		—			—
Combination of concession types		57		1,883		1,883		—			(585	)
Total		590	$	98,923	$	98,185	$	(738	)	$	(2,385	)

(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, 2015 and 2014 and for which there was a subsequent payment default during the nine-month periods ended September 30, 2015 and 2014, respectively, were not material.

Effective January 1, 2015, the Company adopted amended accounting and disclosure guidance for reclassification of residential real estate collateralized consumer mortgage loans upon foreclosure. The amended guidance clarifies that an in-substance repossession or foreclosure occurs and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The adoption resulted in an insignificant increase in other real estate owned. The amount of foreclosed residential real estate property held by the Company was $43 million and $44 million at September 30, 2015 and December 31, 2014, respectively. At September 30, 2015, there were $151 million in loans secured by residential real estate that were in the process of foreclosure.