PAST DUE LOANS, ALLOWANCE FOR CREDIT LOSSES, IMPAIRED LOANS, AND TDRS

Past Due and Non-accrual Loans

The following table presents an aging analysis of the Company’s past due loans as of March 31, 2015 and December 31, 2014. The aging is determined without regard to accrual status. The table also presents non-performing loans, consisting of non-accrual loans (the majority of which are past due) and loans 90 days or more past due and still accruing interest, as of each balance sheet date.

Aging Analysis of Past Due Loans and Non-performing Loans by Class

(Dollar amounts in thousands)



	Aging Analysis (Accruing and Non-accrual)										Non-performing Loans
	Current		30-89 Days Past Due		90 Days or More Past Due		Total Past Due		Total Loans		Non- accrual Loans		90 Days Past Due Loans, Still Accruing Interest
As of March 31, 2015
Commercial and industrial	$	2,301,730	$	12,128	$	4,200	$	16,328	$	2,318,058	$	12,913	$	1,452
Agricultural	368,505		—		331		331		368,836		358		—
Commercial real estate:
Office, retail, and industrial	1,430,272		2,064		11,226		13,290		1,443,562		11,363		738
Multi-family	557,665		2,557		578		3,135		560,800		700		169
Construction	184,070		—		7,034		7,034		191,104		7,488		53
Other commercial real estate	870,026		5,780		5,220		11,000		881,026		5,915		602
Total commercial real estate	3,042,033		10,401		24,058		34,459		3,076,492		25,466		1,562
Total corporate loans	5,712,268		22,529		28,589		51,118		5,763,386		38,737		3,014
Home equity	592,994		2,852		3,697		6,549		599,543		5,483		248
1-4 family mortgages	282,374		1,680		1,704		3,384		285,758		3,819		228
Installment	92,224		498		112		610		92,834		38		74
Total consumer loans	967,592		5,030		5,513		10,543		978,135		9,340		550
Total loans, excluding covered loans	6,679,860		27,559		34,102		61,661		6,741,521		48,077		3,564
Covered loans	52,754		633		9,443		10,076		62,830		4,570		6,390
Total loans	$	6,732,614	$	28,192	$	43,545	$	71,737	$	6,804,351	$	52,647	$	9,954
As of December 31, 2014
Commercial and industrial	$	2,230,947	$	19,505	$	3,104	$	22,609	$	2,253,556	$	22,693	$	205
Agricultural	355,982		1,934		333		2,267		358,249		360		—
Commercial real estate:
Office, retail, and industrial	1,463,724		2,340		12,315		14,655		1,478,379		12,939		76
Multi-family	562,625		1,261		535		1,796		564,421		754		83
Construction	197,255		—		6,981		6,981		204,236		6,981		—
Other commercial real estate	876,609		5,412		5,876		11,288		887,897		6,970		438
Total commercial real estate	3,100,213		9,013		25,707		34,720		3,134,933		27,644		597
Total corporate loans	5,687,142		30,452		29,144		59,596		5,746,738		50,697		802
Home equity	535,587		3,216		4,382		7,598		543,185		6,290		145
1-4 family mortgages	287,892		2,246		1,325		3,571		291,463		2,941		166
Installment	75,428		506		98		604		76,032		43		60
Total consumer loans	898,907		5,968		5,805		11,773		910,680		9,274		371
Total loans, excluding covered loans	6,586,049		36,420		34,949		71,369		6,657,418		59,971		1,173
Covered loans	66,331		2,714		10,390		13,104		79,435		6,186		5,002
Total loans	$	6,652,380	$	39,134	$	45,339	$	84,473	$	6,736,853	$	66,157	$	6,175

Allowance for Credit Losses

The Company maintains an allowance for credit losses at a level deemed adequate by management to absorb probable losses inherent in the loan portfolio. See Note 1, "Summary of Significant Accounting Policies," for the accounting policy for the allowance for credit losses. A rollforward of the allowance for credit losses by portfolio segment for the quarters ended March 31, 2015 and 2014 is presented in the table below.

