Loans and leases and the allowance for credit losses | 4. Loans and leases and the allowance for credit losses The outstanding principal balance and the carrying amount of acquired loans that were recorded at fair value at the acquisition date and included in the consolidated balance sheet follow: September 30, December 31, 2015 2014 (in thousands) Outstanding principal balance $ 2,410,454 3,070,268 Carrying amount: Commercial, financial, leasing, etc. 103,583 247,820 Commercial real estate 728,376 961,828 Residential real estate 385,885 453,360 Consumer 812,117 933,537 $ 2,029,961 2,596,545 Purchased impaired loans included in the table above totaled $149 million at September 30, 2015 and $198 million at December 31, 2014, representing less than 1% of the Company’s assets as of each date. A summary of changes in the accretable yield for acquired loans for the three months and nine months ended September 30, 2015 and 2014 follows: Three months ended September 30 2015 2014 Purchased Other Purchased Other impaired acquired impaired acquired (in thousands) Balance at beginning of period $ 77,624 344,989 $ 26,082 450,970 Interest income (5,865 ) (37,396 ) (4,149 ) (39,019 ) Reclassifications from nonaccretable balance 47 769 129 9,673 Other (a) — 4,697 — 1,870 Balance at end of period $ 71,806 313,059 $ 22,062 423,494 Nine months ended September 30 2015 2014 Purchased Other Purchased Other impaired acquired impaired acquired (in thousands) Balance at beginning of period $ 76,518 397,379 $ 37,230 538,633 Interest income (16,843 ) (118,697 ) (15,583 ) (135,105 ) Reclassifications from nonaccretable balance 12,131 27,792 415 10,448 Other (a) — 6,585 — 9,518 Balance at end of period $ 71,806 313,059 $ 22,062 423,494 (a) Other changes in expected cash flows including changes in interest rates and prepayment assumptions. A summary of current, past due and nonaccrual loans as of September 30, 2015 and December 31, 2014 follows: 30-89 90 Days or Purchased Nonaccrual Total Current Non- Acquired (in thousands) September 30, 2015 Commercial, financial, leasing, etc. $ 19,965,307 29,451 5,882 3,477 4,645 224,415 $ 20,233,177 Real estate: Commercial 23,184,906 105,140 21,629 17,906 45,523 176,491 23,551,595 Residential builder and developer 1,479,659 15,951 — 7,488 65,102 46,022 1,614,222 Other commercial construction 3,493,349 28,433 1,373 1,769 17,484 12,312 3,554,720 Residential 7,323,813 206,044 194,280 16,295 14,392 153,354 7,908,178 Residential Alt-A 226,871 11,662 — — — 64,351 302,884 Consumer: Home equity lines and loans 5,710,632 38,506 — 15,454 2,275 78,126 5,844,993 Automobile 2,319,556 36,867 — 53 — 13,892 2,370,368 Other 3,084,080 31,210 8,301 18,385 — 18,135 3,160,111 Total $ 66,788,173 503,264 231,465 80,827 149,421 787,098 $ 68,540,248 Current 30-89 90 Days or Purchased Nonaccrual Total Non- Acquired (in thousands) December 31, 2014 Commercial, financial, leasing, etc. $ 19,228,265 37,246 1,805 6,231 10,300 177,445 $ 19,461,292 Real estate: Commercial 22,208,491 118,704 22,170 14,662 51,312 141,600 22,556,939 Residential builder and developer 1,273,607 11,827 492 9,350 98,347 71,517 1,465,140 Other commercial construction 3,484,932 17,678 — — 17,181 25,699 3,545,490 Residential 7,640,368 226,932 216,489 35,726 18,223 180,275 8,318,013 Residential Alt-A 249,810 11,774 — — — 77,704 339,288 Consumer: Home equity lines and loans 5,859,378 42,945 — 27,896 2,374 89,291 6,021,884 Automobile 1,931,138 30,500 — 133 — 17,578 1,979,349 Other 2,909,791 33,295 4,064 16,369 — 18,042 2,981,561 Total $ 64,785,780 530,901 245,020 110,367 197,737 799,151 $ 66,668,956 (a) Acquired loans that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately. (b) Accruing loans that were impaired at acquisition date and were recorded at fair value. One-to-four family residential mortgage loans held for sale were $422 million and $435 million at September 30, 2015 and December 31, 2014, respectively. Commercial mortgage loans held for sale were $71 million at September 30, 2015 and $308 million at December 31, 2014. Changes