Loans | Loans Loans consist of the following at (in thousands): June 30, December 31, Commercial loans $ 4,703,328 $ 4,346,506 Commercial loans collateralized by assignment of lease payments 2,076,911 2,002,976 Commercial real estate 3,882,754 3,788,016 Residential real estate 1,411,259 1,060,828 Construction real estate 449,116 518,562 Indirect vehicle 627,819 541,680 Home equity 238,952 266,377 Other consumer loans 74,925 80,781 Total loans, excluding purchased credit-impaired loans 13,465,064 12,605,726 Purchased credit-impaired loans 149,077 163,077 Total loans $ 13,614,141 $ 12,768,803 Loans are made to individuals as well as commercial and tax exempt entities. Specific loan terms vary as to interest rate, repayment, and collateral requirements based on the type of loan requested and the credit worthiness of the prospective borrower. Except for commercial loans collateralized by assignment of lease payments, asset-based loans, residential real estate loans and indirect vehicle loans, credit risk tends to be geographically concentrated in that a majority of the loan customers are located in Illinois. The Company's extension of credit is governed by its Credit Risk Policy, which was established to control the quality of the Company's loans. This policy is reviewed and approved by the Enterprise Risk Committee of the Company's Board of Directors on an annual basis. Commercial Loans. Commercial credit is extended primarily to emerging middle market and middle market customers. Such credits are typically comprised of working capital loans, loans for physical asset expansion, asset acquisition loans and other business loans. Loans to closely held businesses will generally be guaranteed in full or for a significant amount by the businesses' principal owners. Commercial loans are made based primarily on the historical and projected cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not behave as forecasted and collateral securing loans may fluctuate in value due to economic or individual performance factors. Minimum standards and underwriting guidelines have been established for all commercial loan types. Asset-based loans, also included in commercial loans, are made to businesses with the primary source of repayment derived from payments on the related assets securing the loan. Collateral for these loans may include accounts receivable, inventory and equipment, and is monitored regularly to ensure ongoing sufficiency of collateral coverage and quality. The primary risk for these loans is a significant decline in collateral values due to general market conditions. Loan terms that mitigate these risks include typical industry amortization schedules, percentage of collateral advances, maintenance of cash collateral accounts and regular asset monitoring. Because of the national scope of our asset-based lending, the risk of these loans is also diversified by geography. Commercial Loans Collateralized by Assignment of Lease Payments ("Lease Loans"). The Company makes lease loans to lessors where the underlying leases are with both investment grade and non-investment grade companies. Investment grade lessees are companies rated in one of the four highest categories by Moody's Investor Services or Standard & Poor's Rating Services or, in the event the related lessee has not received any such rating, where the related lessee would be viewed under the underwriting policies of the Company as an investment grade company. Whether or not companies fall into this category, each lease loan is considered on its individual merit based on the financial wherewithal of the lessee using financial information available at the time of underwriting. In addition, leases that transfer substantially all of the benefits and risk related to the equipment ownership are classified as direct finance leases and are included in lease loans. Commercial Real Estate Loans. Commercial real estate loans are subject to underwriting standards and processes similar to commercial loans. