Loans

6 Months Ended

Jun. 30, 2017

Receivables [Abstract]

Loans

Loans

The period end loan composition was as follows.

	June 30, 2017		December 31, 2016
	($ in Thousands)
Commercial and industrial	$	6,571,000	$	6,489,014
Commercial real estate — owner occupied	845,336		897,724
Commercial and business lending	7,416,336		7,386,738
Commercial real estate — investor	3,329,585		3,574,732
Real estate construction	1,651,805		1,432,497
Commercial real estate lending	4,981,390		5,007,229
Total commercial	12,397,726		12,393,967
Residential mortgage	7,115,457		6,332,327
Home equity	897,111		934,443
Other consumer	372,775		393,979
Total consumer	8,385,343		7,660,749
Total loans	$	20,783,069	$	20,054,716

The following table presents commercial and consumer loans by credit quality indicator at June 30, 2017.

	Pass		Special Mention		Potential Problem		Nonaccrual		Total
	($ in Thousands)
Commercial and industrial	$	6,183,037	$	103,881	$	142,607	$	141,475	$	6,571,000
Commercial real estate - owner occupied	754,446		14,366		60,724		15,800		845,336
Commercial and business lending	6,937,483		118,247		203,331		157,275		7,416,336
Commercial real estate - investor	3,260,187		13,623		48,569		7,206		3,329,585
Real estate construction	1,621,198		19,989		8,901		1,717		1,651,805
Commercial real estate lending	4,881,385		33,612		57,470		8,923		4,981,390
Total commercial	11,818,868		151,859		260,801		166,198		12,397,726
Residential mortgage	7,060,673		1,233		1,576		51,975		7,115,457
Home equity	882,253		1,168		208		13,482		897,111
Other consumer	372,018		524		—		233		372,775
Total consumer	8,314,944		2,925		1,784		65,690		8,385,343
Total	$	20,133,812	$	154,784	$	262,585	$	231,888	$	20,783,069

The following table presents commercial and consumer loans by credit quality indicator at December 31, 2016.

	Pass		Special Mention		Potential Problem		Nonaccrual		Total
	($ in Thousands)
Commercial and industrial	$	5,937,119	$	141,328	$	227,196	$	183,371	$	6,489,014
Commercial real estate - owner occupied	805,871		17,785		64,524		9,544		897,724
Commercial and business lending	6,742,990		159,113		291,720		192,915		7,386,738
Commercial real estate - investor	3,491,217		14,236		51,228		18,051		3,574,732
Real estate construction	1,429,083		105		2,465		844		1,432,497
Commercial real estate lending	4,920,300		14,341		53,693		18,895		5,007,229
Total commercial	11,663,290		173,454		345,413		211,810		12,393,967
Residential mortgage	6,275,162		1,314		5,615		50,236		6,332,327
Home equity	919,740		1,588		114		13,001		934,443
Other consumer	393,161		562		—		256		393,979
Total consumer	7,588,063		3,464		5,729		63,493		7,660,749
Total	$	19,251,353	$	176,918	$	351,142	$	275,303	$	20,054,716

Factors that are important to managing overall credit quality are sound loan underwriting and administration, systematic monitoring of existing loans and commitments, effective loan review on an ongoing basis, early identification of potential problems, and appropriate allowance for loan losses, allowance for unfunded commitments, nonaccrual, and charge off policies.

For commercial loans, management has determined the pass credit quality indicator to include credits that exhibit acceptable financial statements, cash flow, and leverage. If any risk exists, it is mitigated by the loan structure, collateral, monitoring, or control. For consumer loans, performing loans include credits that are performing in accordance with the original contractual terms. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Special mention credits have potential weaknesses that deserve management’s attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the credit. Potential problem loans are considered inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged. These loans generally have a well-defined weakness, or weaknesses, that may jeopardize liquidation of the debt and are characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Lastly, management considers a loan to be impaired when it is probable that the Corporation will be unable to collect all amounts due according to the original contractual terms of the note agreement, including both principal and interest. Management has determined that commercial and consumer loan relationships that have nonaccrual status or have had their terms restructured in a troubled debt restructuring meet this impaired loan definition. Commercial loans classified as special mention, potential problem, and nonaccrual are reviewed at a minimum on a quarterly basis, while pass and performing rated credits are reviewed on an annual basis or more frequently if the loan renewal is less than one year or if otherwise warranted.

