Loans | Loans The period end loan composition was as follows: ($ in Thousands) June 30, 2020 December 31, 2019 PPP $ 1,012,033 $ — Commercial and industrial 7,968,709 7,354,594 Commercial real estate — owner occupied 914,385 911,265 Commercial and business lending 9,895,127 8,265,858 Commercial real estate — investor 4,174,125 3,794,517 Real estate construction 1,708,189 1,420,900 Commercial real estate lending 5,882,314 5,215,417 Total commercial 15,777,441 13,481,275 Residential mortgage 7,933,518 8,136,980 Home equity 795,671 852,025 Other consumer 326,040 351,159 Total consumer 9,055,230 9,340,164 Total loans $ 24,832,671 $ 22,821,440 Accrued interest receivable on loans totaled $60 million at June 30, 2020, and $63 million at December 31, 2019 and is included in interest receivable on the consolidated balance sheets. Interest accrued but not received for loans placed on nonaccrual is reversed against interest income. The amount of accrued interest reversed totaled $1 million for both the three and six months ended June 30, 2020. The following table presents commercial and consumer loans by credit quality indicator by vintage year at June 30, 2020: Term Loans Amortized Cost Basis by Origination Year (a) ($ in Thousands) Rev Loans Converted to Term (a) Rev Loans Amortized Cost Basis YTD 2020 2019 2018 2017 2016 Prior Total PPP: (b) Risk rating: Pass $ — $ — $ 985,462 $ — $ — $ — $ — $ — $ 985,462 Special Mention — — 7,409 — — — — — 7,409 Potential Problem — — 19,161 — — — — — 19,161 Paycheck Protection Program $ — $ — $ 1,012,033 $ — $ — $ — $ — $ — $ 1,012,033 Commercial and industrial: Risk rating: Pass $ 20 $ 1,832,797 $ 929,266 $ 1,759,308 $ 1,650,024 $ 597,967 $ 361,006 $ 531,995 $ 7,662,364 Special Mention — 12,802 379 23,783 7,299 15 5,541 17 49,836 Potential Problem (c) 517 12,963 17,235 16,544 66,699 52,176 8,492 2,162 176,270 Nonaccrual (d) 14,465 — 1,597 7,140 188 24,550 16,624 30,141 80,239 Commercial and industrial $ 15,003 $ 1,858,562 $ 948,477 $ 1,806,776 $ 1,724,210 $ 674,708 $ 391,662 $ 564,314 $ 7,968,709 Commercial real estate - owner occupied: Risk rating: Pass $ 1,150 $ 17,897 $ 94,106 $ 213,234 $ 131,748 $ 121,963 $ 166,366 $ 111,790 $ 857,103 Special Mention — — 2,450 16,317 12,776 128 2,439 5,321 39,432 Potential Problem — 77 661 1,409 1,923 2,461 6,106 3,281 15,919 Nonaccrual — — — — 223 335 — 1,374 1,932 Commercial real estate - owner occupied $ 1,150 $ 17,973 $ 97,217 $ 230,960 $ 146,670 $ 124,887 $ 174,911 $ 121,768 $ 914,385 Commercial and business lending: Risk rating: Pass $ 1,170 $ 1,850,694 $ 2,008,834 $ 1,972,542 $ 1,781,772 $ 719,930 $ 527,371 $ 643,786 $ 9,504,929 Special Mention — 12,802 10,239 40,100 20,075 143 7,979 5,338 96,677 Potential Problem (c) 517 13,040 37,058 17,953 68,622 54,637 14,598 5,443 211,350 Nonaccrual (d) 14,465 — 1,597 7,140 411 24,884 16,624 31,515 82,171 Commercial and business lending $ 16,153 $ 1,876,535 $ 2,057,727 $ 2,037,736 $ 1,870,880 $ 799,595 $ 566,572 $ 686,082 $ 9,895,127 Commercial real estate - investor: Risk rating: Pass $ — $ 176,047 $ 847,031 $ 1,083,145 $ 836,244 $ 378,098 $ 400,279 $ 288,644 $ 4,009,488 Special Mention — — 12,886 4,869 17,098 3,686 17,180 9,509 65,228 Potential Problem — 803 14,703 52,762 3,313 314 1,796 14,547 88,237 Nonaccrual 446 — 395 10,256 446 — — 75 11,172 Commercial real estate - investor $ 446 $ 176,850 $ 875,014 $ 1,151,033 $ 857,101 $ 382,098 $ 419,255 $ 312,775 $ 4,174,125 Real estate construction: