| 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: | | | | | | | | | | September 30,
2017 | | December 31, 2016 | | (in thousands) | Real-estate - commercial mortgage | $ | 6,275,140 |
| | $ | 6,018,582 |
| Commercial - industrial, financial and agricultural | 4,223,075 |
| | 4,087,486 |
| Real-estate - residential mortgage | 1,887,907 |
| | 1,601,994 |
| Real-estate - home equity | 1,567,473 |
| | 1,625,115 |
| Real-estate - construction | 973,108 |
| | 843,649 |
| Consumer | 302,448 |
| | 291,470 |
| Leasing and other | 278,658 |
| | 246,704 |
| Overdrafts | 3,400 |
| | 3,662 |
| Loans, gross of unearned income | 15,511,209 |
| | 14,718,662 |
| Unearned income | (24,310 | ) | | (19,390 | ) | Loans, net of unearned income | $ | 15,486,899 |
| | $ | 14,699,272 |
|
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 incurred losses 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 incurred losses in its unfunded loan commitments and is recorded in other liabilities on the consolidated balance sheets. 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 allowance for credit losses includes: (1) specific allowances allocated to loans evaluated for impairment under FASB ASC Section 310-10-35; and (2) allowances calculated for pools of loans measured for impairment under FASB ASC Subtopic 450-20.
The Corporation segments 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. Commercial loans include both secured and unsecured loans. Construction loan class segments include loans secured by commercial real estate, loans to commercial borrowers secured by residential real estate and loans to individuals secured by residential real estate. Consumer loan class segments include direct consumer installment loans and indirect vehicle loans.
The following table presents the components of the allowance for credit losses: | | | | | | | | | | September 30,
2017 | | December 31,
2016 | | (in thousands) | Allowance for loan losses | $ | 172,245 |
| | $ | 168,679 |
| Reserve for unfunded lending commitments | 2,504 |
| | 2,646 |
| Allowance for credit losses | $ | 174,749 |
| | $ | 171,325 |
|
The following table presents the activity in the allowance for credit losses: | | | | | | | | | | | | | | | | | | Three months ended September 30 | | Nine months ended September 30 | | 2017 | | 2016 | | 2017 | | 2016 | | (in thousands) | Balance at beginning of period | $ | 174,998 |
| | $ | 165,108 |
| | $ | 171,325 |
| | $ | 171,412 |
| Loans charged off | (7,795 | ) | | (7,672 | ) | | (25,917 | ) | | (29,573 | ) | Recoveries of loans previously charged off | 2,471 |
| | 3,592 |
| | 12,766 |
| | 15,148 |
| Net loans charged off | (5,324 | ) | | (4,080 | ) | | (13,151 | ) | | (14,425 | ) | Provision for credit losses | 5,075 |
| | 4,141 |
| | 16,575 |
| | 8,182 |
| Balance at end of period | $ | 174,749 |
| | $ | 165,169 |
| | $ | 174,749 |
| | $ | 165,169 |
|
The Corporation has historically maintained an unallocated allowance for credit losses for factors and conditions that exist at the balance sheet date, but are not specifically identifiable, and to recognize the inherent imprecision in estimating and measuring loss exposure. In 2017, enhancements were made to allow for the impact of these factors and conditions to be quantified in the allowance allocation process. Accordingly, an unallocated allowance for credit losses is no longer necessary.
The following table presents the activity in the allowance for loan losses by portfolio segment: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Real Estate - Commercial Mortgage | | Commercial - Industrial, Financial and Agricultural | | Real Estate - Home Equity | | Real Estate - Residential Mortgage | | Real Estate - Construction | | Consumer | | Leasing, other and overdrafts | | Unallocated | | Total | | (in thousands) | Three months ended September 30, 2017 | | | | | | | | | | | | | | | | | | Balance at June 30, 2017 | $ | 57,372 |
| | $ | 67,642 |
| | $ | 17,456 |
| | $ | 16,439 |
| | $ | 9,534 |
| | $ | 1,794 |
| | $ | 2,105 |
| | $ | — |
| | $ | 172,342 |
| Loans charged off | (483 | ) | | (2,714 | ) | | (547 | ) | | (195 | ) | | (2,744 | ) | | (373 | ) | | (739 | ) | | — |
