LOANS | LOANS AND CREDIT QUALITY The following loan portfolio and credit quality disclosures exclude covered loans. Covered loans represent loans acquired through a Federal Deposit Insurance Corporation ("FDIC") assisted transaction that are subject to a loss share agreement and are presented separately in the Consolidated Statements of Financial Condition. Refer to the "Covered Assets" section in this footnote for further information regarding covered loans. Loan Portfolio (Amounts in thousands) September 30, December 31, Commercial and industrial $ 6,654,268 $ 5,996,070 Commercial - owner-occupied CRE 2,017,733 1,892,564 Total commercial 8,672,001 7,888,634 Commercial real estate 2,545,143 2,323,616 Commercial real estate - multi-family 704,195 593,103 Total commercial real estate 3,249,338 2,916,719 Construction 412,688 381,102 Residential real estate 439,005 361,565 Home equity 133,122 142,177 Personal 173,160 202,022 Total loans $ 13,079,314 $ 11,892,219 Net deferred loan fees and unamortized discount and premium on loans, included as a reduction in total loans $ 43,330 $ 47,017 Overdrawn demand deposits included in total loans $ 2,936 $ 1,963 We primarily lend to businesses and consumers in the market areas in which we have physical locations. We seek to diversify our loan portfolio by loan type, industry type for commercial and industrial loans, product type for commercial real estate and construction loans, and borrower. Loans Held-For-Sale (Amounts in thousands) September 30, December 31, Mortgage loans held-for-sale (1) $ 24,065 $ 42,215 Other loans held-for-sale (2) 52,160 72,946 Total loans held-for-sale $ 76,225 $ 115,161 (1) Comprised of residential mortgage loan originations intended to be sold in the secondary market. The Company accounts for these loans under the fair value option. Refer to Note 16 for additional information regarding mortgage loans held-for-sale. (2) Amounts at September 30, 2015 , represent commercial, commercial real estate and construction loans carried at the lower of aggregate cost or fair value. Generally, the Company intends to sell these loans within 30-60 days from the date the intent to sell was established. Amounts at December 31, 2014 , consist of $36.6 million of commercial, commercial real estate and construction loans carried at the lower of aggregate cost or fair value and $36.3 million of commercial, commercial real estate, construction, home equity and personal loans held-for-sale in connection with the sale of the Company's banking office located in Norcross, Georgia, which closed in January 2015. Carrying Value of Loans Pledged (Amounts in thousands) September 30, December 31, Loans pledged to secure outstanding borrowings or availability: FRB discount window borrowings (1) $ 416,573 $ 478,692 FHLB advances (2) 4,550,246 1,576,168 Total $ 4,966,819 $ 2,054,860 (1) No borrowings were outstanding at September 30, 2015 and December 31, 2014 . (2) Refer to Notes 7 and 8 for additional information regarding FHLB advances. Loan Portfolio Aging (Amounts in thousands) Delinquent Current 30 – 59 Days Past Due 60 – 89 Days Past Due 90 Days Past Due and Accruing Total Accruing Loans Nonaccrual Total Loans As of September 30, 2015 Commercial $ 8,649,998 $ 632 $ 3,001 $ — $ 8,653,631 $ 18,370 $ 8,672,001 Commercial real estate 3,236,785 351 161 — 3,237,297 12,041 3,249,338 Construction 412,688 — — — 412,688 — 412,688 Residential real estate 434,173 — 560 — 434,733 4,272 439,005 Home equity 123,278 321 250 — 123,849 9,273 133,122 Personal 171,990 932 212 — 173,134 26 173,160 Total loans $ 13,028,912 $ 2,236 $ 4,184 $ — $ 13,035,332 $ 43,982 $ 13,079,314 As of December 31, 2014 Commercial $ 7,855,833 $ 762 $ 992 $ — $ 7,857,587 $ 31,047 $ 7,888,634 Commercial real estate 2,891,301 5,408 261 — 2,896,970 19,749 2,916,719 Construction 380,939 163 — — 381,102 — 381,102 Residential real estate 354,717 943 631 — 356,291 5,274 361,565 Home equity 128,500 397 2,236 — 131,133 11,044 142,177 Personal 201,569 23 — — 201,592 430 202,022 Total loans $ 11,812,859 $ 7,696 $ 4,120 $ — $ 11,824,675 $ 67,544 $ 11,892,219 Impaired Loans Impaired loans consist of nonaccrual loans (which include nonaccrual troubled debt restructurings ("TDRs")) and loans classified as accruing TDRs. A loan is considered impaired when, based on current information and events, either (i) management believes that it is probable that we will be unable to collect all amounts due (both principal and interest) according to the original contractual