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the property. Loan performance may be adversely affected by factors impacting the general economy or conditions specific to the real estate market such as geographic location and/or property type. Construction Real Estate Loans. The Company defines construction loans as loans where the loan proceeds are controlled by the Company and used exclusively for the improvement of real estate in which the Company holds a mortgage. Due to the inherent risk in this type of loan, these loans are subject to other industry specific policy guidelines outlined in the Company's Credit Risk Policy. Consumer Related Loans. The Company originates direct and indirect consumer loans, including primarily residential real estate, home equity lines and loans, credit cards, and indirect vehicle loans (motorcycle, marine, recreational and powersports vehicles). Each loan type is underwritten based upon several factors including debt to income, type of collateral and loan to collateral value, credit history and the Company's relationship with the borrower. Indirect loan and credit card underwriting involves the use of risk-based pricing in the underwriting process. Purchased credit-impaired loans. Purchased credit-impaired loans are accounted for under ASC Topic 310-30, which include purchased credit-impaired loans acquired through business combinations, FDIC-assisted transactions and re-purchase transactions with the Government National Mortgage Association ("GNMA"). The loans re-purchased from GNMA were originally sold by the Company with servicing retained and subsequently became delinquent. These loans are also insured by the Federal Housing Administration (commonly referred to as "FHA") or the U.S. Department of Veterans Affairs (commonly referred to as "VA") where the Company would be able to recover the principal balance of these loans. All re-purchases from GNMA are at the Company's discretion. A collateral pledge agreement exists whereby at all times, the Company must keep on hand, free of all other pledges, liens, and encumbrances, first mortgage loans and home equity loans with unpaid principal balances aggregating no less than 133% for first mortgage loans and 250% for home equity loans of the outstanding advances from the Federal Home Loan Bank. As of June 30, 2017 and December 31, 2016 , the Company had $5.4 billion and $5.5 billion , respectively, of loans pledged as collateral for long-term Federal Home Loan Bank advances and third party letters of credit, while only $4.0 billion and $3.2 billion were required to be pledged at June 30, 2017 and December 31, 2016 , respectively. The following table presents the contractual aging of the recorded investment in past due loans by class of loans as of June 30, 2017 and December 31, 2016 (in thousands): Current 30-59 Days 60-89 Days Loans Past Due Total Total June 30, 2017 Commercial $ 4,688,835 $ 2,963 $ 6,288 $ 5,242 $ 14,493 $ 4,703,328 Commercial collateralized by assignment of lease payments 2,056,105 16,043 3,935 828 20,806 2,076,911 Commercial real estate: Healthcare 649,415 — — — — 649,415 Industrial 824,597 — 4,375 2,875 7,250 831,847 Multifamily 589,626 — — 570 570 590,196 Retail 490,205 2,348 — 1,061 3,409 493,614 Office 407,469 650 — 1,645 2,295 409,764 Other 904,560 2,543 224 591 3,358 907,918 Residential real estate 1,400,794 914 1,151 8,400 10,465 1,411,259 Construction real estate 449,116 — — — — 449,116 Indirect vehicle 624,214 2,656 709 240 3,605 627,819 Home equity 233,135 638 297 4,882 5,817 238,952 Other consumer 74,537 275 70 43 388 74,925 Total loans, excluding purchased credit-impaired