Loans and Allowance for Loan Losses | Note 5 - Loans and Allowance for Loan Losses The following is a summary of current, accruing past due, and non-accrual loans by portfolio class as of September 30, 2016 and December 31, 2015 . Current, Accruing Past Due, and Non-accrual Loans September 30, 2016 (in thousands) Current Accruing 30-89 Days Past Due Accruing 90 Days or Greater Past Due Total Accruing Past Due Non-accrual Total Investment properties $ 5,957,788 2,501 293 2,794 8,884 5,969,466 1-4 family properties 1,047,830 5,355 717 6,072 17,152 1,071,054 Land acquisition 414,425 2,678 1,283 3,961 6,672 425,058 Total commercial real estate 7,420,043 10,534 2,293 12,827 32,708 7,465,578 Commercial, financial and agricultural 6,475,826 17,987 942 18,929 49,874 6,544,629 Owner-occupied 4,441,624 8,145 153 8,298 21,443 4,471,365 Total commercial and industrial 10,917,450 26,132 1,095 27,227 71,317 11,015,994 Home equity lines 1,613,264 5,283 482 5,765 19,815 1,638,844 Consumer mortgages 2,212,358 9,411 101 9,512 21,284 2,243,154 Credit cards 229,735 1,309 1,265 2,574 — 232,309 Other retail loans 686,297 3,754 122 3,876 3,031 693,204 Total retail 4,741,654 19,757 1,970 21,727 44,130 4,807,511 Total loans $ 23,079,147 56,423 5,358 61,781 148,155 23,289,083 (1 ) December 31, 2015 (in thousands) Current Accruing 30-89 Days Past Due Accruing 90 Days or Greater Past Due Total Accruing Past Due Non-accrual Total Investment properties $ 5,726,307 2,284 — 2,284 23,040 5,751,631 1-4 family properties 1,105,914 6,300 103 6,403 16,839 1,129,156 Land acquisition 495,542 639 32 671 17,768 513,981 Total commercial real estate 7,327,763 9,223 135 9,358 57,647 7,394,768 Commercial, financial and agricultural 6,391,036 12,222 785 13,007 49,137 6,453,180 Owner-occupied 4,293,308 5,254 95 5,349 20,293 4,318,950 Total commercial and industrial 10,684,344 17,476 880 18,356 69,430 10,772,130 Home equity lines 1,667,552 5,882 — 5,882 16,480 1,689,914 Consumer mortgages 1,907,644 8,657 134 8,791 22,248 1,938,683 Credit cards 237,742 1,663 1,446 3,109 — 240,851 Other retail loans 418,337 2,390 26 2,416 2,565 423,318 Total retail 4,231,275 18,592 1,606 20,198 41,293 4,292,766 Total loans $ 22,243,382 45,291 2,621 47,912 168,370 22,459,664 (2 ) (1) Total before net deferred fees and costs of $26.2 million . (2) Total before net deferred fees and costs of $30.1 million . The credit quality of the loan portfolio is summarized no less frequently than quarterly using the standard asset classification system utilized by the federal banking agencies. These classifications are divided into three groups – Not Criticized (Pass), Special Mention, and Classified or Adverse rating (Substandard, Doubtful, and Loss) and are defined as follows: Pass - loans which are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell in a timely manner, of any underlying collateral. Special Mention - loans which have potential weaknesses that deserve management's close attention. These loans are not adversely classified and do not expose an institution to sufficient risk to warrant an adverse classification. Substandard - loans which are inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Loans with this classification are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful - loans which have all the weaknesses inherent in loans classified as Substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently known facts, conditions, and values. Loss - loans which are considered by management to be uncollectible and of such little value that their continuance on the institution's books as an asset, without establishment of a specific valuation allowance or charge-off, is not warranted. In the following tables, retail loans are generally assigned a risk grade similar to the classifications