terms of the loan agreement, or (ii) it has been classified as a TDR. The following two tables present our recorded investment in impaired loans outstanding by product segment, including our recorded investment in impaired loans, which represents the principal amount outstanding, net of unearned income, deferred loan fees and costs, and any direct principal charge-offs. Impaired Loans (Amounts in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Specific Reserve Recorded Investment With Specific Reserve Total Recorded Investment Specific Reserve As of September 30, 2015 Commercial $ 50,150 $ 30,841 $ 11,125 $ 41,966 $ 5,468 Commercial real estate 18,524 3,289 8,752 12,041 1,465 Residential real estate 4,459 — 4,272 4,272 558 Home equity 11,979 4,263 7,111 11,374 1,575 Personal 26 — 26 26 6 Total impaired loans $ 85,138 $ 38,393 $ 31,286 $ 69,679 $ 9,072 As of December 31, 2014 Commercial $ 60,174 $ 25,739 $ 26,432 $ 52,171 $ 11,487 Commercial real estate 26,738 9,755 10,193 19,948 2,441 Residential real estate 5,849 349 4,925 5,274 735 Home equity 12,904 3,627 8,839 12,466 1,855 Personal 430 — 430 430 109 Total impaired loans $ 106,095 $ 39,470 $ 50,819 $ 90,289 $ 16,627 Average Recorded Investment and Interest Income Recognized on Impaired Loans (1) (Amounts in thousands) Three Months Ended September 30, 2015 2014 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Commercial $ 53,886 $ 287 $ 54,559 $ 428 Commercial real estate 12,656 — 23,841 16 Residential real estate 4,332 — 9,522 — Home equity 11,942 34 11,696 22 Personal 25 — 560 — Total $ 82,841 $ 321 $ 100,178 $ 466 (1) Represents amounts while classified as impaired for the periods presented. Average Recorded Investment and Interest Income Recognized on Impaired Loans (1) (Continued) (Amounts in thousands) Nine Months Ended September 30, 2015 2014 Average Interest Average Interest Commercial $ 54,331 $ 788 $ 49,593 $ 1,229 Commercial real estate 15,170 13 36,351 60 Residential real estate 4,594 — 9,665 — Home equity 12,653 79 12,628 67 Personal 217 — 609 — Total $ 86,965 $ 880 $ 108,846 $ 1,356 (1) Represents amounts while classified as impaired for the periods presented. Credit Quality Indicators We attempt to mitigate risk through loan structure, collateral, monitoring, and other credit risk management controls. We have adopted an internal risk rating policy in which each loan is rated for credit quality with a numerical rating of 1 through 8 . Loans rated 5 and better ( 1 - 5 ratings, inclusive) are considered "pass" rated credits that we believe exhibit acceptable financial performance, cash flow, and leverage. Credits rated 6 are performing in accordance with contractual terms but are considered "special mention" as these credits demonstrate potential weakness that, if left unresolved, may result in deterioration in our credit position and/or the repayment prospects for the credit. Borrowers rated special mention may exhibit adverse operating trends, high leverage, tight liquidity or other credit concerns. Loans rated 7 may be classified as either accruing ("potential problem") or nonaccrual ("nonperforming"). Potential problem loans, like special mention, are loans that are performing in accordance with contractual terms, but for which management has some level of concern (greater than that of special mention loans) about the ability of the borrowers to meet existing repayment terms in future periods. Potential problem loans continue to accrue interest but the ultimate collection of these loans in full is a risk due to the same conditions that characterize a 6 -rated credit. These credits may also have somewhat increased risk profiles as a result of the current net worth and/or paying capacity of the obligor or guarantors or a declining value of the collateral pledged. These loans generally have a well-defined weakness that may jeopardize collection of the debt and are characterized by the distinct possibility that we may sustain some loss if the deficiencies are not resolved. Although these loans are generally identified as potential problem loans and require additional attention by management, they may never become nonperforming. Nonperforming loans include nonaccrual loans risk rated 7 or 8 and have all the weaknesses inherent in a 7 -rated potential problem loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently-existing facts, conditions and values, highly questionable and improbable. Special mention, potential problem and nonperforming loans are reviewed at a minimum