Allowance for Credit Losses and Credit Quality

12 Months Ended

Dec. 31, 2014

Receivables [Abstract]

Allowance for Credit Losses and Credit Quality

NOTE 7 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

Allowance for Credit Losses Activity

A summary of changes in the allowance for credit losses for the covered loan and non-covered loan portfolios for the years ended December 31 is as follows:

	2014
	Non-covered loans
(Dollars in thousands)	Legacy Loans			Acquired Loans			Covered Loans			Total
Allowance for credit losses
Balance at beginning of period	$	67,342		$	4,557		$	71,175		$	143,074
(Reversal of) Provision for loan losses before benefit attributable to FDIC loss share agreements		14,274			(1,546	)		2,072			14,800
Adjustment attributable to FDIC loss share arrangements		—			—			4,260			4,260
Net (reversal of) provision for loan losses		14,274			(1,546	)		6,332			19,060
Adjustment attributable to FDIC loss share arrangements		—			—			(4,260	)		(4,260	)
Transfer of balance to OREO		—			(933	)		(6,390	)		(7,323	)
Transfer of balance to non-covered		—			8,661			(8,661	)		—
Loans charged-off		(11,312	)		(2,073	)		(13,470	)		(26,855	)
Recoveries		5,870			527			38			6,435
Balance at end of period	$	76,174		$	9,193		$	44,764		$	130,131
Reserve for unfunded lending commitments
Balance, beginning of period	$	11,147		$	—		$	—		$	11,147
Provision for unfunded lending commitments		654			—			—			654
Balance at end of period	$	11,801		$	—		$	—		$	11,801
	2013
	Non-covered loans
	Legacy Loans			Acquired Loans			Covered Loans			Total
Allowance for loan losses
Balance at beginning of period	$	74,211		$	8,816		$	168,576		$	251,603
(Reversal of) Provision for loan losses before adjustment attributable to FDIC loss share agreements		6,828			(3,158	)		(54,610	)		(50,940	)
Adjustment attributable to FDIC loss share arrangements		—			—			56,085			56,085
Net (reversal of) provision for loan losses		6,828			(3,158	)		1,475			5,145
Adjustment attributable to FDIC loss share arrangements		—			—			(56,085	)		(56,085	)
Transfer of balance to OREO		—			(1,085	)		(27,041	)		(28,126	)
Transfer of balance to the RULC		(9,828	)		—			—			(9,828	)
Loans charged-off		(10,686	)		(31	)		(15,764	)		(26,481	)
Recoveries		6,817			15			14			6,846
Balance at end of period		67,342			4,557		$	71,175		$	143,074
Reserve for unfunded lending commitments
Balance, beginning of period		—			—			—			—
Transfer of balance from the allowance for loan losses		9,828			—			—			9,828
Provision for unfunded lending commitments		1,319			—			—			1,319
Balance at end of period	$	11,147		$	—		$	—		$	11,147

	2012
	Non-covered loans
	Legacy Loans			Acquired Loans			Covered Loans			Total
Allowance for loan losses
Balance at beginning of period	$	74,861		$	—		$	118,900		$	193,761
Provision for loan losses before adjustment attributable to FDIC loss share agreements		3,804			9,799			91,153			104,756
Adjustment attributable to FDIC loss share arrangements		—			—			(84,085	)		(84,085	)
Net provision for loan losses		3,804			9,799			7,068			20,671
Adjustment attributable to FDIC loss share arrangements		—			—			84,085			84,085
Transfer of balance to OREO		—			(826	)		(26,343	)		(27,169	)
Loans charged-off		(9,728	)		(179	)		(15,153	)		(25,060	)
Recoveries		5,274			22			19			5,315
Balance at end of period	$	74,211		$	8,816		$	168,576		$	251,603

A summary of changes in the allowance for credit losses for non-covered loans, by loan portfolio type, for the years ended December 31 is as follows:

