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 June 30, 2016 and December 31, 2015. 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		90 Days or More Past Due, Still Accruing Interest
As of June 30, 2016
Commercial and industrial	$	2,684,411	$	10,162	$	5,169	$	15,331	$	2,699,742	$	6,303	$	1,050
Agricultural	401,242		383		233		616		401,858		475		—
Commercial real estate:
Office, retail, and industrial	1,516,265		4,677		8,733		13,410		1,529,675		16,815		34
Multi-family	584,040		2,566		498		3,064		587,104		321		354
Construction	370,596		47		373		420		371,016		360		20
Other commercial real estate	992,309		2,926		5,420		8,346		1,000,655		4,797		2,925
Total commercial real estate	3,463,210		10,216		15,024		25,240		3,488,450		22,293		3,333
Total corporate loans	6,548,863		20,761		20,426		41,187		6,590,050		29,071		4,383
Home equity	717,461		3,278		2,142		5,420		722,881		4,527		153
1-4 family mortgages	411,585		1,901		2,095		3,996		415,581		3,261		604
Installment	222,273		1,306		266		1,572		223,845		—		266
Total consumer loans	1,351,319		6,485		4,503		10,988		1,362,307		7,788		1,023
Covered loans	26,204		681		295		976		27,180		453		—
Total loans	$	7,926,386	$	27,927	$	25,224	$	53,151	$	7,979,537	$	37,312	$	5,406
As of December 31, 2015
Commercial and industrial	$	2,516,197	$	4,956	$	3,573	$	8,529	$	2,524,726	$	5,587	$	857
Agricultural	387,109		245		86		331		387,440		355		—
Commercial real estate:
Office, retail, and industrial	1,386,383		2,647		6,424		9,071		1,395,454		6,875		4
Multi-family	526,625		541		1,158		1,699		528,324		796		548
Construction	216,377		—		505		505		216,882		905		—
Other commercial real estate	922,531		3,575		5,084		8,659		931,190		5,611		661
Total commercial real estate	3,051,916		6,763		13,171		19,934		3,071,850		14,187		1,213
Total corporate loans	5,955,222		11,964		16,830		28,794		5,984,016		20,129		2,070
Home equity	647,175		3,247		3,046		6,293		653,468		5,310		216
1-4 family mortgages	350,980		2,680		2,194		4,874		355,854		3,416		528
Installment	136,780		753		69		822		137,602		20		69
Total consumer loans	1,134,935		6,680		5,309		11,989		1,146,924		8,746		813
Covered loans	29,808		405		562		967		30,775		555		174
Total loans	$	7,119,965	$	19,049	$	22,701	$	41,750	$	7,161,715	$	29,430	$	3,057