Allowance for Credit Losses by Portfolio Segment

(Dollar amounts in thousands)



	Commercial, Industrial, and Agricultural			Office, Retail, and Industrial			Multi- Family			Construction			Other Commercial Real Estate			Consumer			Covered Loans			Reserve for Unfunded Commitments		Total Allowance
Quarter ended March 31, 2015
Beginning balance	$	29,458		$	10,992		$	2,249		$	2,297		$	8,327		$	12,145		$	7,226		$	1,816	$	74,510
Charge-offs	(7,449		)	(156		)	(28		)	—			(1,317		)	(800		)	(303		)	—		(10,053		)
Recoveries	792			322			4			17			266			321			75			—		1,797
Net charge-offs	(6,657		)	166			(24		)	17			(1,051		)	(479		)	(228		)	—		(8,256		)
Provision for loan and covered loan losses and other	9,295			(327		)	130			(238		)	(978		)	(11		)	(1,319		)	—		6,552
Ending balance	$	32,096		$	10,831		$	2,355		$	2,076		$	6,298		$	11,655		$	5,679		$	1,816	$	72,806
Quarter ended March 31, 2014
Beginning balance	$	30,381		$	10,405		$	2,017		$	6,316		$	10,817		$	13,010		$	12,559		$	1,616	$	87,121
Charge-offs	(3,680		)	(1,083		)	(90		)	(661		)	(1,771		)	(2,028		)	(245		)	—		(9,558		)
Recoveries	2,160			58			1			158			144			138			585			—		3,244
Net charge-offs	(1,520		)	(1,025		)	(89		)	(503		)	(1,627		)	(1,890		)	340			—		(6,314		)
Provision for loan and covered loan losses and other	(1,569		)	3,726			40			(157		)	46			825			(1,470		)	—		1,441
Ending balance	$	27,292		$	13,106		$	1,968		$	5,656		$	9,236		$	11,945		$	11,429		$	1,616	$	82,248

The table below provides a breakdown of loans and the related allowance for credit losses by portfolio segment as of March 31, 2015 and December 31, 2014.

Loans and Related Allowance for Credit Losses by Portfolio Segment

(Dollar amounts in thousands)



	Loans								Allowance for Credit Losses
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		PCI		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		PCI		Total
As of March 31, 2015
Commercial, industrial, and agricultural	$	10,098	$	2,672,555	$	4,241	$	2,686,894	$	3,739	$	28,131	$	226	$	32,096
Commercial real estate:
Office, retail, and industrial	10,672		1,422,548		10,342		1,443,562		1,008		9,823		—		10,831
Multi-family	684		557,728		2,388		560,800		—		2,355		—		2,355
Construction	6,671		180,083		4,350		191,104		—		1,813		263		2,076
Other commercial real estate	2,737		872,277		6,012		881,026		—		6,280		18		6,298
Total commercial real estate	20,764		3,032,636		23,092		3,076,492		1,008		20,271		281		21,560
Total corporate loans	30,862		5,705,191		27,333		5,763,386		4,747		48,402		507		53,656
Consumer	—		967,852		10,283		978,135		—		11,293		362		11,655
Total loans, excluding covered loans	30,862		6,673,043		37,616		6,741,521		4,747		59,695		869		65,311
Covered loans	—		23,860		38,970		62,830		—		431		5,248		5,679
Reserve for unfunded commitments	—		—		—		—		—		1,816		—		1,816
Total loans	$	30,862	$	6,696,903	$	76,586	$	6,804,351	$	4,747	$	61,942	$	6,117	$	72,806
As of December 31, 2014
Commercial, industrial, and agricultural	$	19,796	$	2,588,141	$	3,868	$	2,611,805	$	2,249	$	27,209	$	—	$	29,458
Commercial real estate:
Office, retail, and industrial	12,332		1,458,918		7,129		1,478,379		271		10,721		—		10,992
Multi-family	939		561,400		2,082		564,421		—		2,249		—		2,249
Construction	6,671		195,094		2,471		204,236		—		2,297		—		2,297
Other commercial real estate	3,266		880,087		4,544		887,897		11		8,316		—		8,327
Total commercial real estate	23,208		3,095,499		16,226		3,134,933		282		23,583		—		23,865
Total corporate loans	43,004		5,683,640		20,094		5,746,738		2,531		50,792		—		53,323
Consumer	—		902,062		8,618		910,680		—		11,822		323		12,145
Total loans, excluding covered loans	43,004		6,585,702		28,712		6,657,418		2,531		62,614		323		65,468
Covered loans	—		24,753		54,682		79,435		—		488		6,738		7,226
Reserve for unfunded commitments	—		—		—		—		—		1,816		—		1,816
Total loans	$	43,004	$	6,610,455	$	83,394	$	6,736,853	$	2,531	$	64,918	$	7,061	$	74,510

Loans Individually Evaluated for Impairment

The following table presents loans individually evaluated for impairment by class of loan as of March 31, 2015 and December 31, 2014. PCI loans are excluded from this disclosure.