described above; however, upon reaching 90 days and 120 days past due, they are generally downgraded to Substandard and Loss, respectively, in accordance with the FFIEC Uniform Retail Credit Classification and Account Management Policy. Additionally, in accordance with the Interagency Supervisory Guidance on Allowance for Loan and Lease Losses Estimation Practices for Loans and Lines of Credit Secured by Junior Liens on 1-4 Family Residential Properties, the risk grade classifications of retail loans (home equity lines and consumer mortgages) secured by junior liens on 1-4 family residential properties also consider available information on the payment status of the associated senior lien with other financial institutions. Loan Portfolio Credit Exposure by Risk Grade September 30, 2016 (in thousands) Pass Special Mention Substandard (1) Doubtful (2) Loss Total Investment properties $ 5,852,738 80,002 36,726 — — 5,969,466 1-4 family properties 961,369 48,024 54,619 7,042 — 1,071,054 Land acquisition 373,709 30,841 20,182 326 — 425,058 Total commercial real estate 7,187,816 158,867 111,527 7,368 — 7,465,578 Commercial, financial and agricultural 6,259,343 152,273 121,900 10,103 1,010 (3) 6,544,629 Owner-occupied 4,276,792 73,250 119,911 1,412 — 4,471,365 Total commercial and industrial 10,536,135 225,523 241,811 11,515 1,010 11,015,994 Home equity lines 1,611,366 — 22,131 2,895 2,452 (3) 1,638,844 Consumer mortgages 2,218,687 — 23,002 1,285 180 (3) 2,243,154 Credit cards 231,044 — 483 — 782 (4) 232,309 Other retail loans 689,663 — 3,429 42 70 (3) 693,204 Total retail 4,750,760 — 49,045 4,222 3,484 4,807,511 Total loans $ 22,474,711 384,390 402,383 23,105 4,494 23,289,083 (5 ) December 31, 2015 (in thousands) Pass Special Mention Substandard (1) Doubtful (2) Loss Total Investment properties $ 5,560,595 114,705 76,331 — — 5,751,631 1-4 family properties 995,903 64,325 61,726 7,202 — 1,129,156 Land acquisition 436,835 46,208 30,574 364 — 513,981 Total commercial real estate 6,993,333 225,238 168,631 7,566 — 7,394,768 Commercial, financial and agricultural 6,184,179 152,189 100,658 13,330 2,824 (3) 6,453,180 Owner-occupied 4,118,631 78,490 121,272 98 459 (3) 4,318,950 Total commercial and industrial 10,302,810 230,679 221,930 13,428 3,283 10,772,130 Home equity lines 1,666,586 — 20,456 1,206 1,666 (3) 1,689,914 Consumer mortgages 1,910,649 — 26,041 1,700 293 (3) 1,938,683 Credit cards 239,405 — 480 — 966 (4) 240,851 Other retail loans 418,929 — 4,315 — 74 (3) 423,318 Total retail 4,235,569 — 51,292 2,906 2,999 4,292,766 Total loans $ 21,531,712 455,917 441,853 23,900 6,282 22,459,664 (6 ) (1) Includes $281.8 million and $303.7 million of Substandard accruing loans at September 30, 2016 and December 31, 2015 , respectively. (2) The loans within this risk grade are on non-accrual status. Commercial loans generally have an allowance for loan losses in accordance with ASC 310, and retail loans generally have an allowance for loan losses equal to 50% of the loan amount. (3) The loans within this risk grade are on non-accrual status and have an allowance for loan losses equal to the full loan amount. (4) Represent amounts that were 120 days past due. These credits are downgraded to the Loss category with an allowance for loan losses equal to the full loan amount and are generally charged off upon reaching 181 days past due in accordance with the FFIEC Uniform Retail Credit Classification and Account Management Policy. (5) Total before net deferred fees and costs of $26.2 million . (6) Total before net deferred fees and costs of $30.1 million . The following table details the changes in the allowance for loan losses by loan segment for the nine and three months ended September 30, 2016 and 2015 . Allowance for Loan Losses and Recorded Investment in