Loans and Allowance for Loan Losses | Note 6 - 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 June 30, 2017 and December 31, 2016 . Current, Accruing Past Due, and Non-accrual Loans June 30, 2017 (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 $ 6,028,397 3,482 72 3,554 3,712 6,035,663 1-4 family properties 818,327 8,657 101 8,758 8,535 835,620 Land and development 529,967 1,964 126 2,090 10,931 542,988 Total commercial real estate 7,376,691 14,103 299 14,402 23,178 7,414,271 Commercial, financial and agricultural 6,915,588 14,670 765 15,435 69,550 7,000,573 Owner-occupied 4,715,325 9,291 801 10,092 24,918 4,750,335 Total commercial and industrial 11,630,913 23,961 1,566 25,527 94,468 11,750,908 Home equity lines 1,533,528 8,286 705 8,991 20,648 1,563,167 Consumer mortgages 2,444,866 7,141 623 7,764 18,035 2,470,665 Credit cards 223,092 1,550 1,258 2,808 — 225,900 Other consumer loans 1,021,355 7,197 99 7,296 2,988 1,031,639 Total consumer 5,222,841 24,174 2,685 26,859 41,671 5,291,371 Total loans $ 24,230,445 62,238 4,550 66,788 159,317 24,456,550 (1 ) December 31, 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 $ 5,861,198 2,795 — 2,795 5,268 5,869,261 1-4 family properties 873,231 4,801 161 4,962 9,114 887,307 Land and development 591,732 1,441 — 1,441 16,233 609,406 Total commercial real estate 7,326,161 9,037 161 9,198 30,615 7,365,974 Commercial, financial and agricultural 6,846,591 9,542 720 10,262 59,074 6,915,927 Owner-occupied 4,601,356 17,913 244 18,157 16,503 4,636,016 Total commercial and industrial 11,447,947 27,455 964 28,419 75,577 11,551,943 Home equity lines 1,585,228 10,013 473 10,486 21,551 1,617,265 Consumer mortgages 2,265,966 7,876 81 7,957 22,681 2,296,604 Credit cards 229,177 1,819 1,417 3,236 — 232,413 Other consumer loans 809,419 5,771 39 5,810 2,954 818,183 Total consumer 4,889,790 25,479 2,010 27,489 47,186 4,964,465 Total loans $ 23,663,898 61,971 3,135 65,106 153,378 23,882,382 (2 ) (1) Total before net deferred fees and costs of $26.0 million . (2) Total before net deferred fees and costs of $26.0 million . The credit quality of the loan portfolio is reviewed and updated 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, consumer 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 consumer 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 any associated senior liens with other financial institutions. Loan Portfolio Credit Exposure by Risk Grade June 30, 2017 (in thousands) Pass Special Mention Substandard (1) Doubtful (2) Loss Total Investment properties $ 5,952,286 61,451 21,926 — — 6,035,663 1-4 family properties 788,665 24,169 22,559 227 — 835,620 Land and development 477,974 40,576 21,227 3,211 — 542,988 Total commercial real estate 7,218,925 126,196 65,712 3,438 — 7,414,271 Commercial, financial and agricultural 6,710,038 124,412 160,354 5,629 140 (3) 7,000,573 Owner-occupied 4,590,414 52,101 106,410 1,410 — 4,750,335 Total commercial and industrial 11,300,452 176,513 266,764 7,039 140 11,750,908 Home equity lines 1,535,583 — 24,812 373 2,399 (3) 1,563,167 Consumer mortgages 2,450,658 — 19,528 313 166 (3) 2,470,665 Credit cards 224,643 — 445 — 812 (4) 225,900 Other consumer loans 1,028,493 — 2,808 299 39 (3) 1,031,639 Total consumer 5,239,377 — 47,593 985 3,416 5,291,371 Total loans $ 23,758,754 302,709 380,069 11,462 3,556 24,456,550 (5 ) December 31, 2016 (in thousands) Pass Special Mention Substandard (1) Doubtful (2) Loss Total Investment properties $ 