Impaired Loans Individually Evaluated by Class

(Dollar amounts in thousands)



	As of March 31, 2015								As of December 31, 2014
	Recorded Investment In								Recorded Investment In
	Loans with No Specific Reserve		Loans with a Specific Reserve		Unpaid Principal Balance		Specific Reserve		Loans with No Specific Reserve		Loans with a Specific Reserve		Unpaid Principal Balance		Specific Reserve
Commercial and industrial	$	756	$	9,342	$	31,618	$	3,739	$	666	$	19,130	$	35,457	$	2,249
Agricultural	—		—		—		—		—		—		—		—
Commercial real estate:
Office, retail, and industrial	6,973		3,699		16,302		1,008		9,623		2,709		18,340		271
Multi-family	684		—		684		—		939		—		1,024		—
Construction	6,671		—		7,731		—		6,671		—		7,731		—
Other commercial real estate	2,737		—		3,954		—		2,752		514		4,490		11
Total commercial real estate	17,065		3,699		28,671		1,008		19,985		3,223		31,585		282
Total impaired loans individually evaluated for impairment	$	17,821	$	13,041	$	60,289	$	4,747	$	20,651	$	22,353	$	67,042	$	2,531

The following table presents the average recorded investment and interest income recognized on impaired loans by class for the quarters ended March 31, 2015 and 2014. PCI loans are excluded from this disclosure.

Average Recorded Investment and Interest Income Recognized on Impaired Loans by Class

(Dollar amounts in thousands)



	Quarters Ended March 31,
	2015				2014
	Average Recorded Balance		Interest Income Recognized ⁽¹⁾		Average Recorded Balance		Interest Income Recognized ⁽¹⁾
Commercial and industrial	$	14,947	$	70	$	10,307	$	118
Agricultural	—		—		—		—
Commercial real estate:
Office, retail, and industrial	11,502		29		25,469		141
Multi-family	812		—		1,487		—
Construction	6,671		—		5,282		—
Other commercial real estate	3,002		11		8,168		8
Total commercial real estate	21,987		40		40,406		149
Total impaired loans	$	36,934	$	110	$	50,713	$	267


⁽¹⁾	Recorded using the cash basis of accounting.

Credit Quality Indicators

Corporate loans and commitments are assessed for credit risk and assigned ratings based on various characteristics, such as the borrower's cash flow, leverage, and collateral. Ratings for commercial credits are reviewed periodically. The following tables present credit quality indicators by class for corporate and consumer loans, excluding covered loans, as of March 31, 2015 and December 31, 2014.

Corporate Credit Quality Indicators by Class, Excluding Covered Loans

(Dollar amounts in thousands)



	Pass		Special Mention ^{(1) (4)}		Substandard ^{(2) (4)}		Non-accrual ⁽³⁾		Total

As of March 31, 2015
Commercial and industrial	$	2,191,522	$	69,163	$	44,460	$	12,913	$	2,318,058
Agricultural	368,224		254		—		358		368,836
Commercial real estate:
Office, retail, and industrial	1,359,754		40,334		32,111		11,363		1,443,562
Multi-family	548,921		6,649		4,530		700		560,800
Construction	167,362		5,082		11,172		7,488		191,104
Other commercial real estate	834,109		31,800		9,202		5,915		881,026
Total commercial real estate	2,910,146		83,865		57,015		25,466		3,076,492
Total corporate loans	$	5,469,892	$	153,282	$	101,475	$	38,737	$	5,763,386
As of December 31, 2014
Commercial and industrial	$	2,115,170	$	84,615	$	31,078	$	22,693	$	2,253,556
Agricultural	357,595		294		—		360		358,249
Commercial real estate:
Office, retail, and industrial	1,393,885		38,891		32,664		12,939		1,478,379
Multi-family	553,255		6,363		4,049		754		564,421
Construction	178,992		5,776		12,487		6,981		204,236
Other commercial real estate	829,003		32,517		19,407		6,970		887,897
Total commercial real estate	2,955,135		83,547		68,607		27,644		3,134,933
Total corporate loans	$	5,427,900	$	168,456	$	99,685	$	50,697	$	5,746,738


⁽¹⁾	Loans categorized as special mention exhibit potential weaknesses that require the close attention of management since these potential weaknesses may result in the deterioration of repayment prospects in the future.


⁽²⁾	Loans categorized as substandard exhibit a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt. These loans continue to accrue interest because they are well secured and collection of principal and interest is expected within a reasonable time.


⁽³⁾	Loans categorized as non-accrual exhibit a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt or result in a loss if the deficiencies are not corrected.


