Loans

3 Months Ended

Mar. 31, 2018

Receivables [Abstract]

Loans

Loans

The period end loan composition was as follows.

	March 31, 2018(a)		December 31, 2017
	($ in Thousands)
Commercial and industrial	$	6,756,983	$	6,399,693
Commercial real estate — owner occupied	900,913		802,209
Commercial and business lending	7,657,896		7,201,902
Commercial real estate — investor	4,077,671		3,315,254
Real estate construction	1,579,778		1,451,684
Commercial real estate lending	5,657,449		4,766,938
Total commercial	13,315,345		11,968,840
Residential mortgage	8,197,223		7,546,534
Home equity	923,470		883,804
Other consumer	374,453		385,813
Total consumer	9,495,146		8,816,151
Total loans	$	22,810,491	$	20,784,991
(a) Includes $15 million of purchased credit-impaired loans

The following table presents commercial and consumer loans by credit quality indicator at March 31, 2018.

	Pass		Special Mention		Potential Problem		Nonaccrual		Total
	($ in Thousands)
Commercial and industrial	$	6,325,258	$	132,292	$	196,766	$	102,667	$	6,756,983
Commercial real estate - owner occupied	830,489		15,378		34,410		20,636		900,913
Commercial and business lending	7,155,747		147,670		231,176		123,303		7,657,896
Commercial real estate - investor	3,960,155		54,972		46,970		15,574		4,077,671
Real estate construction	1,547,443		29,421		1,695		1,219		1,579,778
Commercial real estate lending	5,507,598		84,393		48,665		16,793		5,657,449
Total commercial	12,663,345		232,063		279,841		140,096		13,315,345
Residential mortgage	8,134,387		5,580		2,155		55,100		8,197,223
Home equity	908,682		1,383		188		13,218		923,470
Other consumer	373,714		600		—		139		374,453
Total consumer	9,416,783		7,563		2,343		68,456		9,495,146
Total	$	22,080,128	$	239,626	$	282,184	$	208,553	$	22,810,491

The following table presents commercial and consumer loans by credit quality indicator at December 31, 2017.

	Pass		Special Mention		Potential Problem		Nonaccrual		Total
	($ in Thousands)
Commercial and industrial	$	6,015,884	$	157,245	$	113,778	$	112,786	$	6,399,693
Commercial real estate - owner occupied	723,291		14,181		41,997		22,740		802,209
Commercial and business lending	6,739,175		171,426		155,775		135,526		7,201,902
Commercial real estate - investor	3,266,389		24,845		19,291		4,729		3,315,254
Real estate construction	1,421,504		29,206		—		974		1,451,684
Commercial real estate lending	4,687,893		54,051		19,291		5,703		4,766,938
Total commercial	11,427,068		225,477		175,066		141,229		11,968,840
Residential mortgage	7,490,860		426		1,616		53,632		7,546,534
Home equity	868,958		1,137		195		13,514		883,804
Other consumer	384,990		652		—		171		385,813
Total consumer	8,744,808		2,215		1,811		67,317		8,816,151
Total	$	20,171,876	$	227,692	$	176,877	$	208,546	$	20,784,991

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 March 31, 2018.

	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	$	6,653,188	$	793	$	87	$	248	$	102,667	$	6,756,983
Commercial real estate - owner occupied	879,766		511		—		—		20,636		900,913
Commercial and business lending	7,532,954		1,304		87		248		123,303		7,657,896
Commercial real estate - investor	4,061,600		240		—		257		15,574		4,077,671
Real estate construction	1,578,069		220		270		—		1,219		1,579,778
Commercial real estate lending	5,639,669		460		270		257		16,793		5,657,449
Total commercial	13,172,623		1,764		357		505		140,096		13,315,345
Residential mortgage	8,125,707		9,876		5,257		1,283		55,100		8,197,223
Home equity	904,305		4,485		1,383		79		13,218		923,470
Other consumer	370,977		1,058		753		1,526		139		374,453
Total consumer	9,400,989		15,419		7,393		2,888		68,456		9,495,146
Total	$	22,573,612	$	17,184	$	7,750	$	3,393	$	208,553	$	22,810,491

(a) The recorded investment in loans past due 90 days or more and still accruing totaled $3 million at March 31, 2018 (the same as the reported balances for the accruing loans noted above).