in the allowance for credit losses for the three months ended September 30, 2015 were as follows: Commercial, Real Estate Commercial Residential Consumer Unallocated Total (in thousands) Beginning balance $ 286,750 311,294 60,294 194,238 77,411 $ 929,987 Provision for credit losses 21,507 1,879 (3,155 ) 24,448 (679 ) 44,000 Net charge-offs Charge-offs (26,912 ) (2,203 ) (3,268 ) (20,758 ) — (53,141 ) Recoveries 5,322 2,119 1,125 4,386 — 12,952 Net charge-offs (21,590 ) (84 ) (2,143 ) (16,372 ) — (40,189 ) Ending balance $ 286,667 313,089 54,996 202,314 76,732 $ 933,798 Changes in the allowance for credit losses for the three months ended September 30, 2014 were as follows: Commercial, Real Estate Commercial Residential Consumer Unallocated Total (in thousands) Beginning balance $ 292,251 311,254 72,404 165,871 75,886 $ 917,666 Provision for credit losses 2,373 8,046 (3,187 ) 21,815 (47 ) 29,000 Net charge-offs Charge-offs (15,921 ) (1,666 ) (4,193 ) (21,312 ) — (43,092 ) Recoveries 7,849 1,267 2,498 3,445 — 15,059 Net charge-offs (8,072 ) (399 ) (1,695 ) (17,867 ) — (28,033 ) Ending balance $ 286,552 318,901 67,522 169,819 75,839 $ 918,633 Changes in the allowance for credit losses for the nine months ended September 30, 2015 were as follows: Commercial, Real Estate Commercial Residential Consumer Unallocated Total (in thousands) Beginning balance $ 288,038 307,927 61,910 186,033 75,654 $ 919,562 Provision for credit losses 32,686 13,769 (571 ) 65,038 1,078 112,000 Net charge-offs Charge-offs (46,990 ) (12,352 ) (9,695 ) (64,542 ) — (133,579 ) Recoveries 12,933 3,745 3,352 15,785 — 35,815 Net charge-offs (34,057 ) (8,607 ) (6,343 ) (48,757 ) — (97,764 ) Ending balance $ 286,667 313,089 54,996 202,314 76,732 $ 933,798 Changes in the allowance for credit losses for the nine months ended September 30, 2014 were as follows: Commercial, Real Estate Commercial Residential Consumer Unallocated Total (in thousands) Beginning balance $ 273,383 324,978 78,656 164,644 75,015 $ 916,676 Provision for credit losses 40,527 (4,067 ) (916 ) 54,632 824 91,000 Net charge-offs Charge-offs (44,872 ) (7,966 ) (17,124 ) (62,407 ) — (132,369 ) Recoveries 17,514 5,956 6,906 12,950 — 43,326 Net charge-offs (27,358 ) (2,010 ) (10,218 ) (49,457 ) — (89,043 ) Ending balance $ 286,552 318,901 67,522 169,819 75,839 $ 918,633 Despite the above allocation, the allowance for credit losses is general in nature and is available to absorb losses from any loan or lease type. In establishing the allowance for credit losses, the Company estimates losses attributable to specific troubled credits identified through both normal and detailed or intensified credit review processes and also estimates losses inherent in other loans and leases on a collective basis. For purposes of determining the level of the allowance for credit losses, the Company evaluates its loan and lease portfolio by loan type. The amounts of loss components in the Company’s loan and lease portfolios are determined through a loan-by-loan analysis of larger balance commercial loans and commercial real estate loans that are in nonaccrual status and by applying loss factors to groups of loan balances based on loan type and management’s classification of such loans under the Company’s loan grading system. Measurement of the specific loss components is typically based on expected future cash flows, collateral values and other factors that may impact the borrower’s ability to pay. In determining the allowance for credit losses, the Company utilizes a loan grading system which is applied to commercial and commercial real estate credits on an individual loan basis. Loan officers are responsible for assigning grades to these loans based on standards outlined in the Company’s Credit Policy. Internal loan grades are also monitored by the Company’s loan review department to ensure consistency and strict adherence to the prescribed standards. Loan grades are assigned loss component factors that reflect the Company’s loss estimate for each group of loans and leases. Factors considered