Loans and Allowance for Credit Losses | NOTE 4 – LOANS AND LEASES AND ALLOWANCE FOR CREDIT LOSSES Loans and leases, net of unearned income Loans and leases, net of unearned income are summarized as follows as of December 31 : 2019 2018 (in thousands) Real estate – commercial mortgage $ 6,700,776 $ 6,434,285 Commercial – industrial, financial and agricultural 4,446,701 4,404,548 Real estate – residential mortgage 2,641,465 2,251,044 Real estate – home equity 1,314,944 1,452,137 Real estate – construction 971,079 916,599 Consumer 463,164 419,186 Equipment lease financing 322,625 311,866 Overdrafts 3,582 2,774 Loans and leases, gross of unearned income 16,864,336 16,192,439 Unearned income (26,810 ) (26,639 ) Loans and leases, net of unearned income $ 16,837,526 $ 16,165,800 The Corporation has extended credit to officers and directors of the Corporation and to their associates. These related-party loans are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than the normal risk of collection. The aggregate dollar amount of these loans, including unadvanced commitments, was $90.1 million and $116.4 million as of December 31, 2019 and 2018 , respectively. During 2019 , additions totaled $4.2 million and repayments totaled $30.5 million for related-party loans. Allowance for Credit Losses The following table presents the components of the allowance for credit losses as of December 31 : 2019 2018 2017 (in thousands) Allowance for loan and lease losses $ 163,622 $ 160,537 $ 169,910 Reserve for unfunded lending commitments 2,587 8,873 6,174 Allowance for credit losses $ 166,209 $ 169,410 $ 176,084 The following table presents the activity in the allowance for credit losses for the years ended December 31 : 2019 2018 2017 (in thousands) Balance at beginning of year $ 169,410 $ 176,084 $ 171,325 Loans and leases charged off (53,189 ) (66,076 ) (33,290 ) Recoveries of loans and leases previously charged off 17,163 12,495 14,744 Net loans and leases charged off (36,026 ) (53,581 ) (18,546 ) Provision for credit losses 32,825 46,907 23,305 Balance at end of year $ 166,209 $ 169,410 $ 176,084 The following tables present the activity in the allowance for loan and lease losses by portfolio segment for the years ended December 31 and loans and leases, net of unearned income, and their related allowance for loan and lease losses, by portfolio segment, as of December 31: Real Estate - Commercial - Real Estate - Real Estate - Real Estate - Consumer Equipment lease financing and other Total (in thousands) Balance at December 31, 2017 $ 58,793 $ 66,280 $ 18,127 $ 16,088 $ 6,620 $ 2,045 $ 1,957 $ 169,910 Loans and leases charged off (2,045 ) (52,441 ) (3,087 ) (1,574 ) (1,368 ) (3,040 ) (2,521 ) (66,076 ) Recoveries of loans and leases previously charged off 1,622 4,994 1,127 620 1,829 1,266 1,037 12,495 Net loans and leases (charged off) recovered (423 ) (47,447 ) (1,960 ) (954 ) 461 (1,774 ) (1,484 ) (53,581 ) Provision for loan and lease losses (1) (5,481 ) 40,035 2,744 3,787 (2,020 ) 2,946 2,197 44,208 Balance at December 31, 2018 52,889 58,868 18,911 18,921 5,061 3,217 2,670 160,537 Loans and leases charged off (1,837 ) (42,410 ) (1,291 ) (1,545 ) (143 ) (3,403 ) (2,560 ) (53,189 ) Recoveries of loans and leases previously charged off 2,202 8,721 688 989 2,591 1,306 666 17,163 Net loans and leases (charged off) recovered 365 (33,689 ) (603 ) (556 ) 2,448 (2,097 ) (1,894 ) (36,026 ) Provision for loan and lease losses (1) (7,644 ) 43,423 (564 ) 1,406 (3,066 ) 2,642 2,914 39,111 Balance at December 31, 2019 $ 45,610 $ 68,602 $ 17,744 $ 19,771 $ 4,443 $ 3,762 $ 3,690 $ 163,622 Allowance for loan and lease losses at December 31, 2019 Collectively evaluated for impairment $ 39,683 $ 58,487 $ 