Loans As Of and For The Nine Months Ended September 30, 2016 (in thousands) Commercial Real Estate Commercial & Industrial Retail Total Allowance for loan losses: Beginning balance $ 87,133 122,989 42,374 252,496 Charge-offs (13,361 ) (17,098 ) (10,611 ) (41,070 ) Recoveries 10,927 6,122 3,601 20,650 Provision for loan losses (3,597 ) 18,875 6,463 21,741 Ending balance (1) $ 81,102 130,888 41,827 253,817 Ending balance: individually evaluated for impairment 11,066 11,474 1,724 24,264 Ending balance: collectively evaluated for impairment $ 70,036 119,414 40,103 229,553 Loans: Ending balance: total loans (1)(2) $ 7,465,578 11,015,994 4,807,511 23,289,083 Ending balance: individually evaluated for impairment 102,837 118,442 37,820 259,099 Ending balance: collectively evaluated for impairment $ 7,362,741 10,897,552 4,769,691 23,029,984 As Of and For The Nine Months Ended September 30, 2015 (in thousands) Commercial Real Estate Commercial & Industrial Retail Total Allowance for loan losses: Beginning balance $ 101,471 118,110 41,736 261,317 Charge-offs (12,120 ) (17,417 ) (16,535 ) (46,072 ) Recoveries 10,500 5,774 5,391 21,665 Provision for loan losses (10,845 ) 15,954 8,881 13,990 Ending balance (1) $ 89,006 122,421 39,473 250,900 Ending balance: individually evaluated for impairment 18,091 12,568 782 31,441 Ending balance: collectively evaluated for impairment $ 70,915 109,853 38,691 219,459 Loans: Ending balance: total loans (1)(3) $ 7,207,461 10,525,972 4,159,243 21,892,676 Ending balance: individually evaluated for impairment 159,582 109,904 39,858 309,344 Ending balance: collectively evaluated for impairment $ 7,047,879 10,416,068 4,119,385 21,583,332 (1) As of and for the nine months ended September 30, 2016 and 2015, there were no purchased credit-impaired loans and no allowance for loan losses for purchased credit-impaired loans. (2) Total before net deferred fees and costs of $26.2 million . (3) Total before net deferred fees and costs of $28.4 million . Allowance for Loan Losses and Recorded Investment in Loans As of and For The Three Months Ended September 30, 2016 (in thousands) Commercial Real Estate Commercial & Industrial Retail Total Allowance for loan losses: Beginning balance $ 79,359 129,633 46,084 255,076 Charge-offs (4,084 ) (6,437 ) (3,463 ) (13,984 ) Recoveries 4,237 1,780 1,037 7,054 Provision for loan losses 1,590 5,912 (1,831 ) 5,671 Ending balance (1) $ 81,102 130,888 41,827 253,817 Ending balance: individually evaluated for impairment 11,066 11,474 1,724 24,264 Ending balance: collectively evaluated for impairment $ 70,036 119,414 40,103 229,553 Loans: Ending balance: total loans (1)(2) $ 7,465,578 11,015,994 4,807,511 23,289,083 Ending balance: individually evaluated for impairment 102,837 118,442 37,820 259,099 Ending balance: collectively evaluated for impairment $ 7,362,741 10,897,552 4,769,691 23,029,984 As of and For The Three Months Ended September 30, 2015 (in thousands) Commercial Real Estate Commercial & Industrial Retail Total Allowance for loan losses: Beginning balance $ 90,691 123,050 40,961 254,702 Charge-offs (1,722 ) (8,342 ) (4,779 ) (14,843 ) Recoveries 4,019 2,203 1,863 8,085 Provision for loan losses (3,982 ) 5,510 1,428 2,956 Ending balance (1) $ 89,006 122,421 39,473 250,900 Ending balance: individually evaluated for impairment 18,091 12,568 782 31,441 Ending balance: collectively evaluated for impairment $ 70,915 109,853 38,691 219,459 Loans: Ending balance: total loans (1)(3) $ 7,207,461 10,525,972 4,159,243 21,892,676 Ending balance: individually evaluated for impairment 159,582 109,904 39,858 309,344 Ending balance: collectively evaluated for impairment $ 7,047,879 10,416,068 4,119,385 21,583,332 (1) As of and for the three months ended September 30, 2016 and 2015, there were no