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, 2018 and December 31, 2017. 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⁽¹⁾		30-89 Days Past Due		90 Days or More Past Due		Total Past Due		Total Loans		Non- accrual⁽²⁾		90 Days or More Past Due, Still Accruing Interest
As of March 31, 2018
Commercial and industrial	$	3,612,554	$	11,412	$	35,100	$	46,512	$	3,659,066	$	43,974	$	1,963
Agricultural	430,903		264		4,567		4,831		435,734		4,086		489
Commercial real estate:
Office, retail, and industrial	1,915,943		5,926		9,333		15,259		1,931,202		12,342		476
Multi-family	680,557		15,249		24		15,273		695,830		144		24
Construction	584,607		35		1,124		1,159		585,766		208		916
Other commercial real estate	1,356,320		4,083		2,835		6,918		1,363,238		4,088		64
Total commercial real estate	4,537,427		25,293		13,316		38,609		4,576,036		16,782		1,480
Total corporate loans	8,580,884		36,969		52,983		89,952		8,670,836		64,842		3,932
Home equity	875,789		3,399		2,346		5,745		881,534		5,780		44
1-4 family mortgages	794,212		2,608		2,082		4,690		798,902		4,393		132
Installment	322,797		2,180		525		2,705		325,502		—		525
Total consumer loans	1,992,798		8,187		4,953		13,140		2,005,938		10,173		701
Total loans	$	10,573,682	$	45,156	$	57,936	$	103,092	$	10,676,774	$	75,015	$	4,633
As of December 31, 2017
Commercial and industrial	$	3,490,783	$	34,620	$	4,511	$	39,131	$	3,529,914	$	40,580	$	1,830
Agricultural	430,221		280		385		665		430,886		219		177
Commercial real estate:
Office, retail, and industrial	1,970,564		3,156		6,100		9,256		1,979,820		11,560		345
Multi-family	672,098		3,117		248		3,365		675,463		377		20
Construction	539,043		198		579		777		539,820		209		371
Other commercial real estate	1,353,263		2,545		2,707		5,252		1,358,515		3,621		317
Total commercial real estate	4,534,968		9,016		9,634		18,650		4,553,618		15,767		1,053
Total corporate loans	8,455,972		43,916		14,530		58,446		8,514,418		56,566		3,060
Home equity	820,099		4,102		2,854		6,956		827,055		5,946		98
1-4 family mortgages	770,120		2,145		2,092		4,237		774,357		4,412		—
Installment	319,178		2,407		397		2,804		321,982		—		397
Total consumer loans	1,909,397		8,654		5,343		13,997		1,923,394		10,358		495
Total loans	$	10,365,369	$	52,570	$	19,873	$	72,443	$	10,437,812	$	66,924	$	3,555


⁽¹⁾	PCI loans with an accretable yield are considered current.


⁽²⁾	Includes PCI loans of $760,000 and $763,000 as of March 31, 2018 and December 31, 2017, respectively, which no longer have an accretable yield as estimates of expected future cash flows have decreased since the acquisition due to credit deterioration.

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 ended March 31, 2018 and 2017 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			Reserve for Unfunded Commitments		Total Allowance for Credit Losses
Quarter ended March 31, 2018
Beginning balance	$	55,791		$	10,996		$	2,534		$	3,481		$	6,381		$	16,546		$	1,000	$	96,729
Charge-offs	(14,670		)	(461		)	—			—			(69		)	(1,885		)	—		(17,085		)
Recoveries	538			97			—			13			39			342			—		1,029
Net charge-offs	(14,132		)	(364		)	—			13			(30		)	(1,543		)	—		(16,056		)
Provision for loan losses and other	15,541			(25		)	58			(1,522		)	(1,060		)	2,189			—		15,181
Ending balance	$	57,200		$	10,607		$	2,592		$	1,972		$	5,291		$	17,192		$	1,000	$	95,854
Quarter ended March 31, 2017
Beginning balance	$	40,709		$	17,595		$	3,261		$	3,444		$	7,739		$	13,335		$	1,000	$	87,083
Charge-offs	(4,074		)	(127		)	—			(5		)	(408		)	(1,664		)	—		(6,278		)
Recoveries	1,666			975			28			227			101			443			—		3,440
Net charge-offs	(2,408		)	848			28			222			(307		)	(1,221		)	—		(2,838		)
Provision for loan losses and other	3,485			(742		)	(429		)	444			(510		)	2,670			—		4,918
Ending balance	$	41,786		$	17,701		$	2,860		$	4,110		$	6,922		$	14,784		$	1,000	$	89,163

The table below provides a breakdown of loans and the related allowance for credit losses by portfolio segment as of March 31, 2018 and December 31, 2017.

