4. Allowance for Loan and Lease Losses

The Company must maintain an allowance for loan and lease losses (the “Allowance”) that is adequate to absorb estimated probable credit losses associated with its loan and lease portfolio. The Allowance consists of an allocated portion, which covers estimated credit losses for specifically identified loans and pools of loans and leases, and an unallocated portion.

Segmentation

Management has identified three primary portfolio segments in estimating the Allowance: commercial lending, residential real estate lending and consumer lending. Commercial lending is further segmented into four distinct portfolios based on characteristics relating to the borrower, transaction, and collateral. These portfolio segments are: commercial and industrial, commercial real estate, construction, and lease financing. Residential real estate is not further segmented, but consists of single-family residential mortgages, real estate secured installment loans and home equity lines of credit. Consumer lending is not further segmented, but consists primarily of automobile loans, credit cards, and other installment loans. Management has developed a methodology for each segment taking into consideration portfolio segment-specific factors such as product type, loan portfolio characteristics, management information systems, and other risk factors.

Specific Allocation

Commercial

A specific allocation is determined for individually impaired commercial loans. A loan is considered impaired when it is probable that the Company will be unable to collect the full amount of principal and interest according to the contractual terms of the loan agreement.

Management identifies material impaired loans based on their size in relation to the Company’s total loan and lease portfolio. Each impaired loan equal to or exceeding a specified threshold requires an analysis to determine the appropriate level of reserve for that specific loan. Impaired loans below the specified threshold are treated as a pool, with specific allocations established based on qualitative factors such as asset quality trends, risk identification, lending policies, portfolio growth, and portfolio concentrations.

Residential

A specific allocation is determined for residential real estate loans based on delinquency status. In addition, each impaired loan equal to or exceeding a specified threshold requires analysis to determine the appropriate level of reserve for that specific loan, generally based on the value of the underlying collateral less estimated costs to sell. The specific allocation will be zero for impaired loans in which the value of the underlying collateral, less estimated costs to sell, exceeds the unpaid principal balance of the loan.

Consumer

A specific allocation is determined for the consumer loan portfolio using delinquency-based formula allocations. The Company uses a formula approach in determining the consumer loan specific allocation and recognizes the statistical validity of measuring losses predicated on past due status.

Pooled Allocation

Commercial

Pooled allocation for pass, special mention, substandard, and doubtful grade commercial loans and leases that share common risk characteristics and properties is determined using a historical loss rate analysis and qualitative factor considerations. Loan grade categories are discussed under “Credit Quality”.

Residential and Consumer

Pooled allocation for non-delinquent consumer and residential real estate loans is determined using a historical loss rate analysis and qualitative factor considerations.

Qualitative Adjustments

Qualitative adjustments to historical loss rates or other static sources may be necessary since these rates may not be an accurate indicator of losses inherent in the current portfolio. To estimate the level of adjustments, management considers factors including global, national and local economic conditions; levels and trends in problem loans; the effect of credit concentrations; collateral value trends; changes in risk due to changes in lending policies and practices; management expertise; industry and regulatory trends; and volume of loans.

Unallocated Allowance

The Company’s Allowance incorporates an unallocated portion to cover risk factors and events that may have occurred as of the evaluation date that have not been reflected in the risk measures utilized due to inherent limitations in the precision of the estimation process. These risk factors, in addition to past and current events based on facts at the unaudited consolidated balance sheet date and realistic courses of action that management expects to take, are assessed in determining the level of unallocated allowance.

The Allowance was comprised of the following for the periods indicated:


	Three Months Ended June 30, 2016
	Commercial Lending
	Commercial		Commercial
	and		Real				Lease
(dollars in thousands)	Industrial		Estate		Construction		Financing		Residential		Consumer		Unallocated		Total
Allowance for loan and lease losses:
Balance at beginning of period	$	35,027	$	18,504	$	4,514	$	807	$	45,638	$	27,923	$	4,741	$	137,154
Charge-offs		(52)		—		—		—		(456)		(4,295)		—		(4,803)
Recoveries		19		47		—		1		460		1,582		—		2,109
Increase (decrease) in Provision		798		(291)		122		(28)		810		3,176		(2,687)		1,900
Balance at end of period	$	35,792	$	18,260	$	4,636	$	780	$	46,452	$	28,386	$	2,054	$	136,360