(b) Of the total nonaccrual loans,$159 million or 76% were current with respect to payment at March 31, 2018.

The following table presents loans by past due status at December 31, 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	$	6,286,369	$	170	$	101	$	267	$	112,786	$	6,399,693
Commercial real estate - owner occupied	779,421		48		—		—		22,740		802,209
Commercial and business lending	7,065,790		218		101		267		135,526		7,201,902
Commercial real estate - investor	3,310,000		374		—		151		4,729		3,315,254
Real estate construction	1,450,459		168		83		—		974		1,451,684
Commercial real estate lending	4,760,459		542		83		151		5,703		4,766,938
Total commercial	11,826,249		760		184		418		141,229		11,968,840
Residential mortgage	7,483,350		9,186		366		—		53,632		7,546,534
Home equity	863,465		5,688		1,137		—		13,514		883,804
Other consumer	382,186		1,227		780		1,449		171		385,813
Total consumer	8,729,001		16,101		2,283		1,449		67,317		8,816,151
Total	$	20,555,250	$	16,861	$	2,467	$	1,867	$	208,546	$	20,784,991

(a) The recorded investment in loans past due 90 days or more and still accruing totaled $2 million at December 31, 2017 (the same as the reported balances for the accruing loans noted above).

(b) Of the total nonaccrual loans,$135 million or 65% were current with respect to payment at December 31, 2017.

The following table presents impaired loans individually evaluated under ASC Topic 310, excluding purchased credit-impaired loans, at March 31, 2018.

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	($ in Thousands)
Loans with a related allowance
Commercial and industrial	$	76,452	$	81,091	$	18,778	$	77,130	$	312
Commercial real estate — owner occupied	16,264		16,617		2,043		22,978		47
Commercial and business lending	92,716		97,708		20,821		100,108		359
Commercial real estate — investor	18,582		18,619		2,721		16,559		464
Real estate construction	458		532		82		461		7
Commercial real estate lending	19,040		19,151		2,803		17,020		471
Total commercial	111,756		116,859		23,624		117,128		830
Residential mortgage	38,438		40,851		6,635		40,475		431
Home equity	10,762		11,383		3,719		10,238		136
Other consumer	1,066		1,069		116		1,067		1
Total consumer	50,266		53,303		10,470		51,780		568
Total loans(a)	$	162,022	$	170,162	$	34,094	$	168,908	$	1,398
Loans with no related allowance
Commercial and industrial	$	52,389	$	76,720	$	—	$	55,897	$	(348	)
Commercial real estate — owner occupied	6,225		7,276		—		2,403		—
Commercial and business lending	58,614		83,996		—		58,300		(348		)
Commercial real estate — investor	1,805		1,853		—		—		—
Real estate construction	—		—		—		—		—
Commercial real estate lending	1,805		1,853		—		—		—
Total commercial	60,419		85,849		—		58,300		(348		)
Residential mortgage	10,425		10,871		—		6,317		39
Home equity	212		212		—		639		1
Other consumer	—		—		—		—		—
Total consumer	10,637		11,083		—		6,956		40
Total loans(a)	$	71,056	$	96,932	$	—	$	65,256	$	(308	)
Total
Commercial and industrial	$	128,841	$	157,811	$	18,778	$	133,027	$	(36	)
Commercial real estate — owner occupied	22,489		23,893		2,043		25,381		47
Commercial and business lending	151,330		181,704		20,821		158,408		11
Commercial real estate — investor	20,387		20,472		2,721		16,559		464
Real estate construction	458		532		82		461		7
Commercial real estate lending	20,845		21,004		2,803		17,020		471
Total commercial	172,175		202,708		23,624		175,428		482
Residential mortgage	48,863		51,722		6,635		46,792		470
Home equity	10,974		11,595		3,719		10,877		137
Other consumer	1,066		1,069		116		1,067		1
Total consumer	60,903		64,386		10,470		58,736		608
Total loans(a)	$	233,078	$	267,094	$	34,094	$	234,164	$	1,090

(a) The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 74% of the unpaid principal balance at March 31, 2018.