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, 2018
Commercial, industrial, and agricultural	$	46,748	$	4,037,396	$	10,656	$	4,094,800	$	8,111	$	48,400	$	689	$	57,200
Commercial real estate:
Office, retail, and industrial	11,375		1,905,401		14,426		1,931,202		481		8,705		1,421		10,607
Multi-family	391		682,238		13,201		695,830		—		2,418		174		2,592
Construction	—		577,297		8,469		585,766		—		1,815		157		1,972
Other commercial real estate	2,223		1,300,548		60,467		1,363,238		—		4,320		971		5,291
Total commercial real estate	13,989		4,465,484		96,563		4,576,036		481		17,258		2,723		20,462
Total corporate loans	60,737		8,502,880		107,219		8,670,836		8,592		65,658		3,412		77,662
Consumer	—		1,984,451		21,487		2,005,938		—		15,926		1,266		17,192
Reserve for unfunded commitments	—		—		—		—		—		1,000		—		1,000
Total loans	$	60,737	$	10,487,331	$	128,706	$	10,676,774	$	8,592	$	82,584	$	4,678	$	95,854
As of December 31, 2017
Commercial, industrial, and agricultural	$	38,718	$	3,909,380	$	12,702	$	3,960,800	$	10,074	$	45,293	$	424	$	55,791
Commercial real estate:
Office, retail, and industrial	10,810		1,954,435		14,575		1,979,820		—		9,333		1,663		10,996
Multi-family	621		660,771		14,071		675,463		—		2,436		98		2,534
Construction	—		530,977		8,843		539,820		—		3,331		150		3,481
Other commercial real estate	1,468		1,291,723		65,324		1,358,515		—		5,415		966		6,381
Total commercial real estate	12,899		4,437,906		102,813		4,553,618		—		20,515		2,877		23,392
Total corporate loans	51,617		8,347,286		115,515		8,514,418		10,074		65,808		3,301		79,183
Consumer	—		1,901,456		21,938		1,923,394		—		15,533		1,013		16,546
Reserve for unfunded commitments	—		—		—		—		—		1,000		—		1,000
Total loans	$	51,617	$	10,248,742	$	137,453	$	10,437,812	$	10,074	$	82,341	$	4,314	$	96,729

Loans Individually Evaluated for Impairment

The following table presents loans individually evaluated for impairment by class of loan as of March 31, 2018 and December 31, 2017. PCI loans are excluded from this disclosure.

Impaired Loans Individually Evaluated by Class

(Dollar amounts in thousands)



	As of March 31, 2018								As of December 31, 2017
	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	$	7,147	$	35,731	$	68,806	$	7,310	$	4,234	$	34,484	$	53,192	$	10,074
Agricultural	—		3,870		4,672		801		—		—		—		—
Commercial real estate:
Office, retail, and industrial	7,538		3,837		12,333		481		7,154		3,656		14,246		—
Multi-family	391		—		391		—		621		—		621		—
Construction	—		—		—		—		—		—		—		—
Other commercial real estate	2,223		—		2,243		—		1,468		—		1,566		—
Total commercial real estate	10,152		3,837		14,967		481		9,243		3,656		16,433		—
Total impaired loans individually evaluated for impairment	$	17,299	$	43,438	$	88,445	$	8,592	$	13,477	$	38,140	$	69,625	$	10,074

The following table presents the average recorded investment and interest income recognized on impaired loans by class for the quarters ended March 31, 2018 and 2017. 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,
	2018				2017
	Average Recorded Investment		Interest Income Recognized⁽¹⁾		Average Recorded Investment		Interest Income Recognized⁽¹⁾
Commercial and industrial	$	40,798	$	22	$	20,849	$	214
Agricultural	1,935		—		557		—
Commercial real estate:
Office, retail, and industrial	11,093		112		14,865		93
Multi-family	506		7		397		28
Construction	—		—		17		136
Other commercial real estate	1,846		52		1,890		12
Total commercial real estate	13,445		171		17,169		269
Total impaired loans	$	56,178	$	193	$	38,575	$	483


⁽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, as of March 31, 2018 and December 31, 2017.

