Loans | Loans Loans consist of the following at (in thousands): March 31, December 31, Commercial loans $ 4,790,803 $ 4,786,180 Commercial loans collateralized by assignment of lease payments 2,095,189 2,113,135 Commercial real estate 4,093,045 4,147,529 Residential real estate 1,391,900 1,432,458 Construction real estate 479,638 406,849 Indirect vehicle 692,642 667,928 Home equity 202,920 219,098 Other consumer loans 78,853 73,141 Total loans, excluding purchased credit-impaired loans 13,824,990 13,846,318 Purchased credit-impaired loans 109,990 119,744 Total loans $ 13,934,980 $ 13,966,062 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 mostly to 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 cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not perform 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. 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 property income based loans and the repayment of these loans is largely dependent on the successful operation of the property, which also serves as collateral for the loan. In addition, $1.3 billion of commercial real estate loans at March 31, 2018 were secured by owner-occupied properties where the primary source of repayment is the cash flow from the ongoing operations and activities conducted by the owner 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 monitored 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 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. Pledged loans. A collateral pledge agreement exists whereby at all times, the Company must keep on hand, free of all other pledges, liens, and encumbrances, loans with unpaid principal balances aggregating no less than 160% for qualifying first mortgage loans, 170% for home equity loans, 161% for qualifying commercial real estate loans and 106% for loans held for sale, of the outstanding advances from the Federal Home Loan Bank. As of March 31, 2018 and December 31, 2017 , the Company had $4.6 billion and $4.7 billion , respectively, of loans pledged as collateral for long-term Federal Home Loan Bank advances and third party letters of credit, while only $3.4 billion and $3.1 billion were required to be pledged at March 31, 2018 and December 31, 2017 , respectively. The following table presents the contractual aging of the recorded investment in past due loans by class of loans as of March 31, 2018 and December 31, 2017 (in thousands): Current 30-59 Days 60-89 Days Loans Past Due Total Total March 31, 2018 Commercial $ 4,751,376 $ 30,468 $ 1,195 $ 7,764 $ 39,427 $ 4,790,803 Commercial collateralized by assignment of lease payments 2,066,953 22,462 5,073 701 28,236 2,095,189 Commercial real estate: Health care 757,936 — — — — 757,936 Industrial 867,979 2,718 — — 2,718 870,697 Multifamily 580,484 — — 164 164 580,648 Retail 482,646 835 — 229 1,064 483,710 Office 454,793 3,087 — 112 3,199 457,992 Other 937,356 3,704 80 922 4,706 942,062 Residential real estate 1,373,261 9,877 219 8,543 18,639 1,391,900 Construction real estate 479,066 572 — — 572 479,638 Indirect vehicle 687,508 3,646 1,026 462 5,134 692,642 Home equity 197,141 1,397 1,077 3,305 5,779 202,920 Other consumer 78,615 112 71 55 238 78,853 Total loans, excluding purchased credit-impaired loans 13,715,114 78,878 8,741 22,257 109,876 13,824,990 Purchased credit-impaired loans 63,071 10,559 2,685 33,675 46,919 109,990 Total loans $ 13,778,185 $ 89,437 $ 11,426 $ 55,932 $ 156,795 $ 13,934,980 Non-performing loan aging $ 30,610 $ 6,296 $ 2,157 $ 22,257 $ 30,710 $ 61,320 December 31, 2017 Commercial $ 4,769,244 $ 1,702 $ 6,926 $ 8,308 $ 16,936 $ 4,786,180 Commercial collateralized by assignment of lease payments 2,099,246 11,320 1,878 691 13,889 2,113,135 Commercial real estate: Health care 710,722 — — — — 710,722 Industrial 908,394 — — 755 755 909,149 Multifamily 601,844 688 — 732 1,420 603,264 Retail 503,224 — — 474 474 503,698 Office 453,960 — 956 1,454 2,410 456,370 Other 956,181 7,035 76 1,034 8,145 964,326 Residential real estate 1,410,473 12,359 1,907 7,719 21,985 1,432,458 Construction real estate 404,595 2,254 — — 2,254 406,849 Indirect