Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2018

Loans, net of unearned income are summarized as follows:



	March 31, 2018			December 31, 2017
	(in thousands)
Real-estate - commercial mortgage	$	6,332,508		$	6,364,804
Commercial - industrial, financial and agricultural	4,299,072			4,300,297
Real-estate - residential mortgage	1,976,524			1,954,711
Real-estate - home equity	1,514,241			1,559,719
Real-estate - construction	976,131			1,006,935
Consumer	326,766			313,783
Leasing and other	297,465			291,556
Overdrafts	2,031			4,113
Loans, gross of unearned income	15,724,738			15,795,918
Unearned income	(28,454		)	(27,671		)
Loans, net of unearned income	$	15,696,284		$	15,768,247

Schedule of Allowance for Credit Losses

The following table presents the components of the allowance for credit losses:



	March 31, 2018		December 31, 2017
	(in thousands)
Allowance for loan losses	$	163,217	$	169,910
Reserve for unfunded lending commitments	12,802		6,174
Allowance for credit losses	$	176,019	$	176,084

Activity in the Allowance for Credit Losses

The following table presents the activity in the allowance for credit losses:



	Three months ended March 31
	2018			2017
	(in thousands)
Balance at beginning of period	$	176,084		$	171,325
Loans charged off	(6,397		)	(9,407		)
Recoveries of loans previously charged off	2,362			5,929
Net loans charged off	(4,035		)	(3,478		)
Provision for credit losses	3,970			4,800
Balance at end of period	$	176,019		$	172,647

The Corporation has historically maintained an unallocated allowance for credit losses for factors and conditions that exist at the balance sheet date, but are not specifically identifiable, and to recognize the inherent imprecision in estimating and measuring loss exposure. In the second quarter of 2017, enhancements were made to allow for the impact of these factors and conditions to be quantified in the allowance allocation process. Accordingly, an unallocated allowance for credit losses is no longer necessary.

The following table presents the activity in the allowance for loan losses by portfolio segment:



	Real Estate - Commercial Mortgage			Commercial - Industrial, Financial and Agricultural			Real Estate - Home Equity			Real Estate - Residential Mortgage			Real Estate - Construction			Consumer			Leasing, other and overdrafts			Unallocated		Total
	(in thousands)
Three months ended March 31, 2018
Balance at December 31, 2017	$	58,793		$	66,280		$	18,127		$	16,088		$	6,620		$	2,045		$	1,957		$	—	$	169,910
Loans charged off	(267		)	(4,005		)	(408		)	(162		)	(158		)	(892		)	(505		)	—		(6,397		)
Recoveries of loans previously charged off	279			1,075			206			107			306			179			210			—		2,362
Net loans charged off	12			(2,930		)	(202		)	(55		)	148			(713		)	(295		)	—		(4,035		)
Provision for loan losses ⁽¹⁾	(88		)	(1,520		)	(397		)	(772		)	(844		)	571			392			—		(2,658		)
Balance at March 31, 2018	$	58,717		$	61,830		$	17,528		$	15,261		$	5,924		$	1,903		$	2,054		$	—	$	163,217
Three months ended March 31, 2017
Balance at December 31, 2016	$	46,842		$	54,353		$	26,801		$	22,929		$	6,455		$	3,574		$	3,192		$	4,533	$	168,679
Loans charged off	(1,224		)	(5,527		)	(698		)	(216		)	(247		)	(856		)	(639		)	—		(9,407		)
Recoveries of loans previously charged off	450			4,191			137			230			548			236			137			—		5,929
Net loans charged off	(774		)	(1,336		)	(561		)	14			301			(620		)	(502		)	—		(3,478		)
Provision for loan losses ⁽¹⁾	1,305			2,292			(2,419		)	(925		)	745			77			578			3,222		4,875
Balance at March 31, 2017	$	47,373		$	55,309		$	23,821		$	22,018		$	7,501		$	3,031		$	3,268		$	7,755	$	170,076


(1)	The provision for loan losses excluded an increase of $6.6 million and a decrease of $75,000 in the reserve for unfunded lending commitments for the three months ended March 31, 2018 and March 31, 2017, respectively. These amounts were reclassified to Other Liabilities.

