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Loans and leases and the allowance for credit losses (Tables)

9 Months Ended

Sep. 30, 2019

Summary of Current, Past Due and Nonaccrual Loans

A summary of current, past due and nonaccrual loans as of September 30, 2019 and December 31, 2018 follows:

	Current		30-89 Days Past Due		Accruing Loans Past Due 90 Days or More (a)		Accruing Loans Acquired at a Discount Past Due 90 days or More (b)		Purchased Impaired (c)		Nonaccrual		Total
	(In thousands)
September 30, 2019
Commercial, financial, leasing, etc.	$	22,689,923		125,742		2,898		—		—		382,809	$	23,201,372
Real estate:
Commercial		25,613,988		186,157		8,387		15		14,406		184,632		26,007,585
Residential builder and developer		1,546,570		6,300		—		—		639		4,975		1,558,484
Other commercial construction		7,229,925		112,651		4,291		—		854		31,441		7,379,162
Residential		12,975,992		495,831		439,649		5,246		162,475		223,566		14,302,759
Residential — limited documentation		1,968,580		72,815		—		—		75,122		81,679		2,198,196
Consumer:
Home equity lines and loans		4,486,664		29,826		—		3,387		—		59,915		4,579,792
Recreational finance		5,262,857		27,880		—		—		—		11,852		5,302,589
Automobile		3,767,965		74,504		—		—		—		21,039		3,863,508
Other		1,373,612		14,771		5,937		32,085		—		3,341		1,429,746
Total	$	86,916,076		1,146,477		461,162		40,733		253,496		1,005,249	$	89,823,193

December 31, 2018
Commercial, financial, leasing, etc.	$	22,701,020		39,798		2,567		168		—		234,423	$	22,977,976
Real estate:
Commercial		25,250,983		134,474		11,457		10		9,769		203,672		25,610,365
Residential builder and developer		1,665,178		20,333		—		—		—		4,798		1,690,309
Other commercial construction		6,982,077		43,615		14,344		—		641		22,205		7,062,882
Residential		13,591,790		404,808		189,682		6,650		203,044		233,352		14,629,326
Residential — limited documentation		2,278,040		72,544		—		—		89,851		84,685		2,525,120
Consumer:
Home equity lines and loans		4,758,513		25,416		—		5,033		—		71,292		4,860,254
Recreational finance		4,085,781		29,947		—		235		—		11,199		4,127,162
Automobile		3,555,757		79,804		—		—		—		23,359		3,658,920
Other		1,271,811		15,598		4,477		27,654		—		4,623		1,324,163
Total	$	86,140,950		866,337		222,527		39,750		303,305		893,608	$	88,466,477

(a)	Excludes loans acquired at a discount.

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

(c)	Accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value.

Outstanding Principal Balance and Carrying Amount of Loans and Included in Consolidated Balance Sheet

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

	September 30,		December 31,
	2019		2018
	(In thousands)

Outstanding principal balance	$	869,636	$	1,016,785
Carrying amount:
Commercial, financial, leasing, etc.		22,829		27,073
Commercial real estate		110,430		135,047
Residential real estate		398,563		473,511
Consumer		89,157		91,860
	$	620,979	$	727,491

Summary of Changes in Accretable Yield for Acquired Loans

A summary of changes in the accretable yield for loans acquired at a discount for the three months and nine months ended September 30, 2019 and 2018 follows:

	Three Months Ended September 30
	2019						2018
	Purchased			Other			Purchased			Other
	Impaired			Acquired			Impaired			Acquired
	(In thousands)

Balance at beginning of period	$	147,104		$	90,911		$	149,388		$	117,715
Interest income		(9,564	)		(9,238	)		(8,105	)		(18,001	)
Reclassifications from nonaccretable balance		9,079			3,990			8,445			25
Other (a)		—			41			—			2,001
Balance at end of period	$	146,619		$	85,704		$	149,728		$	101,740

	Nine Months Ended September 30
	2019						2018
	Purchased			Other			Purchased			Other
	Impaired			Acquired			Impaired			Acquired
	(In thousands)

Balance at beginning of period	$	147,210		$	96,907		$	157,918		$	133,162
Interest income		(37,278	)		(28,621	)		(25,893	)		(48,507	)
Reclassifications from nonaccretable balance		36,687			12,312			17,703			11,230
Other (a)		—			5,106			—			5,855
Balance at end of period	$	146,619		$	85,704		$	149,728		$	101,740

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

Changes in Allowance for Credit Losses

Changes in the allowance for credit losses for the three months ended September 30, 2019 were as follows:

	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Unallocated			Total
	(In thousands)