in assigning loan grades and loss component factors include borrower-specific information related to expected future cash flows and operating results, collateral values, geographic location, financial condition and performance, payment status, and other information; levels of and trends in portfolio charge-offs and recoveries; levels of and trends in portfolio delinquencies and impaired loans; changes in the risk profile of specific portfolios; trends in volume and terms of loans; effects of changes in credit concentrations; and observed trends and practices in the banking industry. As updated appraisals are obtained on individual loans or other events in the market place indicate that collateral values have significantly changed, individual loan grades are adjusted as appropriate. Changes in other factors cited may also lead to loan grade changes at any time. Except for consumer loans and residential real estate loans that are considered smaller balance homogenous loans and acquired loans that are evaluated on an aggregated basis, the Company considers a loan to be impaired for purposes of applying GAAP when, based on current information and events, it is probable that the Company will be unable to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days. Regardless of loan type, the Company considers a loan to be impaired if it qualifies as a troubled debt restructuring. Modified loans, including smaller balance homogenous loans, that are considered to be troubled debt restructurings are evaluated for impairment giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows. Information with respect to loans and leases that were considered impaired follows. September 30, 2015 December 31, 2014 Recorded Unpaid Related Recorded Unpaid Related (in thousands) With an allowance recorded: Commercial, financial, leasing, etc. $ 144,051 166,877 35,195 132,340 165,146 31,779 Real estate: Commercial 105,561 122,369 18,932 83,955 96,209 14,121 Residential builder and developer 6,544 10,276 788 17,632 22,044 805 Other commercial construction 2,445 3,991 391 5,480 6,484 900 Residential 83,349 101,367 4,775 88,970 107,343 4,296 Residential Alt-A 93,168 107,075 8,500 101,137 114,565 11,000 Consumer: Home equity lines and loans 23,257 24,239 3,541 19,771 20,806 6,213 Automobile 23,985 23,985 5,118 30,317 30,317 8,070 Other 18,870 18,870 5,486 18,973 18,973 5,459 501,230 579,049 82,726 498,575 581,887 82,643 With no related allowance recorded: Commercial, financial, leasing, etc. 111,023 133,100 — 73,978 81,493 — Real estate: Commercial 77,147 84,677 — 66,777 78,943 — Residential builder and developer 42,800 68,906 — 58,820 96,722 — Other commercial construction 10,307 28,480 — 20,738 41,035 — Residential 16,232 26,626 — 16,815 26,750 — Residential Alt-A 20,891 35,836 — 26,752 46,964 — 278,400 377,625 — 263,880 371,907 — Total: Commercial, financial, leasing, etc. 255,074 299,977 35,195 206,318 246,639 31,779 Real estate: Commercial 182,708 207,046 18,932 150,732 175,152 14,121 Residential builder and developer 49,344 79,182 788 76,452 118,766 805 Other commercial construction 12,752 32,471 391 26,218 47,519 900 Residential 99,581 127,993 4,775 105,785 134,093 4,296 Residential Alt-A 114,059 142,911 8,500 127,889 161,529 11,000 Consumer: Home equity lines and loans 23,257 24,239 3,541 19,771 20,806 6,213 Automobile 23,985 23,985 5,118 30,317 30,317 8,070 Other 18,870 18,870 5,486 18,973 18,973 5,459 Total $ 779,630 956,674 82,726 762,455 953,794 82,643 Three months ended Three months ended Interest income Interest income Average Total Cash Average Total Cash (in thousands) Commercial, financial, leasing, etc. $ 242,157 1,017 1,017 228,749 611 611 Real estate: Commercial 179,327 2,327 2,327 189,952 821 821 Residential builder and developer 53,009 81 81 90,493 18 18 Other commercial construction 17,236 1,943 1,943 58,500 251 251 Residential 99,939 1,835 1,316 104,516 1,328 776 Residential Alt-A 116,191 1,539 618 131,574 1,643 681 Consumer: Home equity lines and loans 21,952 231 66 19,268 219 81 Automobile 24,429 