The following table presents loans by past due status at June 30, 2017.

	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due (a)		Nonaccrual (b)		Total
	($ in Thousands)
Commercial and industrial	$	6,428,022	$	1,042	$	213	$	248	$	141,475	$	6,571,000
Commercial real estate - owner occupied	828,252		1,136		148		—		15,800		845,336
Commercial and business lending	7,256,274		2,178		361		248		157,275		7,416,336
Commercial real estate - investor	3,321,480		899		—		—		7,206		3,329,585
Real estate construction	1,649,953		40		95		—		1,717		1,651,805
Commercial real estate lending	4,971,433		939		95		—		8,923		4,981,390
Total commercial	12,227,707		3,117		456		248		166,198		12,397,726
Residential mortgage	7,054,317		8,163		1,002		—		51,975		7,115,457
Home equity	877,705		4,755		1,169		—		13,482		897,111
Other consumer	369,509		1,113		633		1,287		233		372,775
Total consumer	8,301,531		14,031		2,804		1,287		65,690		8,385,343
Total	$	20,529,238	$	17,148	$	3,260	$	1,535	$	231,888	$	20,783,069

(a) The recorded investment in loans past due 90 days or more and still accruing totaled $2 million at June 30, 2017 (the same as the reported balances for the accruing loans noted above).

(b) Of the total nonaccrual loans,$180 million or 78% were current with respect to payment at June 30, 2017.

The following table presents loans by past due status at December 31, 2016.

	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due (a)		Nonaccrual (b)		Total
	($ in Thousands)
Commercial and industrial	$	6,303,994	$	965	$	448	$	236	$	183,371	$	6,489,014
Commercial real estate - owner occupied	886,796		968		416		—		9,544		897,724
Commercial and business lending	7,190,790		1,933		864		236		192,915		7,386,738
Commercial real estate - investor	3,555,750		431		500		—		18,051		3,574,732
Real estate construction	1,431,284		264		105		—		844		1,432,497
Commercial real estate lending	4,987,034		695		605		—		18,895		5,007,229
Total commercial	12,177,824		2,628		1,469		236		211,810		12,393,967
Residential mortgage	6,273,949		7,298		844		—		50,236		6,332,327
Home equity	915,593		4,265		1,584		—		13,001		934,443
Other consumer	389,157		2,471		718		1,377		256		393,979
Total consumer	7,578,699		14,034		3,146		1,377		63,493		7,660,749
Total	$	19,756,523	$	16,662	$	4,615	$	1,613	$	275,303	$	20,054,716

(a) The recorded investment in loans past due 90 days or more and still accruing totaled $2 million at December 31, 2016 (the same as the reported balances for the accruing loans noted above).

(b) Of the total nonaccrual loans,$224 million or 81% were current with respect to payment at December 31, 2016.

The following table presents impaired loans at June 30, 2017.

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	($ in Thousands)
Loans with a related allowance
Commercial and industrial	$	89,563	$	94,231	$	17,882	$	95,205	$	635
Commercial real estate — owner occupied	7,249		9,154		526		6,086		93
Commercial and business lending	96,812		103,385		18,408		101,291		728
Commercial real estate — investor	15,832		16,111		330		15,782		767
Real estate construction	1,819		2,188		707		1,868		54
Commercial real estate lending	17,651		18,299		1,037		17,650		821
Total commercial	114,463		121,684		19,445		118,941		1,549
Residential mortgage	60,209		65,163		10,649		60,831		1,112
Home equity	20,927		22,907		9,665		21,232		484
Other consumer	1,315		1,342		229		1,335		12
Total consumer	82,451		89,412		20,543		83,398		1,608
Total loans(a)	$	196,914	$	211,096	$	39,988	$	202,339	$	3,157
Loans with no related allowance
Commercial and industrial	$	83,452	$	107,471	$	—	$	104,989	$	173
Commercial real estate — owner occupied	12,696		13,546		—		12,906		49
Commercial and business lending	96,148		121,017		—		117,895		222
Commercial real estate — investor	6,002		6,466		—		6,071		—
Real estate construction	219		222		—		222		—
Commercial real estate lending	6,221		6,688		—		6,293		—
Total commercial	102,369		127,705		—		124,188		222
Residential mortgage	9,390		10,246		—		9,461		101
Home equity	540		543		—		540		—
Other consumer	—		—		—		—		—
Total consumer	9,930		10,789		—		10,001		101
Total loans(a)	$	112,299	$	138,494	$	—	$	134,189	$	323
Total
Commercial and industrial	$	173,015	$	201,702	$	17,882	$	200,194	$	808
Commercial real estate — owner occupied	19,945		22,700		526		18,992		142
Commercial and business lending	192,960		224,402		18,408		219,186		950
Commercial real estate — investor	21,834		22,577		330		21,853		767
Real estate construction	2,038		2,410		707		2,090		54
Commercial real estate lending	23,872		24,987		1,037		23,943		821
Total commercial	216,832		249,389		19,445		243,129		1,771
Residential mortgage	69,599		75,409		10,649		70,292		1,213
Home equity	21,467		23,450		9,665		21,772		484
Other consumer	1,315		1,342		229		1,335		12
Total consumer	92,381		100,201		20,543		93,399		1,709
Total loans(a)	$	309,213	$	349,590	$	39,988	$	336,528	$	3,480