Risk rating: Pass $ — $ 67,584 $ 279,683 $ 810,738 $ 434,146 $ 69,790 $ 3,095 $ 22,066 $ 1,687,100 Special Mention — — — — 18,402 — — 12 18,414 Potential Problem — — — 211 358 1,557 — 45 2,170 Nonaccrual — — — — — — — 503 503 Real estate construction $ — $ 67,584 $ 279,683 $ 810,949 $ 452,906 $ 71,346 $ 3,095 $ 22,627 $ 1,708,189 Commercial real estate lending: Risk rating: Pass $ — $ 243,630 $ 1,126,713 $ 1,893,883 $ 1,270,390 $ 447,888 $ 403,374 $ 310,710 $ 5,696,589 Special Mention — — 12,886 4,869 35,500 3,686 17,180 9,522 83,643 Potential Problem — 803 14,703 52,973 3,670 1,870 1,796 14,592 90,407 Nonaccrual 446 — 395 10,256 446 — — 578 11,675 Commercial real estate lending $ 446 $ 244,433 $ 1,154,696 $ 1,961,982 $ 1,310,007 $ 453,444 $ 422,349 $ 335,402 $ 5,882,314 Term Loans Amortized Cost Basis by Origination Year (a) ($ in Thousands) Rev Loans Converted to Term (a) Rev Loans Amortized Cost Basis YTD 2020 2019 2018 2017 2016 Prior Total Total commercial: Risk rating: Pass $ 1,170 $ 2,094,324 $ 3,135,547 $ 3,866,425 $ 3,052,162 $ 1,167,818 $ 930,746 $ 954,496 $ 15,201,517 Special Mention — 12,802 23,125 44,969 55,576 3,829 25,159 14,860 180,320 Potential Problem 517 13,843 51,760 70,927 72,292 56,507 16,393 20,035 301,758 Nonaccrual 14,911 — 1,992 17,397 857 24,884 16,624 32,093 93,846 Total commercial $ 16,599 $ 2,120,969 $ 3,212,424 $ 3,999,718 $ 3,180,887 $ 1,253,039 $ 988,922 $ 1,021,484 $ 15,777,441 Residential mortgage: Risk rating: Pass $ — $ 90 $ 943,953 $ 1,726,616 $ 766,921 $ 1,274,176 $ 1,160,820 $ 1,990,617 $ 7,863,194 Special Mention — — — — 270 — 36 206 511 Potential Problem — — 780 707 205 212 226 1,028 3,157 Nonaccrual — — 1,758 3,659 6,953 8,434 10,798 35,055 66,656 Residential mortgage $ — $ 90 $ 946,490 $ 1,730,982 $ 774,348 $ 1,282,822 $ 1,171,880 $ 2,026,905 $ 7,933,518 Home equity: Risk rating: Pass $ 2,005 $ 631,366 $ 1,746 $ 16,439 $ 21,034 $ 15,073 $ 7,510 $ 88,904 $ 782,073 Special Mention 233 199 — — 16 24 — 610 849 Potential Problem — 1,775 — — — — — 146 1,921 Nonaccrual 586 673 297 124 491 387 233 8,623 10,829 Home equity $ 2,824 $ 634,013 $ 2,044 $ 16,564 $ 21,541 $ 15,484 $ 7,743 $ 98,282 $ 795,671 Other consumer: Risk rating: Pass $ 15 $ 168,601 $ 4,497 $ 14,764 $ 5,581 $ 2,811 $ 2,015 $ 126,920 $ 325,190 Special Mention 1 530 — 30 6 — — 7 574 Nonaccrual 7 84 10 53 22 — 78 30 276 Other consumer $ 22 $ 169,215 $ 4,507 $ 14,847 $ 5,610 $ 2,811 $ 2,094 $ 126,957 $ 326,040 Total consumer: Risk rating: Pass $ 2,020 $ 800,057 $ 950,196 $ 1,757,820 $ 793,537 $ 1,292,060 $ 1,170,346 $ 2,206,441 $ 8,970,456 Special Mention 234 729 — 30 292 24 36 823 1,934 Potential Problem — 1,775 780 707 205 212 226 1,174 5,078 Nonaccrual 593 757 2,065 3,836 7,466 8,821 11,110 43,707 77,761 Total consumer $ 2,846 $ 803,318 $ 953,041 $ 1,762,393 $ 801,499 $ 1,301,117 $ 1,181,717 $ 2,252,145 $ 9,055,230 Total loans: Risk rating: Pass $ 3,190 $ 2,894,381 $ 4,085,744 $ 5,624,245 $ 3,845,698 $ 2,459,878 $ 2,101,091 $ 3,160,936 $ 24,171,974 Special Mention 234 13,531 23,125 44,999 55,868 3,854 25,195 15,683 182,254 Potential Problem 517 15,618 52,540 71,634 72,497 56,719 16,619 21,209 306,836 Nonaccrual 15,504 757 4,056 21,232 8,323 33,705 27,733 75,800 171,607 Total loans $ 19,445 $ 2,924,286 $ 4,165,465 $ 5,762,111 $ 3,982,386 $ 2,554,155 $ 2,170,639 $ 3,273,628 $ 24,832,671 (a) Revolving loans converted to term loans are also reported in their year of origination (b) The Corporation’s policy is to