loans 13,392,608 29,030 17,049 26,377 72,456 13,465,064 Purchased credit-impaired loans 83,158 6,095 3,625 56,199 65,919 149,077 Total loans $ 13,475,766 $ 35,125 $ 20,674 $ 82,576 $ 138,375 $ 13,614,141 Non-performing loan aging $ 24,876 $ 490 $ 767 $ 26,070 $ 27,327 $ 52,203 December 31, 2016 Commercial $ 4,337,348 $ 2,515 $ 156 $ 6,487 $ 9,158 $ 4,346,506 Commercial collateralized by assignment of lease payments 1,989,934 9,229 1,869 1,944 13,042 2,002,976 Commercial real estate: Healthcare 582,450 — — — — 582,450 Industrial 825,715 3,045 3,293 1,340 7,678 833,393 Multifamily 547,107 458 53 379 890 547,997 Retail 506,789 568 — — 568 507,357 Office 405,992 350 475 6,381 7,206 413,198 Other 899,950 2,385 1,155 131 3,671 903,621 Residential real estate 1,041,189 8,248 3,409 7,982 19,639 1,060,828 Construction real estate 518,171 — 391 — 391 518,562 Indirect vehicle 537,221 2,836 1,062 561 4,459 541,680 Home equity 261,765 1,219 815 2,578 4,612 266,377 Other consumer 80,443 152 120 66 338 80,781 Total loans, excluding purchased credit-impaired loans 12,534,074 31,005 12,798 27,849 71,652 12,605,726 Purchased credit-impaired loans 86,169 6,546 6,600 63,762 76,908 163,077 Total loans $ 12,620,243 $ 37,551 $ 19,398 $ 91,611 $ 148,560 $ 12,768,803 Non-performing loan aging $ 28,364 $ 2,308 $ 978 $ 27,702 $ 30,988 $ 59,352 The following table presents the recorded investment in non-accrual loans and loans past due ninety days or more and still accruing by class of loans, excluding purchased credit-impaired loans, as of June 30, 2017 and December 31, 2016 (in thousands): June 30, 2017 December 31, 2016 Loans past due Loans past due Non-accrual 90 days or more and still accruing Non-accrual 90 days or more and still accruing Commercial $ 7,126 $ — $ 11,222 $ 1,406 Commercial collateralized by assignment of lease payments 359 681 1,364 1,197 Commercial real estate: Healthcare — — — — Industrial 2,876 — 276 1,064 Multifamily 2,951 — 2,662 — Office 2,041 — 896 6,381 Retail 1,193 — 384 — Other 131 320 83 21 Residential real estate 17,229 147 16,538 235 Construction real estate — — — — Indirect vehicle 2,294 — 2,355 10 Home equity 14,808 — 13,187 — Other consumer 5 42 7 64 Total $ 51,013 $ 1,190 $ 48,974 $ 10,378 The Company utilizes an internal asset classification system as a means of reporting problem and potential problem loans. Under the Company's risk rating system, the Company classifies potential problem and problem loans as “Special Mention,” “Substandard,” and “Doubtful.” Substandard loans include those characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Loans that do not currently expose the Company to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses that deserve management's close attention are deemed to be Special Mention. Loans rated but not adversely classified are deemed to be Pass. Risk ratings are updated any time the situation warrants and at least annually. Loans not rated are included in groups of homogeneous loans with similar risk and loss characteristics and are not included in the table below. The following tables present the risk category of loans by class of loans based on the most recent analysis performed, excluding purchased credit-impaired loans, as of June 30, 2017 and December 31, 2016 (in thousands): Pass Special Substandard Doubtful Total June 30, 2017 Commercial $ 4,485,246 $ 150,485 $ 67,597 $ — $ 4,703,328 Commercial collateralized by assignment of lease payments 2,057,116 10,446 9,349 — 2,076,911 Commercial real estate: Healthcare 608,517 25,640 15,258 — 649,415 Industrial 799,572 25,807 6,468 — 831,847 Multifamily 579,971 155 10,070 — 590,196 Retail 483,638 6,600 3,376 — 493,614 Office 402,731 2,296 4,737 — 409,764 Other 812,418 61,152 34,348 — 907,918 Construction real estate 448,584 532 — — 449,116 Total $ 10,677,793 $ 283,113 $ 151,203 $ — $ 11,112,109 December 31, 2016 Commercial $ 4,127,397 $ 113,838 $ 105,271 $ — $ 4,346,506 Commercial collateralized by assignment of lease payments 1,981,689 16,010 5,277 — 2,002,976 Commercial real estate: Healthcare 545,663 32,251 4,536 — 582,450 Industrial 814,668 17,962 763 — 833,393 Multifamily 544,071 312 3,614 — 547,997 Retail 498,458 8,350 549 — 507,357 Office 404,811 5,299 3,088 — 413,198 Other 820,229 44,629 38,763 — 903,621 Construction real estate 518,562 — — — 518,562 Total $ 10,255,548 $ 238,651 $ 161,861 $ — $ 10,656,060 Approximately $16.7 million and $17.3 million of the substandard loans were non-performing as of June 30, 2017 and December 31, 2016 , respectively. For residential real estate, home equity, indirect vehicle and other consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment in those loan classes based on payment activity, excluding purchased credit-impaired loans, as of June 30, 2017 and December 31, 2016 (in thousands): Performing Non-performing Total June 30, 2017 Residential real estate $ 1,393,883 $ 17,376 $ 1,411,259 Indirect vehicle 625,525 2,294 627,819 Home equity 224,144 14,808 238,952 Other consumer 74,878 47 74,925 Total $ 2,318,430 $ 34,525 $ 2,352,955 December 31, 2016 Residential real estate $ 1,044,055 $ 16,773 $ 1,060,828 Indirect vehicle 539,315 2,365 541,680 Home equity 253,190 13,187 266,377 Other consumer 80,710 71 80,781 Total $ 1,917,270 $ 32,396 $ 1,949,666 The recorded investment in residential mortgage loans secured by residential real estate properties (including purchased credit-impaired loans) for which foreclosure proceedings are in process totaled $41.3 million and $29.1 million at June 30, 2017 and December 31, 2016 , respectively. The following tables present loans individually evaluated for impairment by class of loans, excluding purchased credit-impaired loans, as of June 30, 2017 and December 31, 2016 (in thousands): June 30, 2017 Three Months Ended Six Months Ended Unpaid Recorded Partial Allowance for Average Interest Average Interest With no related allowance recorded: Commercial $ 3,501 $ 3,501 $ — $ — $ 2,218 $ 22 $ 4,875 $ 37 Commercial collateralized by assignment of lease payments 16 1 15 — 134 — 607 — Commercial real estate: Healthcare — — — — — — — — Industrial 2,167 1,871 296 — 1,803 8 1,854 8 Multifamily 1,824 1,824 — — 2,248 — 2,543 29 Retail 4,328 2,587 1,741 — 2,356 27 1,641 27 Office 1,865 1,865 — — 1,911 6 1,620 6 Other — — — — — — — — Residential real estate — — — — — — — — Construction real estate — — — — — — — — Indirect vehicle 250 144 106 — 305 5 282 10 Home equity 815 815 — — 815 — 704 — Other consumer — — — — — — — — With an allowance recorded: Commercial 7,666 7,666 — 1,076 8,428 26 8,519 173 Commercial collateralized by assignment of lease payments — — — — — — — — Commercial real estate: Healthcare — — — — — — — — Industrial 3,252 3,252 — 493 3,309 32 1,664 32 Multifamily 570 570 — 223 565 — 284 — Retail 1,851 1,851 — 8 1,855 28 2,713 28 Office — — — — — — — — Other — — — — — — — — Residential real estate 18,637 16,956 1,681 1,839 16,890 4 16,349 5 Construction real estate — — — — — — — — Indirect vehicle — — — — — — — — Home equity 30,074 28,204 1,870 2,940 28,197 16 28,023 27 Other consumer — — — — — — — — Total $ 76,816 $ 71,107 $ 5,709 $ 6,579 $ 71,034 $ 174 $ 71,678 $ 382 December 31, 2016 Year Ended Unpaid Recorded Partial Allowance for Average Interest With no related allowance recorded: Commercial $ 9,056 $ 9,056 $ — $ — $ 5,944 $ — Commercial collateralized by assignment of lease payments 1,129 747 382 — 1,045 34 Commercial real estate: Healthcare — — — — — — Industrial — — — — 402 — Multifamily 1,922 1,922 — — 2,348 — Retail 2,670 929 1,741 — 2,165 — Office — — — — 256 — Other — — — — 60 — Residential real estate — — — — — — Construction