(a) The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 77% of the unpaid principal balance at June 30, 2017.

The following table presents impaired loans at December 31, 2016. 

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	($ in Thousands)
Loans with a related allowance
Commercial and industrial	$	101,770	$	107,813	$	21,617	$	111,211	$	2,512
Commercial real estate — owner occupied	6,595		8,641		295		7,111		274
Commercial and business lending	108,365		116,454		21,912		118,322		2,786
Commercial real estate — investor	27,196		27,677		3,541		31,142		2,124
Real estate construction	1,203		1,566		441		1,321		67
Commercial real estate lending	28,399		29,243		3,982		32,463		2,191
Total commercial	136,764		145,697		25,894		150,785		4,977
Residential mortgage	62,362		67,090		11,091		63,825		2,263
Home equity	20,651		22,805		9,312		21,825		1,114
Other consumer	1,235		1,284		186		1,294		29
Total consumer	84,248		91,179		20,589		86,944		3,406
Total loans(a)	$	221,012	$	236,876	$	46,483	$	237,729	$	8,383
Loans with no related allowance
Commercial and industrial	$	113,485	$	134,863	$	—	$	117,980	$	1,519
Commercial real estate — owner occupied	8,439		9,266		—		8,759		138
Commercial and business lending	121,924		144,129		—		126,739		1,657
Commercial real estate — investor	6,144		6,478		—		7,092		—
Real estate construction	—		—		—		—		—
Commercial real estate lending	6,144		6,478		—		7,092		—
Total commercial	128,068		150,607		—		133,831		1,657
Residential mortgage	5,974		6,998		—		6,610		184
Home equity	106		107		—		107		4
Other consumer	—		—		—		—		—
Total consumer	6,080		7,105		—		6,717		188
Total loans(a)	$	134,148	$	157,712	$	—	$	140,548	$	1,845
Total
Commercial and industrial	$	215,255	$	242,676	$	21,617	$	229,191	$	4,031
Commercial real estate — owner occupied	15,034		17,907		295		15,870		412
Commercial and business lending	230,289		260,583		21,912		245,061		4,443
Commercial real estate — investor	33,340		34,155		3,541		38,234		2,124
Real estate construction	1,203		1,566		441		1,321		67
Commercial real estate lending	34,543		35,721		3,982		39,555		2,191
Total commercial	264,832		296,304		25,894		284,616		6,634
Residential mortgage	68,336		74,088		11,091		70,435		2,447
Home equity	20,757		22,912		9,312		21,932		1,118
Other consumer	1,235		1,284		186		1,294		29
Total consumer	90,328		98,284		20,589		93,661		3,594
Total loans(a)	$	355,160	$	394,588	$	46,483	$	378,277	$	10,228

(a) The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 78% of the unpaid principal balance at December 31, 2016.

Troubled Debt Restructurings (“Restructured Loans”)

Loans are considered restructured loans if concessions have been granted to borrowers that are experiencing financial difficulty. The Corporation had a recorded investment of approximately $35 million in loans modified in troubled debt restructurings for the six months ended June 30, 2017, of which approximately $6 million was in accrual status and $29 million was in nonaccrual pending a sustained period of repayment. During the six months ended June 30, 2017, the commercial and industrial nonaccrual restructured loans increased primarily due to the restructuring of several large oil and gas loans. These loans were included in nonaccrual loans at both June 30, 2017 and December 31, 2016. The following table presents nonaccrual and performing restructured loans by loan portfolio.

