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Loans and Allowance for Credit Losses
 12 Months Ended
Dec. 31, 2018
Receivables [Abstract]  
Loans and Allowance for Credit Losses
NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES
Loans, net of unearned income
Loans, net of unearned income are summarized as follows as of December 31:
 
2018
 
2017
 
(in thousands)
Real estate – commercial mortgage
$
6,434,285

 
$
6,364,804

Commercial – industrial, financial and agricultural
4,404,548

 
4,300,297

Real estate – residential mortgage
2,251,044

 
1,954,711

Real estate – home equity
1,452,137

 
1,559,719

Real estate – construction
916,599

 
1,006,935

Consumer
419,186

 
313,783

Leasing and other
311,866

 
291,556

Overdrafts
2,774

 
4,113

Loans, gross of unearned income
16,192,439

 
15,795,918

Unearned income
(26,639
)
 
(27,671
)
Loans, net of unearned income
$
16,165,800

 
$
15,768,247



The Corporation has extended credit to officers and directors of the Corporation and to their associates. These related-party loans are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than the normal risk of collection. The aggregate dollar amount of these loans, including unadvanced commitments, was $116.4 million and $113.6 million as of December 31, 2018 and 2017, respectively. During 2018, additions totaled $54.6 million and repayments totaled $51.8 million in related-party loans.
The total portfolio of mortgage loans serviced by the Corporation for unrelated third parties was $4.8 billion and $4.6 billion as of December 31, 2018 and 2017, respectively.
Allowance for Credit Losses
The following table presents the components of the allowance for credit losses as of December 31:
 
2018
 
2017
 
2016
 
(in thousands)
Allowance for loan losses
$
160,537

 
$
169,910

 
$
168,679

Reserve for unfunded lending commitments
8,873

 
6,174

 
2,646

Allowance for credit losses
$
169,410

 
$
176,084

 
$
171,325











The following table presents the activity in the allowance for credit losses for the years ended December 31:
 
2018
 
2017
 
2016
 
(in thousands)
Balance at beginning of year
$
176,084

 
$
171,325

 
$
171,412

Loans charged off
(66,076
)
 
(33,290
)
 
(33,927
)
Recoveries of loans previously charged off
12,495

 
14,744

 
20,658

Net loans charged off
(53,581
)
 
(18,546
)
 
(13,269
)
Provision for credit losses
46,907

 
23,305

 
13,182

Balance at end of year
$
169,410

 
$
176,084

 
$
171,325


The following table presents the activity in the allowance for loan losses by portfolio segment for the years ended December 31 and loans, net of unearned income, and their related allowance for loan losses, by portfolio segment, as of December 31:
 
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)
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
(2,169
)
 
(19,067
)
 
(2,340
)
 
(687
)
 
(3,765
)
 
(2,227
)
 
(3,035
)
 
—

 
(33,290
)
Recoveries of loans previously charged off
1,668

 
7,771

 
813

 
786

 
1,582

 
1,156

 
968

 
—

 
14,744

Net loans charged off
(501
)
 
(11,296
)
 
(1,527
)
 
99

 
(2,183
)
 
(1,071
)
 
(2,067
)
 
—

 
(18,546
)
Provision for loan losses (1)
12,452

 
23,223

 
(7,147
)
 
(6,940
)
 
2,348

 
(458
)
 
832

 
(4,533
)
 
19,777

Balance at December 31, 2017
58,793

 
66,280

 
18,127

 
16,088

 
6,620

 
2,045

 
1,957

 
—

 
169,910

Loans charged off
(2,045
)
 
(52,441
)
 
(3,087
)
 
(1,574
)
 
(1,368
)
 
(3,040
)
 
(2,521
)
 
—

 
(66,076
)
Recoveries of loans previously charged off
1,622

 
4,994

 
1,127

 
620

 
1,829

 
1,266

 
1,037

 
—

 
12,495

Net loans charged off
(423
)
 
(47,447
)
 
(1,960
)
 
(954
)
 
461

 
(1,774
)
 
(1,484
)
 
—

 
(53,581
)
Provision for loan losses (1)
(5,481
)
 
40,035

 
2,744

 
3,787

 
(2,020
)
 