Allowance for Credit Losses

The Company maintains an allowance for credit losses at a level deemed adequate by management to absorb estimated losses inherent in the existing 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 six months ended June 30, 2016 and 2015 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 for Credit Losses
Quarter ended June 30, 2016
Beginning balance	$	37,736		$	14,412		$	2,540		$	2,433		$	6,567		$	11,894		$	1,568		$	1,225	$	78,375
Charge-offs	(2,026		)	(1,641		)	(84		)	(8		)	(879		)	(1,493		)	(2		)	—		(6,133		)
Recoveries	576			8			1			20			69			329			—			—		1,003
Net charge-offs	(1,450		)	(1,633		)	(83		)	12			(810		)	(1,164		)	(2		)	—		(5,130		)
Provision for loan losses and other	3,798			206			469			(206		)	1,717			2,273			(172		)	175		8,260
Ending balance	$	40,084		$	12,985		$	2,926		$	2,239		$	7,474		$	13,003		$	1,394		$	1,400	$	81,505
Quarter ended June 30, 2015
Beginning balance	$	32,096		$	10,831		$	2,355		$	2,076		$	6,298		$	11,655		$	5,679		$	1,816	$	72,806
Charge-offs	(4,127		)	(1,894		)	(469		)	(15		)	(527		)	(751		)	(323		)	—		(8,106		)
Recoveries	854			32			3			203			1,130			319			38			—		2,579
Net charge-offs	(3,273		)	(1,862		)	(466		)	188			603			(432		)	(285		)	—		(5,527		)
Provision for loan losses and other	4,906			2,376			562			(374		)	(534		)	(403		)	(533		)	—		6,000
Ending balance	$	33,729		$	11,345		$	2,451		$	1,890		$	6,367		$	10,820		$	4,861		$	1,816	$	73,279
Six months ended June 30, 2016
Beginning balance	$	37,074		$	13,116		$	2,462		$	1,440		$	6,088		$	11,812		$	1,638		$	1,225	$	74,855
Charge-offs	(3,924		)	(2,165		)	(288		)	(134		)	(2,324		)	(2,485		)	(2		)	—		(11,322		)
Recoveries	1,078			111			26			35			220			649			—			—		2,119
Net charge-offs	(2,846		)	(2,054		)	(262		)	(99		)	(2,104		)	(1,836		)	(2		)	—		(9,203		)
Provision for loan losses and other	5,856			1,923			726			898			3,490			3,027			(242		)	175		15,853
Ending balance	$	40,084		$	12,985		$	2,926		$	2,239		$	7,474		$	13,003		$	1,394		$	1,400	$	81,505
Six months ended June 30, 2015
Beginning balance	$	29,458		$	10,992		$	2,249		$	2,297		$	8,327		$	12,145		$	7,226		$	1,816	$	74,510
Charge-offs	(11,576		)	(2,050		)	(497		)	(15		)	(1,844		)	(1,551		)	(626		)	—		(18,159		)
Recoveries	1,646			354			7			220			1,396			640			113			—		4,376
Net charge-offs	(9,930		)	(1,696		)	(490		)	205			(448		)	(911		)	(513		)	—		(13,783		)
Provision for loan losses and other	14,201			2,049			692			(612		)	(1,512		)	(414		)	(1,852		)	—		12,552
Ending balance	$	33,729		$	11,345		$	2,451		$	1,890		$	6,367		$	10,820		$	4,861		$	1,816	$	73,279

The table below provides a breakdown of loans and the related allowance for credit losses by portfolio segment as of June 30, 2016 and December 31, 2015.

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 June 30, 2016
Commercial, industrial, and agricultural	$	3,755	$	3,087,338	$	10,507	$	3,101,600	$	198	$	39,220	$	666	$	40,084
Commercial real estate:
Office, retail, and industrial	15,742		1,500,762		13,171		1,529,675		2,086		9,517		1,382		12,985
Multi-family	399		574,031		12,674		587,104		—		2,724		202		2,926
Construction	34		366,057		4,925		371,016		—		2,088		151		2,239
Other commercial real estate	3,309		980,256		17,090		1,000,655		8		6,357		1,109		7,474
Total commercial real estate	19,484		3,421,106		47,860		3,488,450		2,094		20,686		2,844		25,624
Total corporate loans	23,239		6,508,444		58,367		6,590,050		2,292		59,906		3,510		65,708
Consumer	—		1,351,270		11,037		1,362,307		—		12,476		527		13,003
Covered loans	—		18,026		9,154		27,180		—		228		1,166		1,394
Reserve for unfunded commitments	—		—		—		—		—		1,400		—		1,400
Total loans	$	23,239	$	7,877,740	$	78,558	$	7,979,537	$	2,292	$	74,010	$	5,203	$	81,505
As of December 31, 2015
Commercial, industrial, and agricultural	$	2,871	$	2,902,361	$	6,934	$	2,912,166	$	883	$	35,378	$	813	$	37,074
Commercial real estate:
Office, retail, and industrial	6,162		1,376,789		12,503		1,395,454		715		10,833		1,568		13,116
Multi-family	800		526,037		1,487		528,324		—		2,367		95		2,462
Construction	178		212,671		4,033		216,882		—		1,160		280		1,440
Other commercial real estate	3,665		913,161		14,364		931,190		—		5,367		721		6,088
Total commercial real estate	10,805		3,028,658		32,387		3,071,850		715		19,727		2,664		23,106
Total corporate loans	13,676		5,931,019		39,321		5,984,016		1,598		55,105		3,477		60,180
Consumer	—		1,135,959		10,965		1,146,924		—		11,425		387		11,812
Covered loans	—		20,856		9,919		30,775		—		248		1,390		1,638
Reserve for unfunded commitments	—		—		—		—		—		1,225		—		1,225
Total loans	$	13,676	$	7,087,834	$	60,205	$	7,161,715	$	1,598	$	68,003	$	5,254	$	74,855