Corporate Credit Quality Indicators by Class

(Dollar amounts in thousands)



	Pass		Special Mention⁽¹⁾⁽⁴⁾		Substandard⁽²⁾⁽⁴⁾		Non-accrual⁽³⁾		Total
As of March 31, 2018
Commercial and industrial	$	3,505,129	$	95,259	$	14,704	$	43,974	$	3,659,066
Agricultural	417,644		7,756		6,248		4,086		435,734
Commercial real estate:
Office, retail, and industrial	1,856,832		26,642		35,386		12,342		1,931,202
Multi-family	682,926		10,961		1,799		144		695,830
Construction	568,148		9,941		7,469		208		585,766
Other commercial real estate	1,310,712		31,431		17,007		4,088		1,363,238
Total commercial real estate	4,418,618		78,975		61,661		16,782		4,576,036
Total corporate loans	$	8,341,391	$	181,990	$	82,613	$	64,842	$	8,670,836
As of December 31, 2017
Commercial and industrial	$	3,388,133	$	70,863	$	30,338	$	40,580	$	3,529,914
Agricultural	413,946		10,989		5,732		219		430,886
Commercial real estate:
Office, retail, and industrial	1,903,737		25,546		38,977		11,560		1,979,820
Multi-family	665,496		7,395		2,195		377		675,463
Construction	521,911		10,184		7,516		209		539,820
Other commercial real estate	1,304,337		29,624		20,933		3,621		1,358,515
Total commercial real estate	4,395,481		72,749		69,621		15,767		4,553,618
Total corporate loans	$	8,197,560	$	154,601	$	105,691	$	56,566	$	8,514,418


⁽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 $651,000 as of March 31, 2018 and $657,000 as of December 31, 2017.

Consumer Credit Quality Indicators by Class

(Dollar amounts in thousands)



	Performing		Non-accrual		Total
As of March 31, 2018
Home equity	$	875,754	$	5,780	$	881,534
1-4 family mortgages	794,509		4,393		798,902
Installment	325,502		—		325,502
Total consumer loans	$	1,995,765	$	10,173	$	2,005,938
As of December 31, 2017
Home equity	$	821,109	$	5,946	$	827,055
1-4 family mortgages	769,945		4,412		774,357
Installment	321,982		—		321,982
Total consumer loans	$	1,913,036	$	10,358	$	1,923,394

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, 2018 and December 31, 2017. 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, 2018						As of December 31, 2017
	Accruing		Non-accrual⁽¹⁾		Total		Accruing		Non-accrual⁽¹⁾		Total
Commercial and industrial	$	260	$	16,830	$	17,090	$	264	$	18,959	$	19,223
Agricultural	—		—		—		—		—		—
Commercial real estate:
Office, retail, and industrial	—		2,336		2,336		—		4,236		4,236
Multi-family	570		144		714		574		149		723
Construction	—		—		—		—		—		—
Other commercial real estate	189		—		189		192		—		192
Total commercial real estate	759		2,480		3,239		766		4,385		5,151
Total corporate loans	1,019		19,310		20,329		1,030		23,344		24,374
Home equity	85		724		809		86		738		824
1-4 family mortgages	674		432		1,106		680		451		1,131
Installment	—		—		—		—		—		—
Total consumer loans	759		1,156		1,915		766		1,189		1,955
Total loans	$	1,778	$	20,466	$	22,244	$	1,796	$	24,533	$	26,329


⁽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 $2.4 million and $2.0 million specific reserves related to TDRs as of March 31, 2018 and December 31, 2017, respectively.

There were no material restructures during the quarters ended March 31, 2018 and 2017.

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 ended March 31, 2018 and 2017.

A rollforward of the carrying value of TDRs for the quarters ended March 31, 2018 and 2017 is presented in the following table.

TDR Rollforward

(Dollar amounts in thousands)



	Quarters Ended March 31,
	2018			2017
Accruing
Beginning balance	$	1,796		$	2,291
Additions	—			922
Net payments	(18		)	(24		)
Net transfers from (to) non-accrual	—			(1,077		)
Ending balance	1,778			2,112
Non-accrual
Beginning balance	24,533			6,297
Additions	355			—
Net payments	(3,113		)	(4,150		)
Charge-offs	(1,309		)	(112		)
Net transfers from accruing	—			1,077
Ending balance	20,466			3,112
Total TDRs	$	22,244		$	5,224

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 March 31, 2018 and December 31, 2017.