391 39 33,666 528 67 Other 19,238 188 23 18,677 177 44 Total $ 773,478 9,552 7,430 875,395 5,596 3,350 Nine months ended Nine months ended Interest income Interest income Average Total Cash Average Total Cash (in thousands) Commercial, financial, leasing, etc. $ 226,243 2,123 2,123 171,227 1,379 1,379 Real estate: Commercial 161,834 4,433 4,433 194,337 2,616 2,616 Residential builder and developer 64,165 275 275 94,453 131 131 Other commercial construction 22,130 2,166 2,166 74,531 1,694 1,694 Residential 101,997 4,639 3,011 132,606 7,784 6,146 Residential Alt-A 120,710 4,799 1,962 135,374 5,002 1,900 Consumer: Home equity lines and loans 20,619 656 179 17,902 540 182 Automobile 26,521 1,257 136 36,560 1,742 228 Other 19,053 547 86 18,229 517 145 Total $ 763,272 20,895 14,371 875,219 21,405 14,421 In determining the allowance for credit losses, residential real estate loans and consumer loans are generally evaluated collectively after considering such factors as payment performance and recent loss experience and trends, which are mainly driven by current collateral values in the market place as well as the amount of loan defaults. Loss rates on such loans are determined by reference to recent charge-off history and are evaluated (and adjusted if deemed appropriate) through consideration of other factors including near-term forecasted loss estimates developed by the Company’s Credit Department. In arriving at such forecasts, the Company considers the current estimated fair value of its collateral based on geographical adjustments for home price depreciation/appreciation and overall borrower repayment performance. With regard to collateral values, the realizability of such values by the Company contemplates repayment of any first lien position prior to recovering amounts on a second lien position. However, residential real estate loans and outstanding balances of home equity loans and lines of credit that are more than 150 days past due are generally evaluated for collectibility on a loan-by-loan basis giving consideration to estimated collateral values. The carrying value of residential real estate loans and home equity loans and lines of credit for which a partial charge-off has been recognized aggregated $59 million and $20 million, respectively, at September 30, 2015 and $63 million and $18 million, respectively, at December 31, 2014. Residential real estate loans and home equity loans and lines of credit that were more than 150 days past due but did not require a partial charge-off because the net realizable value of the collateral exceeded the outstanding customer balance totaled $20 million and $28 million, respectively, at September 30, 2015 and $27 million and $28 million, respectively, at December 31, 2014. In accordance with the previously described policies, the Company utilizes a loan grading system that is applied to all commercial loans and commercial real estate loans. Loan grades are utilized to differentiate risk within the portfolio and consider the expectations of default for each loan. Commercial loans and commercial real estate loans with a lower expectation of default are assigned one of ten possible “pass” loan grades and are generally ascribed lower loss factors when determining the allowance for credit losses. Loans with an elevated level of credit risk are classified as “criticized” and are ascribed a higher loss factor when determining the allowance for credit losses. Criticized loans may be classified as “nonaccrual” if the Company no longer expects to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more. All larger balance criticized commercial loans and commercial real estate loans are individually reviewed by centralized loan review personnel each quarter to determine the appropriateness of the assigned loan grade, including whether the loan should be reported as accruing or nonaccruing. Smaller balance criticized loans are analyzed by business line risk management areas to ensure proper loan grade classification. Furthermore, criticized nonaccrual commercial loans