⁽⁴⁾	Total special mention and substandard loans includes accruing TDRs of $1.6 million as of March 31, 2015 and $1.8 million as of December 31, 2014.

Consumer Credit Quality Indicators by Class, Excluding Covered Loans

(Dollar amounts in thousands)



	Performing		Non-accrual		Total
As of March 31, 2015
Home equity	$	594,060	$	5,483	$	599,543
1-4 family mortgages	281,939		3,819		285,758
Installment	92,796		38		92,834
Total consumer loans	$	968,795	$	9,340	$	978,135
As of December 31, 2014
Home equity	$	536,895	$	6,290	$	543,185
1-4 family mortgages	288,522		2,941		291,463
Installment	75,989		43		76,032
Total consumer loans	$	901,406	$	9,274	$	910,680

TDRs

TDRs are generally performed at the request of the individual borrower and may include forgiveness of principal, reduction in interest rates, changes in payments, and maturity date extensions. The table below presents TDRs by class as of March 31, 2015 and December 31, 2014. See Note 1, "Summary of Significant Accounting Policies," for the accounting policy for TDRs.

TDRs by Class

(Dollar amounts in thousands)



	As of March 31, 2015						As of December 31, 2014
	Accruing		Non-accrual ⁽¹⁾		Total		Accruing		Non-accrual ⁽¹⁾		Total
Commercial and industrial	$	338	$	1,091	$	1,429	$	269	$	18,799	$	19,068
Agricultural	—		—		—		—		—		—
Commercial real estate:
Office, retail, and industrial	571		—		571		586		—		586
Multi-family	883		228		1,111		887		232		1,119
Construction	—		—		—		—		—		—
Other commercial real estate	357		—		357		433		183		616
Total commercial real estate	1,811		228		2,039		1,906		415		2,321
Total corporate loans	2,149		1,319		3,468		2,175		19,214		21,389
Home equity	562		562		1,124		651		506		1,157
1-4 family mortgages	870		115		985		878		184		1,062
Installment	—		—		—		—		—		—
Total consumer loans	1,432		677		2,109		1,529		690		2,219
Total loans	$	3,581	$	1,996	$	5,577	$	3,704	$	19,904	$	23,608


⁽¹⁾	These TDRs are included in non-accrual loans in the preceding tables.

TDRs are included in the calculation of the allowance for credit losses in the same manner as impaired loans. There were $800,000 in specific reserves related to TDRs as of March 31, 2015 and there were $1.8 million in specific reserves related to TDRs as of December 31, 2014.

No loans were restructured during the quarters ended March 31, 2015 and 2014.

Accruing TDRs that do not perform in accordance with their modified terms are transferred to non-accrual. The following table presents TDRs that had payment defaults during the quarters ended March 31, 2015 and 2014 where the default occurred within twelve months of the restructure date.

TDRs That Defaulted Within Twelve Months of the Restructure Date

(Dollar amounts in thousands)



	Quarters Ended March 31,
	2015			2014
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Commercial and industrial	—	$	—	2	$	125
Total	—	$	—	2	$	125

A rollforward of the carrying value of TDRs for the quarters ended March 31, 2015 and 2014 is presented in the following table.

TDR Rollforward

(Dollar amounts in thousands)



	Quarters Ended March 31,
	2015			2014
Accruing
Beginning balance	$	3,704		$	23,770
Additions	—			—
Net payments received	(42		)	(460		)
Returned to performing status	—			(18,821		)
Net transfers from non-accrual	(81		)	1,812
Ending balance	3,581			6,301
Non-accrual
Beginning balance	19,904			4,083
Additions	—			—
Net payments received	(15,399		)	(134		)
Charge-offs	(2,590		)	(34		)
Transfers to OREO	—			(183		)
Loans sold	—			—
Net transfers to accruing	81			(1,812		)
Ending balance	1,996			1,920
Total TDRs	$	5,577		$	8,221

For TDRs to be removed from TDR status in the calendar year after the restructuring, the loans must (i) have an interest rate and terms that reflect market conditions at the time of restructuring, and (ii) be in compliance with the modified terms. No TDRs were returned to performing status during the quarter ended March 31, 2015. TDRs that were returned to performing status totaled $18.8 million for the quarter ended March 31, 2014. Loans that were not restructured at market rates and terms, that are not in compliance with the modified terms, or for which there is a concern about the future ability of the borrower to meet its obligations under the modified terms, continue to be separately reported as restructured until paid in full or charged-off.

There were no material commitments to lend additional funds to borrowers with TDRs as of March 31, 2015 and there were $666,000 in commitments as of December 31, 2014.