| | (7,795 | ) | Recoveries of loans previously charged off | 106 |
| | 665 |
| | 252 |
| | 219 |
| | 629 |
| | 193 |
| | 407 |
| | — |
| | 2,471 |
| Net loans charged off | (377 | ) | | (2,049 | ) | | (295 | ) | | 24 |
| | (2,115 | ) | | (180 | ) | | (332 | ) | | — |
| | (5,324 | ) | Provision for loan losses (1) | (2,008 | ) | | 5,392 |
| | 1,297 |
| | 220 |
| | (283 | ) | | 383 |
| | 226 |
| | — |
| | 5,227 |
| Balance at Sept 30, 2017 | $ | 54,987 |
| | $ | 70,985 |
| | $ | 18,458 |
| | $ | 16,683 |
| | $ | 7,136 |
| | $ | 1,997 |
| | $ | 1,999 |
| | $ | — |
| | $ | 172,245 |
| Three months ended September 30, 2016 | | | | | | | | | | | | | | | | | | Balance at June 30, 2016 | $ | 43,740 |
| | $ | 51,755 |
| | $ | 26,170 |
| | $ | 21,226 |
| | $ | 5,772 |
| | $ | 2,984 |
| | $ | 2,518 |
| | $ | 8,381 |
| | $ | 162,546 |
| Loans charged off | (1,350 | ) | | (3,144 | ) | | (709 | ) | | (802 | ) | | (150 | ) | | (685 | ) | | (832 | ) | | — |
| | (7,672 | ) | Recoveries of loans previously charged off | 296 |
| | 1,539 |
| | 241 |
| | 228 |
| | 898 |
| | 222 |
| | 168 |
| | — |
| | 3,592 |
| Net loans charged off | (1,054 | ) | | (1,605 | ) | | (468 | ) | | (574 | ) | | 748 |
| | (463 | ) | | (664 | ) | | — |
| | (4,080 | ) | Provision for loan losses (1) | 3,171 |
| | (1,871 | ) | | 1,419 |
| | 1,452 |
| | 23 |
| | 852 |
| | 1,075 |
| | (2,061 | ) | | 4,060 |
| Balance at September 30, 2016 | $ | 45,857 |
| | $ | 48,279 |
| | $ | 27,121 |
| | $ | 22,104 |
| | $ | 6,543 |
| | $ | 3,373 |
| | $ | 2,929 |
| | $ | 6,320 |
| | $ | 162,526 |
| Nine months ended September 30, 2017 | | | | | | | | | | | | | | | | | | Balance at December 31, 2016 | $ | 46,842 |
| | $ | 54,353 |
| | $ | 26,801 |
| | $ | 22,929 |
| | $ | 6,455 |
| | $ | 3,574 |
| | $ | 3,192 |
| | $ | 4,533 |
| | $ | 168,679 |
| Loans charged off | (1,949 | ) | | (13,594 | ) | | (1,837 | ) | | (535 | ) | | (3,765 | ) | | (1,659 | ) | | (2,578 | ) | | — |
| | (25,917 | ) | Recoveries of loans previously charged off | 1,490 |
| | 6,830 |
| | 604 |
| | 600 |
| | 1,550 |
| | 899 |
| | 793 |
| | — |
| | 12,766 |
| Net loans charged off | (459 | ) | | (6,764 | ) | | (1,233 | ) | | 65 |
| | (2,215 | ) | | (760 | ) | | (1,785 | ) | | — |
| | (13,151 | ) | Provision for loan losses (1) | 8,604 |
| | 23,396 |
| | (7,110 | ) | | (6,311 | ) | | 2,896 |
| | (817 | ) | | 592 |
| | (4,533 | ) | | 16,717 |
| Balance at September 30, 2017 | $ | 54,987 |
| | $ | 70,985 |
| | $ | 18,458 |
| | $ | 16,683 |
| | $ | 7,136 |
| | $ | 1,997 |
| | $ | 1,999 |
| | $ | — |
| | $ | 172,245 |
| Nine months ended September 30, 2016 | | | | | | | | | | | | | | | | | | Balance at December 31, 2015 | $ | 47,866 |
| | $ | 57,098 |
| | $ | 22,405 |
| | $ | 21,375 |
| | $ | 6,529 |
| | $ | 2,585 |
| | $ | 2,468 |
| | $ | 8,728 |
| | $ | 169,054 |
| Loans charged off | (3,406 | ) | | (13,957 | ) | | (3,295 | ) | | (2,210 | ) | | (1,218 | ) | | (2,261 | ) | | (3,226 | ) | | — |
| | (29,573 | ) | Recoveries of loans previously charged off | 2,488 |
| | 6,789 |
| | 929 |
| | 784 |
| | 2,844 |
| | 957 |
| | 357 |
| | — |
| | 15,148 |
| Net loans charged off | (918 | ) | | (7,168 | ) | | (2,366 | ) | | (1,426 | ) | | 1,626 |
| | (1,304 | ) | | (2,869 | ) | | — |
| | (14,425 | ) | Provision for loan losses (1) | (1,091 | ) | | (1,651 | ) | | 7,082 |
| | 2,155 |
| | (1,612 | ) | | 2,092 |
| | 3,330 |
| | (2,408 | ) | | 7,897 |
| Balance at September 30, 2016 | $ | 45,857 |
| | $ | 48,279 |
| | $ | 27,121 |
| | $ | 22,104 |
| | $ | 6,543 |
| | $ | 3,373 |
| | $ | 2,929 |
| | $ | 6,320 |
| | $ | 162,526 |
|
| | (1) | The provision for loan losses excluded decreases of $152,000 and $142,000 in the reserve for unfunded lending commitments for the three and nine months ended September 30, 2017, respectively and increases of $81,000 and $285,000 in the reserve for unfunded lending commitments for the three and nine months ended September 30, 2016, respectively. |