real estate — — — — — — Indirect vehicle 223 122 101 — 252 — Home equity — — — — 143 — Other consumer — — — — — — With an allowance recorded: Commercial 14,403 14,403 — 2,889 22,737 — Commercial collateralized by assignment of lease payments — — — — 2,397 18 Commercial real estate: Healthcare — — — — — — Industrial — — — — — — Multifamily — — — — — — Retail 3,592 3,592 — 354 6,827 — Office — — — — 745 — Other — — — — 235 — Residential real estate 16,257 14,353 1,904 2,163 13,412 — Construction real estate — — — — — — Indirect vehicle — — — — — — Home equity 31,104 28,790 2,314 2,930 28,677 — Other consumer — — — — — — Total $ 80,356 $ 73,914 $ 6,442 $ 8,336 $ 87,645 $ 52 Impaired loans included accruing restructured loans of $29.7 million and $32.7 million that have been modified and are performing in accordance with those modified terms as of June 30, 2017 and December 31, 2016 , respectively. In addition, impaired loans included $23.7 million and $27.1 million of non-performing restructured loans as of June 30, 2017 and December 31, 2016 , respectively. Loans may be restructured in an effort to maximize collections from financially distressed borrowers. We use various restructuring techniques, including, but not limited to, deferring past due interest or principal, implementing an A/B note structure, redeeming past due taxes, reducing interest rates, extending maturities and modifying amortization schedules. Residential real estate loans are restructured in an effort to minimize losses while allowing borrowers to remain in their primary residences when possible. Programs that we offer to residential real estate borrowers include the Home Affordable Refinance Program (“HARP”), a restructuring program similar to the Home Affordable Modification Program (“HAMP”) for first mortgage borrowers, the Second Lien Modification Program (“2MP”) and similar programs for home equity borrowers in keeping with the restructuring techniques discussed above. A loan classified as a troubled debt restructuring will no longer be included in the troubled debt restructuring disclosures in the years after the restructuring if the loan performs in accordance with the terms specified by the restructuring agreement and the interest rate specified in the restructuring agreement represents a market rate at the time of modification. The specified interest rate is considered a market rate when the interest rate is equal to or greater than the rate the Company is willing to accept at the time of restructuring for a new loan with comparable risk. If there are concerns that the borrower will not be able to meet the modified terms of the loan, the loan will continue to be included in the troubled debt restructuring disclosures. Impairment analyses on commercial-related loans classified as troubled debt restructurings are performed in conjunction with the normal allowance for loan and lease losses process. Consumer loans classified as troubled debt restructurings are aggregated in two pools that share common risk characteristics, home equity and residential real estate loans, with impairment measured on a quarterly basis based on the present value of expected future cash flows discounted at the loan's effective interest rate. The following table presents loans that were restructured during the three months ended June 30, 2017 (dollars in thousands): June 30, 2017 Number of Pre-Modification Recorded Post-Modification Recorded Charge-offs and Performing: Commercial 5 $ 2,491 $ 2,491 $ 373 Commercial real estate Industrial 2 2,787 2,787 — Office 1 549 549 — Other 1 147 147 — Residential real estate 3 493 493 86 Home equity 2 46 46 3 Total 14 $ 6,513 $ 6,513 $ 462 Non-Performing: Commercial 2 $ 676 $ 676 $ — Commercial real estate: Multifamily 3 290 290 — Retail 1 906 906 — Residential real estate 8 