assign risk ratings at the borrower level. PPP loans are 100% guaranteed by the SBA and therefore the Corporation considers these loans to have a risk profile similar to pass rated loans. (c) Includes $63 million of oil and gas related loans (d) Includes $50 million of oil and gas related loans The following table presents commercial and consumer loans by credit quality indicator at December 31, 2019 : ($ in Thousands) Pass Special Mention Potential Problem Nonaccrual Total Commercial and industrial $ 7,118,448 $ 79,525 $ 110,308 $ 46,312 $ 7,354,594 Commercial real estate - owner occupied 866,193 25,115 19,889 67 911,265 Commercial and business lending 7,984,641 104,641 130,197 46,380 8,265,858 Commercial real estate - investor 3,620,785 139,873 29,449 4,409 3,794,517 Real estate construction 1,420,374 33 — 493 1,420,900 Commercial real estate lending 5,041,159 139,906 29,449 4,902 5,215,417 Total commercial 13,025,800 244,547 159,646 51,282 13,481,275 Residential mortgage 8,077,122 563 1,451 57,844 8,136,980 Home equity 841,757 1,164 — 9,104 852,025 Other consumer 350,260 748 — 152 351,159 Total consumer 9,269,139 2,475 1,451 67,099 9,340,164 Total loans $ 22,294,939 $ 247,022 $ 161,097 $ 118,380 $ 22,821,440 Factors that are important to managing overall credit quality are sound loan underwriting and administration, systematic monitoring of existing loans and commitments, effective loan review on an ongoing basis, early identification of potential problems, and appropriate allowance for loan losses, allowance for unfunded commitments, nonaccrual, and charge off policies. For commercial loans, management has determined the pass credit quality indicator to include credits exhibiting acceptable financial statements, cash flow, and leverage. If any risk exists, it is mitigated by the loan structure, collateral, monitoring, or control. For consumer loans, performing loans include credits performing in accordance with the original contractual terms. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Special mention credits have potential weaknesses that deserve management’s attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the credit. Potential problem loans are considered inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged. These loans generally have a well-defined weakness, or weaknesses, which may jeopardize liquidation of the debt, and are characterized by the distinct possibility the Corporation will sustain some loss if the deficiencies are not corrected. Management has determined commercial loan relationships in nonaccrual status and commercial and consumer loan relationships with their terms restructured in a TDR meet the criteria to be individually evaluated. Commercial loans classified as special mention, potential problem, and nonaccrual are reviewed at a minimum on a quarterly basis, while pass and performing rated credits are generally reviewed on an annual basis or more frequently if the loan renewal is less than one year or if otherwise warranted. The following table presents loans by past due status at June 30, 2020: Accruing ($ in Thousands) Current (a) 30-59 Days 60-89 Days 90 Days or Nonaccrual (b)(c) Total PPP $ 1,012,033 $ — $ — $ — $ — $ 1,012,033 Commercial and industrial 7,887,369 274 442 385 80,239 7,968,709 Commercial real estate - owner occupied 912,254 199 — — 1,932 914,385 Commercial and business lending 9,811,656 473 442 385 82,171 9,895,127 Commercial real estate - investor 