	Six Months Ended June 30, 2016
	Commercial Lending
	Commercial		Commercial
	and		Real				Lease
(dollars in thousands)	Industrial		Estate		Construction		Financing		Residential		Consumer		Unallocated		Total
Allowance for loan and lease losses:
Balance at beginning of period	$	34,025	$	18,489	$	3,793	$	888	$	46,099	$	28,385	$	3,805	$	135,484
Charge-offs		(138)		—		—		—		(528)		(8,501)		—		(9,167)
Recoveries		222		3,246		—		1		766		3,208		—		7,443
Increase (decrease) in Provision		1,683		(3,475)		843		(109)		115		5,294		(1,751)		2,600
Balance at end of period	$	35,792	$	18,260	$	4,636	$	780	$	46,452	$	28,386	$	2,054	$	136,360


	Three Months Ended June 30, 2015
	Commercial Lending
	Commercial		Commercial
	and		Real				Lease
(dollars in thousands)	Industrial		Estate		Construction		Financing		Residential		Consumer		Unallocated		Total
Allowance for loan and lease losses:
Balance at beginning of period	$	32,228	$	16,508	$	3,654	$	1,010	$	45,271	$	26,632	$	10,395	$	135,698
Charge-offs		(304)		—		—		—		(4)		(4,685)		—		(4,993)
Recoveries		535		52		—		1		1,070		1,725		—		3,383
Increase (decrease) in Provision		455		(862)		(28)		(3)		(651)		3,168		171		2,250
Balance at end of period	$	32,914	$	15,698	$	3,626	$	1,008	$	45,686	$	26,840	$	10,566	$	136,338


	Six Months Ended June 30, 2015
	Commercial Lending
	Commercial		Commercial
	and		Real				Lease
(dollars in thousands)	Industrial		Estate		Construction		Financing		Residential		Consumer		Unallocated		Total
Allowance for loan and lease losses:
Balance at beginning of period	$	31,835	$	16,320	$	4,725	$	1,089	$	44,858	$	27,041	$	8,931	$	134,799
Charge-offs		(304)		—		—		—		(77)		(8,610)		—		(8,991)
Recoveries		706		240		—		1		1,490		3,243		—		5,680
Increase (decrease) in Provision		677		(862)		(1,099)		(82)		(585)		5,166		1,635		4,850
Balance at end of period	$	32,914	$	15,698	$	3,626	$	1,008	$	45,686	$	26,840	$	10,566	$	136,338

The disaggregation of the Allowance and recorded investment in loans by impairment methodology as of June 30, 2016 and December 31, 2015 were as follows:


	June 30, 2016
	Commercial Lending
	Commercial		Commercial
	and		Real				Lease
(dollars in thousands)	Industrial		Estate		Construction		Financing		Residential		Consumer		Unallocated		Total
Allowance for loan and lease losses:
Individually evaluated for impairment	$	109	$	—	$	—	$	—	$	581	$	—	$	—	$	690
Collectively evaluated for impairment		35,683		18,260		4,636		780		45,871		28,386		2,054		135,670
Balance at end of period	$	35,792	$	18,260	$	4,636	$	780	$	46,452	$	28,386	$	2,054	$	136,360
Loans and leases:
Individually evaluated for impairment	$	30,574	$	11,158	$	—	$	173	$	22,123	$	—	$	—	$	64,028
Collectively evaluated for impairment		3,257,929		2,170,574		424,743		185,931		3,632,402		1,452,088		—		11,123,667
Balance at end of period	$	3,288,503	$	2,181,732	$	424,743	$	186,104	$	3,654,525	$	1,452,088	$	—	$	11,187,695