Beginning balance	$	335,855			343,296			61,011			211,220			78,485		$	1,029,867
Provision for credit losses		24,538			(16,713	)		(309	)		37,735			(251	)		45,000
Net charge-offs
Charge-offs		(15,678	)		(1,107	)		(2,721	)		(40,735	)		—			(60,241	)
Recoveries		6,730			1,656			1,511			13,914			—			23,811
Net (charge-offs) recoveries		(8,948	)		549			(1,210	)		(26,821	)		—			(36,430	)
Ending balance	$	351,445			327,132			59,492			222,134			78,234		$	1,038,437

Changes in the allowance for credit losses for the three months ended September 30, 2018 were as follows:

	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Unallocated		Total
	(In thousands)

Beginning balance	$	328,830			353,761			76,123			182,987			77,547	$	1,019,248
Provision for credit losses		(6,972	)		(11,394	)		741			32,887			738		16,000
Net charge-offs
Charge-offs		(11,792	)		(1,941	)		(3,338	)		(34,995	)		—		(52,066	)
Recoveries		7,123			14,577			1,655			12,951			—		36,306
Net (charge-offs) recoveries		(4,669	)		12,636			(1,683	)		(22,044	)		—		(15,760	)
Ending balance	$	317,189			355,003			75,181			193,830			78,285	$	1,019,488

Changes in the allowance for credit losses for the nine months ended September 30, 2019 were as follows:

	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Unallocated		Total
	(In thousands)

Beginning balance	$	330,055			341,655			69,125			200,564			78,045	$	1,019,444
Provision for credit losses		41,146			(6,415	)		(5,132	)		92,212			189		122,000
Net charge-offs
Charge-offs		(40,786	)		(11,555	)		(9,356	)		(113,050	)		—		(174,747	)
Recoveries		21,030			3,447			4,855			42,408			—		71,740
Net charge-offs		(19,756	)		(8,108	)		(4,501	)		(70,642	)		—		(103,007	)
Ending balance	$	351,445			327,132			59,492			222,134			78,234	$	1,038,437

Changes in the allowance for credit losses for the nine months ended September 30, 2018 were as follows:

	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Unallocated			Total
	(In thousands)

Beginning balance	$	328,599			374,085			65,405			170,809			78,300		$	1,017,198
Provision for credit losses		11,508			(27,464	)		16,469			93,502			(15	)		94,000
Net charge-offs
Charge-offs		(41,273	)		(7,855	)		(11,658	)		(105,479	)		—			(166,265	)
Recoveries		18,355			16,237			4,965			34,998			—			74,555
Net (charge-offs) recoveries		(22,918	)		8,382			(6,693	)		(70,481	)		—			(91,710	)
Ending balance	$	317,189			355,003			75,181			193,830			78,285		$	1,019,488

Impaired Loans and Leases

Information with respect to loans and leases that were considered impaired as of September 30, 2019 and December 31, 2018 and for the three-month and nine-month periods ended September 30, 2019 and 2018 follows.

	September 30, 2019						December 31, 2018
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
With an allowance recorded:
Commercial, financial, leasing, etc.	$	245,355		273,931		60,410		153,478		175,549		46,034
Real estate:
Commercial		60,489		67,104		7,711		110,253		125,117		11,937
Residential builder and developer		8,893		9,311		319		5,981		6,557		462
Other commercial construction		12,821		25,437		1,477		10,563		11,113		640
Residential		125,498		146,098		6,748		124,974		147,817		5,402
Residential — limited documentation		67,729		81,918		2,600		74,156		90,066		3,000
Consumer:
Home equity lines and loans		46,858		51,759		8,923		47,982		53,248		9,135
Recreational finance		5,483		9,481		1,153		6,138		9,163		1,261
Automobile		3,478		3,526		708		3,527		3,599		729
Other		4,699		9,620		943		5,203		8,380		1,046
		581,303		678,185		90,992		542,255		630,609		79,646
With no related allowance recorded:
Commercial, financial, leasing, etc.		159,991		172,191		—		105,507		136,128		—
Real estate:
Commercial		144,554		163,120		—		113,376		124,657		—
Residential builder and developer		3,378		3,378		—		2,593		2,602		—
Other commercial construction		18,620		19,614		—		11,710		11,880		—
Residential		18,949		24,350		—		15,379		20,496		—
Residential — limited documentation		4,007		7,324		—		5,631		9,796		—
		349,499		389,977		—		254,196		305,559		—
Total:
Commercial, financial, leasing, etc.		405,346		446,122		60,410		258,985		311,677		46,034
Real estate:
Commercial		205,043		230,224		7,711		223,629		249,774		11,937
Residential builder and developer		12,271		12,689		319		8,574		9,159		462
Other commercial construction		31,441		45,051		1,477		22,273		22,993		640
Residential		144,447		170,448		6,748		140,353		168,313		5,402
Residential — limited documentation		71,736		89,242		2,600		79,787		99,862		3,000
Consumer:
Home equity lines and loans		46,858		51,759		8,923		47,982		53,248		9,135
Recreational finance		5,483		9,481		1,153		6,138		9,163		1,261
Automobile		3,478		3,526		708		3,527		3,599		729
Other		4,699		9,620		943		5,203		8,380		1,046
Total	$	930,802		1,068,162		90,992		796,451		936,168		79,646