The following table presents impaired loans individually evaluated under ASC Topic 310 at December 31, 2017. 

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	($ in Thousands)
Loans with a related allowance
Commercial and industrial	$	81,649	$	83,579	$	10,838	$	58,494	$	2,629
Commercial real estate — owner occupied	23,796		23,937		2,973		12,124		736
Commercial and business lending	105,445		107,516		13,811		70,618		3,365
Commercial real estate — investor	17,823		17,862		1,597		16,924		1,694
Real estate construction	467		578		86		484		29
Commercial real estate lending	18,290		18,440		1,683		17,408		1,723
Total commercial	123,735		125,956		15,494		88,026		5,088
Residential mortgage	40,561		42,922		6,512		40,411		1,614
Home equity	10,250		10,986		3,718		10,521		549
Other consumer	1,135		1,138		122		1,140		3
Total consumer	51,946		55,046		10,352		52,072		2,166
Total loans(a)	$	175,681	$	181,002	$	25,846	$	140,098	$	7,254
Loans with no related allowance
Commercial and industrial	$	60,595	$	82,839	$	—	$	89,275	$	492
Commercial real estate — owner occupied	2,438		2,829		—		1,948		36
Commercial and business lending	63,033		85,668		—		91,223		528
Commercial real estate — investor	1,295		1,295		—		—		45
Real estate construction	—		—		—		—		—
Commercial real estate lending	1,295		1,295		—		—		45
Total commercial	64,328		86,963		—		91,223		573
Residential mortgage	6,925		7,204		—		4,999		217
Home equity	641		645		—		540		7
Other consumer	—		—		—		—		—
Total consumer	7,566		7,849		—		5,539		224
Total loans(a)	$	71,894	$	94,812	$	—	$	96,762	$	797
Total
Commercial and industrial	$	142,244	$	166,418	$	10,838	$	147,769	$	3,121
Commercial real estate — owner occupied	26,234		26,766		2,973		14,072		772
Commercial and business lending	168,478		193,184		13,811		161,841		3,893
Commercial real estate — investor	19,118		19,157		1,597		16,924		1,739
Real estate construction	467		578		86		484		29
Commercial real estate lending	19,585		19,735		1,683		17,408		1,768
Total commercial	188,063		212,919		15,494		179,249		5,661
Residential mortgage	47,486		50,126		6,512		45,410		1,831
Home equity	10,891		11,631		3,718		11,061		556
Other consumer	1,135		1,138		122		1,140		3
Total consumer	59,512		62,895		10,352		57,611		2,390
Total loans(a)	$	247,575	$	275,814	$	25,846	$	236,860	$	8,051

(a) The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 80% of the unpaid principal balance at December 31, 2017.

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 $4 million in loans modified in troubled debt restructurings for the three months ended March 31, 2018, of which approximately $1 million were in accrual status and $3 million were in nonaccrual pending a sustained period of repayment. The following table presents nonaccrual and performing restructured loans by loan portfolio.

	March 31, 2018				December 31, 2017
	Performing Restructured Loans		Nonaccrual Restructured Loans(a)		Performing Restructured Loans		Nonaccrual Restructured Loans(a)
	($ in Thousands)
Commercial and industrial	$	29,580	$	886	$	30,047	$	1,776
Commercial real estate — owner occupied	3,892		—		3,989		—
Commercial real estate — investor	13,683		1,007		14,389		—
Real estate construction	305		152		310		157
Residential mortgage	19,902		18,640		17,068		18,991
Home equity	8,098		3,117		7,705		2,537
Other consumer	1,041		25		1,110		25
Total	$	76,501	$	23,827	$	74,618	$	23,486

(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 three months ended March 31, 2018 and 2017, respectively, and the recorded investment and unpaid principal balance as of March 31, 2018 and 2017, respectively.