	June 30, 2017				December 31, 2016
	Performing Restructured Loans		Nonaccrual Restructured Loans(a)		Performing Restructured Loans		Nonaccrual Restructured Loans(a)
	($ in Thousands)
Commercial and industrial	$	31,540	$	27,016	$	31,884	$	1,276
Commercial real estate — owner occupied	4,145		2,145		5,490		2,220
Commercial real estate — investor	14,628		602		15,289		924
Real estate construction	321		164		359		150
Residential mortgage	17,624		19,365		18,100		21,906
Home equity	7,985		2,401		7,756		2,877
Other consumer	1,082		22		979		32
Total	$	77,325	$	51,715	$	79,857	$	29,385

(a) Nonaccrual restructured loans have been included within nonaccrual loans.

The following table provides the number of loans modified in a troubled debt restructuring by loan portfolio during the six months ended June 30, 2017 and 2016, respectively, and the recorded investment and unpaid principal balance as of June 30, 2017 and 2016 respectively.

	Six Months Ended June 30, 2017					Six Months Ended June 30, 2016
	Number of Loans	Recorded Investment(a)		Unpaid Principal Balance(b)		Number of Loans	Recorded Investment(a)		Unpaid Principal Balance(b)
	($ in Thousands)
Commercial and industrial	24	$	30,935	$	52,260	11	$	2,608	$	2,676
Commercial real estate — owner occupied	2	716		716		1	120		126
Residential mortgage	36	2,695		2,805		48	3,942		4,171
Home equity	26	674		919		37	1,433		1,554
Total	88	$	35,020	$	56,700	97	$	8,103	$	8,527

(a) Represents post-modification outstanding recorded investment.

(b) Represents pre-modification outstanding recorded investment.

Restructured loan modifications may include payment schedule modifications, interest rate concessions, maturity date extensions, modification of note structure (A/B Note), non-reaffirmed Chapter 7 bankruptcies, principal reduction, or some combination of these concessions. During the six months ended June 30, 2017, restructured loan modifications of commercial and industrial, commercial real estate, and real estate construction loans primarily included maturity date extensions and payment schedule modifications. Restructured loan modifications of home equity and residential mortgage loans primarily included maturity date extensions, interest rate concessions, non-reaffirmed Chapter 7 bankruptcies, or a combination of these concessions for the six months ended June 30, 2017.

The following table provides the number of loans modified in a troubled debt restructuring during the previous twelve months which subsequently defaulted during the six months ended June 30, 2017 and 2016, respectively, as well as the recorded investment in these restructured loans as of June 30, 2017 and 2016, respectively.

	Six Months Ended June 30, 2017			Six Months Ended June 30, 2016
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
	($ in Thousands)
Commercial real estate — owner occupied	—	$	—	2	$	168
Residential mortgage	17	941		25	2,407
Home equity	9	271		11	164
Total	26	$	1,212	38	$	2,739

All loans modified in a troubled debt restructuring are evaluated for impairment. The nature and extent of the impairment of restructured loans, including those which have experienced a subsequent payment default, is considered in the determination of an appropriate level of the allowance for loan losses.

Allowance for Credit Losses

A summary of the changes in the allowance for loan losses by portfolio segment for the six months ended June 30, 2017, was as follows.