purchased credit-impaired loans and no allowance for loan losses for purchased credit-impaired loans. (2) Total before net deferred fees and costs of $26.2 million . (3) Total before net deferred fees and costs of $28.4 million . The tables below summarize impaired loans (including accruing TDRs) as of September 30, 2016 and December 31, 2015 . Impaired Loans (including accruing TDRs) September 30, 2016 Nine Months Ended September 30, 2016 Three Months Ended (in thousands) Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized With no related allowance recorded Investment properties $ 996 1,032 — 6,901 — 3,158 — 1-4 family properties 1,880 5,876 — 1,328 — 1,150 — Land acquisition 920 4,360 — 3,644 — 2,070 — Total commercial real estate 3,796 11,268 — 11,873 — 6,378 — Commercial, financial and agricultural 4,015 5,406 — 5,276 — 4,351 — Owner-occupied 10,896 11,907 — 8,182 — 7,223 — Total commercial and industrial 14,911 17,313 — 13,458 — 11,574 — Home equity lines 1,051 1,051 — 1,043 — 1,051 — Consumer mortgages 814 2,065 — 814 — 814 — Credit cards — — — — — — — Other retail loans — — — — — — — Total retail 1,865 3,116 — 1,857 — 1,865 — Total impaired loans with no related allowance recorded $ 20,572 31,697 — 27,188 — 19,817 — With allowance recorded Investment properties $ 37,634 37,639 3,004 45,536 1,364 38,125 342 1-4 family properties 47,139 47,146 7,394 49,496 822 49,079 361 Land acquisition 14,268 14,268 668 17,842 349 14,095 126 Total commercial real estate 99,041 99,053 11,066 112,874 2,535 101,299 829 Commercial, financial and agricultural 47,881 50,357 9,736 53,618 863 51,820 346 Owner-occupied 55,650 55,870 1,738 51,565 1,419 53,935 492 Total commercial and industrial 103,531 106,227 11,474 105,183 2,282 105,755 838 Home equity lines 10,433 10,433 963 9,563 766 9,870 254 Consumer mortgages 20,571 20,571 610 21,259 332 20,817 108 Credit cards — — — — — — — Other retail loans 4,951 4,951 151 5,108 222 5,455 79 Total retail 35,955 35,955 1,724 35,930 1,320 36,142 441 Total impaired loans with allowance recorded $ 238,527 241,235 24,264 253,987 6,137 243,196 2,108 Total impaired loans Investment properties $ 38,630 38,671 3,004 52,437 1,364 41,283 342 1-4 family properties 49,019 53,022 7,394 50,824 822 50,229 361 Land acquisition 15,188 18,628 668 21,486 349 16,165 126 Total commercial real estate 102,837 110,321 11,066 124,747 2,535 107,677 829 Commercial, financial and agricultural 51,896 55,763 9,736 58,894 863 56,171 346 Owner-occupied 66,546 67,777 1,738 59,747 1,419 61,158 492 Total commercial and industrial 118,442 123,540 11,474 118,641 2,282 117,329 838 Home equity lines 11,484 11,484 963 10,606 766 10,921 254 Consumer mortgages 21,385 22,636 610 22,073 332 21,631 108 Credit cards — — — — — — — Other retail loans 4,951 4,951 151 5,108 222 5,455 79 Total retail 37,820 39,071 1,724 37,787 1,320 38,007 441 Total impaired loans $ 259,099 272,932 24,264 281,175 6,137 263,013 2,108 Impaired Loans (including accruing TDRs) December 31, 2015 Year Ended December 31, 2015 (in thousands) Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With no related allowance recorded Investment properties $ 10,051 12,946 — 11,625 — 1-4 family properties 1,507 5,526 — 2,546 — Land acquisition 8,551 39,053 — 13,897 — Total commercial real estate 20,109 57,525 — 28,068 — Commercial, financial and agricultural 4,393 7,606 — 5,737 — Owner-occupied 8,762 11,210 — 14,657 — Total commercial and industrial 13,155 18,816 — 20,394 — Home equity lines 1,030 1,030 — 573 — Consumer mortgages 814 941 — 995 — Credit cards — — — — — Other retail loans — — — — — Total retail 1,844 1,971 — 1,568 — Total impaired loans with no related allowance recorded $ 35,108 78,312 — 50,030 — With allowance recorded Investment properties $ 62,305 62,305 10,070 73,211 2,131 1-4 