	December 31, 2015
	Commercial Lending
	Commercial		Commercial
	and		Real				Lease
(dollars in thousands)	Industrial		Estate		Construction		Financing		Residential		Consumer		Unallocated		Total
Allowance for loan and lease losses:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	592	$	—	$	—	$	592
Collectively evaluated for impairment		34,025		18,489		3,793		888		45,507		28,385		3,805		134,892
Balance at end of period	$	34,025	$	18,489	$	3,793	$	888	$	46,099	$	28,385	$	3,805	$	135,484
Loans and leases:
Individually evaluated for impairment	$	15,845	$	5,787	$	—	$	181	$	22,334	$	—	$	—	$	44,147
Collectively evaluated for impairment		3,041,610		2,158,661		367,460		198,498		3,510,093		1,401,561		—		10,677,883
Balance at end of period	$	3,057,455	$	2,164,448	$	367,460	$	198,679	$	3,532,427	$	1,401,561	$	—	$	10,722,030

Credit Quality

The Company performs an internal loan review and grading on an ongoing basis. The review provides management with periodic information as to the quality of the loan portfolio and effectiveness of its lending policies and procedures. The objective of the loan review and grading procedures is to identify, in a timely manner, existing or emerging credit quality problems so that appropriate steps can be initiated to avoid or minimize future losses.

Loans subject to grading include: commercial and industrial loans, commercial and standby letters of credit, installment loans to businesses or individuals for business and commercial purposes, commercial real estate loans, overdraft lines of credit, commercial credit cards, and other credits as may be determined. Loans which are not subject to grading include loans that are 100% sold with no recourse to the Company, consumer installment loans, indirect automobile loans, consumer credit cards, business credit cards, home equity lines of credit and residential mortgage loans.

Residential and consumer loans are underwritten primarily on the basis of credit bureau scores, debt-service-to-income ratios, and collateral quality and loan to value ratios.

A credit risk rating system is used to determine loan grade and is based on borrower credit risk and transactional risk. The loan grading process is a mechanism used to determine the risk of a particular borrower and is based on the following eight factors of a borrower: character, earnings and operating cash flow, asset and liability structure, debt capacity, financial reporting, management and controls, borrowing entity, and industry and operating environment.

Pass – “Pass” (uncriticized loans) and leases, are not considered to carry greater than normal risk. The borrower has the apparent ability to satisfy obligations to the Company, and therefore no loss in ultimate collection is anticipated.

Special Mention – Loans and leases that have potential weaknesses that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for assets or in the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

Substandard – Loans and leases that are inadequately protected by the current financial condition and paying capacity of the obligor or by any collateral pledged. Loans and leases so classified must have a well-defined weakness or weaknesses that jeopardize the collection of the debt. They are characterized by the distinct possibility that the bank may sustain some loss if the deficiencies are not corrected.

Doubtful – Loans and leases that have weaknesses found in substandard borrowers with the added provision that the weaknesses make collection of debt in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loss – Loans and leases classified as loss are considered uncollectible and of such little value that their continuance as an asset is not warranted. This classification does not mean that the loan or lease has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be effected in the future.

The credit risk profiles by internally assigned grade for loans and leases as of June 30, 2016 and December 31, 2015 were as follows:


	June 30, 2016
	Commercial		Commercial
	and		Real				Lease
(dollars in thousands)	Industrial		Estate		Construction		Financing		Total
Grade:
Pass	$	3,226,306	$	2,138,445	$	422,277	$	185,922	$	5,972,950
Special mention		39,701		24,266		1,049		9		65,025
Substandard		18,898		19,021		1,417		—		39,336
Doubtful		3,598		—		—		173		3,771
Total	$	3,288,503	$	2,181,732	$	424,743	$	186,104	$	6,081,082


	December 31, 2015
	Commercial		Commercial
	and		Real				Lease
(dollars in thousands)	Industrial		Estate		Construction		Financing		Total
Grade:
Pass	$	2,995,180	$	2,119,933	$	366,695	$	198,296	$	5,680,104
Special mention		46,097		24,695		765		28		71,585
Substandard		12,220		19,682		—		174		32,076
Doubtful		3,958		138		—		181		4,277
Total	$	3,057,455	$	2,164,448	$	367,460	$	198,679	$	5,788,042

There were no loans and leases graded as Loss as of June 30, 2016 and December 31, 2015.