2,946

 
2,197

 
—

 
44,208

Balance at December 31, 2018
$
52,889

 
$
58,868

 
$
18,911

 
$
18,921

 
$
5,061

 
$
3,217

 
$
2,670

 
$
—

 
$
160,537

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses at December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans collectively evaluated for impairment
$
45,634

 
$
46,355

 
$
8,541

 
$
9,527

 
$
4,268

 
$
3,210

 
$
2,670

 
$
—

 
$
120,205

Loans individually evaluated for impairment
7,255

 
12,513

 
10,370

 
9,394

 
793

 
7

 
—

 
N/A

 
40,332

 
$
52,889

 
$
58,868

 
$
18,911

 
$
18,921

 
$
5,061

 
$
3,217

 
$
2,670

 
$
—

 
$
160,537

Loans, net of unearned income at December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans collectively evaluated for impairment
$
6,388,212

 
$
4,349,255

 
$
1,428,764

 
$
2,212,274

 
$
909,209

 
$
419,175

 
$
268,733

 
N/A

 
$
15,975,622

Loans individually evaluated for impairment
46,073

 
55,293

 
23,373

 
38,770

 
7,390

 
11

 
19,268

 
N/A

 
190,178

 
$
6,434,285

 
$
4,404,548

 
$
1,452,137

 
$
2,251,044

 
$
916,599

 
$
419,186

 
$
288,001

 
N/A

 
$
16,165,800

Allowance for loan losses at December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans collectively evaluated for impairment
$
50,681

 
$
54,874

 
$
7,003

 
$
6,193

 
$
5,653

 
$
2,028

 
$
1,957

 
$
—

 
$
128,389

Loans individually evaluated for impairment
8,112

 
11,406

 
11,124

 
9,895

 
967

 
17

 
—

 
N/A

 
41,521

 
$
58,793

 
$
66,280

 
$
18,127

 
$
16,088

 
$
6,620

 
$
2,045

 
$
1,957

 
$
—

 
$
169,910

Loans, net of unearned income at December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans collectively evaluated for impairment
$
6,316,023

 
$
4,236,572

 
$
1,535,026

 
$
1,913,004

 
$
994,738

 
$
313,757

 
$
267,998

 
N/A

 
$
15,577,118

Loans individually evaluated for impairment
48,781

 
63,725

 
24,693

 
41,707

 
12,197

 
26

 
—

 
N/A

 
191,129

 
$
6,364,804

 
$
4,300,297

 
$
1,559,719

 
$
1,954,711

 
$
1,006,935

 
$
313,783

 
$
267,998

 
N/A

 
$
15,768,247



(1)
For the year ended December 31, 2018, the provision for loan losses excluded a $2.7 million increase in the reserve for unfunded lending commitments. The total provision for credit losses, comprised of allocations for both funded and unfunded loans, was $46.9 million for the year ended December 31, 2018. For the year ended December 31, 2017, the provision for loan losses excluded a $3.5 million increase in the reserve for unfunded lending commitments. The total provision for credit losses was $23.3 million for the year ended December 31, 2017.

N/A – Not applicable.
Impaired Loans

The following table presents total impaired loans by class segment as of December 31: 
 
2018
 
2017
 
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
$
25,095

 
$
23,481

 
$
—

 
$
26,728

 
$
22,886

 
$
—

Commercial
33,493

 
26,585

 
—

 
44,936

 
39,550

 
—

Real estate - residential mortgage
3,149

 
3,149

 
—

 
4,575

 
4,575

 
—

Construction
8,980

 
5,083

 
—

 
12,477

 
8,100

 
—

Leasing
19,269

 
19,268

 
—

 
—

 
—

 
—

 
89,986

 
77,566

 
 
 
88,716

 
75,111

 
 
With a related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
Real estate - commercial mortgage
29,005

 
22,592

 
7,255

 
33,710

 
25,895

 
8,112

Commercial
37,706

 
28,708

 
12,513

 
29,816

 
24,175

 
11,406

Real estate - home equity
26,599

 
23,373

 
10,370

 
28,282

 
24,693

 
11,124

Real estate - residential mortgage
39,972

 
35,621

 
9,394

 
42,597

 
37,132

 
9,895

Construction
5,984

 
2,307

 
793

 
7,308

 
4,097

 
967

Consumer
11

 
11

 
7

 
26

 
26

 
17

 
139,277

 
112,612

 
40,332

 
141,739

 
116,018

 
41,521

Total
$
229,263

 
$
190,178

 
$
40,332

 
$
230,455

 
$
191,129

 
$
41,521


As of December 31, 2018 and 2017, there were $77.6 million and $75.1 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 the loans have been 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, for the years ended December 31:
 