1,122 1,122 289 Indirect vehicle 8 77 77 25 Home equity 2 593 593 57 Total 24 $ 3,664 $ 3,664 $ 371 The following table presents loans that were restructured during the six months ended June 30, 2017 (dollars in thousands): June 30, 2017 Number of Pre-Modification Recorded Post-Modification Recorded Charge-offs and Performing: Commercial 5 $ 2,491 $ 2,491 $ 373 Commercial real estate Industrial 2 2,787 2,787 — Office 1 549 549 — Other 1 147 147 — Residential real estate 6 902 902 135 Home equity 3 78 78 6 Total 18 $ 6,954 $ 6,954 $ 514 Non-Performing: Commercial 2 $ 676 $ 676 $ — Commercial real estate: Multifamily 3 290 290 — Retail 1 906 906 — Residential real estate 17 2,380 2,380 443 Indirect vehicle 11 97 97 29 Home equity 3 593 593 57 Total 37 $ 4,942 $ 4,942 $ 529 The following table presents loans that were restructured during the three months ended June 30, 2016 (dollars in thousands): June 30, 2016 Number of Pre-Modification Recorded Post-Modification Recorded Charge-offs and Performing: Commercial 1 $ 1,870 $ 1,870 $ 412 Total 1 $ 1,870 $ 1,870 $ 412 Non-Performing: Commercial 4 $ 8,607 $ 8,607 $ 3,500 Residential real estate 1 83 83 — Indirect vehicle 8 69 69 21 Home equity 14 2,030 2,030 15 Total 27 $ 10,789 $ 10,789 $ 3,536 The following table presents loans that were restructured during the six months ended June 30, 2016 (dollars in thousands): June 30, 2016 Number of Pre-Modification Recorded Post-Modification Recorded Charge-offs and Performing: Commercial 1 $ 1,870 $ 1,870 $ 412 Home equity 2 410 410 — Total 3 $ 2,280 $ 2,280 $ 412 Non-Performing: Commercial 4 $ 8,607 $ 8,607 $ 3,500 Residential real estate 2 155 155 — Indirect vehicle 18 149 149 43 Home equity 23 3,111 3,111 66 Total 47 $ 12,022 $ 12,022 $ 3,609 Of the troubled debt restructurings entered into during the past twelve months, none subsequently defaulted during the six months ended June 30, 2017 . Performing troubled debt restructurings are considered to have defaulted when they become 90 days or more past due post-restructuring or are placed on non-accrual status. The following table presents the troubled debt restructurings activity during the six months ended June 30, 2017 (in thousands): Performing Non-performing Beginning balance $ 32,687 $ 27,068 Additions 6,954 4,942 Charge-offs — (383 ) Principal payments, net (631 ) (4,013 ) Removals (10,630 ) (2,389 ) Transfer to other real estate owned — (289 ) Transfers in 1,448 170 Transfers out (170 ) (1,448 ) Ending balance $ 29,658 $ 23,658 Loans removed from troubled debt restructuring status are those that were restructured in a previous calendar year at a market rate of interest and have performed in compliance with the modified terms. The following table presents the type of modification for loans that have been restructured during the six months ended June 30, 2017 (in thousands): June 30, 2017 Extended Maturity, Delay in Amortization Extended Payments or and Reduction Maturity and/or Reduction of of Interest Rate Amortization Interest Rate Total Commercial $ — $ 3,167 $ — $ 3,167 Commercial collateralized by assignment of lease payments — — — — Commercial real estate: Healthcare — — — — Industrial — 2,787 — 2,787 Multifamily — 290 — 290 Retail — 906 — 906 Office — 549 — 549 Other — 147 — 147 Residential real estate 1,110 1,589 583 3,282 Construction real estate — — — — Indirect vehicle — — 97 97 Home equity — 1 670 671 Other consumer — — — — Total $ 1,110 $ 9,436 $ 1,350 $ 11,896 The following table presents the activity in the allowance for credit losses, balance in allowance for credit losses and recorded investment in loans by portfolio segment and based on impairment method as of June 30, 2017 and 2016 (in thousands): Commercial Commercial collateralized by assignment of lease payments Commercial real estate Residential real