5,794,626 43,336 31,299 — — 5,869,261 1-4 family properties 826,311 33,928 26,790 278 — 887,307 Land and development 514,853 60,205 27,361 6,987 — 609,406 Total commercial real estate 7,135,790 137,469 85,450 7,265 — 7,365,974 Commercial, financial and agricultural 6,642,648 126,268 140,425 6,445 141 (3) 6,915,927 Owner-occupied 4,462,420 60,856 111,330 1,410 — 4,636,016 Total commercial and industrial 11,105,068 187,124 251,755 7,855 141 11,551,943 Home equity lines 1,589,199 — 22,774 2,892 2,400 (3) 1,617,265 Consumer mortgages 2,271,916 — 23,268 1,283 137 (3) 2,296,604 Credit cards 230,997 — 637 — 779 (4) 232,413 Other consumer loans 814,844 — 3,233 42 64 (3) 818,183 Total consumer 4,906,956 — 49,912 4,217 3,380 4,964,465 Total loans $ 23,147,814 324,593 387,117 19,337 3,521 23,882,382 (6 ) (1) Includes $235.8 million and $256.6 million of Substandard accruing loans at June 30, 2017 and December 31, 2016 , 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 $26.0 million . (6) Total before net deferred fees and costs of $26.0 million . The following table details the changes in the allowance for loan losses by loan segment for the six and three months ended June 30, 2017 . Allowance for Loan Losses and Recorded Investment in Loans As of and For The Six Months Ended June 30, 2017 (in thousands) Commercial Real Estate Commercial & Industrial Retail Total Allowance for loan losses: Beginning balance $ 81,816 125,778 44,164 251,758 Charge-offs (3,207 ) (19,535 ) (9,656 ) (32,398 ) Recoveries 3,648 3,282 2,871 9,801 Provision for loan losses (4,730 ) 13,912 9,752 18,934 Ending balance (1) $ 77,527 123,437 47,131 248,095 Ending balance: individually evaluated for impairment 4,386 7,226 1,038 12,650 Ending balance: collectively evaluated for impairment $ 73,141 116,211 46,093 235,445 Loans: Ending balance: total loans (1)(2) $ 7,414,271 11,750,908 5,291,371 24,456,550 Ending balance: individually evaluated for impairment 73,638 122,889 31,688 228,215 Ending balance: collectively evaluated for impairment $ 7,340,633 11,628,019 5,259,683 24,228,335 As of and For The Six Months Ended June 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 (9,277 ) (10,661 ) (7,148 ) (27,086 ) Recoveries 6,690 4,342 2,564 13,596 Provision for loan losses (5,187 ) 12,963 8,294 16,070 Ending balance (1) $ 79,359 129,633 46,084 255,076 Ending balance: individually evaluated for impairment 12,515 14,221 1,691 28,427 Ending balance: collectively evaluated for impairment $ 66,844 115,412 44,393 226,649 Loans: Ending balance: total loans (1)(3) $ 7,507,695 10,955,430 4,625,410 23,088,535 Ending balance: individually evaluated for impairment 112,954 119,805 37,788 270,547 Ending balance: collectively evaluated for impairment $ 7,394,741 10,835,625 4,587,622 22,817,988 (1) As of and for the six months ended June 30, 2017 and 2016, 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 $26.0 million . (3) Total before net deferred fees and costs of $27.6 million . Allowance for Loan Losses and Recorded Investment in Loans As Of and For The Three Months Ended June 30, 2017 (in thousands) Commercial Real Estate Commercial & Industrial Consumer Total Allowance for loan losses: Beginning balance $ 78,314 127,096 48,104 253,514 Charge-offs (1,299 ) (12,642 ) (5,722 ) (19,663 ) Recoveries 759 1,458 1,767 3,984 Provision for loan losses (247 ) 7,525 2,982 10,260 Ending balance (1) $ 77,527 123,437 47,131 248,095 Ending balance: individually evaluated for impairment 