on a quarterly basis, while all other rated credits over a certain dollar threshold, depending on loan type, are reviewed annually or more frequently as the circumstances warrant. Credit Quality Indicators (Dollars in thousands) Special Mention % of Portfolio Loan Type Potential Problem Loans % of Portfolio Loan Type Non- Performing Loans % of Portfolio Loan Type Total Loans As of September 30, 2015 Commercial $ 139,622 1.6 $ 116,345 1.3 $ 18,370 0.2 $ 8,672,001 Commercial real estate 77 * 2,687 0.1 12,041 0.4 3,249,338 Construction — — — — — — 412,688 Residential real estate 6,029 1.4 6,071 1.4 4,272 1.0 439,005 Home equity 487 0.4 2,696 2.0 9,273 7.0 133,122 Personal 612 0.4 151 0.1 26 * 173,160 Total $ 146,827 1.1 $ 127,950 1.0 $ 43,982 0.3 $ 13,079,314 As of December 31, 2014 Commercial $ 93,130 1.2 $ 78,562 1.0 $ 31,047 0.4 $ 7,888,634 Commercial real estate 3,552 0.1 746 * 19,749 0.7 2,916,719 Construction — — — — — — 381,102 Residential real estate 2,964 0.8 5,981 1.7 5,274 1.5 361,565 Home equity 1,170 0.8 2,108 1.5 11,044 7.8 142,177 Personal 173 0.1 45 * 430 0.2 202,022 Total $ 100,989 0.8 $ 87,442 0.7 $ 67,544 0.6 $ 11,892,219 * Less than 0.1% Troubled Debt Restructured Loans Troubled Debt Restructured Loans Outstanding (Amounts in thousands) September 30, 2015 December 31, 2014 Accruing Nonaccrual (1) Accruing Nonaccrual (1) Commercial $ 23,596 $ 10,674 $ 21,124 $ 20,113 Commercial real estate — 9,397 199 8,005 Residential real estate — 1,308 — 1,881 Home equity 2,101 5,402 1,422 5,886 Personal — — — 413 Total $ 25,697 $ 26,781 $ 22,745 $ 36,298 (1) Included in nonperforming loans. At September 30, 2015 and December 31, 2014 , credit commitments to lend additional funds to debtors whose loan terms have been modified in a TDR (both accruing and nonaccruing) totaled $10.2 million and $8.5 million , respectively. Additions to Accruing Troubled Debt Restructurings During the Period (Dollars in thousands) Three Months Ended September 30, 2015 2014 Number of Borrowers Recorded Investment (1) Number of Borrowers Recorded Investment (1) Pre- Modification Post- Modification Pre- Modification Post- Modification Commercial Extension of maturity date (2) 2 $ 7,800 $ 7,800 1 $ 16,325 $ 16,325 Other concession (3) — — — 1 1,904 1,904 Total accruing 2 $ 7,800 $ 7,800 2 $ 18,229 $ 18,229 Nine Months Ended September 30, 2015 2014 Recorded Investment (1) Recorded Investment (1) Number of Borrowers Pre- Modification Post- Modification Number of Borrowers Pre- Modification Post- Modification Commercial Extension of maturity date (2) 7 $ 23,609 $ 23,328 3 $ 20,075 $ 20,075 Other concession (3) — — — 3 17,483 17,483 Total commercial 7 23,609 23,328 6 37,558 37,558 Commercial real estate Other concession (3) — — — 1 426 426 Home equity Extension of maturity date (2) 1 346 346 — — — Total accruing 8 $ 23,955 $ 23,674 7 $ 37,984 $ 37,984 Change in recorded investment due to principal paydown at time of modification $ 281 $ — (1) Represents amounts as of the date immediately prior to and immediately after the modification is effective. (2) Extension of maturity date also includes loans renewed at an existing rate of interest that is considered a below market rate for that particular loan’s risk profile. (3) Other concessions primarily include interest rate reductions, loan increases or deferrals of principal. Additions to Nonaccrual Troubled Debt Restructurings During the Period (Dollars in thousands) Three Months Ended September 30, 2015 2014 Number of Borrowers Recorded Investment (1) Number of Borrowers Recorded Investment (1) Pre- Modification Post- Modification Pre- Modification Post- Modification Commercial Extension of maturity date (2) 1 $ 19 $ 19 — $ — $ — Other concession (3) 1 4,473 4,473 4 17,046 17,046 Total commercial 2 4,492 4,492 4 17,046 17,046 Commercial real estate Other concession (3) — — — 1 653 686 Home equity Other concession (3) 2 276 276 1 544 607 Total nonaccrual 4 $ 4,768 $ 4,768 6 $ 18,243 $ 18,339 Nine Months Ended September 30, 2015 2014 Recorded Investment (1) Recorded Investment (1) Number of Pre- Post- Number of Pre- Post- Commercial Extension of maturity date (2) 5 $ 2,602 $ 2,602 — $ — $ — Other concession (3) 3 7,253 7,246 8 17,599 17,549 Total commercial 8 9,855 9,848 8 17,599 17,549 Commercial real estate Extension of maturity date (2) 2 1,747 1,660 — — — Other concession (3) 1 3,773 3,773 2 1,773 1,806 Total commercial real estate 3 5,520 5,433 2 1,773 1,806 Residential real estate Other concession (3) — — — 3 496 566 