Loans and Allowance for Loan Losses | Loans and Allowance for Loan Losses The following table presents the composition of the loan portfolio. December 31, 2018 2017 (In Thousands) Commercial loans: Commercial, financial and agricultural $ 26,562,319 $ 25,749,949 Real estate – construction 1,997,537 2,273,539 Commercial real estate – mortgage 13,016,796 11,724,158 Total commercial loans 41,576,652 39,747,646 Consumer loans: Residential real estate – mortgage 13,422,156 13,365,747 Equity lines of credit 2,747,217 2,653,105 Equity loans 298,614 363,264 Credit card 818,308 639,517 Consumer direct 2,553,588 1,690,383 Consumer indirect 3,770,019 3,164,106 Total consumer loans 23,609,902 21,876,122 Total loans $ 65,186,554 $ 61,623,768 Total loans includes unearned income totaling $258.6 million and $257.9 million at December 31, 2018 and 2017 , respectively; and unamortized deferred costs totaling $380.2 million and $343.9 million at December 31, 2018 and 2017 , respectively. The loan portfolio is diversified geographically, by product type and by industry exposure. Geographically, the portfolio is predominantly in the Sunbelt states, including Alabama, Arizona, Colorado, Florida, New Mexico and Texas, as well as growing but modest exposure in northern and southern California. The loan portfolio’s most significant geographic presence is within Texas. The Company monitors its exposure to various industries and adjusts loan production based on current and anticipated changes in the macro-economic environment as well as specific structural, legal and business conditions affecting each broad industry category. At December 31, 2018 , approximately $13.9 billion of loans were pledged to secure deposits and FHLB advances and for other purposes as required or permitted by law. Allowance for Loan Losses and Credit Quality The following table, which excludes loans held for sale, presents a summary of the activity in the allowance for loan losses. The portion of the allowance that has not been identified by the Company as related to specific loan categories has been allocated to the individual loan categories on a pro rata basis for purposes of the table below: Commercial, Financial and Agricultural Commercial Real Estate (1) Residential Real Estate (2) Consumer (3) Covered Total Loans (In Thousands) Year Ended December 31, 2018 Allowance for loan losses: Beginning balance $ 420,635 $ 118,133 $ 109,856 $ 194,136 $ — $ 842,760 Provision (credit) for loan losses 44,403 (8,431 ) (3,216 ) 332,664 — 365,420 Loans charged-off (83,017 ) (3,867 ) (17,821 ) (295,999 ) — (400,704 ) Loan recoveries 11,294 6,602 13,110 46,760 — 77,766 Net (charge-offs) recoveries (71,723 ) 2,735 (4,711 ) (249,239 ) — (322,938 ) Ending balance $ 393,315 $ 112,437 $ 101,929 $ 277,561 $ — $ 885,242 Year Ended December 31, 2017 Allowance for loan losses: Beginning balance $ 458,580 $ 116,937 $ 119,484 $ 143,292 $ — $ 838,293 Provision (credit) for loan losses 49,528 6,195 (874 ) 232,875 (31 ) 287,693 Loans charged off (106,570 ) (9,983 ) (21,287 ) (221,212 ) — (359,052 ) Loan recoveries 19,097 4,984 12,533 39,181 31 75,826 Net (charge-offs) recoveries (87,473 ) (4,999 ) (8,754 ) (182,031 ) 31 (283,226 ) Ending balance $ 420,635 $ 118,133 $ 109,856 $ 194,136 $ — $ 842,760 Year Ended December 31, 2016 Allowance for loan losses: Beginning balance $ 402,113 $ 122,068 $ 132,104 $ 104,948 $ 1,440 $ 762,673 Provision (credit) for loan losses 129,646 (5,502 ) (4,156 ) 182,558 43 302,589 Loans charged off (84,218 ) (4,866 ) (19,946 ) (180,573 ) (1,484 ) (291,087 ) Loan recoveries 11,039 5,237 11,482 36,359 1 64,118 Net (charge-offs) recoveries (73,179 ) 371 (8,464 ) (144,214 ) (1,483 ) (226,969 ) Ending balance $ 458,580 $ 116,937 $ 119,484 $ 143,292 $ — $ 838,293 (1) Includes commercial real estate – mortgage and real estate – construction loans. (2) Includes residential real estate – mortgage, equity lines of credit and equity loans. (3) Includes credit card, consumer direct and consumer indirect loans. The table below provides a summary of the allowance for loan losses and related loan balances by portfolio. Commercial, Financial and Agricultural Commercial Real Estate (1) Residential Real Estate (2) Consumer (3) Total Loans (In Thousands) December 31, 2018 Ending balance of allowance attributable to loans: Individually evaluated for impairment $ 73,072 $ 6,283 $ 26,008 $ 1,880 $ 107,243 Collectively evaluated for impairment 320,243 106,154 75,921 275,681 777,999 Total allowance for loan losses $ 393,315 $ 112,437 $ 101,929 $ 277,561 $ 885,242 Loans: Ending balance of loans: Individually evaluated for