The credit risk profiles based on payment activity for loans and leases that were not subject to loan grading as of June 30, 2016 and December 31, 2015 were as follows:


	June 30, 2016
(dollars in thousands)	Residential		Consumer		Consumer - Auto		Credit Cards		Total
Performing	$	3,636,780	$	237,534	$	856,212	$	339,326	$	5,069,852
Nonperforming and delinquent		17,745		3,558		12,137		3,321		36,761
Total	$	3,654,525	$	241,092	$	868,349	$	342,647	$	5,106,613


	December 31, 2015
(dollars in thousands)	Residential		Consumer		Consumer - Auto		Credit Cards		Total
Performing	$	3,507,756	$	236,207	$	794,692	$	350,962	$	4,889,617
Nonperforming and delinquent		24,671		2,691		13,265		3,744		44,371
Total	$	3,532,427	$	238,898	$	807,957	$	354,706	$	4,933,988

Impaired and Nonaccrual Loans and Leases

The Company evaluates certain loans and leases individually for impairment. A loan or lease is considered to be impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan or lease. An allowance for impaired commercial loans, including commercial real estate and construction loans, is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. An allowance for impaired residential loans is measured based on the estimated fair value of the collateral, less any selling costs. Management exercises significant judgment in developing these estimates.

The Company generally places a loan on nonaccrual status when management believes that collection of principal or interest has become doubtful or when a loan or lease becomes 90 days past due as to principal or interest, unless it is well secured and in the process of collection.

It is the Company’s policy to charge off a loan when the facts indicate that the loan is considered uncollectible.

The aging analyses of past due loans and leases as of June 30, 2016 and December 31, 2015 were as follows:


	June 30, 2016
	Accruing Loans and Leases
					Greater								Total Non
					Than or						Total		Accruing
	30-59		60-89		Equal to		Total				Accruing		Loans
	Days		Days		90 Days		Past				Loans and		and		Total
(dollars in thousands)	Past Due		Past Due		Past Due		Due		Current		Leases		Leases		Outstanding
Commercial and industrial	$	—	$	—	$	—	$	—	$	3,284,905	$	3,284,905	$	3,598	$	3,288,503
Commercial real estate		576		—		—		576		2,181,156		2,181,732		—		2,181,732
Construction		—		—		—		—		424,419		424,419		324		424,743
Lease financing		—		—		—		—		185,931		185,931		173		186,104
Residential		6,008		1,172		1,334		8,514		3,636,780		3,645,294		9,231		3,654,525
Consumer		14,513		2,935		1,568		19,016		1,433,072		1,452,088		—		1,452,088
Total	$	21,097	$	4,107	$	2,902	$	28,106	$	11,146,263	$	11,174,369	$	13,326	$	11,187,695


	December 31, 2015
	Accruing Loans and Leases
					Greater								Total Non
					Than or						Total		Accruing
	30-59		60-89		Equal to		Total				Accruing		Loans
	Days		Days		90 Days		Past				Loans and		and		Total
(dollars in thousands)	Past Due		Past Due		Past Due		Due		Current		Leases		Leases		Outstanding
Commercial and industrial	$	198	$	72	$	2,496	$	2,766	$	3,050,731	$	3,053,497	$	3,958	$	3,057,455
Commercial real estate		—		190		161		351		2,163,959		2,164,310		138		2,164,448
Construction		—		—		—		—		367,460		367,460		—		367,460
Lease financing		41		—		174		215		198,283		198,498		181		198,679
Residential		10,143		1,447		737		12,327		3,507,756		3,520,083		12,344		3,532,427
Consumer		15,191		3,056		1,454		19,701		1,381,860		1,401,561		—		1,401,561
Total	$	25,573	$	4,765	$	5,022	$	35,360	$	10,670,049	$	10,705,409	$	16,621	$	10,722,030

The total carrying amounts and the total unpaid principal balances of impaired loans and leases as of June 30, 2016 and December 31, 2015 were as follows:


