LOANS | LOANS AND CREDIT QUALITY The following loan portfolio and credit quality disclosures exclude covered loans. Covered loans represent loans acquired through a FDIC-assisted acquisition 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) December 31, 2015 2014 Commercial and industrial $ 6,747,389 $ 5,996,070 Commercial – owner-occupied commercial real estate 1,888,238 1,892,564 Total commercial 8,635,627 7,888,634 Commercial real estate 2,629,873 2,323,616 Commercial real estate – multi-family 722,637 593,103 Total commercial real estate 3,352,510 2,916,719 Construction 522,263 381,102 Residential real estate 461,412 361,565 Home equity 129,317 142,177 Personal 165,346 202,022 Total loans $ 13,266,475 $ 11,892,219 Net deferred loan fees and unamortized discount and premium on loans, included as a reduction in total loans $ 42,861 $ 47,017 Overdrawn demand deposits included in total loans $ 2,654 $ 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, and borrower. Loans Held-For-Sale (Amounts in thousands) December 31, 2015 2014 Mortgage loans held-for-sale (1) $ 35,704 $ 42,215 Other loans held-for-sale (2) 73,094 72,946 Total loans held-for-sale $ 108,798 $ 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 20 for additional information regarding mortgage loans held-for-sale. (2) Amounts at December 31, 2015 represent commercial, commercial real estate and construction loans carried at the lower of aggregate cost or fair value, including one nonaccrual loan totaling $667,000 . 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 in Norcross, Georgia, which closed in January 2015. Carrying Value of Loans Pledged (Amounts in thousands) December 31, 2015 2014 Loans pledged to secure outstanding borrowings or availability: FRB discount window borrowings (1) $ 440,023 $ 478,692 FHLB advances (2) 4,133,942 1,576,168 Total $ 4,573,965 $ 2,054,860 (1) No borrowings were outstanding at December 31, 2015 or 2014 . (2) Refer to Notes 9 and 10 for additional information regarding FHLB advances. Related Party Loans Some of our executive officers and directors are clients of our Bank, and some of our executive officers and directors are direct or indirect owners of 10% or more of the stock of corporations which are, or have been in the past, clients of the Bank. These loans were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other unaffiliated persons and do not involve more than the normal risk of collectability. These loans totaled $27.4 million and $9.9 million at December 31, 2015 and 2014 , respectively. 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 December 31, 2015 Commercial $ 8,595,150 $ 6,641 $ 1,042 $ — $ 8,602,833 $ 32,794 $ 8,635,627 Commercial real estate 3,343,714 — 295 — 3,344,009 8,501 3,352,510 Construction 522,263 — — — 522,263 — 522,263 Residential real estate 455,764 613 273 — 456,650 4,762 461,412 Home equity 121,580 66 — — 121,646 7,671 129,317 Personal 165,188 132 5 — 165,325 21 165,346 Total loans $ 13,203,659 $ 7,452 $ 1,615 $ — $ 13,212,726 $ 53,749 $ 13,266,475 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 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 December 31, 2015 Commercial $ 49,912 $ 27,300 $ 20,020 $ 47,320 $ 4,458 Commercial real estate 14,150 2,085 6,416 8,501 1,156 Residential real estate 4,950 — 4,762 4,762 539 Home equity 10,071 2,626 7,065 9,691 1,106 Personal 21 — 21 21 3 Total impaired loans $ 79,104 $ 32,011 $ 38,284 $ 70,295 $ 7,262 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) 2015 2014 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Commercial $ 52,489 $ 968 $ 51,030 $ 1,441 Commercial real estate 14,269 13 32,256 67 Construction 171 — — — Residential real estate 4,584 — 9,281 — Home equity 12,012 107 12,592 88 Personal 173 — 582 — Total $ 83,698 $ 1,088 $ 105,741 $ 1,596 (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 under 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 they 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 December 31, 2015 Commercial $ 85,217 1.0 $ 124,654 1.4 $ 32,794 0.4 $ 8,635,627 Commercial real estate 27,580 0.8 121 * 8,501 0.3 3,352,510 Construction — — — — — — 522,263 Residential real estate 5,988 1.3 5,031 1.1 4,762 1.0 