The following table presents loans, net of unearned income and their related allowance for loan losses, by portfolio segment:



	Real Estate - Commercial Mortgage		Commercial - Industrial, Financial and Agricultural		Real Estate - Home Equity		Real Estate - Residential Mortgage		Real Estate - Construction		Consumer		Leasing, other and overdrafts		Unallocated		Total
	(in thousands)
Allowance for loan losses at March 31, 2018:
Loans collectively evaluated for impairment	$	50,392	$	51,314	$	6,440	$	5,610	$	5,245	$	1,887	$	2,054	N/A		$	122,942
Loans individually evaluated for impairment	8,325		10,516		11,088		9,651		679		16		—		N/A		40,275
	$	58,717	$	61,830	$	17,528	$	15,261	$	5,924	$	1,903	$	2,054	N/A		$	163,217

Loans, net of unearned income at March 31, 2018
Loans collectively evaluated for impairment	$	6,279,144	$	4,234,362	$	1,489,429	$	1,935,587	$	965,398	$	326,742	$	271,042	N/A		$	15,501,704
Loans individually evaluated for impairment	53,364		64,710		24,812		40,937		10,733		24		—		N/A		194,580
	$	6,332,508	$	4,299,072	$	1,514,241	$	1,976,524	$	976,131	$	326,766	$	271,042	N/A		$	15,696,284

Allowance for loan losses at March 31, 2017:
Loans collectively evaluated for impairment	$	37,457	$	43,155	$	14,744	$	10,581	$	4,915	$	3,007	$	3,268	$	7,755	$	124,882
Loans individually evaluated for impairment	9,916		12,154		9,077		11,437		2,586		24		—		N/A		45,194
	$	47,373	$	55,309	$	23,821	$	22,018	$	7,501	$	3,031	$	3,268	$	7,755	$	170,076

Loans, net of unearned income at March 31, 2017:
Loans collectively evaluated for impairment	$	6,067,492	$	4,119,550	$	1,576,949	$	1,620,302	$	869,225	$	288,789	$	243,983	N/A		$	14,786,290
Loans individually evaluated for impairment	51,041		48,259		18,952		44,840		13,758		37		—		N/A		176,887
	$	6,118,533	$	4,167,809	$	1,595,901	$	1,665,142	$	882,983	$	288,826	$	243,983	N/A		$	14,963,177

N/A - Not applicable

Total Impaired Loans by Class Segment

The following table presents total impaired loans by class segment:



	March 31, 2018						December 31, 2017
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Unpaid Principal Balance		Recorded Investment		Related Allowance
	(in thousands)
With no related allowance recorded:
Real estate - commercial mortgage	$	29,862	$	27,819	$	—	$	26,728	$	22,886	$	—
Commercial	46,673		40,525		—		44,936		39,550		—
Real estate - residential mortgage	4,547		4,547		—		4,575		4,575		—
Construction	12,343		7,842		—		12,477		8,100		—
	93,425		80,733				88,716		75,111
With a related allowance recorded:
Real estate - commercial mortgage	32,863		25,545		8,325		33,710		25,895		8,112
Commercial	29,723		24,185		10,516		29,816		24,175		11,406
Real estate - home equity	28,387		24,812		11,088		28,282		24,693		11,124
Real estate - residential mortgage	41,889		36,390		9,651		42,597		37,132		9,895
Construction	6,186		2,891		679		7,308		4,097		967
Consumer	25		24		16		26		26		17
	139,073		113,847		40,275		141,739		116,018		41,521
Total	$	232,498	$	194,580	$	40,275	$	230,455	$	191,129	$	41,521

As of March 31, 2018 and December 31, 2017, there were $80.7 million and $75.1 million, respectively, of impaired loans that did not have a related allowance for loan loss. The estimated fair values of the collateral securing these loans exceeded their carrying amount, or the loans were previously charged down to realizable collateral values. Accordingly, no specific valuation allowance was considered to be necessary.

The following table presents average impaired loans by class segment:



	Three months ended March 31
	2018				2017
	Average Recorded Investment		Interest Income (1)		Average Recorded Investment		Interest Income (1)
	(in thousands)
With no related allowance recorded:
Real estate - commercial mortgage	$	25,353	$	83	$	23,842	$	70
Commercial	40,038		73		25,574		36
Real estate - residential mortgage	4,561		27		4,673		26
Construction	7,971		—		5,046		2
	77,923		183		59,135		134
With a related allowance recorded:
Real estate - commercial mortgage	25,720		84		29,126		85
Commercial	24,181		44		23,044		32
Real estate - home equity	24,752		184		19,079		95
Real estate - residential mortgage	36,761		221		40,839		230
Construction	3,495		—		7,100		3
Consumer	25		—		38		—
Leasing, other and overdrafts	—		—		713		—
	114,934		533		119,939		445
Total	$	192,857	$	716	$	179,074	$	579


(1)	All impaired loans, excluding accruing TDRs, were non-accrual loans. Interest income recognized for the three months ended March 31, 2018 and 2017 represents amounts earned on accruing TDRs.