family properties 51,376 51,376 6,184 61,690 1,618 Land acquisition 24,168 24,738 2,715 34,793 936 Total commercial real estate 137,849 138,419 18,969 169,694 4,685 Commercial, financial and agricultural 42,914 44,374 8,339 43,740 1,125 Owner-occupied 49,530 49,688 2,138 55,323 1,814 Total commercial and industrial 92,444 94,062 10,477 99,063 2,939 Home equity lines 9,575 9,575 206 8,318 346 Consumer mortgages 22,173 23,297 651 26,044 1,229 Credit cards — — — — — Other retail loans 4,651 4,651 132 5,105 323 Total retail 36,399 37,523 989 39,467 1,898 Total impaired loans with allowance recorded $ 266,692 270,004 30,435 308,224 9,522 Total impaired loans Investment properties $ 72,356 75,251 10,070 84,836 2,131 1-4 family properties 52,883 56,902 6,184 64,236 1,618 Land acquisition 32,719 63,791 2,715 48,690 936 Total commercial real estate 157,958 195,944 18,969 197,762 4,685 Commercial, financial and agricultural 47,307 51,980 8,339 49,477 1,125 Owner-occupied 58,292 60,898 2,138 69,980 1,814 Total commercial and industrial 105,599 112,878 10,477 119,457 2,939 Home equity lines 10,605 10,605 206 8,891 346 Consumer mortgages 22,987 24,238 651 27,039 1,229 Credit cards — — — — — Other retail loans 4,651 4,651 132 5,105 323 Total retail 38,243 39,494 989 41,035 1,898 Total impaired loans $ 301,800 348,316 30,435 358,254 9,522 The average recorded investment in impaired loans was $375.5 million and $323.5 million for the nine and three months ended September 30, 2015 . Excluding accruing TDRs, there was no interest income recognized for the investment in impaired loans for the nine and three months ended September 30, 2015 . Interest income recognized for accruing TDRs was $7.3 million and $2.2 million for the nine and three months ended September 30, 2015 . At September 30, 2016 and December 31, 2015 , impaired loans of $57.2 million and $77.9 million , respectively, were on non-accrual status. Concessions provided in a TDR are primarily in the form of providing a below market interest rate given the borrower's credit risk, a period of time generally less than one year with a reduction of required principal and/or interest payments (e.g., interest only for a period of time), or an extension of the maturity of the loan generally for less than one year. Insignificant periods of reduction of principal and/or interest payments, or one-time deferrals of 3 months or less, are generally not considered to be financial concessions. The following tables represent, by concession type, the post-modification balance for loans modified or renewed during the nine and three months ended September 30, 2016 and 2015 that were reported as accruing or non-accruing TDRs. TDRs by Concession Type Nine Months Ended September 30, 2016 (in thousands, except contract data) Number of Contracts Principal Forgiveness Below Market Interest Rate Term Extensions and/or Other Concessions Total Investment properties 4 $ — 1,826 3,518 5,344 1-4 family properties 23 — 3,703 1,211 4,914 Land acquisition 13 — — 1,766 1,766 Total commercial real estate 40 — 5,529 6,495 12,024 Commercial, financial and agricultural 50 — 13,948 5,232 19,180 Owner-occupied 7 — 5,458 550 6,008 Total commercial and industrial 57 — 19,406 5,782 25,188 Home equity lines 5 — 224 123 347 Consumer mortgages 6 — 354 51 405 Credit cards — — — — — Other retail loans 24 — 394 1,828 2,222 Total retail 35 — 972 2,002 2,974 Total TDRs 132 $ — 25,907 14,279 40,186 (1 ) Three Months Ended September 30, 2016 (in thousands, except contract data) Number of Contracts Principal Forgiveness Below Market Interest Rate Term Extensions and/or Other Concessions Total Investment properties 1 $ — — 3,370 3,370 1-4 family properties 4 — 213 47 260 Land acquisition 2 — — 497 497 Total commercial real estate 7 — 213 3,914 