Loans | Loans Loans consist of the following at (in thousands): September 30, December 31, Commercial loans $ 4,936,536 $ 4,786,180 Commercial loans collateralized by assignment of lease payments 2,065,588 2,113,135 Commercial real estate 3,832,032 4,147,529 Residential real estate 1,403,087 1,432,458 Construction real estate 548,882 406,849 Indirect vehicle 790,573 667,928 Home equity 181,477 219,098 Other consumer loans 85,705 73,141 Total loans, excluding purchased credit-impaired loans 13,843,880 13,846,318 Purchased credit-impaired loans 91,072 119,744 Total loans $ 13,934,952 $ 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, $1.2 billion of commercial real estate loans at September 30, 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 repurchase transactions with the Government National Mortgage Association ("GNMA"). The loans repurchased 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 repurchases 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, 157% for qualifying commercial real estate loans and 105% for loans held for sale, of the outstanding advances from the Federal Home Loan Bank. As of September 30, 2018 and December 31, 2017 , the Company had $3.9 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 $3.1 billion were required to be pledged at September 30, 2018 and December 31, 2017 . The Company also has a collateral pledge agreement with the Federal Reserve Bank. As of September 30, 2018 and December 31, 2017 , the Company had $859.0 million and $902.2 million , respectively, of loans pledged as collateral at the Federal Reserve Bank for the discount window as a backup liquidity funding source. The following table presents the contractual aging of the recorded investment in past due loans by class of loans as of September 30, 2018 and December 31, 2017 (in thousands): Current 30-59 Days 60-89 Days Loans Past Due Total Total September 30, 2018 Commercial $ 4,927,393 $ 3,487 $ 1,077 $ 4,579 $ 9,143 $ 4,936,536 Commercial collateralized by assignment of lease payments 2,032,510 29,858 2,458 762 33,078 2,065,588 Commercial real estate: Health care 664,187 269 — — 269 664,456 Industrial 865,914 — — 2,811 2,811 868,725 Multifamily 503,597 128 — 529 657 504,254 Retail 479,167 413 — 819 1,232 480,399 Office 418,330 — — 120 120 418,450 Other 887,428 2,547 175 5,598 8,320 895,748 Residential real estate 1,388,338 659 2,610 11,480 14,749 1,403,087 Construction real estate 548,882 — — — — 548,882 Indirect vehicle 783,161 4,747 1,847 818 7,412 790,573 Home equity 175,747 2,650 836 2,244 5,730 181,477 Other consumer 85,284 169 113 139 421 85,705 Total loans, excluding purchased credit-impaired loans 13,759,938 44,927 9,116 29,899 83,942 13,843,880 Purchased credit-impaired loans 53,843 2,809 3,904 30,516 37,229 91,072 Total loans $ 13,813,781 $ 47,736 $ 13,020 $ 60,415 $ 121,171 $ 13,934,952 Non-performing loan aging $ 39,737 $ 2,932 $ 1,163 $ 29,899 $ 33,994 $ 73,731 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 September 30, 2018 and December 31, 2017 (in thousands): September 30, 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 $ 24,086 $ — $ 14,001 $ 3,500 Commercial collateralized by assignment of lease payments 630 662 490 531 Commercial real estate: Health care — — — — Industrial 2,811 — 8,807 — Multifamily 568 — 860 — Office 432 — 2,772 — Retail 819 — 590 — Other 5,887 39 8,016 190 Residential real estate 20,080 381 18,374 1,210 Construction real estate — — — — Indirect vehicle 4,051 73 3,019 81 Home equity 13,068 — 14,305 — Other consumer 5 139 4 58 Total $ 72,437 $ 1,294 $ 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 September 30, 2018 and December 31, 2017 (in thousands): Pass Special Substandard Doubtful Total September 30, 