$ in Thousands	Commercial and industrial			Commercial real estate - owner occupied			Commercial real estate - investor			Real estate construction			Residential mortgage			Home equity			Other consumer			Total
December 31, 2016	$	140,126		$	14,034		$	45,285		$	26,932		$	27,046		$	20,364		$	4,548		$	278,335
Charge offs	(21,912		)	(83		)	(803		)	(62		)	(1,034		)	(1,196		)	(2,140		)	(27,230		)
Recoveries	6,498			145			163			47			342			1,423			378			8,996
Net charge offs	(15,414		)	62			(640		)	(15		)	(692		)	227			(1,762		)	(18,234		)
Provision for loan losses	18,295			(5,551		)	(3,155		)	4,571			5,212			(351		)	1,979			21,000
June 30, 2017	$	143,007		$	8,545		$	41,490		$	31,488		$	31,566		$	20,240		$	4,765		$	281,101
Allowance for loan losses:
Impaired loans:
Individually evaluated	$	17,350		$	187		$	183		$	—		$	106		$	—		$	—		$	17,826
Collectively evaluated	532			339			147			707			10,543			9,665			229			22,162
Total impaired loans	17,882			526			330			707			10,649			9,665			229			39,988
Non-impaired loans:
Collectively evaluated	125,125			8,019			41,160			30,781			20,917			10,575			4,536			241,113
Total	$	143,007		$	8,545		$	41,490		$	31,488		$	31,566		$	20,240		$	4,765		$	281,101
Period end loan balances:
Impaired loans:
Individually evaluated	$	140,061		$	15,303		$	6,799		$	220		$	11,060		$	643		$	—		$	174,086
Collectively evaluated	32,954			4,642			15,035			1,818			58,539			20,824			1,315			135,127
Total impaired loans	173,015			19,945			21,834			2,038			69,599			21,467			1,315			309,213
Non-impaired loans:
Collectively evaluated	6,397,985			825,391			3,307,751			1,649,767			7,045,858			875,644			371,460			20,473,856
Total	$	6,571,000		$	845,336		$	3,329,585		$	1,651,805		$	7,115,457		$	897,111		$	372,775		$	20,783,069

The allowance for credit losses is comprised of the allowance for loan losses and the allowance for unfunded commitments. The level of the allowance for loan losses represents management’s estimate of an amount appropriate to provide for probable credit losses in the loan portfolio at the balance sheet date. The allowance for unfunded commitments is maintained at a level believed by management to be sufficient to absorb estimated probable losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit) and is included in accrued expenses and other liabilities on the consolidated balance sheets. See Note 12 for additional information on the allowance for unfunded commitments.

For comparison purposes, a summary of the changes in the allowance for loan losses by portfolio segment for the year ended December 31, 2016, was as follows.

$ in Thousands	Commercial and industrial			Commercial real estate - owner occupied			Commercial real estate - investor			Real estate construction			Residential mortgage			Home equity			Other consumer			Total
December 31, 2015	$	129,959		$	18,680		$	43,018		$	25,266		$	28,261		$	23,555		$	5,525		$	274,264
Charge offs	(71,016		)	(512		)	(1,504		)	(558		)	(4,332		)	(4,686		)	(3,831		)	(86,439		)
Recoveries	14,543			74			1,624			203			755			3,491			820			21,510
Net charge offs	(56,473		)	(438		)	120			(355		)	(3,577		)	(1,195		)	(3,011		)	(64,929		)
Provision for loan losses	66,640			(4,208		)	2,147			2,021			2,362			(1,996		)	2,034			69,000
December 31, 2016	$	140,126		$	14,034		$	45,285		$	26,932		$	27,046		$	20,364		$	4,548		$	278,335
Allowance for loan losses:
Impaired loans:
Individually evaluated	$	20,836		$	—		$	3,117		$	—		$	147		$	3		$	—		$	24,103
Collectively evaluated	781			295			424			441			10,944			9,309			186			22,380
Total impaired loans	21,617			295			3,541			441			11,091			9,312			186			46,483
Non-impaired loans:
Collectively evaluated	118,509			13,739			41,744			26,491			15,955			11,052			4,362			231,852
Total	$	140,126		$	14,034		$	45,285		$	26,932		$	27,046		$	20,364		$	4,548		$	278,335
Period end loan balances:
Impaired loans:
Individually evaluated	$	180,965		$	8,439		$	17,322		$	—		$	7,033		$	650		$	—		$	214,409
Collectively evaluated	34,290			6,595			16,018			1,203			61,303			20,107			1,235			140,751
Total impaired loans	215,255			15,034			33,340			1,203			68,336			20,757			1,235			355,160
Non-impaired loans:
Collectively evaluated	6,273,759			882,690			3,541,392			1,431,294			6,263,991			913,686			392,744			19,699,556
Total	$	6,489,014		$	897,724		$	3,574,732		$	1,432,497		$	6,332,327		$	934,443		$	393,979		$	20,054,716

A summary of the changes in the allowance for unfunded commitments was as follows.

	Six Months Ended June 30, 2017		Year Ended December 31, 2016
	($ in Thousands)
Allowance for Unfunded Commitments:
Balance at beginning of period	$	25,400	$	24,400
Provision for unfunded commitments	—		1,000
Balance at end of period	$	25,400	$	25,400