Loans and Allowance for Credit Losses

3 Months Ended

Mar. 31, 2012

Receivables [Abstract]

Loans and Allowance for Credit Losses

Loans and Allowance for Credit Losses

Loans, Net of Unearned Income

Loans, net of unearned income are summarized as follows:

	March 31, 2012			December 31, 2011
	(in thousands)
Real-estate - commercial mortgage	$	4,634,428		$	4,602,596
Commercial - industrial, financial and agricultural	3,518,228			3,639,368
Real-estate - home equity	1,601,880			1,624,562
Real-estate - residential mortgage	1,176,947			1,097,192
Real-estate - construction	647,700			615,445
Consumer	308,495			318,101
Leasing and other	62,994			63,254
Overdrafts	13,782			15,446
Loans, gross of unearned income	11,964,454			11,975,964
Unearned income	(6,854		)	(6,994		)
Loans, net of unearned income	$	11,957,600		$	11,968,970

Allowance for Credit Losses

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses represents management’s estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in its unfunded loan commitments and is recorded in other liabilities on the consolidated balance sheet. The allowance for credit losses is increased by charges to expense, through the provision for credit losses, and decreased by charge-offs, net of recoveries.

The Corporation’s established methodology for evaluating the adequacy of the allowance for loan losses considers both components of the allowance: (1) specific allowances allocated to loans evaluated for impairment under the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) Section 310-10-35, and (2) allowances calculated for pools of loans measured for impairment under FASB ASC Subtopic 450-20.

Effective April 1, 2011, the Corporation revised and enhanced its allowance for credit loss methodology. The significant revisions to the methodology included: (1) a reduction in the amount of loans evaluated for impairment under FASB ASC Section 310-10-35, resulting in only non-accrual loans and certain troubled debt restructurings (TDRs) being identified as impaired; (2) more frequent, quarterly evaluations of impaired loans, including obtaining more timely third-party appraisals for commercial loans collateralized by real estate; and (3) the use of a detailed regression analysis to compute allocation needs for pools of loans measured for impairment under FASB ASC Section 450-20. The Corporation’s conclusion as of March 31, 2011 that its total allowance for credit losses of $271.2 million was sufficient to cover losses inherent in the loan portfolio did not change as a result of implementing its new allowance for credit loss methodology.

The development of the Corporation’s allowance for credit losses is based first on a segmentation of its loan portfolio by general loan type, or "portfolio segments," as presented in the table under the heading, "Loans, Net of Unearned Income," above. Certain portfolio segments are further disaggregated and evaluated collectively for impairment based on “class segments,” which are largely based on the type of collateral underlying each loan. For commercial loans, class segments include loans secured by collateral and unsecured loans. Construction loan class segments include loans secured by commercial real estate and loans secured by residential real estate. Consumer loan class segments are based on collateral types and include direct consumer installment loans and indirect automobile loans.

The following table presents the components of the allowance for credit losses:

	March 31, 2012		December 31, 2011
	(in thousands)
Allowance for loan losses	$	256,496	$	256,471
Reserve for unfunded lending commitments	1,641		1,706
Allowance for credit losses	$	258,137	$	258,177

The following table presents the activity in the allowance for credit losses for the three months ended March 31:

	2012			2011
	(in thousands)
Balance at beginning of period	$	258,177		$	275,498
Loans charged off	(30,259		)	(45,529		)
Recoveries of loans previously charged off	2,219			3,187
Net loans charged off	(28,040		)	(42,342		)
Provision for credit losses	28,000			38,000
Balance at end of period	$	258,137		$	271,156

The following tables present the activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2012 and 2011:

	Real Estate - Commercial Mortgage			Commercial - Industrial, Financial and Agricultural			Real Estate - Home Equity			Real Estate - Residential Mortgage			Real Estate - Construction			Consumer			Leasing and other and overdrafts			Unallocated			Total
	(in thousands)
Three months ended March 31, 2012
Balance at December 31, 2011	$	85,112		$	74,896		$	12,841		$	22,986		$	30,066		$	2,083		$	2,397		$	26,090		$	256,471
Loans charged off	(11,891		)	(5,669		)	(2,206		)	(847		)	(8,571		)	(634		)	(441		)	—			(30,259		)
Recoveries of loans previously charged off	816			636			20			73			64			350			260			—			2,219
Net loans charged off	(11,075		)	(5,033		)	(2,186		)	(774		)	(8,507		)	(284		)	(181		)	—			(28,040		)
Provision for loan losses (1)	7,615			9,893			2,428			2,639			9,627			(156		)	1,058			(5,039		)	28,065
Balance at March 31, 2012	$	81,652		$	79,756		$	13,083		$	24,851		$	31,186		$	1,643		$	3,274		$	21,051		$	256,496
Three months ended March 31, 2011
Balance at December 31, 2010	$	40,831		$	101,436		$	6,454		$	17,425		$	58,117		$	4,669		$	3,840		$	41,499		$	274,271
Loans charged off	(10,047		)	(13,336		)	(1,468		)	(4,996		)	(13,894		)	(1,291		)	(497		)	—			(45,529		)
Recoveries of loans previously charged off	1,535			391			1			44			563			309			344			—			3,187
Net loans charged off	(8,512		)	(12,945		)	(1,467		)	(4,952		)	(13,331		)	(982		)	(153		)	—			(42,342		)
Provision for loan losses (1)	16,239			11,689			669			7,102			10,705			1,049			(1,111		)	(7,999		)	38,343
Balance at March 31, 2011	$	48,558		$	100,180		$	5,656		$	19,575		$	55,491		$	4,736		$	2,576		$	33,500		$	270,272

(1) Provision for loan losses is gross of a $65,000 and $343,000 decrease, respectively, in provision applied to unfunded commitments for the three months ended March 31, 2012 and 2011. The total provision for credit losses, comprised of allocations for both funded and unfunded loans, was $28.0 million and $38.0 million for the three months ended March 31, 2012 and 2011, respectively.

The following tables present loans, net of unearned income and their related allowance for loan losses, by portfolio segment, as of March 31, 2012 and 2011:

	Real Estate - Commercial Mortgage		Commercial - Industrial, Financial and Agricultural		Real Estate - Home Equity		Real Estate - Residential Mortgage		Real Estate - Construction		Consumer		Leasing and other and overdrafts		Unallocated (1)		Total
	(in thousands)
Allowance for loan losses at March 31, 2012
Measured for impairment under FASB ASC Subtopic 450-20	$	50,619	$	47,484	$	9,549	$	8,045	$	17,551	$	1,638	$	3,253	$	21,051	$	159,190
Evaluated for impairment under FASB ASC Section 310-10-35	31,033		32,272		3,534		16,806		13,635		5		21		N/A		97,306
	$	81,652	$	79,756	$	13,083	$	24,851	$	31,186	$	1,643	$	3,274	$	21,051	$	256,496
Loans, net of unearned income at March 31, 2012
Measured for impairment under FASB ASC Subtopic 450-20	$	4,523,691	$	3,441,018	$	1,595,522	$	1,136,199	$	581,381	$	308,487	$	69,890	N/A		$	11,656,188
Evaluated for impairment under FASB ASC Section 310-10-35	110,737		77,210		6,358		40,748		66,319		8		32		N/A		301,412
	$	4,634,428	$	3,518,228	$	1,601,880	$	1,176,947	$	647,700	$	308,495	$	69,922	N/A		$	11,957,600
Allowance for loan losses at March 31, 2011
Measured for impairment under FASB ASC Subtopic 450-20	$	26,327	$	36,709	$	5,656	$	15,288	$	39,448	$	4,736	$	2,576	$	33,500	$	164,240
Evaluated for impairment under FASB ASC Section 310-10-35	22,231		63,471		—		4,287		16,043		—		—		N/A		106,032
	$	48,558	$	100,180	$	5,656	$	19,575	$	55,491	$	4,736	$	2,576	$	33,500	$	270,272
Loans, net of unearned income at March 31, 2011
Measured for impairment under FASB ASC Subtopic 450-20	$	4,224,868	$	3,472,225	$	1,620,340	$	1,003,323	$	629,359	$	337,413	$	60,051	N/A		$	11,347,579
Evaluated for impairment under FASB ASC Section 310-10-35	167,811		220,443		—		18,928		118,447		—		—		N/A		525,629
	$	4,392,679	$	3,692,668	$	1,620,340	$	1,022,251	$	747,806	$	337,413	$	60,051	N/A		$	11,873,208

(1) The Corporation’s unallocated allowance, which was approximately 8% and 12% as of March 31, 2012 and 2011, respectively, was reasonable and appropriate as the estimates used in the allocation process are inherently imprecise.

N/A – Not applicable.

Impaired Loans

A loan is considered to be impaired if it is probable that all amounts will not be collected according to the contractual terms of the loan agreement.