2018 Commercial $ 4,627,512 $ 161,909 $ 147,115 $ — $ 4,936,536 Commercial collateralized by assignment of lease payments 2,051,164 8,422 6,002 — 2,065,588 Commercial real estate: Health care 544,562 49,515 70,379 — 664,456 Industrial 840,860 14,820 13,045 — 868,725 Multifamily 500,369 606 3,279 — 504,254 Retail 457,416 19,862 3,121 — 480,399 Office 408,532 1,964 7,954 — 418,450 Other 857,001 10,463 28,284 — 895,748 Construction real estate 546,012 1,645 1,225 — 548,882 Total $ 10,833,428 $ 269,206 $ 280,404 $ — $ 11,383,038 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 $35.3 million and $35.6 million of the substandard loans were non-performing as of September 30, 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 September 30, 2018 and December 31, 2017 (in thousands): Performing Non-performing Total September 30, 2018 Residential real estate $ 1,382,626 $ 20,461 $ 1,403,087 Indirect vehicle 786,449 4,124 790,573 Home equity 168,409 13,068 181,477 Other consumer 85,561 144 85,705 Total $ 2,423,045 $ 37,797 $ 2,460,842 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 $53.7 million and $43.6 million at September 30, 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 September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 Three Months Ended Nine Months Ended Unpaid Recorded Partial Allowance for Average Interest Average Interest With no related allowance recorded: Commercial $ 35,407 $ 14,641 $ 20,766 $ — $ 17,634 $ 222 $ 10,430 $ 222 Commercial collateralized by assignment of lease payments — — — — — — — — Commercial real estate: Health care — — — — — — — — Industrial 3,426 2,811 615 — 3,491 — 1,176 — Multifamily — — — — — — — — Retail — — — — — — — — Office — — — — — — — — Other — — — — — — 1,096 52 Residential real estate 3,847 3,809 38 — 2,260 — 3,261 — Construction real estate — — — — — — — — Indirect vehicle 775 449 326 — 853 3 660 31 Home equity 79 79 — — 79 — 27 — Other consumer — — — — — — — — With an allowance recorded: Commercial 7,996 7,996 — 797 8,559 85 6,147 182 Commercial collateralized by assignment of lease payments — — — — — — 110 — Commercial real estate: Health care — — — — — — 357 28 Industrial — — — — — — 2,126 8 Multifamily — — — — — — — — Retail — — — — — — — — Office — — — — — — — — Other 4,766 4,766 — 438 4,894 — 3,032 124 Residential real estate 19,604 17,591 2,013 1,621 17,590 — 18,496 32 Construction real estate — — — — — — — — Indirect vehicle — — — — — — — — Home equity 29,741 26,890 2,851 1,534 27,102 — 28,563 30 Other consumer — — — — — — — — Total $ 105,641 $ 79,032 $ 26,609 $ 4,390 $ 82,462 $ 310 $ 75,481 $ 709 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 $23.0 million and $28.6 million that have been modified and are performing in accordance with those modified terms as of September 30, 2018 and December 31, 2017 , respectively. In addition, impaired loans included $24.0 million and $30.8 million of non-performing restructured loans as of September 30, 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 September 30, 2018 (dollars in thousands): September 30, 2018 Number of Pre-Modification Recorded Post-Modification Recorded Charge-offs and Performing: Residential real estate 1 $ 132 $ 132 $ 12 Home equity 1 91 91 5 Total 2 $ 223 $ 223 $ 17 Non-Performing: Commercial 1 $ 750 $ 750 $ — Residential real estate 3 709 709 246 Indirect vehicle 21 151 151 110 Home equity 2 396 396 219 Total 27 $ 2,006 $ 2,006 $ 575 The following table presents loans that were restructured during the nine months ended September 30, 2018 (dollars in thousands): September 30, 2018 Number of Pre-Modification Recorded Post-Modification Recorded Charge-offs and Performing: Residential real estate 2 $ 220 $ 220 $ 21 Home equity 1 91 91 5 Total 