	June 30, 2016
			Unpaid
	Recorded		Principal		Related
(dollars in thousands)	Investment		Balance		Allowance
Impaired loans with no related allowance recorded:
Commercial and industrial	$	28,790	$	29,383	$	—
Commercial real estate		11,158		11,158		—
Lease financing		173		173		—
Residential		13,282		14,691		—
Total	$	53,403	$	55,405	$	—
Impaired loans with a related allowance recorded:
Commercial and industrial	$	1,784	$	2,175	$	109
Residential		8,841		8,894		581
Total	$	10,625	$	11,069	$	690
Total impaired loans:
Commercial and industrial	$	30,574	$	31,558	$	109
Commercial real estate		11,158		11,158		—
Lease financing		173		173		—
Residential		22,123		23,585		581
Total	$	64,028	$	66,474	$	690


	December 31, 2015
			Unpaid
	Recorded		Principal		Related
(dollars in thousands)	Investment		Balance		Allowance
Impaired loans with no related allowance recorded:
Commercial and industrial	$	15,845	$	16,516	$	—
Commercial real estate		5,787		5,853		—
Lease financing		181		181		—
Residential		15,247		16,692		—
Total	$	37,060	$	39,242	$	—
Impaired loans with a related allowance recorded:
Residential	$	7,087	$	7,140	$	592
Total	$	7,087	$	7,140	$	592
Total impaired loans:
Commercial and industrial	$	15,845	$	16,516	$	—
Commercial real estate		5,787		5,853		—
Lease financing		181		181		—
Residential		22,334		23,832		592
Total	$	44,147	$	46,382	$	592

The following table provides information with respect to the Company’s average balances, and of interest income recognized from, impaired loans for the three and six months ended June 30, 2016 and 2015:


	Three Months Ended				Six Months Ended
	June 30, 2016				June 30, 2016
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
(dollars in thousands)	Investment		Recognized		Investment		Recognized
Impaired loans with no related allowance recorded:
Commercial and industrial	$	30,443	$	338	$	25,577	$	651
Commercial real estate		8,397		140		7,527		284
Construction		283		—		188		8
Lease financing		176		—		177		—
Residential		13,626		104		14,166		235
Total	$	52,925	$	582	$	47,635	$	1,178
Impaired loans with a related allowance recorded:
Commercial and industrial	$	892	$	—	$	595	$	—
Residential		8,857		85		8,267		176
Total	$	9,749	$	85	$	8,862	$	176
Total impaired loans:
Commercial and industrial	$	31,335	$	338	$	26,172	$	651
Commercial real estate		8,397		140		7,527		284
Construction		283		—		188		8
Lease financing		176		—		177		—
Residential		22,483		189		22,433		411
Total	$	62,674	$	667	$	56,497	$	1,354


	Three Months Ended				Six Months Ended
	June 30, 2015				June 30, 2015
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
(dollars in thousands)	Investment		Recognized		Investment		Recognized
Impaired loans with no related allowance recorded:
Commercial and industrial	$	16,105	$	143	$	15,667	$	288
Commercial real estate		4,407		189		4,606		212
Construction		4,395		38		4,456		76
Lease financing		187		—		187		—
Residential		18,322		76		19,552		178
Total	$	43,416	$	446	$	44,468	$	754
Impaired loans with a related allowance recorded:
Commercial and industrial	$	918	$	9	$	1,236	$	18
Commercial real estate		1,400		21		1,400		42
Residential		6,604		69		7,527		127
Total	$	8,922	$	99	$	10,163	$	187
Total impaired loans:
Commercial and industrial	$	17,023	$	152	$	16,903	$	306
Commercial real estate		5,807		210		6,006		254
Construction		4,395		38		4,456		76
Lease financing		187		—		187		—
Residential		24,926		145		27,079		305
Total	$	52,338	$	545	$	54,631	$	941

Modifications

Commercial and industrial loans modified in a troubled debt restructuring (“TDR”) often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested. Commercial real estate and construction loans modified in a TDR often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period. Lease financing modifications generally involve a short-term forbearance period, usually about three months, after which the missed payments are added to the end of the lease term, thereby extending the maturity date. Interest continues to accrue on the missed payments and as a result, the effective yield on the lease remains unchanged. As the forbearance period usually involves an insignificant payment delay, lease financing modifications typically do not meet the reporting criteria for a TDR. Residential real estate loans modified in a TDR are primarily comprised of loans where monthly payments are lowered to accommodate the borrowers' financial needs for a period of time, normally two years. During that time, the borrower's entire monthly payment is applied to principal. After the lowered monthly payment period ends, the borrower reverts back to paying principal and interest per the original terms with the maturity date adjusted accordingly. Generally, consumer loans are not classified as a TDR as they are normally charged off upon reaching a predetermined delinquency status that ranges from 120 to 180 days and varies by product type.