estate Construction real estate Indirect vehicle Home equity Other consumer Unfunded commitments Total June 30, 2017 Allowance for credit losses: Three Months Ended Beginning balance $ 40,690 $ 12,143 $ 58,220 $ 8,131 $ 14,859 $ 3,624 $ 5,312 $ 1,191 $ 2,328 $ 146,498 Charge-offs 700 — 262 270 — 930 261 498 — 2,921 Recoveries 1,339 249 362 58 47 565 292 109 — 3,021 Provision 2,454 373 4,927 330 357 704 206 412 (64 ) 9,699 Ending balance $ 43,783 $ 12,765 $ 63,247 $ 8,249 $ 15,263 $ 3,963 $ 5,549 $ 1,214 $ 2,264 $ 156,297 Six Months Ended Beginning balance $ 44,661 $ 12,238 $ 51,807 $ 5,971 $ 14,758 $ 3,421 $ 5,469 $ 1,041 $ 2,476 $ 141,842 Charge-offs 868 — 1,347 360 — 2,341 434 944 — 6,294 Recoveries 2,849 712 880 586 159 1,217 575 338 — 7,316 Provision (2,859 ) (185 ) 11,907 2,052 346 1,666 (61 ) 779 (212 ) 13,433 Ending balance $ 43,783 $ 12,765 $ 63,247 $ 8,249 $ 15,263 $ 3,963 $ 5,549 $ 1,214 $ 2,264 $ 156,297 Ending allowance balance attributable to loans: Individually evaluated for impairment $ 1,076 $ — $ 724 $ 1,839 $ — $ — $ 2,940 $ — $ 516 $ 7,095 Collectively evaluated for impairment 42,619 12,765 62,115 6,410 15,227 3,963 2,609 1,214 1,748 148,670 Acquired and accounted for under ASC 310-30 (1) 88 — 408 — 36 — — — — 532 Total ending allowance balance $ 43,783 $ 12,765 $ 63,247 $ 8,249 $ 15,263 $ 3,963 $ 5,549 $ 1,214 $ 2,264 $ 156,297 Loans: Individually evaluated for impairment $ 11,167 $ 1 $ 13,820 $ 16,956 $ — $ 144 $ 29,019 $ — $ — $ 71,107 Collectively evaluated for impairment 4,692,161 2,076,910 3,868,934 1,394,303 449,116 627,675 209,933 74,925 — 13,393,957 Acquired and accounted for under ASC 310-30 (1) 17,797 — 38,859 73,872 5,201 — 11,558 1,790 — 149,077 Total ending loans balance $ 4,721,125 $ 2,076,911 $ 3,921,613 $ 1,485,131 $ 454,317 $ 627,819 $ 250,510 $ 76,715 $ — $ 13,614,141 Commercial Commercial collateralized by assignment of lease payments Commercial real estate Residential real estate Construction real estate Indirect vehicle Home equity Other consumer Unfunded commitments Total June 30, 2016 Allowance for credit losses: Three Months Ended Beginning balance $ 46,962 $ 10,505 $ 46,785 $ 5,596 $ 14,614 $ 2,732 $ 5,022 $ 2,277 $ 3,239 $ 137,732 Charge-offs 72 2,347 1,720 476 144 651 619 395 — 6,424 Recoveries 952 467 1,843 82 17 501 193 141 — 4,196 Provision 2,455 1,924 (868 ) (402 ) (257 ) 518 (397 ) 376 (520 ) 2,829 Ending balance $ 50,297 $ 10,549 $ 46,040 $ 4,800 $ 14,230 $ 3,100 $ 4,199 $ 2,399 $ 2,719 $ 138,333 Six Months Ended Beginning balance $ 39,316 $ 10,434 $ 45,475 $ 5,734 $ 15,113 $ 2,418 $ 7,374 $ 2,276 $ 3,368 $ 131,508 Charge-offs 785 2,921 2,072 844 144 1,582 857 807 — 10,012 Recoveries 1,332 517 2,437 106 44 964 511 534 — 6,445 Provision 10,434 2,519 200 (196 ) (783 ) 1,300 (2,829 ) 396 (649 ) 10,392 Ending balance $ 50,297 $ 10,549 $ 46,040 $ 4,800 $ 14,230 $ 3,100 $ 4,199 $ 2,399 $ 2,719 $ 138,333 Ending allowance balance attributable to loans: Individually evaluated for impairment $ 11,388 $ 391 $ 426 $ 2,446 $ — $ — $ 2,719 $ — $ 731 $ 18,101 Collectively evaluated for impairment 38,762 10,158 45,084 2,354 14,194 3,100 1,480 2,399 1,988 119,519 Acquired and accounted for under ASC 310-30 (1) 147 — 530 — 36 — — — — 713 Total ending allowance balance $ 50,297 $ 10,549 $ 46,040 $ 4,800 $ 14,230 $ 3,100 $ 4,199 $ 2,399 $ 2,719 $ 138,333 Loans: Individually evaluated for impairment $ 31,652 $ 1,170 $ 7,962 $ 13,049 $ — $ 146 $ 29,419 $ — $ — $ 83,398 Collectively evaluated for impairment 3,529,848 1,793,295 2,819,758 740,658 357,807 491,334 169,203 75,775 — 9,977,678 Acquired and accounted for under ASC 310-30 (1) 21,745 — 26,199 59,538 13,795 — 13,091 2,443 — 136,811 Total ending loans balance $ 3,583,245 $ 1,794,465 $ 2,853,919 $ 813,245 $ 371,602 $ 491,480 $ 211,713 $ 78,218 $ — $ 10,197,887 (1) Loans acquired in