4,149,079 2,886 10,989 — 11,172 4,174,125 Real estate construction 1,707,300 373 12 — 503 1,708,189 Commercial real estate lending 5,856,379 3,259 11,001 — 11,675 5,882,314 Total commercial 15,668,035 3,732 11,443 385 93,846 15,777,441 Residential mortgage 7,863,839 2,789 233 — 66,656 7,933,518 Home equity 781,735 2,259 849 — 10,829 795,671 Other consumer 323,201 883 599 1,081 276 326,040 Total consumer 8,968,775 5,932 1,681 1,081 77,761 9,055,230 Total loans $ 24,636,810 $ 9,664 $ 13,125 $ 1,466 $ 171,607 $ 24,832,671 (a) Any deferred loans related to COVID-19 are considered current in accordance with Section 4013 of the CARES Act. (b) Of the total nonaccrual loans, $117 million, or 68%, were current with respect to payment at June 30, 2020. (c) No interest income was recognized on nonaccrual loans for both the three and six months ended June 30, 2020. In addition, there were $91 million of nonaccrual loans for which there was no related ACLL at June 30, 2020. The following table presents loans by past due status at December 31, 2019: Accruing ($ in Thousands) Current 30-59 Days 60-89 Days 90 Days or Nonaccrual (a) Total Commercial and industrial $ 7,307,118 $ 576 $ 245 $ 342 $ 46,312 $ 7,354,594 Commercial real estate - owner occupied 909,828 1,369 — — 67 911,265 Commercial and business lending 8,216,947 1,945 245 342 46,380 8,265,858 Commercial real estate - investor 3,788,296 1,812 — — 4,409 3,794,517 Real estate construction 1,420,310 64 33 — 493 1,420,900 Commercial real estate lending 5,208,606 1,876 33 — 4,902 5,215,417 Total commercial 13,425,552 3,821 278 342 51,282 13,481,275 Residential mortgage 8,069,863 8,749 525 — 57,844 8,136,980 Home equity 837,274 4,483 1,164 — 9,104 852,025 Other consumer 347,007 1,135 949 1,917 152 351,159 Total consumer 9,254,144 14,366 2,638 1,917 67,099 9,340,164 Total loans $ 22,679,696 $ 18,188 $ 2,916 $ 2,259 $ 118,380 $ 22,821,440 (a) Of the total nonaccrual loans, $48 million, or 41%, were current with respect to payment at December 31, 2019. The following table presents impaired loans individually evaluated under ASC Topic 310, excluding $2 million of purchased credit-impaired loans, at December 31, 2019 : ($ in Thousands) Recorded Unpaid Related Average Interest Loans with a related allowance Commercial and industrial $ 47,249 $ 63,346 $ 12,010 $ 45,290 $ 1,832 Commercial real estate — owner occupied 1,676 1,682 19 1,774 88 Commercial and business lending 48,924 65,028 12,029 47,064 1,919 Commercial real estate — investor 928 2,104 15 950 15 Real estate construction 477 559 67 494 30 Commercial real estate lending 1,405 2,663 82 1,445 45 Total commercial 50,329 67,691 12,111 48,509 1,965 Residential mortgage 21,450 22,625 2,740 23,721 856 Home equity 3,076 3,468 1,190 3,756 191 Other consumer 1,247 1,249 125 1,250 1 Total consumer 25,773 27,342 4,055 28,726 1,047 Total loans with a related allowance $ 76,102 $ 95,033 $ 16,165 $ 77,235 $ 3,012 Loans with no related allowance Commercial and industrial $ 14,787 $ 33,438 $ — $ 20,502 $ 63 Commercial real estate — owner occupied — — — — — Commercial and business lending 14,787 33,438 — 20,502 63 Commercial real estate — investor 3,705 3,705 — 3,980 159 Real estate construction — — — — — Commercial real estate lending 3,705 3,705 — 3,980 159 Total commercial 18,491 37,142 — 24,482 222 Residential mortgage 14,104 14,461 — 10,962 373 Home equity 1,346 1,383 — 1,017 21 Other consumer — — — — — Total consumer 15,450 