	2014
(Dollars in thousands)	Commercial Real Estate			Commercial Business			Residential Mortgage			Consumer			Total
Allowance for loan losses
Balance at beginning of period	$	26,590		$	28,515		$	2,546		$	14,248		$	71,899
(Reversal of) Provision for loan losses		(295	)		4,302			694			8,027			12,728
Transfer of balance to OREO		—			(868	)		—			(65	)		(933	)
Transfer of balance to non-covered		6,009			1,699			—			953			8,661
Loans charged off		(2,247	)		(1,659	)		(613	)		(8,866	)		(13,385	)
Recoveries		2,964			105			248			3,080			6,397
Balance at end of period	$	33,021		$	32,094		$	2,875		$	17,377		$	85,367
Reserve for unfunded commitments
Balance at beginning of period	$	3,089		$	4,839		$	72		$	3,147		$	11,147
(Reversal of) Provision for unfunded commitments		350			421			96			(213	)		654
Balance at end of period	$	3,439		$	5,260		$	168		$	2,934		$	11,801
Allowance on loans individually evaluated for impairment	$	20		$	407		$	—		$	3		$	430
Allowance on loans collectively evaluated for impairment		33,001			31,687			2,875			17,374			84,939
Loans, net of unearned income:
Balance at end of period	$	4,216,007		$	3,377,689		$	952,273		$	2,450,531		$	10,996,500
Balance at end of period individually evaluated for impairment		7,013			3,988			—			699			11,700
Balance at end of period collectively evaluated for impairment		4,186,968			3,369,982			936,604			2,438,569			10,932,123
Balance at end of period acquired with deteriorated credit quality		22,026			3,719			15,669			11,263			52,677

	2013
	Commercial			Commercial			Residential
(Dollars in thousands)	Real Estate			Business			Mortgage			Consumer			Total
Allowance for credit losses
Balance at beginning of period	$	38,264		$	28,721		$	2,125		$	13,917		$	83,027
(Reversal of) Provision for loan losses		(8,830	)		3,543			860			8,097			3,670
Transfer of balance to OREO		(319	)		(113	)		(646	)		(7	)		(1,085	)
Transfer of balance to the RULC		(2,939	)		(3,497	)		(40	)		(3,352	)		(9,828	)
Loans charged off		(2,940	)		(516	)		(518	)		(6,743	)		(10,717	)
Recoveries		3,354			377			765			2,336			6,832
Balance at end of period	$	26,590		$	28,515		$	2,546		$	14,248		$	71,899
Reserve for unfunded commitments
Balance at beginning of period	$	—		$	—		$	—		$	—		$	—
Transfer of balance from the allowance for loan losses		2,939			3,497			40			3,352			9,828
Provision for unfunded commitments		150			1,342			32			(205	)		1,319
Balance at end of period	$	3,089		$	4,839		$	72		$	3,147		$	11,147
Allowance on loans individually evaluated for impairment	$	8		$	841		$	180		$	—		$	1,029
Allowance on loans collectively evaluated for impairment		26,582			27,674			2,366			14,248			70,870
Loans, net of unearned income:
Balance at end of period	$	3,479,973		$	2,959,088		$	432,507		$	1,900,658		$	8,772,226
Balance at end of period individually evaluated for impairment		8,705			15,812			1,407			258			26,182
Balance at end of period collectively evaluated for impairment		3,459,028			2,943,246			430,974			1,899,013			8,732,261
Balance at end of period acquired with deteriorated credit quality		12,240			30			126			1,387			13,783
	2012
	Commercial			Commercial			Residential
(Dollars in thousands)	Real estate			Business			Mortgage			Consumer			Total
Allowance for credit losses
Balance at beginning of period	$	35,604		$	25,705		$	897		$	12,655		$	74,861
(Reversal of) Provision for loan losses		1,786			4,021			2,578			5,218			13,603
Transfer of balance to OREO		(292	)		—			(525	)		(9	)		(826	)
Loans charged off		(2,000	)		(1,116	)		(863	)		(5,928	)		(9,907	)
Recoveries		3,166			111			38			1,981			5,296
Balance at end of period	$	38,264		$	28,721		$	2,125		$	13,917		$	83,027
Allowance on loans individually evaluated for impairment	$	226		$	449		$	163		$	42		$	880
Allowance on loans collectively evaluated for impairment		38,038			28,272			1,962			13,875			82,147
Loans, net of unearned income:
Balance at end of period	$	2,990,700		$	2,450,667		$	290,040		$	1,674,417		$	7,405,824
Balance at end of period individually evaluated for impairment		28,052			4,401			1,703			315			34,471
Balance at end of period collectively evaluated for impairment		2,906,792			2,442,796			288,007			1,669,067			7,306,662
Balance at end of period acquired with deteriorated credit quality		55,856			3,470			330			5,035			64,691