The following table presents loans, net of unearned income and their related allowance for loan losses, by portfolio segment: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Real Estate - Commercial Mortgage | | Commercial - Industrial, Financial and Agricultural | | Real Estate - Home Equity | | Real Estate - Residential Mortgage | | Real Estate - Construction | | Consumer | | Leasing, other and overdrafts | | Unallocated | | Total | | (in thousands) | Allowance for loan losses at September 30, 2017: | | | | | | | | | | | | | | | Measured for impairment under FASB ASC Subtopic 450-20 | $ | 47,261 |
| | $ | 55,486 |
| | $ | 7,632 |
| | $ | 6,488 |
| | $ | 5,702 |
| | $ | 1,976 |
| | $ | 1,999 |
| | $ | — |
| | $ | 126,544 |
| Evaluated for impairment under FASB ASC Section 310-10-35 | 7,726 |
| | 15,499 |
| | 10,826 |
| | 10,195 |
| | 1,434 |
| | 21 |
| | — |
| | N/A |
| | 45,701 |
| | $ | 54,987 |
| | $ | 70,985 |
| | $ | 18,458 |
| | $ | 16,683 |
| | $ | 7,136 |
| | $ | 1,997 |
| | $ | 1,999 |
| | $ | — |
| | $ | 172,245 |
| | | | | | | | | | | | | | | | | | | Loans, net of unearned income at September 30, 2017: | | | | | | | | | | | | | | | Measured for impairment under FASB ASC Subtopic 450-20 | $ | 6,228,935 |
| | $ | 4,162,857 |
| | $ | 1,543,551 |
| | $ | 1,845,329 |
| | $ | 959,584 |
| | $ | 302,415 |
| | $ | 257,748 |
| | N/A |
| | $ | 15,300,419 |
| Evaluated for impairment under FASB ASC Section 310-10-35 | 46,205 |
| | 60,218 |
| | 23,922 |
| | 42,578 |
| | 13,524 |
| | 33 |
| | — |
| | N/A |
| | 186,480 |
| | $ | 6,275,140 |
| | $ | 4,223,075 |
| | $ | 1,567,473 |
| | $ | 1,887,907 |
| | $ | 973,108 |
| | $ | 302,448 |
| | $ | 257,748 |
| | N/A |
| | $ | 15,486,899 |
| | | | | | | | | | | | | | | | | | | Allowance for loan losses at September 30, 2016: | | | | | | | | | | | | | | | Measured for impairment under FASB ASC Subtopic 450-20 | $ | 36,151 |
| | $ | 38,858 |
| | $ | 17,828 |
| | $ | 10,410 |
| | $ | 4,422 |
| | $ | 3,346 |
| | $ | 2,929 |
| | $ | 6,320 |
| | $ | 120,264 |
| Evaluated for impairment under FASB ASC Section 310-10-35 | 9,706 |
| | 9,421 |
| | 9,293 |
| | 11,694 |
| | 2,121 |
| | 27 |
| | — |
| | N/A |
| | 42,262 |
| | $ | 45,857 |
| | $ | 48,279 |
| | $ | 27,121 |
| | $ | 22,104 |
| | $ | 6,543 |
| | $ | 3,373 |
| | $ | 2,929 |
| | $ | 6,320 |
| | $ | 162,526 |
| | | | | | | | | | | | | | | | | | | Loans, net of unearned income at September 30, 2016: | | | | | | | | | | | | | | | Measured for impairment under FASB ASC Subtopic 450-20 | $ | 5,763,863 |
| | $ | 3,972,461 |
| | $ | 1,621,731 |
| | $ | 1,496,461 |
| | $ | 850,315 |
| | $ | 283,633 |
| | $ | 219,780 |
| | N/A |
| | $ | 14,208,244 |
| Evaluated for impairment under FASB ASC Section 310-10-35 | 55,052 |
| | 51,658 |
| | 18,690 |
| | 46,235 |
| | 11,319 |
| | 40 |
| | — |
| | N/A |
| | 182,994 |
| | $ | 5,818,915 |
| | $ | 4,024,119 |
| | $ | 1,640,421 |
| | $ | 1,542,696 |
| | $ | 861,634 |
| | $ | 283,673 |
| | $ | 219,780 |
| | N/A |
| | $ | 14,391,238 |
|
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. Impaired loans consist of all loans on non-accrual status and accruing troubled debt restructurings ("TDRs"). An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. Impaired loans to borrowers with total outstanding commitments greater than or equal to $1.0 million are evaluated individually for impairment. Impaired loans to borrowers with total outstanding commitments less than $1.0 million are pooled and measured for impairment collectively.
All loans individually evaluated for impairment under FASB ASC Section 310-10-35 are measured for losses on a quarterly basis. As of September 30, 2017 and December 31, 2016, substantially all of the Corporation’s individually evaluated impaired loans with total outstanding balances greater than or equal to $1.0 million 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 and construction loans, or business assets, such as accounts receivable or inventory, in the case of commercial and industrial loans. Commercial and industrial loans may also be secured by real property.
As of September 30, 2017 and 2016, approximately 95% and 73%, respectively, of impaired loans with principal balances greater than or equal to $1.0 million, whose primary collateral is real estate, were measured at estimated fair value of the collateral using appraisals performed by state certified third-party appraisers that had been updated in the preceding 12 months.