15,845 — 11,979 394 Total loans with no related allowance $ 33,941 $ 52,987 $ — $ 36,462 $ 616 Total Commercial and industrial $ 62,035 $ 96,784 $ 12,010 $ 65,792 $ 1,895 Commercial real estate — owner occupied 1,676 1,682 19 1,774 88 Commercial and business lending 63,711 98,466 12,029 67,566 1,982 Commercial real estate — investor 4,633 5,808 15 4,931 174 Real estate construction 477 559 67 494 30 Commercial real estate lending 5,110 6,367 82 5,425 204 Total commercial 68,820 104,833 12,111 72,991 2,186 Residential mortgage 35,554 37,087 2,740 34,683 1,229 Home equity 4,422 4,851 1,190 4,773 211 Other consumer 1,247 1,249 125 1,250 1 Total consumer 41,223 43,187 4,055 40,706 1,441 Total loans (a) $ 110,043 $ 148,020 $ 16,165 $ 113,697 $ 3,628 (a) The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 63% of the unpaid principal balance at December 31, 2019. Troubled Debt Restructurings Loans are considered restructured loans if concessions have been granted to borrowers that are experiencing financial difficulty. The following table presents nonaccrual and performing restructured loans by loan portfolio: June 30, 2020 December 31, 2019 ($ in Thousands) Performing Nonaccrual Restructured Loans (a) Performing Nonaccrual Restructured Loans (a) PPP $ — $ — $ — $ — Commercial and industrial 16,321 7,968 16,678 7,376 Commercial real estate — owner occupied 1,441 — 1,676 — Commercial real estate — investor 114 395 293 — Real estate construction 313 173 298 179 Residential mortgage 4,178 15,401 3,955 13,035 Home equity 1,717 1,424 1,896 1,904 Other consumer 1,219 — 1,246 1 Total restructured loans (b) $ 25,303 $ 25,362 $ 26,041 $ 22,494 (a) Nonaccrual restructured loans have been included within nonaccrual loans. (b) Does not include any restructured loans related to COVID-19 in accordance with Section 4013 of the CARES Act. The Corporation had a recorded investment of $8 million in loans modified in a TDR during the six months ended June 30, 2020, of which $1 million were in accrual status and $7 million were in nonaccrual pending a sustained period of repayment. Short-term loan modifications made in good faith to help ease the adverse effects of COVID-19 are not categorized as TDRs in accordance with regulatory guidance. The following table provides the number of loans modified in a TDR by loan portfolio, the recorded investment and unpaid principal balance for the six months ended June 30, 2020 and 2019: Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 ($ in Thousands) Number Recorded Investment (a) Unpaid Principal Balance (b) Number Recorded Investment (a) Unpaid Principal Balance (b) PPP — $ — $ — — $ — $ — Commercial and industrial 2 1,112 1,140 1 196 196 Commercial real estate — owner occupied 1 288 319 — — — Commercial real estate — investor 1 395 1,705 — — — Real estate construction 1 102 102 — — — Residential mortgage 24 5,163 5,237 38 5,665 5,682 Home equity 15 471 483 18 499 506 Other consumer — — — 1 10 10 Total loans modified 44 $ 7,531 $ 8,986 58 $ 6,370 $ 6,394 (a) Represents post-modification outstanding recorded investment. (b) Represents pre-modification outstanding recorded investment. Restructured loan modifications may include payment schedule modifications, interest rate concessions, maturity date extensions, modification of note structure (A/B Note), non-reaffirmed Chapter 7 bankruptcies, principal reduction, or some combination of these concessions. During the six months ended June 30, 