Home equity Extension of maturity date (2) 3 170 165 1 114 114 Other concession (3) 4 353 353 4 1,659 1,722 Total home equity 7 523 518 5 1,773 1,836 Total nonaccrual 18 $ 15,898 $ 15,799 18 $ 21,641 $ 21,757 Net decrease in recorded investment at time of modification $ 99 $ 50 (1) Represents amounts as of the date immediately prior to and immediately after the modification is effective. (2) Extension of maturity date also includes loans renewed at an existing rate of interest that is considered a below market rate for that particular loan’s risk profile. (3) Other concessions primarily include interest rate reductions, loan increases or deferrals of principal. At the time an accruing loan becomes modified and meets the definition of a TDR, it is considered impaired and no longer included as part of the general loan loss reserve population. However, our general loan loss reserve methodology does consider the amount and product type of the TDRs removed as a proxy for potentially heightened risk in the general portfolio when establishing final reserve requirements. As impaired loans, TDRs (both accruing and nonaccruing) are evaluated for impairment at the end of each quarter with a specific valuation reserve created, or adjusted (either individually or as part of a pool), if necessary, as a component of the allowance for loan losses. Refer to the "Impaired Loan" and "Allowance for Loan Loss" sections of Note 1 , "Summary of Significant Accounting Policies," in the "Notes to Consolidated Financial Statements" of our 2014 Annual Report on Form 10-K regarding our policy for assessing potential impairment on such loans. Our allowance for loan losses included $4.9 million and $10.6 million in specific reserves for nonaccrual TDRs at September 30, 2015 , and December 31, 2014 , respectively. For accruing TDRs, there were $14,000 specific reserves at September 30, 2015 and none at December 31, 2014 , respectively, as the present value of cash flows for the restructured loan were greater than the recorded investment in the loan at December 31, 2014. During the three and nine months ended September 30, 2015 , a single commercial real estate loan totaling $175,000 became nonperforming within 12 months of being modified as an accruing TDR. During the nine months ended September 30, 2014 , a single commercial real estate loan totaling $699,000 became nonperforming within 12 months of being modified as an accruing TDR. A loan typically becomes nonperforming and placed on nonaccrual status when the principal or interest payments are 90 days past due based on contractual terms or when an individual analysis of a borrower’s creditworthiness indicates a loan should be placed on nonaccrual status earlier than the 90-day past due date. Other Real Estate Owned The following table presents the composition of property acquired as a result of borrower defaults on loans secured by real property. OREO Composition (Amounts in thousands) September 30, 2015 December 31, 2014 Single-family homes $ 6,354 $ 7,902 Land parcels 2,664 4,237 Multi-family 598 488 Office/industrial 1,799 3,832 Retail 1,345 957 Total OREO properties $ 12,760 $ 17,416 The recorded investment in consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process totaled $5.1 million at September 30, 2015 , and $5.5 million at December 31, 2014 . Covered Assets Covered assets represent acquired residential mortgage loans and foreclosed real estate covered under a loss sharing agreement with the FDIC and include an indemnification receivable representing the present value of the expected reimbursement from the FDIC related to expected losses on the acquired loans and foreclosed real estate under such agreement. The loss share agreement will expire on September 30, 2019. The carrying amount of covered assets is presented in the following table. Covered Assets (Amounts in thousands) September 30, 2015 December 31, 2014 Residential mortgage loans (1) $ 26,526 $ 32,182 Foreclosed real estate - single family homes — 187 Estimated loss reimbursement by the FDIC 2,033 1,763 Total covered assets 28,559 34,132 Allowance for covered loan losses (6,337 ) (5,191 ) Net covered assets $ 22,222 $ 28,941 (1) Includes $262,000 and $420,000 of purchased credit-impaired loans as of September 30, 2015 , and December 31, 2014 , respectively. The recorded investment in residential mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process totaled $531,000 and $856,000 at September 30, 2015 and December 31, 2014 , respectively. |