Interest Income Recognized on Impaired Loans

	Three Months Ended September 30, 2019						Three Months Ended September 30, 2018
			Interest Income Recognized						Interest Income Recognized
	Average Recorded Investment		Total		Cash Basis		Average Recorded Investment		Total		Cash Basis
	(In thousands)

Commercial, financial, leasing, etc.	$	288,516		836		836		256,196		1,985		1,985
Real estate:
Commercial		201,931		1,798		1,798		204,315		1,489		1,489
Residential builder and developer		11,837		89		89		9,000		—		—
Other commercial construction		32,458		13		13		9,623		3,379		3,379
Residential		143,508		2,353		984		133,337		1,959		773
Residential — limited documentation		72,926		1,348		229		81,729		1,607		481
Consumer:
Home equity lines and loans		46,982		416		74		48,542		421		62
Recreational finance		5,562		147		4		3,531		65		1
Automobile		3,413		54		18		7,805		181		20
Other		5,220		145		1		3,919		61		5
Total	$	812,353		7,199		4,046		757,997		11,147		8,195

	Nine Months Ended September 30, 2019						Nine Months Ended September 30, 2018
			Interest Income Recognized						Interest Income Recognized
	Average Recorded Investment		Total		Cash Basis		Average Recorded Investment		Total		Cash Basis
	(In thousands)

Commercial, financial, leasing, etc.	$	275,896		7,501		7,501		266,594		4,101		4,101
Real estate:
Commercial		214,027		4,921		4,921		184,795		8,447		8,447
Residential builder and developer		10,101		239		239		9,111		1,682		1,682
Other commercial construction		25,126		589		589		9,056		3,438		3,438
Residential		142,155		6,765		2,654		126,910		6,190		2,612
Residential — limited documentation		75,702		4,153		655		83,700		4,763		1,494
Consumer:
Home equity lines and loans		47,325		1,238		193		48,661		1,268		220
Recreational finance		5,799		414		12		2,156		193		6
Automobile		3,465		161		55		11,189		630		49
Other		5,155		409		10		2,389		106		6
Total	$	804,751		26,390		16,829		744,561		30,818		22,055

Summary of Loan Grades

3. Loans and leases and the allowance for credit losses, continued

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, 2019
Pass	$	21,893,239		25,095,663		1,447,978		7,122,983
Criticized accrual		925,324		727,291		105,531		224,738
Criticized nonaccrual		382,809		184,632		4,975		31,441
Total	$	23,201,372		26,007,586		1,558,484		7,379,162
December 31, 2018
Pass	$	21,693,705		24,539,706		1,546,002		6,890,562
Criticized accrual		1,049,848		866,987		139,509		150,115
Criticized nonaccrual		234,423		203,672		4,798		22,205
Total	$	22,977,976		25,610,365		1,690,309		7,062,882

Allocation of Allowance for Credit Losses on Basis of Company's Impairment Methodology

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, 2019
Individually evaluated for impairment	$	60,410		9,507		9,348		11,727	$	90,992
Collectively evaluated for impairment		291,035		317,625		44,766		210,407		863,833
Purchased impaired		—		—		5,378		—		5,378
Allocated	$	351,445		327,132		59,492		222,134		960,203
Unallocated										78,234
Total									$	1,038,437
December 31, 2018
Individually evaluated for impairment	$	46,034		13,039		8,402		12,171	$	79,646
Collectively evaluated for impairment		284,021		328,616		48,326		188,393		849,356
Purchased impaired		—		—		12,397		—		12,397
Allocated	$	330,055		341,655		69,125		200,564		941,399
Unallocated										78,045
Total									$	1,019,444

Recorded Investment in Loans and Leases on Basis of Company's Impairment Methodology

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, 2019
Individually evaluated for impairment	$	405,346		248,755		216,183		60,518	$	930,802
Collectively evaluated for impairment		22,796,026		34,680,577		16,047,175		15,115,117		88,638,895
Purchased impaired		—		15,899		237,597		—		253,496
Total	$	23,201,372		34,945,231		16,500,955		15,175,635	$	89,823,193
December 31, 2018
Individually evaluated for impairment	$	258,985		254,476		220,140		62,850	$	796,451
Collectively evaluated for impairment		22,718,991		34,098,670		16,641,411		13,907,649		87,366,721
Purchased impaired		—		10,410		292,895		—		303,305
Total	$	22,977,976		34,363,556		17,154,446		13,970,499	$	88,466,477