2020, restructured loan modifications of commercial loans primarily included maturity date extensions and payment schedule modifications. Restructured loan modifications of consumer loans primarily included maturity date extensions, interest rate concessions, non-reaffirmed Chapter 7 bankruptcies, or a combination of these concessions for the six months ended June 30, 2020. The following table provides the number of loans modified in a TDR during the previous twelve months which subsequently defaulted during the six months ended June 30, 2020 and 2019 and the recorded investment in these restructured loans as of June 30, 2020 and 2019: Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 ($ in Thousands) Number of Recorded Number of Recorded Residential mortgage 5 $ 1,036 16 $ 2,813 Home equity 4 208 14 477 Total loans modified 9 $ 1,244 30 $ 3,290 All loans modified in a TDR are evaluated for impairment. The nature and extent of the impairment of restructured loans, including those which have experienced a subsequent payment default, are considered in the determination of an appropriate level of the ACLL. The Corporation analyzes loans for classification as a probable TDR. This analysis includes identifying customers that are showing possible liquidity issues in the near term without reasonable access to alternative sources of capital. At adoption of ASU 2016-13 on January 1, 2020, the Corporation had $114 million in loans meeting this classification compared to $102 million at June 30, 2020. Of the loans classified as probable TDRs at June 30, 2020, $76 million are within the oil and gas portfolio, while one loan with a balance of $26 million, is in general commercial and business lending. Allowance for Credit Losses on Loans The ACLL is comprised of the allowance for loan losses and the allowance for unfunded commitments. The level of the ACLL represents management’s estimate of an amount appropriate to provide for expected lifetime credit losses in the loan portfolio at the balance sheet date. A main factor in the determination of the ACLL is the economic forecast. The Corporation utilized the Moody's baseline forecast, updated during June 2020, in the allowance model. The forecast is applied over a 1 year reasonable and supportable period with immediate reversion to historical long run losses. The Corporation changed the reversion methodology during the first quarter of 2020 from straight-line over 1 year to immediate reversion due to the uncertainty within the economic forecasts due to COVID-19. The allowance for unfunded commitments is maintained at a level believed by management to be sufficient to absorb expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit). See Note 12 for additional information on the change in the allowance for unfunded commitments. The following table presents a summary of the changes in the ACLL by portfolio segment for the six months ended June 30, 2020: ($ in Thousands) Dec. 31, 2019 Cumulative effect of ASU 2016-13 adoption (CECL) Jan. 1, 2020 Charge offs Recoveries Net Charge offs Gross up of allowance for PCD loans at acquisition Provision recorded at acquisition Provision for loan losses June 30, 2020 ACLL / Loans Allowance for loan losses PPP $ — $ — $ — $ — $ — $ — $ — $ — $ 808 $ 808 Commercial and industrial 91,133 52,919 144,052 (42,183) 2,215 (39,968) 293 408 70,767 175,553 Commercial real estate — owner occupied 10,284 (1,851) 8,433 — 1 1 890 255 736 10,315 