When updated 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 the original appraisal values, as long as the original appraisal indicated an acceptable loan-to-value position and, in the opinion of the Corporation's internal credit administration staff, there has not been a significant deterioration in the collateral value since the original appraisal was performed. Original appraisals are typically used only when the estimated collateral value, as adjusted for the age of the appraisal, results in a current loan-to-value ratio that is lower than the Corporation's loan-to-value requirements for new loans, generally less than 70%.
The following table presents total impaired loans by class segment: | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2017 | | December 31, 2016 | | Unpaid Principal Balance | | Recorded Investment | | Related Allowance | | Unpaid Principal Balance | | Recorded Investment | | Related Allowance | | (in thousands) | With no related allowance recorded: | | | | | | | | | | | Real estate - commercial mortgage | $ | 24,722 |
| | $ | 21,000 |
| | $ | — |
| | $ | 28,757 |
| | $ | 25,447 |
| | $ | — |
| Commercial - secured | 32,738 |
| | 30,053 |
| | — |
| | 29,296 |
| | 25,526 |
| | — |
| Real estate - residential mortgage | 4,603 |
| | 4,603 |
| | — |
| | 4,689 |
| | 4,689 |
| | — |
| Construction - commercial residential | 14,086 |
| | 9,450 |
| | — |
| | 6,271 |
| | 4,795 |
| | — |
| | 76,149 |
| | 65,106 |
| |
| | 69,013 |
| | 60,457 |
| |
| With a related allowance recorded: | | | | | | | | | | | Real estate - commercial mortgage | 32,770 |
| | 25,205 |
| | 7,726 |
| | 37,132 |
| | 29,446 |
| | 10,162 |
| Commercial - secured | 33,481 |
| | 29,189 |
| | 14,974 |
| | 27,767 |
| | 22,626 |
| | 13,198 |
| Commercial - unsecured | 1,236 |
| | 976 |
| | 525 |
| | 1,122 |
| | 823 |
| | 455 |
| Real estate - home equity | 27,739 |
| | 23,922 |
| | 10,826 |
| | 23,971 |
| | 19,205 |
| | 9,511 |
| Real estate - residential mortgage | 43,979 |
| | 37,975 |
| | 10,195 |
| | 48,885 |
| | 41,359 |
| | 11,897 |
| Construction - commercial residential | 6,119 |
| | 2,883 |
| | 1,006 |
| | 10,103 |
| | 4,206 |
| | 1,300 |
| Construction - commercial | 186 |
| | 100 |
| | 36 |
| | 681 |
| | 435 |
| | 145 |
| Construction - other | 1,096 |
| | 1,091 |
| | 392 |
| | 1,096 |
| | 1,096 |
| | 423 |
| Consumer - direct | 24 |
| | 19 |
| | 13 |
| | 21 |
| | 21 |
| | 14 |
| Consumer - indirect | 14 |
| | 14 |
| | 8 |
| | 19 |
| | 19 |
| | 12 |
| | 146,644 |
| | 121,374 |
| | 45,701 |
| | 150,797 |
| | 119,236 |
| | 47,117 |
| Total | $ | 222,793 |
| | $ | 186,480 |
| | $ | 45,701 |
| | $ | 219,810 |
| | $ | 179,693 |
| | $ | 47,117 |
|
As of September 30, 2017 and December 31, 2016, there were $65.1 million and $60.5 million, respectively, of impaired loans that did not have a related allowance for loan loss. The estimated fair values of the collateral securing these loans exceeded their carrying amount, or they were previously charged down to realizable collateral values. Accordingly, no specific valuation allowance was considered to be necessary. The following table presents average impaired loans by class segment: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended September 30 | | Nine months ended September 30 | | 2017 | | 2016 | | 2017 | | 2016 | | Average
Recorded
Investment | | Interest
Income (1) | | Average
Recorded
Investment | | Interest
Income (1) | | Average
Recorded
Investment | | Interest
Income (1) | | Average
Recorded
Investment | | Interest
Income (1) | | (in thousands) | With no related allowance recorded: | | | | | | | | | | | | | | | | Real estate - commercial mortgage | $ | 21,698 |
| | $ | 72 |
| | $ | 25,048 |
| | $ | 78 |
| | $ | 22,770 |
| | $ | 213 |
| | $ | 23,929 |
| | 219 |
| Commercial - secured | 33,044 |
| | 46 |
| | 23,836 |
| | 32 |
| | 29,309 |
| | 128 |
| | 18,400 |
| | 68 |
| Real estate - residential mortgage | 4,616 |
| | 27 |
| | 6,151 |
| | 33 |
| | 4,645 |
| | 79 |
| | 5,826 |
| | 96 |
| Construction - commercial residential | 8,747 |
| | 5 |
| | 5,734 |
| | 10 |
| | 6,745 |
| | 11 |
| | 6,658 |
| | 45 |
| Construction - commercial | 295 |
| | — |
| | — |
| | — |
| | 298 |
| | — |
| | — |
| | — |
| | 68,400 |
| | 150 |
| | 60,769 |
| | 153 |
| | 63,767 |
| | 431 |
| | 54,813 |
| | 428 |
| With a related allowance recorded: | | | | | | | | | | | | | | | | Real estate - commercial mortgage | 25,910 |
| | 86 |
| | 29,139 |
| | 91 |
| | 27,518 |
| | 259 |
| | 32,310 |
| | 303 |
| Commercial - secured | 24,334 |
| | 33 |
| | 21,688 |
| | 29 |
| | 23,291 |
| | 96 |
| | 26,665 |
| | 100 |
| Commercial - unsecured | 818 |
| | 1 |
| | 953 |
| | 1 |
| | 806 |
| | 1 |
| | 903 |