Loans Individually Evaluated for Impairment

The following table presents loans individually evaluated for impairment by class of loan as of June 30, 2016 and December 31, 2015. PCI loans are excluded from this disclosure.

Impaired Loans Individually Evaluated by Class

(Dollar amounts in thousands)



	As of June 30, 2016								As of December 31, 2015
	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	$	1,909	$	1,846	$	5,873	$	198	$	1,673	$	1,198	$	4,592	$	883
Agricultural	—		—		—		—		—		—		—		—
Commercial real estate:
Office, retail, and industrial	8,900		6,842		21,121		2,086		4,654		1,508		12,083		715
Multi-family	399		—		399		—		800		—		941		—
Construction	34		—		34		—		178		—		299		—
Other commercial real estate	3,039		270		4,740		8		3,665		—		4,403		—
Total commercial real estate	12,372		7,112		26,294		2,094		9,297		1,508		17,726		715
Total impaired loans individually evaluated for impairment	$	14,281	$	8,958	$	32,167	$	2,292	$	10,970	$	2,706	$	22,318	$	1,598

The following table presents the average recorded investment and interest income recognized on impaired loans by class for the quarters and six months ended June 30, 2016 and 2015. 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 June 30,
	2016				2015
	Average Recorded Investment		Interest Income Recognized ⁽¹⁾		Average Recorded Investment		Interest Income Recognized ⁽¹⁾
Commercial and industrial	$	3,236	$	12	$	9,277	$	6
Agricultural	—		—		—		—
Commercial real estate:
Office, retail, and industrial	12,713		29		11,188		4
Multi-family	401		—		866		1
Construction	34		—		5,395		—
Other commercial real estate	3,641		53		2,822		8
Total commercial real estate	16,788		82		20,271		13
Total impaired loans	$	20,024	$	94	$	29,548	$	19

	Six Months Ended June 30,
	2016				2015
	Average Recorded Investment		Interest Income Recognized ⁽¹⁾		Average Recorded Investment		Interest Income Recognized ⁽¹⁾
Commercial and industrial	$	3,114	$	50	$	12,783	$	76
Agricultural	—		—		—		—
Commercial real estate:
Office, retail, and industrial	10,529		77		11,570		33
Multi-family	534		1		890		1
Construction	82		—		5,820		—
Other commercial real estate	3,649		72		2,970		19
Total commercial real estate	14,794		150		21,250		53
Total impaired loans	$	17,908	$	200	$	34,033	$	129


⁽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 June 30, 2016 and December 31, 2015.