An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. Impaired loans with balances greater than $1.0 million are evaluated individually for impairment. Impaired loans with balances less than $1.0 million are pooled and measured for impairment collectively. As of March 31, 2012 and December 31, 2011, substantially all of the Corporation’s individually evaluated impaired loans were measured based on the estimated fair value of each loan’s collateral. Collateral could be in the form of real estate in the case of impaired commercial mortgages, construction loans and residential mortgages, or business assets, such as accounts receivable or inventory, in the case of commercial loans. Commercial loans may also be secured by real property.

As of March 31, 2012 and 2011, approximately82%and 57%, respectively, of impaired loans with principal balances greater than $1.0 million, whose primary collateral is real estate, were measured at estimated fair value using certified third-party appraisals that had been updated within the preceding 12 months.

Where updated certified appraisals are not obtained for loans evaluated for impairment under FASB ASC Section 310-10-35 that are secured by real estate, fair values are estimated based on one or more of the following:

• Original appraisal – if the original appraisal indicated a very strong loan to value position and, in the opinion of the Corporation’s internal loan evaluation staff, there has not been a significant deterioration in the collateral value, the original appraisal may be used to support the value of the collateral. Original appraisals are typically used only when the estimated collateral value, as adjusted, results in a current loan to value ratio that is lower than the Corporation’s policy for new loans, generally 80%.

• Broker price opinions – in lieu of obtaining an updated certified appraisal, a less formal indication of value, such as a broker price opinion, may be obtained. These opinions are generally used to validate internal estimates of collateral value and are not relied upon as the sole determinant of fair value.

• Discounted cash flows – while substantially all of the Corporation’s impaired loans are measured based on the estimated fair value of collateral, discounted cash flows analyses may be used to validate estimates of collateral value derived from other approaches.

The following table presents total impaired loans by class segment:

													Three Months Ended				Three Months Ended
	March 31, 2012						December 31, 2011						March 31, 2012				March 31, 2011
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized (1)		Average Recorded Investment		Interest Income Recognized
	(in thousands)
With no related allowance recorded:
Real estate - commercial mortgage	$	54,397	$	40,526	$	—	$	54,445	$	46,768	$	—	$	43,647	$	71	$	54,346	$	403
Commercial - secured	28,420		21,679		—		35,529		28,440		—		25,060		7		25,767		146
Commercial - unsecured	13		13		—		—		—		—		7		—		528		3
Real estate - home equity	500		500		—		—		—		—		350		—		—		—
Real estate - residential mortgage	491		491		—		199		199		—		246		2		13,665		43
Construction - commercial residential	66,370		30,492		—		62,822		31,233		—		30,863		25		32,406		178
Construction - commercial	3,597		3,143		—		3,604		3,298		—		3,221		2		2,909		20
	153,788		96,844				156,599		109,938				103,394		107		129,621		793
With a related allowance recorded:
Real estate - commercial mortgage	91,655		70,211		31,033		100,529		79,566		36,060		74,889		122		108,720		839
Commercial - secured	67,416		52,478		30,005		61,970		47,652		26,248		50,065		13		194,450		1,177
Commercial - unsecured	3,408		3,040		2,267		3,139		2,789		2,177		2,915		1		6,782		31
Real estate - home equity	5,858		5,858		3,534		5,294		5,294		3,076		5,576		—		15,664		90
Real estate - residential mortgage	40,257		40,257		16,806		39,918		39,918		16,295		40,088		390		91,482		435
Construction - commercial residential	42,751		28,492		11,886		41,176		25,632		11,287		27,062		22		2,901		17
Construction - commercial	5,201		3,020		1,065		3,221		1,049		506		2,035		2		—		—
Construction - other	1,172		1,172		684		1,127		1,127		663		1,150		1		—		—
Consumer - direct	8		8		5		368		368		228		188		—		—		—
Leasing and other and overdrafts	32		32		21		56		56		37		44		—		—		—
Total	257,758		204,568		97,306		256,798		203,451		96,577		204,012		551		419,999		2,589
	$	411,546	$	301,412	$	97,306	$	413,397	$	313,389	$	96,577	$	307,406	$	658	$	549,620	$	3,382

(1) Effective April 1, 2011 all impaired loans, excluding certain accruing TDRs, were non-accrual loans. Interest income recognized for the three months ended March 31, 2012 represents amounts earned on accruing TDRs.

As of March 31, 2012 and December 31, 2011, there were$96.8 million and $109.9 million, respectively, of impaired loans that did not have a related allowance for loan loss. The estimated fair values of the collateral for these loans exceeded their carrying amount and, accordingly, no specific valuation allowance was considered to be necessary.