7,938 $ 10,562 $ 4,066 $ 3,756 $ 3,690 $ 128,182 Individually evaluated for impairment 5,927 10,115 9,806 9,209 377 6 — 35,440 $ 45,610 $ 68,602 $ 17,744 $ 19,771 $ 4,443 $ 3,762 $ 3,690 $ 163,622 Loans and leases, net of unearned income Collectively evaluated for impairment $ 6,654,280 $ 4,393,402 $ 1,292,872 $ 2,603,239 $ 967,461 $ 463,156 $ 282,869 $ 16,657,279 Individually evaluated for impairment 46,496 53,299 22,072 38,226 3,618 8 16,528 180,247 $ 6,700,776 $ 4,446,701 $ 1,314,944 $ 2,641,465 $ 971,079 $ 463,164 $ 299,397 $ 16,837,526 Allowance for loan and lease losses at December 31, 2018 Collectively evaluated for impairment $ 45,634 $ 46,355 $ 8,541 $ 9,527 $ 4,268 $ 3,210 $ 2,670 $ 120,205 Individually evaluated for impairment 7,255 12,513 10,370 9,394 793 7 — 40,332 $ 52,889 $ 58,868 $ 18,911 $ 18,921 $ 5,061 $ 3,217 $ 2,670 $ 160,537 Loans and leases, net of unearned income Collectively evaluated for impairment $ 6,388,212 $ 4,349,255 $ 1,428,764 $ 2,212,274 $ 909,209 $ 419,175 $ 268,733 $ 15,975,622 Individually evaluated for impairment 46,073 55,293 23,373 38,770 7,390 11 19,268 190,178 $ 6,434,285 $ 4,404,548 $ 1,452,137 $ 2,251,044 $ 916,599 $ 419,186 $ 288,001 $ 16,165,800 (1) For the year ended December 31, 2019 , the provision for loan and lease losses excluded a $6.3 million decrease in the reserve for unfunded lending commitments. The total provision for credit losses, comprised of allocations for both funded and unfunded loans, was $32.8 million for the year ended December 31, 2019 . For the year ended December 31, 2018 , the provision for loan losses excluded a $2.7 million increase in the reserve for unfunded lending commitments. The total provision for credit losses was $46.9 million for the year ended December 31, 2018 . N/A – Not applicable. Impaired Loans The following table presents total impaired loans and leases by class segment as of December 31 : 2019 2018 Unpaid Recorded Related Unpaid Recorded Related (in thousands) With no related allowance recorded: Real estate - commercial mortgage $ 25,005 $ 22,702 $ — $ 25,095 $ 23,481 $ — Commercial 53,533 30,208 — 33,493 26,585 — Real estate - residential mortgage 4,494 4,332 — 3,149 3,149 — Real estate - construction 6,338 2,487 — 8,980 5,083 — Equipment lease financing 19,269 16,528 — 19,269 19,268 — 108,639 76,257 89,986 77,566 With a related allowance recorded: Real estate - commercial mortgage 29,581 23,794 5,927 29,005 22,592 7,255 Commercial 37,992 23,091 10,115 37,706 28,708 12,513 Real estate - home equity 25,039 22,072 9,806 26,599 23,373 10,370 Real estate - residential mortgage 38,483 33,894 9,209 39,972 35,621 9,394 Real estate - construction 3,875 1,131 377 5,984 2,307 793 Consumer 8 8 6 11 11 7 134,978 103,990 35,440 139,277 112,612 40,332 Total $ 243,617 $ 180,247 $ 35,440 $ 229,263 $ 190,178 $ 40,332 As of December 31, 2019 and 2018 , there were $76.3 million and $77.6 million , respectively, of impaired loans and leases that did not have a related allowance for loan loss. The estimated fair values of the collateral securing these loans and leases exceeded their carrying amount, or the loans and leases have been charged down to realizable collateral values. Accordingly, no specific valuation allowance was considered to be necessary. The following table presents average impaired loans and leases, by class segment, for the years ended December 31 : 2019 2018 2017 Average Interest Income (1) Average Interest Income (1) Average Interest Income (1) (in thousands) With no related allowance recorded: Real estate - commercial mortgage $ 26,163 $ 368 $ 25,258 $ 368 $ 22,793 $ 281 Commercial 25,777 122 33,395 259 31,357 182 Real estate - residential mortgage 3,875 94 3,727 91 4,631 107 Real