| | 3 |
| Real estate - home equity | 22,837 |
| | 150 |
| | 18,283 |
| | 76 |
| | 20,957 |
| | 362 |
| | 17,589 |
| | 203 |
| Real estate - residential mortgage | 38,329 |
| | 225 |
| | 40,913 |
| | 221 |
| | 39,584 |
| | 680 |
| | 42,399 |
| | 683 |
| Construction - commercial residential | 5,047 |
| | 4 |
| | 4,947 |
| | 8 |
| | 5,397 |
| | 11 |
| | 5,568 |
| | 37 |
| Construction - commercial | 113 |
| | — |
| | 476 |
| | — |
| | 186 |
| | — |
| | 546 |
| | — |
| Construction - other | 1,091 |
| | — |
| | 756 |
| | — |
| | 1,094 |
| | — |
| | 579 |
| | — |
| Consumer - direct | 19 |
| | — |
| | 19 |
| | — |
| | 19 |
| | — |
| | 17 |
| | 1 |
| Consumer - indirect | 15 |
| | — |
| | 11 |
| | — |
| | 17 |
| | — |
| | 14 |
| | — |
| Leasing, other and overdrafts | — |
| | — |
| | — |
| | — |
| | 356 |
| | — |
| | 712 |
| | — |
| | 118,513 |
| | 499 |
| | 117,185 |
| | 426 |
| | 119,225 |
| | 1,409 |
| | 127,302 |
| | 1,330 |
| Total | $ | 186,913 |
| | $ | 649 |
| | $ | 177,954 |
| | $ | 579 |
| | $ | 182,992 |
| | $ | 1,840 |
| | $ | 182,115 |
| | 1,758 |
| | | | | | | | | | | | | | | | |
| | (1) | All impaired loans, excluding accruing TDRs, were non-accrual loans. Interest income recognized for the three and nine months ended September 30, 2017 and 2016 represents amounts earned on accruing TDRs. |
Credit Quality Indicators and Non-performing Assets
The following is a summary of the Corporation's internal risk rating categories: | | • | Pass: These loans do not currently pose undue credit risk and can range from the highest to average quality, depending on the degree of potential risk. |
| | • | Special Mention: These loans constitute an undue and unwarranted credit risk, but not to a point of justifying a classification of substandard. Loans in this category are currently acceptable, but are nevertheless potentially weak. |
| | • | Substandard or Lower: These loans are inadequately protected by current sound worth and paying capacity of the borrower. There exists a well-defined weakness or weaknesses that jeopardize the normal repayment of the debt. |
The following table presents internal credit risk ratings for the indicated loan class segments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | Special Mention | | Substandard or Lower | | Total | | September 30, 2017 | | December 31, 2016 | | September 30, 2017 | | December 31, 2016 | | September 30, 2017 | | December 31, 2016 | | September 30, 2017 | | December 31, 2016 | | (dollars in thousands) | Real estate - commercial mortgage | $ | 6,028,523 |
| | $ | 5,763,122 |
| | $ | 118,947 |
| | $ | 132,484 |
| | $ | 127,670 |
| | $ | 122,976 |
| | $ | 6,275,140 |
| | $ | 6,018,582 |
| Commercial - secured | 3,807,138 |
| | 3,686,152 |
| | 98,639 |
| | 128,873 |
| | 183,181 |
| | 118,527 |
| | 4,088,958 |
| | 3,933,552 |
| Commercial - unsecured | 127,561 |
| | 145,922 |
| | 3,474 |
| | 4,481 |
| | 3,082 |
| | 3,531 |
| | 134,117 |
| | 153,934 |
| Total commercial - industrial, financial and agricultural | 3,934,699 |
| | 3,832,074 |
| | 102,113 |
| | 133,354 |
| | 186,263 |
| | 122,058 |
| | 4,223,075 |
| | 4,087,486 |
| Construction - commercial residential | 134,786 |
| | 113,570 |
| | 6,746 |
| | 15,447 |
| | 14,595 |
| | 13,172 |
| | 156,127 |
| | 142,189 |
| Construction - commercial | 743,111 |
| | 635,963 |
| | 4,418 |
| | 3,412 |
| | 3,869 |
| | 5,115 |
| | 751,398 |
| | 644,490 |
| Total construction (excluding Construction - other) | 877,897 |
| | 749,533 |
| | 11,164 |
| | 18,859 |
| | 18,464 |
| | 18,287 |
| | 907,525 |
| | 786,679 |
| | $ | 10,841,119 |
| | $ | 10,344,729 |
| | $ | 232,224 |
| | $ | 284,697 |
| | $ | 332,397 |
| | $ | 263,321 |
| | $ | 11,405,740 |
| | $ | 10,892,747 |
| % of Total | 95.1 | % | | 95.0 | % | | 2.0 | % | | 2.6 | % | | 2.9 | % | | 2.4 | % | | 100.0 | % | | 100.0 | % |
The risk rating process allows management to identify credits that potentially carry more risk in a timely manner and to allocate resources to managing troubled accounts. The Corporation believes that internal risk ratings are the most relevant credit quality indicator for the class segments presented above. The migration of loans through the various internal risk rating categories is a significant component of the allowance for credit loss methodology, which bases the probability of default on this migration. Assigning risk ratings involves judgment. The Corporation's loan review officers provide an independent assessment of risk rating accuracy. Ratings may be changed based on the ongoing monitoring procedures performed by loan officers or credit administration staff, or if specific loan review activities identify a deterioration or an improvement in the loan.