3 $ 311 $ 311 $ 26 Non-Performing: Commercial 1 $ 750 $ 750 $ — Residential real estate 19 3,150 3,150 1,184 Indirect vehicle 41 272 272 148 Home equity 7 606 606 233 Total 68 $ 4,778 $ 4,778 $ 1,565 The following table presents loans that were restructured during the three months ended September 30, 2017 (dollars in thousands): September 30, 2017 Number of Pre-Modification Recorded Post-Modification Recorded Charge-offs and Performing: Commercial real estate: Industrial 1 $ 387 $ 387 $ — Retail 2 337 337 — Other 2 3,555 3,555 — Home equity 1 19 19 1 Total 6 $ 4,298 $ 4,298 $ 1 Non-Performing: Residential real estate 11 $ 2,775 $ 2,775 $ 739 Indirect vehicle 20 153 153 105 Home equity 1 15 15 1 Total 32 $ 2,943 $ 2,943 $ 845 The following table presents loans that were restructured during the nine months ended September 30, 2017 (dollars in thousands): September 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 3 3,174 3,174 — Retail 2 337 337 — Office 1 549 549 — Other 3 3,703 3,703 — Residential real estate 6 902 902 135 Home equity 4 97 97 7 Total 24 $ 11,253 $ 11,253 $ 515 Non-Performing: Commercial 2 $ 676 $ 676 $ — Commercial real estate: Multifamily 3 290 290 — Retail 1 906 906 — Residential real estate 28 5,155 5,155 1,182 Indirect vehicle 31 250 250 134 Home equity 4 608 608 58 Total 69 $ 7,885 $ 7,885 $ 1,374 Of the troubled debt restructurings entered into during the past twelve months, none subsequently defaulted during the nine months ended September 30, 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 nine months ended September 30, 2018 (in thousands): Performing Non-performing Beginning balance $ 28,554 $ 30,836 Additions 311 4,778 Charge-offs — (3,057 ) Principal payments, net (8,010 ) (6,398 ) Removals (77 ) (8 ) Transfer to other real estate owned — — Transfers in 2,970 778 Transfers out (778 ) (2,970 ) Ending balance $ 22,970 $ 23,959 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 nine months ended September 30, 2018 (in thousands): September 30, 2018 Extended Maturity, Delay in Amortization Extended Payments and/or and Reduction Maturity and/or Reduction of of Interest Rate Amortization Interest Rate Total Commercial $ — $ 750 $ — $ 750 Residential real estate 2,097 862 411 3,370 Indirect vehicle — — 272 272 Home equity 293 404 — 697 Total $ 2,390 $ 2,016 $ 683 $ 5,089 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 September 30, 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 September 30, 2018 Allowance for credit losses: Three Months Ended Beginning balance $ 40,318 $ 13,095 $ 65,391 $ 5,732 $ 26,792 $ 4,738 $ 4,142 $ 2,582 $ 1,788 $ 164,578 Charge-offs 20,895 7,181 704 76 — 1,726 724 294 — 31,600 Recoveries 639 846 424 121 13 554 261 80 — 2,938 Provision 12,611 5,946 1,078 (445 ) 66 (486 ) 2,111 402 220 21,503 Ending balance $ 32,673 $ 12,706 $ 66,189 $ 5,332 $ 26,871 $ 3,080 $ 5,790 $ 2,770 $ 2,008 $ 157,419 Nine 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 23,831 7,897 5,801 805 — 4,878 972 954 — 45,138 Recoveries 1,143 1,246 1,515 217 443 2,397 559 399 — 7,919 Provision 9,094 6,350 7,046 (1,092 ) 10,927 833 907 855 310 35,230 Ending balance $ 32,673 $ 12,706 $ 66,189 $ 5,332 $ 26,871 $ 3,080 $ 5,790 $ 2,770 $ 2,008 $ 157,419 Ending allowance balance attributable to loans: Individually evaluated for impairment $ 797 $ — $ 438 $ 1,621 $ — $ — $ 1,534 $ — $ 754 $ 5,144 Collectively evaluated for impairment 31,638 12,706 64,710 3,711 26,835 3,080 4,256 2,770 1,254 150,960 Acquired and accounted for under ASC 310-30 (1) 238 — 1,041 — 36 — — — — 1,315 Total ending allowance balance $ 32,673 $ 12,706 $ 66,189 $ 5,332 $ 26,871 $ 3,080 $ 5,790 $ 2,770 $ 2,008 $ 157,419 Loans: Individually evaluated for impairment $ 22,637 $ — $ 