Loans modified in a TDR are typically already on nonaccrual status and partial charge-offs have in some cases already been taken against the outstanding loan balance. Loans modified in a TDR will have to be evaluated for impairment. As a result, this may have a financial effect of increasing the specific Allowance associated with the loan. An Allowance for impaired commercial loans, including commercial real estate and construction loans, that have been modified in a TDR is measured based on the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. An Allowance for impaired residential loans that have been modified in a TDR is measured based on the estimated fair value of the collateral, less any selling costs. Management exercises significant judgment in developing these estimates.

The following presents, by class, information related to loans modified in a TDR during the three and six months ended June 30, 2016 and 2015:


	Three Months Ended							Six Months Ended
	June 30, 2016							June 30, 2016
		Unpaid		Unpaid					Unpaid		Unpaid
	Number	Principal		Principal				Number	Principal		Principal
	of	Pre-		Post-		Related		of	Pre-		Post-		Related
(dollars in thousands)	Contracts	Modification		Modification		Allowance		Contracts	Modification		Modification		Allowance
Commercial and industrial	2	$	7,857	$	7,857	$	—	4	$	16,353	$	16,353	$	—
Commercial real estate	2		5,538		5,538		—	2		5,538		5,538		—
Residential	2		1,195		1,195		—	8		3,589		3,589		63
Total	6	$	14,590	$	14,590	$	—	14	$	25,480	$	25,480	$	63


	Three Months Ended							Six Months Ended
	June 30, 2015							June 30, 2015
		Unpaid		Unpaid					Unpaid		Unpaid
	Number	Principal		Principal				Number	Principal		Principal
	of	Pre-		Post-		Related		of	Pre-		Post-		Related
(dollars in thousands)	Contracts	Modification		Modification		Allowance		Contracts	Modification		Modification		Allowance
Commercial real estate	1	$	2,755	$	2,755	$	—	1	$	2,755	$	2,755	$	—
Residential	1		621		621		—	3		1,422		1,422		31
Total	2	$	3,376	$	3,376	$	—	4	$	4,177	$	4,177	$	31

The above loans were modified in a TDR through temporary interest-only payments or reduced payments.

The Company had total remaining loan and lease commitments including standby letters of credit of $5.2 billion as of both June 30, 2016 and December 31, 2015. Of the $5.2 billion at June 30, 2016, there were commitments of $6.4 million related to borrowers who had loan terms modified in a TDR. Of the $5.2 billion at December 31, 2015, there were no commitments to borrowers who had loan terms modified in a TDR.

The following table presents, by class, loans modified in TDRs that have defaulted in the current period within 12 months of their permanent modification date for the periods indicated. The Company is reporting these defaulted TDRs based on a payment default definition of 30 days past due:


	Three Months Ended			Six Months Ended
	June 30, 2016			June 30, 2016
	Number of	Recorded		Number of	Recorded
(dollars in thousands)	Contracts	Investment		Contracts	Investment
Commercial and industrial (1)	—	$	—	1	$	2,496
Total	—	$	—	1	$	2,496


	Three Months Ended			Six Months Ended
	June 30, 2015			June 30, 2015
	Number of	Recorded		Number of	Recorded
(dollars in thousands)	Contracts	Investment		Contracts	Investment
Commercial and industrial (1)	1	$	2,755	1	$	2,755
Residential (2)	1		250	1		250
Total	2	$	3,005	2	$	3,005

(1) For the six months ended June 30, 2016, the commercial and industrial loan that subsequently defaulted was refinanced. For the three and six months ended June 30, 2015, the commercial and industrial loan that subsequently defaulted was refinanced.

(2) For the three and six months ended June 30, 2015, the residential real estate loans that subsequently defaulted were modified by reducing the interest rate.