4,127 Commercial, financial and agricultural 5 — — 387 387 Owner-occupied 1 — 2,791 — 2,791 Total commercial and industrial 6 — 2,791 387 3,178 Home equity lines 2 — — 123 123 Consumer mortgages — — — — — Credit cards — — — — — Other retail loans 7 — 70 294 364 Total retail 9 — 70 417 487 Total TDRs 22 $ — 3,074 4,718 7,792 (2 ) (1) No net charge-offs were recorded during the nine months ended September 30, 2016 upon restructuring of these loans. (2) No net charge-offs were recorded during the three months ended September 30, 2016 upon restructuring of these loans. TDRs by Concession Type Nine Months Ended September 30, 2015 (in thousands, except contract data) Number of Contracts Principal Forgiveness Below Market Interest Rate Term Extensions and/or Other Concessions Total Investment properties 5 $ — 16,932 6,905 23,837 1-4 family properties 31 14,823 4,078 1,774 20,675 Land acquisition 8 — 604 1,187 1,791 Total commercial real estate 44 14,823 21,614 9,866 46,303 Commercial, financial and agricultural 71 — 3,094 5,455 8,549 Owner-occupied 7 — 1,739 1,314 3,053 Total commercial and industrial 78 — 4,833 6,769 11,602 Home equity lines 53 — 2,826 2,905 5,731 Consumer mortgages 12 — 510 786 1,296 Credit cards — — — — — Other retail loans 20 — 259 634 893 Total retail 85 — 3,595 4,325 7,920 Total TDRs 207 $ 14,823 30,042 20,960 65,825 (3 ) Three Months Ended September 30, 2015 (in thousands, except contract data) Number of Contracts Principal Forgiveness Below Market Interest Rate Term Extensions and/or Other Concessions Total Investment properties 1 $ — — 3,090 3,090 1-4 family properties 10 — 721 895 1,616 Land acquisition 2 — — 368 368 Total commercial real estate 13 — 721 4,353 5,074 Commercial, financial and agricultural 22 — 1,514 1,611 3,125 Owner-occupied 4 — — 898 898 Total commercial and industrial 26 — 1,514 2,509 4,023 Home equity lines 5 — 309 757 1,066 Consumer mortgages — — — — — Credit cards — — — — — Other retail loans 7 — 2 139 141 Total retail 12 — 311 896 1,207 Total TDRs 51 $ — 2,546 7,758 10,304 (4 ) (3) Net charge-offs of $4.0 million were recorded during the nine months ended September 30, 2015 upon restructuring of these loans. (4) No net charge-offs were recorded during the three months ended September 30, 2015 upon restructuring of these loans. For the nine and three months ended September 30, 2016 , there were two defaults with a recorded investment of $181 thousand and one default with a recorded investment of $89 thousand , respectively, on accruing TDRs restructured during the previous twelve months (defaults are defined as the earlier of the TDR being placed on non-accrual status or reaching 90 days past due with respect to principal and/or interest payments) compared to four defaults with a recorded investment of $593 thousand and two defaults with a recorded investment of $478 thousand , respectively, for the nine and three months ended September 30, 2015 . If, at the time a loan was designated as a TDR, the loan was not already impaired, the measurement of impairment that resulted from the TDR designation changes from a general pool-level reserve to a specific loan measurement of impairment in accordance with ASC 310-10-35. Generally, the change in the allowance for loan losses resulting from such TDR designation is not significant. At September 30, 2016 , the allowance for loan losses allocated to accruing TDRs totaling $201.9 million was $11.8 million compared to accruing TDRs of $223.9 million with an allocated allowance for loan losses of $12.6 million at December 31, 2015 . Non-accrual, non-homogeneous loans (commercial-type impaired loans greater than $1 million ) that are designated as TDRs, are individually measured for the amount of impairment, if any, both before and after the TDR designation. |