Financing Receivable Credit Quality Indicators

The following table presents internal credit risk ratings for the indicated loan class segments:



	Pass						Special Mention						Substandard or Lower						Total
	March 31, 2018			December 31, 2017			March 31, 2018			December 31, 2017			March 31, 2018			December 31, 2017			March 31, 2018			December 31, 2017
	(dollars in thousands)
Real estate - commercial mortgage	$	6,027,210		$	6,066,396		$	144,809		$	147,604		$	160,489		$	150,804		$	6,332,508		$	6,364,804
Commercial - secured	3,873,737			3,831,485			100,242			121,842			180,234			179,113			4,154,213			4,132,440
Commercial - unsecured	139,139			159,620			3,378			5,478			2,342			2,759			144,859			167,857
Total commercial - industrial, financial and agricultural	4,012,876			3,991,105			103,620			127,320			182,576			181,872			4,299,072			4,300,297
Construction - commercial residential	141,587			143,759			4,613			5,259			12,282			14,084			158,482			163,102
Construction - commercial	744,274			761,218			834			846			3,688			3,752			748,796			765,816
Total construction (excluding Construction - other)	885,861			904,977			5,447			6,105			15,970			17,836			907,278			928,918
	$	10,925,947		$	10,962,478		$	253,876		$	281,029		$	359,035		$	350,512		$	11,538,858		$	11,594,019
% of Total	94.7		%	94.6		%	2.2		%	2.4		%	3.1		%	3.0		%	100.0		%	100.0		%

The following table presents a summary of performing, delinquent and non-performing loans for the indicated loan class segments:



	Performing						Delinquent (1)						Non-performing (2)						Total
	March 31, 2018			December 31, 2017			March 31, 2018			December 31, 2017			March 31, 2018			December 31, 2017			March 31, 2018			December 31, 2017
	(dollars in thousands)
Real estate - home equity	$	1,493,485		$	1,535,557		$	8,731		$	12,655		$	12,025		$	11,507		$	1,514,241		$	1,559,719
Real estate - residential mortgage	1,938,817			1,914,888			17,539			18,852			20,168			20,971			1,976,524			1,954,711
Construction - other	68,363			77,403			—			203			490			411			68,853			78,017
Consumer - direct	55,681			54,828			323			315			54			70			56,058			55,213
Consumer - indirect	267,584			254,663			2,931			3,681			193			226			270,708			258,570
Total consumer	323,265			309,491			3,254			3,996			247			296			326,766			313,783
Leasing	270,027			267,111			843			855			172			32			271,042			267,998
	$	4,093,957		$	4,104,450		$	30,367		$	36,561		$	33,102		$	33,217		$	4,157,426		$	4,174,228
% of Total	98.5		%	98.3		%	0.7		%	0.9		%	0.8		%	0.8		%	100.0		%	100.0		%


(1)	Includes all accruing loans 30 days to 89 days past due.


(2)	Includes all accruing loans 90 days or more past due and all non-accrual loans.

Non-Performing Assets

The following table presents non-performing assets:



	March 31, 2018		December 31, 2017
	(in thousands)
Non-accrual loans	$	122,966	$	124,749
Loans 90 days or more past due and still accruing	11,676		10,010
Total non-performing loans	134,642		134,759
Other real estate owned (OREO)	10,744		9,823
Total non-performing assets	$	145,386	$	144,582

Past due Loan Status and Non-Accrual Loans by Portfolio Segment

The following tables present past due status and non-accrual loans by portfolio segment and class segment:



	March 31, 2018
	30-59 Days Past Due		60-89 Days Past Due		≥ 90 Days Past Due and Accruing		Non- accrual		Total ≥ 90 Days		Total Past Due		Current		Total
	(in thousands)
Real estate - commercial mortgage	$	11,606	$	1,091	$	1,001	$	35,183	$	36,184	$	48,881	$	6,283,627	$	6,332,508
Commercial - secured	4,048		3,607		1,935		52,336		54,271		61,926		4,092,287		4,154,213
Commercial - unsecured	814		159		10		634		644		1,617		143,242		144,859
Total commercial - industrial, financial and agricultural	4,862		3,766		1,945		52,970		54,915		63,543		4,235,529		4,299,072
Real estate - home equity	6,401		2,330		3,280		8,745		12,025		20,756		1,493,485		1,514,241
Real estate - residential mortgage	12,725		4,814		4,833		15,335		20,168		37,707		1,938,817		1,976,524
Construction - commercial residential	—		—		—		10,422		10,422		10,422		148,060		158,482
Construction - commercial	—		—		—		19		19		19		748,777		748,796
Construction - other	—		—		198		292		490		490		68,363		68,853
Total real estate - construction	—		—		198		10,733		10,931		10,931		965,200		976,131
Consumer - direct	211		112		54		—		54		377		55,681		56,058
Consumer - indirect	2,253		678		193		—		193		3,124		267,584		270,708
Total consumer	2,464		790		247		—		247		3,501		323,265		326,766
Leasing, other and overdrafts	662		181		172		—		172		1,015		270,027		271,042
Total	$	38,720	$	12,972	$	11,676	$	122,966	$	134,642	$	186,334	$	15,509,950	$	15,696,284