The Corporation does not assign internal risk ratings to smaller balance, homogeneous loans, such as home equity, residential mortgage, construction loans to individuals secured by residential real estate, consumer and lease receivables. For these loans, the most relevant credit quality indicator is delinquency status. The migration of loans through the various delinquency status categories is a significant component of the allowance for credit losses methodology for those loans, which bases the probability of default on this migration.
The following table presents a summary of performing, delinquent and non-performing loans for the indicated loan class segments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Performing | | Delinquent (1) | | Non-performing (2) | | Total | | September 30, 2017 | | December 31, 2016 | | September 30, 2017 | | December 31, 2016 | | September 30, 2017 | | December 31, 2016 | | September 30, 2017 | | December 31, 2016 | | (dollars in thousands) | Real estate - home equity | $ | 1,542,289 |
| | $ | 1,602,687 |
| | $ | 12,955 |
| | $ | 9,274 |
| | $ | 12,229 |
| | $ | 13,154 |
| | $ | 1,567,473 |
| | $ | 1,625,115 |
| Real estate - residential mortgage | 1,845,495 |
| | 1,557,995 |
| | 20,769 |
| | 20,344 |
| | 21,643 |
| | 23,655 |
| | 1,887,907 |
| | 1,601,994 |
| Construction - other | 64,110 |
| | 55,874 |
| | 382 |
| | — |
| | 1,091 |
| | 1,096 |
| | 65,583 |
| | 56,970 |
| Consumer - direct | 55,490 |
| | 93,572 |
| | 158 |
| | 1,752 |
| | 63 |
| | 1,563 |
| | 55,711 |
| | 96,887 |
| Consumer - indirect | 243,723 |
| | 190,656 |
| | 2,834 |
| | 3,599 |
| | 180 |
| | 328 |
| | 246,737 |
| | 194,583 |
| Total consumer | 299,213 |
| | 284,228 |
| | 2,992 |
| | 5,351 |
| | 243 |
| | 1,891 |
| | 302,448 |
| | 291,470 |
| Leasing | 256,784 |
| | 229,591 |
| | 884 |
| | 1,068 |
| | 80 |
| | 317 |
| | 257,748 |
| | 230,976 |
| | $ | 4,007,891 |
| | $ | 3,730,375 |
| | $ | 37,982 |
| | $ | 36,037 |
| | $ | 35,286 |
| | $ | 40,113 |
| | $ | 4,081,159 |
| | $ | 3,806,525 |
| % of Total | 98.2 | % | | 98.0 | % | | 0.9 | % | | 0.9 | % | | 0.9 | % | | 1.1 | % | | 100.0 | % | | 100.0 | % |
| | (1) | Includes all accruing loans 30 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: | | | | | | | | | | September 30,
2017 | | December 31,
2016 | | (in thousands) | Non-accrual loans | $ | 123,345 |
| | $ | 120,133 |
| Loans 90 days or more past due and still accruing | 13,124 |
| | 11,505 |
| Total non-performing loans | 136,469 |
| | 131,638 |
| Other real estate owned (OREO) | 10,542 |
| | 12,815 |
| Total non-performing assets | $ | 147,011 |
| | $ | 144,453 |
|
The following tables present past due status and non-accrual loans by portfolio segment and class segment: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2017 | | 30-59 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 | $ | 10,276 |
| | $ | 2,297 |
| | $ | 2,884 |
| | $ | 31,766 |
| | $ | 34,650 |
| | $ | 47,223 |
| | $ | 6,227,917 |
| | $ | 6,275,140 |
| Commercial - secured | 8,382 |
| | 2,378 |
| | 1,503 |
| | 51,787 |
| | 53,290 |
| | 64,050 |
| | 4,024,908 |
| | 4,088,958 |
| Commercial - unsecured | 114 |
| | 34 |
| | — |
| | 919 |
| | 919 |
| | 1,067 |
| | 133,050 |
| | 134,117 |
| Total commercial - industrial, financial and agricultural | 8,496 |
| | 2,412 |
| | 1,503 |
| | 52,706 |
| | 54,209 |
| | 65,117 |
| | 4,157,958 |
| | 4,223,075 |
| Real estate - home equity | 11,192 |
| | 1,763 |
| | 3,096 |
| | 9,133 |
| | 12,229 |
| | 25,184 |
| | 1,542,289 |
| | 1,567,473 |
| Real estate - residential mortgage | 15,106 |
| | 5,663 |
| | 5,258 |
| | 16,385 |
| | 21,643 |
| | 42,412 |
| | 1,845,495 |
| | 1,887,907 |
| Construction - commercial residential | 400 |
| | 18 |
| | 60 |
| | 12,164 |
| | 12,224 |
| | 12,642 |
| | 143,485 |