vehicle 661,028 4,905 1,083 912 6,900 667,928 Home equity 210,831 3,161 1,073 4,033 8,267 219,098 Other consumer 72,846 202 36 57 295 73,141 Total loans, excluding purchased credit-impaired loans 13,762,588 43,626 13,935 26,169 83,730 13,846,318 Purchased credit-impaired loans 63,937 8,749 3,997 43,061 55,807 119,744 Total loans $ 13,826,525 $ 52,375 $ 17,932 $ 69,230 $ 139,537 $ 13,966,062 Non-performing loan aging $ 36,879 $ 8,799 $ 4,961 $ 26,169 $ 39,929 $ 76,808 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 March 31, 2018 and December 31, 2017 (in thousands): March 31, 2018 December 31, 2017 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 $ 12,654 $ 150 $ 14,001 $ 3,500 Commercial collateralized by assignment of lease payments 672 367 490 531 Commercial real estate: Health care 5,394 — — — Industrial 3,433 — 8,807 — Multifamily 277 — 860 — Office 458 — 2,772 — Retail 286 — 590 — Other 1,129 9 8,016 190 Residential real estate 19,353 362 18,374 1,210 Construction real estate — — — — Indirect vehicle 3,149 5 3,019 81 Home equity 13,338 225 14,305 — Other consumer 8 51 4 58 Total $ 60,151 $ 1,169 $ 71,238 $ 5,570 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 March 31, 2018 and December 31, 2017 (in thousands): Pass Special Substandard Doubtful Total March 31, 2018 Commercial $ 4,503,362 $ 164,489 $ 122,952 $ — $ 4,790,803 Commercial collateralized by assignment of lease payments 2,075,740 13,828 5,621 — 2,095,189 Commercial real estate: Health care 684,542 13,156 60,238 — 757,936 Industrial 851,429 11,627 7,641 — 870,697 Multifamily 578,352 858 1,438 — 580,648 Retail 472,397 9,109 2,204 — 483,710 Office 452,559 4,975 458 — 457,992 Other 872,138 37,948 31,976 — 942,062 Construction real estate 479,638 — — — 479,638 Total $ 10,970,157 $ 255,990 $ 232,528 $ — $ 11,458,675 December 31, 2017 Commercial $ 4,535,111 $ 147,232 $ 103,837 $ — $ 4,786,180 Commercial collateralized by assignment of lease payments 2,095,668 7,527 9,940 — 2,113,135 Commercial real estate: Health care 640,751 33,672 36,299 — 710,722 Industrial 885,524 12,411 11,214 — 909,149 Multifamily 595,818 146 7,300 — 603,264 Retail 492,830 8,326 2,542 — 503,698 Office 452,902 696 2,772 — 456,370 Other 891,703 37,682 34,941 — 964,326 Construction real estate 406,849 — — — 406,849 Total $ 10,997,156 $ 247,692 $ 208,845 $ — $ 11,453,693 Approximately $24.3 million and $35.6 million of the substandard loans were non-performing as of March 31, 2018 and December 31, 2017 , 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 March 31, 2018 and December 31, 2017 (in thousands): Performing Non-performing Total March 31, 2018 Residential real estate $ 1,372,185 $ 19,715 $ 1,391,900 Indirect vehicle 689,488 3,154 692,642 Home equity 189,357 13,563 202,920 Other consumer 78,794 59 78,853 Total $ 2,329,824 $ 36,491 $ 2,366,315 December 31, 2017 Residential real estate $ 1,412,874 $ 19,584 $ 1,432,458 Indirect vehicle 664,828 3,100 667,928 Home equity 204,793 14,305 219,098 Other consumer 73,079 62 73,141 Total $ 2,355,574 $ 37,051 $ 2,392,625 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 $51.4 million and $43.6 million at March 31, 2018 and December 31, 2017 , respectively. The following tables present loans individually evaluated for impairment by class of loans, excluding purchased credit-impaired loans, as of March 31, 2018 and December 31, 2017 (in thousands): March 31, 2018 Three Months Ended Unpaid Recorded Partial Allowance for Average Interest With no related allowance recorded: Commercial $ 6,055 $ 5,513 $ 542 $ — $ 7,067 $ — Commercial collateralized by assignment of lease payments — — — — — — Commercial real estate: Health care — — — — — — Industrial — — — — — — Multifamily — — — — — — Retail — — — — — — Office — — — — — — Other 3,309 3,309 — — 3,325 52 Residential real estate 3,432 3,394 38 — 3,394 — Construction real estate — — — — — — Indirect vehicle 424 209 215 — 479 7 Home equity — — — — — — Other consumer — — — — — — With an allowance recorded: Commercial 7,020 7,020 — 2,815 4,925 19 Commercial collateralized by assignment of lease payments — — — — — — Commercial real estate: Health care 5,394 5,394 — 2,979 1,083 28 Industrial 3,433 3,433 — 1,497 2,917 4 Multifamily — — — — — — Retail — — — — — — Office — — — — — — Other — — — — — — Residential real estate 21,766 19,313 2,453 1,996 19,311 1 Construction real estate — — — — — — Indirect vehicle — — — — — — Home equity 32,136 29,661 2,475 1,937 29,681 10 Other consumer — — — — — — Total $ 82,969 $ 77,246 $ 5,723 $ 11,224 $ 72,182 $ 121 December 31, 2017 Year Ended Unpaid Recorded Partial Allowance for Average Interest With no related allowance recorded: Commercial $ 8,312 $ 7,771 $ 541 $ — $ 5,595 $ 95 Commercial collateralized by assignment of lease payments — — — — 301 — Commercial real estate: Health care — — — — — — Industrial — — — — 1,260 8 Multifamily — — — — 1,261 29 Retail — — — — 814 27 Office 527 527 — — 1,426 18 Other 10,597 10,597 — — 2,312 128 Residential real estate 1,950 1,912 38 — 483 — Construction real estate — — — — — — Indirect vehicle 408 202 206 — 411 26 Home equity 81 81 — — 376 — Other consumer — — — — — — With an allowance recorded: Commercial 7,418 7,418 — 2,315 7,668 277 Commercial collateralized by assignment of lease payments — — — — 126 14 Commercial real estate: Health care — — — — — — Industrial 8,339 8,317 22 2,669 3,215 171 Multifamily 568 568 — 320 426 — Retail — — — — 1,345 28 Office 2,293 2,277 16 752 636 4 Other — — — — 29 — Residential real estate 21,380 19,014 2,366 2,158 17,616 25 Construction real estate — — — — — — Indirect vehicle — — — — — — Home equity 30,762 28,286 2,476 2,200 27,982 54 Other consumer — — — — — — Total $ 92,635 $ 86,970 $ 5,665 $ 10,414 $ 73,282 $ 904 Impaired loans included accruing restructured loans of $28.6 million that have been modified and are performing in accordance with those modified terms as of March 31, 2018 and December 31, 2017 . In addition, impaired loans included $28.5 million and $30.8 million of non-performing restructured loans as of March 31, 2018 and December 31, 2017 , 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. 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 March 31, 2018 (dollars in thousands): March 31, 2018 Number of Pre-Modification Recorded Post-Modification Recorded Charge-offs and Performing: Residential real estate 1 $ 88 $ 88 $ 9 Total 1 $ 88 $ 88 $ 9 Non-Performing: Residential real estate 8 $ 1,506 $ 1,506 $ 786 Indirect vehicle 11 67 67 2 Home equity 3 134 134 9 Total 22 $ 1,707 $ 1,707 $ 797 The following table presents loans that were restructured during the three months ended March 31, 2017 (dollars in thousands): March 31, 2017 Number of Pre-Modification Recorded Post-Modification Recorded Charge-offs and Performing: Residential real estate 3 $ 409 $ 409 $ 49 Home equity 1 33 33 3 Total 4 $ 442 $ 442 $ 52 Non-Performing: Residential real estate 9 $ 1,257 $ 1,257 $ 154 Indirect vehicle 3 20 20 4 Total 12 $ 1,277 $ 1,277 $ 158 Of the troubled debt restructurings entered into during the past twelve months, none subsequently defaulted during the three months ended March 31, 2018 . 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 three months ended March 31, 2018 (in thousands): Performing Non-performing Beginning balance $ 28,554 $ 30,836 Additions 88 1,707 Charge-offs — (20 ) Principal payments, net (1,471 ) (1,660 ) Removals (77 ) (852 ) Transfer to other real estate owned — — Transfers in 1,962 465 Transfers out (465 ) (1,962 ) Ending balance $ 28,591 $ 28,514 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 three months ended March 31, 2018 (in thousands): March 31, 2018 Extended Maturity, Delay in Amortization Extended Payments and/or and Reduction Maturity and/or Reduction of of Interest Rate Amortization Interest Rate Total Residential real estate $ 1,256 $ 252 $ 86 $ 1,594 Indirect vehicle — — 67 67 Home equity — 134 — 134 Total $ 1,256 $ 386 $ 153 $ 1,795 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 March 31, 2018 and 2017 (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 March 31, 2018 Allowance for credit losses: Three Months Ended Beginning balance $ 46,267 $ 13,007 $ 63,429 $ 7,012 $ 