A summary of changes in the allowance for credit losses for covered loans, by loan portfolio type, for the years ended December 31 is as follows:

	2014
(Dollars in thousands)	Commercial Real Estate			Commercial Business			Residential Mortgage			Consumer			Total
Allowance for loan losses
Balance at beginning of period	$	38,772		$	5,380		$	10,889		$	16,134		$	71,175
(Reversal of) Provision for loan losses		3,058			399			1,168			1,707			6,332
(Decrease) Increase in FDIC loss share receivable		227			509			(3,854	)		(1,142	)		(4,260	)
Transfer of balance to OREO		(1,897	)		(1,162	)		(1,719	)		(1,612	)		(6,390	)
Transfer of balance to non-covered		(6,009	)		(1,699	)		—			(953	)		(8,661	)
Loans charged off		(10,117	)		(2,192	)		(198	)		(963	)		(13,470	)
Recoveries		38			—			—			—			38
Balance at end of period	$	24,072		$	1,235		$	6,286		$	13,171		$	44,764
Allowance on loans individually evaluated for impairment	$	—		$	—		$	—		$	—		$	—
Allowance on loans collectively evaluated for impairment		24,072			1,235			6,286			13,171			44,764
Loans, net of unearned income:
Balance at end of period	$	189,126		$	31,260		$	128,024		$	96,134		$	444,544
Balance at end of period individually evaluated for impairment		—			—			—			—			—
Balance at end of period collectively evaluated for impairment		187,873			31,260			105,106			82,773			407,012
Balance at end of period acquired with deteriorated credit quality		1,253			—			22,918			13,361			37,532
	2013
(Dollars in thousands)	Commercial Real Estate			Commercial Business			Residential Mortgage			Consumer			Total
Allowance for credit losses
Balance at beginning of period	$	100,871		$	11,375		$	22,566		$	33,764		$	168,576
(Reversal of) Provision for loan losses		1,523			(649	)		286			315			1,475
(Decrease) Increase in FDIC loss share receivable		(28,238	)		(5,032	)		(4,896	)		(17,919	)		(56,085	)
Transfer of balance to OREO		(19,634	)		(314	)		(7,067	)		(26	)		(27,041	)
Loans charged off		(15,764	)		—			—			—			(15,764	)
Recoveries		14			—			—			—			14
Balance at end of period	$	38,772		$	5,380		$	10,889		$	16,134		$	71,175
Allowance on loans individually evaluated for impairment	$	—		$	—		$	—		$	—		$	—
Allowance on loans collectively evaluated for impairment		38,772			5,380			10,889			16,134			71,175
Loans, net of unearned income:
Balance at end of period	$	387,332		$	37,025		$	154,025		$	141,411		$	719,793
Balance at end of period individually evaluated for impairment		—			—			—			—			—
Balance at end of period collectively evaluated for impairment		372,428			37,025			125,802			118,461			653,716
Balance at end of period acquired with deteriorated credit quality		14,904			—			28,223			22,950			66,077

	2012
(Dollars in thousands)	Commercial Real estate			Commercial business			Residential Mortgage			Consumer			Total
Allowance for credit losses
Balance at beginning of period	$	69,175		$	9,788		$	21,184		$	18,753		$	118,900
(Reversal of) Provision for loan losses		4,970			964			323			811			7,068
(Decrease) Increase in FDIC loss share receivable		51,543			3,616			13,895			15,031			84,085
Transfer of balance to OREO		(11,202	)		(2,993	)		(11,323	)		(825	)		(26,343	)
Loans charged off		(13,631	)		—			(1,513	)		(9	)		(15,153	)
Recoveries		16			—			—			3			19
Balance at end of period	$	100,871		$	11,375		$	22,566		$	33,764		$	168,576
Allowance on loans individually evaluated for impairment	$	—		$	—		$	—		$	—		$	—
Allowance on loans collectively evaluated for impairment		100,871			11,375			22,566			33,764			168,576
Loans, net of unearned income:
Balance at end of period	$	640,843		$	87,051		$	187,164		$	177,698		$	1,092,756
Balance at end of period individually evaluated for impairment		—			—			—			—			—
Balance at end of period collectively evaluated for impairment		473,101			84,294			166,932			154,784			879,111
Balance at end of period acquired with deteriorated credit quality		167,742			2,757			20,232			22,914			213,645