	Three Months Ended March 31, 2018					Three Months Ended March 31, 2017
	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	2	$	92	$	92	20	$	52,326	$	60,546
Commercial real estate — owner occupied	—	—		—		1	204		204
Commercial real estate — investor	1	1,007		1,037		1	733		744
Residential mortgage	11	1,807		1,807		16	1,301		1,322
Home equity	17	1,044		1,060		15	347		347
Other consumer	2	8		11		—	—		—
Total	33	$	3,958	$	4,007	53	$	54,911	$	63,163

(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 three months ended March 31, 2018, 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 three months ended March 31, 2018.

The following table provides the number of loans modified in a troubled debt restructuring during the previous twelve months which subsequently defaulted during the three months ended March 31, 2018 and 2017, respectively, as well as the recorded investment in these restructured loans as of March 31, 2018 and 2017, respectively.

	Three Months Ended March 31, 2018			Three Months Ended March 31, 2017
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
	($ in Thousands)
Residential mortgage	4	467		6	383
Home equity	12	954		2	26
Total	16	$	1,421	8	$	409

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

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.

The following table presents a summary of the changes in the allowance for loan losses by portfolio segment for the three months ended March 31, 2018.

($ 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, 2017	$	123,068		$	10,352		$	41,059	$	34,370		$	29,607		$	22,126		$	5,298		$	265,880
Charge offs	(8,067		)	(1,042		)	—		(47		)	(493		)	(1,250		)	(1,256		)	(12,155		)
Recoveries	1,468			17			8		236			362			573			168			2,832
Net Charge offs	(6,599		)	(1,025		)	8		189			(131		)	(677		)	(1,088		)	(9,323		)
Provision for loan losses	1,377			2,520			1,215		(6,125		)	536			241			736			500
March 31, 2018	$	117,847		$	11,847		$	42,282	$	28,434		$	30,012		$	21,690		$	4,946		$	257,058
Allowance for loan losses
Individually evaluated for impairment	$	18,778		$	2,043		$	2,721	$	82		$	6,635		$	3,719		$	116		$	34,094
Collectively evaluated for impairment	99,069			9,804			39,561		28,352			23,377			17,971			4,830			222,964
Acquired and accounted for under ASC 310-30(a)	—			—			—		—			—			—			—			—
Total allowance for loan losses	$	117,847		$	11,847		$	42,282	$	28,434		$	30,012		$	21,690		$	4,946		$	257,058
Loans
Individually evaluated for impairment	$	128,841		$	22,489		$	20,387	$	458		$	48,863		$	10,974		$	1,066		$	233,078
Collectively evaluated for impairment	6,625,314			876,631			4,048,532		1,579,065			8,147,224			912,421			373,388			22,562,575
Acquired and accounted for under ASC 310-30(a)	2,828			1,793			8,752		255			1,136			74			—			14,838
Total loans	$	6,756,983		$	900,913		$	4,077,671	$	1,579,778		$	8,197,223		$	923,470		$	374,453		$	22,810,491

(a) Loans acquired in business combinations and accounted for under ASC Subtopic 310-30 "Receivables — Loans and Debt Securities Acquired with Deteriorated Credit Quality."