7,577 $ 21,400 $ — $ 449 $ 26,969 $ — $ — $ 79,032 Collectively evaluated for impairment 4,913,899 2,065,588 3,824,455 1,381,687 548,882 790,124 154,508 85,705 — 13,764,848 Acquired and accounted for under ASC 310-30 (1) 7,173 — 22,173 47,929 3,646 — 8,999 1,152 — 91,072 Total ending loans balance $ 4,943,709 $ 2,065,588 $ 3,854,205 $ 1,451,016 $ 552,528 $ 790,573 $ 190,476 $ 86,857 $ — $ 13,934,952 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 September 30, 2017 Allowance for credit losses: Three Months Ended Beginning balance $ 43,783 $ 12,765 $ 63,247 $ 8,249 $ 15,263 $ 3,963 $ 4,750 $ 2,013 $ 2,264 $ 156,297 Charge-offs 235 188 31 541 — 1,097 439 299 — 2,830 Recoveries 719 — 1,432 38 502 498 149 82 — 3,420 Provision 1,715 240 935 94 (707 ) 1,317 422 489 12 4,517 Ending balance $ 45,982 $ 12,817 $ 65,583 $ 7,840 $ 15,058 $ 4,681 $ 4,882 $ 2,285 $ 2,276 $ 161,404 Nine Months Ended Beginning balance $ 44,661 $ 12,238 $ 51,807 $ 5,971 $ 14,758 $ 3,421 $ 4,689 $ 1,821 $ 2,476 $ 141,842 Charge-offs 1,103 188 1,378 901 — 3,438 873 1,243 — 9,124 Recoveries 3,568 712 2,312 624 661 1,715 724 420 — 10,736 Provision (1,144 ) 55 12,842 2,146 (361 ) 2,983 342 1,287 (200 ) 17,950 Ending balance $ 45,982 $ 12,817 $ 65,583 $ 7,840 $ 15,058 $ 4,681 $ 4,882 $ 2,285 $ 2,276 $ 161,404 Ending allowance balance attributable to loans: Individually evaluated for impairment $ 1,012 $ 585 $ 855 $ 2,169 $ — $ — $ 2,562 $ — $ 1,220 $ 8,403 Collectively evaluated for impairment 44,879 12,232 63,868 5,671 15,023 4,681 2,320 2,285 1,056 152,015 Acquired and accounted for under ASC 310-30 (1) 91 — 860 — 35 — — — — 986 Total ending allowance balance $ 45,982 $ 12,817 $ 65,583 $ 7,840 $ 15,058 $ 4,681 $ 4,882 $ 2,285 $ 2,276 $ 161,404 Loans: Individually evaluated for impairment $ 10,642 $ 921 $ 11,999 $ 19,370 $ — $ 349 $ 27,468 $ — $ — $ 70,749 Collectively evaluated for impairment 4,783,196 2,073,294 4,082,707 1,414,225 395,794 654,864 201,258 77,372 — 13,682,710 Acquired and accounted for under ASC 310-30 (1) 13,677 — 32,063 68,071 5,183 — 11,200 1,725 — 131,919 Total ending loans balance $ 4,807,515 $ 2,074,215 $ 4,126,769 $ 1,501,666 $ 400,977 $ 655,213 $ 239,926 $ 79,097 $ — $ 13,885,378 (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 nine months ended September 30, 2018 , there was a negative provision for credit losses of $119 thousand and net recoveries of $256 thousand in relation to purchased credit-impaired loans. There was $1.3 million and $1.2 million in allowance for loan and lease losses related to these purchased credit-impaired loans at September 30, 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 and nine months ended September 30, 2018 and 2017 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Balance at beginning of period $ 8,241 $ 12,686 $ 12,069 $ 16,050 Purchases — — — 43 Accretion (2,579 ) (4,315 ) (7,213 ) (9,334 ) Other (1) 236 3,453 1,042 5,065 Balance at end of period $ 5,898 $ 11,824 $ 5,898 $ 11,824 (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): September 30, 2018 Purchased Purchased Non-Credit-Impaired Total Covered loans (1) : Consumer related $ 12,979 $ — $ 12,979 Non-covered loans: Commercial loans 7,173 122,630 129,803 Commercial loans collateralized by assignment of lease payments — 14,114 14,114 Commercial real estate 22,173 536,351 558,524 Construction real estate 3,646 1,618 5,264 Consumer related 4,857 212,838 217,695 Total non-covered loans 37,849 887,551 925,400 Total acquired $ 50,828 $ 887,551 $ 938,379 (1) Covered loans refer to loans covered under loss-sharing agreements with the FDIC. The remaining 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 include loans repurchased from GNMA of $40.2 million as of September 30, 2018 . |