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 June 30, 2016
Commercial and industrial	$	2,511,957	$	130,476	$	51,006	$	6,303	$	2,699,742
Agricultural	366,283		17,130		17,970		475		401,858
Commercial real estate:
Office, retail, and industrial	1,441,594		38,902		32,364		16,815		1,529,675
Multi-family	577,991		4,821		3,971		321		587,104
Construction	357,969		4,250		8,437		360		371,016
Other commercial real estate	966,607		12,123		17,128		4,797		1,000,655
Total commercial real estate	3,344,161		60,096		61,900		22,293		3,488,450
Total corporate loans	$	6,222,401	$	207,702	$	130,876	$	29,071	$	6,590,050
As of December 31, 2015
Commercial and industrial	$	2,379,992	$	86,263	$	52,884	$	5,587	$	2,524,726
Agricultural	381,523		—		5,562		355		387,440
Commercial real estate:
Office, retail, and industrial	1,320,164		32,627		35,788		6,875		1,395,454
Multi-family	517,412		6,146		3,970		796		528,324
Construction	201,496		4,678		9,803		905		216,882
Other commercial real estate	898,746		13,179		13,654		5,611		931,190
Total commercial real estate	2,937,818		56,630		63,215		14,187		3,071,850
Total corporate loans	$	5,699,333	$	142,893	$	121,661	$	20,129	$	5,984,016


⁽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 well-defined 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 well-defined 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 $847,000 as of June 30, 2016 and $862,000 as of December 31, 2015.

Consumer Credit Quality Indicators by Class, Excluding Covered Loans

(Dollar amounts in thousands)



	Performing		Non-accrual		Total
As of June 30, 2016
Home equity	$	718,354	$	4,527	$	722,881
1-4 family mortgages	412,320		3,261		415,581
Installment	223,845		—		223,845
Total consumer loans	$	1,354,519	$	7,788	$	1,362,307
As of December 31, 2015
Home equity	$	648,158	$	5,310	$	653,468
1-4 family mortgages	352,438		3,416		355,854
Installment	137,582		20		137,602
Total consumer loans	$	1,138,178	$	8,746	$	1,146,924

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 June 30, 2016 and December 31, 2015. See Note 1, "Summary of Significant Accounting Policies," for the accounting policy for TDRs.

TDRs by Class

(Dollar amounts in thousands)



	As of June 30, 2016						As of December 31, 2015
	Accruing		Non-accrual ⁽¹⁾		Total		Accruing		Non-accrual ⁽¹⁾		Total
Commercial and industrial	$	289	$	286	$	575	$	294	$	1,050	$	1,344
Commercial real estate:
Office, retail, and industrial	159		—		159		164		—		164
Multi-family	591		177		768		598		186		784
Other commercial real estate	329		—		329		340		—		340
Total commercial real estate	1,079		177		1,256		1,102		186		1,288
Total corporate loans	1,368		463		1,831		1,396		1,236		2,632
Home equity	286		826		1,112		494		667		1,161
1-4 family mortgages	837		401		1,238		853		421		1,274
Total consumer loans	1,123		1,227		2,350		1,347		1,088		2,435
Total loans	$	2,491	$	1,690	$	4,181	$	2,743	$	2,324	$	5,067


⁽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 no specific reserves related to TDRs as of June 30, 2016 and there were $758,000 in specific reserves related to TDRs as of December 31, 2015.

No TDRs were restructured during the quarters and six months ended June 30, 2016 and 2015.

Accruing TDRs that do not perform in accordance with their modified terms are transferred to non-accrual. There were no material TDRs that defaulted within twelve months of the restructure date during the quarters and six months ended June 30, 2016 and 2015.

A rollforward of the carrying value of TDRs for the quarters and six months ended June 30, 2016 and 2015 is presented in the following table.

TDR Rollforward

(Dollar amounts in thousands)



	Quarters Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Accruing
Beginning balance	$	2,702		$	3,581		$	2,743		$	3,704
Net payments received	(28		)	(349		)	(69		)	(391		)
Net transfers to non-accrual	(183		)	(165		)	(183		)	(246		)
Ending balance	2,491			3,067			2,491			3,067
Non-accrual
Beginning balance	2,268			1,996			2,324			19,904
Net payments received	(522		)	(55		)	(578		)	(15,454		)
Charge-offs	(239		)	(36		)	(239		)	(2,626		)
Net transfers from accruing	183			165			183			246
Ending balance	1,690			2,070			1,690			2,070
Total TDRs	$	4,181		$	5,137		$	4,181		$	5,137

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 June 30, 2016 and December 31, 2015.