For comparison purposes, a summary of the changes in the allowance for loan losses by portfolio segment for the year ended December 31, 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	(44,533		)	(344		)	(991		)	(604		)	(2,611		)	(2,724		)	(4,439		)	(56,246		)
Recoveries	11,465			173			242			74			927			3,194			716			16,791
Net Charge offs	(33,068		)	(171		)	(749		)	(530		)	(1,684		)	470			(3,723		)	(39,455		)
Provision for loan losses	16,010			(3,511		)	(3,477		)	7,968			4,245			1,292			4,473			27,000
December 31, 2017	$	123,068		$	10,352		$	41,059		$	34,370		$	29,607		$	22,126		$	5,298		$	265,880
Allowance for loan losses
Individually evaluated for impairment	$	10,838		$	2,973		$	1,597		$	86		$	6,512		$	3,718		$	122		$	25,846
Collectively evaluated for impairment	112,230			7,379			39,462			34,284			23,095			18,408			5,176			240,034
Total allowance for loan losses	$	123,068		$	10,352		$	41,059		$	34,370		$	29,607		$	22,126		$	5,298		$	265,880
Loans
Individually evaluated for impairment	$	142,244		$	26,234		$	19,118		$	467		$	47,486		$	10,891		$	1,135		$	247,575
Collectively evaluated for impairment	6,257,449			775,975			3,296,136			1,451,217			7,499,048			872,913			384,678			20,537,416
Total loans	$	6,399,693		$	802,209		$	3,315,254		$	1,451,684		$	7,546,534		$	883,804		$	385,813		$	20,784,991

The allowance related to the oil and gas portfolio was $19 million at March 31, 2018 and represented 3% of total oil and gas loans.

($ in Millions)	Three Months Ended March 31, 2018			Year Ended December 31, 2017
Balance at beginning of period	$	27		$	38
Charge offs	(4		)	(25		)
Recoveries	—			—
Net Charge offs	(4		)	(25		)
Provision for loan losses	(4		)	14
Balance at end of period	$	19		$	27
Allowance for loan losses
Individually evaluated for impairment	$	10		$	5
Collectively evaluated for impairment	9			22
Total allowance for loan losses	$	19		$	27
Loans
Individually evaluated for impairment	$	69		$	77
Collectively evaluated for impairment	588			523
Total loans	$	657		$	600

The following table presents a summary of the changes in the allowance for unfunded commitments.

	Three Months Ended March 31, 2018			Year Ended December 31, 2017
	($ in Thousands)
Allowance for Unfunded Commitments
Balance at beginning of period	$	24,400		$	25,400
Provision for unfunded commitments	(500		)	(1,000		)
Amount recorded at acquisition	2,436			—
Balance at end of period	$	26,336		$	24,400

Loans Acquired in Acquisition

Loans acquired in a business combination are recorded at estimated fair value on their purchase date without a carryover of the related allowance for loan and lease losses. Acquired loans are segregated into two types:

• Performing loans are accounted for in accordance with ASC Topic 310-20 "Nonrefundable Fees and Other Costs" as these loans do not have evidence of credit deterioration since origination.

• Nonperforming loans are accounted for in accordance with ASC Topic 310-30 as they display significant credit deterioration since origination.

For performing loans the difference between the estimated fair value of the loans and the principal outstanding is accreted over the remaining life of the loans.

In accordance with ASC 310-30, purchased credit-impaired loans are pooled by loan type and the difference between contractually required payments at acquisition and the cash flows expected to be collected is referred to as the non-accretable difference. Further, any excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable yield and is recognized into interest income over the remaining life of the loan pools when there is a reasonable expectation about the amount and timing of such cash flows.

Changes in the accretable yield for loans acquired and accounted for under ASC Topic 310-30 were as follows for the three months ended March 31, 2018 and for the year ended December 31, 2017

	Three Months Ended March 31, 2018		Year Ended December 31, 2017
	($ in Thousands)
Changes in Accretable Yield
Balance at beginning of period	$	—	$	—
Purchases	4,244		—
Accretion	—		—
Other (a)	—		—
Balance at end of period	$	4,244	$	—

(a) Represents the accretable difference that is relieved when a loan exits the PCI population due to full payoff, full charge-off, or transfer to repossessed assets, etc.

For loans acquired, the fair value of purchased credit-impaired loans, on the acquisition date, was determined based on assigned risk ratings, expected cash flows and the fair value of loan collateral. The fair value of loans that were non-impaired was determined based on estimates of losses on defaults and other market factors.