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 December 31, 2016 and 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 December 31, 2016
Commercial and industrial	$	2,816,442	$	6,426	$	4,790	$	11,216	$	2,827,658	$	29,938	$	374
Agricultural	388,596		—		900		900		389,496		181		736
Commercial real estate:
Office, retail, and industrial	1,563,867		5,327		12,633		17,960		1,581,827		17,277		1,129
Multi-family	612,428		858		748		1,606		614,034		311		604
Construction	450,927		332		281		613		451,540		286		—
Other commercial real estate	974,406		1,307		3,646		4,953		979,359		2,892		1,526
Total commercial real estate	3,601,628		7,824		17,308		25,132		3,626,760		20,766		3,259
Total corporate loans	6,806,666		14,250		22,998		37,248		6,843,914		50,885		4,369
Home equity	726,676		3,627		2,301		5,928		732,604		4,986		17
1-4 family mortgages	412,737		2,652		965		3,617		416,354		2,939		231
Installment	236,264		1,476		259		1,735		237,999		—		259
Total consumer loans	1,375,677		7,755		3,525		11,280		1,386,957		7,925		507
Covered loans	22,097		918		259		1,177		23,274		479		133
Total loans	$	8,204,440	$	22,923	$	26,782	$	49,705	$	8,254,145	$	59,289	$	5,009
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 years ended December 31, 2016, 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 for Credit Losses
As of December 31, 2016
Beginning balance	$	37,074		$	13,116		$	2,462		$	1,440		$	6,088		$	11,812		$	1,638		$	1,225		$	74,855
Charge-offs	(9,844		)	(4,707		)	(307		)	(134		)	(2,932		)	(5,229		)	(140		)	—			(23,293		)
Recoveries	2,451			337			97			56			524			1,298			—			—			4,763
Net charge-offs	(7,393		)	(4,370		)	(210		)	(78		)	(2,408		)	(3,931		)	(140		)	—			(18,530		)
Provision for loan losses and other	11,028			8,788			1,002			2,082			4,050			4,613			(580		)	(225		)	30,758
Ending Balance	$	40,709		$	17,534		$	3,254		$	3,444		$	7,730		$	12,494		$	918		$	1,000		$	87,083
As of December 31, 2015
Beginning balance	$	29,458		$	10,992		$	2,249		$	2,297		$	8,327		$	12,145		$	7,226		$	1,816		$	74,510
Charge-offs	(15,885		)	(2,887		)	(545		)	(136		)	(2,643		)	(4,187		)	(634		)	—			(26,917		)
Recoveries	2,573			467			15			350			1,993			1,183			120			—			6,701
Net charge-offs	(13,312		)	(2,420		)	(530		)	214			(650		)	(3,004		)	(514		)	—			(20,216		)
Provision for loan losses and other	20,928			4,544			743			(1,071		)	(1,589		)	2,671			(5,074		)	(591		)	20,561
Ending balance	$	37,074		$	13,116		$	2,462		$	1,440		$	6,088		$	11,812		$	1,638		$	1,225		$	74,855
As of December 31, 2014
Beginning balance	$	30,381		$	10,405		$	2,017		$	6,316		$	10,817		$	13,010		$	12,559		$	1,616		$	87,121
Charge-offs	(17,424		)	(7,345		)	(943		)	(1,052		)	(4,834		)	(7,574		)	(1,012		)	—			(40,184		)
Recoveries	3,800			497			87			166			1,727			729			1,199			—			8,205
Net charge-offs	(13,624		)	(6,848		)	(856		)	(886		)	(3,107		)	(6,845		)	187			—			(31,979		)
Provision for loan losses and other	12,701			7,435			1,088			(3,133		)	617			5,980			(5,520		)	200			19,368
Ending balance	$	29,458		$	10,992		$	2,249		$	2,297		$	8,327		$	12,145		$	7,226		$	1,816		$	74,510

