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 June 30, 2016 and December 31, 2015 . Current, Accruing Past Due, and Non-accrual Loans June 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 $ 5,901,061 5,451 — 5,451 14,149 5,920,661 1-4 family properties 1,106,507 3,270 134 3,404 17,869 1,127,780 Land acquisition 448,740 2,698 206 2,904 7,610 459,254 Total commercial real estate 7,456,308 11,419 340 11,759 39,628 7,507,695 Commercial, financial and agricultural 6,526,947 10,025 4,042 14,067 55,821 6,596,835 Owner-occupied 4,331,804 9,673 — 9,673 17,118 4,358,595 Total commercial and industrial 10,858,751 19,698 4,042 23,740 72,939 10,955,430 Home equity lines 1,633,322 6,604 271 6,875 16,912 1,657,109 Consumer mortgages 2,103,106 7,113 — 7,113 21,895 2,132,114 Credit cards 233,118 1,610 1,306 2,916 — 236,034 Other retail loans 594,142 3,308 5 3,313 2,698 600,153 Total retail 4,563,688 18,635 1,582 20,217 41,505 4,625,410 Total loans $ 22,878,747 49,752 5,964 55,716 154,072 23,088,535 (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 $27.6 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 June 30, 2016 (in thousands) Pass Special Mention Substandard (1) Doubtful (2) Loss Total Investment properties $ 5,788,229 86,101 46,331 — — 5,920,661 1-4 family properties 1,009,820 51,938 58,789 7,233 — 1,127,780 Land acquisition 387,082 52,062 19,784 326 — 459,254 Total commercial real estate 7,185,131 190,101 124,904 7,559 — 7,507,695 Commercial, financial and agricultural 6,317,597 163,494 105,107 10,400 237 (3) 6,596,835 Owner-occupied 4,160,662 81,636 114,409 1,420 468 (3) 4,358,595 Total commercial and industrial 10,478,259 245,130 219,516 11,820 705 10,955,430 Home equity lines 1,632,841 — 21,808 1,201 1,259 (3) 1,657,109 Consumer mortgages 2,102,767 — 27,808 1,372 167 (3) 2,132,114 Credit cards 234,728 — 533 — 773 (4) 236,034 Other retail loans 595,455 — 4,620 — 78 (3) 600,153 Total retail 4,565,791 — 54,769 2,573 2,277 4,625,410 Total loans $ 22,229,181 435,231 399,189 21,952 2,982 23,088,535 (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 $270.1 million and $303.7 million of Substandard accruing loans at June 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 $27.6 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 six and three months ended June 30, 2016 and 2015 . Allowance for Loan Losses and Recorded Investment in Loans 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)(2) $ 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 As of and For The Six Months Ended June 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 (10,397 ) (9,074 ) (11,757 ) (31,228 ) Recoveries 6,481 3,570 3,528 13,579 Provision for loan losses (6,864 ) 10,444 7,454 11,034 Ending balance (1) $ 90,691 123,050 40,961 254,702 Ending balance: individually evaluated for impairment 17,197 10,292 1,092 28,581 Ending balance: collectively evaluated for impairment $ 73,494 112,758 39,869 226,121 Loans: Ending balance: total loans (1)(3) $ 7,071,595 10,404,527 4,047,868 21,523,990 Ending balance: individually evaluated for impairment 193,230 112,491 41,013 346,734 Ending balance: collectively evaluated for impairment $ 6,878,365 10,292,036 4,006,855 21,177,256 (1) As of and for the six months ended June 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 $27.6 million . (3) Total before net deferred fees and costs of $29.1 million . Allowance for Loan Losses and Recorded Investment in Loans As of and For The Three Months Ended June 30, 2016 (in thousands) Commercial Real Estate Commercial & Industrial Retail 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)(2) $ 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 As of and For The Three Months Ended June 30, 2015 (in thousands) Commercial Real Estate Commercial & Industrial Retail Total Allowance for loan losses: Beginning balance $ 94,208 117,806 41,357 253,371 Charge-offs (2,957 ) (3,802 ) (3,845 ) (10,604 ) Recoveries 2,540 1,305 1,454 5,299 Provision for loan losses (3,100 ) 7,741 1,995 6,636 Ending balance (1) $ 90,691 123,050 40,961 254,702 Ending balance: individually evaluated for impairment 17,197 10,292 1,092 28,581 Ending balance: collectively evaluated for impairment $ 73,494 112,758 39,869 226,121 Loans: Ending balance: total loans (1)(3) 7,071,595 10,404,527 4,047,868 21,523,990 Ending balance: individually evaluated for impairment 193,230 112,491 41,013 346,734 Ending balance: collectively evaluated for impairment $ 6,878,365 10,292,036 4,006,855 21,177,256 (1) As of and for the three months ended June 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 $27.6 million . (3) Total before net deferred fees and costs of $29.1 million . The tables below summarize impaired loans (including accruing TDRs) as of June 30, 2016 and December 31, 2015 . Impaired Loans (including accruing TDRs) June 30, 2016 Six Months Ended 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 $ 4,249 4,275 — 8,772 — 8,185 — 1-4 family properties 1,219 5,243 — 1,417 — 1,329 — Land acquisition 2,650 7,109 — 4,431 — 2,857 — Total commercial real estate 8,118 16,627 — 14,620 — 12,371 — Commercial, financial and agricultural 5,434 7,585 — 5,738 — 5,761 — Owner-occupied 