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, 2018 and December 31, 2017 . Current, Accruing Past Due, and Non-accrual Loans June 30, 2018 (in thousands) Current Accruing 30-89 Days Past Due Accruing 90 Days or Greater Past Due Total Accruing Past Due Non-accrual Total Commercial, financial and agricultural $ 7,170,877 $ 18,425 $ 547 $ 18,972 $ 81,231 $ 7,271,080 Owner-occupied 4,994,038 4,180 98 4,278 6,076 5,004,392 Total commercial and industrial 12,164,915 22,605 645 23,250 87,307 12,275,472 Investment properties 5,505,409 1,838 611 2,449 1,738 5,509,596 1-4 family properties 715,154 2,309 — 2,309 3,247 720,710 Land and development 407,639 1,602 — 1,602 4,624 413,865 Total commercial real estate 6,628,202 5,749 611 6,360 9,609 6,644,171 Home equity lines 1,430,778 8,450 362 8,812 14,265 1,453,855 Consumer mortgages 2,741,064 4,805 244 5,049 4,822 2,750,935 Credit cards 235,406 1,793 1,225 3,018 — 238,424 Other consumer loans 1,783,466 8,990 135 9,125 1,325 1,793,916 Total consumer 6,190,714 24,038 1,966 26,004 20,412 6,237,130 Total loans $ 24,983,831 $ 52,392 $ 3,222 $ 55,614 $ 117,328 $ 25,156,773 (1 ) December 31, 2017 (in thousands) Current Accruing 30-89 Days Past Due Accruing 90 Days or Greater Past Due Total Accruing Past Due Non-accrual Total Commercial, financial and agricultural $ 7,097,127 $ 11,214 $ 1,016 $ 12,230 $ 70,130 $ 7,179,487 Owner-occupied 4,830,150 6,880 479 7,359 6,654 4,844,163 Total commercial and industrial 11,927,277 18,094 1,495 19,589 76,784 12,023,650 Investment properties 5,663,665 2,506 90 2,596 3,804 5,670,065 1-4 family properties 775,023 3,545 202 3,747 2,849 781,619 Land and development 476,131 1,609 67 1,676 5,797 483,604 Total commercial real estate 6,914,819 7,660 359 8,019 12,450 6,935,288 Home equity lines 1,490,808 5,629 335 5,964 17,455 1,514,227 Consumer mortgages 2,622,061 3,971 268 4,239 7,203 2,633,503 Credit cards 229,015 1,930 1,731 3,661 — 232,676 Other consumer loans 1,461,223 10,333 226 10,559 1,669 1,473,451 Total consumer 5,803,107 21,863 2,560 24,423 26,327 5,853,857 Total loans $ 24,645,203 $ 47,617 $ 4,414 $ 52,031 $ 115,561 $ 24,812,795 (2 ) (1) Total before net deferred fees and costs of $22.7 million . (2) Total before net deferred fees and costs of $25.3 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 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, 2018 (in thousands) Pass Special Mention Substandard (1) Doubtful (2) Loss Total Commercial, financial and agricultural $ 6,996,081 $ 107,251 $ 164,581 $ 3,167 $ — $ 7,271,080 Owner-occupied 4,873,936 63,373 67,010 73 — 5,004,392 Total commercial and industrial 11,870,017 170,624 231,591 3,240 — 12,275,472 Investment properties 5,422,727 51,279 35,590 — — 5,509,596 1-4 family properties 698,532 9,245 12,933 — — 720,710 Land and development 369,071 29,612 12,053 3,129 — 413,865 Total commercial real estate 6,490,330 90,136 60,576 3,129 — 6,644,171 Home equity lines 1,435,724 — 16,599 175 1,357 (3) 1,453,855 Consumer mortgages 2,743,245 — 7,588 102 — (3) 2,750,935 Credit cards 237,198 — 447 — 779 (4) 238,424 Other consumer loans 1,792,568 — 1,087 257 4 (3) 1,793,916 Total consumer 6,208,735 — 25,721 534 2,140 6,237,130 Total loans $ 24,569,082 $ 260,760 $ 317,888 $ 6,903 $ 2,140 $ 25,156,773 (5 ) December 31, 2017 (in thousands) Pass Special Mention Substandard (1) Doubtful (2) Loss Total Commercial, financial and agricultural $6,929,506 $115,912 $132,818 $1,251 $ — $7,179,487 Owner-occupied 4,713,877 50,140 80,073 73 — 4,844,163 Total commercial and industrial 11,643,383 166,052 212,891 1,324 — 12,023,650 Investment properties 5,586,792 64,628 18,645 — — 5,670,065 1-4 family properties 745,299 19,419 16,901 — — 781,619 Land and development 431,759 33,766 14,950 3,129 — 483,604 Total commercial real estate 6,763,850 117,813 50,496 3,129 — 6,935,288 Home equity lines 1,491,105 — 21,079 285 1,758 (3) 1,514,227 Consumer mortgages 2,622,499 — 10,607 291 106 (3) 2,633,503 Credit cards 230,945 — 399 — 1,332 (4) 232,676 Other consumer loans 1,470,944 — 2,168 329 10 (3) 1,473,451 Total consumer 5,815,493 — 34,253 905 3,206 5,853,857 Total loans $ 24,222,726 $ 283,865 $ 297,640 $ 5,358 $ 3,206 $ 24,812,795 (6 ) (1) Includes $209.6 million and $190.6 million of Substandard accruing loans at June 30, 2018 and December 31, 2017 , 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 $22.7 million . (6) Total before net deferred fees and costs of $25.3 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, 2018 and 2017 . Allowance for Loan Losses and Recorded Investment in Loans As Of and For The Six Months Ended June 30, 2018 (in thousands) Commercial & Industrial Commercial Real Estate Consumer Total Allowance for loan losses: Beginning balance $ 126,803 $ 74,998 $ 47,467 $ 249,268 Charge-offs (23,786 ) (2,446 ) (9,894 ) (36,126 ) Recoveries 3,995 6,964 3,058 14,017 Provision for loan losses 23,323 (4,311 ) 5,554 24,566 Ending balance (1) $ 130,335 $ 75,205 $ 46,185 $ 251,725 Ending balance: individually evaluated for impairment $ 9,474 $ 4,687 $ 771 $ 14,932 Ending balance: collectively evaluated for impairment $ 120,861 $ 70,518 $ 45,414 $ 236,793 Loans: Ending balance: total loans (1)(2) $ 12,275,472 $ 6,644,171 $ 6,237,130 $ 25,156,773 Ending balance: individually evaluated for impairment $ 107,544 $ 53,805 $ 27,676 $ 189,025 Ending balance: collectively evaluated for impairment $ 12,167,928 $ 6,590,366 $ 6,209,454 $ 24,967,748 As Of and For The Six Months Ended June 30, 2017 (in thousands) Commercial & Industrial Commercial Real Estate Consumer Total Allowance for loan losses: Beginning balance $ 125,778 $ 81,816 $ 44,164 $ 251,758 Charge-offs (19,535 ) (3,207 ) (9,656 ) (32,398 ) Recoveries 3,282 3,648 2,871 9,801 Provision for loan losses 13,912 (4,730 ) 9,752 18,934 Ending balance (1) $ 123,437 $ 77,527 $ 47,131 $ 248,095 Ending balance: individually evaluated for impairment $ 7,226 $ 4,386 $ 1,038 $ 12,650 Ending balance: collectively evaluated for impairment $ 116,211 $ 73,141 $ 46,093 $ 235,445 Loans: Ending balance: total loans (1)(3) $ 11,742,945 $ 7,422,234 $ 5,291,371 $ 24,456,550 Ending balance: individually evaluated for impairment $ 122,889 $ 73,638 $ 31,688 $ 228,215 Ending balance: collectively evaluated for impairment $ 11,620,056 $ 7,348,596 $ 5,259,683 $ 24,228,335 (1 ) As of and for the six months ended June 30, 2018 and 2017, 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 $22.7 million . (3) Total before net deferred fees and costs of $26.0 million . Allowance for Loan Losses and Recorded Investment in Loans As Of and For The Three Months Ended June 30, 2018 (in thousands) Commercial & Industrial Commercial Real Estate Consumer Total Allowance for loan losses: Beginning balance $ 134,745 $ 73,991 $ 49,028 $ 257,764 Charge-offs (15,770 ) (523 ) (5,211 ) (21,504 ) Recoveries 1,635 