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 September 30, 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 September 30, 2015
Commercial and industrial	$	2,380,931	$	6,937	$	4,992	$	11,929	$	2,392,860	$	6,438	$	900
Agricultural	393,574		71		87		158		393,732		112		—
Commercial real estate:
Office, retail, and industrial	1,398,173		9,642		6,262		15,904		1,414,077		6,961		—
Multi-family	535,085		1,100		3,123		4,223		539,308		1,046		2,269
Construction	188,561		467		3,058		3,525		192,086		3,332		—
Other commercial real estate	858,597		5,867		5,284		11,151		869,748		5,898		897
Total commercial real estate	2,980,416		17,076		17,727		34,803		3,015,219		17,237		3,166
Total corporate loans	5,754,921		24,084		22,806		46,890		5,801,811		23,787		4,066
Home equity	640,783		3,464		2,976		6,440		647,223		5,201		214
1-4 family mortgages	290,066		2,643		1,552		4,195		294,261		3,320		152
Installment	130,292		766		127		893		131,185		—		127
Total consumer loans	1,061,141		6,873		4,655		11,528		1,072,669		8,521		493
Total loans, excluding covered loans	6,816,062		30,957		27,461		58,418		6,874,480		32,308		4,559
Covered loans	48,743		250		2,226		2,476		51,219		1,303		1,372
Total loans	$	6,864,805	$	31,207	$	29,687	$	60,894	$	6,925,699	$	33,611	$	5,931
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 and nine months ended September 30, 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 September 30, 2015
Beginning balance	$	33,729		$	11,345		$	2,451		$	1,890		$	6,367		$	10,820		$	4,861		$	1,816		$	73,279
Charge-offs	(1,948		)	(563		)	(68		)	—			(598		)	(1,172		)	(8		)	—			(4,357		)
Recoveries	347			106			1			114			506			213			7			—			1,294
Net charge-offs	(1,601		)	(457		)	(67		)	114			(92		)	(959		)	(1		)	—			(3,063		)
Provision for loan and covered loan losses and other	3,247			967			226			(559		)	(181		)	1,144			(744		)	(591		)	3,509
Ending balance	$	35,375		$	11,855		$	2,610		$	1,445		$	6,094		$	11,005		$	4,116		$	1,225		$	73,725
Quarter ended September 30, 2014
Beginning balance	$	29,194		$	11,831		$	2,048		$	4,885		$	8,585		$	12,440		$	9,343		$	1,616		$	79,942
Charge-offs	(9,763		)	(2,514		)	(26		)	(157		)	(1,363		)	(3,148		)	(135		)	—			(17,106		)
Recoveries	716			55			—			—			108			150			130			—			1,159
Net charge-offs	(9,047		)	(2,459		)	(26		)	(157		)	(1,255		)	(2,998		)	(5		)	—			(15,947		)
Provision for loan and covered loan losses and other	10,458			265			(65		)	(3,130		)	189			3,699			(689		)	—			10,727
Ending balance	$	30,605		$	9,637		$	1,957		$	1,598		$	7,519		$	13,141		$	8,649		$	1,616		$	74,722
Nine months ended September 30, 2015
Beginning balance	$	29,458		$	10,992		$	2,249		$	2,297		$	8,327		$	12,145		$	7,226		$	1,816		$	74,510
Charge-offs	(13,524		)	(2,613		)	(565		)	(15		)	(2,442		)	(2,723		)	(634		)	—			(22,516		)
Recoveries	1,993			460			8			334			1,902			853			120			—			5,670
Net charge-offs	(11,531		)	(2,153		)	(557		)	319			(540		)	(1,870		)	(514		)	—			(16,846		)
Provision for loan and covered loan losses and other	17,448			3,016			918			(1,171		)	(1,693		)	730			(2,596		)	(591		)	16,061
Ending balance	$	35,375		$	11,855		$	2,610		$	1,445		$	6,094		$	11,005		$	4,116		$	1,225		$	73,725
Nine months ended September 30, 2014
Beginning balance	$	30,381		$	10,405		$	2,017		$	6,316		$	10,817		$	13,010		$	12,559		$	1,616		$	87,121
Charge-offs	(15,542		)	(7,108		)	(383		)	(1,052		)	(3,695		)	(7,005		)	(659		)	—			(35,444		)
Recoveries	3,135			403			3			160			341			502			992			—			5,536
Net charge-offs	(12,407		)	(6,705		)	(380		)	(892		)	(3,354		)	(6,503		)	333			—			(29,908		)
Provision for loan and covered loan losses and other	12,631			5,937			320			(3,826		)	56			6,634			(4,243		)	—			17,509
Ending balance	$	30,605		$	9,637		$	1,957		$	1,598		$	7,519		$	13,141		$	8,649		$	1,616		$	74,722