4,386 7,226 1,038 12,650 Ending balance: collectively evaluated for impairment $ 73,141 116,211 46,093 235,445 Loans: Ending balance: total loans (1)(2) $ 7,414,271 11,750,908 5,291,371 24,456,550 Ending balance: individually evaluated for impairment 73,638 122,889 31,688 228,215 Ending balance: collectively evaluated for impairment $ 7,340,633 11,628,019 5,259,683 24,228,335 As Of and For The Three Months Ended June 30, 2016 (in thousands) Commercial Real Estate Commercial & Industrial Consumer Total Allowance for loan losses: Beginning balance $ 84,557 124,878 45,081 254,516 Charge-offs (7,455 ) (5,136 ) (3,180 ) (15,771 ) Recoveries 5,397 3,078 1,163 9,638 Provision for loan losses (3,140 ) 6,813 3,020 6,693 Ending balance (1) $ 79,359 129,633 46,084 255,076 Ending balance: individually evaluated for impairment 12,515 14,221 1,691 28,427 Ending balance: collectively evaluated for impairment $ 66,844 115,412 44,393 226,649 Loans: Ending balance: total loans (1)(3) $ 7,507,695 10,955,430 4,625,410 23,088,535 Ending balance: individually evaluated for impairment 112,954 119,805 37,788 270,547 Ending balance: collectively evaluated for impairment $ 7,394,741 10,835,625 4,587,622 22,817,988 (1) For the three months ended June 30, 2017 and 2016, 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 $26.0 million . (3) Total before net deferred fees and costs of $27.6 million . The tables below summarize impaired loans (including accruing TDRs) as of June 30, 2017 and December 31, 2016 . Impaired Loans (including accruing TDRs) June 30, 2017 Six Months Ended June 30, 2017 Three Months Ended June 30, 2017 (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 $ — — — 246 — — — 1-4 family properties 253 2,582 — 380 — 257 — Land and development 2,226 5,539 — 2,193 — 2,246 — Total commercial real estate 2,479 8,121 — 2,819 — 2,503 — Commercial, financial and agricultural 26,913 33,098 — 22,956 — 26,202 — Owner-occupied 13,824 20,250 — 10,383 — 11,910 — Total commercial and industrial 40,737 53,348 — 33,339 — 38,112 — Home equity lines 1,064 1,064 — 1,060 — 1,064 — Consumer mortgages 744 941 — 744 — 744 — Credit cards — — — — — — — Other consumer loans — — — — — — — Total consumer 1,808 2,005 — 1,804 — 1,808 — Total impaired loans with no related allowance recorded $ 45,024 63,474 — 37,962 — 42,423 — With allowance recorded Investment properties $ 29,168 29,168 1,175 29,575 597 29,264 306 1-4 family properties 15,879 15,893 448 16,995 386 16,133 250 Land and development 26,112 26,168 2,763 27,381 299 26,366 126 Total commercial real estate 71,159 71,229 4,386 73,951 1,282 71,763 682 Commercial, financial and agricultural 46,569 46,887 5,524 46,455 787 48,959 436 Owner-occupied 35,583 35,594 1,702 42,814 674 38,318 336 Total commercial and industrial 82,152 82,481 7,226 89,269 1,461 87,277 772 Home equity lines 7,135 7,135 171 8,197 465 7,680 229 Consumer mortgages 18,762 18,762 598 19,720 183 19,009 92 Credit cards — — — — — — — Other consumer loans 3,983 3,984 269 4,692 132 4,380 59 Total consumer 29,880 29,881 1,038 32,609 780 31,069 380 Total impaired loans with allowance recorded $ 183,191 183,591 12,650 195,829 3,523 190,109 1,834 Total impaired loans Investment properties $ 29,168 29,168 1,175 29,821 597 29,264 306 1-4 family properties 16,132 18,475 448 17,375 386 16,390 250 Land and development 28,338 31,707 2,763 29,574 299 28,612 126 Total commercial real estate 73,638 79,350 4,386 76,770 1,282 74,266 682 Commercial, financial