and commercial real estate loans are considered impaired and, as a result, specific loss allowances on such loans are established within the allowance for credit losses to the extent appropriate in each individual instance. The following table summarizes the loan grades applied to the various classes of the Company’s commercial loans and commercial real estate loans. Real Estate Commercial, Residential Other Financial, Builder and Commercial Leasing, etc. Commercial Developer Construction (in thousands) September 30, 2015 Pass $ 19,223,102 22,479,501 1,507,057 3,447,841 Criticized accrual 785,660 895,603 61,143 94,567 Criticized nonaccrual 224,415 176,491 46,022 12,312 Total $ 20,233,177 23,551,595 1,614,222 3,554,720 December 31, 2014 Pass $ 18,695,440 21,837,022 1,347,778 3,347,522 Criticized accrual 588,407 578,317 45,845 172,269 Criticized nonaccrual 177,445 141,600 71,517 25,699 Total $ 19,461,292 22,556,939 1,465,140 3,545,490 The Company also measures additional losses for purchased impaired loans when it is probable that the Company will be unable to collect all cash flows expected at acquisition plus additional cash flows expected to be collected arising from changes in estimates after acquisition. The determination of the allocated portion of the allowance for credit losses is very subjective. Given that inherent subjectivity and potential imprecision involved in determining the allocated portion of the allowance for credit losses, the Company also provides an inherent unallocated portion of the allowance. The unallocated portion of the allowance is intended to recognize probable losses that are not otherwise identifiable and includes management’s subjective determination of amounts necessary to provide for the possible use of imprecise estimates in determining the allocated portion of the allowance. Therefore, the level of the unallocated portion of the allowance is primarily reflective of the inherent imprecision in the various calculations used in determining the allocated portion of the allowance for credit losses. Other factors that could also lead to changes in the unallocated portion include the effects of expansion into new markets for which the Company does not have the same degree of familiarity and experience regarding portfolio performance in changing market conditions, the introduction of new loan and lease product types, and other risks associated with the Company’s loan portfolio that may not be specifically identifiable. The allocation of the allowance for credit losses summarized on the basis of the Company’s impairment methodology was as follows: Commercial, Financial, Real Estate Leasing, etc. Commercial Residential Consumer Total (in thousands) September 30, 2015 Individually evaluated for impairment $ 35,195 19,743 13,275 14,145 $ 82,358 Collectively evaluated for impairment 250,271 292,214 39,804 186,706 768,995 Purchased impaired 1,201 1,132 1,917 1,463 5,713 Allocated $ 286,667 313,089 54,996 202,314 857,066 Unallocated 76,732 Total $ 933,798 December 31, 2014 Individually evaluated for impairment $ 31,779 15,490 14,703 19,742 $ 81,714 Collectively evaluated for impairment 251,607 291,244 45,061 165,140 753,052 Purchased impaired 4,652 1,193 2,146 1,151 9,142 Allocated $ 288,038 307,927 61,910 186,033 843,908 Unallocated 75,654 Total $ 919,562 The recorded investment in loans and leases summarized on the basis of the Company’s impairment methodology was as follows: Commercial, Financial, Real Estate Leasing, etc. Commercial Residential Consumer Total (in thousands) September 30, 2015 Individually evaluated for impairment $ 255,074 243,743 213,640 66,112 $ 778,569 Collectively evaluated for impairment 19,973,458 28,348,685 7,983,030 11,307,085 67,612,258 Purchased impaired 4,645 128,109 14,392 2,275 149,421 Total $ 20,233,177 28,720,537 8,211,062 11,375,472 $ 68,540,248 December 31, 2014 Individually evaluated for impairment $ 206,318 252,347 232,398 69,061 $ 760,124 Collectively evaluated for impairment 19,244,674 27,148,382 8,406,680 10,911,359 65,711,095 