The table below provides a breakdown of loans and the related allowance for credit losses by portfolio segment as of September 30, 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 September 30, 2015
Commercial, industrial, and agricultural	$	3,480	$	2,777,887	$	5,225	$	2,786,592	$	926	$	33,913	$	536	$	35,375
Commercial real estate:
Office, retail, and industrial	5,923		1,403,781		4,373		1,414,077		648		11,177		30		11,855
Multi-family	802		535,649		2,857		539,308		—		2,581		29		2,610
Construction	1,872		185,984		4,230		192,086		—		1,033		412		1,445
Other commercial real estate	3,976		859,138		6,634		869,748		—		5,850		244		6,094
Total commercial real estate	12,573		2,984,552		18,094		3,015,219		648		20,641		715		22,004
Total corporate loans	16,053		5,762,439		23,319		5,801,811		1,574		54,554		1,251		57,379
Consumer	—		1,063,046		9,623		1,072,669		—		10,767		238		11,005
Total loans, excluding covered loans	16,053		6,825,485		32,942		6,874,480		1,574		65,321		1,489		68,384
Covered loans	—		22,248		28,971		51,219		—		298		3,818		4,116
Reserve for unfunded commitments	—		—		—		—		—		1,225		—		1,225
Total loans	$	16,053	$	6,847,733	$	61,913	$	6,925,699	$	1,574	$	66,844	$	5,307	$	73,725
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 September 30, 2015 and December 31, 2014. PCI loans are excluded from this disclosure.

Impaired Loans Individually Evaluated by Class

(Dollar amounts in thousands)



	As of September 30, 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	$	2,244	$	1,236	$	4,281	$	926	$	666	$	19,130	$	35,457	$	2,249
Agricultural	—		—		—		—		—		—		—		—
Commercial real estate:
Office, retail, and industrial	4,415		1,508		11,421		648		9,623		2,709		18,340		271
Multi-family	802		—		942		—		939		—		1,024		—
Construction	1,872		—		1,979		—		6,671		—		7,731		—
Other commercial real estate	3,976		—		4,695		—		2,752		514		4,490		11
Total commercial real estate	11,065		1,508		19,037		648		19,985		3,223		31,585		282
Total impaired loans individually evaluated for impairment	$	13,309	$	2,744	$	23,318	$	1,574	$	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 and nine months ended September 30, 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 September 30,
	2015				2014
	Average Recorded Balance		Interest Income Recognized ⁽¹⁾		Average Recorded Balance		Interest Income Recognized ⁽¹⁾
Commercial and industrial	$	5,968	$	37	$	20,137	$	57
Agricultural	—		—		—		—
Commercial real estate:
Office, retail, and industrial	8,814		4		15,873		3
Multi-family	925		12		1,155		—
Construction	2,995		118		5,792		—
Other commercial real estate	3,442		15		5,234		22
Total commercial real estate	16,176		149		28,054		25
Total impaired loans	$	22,144	$	186	$	48,191	$	82

	Nine Months Ended September 30,
	2015				2014
	Average Recorded Investment		Interest Income Recognized ⁽¹⁾		Average Recorded Investment		Interest Income Recognized ⁽¹⁾
Commercial and industrial	$	10,457	$	113	$	15,222	$	204
Agricultural	—		—		—		—
Commercial real estate:
Office, retail, and industrial	10,158		37		20,671		150
Multi-family	868		13		1,321		—
Construction	4,833		118		5,537		—
Other commercial real estate	3,222		34		6,701		137
Total commercial real estate	19,081		202		34,230		287
Total impaired loans	$	29,538	$	315	$	49,452	$	491