and agricultural 73,482 79,985 5,524 69,411 787 75,161 436 Owner-occupied 49,407 55,844 1,702 53,197 674 50,228 336 Total commercial and industrial 122,889 135,829 7,226 122,608 1,461 125,389 772 Home equity lines 8,199 8,199 171 9,257 465 8,744 229 Consumer mortgages 19,506 19,703 598 20,464 183 19,753 92 Credit cards — — — — — — — Other consumer loans 3,983 3,984 269 4,692 132 4,380 59 Total consumer 31,688 31,886 1,038 34,413 780 32,877 380 Total impaired loans $ 228,215 247,065 12,650 233,791 3,523 232,532 1,834 Impaired Loans (including accruing TDRs) December 31, 2016 Year Ended December 31, 2016 (in thousands) Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With no related allowance recorded Investment properties $ 748 793 — 2,013 — 1-4 family properties 643 2,939 — 1,021 — Land and development 2,099 7,243 — 6,769 — Total commercial real estate 3,490 10,975 — 9,803 — Commercial, financial and agricultural 17,958 20,577 — 6,321 — Owner-occupied 5,508 7,377 — 8,394 — Total commercial and industrial 23,466 27,954 — 14,715 — Home equity lines 1,051 1,051 — 1,045 — Consumer mortgages 744 814 — 870 — Credit cards — — — — — Other consumer loans — — — — — Total consumer 1,795 1,865 — 1,915 — Total impaired loans with no related allowance recorded $ 28,751 40,794 — 26,433 — With allowance recorded Investment properties $ 31,489 31,489 2,044 42,659 1,436 1-4 family properties 23,642 23,649 769 39,864 855 Land and development 32,789 32,788 5,103 25,568 995 Total commercial real estate 87,920 87,926 7,916 108,091 3,286 Commercial, financial and agricultural 43,386 45,913 5,687 51,968 1,215 Owner-occupied 53,708 53,942 2,697 52,300 1,946 Total commercial and industrial 97,094 99,855 8,384 104,268 3,161 Home equity lines 9,638 9,638 971 9,668 432 Consumer mortgages 20,953 20,953 673 20,993 1,014 Credit cards — — — — — Other consumer loans 5,140 5,140 167 5,062 303 Total consumer 35,731 35,731 1,811 35,723 1,749 Total impaired loans with allowance recorded $ 220,745 223,512 18,111 248,082 8,196 Total impaired loans Investment properties $ 32,237 32,282 2,044 44,672 1,436 1-4 family properties 24,285 26,588 769 40,885 855 Land and development 34,888 40,031 5,103 32,337 995 Total commercial real estate 91,410 98,901 7,916 117,894 3,286 Commercial, financial and agricultural 61,344 66,490 5,687 58,289 1,215 Owner-occupied 59,216 61,319 2,697 60,694 1,946 Total commercial and industrial 120,560 127,809 8,384 118,983 3,161 Home equity lines 10,689 10,689 971 10,713 432 Consumer mortgages 21,697 21,767 673 21,863 1,014 Credit cards — — — — — Other consumer loans 5,140 5,140 167 5,062 303 Total consumer 37,526 37,596 1,811 37,638 1,749 Total impaired loans $ 249,496 264,306 18,111 274,515 8,196 The average recorded investment in impaired loans was $290.3 million and $281.9 million , respectively, for the six and three months ended June 30, 2016 . Excluding accruing TDRs, there was no interest income recognized for the investment in impaired loans for the six and three months ended June 30, 2016 . Interest income recognized for accruing TDRs was $4.0 million and $2.0 million , respectively, for the six and three months ended June 30, 2016 . At June 30, 2017 and December 31, 2016 , impaired loans of $60.8 million and $53.7 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 six and three months ended June 30, 2017 and 2016 that were reported as accruing or non-accruing TDRs. TDRs by Concession Type Six Months Ended June 30, 2017 (in