461,412 Home equity 623 0.5 2,451 1.9 7,671 5.9 129,317 Personal 620 0.4 141 0.1 21 * 165,346 Total $ 120,028 0.9 $ 132,398 1.0 $ 53,749 0.4 $ 13,266,475 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) December 31, 2015 2014 Accruing Nonaccrual (1) Accruing Nonaccrual (1) Commercial $ 14,526 $ 25,034 $ 21,124 $ 20,113 Commercial real estate — 7,619 199 8,005 Residential real estate — 1,341 — 1,881 Home equity 2,020 5,177 1,422 5,886 Personal — — — 413 Total $ 16,546 $ 39,171 $ 22,745 $ 36,298 (1) Included in nonperforming loans. At December 31, 2015 and 2014 , credit commitments to lend additional funds to debtors whose loan terms have been modified in a TDR (both accruing and nonaccruing) totaled $9.7 million and $8.5 million , respectively. Additions to Accruing Troubled Debt Restructurings During the Year (Dollars in thousands) Year Ended December 31, 2015 Year Ended December 31, 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) 9 $ 27,937 $ 27,656 4 $ 20,725 $ 20,725 Other concession (3) — — — 5 21,289 21,289 Total commercial 9 27,937 27,656 9 42,014 42,014 Commercial real estate Extension of maturity date (2) — — — 1 202 202 Other concession (3) — — — 1 426 426 Total commercial real estate — — — 2 628 628 Home equity Extension of maturity date (2) 1 346 346 — — — Total accruing 10 $ 28,283 $ 28,002 11 $ 42,642 $ 42,642 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 existing rate of interest which 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 Year (Dollars in thousands) Year Ended December 31, 2015 Year Ended December 31, 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) 6 $ 19,899 $ 19,899 — $ — $ — Other concession (3) 3 7,253 7,246 10 17,900 17,822 Total commercial 9 27,152 27,145 10 17,900 17,822 Commercial real estate Extension of maturity date (2) 2 1,747 1,660 — — — Other concession (3) 1 3,773 3,773 3 2,057 2,070 Total commercial real estate 3 5,520 5,433 3 2,057 2,070 Residential real estate Other concession (3) 1 64 49 5 961 1,034 Home equity Extension of maturity date (2) 4 229 224 1 114 114 Other concession (3) 5 513 513 8 2,780 2,793 Total home equity 9 742 737 9 2,894 2,907 Total nonaccrual 22 $ 33,478 $ 33,364 27 $ 23,812 $ 23,833 Change in recorded investment due to net principal paydowns (advances) at time of modification $ 114 $ (21 ) (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 existing rate of interest which 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 calculation. However, our general reserve methodology considers the amount and product type of the TDRs removed as a proxy for potentially heightened risk in the 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 regarding our policy for assessing potential impairment on such loans. Our allowance for loan losses included $7.3 million and $10.6 million in specific reserves for nonaccrual TDRs at December 31, 2015 and 2014 , respectively. During the year ended December 31, 2015 , a single commercial real estate loan totaling $175,000 became nonperforming within 12 months of being modified as an accruing TDR. During the year ended December 31, 2014 , a single commercial real estate loan and two residential real estate loans totaling $756,000 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) December 31, 2015 2014 Single-family homes $ 1,878 $ 7,902 Land parcels 1,760 4,237 Multi-family 598 488 Office/industrial 1,779 3,832 Retail 1,258 957 Total OREO properties $ 7,273 $ 17,416 The recorded investment in consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process totaled $3.0 million at December 31, 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 share 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) December 31, 2015 2014 Residential mortgage loans (1) $ 24,717 $ 32,182 Foreclosed real estate - single family homes 530 187 Estimated loss reimbursement by the FDIC 1,707 1,763 Total covered assets 26,954 34,132 Allowance for covered loan losses (5,712 ) (5,191 ) Net covered assets $ 21,242 $ 28,941 (1) Includes $257,000 and $420,000 of purchased credit-impaired loans as of December 31, 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 $775,000 and $856,000 at December 31, 2015 and December 31, 2014 , respectively. |