Commercial and business lending 101,417 51,068 152,485 (42,183) 2,216 (39,967) 1,183 663 72,311 186,676 Commercial real estate — investor 40,514 2,041 42,555 (140) 168 28 753 472 14,713 58,520 Real estate construction 24,915 7,467 32,382 (19) 27 8 435 492 5,076 38,393 Commercial real estate lending 65,428 9,508 74,937 (159) 195 36 1,188 964 19,789 96,913 Total commercial 166,846 60,576 227,422 (42,342) 2,412 (39,931) 2,371 1,627 92,101 283,590 Residential mortgage 16,960 33,215 50,175 (1,301) 174 (1,127) 651 403 (6,276) 43,825 Home equity 10,926 11,649 22,575 (1,213) 981 (232) 422 374 (1,677) 21,462 Other consumer 6,639 7,016 13,655 (2,802) 562 (2,240) 61 140 3,309 14,926 Total consumer 34,525 51,880 86,405 (5,316) 1,717 (3,599) 1,134 917 (4,644) 80,213 Total loans $ 201,371 $ 112,457 $ 313,828 $ (47,659) $ 4,129 $ (43,530) $ 3,504 $ 2,543 $ 87,457 $ 363,803 Allowance for unfunded commitments PPP $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial and industrial 12,276 (3,998) 8,278 — — — — 61 11,261 19,601 Commercial real estate — owner occupied 127 — 127 — — — — 4 93 224 Commercial and business lending 12,403 (3,998) 8,405 — — — — 65 11,354 19,824 Commercial real estate — investor 530 246 776 — — — — 2 (227) 550 Real estate construction 7,532 18,347 25,879 — — — — 45 11,956 37,880 Commercial real estate lending 8,062 18,593 26,655 — — — — 47 11,729 38,430 Total commercial 20,465 14,595 35,060 — — — — 112 23,084 58,256 Home equity 1,038 2,591 3,629 — — — — 66 152 3,846 Other consumer 405 1,504 1,909 — — — — — 766 2,675 Total consumer 1,443 4,095 5,538 — — — — 66 917 6,522 Total loans $ 21,907 $ 18,690 $ 40,597 $ — $ — $ — $ — $ 179 $ 24,000 $ 64,776 Allowance for credit losses on loans PPP $ — $ — $ — $ — $ — $ — $ — $ — $ 808 $ 808 0.08 % Commercial and industrial 103,409 48,921 152,330 (42,183) 2,215 (39,968) 293 469 82,028 195,155 2.45 % Commercial real estate — owner occupied 10,411 (1,851) 8,560 — 1 1 890 259 829 10,538 1.15 % Commercial and business lending 113,820 47,070 160,890 (42,183) 2,216 (39,967) 1,183 728 83,666 206,501 2.09 % Commercial real estate — investor 41,044 2,287 43,331 (140) 168 28 753 474 14,486 59,070 1.42 % Real estate construction 32,447 25,814 58,261 (19) 27 8 435 537 17,032 76,273 4.47 % Commercial real estate lending 73,490 28,101 101,591 (159) 195 36 1,188 1,011 31,518 135,343 2.30 % Total commercial 187,311 75,171 262,482 (42,342) 2,412 (39,931) 2,371 1,739 115,184 341,844 2.17 % Residential mortgage 16,960 33,215 50,175 (1,301) 174 (1,127) 651 403 (6,277) 43,826 0.55 % Home equity 11,964 14,240 26,204 (1,213) 981 (232) 422 440 (1,526) 25,308 3.18 % Other consumer 7,044 8,520 15,564 (2,802) 562 (2,240) 61 140 4,076 17,601 5.40 % Total consumer 35,968 55,975 91,943 (5,316) 1,717 (3,599) 1,134 983 (3,727) 86,735 0.96 % Total loans $ 223,278 $ 131,147 $ 354,425 $ (47,659) $ 4,129 $ (43,530) $ 3,504 $ 2,722 $ 111,457 $ 428,579 1.73 % The following table presents details of the allowance for loan losses segregated by loan portfolio segment as of December 31, 2019, calculated in accordance with prior incurred loss methodology applicable under ASC Topic 310: ($ in Thousands) December 31, 2018 Charge offs Recoveries Net Charge offs Provision for loan losses December 31, 2019 Allowance for loan losses Commercial and industrial $ 108,835 $ (63,315) $ 11,875 $ (51,441) $ 33,738 $ 91,133 Commercial real estate — owner occupied 9,255 (222) 2,795 2,573 (1,543) 10,284 Commercial and