Purchased impaired 10,300 166,840 18,223 2,374 197,737 Total $ 19,461,292 27,567,569 8,657,301 10,982,794 $ 66,668,956 During the normal course of business, the Company modifies loans to maximize recovery efforts. If the borrower is experiencing financial difficulty and a concession is granted, the Company considers such modifications as troubled debt restructurings and classifies those loans as either nonaccrual loans or renegotiated loans. The types of concessions that the Company grants typically include principal deferrals and interest rate concessions, but may also include other types of concessions. The tables below summarize the Company’s loan modification activities that were considered troubled debt restructurings for the three months ended September 30, 2015 and 2014: Recorded investment Financial effects of Three months ended September 30, 2015 Number Pre- Post- Recorded Interest (dollars in thousands) Commercial, financial, leasing, etc. Principal deferral 36 $ 7,893 $ 7,419 $ (474 ) $ — Combination of concession types 1 31 31 — (6 ) Real estate: Commercial Principal deferral 15 4,230 4,208 (22 ) — Combination of concession types 1 1,156 1,169 13 (54 ) Other commercial construction Principal deferral 3 296 390 94 — Residential Principal deferral 31 3,540 3,743 203 — Other 1 267 267 — — Combination of concession types 10 1,296 1,380 84 (178 ) Residential Alt-A Principal deferral 1 265 276 11 — Combination of concession types 4 605 662 57 (91 ) Consumer: Home equity lines and loans Principal deferral 4 727 727 — — Combination of concession types 22 2,003 2,003 — (199 ) Automobile Principal deferral 35 316 316 — — Other 15 93 93 — — Combination of concession types 25 471 471 — (17 ) Other Principal deferral 24 352 352 — — Other 5 33 33 — — Combination of concession types 12 117 117 — (12 ) Total 245 $ 23,691 $ 23,657 $ (34 ) $ (557 ) (a) Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages. (b) Represents the present value of interest rate concessions discounted at the effective rate of the original loan. Recorded investment Financial effects of Three months ended September 30, 2014 Number Pre- Post- Recorded Interest (dollars in thousands) Commercial, financial, leasing, etc. Principal deferral 15 $ 1,305 $ 1,300 $ (5 ) $ — Real estate: Commercial Principal deferral 8 2,081 2,068 (13 ) — Other 1 650 — (650 ) — Combination of concession types 4 483 478 (5 ) (95 ) Residential builder and developer Principal deferral 1 241 241 — — Other commercial construction Principal deferral 1 145 142 (3 ) — Residential Principal deferral 3 98 97 (1 ) — Combination of concession types 8 1,100 1,136 36 (135 ) Residential Alt-A Combination of concession types 3 349 369 20 (64 ) Consumer: Home equity lines and loans Combination of concession types 5 519 519 — (67 ) Automobile Principal deferral 45 1,003 1,003 — — Interest rate reduction 3 30 30 — (2 ) Other 7 96 96 — — Combination of concession types 19 348 348 — (21 ) Other Principal deferral 6 48 48 — — Interest rate reduction 1 2 2 — — Combination of concession types 24 511 511 — (121 ) Total 154 $ 9,009 $ 8,388 $ (621 ) $ (505 ) (a) Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages. (b) Represents the present value of interest rate concessions discounted at the effective rate of the original loan. The tables below summarize the Company’s loan modification activities that were considered troubled debt restructurings for the nine months ended September 30, 2015 and 2014: Recorded investment Financial effects of Nine months ended September 30, 2015 Number Pre- Post- Recorded Interest (dollars in thousands) Commercial, financial, leasing, etc. Principal deferral 87 $ 25,483 $ 24,331 $ (1,152 ) $ — Interest rate reduction 1 99 99 — (19 ) Other 2 8,991 8,883 (108 ) — Combination of concession types 6 25,075 24,884 (191 ) (245 ) Real estate: Commercial Principal deferral 37 47,005 45,569 (1,436 ) — Combination of concession types 6 3,238 3,242 4 (159 ) Residential builder and developer Principal deferral 2 10,650 10,598 (52 ) — Other commercial