impairment $ 386,282 $ 85,250 $ 153,342 $ 5,135 $ 630,009 Collectively evaluated for impairment 26,176,037 14,929,083 16,314,645 7,136,780 64,556,545 Total loans $ 26,562,319 $ 15,014,333 $ 16,467,987 $ 7,141,915 $ 65,186,554 December 31, 2017 Ending balance of allowance attributable to loans: Individually evaluated for impairment $ 61,705 $ 9,864 $ 30,613 $ 2,203 $ 104,385 Collectively evaluated for impairment 358,930 108,269 79,243 191,933 738,375 Total allowance for loan losses $ 420,635 $ 118,133 $ 109,856 $ 194,136 $ 842,760 Loans: Ending balance of loans: Individually evaluated for impairment $ 307,680 $ 85,180 $ 172,857 $ 3,577 $ 569,294 Collectively evaluated for impairment 25,442,269 13,912,517 16,209,259 5,490,429 61,054,474 Total loans $ 25,749,949 $ 13,997,697 $ 16,382,116 $ 5,494,006 $ 61,623,768 (1) Includes commercial real estate – mortgage and real estate – construction loans. (2) Includes residential real estate – mortgage, equity lines of credit and equity loans. (3) Includes credit card, consumer direct and consumer indirect loans. The following table presents information on individually evaluated impaired loans, by loan class. December 31, 2018 Individually Evaluated Impaired Loans With No Recorded Allowance Individually Evaluated Impaired Loans With a Recorded Allowance Recorded Investment Unpaid Principal Balance Allowance Recorded Investment Unpaid Principal Balance Allowance (In Thousands) Commercial, financial and agricultural $ 162,011 $ 196,316 $ — $ 224,271 $ 262,947 $ 73,072 Real estate – construction — — — 138 138 6 Commercial real estate – mortgage 45,628 48,404 — 39,484 44,463 6,277 Residential real estate – mortgage — — — 104,787 104,787 8,711 Equity lines of credit — — — 16,012 16,016 13,334 Equity loans — — — 32,543 33,258 3,963 Credit card — — — — — — Consumer direct — — — 4,715 4,715 1,473 Consumer indirect — — — 420 420 407 Total loans $ 207,639 $ 244,720 $ — $ 422,370 $ 466,744 $ 107,243 December 31, 2017 Individually Evaluated Impaired Loans With No Recorded Allowance Individually Evaluated Impaired Loans With a Recorded Allowance Recorded Investment Unpaid Principal Balance Allowance Recorded Investment Unpaid Principal Balance Allowance (In Thousands) Commercial, financial and agricultural $ 142,908 $ 175,743 $ — $ 164,772 $ 175,512 $ 61,705 Real estate – construction 2,849 2,858 — 130 130 7 Commercial real estate – mortgage 35,140 36,415 — 47,061 55,122 9,857 Residential real estate – mortgage — — — 117,751 117,751 10,214 Equity lines of credit — — — 19,183 19,188 16,021 Equity loans — — — 35,923 36,765 4,378 Credit card — — — — — — Consumer direct — — — 2,545 2,545 1,254 Consumer indirect — — — 1,032 1,032 949 Total loans $ 180,897 $ 215,016 $ — $ 388,397 $ 408,045 $ 104,385 The following table presents information on individually evaluated impaired loans, by loan class. Years Ended December 31, 2018 2017 2016 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (In Thousands) Commercial, financial and agricultural $ 293,841 $ 1,379 $ 426,809 $ 947 $ 632,319 $ 1,221 Real estate – construction 8,600 7 1,874 11 1,734 8 Commercial real estate – mortgage 81,989 870 72,692 1,071 44,530 1,195 Residential real estate – mortgage 108,094 2,658 115,583 2,676 109,792 2,672 Equity lines of credit 17,413 748 21,458 871 26,638 1,025 Equity loans 34,290 1,180 38,090 1,312 44,051 1,490 Credit card — — — — — — Consumer direct 2,766 59 1,629 27 833 28 Consumer indirect 641 5 1,553 10 2,221 13 Total loans $ 547,634 $ 6,906 $ 679,688 $ 6,925 $ 862,118 $ 7,652 The Company monitors the credit quality of its commercial portfolio using an internal dual risk rating, which considers both the obligor and the facility. The obligor risk ratings are defined by ranges of default probabilities of the borrowers, through internally assigned letter grades (AAA through D2), and the facility risk ratings are defined by ranges of the loss given default. The combination of those two approaches results in the assessment of the likelihood of loss and it is mapped to the regulatory classifications. The Company assigns internal risk ratings at loan origination and at regular intervals subsequent to origination. Loan review intervals are dependent on the size and risk grade of the loan, and are generally conducted at least annually. Additional reviews are conducted when information affecting the loan’s risk grade becomes available. The general characteristics of the risk grades are as follows: • The Company’s internally assigned letter grades “AAA” through “B-” correspond to the regulatory classification “Pass.” These loans do not have any