Credit Quality Indicators and Non-performing Assets

The following table presents internal credit risk ratings for commercial loans, commercial mortgages and certain construction loans, by class segment:

	Pass						Special Mention						Substandard or Lower						Total
	March 31, 2012			December 31, 2011			March 31, 2012			December 31, 2011			March 31, 2012			December 31, 2011			March 31, 2012			December 31, 2011
	(in thousands)
Real estate - commercial mortgage	$	4,127,388		$	4,099,103		$	169,227		$	160,935		$	337,813		$	342,558		$	4,634,428		$	4,602,596
Commercial - secured	2,877,106			2,977,957			160,129			166,588			258,410			249,014			3,295,645			3,393,559
Commercial -unsecured	208,144			230,962			3,371			6,066			11,068			8,781			222,583			245,809
Total commercial - industrial, financial and agricultural	3,085,250			3,208,919			163,500			172,654			269,478			257,795			3,518,228			3,639,368
Construction - commercial residential	167,038			175,706			48,350			50,854			141,222			126,378			356,610			352,938
Construction - commercial	211,577			186,049			4,684			7,022			18,308			16,309			234,569			209,380
Total construction (excluding Construction - other)	378,615			361,755			53,034			57,876			159,530			142,687			591,179			562,318
	$	7,591,253		$	7,669,777		$	385,761		$	391,465		$	766,821		$	743,040		$	8,743,835		$	8,804,282
% of Total	86.8		%	87.1		%	4.4		%	4.5		%	8.8		%	8.4		%	100.0		%	100.0		%

The following table presents a summary of delinquency and non-performing status for home equity, residential mortgages, construction - other and consumer loans by class segment:

	Performing						Delinquent (1)						Non-performing (2)						Total
	March 31, 2012			December 31, 2011			March 31, 2012			December 31, 2011			March 31, 2012			December 31, 2011			March 31, 2012			December 31, 2011
	(in thousands)
Real estate - home equity	$	1,579,174		$	1,601,722		$	11,792		$	11,633		$	10,914		$	11,207		$	1,601,880		$	1,624,562
Real estate - residential mortgage	1,121,395			1,043,733			32,536			37,123			23,016			16,336			1,176,947			1,097,192
Construction - other	54,424			49,593			843			2,341			1,254			1,193			56,521			53,127
Consumer - direct	31,529			34,263			505			657			407			518			32,441			35,438
Consumer - indirect	146,798			151,112			1,518			2,437			81			183			148,397			153,732
Consumer - other	122,518			122,894			2,793			3,354			2,346			2,683			127,657			128,931
Total consumer	300,845			308,269			4,816			6,448			2,834			3,384			308,495			318,101
Leasing and other and overdrafts	69,097			70,550			477			1,049			348			107			69,922			71,706
	$	3,124,935		$	3,073,867		$	50,464		$	58,594		$	38,366		$	32,227		$	3,213,765		$	3,164,688
% of Total	97.2		%	97.1		%	1.6		%	1.9		%	1.2		%	1.0		%	100.0		%	100.0		%

(1) Includes all accruing loans 31 days to 89 days past due.

(2) Includes all accruing loans 90 days or more past due and all non-accrual loans.

The following table presents non-performing assets:

	March 31, 2012		December 31, 2011
	(in thousands)
Non-accrual loans	$	248,719	$	257,761
Accruing loans greater than 90 days past due	35,270		28,767
Total non-performing loans	283,989		286,528
Other real estate owned (OREO)	33,516		30,803
Total non-performing assets	$	317,505	$	317,331

The following table presents TDRs, by portfolio segment:

	March 31, 2012		December 31, 2011
	(in thousands)
Real-estate - residential mortgage	$	33,800	$	32,331
Real-estate - commercial mortgage	28,153		22,425
Real-estate - construction	10,303		7,645
Commercial - industrial, financial and agricultural	4,075		3,581
Consumer	464		193
Total accruing TDRs	76,795		66,175
Non-accrual TDRs (1)	32,411		32,587
Total TDRs	$	109,206	$	98,762

(1) Included within non-accrual loans in table detailing non-performing assets above.

As of March 31, 2012 and December 31, 2011, there were $150,000 and $1.7 million respectively, of commitments to lend additional funds to borrowers whose loans were modified under TDRs.