| | 156,127 |
| Construction - commercial | 366 |
| | — |
| | — |
| | 100 |
| | 100 |
| | 466 |
| | 750,932 |
| | 751,398 |
| Construction - other | 382 |
| | — |
| | — |
| | 1,091 |
| | 1,091 |
| | 1,473 |
| | 64,110 |
| | 65,583 |
| Total real estate - construction | 1,148 |
| | 18 |
| | 60 |
| | 13,355 |
| | 13,415 |
| | 14,581 |
| | 958,527 |
| | 973,108 |
| Consumer - direct | 118 |
| | 40 |
| | 63 |
| | — |
| | 63 |
| | 221 |
| | 55,490 |
| | 55,711 |
| Consumer - indirect | 2,393 |
| | 441 |
| | 180 |
| | — |
| | 180 |
| | 3,014 |
| | 243,723 |
| | 246,737 |
| Total consumer | 2,511 |
| | 481 |
| | 243 |
| | — |
| | 243 |
| | 3,235 |
| | 299,213 |
| | 302,448 |
| Leasing, other and overdrafts | 764 |
| | 120 |
| | 80 |
| | — |
| | 80 |
| | 964 |
| | 256,784 |
| | 257,748 |
| Total | $ | 49,493 |
| | $ | 12,754 |
| | $ | 13,124 |
| | $ | 123,345 |
| | $ | 136,469 |
| | $ | 198,716 |
| | $ | 15,288,183 |
| | $ | 15,486,899 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2016 | | 30-59 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 | $ | 6,254 |
| | $ | 1,622 |
| | $ | 383 |
| | $ | 38,936 |
| | $ | 39,319 |
| | $ | 47,195 |
| | $ | 5,971,387 |
| | $ | 6,018,582 |
| Commercial - secured | 6,660 |
| | 2,616 |
| | 959 |
| | 41,589 |
| | 42,548 |
| | 51,824 |
| | 3,881,728 |
| | 3,933,552 |
| Commercial - unsecured | 898 |
| | 35 |
| | 152 |
| | 760 |
| | 912 |
| | 1,845 |
| | 152,089 |
| | 153,934 |
| Total commercial - industrial, financial and agricultural | 7,558 |
| | 2,651 |
| | 1,111 |
| | 42,349 |
| | 43,460 |
| | 53,669 |
| | 4,033,817 |
| | 4,087,486 |
| Real estate - home equity | 6,596 |
| | 2,678 |
| | 2,543 |
| | 10,611 |
| | 13,154 |
| | 22,428 |
| | 1,602,687 |
| | 1,625,115 |
| Real estate - residential mortgage | 15,600 |
| | 4,744 |
| | 5,224 |
| | 18,431 |
| | 23,655 |
| | 43,999 |
| | 1,557,995 |
| | 1,601,994 |
| Construction - commercial residential | 233 |
| | 51 |
| | 36 |
| | 8,275 |
| | 8,311 |
| | 8,595 |
| | 133,594 |
| | 142,189 |
| Construction - commercial | 743 |
| | — |
| | — |
| | 435 |
| | 435 |
| | 1,178 |
| | 643,312 |
| | 644,490 |
| Construction - other | — |
| | — |
| | — |
| | 1,096 |
| | 1,096 |
| | 1,096 |
| | 55,874 |
| | 56,970 |
| Total real estate - construction | 976 |
| | 51 |
| | 36 |
| | 9,806 |
| | 9,842 |
| | 10,869 |
| | 832,780 |
| | 843,649 |
| Consumer - direct | 1,211 |
| | 541 |
| | 1,563 |
| | — |
| | 1,563 |
| | 3,315 |
| | 93,572 |
| | 96,887 |
| Consumer - indirect | 3,200 |
| | 399 |
| | 328 |
| | — |
| | 328 |
| | 3,927 |
| | 190,656 |
| | 194,583 |
| Total consumer | 4,411 |
| | 940 |
| | 1,891 |
| | — |
| | 1,891 |
| | 7,242 |
| | 284,228 |
| | 291,470 |
| Leasing, other and overdrafts | 543 |
| | 525 |
| | 317 |
| | — |
| | 317 |
| | 1,385 |
| | 229,591 |
| | 230,976 |
| Total | $ | 41,938 |
| | $ | 13,211 |
| | $ | 11,505 |
| | $ | 120,133 |
| | $ | 131,638 |
| | $ | 186,787 |
| | $ | 14,512,485 |
| | $ | 14,699,272 |
|
The following table presents TDRs, by class segment: | | | | | | | | | | September 30,
2017 | | December 31,
2016 | | (in thousands) | Real-estate - residential mortgage | $ | 26,193 |
| | $ | 27,617 |
| Real-estate - commercial mortgage | 14,439 |
| | 15,957 |
| Real estate - home equity | 14,789 |
| | 8,594 |
| Commercial | 7,512 |
| | 6,627 |
| Construction | 169 |
| | 726 |
| Consumer | 33 |
| | 39 |
| Total accruing TDRs | 63,135 |
| | 59,560 |
| Non-accrual TDRs (1) | 28,742 |
| | 27,850 |
| Total TDRs | $ | 91,877 |
| | $ | 87,410 |
|
| | (1) | Included in non-accrual loans in the preceding table detailing non-performing assets. |
As of September 30, 2017 and December 31, 2016, there were $3.8 million and $3.6 million of commitments, respectively, to lend additional funds to borrowers whose loans were modified under TDRs.