identified potential or well-defined weaknesses and have a high likelihood of orderly repayment. Exceptions exist when either the facility is fully secured by a CD and held at the Company or the facility is secured by properly margined and controlled marketable securities. • Internally assigned letter grades “CCC+” through “CCC” correspond to the regulatory classification “Special Mention.” Loans within this classification have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position at some future date. Special mention loans are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. • Internally assigned letter grades “CCC-” through “D1” correspond to the regulatory classification “Substandard.” A loan classified as substandard is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the loan. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. • The internally assigned letter grade “D2” corresponds to the regulatory classification “Doubtful.” Loans classified as doubtful have all the weaknesses inherent in a loan classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable or improbable. The Company considers payment history as the best indicator of credit quality for the consumer portfolio. Nonperforming loans in the tables below include loans classified as nonaccrual, loans 90 days or more past due and loans modified in a TDR 90 days or more past due. The following tables, which exclude loans held for sale, illustrate the credit quality indicators associated with the Company’s loans, by loan class. Commercial December 31, 2018 Commercial, Financial and Agricultural Real Estate - Construction Commercial Real Estate - Mortgage (In Thousands) Pass $ 25,395,640 $ 1,971,852 $ 12,620,421 Special Mention 412,129 12,372 215,322 Substandard 631,706 13,313 170,303 Doubtful 122,844 — 10,750 $ 26,562,319 $ 1,997,537 $ 13,016,796 December 31, 2017 Commercial, Financial and Agricultural Real Estate - Construction Commercial Real Estate - Mortgage (In Thousands) Pass $ 24,387,737 $ 2,257,659 $ 11,309,484 Special Mention 614,006 12,401 215,076 Substandard 623,672 3,479 187,049 Doubtful 124,534 — 12,549 $ 25,749,949 $ 2,273,539 $ 11,724,158 Consumer December 31, 2018 Residential Real Estate -Mortgage Equity Lines of Credit Equity Loans Credit Card Consumer Direct Consumer Indirect (In Thousands) Performing $ 13,248,822 $ 2,707,289 $ 287,392 $ 801,297 $ 2,535,724 $ 3,742,394 Nonperforming 173,334 39,928 11,222 17,011 17,864 27,625 $ 13,422,156 $ 2,747,217 $ 298,614 $ 818,308 $ 2,553,588 $ 3,770,019 December 31, 2017 Residential Real Estate -Mortgage Equity Lines of Credit Equity Loans Credit Card Consumer Direct Consumer Indirect (In Thousands) Performing $ 13,182,760 $ 2,616,825 $ 350,531 $ 627,588 $ 1,681,246 $ 3,147,223 Nonperforming 182,987 36,280 12,733 11,929 9,137 16,883 $ 13,365,747 $ 2,653,105 $ 363,264 $ 639,517 $ 1,690,383 $ 3,164,106 The following tables present an aging analysis of the Company’s past due loans, excluding loans classified as held for sale. December 31, 2018 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Nonaccrual Accruing TDRs Total Past Due and Impaired Not Past Due or Impaired Total (In Thousands) Commercial, financial and agricultural $ 17,257 $ 11,784 $ 8,114 $ 400,389 $ 18,926 $ 456,470 $ 26,105,849 $ 26,562,319 Real estate – construction 218 8,849 544 2,851 116 12,578 1,984,959 1,997,537 Commercial real estate – mortgage 11,678 3,375 2,420 110,144 3,661 131,278 12,885,518 13,016,796 Residential real estate – mortgage 80,366 29,852 5,927 167,099 57,446 340,690 13,081,466 13,422,156 Equity lines of credit 14,007 5,109 2,226 37,702 — 59,044 2,688,173 2,747,217 Equity loans 3,471 843 180 10,939 26,768 42,201 256,413 298,614 Credit card 9,516 7,323 17,011 — — 33,850 784,458 818,308 Consumer direct 37,336 19,543 13,336 4,528 2,684 77,427 2,476,161 2,553,588 Consumer indirect 100,434 32,172 9,791 17,834 — 160,231 3,609,788 3,770,019 Total loans $ 274,283 $ 118,850 $ 59,549 $ 751,486 $ 109,601 $ 1,313,769 $ 63,872,785 $ 65,186,554 December 31, 2017 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Nonaccrual Accruing TDRs Total Past Due and Impaired Not Past Due or Impaired Total (In Thousands) Commercial, financial and agricultural $ 14,804 $ 3,753 $ 18,136 $ 310,059 $ 1,213 $ 347,965 $ 25,401,984 $ 25,749,949 Real estate – construction 12,293 70 1,560 5,381 101 19,405 2,254,134 2,273,539 Commercial real estate – mortgage 10,473 3,270 927 111,982 4,155 130,807 11,593,351 11,724,158 Residential real estate – mortgage 69,474 34,440 8,572 173,843 64,898 351,227 13,014,520 13,365,747 Equity lines of credit 10,956 7,556 2,259 