The table below provides a breakdown of loans and the related allowance for credit losses by portfolio segment as of December 31, 2016 and 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 December 31, 2016
Commercial, industrial, and agricultural	$	24,645	$	3,189,327	$	3,182	$	3,217,154	$	507	$	39,554	$	648	$	40,709
Commercial real estate:
Office, retail, and industrial	16,287		1,553,234		12,306		1,581,827		—		16,148		1,386		17,534
Multi-family	398		601,429		12,207		614,034		—		3,059		195		3,254
Construction	34		447,058		4,448		451,540		—		3,280		164		3,444
Other commercial real estate	1,286		965,900		12,173		979,359		18		6,613		1,099		7,730
Total commercial real estate	18,005		3,567,621		41,134		3,626,760		18		29,100		2,844		31,962
Total corporate loans	42,650		6,756,948		44,316		6,843,914		525		68,654		3,492		72,671
Consumer	—		1,377,501		9,456		1,386,957		—		12,101		393		12,494
Covered loans	—		15,379		7,895		23,274		—		109		809		918
Reserve for unfunded commitments	—		—		—		—		—		1,000		—		1,000
Total loans	$	42,650	$	8,149,828	$	61,667	$	8,254,145	$	525	$	81,864	$	4,694	$	87,083
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 December 31, 2016 and 2015. PCI loans are excluded from this disclosure.

Impaired Loans Individually Evaluated by Class

(Dollar amounts in thousands)



	As of December 31,
	2016								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	$	11,579	$	13,066	$	29,514	$	507	$	1,673	$	1,198	$	4,592	$	883
Agricultural	—		—		—		—		—		—		—		—
Commercial real estate:
Office, retail, and industrial	16,287		—		21,057		—		4,654		1,508		12,083		715
Multi-family	398		—		398		—		800		—		941		—
Construction	34		—		34		—		178		—		299		—
Other commercial real estate	1,016		270		2,141		18		3,665		—		4,403		—
Total commercial real estate	17,735		270		23,630		18		9,297		1,508		17,726		715
Total impaired loans individually evaluated for impairment	$	29,314	$	13,336	$	53,144	$	525	$	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 years ended December 31, 2016, 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)



	Years Ended December 31,
	2016				2015				2014
	Average Recorded Investment		Interest Income Recognized ⁽¹⁾		Average Recorded Investment		Interest Income Recognized ⁽¹⁾		Average Recorded Investment		Interest Income Recognized ⁽¹⁾
Commercial and industrial	$	9,178	$	104	$	8,940	$	163	$	16,137	$	371
Agricultural	—		—		—		—		—		—
Commercial real estate:
Office, retail, and industrial	12,867		291		9,359		52		19,003		245
Multi-family	479		11		855		13		1,245		5
Construction	63		—		3,902		118		5,764		—
Other commercial real estate	2,809		86		3,310		44		6,014		138
Total commercial real estate	16,218		388		17,426		227		32,026		388
Total impaired loans	$	25,396	$	492	$	26,366	$	390	$	48,163	$	759


⁽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 December 31, 2016 and 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 December 31, 2016
Commercial and industrial	$	2,638,833	$	92,340	$	66,547	$	29,938	$	2,827,658
Agricultural	366,382		17,039		5,894		181		389,496
Commercial real estate:
Office, retail, and industrial	1,491,030		34,007		39,513		17,277		1,581,827
Multi-family	607,324		4,370		2,029		311		614,034
Construction	438,946		111		12,197		286		451,540
Other commercial real estate	951,115		11,808		13,544		2,892		979,359
Total commercial real estate	3,488,415		50,296		67,283		20,766		3,626,760
Total corporate loans	$	6,493,630	$	159,675	$	139,724	$	50,885	$	6,843,914
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 a well-defined weakness 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 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 $834,000 as of December 31, 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 December 31, 2016
Home equity	$	727,618	$	4,986	$	732,604
1-4 family mortgages	413,415		2,939		416,354
Installment	237,999		—		237,999
Total consumer loans	$	1,379,032	$	7,925	$	1,386,957
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 December 31, 2016 and 2015. See Note 1, "Summary of Significant Accounting Policies," for the accounting policy for TDRs.