2018
 
2017
 
2016
 
Average
Recorded
Investment
 
Interest Income
Recognized (1)
 
Average
Recorded
Investment
 
Interest Income
Recognized (1)
 
Average
Recorded
Investment
 
Interest Income
Recognized (1)
 
(in thousands)
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
Real estate - commercial mortgage
$
25,258

 
$
368

 
$
22,793

 
$
281

 
$
24,232

 
$
294

Commercial
33,395

 
259

 
31,357

 
182

 
19,825

 
104

Real estate - residential mortgage
3,727

 
91

 
4,631

 
107

 
5,598

 
126

Construction
6,943

 
—

 
7,255

 
12

 
6,285

 
48

 
69,323

 
718

 
66,036

 
582

 
55,940

 
572

With a related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
Real estate - commercial mortgage
24,300

 
345

 
27,193

 
338

 
31,737

 
384

Commercial
24,888

 
185

 
24,112

 
137

 
26,744

 
134

Real estate - home equity
24,426

 
794

 
21,704

 
534

 
17,912

 
285

Real estate - residential mortgage
36,387

 
896

 
39,093

 
903

 
42,191

 
908

Construction
2,683

 
—

 
6,160

 
11

 
6,501

 
41

Consumer
16

 
1

 
33

 
2

 
33

 
2

Leasing, other and overdrafts
3,854

 
—

 
285

 
—

 
854

 
—

 
116,554

 
2,221

 
118,580

 
1,925

 
125,972

 
1,754

Total
$
185,877

 
$
2,939

 
$
184,616

 
$
2,507

 
$
181,912

 
$
2,326



(1)
All impaired loans, excluding accruing TDRs, were non-accrual loans. Interest income recognized for the years ended December 31, 2018, 2017 and 2016 represents amounts earned on accruing TDRs.

Credit Quality Indicators and Non-performing Assets

The following table presents internal credit risk ratings for the indicated loan class segments as of December 31:

Pass
 
Special Mention
 
Substandard or Lower
 
Total

2018
 
2017
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017

(dollars in thousands)
Real estate - commercial mortgage
$
6,129,463

 
$
6,066,396

 
$
170,827

 
$
147,604

 
$
133,995

 
$
150,804

 
$
6,434,285

 
$
6,364,804

Commercial - secured
3,902,484

 
3,831,485

 
193,470

 
121,842

 
129,026

 
179,113

 
4,224,980

 
4,132,440

Commercial -unsecured
171,589

 
159,620

 
4,016

 
5,478

 
3,963

 
2,759

 
179,568

 
167,857

Total commercial - industrial, financial and agricultural
4,074,073

 
3,991,105

 
197,486

 
127,320

 
132,989

 
181,872

 
4,404,548

 
4,300,297

Construction - commercial residential
104,079

 
143,759

 
6,912

 
5,259

 
6,881

 
14,084

 
117,872

 
163,102

Construction - commercial
723,030

 
761,218

 
1,163

 
846

 
2,533

 
3,752

 
726,726

 
765,816

Total construction (excluding construction - other)
827,109

 
904,977

 
8,075

 
6,105

 
9,414

 
17,836

 
844,598

 
928,918

Total
$
11,030,645

 
$
10,962,478

 
$
376,388

 
$
281,029

 
$
276,398

 
$
350,512

 
$
11,683,431

 
$
11,594,019

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% of Total
94.4
%
 
94.6
%
 
3.2
%
 
2.4
%
 
2.4
%
 
3.0
%
 
100.0
%
 
100.0
%

The following table presents delinquency and non-performing status for loans that do not have internal credit risk ratings, by class segment, as of December 31:
 
Performing
 
Delinquent (1)
 
Non-performing (2)
 