The following table presents TDRs, by class segment and type of concession for loans that were modified during the three and nine months ended September 30, 2017 and 2016: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended September 30 | | Nine months ended September 30 | | 2017 | | 2016 | | 2017 | | 2016 | Number of Loans | | Post-Modification Recorded Investment | | Number of Loans | | Post-Modification Recorded Investment | | Number of Loans | | Post-Modification Recorded Investment | | Number of Loans | | Post-Modification Recorded Investment | | (dollars in thousands) | Real estate – residential mortgage: | | | | | | | | | | | | | | | | | Extend maturity with rate concession | 2 |
| | $ | 468 |
| | — |
| | $ | — |
| | 2 |
| | $ | 468 |
| | — |
| | $ | — |
| | Extend maturity without rate concession | 2 |
| | 151 |
| | — |
| | — |
| | 4 |
| | 488 |
| | 2 |
| | $ | 315 |
| | Bankruptcy | — |
| | — |
| | 2 |
| | 350 |
| | 2 |
| | 335 |
| | 3 |
| | 723 |
| Real estate - commercial mortgage: | | | | | | | | | | | | | | | | | Extend maturity without rate concession | 2 |
| | 1,247 |
| | — |
| | — |
| | 6 |
| | 2,228 |
| | — |
| | $ | — |
| | Bankruptcy | — |
| | — |
| | — |
| | — |
| | 1 |
| | 12 |
| | — |
| | $ | — |
| Real estate - home equity: | | | | | | | | | | | | | | | | | Extend maturity without rate concession | 14 |
| | 1,315 |
| | 24 |
| | 1,063 |
| | 47 |
| | 3,874 |
| | 63 |
| | $ | 3,058 |
| | Bankruptcy | 6 |
| | 127 |
| | 11 |
| | 563 |
| | 23 |
| | 1,643 |
| | 33 |
| | $ | 2,279 |
| Commercial: | | | | | | | | | | | | | | | | | Extend maturity without rate concession | 1 |
| | 160 |
| | 4 |
| | 1,826 |
| | 9 |
| | 5,853 |
| | 10 |
| | 3,802 |
| | Bankruptcy | — |
| | — |
| | — |
| | — |
| | 1 |
| | 490 |
| | — |
| | — |
| Commercial – unsecured: | | | | | | | | | | | | | | | | | Extend maturity without rate concession | — |
| | — |
| | — |
| | — |
| | 1 |
| | 33 |
| | 2 |
| | 103 |
| Construction - commercial residential: | | | | | | | | | | | | | | | | | Extend maturity without rate concession | — |
| | — |
| | — |
| | — |
| | 1 |
| | 1,204 |
| | — |
| | — |
| Consumer - direct: | | | | | | | | | | | | | | | | | Bankruptcy | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 1 |
| | 2 |
| Consumer - indirect: | | | | | | | | | | | | | | | | | Bankruptcy | — |
| | — |
| | 1 |
| | 21 |
| | — |
| | — |
| | 1 |
| | 21 |
| | | | | | | | | | | | | | | | | | Total | 27 |
| | $ | 3,468 |
| | 42 |
| | $ | 3,823 |
| | 97 |
| | $ | 16,628 |
| | 115 |
| | $ | 10,303 |
| | | | | | | | | | | | | | | | | |
The following table presents TDRs, by class segment, as of September 30, 2017 and 2016, that were modified in the previous 12 months and had a post-modification payment default during the nine months ended September 30, 2017 and 2016. The Corporation defines a payment default as a single missed payment. | | | | | | | | | | | | | | | | 2017 | | 2016 | | Number of Loans | | Recorded Investment | | Number of Loans | | Recorded Investment | | (dollars in thousands) | Real estate - residential mortgage | 5 |
| | $ | 1,321 |
| | 7 |
| | $ | 1,395 |
| Real estate - commercial mortgage | 3 |
| | 653 |
| | 2 |
| | 129 |
| Real estate - home equity | 27 |
| | 1,598 |
| | 29 |
| | 1,902 |
| Commercial | 2 |
| | 264 |
| | 6 |
| | 2,593 |
| Commercial - unsecured | — |
| | — |
| | 1 |
| | 26 |
| Construction - commercial residential | 1 |
| | 1,198 |
| | — |
| | — |
| Construction - other | 1 |
| | 411 |
| | — |
| | — |
| Total | 39 |
| | $ | 5,445 |
| | 45 |
| | $ | 6,045 |
|
|