TDRs by Class

(Dollar amounts in thousands)



	As of December 31,
	2016						2015
	Accruing		Non-accrual ⁽¹⁾		Total		Accruing		Non-accrual ⁽¹⁾		Total
Commercial and industrial	$	281	$	150	$	431	$	294	$	1,050	$	1,344
Agricultural	—		—		—		—		—		—
Commercial real estate:
Office, retail, and industrial	155		4,733		4,888		164		—		164
Multi-family	586		168		754		598		186		784
Construction	—		—		—		—		—		—
Other commercial real estate	268		48		316		340		—		340
Total commercial real estate	1,009		4,949		5,958		1,102		186		1,288
Total corporate loans	1,290		5,099		6,389		1,396		1,236		2,632
Home equity	177		820		997		494		667		1,161
1-4 family mortgages	824		378		1,202		853		421		1,274
Installment	—		—		—		—		—		—
Total consumer loans	1,001		1,198		2,199		1,347		1,088		2,435
Total loans	$	2,291	$	6,297	$	8,588	$	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 December 31, 2016, and there were $758,000 in specific reserves related to TDRs as of December 31, 2015.

The following table presents a summary of loans that were restructured during the years ended December 31, 2016, 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
Year Ended December 31, 2016
Office, retail, and industrial	1	$	5,460	$	—	$	—	$	1,083	$	4,377
Other commercial real estate	1	745		—		—		—		745
Total loans restructured during the period	2	$	6,205	$	—	$	—	$	1,083	$	5,122
Year Ended December 31, 2015
Home equity	1	120		—		—		—		120
1-4 family mortgages	2	325		—		—		—		325
Total loans restructured during the period	3	$	445	$	—	$	—	$	—	$	445
Year Ended December 31, 2014
Commercial and industrial	7	$	23,852	$	—	$	—	$	—	$	23,852
Office, retail, and industrial	1	417		—		—		—		417
Multi-family	1	275		—		—		—		275
Home equity	1	75		—		—		—		75
Total loans restructured during the period	10	$	24,619	$	—	$	—	$	—	$	24,619

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 years ended December 31, 2016, 2015, and 2014 where the default occurred within twelve months of the restructure date.

TDRs That Defaulted Within Twelve Months of the Restructured Date

(Dollar amounts in thousands)



	Years Ended December 31,
	2016			2015			2014
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Commercial and industrial	—	$	—	—	$	—	2	$	125
Home equity	1	119		—	—		1	77
Total	1	$	119	—	$	—	3	$	202

A rollforward of the carrying value of TDRs for the years ended December 31, 2016, 2015, and 2014 is presented in the following table.

TDR Rollforward

(Dollar amounts in thousands)



	Years Ended December 31,
	2016			2015			2014
Accruing
Beginning balance	$	2,743		$	3,704		$	23,770
Additions	—			120			804
Net payments	(120		)	(774		)	(1,440		)
Returned to performing status	—			—			(20,656		)
Net transfers (to) from non-accrual	(332		)	(307		)	1,226
Ending balance	2,291			2,743			3,704
Non-accrual
Beginning balance	2,324			19,904			4,083
Additions	6,205			325			23,815
Net (payments) advances	(1,072		)	(15,525		)	1,991
Charge-offs	(1,492		)	(2,687		)	(8,457		)
Transfers to OREO	—			—			(302		)
Loans sold	—			—			—
Net transfers from (to) accruing	332			307			(1,226		)
Ending balance	6,297			2,324			19,904
Total TDRs	$	8,588		$	5,067		$	23,608

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 December 31, 2016 and 2015.