estate - construction 3,559 — 6,943 — 7,255 12 Equipment lease financing 17,814 — — — — — 77,188 584 69,323 718 66,036 582 With a related allowance recorded: Real estate - commercial mortgage 25,428 351 24,300 345 27,193 338 Commercial 25,717 126 24,888 185 24,112 137 Real estate - home equity 23,004 845 24,426 794 21,704 534 Real estate - residential mortgage 34,407 829 36,387 896 39,093 903 Real estate - construction 1,573 — 2,683 — 6,160 11 Consumer 9 — 16 1 33 2 Equipment lease financing 83 — 3,854 — 285 — 110,221 2,151 116,554 2,221 118,580 1,925 Total $ 187,409 $ 2,735 $ 185,877 $ 2,939 $ 184,616 $ 2,507 (1) All impaired loans and leases, excluding accruing TDRs, were non-accrual loans and leases. Interest income recognized for the years ended December 31, 2019, 2018 and 2017 represents amounts earned on accruing TDRs. Credit Quality Indicators and Non-performing Assets The following table presents internal credit risk ratings for the indicated loan class segments as of December 31 : Pass Special Mention Substandard or Lower Total 2019 2018 2019 2018 2019 2018 2019 2018 (dollars in thousands) Real estate - commercial mortgage $ 6,429,407 $ 6,129,463 $ 137,163 $ 170,827 $ 134,206 $ 133,995 $ 6,700,776 $ 6,434,285 Commercial - secured 3,830,847 3,902,484 171,442 193,470 195,884 129,026 4,198,173 4,224,980 Commercial -unsecured 234,987 171,589 9,665 4,016 3,876 3,963 248,528 179,568 Total commercial - industrial, financial and agricultural 4,065,834 4,074,073 181,107 197,486 199,760 132,989 4,446,701 4,404,548 Construction - commercial residential 100,808 104,079 2,897 6,912 3,461 6,881 107,166 117,872 Construction - commercial 765,562 723,030 1,322 1,163 2,676 2,533 769,560 726,726 Total construction (excluding construction - other) 866,370 827,109 4,219 8,075 6,137 9,414 876,726 844,598 Total $ 11,361,611 $ 11,030,645 $ 322,489 $ 376,388 $ 340,103 $ 276,398 $ 12,024,203 $ 11,683,431 % of Total 94.5 % 94.4 % 2.7 % 3.2 % 2.8 % 2.4 % 100.0 % 100.0 % The following table presents delinquency and non-performing status for loans and leases that did not have internal credit risk ratings, by class segment, as of December 31 : Performing Delinquent (1) Non-performing (2) Total 2019 2018 2019 2018 2019 2018 2019 2018 (dollars in thousands) Real estate - home equity $ 1,292,035 $ 1,431,666 $ 12,341 $ 10,702 $ 10,568 $ 9,769 $ 1,314,944 $ 1,452,137 Real estate - residential mortgage 2,584,763 2,202,955 34,291 28,988 22,411 19,101 2,641,465 2,251,044 Real estate - construction - other 92,649 71,511 895 — 809 490 94,353 72,001 Consumer - direct 63,582 55,629 465 338 190 66 64,237 56,033 Consumer - indirect 393,974 359,405 4,685 3,405 268 343 398,927 363,153 Total consumer 457,556 415,034 5,150 3,743 458 409 463,164 419,186 Equipment lease financing 278,743 267,112 4,012 1,302 16,642 19,587 299,397 288,001 Total $ 4,705,746 $ 4,388,278 $ 56,689 $ 44,735 $ 50,888 $ 49,356 $ 4,813,323 $ 4,482,369 % of Total 97.8 % 97.9 % 1.2 % 1.0 % 1.0 % 1.1 % 100.0 % 100.0 % (1) Includes all accruing loans and leases 30 days to 89 days past due. (2) Includes all accruing loans and leases 90 days or more past due and all non-accrual loans. The following table presents total non-performing assets as of December 31 : 2019 2018 (in thousands) Non-accrual loans and leases $ 125,098 $ 128,572 Loans and leases 90 days or more past due and still accruing 16,057 11,106 Total non-performing loans and leases 141,155 139,678 OREO 6,831 10,518 Total non-performing assets $ 147,986 $ 150,196 The following table presents past due status and non-accrual loans and leases, by portfolio segment and class segment, as of December 31 : 2019 30-59 60-89 ≥ 90 Days Past Due and Accruing Non- Current Total (in thousands) Real