15,501 $ 4,728 $ 5,296 $ 2,470 $ 1,698 $ 159,408 Charge-offs 1,402 — 2,476 701 — 1,824 64 351 — 6,818 Recoveries 337 251 762 70 393 1,179 70 230 — 3,292 Provision 349 (265 ) 4,083 (5 ) 3,909 267 (956 ) 146 (20 ) 7,508 Ending balance $ 45,551 $ 12,993 $ 65,798 $ 6,376 $ 19,803 $ 4,350 $ 4,346 $ 2,495 $ 1,678 $ 163,390 Ending allowance balance attributable to loans: Individually evaluated for impairment $ 2,815 $ — $ 4,476 $ 1,996 $ — $ — $ 1,937 $ — $ 563 $ 11,787 Collectively evaluated for impairment 42,662 12,993 60,497 4,380 19,768 4,350 2,409 2,495 1,115 150,669 Acquired and accounted for under ASC 310-30 (1) 74 — 825 — 35 — — — — 934 Total ending allowance balance $ 45,551 $ 12,993 $ 65,798 $ 6,376 $ 19,803 $ 4,350 $ 4,346 $ 2,495 $ 1,678 $ 163,390 Loans: Individually evaluated for impairment $ 12,533 $ — $ 12,136 $ 22,707 $ — $ 209 $ 29,661 $ — $ — $ 77,246 Collectively evaluated for impairment 4,778,270 2,095,189 4,080,909 1,369,193 479,638 692,433 173,259 78,853 — 13,747,744 Acquired and accounted for under ASC 310-30 (1) 10,877 — 24,648 57,633 4,980 — 10,483 1,369 — 109,990 Total ending loans balance $ 4,801,680 $ 2,095,189 $ 4,117,693 $ 1,449,533 $ 484,618 $ 692,642 $ 213,403 $ 80,222 $ — $ 13,934,980 March 31, 2017 Allowance for credit losses: Three 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 168 — 1,085 90 — 1,411 173 446 — 3,373 Recoveries 1,510 463 518 528 112 652 283 229 — 4,295 Provision (5,313 ) (558 ) 6,980 1,722 (11 ) 962 (267 ) 367 (148 ) 3,734 Ending balance $ 40,690 $ 12,143 $ 58,220 $ 8,131 $ 14,859 $ 3,624 $ 5,312 $ 1,191 $ 2,328 $ 146,498 Ending allowance balance attributable to loans: Individually evaluated for impairment $ 986 $ — $ 286 $ 2,192 $ — $ — $ 2,634 $ — $ 541 $ 6,639 Collectively evaluated for impairment 39,545 12,143 57,799 5,939 14,824 3,624 2,678 1,191 1,787 139,530 Acquired and accounted for under ASC 310-30 (1) 159 — 135 — 35 — — — — 329 Total ending allowance balance $ 40,690 $ 12,143 $ 58,220 $ 8,131 $ 14,859 $ 3,624 $ 5,312 $ 1,191 $ 2,328 $ 146,498 Loans: Individually evaluated for impairment $ 15,214 $ 729 $ 10,160 $ 15,803 $ — $ 108 $ 28,437 $ — $ — $ 70,451 Collectively evaluated for impairment 4,348,908 2,007,872 3,724,011 1,211,415 554,942 573,684 218,368 80,016 — 12,719,216 Acquired and accounted for under ASC 310-30 (1) 24,768 — 46,683 77,332 5,624 — 12,382 2,025 — 168,814 Total ending loans balance $ 4,388,890 $ 2,008,601 $ 3,780,854 $ 1,304,550 $ 560,566 $ 573,792 $ 259,187 $ 82,041 $ — $ 12,958,481 (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 three months ended March 31, 2018 , there was a negative provision for credit losses of $413 thousand and net recoveries of $170 thousand in relation to purchased credit-impaired loans. There was $934 thousand and $1.2 million in allowance for loan and lease losses related to these purchased credit-impaired loans at March 31, 2018 and December 31, 2017 , 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 months ended March 31, 2018 and 2017 (in thousands): Three Months Ended March 31, 2018 2017 Balance at beginning of period $ 12,069 $ 16,050 Purchases — 43 Accretion (2,411 ) (2,188 ) Other (1) 609 1,006 Balance at end of period $ 10,267 $ 14,911 (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): March 31, 2018 Purchased Purchased Non-Credit-Impaired Total Covered loans (1) : Consumer related $ 14,449 $ — $ 14,449 Non-covered loans: Commercial loans 10,877 210,070 220,947 Commercial loans collateralized by assignment of lease payments — 30,534 30,534 Commercial real estate 24,648 703,127 727,775 Construction real estate 4,980 4,743 9,723 Consumer related 5,562 252,660 258,222 Total non-covered loans 46,067 1,201,134 1,247,201 Total acquired $ 60,516 $ 1,201,134 $ 1,261,650 (1) Covered loans refer to loans covered under loss-sharing agreements with the FDIC. The loss-share agreements expire between 2019 and 2020. In addition to loans acquired through a business combination noted in the table above, consumer related purchased credit-impaired loans includes loans repurchased from GNMA of $49.5 million as of March 31, 2018 . |