business lending 118,090 (63,537) 14,670 (48,868) 32,195 101,417 Commercial real estate — investor 40,844 — 31 31 (361) 40,514 Real estate construction 28,240 (60) 302 243 (3,568) 24,915 Commercial real estate lending 69,084 (60) 333 274 (3,929) 65,429 Total commercial 187,174 (63,597) 15,003 (48,594) 28,266 166,846 Residential mortgage 25,595 (3,322) 692 (2,630) (6,005) 16,960 Home equity 19,266 (1,846) 2,599 753 (9,093) 10,926 Other consumer 5,988 (5,548) 868 (4,681) 5,332 6,639 Total consumer 50,849 (10,716) 4,159 (6,558) (9,766) 34,525 Total loans $ 238,023 $ (74,313) $ 19,161 $ (55,152) $ 18,500 $ 201,371 A summary of the individually and collectively evaluated loans by portfolio segment at December 31, 2019, was as follows: Allowance for loan losses Loans ($ in Thousands) Individually evaluated for impairment Collectively evaluated for impairment Total allowance for loan losses Individually evaluated for impairment Collectively evaluated for impairment Acquired and accounted for under ASC 310-30 (a) Total loans Commercial and industrial $ 12,010 $ 79,123 $ 91,133 $ 62,035 $ 7,292,217 $ 342 $ 7,354,594 Commercial real estate — owner occupied 19 10,265 10,284 1,676 909,010 579 911,265 Commercial and business lending 12,029 89,388 101,417 63,711 8,201,227 921 8,265,858 Commercial real estate — investor 15 40,498 40,514 4,633 3,789,755 129 3,794,517 Real estate construction 67 24,848 24,915 477 1,420,416 7 1,420,900 Commercial real estate lending 82 65,346 65,429 5,110 5,210,171 136 5,215,417 Total commercial 12,111 154,734 166,846 68,821 13,411,398 1,057 13,481,275 Residential mortgage 2,740 14,220 16,960 35,554 8,100,958 469 8,136,980 Home equity 1,190 9,737 10,926 4,422 847,577 26 852,025 Other consumer 125 6,514 6,639 1,247 349,912 — 351,159 Total consumer 4,055 30,471 34,525 41,223 9,298,447 495 9,340,164 Total loans $ 16,165 $ 185,205 $ 201,371 $ 110,043 $ 22,709,845 $ 1,552 $ 22,821,440 (a) Loans acquired in business combinations and accounted for under ASC Subtopic 310-30 "Receivables — Loans and Debt Securities Acquired with Deteriorated Credit Quality." Loans Acquired in Acquisitions Loans acquired in a business combination after January 1, 2020 are recorded in accordance with ASC Topic 326. See Note 2 Acquisitions and Dispositions for more information on loans acquired in a business combination. After January 1, 2020, acquired loans were segregated into two types: • PCD loans are loans demonstrating more than insignificant credit deterioration since origination and are accounted for with ASC 326-30. Under this guidance, the credit mark on acquired assets grosses up the allowance for loan losses and the amortized cost of the loan. • Non-PCD loans are accounted for in accordance with ASC Topic 310-20 "Nonrefundable Fees and Other Costs" as these loans do not show evidence of credit deterioration since origination. Loans acquired in a business combination prior to January 1, 2020 were recorded at estimated fair value on their purchase date without a carryover of the related allowance for loan losses. Prior to January 1, 2020, acquired loans were segregated into two types: • Performing loans were accounted for in accordance with ASC Topic 310-20 "Nonrefundable Fees and Other Costs" as these loans do not have evidence of credit deterioration since origination. • Nonperforming loans were accounted for in accordance with ASC Topic 310-30 as they displayed significant credit deterioration since origination. |