business combinations and accounted for under ASC Subtopic 310-30 “Receivables — Loans and Debt Securities Acquired with Deteriorated Credit Quality.” Purchased 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. These acquired loans are segregated into three types: pass rated loans with no discount attributable to credit quality, non-impaired loans with a discount attributable at least in part to credit quality and impaired loans with evidence of significant credit deterioration. • Pass rated loans (typically 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. • Non-impaired loans (typically performing substandard loans) are accounted for in accordance with ASC Topic 310-30 if they display at least some level of credit deterioration since origination. • Impaired loans (typically substandard loans on non-accrual status) are accounted for in accordance with ASC Topic 310-30 as they display significant credit deterioration since origination. For pass rated loans (non-purchased credit-impaired 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, for both purchased non-impaired loans and purchased credit-impaired loans, the 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. Substantially all of the loans acquired in FDIC-assisted transactions displayed at least some level of credit deterioration and as such are included as non-impaired and impaired loans as described immediately above. During the six months ended June 30, 2017 , there was a negative provision for credit losses of $203 thousand and net charge-offs of $131 thousand in relation to purchased credit-impaired loans. There was $532 thousand and $866 thousand in allowance for loan and lease losses related to these purchased credit-impaired loans at June 30, 2017 and December 31, 2016 , respectively. The provision for credit losses and accompanying charge-offs are included in the table above. Changes in the accretable yield for loans acquired and accounted for under ASC 310-30 were as follows for the three and six months ended June 30, 2017 and 2016 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Balance at beginning of period $ 14,911 $ 13,970 $ 16,050 $ 12,596 Purchases — — 43 — Accretion (2,831 ) (2,419 ) (5,019 ) (4,629 ) Other (1) 606 1,609 1,612 5,193 Balance at end of period $ 12,686 $ 13,160 $ 12,686 $ 13,160 (1) Primarily includes discount transfers from non-accretable discount to accretable discount due to better than expected performance of loan pools acquired and accounted for under ASC 310-30. In our FDIC-assisted transactions, 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. Due to the loss-share agreements with the FDIC, we recorded a receivable (FDIC indemnification asset) from the FDIC equal to the present value of the corresponding reimbursement percentages on the estimated losses embedded in the loan portfolio. For other loans acquired through business combinations, 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. The carrying amount of loans acquired through a business combination by loan pool type are as follows (in thousands): June 30, 2017 Purchased Purchased Non-Credit-Impaired Total Covered loans (1) : Consumer related $ 16,477 $ — $ 16,477 Non-covered loans: Commercial loans 17,797 482,140 499,937 Commercial loans collateralized by assignment of lease payments — 55,661 55,661 Commercial real estate 38,859 1,036,159 1,075,018 Construction real estate 5,201 12,840 18,041 Consumer related 5,059 313,767 318,826 Total non-covered loans 66,916 1,900,567 1,967,483 Total acquired $ 83,393 $ 1,900,567 $ 1,983,960 (1) Covered loans refer to loans covered under loss-sharing agreements with the FDIC. In addition to loans acquired through a business combination noted in the table above, consumer related purchased credit-impaired loans includes re-purchase transactions |