Loan Modification Activities that were Considered Troubled Debt Restructurings

The table that follows summarizes the Company’s loan modification activities that were considered troubled debt restructurings for the three-month and nine-month periods ended September 30, 2019 and 2018:

					Post-modification (a)
	Number		Pre- modification Recorded Investment		Principal Deferral		Interest Rate Reduction		Other		Combination of Concession Types		Total
Three Months Ended September 30, 2019	(Dollars in thousands)

Commercial, financial, leasing, etc.	26		$	6,145	$	1,441	$	—	$	—	$	4,666	$	6,107
Real estate:
Commercial		9		2,986		383		—		—		2,589		2,972
Residential		20		5,161		3,046		—		—		2,535		5,581
Residential — limited documentation		1		236		—		—		—		240		240
Consumer:
Home equity lines and loans		12		1,392		—		—		—		1,399		1,399
Recreational finance		3		61		61		—		—		—		61
Automobile		26		485		457		—		—		28		485
Total		97	$	16,466	$	5,388	$	—	$	—	$	11,457	$	16,845

Three Months Ended September 30, 2018

Commercial, financial, leasing, etc.		47	$	6,837	$	1,683	$	5	$	—	$	5,018	$	6,706
Real estate:
Commercial		18		11,581		1,493		—		3,475		6,297		11,265
Residential		34		8,182		6,026		—		—		3,002		9,028
Residential — limited documentation		3		716		—		—		—		847		847
Consumer:
Home equity lines and loans		17		1,651		220		—		—		1,450		1,670
Recreational finance		2		44		44		—		—		—		44
Automobile		30		526		526		—		—		—		526
Total		151	$	29,537	$	9,992	$	5	$	3,475	$	16,614	$	30,086

3. Loans and leases and the allowance for credit losses, continued

					Post-modification (a)
Nine Months Ended September 30, 2019	Number		Pre- modification Recorded Investment		Principal Deferral		Interest Rate Reduction		Other		Combination of Concession Types		Total
	(Dollars in thousands)

Commercial, financial, leasing, etc.		115	$	39,357	$	8,582	$	—	$	—	$	30,827	$	39,409
Real estate:
Commercial		38		22,567		3,947		—		—		18,197		22,144
Residential builder and developer		2		1,330		1,068		—		—		—		1,068
Other commercial construction		2		1,456		—		—		—		1,399		1,399
Residential		63		16,490		8,805		—		—		8,842		17,647
Residential — limited documentation		4		1,084		399		—		—		705		1,104
Consumer:
Home equity lines and loans		32		3,141		90		—		—		3,078		3,168
Recreational finance		8		164		164		—		—		—		164
Automobile		58		991		926		—		—		65		991
Total		322	$	86,580	$	23,981	$	—	$	—	$	63,113	$	87,094

Nine Months Ended September 30, 2018

Commercial, financial, leasing, etc.		150	$	96,221	$	47,029	$	658	$	6,111	$	43,086	$	96,884
Real estate:
Commercial		66		25,561		14,693		175		3,869		7,224		25,961
Other commercial construction		1		752		746		—		—		—		746
Residential		111		28,769		15,785		—		—		15,670		31,455
Residential — limited documentation		8		1,595		467		—		—		1,423		1,890
Consumer:
Home equity lines and loans		41		3,554		224		—		—		3,357		3,581
Recreational finance		4		93		93		—		—		—		93
Automobile		57		1,007		995		—		—		12		1,007
Total		438	$	157,552	$	80,032	$	833	$	9,980	$	70,772	$	161,617

(a)	Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages. The present value of interest rate concessions, discounted at the effective rate of the original loan, was not material.

Summary of Lease Financing Receivables

A summary of lease financing receivables follows:

	September 30,			December 31,
	2019			2018
	(In thousands)
Commercial leases:
Direct financings:
Lease payments receivable	$	1,177,518		$	1,155,464
Estimated residual value of leased assets		84,692			85,169
Unearned income		(105,774	)		(110,458	)
Investment in direct financings		1,156,436			1,130,175
Leveraged leases:
Lease payments receivable		82,127			85,007
Estimated residual value of leased assets		81,163			81,261
Unearned income		(32,220	)		(33,717	)
Investment in leveraged leases		131,070			132,551
Total investment in leases	$	1,287,506		$	1,262,726
Deferred taxes payable arising from leveraged leases	$	71,432		$	74,995

Minimum Future Lease Payments to be Received from Lease Financings

At September 30, 2019, the minimum future lease payments to be received from lease financings were as follows:

	(In thousands)
Twelve-month period ending September 30:
2020	$	346,223
2021		305,385
2022		216,018
2023		164,490
2024		82,455
Later years		145,074
	$	1,259,645