34,021 237 55,029 2,598,076 2,653,105 Equity loans 4,170 657 995 11,559 30,105 47,486 315,778 363,264 Credit card 6,710 4,804 11,929 — — 23,443 616,074 639,517 Consumer direct 19,766 7,020 6,712 2,425 534 36,457 1,653,926 1,690,383 Consumer indirect 92,017 26,460 7,288 9,595 — 135,360 3,028,746 3,164,106 Total loans $ 240,663 $ 88,030 $ 58,378 $ 658,865 $ 101,243 $ 1,147,179 $ 60,476,589 $ 61,623,768 It is the Company’s policy to classify TDRs that are not accruing interest as nonaccrual loans. It is also the Company’s policy to classify TDR past due loans that are accruing interest as TDRs and not according to their past due status. The tables above reflect this policy. Within each of the Company’s loan classes, TDRs typically involve modification of the loan interest rate to a below market rate or an extension or deferment of the loan. During the year ended December 31, 2018 , $28 million of TDR modifications included an interest rate concession and $119 million of TDR modifications resulted from modifications to the loan’s structure. During the year ended December 31, 2017 , $7 million of TDR modifications included an interest rate concession and $246 million of TDR modifications resulted from modifications to the loan’s structure. During the year ended December 31, 2016 , $5 million of TDR modifications included an interest rate concession and $65 million of TDR modifications resulted from modifications to the loan’s structure. The following table presents an analysis of the types of loans that were restructured and classified as TDRs, excluding loans classified as held for sale. December 31, 2018 December 31, 2017 December 31, 2016 Number of Contracts Post-Modification Outstanding Recorded Investment Number of Contracts Post-Modification Outstanding Recorded Investment Number of Contracts Post-Modification Outstanding Recorded Investment (Dollars in Thousands) Commercial, financial and agricultural 8 $ 122,182 26 $ 232,511 10 $ 44,569 Real estate – construction 2 307 — — 2 3,504 Commercial real estate – mortgage 4 4,072 3 1,223 5 1,431 Residential real estate – mortgage 73 14,851 66 15,714 70 13,211 Equity lines of credit 11 289 41 1,858 82 3,869 Equity loans 25 2,687 30 1,246 17 1,369 Credit card — — — — — — Consumer direct 16 2,158 — — 4 35 Consumer indirect — — 14 209 128 2,148 Covered loans — — 2 103 — — The impact to the allowance for loan losses related to modifications classified as TDRs was approximately $11.2 million and $27.1 million for the years ended December 31, 2018 and 2017 , respectively. For the year ended December 31, 2016 , the impact to the allowance for loan losses related to modifications classified as TDRs were not material. The Company considers TDRs aged 90 days or more past due, charged off or classified as nonaccrual subsequent to modification, where the loan was not classified as a nonperforming loan at the time of modification, as subsequently defaulted. The following tables provide a summary of initial subsequent defaults that occurred within one year of the restructure date. The table excludes loans classified as held for sale as of period-end and includes loans no longer in default as of year-end. Years Ended December 31, 2018 2017 2016 Number of Contracts Recorded Investment at Default Number of Contracts Recorded Investment at Default Number of Contracts Recorded Investment at Default (Dollars in Thousands) Commercial, financial and agricultural — $ — 1 $ 686 — $ — Real estate – construction — — — — — — Commercial real estate – mortgage — — — — — — Residential real estate – mortgage 7 834 1 505 — — Equity lines of credit — — — — 8 204 Equity loans 6 358 2 51 3 293 Credit card — — — — — — Consumer direct 1 5 — — — — Consumer indirect — — 1 22 2 32 Covered loans — — — — — — All commercial and consumer loans modified in a TDR are considered to be impaired, even if they maintain their accrual status. At December 31, 2018 and 2017 , there were $54.2 million and $15.9 million , respectively, of commitments to lend additional funds to borrowers whose terms have been modified in a TDR. Foreclosure Proceedings Other real estate owned, a component of other assets in the Company's Consolidated Balance Sheets, totaled $17 million at both December 31, 2018 and 2017 . Other real estate owned included $14 million and $12 million of foreclosed residential real estate properties at December 31, 2018 and 2017 , respectively. As of December 31, 2018 and 2017 , there were $62 million and $57 million , respectively, of loans secured by residential real estate properties for which formal foreclosure proceedings were in process. |