construction Principal deferral 3 296 390 94 — Residential Principal deferral 50 4,954 5,239 285 — Other 1 267 267 — — Combination of concession types 22 2,551 2,795 244 (356 ) Residential Alt-A Principal deferral 2 426 437 11 — Combination of concession types 7 1,239 1,298 59 (121 ) Consumer: Home equity lines and loans Principal deferral 6 1,946 1,946 — — Combination of concession types 41 3,555 3,555 — (424 ) Automobile Principal deferral 133 1,234 1,234 — — Interest rate reduction 7 137 137 — (10 ) Other 38 134 134 — — Combination of concession types 42 693 693 — (28 ) Other Principal deferral 73 1,418 1,418 — — Other 12 113 113 — — Combination of concession types 35 384 384 — (44 ) Total 613 $ 139,888 $ 137,646 $ (2,242 ) $ (1,406 ) (a) Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages. (b) Represents the present value of interest rate concessions discounted at the effective rate of the original loan. Recorded investment Financial effects of Nine months ended September 30, 2014 Number Pre- Post- Recorded Interest (dollars in thousands) Commercial, financial, leasing, etc. Principal deferral 66 $ 20,673 $ 20,499 $ (174 ) $ — Other 1 19,593 19,593 — — Combination of concession types 5 9,836 9,766 (70 ) (14 ) Real estate: Commercial Principal deferral 32 17,452 17,384 (68 ) — Other 1 650 — (650 ) — Interest rate reduction 1 255 252 (3 ) (48 ) Combination of concession types 6 892 940 48 (208 ) Residential builder and developer Principal deferral 2 1,639 1,639 — — Other commercial construction Principal deferral 4 6,703 6,611 (92 ) — Residential Principal deferral 19 1,842 1,926 84 — Interest rate reduction 1 98 104 6 (32 ) Other 1 188 188 — — Combination of concession types 30 4,211 4,287 76 (483 ) Residential Alt-A Principal deferral 5 828 900 72 — Combination of concession types 19 3,101 3,134 33 (345 ) Consumer: Home equity lines and loans Principal deferral 3 280 280 — — Interest rate reduction 5 341 341 — (76 ) Combination of concession types 41 4,147 4,147 — (443 ) Automobile Principal deferral 168 2,599 2,599 — — Interest rate reduction 6 90 90 — (5 ) Other 26 204 204 — — Combination of concession types 65 939 939 — (83 ) Other Principal deferral 21 141 141 — — Interest rate reduction 4 293 293 — (63 ) Other 1 45 45 — — Combination of concession types 57 1,883 1,883 — (585 ) Total 590 $ 98,923 $ 98,185 $ (738 ) $ (2,385 ) (a) Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages. (b) Represents the present value of interest rate concessions discounted at the effective rate of the original loan. Troubled debt restructurings are considered to be impaired loans and for purposes of establishing the allowance for credit losses are evaluated for impairment giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows. Impairment of troubled debt restructurings that have subsequently defaulted may also be measured based on the loan’s observable market price or the fair value of collateral if the loan is collateral-dependent. Charge-offs may also be recognized on troubled debt restructurings that have subsequently defaulted. Loans that were modified as troubled debt restructurings during the twelve months ended September 30, 2015 and 2014 and for which there was a subsequent payment default during the nine-month periods ended September 30, 2015 and 2014, respectively, were not material. Effective January 1, 2015, the Company adopted amended accounting and disclosure guidance for reclassification of residential real estate collateralized consumer mortgage loans upon foreclosure. The amended guidance clarifies that an in-substance repossession or foreclosure occurs and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The adoption resulted in an insignificant increase in other real estate owned. The amount of foreclosed residential real estate property held by the Company was $43 million and $44 million at September 30, 2015 and December 31, 2014, respectively. At September 30, 2015, there were $151 million in loans secured by residential real estate that were in the process of foreclosure. |