Total
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
 
(dollars in thousands)
Real estate - home equity
$
1,431,666

 
$
1,535,557

 
$
10,702

 
$
12,655

 
$
9,769

 
$
11,507

 
$
1,452,137

 
$
1,559,719

Real estate - residential mortgage
2,202,955

 
1,914,888

 
28,988

 
18,852

 
19,101

 
20,971

 
2,251,044

 
1,954,711

Real estate - construction - other
71,511

 
77,403

 
—

 
203

 
490

 
411

 
72,001

 
78,017

Consumer - direct
55,629

 
54,828

 
338

 
315

 
66

 
70

 
56,033

 
55,213

Consumer - indirect
359,405

 
254,663

 
3,405

 
3,681

 
343

 
226

 
363,153

 
258,570

Total consumer
415,034

 
309,491

 
3,743

 
3,996

 
409

 
296

 
419,186

 
313,783

Leasing, other and overdrafts
267,112

 
267,111

 
1,302

 
855

 
19,587

 
32

 
288,001

 
267,998

Total
$
4,388,278

 
$
4,104,450

 
$
44,735

 
$
36,561

 
$
49,356

 
$
33,217

 
$
4,482,369

 
$
4,174,228

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% of Total
97.9
%
 
98.3
%
 
1.0
%
 
0.9
%
 
1.1
%
 
0.8
%
 
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 total non-performing assets as of December 31:
 
2018
 
2017
 
(in thousands)
Non-accrual loans
$
128,572

 
$
124,749

Loans 90 days or more past due and still accruing
11,106

 
10,010

Total non-performing loans
139,678

 
134,759

Other real estate owned
10,518

 
9,823

Total non-performing assets
$
150,196

 
$
144,582









The following table presents past due status and non-accrual loans, by portfolio segment and class segment, as of December 31:

 
2018
 
30-59
Days Past
Due
 
60-89
Days Past
Due
 
≥ 90 Days Past Due and Accruing
 
Non-
accrual
 
Current
 
Total
 
(in thousands)
Real estate - commercial mortgage
$
12,206

 
$
1,500

 
$
1,765

 
$
30,388

 
$
6,388,426

 
$
6,434,285

Commercial - secured
5,227

 
938

 
1,068

 
49,299

 
4,168,448

 
4,224,980

Commercial - unsecured
1,598

 
—

 
51

 
851

 
177,068

 
179,568

Total Commercial - industrial, financial and agricultural
6,825

 
938

 
1,119

 
50,150

 
4,345,516

 
4,404,548

Real estate - home equity
7,144

 
3,558

 
3,061

 
6,708

 
1,431,666

 
1,452,137

Real estate - residential mortgage
20,796

 
8,192

 
4,433

 
14,668

 
2,202,955

 
2,251,044

Construction - commercial
—

 
—

 
—

 
19

 
726,707

 
726,726

Construction - commercial residential
2,489

 
—

 
—

 
6,881

 
108,502

 
117,872

Construction - other
—

 
—

 
—

 
490

 
71,511

 
72,001

Total Real estate - construction
2,489

 
—

 
—

 
7,390

 
906,720

 
916,599

Consumer - direct
267

 
71

 
66

 
—

 
55,629

 
56,033

Consumer - indirect
2,908

 
497

 
343

 
—

 
359,405

 
363,153

Total Consumer
3,175

 
568

 
409

 
—

 
415,034

 
419,186

Leasing, other and overdrafts
1,005

 
297

 
319

 
19,268

 
267,112

 
288,001

         Total
$
53,640

 
$
15,053

 
$
11,106

 
$
128,572

 
$
15,957,429

 
$
16,165,800


 
2017
 
30-59
Days Past
Due
 
60-89
Days Past
Due
 
≥ 90 Days Past Due and Accruing
 
Non-
accrual
 
Current
 
Total
 
(in thousands)
Real estate - commercial mortgage
$
9,456

 
$
4,223

 
$
625

 
$
34,822

 
$
6,315,678

 
$
6,364,804

Commercial - secured
4,778

 
5,254

 
1,360

 
52,255

 
4,068,793

 
4,132,440

Commercial - unsecured
305

 
10

 
45

 
649

 
166,848

 
167,857

Total Commercial - industrial, financial and agricultural
5,083

 
5,264

 
1,405

 
52,904

 
4,235,641

 
4,300,297

Real estate - home equity
9,640

 
3,015

 
2,372

 
9,135

 
1,535,557

 
1,559,719

Real estate - residential mortgage
11,961

 
6,891

 
5,280

 
15,691

 
1,914,888

 
1,954,711

Construction - commercial
483

 
—

 
—

 
19

 
765,314

 
765,816

Construction - commercial residential
—

 
439

 
—

 
11,767

 
150,896

 
163,102

Construction - other
203

 
—

 
—

 
411

 
77,403

 
78,017

Total Real estate - construction
686

 
439

 
—

 
12,197

 
993,613

 
1,006,935

Consumer - direct
260

 
55

 
70

 
—

 
54,828

 
55,213

Consumer - indirect
3,055

 
626

 
226

 
—

 
254,663

 
258,570

Total Consumer
3,315

 
681

 
296

 
—

 
309,491

 
313,783

Leasing, other and overdrafts
568

 
287

 
32

 
—

 
267,111

 
267,998

         Total
$
40,709

 
$
20,800

 
$
10,010

 
$
124,749

 
$
15,571,979

 
$
15,768,247











The following table presents TDRs as of December 31:
 
2018
 
2017
 
(in thousands)
Real-estate - residential mortgage
$
24,102

 
$
26,016

Real estate - home equity
16,665

 
15,558

Real-estate - commercial mortgage
15,685

 
13,959

Commercial
5,143

 
10,820

Consumer - direct
10

 
26

Total accruing TDRs
61,605

 
66,379

Non-accrual TDRs (1)
28,659

 
29,051

Total TDRs
$
90,264

 
$
95,430

 
(1)Included within non-accrual loans in the preceding table.

As of December 31, 2018 and 2017, there were $41,600 and $8.6 million, respectively, of commitments 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 years ended December 31:

 
2018
 
2017
 
2016
Number of Loans
 
Post-Modification Recorded Investment
 
Number of Loans
 
Post-Modification Recorded Investment
 
Number of Loans
 
Post-Modification Recorded Investment
 
(dollars in thousands)
Commercial:
 
 
 
 
 
 
 
 
 
 
 
 
Extend maturity without rate concession
8

 
$
4,226

 
23

 
$
15,058

 
12

 
$
3,904

 
Bankruptcy
—

 
—

 
1

 
490

 
—

 
—

Real estate - commercial mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
Extend maturity without rate concession
6

 
8,261

 
9

 
2,899

 
—

 
—

 
Bankruptcy
—

 
—

 
1

 
12

 
—

 
—

Real estate - home equity:
 
 
 
 
 
 
 
 
 
 
 
 
Extend maturity without rate concession
85

 
4,549

 
69

 
5,843

 
89

 
4,484

 
Bankruptcy
11

 
538

 
28

 
1,813

 
47

 
2,671

Real estate – residential mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
Extend maturity with rate concession
4

 
451

 
2

 
468

 
—

 
—

 
Extend maturity without rate concession
2

 
345

 
5

 
1,044

 
2

 
315

 
Bankruptcy
1

 
5

 
3

 
392

 
6

 
981

Construction - commercial residential:
 
 
 
 
 
 
 
 
 
 
 
 
Extend maturity without rate concession
—

 
—

 
1

 
1,204

 
—

 
—

 
Bankruptcy
—

 
—

 
1

 
411

 
—

 
—

Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
Bankruptcy
—

 
—

 
—

 
—

 
2

 
23

 
 
 
 
 
 
 
 
 
 
 
 
 
        Total
117

 
$
18,375

 
143

 
$
29,634

 
158

 
$
12,378



The following table presents TDRs, by class segment, that were modified during the years ended December 31, 2018, 2017 and 2016 that had a post-modification payment default during their respective year of modification. The Corporation defines a payment default as a single missed scheduled payment:
 
2018
 
2017
 
2016
 
Number of Loans
 
Recorded Investment
 
Number of Loans
 
Recorded Investment
 
Number of Loans
 
Recorded Investment
 
(dollars in thousands)
Construction - commercial residential
—

 
$
—

 
1

 
$
1,192

 
—

 
$
—

Construction - other
—

 
—

 
1

 
411

 
—

 
—

Real estate - commercial mortgage
2

 
448

 
2

 
549

 
1

 
118

Real estate - residential mortgage
5

 
717

 
5

 
577

 
8

 
1,500

Commercial
1

 
2,163

 
6

 
1,571

 
7

 
2,523

Real estate - home equity
30

 
1,635

 
25

 
1,575

 
28

 
1,836

Consumer
—

 
—

 
—

 
—

 
1

 
19

        Total
38

 
$
4,963

 
40

 
$
5,875

 
45

 
$
5,996