Credit Quality

The Company’s investment in non-covered loans by credit quality indicator is presented in the following tables. Because of the difference in accounting for acquired loans, the tables below further segregate the Company’s non-covered loans between legacy loans and acquired loans. Loan premiums/discounts in the tables below represent the adjustment of non-covered acquired loans to fair value at the acquisition date, as adjusted for income accretion and changes in cash flow estimates in subsequent periods. Asset risk classifications for commercial loans reflect the classification as of December 31, 2014 and 2013, respectively. Credit quality information in the tables below includes loans acquired at the gross loan balance, prior to the application of premiums/discounts, at December 31, 2014 and 2013.

	Legacy loans
	December 31, 2014										December 31, 2013
(Dollars in thousands)	Pass		Special Mention		Sub- standard		Doubtful		Total		Pass		Special Mention		Sub- standard		Doubtful		Total
Commercial real estate - Construction	$	483,930	$	240	$	69	$	—	$	484,239	$	370,824	$	9,309	$	2,962	$	—	$	383,095
Commercial real estate - Other		3,161,593		49,847		22,217		162		3,233,819		2,694,161		27,227		30,308		113		2,751,809
Commercial business		3,245,912		7,330		28,965		1,933		3,284,140		2,866,794		6,164		32,167		926		2,906,051
Total	$	6,891,435	$	57,417	$	51,251	$	2,095	$	7,002,198	$	5,931,779	$	42,700	$	65,437	$	1,039	$	6,040,955

	Legacy loans
	December 31, 2014						December 31, 2013
(Dollars in thousands)	Current		30+ Days Past Due		Total		Current		30+ Days Past Due		Total
Residential mortgage - Prime	$	392,900	$	15,310	$	408,210	$	286,167	$	11,640	$	297,807
Residential mortgage - Subprime		115,889		3,595		119,484		114,939		1,626		116,565
Consumer - Home equity		1,278,865		12,111		1,290,976		1,091,894		9,333		1,101,227
Consumer - Indirect automobile		392,504		4,262		396,766		370,388		2,995		373,383
Consumer - Credit card		71,297		1,448		72,745		62,873		769		63,642
Consumer - Other		375,853		2,482		378,335		293,693		1,049		294,742
Total	$	2,627,308	$	39,208	$	2,666,516	$	2,219,954	$	27,412	$	2,247,366

	Non-covered acquired loans
	December 31, 2014													December 31, 2013
(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Discount			Total		Pass		Special Mention		Substandard		Doubtful		Discount			Total
Commercial real estate - Construction	$	24,118	$	2,006	$	4,624	$	—	$	(1,170	)	$	29,578	$	21,244	$	—	$	1,519	$	—	$	(2,532	)	$	20,231
Commercial real estate - Other		445,557		12,794		49,139		—		(39,119	)		468,371		350,412		5,096		21,413		93		(52,176	)		324,838
Commercial business		91,837		1,861		4,818		257		(5,224	)		93,549		53,533		517		1,901		—		(2,914	)		53,037
Total	$	561,512	$	16,661	$	58,581	$	257	$	(45,513	)	$	591,498	$	425,189	$	5,613	$	24,833	$	93	$	(57,622	)	$	398,106

	Non-covered acquired loans
	December 31, 2014									December 31, 2013
(Dollars in thousands)	Current		30+ Days Past Due		Premium (discount)			Total		Current		30+ Days Past Due		Premium (discount)			Total
Residential mortgage - Prime	$	418,552	$	11,858	$	(5,831	)	$	424,579	$	18,796	$	226	$	(887	)	$	18,135
Consumer - Home equity		216,310		9,808		(8,419	)		217,699		53,995		5,071		(5,623	)		53,443
Consumer - Indirect automobile		393		39		(40	)		392		1,725		128		—			1,853
Consumer - Other		94,315		3,520		(4,217	)		93,618		12,598		1,251		(1,481	)		12,368
Total	$	729,570	$	25,225	$	(18,507	)	$	736,288	$	87,114	$	6,676	$	(7,991	)	$	85,799

The Company’s investment in covered loans by credit quality indicator is presented in the following table. Loan premiums/discounts in the tables below represent the adjustment of covered loans to net book value before allowance at the reporting date.