thousands, except contract data) Number of Contracts Principal Forgiveness Below Market Interest Rate Term Extensions and/or Other Concessions Total Investment properties — $ — — — — 1-4 family properties 16 — 2,089 513 2,602 Land acquisition 1 — — 135 135 Total commercial real estate 17 — 2,089 648 2,737 Commercial, financial and agricultural 28 — 5,760 6,279 12,039 Owner-occupied 1 — — 22 22 Total commercial and industrial 29 — 5,760 6,301 12,061 Home equity lines — — — — — Consumer mortgages 1 — — 9 9 Credit cards — — — — — Other retail loans 8 — — 570 570 Total retail 9 — — 579 579 Total TDRs 55 $ — 7,849 7,528 15,377 (1 ) Three Months Ended June 30, 2017 (in thousands, except contract data) Number of Contracts Principal Forgiveness Below Market Interest Rate Term Extensions and/or Other Concessions Total Investment properties — $ — — — — 1-4 family properties 8 — 478 196 674 Land and development 1 — — 135 135 Total commercial real estate 9 — 478 331 809 Commercial, financial and agricultural 10 — 1,895 740 2,635 Owner-occupied 1 — — 22 22 Total commercial and industrial 11 — 1,895 762 2,657 Home equity lines — — — — — Consumer mortgages 1 — — 9 9 Credit cards — — — — — Other consumer loans 5 — — 295 295 Total consumer 6 — — 304 304 Total TDRs 26 $ — 2,373 1,397 3,770 (1 ) (1) No net charge-offs were recorded during the six and three months ended June 30, 2017 upon restructuring of these loans. TDRs by Concession Type Six Months Ended June 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 3 $ — 1,826 148 1,974 1-4 family properties 19 — 3,490 1,164 4,654 Land acquisition 11 — — 1,269 1,269 Total commercial real estate 33 — 5,316 2,581 7,897 Commercial, financial and agricultural 45 — 13,948 4,845 18,793 Owner-occupied 6 — 2,667 550 3,217 Total commercial and industrial 51 — 16,615 5,395 22,010 Home equity lines 3 — 224 — 224 Consumer mortgages 6 — 354 51 405 Credit cards — — — — — Other retail loans 17 — 324 1,534 1,858 Total retail 26 — 902 1,585 2,487 Total TDRs 110 $ — 22,833 9,561 32,394 (2 ) Three Months Ended June 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 $ — 1,389 — 1,389 1-4 family properties 12 — 3,095 324 3,419 Land and development 5 — — 734 734 Total commercial real estate 18 — 4,484 1,058 5,542 Commercial, financial and agricultural 15 — 1,934 1,458 3,392 Owner-occupied 2 — 1,132 102 1,234 Total commercial and industrial 17 — 3,066 1,560 4,626 Home equity lines 1 — 28 — 28 Consumer mortgages 3 — 200 51 251 Credit cards — — — — — Other consumer loans 10 — 94 1,449 1,543 Total consumer 14 — 322 1,500 1,822 Total TDRs 49 $ — 7,872 4,118 11,990 (2 ) (2) No net charge-offs were recorded during the six and three months ended June 30, 2016 upon restructuring of these loans. For both the six and three months ended June 30, 2017 , there were three defaults with a recorded investment of $292 thousand 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 one default for both the six and three months ended June 30, 2016 with a recorded investment of $92 thousand . 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 closely approximates the reserve derived through 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 June 30, 2017 , the allowance for loan losses allocated to accruing TDRs totaling $167.4 million was $8.5 million compared to accruing TDRs of $195.8 million with an allocated allowance for loan losses of $9.8 million at December 31, 2016 . 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. |