estate - commercial mortgage $ 10,912 $ 1,543 $ 4,113 $ 33,166 $ 6,651,042 $ 6,700,776 Commercial - secured 2,062 2,296 986 47,506 4,145,323 4,198,173 Commercial - unsecured 240 334 399 600 246,955 248,528 Total Commercial - industrial, financial and agricultural 2,302 2,630 1,385 48,106 4,392,278 4,446,701 Real estate - home equity 9,635 2,706 3,564 7,004 1,292,035 1,314,944 Real estate - residential mortgage 26,982 7,309 5,735 16,676 2,584,763 2,641,465 Construction - commercial — 900 — 19 768,641 769,560 Construction - commercial residential 820 — 64 3,414 102,868 107,166 Construction - other 895 — 624 185 92,649 94,353 Total Real estate - construction 1,715 900 688 3,618 964,158 971,079 Consumer - direct 278 187 190 — 63,582 64,237 Consumer - indirect 3,950 735 268 — 393,974 398,927 Total Consumer 4,228 922 458 — 457,556 463,164 Equipment lease financing 552 3,460 114 16,528 278,743 299,397 Total $ 56,326 $ 19,470 $ 16,057 $ 125,098 $ 16,620,575 $ 16,837,526 2018 30-59 60-89 ≥ 90 Days Past Due and Accruing Non- Current Total (in thousands) Real estate - commercial mortgage $ 12,206 $ 1,500 $ 1,765 $ 30,388 $ 6,388,426 $ 6,434,285 Commercial - secured 5,227 938 1,068 49,299 4,168,448 4,224,980 Commercial - unsecured 1,598 — 51 851 177,068 179,568 Total Commercial - industrial, financial and agricultural 6,825 938 1,119 50,150 4,345,516 4,404,548 Real estate - home equity 7,144 3,558 3,061 6,708 1,431,666 1,452,137 Real estate - residential mortgage 20,796 8,192 4,433 14,668 2,202,955 2,251,044 Construction - commercial — — — 19 726,707 726,726 Construction - commercial residential 2,489 — — 6,881 108,502 117,872 Construction - other — — — 490 71,511 72,001 Total Real estate - construction 2,489 — — 7,390 906,720 916,599 Consumer - direct 267 71 66 — 55,629 56,033 Consumer - indirect 2,908 497 343 — 359,405 363,153 Total Consumer 3,175 568 409 — 415,034 419,186 Equipment lease financing 1,005 297 319 19,268 267,112 288,001 Total $ 53,640 $ 15,053 $ 11,106 $ 128,572 $ 15,957,429 $ 16,165,800 The following table presents TDRs as of December 31 : 2019 2018 (in thousands) Real-estate - residential mortgage $ 21,551 $ 24,102 Real estate - home equity 15,068 16,665 Real-estate - commercial mortgage 13,330 15,685 Commercial 5,193 5,143 Consumer 8 10 Total accruing TDRs 55,150 61,605 Non-accrual TDRs (1) 20,825 28,659 Total TDRs $ 75,975 $ 90,264 (1) Included within non-accrual loans in the preceding table. The following table presents TDRs by class segment and type of concession for loans that were modified during the years ended December 31: 2019 2018 2017 Number of Loans Post-Modification Recorded Investment Number of Loans Post-Modification Recorded Investment Number of Loans Post-Modification Recorded Investment (dollars in thousands) Commercial 16 $ 5,378 8 $ 4,226 24 $ 15,548 Real estate - commercial mortgage 2 263 6 8,261 10 2,911 Real estate - home equity 59 2,706 96 5,087 97 7,656 Real estate - residential mortgage 6 2,252 7 801 10 1,904 Real estate - construction — — — — 2 1,615 Total 83 $ 10,599 117 $ 18,375 143 $ 29,634 The following table presents TDRs, by class segment, that were modified during the years ended December 31, 2019 , 2018 and 2017 that had a post-modification payment default during their respective year of modification. A payment default is defined as a single missed scheduled payment: 2019 2018 2017 Number of Loans Recorded Investment Number of Loans Recorded Investment Number of Loans Recorded Investment (dollars in thousands) Real estate -construction — — 2 448 4 2,152 Real estate - residential mortgage 2 521 5 717 5 577 Commercial 5 442 1 2,163 6 1,571 Real estate - home equity 18 1,003 30 1,635 25 1,575 Total 25 $ 1,966 38 $ 4,963 40 $ 5,875 |