480 1,560 3,675 Provision for loan losses 9,725 1,257 808 11,790 Ending balance (1) $ 130,335 $ 75,205 $ 46,185 $ 251,725 Ending balance: individually evaluated for impairment $ 9,474 $ 4,687 $ 771 $ 14,932 Ending balance: collectively evaluated for impairment $ 120,861 $ 70,518 $ 45,414 $ 236,793 Loans: Ending balance: total loans (1)(2) $ 12,275,472 $ 6,644,171 $ 6,237,130 $ 25,156,773 Ending balance: individually evaluated for impairment $ 107,544 $ 53,805 $ 27,676 $ 189,025 Ending balance: collectively evaluated for impairment $ 12,167,928 $ 6,590,366 $ 6,209,454 $ 24,967,748 As Of and For The Three Months Ended June 30, 2017 (in thousands) Commercial & Industrial Commercial Real Estate Consumer Total Allowance for loan losses: Beginning balance $ 127,096 $ 78,314 $ 48,104 $ 253,514 Charge-offs (12,642 ) (1,299 ) (5,722 ) (19,663 ) Recoveries 1,458 759 1,767 3,984 Provision for loan losses 7,525 (247 ) 2,982 10,260 Ending balance (1) $ 123,437 $ 77,527 $ 47,131 $ 248,095 Ending balance: individually evaluated for impairment $ 7,226 $ 4,386 $ 1,038 $ 12,650 Ending balance: collectively evaluated for impairment $ 116,211 $ 73,141 $ 46,093 $ 235,445 Loans: Ending balance: total loans (1)(3) $ 11,742,945 $ 7,422,234 $ 5,291,371 $ 24,456,550 Ending balance: individually evaluated for impairment $ 122,889 $ 73,638 $ 31,688 $ 228,215 Ending balance: collectively evaluated for impairment $ 11,620,056 $ 7,348,596 $ 5,259,683 $ 24,228,335 (1 ) As of and for the three months ended June 30, 2018 and 2017 , 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 $22.7 million . (3) Total before net deferred fees and costs of $26.0 million . The tables below summarize impaired loans (including accruing TDRs) as of June 30, 2018 and December 31, 2017 . Impaired Loans (including accruing TDRs) June 30, 2018 Six Months Ended June 30, 2018 Three Months Ended June 30, 2018 (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 Commercial, financial and agricultural $ 21,549 $ 32,458 $ — $ 11,129 $ — $ 13,575 $ — Owner-occupied — — — — — — — Total commercial and industrial 21,549 32,458 — 11,129 — 13,575 — Investment properties — — — — — — — 1-4 family properties — — — — — — — Land and development — — — 19 — — — Total commercial real estate — — — 19 — — — Home equity lines — — — 1,423 — 724 — Consumer mortgages 62 87 — 1,330 — 1,780 — Credit cards — — — — — — — Other consumer loans — — — — — — — Total consumer 62 87 — 2,753 — 2,504 — Total impaired loans with no related allowance recorded $ 21,611 $ 32,545 $ — $ 13,901 $ — $ 16,079 $ — With allowance recorded Commercial, financial and agricultural $ 45,171 $ 45,385 $ 6,813 $ 62,564 $ 428 $ 57,930 $ 155 Owner-occupied 40,824 40,884 2,660 38,073 730 38,432 373 Total commercial and industrial 85,995 86,269 9,473 100,637 1,158 96,362 528 Investment properties 24,218 24,218 1,659 23,604 418 24,439 220 1-4 family properties 10,458 10,458 309 11,466 442 11,217 226 Land and development 19,129 20,869 2,720 18,280 150 18,428 74 Total commercial real estate 53,805 55,545 4,688 53,350 1,010 54,084 520 Home equity lines 3,915 3,915 174 3,822 76 3,262 30 Consumer mortgages 18,767 18,767 350 19,283 394 19,459 199 Credit cards — — — — — 4,985 — Other consumer loans 4,932 4,938 248 5,188 143 — 72 Total consumer 27,614 27,620 772 28,293 613 27,706 301 Total impaired loans with allowance recorded $ 167,414 $ 169,434 $ 14,933 $ 182,280 $ 2,781 $ 178,152 $ 1,349 Total impaired loans Commercial, financial and agricultural $ 66,720 $ 77,843 $ 6,813 $ 73,693 $ 428 $ 71,505 $ 155 Owner-occupied 40,824 40,884 2,660 38,073 730 38,432 373 Total commercial and industrial 107,544 118,727 9,473 111,766 1,158 109,937 528 Investment properties 24,218 24,218 1,659 23,604 418 24,439 220 1-4 family properties 10,458 10,458 309 11,466 442 11,217 226 Land and development 19,129 20,869 2,720 18,299 150 18,428 74 Total commercial real estate 53,805 55,545 4,688 53,369 1,010 54,084 520 Home equity lines 3,915 3,915 174 5,245 76 3,986 30 Consumer mortgages 18,829 18,854 350 20,613 394 21,239 199 Credit cards — — — — — 4,985 — Other consumer loans 4,932 4,938 248 5,188 143 — 72 Total consumer 27,676 27,707 772 31,046 613 30,210 301 Total impaired loans $ 189,025 $ 201,979 $ 14,933 $ 196,181 $ 2,781 $ 194,231 $ 1,349 Impaired Loans (including accruing TDRs) December 31, 2017 Year Ended December 31, 2017 (in thousands) Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With no related allowance recorded Commercial, financial and agricultural $ 8,220 $ 9,576 $ — $ 21,686 $ — Owner-occupied — — — 6,665 — Total commercial and industrial 8,220 9,576 — 28,351 — Investment properties — — — 123 — 1-4 family properties — — — 323 — Land and development 56 1,740 — 1,816 — Total commercial real estate 56 1,740 — 2,262 — Home equity lines 2,746 2,943 — 1,205 — Consumer mortgages — — — 496 — Credit cards — — — — — Other consumer loans — — — — — Total consumer 2,746 2,943 — 1,701 — Total impaired loans with no related allowance recorded $ 11,022 $ 14,259 $ — $ 32,314 $ — With allowance recorded Commercial, financial and agricultural $ 65,715 $ 65,851 $ 7,406 $ 50,468 $ 1,610 Owner-occupied 37,399 37,441 2,109 40,498 1,382 Total commercial and industrial 103,114 103,292 9,515 90,966 2,992 Investment properties 23,364 23,364 1,100 28,749 1,144 1-4 family properties 15,056 15,056 504 16,257 925 Land and development 18,420 18,476 2,636 23,338 404 Total commercial real estate 56,840 56,896 4,240 68,344 2,473 Home equity lines 5,096 5,096 114 7,476 334 Consumer mortgages 18,668 18,668 569 19,144 896 Credit cards — — — — — Other consumer loans 5,546 5,546 470 4,765 266 Total consumer 29,310 29,310 1,153 31,385 1,496 Total impaired loans with allowance recorded $ 189,264 $ 189,498 $ 14,908 $ 190,695 $ 6,961 Total impaired loans Commercial, financial and agricultural $ 73,935 $ 75,427 $ 7,406 $ 72,154 $ 1,610 Owner-occupied 37,399 37,441 2,109 47,163 1,382 Total commercial and industrial 111,334 112,868 9,515 119,317 2,992 Investment properties 23,364 23,364 1,100 28,872 1,144 1-4 family properties 15,056 15,056 504 16,580 925 Land and development 18,476 20,216 2,636 25,154 404 Total commercial real estate 56,896 58,636 4,240 70,606 2,473 Home equity lines 7,842 8,039 114 8,681 334 Consumer mortgages 18,668 18,668 569 19,640 896 Credit cards — — — — — Other consumer loans 5,546 5,546 470 4,765 266 Total consumer 32,056 32,253 1,153 33,086 1,496 Total impaired loans $ 200,286 $ 203,757 $ 14,908 $ 223,009 $ 6,961 The average recorded investment in impaired loans was $233.8 million and $232.5 million respectively for the six and three months ended June 30, 2017. Excluding accruing TDRs, there was no interest income recognized for the investment in impaired loans for the six and three months ended June 30, 2017. Interest income recognized for accruing TDRs was $3.5 