The following table presents loans modified as TDRs during the three months ended March 31, 2012 and classified as TDRs as of March 31, 2012, by class segment:

	Number of Loans	Recorded Investment
	(dollars in thousands)
Construction - commercial residential	3	$	6,365
Real estate - residential mortgage	13	4,679
Commercial - secured	5	3,040
Real estate - commercial mortgage	4	5,669
Real estate - home equity	2	171
	27	$	19,924

The following table presents loans modified as TDRs within the previous 12 months, and classified as TDRs as of March 31, 2012, which had a payment default during the three months ended March 31, 2012, by class segment:

	Number of Loans	Recorded Investment
	( dollars in thousands)
Construction - commercial residential	3	$	7,550
Real estate - commercial mortgage	9	4,088
Real estate - residential mortgage	8	1,714
Commercial - secured	2	115
Real estate - home equity	2	239
	24	$	13,706

The following table presents past due status and non-accrual loans by portfolio segment and class segment:

	March 31, 2012
	31-59 Days Past Due		60-89 Days Past Due		≥ 90 Days Past Due and Accruing		Non- accrual		Total ≥ 90 Days		Total Past Due		Current		Total
	(in thousands)
Real estate - commercial mortgage	$	13,925	$	5,796	$	5,564	$	98,512	$	104,076	$	123,797	$	4,510,631	$	4,634,428
Commercial - secured	6,739		4,712		6,202		73,687		79,889		91,340		3,204,305		3,295,645
Commercial - unsecured	499		469		70		2,925		2,995		3,963		218,620		222,583
Total commercial - industrial, financial and agricultural	7,238		5,181		6,272		76,612		82,884		95,303		3,422,925		3,518,228
Real estate - home equity	8,826		2,966		5,167		5,747		10,914		22,706		1,579,174		1,601,880
Real estate - residential mortgage	22,838		9,698		15,274		7,742		23,016		55,552		1,121,395		1,176,947
Construction - commercial residential	2,329		478		—		52,372		52,372		55,179		301,431		356,610
Construction - commercial	—		—		128		6,163		6,291		6,291		228,278		234,569
Construction - other	171		672		82		1,172		1,254		2,097		54,424		56,521
Total real estate - construction	2,500		1,150		210		59,707		59,917		63,567		584,133		647,700
Consumer - direct	377		128		41		366		407		912		31,529		32,441
Consumer - indirect	1,211		307		81		—		81		1,599		146,798		148,397
Consumer - other	1,741		1,052		2,346		—		2,346		5,139		122,518		127,657
Total consumer	3,329		1,487		2,468		366		2,834		7,650		300,845		308,495
Leasing and other and overdrafts	388		89		315		33		348		825		69,097		69,922
	$	59,044	$	26,367	$	35,270	$	248,719	$	283,989	$	369,400	$	11,588,200	$	11,957,600
	December 31, 2011
	31-59 Days Past Due		60-89 Days Past Due		≥ 90 Days Past Due and Accruing		Non- accrual		Total ≥ 90 Days		Total Past Due		Current		Total
	(in thousands)
Real estate - commercial mortgage	$	11,167	$	14,437	$	4,394	$	109,412	$	113,806	$	139,410	$	4,463,186	$	4,602,596
Commercial - secured	9,284		4,498		4,831		73,048		77,879		91,661		3,301,899		3,393,560
Commercial - unsecured	671		515		409		2,656		3,065		4,251		241,557		245,808
Total commercial - industrial, financial and agricultural	9,955		5,013		5,240		75,704		80,944		95,912		3,543,456		3,639,368
Real estate - home equity	7,439		4,194		5,714		5,493		11,207		22,840		1,601,722		1,624,562
Real estate - residential mortgage	23,877		13,246		8,502		7,834		16,336		53,459		1,043,733		1,097,192
Construction - commercial residential	2,372		4,824		1,656		53,420		55,076		62,272		290,665		352,937
Construction - commercial	31		—		128		4,347		4,475		4,506		204,875		209,381
Construction - other	2,341		—		66		1,127		1,193		3,534		49,593		53,127
Total real estate - construction	4,744		4,824		1,850		58,894		60,744		70,312		545,133		615,445
Consumer - direct	455		202		150		368		518		1,175		34,263		35,438
Consumer - indirect	1,997		440		183		—		183		2,620		151,112		153,732
Consumer - other	2,251		1,103		2,683		—		2,683		6,037		122,894		128,931
Total consumer	4,703		1,745		3,016		368		3,384		9,832		308,269		318,101
Leasing and other and overdrafts	925		124		51		56		107		1,156		70,550		71,706
	$	62,810	$	43,583	$	28,767	$	257,761	$	286,528	$	392,921	$	11,576,049	$	11,968,970