⁽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 September 30, 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 September 30, 2015
Commercial and industrial	$	2,247,010	$	90,414	$	48,998	$	6,438	$	2,392,860
Agricultural	388,034		—		5,586		112		393,732
Commercial real estate:
Office, retail, and industrial	1,335,648		37,420		34,048		6,961		1,414,077
Multi-family	527,520		6,147		4,595		1,046		539,308
Construction	173,821		5,181		9,752		3,332		192,086
Other commercial real estate	829,347		24,140		10,363		5,898		869,748
Total commercial real estate	2,866,336		72,888		58,758		17,237		3,015,219
Total corporate loans	$	5,501,380	$	163,302	$	113,342	$	23,787	$	5,801,811
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 $870,000 as of September 30, 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 September 30, 2015
Home equity	$	642,022	$	5,201	$	647,223
1-4 family mortgages	290,941		3,320		294,261
Installment	131,185		—		131,185
Total consumer loans	$	1,064,148	$	8,521	$	1,072,669
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 September 30, 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 September 30, 2015						As of December 31, 2014
	Accruing		Non-accrual ⁽¹⁾		Total		Accruing		Non-accrual ⁽¹⁾		Total
Commercial and industrial	$	297	$	1,063	$	1,360	$	269	$	18,799	$	19,068
Commercial real estate:
Office, retail, and industrial	166		—		166		586		—		586
Multi-family	601		192		793		887		232		1,119
Other commercial real estate	346		—		346		433		183		616
Total commercial real estate	1,113		192		1,305		1,906		415		2,321
Total corporate loans	1,410		1,255		2,665		2,175		19,214		21,389
Home equity	501		681		1,182		651		506		1,157
1-4 family mortgages	860		430		1,290		878		184		1,062
Total consumer loans	1,361		1,111		2,472		1,529		690		2,219
Total loans	$	2,771	$	2,366	$	5,137	$	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 $769,000 in specific reserves related to TDRs as of September 30, 2015 and there were $1.8 million in specific reserves related to TDRs as of December 31, 2014.

The following table presents a summary of loans that were restructured during the quarters and nine months ended September 30, 2015, and 2014.

Loans Restructured During the Period

(Dollar amounts in thousands)



	Number of Loans	Pre- Modification Recorded Investment		Funds Disbursed		Interest and Escrow Capitalized		Charge-offs		Post- Modification Recorded Investment
Quarter ended September 30, 2015
Home equity	1	$	120	$	—	$	—	$	—	$	120
1-4 family mortgages	2	325		—		—		—		325
Total loans restructured during the period	3	$	445	$	—	$	—	$	—	$	445
Quarter ended September 30, 2014
Commercial and industrial	5	$	23,015	$	—	$	—	$	—	$	23,015
Office, retail, and industrial	1	417		—		—		—		417
Total loans restructured during the period	6	$	23,432	$	—	$	—	$	—	$	23,432
Nine months ended September 30, 2015
Home equity	1	$	120	$	—	$	—	$	—	$	120
1-4 family mortgages	2	325		—		—		—		325
Total loans restructured during the period	3	$	445	$	—	$	—	$	—	$	445
Nine months ended September 30, 2014
Commercial and industrial	5	$	23,015	$	—	$	—	$	—	$	23,015
Office, retail, and industrial	1	417		—		—		—		417
Home equity	1	75		—		—		—		75
Total loans restructured during the period	7	$	23,507	$	—	$	—	$	—	$	23,507

Accruing TDRs that do not perform in accordance with their modified terms are transferred to non-accrual. No material loans defaulted within twelve months of the restructure date during the quarters and nine months ended September 30, 2015 and 2014.

A rollforward of the carrying value of TDRs for the quarters and nine months ended September 30, 2015 and 2014 is presented in the following table.

TDR Rollforward

(Dollar amounts in thousands)



	Quarters Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Accruing
Beginning balance	$	3,067		$	5,697		$	3,704		$	23,770
Additions	120			417			120			492
Net payments received	(355		)	(109		)	(746		)	(1,219		)
Returned to performing status	—			—			—			(18,821		)
Net transfers from non-accrual	(61		)	(556		)	(307		)	1,227
Ending balance	2,771			5,449			2,771			5,449
Non-accrual
Beginning balance	2,070			1,700			19,904			4,083
Additions	325			23,015			325			23,015
Net payments received	(29		)	(135		)	(15,483		)	(292		)
Charge-offs	(61		)	(8,159		)	(2,687		)	(8,345		)
Transfers to OREO	—			—			—			(257		)
Net transfers to accruing	61			556			307			(1,227		)
Ending balance	2,366			16,977			2,366			16,977
Total TDRs	$	5,137		$	22,426		$	5,137		$	22,426

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. 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 September 30, 2015 and there were $666,000 in commitments as of December 31, 2014.