million and $1.8 million respectively for the six and three months ended June 30, 2017. At June 30, 2018 and December 31, 2017 , impaired loans of $63.7 million and $49.0 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, 2018 and 2017 that were reported as accruing or non-accruing TDRs. TDRs by Concession Type Six Months Ended June 30, 2018 (in thousands, except contract data) Number of Contracts Principal Forgiveness Below Market Interest Rate Term Extensions and/or Other Concessions Total Commercial, financial and agricultural 14 $ — $ — $ 1,565 $ 1,565 Owner-occupied 6 — 4,799 684 5,483 Total commercial and industrial 20 — 4,799 2,249 7,048 Investment properties 3 — 6,011 2,215 8,226 1-4 family properties 7 — 965 492 1,457 Land and development 3 — — 1,786 1,786 Total commercial real estate 13 — 6,976 4,493 11,469 Home equity lines 3 — 172 148 320 Consumer mortgages 14 — 4,695 87 4,782 Credit cards — — — — — Other consumer loans 31 — 925 821 1,746 Total consumer 48 — 5,792 1,056 6,848 Total TDRs 81 $ — $ 17,567 $ 7,798 $ 25,365 (1 ) Three Months Ended June 30, 2018 (in thousands, except contract data) Number of Contracts Principal Forgiveness Below Market Interest Rate Term Extensions and/or Other Concessions Total Commercial, financial and agricultural 5 $ — $ — $ 576 $ 576 Owner-occupied 4 — 2,094 592 2,686 Total commercial and industrial 9 — 2,094 1,168 3,262 Investment properties 2 — 6,011 256 6,267 1-4 family properties 1 — — 492 492 Land and development 3 — — 1,786 1,786 Total commercial real estate 6 — 6,011 2,534 8,545 Home equity lines 3 — 172 148 320 Consumer mortgages 7 — 2,963 87 3,050 Credit cards — — — — — Other consumer loans 17 — 388 313 701 Total consumer 27 — 3,523 548 4,071 Total TDRs 42 $ — $ 11,628 $ 4,250 $ 15,878 (1 ) (1) No net charge-offs were recorded during the six and three months ended June 30, 2018 upon restructuring of these loans. 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 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 Investment properties — — — — — 1-4 family properties 16 — 2,089 513 2,602 Land and development 1 — — 135 135 Total commercial real estate 17 — 2,089 648 2,737 Home equity lines — — — — — Consumer mortgages 1 — — 9 9 Credit cards — — — — — Other consumer loans 8 — — 570 570 Total consumer 9 — — 579 579 Total TDRs 55 $ — $ 7,849 $ 7,528 $ 15,377 (2 ) 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 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 Investment properties — — — — — 1-4 family properties 8 — 478 196 674 Land and development 1 — — 135 135 Total commercial real estate 9 — 478 331 809 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 (2 ) (2) No net charge-offs were recorded during the six and three months ended June 30, 2017 upon restructuring of these loans. For both the six and three months ended June 30, 2018 there were eight defaults with a recorded investment of $10.5 million 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 three defaults for both the six and three months ended June 30, 2017 with a recorded investment of $292 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, 2018 , the allowance for loan losses allocated to accruing TDRs totaling $125.3 million was $6.5 million compared to accruing TDRs of $151.3 million with an allocated allowance for loan losses of $8.7 million at December 31, 2017 . 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 . |