	December 31, 2017
	30-59 Days Past Due		60-89 Days Past Due		≥ 90 Days Past Due and Accruing		Non- accrual		Total ≥ 90 Days		Total Past Due		Current		Total
	(in thousands)
Real estate - commercial mortgage	$	9,456	$	4,223	$	625	$	34,822	$	35,447	$	49,126	$	6,315,678	$	6,364,804
Commercial - secured	4,778		5,254		1,360		52,255		53,615		63,647		4,068,793		4,132,440
Commercial - unsecured	305		10		45		649		694		1,009		166,848		167,857
Total commercial - industrial, financial and agricultural	5,083		5,264		1,405		52,904		54,309		64,656		4,235,641		4,300,297
Real estate - home equity	9,640		3,015		2,372		9,135		11,507		24,162		1,535,557		1,559,719
Real estate - residential mortgage	11,961		6,891		5,280		15,691		20,971		39,823		1,914,888		1,954,711
Construction - commercial residential	—		439		—		11,767		11,767		12,206		150,896		163,102
Construction - commercial	483		—		—		19		19		502		765,314		765,816
Construction - other	203		—		—		411		411		614		77,403		78,017
Total real estate - construction	686		439		—		12,197		12,197		13,322		993,613		1,006,935
Consumer - direct	260		55		70		—		70		385		54,828		55,213
Consumer - indirect	3,055		626		226		—		226		3,907		254,663		258,570
Total consumer	3,315		681		296		—		296		4,292		309,491		313,783
Leasing, other and overdrafts	568		287		32		—		32		887		267,111		267,998
Total	$	40,709	$	20,800	$	10,010	$	124,749	$	134,759	$	196,268	$	15,571,979	$	15,768,247

Troubled Debt Restructurings on Financing Receivables

The following table presents TDRs, by class segment:



	March 31, 2018		December 31, 2017
	(in thousands)
Real-estate - residential mortgage	$	25,602	$	26,016
Real-estate - commercial mortgage	18,181		13,959
Real estate - home equity	16,067		15,558
Commercial	11,740		10,820
Consumer	24		26
Total accruing TDRs	71,614		66,379
Non-accrual TDRs ⁽¹⁾	24,897		29,051
Total TDRs	$	96,511	$	95,430


(1)	Included in non-accrual loans in the preceding table detailing non-performing assets

Loan Terms Modified Under Troubled Debt Restructurings

The following table presents TDRs, by class segment and type of concession for loans that were modified during the three months ended March 31, 2018 and 2017:



		Three months ended March 31
		2018			2017
		Number of Loans	Post-Modification Recorded Investment		Number of Loans	Post-Modification Recorded Investment
		(dollars in thousands)
Real estate – residential mortgage:
	Extend maturity without rate concession	—	—		2	337
	Bankruptcy	1	5		1	178
Real estate - commercial mortgage:
	Extend maturity without rate concession	—	—		1	318
Real estate - home equity:
	Extend maturity without rate concession	17	1,276		16	1,284
	Bankruptcy	2	108		7	453
Commercial:
	Extend maturity without rate concession	9	9,359		4	3,126

Total		29	$	10,748	31	$	5,696

The following table presents TDRs, by class segment, as of March 31, 2018 and 2017, that were modified in the previous 12 months and had a post-modification payment default during the three months ended March 31, 2018 and 2017. The Corporation defines a payment default as a single missed payment.



	2018			2017
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
	(dollars in thousands)
Real estate - residential mortgage	5	$	332	8	$	2,006
Real estate - commercial mortgage	1	180		2	430
Real estate - home equity	18	1,000		14	639
Commercial	6	526		6	3,654
Construction	2	1,484		—	—
Total	32	$	3,522	30	$	6,729