	Covered loans
	December 31, 2014											December 31, 2013
(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total			Pass		Special Mention		Substandard		Doubtful		Total
Commercial real estate - Construction	$	34,731	$	1,928	$	8,008	$	—	$	44,667		$	42,886	$	7,401	$	23,891	$	497	$	74,675
Commercial real estate - Other		87,509		20,422		51,252		—		159,183			148,579		49,699		144,680		3,267		346,225
Commercial business		23,380		395		9,275		—		33,050			30,710		780		14,556		984		47,030
	$	145,620	$	22,745	$	68,535	$	—	$	236,900		$	222,175	$	57,880	$	183,127	$	4,748	$	467,930
Discount										(16,514	)										(43,573	)
Total									$	220,386										$	424,357

	Covered loans
	December 31, 2014									December 31, 2013
(Dollars in thousands)	Current		30+ Days Past Due		Premium (discount)			Total		Current		30+ Days Past Due		Premium (discount)			Total
Residential prime	$	140,628	$	22,058	$	(34,662	)	$	128,024	$	158,710	$	30,814	$	(35,499	)	$	154,025
Consumer - Home equity		99,478		16,542		(23,590	)		92,430		143,236		35,811		(41,925	)		137,122
Consumer - Credit card		614		34		—			648		648		31		—			679
Consumer - Other		337		18		2,701			3,056		591		144		2,875			3,610
Total	$	241,057	$	38,652	$	(55,551	)	$	224,158	$	303,185	$	66,800	$	(74,549	)	$	295,436

Legacy Impaired Loans

Information on the Company’s investment in legacy impaired loans is presented in the following tables as of and for the periods indicated.

	December 31, 2014
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance			Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial real estate	$	6,680	$	6,680	$	—		$	6,703	$	132
Commercial business		2,483		2,483		—			2,873		57
Consumer - Home equity		682		682		—			696		19
With an allowance recorded:
Commercial real estate		1,068		1,093		(25	)		1,158		39
Commercial business		1,212		1,620		(408	)		2,117		23
Residential mortgage - Prime		10,532		10,768		(236	)		10,577		11
Residential mortgage - Subprime		3,579		3,595		(16	)		3,686		99
Consumer - Home equity		7,121		7,165		(44	)		7,544		43
Consumer - Indirect automobile		1,410		1,419		(9	)		2,016		51
Consumer - Credit card		1,012		1,032		(20	)		797		—
Consumer - Other		781		790		(9	)		1,009		39
Total	$	36,560	$	37,327	$	(767	)	$	39,176	$	513
Total commercial loans	$	11,443	$	11,876	$	(433	)	$	12,851	$	251
Total mortgage loans		14,111		14,363		(252	)		14,263		110
Total consumer loans		11,006		11,088		(82	)		12,062		152

	December 31, 2013
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance			Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial real estate	$	8,567	$	8,567	$	—		$	10,443	$	43
Commercial business		13,256		13,256		—			11,074		170
Consumer - Home equity		258		258		—			281		1
With an allowance recorded:
Commercial real estate		1,268		1,284		(16	)		4,414		8
Commercial business		1,927		2,770		(843	)		2,892		100
Residential mortgage - Prime		9,791		10,019		(228	)		8,096		98
Residential mortgage - Subprime		1,617		1,626		(9	)		1,579		—
Consumer - Home equity		6,506		6,550		(44	)		7,593		93
Consumer - Indirect automobile		1,267		1,275		(8	)		2,090		55
Consumer - Credit card		404		411		(7	)		418		—
Consumer - Other		481		485		(4	)		765		19
Total	$	45,342	$	46,501	$	(1,159	)	$	49,645	$	587
Total commercial loans	$	25,018	$	25,877	$	(859	)	$	28,823	$	321
Total mortgage loans		11,408		11,645		(237	)		9,675		98
Total consumer loans		8,916		8,979		(63	)		11,147		168

As of December 31, 2014 and 2013, the Company was not committed to lend additional funds to any customer whose loan was classified as impaired or as a troubled debt restructuring.