8,023 9,019 — 8,661 — 8,753 — Total commercial and industrial 13,457 16,604 — 14,399 — 14,514 — Home equity lines 1,043 1,043 — 1,039 — 1,043 — Consumer mortgages 814 2,065 — 814 — 814 — Credit cards — — — — — — — Other retail loans — — — — — — — Total retail 1,857 3,108 — 1,853 — 1,857 — Total impaired loans with no related allowance recorded $ 23,432 36,339 — 30,872 — 28,742 — With allowance recorded Investment properties $ 39,590 39,593 4,356 49,244 1,022 40,474 366 1-4 family properties 50,946 50,985 7,466 49,705 461 49,975 344 Land acquisition 14,300 14,301 693 19,715 223 16,342 95 Total commercial real estate 104,836 104,879 12,515 118,664 1,706 106,791 805 Commercial, financial and agricultural 53,621 55,850 12,634 54,517 517 59,487 328 Owner-occupied 52,727 52,948 1,587 50,379 927 51,355 483 Total commercial and industrial 106,348 108,798 14,221 104,896 1,444 110,842 811 Home equity lines 9,019 9,019 134 9,410 512 9,201 250 Consumer mortgages 20,939 20,939 1,179 21,480 224 21,138 109 Credit cards — — — — — — — Other retail loans 5,973 5,975 378 4,935 143 5,190 71 Total retail 35,931 35,933 1,691 35,825 879 35,529 430 Total impaired loans with allowance recorded $ 247,115 249,610 28,427 259,385 4,029 253,162 2,046 Total impaired loans Investment properties $ 43,839 43,868 4,356 58,016 1,022 48,659 366 1-4 family properties 52,165 56,228 7,466 51,122 461 51,304 344 Land acquisition 16,950 21,410 693 24,146 223 19,199 95 Total commercial real estate 112,954 121,506 12,515 133,284 1,706 119,162 805 Commercial, financial and agricultural 59,055 63,435 12,634 60,255 517 65,248 328 Owner-occupied 60,750 61,967 1,587 59,040 927 60,108 483 Total commercial and industrial 119,805 125,402 14,221 119,295 1,444 125,356 811 Home equity lines 10,062 10,062 134 10,449 512 10,244 250 Consumer mortgages 21,753 23,004 1,179 22,294 224 21,952 109 Credit cards — — — — — — — Other retail loans 5,973 5,975 378 4,935 143 5,190 71 Total retail 37,788 39,041 1,691 37,678 879 37,386 430 Total impaired loans $ 270,547 285,949 28,427 290,257 4,029 281,904 2,046 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 $401.5 million and $375.5 million for the six and three months ended June 30, 2015 . Excluding accruing TDRs, there was no interest income recognized for the investment in impaired loans for the six and three months ended June 30, 2015 . Interest income recognized for accruing TDRs was $5.1 million and $2.5 million for the six and three months ended June 30, 2015 . At June 30, 2016 and December 31, 2015 , impaired loans of $65.4 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 six and three months ended June 30, 2016 and 2015 that were reported as accruing or non-accruing TDRs. 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 (1 ) 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 acquisition 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 retail loans 10 — 94 1,449 1,543 Total retail 14 — 322 1,500 1,822 Total TDRs 49 $ — 7,872 4,118 11,990 (2 ) (1) No net charge-offs were recorded during the six months ended June 30, 2016 upon restructuring of these loans. (2) No net charge-offs were recorded during the three months ended June 30, 2016 upon restructuring of these loans. TDRs by Concession Type Six Months Ended June 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 4 $ — 16,932 3,815 20,747 1-4 family properties 21 14,823 3,358 879 19,060 Land acquisition 6 — 604 819 1,423 Total commercial real estate 31 14,823 20,894 5,513 41,230 Commercial, financial and agricultural 49 — 1,580 3,844 5,424 Owner-occupied 3 — 1,739 416 2,155 Total commercial and industrial 52 — 3,319 4,260 7,579 Home equity lines 48 — 2,517 2,148 4,665 Consumer mortgages 12 — 510 786 1,296 Credit cards — — — — — Other retail loans 13 — 257 495 752 Total retail 73 — 3,284 3,429 6,713 Total TDRs 156 $ 14,823 27,497 13,202 55,522 (3 ) Three Months Ended June 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 $ — — 211 211 1-4 family properties 8 — 502 729 1,231 Land acquisition 3 — 349 111 460 Total commercial real estate 12 — 851 1,051 1,902 Commercial, financial and agricultural 24 — 565 1,954 2,519 Owner-occupied 1 — — 416 416 Total commercial and industrial 25 — 565 2,370 2,935 Home equity lines 37 — 1,542 2,013 3,555 Consumer mortgages 1 — 265 — 265 Credit cards — — — — — Other retail loans 7 — — 431 431 Total retail 45 — 1,807 2,444 4,251 Total TDRs 82 $ — 3,223 5,865 9,088 (4 ) (3) Net charge-offs of $4.0 million were recorded during the six months ended June 30, 2015 upon restructuring of these loans. (4) No net charge-offs were recorded during the three months ended June 30, 2015 upon restructuring of these loans. For both the six and three months ended June 30, 2016 , there was one default with a recorded investment of $92 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 two defaults with a recorded investment of $115 thousand and no defaults, respectively, for the six and three months ended June 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 June 30, 2016 , the allowance for loan losses allocated to accruing TDRs totaling $205.2 million was $12.7 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. |